Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — FY2019 Earnings Presentation
34 slides from Grand City Properties Sa's earnings presentation, March 2020
Slide 1: FY 2019 Financial Results Presentation
FY 2019 FINANCIAL RESULTS PRESENTATION MAR 2020
Slide 2: Table of Contents
TABLE OF CONTENTS COLOGNE BERLIN HALLE LONDON Financial performance 1 Financial Highlights 2 3 ESG 4 Guidance and Portfolio update
Slide 3: Financial Highlights – Maintaining Steady Growth with Increased Operational Profitability
FINANCIAL HIGHLIGHTS – 1 MAINTAINING STEADY GROWTH WITH INCREASED OPERATIONAL PROFITABILITY -15% Net profit Steady rental Rental and Net rental income Adjusted EBITDA €493 million growth, increased operating income adjusted EBITDA €383 million €298 million EPS (Basic) €560 million +3% €2.43 +5% +8%
Slide 4: Update on Recent Developments
1 UPDATE ON RECENT DEVELOPMENTS Grand City Properties is closely following the development of the COVID-19 Corona Virus, following guidance by the Robert Koch institute. The health and safety of our employees is the Company’s primary focus and responsibility. Policies are continuously reviewed and u
Slide 5: Profitability – Strong Like-for-Like Results
2 PROFITABILITY – STRONG LIKE-FOR-LIKE RESULTS NET RENTAL INCOME (IN € MILLIONS) Selected consolidated statement of profit or loss 1-12/2019 1-12/2018 in € ‘000 unless otherwise indicated CAGR Rental and operating income 560,303 544,977 Net rental income 382,605 364,365 +10% 383 364 328 Property rev
Slide 6: FFO I
2 FFO I 1-12/2019 1-12/2018 FFO I (IN € MILLION) in € ‘000 unless otherwise indicated Adjusted EBITDA 297,662 275,530 FFO I Finance expenses (45,041) (45,929) CAGR Current tax expenses (37,062) (29,845) +10% 212 Contribution to minorities (3,593) (1,902) 198 FFO I 211,966 197,854 178 160 FFO I per s
Slide 7: FFO II – Consistent Value Crystalisation
2 FFO II – CONSISTENT VALUE CRYSTALISATION in € ‘000 unless otherwise indicated 1-12/2019 1-12/2018 FFO II (IN € MILLION) FFO I 211,966 197,854 Result from disposal of properties* 169,421 136,602 FFO II 381,387 334,456 52% Disposal margin * the excess amount of the sale price to total cost plus cape
Slide 8: EPRA NAV
2 EPRA NAV Dec 2019 Dec 2018 EPRA NAV (IN € MILLION) € ‘000 Per share € ‘000 Per share EPRA NAV EPRA NAV incl perpetual notes Equity per the financial statements 4,966,599 4,666,987 CAGR EPRA NAV Equity attributable to perpetual notes investors (1,030,050) (1,030,050) +17% 5,150 Equity excluding per
Slide 9: Investment Property – Accretive Capital Recycling
2 INVESTMENT PROPERTY – ACCRETIVE CAPITAL RECYLING ~€500 MILLION ACQUISITION CRITERIA DISPOSALS OF NON-CORE AND MATURE ASSETS Acquisition in densely populated areas and major cities Disposal 7% above of 7,500 units net book High cash flow generating assets value SOLD ASSETS IN NRW, INVESTMENT PROPER
Slide 10: Investment Property Growth
2 INVESTMENT PROPERTY GROWTH INVESTMENT PROPERTIES (IN € MILLIONS)1) VALUATION PARAMETERS CAGR 2019 2018 +18% 7,972 Rent Multiple 20.4x 18.9x 7,244 Value per sqm €1,543 €1,257 6,388 Market rental growth per annum 1.4% 1.5% Management cost per unit €262 €258 4,796 Ongoing maintenance cost per sqm €8.
Slide 11: Portfolio Overview
2 PORTFOLIO OVERVIEW PORTFOLIO OVERVIEW DECEMBER 2019 Area Annualized net In-place rent per Value per sqm Value (in €M) EPRA vacancy Number of units Rental yield (in k sqm) rent (in €M) sqm (in €) (in €) NRW 1,883 1,649 7.9% 107 5.8 24,410 1,142 5.7% Berlin 1,678 558 5.0% 53 8.3 7,580 3,008 3.2% Dre
Slide 12: Portfolio Distribution
2 PORTFOLIO DISTRIBUTION DISTRIBUTION BY VALUE - DECEMBER 2019 DIVERSIFIED PORTFOLIO WITH DISTINCT ECONOMIC DRIVERS 12
Slide 13: Best in Class Berlin Portfolio – December 2019
2 BEST IN CLASS BERLIN PORTFOLIO – DECEMBER 2019 PORTFOLIO OVERVIEW BERLIN 24% QUALITY LOCATIONS IN TOP TIER NEIGHBORHOODS OF BERLIN of GCP’s Portfolio Value 2/3 of the Berlin portfolio is 14% of GCP’s total rent 2/3 located in top tier neighborhoods: Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, F
Slide 14: Berlin Rent Cap – Limited Effect on the Total Portfolio
2 BERLIN RENT CAP – LIMITED EFFECT ON THE TOTAL PORTFOLIO Berlin Mietendeckel (rent cap) was passed on January 30, 2020 and was implemented on February 23, 2020 - The final law implemented had a few changes, most importantly ▪ Landlords will be required to reduce rents automatically without any requ
Slide 15: High Quality London Portfolio - December 2019
2 HIGH QUALITY LONDON PORTFOLIO - DECEMBER 2019 LONDON PORTFOLIO WELL CONNECTED LONDON PORTFOLIO 13%* of GCP’s Portfolio Over 90% of the portfolio is The total London situated within a short portfolio, including pre- walking distance to an marketed units consists underground/overground of ca. 2,600u
Slide 16: Portfolio NRW – December 2019
2 PORTFOLIO NRW – DECEMBER 2019 GCP is well positioned in Germany’s largest metropolitan area… PORTFOLIO DISTRIBUTION POPULATION DENSITY IN NRW 24%* 4th of GCP’s largest city Portfolio in Germany COLOGNE DORTMUND DUISBURG ESSEN WUPPERTAL * all breakdowns are by values
Slide 17: Portfolio East and North – December 2019
2 PORTFOLIO EAST AND NORTH – DECEMBER 2019 …with further diversification in Germany’s fast growing Eastern and largest Northern cities EAST PORTFOLIO NORTH PORTFOLIO 13%* 5%* of GCP’s of GCP’s Portfolio Portfolio DRESDEN LEIPZIG HALLE HAMBURG BREMEN * all breakdowns are by values
Slide 18: Portfolio Potential
2 PORTFOLIO POTENTIAL CURRENT ANNUALIZED NET RENTAL INCOME VS MARKET POTENTIAL* +8% 471 Conservatively including rent +20% 442 cap levels in Berlin Only 3% of units subject to rent restrictions from 368 Subsidization (starting 2020) ~9 years Average tenancy length Dec 2019 Annualized Full market pot
Slide 19: Financial Policy
2 FINANCIAL POLICY GCP financial policy GCP 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) on a sustainable basis Maintaining conservative financial ratios wit
Slide 20: Loan-to-Value
2 LOAN-TO-VALUE in € ‘000 unless otherwise indicated Dec 2019 Dec 2018 1) Investment property 7,909,693 7,298,879 Investment property of assets held for sale 196,432 132,137 COST OF DEBT Equity accounted investees 21,020 26,207 Total value 8,127,145 7,457,223 Low spreads (13/03/2020) 2) Total Debt 3
Slide 21: Capital Structure
2 CAPITAL STRUCTURE INTEREST HEDGING STRUCTURE DEC 2019 FINANCING SOURCE MIX 7% 11% 6% Bank Debt 5% 93% fixed & swapped Hedged 27% 34% Straight Bond 3% 3% capped Convertible variable 59% 57% Equity 88% Perpetuals Dec 2018 Dec 2019 ø Maturity as of year end 2019 8 years MATURITY SCHEDULE 800 700 600
Slide 22: Debt Coverage and Credit Rating
2 DEBT COVERAGE AND CREDIT RATING DEBT AND INTEREST COVER RATIOS – FY 2019 UNENCUMBERED ASSETS 6.6x €6.5 BN 5.5x 79% of €4.8 BN value €4.1 BN 65% of 64% of value value ICR* DSCR** *) Adjusted EBITDA / interest Dec Dec Dec **) Adjusted EBITDA / (interest + loan amortization) 2017 2018 2019 CORPORATE
Slide 23: 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 21.2 ▪ Increasing property quality ▪ Improving standards of apartments ▪ Bring newly built and/or re-opening of 20.3 ▪ Support valu
Slide 24: ESG - Outperformer
3 ESG - OUTPERFORMER GCP publishes its Corporate Responsibility Report annually, 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.
Slide 25: Guidance
4 GUIDANCE 2019 2019 2020 Guidance Actual Guidance FFO I (in € millions) €211 - €213 €212 €220 - €226 FFO I per share (in €) €1.26 - €1.27 €1.27 €1.31 - €1.35 Dividend per share (in €) €0.82 - €0.83 €0.8238 €0.85 - €0.87 FFO I per share €1.06 - €1.07 €1.07 €1.11 - €1.15 after perpetual notes attribu
Slide 26: Appendix
26 APPENDIX GRAND CITY Properties S.A,
Slide 27: Proven Ability to Access Capital Markets
PROVEN ABILITY TO ACCESS CAPITAL MARKETS Proven track record Over €6 billion of capital raised since 2012, with a proven track € 1,308 mn record in 4 different instruments: Equity, Perpetual notes, Convertible bonds and Straight bonds across a broad spectrum of € 1,201 mn investors & markets Over €7
Slide 28: Analyst Coverage
ANALYST COVERAGE Analyst Research Target Price 32 31.7 28 29.0 28.0 27.5 27.0 24 25.5 25.2 25.0 25.0 24.5 24.1 23.0 23.0 22.7 20 21.0 21.0 21.0 21.0 20.0 19.0 16 12 8 4 0 Citigroup UBS First Berlin Deutsche Bank Berenberg HSBC Credit Suisse Kepler Commerzbank J.P. Morgan Goldman Sachs Bankhaus Hauck
Slide 29: Share Development and Structure
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 10
Slide 30: Outperforming
OUTPERFORMING Spread over mid-€-swap for straight bonds 2.50 21-11-2014: S&P rating upgrade to 'BBB-' 24-07-2015: S&P rating upgrade to 'BBB' 09-02-2015: Moody’s assignment of 'Baa2' rating 07-09-2017:Moody's rating upgrade to 'Baa1' 2.00 Issuance spread: 1.76% 23-11-2016: S&P rating upgrade to 'BBB
Slide 31: Management
MANAGEMENT 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 CEO the financial turnaround of Mövenpick, drove international expansi
Slide 32: Management
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. Schillinger is an Head of Facility Management engineer in electr
Slide 33: Credit Rating Matrix
CREDIT RATING MATRIX Financial risk profile Moody's 12-18 Month Forw ard View As of 1 2 3 4 5 6 Min Modest Intermediate Significant Aggr High 5/31/2019 [2] - e- Lever- Real Estate / REIT Industry Grid [1] imal ssive aged Factor 1 : Scale (5%) Measure Score 1 a) Gross Assets (USD Billion) $10.7 - $10
Slide 34: Contact and Disclaimer
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 accordance