Grand City Properties Sa · XETR:GYC
Grand City Properties Sa — Q3 2017 Earnings Presentation
33 slides from Grand City Properties Sa's earnings presentation, November 2017
Slide 1: Q3 2017 Earnings Call Presentation
Cologne Berlin Leipzig Q3 2017 EARNINGS CALL PRESENTATION NOVEMBER 2017 Munich Berlin
Slide 2: Table of Contents
Table of Contents 1 Highlights 2 Financial and Portfolio performance 3 ESG Outperformer 4 Appendix 2
Slide 3: Highlights
1 Highlights High Sustainalytics score reflecting GCP’s EPRA awards and recognition in Sep 2017 strong ESG commitment 91st Percentile Grand City Properties was ranked in the 91st percentile EPRA BPR GOLD + MOST IMPROVED for financial reporting standards among over 300 real estate peers worldwide by
Slide 4: Financial Highlights 9M 2017
1 Financial Highlights 9M 2017 Strong Rental and Net rent Adjusted EBITDA FFO I operational operating income €242 million €183 million €130 million results €366 million Remarkable FFO I per share 65% of FFO I Profit EPS (basic) Bottom-line €0.83 Dividend yield €404 million €2.13 results (FFO yield:
Slide 5: Profit and Loss
2 Profit and Loss Selected Income Statement Data 1-9/2017 1-9/2016 € million Net rental income in €m Revenue 367 327 Rental and operating income 366 320 242 +15% Net rent 242 210 Capital gains, property revaluations and other income 381 464 210 Property operating expenses (177) (150) Administrative
Slide 6: Adj EBITDA & FFO
2 Adj EBITDA & FFO Adjusted EBITDA in €m +11% 183 1-9/2017 1-9/2016 165 € million Adjusted EBITDA 183 165 Finance expenses (30) (27) Current tax expenses (22) (20) Contribution to minorities (1) (1) 9M 2016 9M 2017 FFO I in €m FFO I 130 117 +11% 130 FFO I per share in € 0.83 0.77 117 FFO I yield (an
Slide 7: Investment Properties
2 Investment Properties Value Investment Properties in € bn Portfolio size in units 5.8 CAGR Sep +26% +21% 2017 4.8 2016 +24% 3.9 2015 86k 83k 76k 2015 2016 Sep 2017 Acquisitions Acquisition Criteria multiple ø 22x 4.5k units Acquisitions across strategic Acquisition in densely populated areas and m
Slide 8: Portfolio Distribution
2 Portfolio Distribution Distribution by value September 2017 Hamburg Nuremberg/ Others 17% Bremen Fürth/ Munich 3% Mannheim/ KL/ NRW 29% Hannover Frankfurt/ Mainz Berlin 5% Bremen/ Hamburg/ Halle Leipzig Hannover 7% Dresden/ NRW Leipzig/ Halle Berlin 22% Dresden 17% Frankfurt Mainz Nuremberg/ Fuert
Slide 9: Portfolio Overview
2 Portfolio Overview Meaningful diversification among areas of sustainable economic fundamentals and demographic prospects Portfolio overview September 2017 Value Area EPRA Annualized In-place rent Number of Value per Rental yield (in €M) (in k sqm) vacancy net rent per sqm units sqm (in €M) (in €)
Slide 10: Portfolio Detailed Distribution as of Sep 2017
2 Portfolio Detailed Distribution as of Sep 2017* Largest European metropolitan area …With focus on areas with well distributed within NRW strong fundamentals Largest city in NRW Quality Berlin locations in top tier neighborhoods Köln 20% Others 23% Duisburg 9% Herne 2% Gelsenkirchen Marl 2% 8% Reck
Slide 11: EPRA NAV
2 EPRA NAV EPRA NAV in €m Sep 2017 Dec 2016 3,734 € million Per share € million Per share CAGR 2014 – Sep 2017 Equity per the financial statements 3,581 3,065 +45% 3,208 incl. perpetuals 3,068 Equity attributable to perpetual notes investors (666) (667) Equity excluding perpetual notes 2,915 2,398 2
Slide 12: EPRA NAV Bridge
2 EPRA NAV BRIDGE 666 3,734 198 3,068 441 -112.5 2,541 Dec 2016 9M 2017 Equity increase Dividend distribution Sep 2017 Equity attributable Sep 2017 EPRA NAV Profit and other Jun 2017 EPRA NAV to perpetual notes EPRA NAV investors incl. perpetual notes 12
Slide 13: Financial policy
2 Financial policy GCP financial policy Strive to achieve A- global rating in the long term LTV limit at 45% Debt to debt+equity 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
Slide 14: LTV
2 LTV Sep Dec Cost of debt 2017 2016 € million Investment property 5,847 4,851 All-time low spreads Assets held for sale 148 146 Series D 2021 0.21% 1.5% Equity accounted investees 65 118 Series E 2025 0.53% Total value 6,060 5,114 Perpetual notes 1.71% Total Debt 2,758 2,415 Cash and liquid assets
Slide 15: Capital structure
2 Capital structure Hedging structure Financing source mix 99% Hedged 19% 21% Straight Bond 17% 16% Bank Debt 8% 7% Convertible 56% 56% Equity Dec 16 Sep 17 Maturity Schedule Issuance of €600 million strengthening financial position: Series G 2026 • repurchase €321m of Series D 2021 bond coupon of 1
Slide 16: Debt coverage and rating
2 Debt coverage and rating Cover Ratios Unencumbered Assets € 3.6 bn 6.1 € 2.8 bn 4.8 € 2 bn 60% of value 56% 53% of value of value ICR* DSCR** *) Adjusted EBITDA / interest **) Adjusted EBITDA / (interest + loan amortization) Dec 2015 Dec 2016 Sep 2017 Corporate Credit Rating A- Long Term BBB+ Baa1
Slide 17: 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 1-9/2017 1-9/2016
Slide 18: ESG Outperformer
3 ESG Outperformer Overall score November 2017 91st Percentile GCP is ranked #30 among 311 real estate peers EPRA BPR GOLD + MOST IMPROVED for financial reporting standards GCP’s continuous ESG efforts have been recognized EPRA sBPR GOLD + MOST IMPROVED for sustainability reporting by Sustainalytics
Slide 19: Appendix
Properties S.
Slide 20: Portfolio Potential
4 Portfolio Potential Residential in-place rent compared to market rent prices Current Annualized Rental Income vs. Market Potential* 440 338 85% 15% Sep 2017 Run-Rate Annualized market potential Below market level at market level * including vacancy reduction 6% of units 12 years subject to rent re
Slide 21: Proven ability to access capital markets
4 Proven ability to access capital markets Equity and Bond Bookrunners Oct-17 Issuance of Series H, 2032 straight bonds of € 110m under the EMTN, coupon of 2.00% p.a Jul-17 Issuance of Series G 2026, 9-year straight bonds €600 million under the EMTN, coupon of 1.375% p.a. and repayment of €321m of S
Slide 22: Analyst coverage
4 I. Analyst coverage Analyst research target price GCP‘s operations are researched by leading real estate market analysts, who conduct Indices independent equity research and target price recommendations FTSE EPRA/NAREIT: Developed Global Developed Europe GPR (Global Property 22 Research) 250 Index
Slide 23: 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: 164.8 million/ Fully diluted amount of shares: 183.5 million 23
Slide 24: Outperforming
4 I. Outperforming Straight Bond Series D Spread over mid-€-swap, remaining 4 years Straight Bond Series E Spread over mid-€-swap, remaining 7.5 years 3.75% Perpetual notes Spread over mid-€-swap 24
Slide 25: Most successful IPO since 2007
4 I. Most successful 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 25 Nr. 34, page 23
Slide 26: 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 27: 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 28: Credit rating matrix
4 Credit rating matrix 1 2 3 4 5 6 Min Modest Aggre- High - Intermediate Significant ssive Lever- imal aged 1 aaa Excellent bbb- / aa a+/a a- bbb /bb+ aa+ GCP will continue strengthening its position within the business profile Business risk profile 2 (Vonovia- BBB+)* aa/ Strong aa- a+/a A- BBB+ BBB
Slide 29: 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 of Change (MAC) clause approx. €2
Slide 30: Hannover Dresden Mannheim
Hannover Mannheim Berlin Dresden Essen Duisburg Leipzig Hamburg Berlin 30
Slide 31: Cologne Berlin Halle
Cologne Berlin Halle Gelsenkirchen Leipzig Berlin Berlin Frankfurt Nuremberg 31
Slide 32: Berlin Leipzig Munich
Berlin Leipzig Munich Bremen Wuppertal Dortmund 32
Slide 33: 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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