Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — FY2016 Earnings Presentation
37 slides from Grand City Properties Sa's earnings presentation, March 2017
Slide 1: Presentation of the Financial Result for the Year 2016
Cologne Berlin Leipzig PRESENTATION OF THE FINANCIAL RESULT FOR THE YEAR 2016 MARCH 2017 Munich Berlin
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Financial performance 3 Portfolio and operations 4 Outlook 5 Appendix 2
Slide 3: Highlights
1 Highlights +31% +27% +25% +34% Outstanding Rental and operating Adjusted EBITDA FFO I FFO II operational income €436 million €225 million €160 million €229 million results +172% +66% +31% +4% Updated dividend policy Excellent Profit over EPS (basic) FFO I per share to 65% of FFO I Bottom-line €653
Slide 4: Profit and Loss
2 Profit and Loss Rental and operating income in €m 462 Selected Income Statement Data 2016 2015 CAGR 436 +42% € million 333 Revenue 443 333 Revenue from sale of inventories 7 - 217 Rental and operating income 436 333 Capital gains, property revaluations and other income 598 311 2014 2015 2016 Feb 2
Slide 5: FFO
2 FFO FFO I in €m 168 CAGR 160 +44% 2016 2015 128 € million Adjusted EBITDA 225 177 76 Finance expenses (36) (26) Current tax expenses (27) (23) 2014 2015 2016 Feb 2017 Contribution to minorities (1.5) (0.6) Run-Rate FFO II in €m FFO I 160 128 229 Total result from disposal of properties 69 43 CAGR
Slide 6: FFO I Bridge (€ millions)
2 FFO I Bridge (€ millions) 102 -53 -2 -10 160 -4 -1 128 2015 FFO I Rental income Operating Adminstrative and Finance expenses Current tax Minorities 2016 FFO I expenses other expenses expenses Strong operational growth leading to significant bottom-line result 6
Slide 7: Investment Properties
2 Investment Properties Value Investment Properties in € bn Portfolio size in units 4.8 Feb 2016 2017 CAGR 3.9 +48% 2015 2.2 2014 83k 84k 76k 43k 2014 2015 2016 Acquisitions Acquisition Criteria multiple ø 14.7x Acquisitions in strategic Acquisition in densely populated areas and major cities focus
Slide 8: EPRA NAV
2 EPRA NAV EPRA NAV in €m 2016 2015 € million Per share € million Per share CAGR Equity per the financial statements 3,065 2,172 +37% Equity attributable to perpetual notes investors (667) (478) Equity excluding perpetual notes 2,398 1,694 Effect in-the-money convertible bond - 126 Effect of derivat
Slide 9: EPRA NAV Bridge (in € million)
2 EPRA NAV Bridge (in € million) 667 3,208 650 2,541 1,924 5 -38 2015 EPRA NAV Dividend Effects of Profit before def 2016 EPRA NAV Equity attributable EPRA NAV incl. distribution derivatives tax & others to perpetual notes perpetual notes investors 9 Significant shareholder value creation
Slide 10: 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 11: LTV
2 LTV Dec Cost of debt 2016 2015 € million Investment property 4,851 3,877 Assets held for sale 146 - 1.6% Equity accounted investees 118 - Total value 5,114 3,877 Total Debt 2,415 2,015 Cash and liquid assets 632 389 Net debt 1,783 1,626 LTV 34.9% 41.9% LTV 45.1% 45% Company BOD limit Significant h
Slide 12: Debt structure
2 Debt structure Hedging structure Financing source mix 3% 97% Hedged 14% 21% 25% 19% Bond 17% Bank Debt 24% 20% 8% Convertible 10% 3% 83% 52% 56% Equity 45% Perpetuals Perpetuals Fixed & Swapped Capped Variable Dec 14 Dec 15 Dec 16 Maturity Schedule 600 ø 7 Years 500 400 EUR millions 300 200 100 0
Slide 13: Maintaining strong and diverse financing sources
2 Maintaining strong and diverse financing sources GCP has over 40 non-recourse separate bank loans from over 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 €200
Slide 14: Debt coverage and rating
2 Debt coverage and rating Cover Ratios Unencumbered Assets € 2.8 bn 6.2 € 2 bn 4.7 56% of value € 1.1 bn 53% of value 52% of value ICR* DSCR** *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) Dec 2014 Dec 2015 Dec Corporate Credit Rating A- Long Term BBB+ Goal GCP
Slide 15: Business risk profile
2 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 16: Proven ability to access capital markets
2 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. GCP raised in 2016 alone Feb-16 Issuance of Series F, 2022 convertible bonds of € 450m, coupon of 0.25% p.a €650 million and full conversion Series C
Slide 17: Portfolio Distribution
3 Portfolio Distribution Distribution by value (Feb 17) Hamburg Others 18% Bremen/Hamburg NRW 32% Bremen 5% Nuremberg-Fürth/ Munich 4% Berlin Mannheim/ KL/Frankfurt Dresden/Leipzig/ Halle /Mainz 6% Berlin 17% Leipzig Halle 18% NRW Dresden Frankfurt Mainz Nuremberg/ Focus on value-add Fuerth opportun
Slide 18: Portfolio Overview
3 Portfolio Overview Meaningful diversification among areas of sustainable economic fundamentals and demographic prospects. Portfolio overview Feb 2017 Value Rentable area EPRA Annualized In-place rent Number of Value per Rental yield (in €M) (in k sqm) vacancy net rent per sqm (in €) units sqm (in
Slide 19: Portfolio Detailed Distribution as of Feb 2017
3 Portfolio Detailed Distribution as of Feb 2017* …With focus on areas with strong fundamentals Largest European metropolitan area well distributed within NRW Quality Berlin locations largest city in NRW Others 20% Köln 19% Herne 2% Marl 2% Recklinghausen 2% Duisburg 10% Solingen 2% Velbert 2% Gelse
Slide 20: Portfolio Potential
3 Portfolio Potential Residential in-place rent compared to market rent prices Current Annualized Rental Income vs. Market Potential* 584 462 85% 15% Below market level at market level Current Run-Rate Annualized market potential *including vacancy reduction 6% of units 14 years subject to rent rest
Slide 21: Occupancy & Maintenance Capex
3 Maintenance Capex Capex and maintenance per sqm 16.4 14.1 11.1 8.7 5.4 5.3 Halle 2015 2016 Maintenance per sqm Capex per sqm Capex strategy Upgrade utilities, Increase Occupancy & Reduce Cost & Increase CO2 Emissions install efficient attractiveness for Rent systems, maintain Capex existing and an
Slide 22: Management
3 Management CEO Christian Windfuhr Mr. Windfuhr is Grand City Properties’s 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 expa
Slide 23: Management
3 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 elect
Slide 24: ESG Measures: Social Responsibility
ESG Measures: 3 Social Responsibility Neighborhood and community building initiatives • Family friendly tenant events for Easter, summer and Christmas enhance bonding and strengthen the community • Supporting local associations such as a homework initiatives for school children, children soccer club
Slide 25: Tenant Satisfaction
3 Tenant Satisfaction Best-in-class service for our tenants through professional and 24/7 availability • 24/7 availability of dedicated and professional service team • Toll free numbers • GCP‘s Service Center is certified with two TÜV service quality certificates • Ticketing system – each tenant app
Slide 26: ESG Measures: Tenant satisfaction with IT support
ESG Measures: 3 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
Slide 27: ESG Measures: Cost and consumption saving measures
ESG Measures: 3 Cost and consumption saving measures Cost savings & yield improvements through new methods and wireless meters Changing fixed costs into variable costs Reduce costs for tenants and vacancy costs Increase tenant satisfaction Essen 27
Slide 28: ESG Measures: Sustainability and environmental
ESG Measures: 3 Sustainability and environmental HEATING • Replacing heating systems to district heating with the focus on renewable resources or centralized gas with the focus on climate-neutral produced gas • Insulation measures, e.g. windows, cellars RENEWABLE ENERGY • Majority of properties comm
Slide 29: 2017 Prime standard
4 2017 Prime standard Uplisting Change listing from unregulated market to fully regulated market (Prime standard) Growth and financing requirements have stabilized Potential to be included in strong indicies: based on current market cap free float we assume MDAX inclusion as likely Timeframe: within
Slide 30: Appendix
Properties S.
Slide 31: Analyst coverage and Index inclusions
5 I. Analyst coverage Analyst research target price GCP‘s operations are researched by leading real estate market analysts, who conduct independent equity research and target price recommendations Index inclusions FTSE EPRA/NAREIT: Developed Global Developed Europe GPR (Global Property Research) 250
Slide 32: Outperforming
5 I. Outperforming Share Price Since First Equity Placement (19.7.2012) Straight Bond Series D Spread over mid-€-swap, remaining 5 years Share ownership structure Share price/conversion price throughout the Company’s issuances Aroundtown (through Edolaxia Group) 54.94% 35.67% Fidelity Worldwide Inve
Slide 33: Most successful IPO since 2007
5 I. Most succesfull 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 33 Nr. 34, page 23
Slide 34: Hannover Dresden Mannheim
Hannover Mannheim Berlin Dresden Essen Duisburg Leipzig Hamburg Berlin 34
Slide 35: Cologne Berlin Halle
Cologne Berlin Halle Gelsenkirchen Leipzig Berlin Frankfurt Nuremberg Berlin 35
Slide 36: Leipzig Munich Bremen
Leipzig Munich Bremen Berlin Wuppertal Dortmund 36
Slide 37: 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