Icade Sa · EURONEXT:ICAD
Icade Sa — Investor Day (November 2015)
49 slides from Icade Sa's investor day presentation, Nov 30, 2015
Slide 1: Our Ambition for Icade: Focus and Growth
Millénaire Park (Paris 19th) OUR AMBITION FOR ICADE: FOCUS AND GROWTH November 30th, 2015
Slide 2: Agenda
Investor Day November 30th, 2015 2 AGENDA 1. Introduction 2. Our ambition for Icade: Focus and Growth 2.1. One clear five-track strategic roadmap 2.2. A simplified organization 2.3. One single committed team 2.4. A diligent timeline for execution 3. Conclusion
Slide 3: 1. Introduction
Millénaire Park from Veolia’s new headquarters building site (Paris 19th) 3 1. INTRODUCTION Photo Fernando Urquijo
Slide 4: Icade needs to clarify its strategy
1. INTRODUCTION Investor Day November 30th, 2015 4 ICADE NEEDS TO CLARIFY ITS STRATEGY The new strategic plan proposed by the management was unanimously approved by the Board Icade needed to clarify its strategy, penalized by a lack of visibility During the last 3 years, our performance has been bro
Slide 5: Icade at a glance
1. INTRODUCTION Investor Day November 30th, 2015 5 ICADE AT A GLANCE Investment: 5th largest real estate company Healthcare: undisputed leader in France A PROPERTY PORTFOLIO in France(1) GAV: €3.1bn(3) OF €9.0bn (30/06/15)(4) Offices: €3.5bn - 39% - 100% Paris area Annualized gross IFRS rents: €203m
Slide 6: Icade at a glance
1. INTRODUCTION Investor Day November 30th, 2015 6 ICADE AT A GLANCE Strong financial structure LTV: 38.2% (30/06/15) Rating S&P: BBB+ Cost of debt: 2.8% (30/06/2015) 8th largest REIT in Europe(1) Market capitalization: €4.9bn Dividend policy based on EPRA recurring result: 5.6% dividend yield(1) A
Slide 7: Our vision on real estate markets
1. INTRODUCTION Investor Day November 30th, 2015 7 OUR VISION ON REAL ESTATE MARKETS Offices & Business parks: “customer experience: emerging client needs” Close to lowest point of cycle (“JLL Clock”) Tenants want to benefit from market situation to choose better locations, but still cautious on ren
Slide 8: Our vision on real estate markets
1. INTRODUCTION Investor Day November 30th, 2015 8 OUR VISION ON REAL ESTATE MARKETS Healthcare: no more a niche market Healthcare spending growth above GDP growth Healthcare private sector always more competitive than public sectors New players around: clearly now a genuine asset class Cap. rate co
Slide 9: On top we can leverage additional strengths
1. INTRODUCTION Investor Day November 30th, 2015 9 ON TOP WE CAN LEVERAGE ON ADDITIONAL STRENGTHS 1.2 Outstanding million sqm teams… Market leader Significant land 52% for innovation development potential held by …with talented long-term and shareholders senior Brand image professionals built on tru
Slide 10: Icade: challenges facing us
1. INTRODUCTION Investor Day November 30th, 2015 10 ICADE: CHALLENGES FACING US 1 VACANCY RATE OF BUSINESS PARKS AND IMPACT ON VALUATION 2 PROFITABILITY OF DEVELOPMENT DIVISION 3 NON OPTIMIZED “SILO-BASED” ORGANIZATION 4 CRITICAL SIZE FOR THE SERVICE DIVISION
Slide 11: Strategic alternatives reviewed
1. INTRODUCTION Investor Day November 30th, 2015 11 STRATEGIC ALTERNATIVES REVIEWED FAVOR FOCUS ONLY ON MONETIZE SELL THE PROPERTY INVEST ONE ASSET THE PARIS THE HEALTHCARE DEVELOPMENT TO REACH CLASS REGION BUSINESS BUSINESS CRITICAL SIZE or or or or or KEEP INVEST ALSO IN GROW IT FURTHER DEVELOP SY
Slide 12: 2. Our ambition for Icade: Focus and Growth
Pedestrian bridge above Paris ring road (between Macdonald boulevard and Millénaire12Park) 2. OUR AMBITION FOR ICADE: Photo Fernando Urquijo FOCUS AND GROWTH
Slide 13: Our ambition
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 13 OUR AMBITION 1. 2. FOCUS ON BE A TOP OUR LEADERSHIP PERFORMING POSITIONS TO DELIVER REAL ESTATE GROWTH AND INTEGRATED “BEST IN CLASS” PLAYER RESULTS
Slide 14: Our plan
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 14 OUR PLAN A DILIGENT A SIMPLIFIED TIMELINE FOR ORGANIZATION EXECUTION 1 2 3 4 ONE CLEAR FIVE-TRACK ONE SINGLE STRATEGIC ROADMAP COMMITTED TEAM
Slide 15: Services business
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 15 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP SERVICES BUSINESS TRACK 1 KEY FIGURES KEY MESSAGES CRITICAL SIZE AND PROFITABILITY DIFFICULT TO ACHIEVE WITHOUT SIGNIFICANT INVESTMENTS 2014 SALES 2014 EBITDA € 45m € 1.7m Tour At
Slide 16: Services business: future outside of Icade
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 16 1 SERVICES BUSINESS: FUTURE ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP OUTSIDE OF ICADE TRACK 1 The Services business accounts for less than 3% of Icade’s turnover with low EBIT margin While know-how is clearly recognized by
Slide 17: Property development
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 17 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP PROPERTY DEVELOPMENT TRACK 2 KEY FIGURES KEY MESSAGES HY 2015 HY 2015 HOUSING RESERVATIONS BACKLOG BOTTOM OUT IN 2015 (value) € 405m € 1.5bn CONFIDENT IN OUR BACK TO GROWTH AND PR
Slide 18: Property development: strong track record
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 18 1 PROPERTY DEVELOPMENT: ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP STRONG TRACK RECORD TRACK 2 PROPERTY DEVELOPMENT SALES EVOLUTION RETURN ON EQUITY(3) (€m) (%) (1) 1,245 1,142 1,092 1,106 1,092 1,031 1,071 (2) 975 14.6% 12.
Slide 19: Property development: building synergies to boost profitability
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 19 1 PROPERTY DEVELOPMENT: BUILDING ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP SYNERGIES TO BOOST PROFITABILITY TRACK 2 Based on its pipeline, Icade Promotion will fuel the Investment activities of Icade: €100m in 2016, €150m p
Slide 20: Business parks
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 20 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP BUSINESS PARKS TRACK 3 KEY FIGURES (30/06/15) KEY MESSAGES ANNUALIZED GROSS GAV IFRS RENTS € 3.9bn € 214m FLIGHT OPERATIONAL PLAN TO INCREASE TO QUALITY OCCUPANCY RATE NUMBER FINA
Slide 21: Business parks
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 21 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP BUSINESS PARKS TRACK 3 A too diversified portfolio: differentiated GAV evolution Business parks valuation is being finalized Potential asset impairments in H2 2015 Focus on Busine
Slide 22: Offices
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 22 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP OFFICES TRACK 4 KEY FIGURES (30/06/15) KEY MESSAGES ANNUALIZED GROSS IFRS RENTS € 175m OUR MAIN ASSET CLASS IN CURRENT MARKET GAV CONDITIONS, WE € 3.5bn PLAN TO INCREASE FINANCIAL
Slide 23: Offices
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 23 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP OFFICES TRACK 4 Keep on investing in the Paris Region through our own pipeline Leverage on in-house know-how and Icade Promotion track record to enlarge our investment scope to Fr
Slide 24: Case study on synergies and regions: Sky 56 in Lyon Part-Dieu
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 24 1 CASE STUDY ON SYNERGIES AND REGIONS: O NE CLEAR FIVE-TRACK STRATEGIC ROADMAP SKY 56 IN LYON PART-DIEU TRACK 4 Surface: 30,700 sqm KEY CONSIDERATIONS LYON’S REAL ESTATE MARKET(1) Price €134m ETT Development On top of in
Slide 25: Healthcare (Icade Santé)
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 25 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP HEALTHCARE (ICADE SANTÉ) TRACK 5 KEY FIGURES (30/06/15) – PROFORMA VITALIA KEY MESSAGES GAV ANNUALIZED GROSS IFRS ICADE SANTÉ KEY € 3.1 bn(1) RENTS VALUE CREATION: CONTRIBUTOR (56
Slide 26: Healthcare (Icade Santé)
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 26 1 ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP HEALTHCARE (ICADE SANTÉ) TRACK 5 Continue to enlarge our leadership in the French market through selective acquisitions Value creation on top of existing cash-flows through active
Slide 27: Innovation & CSR are a significant part of the strategic plan
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 27 1 INNOVATION & CSR ARE A SIGNIFICANT ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP PART OF THE STRATEGIC PLAN CSR & INNOVATION Industrial joint ventures to develop 4 new services and products Lighting and healthcare technologie
Slide 28: Innovation & CSR are a significant part of the strategic plan
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 28 1 INNOVATION & CSR ARE A SIGNIFICANT ONE CLEAR FIVE-TRACK STRATEGIC ROADMAP PART OF THE STRATEGIC PLAN CSR & INNOVATION A very collaborative CSR governance: Bi-annual CSR Strategic Committee gathering independent experts
Slide 29: Our plan
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 29 OUR PLAN A DILIGENT A SIMPLIFIED TIMELINE FOR ORGANIZATION EXECUTION 1 2 3 4 ONE CLEAR FIVE-TRACK ONE SINGLE STRATEGIC ROADMAP COMMITTED TEAM
Slide 30: Adapt our organization and favor a collaborative culture
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 30 2 ADAPT OUR ORGANIZATION AND FAVOR A SIMPLIFIED ORGANIZATION A COLLABORATIVE CULTURE Services Services Investment Icade Investment Property Icade Pôle Acquisitions Asset- Healthcare Development Investment Healthcare Deve
Slide 31: Our plan
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 31 OUR PLAN A DILIGENT A SIMPLIFIED TIMELINE FOR ORGANIZATION EXECUTION 1 2 3 4 ONE CLEAR FIVE-TRACK ONE SINGLE STRATEGIC ROADMAP COMMITTED TEAM
Slide 32: One team committed to Icade's success
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 32 3 ONE TEAM COMMITTED ONE SINGLE COMMITTED TEAM TO ICADE’S SUCCESS All employees: variable compensation based on Cash-flow target Executive committee: one single rule to align interests on variable compensation Incentive
Slide 33: Our plan
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 33 OUR PLAN A DILIGENT A SIMPLIFIED TIMELINE FOR ORGANIZATION EXECUTION 1 2 3 4 ONE CLEAR FIVE-TRACK ONE SINGLE STRATEGIC ROADMAP COMMITTED TEAM
Slide 34: Starting execution right now
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 34 4 A DILIGENT TIMELINE FOR EXECUTION STARTING EXECUTION RIGHT NOW ACTION PLAN FOR 2016 Reduce business parks vacancy rate Start developing synergies between investment and development Exit services Implement “aligned” com
Slide 35: Ambition
2. OUR AMBITION FOR ICADE: FOCUS AND GROWTH Investor Day November 30th, 2015 35 4 A DILIGENT TIMELINE FOR EXECUTION AMBITION 2015 2016-18 guidance ambition We confirm the 2015 guidance on: Maintenance of our current financial policy • EPRA Recurring Net Result GAV increase (Group share): • Group Cas
Slide 36: 3. Conclusion
Veolia’s new headquarters building site (Paris 19th) 36 3. CONCLUSION Photo Fernando Urquijo
Slide 37: Key takeaways
3. CONCLUSION Investor Day November 30th, 2015 37 KEY TAKEAWAYS 1 EXIT SERVICES BUSINESS 2 DEVELOPMENT: BACK TO PROFITABILITY AND DELIVER SYNERGIES WITH INVESTMENT 3 FLIGHT TO QUALITY ON BUSINESS PARKS COMBINED WITH AN OPERATIONAL PLAN TO REDUCE VACANCY OFFICES: BETTER PROFITABILITY THROUGH DEVELOPM
Slide 38: Conclusion
3. CONCLUSION Investor Day November 30th, 2015 38 CONCLUSION We now have a strategic plan… …A PLAN FOCUSED ON GROWTH AND VALUE CREATION We have the operating roadmap We are aligned with shareholders… …AND THE BOARD IS FULLY SUPPORTIVE Market timing is increasingly with us We already have the pipelin
Slide 39: Appendices
Tour EQHO (La Défense, 92) 39 APPENDICES Photo Fernando Urquijo
Slide 40: A controlled diversification
APPENDICES Investor Day November 30th, 2015 40 A CONTROLLED DIVERSIFICATION BREAKDOWN BY OPERATOR (POST-ACQUISITION) (% of total portfolio value) Dunkerque Drancy Paris 20.1% Ermont Le Bourget Saint-Omer Villeneuve d’Ascq Poissy Bry-sur- Le Chesnay Marne Arras Générale de Santé Valenciennes Charento
Slide 41: A value-creating pipeline
APPENDICES Investor Day November 30th, 2015 41 A VALUE-CREATING PIPELINE Not committed Not CAMPUS committed LA DÉFENSE ÎLOT E (Nanterre, 92) (Saint-Denis, 93) Icade’s portfolio 70,000 sqm 28,500 sqm Rent: €29.1m Rent: €7.8m in the Paris region Completion: 36 months Completion: 30 months after launch
Slide 42: Details of development pipeline
APPENDICES Investor Day November 30th, 2015 42 DETAILS OF DEVELOPMENT PIPELINE REMAINING GEOGRAPHICAL SPACE INVESTMENT COST(1) YIELD PRE- PROJECT SECTOR (sqm) (M€) (€ M) ON COST COMPLETION LETTING H2 2015 2016 PIPELINE LAUNCHED 78,600 56.7 119.5 371.9 8.0% Veolia Business park Aubervilliers 45,000 4
Slide 43: Yield
APPENDICES Investor Day November 30th, 2015 43 YIELD(1) 11.4% 11.1% 10.2% 9.0% 8.9% 8.2% 8.1% 8.0% 8.0% 7.9% 7.9% 7.6% 7.6% 7.5% 7.4% 7.4% 7.3% 7.3% 7.2% 7.2% 7.1% 7.1% 7.1% 6.9% 6.9% 6.9% 6.9% 6.9% 6.8% 6.8% 6.8% 6.8% 6.7% 6.7% 6.6% Offices, France Business parks Healthcare Non-strategic TOTAL COMM
Slide 44: IFRS income statement
APPENDICES Investor Day November 30th, 2015 44 IFRS INCOME STATEMENT (€ m) 30/06/2015 30/06/2014(1) Revenues 714.4 757.9 EBITDA 242.2 234.4 Depreciation and impairment net of investment subsidies (135.7) (134.5) Income from asset sales 33.3 1.1 Operating profit 34.0 99.6 Cost of net debt (62.1) (67.
Slide 45: EPRA income statement and per-share data
APPENDICES Investor Day November 30th, 2015 45 EPRA INCOME STATEMENT AND PER-SHARE DATA 30/06/2015 30/06/2014 Earnings from Earnings from property property investment investment (€ m) (EPRA) Other TOTAL (EPRA) Other TOTAL Rental income 273.3 - 273.3 275.2 - 275.2 Net rental income 247.3 - 247.3 244.
Slide 46: Income statement by division
APPENDICES Investor Day November 30th, 2015 46 INCOME STATEMENT BY DIVISION PROPERTY INVESTMENT PROPERTY DEVELOPMENT SERVICES INTER-DIVISION TOTAL (€ m) 30/06/14(1) 30/06/15 30/06/14(1) 30/06/15 30/06/14 30/06/15 30/06/14(1) 30/06/15 30/06/14 30/06/15 Revenues 282.1 279.2 465.5 422.7 20.6 20.3 (10.3
Slide 47: Residential property development
APPENDICES Investor Day November 30th, 2015 47 RESIDENTIAL PROPERTY DEVELOPMENT HOUSING RESERVATIONS - VALUE (€ m) BACKLOG (€ m) 1,028 1,082 1,012 697 811 826 856 555 460 435 463 458 433 405 359 326 355 S1 2010 S2 2010 S1 2011 S2 2011 S1 2012 S2 2012 S1 2013 S2 2013 S1 2014 S2 2014 S1 2015 31/12/201
Slide 48: Liabilities under control
APPENDICES Investor Day November 30th, 2015 48 LIABILITIES UNDER CONTROL LTV RATIO UNDER CONTROL “BANK” ICR IMPACTED BY IMPAIRMENT LOSSES 4.7 x 52.0%(1) 40.3% 4.0 x 3.5 x 3.9 x 4.0 x Guidance 3.4 x 40.0% 36.9% 3.4 x 2.7 x 37.5% 38.2% 2 x(1) 31/12/2013 30/06/2014 31/12/2014 30/06/2015 31/12/2013 30/0
Slide 49: Market conditions favouring optimisation of liabilities
APPENDICES Investor Day November 30th, 2015 49 MARKET CONDITIONS FAVOURING OPTIMISATION OF LIABILITIES DIVERSIFICATION OF SOURCES OF FINANCING Good access to sources of financing Increase in use of commercial papers from €203m to €280m Other liabilities Balance sheet structure strengthened by increa