Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — H1 2017 Earnings Presentation
38 slides from Grand City Properties Sa's earnings presentation, August 2017
Slide 1: H1 2017 Earnings Call Presentation
Cologne Berlin Leipzig H1 2017 EARNINGS CALL PRESENTATION AUGUST 2017 Munich Berlin
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Financial and Portfolio performance 3 ESG Measures 4 Appendix 2
Slide 3: Capital market milestones
1 Capital market milestones Strengthening the financial position Issuance of Series G 2026 (1.375%) buyback of €321m Series D bonds 2021 (2%) Capital increase of €198 million at €18 per share A- Cost 7.5 Long-term target of years Debt Debt BBB+ Baa2 Positive Matur (S&P) 1.5% ity (Moody’s) Supporting
Slide 4: Financial Highlights H1 2017
1 Financial Highlights H1 2017 Outstanding Rental and Net rent Adjusted EBITDA FFO I operational operating income €159 million €121 million €85 million results €239 million Excellent FFO I per share 65% of FFO I Profit EPS (basic) Bottom-line €0.55 Dividend yield €225 million €1.24 results (FFO yiel
Slide 5: Profit and Loss
2 Profit and Loss Selected Income Statement Data 1-6/2017 1-6/2016 € million Net rental income, annualized in €m Revenue 240 209 CAGR +19% 338 Rental and operating income 239 209 319 Net rent 159 137 275 Capital gains, property revaluations and other income 168 379 Result on the disposal of inventor
Slide 6: Adj EBITDA & FFO
Adjusted EBITDA, annualized in €m 2 Adj EBITDA & FFO CAGR +15% 253 242 1-6/2017 1-6/2016 215 € million Adjusted EBITDA 121 108 Finance expenses (20) (18) Current tax expenses (15) (13) H1 2016 H1 2017 Aug 2017 Contribution to minorities (0.8) (0.7) Run Rate FFO I, annualized in €m FFO I 85 77 CAGR +
Slide 7: Investment Properties
2 Investment Properties Value Investment Properties in € bn Portfolio size in units CAGR +13% 5.4 Aug +23% Jun 2017 2017 4.8 2016 +24% 3.9 2015 86k 87k 83k 76k 2015 2016 June 2017 Acquisitions Acquisition Criteria multiple ø 20x 3.2k units Acquisitions across strategic Acquisition in densely populat
Slide 8: Portfolio Distribution
2 Portfolio Distribution Distribution by value June 17 Hamburg Others 17% Bremen Bremen/Hamburg /Hannover 7% NRW 30% Hannover Nuremberg/Fürth/ Berlin Munich 3% Mannheim/KL/Frankfurt Halle Leipzig /Mainz 6% Berlin 20% NRW Dresden/Leipzig Dresden /Halle 17% Frankfurt Mainz Nuremberg/ Focus on value-ad
Slide 9: Portfolio Overview
2 Portfolio Overview Meaningful diversification among areas of sustainable economic fundamentals and demographic prospects Portfolio overview June 2017 Value Area EPRA Annualized In-place rent Number of Value per Rental yield (in €M) (in k sqm) vacancy net rent per sqm units sqm (in €M) (in €) (in €
Slide 10: Portfolio Detailed Distribution as of June 2017
2 Portfolio Detailed Distribution as of June 2017* Largest European metropolitan area …With focus on areas with well distributed within NRW strong fundamentals Largest city in NRW Quality Berlin locations in top tier neighborhoods Others 20% Köln 19% Herne 2% Marl 2% Recklinghausen 2% Duisburg 10% S
Slide 11: EPRA NAV
2 EPRA NAV EPRA NAV in €m Jun 2017 Dec 2016 3,530 € million Per share € million Per share CAGR 3,208 Equity per the financial statements 3,371 3,065 +47% 2,864 Equity attributable to perpetual notes investors (666) (667) incl. perpetuals 2,541 Equity excluding perpetual notes 2,705 2,398 2,402 Effec
Slide 12: EPRA NAV Bridge
2 EPRA NAV BRIDGE 666 3,530 +198 -112.5 2,864 +238 2,541 Dec 2016 H1 2017 Equity increase Provisions for July Jun 2017 Equity attributable June 2017 EPRA NAV profit and other (Jun 2017) 2017 dividend EPRA NAV to perpetual notes EPRA NAV distribution investors incl. perpetuals 12
Slide 13: Financial policy
2 Financial policy GCP 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 maturity profile Good mix of long
Slide 14: LTV
2 LTV Jun Dec Cost of debt 2017 2016 € million Investment property 5,467 4,851 All-time low spreads Assets held for sale 146 146 Series D 2021 0.27% 1.5% Equity accounted investees 84 118 Series E 2025 0.79% Total value 5,696 5,114 Perpetual notes 2.21% 3.75% Total Debt 2,469 2,415 Cash and liquid a
Slide 15: Capital structure
2 Capital structure Hedging structure Financing source mix 98% Hedged Maturity Schedule strengthening financial position: • repurchase €321m of Series D 2021 bond ø 7.5 Years Issuance of €600 million • issuance of Series G 2026 bonds Series G 2026 coupon of 1.375% Repurchased €321 million in July 20
Slide 16: Debt coverage and rating
2 Debt coverage and rating Cover Ratios Unencumbered Assets € 3.2 bn € 2.8 bn 6.2 € 2 bn 5.0 59% of 56% of value value 53% of value ICR* DSCR** *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) Dec 2015 Dec 2016 Jun 2017 Corporate Credit Rating A- Long Term BBB+ Goal
Slide 17: Maintenance and Capex
2 Maintenance and Capex Capex strategy Upgrade utilities, Increase Occupancy & Reduce Cost & CO2 Emissions Increase install efficient attractiveness for Rent systems, maintain Capex existing and and increase asset prospective quality tenants Capex and maintenance € per sqm Leipzig 1-6/2017 1-6/2016
Slide 18: ESG Measures
3 ESG Measures Continue to improve corporate governance Continue to improve energy reduction Gas & electricity from renewable resources Vision mission guiding principles Strong work employment regulations Training and schooling for our over 800 employees on all levels 18
Slide 19: Appendix
Properties S.
Slide 20: Portfolio Potential
4 Portfolio Potential Residential in-place rent compared to market rent prices Current Annualized Rental Income vs. Market Potential* 440 338 85% 15% Aug 17 net rent run rate Annualized net rent market Below market level at market level potential * including vacancy reduction 6% of units 13 years su
Slide 21: Proven ability to access capital markets
4 Proven ability to access capital markets Equity and Bond Bookrunners Issuance of Series G 2026, 9-year straight bonds €600 million under the EMTN, coupon of 1.375% p.a. and repayment of €321m of Jul-17 Series D (2% coupon, 4 years to maturity) extending maturity and reducing cost of debt Strong ac
Slide 22: Analyst coverage
4 I. Analyst coverage Analyst research target price GCP‘s operations are researched by leading real estate market analysts, who conduct Indices independent equity research and target price recommendations FTSE EPRA/NAREIT: Developed Global Developed Europe GPR (Global Property 22 Research) 250 Index
Slide 23: Outperforming
4 I. Outperforming Share Price Since First Equity Placement (19.7.2012) Share ownership structure Share price/conversion price throughout the Company’s issuances Basic amount of shares: 164.8 million/ Fully diluted amount of shares: 183.5 million 23
Slide 24: Outperforming
4 I. Outperforming Straight Bond Series D Spread over mid-€-swap, remaining 4 years Straight Bond Series E Spread over mid-€-swap, remaining 7.5 years 3.75% Perpetual notes Spread over mid-€-swap 24
Slide 25: Most successful IPO since 2007
4 I. Most succesful IPO since 2007* According to the Frankfurter Allgemeine Zeitung Grand city properties is the most successful IPO in Germany since 2007 among 106 IPOs Source: Frankfurter Allgemeine Zeitung February 9, 2017 25 Nr. 34, page 23
Slide 26: Management
4 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 27: Management
4 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 Head of Facility Management and joined GCP in 2006. Mr. Schillinger is an engineer in elec
Slide 28: ESG Measures
4 ESG Measures Environmental Social Corporate Governance • GCP implements environment- • Tenant satisfaction is a top • Experienced and diverse friendly measures throughout its priority and an essential part of management board portfolio, with the goal of GCP’s business strategy • Four committees co
Slide 29: ESG Measures: Environmental and sustainability
ESG Measures: 4 Environmental and sustainability RENEWABLE ENERGY • Two thirds of properties have been switched to electricity from 100% renewable sources in the past two years, with the goal of gradually switching when the opportunity arises • All of GCP’s offices are supplied with energy from 100%
Slide 30: ESG Measures: Social Responsibility
ESG Measures: 4 Social Responsibility Neighborhood and community initiatives • The creation and maintenance of a comfortable community feeling is of high priority to Grand City, and this is the target of our various initiatives • GCP organizes over 150 family-friendly tenant events such as Easter eg
Slide 31: ESG Measures: Tenant Satisfaction
4 ESG Measures: Tenant Satisfaction Best-in-class tenant service through professional and 24/7 availability A dedicated and professional service team is available 24/7 for existing and prospective tenants, reachable through toll-free numbers, e-mail, and the recently launched GCP mobile app GCP‘s Se
Slide 32: ESG Measures: Tenant satisfaction through IT support
ESG Measures: 4 Tenant satisfaction through IT support Advanced IT/software systems to monitor the complete portfolio and to identify fluctuations of tenants, with immediate control over newly acquired assets Operational excellence with tenant management software - top service to ensure tenant satis
Slide 33: Business risk profile
4 S&P Anchor rating matrix Financial risk profile 1 2 3 4 5 6 Minimal Modest Significant Aggressive High Intermediate Leveraged 1 aaa/ Excellent aa a+/a a- bbb bbb-/bb+ aa+ GCP will continue strengthening its position within the business profile (Vonovia- BBB+)* 2 Business risk profile aa/ Strong aa
Slide 34: Maintaining strong and diverse financing sources
4 Maintaining strong and diverse financing sources GCP has over 40 non-recourse separate bank loans from around 20 banks Revolving credit facilities Strong corporate credit All credit facilities do not lines with international have a Material Adverse banking leaders Change (MAC) clause exceeding €20
Slide 35: Hannover Dresden Mannheim
Hannover Mannheim Berlin Dresden Essen Duisburg Leipzig Hamburg Berlin 35
Slide 36: Cologne Berlin Halle
Cologne Berlin Halle Gelsenkirchen Leipzig Berlin Berlin Frankfurt Nuremberg 36
Slide 37: Berlin Leipzig Munich
Berlin Leipzig Munich Bremen Wuppertal Dortmund 37
Slide 38: 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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