Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — H1 2014 Earnings Presentation
35 slides from Altarea Sca's earnings presentation, July 2014
Slide 1: 2014 Half-Year Results
www.altareacogedim.com \ HALF-YEAR RESULTS COGEDIN ny 2014, i th RE TAI HOUSING I OFFI 2014 HALF-YEAR RESULTS
Slide 2: Disclaimer
Disclaimer • This presentation is not an offer to sell, a solicitation of an offer to sell or exchange securities, nor does it represent a recommendation to buy or to sell Altarea securities. • The distribution of this document in some countries may be restricted by law or regulation. As such, perso
Slide 3: INTRODUCTION P. 4 HY 2014 ACHIEVEMENTS
INTRODUCTION P. 4 HY 2014 ACHIEVEMENTS P. 7 FINANCE P. 22 APPENDICES P. 31 2014 HALF-YEAR RESULTS 3
Slide 4: Introduction
INTRODUCTION 2014 HALF-YEAR RESULTS 4
Slide 5: Half-Year Highlights
HALF-YEAR HIGHLIGHTS Increase in tenant revenue (+2,9% l-f-l growth in France) Growth in the pipeline - success in the development of new businesses GOOD OPERATING PERFORMANCES Sound sales growth (+22% in value and +43% in volume (1)) driven by sales to institutional investors and the new entr
Slide 6: A Sustainable Growth Dynamic
A SUSTAINABLE GROWTH DYNAMIC • Sound financial structure (LTV: 41.6%, cash available: 580 M€, no corporate repayment before 2017) • A very strong pipeline of projects • A roadmap for 2017/2018 A STRONG VALUE CREATION POTENTIAL GROUP ROADMAP Retail pipeline: €1.8 bil. of Massive deleveraging achi
Slide 7: Half-Year 2014 Achievements
HALF-YEAR 2014 ACHIEVEMENTS 2014 HALF-YEAR RESULTS 7
Slide 8: Retail Strategy
RETAIL STRATEGY • Focus on large assets and projects • Control on strategic assets optimised through partnerships • Group equity reallocated to high added-value developments CASE STUDIES (ASSETS) CASE STUDIES (PROJECTS) Cap 3000 Toulouse Gramont Qwartz Toulon - La Valette Partners: APG, Predica Part
Slide 9: Retail Portfolio
RETAIL PORTFOLIO • Strong operational performance of French assets (86% of the portfolio) • Stabilization of rental values and tenant revenue in Spain and Italy (14% of the portfolio) OPERATIONAL PERFORMANCE - FRANCE VALUE OF PORTFOLIO ASSETS (in € billion) (controlled assets) (4) Rental income (Jan
Slide 10: Retail: Qwartz, the 1st Connected Shopping Center
RETAIL QWARTZ: THE 1ST CONNECTED SHOPPING CENTER • A « digital » positioning as a competitive advantage • Unique merchandising and entertainments: M&S, Primark, « Cité du e-commerce », Qwartz & Co… • Very high number of visits QWARTZ : A UNIQUE SHOPPING EXPERIENCE IN THE HEART OF GREATER PARIS 165 b
Slide 11: Retail Pipeline
RETAIL PIPELINE • An average development spread of 300 bp (1) • A pipeline of premium projects • The pipeline potentially represents 80% of the standing portfolio (2) EMBEDDED GROWTH DYNAMIC PIPELINE DETAILS In € million 364 (4) Surface area GLA 5,026,746 ft² (467,000 m²) o/w refurbishments/ extensi
Slide 12: Retail: Paris-Montparnasse Train Station
RETAIL PARIS-MONTPARNASSE TRAIN STATION • An ambitious cross-canal program to modernise the Paris-Montparnasse train station, in line with the Group’s strategy (large and premium location, “railway retail”) • Expertise of Altarea (3rd program after the Paris East Station and the Paris North Station)
Slide 13: High-Street Retail: A New Product Line
RETAIL HIGH-STREET RETAIL: A NEW PRODUCT LINE • Deep market, strong expectations from local authorities • Development synergies: Retail, Residential & Offices business lines • “Lease and sell” business model and substantial contribution to FFO starting 2015 / 2016 VARIOUS ASSET FORMATS ONGOING PROJE
Slide 14: E-Commerce: Repositioning of Rue du Commerce
E-COMMERCE REPOSITIONING OF RUE DU COMMERCE • Offer refocused on the “man universe” with more than 1,200 brands (“High-Tech - Home appliances - DIY”) • Decrease in volumes in the other universes • Higher commissions on reinforced universes STRONGER MARKETING TARGETING INDICATEURS OPÉRATIONNELS Adver
Slide 15: Residential Strategy
RESIDENTIAL STRATEGY • Increase in volumes and gain of market shares • Strengthen the offer on entry-level and mid-level ranges of products • Growth of sales to institutional investors PRODUCTS IN LINE WITH INSTITUTIONAL INVESTORS’ BREAKTROUGH IN ENTRY-LEVEL xx EXPECTATIONS AND MID-RANGE Romainville
Slide 16: Residential: Strong Sales Growth
RESIDENTIAL STRONG SALES GROWTH (+43%(1)) • Reservations driven by sales to institutionals and the success of the new offer • HY margins reflect the current period of transition (2) • Good performance of the operating cash-flow excluding the impact of Laënnec (2013) RESERVATIONS: +43%(1) OPERATIONAL
Slide 17: Residential: Example Florescence
ROGEMENT L ESIDENTIAL FORTE E XAMPLE : FLORESCENCE CROISSANCE DES VENTES (+43% EN VOLUME) • Cluttered area close to Annecy and Lyon, strong attraction of the Swiss border, dynamic demography • Mid-range program ideally located • Strong interest from investors attesting the relevance of the new posit
Slide 18: Residential: Acquisition of 55% of Histoire & Patrimoine
R ESIDENTIAL LOGEMENT ACQUISITION FORTE OF 55%DES CROISSANCE OF VENTES & PATRIMOINE HISTOIRE(+43% EN VOLUME) (€15.5 MILLION) • Leader in the renovation of urban heritage listed or classified as an historic monument • A complementary expertise in favor of new business for the Group (sales synergies /
Slide 19: Offices Strategy
OFFICES STRATEGY • A comprehensive business model « investor, developer, project manager» • Ability to provide a tailor-made solution for any type of demand • A favorable market environment DEVELOPMENT (Off-plan sales / SERVICES INVESTMENT VIA ALTAFUND(1) property development contracts) (delegated p
Slide 20: Offices: Leveraging the Business Model
OFFICES LEVERAGING THE BUSINESS MODEL • Strong activity: many deals completed this semester • Operating cash-flow up +21% at €8.7 million PORTFOLIO OF PROJECTS UNDE DEVELOPMENT OPERATION DEVELOPED DURING THE SEMESTER AS OF 30 JUNE 2014 Surface Group share Project by nature at 100% in value New proje
Slide 21: Offices: Raspail, an Exemplary Project
OFFICES RASPAIL, AN EXEMPLARY PROJECT • Less than 2 years to execute the entire project (acquisition, restructuring, renting, disposal) • La Française as tenant / investor • Operator: Altafund / Promotor: Cogedim Entreprise (Property development contracts) EMBLEMATIC OFFICES AND PERFECT LOCALIZATION
Slide 22: Finance
FINANCE 2014 HALF-YEAR RESULTS 22
Slide 23: Finance
FINANCE €866 million of corporate financing signed this semester DYNAMIC Evolution in the financing mix (mortgage / corporate banking loans / SEMESTER IN credit markets) FINANCING An optimised structure FFO consolidated (1) : €84.6 million +3.1 % LIMITED DILUTION €5.53/share - 13.8% OF THE P
Slide 24: Substantial Activity in Financing
SUBSTANTIAL ACTIVITY IN FINANCING • Increased access to credit markets (private bond issue and treasury note) • An optimised average cost FINANCING AGREEMENTS SIGNED THIS SEMESTER CONSOLIDATED DEBT AS OF 30 JUNE 2014 In € million 866 7-year private bond issue Corporate 230 (spread: 195 bps) banking
Slide 25: An Optimised Structure
AN OPTIMISED STRUCTURE • Very solid ratios • No issue for the coming mortgage reimbursements • No corporate issue before 2017 (duration of corporate debt: 5.1 years) AN EXTREMELY SOUND FINANCIAL DEBT MATURITY SCHEDULE STRUCTURE Average LTV of the Net debt €1,858 mil. financed assets: 38% 498 -€212 m
Slide 26: Operating Cash-Flow
OPERATING CASH-FLOW • Decline in the contribution from Residential (2013 perimeter includes Laënnec) and E-commerce • Partially offset by strong performances in brick-and-mortar Retail and Office property OPERATIONAL CASH-FLOW (in € million) CHANGE IN CONTRIBUTION BY BUSINESS + • Qwartz opening • Li
Slide 27: From Operating Cash-Flow to Consolidated Net Income
FROM OPERATING CASH-FLOW TO CONSOLIDATED NET INCOME • Growth in consolidated FFO at €84.6 million (+3.1%) • FFO/share: €5.53 (-13.8%) • Significant impact of financial instruments income (swaps and fixed-rate debt) and taxes In € million +3.8 M€ 102.7 84.6 -16.5 (+3.1%) 88.4 Net cost of -1.7 debt Co
Slide 28: FFO per Share Dilution
FFO PER SHARE DILUTION • Equity raised over the past 12 months: 42% of the market capitalisation • Limited dilution of FFO per share • Substantially improved risk profile (LTV at 41.6%, vs. 47.6% as of 30 June 2013) In €/share • €570 million of equity raised during the past 12 months 6.65 (+3.1%) −
Slide 29: Diluted Going Concern NAV
DILUTED GOING CONCERN NAV (1) • Diluted going concern NAV up +2.7% at €1,596 million • On a per-share basis, a 4.9% decline to €127.6/share In €/share • Dilutive impact of the script 134.1 dividend in 2014 (4) (8% 127.6 increase in the outstanding -10.0 +2.8 number of shares) Dividend -1.1 -3.8 119.
Slide 30: Guidance 2014
GUIDANCE 2014 Expected dilution in the per-share FFO slightly above 10% in 2014, as a result of the recent operations which enabled to strongly enhance the balance sheet Dividend of €10.00/share CONSEIL DE SURVEILLANCE DU 31 JUILLET 2014 30
Slide 31: Appendices
APPENDICES 2014 HALF-YEAR RESULTS 31
Slide 32: P&L 2014 Half-Year Results
P&L 06/30/2014 06/30/2013 restated 06/30/2013 published Changes in Changes in value, value, Funds from Funds from estimated estimated Funds from In € million operations (FFO) TOTAL operations expenses and TOTAL expenses and operations (FFO) (FFO) transaction costs transaction costs Shopping cent
Slide 33: Balance Sheet (1/2)
BALANCE SHEET (1/2) In € million 06/30/2014 12/31/2013 NON-CURRENT ASSETS 3,646.6 3,600.7 Intangible assets 240.7 237.7 o/w goodwill 128.7 128.7 o/w brands 97.7 98.6 Other intangible assets 14.3 10.4 Property. plant and equipment 11.7 12.6 Investment properties 2,963.4 3,029.0 o/w investment propert
Slide 34: Balance Sheet (2/2)
BALANCE SHEET (2/2) In € million 06/30/2014 12/31/2013 EQUITY 1,880.8 1,832.9 Equity attributable to Altarea SCA shareholders 1,202.4 1,151.3 Share capital 191.2 177.1 Other paid-in capital 518.7 437.0 Reserves 425.5 391.0 Income associated with Altarea SCA shareholders 67.0 146.2 Equity attributabl
Slide 35: Net Asset Value
NET ASSET VALUE GROUP NAV 06/30/2014 12/31/2013 Change In € million Change €/share In € million €/share /share Consolidated equity, Group share 1,202.4 96.1 1,151.3 99.3 Other unrealized capital gains 299.0 317.6 Restatement of financial instruments 114.8 71.5 Deferred tax on the balance sheet for n