Slide 1: 2016 Financial Results Presentation
Munich Hannover Berlin 2016 FINANCIAL RESULTS PRESENTATION MARCH 2017 Berlin Hamburg
Slide 2: Table of Contents
TABLE OF CONTENTS HIGHLIGHTS FINANCIAL RESULTS CAPITAL MARKET ACHIEVEMENTS OPERATIONS AND PORTFOLIO OUTLOOK APPENDIX 2
Slide 3: Highlights
HIGHLIGHTS Market cap1) P&L Highlights €2.9bn Rental and operating income €274 million +119% EPS Profit €901 million -2% €1.11 Adjusted EBITDA €268 million +75% FFO I €166 million +76% 2016 FFO yield1) 6% FFO I per share €0.25 +47% RR FFO yield1) 8% Dividend per share €0.1632) +220% 2016 Div yield1)
Slide 4: Financial Results
FINANCIAL RESULTS 4
Slide 5: Profit and Loss
PROFIT AND LOSS 2016 2015 In € million Rental and Operating income (in € M) Rental and operating income 274 125 Capital gains, revaluations and other income 720 815 Share in profit from investment in equity-accounted 197 134 investees Property operating expenses (75) (29) Administrative and other ex
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA € million Feb 2017 RR 2016 2015 Operating profit 1,107 1,041 Depreciation and amortization 2 ~0 EBITDA 1,109 1,041 subtracted as these profits Capital gains, revaluations and other income (720) (815) include AT’s share in non- Share in profit from investment in equity-accounted opera
Slide 7: FFO I
FFO I € million Feb 2017 RR 2016 2015 Adjusted EBITDA commercial portfolio 277 194 93 Finance expenses (47) (20) Current tax (20) (9) Minorities in PCI and on Contribution to minorities (7) (8) SPV level FFO I commercial portfolio 120 55 FFO I adjustment for AT holding rate in GCP 46 39 AT‘s share i
Slide 8: Capex and AFFO
CAPEX AND AFFO Maintenance and Capex (in € M) Investment supporting Tenants & lettings Investments aimed to provide Mainly additional ongoing income drivers investments to sustain the asset quality Maintenance CAPEX € million 2016 2015 FFO I 165.6 94.0 Capex 9.5 4.6 AFFO 156.1 89.4 8
Slide 9: Total Assets
TOTAL ASSETS Investment Property (€ bn) In € million 2016 2015 Investment property 5,016 2,431 Equity accounted investee, holding in GCP SA 1,317 1,060 Equity accounted investee, other 240 123 Non-current assets 6,989 4,008 Assets held as held for sale 153 - Cash and liquid assets 836 387 Current as
Slide 10: EPRA NAV
EPRA NAV 2016 2015 EPRA NAV (€ bn) € million Per share € million Per share Equity per the financial statements 3,941 2,426 Equity attributable to perpetual notes investors (478) - Equity excluding perpetual notes 3,463 2,426 Effect in-the-money convertible bond 394 426 Effect of derivative financial
Slide 11: EPRA NAV Bridge (€ M)
EPRA NAV BRIDGE (€ M) EPRA NAV increase of 42% including perpetual notes EPRA NAV increased by 60% 11
Slide 12: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE Debt maturity profile (Dec 2016) Loan-to-Value 5.5 years average maturity 2% cost of debt Series B is in the money at a premium of 26% ** Full redemption option at par value from May 2017 at share price of €4.73 12 * assuming conversion of the convertible bonds which a
Slide 13: Financial Policy & Financial Flexibility
FINANCIAL POLICY & FINANCIAL FLEXIBILITY Aroundtown financial policy Strive to achieve A- global rating in the long term LTV limit at 45% Debt-to-cap ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios Unencumbered assets above 50% of total assets Long debt matur
Slide 14: Investment Grade Rating and S&P Anchor Rating Matrix
INVESTMENT GRADE RATING AND S&P ANCHOR RATING MATRIX Financial risk profile 1 2 3 4 5 6 Minim Modest Aggres High al Intermediate Significant sive Levera ged ‘BBB’ Investment Grade from S&P 1 Excellent aaa/ aa+ aa a+/a a- bbb bbb- /bb+ BBB 2 (DW) (GCP) (Vonovia- BBB+)* Business risk profile aa/ Stron
Slide 15: Capital Market Achievements
CAPITAL MARKET ACHIEVEMENTS 15
Slide 16: Capital Market Achievements
CAPITAL MARKET ACHIEVEMENTS Largest European real estate issuer in 2016 Issued over €2.5 bn in 2016 alone, continued issuances in 2017 to over €3 bn Equity and bond bookrunners First perpetual €2,550 M notes issuance in 2016 Established EMTN €1,160 M program of €1.5 bn in March 2017 €520 M Further d
Slide 17: Operations and Portfolio
OPERATIONS AND PORTFOLIO 17
Slide 18: Top Tier German/NL Cities
TOP TIER GERMAN/NL CITIES Group Regional distribution* (by Value) inhabitants per sqkm (2013) In-place rent 7.4 €/sqm EPRA Vacancy 7.4% 18 *Accounting for 36% in GCP portfolio
Slide 19: Commercial Investment Properties (February 2017)
COMMERCIAL INVESTMENT PROPERTIES (FEBRUARY 2017) Portfolio breakdown per asset type Investment Rentable area EPRA vacancy Annualized net In-place rent Value per sqm Rental yield properties (in €M) (in 000' sqm) rent (in €M) per sqm (in €) (in €) Office 2.962 1.428 9,9% 173 10,6 2.075 5,8% Retail 1.1
Slide 20: Top Tier Cities - Feb 2017
TOP TIER CITIES - FEB 2017 Asset Type Breakdown* *Accounting for 36% in GCP portfolio Residential geographical breakdown Commercial geographical breakdown 20 All breakdowns are by value
Slide 21: Top Tier Cities in the Asset Classes - Feb 2017
TOP TIER CITIES IN THE ASSET CLASSES- FEB 2017 Commercial Asset Type Breakdown* Retail geographical breakdown Office geographical breakdown Hotel geographical breakdown 21 All breakdowns are by value
Slide 22: Quality Locations in Berlin Inner City
QUALITY LOCATIONS IN BERLIN INNER CITY 62% of the Berlin portfolio is located within inner-city 16% are well located in strong and growing areas outside the inner circle, such as West Charlottenburg/Wilmersdorf, Lichtenberg, South Schöneberg, Potsdam, Schönefeld , Steglitz and others 78% in top neig
Slide 23: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE Limited dependency on single tenants due to large tenant base of approx. 2,500 tenants 23
Slide 24: Highly Performing Hotel Locations
HIGHLY PERFORMING HOTEL LOCATIONS Portfolio composition by category (by value) Most of the hotel assets are held through a 98% stake in Prime City 4% 3% Investment 12% As of February 2017 €1 bn and 540k sqm of well diversified 5 stars portfolio of branded hotels 4 stars 81% 3 stars High portion of 8
Slide 25: Commercial Portfolio – Potential to Come
COMMERCIAL PORTFOLIO – POTENTIAL TO COME Commercial current annualized Rental Income vs. Commercial in-place rent compared to market rent prices Market Potential including vacancy reduction Large upside potential for rent increase to market levels with very limited downside risk. Long lease terms wi
Slide 26: Management
MANAGEMENT CEO and CFO CEO of Aroundtown. Previously, Mr. Mayo was the CEO of the Dankner Group, which under his management was a leading Shmuel international investment conglomerate with over $8 billion of assets. Mr. Mayo is since 2006 in the management of Aroundtown and its Mayo subsidiaries and
Slide 27: Office, Retail and Hotel Management Team
OFFICE, RETAIL AND HOTEL MANAGEMENT TEAM Markus Head of commercial operations. Before joining the Group he was a board member of Strabag AG and CEO of Raiffeisen evolution, responsible for project Neurauter development on 11 European countries with a development volume of more than €2bn. Mr. Neuraut
Slide 28: Outlook
OUTLOOK 28
Slide 29: Outlook
OUTLOOK Regulated market • Upgrade the listing to an EU-regulated market • Enhance visibility and tradability • Inclusion into various stock indices • Planned within the course of 2017 Migration of company seat • Incorporation in Luxembourg from currently Cyprus • Continue as a Luxembourg corporatio
Slide 30: Appendix
APPENDIX 30
Slide 31: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Covering Analysts Analyst Research Target Price Recommendations are set with buy and above the current share price 31
Slide 32: Aroundtown's Share Price Performance
AROUNDTOWN‘S SHARE PRICE PERFORMANCE Share performance since initial placement of capital (13.7.2015) The share Frankfurt SE Placement Euronext Shareholder structure basic Shareholder structure fully diluted First equity issuance 13.07.2015 Number of shares (basic) 677,453,201 Number of shares incl.
Slide 33: Aroundtown's Bond Performance
AROUNDTOWN’S BOND PERFORMANCE Convertible bond Series B performance since placement (27.4.2015) Series B is in the money at a premium of 26% * Convertible bond Series C performance since placement (15.12.2015) Spread over mid-€-swap for straight bonds A and D, remaining 5 years 33 * at a share price
Slide 34: Strategy and Business Model
STRATEGY AND BUSINESS MODEL STRONG CASH FLOW, QUALITY Quality assets PORTFOLIO WITH GROWTH top tier cities, POTENTIAL Germany/NL REPOSITIONING AND Healthy capital OPERATIONAL Creation Attractive IMPROVEMENTS structure with a Keep improving the acquisitions below strong & company rating market & belo
Slide 35: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Proven business model and successful track-record Well allocated assets in the top cities of Germany and NL Highly cash generative portfolio resulting from successful repositioning Proven ability to drive operational performance, increase rents and occupancy and exten
Slide 36: Full Control over the Entire Operational Value Chain
FULL CONTROL OVER THE ENTIRE OPERATIONAL VALUE CHAIN • signs off on finalized rent contracts • Rental and marketing responsibility • monitors performance Head of • Lease management Operations • Contract negotiations • WALT management • 24/7 tenant service • Capex analysis Legal • Performance monitor
Slide 37: Lease Management as Drivers for Growth
LEASE MANAGEMENT AS DRIVERS FOR GROWTH – ACHIEVING LONG-TERM GROWING CASH FLOWS Localized one team touchpoint approach – building strong and long-term relationships with tenants. Teams become specialized with the individual asset, the tenants and the regional markets – proactively meeting tenants on
Slide 38: Rental and Marketing as Drivers for Additional Growth
RENTAL AND MARKETING AS DRIVERS FOR ADDITIONAL GROWTH Tailor made rental and marketing strategy on an asset basis Comprehensive vacancy analysis – conducting usability studies/letting concepts of vacant spaces in order to attract a large pool of diverse tenants Optimizing the usage of each asset and
Slide 39: Commercial Portfolio Management Strong Track Record in Property Value Creation
COMMERCIAL PORTFOLIO MANAGEMENT STRONG TRACK RECORD IN PROPERTY VALUE CREATION Portfolio Year of acquisition Total sqm Vacancy reduction net rental increase since acquisition at acquisition currently /at exit Bremen 1 2006 4,700 0% 0% 118% Dortmund 2006 4,000 0% 0% 110% Düsseldorf 1 2006 5,200 0% 0%
Slide 40: Regional Market Overview
REGIONAL MARKET OVERVIEW Hamburg ► GDP growth1: 1.9% ► Migration balance2: 0.9% Bremen ► Population density3: 2,334 per km2 ► GDP growth1 : 2.7% ► Migration balance2: 0.4% ► Population density3: 1,695 per km2 Hannover ► GDP growth (LS) 1: 2.1% NRW ► Migration balance2: 0.4% ► GDP share 2015 : 21% of
Slide 41: Germany – Growing and Strong Economy
GERMANY – GROWING AND STRONG ECONOMY GDP growth Debt/GDP 2016 Budget Surplus/Deficit 2015 Source: Eurostat Source: Eurostat, data as of Q3 2016 Source: destatis Germany has a growing GDP paired with a strong budget discipline… Unemployment rate 2016 Unemployment rate 1991-2016 Source: destatis Sourc
Slide 42: German Office Market: Low Supply and Strong Demand
GERMAN OFFICE MARKET LOW SUPPLY AND STRONG DEMAND… *In Top 7 locations according to DG HYP: Berlin, Munich, Construction of new commercial buildings in Germany Low addition of new office space* Frankfurt, Cologne, Hamburg, Düsseldorf, Stuttgart Increasing and above average office space take-up* Offi
Slide 43: German Office Market: Increasing Rents and Occupancy
GERMAN OFFICE MARKET …LEAD TO INCREASING RENTS AND OCCUPANCY Top 7 locations: Berlin, Munich, Frankfurt, Cologne, Hamburg, Office rents are increasing Düsseldorf, Stuttgart Decreasing vacancy… …across Germany… 43 Source: DG HYP German Real Estate Market report
Slide 44: German Retail Market
GERMAN RETAIL MARKET Development of wages and consumer prices Increase in real disposable income Disposable income is increasing as real wages are increasing while inflation is decreasing,… Consumer climate Strong increase in retail sales 44 …which leads to a higher consumer climate and higher retai
Slide 45: German Retail Market
GERMAN RETAIL MARKET Retail rents are increasing Especially in the Top 7 cities Source: DG HYP German Real Estate Market report Strong consumer spending from strong employment market supports increasing rents 45
Slide 46: German Hotel Market Overview
GERMAN HOTEL MARKET OVERVIEW Overnight stays across all accommodation types Transaction volume of hotel properties € millions millions RevPar development Rated hotels by category Insolvencies in the accommodation services sector # of bankruptcies Total: 8,521 *Jan 2017 Source: Smith Travel Research
Slide 47: Macro Fundamentals Support GCP
MACRO FUNDAMENTALS SUPPORT GCP Population in Germany Population Density Annualized growth in rent price index* 2012-2016 (residents per km²) From 1991 to 2015 the amount of households increased by 15.7% International and domestic immigration trends to cities also support House price index in real te
Slide 48: Hamburg Dortmund Amsterdam
Hamburg Dortmund Hannover Amsterdam Leipzig Berlin Berlin Baden-Baden Rheinsberg 48
Slide 49: Frankfurt Mainz Düsseldorf
Frankfurt Mainz Düsseldorf Rotterdam Nuremberg Stuttgart 49
Slide 50: Berlin Potsdam Munich
Potsdam Berlin Frankfurt Munich Amsterdam Hamburg Utrecht Halle Dresden 50
Slide 51: Disclaimer
DISCLAIMER IMPORTANT: This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distribute
Slide 52: Rotterdam Frankfurt Munich
Rotterdam Frankfurt Munich Leipzig Amsterdam Berlin 52