Investis Holding SA · SIX:IREN
Investis Holding SA — H1 2020 Earnings Presentation
43 slides from Investis Holding SA's earnings presentation, Aug 27, 2020
Slide 1: Half-Year Results 2020
HALF-YEAR RESULTS 2020 27th August 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 1st HY 2020 2. Market trends in a COVID-19 environment 3. Financial overview 1st HY 2020 4. Outlook 5. Q & A 6. Details on segment HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 3
Slide 4: Key figures HY 2020 – Market cap CHF 1.1 bn
Key figures HY 2020 – Market cap CHF 1.1 bn GROUP PROPERTIES REAL ESTATE SERVICES Revenue CHF 89m Portfolio CHF 1,476 bln Revenue PM CHF 30m EBITDA before reval + 3.3% Like-for like Revenue FS CHF 31m EBIT +8.5% rental growth + 0.9% EBIT margin 8.7% Vacancy rate 2.8% Equity ratio 49% Total buildings
Slide 5: Real Estate Market in Geneva
Real Estate Market in Geneva Immigration most affected by COVID-19 – expected to recover Migration/ Demography Construction activity Regulations Capital Markets ▪ Positive development of ▪ No significant impact on ▪ Tax regime for corporations ▪ CHF interest rates expected immigration in 1st Q const
Slide 6: Immigration / Migration in Investis' key markets
Immigration / Migration in Investis’ key markets Switzerland is one of the most dynamic countries in Europe in terms of population growth ▪ Lake Geneva region has the highest proportion of foreign population in Switzerland with 33% − Swiss average at 25% ▪ The canton of Geneva has a portion of forei
Slide 7: Real Estate Market in Geneva
Real Estate Market in Geneva Immigration remains a key factor for demand and vacancies ▪ Housing market in Geneva could benefit: In past crisis, Switzerland has always managed to emerge from a crisis faster and better than its neighbouring countries. This subsequently led to increased immigration. T
Slide 8: Real Estate Market in Switzerland
Real Estate Market in Switzerland Shortage of apartments in Investis’ key market (# of apartments, 2019) Source: WüestPartner, April 2020 HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 8
Slide 9: Real Estate Market in Switzerland
Real Estate Market in Switzerland Reletting is not a problem in Investis’ key markets Duration of advertising for apartments on the market, 2019 Source: Crédit Suisse HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 9
Slide 10: Real Estate Market Switzerland
Real Estate Market Switzerland Very low vacancy rates in Investis’ key markets – to be continued Vacancyrates in 2019 for rented properties only Vacancyrate below avg/ drop in # of constructionpermits Vacancyrate above avg/ drop in # of constructionpermits Vacancy rate below avg / rise in # of const
Slide 11: Real Estate Market in Switzerland
Real Estate Market in Switzerland Highest housing occupancy density in Geneva suggests tighter rental market conditions - 18% less housings built from June 2019 – June 2020 2000 2012 2018 0.80 0.75 0.70 inhabitant per room 0.65 0.60 0.55 0.50 Source: NAEF, CBRE HALF-YEAR RESULTS 2020 – IR PRESENTATI
Slide 12: Real Estate Market in Switzerland
Real Estate Market in Switzerland Geneva’s vacancy rate is growing at a slower pace then the national trend (Vacancy rates for rented and owned properties combined) Switzerland Geneva 2.00 1.80 1.66 1.60 Vacany rate (in %) 1.40 1.20 1.00 0.80 0.60 0.49 0.40 0.20 0.00 Source: BFS, OCSTAT HALF-YEAR RE
Slide 13: Real Estate Market in Geneva
Real Estate Market in Geneva Positive impact on the residential market could be expected – no halt in the market ▪ Between May 2019 and May 2020 rents for non-new apartments rose by 0.9% 1) − Especially for small apartments, the increase is greater and ranges from 1.8% for studios to +1.4% for two a
Slide 14: Strategy: Buy and hold
Strategy: Buy and hold Rue du Nant 30 – Geneva – Acquisition in December 1998 Appraisal value Rent in CHF/m in CHF/k 1998 Residential block built in 1986 with 40 residential units and 2 retail units 339 2014 Renovation of bathrooms and kitchens 2015 Additional energy efficiency renovation 12.3 623 +
Slide 15: Real Estate Market Switzerland
Real Estate Market Switzerland Still favourable yield premium over 10-year federal bond Geneva Lausanne Zurich 10-y Bond 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% -0.50% -1.00% Source: WP, CBRE HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 15
Slide 16: 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: ▪ The number of residential propert
Slide 17: Agenda
Agenda 1. Highlights of the 1st HY 2020 2. Market trends in a COVID-19 environment 3. Financial overview 1st HY 2020 4. Outlook 5. Q & A 6. Details on segment HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 17
Slide 18: HY 2020 in a nutshell
HY 2020 in a nutshell – excellent operating performance …. …. coupled with substantial revaluation effects ▪ Investis Group: − Operating performance excl. revaluations up by +3.3% to CHF 23.6m − Net profit at CHF 51.2m (HY 2019: CHF 111.9m positively impacted by tax reform CHF 61m) − Net profit excl
Slide 19: Investis Group: Overview on the financial performance for the HY 2020
Investis Group: Overview on the financial performance for the HY 2020 (CHFm) HY 2020 ∆ in % HY 2019 FY 2019 FY 2018 HY 2020 Revenues HY 2020 Invested Capital restated Revenue 89.2 -9.5 98.6 187.5 197.5 1% EBITDA 23.6 +3.3 22.9 46.7 39.7 before revaluations/disposals 68% 32% Income from revaluations
Slide 20: Properties: Geographical concentration in the Lake Geneva region
Properties: The geographical concentration in the Lake Geneva region remains an ASSET... Further growth in rental income coupled with achieved rental increases (CHFm) HY 2020 ∆ in % HY 2019 FY 2019 FY 2018 ▪ Like-for-like rental growth +0.9% (as at 31.12.2019: +0.4%) Revenue 29.0 +3.5 28.1 57.0 55.0
Slide 21: Properties: Further expanding portfolio
Properties: Further expanding portfolio -> adding value & rental growth -> buy and hold Property Portfolio: 170 properties – 3,020 residential units – Value CHF 1.48 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 3-r
Slide 22: Properties: further potential for rent increases still intact
Properties: further potential for rent increases still intact Rent potential based on CBRE appraisal (CHFm) 57.0 55.0 (CHFm) 47.5 +15% 41.9 +4.1% 40.8 37.8 35.0 32.4 +1.0% 29.0 27.3 25.0 Current rent Market rent 1) 19.6 40.8 6.3% 41.9 77% of our residential and commercial rental +3.4% +1.1% +1.9% +1
Slide 23: Real Estate Services: lower revenues due to disposal of subsidiaries
Real Estate Services: lower revenues due to disposal of subsidiaries in 2019 Complementary services affected in both activities by COVID-19 Revenue split (CHFm) HY 2020 ∆ in % HY 2019 FY 2019 FY 2018 2% Revenue 62.1 -15.6 73.6 136.0 147.8 EBIT 5.4 -11.0 6.1 11.5 7.7 49% 48% EBIT margin 8.7% n/a 8.3%
Slide 24: COVID-19 impact
COVID-19 impact PROPERTIES ▪ Rent reduction in commercial units CHF 136/k ▪ High vacancy in serviced apartments (in Q2 >50%) CHF 175/k ▪ COVID-19 diluted like-for-like rent increase by 110bp REAL ESTATE SERVICES ▪ No “short time work” (Kurzarbeit); service level 100% fulfilled during lockdown ▪ High
Slide 25: Investis Group: Excellent net profit
Investis Group: Excellent net profit Release of deferred tax liabilities positively influenced net profit in HY 2019 (CHFm) HY 2020 ∆ in % HY 2019 FY 2019 FY 2018 restated ▪ Financial income in 2019 included the effects of reducing the stake in Polytech Ventures EBIT 61.9 +8.5 57.0 127.2 74.6 Holdin
Slide 26: Strong capital structure and prudent financing policy
Strong capital structure and prudent financing policy Solid balance sheet and liquidity allows to continue to invest in strategic priorities Balance Sheet (CHFm) 30.06.2020 ∆ in % 31.12.2019 31.12.2018 31.12.2017 Debt structure per 30.06.2020 Bonds CHF 560m Cash and cash equivalents 10 -84.9 66 33 5
Slide 27: Agenda
Agenda 1. Highlights of the 1st HY 2020 2. Market trends in a COVID-19 environment 3. Financial overview 1st HY 2020 4. Outlook 5. Q & A 6. Details on segment HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 27
Slide 28: Outlook – subject to more uncertainties than in the past
Outlook – subject to more uncertainties than in the past Residential rental market least affected in the real estate sector in Switzerland by COVID-19 ▪ Migration, demographic change, low proportion of new build properties in central locations means that there is ongoing strong demand for rental apa
Slide 29: What makes INVESTIS unique?
What makes INVESTIS unique? ▪ Largest listed residential property owner in the undersupplied Lake Geneva region – sustaining demand, high return, low vacancies – continuous rent potential of around 15% – low exposure in commercial properties ▪ High barriers of entry for new market players ▪ Leading
Slide 30: Agenda
Agenda 1. Highlights of the 1st HY 2020 2. Market trends in a COVID-19 environment 3. Financial overview 1st HY 2020 4. Outlook 5. Q & A 6. Details on segment HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 30
Slide 31: Q&A
Q&A HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 31
Slide 32: Agenda
Agenda 1. Highlights of the 1st HY 2020 2. Market trends in a COVID-19 environment 3. Financial overview 1st HY 2020 4. Outlook 5. Q & A 6. Details on segment HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 32
Slide 33: Investis Group is a leading Swiss residential property company
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 34: 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 35: Very focused and attractive portfolio around the 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% HALF-YEAR RESULTS 20
Slide 36: Real Estate Services: active nationwide with well-known 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 37: 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 38: Property Management – PRIVERA
Property Management – PRIVERA …… …… focuses on institutional clients due to its nationwide presence ▪ Fully digitalised processes (incoming mail, application and rental process) ▪ Rents under Management at CHF 1.43bln ▪ 12 offices across the country, FTE of just under 400 ▪ Top 10 clients generate j
Slide 39: Facility Services – hauswartprofis/conciergepro
Facility Services – hauswartprofis/conciergepro …. …. 600 experts (FTE’s) have been taking care of the in- and outside of buildings for > 30 years Around 80% Maintenance Cleaning Building in residential services buildings ▪ Inhouse maintenance for apartment ▪ Apartments ▪ Guarantee daily operation b
Slide 40: Facility Services – hauswartprofis
Facility Services – hauswartprofis …… …… focus on innovation with experienced staff ▪ 13 offices across the country, with FTE of around 600 ▪ Diversified business model with recurring, contract-based revenues ▪ Major player in the market combining all activities of facility services ▪ Management of
Slide 41: Organisation
Organisation HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 41
Slide 42: Corona Virus (COVID-19)
Corona Virus (COVID-19) Investment market ▪ Lack of visibility - Transaction volumes might decrease ▪ Further decline in interest rates expected ▪ Rental income in residential is less vulnerable i.e. little impact expected Rents in residential properties ▪ Focus is expected to be on Investis key mar
Slide 43: Thank you for your attention!
Thank you for your attention! HALF-YEAR RESULTS 2020 – IR PRESENTATION – 27 AUGUST 2020 43