Covivio SA · EURONEXT:COV
Covivio SA — Q3 2020 Earnings Presentation
35 slides from Covivio SA's earnings presentation, 2020
Slide 1: Q3 Results 2020
5 Q3 RESULTS | 2020 COVIVIO
Slide 2: Summary
SUMMARY I. UPDATE ON COVIVIO’S MARKETS & KEY ACHIEVEMENTS I.A. Update on Covivio’s markets I.B. Q3 2020 key achievements II. ACTIVITY AT END-SEPTEMBER I. II.A. Development pipeline II. II.B. Letting activity & revenues APPENDIX 2
Slide 3: Update on Covivio's markets & key achievements
I. UPDATE ON COVIVIO’S MARKETS & KEY ACHIEVEMENTS ► Update on Covivio’s markets ► Q3 2020 key achievements Milan Via Dante 3
Slide 4: Update on offices markets: France, Italy & Germany
UPDATE ON OFFICES MARKETS / FRANCE, ITALY & GERMANY LETTING ACTIVITY … WHILE INVESTMENT MARKET PICKING-UP SLOWLY… REMAINS ACTIVE €34 Bn YTD In Greater Paris and top 7 German cities1 In France, Italy & Germany Take-up Numerous transactions comforting valuations Both in Paris & the first ring +13% 47,
Slide 5: German residential market: supportive environment continues
GERMAN RESIDENTIAL MARKET / SUPPORTIVE ENVIRONMENT CONTINUES Focus on Berlin Rental offer is dropping Number of apartments on offer to rent, in thousand new units needed per year Severe housing 400,000 in Germany 14.8 shortage… 12.5 11.4 11.1 12.7 11.7 12.3 11.7 10.6 9.1 8.6 6.8 6.8 6.9 6.5 6.1 5.4
Slide 6: Hotel market: short-term uncertainty persists
HOTEL MARKET / SHORT-TERM UNCERTAINTY PERSISTS THE NEED & WILL TO TRAVEL IS THERE… -55% RevPar in Europe in August Covivio’s main hotel exposure, France & Germany outperforming the rest of Europe in August Better performance than expected during July & August thanks to easing travel restrictions May
Slide 7: Update on Covivio's markets & key achievements
I. UPDATE ON COVIVIO’S MARKETS & KEY ACHIEVEMENTS ► Update on our markets ► Q3 2020 key achievements Berlin Residential, new development 7
Slide 8: Full letting of Paris 5th Gobelins
FULL LETTING OF PARIS 5TH GOBELINS… 4,500 M² REDEVELOPMENT PROJECT OF A FORMER ORANGE BUILDING TRANSFORMATION OF AN OBSOLETE ASSET 5.0% 1. INTO A NEW EFFICIENT BUILDING EBIT yield €2.5 m EBIT Departure of Orange & launch of redevelopment = End-2018 for €50 m total cost +15% margin vs IFRS market ren
Slide 9: Proving the relevance of Covivio office strategy
…PROVING THE RELEVANCE OF COVIVIO OFFICE STRATEGY OFFERING OFFERING INCREASING QUALITY LOCATIONS QUALITY BUILDINGS THE RANGE OF REAL THROUGH THE PIPELINE ESTATE SOLUTIONS A high level of services as a key differentiating strength ✓ Transforming obsolete buildings Major business districts in into eff
Slide 10: Disposals: close to €500 million with +12% margin
DISPOSALS / CLOSE TO €500 MILLION WITH +12% MARGIN ON TRACK TO >€600 MILLION GROUP SHARE TARGET FOR 2020 Disposal agreements €m €m Gross yield Margin New disposals in Q3 End-September 2020 100% Group share Group share Group share Mature & non-core France offices1 €190 m €190 m 5.6% 7% offices in Fra
Slide 11: Delivering on German residential pipeline
DELIVERING ON GERMAN RESIDENTIAL PIPELINE 2017: INITIATION 2018-2020: PIPELINE DOUBLED 2020: FIRST DELIVERIES 2021 & BEYOND by acquiring land banks Exploiting land banks Successful projects Acceleration of deliveries on our portfolio 1/3 of projects committed with 46% margin on sale Incl. 1,600 m² l
Slide 12: Closing hotel acquisition
CLOSING HOTEL ACQUISITION TOURISM WILL COME BACK IN TOP EUROPEAN DESTINATIONS €573 million CLOSING OF THE ACQUISITION OF 8 HOTELS €248 m Group share In the heart of some of the most visited European cities 1,115 rooms PALAZZO NAIADI ROME PALAZZO GADDI FLORENCE HOTEL DEI DOGI VENICE HOTEL BELLINI VEN
Slide 13: ESG ratings: Covivio ranked among the world leaders
ESG RATINGS / COVIVIO RANKED AMONG THE WORLD LEADERS 3 AGENCIES HAVE UPDATED THEIR RATING IN Q3 B- Best possible rating Prime status Sector leader1 Among the sector Top 3% worldwide leaders Ranked 5th worldwide out of 358 real estate companies out of 4,823 companies (all sectors) 13 1 #1 out of 86 E
Slide 14: Activity at end-September
II. ACTIVITY AT END-SEPTEMBER ► Development pipeline ► Letting activity & revenues Milan The Sign 14
Slide 15: Development pipeline: 72,000 m² delivered YTD
DEVELOPMENT PIPELINE / 72,000 M² DELIVERED YTD €332 M COST IN GROUP SHARE GREATER PARIS ITALY GERMANY 25,600 M² 38,200 M² 7,800 M² Châtillon - IRO MILAN - The Sign A MILAN - Duca D’Aosta MILAN - Symbiosis School BERLIN Residential 25,600 m² / €138 m / 6.4% yield 9,260 m² / €39 m / 7.3% yield 2,600 m
Slide 16: Q3 office activity: letting activity picking up in September
Q3 OFFICE ACTIVITY / LETTING ACTIVITY PICKING-UP IN SEPTEMBER 125,000 M² LET OR RENEWED IN Q3 Activity YTD Of which in Q3 Mainly New lettings, mainly on 14,600 m² Chatillon IRO 45,400 m² the pipeline for 7 years Two assets in Milan CBD Turin Corso Ferrucci 23 Orange assets in France Renewals with lo
Slide 17: German residential revenue: +2.8% LFL rental growth
GERMAN RESIDENTIAL REVENUE / +2.8% LFL RENTAL GROWTH Berlin 49% of rents +2.1% LfL NRW, Hamburg, +3.4% Hamburg Berlin +2.1% Dresden 7% of rents +2.6% LfL & Leipzig Dresden & Leipzig 10% of rents +3.6% LfL NRW 34% of rents +3.5% LfL rental growth Rental growth slowing Rental growth due to regulation
Slide 18: Revenues at end-September: +1.5% LFL excluding hotels
REVENUES AT END-SEPTEMBER / +1.5% LFL EXCLUDING HOTELS Revenues Revenues Revenues % change Average Occupancy rate End-September 2020, €million 9 months 2020 9 months 2019 9 months 2020 like-for-like lease term % 100% Group share Group share Group share firm, in years France Offices 180.8 171.9 157.8
Slide 19: Key takeaways
KEY TAKEAWAYS 1. OPERATIONAL RESULTS IN LINE WITH GUIDANCE ANNOUNCED IN JULY In Offices: Covivio’s strategy is proving relevant 2. DELIVERING ON THE PIPELINE In Residential: accelerating on deliveries with high-value creation 3. DISPOSAL PLAN WELL ON TRACK TO REACH TARGET OF >€600 M GROUP SHARE 19
Slide 20: Appendix
APPENDIX Paris 5th Gobelins 20
Slide 21: Portfolio
PORTFOLIO COVIVIO
Slide 22: A high-quality, well located offices portfolio
A HIGH-QUALITY, WELL LOCATED OFFICES PORTFOLIO €12.4 bn €10.2 bn Group share AT END-JUNE 2020 92% LOCATED IN1 PARIS €2.4 bn Group share GREATER PARIS €2.6 bn MILAN TOP 5 GERMAN CITIES & €2.2 bn & €1.4 bn MAJOR FRENCH CITIES €0.8 bn Lyon, Bordeaux, Marseille, Lille 22 1 Excluding Telecom Italia portf
Slide 23: France offices portfolio
FRANCE OFFICES PORTFOLIO Covivio’s Greater Paris Portfolio A €7.1 BN PORTFOLIO €5.9 bn in Group share Rueil-sur-Seine 23% Western Crescent and La Défense 20% 1st Ring % value Group share 1% 2nd Ring 40% 13% Paris Major Regional Cities PARIS CENTER OUEST 2% Regions LA DÉFENSE COVIVIO ASSETS (% of the
Slide 24: Orange assets: value creative redevelopment potential
ORANGE ASSETS / VALUE CREATIVE REDEVELOPMENT POTENTIAL 520,000 M² OF PARISIAN ASSETS WITH HIGH POTENTIAL FOR TRANSFORMATION CARNOT LABORDE Paris 17th Paris 8th 11,200 m² 6,200 m² Pereire N2 Batignolles Montmartre Maillot Laborde Jemmapes Carnot The Line Provence J. Goujon Anjou Ménilmontant VALUE Pe
Slide 25: Italy offices portfolio
ITALY OFFICES PORTFOLIO Milan: a €2.3 bn portfolio (€2.2 billion Group share) Focusing on Milan (excl. Telecom Italia) focused on the best locations Milan M3 89% M5 Bicocca % value excl. Telecom M1 Italia M2 PORTFOLIO 100% - M1 Certosa Maciachini €3.6 BN Group share Outside Milan 11% Porta Nuova Cit
Slide 26: Germany offices portfolio
GERMANY OFFICES PORTFOLIO In the Top 5 German cities Other 1% Munich 8% Berlin 21% PORTFOLIO 100% €1.7 BN Hamburg 19% % value - Group share Frankfurt Düsseldorf PORTFOLIO 31% GROUP SHARE 21% €1.4 BN +€0.6 bn of development potential Especially in Berlin Alexanderplatz Frankfurt – City Gate 26
Slide 27: Covivio flexible offer: 21,300 m² opened
COVIVIO FLEXIBLE OFFER / 21,300 M² OPENED ON 6 SITES EUROMED MARSEILLE GARE DE LYON – PARIS 12th DANTE 7 – MILAN SILEX II – LYON Opening of the 1st site in Marseille 2nd site in Paris Opening of the 1st site in Milan Opening of the 1st site in Lyon 2,300 m² 5,000 m² 4,700 m² 5,000 m² Mixed building
Slide 28: German residential portfolio
GERMAN RESIDENTIAL PORTFOLIO Berlin: a €3.6 billion portfolio (€2.3 bn Group share) focused on the best locations Prime locations Average locations 72% of the portfolio 5% of the portfolio Covivio Assets 10% Good locations Basic locations Dresden & Leipzig 7% 23% of the portfolio Hamburg PORTFOLIO 1
Slide 29: Hotels: a unique portfolio able to face a conjunctural crisis
HOTELS / A UNIQUE PORTFOLIO ABLE TO FACE A CONJUNCTURAL CRISIS …WITH SOUND 87% IN MAJOR EUROPEAN CITIES1… PROFITABILTY PROFILE PORTFOLIO2 €2.4 BN Edinburgh ~35% Group share Germany Amsterdam 26% EBITDAR Margin Warsaw in 2019 UK Berlin London 15% Lille Brussels Krakow % value2 Paris Munich France Spa
Slide 30: Covivio hotel portfolio: diversified by tenant & segment
COVIVIO HOTEL PORTFOLIO / DIVERSIFIED BY TENANT & SEGMENT 27% Economic B&B 11% RHG 11% IHG 17% Marriott 7% 38 % % revenue1 Midscale % value in Group Share NH Hotels in Group Share 7% Hotusa 3% Accor Barcelo 27% 2% 35% Upscale Other 15% 1 Based on 2019 annualized revenues 30
Slide 31: ESG Strategy
ESG STRATEGY COVIVIO
Slide 32: Covivio carbon trajectory: -1/3 over 2010-2030
COVIVIO CARBON TRAJECTORY: -1/3 OVER 2010-2030 Covivio carbon trajectory -1/3 carbon weight/m² over 2010-2030 In line with the <2° trajectory of the 2015 Paris agreement Average carbon weight per m² ▪ Over all European activities Average carbon weight per m² ▪ Taking into account the whole life cycl
Slide 33: Owning & developing sustainable buildings in a sustainable city
OWNING & DEVELOPING SUSTAINABLE BUILDINGS IN A SUSTAINABLE CITY… GREENER 84% 100% ASSETS with in German residential Target 2025 First operator to obtain 100% of assets certified “HQE in Operation” in Germany CLOSE TO PUBLIC 96% 100% TRANSPORT <5’ walk from public transports Target 2025 Target SUPPOR
Slide 34: Generating more well-being for end-users
…AND GENERATING MORE WELL BEING FOR END-USERS E Success of our flex-workspace offer MORE Target 100% of office & residential buildings Offer a digital journey to our clients SERVICES with a service offer by 2025 ► Deployment of our Office service app started in 2020 ► Residential app available to 10
Slide 35: Contact
CONTACT Paul Arkwright Hugo Soussan Tel.: +33 1 58 97 51 85 Tel.: +33 1 58 97 51 54 Mobile: +33 6 77 33 93 58 Mobile: +33 6 84 44 95 40 paul.arkwright@covivio.fr hugo.soussan@covivio.fr Paris 30, avenue Kléber 75116 Paris Tel.: +33 1 58 97 50 00 www.covivio.eu