Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — Q1 2017 Earnings Presentation
37 slides from Grand City Properties Sa's earnings presentation, May 2017
Slide 1: Q1 2017 Earnings Call Presentation
Cologne Berlin Leipzig Q1 2017 EARNINGS CALL PRESENTATION MAY 2017 Munich Berlin
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Financial and Portfolio performance 3 ESG Measures 4 Appendix 2
Slide 3: Uplisting to Prime standard
1 Uplisting to Prime standard Market visibility Larger investor pool Tradability Share liquidity Possible inclusion in the DAX family… …as well as other European indices Market Cap Free Float €2.9bn* 64% 3 *Based on a share price of €18.9
Slide 4: Financial Highlights Q1 2017
1 Financial Highlights Q1 2017 Outstanding Rental and Net rent Adjusted EBITDA FFO I operational operating income €79 million €60 million €42 million results €118 million Excellent FFO I per share Profit over EPS (basic) Dividend yield Bottom-line €0.27 €92 million €0.51 3.7%* results (FFO yield: 5.
Slide 5: Profit and Loss
2 Profit and Loss Rental and operating income in €m Q1 16 – Q1 17 118 Selected Income Statement Data 1-3/2017 1-3/2016 115 +17% € million 111 Revenue 108 119 101 Revenue from sale of inventories 1 - 101 Rental and operating income 118 101 Capital gains, property revaluations and other income 55 69 P
Slide 6: Adj EBITDA & FFO
Adjusted EBITDA in €m 2 Adj EBITDA & FFO 60 +11% 53 1-3/2017 1-3/2016 € million Adjusted EBITDA 60 53 Finance expenses (10) (9) Current tax expenses (7) (6) Q1 2016 Q1 2017 Contribution to minorities (0.4) (0.4) FFO I in €m FFO I 42 38 42 +12% FFO I per share in € 0.27 0.25 38 FFO I yield (annualize
Slide 7: Investment Properties
2 Investment Properties Value Investment Properties in € bn Portfolio size in units Mar +4% 2017 CAGR 5.0 2016 +23% 4.8 +24% 2015 3.9 2014 83k 84k 76k 43k 2015 2016 Mar 2017 Acquisitions Acquisition Criteria 1,400 units multiple ø 13x Acquisition in densely populated areas and major cities Acquisiti
Slide 8: Portfolio Distribution
2 Portfolio Distribution Distribution by value (Mar 17) Hamburg Others 18% Bremen/Hamburg NRW 32% Bremen 5% Nuremberg-Fürth/ Munich 4% Berlin Mannheim/ KL/Frankfurt Dresden/Leipzig/ Halle /Mainz 6% Berlin 17% Leipzig Halle 18% NRW Dresden Frankfurt Mainz Nuremberg/ Focus on value-add Fuerth opportun
Slide 9: Portfolio Overview
2 Portfolio Overview Meaningful diversification among areas of sustainable economic fundamentals and demographic prospects Portfolio overview March 2017 Value Area EPRA Annualized In-place rent Number of Value per Rental yield (in €M) (in k sqm) vacancy net rent per sqm (in €) units sqm (in €M) NRW
Slide 10: Portfolio Detailed Distribution as of Mar 2017
2 Portfolio Detailed Distribution as of Mar 2017* …With focus on areas with strong fundamentals Largest European metropolitan area well distributed within NRW Quality Berlin locations Largest city in NRW Others 20% Köln 19% Herne 2% Marl 2% Recklinghausen 2% Duisburg 10% Solingen 2% Velbert 2% Gelse
Slide 11: EPRA NAV
2 EPRA NAV EPRA NAV in €m Mar 2017 Dec 2016 3,208 3,299 € million Per share € million Per share CAGR Equity per the financial statements 3,155 3,065 +35% Equity attributable to perpetual notes investors (669) (667) 2,541 2,630 Equity excluding perpetual notes 2,486 2,398 2,402 Effect of derivative f
Slide 12: Financial policy
2 Financial policy GCP financial policy Strive to achieve A- global rating in the long term LTV limit at 45% Debt-to-cap ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios Unencumbered assets above 50% of total assets Long debt maturity profile Good mix of long
Slide 13: LTV
2 LTV Mar Dec Cost of debt 2017 2016 € million Investment property 5,019 4,851 All-time low spreads Assets held for sale 145 146 Series D 2021 0.6% 1.6% Equity accounted investees 122 118 Series E 2025 0.9% Total value 5,287 5,114 Perpetual notes 2.6% Total Debt 2,437 2,415 Cash and liquid assets 48
Slide 14: Capital structure
2 Capital structure Hedging structure Financing source mix 96% Hedged Maturity Schedule ø 7 Years 14
Slide 15: Debt coverage and rating
2 Debt coverage and rating Cover Ratios Unencumbered Assets 6.2 € 2.8 bn € 2.9 bn € 2 bn 5.0 57% of 56% of value value 53% of value ICR* DSCR** *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) Dec 2015 Dec 2016 Mar 2017 Corporate Credit Rating A- Long Term BBB+ Goal
Slide 16: Maintenance and Capex
2 Maintenance and Capex Capex strategy Upgrade utilities, Increase Occupancy & Reduce Cost & CO2 Emissions Increase install efficient attractiveness for Rent systems, maintain Capex existing and and increase asset prospective quality tenants Capex and maintenance € per sqm Leipzig 1-3/2017 1-3/2016
Slide 17: ESG Measures
3 ESG Measures Continue to improve corporate governance Continue to improve energy reduction Gas & electricity from renewable resources Vision mission guiding principles Strong work employment regulations Training and schooling for our approx. 800 employees on all levels 17
Slide 18: Appendix
Properties S.
Slide 19: Portfolio Potential
4 Portfolio Potential Residential in-place rent compared to market rent prices Current Annualized Rental Income vs. Market Potential* 593 472 85% 15% Below market level at market level Q1 17 annualized Annualized market potential * including vacancy reduction 6% of units 14 years subject to rent res
Slide 20: Proven ability to access capital markets
4 Proven ability to access capital markets Equity and Bond Bookrunners Sep-16 Issuance of €200 million perpetual notes, bearing a coupon of 2.75% p.a. GCP raised in 2016 alone Feb-16 Issuance of Series F, 2022 convertible bonds of € 450m, coupon of 0.25% p.a €650 million and full conversion Series C
Slide 21: Analyst coverage
4 I. Analyst coverage Analyst research target price GCP‘s operations are researched by leading real estate market analysts, who conduct independent equity research and target price recommendations Index inclusions FTSE EPRA/NAREIT: Developed Global Developed Europe GPR (Global Property Research) 250
Slide 22: Outperforming
4 I. Outperforming Share Price Since First Equity Placement (19.7.2012) Share ownership structure Share price/conversion price throughout the Company’s issuances Basic amount of shares: 153.8 million/ Fully diluted amount of shares: 171.9 million 22
Slide 23: Outperforming
4 I. Outperforming Straight Bond Series D Spread over mid-€-swap, remaining 4.5 years Straight Bond Series E Spread over mid-€-swap, remaining 8 years 3.75% Perpetual notes Spread over mid-€-swap 23
Slide 24: Most successful IPO since 2007
4 I. Most succesful IPO since 2007* According to the Frankfurter Allgemeine Zeitung Grand city properties is the most successful IPO in Germany since 2007 among 106 IPOs Source: Frankfurter Allgemeine Zeitung February 9, 2017 24 Nr. 34, page 23
Slide 25: Management
4 Management CEO 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 the financial turnaround of Mövenpick, drove international expan
Slide 26: Management
4 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 Head of Facility Management and joined GCP in 2006. Mr. Schillinger is an engineer in elec
Slide 27: ESG Measures
4 ESG Measures Environmental Social Corporate Governance • GCP implements environment- • Tenant satisfaction is a top • Experienced and diverse friendly measures throughout priority and an essential part of management board its portfolio, with the goal of GCP’s business strategy • Four committees co
Slide 28: ESG Measures: Environmental and sustainability
ESG Measures: 4 Environmental and sustainability RENEWABLE ENERGY • Two thirds of properties have been switched to electricity from 100% renewable sources in the past two years, with the goal of gradually switching when the opportunity arises • All of GCP’s offices are supplied with energy from 100%
Slide 29: ESG Measures: Social Responsibility
ESG Measures: 4 Social Responsibility Neighborhood and community initiatives • The creation and maintenance of a comfortable community feeling is of high priority to Grand City, and this is the target of our various initiatives • GCP organizes over 150 family-friendly tenant events such as Easter, s
Slide 30: ESG Measures: Tenant Satisfaction
4 ESG Measures: Tenant Satisfaction Best-in-class tenant service through professional and 24/7 availability A dedicated and professional service team is available 24/7 for existing and prospective tenants, reachable through toll-free numbers, e-mail, and the recently launched GCP mobile app GCP‘s Se
Slide 31: ESG Measures: Tenant satisfaction with IT support
ESG Measures: 4 Tenant satisfaction with IT support Advanced IT/software systems to monitor the complete portfolio and to identify fluctuations of tenants, with immediate control over newly acquired assets Operational excellence with tenant management software - top service to ensure tenant satisfac
Slide 32: Business risk profile
4 S&P Anchor rating matrix Financial risk profile 1 2 3 4 5 6 Minimal Modest Significant Aggressive High Intermediate Leveraged 1 aaa/ Excellent aa a+/a a- bbb bbb-/bb+ aa+ GCP will continue strengthening its position within the business profile (Vonovia- BBB+)* 2 Business risk profile aa/ Strong aa
Slide 33: Maintaining strong and diverse financing sources
4 Maintaining strong and diverse financing sources GCP has over 40 non-recourse separate bank loans from around 20 banks Revolving credit facilities Strong corporate credit All credit facilities do not lines with international have a Material Adverse banking leaders Change (MAC) clause exceeding €20
Slide 34: Hannover Dresden Mannheim
Hannover Mannheim Berlin Dresden Essen Duisburg Leipzig Hamburg Berlin 34
Slide 35: Cologne Berlin Halle
Cologne Berlin Halle Gelsenkirchen Leipzig Berlin Frankfurt Nuremberg Berlin 35
Slide 36: Leipzig Munich Bremen
Leipzig Munich Bremen Berlin Wuppertal Dortmund 36
Slide 37: Contact and Disclaimer
5 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 accordanc
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