Slide 1: Annual results 2016
Annual results 2016 LEADING OWNER DEVELOPER IN FRENCH GATEWAY CITIES
Slide 2: Disclaimer
DISCLAIMER This presentation was prepared for information purposes only, complementing the information also made publicly available by Altarea Cogedim, which readers are invited to consult. It is not intended as, and should not be construed to be a solicitation, a recommendation or an offer to purch
Slide 3: Sommaire
SOMMAIRE 01 A WINNING BUSINESS MODEL 02 OPERATIONAL PERFORMANCE MIXED-USE URBAN PROJECTS RETAIL RESIDENTIAL OFFICE PROPERTY 03 FINANCIAL PERFORMANCE 04 OUTLOOK 05 APPENDICES 3
Slide 4: A winning business model
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Slide 5: A changing market environment, a unique positioning
A CHANGING MARKET ENVIRONMENT, A UNIQUE POSITIONING ON-GOING MARKET REVOLUTIONS REINVENTING REAL-ESTATE Conceiving multipolar Urbanisation cities Creating housing in high Mixed-uses evolution Altarea Cogedim demand areas Property asset designer Environmental and Reinventing for Metropolises energy (
Slide 6: Business model
BUSINESS MODEL Our locations Metropolises Lille Rennes Strasbourg 50% Paris of the population « To meet metropolises’ on 10% of the land area real estate needs Nantes Lyon taking into account the social & Grenoble Bordeaux 50% economic value of all stakeholders » Annecy Montpellier of new businesses
Slide 7: Our operating model
OUR OPERATING MODEL RESIDENTIAL Developer Entry/mid-range level, High-end, Managed residences RETAIL OFFICES REIT/Developer Investor/Developer/Service provider Regional shopping centres Asset repositioning Travel retail Turnkey projects Large retail parks Outstanding locations/architecture Convenien
Slide 8: Our financial model
OUR FINANCIAL MODEL A "Retail REIT" profile with enhanced profitability of development businesses +16% CAGR Retail REIT 17% Development 31% 10-15% Capital employed 80-85% 0-10% 52% 2013 2014 2015 2016 Contribution to FFO 2016 ANNUAL RESULTS 8
Slide 9: Another year of strong growth
ANOTHER YEAR OF STRONG GROWTH Net rental income Retail FFO / share (1) €168.3 million +4.9% €13.6 +7.2% Property Development New Orders (Residential and Office Property) Going Concern NAV/share (1) €2 884 million incl. tax +46% €159.6 +16.2% Housing sold Dividend (2) 10,011 units +67% €11.5 +4.5% wi
Slide 10: Pipeline… large… under control
PIPELINE… Large… under control €14.7 Bn (1) 3,062,000 m² Optional launch based on : - marketing - financial criteria €2.9 Bn €8.1Bn 469,000 m² 1,934,000 m² €0.5 Bn €3.2 Bn ≤ €1 bn 160,000 m² 499,000 m² In commitments (Group share) (1) Potential market value. 2016 ANNUAL RESULTS 10
Slide 11: Building our opportunities
BUILDING OUR OPPORTUNITIES Creating our opportunities Designing the Finding the "hidden" market winning project Pont d’Issy Avenue 83 - Toulon-la-Valette Blanc-Mesnil 2016 ANNUAL RESULTS 11
Slide 12: Digitalisation through open innovation
DIGITALISATION THROUGH OPEN INNOVATION Pipeline Digital real-estate prospection Development 3D digital model Marketing Virtual reality configuration Altarea Cogedim digitalises Design & Digital mock-up (BIM) each step Construction Supervision of construction sites of the project Community Geolocaliz
Slide 13: Highest focus on corporate responsibility
HIGHEST FOCUS ON CORPORATE RESPONSABILITY #1 DEVELOPEMENT CONSTRUCTION CUSTOMER RELATIONSHIPS IN OPERATION Top 35 In the 2017 customer 97% of housing within Low-nuisance construction relationship ranking (1) less than 500m of site charter -65% lower CO2 public transportation emissions network 100% o
Slide 14: Cultivating excellence
CULTIVATING EXCELLENCE Attracting the best Developing skills Sharing value 1,400 employees 11,000 hours of training 100% of employees are shareholder +33% compared to 2015 (1) 1 In-house academy 113,000+bonus shares granted (1) Headcount including Pitch Development, excl. Histoire et Patrimoine. 316
Slide 15: Operational performance
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Slide 16: Mixed-use urban projects
MIXED-USE URBAN PROJECTS A UNIQUE PROPOSITION
Slide 17: Leader in mixed use developments
LEADER IN MIXED USE DEVELOPMENTS A unique offering, Retail: dedicated teams A key factor of success for major projects 342,000 m² won in 2016 (1) 10 projects underway €2.1 Bn in potential revenue, Group share (1) Issy-Cœur de ville, Bordeaux-Belvédère and Bobigny-La Place. 2016 ANNUAL RESULTS 17
Slide 18: Issy-Coeur de Ville - Issy-les-Moulineaux
ISSY-COEUR DE VILLE - ISSY-LES-MOULINEAUX Initial call for tender : 60,000 m² 100% offices OUR PROJECT 100,000 m² 40,000 m² 20,000 m² 40,000 m² 13,000 m² 700 units €800 million In potential revenue (100%) 2018 - 2021 duration of building site 2016 ANNUAL RESULTS 18
Slide 19: Retail
RETAIL IN A MATURE MARKET THE STRENGTH OF THE DEVELOPPER
Slide 20: Strength of the developer in a mature market
STRENGTH OF THE DEVELOPPER IN A MATURE MARKET GENERAL CONTEXT OPPORTUNITIES Low economic growth Travel retail (quality of location) Changing consumer Shopping centre: behaviour A new living HUB Altarea Cogedim (shopping, leisure, service) A "Retail REIT" developer profile Consolidation of brands Div
Slide 21: Our convictions
OUR CONVICTIONS CONCENTRATING GROWTH ON WINNING FORMATS THROUGH PIPELINE DEVELOPMENT Regional centres for Designing shopping Gare Montparnasse new assets Large retail parks Expanding for best value existing assets Travel retail Gare d’Austerlitz Rental dynamic Train stations 2016 ANNUAL RESULTS 21
Slide 22: 2016: Solid activity across sectors
2016: SOLID ACTIVITY ACROSS SECTORS TRAVEL RETAIL NEW ASSETS EXISTING ASSETS Major signings 84,000 m² delivered Development / Expansion Gare Montparnasse L’Avenue 83 (Toulon) Cap 3000 (Nice) Gare d’Austerlitz Le Parks (Paris) Carré de Soie (Lyon) 2016 ANNUAL RESULTS 22
Slide 23: Existing portfolio
EXISTING PORTFOLIO Efficient assets Leading Anchors / Tenants 41 €110 €4.5 5.28 million billion % assets average value Portfolio value (1) capitalization rate OUR CUSTOMERS OUR RENTAL INCOME +1.3% +4.9% footfall net rental income vs -1.2% (2) +1.1% +1.5% 15% +9% Tenants’ revenue rental income on vs
Slide 24: Strong embedded value
STRONG EMBEDDED VALUE +72% 17 projects pipeline's potential rental income compared to portfolios current rental €2.1 billion income (1) cost price 7.6% 2019 – 2023 return time for delivery 100% data (1) €158.1 million of potential rental income and €218.4 million of current rental income, respective
Slide 25: 2017 milestones
2017 MILESTONES Delivery Launch of construction site Upsizing visuel Promenade de Flandre Gare Montparnasse Cap 3000 58,000 m² - Roncq 18,000 m² - Paris +37,000 m² - Nice Pre-marketing at 90% Launch of construction site Launch of the final expansion 2017 delivery 2018 delivery – Phase 1 2019 deliver
Slide 26: Property development
PROPERTY DEVELOPMENT VERY STRONG MOMENTUM
Slide 27: Property development: very strong momentum
PROPERTY DEVELOPMENT: VERY STRONG MOMENTUM New orders Operating income(1) and profit margin +32% +33% CAGR CAGR 109.6 2 884 +34% +46% 82.1 1 980 57.1 8.0% 1 242 1 332 46.1 8.2% 7.0% 5.3% 2013 2014 2015 2016 (in € million) 2013 2014 2015 2016 x2.3 x2.4 (1) Excluding Laennec impact for the period. 201
Slide 28: Residential
RESIDENTIAL IN A SOLID MARKET, A SUCCESSFUL TRANSFORMATION
Slide 29: A solid market
A SOLID MARKET Deep housing needs +21% Catch-up post 2013 & 2014 decline new orders in volume vs. 2015 = Stabilized prices Healthy rental market FPI data 2016 ANNUAL RESULTS 29
Slide 30: A successful transformation
A SUCCESSFUL TRANSFORMATION GENERAL CONTEXT OPPORTUNITIES “Metropolisation” Rethinking the offer for large cites (new areas, social mix) Demographic trends Altarea Cogedim Offering every kind of residential product a complete line Favourable credit market of housing solutions Focusing on customer Ad
Slide 31: Drivers of change
DRIVERS OF CHANGE COMMITMENT TO CUSTOMERS FOCUSING ON QUALITY GEOGRAPHIC COVERAGE STRENGTHENING DEVELOPMENT RESSOURCES 2016 ANNUAL RESULTS 31
Slide 32: 2018 target achieved in 2016
2018 TARGET ACHIEVED IN 2016 (10,000 + ORDERS) +39% 10 011 CAGR +67% 6 011 in 2016 4 526 3 732 (number of units) 2013 2014 2015 2016 2016 ANNUAL RESULTS 32
Slide 33: Housing for everyone
HOUSING FOR EVERYONE All dwellings All customers +78% +33% High-end Entry-level / mid-range 32% Private Investors 54% 54% Institutional 59% Investors 9% Other (1) 1st-time buyers 46% 46% Social housing €228 k (incl. tax) 70% 30% average price detail block (base €2,286 million) (1) o/w 7% of Serviced
Slide 34: Commercial and financial performance
COMMERCIAL AND FINANCIAL PERFORMANCE 2016 MARKETED NEW BUSINESS NEW ORDERS PROJECTS €1,068 million +21% revenue excl. tax 3,853 2,650 2,286 €69.5 million €m (incl. tax) €m (incl. tax) €m (incl. tax) operating income +33% +29% +63% +61% 6.5% 15,724 units 11,147 units 10,011 units Property income +60
Slide 35: Strong visibility 2017 - 2018
STRONG VISIBILITY 2017 - 2018 €2.6 billion +52% Strong residential backlog excl. tax (1) development net income growth €8.1 billion +38% in an equivalent economic climate Pipeline Massy – Place du Grand Ouest Delivery in 2017 (1) Secured 24-month backlog. 2016 ANNUAL RESULTS 35
Slide 36: Office development
OFFICE DEVELOPMENT A MATCHING OFFER IN A RECOVERING MARKET
Slide 37: A matching offer in a recovering market
A MATCHING OFFER IN A RECOVERING MARKET GENERAL CONTEXT OPPORTUNITIES Large unsatisfied Cap. rate compression corporates needs Altarea Cogedim Acceleration of existing Cycle anticipation A unique integrated model stock's obsolescence Significant business volume Rental market Very liquid investment w
Slide 38: A diversified revenue mix
A DIVERSIFIED REVENUE MIX Siège social SANOFI 52 Champs-Elysées Tours Pascal Investor Developer Project management Capital gains Margin Fees (DPM & fund management) 2016 ANNUAL RESULTS 38
Slide 39: 2016: Intense level of activity
2016 : INTENSE LEVEL OF ACTIVITY 163 000 m² 272 000 m² 80 000 m² NEW ORDERS PERMITS GRANTED DELIVERIES Pont d’Issy – Issy-les-Moulineaux Siège Social SAFRAN – Toulouse Ilots des mariniers – Paris XIVème ACQUISITION CONSTRUCTION LAUNCH Turn-key project : Tour ERIA – La Défense Marriott – Gare de Lyon
Slide 40: Commercial & financial achievements
COMMERCIAL & FINANCIAL ACHIEVEMENTS EQUITY PIPELINE NEW ORDERS COMMITMENTS €302 million +135% revenues excl. tax €3,167 €598 €349 €40 million million excl. tax million (incl. tax) million operating result +32% of which 498,600 m² 163,100 m² €172 million 13.2% under development remaining to be invest
Slide 41: 2017/2018 strong revenue visibility
2017/2018 STRONG REVENUE VISIBILITY €630 million +92% secured backlog (excl. tax) Major development Growing contracts currently contribution of Offices under signing to Group results Strong current leasing activity Kosmo – Neuilly sur Seine 2016 ANNUAL RESULTS 41
Slide 42: Financial performance
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Slide 43: Strong income growth
STRONG INCOME GROWTH Revenue €1 581.7 million +29.8% Strong growth in Property Development revenue Recurring net result (FFO) €192.0 million +19.1% €13.6 /share +7.2% FFO/share dilution impact Going Concern NAV €2 398.1 million +39.5% €159.6 /share +16.2% Growth in Retail value Upscale in property d
Slide 44: Revenues: €1,581.7 million, +29.8%
REVENUES: €1 581.7 MILLION, +29.8% Development : + 35.4% +2.5% +135.3% +20.9% vs. 2015 vs. 2015 vs. 2015 1,067.6 883.1 762.9 755.3 302.4 211.7 206.6 196.1 110.8 128.5 192.2 66.2 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 (in €m) Excluding impact from Laennec in 2013 and Rue du Comme
Slide 45: Recurring net result (FFO): €192.0 million
RECURRING NET RESULT (FFO) : €192.0 MILLION (1), +19.1% Development : + 35.2% +5.7% +28.6% +39.6% vs. 2015 vs. 2015 vs. 2015 100.8 99.6 95.3 94.2 58.9 42.2 36.4 28.3 28.3 16.1 16.4 12.0 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 (1) Including non-allocated Corporate income for €2.9
Slide 46: Capital raisings, sharp drop in LTV
CAPITAL RAISINGS, SHARP DROP IN LTV LTV guidance of Net debt between 40% and 45% 140 (444) 257 44.5% 45% Dividend AK 41.7% 40% 267 37.7% Min (192) 37.2% Retail Pitch WCR (45) FFO Development Other 31/12/2015 31/12/2016 2013 2014 2015 2016 (in €m) 2016 ANNUAL RESULTS 46
Slide 47: Financing: further resource optimisation
FINANCING: FURTHER RESOURCE OPTIMISATION 1.92 % 5.4 years average cost of debt duration 3.52% €1,241 million 6.0 financing signed 5.4 years 2.80% Resource diversification 2.41% 4.3 4.1 3.7 1.94% < 2.50% 1.92% long term secured rate 2012 2013 2014 2015 2016 2016 ANNUAL RESULTS 47
Slide 48: FFO/share: growth offsets dilution
FFO/SHARE: GROWTH OFFSETS DILUTION +6,7% CAGR €13.6 +€2.2 €12.7 €(1.3) +19% €12.1 €11.2 -13% €13.6 Dilution FFO/share 7.2% 2013 (1) 2014 2015 2016 (1) 2013 FFO restated to reflect the impact of the Laennec 2016 ANNUAL RESULTS 48
Slide 49: Going Concern NAV: €159.6 / share, +16.2%
GOING CONCERN NAV: €159.6 / SHARE, +16.2% GROWTH IN VALUE +22,3 €/share €1.9 €159.6 Development €9.2 Other Retail €2.5 €14.6 Cap. rates & income €(11.0) €137.5 €13.6 AK Création de €(4.7) Valeur Dividend Fin. inst. FFO & Other Value increase linked to development business growth 128,8 € +25,9% 31/12
Slide 50: Dividend: high yield
DIVIDEND: HIGH YIELD Tax considerations (96% non taxable) €11.5 €11.01: Redemption premium per share (1) €0.40: Income distribution derived from taxable income €0.09: Income distribution derived from SIIC income +4.5% Scrip dividend(2) (1) Subject to shareholders' approval during the General Meeting
Slide 51: Outlook
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Slide 52: Broadened ambition
BROADENED AMBITION ENVIRONMENT Expected increase in interests rates EXPAND INVEST Evolution of the regulatory and political environments CREATE SECURE Metropolises growing needs STRENGHTEN OUR EXPERTISE 2016 ANNUAL RESULTS 52
Slide 53: Guidance and outlook
GUIDANCE AND OUTLOOK 2017 guidance confirmed Operational targets Strong visibility 2018 - 2019 10,000+ recurring units +5% to +10% / year ≥ €14.5 growth in income FFO / share Lease and sale 40%-45% ≥ €11.5 LTV Dividend / share Implementing the pipeline Dividend growth 2016 ANNUAL RESULTS 53
Slide 54: A reasonably optimistic vision
A REASONABLY OPTIMISTIC VISION An ensured long-term The best product in Strongly dedicated growth of the market each segment teams 2016 ANNUAL RESULTS 54
Slide 55: Appendices
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Slide 56: Glossary (1/3)
GLOSSARY (1/3) Average cost of debt: : Total average cost of debt, including implementation fees and CNU (Non-use fees). Bad debt ratio: Net amount of allocations to and reversals of provisions for bad debt plus any write-offs during the period as a percentage of total rent and expenses charged to t
Slide 57: Glossary (2/3)
GLOSSARY (2/3) FPI: (Fédération des Promoteurs Immobiliers), the French federation of real estate developers, which publishes an annual index of the sales achieved by its members. Going-concern NAV Equity market value assuming a continuation in business, taking into account the potential dilution re
Slide 58: Glossary (3/3)
GLOSSARY (3/3) Property development new orders (Residential and Offices): Value (incl. tax) of Residential and Office orders (signed off-plan & property development contracts, capitalised fees for delegated projects, and AltaFund arbitrations) signed during a period. Profit margin (Property developm
Slide 59: Building up French metropolises
BUILDING UP FRENCH METROPOLISES Surface areas Secured pipeline (by metropolitan area) Potential value (€m) (b) (m²) (a) Greater Paris 1,572,200 8,584 Nice-Côte d’Azur metropolitan area 212,900 1,582 Marseille-Aix-Toulon 264,700 929 Toulouse metropolitan area 212,400 691 Greater Lyon 112,000 430 Gren
Slide 60: Retail REIT – portfolio and pipeline
RETAIL REIT – PORTFOLIO AND PIPELINE Assets in operation Projects under development Value assessed Gross rent current GLA in m² Gross rent projected Net investments (€m) 31 December 2016 GLA in m² by specialist (€m) (d) created (€m) (f) (€m) (e) Controlled assets (fully consolidated(a)) 702,700 190.
Slide 61: Retail REIT
RETAIL REIT Change in net rental income Change in capitalisation rate In €m Net rental income at 31 December 2015 160.5 Average net rate of return, 2016 2015 at 100 % o/w disposals 2015 2.9 France 5.19% 5.26% o/w shopping centre under redevelopment (a) 41.5 o/w at constant scope 116.1 International
Slide 62: Group financial debt
GROUP FINANCIAL DEBT Bonds & treasury notes 39% Mortgage 34% 10% Development 17% Corporate Banking 2016 ANNUAL RESULTS 62
Slide 63: Net asset value
NET ASSET VALUE GROUP NAV 31/12/2016 31/12/2015 Published Change/ In €m Change €/share(d) In €m €/share(d) share Consolidated equity, Group share 1,620.9 107.8 1,230.3 98.3 Other unrealised capital gains 636.5 381.4 Restatement of financial instruments 68.7 20.8 Deferred tax on the balance sheet for
Slide 64: Income statement
INCOME STATEMENT 31/12/2016 31/12/2015 Operating cash flow from Changes in value, operating cash flow Changes in value, In €m operations estimated expenses TOTAL from operations estimated expenses TOTAL (FFO) and transaction costs (FFO) and transaction costs Retail 206.2 5.3% 5.5 211.7 195.9 10.7 20
Slide 65: Detailed balance sheet (1/2)
DETAILED BALANCE SHEET (1/2) In €m 31/12/2016 31/12/2015 NON-CURRENT ASSETS 5,034.9 4,498.0 Intangible assets 257.9 202.1 o/w goodwill 155.3 128.7 o/w brands 89.9 66.6 o/w client relations 5.5 - o/w other intangible assets 7.2 6.7 Property, plant and equipment 14.2 6.2 Investment properties 4,256.0
Slide 66: Detailed balance sheet (2/2)
DETAILED BALANCE SHEET (2/2) In €m 31/12/2016 31/12/2015 EQUITY 2,758.3 2,250.9 Equity attributable to Altarea SCA shareholders 1,620.9 1,230.3 Capital 229.7 191.2 Other paid-in capital 588.3 396.6 Reserves 635.1 534.0 Income associated with Altarea SCA shareholders 167,8 108.4 Equity attributable t