Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — FY2017 Earnings Presentation
64 slides from Altarea Sca's earnings presentation, 2018
Slide 1: Leading Property Developer in France: 2017 Annual Results
LEADING PROPERTY DEVELOPER IN FRANCE Visuel couverture temporaire 2017 ANNUAL RESULTS
Slide 2: Disclaimer
Disclaimer This presentation has been prepared for information purposes only, and is intended to supplement other information published by Altarea Cogedim, which readers are encouraged to refer to. It is not, and must not be interpreted as, a solicitation, recommendation or offer to purchase, sell,
Slide 3: Outstanding successes in 2017
Altarea Cogedim Outstanding successes in 2017 Leading property developer in France A unique business model Very favourable outlook 2017 ANNUAL RESULTS / 3
Slide 4: Contents
Contents 01 Urban entrepreneur 02 Creating top-of-the art real estate LARGE MIXED-USE PROJECTS / RESIDENTIAL / OFFICE / RETAIL 03 Delivering long term performance 04 Altarea Cogedim 2020 05 Glossary 06 Appendices Quai 54 - Bordeaux 2017 ANNUAL RESULTS / 4
Slide 5: Urban entrepreneur
01. Urban entrepreneur La Place - Bobigny 2017 ANNUAL RESULTS / 5
Slide 6: Cities are facing growing complexity
Cities are facing growing complexity ? Metropolisation Gathering of Mobility & Sustainable Scarcity of Urban and Economic population Transports development land social considerations diversity A systematic real estate component 2017 ANNUAL RESULTS / 6
Slide 7: The sole urban player with development skills in all asset classes
Altarea Cogedim, the sole urban player with development skills in all asset classes Altarea Cogedim Leading property developer in France 2017 ANNUAL RESULTS / 7
Slide 8: Leading property developer in France
Leading property developer in France €17.1 billion 3.6 million m² potential value* €9.2 billion 2.2 million m² €4.5 billion 0.8 million m² €3.4 billion 0.6 million m² *Essentially in the form of options 2017 ANNUAL RESULTS / 8
Slide 9: A growth story, an entrepreneurial culture
A growth story, an entrepreneurial culture 2017 2007 Leading property developer in France Altarea Cogedim €3.3 bn 2004 Group market capitalisation IPO €1.9 bn €0.3 bn market capitalisation 1994 market capitalisation Founding of Altarea 1,742 employees <€1 mn of enterprise value 750 employees 160 emp
Slide 10: Urban entrepreneur
Urban entrepreneur A major economic An ambitious vision Betting on talents Long term targets impact 52,700 Creativity, daring, 1st Reshaping the links place between the core of direct, indirect commitment worldwide (of listed large cities and their and induced jobs companies) outskirts Accuracy, exp
Slide 11: Creating value(s) for the community
Altarea Cogedim, creating value(s) for the community HUMAN ARCHITECTURAL USE RETAIL ECONOMIC Nudge – Paris 13th Arrondissement L’Hospitalité – Le Kremlin-Bicêtre Bridge - Issy les Moulineaux Tour Eria – La Défense Ferney Voltaire For For For For For inhabitants cities users brands investors 2017 ANN
Slide 12: Creating top of the art real estate
02. Creating top of the art real estate Wacken Europe Sky Place - Strasbourg 2017 ANNUAL RESULTS / 12
Slide 13: Large mixed-use projects
LARGE MIXED-USE PROJECTS Cœur de Ville - Bezons 2017 ANNUAL RESULTS / 13
Slide 14: The City Factory
The City Factory LARGE MIXED-USED PROJECTS RISING NEEDS > to 40,000 m² of Development floor area Multi-product Complex / Integrated / Structuring Production > to 400 housing Multi-use projects units Leasing 2017 ANNUAL RESULTS / 14
Slide 15: Leader in large mixed-use projects in France
Leader in large mixed-use projects in France 9 758,400 m² 8,080 €2,9 bn Key factors of success projects total surface area residential potential value ongoing 2017: delivery of the largest project in the Paris region One-stop shop for local authorities A differentiating factor: retail / leisure know
Slide 16: Two new major mixed-use projects won
Two new major mixed-use projects won QUARTIER GUILLAUMET - Toulouse JOIA MERIDIA - Nice 101,000 m² 73,500 m² 800 units 2,900 m² 4,700 m² 1,200 units 7,500 m² 5,800 m² 10,000 m² of equipment 8,000 m² of hotels 2017 ANNUAL RESULTS / 16
Slide 17: Property Development
PROPERTY DEVELOPMENT Place Centrale - Toulouse 2017 ANNUAL RESULTS / 17
Slide 18: Property Development: very strong growth across all indicators
Property Development (Residential and Office) Very strong growth across all performance indicators FFO OPERATING NEW ORDERS REVENUE BACKLOG INCOME €3.7 bn (incl. tax) €1.7 bn €160.6 m €4.2 bn (excl. tax) +29% +26% +46% +28% 2017 ANNUAL RESULTS / 18
Slide 19: Residential
RESIDENTIAL Inspirations - Nantes 2017 ANNUAL RESULTS / 19
Slide 20: The strongest momentum among French developers
The strongest momentum among French developers (1) X 3 11,189 10,011 €2.6 bn in new orders 6,011 +12% +15% vs 2016 4,526 3,732 8.6% market share +4.2 points since 2013 2013 2014 2015 2016 2017 (in number of units reserved) (1) Vs 1.5x for the market for the same period – Source: French Ministry for
Slide 21: Outperformance fundamentals
Outperformance fundamentals CUSTOMER BRANDS QUALITY INNOVATION CUSTOMER RELATIONS LOCATION mon-cogedim.com customer website 2018 dedicated to project Les Echos / HCG tracking HABITABILITY 1 8 3D housing developer all sectors ARCHITECTURE configurator Application for neighbourhood services 2017 ANNUA
Slide 22: Optimising the offer thanks to customer knowledge
Optimising the offer thanks to customer knowledge FROM CUSTOMER KNOWLEDGE... ...TO MANAGING THE OFFER Understanding Managing a Monitoring the Housing Geolocation of Distribution Customer prospective repeat- format potential channels profiles customer base purchase rate demand Prudent Young professio
Slide 23: Strong operational growth
Strong operational growth COMMERCIAL PROJECTS UNDER SUPPLY REVENUE LAUNCHES CONSTRUCTION L’HOSPITALITÉ - Kremlin Bicêtre MAISON D’ARRÊT - Nantes EMBLEM - Bordeaux COGEDIM CLUB - Suresnes €4.0 bn €2.9 bn 210 €1.4 bn (incl. tax) (excl. tax) +4% +9% +43 projects +33% 2017 ANNUAL RESULTS / 23
Slide 24: Continued pipeline enhancement
Continued pipeline enhancement Sustainable neighbourhood development (2,000 housing) – Neuilly-sur-Marne €9.2 bn (incl. tax) potential value 130,000 m² floor area 42 months of visibility 1,650 new family housing 200 38,985 units renovated family housing 150 social student accommodation 99% 4 in high
Slide 25: Office
OFFICE Bridge - Issy-les-Moulineaux 2017 ANNUAL RESULTS / 25
Slide 26: Tailor-made products on prime locations
Tailor-made products on prime locations Remarkable architecture Tailor-made uses Image driver Open towards the city Flexibility and adaptability Embodiment of brands/businesses Designed for mixed-uses Convenient office to foster Sustainable, low-energy buildings creativity/productivity 2017 ANNUAL R
Slide 27: A unique business model
A unique business model THE MODEL MEDIUM-TERM INVESTOR DEVELOPER MEDIUM-TERM INVESTOR Assets redevelopment on high- potential locations In partnership or via AltaFund To be sold back in the medium term DEVELOPER VEFA / BEFA / CPI / MOD (Building contracts) For external investors / users And for 100%
Slide 28: Strong operational growth
Strong operational growth NEW ORDERS CONSTRUCTION DELIVERIES LEASING (CPI / VEFA) LAUNCHES ORANGE - Lyon TOUR ERIA- La Défense RUE DES ARCHIVES - Paris KOSMO – Neuilly/Seine €1.1bn 15 21 buildings 3 signatures (incl. tax) projects +80% 264,000 m² 236,850 m² > €60 million rents 2017 ANNUAL RESULTS /
Slide 29: Leading office developer in France
Leading office developer in France Investment Development (CPI / VEFA / MOD) 51 secured projects €4.5 bn (excl. tax) potential value 835,900 m² BRIDGE – Issy-les-Moulineaux EMBLEM BASSINS A FLOTS – Bordeaux at 100% 8 projects 39 projects / 499,500 m² 257,900 m² 4 MOD projects / 78,500 m² €3.1 bn pot
Slide 30: Retail
RETAIL Ferney Voltaire 2017 ANNUAL RESULTS / 30
Slide 31: Developing high potential niche markets
Developing high potential niche markets LARGE DOMINANT LARGE CONVENIENCE TRAVEL RETAIL SHOPPING CENTRES RETAIL PARKS PROXIMITY GARE MONTPARNASSE - Paris Cap 3000 - Nice PROMENADE DE FLANDRE - Roncq LA PLACE – Bobigny Existing flows Strong attractiveness Efficient « Services » and development price/p
Slide 32: Leading retail developer in France
Leading retail developer in France A MIXED MODEL PROPRIETARY DEVELOPMENT For long term ownership of the property, alone or in partnership DEVELOPMENT FOR THIRD PARTIES To sell at delivery to external investors GARE MONTPARNASSE - Paris €3.4 billion 614,750 €192 million potential value m² potential r
Slide 33: Iconic successes
Iconic successes Delivery Tenders won PROMENADE DE FLANDRE – Roncq FERNEY VOLTAIRE - Genève A 60,000 m² retail park A retail leisure centre within an 100% sold to Auchan group before exceptional catchment area at the boarder delivery of France and Switzerland 2017 ANNUAL RESULTS / 33
Slide 34: High performing portfolio
High performing portfolio Like-for-like Tenant sales in France net rental income +3.9% +2.0% vs. +1.5% in 2016 vs. -1.2% CNCC Bad debt Financial vacancy BERCY VILLAGE - Paris 1.2% 2.4% 40 assets €4.7 bn (incl. tax) €3.1 bn (incl. tax) at 100% group share vs. 2.3% in 2016 vs. 2.7% in 2016 839,100 m2
Slide 35: Cap 3000: final phase of the extension
Cap 3000: final phase of the extension 2017: end of restructuring and start of extension works CAP 3000 - Nice End of 2019: Delivery 135,000 m² and 300 shops Leading centre on the French mediterranean area 2017 Openings 2017 ANNUAL RESULTS / 35
Slide 36: Delivering long term performance
03. Delivering long term performance Cap 3000 - Nice 2017 ANNUAL RESULTS / 36
Slide 37: Another year of remarkable growth
Another year of remarkable growth Recurring Consolidated revenue 1,939.5 net result 256.3 16.42 € million (FFO) € million €/share +22.6% +33.5% +20.7% LTV Going 36.1 concern 2,793.3 174.0 % NAV € million €/share -110 bps +16.5% +9.1% 2017 ANNUAL RESULTS / 37
Slide 38: Doubling the FFO in three years
Doubling the FFO in three years X 2.0 €256 m €16.42 /share €192 m €161 m +33.5% +20.7% vs 2016 €126 m 2014 2015 2016 2017 2017 ANNUAL RESULTS / 38
Slide 39: Profitability driven by Residential and Office
Profitability driven by Residential and Office… FFO Residential & Office (€ million) (8.6) (4.4) 132.8 132.8 22.2 Tax Other +€37.5 Margin (incl. minorities) m effect 28.3 95.3 95.3 Volume 70.5 effect 44.3 2016 2017 Property development Profitability (operating revenue income FFO/revenue) €1.7 bn 9.3
Slide 40: … but also by Retail
… but also by Retail FFO Retail (€ million) (8.5) (2.1) 122.4 122.4 services and 24.5 financial dvlpmt +€22.8 costs 100.8 99.6 m 94.2 development 99.6 9.0 margin rental effect 2016 2017 Net rental income Development margin €174.7 million Promenade de 2014 2015 2016 2017 + 3.9% on a like-for-like bas
Slide 41: NAV: 174.0 €/share (+9.1%)
NAV: 174.0 €/share (+9.1%) Diluted Going Concern NAV (€/share) 4.8 (2.2) 174.0 6.9 other 159.6 property retail development 174.0 16.4 (11.5) 159.6 +14.4 € dividend FFO 2016 2017 137.3 129.8 2016 2017 Retail Property Development 2014 2015 2016 2017 +2.9% +4.7% 2017 ANNUAL RESULTS / 41
Slide 42: Net debt: €2.5 billion
Net debt: €2.5 billion Net debt (€ million) LTV ICR CAPEX Retail 36.1% 9.3x disposals , , others -110 bps +1.9x WCR shares dividends Property re- (incl. development FFO 2017 purchase minority interests) Duration Average cost 5 years 1.75% 4 months -17 bps 2017 ANNUAL RESULTS / 42
Slide 43: A Developer-Investor financial model
A Developer-Investor financial model A DEVELOPER OUTPERFORMANCE OF THE INVESTED CAPITAL (FFO/NAV) 9.4% 9.0% Altarea Strongly capitalised 8.0% Cogedim (€3.2 billion of equity) 7.8% 6.3% Low geared 5.9% 5.9% 5.9% Retail Reit (LTV: 36.1%) 5.7% 5.3% 5.2% Office 4.7% Reit Highly liquid (Available cash: €
Slide 44: Shareholders return
Shareholders return SHARE PERFORMANCE (TSR) DIVIDEND 18.5% €12.5 per share (1) (+8.7% vs. 2016) in 2017 98% Tax considerations 9.8€: Share-premium refund cumulative over 3 years 1.7€: Distribution from taxable income 1.0€: Distribution from SIIC income (1) Subject to shareholders' approval at the Ge
Slide 45: Altarea Cogedim 2020
04. Altarea Cogedim 2020 Joia Meridia - Nice 2017 ANNUAL RESULTS / 45
Slide 46: A business model adequately fitted to the current economic environment
A business model adequately fitted to the current economic environment Decreasing Improving Abundant Slow increase Resurgence of unemployment economy liquidity in interest rates inflation rate VALUE CREATION IS BASED ON OUR PRODUCTS 2017 ANNUAL RESULTS / 46
Slide 47: The Group's potential has never been stronger
The Group’s potential has never been stronger BACKLOG: €4.2 bn PIPELINE: €17.1 bn LTV: 36.1% Significant visibility Large amount Historically-low on future benefits of secured developments debt ratio THE BEST OPERATING TEAMS 2017 ANNUAL RESULTS / 47
Slide 48: Our medium term objectives
Our medium term objectives Urban Exceed 10% Implement our Deliver entrepreneur market share in twofold business the pipeline France strategy Travel retail and large Confirm our leader Expand our Reinforce property shopping centres position geographical coverage development projects openings in 2020-
Slide 49: Guidance 2020
Guidance 2020 A group ahead of its roadmap Numerous growth opportunities FFO around €300 million taking into account the growing tax impact on its non SIIC activity LTV around 40% A dividend policy ensuring continuity with the last few years 2017 ANNUAL RESULTS / 49
Slide 50: Glossary
05. Glossary 2017 ANNUAL RESULTS / 50
Slide 51: Glossary 1/4
Glossary 1/4 AltaFund: A discretionary investment fund, created in 2011, with €650 million in equity of which Altarea Cogedim is one of the contributors alongside leading institutional investors. Average cost of debt: Average cost including related fees (commitment fees, CNU…). Bad debt ratio / doub
Slide 52: Glossary 2/4
Glossary 2/4 FFO (Funds from operations) or recurring net result: Net result excluding changes in value, calculated expenses, transaction fees and changes in deferred tax. Group share. Financial vacancy: Estimated rental value (ERV) of vacant units as a percentage of total estimated rental value. Fr
Slide 53: Glossary 3/4
Glossary 3/4 NAV: Net asset value New Orders (Residential and Offices): value (incl. tax) of residential reservations and office orders. New Orders - Residential: New orders net of withdrawals in € including tax when expressed as a value. New Orders at 100%, with the exception of jointly controlled
Slide 54: Glossary 4/4
Glossary 4/4 Recurring net income or FFO (Funds From Operations): Net result excluding changes in value, calculated expenses, transaction fees and changes in deferred tax. Group share. Rental income on a like-for-like basis: Rental income excluding assets delivered, purchased or sold during the peri
Slide 55: Appendices
06. Appendices 2017 ANNUAL RESULTS / 55
Slide 56: Leading owner developer in France
Leading owner developer in France Secured pipeline (by metropolitan area) Portfolio of large mixed-use projects at the publication date Surface areas Potential value (€m)(b) Large projects at the Residential Office Total (m2)(a) Retail (m2) publication date(a) (units) (m2) (m2)(b) Grand Paris 1,848,
Slide 57: Office: a unique model
Office: a unique model Pending operations and pipeline Surface Revenue Surface areas at 100% Potential value at 100% Type Progress(b) At 31 December 2017 No. area (m²) (€m)(a) (m2) (€m excl. tax) Investments(a) 8 257,900 3,088 Group investment projects (8 257,900 920 Property developer (property dev
Slide 58: Retail REIT – Portfolio
Retail REIT – Portfolio Portfolio at 31 December 2017 Change in net rental income Value assessed by € million Change Figures at 100% No. GLA (in m²) Current gross rent (€m) (d) specialist (€m) (e) Controlled assets(a) 33 724,600 187.6 4,260 Net rental income 31 December 168.3 Equity assets(b) 7 114,
Slide 59: Group financial debt
Group financial debt Breakdown of gross debt at €3,696 million Maturity schedule for Group debt 29% Mortgage debt Credit markets (a) 48% 8% Property development debt 15% Corporate and bank debt (a) This figure includes €838 million in treasury notes. Duration and average cost 3.52% 6.0 5 years 4 2.8
Slide 60: Net asset value (NAV)
Net asset value (NAV) GROUP NAV 31/12/2017 31/12/2016 € millions Change €/share Change/share € millions €/share Consolidated equity, Group share 1,904.8 118.7 1,620.9 107.8 Other unrealised capital gains 722.1 636.5 Restatement of financial instruments 26.2 68.7 Deferred tax on the balance sheet for
Slide 61: Loan to Value (LTV)
Loan to Value (LTV) At 31/12/2017 € millions Gross debt 3,696 Cash and cash equivalents (1,169) Consolidated net debt 2,526 Shopping centres at value (FC)(a) 4,261 Shopping centres at value (EM affiliates' securities) and Other(b) 370 Investment properties valued at cost(c) 526 Office Investments(d)
Slide 62: Income statement
Income statement Changes in value, Funds from € millions Retail Residential Office Other Corporate estimated expenses and TOTAL operations (FFO) transaction costs Revenue 208.1 1,424.4 306.6 0.4 1,939.5 – 1,939.5 Change vs 31/12/2016 +1.2% +33.4% +1.4% na +23.0% +22.6%* Net rental income 174.7 – – –
Slide 63: Detailed balance sheet (1/2)
DETAILED BALANCE SHEET (1/2) € millions 31/12/2017 31/12/2016 NON-CURRENT ASSETS 5,437.9 5,034.9 Intangible assets 258.5 257.9 o/w goodwill 155.3 155.3 o/w brands 89.9 89.9 o/w client relations – 5.5 o/w other intangible assets 13.3 7.2 Property. plant and equipment 18.5 14.2 Investment properties 4
Slide 64: Detailed balance sheet (2/2)
DETAILED BALANCE SHEET (2/2) € millions 31/12/2017 31/12/2016 EQUITY 3,164.7 2,758.3 Equity attributable to Altarea SCA shareholders 1,904.8 1,620.9 Capital 245.3 229.7 Other paid-in capital 563.2 588.3 Reserves 773.2 635.1 Income associated with Altarea SCA shareholders 323.0 167.8 Equity attributa