Colonial Sfl Socimi Sa · BME:COL
Colonial Sfl Socimi Sa — Inmobiliaria Colonial, SOCIMI — Q1 2023 Earnings Presentation
39 slides from Colonial Sfl Socimi Sa's earnings presentation, May 15, 2023
Slide 1: First Quarter Results 2023
First Quarter 2023 First Quarter Results 2023 May 15th, 2023
Slide 2: Disclaimer
Disclaimer By attending this presentation and receiving this document, you are agreeing to be bound by the following limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws and/or may result in civil, administrative or criminal liabilities.
Slide 3: Agenda
Agenda 01 Highlights 02_ Financials – Solid Cash Flow Growth 03 Operations – Ongoing strong momentum 04 Outperformance on the back of polarization 05 Conclusion 3
Slide 4: Presenting management team
Presenting management team PRESENTING MANAGEMENT TEAM Pere Viñolas Carmina Ganyet Carlos Krohmer Chief Executive Officer Chief Corporate Officer Chief Corporate Development Officer 4
Slide 5: Delivery of profitable Growth on the back of polarization
01 Highlights Delivery of profitable Growth on the back of polarization
Slide 6: Strong Operations
01 Highlights The Best Office Product delivering outperformance Strong Cash Flow Recurring Net Profit Recurring EPS EBITDA Revenues €38m €7.0Cts/sh €65m €90m +14% +14% +19% +5% Continued +5% Continued +13% Continued +11% +10% Operations1 Operations1 Operations1 LFL Strong Operations Occupancy Lettin
Slide 7: The Best Office Product delivering outperformance
01 Highlights The Best Office Product delivering outperformance 1. 1 Colonial delivers strong cash flow growth with full pricing power Strong Cash Flow Growth Pricing Power & Project Delivery 2. 2 Colonial achieves one of the highest GRI & NRI like for like growth rates in the sector 3 3. Inflation
Slide 8: Financials – Solid Cash Flow Growth
02 Financials – Solid Cash Flow Growth Strong top-line results driving profitable growth
Slide 9: Strong profitable growth on all metrics
02 Financials – Solid Cash Flow Growth Strong profitable growth on all metrics STRONG INCREASE IN NET RENTAL INCOME DRIVING SOLID EPS GROWTH GROSS RENTAL INCOME NET RENTAL INCOME EBITDA €m €m €m 90.3 +11% 76.9 +12% 65.4 +13% 81.6 57.8 +10% 68.4 +11% Like-for - Like-for - +19% Like Like Continued Ope
Slide 10: Recurring EPS with +14% growth on continued operations
02 Financials – Solid Cash Flow Growth Recurring EPS with +14% growth on continued operations 1. Recurring EPS of continued operations increases by +14%1 2. Recurring EPS post revenue decrease of disposals +5% vs previous year RECURRING PROFIT - €m RECURRING EARNINGS PER SHARE (EPS) (4.3) €cts/share
Slide 11: Gross Rental Income increases by +11%
02 Financials – Solid Cash Flow Growth Gross Rental Income increases by +11% 1. The Core Portfolio contributes with +9% growth in revenues on the back of superior pricing power 2. The Projects contribute with +3% growth in revenues 3. The acquisition of the Pasteur asset in Paris contributes with +5
Slide 12: Double digit rental growth with +10% like for like increase
02 Financials – Solid Cash Flow Growth Double digit rental growth with +10% like for like increase 1. The Gross Rental Income increases by +11% driven by the Paris portfolio with a +17% growth 2. The outstanding like for like growth of +10% highlights the outperformance of Colonial’s Prime portfolio
Slide 13: Financial Cost under control with 100% at fixed rate
02 Financials – Solid Cash Flow Growth Financial Cost under control with 100% at fixed rate 1. Standard & Poor’s BBB+ credit rating with stable Outlook confirmed in April-23 2. Colonial has 100% of the debt at fixed cost maintaining financial costs under control at 1.67%1 3. Disposal program decreas
Slide 14: Strong pricing power through prime positioning
03 Operations – Ongoing strong momentum Strong pricing power through prime positioning
Slide 15: Colonial delivers strong letting performance
03 Operations – Ongoing strong momentum Colonial delivers strong letting performance Colonial has signed more than 45,000 sqm in a quarter, reducing vacancy and locking in long-term contract maturities LETTING VOLUME SQM EPRA VACANCY1 MATURITY (years) 1st 4Q 2022 1Q 2023 4Q 2022 1Q 2023 potential ex
Slide 16: Colonial has one of the highest occupancy ratios in the sector
03 Operations – Ongoing strong momentum Colonial has one of the highest occupancy ratios in the sector thanks to its prime positioning 1. The Colonial Group increases it occupancy up to 97% due to strong quarterly letting performance 2. The Paris portfolio hast the strongest occupancy profile being
Slide 17: 3.3% of available high-quality space with solid letting prospects
03 Operations – Ongoing strong momentum 3.3% of available high-quality space with solid letting prospects > Scarce availability of high quality space in the CBD of Paris, Madrid and Barcelona > The remaining availability results mainly from entry into operation of the 22@ renovation program EPRA VAC
Slide 18: The Colonial Portfolio captures strong rental growth
03 Operations – Ongoing strong momentum The Colonial Portfolio captures strong rental growth 1. Colonial continues delivering a strong release spread, highlighting Paris with +10% 2. Strong Growth on Office ERVs in a quarter with +3% vs 12/22, Madrid outstanding with +8% RELEASE SPREAD2 GROWTH ON SI
Slide 19: Pricing Power & Alpha driving superior revenue growth
04 Outperformance on the back of polarization Pricing Power & Alpha driving superior revenue growth
Slide 20: Colonial's Prime Portfolio delivers the highest like for like growth
04 Outperformance on the back of polarization Colonial’s Prime Portfolio delivers the highest like for like growth 1. Colonial has delivered on Gross Rental Income & Net rental Income the highest like for like growth in the last 5 years 2. Colonial’s like for like rental growth is among the highest
Slide 21: Colonial has one of the highest occupancy ratios in the sector
04 Outperformance on the back of polarization Colonial has one of the highest occupancy ratios in the sector thank to its prime positioning EPRA Occupancy 1Q 23 Colonial’s strong occupancy profile delivers stable cash flows with solid growth Colonial vs Peers Paris CBD Occupancy at 99.5% Record occu
Slide 22: Prime Positioning allows to fully capture additional cash flows from indexation
04 Outperformance on the back of polarization Colonial’s Prime Positioning allows to fully capture additional cash flows from indexation 1. Colonial has captured 6% of revenue growth through indexation securing additional revenues for 2023 P/L 2. Released indexation references for contracts in 2Q 20
Slide 23: Prime Factory Approach delivers additional Cash Flow & Value Creation
04 Outperformance on the back of polarization Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation 1. Colonial is successfully delivering the project pipeline with one of the highest yield on costs in the sector 2. High levels of secured rents as solid source for addition
Slide 24: Prime Factory Approach delivers additional Cash Flow & Value Creation
04 Outperformance on the back of polarization Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation ONGOING PROJECTS LOUVRE SAINT HONORÉ MÉNDEZ ÁLVARO CAMPUS RIVES DE SEINE PARIS CBD MADRID CBD SOUTH PARIS CITY CENTER RELOADING 2H 2023 1H 2024 16,000 sqm 89,871 sqm 22,000
Slide 25: Strong track record on value creation through capital recycling
04 Outperformance on the back of polarization Colonial has a strong track record on value creation through capital recycling Colonial continues with its successful flight to quality strategy through active portfolio asset allocation ONGOING FLIGHT TO QUALITY THROUGH ACTIVE CAPITAL ALLOCATION 2015 Al
Slide 26: Colonial well positioned
05 Conclusion Colonial well positioned
Slide 27: Colonial's prime portfolio well positioned to navigate the market
05 Conclusion Colonial well positioned COLONIAL DELIVERS STRONG CASH FLOWS WITH FULL PRICING POWER 1 1. Recurring EPS with +14% growth on continued operations 2. 2 Double digit rental growth with +11% like for like increase on Net Rental Income 3. 3 Colonial’s prime portfolio with 97% occupancy and
Slide 28: Appendices Q&A
Appendices Q&A
Slide 29: Solid profitability with enhanced quality
APPENDICES Solid profitability with enhanced quality PROFIT & LOSS ACCOUNT Profit & Loss Account REVENUE - GROSS RENTAL INCOME GROUP RECURRING EBITDA €m €m Results analysis - €m 1Q 2023 1Q 2022 +11% +11% Gross Rents 90 82 90.3 71.3 Recurring EBITDA 71 64 81.6 64.4 Recurring financial result (23) (18
Slide 30: Net Rental Income growth of +12% (+11% like for like)
APPENDICES Net Rental Income growth of +12% (+11% like for like) Net Rental Income variance NRI Variance YoY Gross Rental Net Rental Income LFL Income LFL +12% 76.9 +10% +11% +11% GROUP 68.4 Like-for - Like PARIS +10% +9% 03/22 03/23 Diagonal 609 Washington Plaza MADRID +16% +26% flat (6%) BARCELONA
Slide 31: Solid Capital Structure with strong Hedging Profile
APPENDICES Solid Capital Structure with strong Hedging Profile Proactive hedging strategy… … Strong protection from interest rates increases Interest rate pre-hedges covering €2.4bn of future bonds maturity formalized in 11/21 pre interest rate increase Market rates Forward 3m Euribor rate Colonial
Slide 32: A solid capital structure
APPENDICES A solid capital structure Extension of Debt Maturities A Solid Financial Structure Maturity profile of debt facilities - €m 31/12/2022 31/03/2023 Green Bonds Col Green Bonds SFL ECPs Green loans Undrawn balances aaaa aaaa Net Debt €5,355m €5,046m LTV 38.7% 36.8%1 1.000 425 450 500 320 599
Slide 33: Office markets are driven by strong demand for prime
APPENDICES Office markets are driven by strong demand for prime Strong polarization for central locations both in rental and investment office markets Rental market – Recovering Take-up facing scarce supply Investment Market CBD Vacancy - % CBD Take-up – 000 sqm Office Investment volume in Île de Fr
Slide 34: Vacancy at very healthy levels in every segment
APPENDICES Vacancy at very healthy levels in every segment EPRA1 VACANCY PARIS 0.8% 0.2% 0.2% 0.4% Total 3/22 9/22 12/22 3/23 5% 4% 4% 3% Vacancy2 MADRID TOTAL 7% 5% 5% 5% 4% 4% 3% 3% Entries into operation Velázquez 86D Renovation pogram 2% 2% 3/22 9/22 12/22 3/23 3/22 9/22 12/22 3/23 BARCELONA 18%
Slide 35: Prime Factory Approach delivers additional Cash Flow & Value Creation
APPENDICES Colonial’s Prime Factory Approach delivers additional Cash Flow & Value Creation DELIVERING & RELOADING PROJECT PIPELINE Project pipeline Topped-Up GRI 03/23 GLA Total Cost Yield In €m Project City Delivery Let 1 (sqm) €m on Cost €82m 1 Diagonal 525 Barcelona CBD ✓ 5,706 100% 41 ≈ 5% 2 83
Slide 36: Investment markets for prime product remain active (Paris)
APPENDICES Investment markets for prime product remain active Asset Area Price GLA Cap. Value 19 François 1er CBD €150m 2,600 sqm €57,692/sqm (1Q 2023) 62 Champs Elysées CBD €100m 2,300 sqm €43,478/sqm (1Q 2023) 35 Montaigne CBD €200m 5,100 sqm €39,216/sqm (1Q 2023) PARIS 11 Hoche CBD €115m 3,300 sq
Slide 37: Investment markets for prime product remain active (Madrid)
APPENDICES Investment markets for prime product remain active Asset Area Price GLA Cap. Value Castellana 51 CBD €239m 18,700 sqm €12,750/sqm (3Q 2022) Almagro 9, José Abascal 56 & €315m CBD 33,731 sqm €9,338/sqm Miguel Ángel 11 (1Q 2023) MADRID Fray Luis de León 13 City Center €32m 4,300 sqm €7,442/
Slide 38: Investment markets for prime product remain active (Barcelona)
APPENDICES Investment markets for prime product remain active Asset Area Price GLA Cap. Value Portal de l’Àngel 40* City Center €105m 4,400 sqm €23,863/sqm (4Q 2022) * Includes Office & Retail Units Diagonal 662** CBD €240m 27,300 sqm €8,791/sqm Transaction not completed ** Sale price as of publishi
Slide 39: www.inmocolonial.com
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Inmobiliaria Colonial, SOCIMI — Q1 2023 Earnings Presentation on 6ix