Aroundtown Sa · XETR:AT1
Aroundtown Sa — H1 2020 Earnings Presentation
56 slides from Aroundtown Sa's earnings presentation, August 2020
Slide 1: H1 2020 Financial Results Presentation
H1 2020 FINANCIAL RESULTS PRESENTATION AUG 2020 Berlin
Slide 2: Table of Contents
TABLE OF CONTENTS HIGHLIGHTS OPERATIONS AND PORTFOLIO FINANCIAL RESULTS GUIDANCE APPENDIX Frankfurt 2
Slide 3: Positive Portfolio Performance Despite Crisis
POSITIVE PORTFOLIO PERFORMANCE DESPITE CRISIS STRONG TOP LINE GROWTH H1 Collection rate €502m TOTAL €500m Net rental LIKE-FOR-LIKE 84% 95% +€560m Income +3.0% Total portfolio Excl. hotels Adj. EBITDA Revaluation +40% YOY H1 2020 +38% YOY gains SOLID PERFORMANCE €0.20 €0.17 €312m FFO I FFO I €384m €6
Slide 4: Quality Portfolio Combined with Robust Capital Structure
QUALITY PORTFOLIO COMBINED WITH ROBUST CAPITAL STRUCTURE Capital recycling Healthy balance sheet and High quality portfolio Defensive debt profile at a premium capital structure €26bn Group portfolio, 70% Office, €1bn signed YTD disposals: €2.7bn cash and liquid assets Long average debt maturity
Slide 5: Property Revaluations H1 2020
PROPERTY REVALUATIONS H1 2020 ALL VALUATIONS ARE DONE BY QUALIFIED AND INDEPENDENT EXTERNAL VALUATORS TOTAL VALUATIONS H1 2020: Total portfolio: +€560m +2.5% LFL REVALUATIONS all asset classes excluding hotels: +€766m (June 2020 vs Dec 2019) Hotel portfolio -€206m Two-thirds of the total p
Slide 6: Disposals Year-to-Date
DISPOSALS YEAR-TO-DATE BREAKDOWN PER ASSET TYPE BREAKDOWN PER ASSET REGION €1bn +6% 17x Non-core cities in Sachsen (13%), Thüringen (7%), Mecklenburg- Vorpommern (6%), Sachsen-Anhalt (3%), Brandenburg (3%), etc YTD signed Margin over Rent Retail 70% Disposals Book Value multiple Non-core cities 46%
Slide 7: Share Buyback Program
SHARE BUYBACK PROGRAM Beginning of June 2020, AT launched a share buyback program until the end of 2020 with a value of up to €500 million in order to benefit from the significant share price discount to the underlying net asset value 26% have been executed so far, well on-track to be finalized
Slide 8: Operations and Portfolio
OPERATIONS AND PORTFOLIO Munich 8
Slide 9: Strong Economies, Top Tier Cities, Central Locations, Quality Tenants
STRONG ECONOMIES TOP TIER CITIES CENTRAL LOCATIONS QUALITY TENANTS Germany & the Netherlands: Top 5 office cities: Berlin, Munich, Frankfurt, Strong diversification among asset classes 87% of the commercial portfolio Amsterdam & Hamburg with different fundamental drivers Two of the strongest e
Slide 10: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE Large Tenant Base with over 4,000 tenants Limited dependency on single tenants due to large tenant base of over 4,000 tenants, further supported by highly granular German residential market Top 10 tenants represent less than 20% of rent Long lea
Slide 11: Office Portfolio – Well-Located in Top Tier Cities
OFFICE PORTFOLIO – WELL-LOCATED IN TOP TIER CITIES OF GERMANY AND THE NL OFFICE 50% Well-diversified with no dependency on a single location (Top 4 59%: Berlin, Munich, Frankfurt & Amsterdam) 4.8y WALT With €3.3bn Berlin office assets, AT is the largest office Top 4: 59% (of offices) landlord in
Slide 12: Residential Portfolio
RESIDENTIAL PORTFOLIO RESIDENTIAL 12% GERMANY: NRW (20%), Berlin (25%), Dresden/Leipzig/Halle 9y average tenancy length Office (13%) and London (15%) 50% Retail 7% Only 1% rent deferral in H1 2020 due to Covid Logistics/Who lesale/Other German residential: the most resilient asset type in Europe 8%
Slide 13: Retail & Logistics/Wholesale Properties
RETAIL & LOGISTICS/WHOLESALE PROPERTIES Residential 12% Office 50% Retail 7% Mainly last-mile properties, resilient during the current disruption ~100% collection rate in H1 2020 and July. Hotel 23% LOGISTICS/WHOLESALE 8% 6.9y WALT Stuttgart 13
Slide 14: Retail & Logistics/Wholesale Properties – Retail
RETAIL & LOGISTICS/WHOLESALE PROPERTIES 91% collection rate in H1 2020 Residential Collection rate July 94% 12% Office 50% RETAIL 7% Half of the portfolio is essential goods - Grocery-anchored, 4.8y WALT pharmacies, drugstores, banks, DIY, Grocery-anchored at mainly long-leased retail boxes in locat
Slide 15: Hotel Portfolio
HOTEL PORTFOLIO WELL-DISTRIBUTED HOTEL PORTFOLIO ACROSS EUROPE WITH A FOCUS ON THE 4 STAR CATEGORY Hotel portfolio consisting of 23% of the total portfolio including 176 hotels well-distributed mainly in top tier cities in Europe The rental agreements are double or triple net, fixed plus CPI l
Slide 16: Hotel Property Revaluations
HOTEL PROPERTY REVALUATIONS 95% OF THE HOTEL PORTFOLIO HAS BEEN REVALUED DURING H1 2020 BY EXTERNAL VALUATORS BERLIN -3.1% COLOGNE -2.8% GERMANY -3.8% HAMBURG/LÜNEBURGER HEIDE +2.7% 50% of Hotel Portfolio MUNICH/BR -3.2% FRANKFURT -6.7% -3.4% LFL REVALUATIONS (June 2020 vs Dec 2019) BENELUX +0.4% NE
Slide 17: Hotel Portfolio – Domestic Demand
HOTEL PORTFOLIO Retail 7% Logistics/ Wholesale HOTELS 23% Residential 12% /Other 8% Domestic demand is largest in Germany (over 80%), UK 15.2y WALT (over 80%) and Netherlands (over 60%). Market data from STR has indicated that over the summer months domestic demand, or “Staycation”, has significantl
Slide 18: Update on Hotel Rent Collection
UPDATE ON HOTEL RENT COLLECTION H1 2020 HOTEL RENT COLLECTION H1 collection rate: 59%. Collection rate July 33%, AT is in continuous discussion with its hotel tenants, working on a case by case basis to find right solutions for each tenant and to 100% continue the strategic relationship with str
Slide 19: Tenants and Brands
TENANTS AND BRANDS Fixed of 10-25 years (WALT of 15.2 years) leases to over 30 different strong third party hotel operators, operating with high profitability for many years No dependency on any single tenant. Center Parcs (CP) is the largest tenant with 5% of the group’s rental income (19% of AT’s
Slide 20: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE DEBT MATURITY PROFILE STRONG DEBT AND HEDGING PROFILE 1,200 Millions Debt maturity 1,000 6.2 years 800 Ø maturity 95% 600 2% Cost of debt 3% 400 1.6% Ø cost of debt 200 fixed, swapped cap 0 variable 97% hedged 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Slide 21: Financial Results
FINANCIAL RESULTS Frankfurt 21
Slide 22: Profit and Loss
PROFIT AND LOSS 1-6/2020 1-6/2019 in € millions Net rental income, recurring long-term* (in €m) REVENUE 588.3 420.6 RECURRING LONG-TERM NET RENTAL INCOME 497.7 354.7 CAGR PROPERTY REVALUATIONS AND CAPITAL GAINS 564.0 679.4 +39% Share in profit from investment in equity-accounted investees 108.2 198.
Slide 23: Adjusted EBITDA
ADJUSTED EBITDA 1-6/2020 1-6/2019 in € millions Subtracted as these profits include AT’s share in non- Operating profit 1,048.2 1,175.1 operational profits generated by the equity accounted Total depreciation and amortization 1.7 0.8 investees EBITDA 1,049.9 1,175.9 Property revaluations and capital
Slide 24: FFO I & FFO II
FFO I & FFO II 1-6/2020 1-6/2019 CAGR FFO I PER SHARE (in €) in € millions FFO I per share ADJUSTED EBITDA COMMERCIAL PORTFOLIO, RECURRING LONG TERM 416.6 298.2 FFO I FFO I per share after perpetual per share Finance expenses (98.9) (70.3) FFO I per share after perpetual, Covid adjusted Current tax
Slide 25: EPRA NAV
EPRA NAV Jun 2020 Dec 2019 EPRA NAV (in €m) in € millions Per share in € millions Per share NAV PER THE FINANCIAL STATEMENTS 16,445.0 13,378.9 CAGR Equity attributable to perpetual notes investors (3,118.6) (2,484.0) EPRA NAV incl. perpetual notes NAV EXCLUDING PERPETUAL NOTES 13,326.4 10,894.9 15,5
Slide 26: Guidance
GUIDANCE FY 2020 FY 2019 Guidance FFO I after perpetual (in € million) 460-485 446 FFO I per share after perpetual (in €) 0.34-0.36 0.38 FFO I per share after perpetual, COVID adjusted (in €) 0.25-0.28 0.38 FFO I AFTER PERPETUAL INCLUDING YTD €1 BILLION SIGNED DISPOSALS, PLUS ADDITIONAL ~€1 BILLIO
Slide 27: Appendix
7° APPENDIX j 27 i Rotterdam
Slide 28: Commercial Investment Properties
COMMERCIAL INVESTMENT PROPERTIES Portfolio breakdown per asset type* Investment Lettable area Annualized JUNE 2020 EPRA Vacancy In-place rent/sqm (€) Value/sqm (€) Rental Yield property (€m) (k sqm) net rent (€m) Office 11,864 4,043 9.7% 510 10.9 2,934 4.3% Hotel 5,936 1,920 4.1% 318 14.1 3,092 5.4%
Slide 29: Best in Class Berlin Portfolio – June 2020
BEST IN CLASS BERLIN PORTFOLIO – JUNE 2020 89% of the commercial portfolio is located in top tier neighborhoods 89% • Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, Friedrichshain, Top Tier Lichtenberg, Schöneberg, Neukölln, Steglitz and Potsdam • Strongly benefiting from the unique dynamics & gro
Slide 30: Strategic Top Tier Hotels in Strong Locations
STRATEGIC TOP TIER HOTELS IN STRONG LOCATIONS WITH FASTER RECOVERY POTENTIAL Hotel Rooms Brand Hilton Berlin Gendarmenmarkt Prime Center 601 Bristol Berlin Ku’damm Prime Center (ex-Kempinski) 301 Die Welle H-Hotels Berlin Alexanderplatz 624 InterContinental Frankfurt Prime Center 473 Hilton London H
Slide 31: ESG Measures
ESG MEASURES Environmental Social Corporate Governance Experienced and diverse management AT implements environment-friendly board Tenant satisfaction is a top priority and measures throughout its portfolio, with an essential part of AT’s business Committees consisting mostly of the goal of redu
Slide 32: Conserving Energy Measures, Reducing Carbon Footprint
CONSERVING ENERGY MEASURES, REDUCING CARBON FOOTPRINT AROUNDTOWN HAS IMPLEMENTED AN ENERGY INVESTMENT PROGRAM, SUPPORTING THE COMPANY’S GOAL OF ACHIEVING A 40% CARBON EMISSIONS REDUCTION BY 2030. THE PROGRAM IS FOCUSED AROUND FIVE CORE COMPONENTS; INSTALLATION AND OPERATION OF SOLAR AND WIND POWER
Slide 33: Commitment to Sustainability
COMMITTMENT TO SUSTAINABILITY ESG ACHIEVEMENTS INCLUSION INTO In September 2019, Aroundtown received the EPRA BPR Gold award for the third consecutive year, the highest standard for financial reporting. In addition, Aroundtown received the EPRA sBPR in March 2020 Gold award for the second consecutiv
Slide 34: Highest Rated in German Commercial Real Estate
HIGHEST RATED IN GERMAN COMMERCIAL REAL ESTATE Financial risk profile Financial policy: 1 2 3 4 5 6 Minim Modest Intermediate Significant Aggre High al ssive Levera ged Strive to achieve A global rating in the long term 1 aaa/ bbb- aa a+/a a- bbb Business risk profile Excellent aa+ /bb+ (Vonovia BBB
Slide 35: Aroundtown Bond Covenants
AROUNDTOWN BOND COVENANTS Each of the bond covenants is met with a significant headroom. Internal financial policy is set at stricter levels ECB eligibility: Bonds issued under the EMTN Programme (Listed in the EU)* The bonds are unsecured and have the below covenant package: Overview of Coven
Slide 36: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Analyst Research Target Price 10.00 9.50 9.50 8.80 8.40 8.40 8.00 7.75 7.50 7.00 7.00 6.60 6.52 6.50 6.30 6.10 5.50 5.20 5.20 5.00 First Berlin SRC Research Hauck & M.M. Warburg HSBC Oddo BHF JP Morgan Kepler Commerzbank Berenberg Deutsche Bank Bankhaus Jefferies Baa
Slide 37: Aroundtown's Share Price Performance
AROUNDTOWN‘S SHARE PRICE PERFORMANCE Share performance and total return since initial placement of capital (13.7.2015) Aroundtown is the best performer in 2017/2018 amongst European real Estate 9.0 8.0 7.0 Aroundtown +69% EPRA Germany +100% 6.0 (rebased) 5.0 Issue price of €3.20 4.0 MDAX +34% (rebas
Slide 38: Capital Market Activity
CAPITAL MARKET ACTIVITY Capital market activity per year Capital market activity per issuance type 2015-2020 YTD €4.6bn €4.2bn €4.2bn Str. Bond €10bn €3.0bn €2.6bn Conv. €1.2bn Bond €0.8bn Equity €6.2bn €2.6bn €0.2bn 2015 2016 2017 2018 2019 2020 YTD Equity Perpetual Conv. Bond Equity (incl. Convers
Slide 39: Board of Directors / Advisory Board
BOARD OF DIRECTORS FRANK ROSEEN - DIRECTOR MARKUS LEININGER- INDEPENDENT DIRECTOR FORMER SENIOR BANKER WITH A FOCUS ON FINANCING, PRIVATE EQUITY AND REAL ESTATE. HIGHLY EXPERIENCED WITH A TRACK RECORD OF 30 YEARS. HELD VARIOUS SENIOR MANAGEMENT SERVED AS HEAD OF OPERATIONS WITH EUROHYPO AG AND RHEIN
Slide 40: Management Team
MANAGEMENT TEAM EYAL BEN DAVID - CFO SHMUEL MAYO - CEO SINCE 2008 IN THE MANAGEMENT OF AROUNDTOWN AND ITS SINCE 2006 IN THE MANAGEMENT OF AROUNDTOWN AND ITS SUBSIDIARIES. PREVIOUSLY, HELD A PRIVATE PRACTICE OF CERTIFIED PUBLIC SUBSIDIARIES. PREVIOUSLY, HE WAS THE CEO OF A LEADING ACCOUNTANTS FOCUSED
Slide 41: Berlin Potsdamer Platz: The Prime Commercial and Tourist Center
BERLIN POTSDAMER PLATZ: THE PRIME COMMERCIAL AND TOURIST CENTER landmark Potsdamer Platz Office Potsdamer Platz property Office Crowne Plaza Potsdamer Platz Hotel Checkpoint Charlie Potsdamer Platz Hotel Office Potsdamer Platz Checkpoint Charlie Residential (GCP) Office Potsdamer Platz Checkpoint Ch
Slide 42: Berlin Alexanderplatz: The Prime Commercial and Tourist Center
BERLIN ALEXANDERPLATZ: THE PRIME COMMERCIAL AND TOURIST CENTER Berlin Mitte Berlin Mitte Berlin Prime Center Mitte Pankow Residential (GCP) Residential (GCP) Hotel Mixed-use Pankow Mixed-use landmark Berlin Mitte Alexanderplatz Prenzlauer Berg Greifswalder str. Mixed-use campus Berlin Mitte Resident
Slide 43: Berlin Ku'damm: The Prime Commercial and Tourist Center
BERLIN KU’DAMM: THE PRIME COMMERCIAL AND TOURIST CENTER Berlin City Center Mitte Office Potsdamer Platz landmark AC by Marriot Ku’Damm KaDeWe Berlin Mitte Hotel Residential (GCP) Moxy by Marriot Berlin Mitte property Hotel Ku’Damm KaDeWe Office Berlin City Center Mitte Office Ku’damm /Uhlandstr. Ber
Slide 44: Frankfurt: Quality Assets in Central Locations
FRANKFURT: QUALITY ASSETS IN CENTRAL LOCATIONS landmark property Frankfurt Büro Center (FBC) Frankfurt HBF Frankfurt Stadtmitte Frankfurt Main Triangel InterContinental Frankfurt Frankfurt HBF Frankfurt Office Campus Office Office Office Office Hotel Office Office European Central Bank Headquarters
Slide 45: Development Rights: Prime Center Berlin Alexanderplatz
DEVELOPMENT/BUILDING RIGHTS: PRIME CENTER BERLIN ALEXANDERPLATZ PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL TLG’s office building on Berlin’s Alexanderplatz covers 55k The asset’s district “Mitte” is Berlin’s top office district Development plans include three new buildings,
Slide 46: Development Rights – Hilton Berlin Gendarmenmarkt
DEVELOPMENT/BUILDING RIGHTS - HILTON BERLIN PRIME CENTER GENDARMENMARKT PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL The 4 star Hilton Hotel is located in the heart of Berlin on The asset’s district “Mitte” is Berlin’s top office district Overground parking garage: Conversion
Slide 47: Development Rights – Berlin Kreuzberg/Alt-Treptow
DEVELOPMENT/BUILDING RIGHTS - BERLIN KREUZBERG/ALT-TREPTOW PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL The cinema center holds 7k sqm & is located across the Located between Mediaspree and Adlershof Science Park, Conversion into an office building: Park Center retail/office c
Slide 48: Development Rights – Berlin Treptow-Köpenick Brewery Project
DEVELOPMENT/BUILDING RIGHTS - BERLIN TREPTOW-KÖPENICK – THE BREWERY PROJECT PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL This office property is located in the Niederschöneweide Located between Treptower Park and Adlershof Science Conversion and development into mixed use urba
Slide 49: Development Rights – Frankfurt Main Central Train Station
DEVELOPMENT/BUILDING RIGHTS - FRANKFURT MAIN CENTRAL TRAIN STATION PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL The 22 storey office tower covers 21k sqm and is situated The office tower is located at the corner of Aroundtown recently acquired the office tower. The asset adjac
Slide 50: Development Rights – Dresden Prime Center
DEVELOPMENT/BUILDING RIGHTS – DRESDEN PRIME CENTER NEO DRESDEN Project NEO DRESDEN A modern office complex in Dresden’s vibrant and urban Neustadt district Neustadt Train Station With its 15k sqm lettable area, the project will provide high quality office space in 0.5km this tight supply market
Slide 51: Regional Market Overview
REGIONAL MARKET OVERVIEW Bremen Hamburg GDP growth1 : 3.3% GDP growth1 : 2.4% Migration balance2: 1.1% Migration balance2: 0.9% Population density3: 1,734 per km2 Population density3 : 2,397 per km2 Amsterdam Hannover GDP growth1 : 3.8% GDP growth1 (NI): 2.5% Migration balance2: 6.
Slide 52: Office Compared to Previous Crisis and Recovery
OFFICE COMPARED TO PREVIOUS CRISIS AND RECOVERY HIGH PRE-LET RATIOS GERMAN OFFICE VACANCY DEVELOPMENT 2007 vs 2020e PRE-LET RATIOS INCREASED DURING Q2 2020 AS A RESULT OF LOW NEW VERY LOW VACANCIES ENSURE THAT THE MARKET IS SUPPLY AT STRONG DEMAND. CURRENTLY WELL POSITIONED TO SUSTAIN A DOWNTURN Vac
Slide 53: German Office Yields vs German Bund Yields
GERMAN OFFICE YIELDS VS GERMAN BUND YIELDS The spread between German prime office yields and German bund yields expanded widely, with the current spread of 3.6% being significantly above the average Development of Prime Office Yield vs Bund Yield 395 364 bps 7% spread of 2.5% since 2004. 345 6% 0.
Slide 54: German Hotel Market – Domestic Travel Key for Recovery
GERMAN HOTEL MARKET - DOMESTIC TRAVEL WILL BE THE KEY FOR RECOVERY FROM COVID Share of domestic travel German hotel market is among the least volatile hotel markets in in % of total travel Europe due to: 85% High share of domestic travel 81% Low dependency on long-haul flights 61% 58% 57% 53% 47% 42
Slide 55: German Hotel Market – Fast Recovery During Past Crisis
GERMAN HOTEL MARKET – FAST RECOVERY DURING PAST CRISIS Owing to high share of domestic travel and low dependency on long-haul flights, German hotel market recovered swiftly from the financial crisis, much quicker than the rest of Europe and also at a higher acceleration rate Source: OECD, last data
Slide 56: 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