Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — 9M 2023 Earnings Presentation
35 slides from Grand City Properties Sa's earnings presentation, November 2023
Slide 1: Financial Results Presentation 9M 2023
Berlin FINANCIAL RESULTS PRESENTATION 9M 2023 November 2023
Slide 2: 9M 2023 Financial Highlights and Sep 2023 Portfolio Highlights
9M 2023 FINANCIAL SEP 2023 PORTFOLIO HIGHLIGHTS HIGHLIGHTS CONTINOUSLY DELIVERING OPERATIONAL PERFORMANCE Net rental income €307m Adjusted EBITDA +4% FFO I €240m €141m +4% -2% FFO I per share In-place rental growth continued, Historic low vacancy of 3.8% as of reaching €8.5/sqm as of September Septe
Slide 3: Strategic Measures to De-lever
STRATEGIC MEASURES TO DE-LEVER PRO-ACTIVE APROACH TO REDUCE STABLE AND LOW LEVERAGE WITH HEADROOM TO ABSORB LEVERAGE AND EXTEND DEBT MATURITY FURTHER MARKET DETERIORATION ❖ Disposal activities ❖ Raising secured debt LOW AND STABLE LTV LOW AND DECREASING NET DESPITE DEVALUATION DEBT/EBITDA1) ❖ Strong
Slide 4: Highlights
HIGHLIGHTS WELL POSITIONED IN CURRENT ENVIRONMENT WITH HIGH HEADROOM TO BOND COVENANTS DISPOSALS NEW BANK FINANCING STRONG LIQUIDITY POSITION €440m €110m Cash and liquid assets amount to 25% of total debt and cover debt €130m ~€270m 9M 2023 Signed Q4 2023 €1.1bn maturities until Q2 2026, 9M 2023 sig
Slide 5: Operational Results
OPERATIONAL RESULTS SOLID L-F-L RENTAL GROWTH 3.1% 3.1% 2.8% 2.9% Selected consolidated statement of profit or loss 9M 2023 9M 2022 0.3% Continued strong like-for-like 0.8% 0.6% 0.7% in € ‘000 unless otherwise indicated rental growth of 3.1% as of June Revenue 455,862 424,423 2023, driven by 2.8% in
Slide 6: FFO I + II
FFO I + II FFO I FFO I per share (in € millions) (in €) -2% in € ‘000 unless otherwise indicated 9M 2023 9M 2022 145 141 -6% 0.87 0.82 Adjusted EBITDA 239,584 230,069 Finance expenses (42,093) (34,788) Current tax expenses (29,757) (29,872) Contribution to minorities (3,265) (2,264) 9M 2022 9M 2023
Slide 7: EPRA NAV Metrics
EPRA NAV METRICS EPRA NAV PER SHARE METRICS (in €) EPRA NAV METRICS (in € millions) EPRA NRV PS EPRA NTA PS EPRA NDV PS EPRA NRV EPRA NTA EPRA NDV -8% -9% -11% -9% -8% -11% 30.8 5,323 28.2 4,870 4,642 27.0 26.9 4,656 24.7 4,119 23.9 4,262 reclassified to reclassified to exclude RETT exclude RETT Dec
Slide 8: Portfolio Overview
PORTFOLIO OVERVIEW Berlin INVESTMENT PROPERTY ANNUALISED NET RENTAL (in € millions) INCOME vs. -6% MARKET POTENTIAL (ERV) (INCLUDING VACANCY REDUCTION) 9,530 (in € millions) 8,983 +17% 470 402 ❖ In addition to the portfolio below GCP has investment property held for sale amounting to ~€175 million,
Slide 9: Market Fundamentals Remain Highly Supportive
MARKET FUNDAMENTALS REMAIN HIGHLY SUPPORTIVE Market fundamentals provide significant tailwind to continuous operational achievements resulting in higher rents, lower vacancies, supporting valuations Germany London ❖ Elevated net migration, urbanization and decreasing household size drive the strong
Slide 10: Maintenance & Capex
MAINTENANCE & CAPEX Cologne (NRW) REPOSITIONING CAPEX REPOSITIONING CAPEX & MAINTENANCE PLAYGROUND (in € per average sqm) Solingen (NRW) - Focus remains on improving asset quality 17.0 16.5 - All capex is directed towards value creation and increasing rental income - Other value-add measures include
Slide 11: Regulatory Environment – Modernisation
REGULATORY ENVIRONMENT – MODERNISATION - GCP continues to monitor the changes with regards to the modernization and sustainability investments. The German government recently rolled out a new subsidy and tax incentive scheme – however, these have changed continuously in recent years, and, in our opi
Slide 12: Strong Financial Profile
STRONG FINANCIAL PROFILE FINANCING SOURCES MIX LOW LEVERAGE INTEREST HEDGING RATIO Wuppertal Fixed & Swapped 3% 8% LOW AND STABLE LTV Bank Debt Capped 45% Board of Directors’ Limit 12% Variable 37% Straight Bond 36% 36% 36% EPRA LTV 7% NET DEBT/ (including perpetual EBITDA notes as debt) 60% Equity
Slide 13: High Headroom for All Covenant Types
HIGH HEADROOM FOR ALL COVENANT TYPES 9M 2023 STRESS CASE 1) COVENANT GCP COVENANT LIMIT RESULTS (value decrease until covenant breach) o GCP has the highest covenant headroom among its listed real -42% Implies €4.7bn TOTAL DEBT / estate peers, while the Company TOTAL ASSETS <=60% (1) 32% (Additional
Slide 14: Bank Financing - Increasing Liquidity and Extending Maturities
BANK FINANCING - INCREASING LIQUIDITY AND EXTENDING MATURITIES STRONG ACCESS TO BANK FINANCING NEW BANK FINANCING YTD Ø MARGIN Ø TERM ❖ GCP closed approx. €440 million of new €440m €110m bank financing in 9M 2023 and signed 9M 2023 Signed Q4 2023 1.4% >7.5 years additional approx. €110 million in Q4
Slide 15: Debt Maturity Schedule
DEBT MATURITY SCHEDULE CURRENT AVERAGE DEBT 1,400 COST OF DEBT MATURITY 1.9% 5.5 years 1,200 1,000 Further increases in liquidity from disposals, operational cash September 2023 Cash and liquid assets EUR Millions 800 cover debt maturities until Q2 2026 flow and new bank debt will continue to extend
Slide 16: Perpetual Notes Refresher
PERPETUAL NOTES REFRESHER 2023 PERPETUAL NOTES NON-CALL DECISIONS ❖ At the end of 2022, GCP announced its decision not to call the €200 million CHARACTERISTICS PERPETUAL NOTES perpetual notes series which had its first call date in January 2023. ❖ In September 2023, GCP announced its decision not to
Slide 17: Guidance
GUIDANCE FY 2023 FFO I 175M – 185M FFO I per share (in €) 1.01 - 1.07 GUIDANCE CONFIRMED Dividend per share (in €)* 0.76 - 0.80 Total net rent like-for-like growth ~3% LTV <45% Leipzig * The dividend will be subject to market condition and AGM approval BERLIN FFO drivers: ❖ Low single digit adj. EBI
Slide 18: Appendix
APPENDIX GCP
Slide 19: Diversified Portfolio with High Growth Potential
DIVERSIFIED PORTFOLIO WITH HIGH GROWTH POTENTIAL 19
Slide 20: Focus on Central Locations in Berlin and NRW
FOCUS ON CENTRAL LOCATIONS IN BERLIN AND NRW* BEST IN CLASS BERLIN PORTFOLIO WELL DISTRIBUTED NRW PORTFOLIO 24% of GCP’s Portfolio Value 4th Largest city in Germany 70% of the Berlin portfolio is 21% located in top tier of GCP’s neighborhoods: Portfolio Charlottenburg, Wilmersdorf, Mitte, Kreuzberg,
Slide 21: High Quality London Portfolio
HIGH QUALITY LONDON PORTFOLIO* 18% of GCP’s WELL CONNECTED ❖The total London portfolio, including pre-marketed units, consists of Portfolio LONDON PORTFOLIO approx. 3,600 units ❖Over 80% of the portfolio is situated within a short walking distance to an underground/overground station ❖Through strong
Slide 22: Quality East and North Portfolio
QUALITY EAST AND NORTH PORTFOLIO QUALITY EAST PORTFOLIO QUALITY NORTH PORTFOLIO DRESDEN/LEIPZIG/HALLE HAMBURG / BREMEN 14%* 5%* of GCP’s of GCP’s Portfolio Portfolio DIVERSIFICATION INTO GERMANY’S DYNAMIC WELL POSITIONED IN Leipzig & Dresden EASTERN CITIES WITH GERMANY’S LARGEST are the largest citi
Slide 23: ESG and Sustainability
ESG AND SUSTAINABILITY ENHANCED REPORTING In order to effectively address the varied interests and priorities of our business partners, investors, tenants, employees and communities NON-FINANCIAL REPORT SUSTAINABILITY INSIGHTS based on 12 topics identified as material in GCP’s materiality externally
Slide 24: ESG Goals and Contribution
ESG GOALS AND CONTRIBUTION 24
Slide 25: Environment
ENVIRONMENT GOING FORWARD Essen Halle Create and deliver a portfolio wide CO2 reduction pathway report by energy auditing the environmental performance of buildings such as the use of energy, waste and water. Continue to switch the electricity supply of all common areas to PPA (Power Purchase Agreem
Slide 26: Social
SOCIAL TENANTS GCP FOUNDATION EMPLOYEES LOOKING FORWARD GCP values diversity – a fact that is also Entertaining, diverse, convincing: GCP From Dortmund to Halle, from Bremen to underlined with almost 40 nations creates attractive digital alternatives to Mainz: Support for charitable projects represe
Slide 27: Governance
GOVERNANCE 1 BEST-IN-CLASS REPORTING LEADING TO HIGH STANDARDS OF TRANSPARENCY - For the SEVENTH CONSECUTIVE year in September 2023, GCP received the EPRA BPR and sBPR gold awards for its financial reporting and sustainability reporting, respectively. 2 EXPERIENCED LEADERSHIP WITH STRONG AND INDEPEN
Slide 28: Financial Policy
FINANCIAL POLICY GCP FINANCIAL POLICY LTV limit at 45% Debt to debt plus equity ratio at 45% (or lower) on a sustainable basis Maintaining conservative financial ratios with a strong ICR Unencumbered assets above 50% of total assets Long debt maturity profile Good mix of long-term unsecured bonds &
Slide 29: Analyst Coverage
ANALYST COVERAGE 19.2 14.5 12.8 12 11.75 10.6 9.2 9 8.5 8.3 8.2 8 8 7.4 7.2 7 Citigroup Kepler Cheuvreux First Berlin HSBC J.P. Morgan DZ Bank Societe Generale Berenberg UBS Goldman Sachs Oddo BHF Deutsche Bank Bank of America Jefferies Kempen & co Barclays 01.09.2023 11.09.2023 17.08.2023 27.09.202
Slide 30: Share Development & Ownership Structure
SHARE DEVELOPMENT & OWNERSHIP STRUCTURE GCP - SHARE PRICE AND TOTAL RETURN SINCE FIRST EQUITY PLACEMENT (19.7.2012) 26 24 Grand City Properties 343% 22 SDAX (rebased) 170% 20 FTSE EPRA/NAREIT 18 73% Germany (rebased) 16 14 12 10 Issue price 8 €2.75 6 4 2 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul
Slide 31: Management
MANAGEMENT Refael Zamir Mr. Zamir is the Chief Executive Officer of Grand City Properties since 2020 (and Daily Manager (administrateur-délégué)). Mr. Zamir has been working for the Group since 2013. He served as Chief Chief Executive Officer Financial Officer from 2014 to 2023 and as Chairman of th
Slide 32: Management
MANAGEMENT Senior Management (continued) Michael Bar-Yosef Mr. Bar-Yosef is responsible for financial modeling and cooperates with equity researchers to analyze their financial models and has more than 10 years of experience. Before joining GCP he served as Senior Financial Analyst a financial and c
Slide 33: Business Risk Profile
CREDIT RATING MATRIX FINANCIAL RISK PROFILE 1 2 3 4 5 6 MINIMAL MODEST INTERMEDIATE SIGNIFICANT AGGRESSIVE HIGH LEVER-AGED 1 aaa/ GCP will continue strengthening its position within the business profile EXCELLENT aa a+/a a- bbb bbb-/bb+ BUSINESS RISK PROFILE aa+ (Vonovia- BBB+)1 2 (GCP) (Aroundtown)
Slide 34: Disclaimer
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 with applicable law, e.g. regarding national and international insider dealing rules, and must not be distribute
Slide 35: Thank You
THANK YOU Investor Relations Team E-mail: gcp-ir@grandcity.lu www.grandcityproperties.com
Grand City Properties — 9M 2023 Earnings Presentation on 6ix