Grand City Properties SA · XETR:GYC
Grand City Properties SA — Investor Presentation (November 2016)
35 slides from Grand City Properties SA's investor presentation, November 2016
Slide 1: Company Presentation November 2016
Cologne Berlin Leipzig COMPANY PRESENTATION NOVEMBER 2016 Munich Berlin
Slide 2: Company Overview
COMPANY OVERVIEW GCP is a specialist real estate company focused on investing in and managing value-add opportunities in densely populated areas of the German real estate market As of October 2016, the company holds 84k units located mainly in Berlin, North Rhine Westphalia (NRW), Dresden, Leipzig,
Slide 3: Financial Highlights – 9M 2016
FINANCIAL HIGHLIGHTS – 9M 2016 Rental and operating income up 36% YOY, at €320 million for the first 9 months 2016 EBITDA increased 78% YOY to €630 million Adjusted EBITDA at €165 million for the 9 months 2016, up 35% YOY FFO I for the 9 months 2016 increased to €117 million, up 33% YOY FFO I per sh
Slide 4: Business Model and Acquisition Criteria
BUSINESS MODEL AND ACQUISITION CRITERIA Deal-sourcing network Due Diligence & negotiation of best possible deal terms Acquisition established for over 12 years Take-over Repositioning + Capex Long term Increase Rent & occupancy Hold (90%) Decrease operating costs & non- Yield & value increas
Slide 5: Germany: Stable and Strong Macro Fundamentals
GERMANY STABLE AND STRONG MACRO FUNDAMENTALS GCP conduct‘s its business activities in Germany‘s main cities and metropolitans, benefiting from the country‘s strong market environment and economic fundamentls. Debt/GDP 2015 Budget Surplus/deficit 2015 Unemployment rate 2015 Population Density Populat
Slide 6: Highly Performing Locations
HIGHLY PERFORMING LOCATIONS Bremen Regional distribution (by value) ► GDP growth1 : 2.7% ► Migration balance3: 0.4% ► Population density4: 1,695 per km2 Berlin ► GDP growth1: 3.0% ► Migration balance2: 1.2% ► Population density3: 3,891 per km2 Dresden/Leipzig/Halle NRW ► GDP growth (SN) 1 : 1.5% ►GD
Slide 7: Portfolio City Distribution (by value)
PORTFOLIO CITY DISTRIBUTION (by value) FUNDAMENTALLY STRONG LOCATIONS Dresden/Leipzig/Halle NRW Regional distribution Regional distribution Berlin Regional distribution Cologne Berlin Dresden 7
Slide 8: Defensive Portfolio Embedding Potential to Come
DEFENSIVE PORTFOLIO EMBEDDING POTENTIAL TO COME Current Annualized Rental Income vs. Market Potential Residential in-place rent compared to market rent prices including vacancy reduction at market rent Large upside potential for rent increase to market levels with very limited downside risk 6% of th
Slide 9: Key Financials (1)
KEY FINANCIALS (1) Total Gross Revenue1) (in € millions) Adj. EBITDA (in € millions) 1) Excluding revenue from sale of buildings FFO (in € millions) FFO I per share (in €) * Adjusted for one-time costs ** capital gain and capex figures are not annualized Net Profit (in € millions) Berlin 9 Nuremberg
Slide 10: Key Financials (2)
KEY FINANCIALS (2) Rental and operating income growth (in € millions) Adj. EBITDA growth (in € millions) FFO I growth (in € millions) FFO I growth per share (in €) Net Profit growth (in € millions) 10 Leipzig Dortmund
Slide 11: Key Financials (3)
KEY FINANCIALS (3) Portfolio size (in ’000 units) Total equity (in € millions) EPRA NAV (in € millions) Munich EPRA NAV EPRA NNNAV EPRA NAV net of EPRA NAV including Basic # of EPRA NAV incl. perpetual Diluted # of minorities perpetual notes Shares notes & Conv. Bond F * Shares Sep 30th 2016 (in 000
Slide 12: Debt Schedule
DEBT SCHEDULE Berlin Leipzig Investment grade rating by S&P of BBB+ (A-2 Short Term) and from Moody’s of Baa2 with a positive outlook. The ratings are supported by a strong financial profile which validates the success of the business model GCP’s long maturity schedule enables the Company to fully f
Slide 13: Debt Structure and Cover Ratios
DEBT STRUCTURE AND COVER RATIOS Interest Coverage Ratio (Adjusted EBITDA / interest) & Debt Service Coverage Ratio * ) Adjusted EBITDA / (interest + loan amortization) 1-9 2016 *) DSCR, also called fixed charge coverage ratio Hedging structure Unencumbered Assets* Financing Source Mix *Calculated as
Slide 14: GCP Financial Policy & Covenant Package
GCP FINANCIAL POLICY & COVENTANT PACKAGE GCP has the following 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 very conservative financial ratios • Unencumbered assets above 50% of t
Slide 15: Peers Analysis
PEERS ANALYSIS Peer companies Lower Upper Range Range Business Portfolio is in strong locations benefiting Amount of Units 340k 84k 17k from economy of scale but with no 397k managed In-place rent (€ per m2) 5.0 6.4 dependence on single locations 5.35 Vacancy rate 8.1% 10.7% 1.8% Top Locations Well
Slide 16: Moody's Rating Peer Comparison
MOODY’S RATING PEER COMPARISON Rating Sub- Broad Rating Rating Sub-Factor Factor Factor Weight Measure Score Measure Score Measure Score Measure Score (LTM Q3 16) (12-18 Month (LTM Q3 15) (LTM Q4 Forward View) 14) Liquidity Coverage 8.00% A A A A A A Baa Baa Liquidity and Debt Maturities ratio 6.25%
Slide 17: S&P Anchor Rating Matrix
S&P ANCHOR RATING MATRIX Financial risk profile 1 2 3 4 5 6 Minimal Modest Intermediate Significant Aggressive Highly Leveraged 1 Excellent aaa/aa+ aa a+/a a- bbb bbb-/bb+ Business risk profile GCP will continue strengthening its position within the business profile (Vonovia)* Leipzig 2 Strong aa/aa
Slide 18: Financial Highlights (in € M)
FINANCIAL HIGHLIGHTS (IN € M) 1-9/2016 1-9/2015 Rental and Operating Income 320.2 234.9 EBITDA 630.6 354.0 Adjusted EBITDA 164.7 121.6 Profit for the period 495.3 286.1 EPS (basic) in € 2.66 2.07 EPS (diluted) in € 2.43 1.76 FFO I 116.5 87.3 FFO I per share in € 0.76 0.71 FFO I per share in €, after
Slide 19: Financial Highlights (in € M)
FINANCIAL HIGHLIGHTS (IN € M) Berlin As of 30 Sep 2016 31 December 2015 Total Assets 6,108 4,689 Investment property 1) 4,819 3,877 Cash and liquid assets 644 389 Hamburg Total Equity 2,957 2,172 EPRA NAV including Perpetual Notes 3,297 2,544 EPRA NAV 2,631 2,066 Total loans and borrowings 982 847 S
Slide 20: Proven Ability to Access Capital Markets
PROVEN ABILITY TO ACCESS CAPITAL MARKETS EQUITY AND BOND BOOKRUNNERS Sep-16 Issuance of €200 million perpetual notes, bearing a coupon of 2.75% p.a. Nov-16 Feb-16 Issuance of Series F, 2022 convertible bonds of € 450m, coupon of 0.25% p.a BBB+ (A-2 Short Term) Jan-16 Completion of the conversion of
Slide 21: Financing Sources
FINANCING SOURCES GCP has over 40 non-recourse separate bank loans from over 20 banks Munich Cologne Berlin 21
Slide 22: Abundant Liquidity from Revolving Credit Facilities
ABUNDANT LIQUIDITY FROM REVOLVING CREDIT FACILITIES GCP signed strong corporate credit lines with international banking leaders exceeding €200 million All credit facilities do not have a Material Adverse Change (MAC) clause Revolving Credit Facilities as an additional liquidity source, increasing th
Slide 23: Analyst Coverage
ANALYST COVERAGE Strong buy recommendation from S&P Capital IQ GCP‘s operations are researched by leading real estate market analysts, who conduct independent equity research and target price recommendations Index inclusions: major FTSE EPRA/NAREIT indices FTSE EPRA/NAREIT Global FTSE EPRA/NAR
Slide 24: Outperforming
OUTPERFORMING Share Price Since First Equity Placement (19.7.2012) GYC Duisburg EPRA Germany (rebased) Straight Bond Series D Spread over mid-€-swap, remaining 5 years Berlin Dortmund Share price/conversion price throughout the Company’s issuances Basic amount of shares: 153.8 million 24 Fully dilut
Slide 25: GCP's Sustainable Competitive Advantages
GCP’S SUSTAINABLE COMPETITIVE ADVANTAGES • Efficient management, w ith know -how in identifying and extracting potential from properties • M anagement w ith remarkable track record and the best market operational and financial performance in the last decade • Outstanding IT/softw are systems support
Slide 26: Board of Directors and Advisory Board
BOARD OF DIRECTORS AND ADVISORY BOARD Christian Mr. Windfuhr is Grand City Properties’s CEO. Before joining the Grand City Group Mr. Windfuhr served as CEO of Windfuhr Maritim Hotels, with 40 hotels in Germany. Prior to this he served as CEO of Mövenpick. He achieved the financial turnaround of Möve
Slide 27: Management Track Record Value-Add
MANAGEMENT TRACK RECORD VALUE-ADD Track record of rapid, profitable and cash generative growth through both exceptional asset management and highly differentiated portfolio sourcing Portfolio Year of Units Total sqm Vacancy reduction Net rent/sqm (€/sqm) net rental acquisition increase since acquisi
Slide 28: Asset Management, Sales & Marketing, Operations
Bremen Düsseldorf Asset Management Mr. Timur Sezgin IT Development Operations / Acquisitions & Sales & Marketing Construction Maintenance Due Diligence Customer Relation Management (CRM) through Proprietary and Centralized IT system Continuous monitoring of portfolio operations, costs and staff perf
Slide 29: Rental Management with IT Support
RENTAL MANAGEMENT WITH IT SUPPORT Centralized 24/7 Service Center in Berlin for lead management Direct transfer of market demand / supply into product development by conversion of existing object (e.g. convert big 3-room apartment Mr. Kenan Wallenstein Sales and Marketing Director into 4-room apartm
Slide 30: Tenant Satisfaction with IT Support
TENANT SATISFACTION WITH IT SUPPORT Fully developed IT/software to monitor the complete portfolio and to identify fluctuations of tenants Immediate control on new portfolios Operational excellence with tenant management software - top service to ensure tenant satisfaction and reduce termination Cert
Slide 31: Rent Increase
RENT INCREASE Automated rent increase calculation Market limitation Martin Schlösser Rental team Legal limitation Dresden In-place rent like-for-like growth at 2.1% p.a. Gelsenkirchen Essen Leipzig 31
Slide 32: Cost Saving Measures
COST SAVING MEASURES Cost savings & yield improvements through new methods and wireless meters Changing fixed costs into variable costs Mr. Sebastian Remmert-Faltin Operational Manager Reduce costs for tenants and vacancy costs Essen Increase tenant satisfaction 32
Slide 33: Summary
SUMMARY Experienced management team with unique knowledge of the market Investing in value-add assets with Proven expertise with established downside track record protection In-house IT/software to support a strong team Conservative financial leverage with best financial profile in German real estat
Slide 34: Contact
CONTACT Or Zohar Director of Acquisition & Business Development E-mail: or.zohar@grandcity.lu www.grandcityproperties.com Halle Dortmund Braunschweig Berlin 34
Slide 35: 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
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