Investis Holding SA · SIX:IREN
Investis Holding SA — FY2019 Earnings Presentation
44 slides from Investis Holding SA's earnings presentation, Mar 25, 2020
Slide 1: Full Year Results 2019
FULL YEAR RESULTS 2019 25th March 2020
Slide 2: Disclaimer
Disclaimer This communication contains specific forward-looking statements, beliefs or opinions, including statements with respect to objectives, which are based on current beliefs, expectations and projections about future events and assumptions of the management of Investis Holding SA ("Investis")
Slide 3: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 3
Slide 4: Strong year with excellent operating performance
Strong year with excellent operating performance CHF 1.4 bln 170 Margin 8.4% 47 % CHF 172.8 m + 6.9% Properties Portfolio 3,049 EBIT margin Equity Net profit value Residential units Real Estate Services ratio FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 4
Slide 5: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 5
Slide 6: IPO commitments achieved in time
IPO Commitments done back in June 2016 …… ………. have been achieved in time 1. Investments into Portfolio: achievement of rental income of > CHF 50m by 2019 2. Strengthening Real Estate Services: achievement high single digit EBIT margin by 2019 3. Debt restructuring by 2019 no subordination of bond h
Slide 7: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 7
Slide 8: Leading Swiss residential property company in Lake Geneva region
Investis Group is a leading Swiss residential property company in the Lake Geneva region and a national real estate services provider Strategy and investment policy ▪ Focus on residential properties in GE and VD ▪ Buy and hold ▪ Continuous reduction on developments ▪ Expansion of portfolio through t
Slide 9: Strategy: Buy and hold, Rue du Nant 30 Geneva
Strategy: Buy and hold Acquisition costs/ appraisal value Rent Rue du Nant 30 – Geneva in CHF/m in CHF/k Acquisition in December 1998 1998 Residential block built in 1986 with 1.9 339 40 residential units and 2 retail units 2014 Renovation of bathrooms and kitchens 2015 Additional energy efficiency
Slide 10: Very focused and attractive portfolio around Lake Geneva
Very focused and attractive portfolio around the Lake Geneva Strategy buy and hold – realise rent upside potential Focus is on: ▪ Residential − 91% Residential − 9% Commercial VD: 23% ▪ Lake Geneva region ▪ Middle segment (no luxury apartments) ▪ Low vacancy rates GE: 73% VS: 4% FULL YEAR RESULTS 20
Slide 11: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 11
Slide 12: Real Estate Market in Geneva
Real Estate Market in Geneva Basic parameters influencing the real estate market in the Lake Geneva region Migration/ Demography Construction activity Regulations Capital Markets ▪ Into Switzerland ▪ Limited activity especially in GE ▪ Tax regime for corporations ▪ CHF interest rates expected ▪ From
Slide 13: Continuous positive net migration is an asset in a regulated environment
Continuous positive net migration is an asset in a very regulated environment The ongoing immigration cannot cover the demand ▪ Limited availability and high regulatory obstacles in the residential properties sector in the area increases the barriers to successfully enter the residential property in
Slide 14: Very low vacancy rates in Investis' key markets
Real Estate Market Switzerland Very low vacancy rates in Investis’ key markets – no signs of trend reversal Vacancyrates in 2019 for rented properties only Vacancyrate below avg/ drop in # of constructionpermits Vacancyrate aboveavg/ drop in # of constructionpermits Vacancy rate below avg / rise in
Slide 15: Geneva's vacancy rate growing at a slower pace than national trend
Residential Real Estate Market in Switzerland Geneva’s vacancy rate growing at a slower pace than the national trend (Vacancy rates for rented and owned properties combined) Source: BFS, OCSTAT FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 15
Slide 16: Residential Real Estate Market in Switzerland: rental growth and price outlook
Residential Real Estate Market in Switzerland More significant rebound in rental Positive outlook on residential prices in the growth in big city centers Lake Geneva region New leases Capital growth forecasts (2017-2021) in rental apartments Index Q1 2009 = 100 The size of the circles is proportiona
Slide 17: Real Estate Market in Switzerland – to sum up
Real Estate Market in Switzerland – to sum up Investis is active in markets where there is a constant situation of undersupply in the residential market – Lake Geneva region is Investis’ USP and highly differentiates from its peers in the Swiss residential market: ▪ Residential properties in city ce
Slide 18: Real Estate Services: active nationwide with local brands
Real Estate Services: active nationwide with well-known local brands Focus on two Activities and two national brands for PROPERTY MANAGEMENT FACILITY SERVICES ▪ Property management ▪ Caretaking services ▪ Co-ownership associations ▪ Cleaning services ▪ Center management ▪ Building technology ▪ Letti
Slide 19: Property Management – PRIVERA
Property Management – PRIVERA …. …. the leading independent Property Management company in Switzerland offers an integrated service throughout the lifecycle of a property with … Property Around 90% Co-ownership Construction management of revenues associations management ▪ Tenant selection, administr
Slide 20: Property Management – PRIVERA focuses on institutional clients
Property Management – PRIVERA …… …… focuses on institutional clients due to its nationwide presence ▪ Rents under Management at CHF 1.41bln ▪ 12 offices across the country, HC of around 450 ▪ Top 10 clients generate just over 1/3 of the total revenues ▪ Top 20 clients generate around 50% of the reve
Slide 21: Facility Services – hauswartprofis/conciergepro
Facility Services – hauswartprofis/conciergepro …. …. 900 experts have been taking care of the inside and outside of buildings for > 30 years Around 80% Maintenance Cleaning Building in residential services buildings ▪ Inhouse maintenance for apartment ▪ Apartments ▪ Guarantee daily operation buildi
Slide 22: Facility Services – hauswartprofis focus on innovation
Facility Services – hauswartprofis …… …… focus on innovation with experienced staff ▪ 13 offices across the country, with HC of around 900 ▪ Diversified business model with recurring, contract-based revenues ▪ Major player in the market combining all activities of facility services ▪ Management of 2
Slide 23: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 23
Slide 24: 2019 in a nutshell – excellent operating performance
2019 in a nutshell – excellent operating performance All targets set during the IPO achieved in time ▪ Investis Group: ▪ Net profit at CHF 172.8m ▪ Net profit excluding revaluation effect doubled to CHF 69.5m (CHF 35.6m) ▪ NAV per share excluding deferred taxes with regard to properties considerably
Slide 25: Investis Group: Overview on financial performance FY 2019
Investis Group: Overview on the financial performance for the FY 2019 (CHFm) FY 2019 ∆ in % FY 2018 FY 2017 FY 2016 FY 2019 Revenues Revenue 187.5 -5.1 197.5 190.0 161.9 EBITDA 46.7 +17.5 39.7 37.3 28.7 before revaluations/disposals 30% Income from revaluations / from 70% 64.8 +75.5 36.9 25.6 49.6 d
Slide 26: Properties: geographical concentration remains an asset
Properties: The geographical concentration in the Lake Geneva region remains an ASSET... Further growth in rental income coupled with achieved rental increases (CHFm) FY 2019 ∆ in % FY 2018 FY 2017 FY 2016 ▪ Like-for-like rental growth +0.4% (PY 1.7%) ▪ Low vacancy rate at 3.2% (PY 2.9%) Revenue 57.
Slide 27: Properties: Further expanding portfolio
Properties: Further expanding portfolio -> adding value & rental growth -> buy and hold Investment Properties: 170 properties – 3,049 residential units – Value CHF 1.44 bln by category: by canton: by apartment type 1) : 9% 4% 13% 29% 23% 28% 73% 30% 91% Residential Commercial GE VD VS 1-room 2-room
Slide 28: Properties: further potential for rent increases
Properties: further potential for rent increases still intact Rent potential based on CBRE appraisal (CHFm) 57.0 55.0 (CHFm) 47.5 +15% +4.1% 40.8 41.9 37.8 35.0 32.4 +1.0% 27.3 25.0 Current rent Market rent 1) 40.8 6.3% 41.9 72% of our residential and commercial rental contracts are indexed to the C
Slide 29: Real Estate Services: high single digit EBIT margin achieved
Real Estate Services: target of high single digit EBIT margin achieved Both activities achieving their respective targets – concentration to two national brands Revenue split (CHFm) FY 2019 ∆ in % FY 2018 FY 2017 FY 2016 Revenue 136.0 -8.0 147.8 147.6 136.1 EBIT 11.5 +49.2 7.7 7.8 3.9 49% 51% EBIT m
Slide 30: Corporate: gain from disposal of subsidiaries
Corporate: considerable gain from the disposal of subsidiaries Gain on concentrating the Real Estate Services portfolio to two national brands (CHFm) FY 2019 FY 2018 FY 2017 FY 2016 Operating costs -5.1 -5.0 -5.0 -4.2 Income from disposal of 18.2 n/a n/a n/a subsidiaries EBIT 13.1 -5.0 -5.0 -4.2 ▪ T
Slide 31: Investis Group: Excellent Net Profit
Investis Group: Excellent Net Profit Positive one-off effect led to a net tax income (CHFm) FY 2019 ∆ in % FY 2018 FY 2017 FY 2016 ▪ Financial income includes the effects of EBIT 127.2 +70.5 74.6 60.9 76.4 reducing the stake in Polytech Ventures Holding SA Financial income 5.8 n/a 0.1 0.6 2.0 ▪ Aver
Slide 32: Significant increase in NAV per share
Significant increase in NAV per share excluding deferred tax with regard to properties to CHF 67.61 Solid shareholders’ equity at 47% - sound Balance Sheet Balance Sheet (CHFm) 31.12.2019 ∆ in % 31.12.2018 31.12.2017 31.12.2016 Cash and cash equivalents 66 +98.0 33 51 53 Debt structure as per 31.12.
Slide 33: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 33
Slide 34: Outlook
Outlook ▪ AGM 28 April 2020 to take place under extraordinary circumstances without physical presence of shareholders – they will have to exercise their voting rights by giving power of attorney to the independent proxy ▪ All Board members to stand for re-election ▪ The two members of the Compensati
Slide 35: Corona Virus (COVID-19): possible impact for Investis
Corona Virus (COVID-19) What could be the impact for Investis? First thoughts … Investment market ▪ Lack of visibility - Transaction volumes might decrease ▪ Further decline in interest rates expected ▪ Rental income is less vulnerable as non-exchangeable Rents in residential properties ▪ Rents in a
Slide 36: Q&A
Q&A FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 36
Slide 37: Agenda
Agenda 1. Highlights of the financial year 2019 2. IPO achievements 3. Strategy 4. Market trends 5. Financial review 6. Outlook 7. Appendix FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 37
Slide 38: Main achievements since IPO
Main achievements since IPO ▪ Development of the property portfolio – Portfolio value up 64% since IPO to CHF 1.4 bln – CHF 585m invested since 30.6.2016 – Annualised full occupancy property rent increased to CHF 61m from CHF 42m (June 2016) – Revaluation gains: 2016: CHF 47m / 2017: CHF 25m / 2018:
Slide 39: Fundamental business strengths
Fundamental business strengths Value proposition PROPERTIES REAL ESTATE SERVICES Pure Swiss player Stable financing and financial flexibility to take advantage of market opportunities Established position with high barriers to entry and differentiated success factors Highly entrepreneurial managemen
Slide 40: Organisation
Organisation FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 40
Slide 41: Additional information on the Real Estate Market
Additional information on the Real Estate Market FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 41
Slide 42: Summary of the rental apartment market in the Lake Geneva region
Real Estate Market Switzerland Summary of the rental apartment market in the Lake Geneva region Source: Wüest Partner FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 42
Slide 43: Why interest rates will not rise
Why interest rates will not rise … Real interest rate is to remain negative for the near future 10y Swiss Gvt Bond 3m LIBOR Development of inflation month by months Mortgage rates for new business: Nominal interest rate: 10y Swiss Gvt Bond 10y fix LIBOR Roll-over 3months (3y) Real interest rate: Nom
Slide 44: Thank you for your attention!
Thank you for your attention! FULL YEAR RESULTS 2019 – IR PRESENTATION – 25 MARCH 2020 44