Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — 9M 2019 Earnings Presentation
32 slides from Grand City Properties Sa's earnings presentation, November 2019
Slide 1: 9M 2019 Financial Results Presentation
9M 2019 FINANCIAL RESULTS PRESENTATION NOV 2019 Essen
Slide 2: Table of Contents
TABLE OF CONTENTS 1 Financial Highlights 2 Financial performance and Portfolio update 3 ESG 4 Guidance 5 Appendix 2
Slide 3: Financial Highlights 9M 2019
1 FINANCIAL HIGHLIGHTS 9M 2019 Net profit Rental and Steady growth in Net rental income Adjusted EBITDA €365 million revenue & profit operating income €285 million €220 million EPS (Basic) €418 million €1.80 Improved operational FFO I per share FFO I per share 65% of FFO I FFO I after perpetual note
Slide 4: Operational Results
2 OPERATIONAL RESULTS Selected Income Statement Data 1-9/2019 1-9/2018 NET RENTAL INCOME (IN € MILLION) ADJUSTED EBITDA (IN € MILLION) in € ‘000 unless otherwise indicated Rental and operating income 418,495 403,558 285 220 Net rent rental income 285,030 271,854 272 204 Property revaluations and cap
Slide 5: FFO I + II
2 FFO I + II 1-9/2019 1-9/2018 FFO I (IN € MILLION) FFO I (IN € MILLION) 9M 18 vs 9M 19 in € ‘000 unless otherwise indicated Adjusted EBITDA 219,971 204,331 CAGR Finance expenses (33,987) (34,119) 160 +11% 213 150 Current tax expenses (23,283) (19,404) 198 Contribution to minorities (2,858) (1,003)
Slide 6: EPRA NAV
2 EPRA NAV Sep 2019 Dec 2018 EPRA NAV (IN € MILLION) € ‘000 Per share € ‘000 Per share EPRA NAV Equity per the financial statements 4,858,096 4,666,987 CAGR EPRA NAV Incl. perpetual notes EPRA NAV Equity attributable to perpetual notes investors (1,030,482) (1,030,050) 5,012 4,783 +18% Equity exclud
Slide 7: Investment Property
2 INVESTMENT PROPERTY INVESTMENT PROPERTIES DEVELOPMENT (IN € MILLIONS) ACQUISITION CRITERIA 7,599 7,244 Acquisition in densely populated areas and major cities 6,388 High cash flow generating assets 4,796 Vacancy reduction potential Rent level per sqm is below market level (under-rented), upside po
Slide 8: Portfolio Overview
2 PORTFOLIO OVERVIEW Diversification among areas of sustainable economic fundamentals and demographic prospects PORTFOLIO OVERVIEW SEPTEMBER 2019 Value Area EPRA Annualized In-place rent Number of units Value Rental yield (in €M) (in k sqm) Vacancy net rent per sqm per sqm (in €M) (in €) (in €) NRW
Slide 9: Portfolio Distribution
2 PORTFOLIO DISTRIBUTION GB DISTRIBUTION BY VALUE SEPTEMBER 2019 London Hamburg Bremen Berlin NRW Halle Leipzig Dresden Frankfurt Nuremberg/ Mainz Fuerth Kaiserslautern Focus on value-add Mannheim opportunities in densely populated metropolitan areas Munich 9
Slide 10: Best in Class Berlin Portfolio – September 2019
2 BEST IN CLASS BERLIN PORTFOLIO – SEPTEMBER 2019 Berlin is the single largest city in the portfolio 24% PORTFOLIO OVERVIEW BERLIN of GCP’s QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN Portfolio Value 15% of GCP’s 2/3 of the Berlin portfolio is total rent 2/3 located in top tier neighborhoo
Slide 11: Berlin Rent Cap Proposal
2 BERLIN RENT CAP PROPOSAL TIMELINE OF THE PROPOSED LAW POTENTIAL EFFECT OF THE PROPOSAL IN OUR OPINION, THE ONLY SOLUTION ON THE BERLIN HOUSING MARKET TO EASE THE RENTAL MARKET IS TO 18 Jun Reference date for proposed rental cap, with rents capped as per the INCREASE HOUSING SUPPLY 2019 rent table
Slide 12: Impact of Berlin Rent Cap on GCP
2 IMPACT OF BERLIN RENT CAP ON GCP LIMITED IMPACT ON GCP - GCP’s portfolio is well distributed, with Berlin accounting for 15% of total portfolio rent. - 85% of the portfolio rent is located in other cities. GCP benefits from the strong geographical diversification with a wide footprint in locations
Slide 13: Portfolio Potential
2 PORTFOLIO POTENTIAL CURRENT ANNUALIZED NET RENTAL INCOME VS MARKET POTENTIAL* +8% 453 Conservatively including rent cap levels in Berlin Only 3% of units +20% 425 subject to rent restrictions from subsidization, beginning from 354 ~10 years 2020 Average tenancy length Sep 2019 Annualized Full mark
Slide 14: Portfolio NRW – September 2019
2 PORTFOLIO NRW – SEPTEMBER 2019 GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION 24% POPULATION DENSITY IN NRW of GCP’s Portfolio 4th largest city in Germany Dortmund Duisburg Essen Mönchengladbach Cologne 14 * all breakdowns are by values
Slide 15: High Quality London Portfolio - September 2019
2 HIGH QUALITY LONDON PORTFOLIO - SEPTEMBER 2019 LONDON PORTFOLIO WELL CONNECTED LONDON PORTFOLIO 12% of GCP’s Portfolio Over 90% of the portfolio is situated within a short walking distance to an underground/overground station The total London portfolio, including pre-marketed units consists of ca.
Slide 16: Portfolio East and North – September 2019
2 PORTFOLIO EAST AND NORTH – SEPTEMBER 2019 …with further diversification in Germany’s fast growing Eastern and largest Northern cities EAST PORTFOLIO NORTH PORTFOLIO 14% 5% of GCP’s of GCP’s Portfolio Portfolio Dresden Leipzig Halle Hamburg Bremen 16 * all breakdowns are by values
Slide 17: Financial Policy
2 FINANCIAL POLICY GCP has dozens of non-recourse separate bank loans from various GCP financial policy banks and maintains strong relations with a range of banks and Strive to achieve A- global rating in the long term credit providers LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower
Slide 18: Loan-to-Value
2 LOAN-TO-VALUE in € ‘000 unless otherwise indicated Sep 2019 Dec 2018 1) Investment property 7,575,243 7,298,879 Investment property of assets held for sale 415,860 132,137 COST OF DEBT Equity accounted investees 20,423 26,207 Total value 8,011,526 7,457,223 Low spreads (15/11/2019) 2) Total Debt 3
Slide 19: Capital Structure
2 CAPITAL STRUCTURE INTEREST HEDGING STRUCTURE SEP 2019 FINANCING SOURCE MIX 6% 11% 6% Bank Debt 6% 94% Hedged 34% 27% Straight Bond 3% 3% Convertible 59% 57% Equity 88% fixed & swapped Perpetuals capped Dec 2018 Sep 2019 variable ø Maturity as at ø Maturity as at ø Maturity as at ø Maturity as of y
Slide 20: Debt Coverage and Credit Rating
2 DEBT COVERAGE AND CREDIT RATING DEBT AND INTEREST COVER RATIOS – 1-9/2019 UNENCUMBERED ASSETS 6.5x €6.4 BN 5.4x 80% of €4.8 BN value €4.1 BN 65% of 64% of value value ICR* DSCR** *) Adjusted EBITDA / interest Dec Dec Sep **) Adjusted EBITDA / (interest + loan amortization) 2017 2018 2019 CORPORATE
Slide 21: Maintenance, Capex and Modernization
2 MAINTENANCE, CAPEX AND MODERNIZATION REPOSITIONING CAPEX AND MAINTENANCE CAPEX STRATEGY (IN € PER AVG SQM) Repositioning capex Modernization Pre-letting modifications ▪ Increasing property quality ▪ Improving standards of apartments ▪ Bring newly built and/or re-opening of 15.1 15.9 ▪ Support valu
Slide 22: ESG - Outperformer
3 ESG - OUTPERFORMER GCP publishes a Corporate Responsibility Report, demonstrating the Company’s commitment to sustainability by presenting to investors, business partners, employees and other stakeholders its activities and achievements and to embed the high ESG criteria of the Company. The report
Slide 23: 2019 Guidance
4 2019 GUIDANCE FY 2019 Guidance FFO I (in € millions) 211-213 FFO I per share (in €) 1.26-1.27 Guidance confirmed Dividend per share (in €) 0.82-0.83 FFO I per share 1.06-1.07 after perpetual notes attribution (in €) Total net rent like-for-like growth >3.5% LTV <45% Strong portfolio and solid oper
Slide 24: Appendix
GRAND CITY Properties S.A,
Slide 25: Proven Ability to Access Capital Markets
5 PROVEN ABILITY TO ACCESS CAPITAL MARKETS Aug-19 ➢ Issuance of Series V, 2034 straight bonds of €70m, under the EMTN programme, effective coupon of 1.5% until 2024 Jul-19 ➢ Issuance of Series U, 2025 straight bonds of €80m, under the EMTN programme, coupon of 0.75% Proven track record Jul-19 ➢ Issu
Slide 26: Analyst Coverage
5 ANALYST COVERAGE Analyst Research Target Price 32 31.7 28 28.0 28.0 24 26.5 25.5 25.2 25.0 25.0 24.5 23.5 23.0 23.0 23.0 20 21.0 21.0 21.0 21.0 20.0 16 17.5 12 8 4 0 Citigroup UBS First Berlin Berenberg HSBC Credit Suisse Kepler Commerzbank J.P. Morgan Deutsche Bank Bankhaus Lampe Hauck & Goldman
Slide 27: Share Development and Structure
5 SHARE DEVELOPMENT AND STRUCTURE GCP - Share Price and Total Return Since First Equity Placement (19.7.2012) Share price/conversion price throughout the Company’s issuances 24.81 *Refers to the conversion price of the convertible bonds issuance Frankfurt Stock Exchange **Effective conversion price
Slide 28: Outperforming
5 OUTPERFORMING Spread over mid-€-swap for straight bonds 2.50 21-11-2014: S&P rating upgrade to 'BBB-' 24-07-2015: S&P rating upgrade to 'BBB' Series D: remaining 2 years 09-02-2015: Moody’s assignment of 'Baa2' rating 07-09-2017:Moody's rating upgrade to 'Baa1' Series E: remaining 6 years 2.00 Iss
Slide 29: Management
5 MANAGEMENT CEO Christian Windfuhr Mr. Windfuhr is Grand City Properties’ CEO. Before joining Grand City Mr. Windfuhr served as CEO of Maritim Hotels, with 40 hotels in Germany. Prior to this he served as CEO of Mövenpick. He achieved the financial turnaround of Mövenpick, drove international expan
Slide 30: Management
5 MANAGEMENT Senior Management (continued) Uwe Schillinger Mr. Schillinger is GCP’s Director for Technical Service and responsible for the Facility Management. He has 12 years experience in facility management and joined GCP in 2006. Mr. Schillinger is an Head of Facility Management engineer in elec
Slide 31: Credit Rating Matrix
5 CREDIT RATING MATRIX Financial risk profile Moody's 12-18 Month 1 2 3 4 5 6 Forw ard View As of Min Modest Aggre- High - Intermediate Significant ssive Lever- 5/31/2019 [2] imal aged Real Estate / REIT Industry Grid [1] Factor 1 : Scale (5%) Measure Score 1 aaa a) Gross Assets (USD Billion) $10.7
Slide 32: Contact and Disclaimer
5 CONTACT Katrin Petersen Head of Communications E-mail: katrin.petersen@grandcity.lu www.grandcityproperties.com 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 accordanc
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