Aroundtown Sa · XETR:AT1
Aroundtown Sa — Aroundtown Sa Ord — Q1 2020 Earnings Presentation
46 slides from Aroundtown Sa's earnings presentation, May 27, 2020
Slide 1: Q1 2020 Financial Results Presentation
Q1 2020 FINANCIAL RESULTS PRESENTATION MAY 2020 Berlin
Slide 2: Table of Contents
TABLE OF CONTENTS HIGHLIGHTS FINANCIAL RESULTS OPERATIONS AND PORTFOLIO APPENDIX Berlin 2
Slide 3: Highlights
HIGHLIGHTS Insignificant impact from Covid-19 on Q1 operational results MERGER WITH TLG CONCLUDED REINFORCING THE DEFENSIVENESS OF THE BALANCE SHEET HIGH LIQUIDITY AND UNENCUMBERED ASSETS DEFENSIVE DEBT PROFILE ➢ Best-in-class debt profile: ➢€3bn cash and liquid assets, 9% of total assets (as of Mar
Slide 4: Financial Results
FINANCIAL RESULTS Frankfurt 4
Slide 5: Profit and Loss
PROFIT AND LOSS 1-3/2020 1-3/2019 Net rental income, recurring long-term* (in €m) in € millions REVENUE 277.7 207.5 RECURRING LONG-TERM NET RENTAL INCOME 233.4 175.5 CAGR 2017-Q1 2020 annualized +13% PROPERTY REVALUATIONS AND CAPITAL GAINS 318.4 239.9 1,052 Share in profit from investment in equity-
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA 1-3/2020 1-3/2019 in € millions Subtracted as these profits include AT’s share in non- Operating profit 536.4 479.2 operational profits generated by the equity accounted Total depreciation and amortization 1.0 0.5 investees EBITDA 537.4 479.7 Property revaluations, capital gains and
Slide 7: FFO I & FFO II
FFO I & FFO II 1-3/2020 1-3/2019 FFO I per share FFO I PER SHARE (in €) FFO I per share after in € millions perpetual ADJUSTED EBITDA COMMERCIAL PORTFOLIO, 196.5 148.1 RECURRING LONG TERM CAGR Finance expenses, net (45.5) (33.7) FFO I 0.46 Current tax expenses (24.4) (12.5) per share 0.43 Contributi
Slide 8: Total Assets
TOTAL ASSETS Total Assets (in €bn) Investment Property (in €bn) CAGR CAGR +46% 32.3 +47% 23.2 25.4 18.1 19.0 14.2 13.8 9.8 Dec 2017 Dec 2018 Dec 2019 Mar 2020 Dec 2017 Dec 2018 Dec 2019 Mar 2020 Frankfurt 8
Slide 9: EPRA NAV
EPRA NAV Mar 2020 Dec 2019 EPRA NAV (in €m) in € millions Per share in € millions Per share NAV PER THE FINANCIAL STATEMENTS 16,248.0 13,378.9 CAGR Equity attributable to perpetual notes investors (3,109.1) (2,484.0) EPRA NAV incl. perpetual notes NAV EXCLUDING PERPETUAL NOTES 13,138.9 10,894.9 15,2
Slide 10: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE 1200 DEBT MATURITY PROFILE STRONG DEBT AND HEDGING PROFILE Millions Debt maturity 1000 6.4 years average 800 maturity 93% 2% 600 5% Cost of debt 400 1.6% Ø cost of debt 200 fixed, swapped cap variable 95% 0 hedged 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Slide 11: Aroundtown Bond Covenants
AROUNDTOWN BOND COVENANTS ✓ Each of the bond covenants is met with a significant headroom. Internal financial policy is set at stricter levels ✓ ECB eligibility: Bonds issued under the EMTN Programme (Listed in the EU)* ✓ The bonds are unsecured and have the below covenant package: Overview of Coven
Slide 12: Operations and Portfolio
OPERATIONS AND PORTFOLIO Frankfurt 12
Slide 13: Highly Diversified Overview Provides Stability
HIGHLY DIVERSIFIED OVERVIEW PROVIDES STABILITY STRONG DIVERSIFICATION AMONG ASSET CLASSES WITH DIFFERENT FUNDAMENTAL DRIVERS The largest type is office and together with Logistics/Wholesale and Residential, it makes up 68% of the Group portfolio 87% of the portfolio is located in the strongest econo
Slide 14: Defensive Portfolio with Strong Tenant Structure
DEFENSIVE PORTFOLIO WITH STRONG TENANT STRUCTURE Large Tenant Base with over 4,000 tenants ➢Collection rate in April 2020 excl. hotels 90% ➢Limited dependency on single tenants due to large tenant base of over 4,000 tenants, further supported by highly granular German The merger with TLG puts the re
Slide 15: Office Portfolio
OFFICE PORTFOLIO WELL LOCATED OFFICES IN TOP TIER CITIES MAINLY IN GERMANY AND THE NETHERLANDS Well-diversified with no dependency on a single location (Top 3 cities are Berlin, Frankfurt, Munich) Strong tenant base with well-diversified industry sectors. Top industries are Governmental, Insurance &
Slide 16: Office Portfolio and Residential Portfolio
OFFICE PORTFOLIO AND RESIDENTIAL PORTFOLIO GERMANY & NL: Berlin (26%), Frankfurt (15%), Munich (14%) Over 92% collection rate in April 2020 so far OFFICE 49% High diversification of tenants and tenant industries 4.5y WALT Limited amount of tenants with high sensitivity to the Covid-19 Hotel 23% GERM
Slide 17: Retail & Logistics/Wholesale Properties
RETAIL & LOGISTICS/WHOLESALE PROPERTIES 80% collection rate in April 2020 so far Majority of the portfolio is essential goods - Grocery- anchored, pharmacies, drugstores, banks, DIY Residential Office 49% 12% RETAIL 9% Grocery-anchored at mainly long-leased retail boxes in 5y WALT locations with lim
Slide 18: Hotel Portfolio
HOTEL PORTFOLIO WELL-DISTRIBUTED HOTEL PORTFOLIO ACROSS EUROPE WITH A FOCUS ON THE 4 STAR CATEGORY Hotel portfolio consisting of 23% of the total portfolio including 176 hotels well-distributed mainly in top tier cities in Europe The rental agreements are double or triple net, fixed plus CPI linked
Slide 19: Hotel Portfolio
HOTEL PORTFOLIO GERMANY & UK & NL Retail 9% Logistics/ Wholesale 176 Hotels Residential 12% /Other 7% HOTELS 23% Fixed long term leases to >30 different third party hotel operators 15y WALT Q1 results: Limited impact from Covid-19 on collection rate Focus on top tier Q2 : Challenging for the hotel i
Slide 20: Hotels – Current Stage
HOTELS – CURRENT STAGE CURRENT STAGE OF RE-OPENING HOTELS COUNTRY BREAKDOWN BY RENT Did not close: 20 hotels (9% of rent) AND SHUTDOWN RESTRICTION LIFTED Opened in May: 35 hotels (20% of rent) Open by end of May As of end of May: 75 hotels (50% of rent) Mostly opening Germany 50% by May-June Current
Slide 21: Tenants and Brands
TENANTS AND BRANDS Hilton group Marriott group Wyndham Brands Fixed of 10-25 years (WALT of 15 years) leases to over 30 different strong third party hotel Radisson brands IHG brand Accor group operators, operating with high profitability for many years No dependency on any single tenant. Center Parc
Slide 22: Stages Preparedness
AROUNDTOWN IS WELL-PREPARED FOR EVERY STEP OF THE CYCLE STAGES PREPAREDNESS THREAT FOR TENANTS RISK MITIGATION Long-term shutdown High liquidity to contain the impact, healthy balance sheet, high flexibility & large headroom Unable to work at full-capacity Well-diversified portfolio: Offices, reside
Slide 23: Appendix
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Slide 24: Commercial Investment Properties
COMMERCIAL INVESTMENT PROPERTIES Portfolio breakdown per asset type* Investment Lettable area Annualized MARCH 2020 EPRA Vacancy In-place rent/sqm (€) Value/sqm (€) Rental Yield property (€m) (k sqm) net rent (€m) Office 11,751 4,116 9.6% 516 10.9 2,855 4.4% Hotel 6,126 1,922 3.6% 321 14.2 3,187 5.2
Slide 25: Best in Class Berlin Portfolio – March 2020
BEST IN CLASS BERLIN PORTFOLIO – MARCH 2020 ➢ 88% of the commercial portfolio is located in top tier neighborhoods 88% • Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, Friedrichshain, Top Tier Lichtenberg, Schöneberg, Neukölln, Steglitz and Potsdam • Strongly benefiting from the unique dynamics & gr
Slide 26: Commercial Portfolio: Upside Potential
COMMERCIAL PORTFOLIO: UPSIDE POTENTIAL Commercial in-place rent compared to market rent prices Commercial March 2020 annualized rental income vs. Market potential including vacancy reduction (in €m) +25% 1,315 1,052 below market 20% rent 80% at market rent Mar 2020 annualized Annualized market poten
Slide 27: Strategic Top Tier Hotels in Strong Locations
STRATEGIC TOP TIER HOTELS IN STRONG LOCATIONS WITH FASTER RECOVERY POTENTIAL Hotel Rooms Brand Hilton Berlin Gendarmenmarkt Prime Center 601 Bristol Berlin Ku’damm Prime Center (ex-Kempinski) 301 InterContinental Frankfurt Prime Center 473 Hilton London Hyde Park Prime Center 132 Marriott Conference
Slide 28: Highest Rated in German Commercial Real Estate
HIGHEST RATED IN GERMAN COMMERCIAL REAL ESTATE Financial risk profile Financial policy: 1 2 3 4 5 6 Minim Modest Intermediate Significant Aggre High al ssive Levera ged Strive to achieve A global rating in the long term 1 aaa/ bbb- Business risk profile Excellent aa a+/a a- bbb aa+ /bb+ 2 aa/ (Klepi
Slide 29: Equity Analyst Research Coverage
EQUITY ANALYST RESEARCH COVERAGE Analyst Research Target Price 11.00 10.81 10.00 9.80 9.50 9.25 9.00 8.80 8.50 8.40 8.30 8.30 7.75 7.40 6.52 6.50 6.40 5.90 4.60 HSBC Citigroup First Berlin Commerzbank SRC Research Baader Bank Hauck & M.M. Warburg JP Morgan Oddo BHF Deutsche Bank UBS Kepler Berenberg
Slide 30: Aroundtown's Share Price Performance
AROUNDTOWN‘S SHARE PRICE PERFORMANCE Share performance and total return since initial placement of capital (13.7.2015) 9.0 Aroundtown is the best performer in 2017/2018 amongst European real Estate 8.0 7.0 Aroundtown +68% EPRA Germany (rebased) +74% 6.0 MDAX +24% 5.0 (rebased) Issue price of €3.20 4
Slide 31: Capital Market Activity
CAPITAL MARKET ACTIVITY Capital market activity per year Capital market activity per issuance type 2015-2020 YTD €4.6bn €4.2bn €4.2bn Str. Bond €10bn €3.0bn €2.6bn Conv. €1.2bn Bond €0.8bn Equity €6.2bn €2.6bn €0.2bn 2015 2016 2017 2018 2019 2020 YTD Equity Perpetual Conv. Bond Equity (incl. Convers
Slide 32: Board of Directors
BOARD OF DIRECTORS FRANK ROSEEN - DIRECTOR MARKUS LEININGER- INDEPENDENT DIRECTOR FORMER SENIOR BANKER WITH A FOCUS ON FINANCING, PRIVATE EQUITY AND REAL ESTATE. HIGHLY EXPERIENCED WITH A TRACK RECORD OF 30 YEARS. HELD VARIOUS SENIOR MANAGEMENT SERVED AS HEAD OF OPERATIONS WITH EUROHYPO AG AND RHEIN
Slide 33: Management Team
MANAGEMENT TEAM MARKUS NEURAUTER - HEAD OF COMMERCIAL OPERATIONS SHMUEL MAYO - CEO BEFORE JOINING THE GROUP HE WAS A BOARD MEMBER OF STRABAG AG AND CEO OF RAIFFEISEN EVOLUTION, RESPONSIBLE FOR PROJECT DEVELOPMENT IN 11 EUROPEAN COUNTRIES WITH A SINCE 2006 IN THE MANAGEMENT OF AROUNDTOWN AND ITS DEVE
Slide 34: Berlin Potsdamer Platz: The Prime Commercial and Tourist Center
BERLIN POTSDAMER PLATZ: THE PRIME COMMERCIAL AND TOURIST CENTER landmark Potsdamer Platz Office Potsdamer Platz property Office Crowne Plaza Potsdamer Platz Hotel Checkpoint Charlie Potsdamer Platz Hotel Office Potsdamer Platz Checkpoint Charlie Residential (GCP) Office Potsdamer Platz Checkpoint Ch
Slide 35: Berlin Alexanderplatz: The Prime Commercial and Tourist Center
BERLIN ALEXANDERPLATZ: THE PRIME COMMERCIAL AND TOURIST CENTER Berlin Mitte Berlin Mitte Berlin Prime Center Mitte Residential (GCP) Residential (GCP) Hotel landmark Alexanderplatz Prenzlauer Berg Greifswalder str. Berlin Mitte Office Mixed-use campus Retail Berlin Mitte Residential (GCP) property R
Slide 36: Berlin Ku'Damm: The Prime Commercial and Tourist Center
BERLIN KU’DAMM: THE PRIME COMMERCIAL AND TOURIST CENTER Berlin Mitte City Center Retail Berlin City Center Mitte Office Potsdamer Platz landmark AC by Marriot Ku’Damm KaDeWe Berlin Mitte Hotel Residential (GCP) Moxy by Marriot Berlin Mitte property Hotel Ku’Damm KaDeWe Office Berlin City Center Mitt
Slide 37: Frankfurt: Quality Assets in Central Locations
FRANKFURT: QUALITY ASSETS IN CENTRAL LOCATIONS landmark property Frankfurt Büro Center (FBC) Frankfurt HBF Frankfurt Stadtmitte Frankfurt Main Triangel InterContinental Frankfurt Frankfurt HBF Frankfurt Office Campus Office Office Office Office Hotel Office Office European Central Bank Headquarters
Slide 38: Development Rights: Prime Center Berlin Alexanderplatz
DEVELOPMENT/BUILDING RIGHTS: PRIME CENTER BERLIN ALEXANDERPLATZ PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL ➢ TLG’s office building on Berlin’s Alexanderplatz covers 55k ➢ The asset’s district “Mitte” is Berlin’s top office district ➢ Development plans include three new buildings,
Slide 39: Development Rights - Hilton Berlin Gendarmenmarkt
DEVELOPMENT/BUILDING RIGHTS - HILTON BERLIN PRIME CENTER GENDARMENMARKT PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL ➢ The 4 star Hilton Hotel is located in the heart of Berlin on ➢ The asset’s district “Mitte” is Berlin’s top office district ➢ Overground parking garage: Conversion
Slide 40: Development Rights - Berlin Kreuzberg/Alt-Treptow
DEVELOPMENT/BUILDING RIGHTS - BERLIN KREUZBERG/ALT-TREPTOW PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL ➢ The cinema center holds 7k sqm & is located across the ➢ Located between Mediaspree and Adlershof Science Park, ➢ Conversion into an office building: Park Center retail/office c
Slide 41: Development Rights - Berlin Treptow-Köpenick Brewery Project
DEVELOPMENT/BUILDING RIGHTS - BERLIN TREPTOW-KÖPENICK – THE BREWERY PROJECT PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL ➢ This office property is located in the Niederschöneweide ➢ Located between Treptower Park and Adlershof Science ➢ Conversion and development into mixed use urba
Slide 42: Development Rights - Frankfurt Main Central Train Station
DEVELOPMENT/BUILDING RIGHTS - FRANKFURT MAIN CENTRAL TRAIN STATION PROPERTY DESCRIPTION MARKET DEMAND VALUE EXTRACTION POTENTIAL ➢ The 22 storey office tower covers 21k sqm and is situated ➢ The office tower is located at the corner of ➢ Aroundtown recently acquired the office tower. The asset adjac
Slide 43: Regional Market Overview
REGIONAL MARKET OVERVIEW Bremen Hamburg ◼ GDP growth1 : 3.3% ◼ GDP growth1 : 2.4% ◼ Migration balance2: 1.1% ◼ Migration balance2: 0.9% ◼ Population density3: 1,734 per km2 ◼ Population density3 : 2,397 per km2 Amsterdam Hannover ◼ GDP growth1 : 3.8% ◼ GDP growth1 (NI): 2.5% ◼ Migration balance2: 6.
Slide 44: German Hotel Market - Domestic Travel Key for Recovery
GERMAN HOTEL MARKET - DOMESTIC TRAVEL WILL BE THE KEY FOR RECOVERY FROM COVID-19 Share of domestic travel German hotel market is among the least volatile hotel markets in in % of total travel Europe due to: 85% High share of domestic travel 81% Low dependency on long-haul flights 61% 58% 57% 53% 47%
Slide 45: German Hotel Market – Fast Recovery During Past Crisis
GERMAN HOTEL MARKET – FAST RECOVERY DURING PAST CRISIS Owing to high share of domestic travel and low dependency on long-haul flights, German hotel market recovered swiftly from the financial crisis, much quicker than the rest of Europe and also at a higher acceleration rate Source: OECD, last data
Slide 46: 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