Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — H1 2019 Earnings Presentation
30 slides from Grand City Properties Sa's earnings presentation, August 2019
Slide 1: H1 2019 Financial Results Presentation
H1 2019 FINANCIAL RESULTS PRESENTATION AUG 2019 Cologne
Slide 2: Table of Contents
TABLE OF CONTENTS 1 Financial Highlights 2 Financial and Portfolio performance 3 ESG 4 Guidance 5 Appendix 2
Slide 3: Financial Highlights H1 2019
1 FINANCIAL HIGHLIGHTS H1 2019 Net profit Rental and Consistent top-line & Net rental income Adjusted EBITDA € 250 million bottom-line growth operating income € 189 million € 146 million EPS (Basic) € 278 million € 1.28 FFO I per share FFO I per share 65% of FFO I Robust operational FFO I after perp
Slide 4: Operational Results
2 OPERATIONAL RESULTS Selected Income Statement Data H1 2019 H1 2018 NET RENTAL INCOME (IN € MILLION) ADJUSTED EBITDA (IN € MILLION) in € ‘000 unless otherwise indicated Rental and operating income 278,195 268,275 189 146 Net rental income 189,320 181,682 182 137 Property revaluations and capital ga
Slide 5: FFO I + II
2 FFO I + II H1 2019 H1 2018 FFO I (IN € MILLION) FFO I (IN € MILLION) H1 18 vs H1 19 in € ‘000 unless otherwise indicated Adjusted EBITDA 146,253 136,749 CAGR Finance expenses (22,807) (23,322) 106 +12% 212 99 Current tax expenses (15,429) (13,600) 198 Contribution to minorities (1,987) (714) FFO I
Slide 6: EPRA NAV
2 EPRA NAV Jun 2019 Dec 2018 EPRA NAV (IN € MILLION) € ‘000 Per share € ‘000 Per share EPRA NAV CAGR Equity per the financial statements 4,722,045 4,666,987 EPRA NAV EPRA NAV Incl. perpetual notes Equity attributable to perpetual notes investors (1,022,165) (1,030,050) incl. perpetual 4,783 4,879 Eq
Slide 7: Investment Property
2 INVESTMENT PROPERTY INVESTMENT PROPERTIES DEVELOPMENT (IN € MILLIONS) ACQUISITION CRITERIA 7,593 Acquisition in densely populated areas and major cities 7,244 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 JUNE 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 2,010
Slide 9: Portfolio Distribution
2 PORTFOLIO DISTRIBUTION GB DISTRIBUTION BY VALUE JUNE 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 – June 2019
2 BEST IN CLASS BERLIN PORTFOLIO – JUNE 2019 Berlin is the single largest city in the portfolio PORTFOLIO OVERVIEW BERLIN QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN* 21% of GCP’s Portfolio 2/3 of the Berlin portfolio is 2/3 located in top tier neighborhoods: Charlottenburg, Wilmersdorf, M
Slide 11: Berlin Rent Freeze Proposal
2 BERLIN RENT FREEZE PROPOSAL TIMELINE IN OUR OPINION, THE ONLY SOLUTION POTENTIAL EFFECT OF THE PROPOSAL TO EASE THE RENTAL MARKET IS TO INCREASE HOUSING SUPPLY 18 Jun Berlin Senate presented a resolution for the creation of a 2019 - Fewer and delayed investments in construction for Berlin Senate h
Slide 12: Portfolio NRW – June 2019
2 PORTFOLIO NRW – JUNE 2019 GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION 27% POPULATION DENSITY IN NRW of GCP’s Portfolio 4th largest city in Germany Dortmund Duisburg Essen Wuppertal Cologne 12
Slide 13: Portfolio East, London and North – June 2019
2 PORTFOLIO EAST, LONDON AND NORTH – JUNE 2019 …with further diversification in Germany’s fast growing Eastern and largest Northern cities as well as well high quality, well connected locations in London EAST PORTFOLIO LONDON PORTFOLIO NORTH PORTFOLIO 14% 11% 5% of GCP’s of GCP’s of GCP’s Portfolio
Slide 14: 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 credit providers Strive to achieve A- global rating in the long term LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower
Slide 15: Loan-to-Value
2 LOAN-TO-VALUE in € ‘000 unless otherwise indicated Jun 2019 Dec 2018 Investment property* 7,557,960 7,298,879 COST OF DEBT Investment property of assets held for sale 203,861 132,137 Equity accounted investees 27,037 26,207 Low spreads (16/8/2019) Total value 7,788,858 7,457,223 1.4% Series D 2021
Slide 16: Capital Structure
2 CAPITAL STRUCTURE INTEREST HEDGING STRUCTURE JUN 2019 FINANCING SOURCE MIX 11% 8% Bank Debt 5% 95% 7% Hedged Straight Bond 27% 31% 3% 3% Convertible 59% 58% Equity 88% fixed & swapped Dec 2018 Jun 2019 capped ø Maturity as at ø Maturity as at ø Maturity as at ø Maturity as of variable year end 201
Slide 17: Debt Coverage and Credit Rating
2 DEBT COVERAGE AND CREDIT RATING DEBT AND INTEREST COVER RATIOS – JUN 2019 UNENCUMBERED ASSETS 6.4x €5.9 BN 5.3x 76% of €4.8 BN value €4.1 BN 65% of 64% of value value ICR* DSCR** *) Adjusted EBITDA / interest Dec Dec Jun **) Adjusted EBITDA / (interest + loan amortization) 2017 2018 2019 CORPORATE
Slide 18: Maintenance, Capex and Modernization
2 MAINTENANCE, CAPEX AND MODERNIZATION CAPEX STRATEGY REPOSITIONING CAPEX AND MAINTENANCE (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 9.8 9.3 Support value
Slide 19: 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 20: 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% Operational profitability and i
Slide 21: Appendix
21 GRAND CITY Properties S.A,
Slide 22: Portfolio Potential
5 PORTFOLIO POTENTIAL RESIDENTIAL IN-PLACE RENT COMPARED TO MARKET RENT CURRENT ANNUALIZED NET RENTAL INCOME VS MARKET POTENTIAL 456 356 84% 16% Jun 2019 Annualized below market level at market level annualized market potential* * including vacancy reduction 5% of units 10 years subject to rent rest
Slide 23: 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 24: Analyst Coverage
5 ANALYST COVERAGE Analyst Research Target Price 32 31.7 28 28.0 28.0 24 26.5 26.0 25.5 25.5 25.0 25.0 24.5 24.5 23.5 23.0 23.0 20 22.0 21.0 21.0 20.0 19.0 16 17.5 12 8 4 0 Citigroup UBS First Berlin Berenberg Deutsche Bank HSBC Credit Suisse Kepler Commerzbank J.P. Morgan Goldman Sachs DZ Bank Bank
Slide 25: 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 26: Outperforming
5 OUTPERFORMING Spread over mid-€-swap for straight bonds 21-11-2014: S&P rating upgrade to 'BBB-' 2.50 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 27: 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 28: 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. Head of Facility Management Schillinger is an engineer in elec
Slide 29: 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 30: 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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