Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — H1 2018 Earnings Presentation
47 slides from Altarea Sca's earnings presentation, 2018
Slide 1: Leading property developer in France: 2018 half-year results
LEADING PROPERTY DEVELOPER IN FRANCE 2018 HALF-YEAR RESULTS
Slide 2: Disclaimer
Disclaimer This presentation has been prepared for information purposes only, and is intended to supplement other information published by Altarea Cogedim, which readers are encouraged to refer to. It is not, and must not be interpreted as, a solicitation, recommendation or offer to purchase, sell,
Slide 3: 2018 half year: key figures
2018 half year: key figures Revenue Revenue Net rents Revenue €798.5m €192m €84.2m €1,096m +25% +15% +0.9% on a lfl basis +20.1% New orders New orders Retail portfolio FFO €4.7bn €124.2m 7.8 €/share 5,207 units €332m incl. transfer duties +7.6% +2.6% +8% 36 assets NAV €2,747m 171.2 €/share +7.0% yoy
Slide 4: Pipeline: leading property developer in France
Pipeline Leading property developer in France €17.8bn 4.1 million m² * in potential value €9.9bn 2.2 million m² €4.6bn 1.3 million m² €3.3bn 0.6 million m² * Pipeline essentially secured in the form of options 2018 HALF-YEAR RESULTS / 4
Slide 5: Large mixed-use projects
01. LARGE MIXED-USE PROJECTS Joia Méridia – Nice 2018 HALF-YEAR RESULTS / 5
Slide 6: Large mixed-use projects: massive needs for property infrastructure
Large mixed-use projects Massive needs for property infrastructure MASSY-PALAISEAU, A TOWN BUILT AROUND A TRAIN STATION Massy in Territorial 1950 (population metropolisation 6,400) Areas once located on the outskirts of the main city are being transformed into real urban centres Paris Greater Area:
Slide 7: Altarea Cogedim: leader in large mixed-use projects in France
Altarea Cogedim Leader in large mixed-use projects in France 10 > 860,000 m² projects ongoing total surface area at 100% One-stop shop for local authorities Unique for: Its retail/leisure know-how Its dedicated organisation The Group financial backing AEROSPACE – Toulouse – 75,000 m² 7 2018 HALF-YEA
Slide 8: Two new major projects won
Two new major projects won JOIA MERIDIA – Nice – 73,500 m² QUARTIER DES GASSETS – Marne-la-Vallée – >100,000 m² Mixed-use project with a main retail component 800 units 2,900 m² 4,700 m² 8,000 m² capitalising on a unique location 2018 HALF-YEAR RESULTS / 8
Slide 9: Residential
02. RESIDENTIAL L’hospotalité - Kremlin Bicêtre 2018 HALF-YEAR RESULTS / 9
Slide 10: New housing market trends
New housing market Trends A TWO-TIER MARKET A STRONG DEMAND SUPPLY ISSUES Slight fall nationwide 1st-time buyers: Scarcity of operable land ~120,000 units expected improved solvency for short term projects Slowdown in “B-class” areas Price stability (B2 and C) Interest rates and credit insurance Ris
Slide 11: 2018 half year: strong performances
2018 half year Strong performances SUPPLY COMMERCIAL LAUNCHES NEW ORDERS REVENUE MELUN HOPITAL – Melun (77) CŒURS MEUNIERS – Bagneux (92) RÉVÉLATIONS – Nantes (44) GRAND CŒUR – Bures-sur-Yvette (91) €1,990m €1,296m 5,207 €1,282m €798m (incl. tax) (incl. tax) units (incl. tax) (excl. tax) 8,074 units
Slide 12: A multi-brand strategy
A “multi-brand” strategy OBJECTIVE: INCREASE OUR MARKET SHARES ORGANISATION Operational issues addressed A leading French brand at brand level with a nationwide reputation Sourcing, implementation, clients Each entity keeps its own culture Strengthened by a second brand Pooling of resources and
Slide 13: Histoire & Patrimoine: urban renovation and historic buildings
Histoire & Patrimoine Leading specialist in urban renovation & historic buildings A property developer specialising in the redevelopment of remarkable buildings (tax saving scheme) Historical buildings / Malraux / Land deficit / Pinel Revenue: €100-200m HÔTEL VOYSIN – Paris Le Marais HÔTEL D’AUX – N
Slide 14: Pipeline: strong outlooks
Pipeline Strong outlooks Révélations – First conversion of a prison in France – Nantes €9.9 bn (incl. tax) potential value 158 residential of which 50% 4 years of business social housing 1 40-place nursery 40,181 units 1 theatre 99% Pyramide d’Or 2018 in “A-class” areas eligible for Grand Prix Natio
Slide 15: Business property
03. BUSINESS PROPERTY Convergence – Rueil Malmaison 2018 HALF-YEAR RESULTS / 15
Slide 16: A strong market in Paris Greater area
A strong market in Paris Greater area SHORTAGE OF SUPPLY INCREASE IN RENTAL VALUES STRONG INVESTMENT MARKET Recovery in employment Lack of suitable supply High level +83,000 jobs in 6 months Transaction volumes up of investments + Decline in immediate supply €9.1bn invested (+69%) Increase in demand
Slide 17: Business property: leading developer in France
Business property Leading developer in France Investment Development (1) 55 secured projects 1,270,300 m² at 100% BRIDGE – Issy-les-Moulineaux BALMA (Orange) – Toulouse 44 projects / 959,900 m² 7 projects / 231,700 m² 4 MOD projects / 78,700 m² (1) Property development agreements (CPI), off-plan sal
Slide 18: 2018 half year: increase in investments
2018 half year Increase in investments PROJECTS UNDER NEW SUPPLY NEW ORDERS REVENUE CONSTRUCTION €191.8m +15% CB3 TOWER – Courbevoie BASSINS À FLOTS – Bordeaux (off-plan sales) CONVERGENCE – Rueil Malmaison OPERATING INCOME €332m (incl. tax) €42.5m 6 projects 24 projects +29% 447,000 m² 374,050 m² 2
Slide 19: Sale of KOSMO (Neuilly-sur-Seine) for €466m
Sale of KOSMO (Neuilly-sur-Seine) for €466m PROJECT TIMELINE December 2013 Acquisition of 2 co-ownership units by AltaFund (Altarea Cogedim share: 17%) December 2015 Project Development Agreement (PDA) signed January 2016 Building permit fully granted July 2016 Start of works October 2017 Lease sign
Slide 20: Logistics: a new product line for the Group
Logistics A new product line for the Group THE OFFICE MODEL DUPLICATED TO LOGISTICS Operational know-how acquired via Pitch Promotion The Group acts as: • Developer-investor o Through direct investments BOLLÈNE PROJECT – Direct investment 260,000 m² logistics park on the A7 North of Avignon o or via
Slide 21: Retail
04. RETAIL Ferney Voltaire – Pays de Gex 2018 HALF-YEAR RESULTS / 21
Slide 22: Group's convictions
Group’s convictions LARGE DOMINANT LARGE TRAVEL RETAIL CONVENIENCE RETAIL SHOPPING CENTRES RETAIL PARKS Cap 3000 - Nice Family Village (Limoges) GARE MONTPARNASSE - Paris LA PLACE - Bobigny Natural appeal Price/product efficiency High natural footfall “Services” dimension Flagship formats Boosted by
Slide 23: Portfolio
Portfolio Net rental income Tenants revenue in At 30 June 2018 France €84.2m +1.3% +0.9% on a l-f-l basis vs -1.8% CNCC Bad debt Financial vacancy 1.1% 1.4% QWARTZ (Villeneuve-la-Garenne) – Former Marks & Spencer store 100% re-let in less than a year vs 1.2% end-2017 vs 2.4% end-2017 36 assets €4.7b
Slide 24: Paris-Montparnasse rail station: an amazing transformation
Paris-Montparnasse rail station An amazing transformation PROVISIONAL OPENING PHASE 1 PHASE 2 PHASE 3 SCHEDULE Q4 2018 Q4 2019 Q4 2020 PARIS-MONTPARNASSE – 18,200 m² (8,500 m² for Phase 1) STRONG COMMERCIAL SUCCESS New shops Unique restauration offer 130 shops, restaurants and amenities at final ope
Slide 25: An Investor & Developer model
Pipeline An “Investor & Developer” model Development for own account for long term ownership of the property, alone or in partnership Development for third parties to sell at delivery to external investors PARIS-AUSTERLITZ RAIL STATION 2019 – 2024 €3.3bn 595,100 €191m delivery period Potential value
Slide 26: Financial results
05. FINANCIAL RESULTS Cap 3000 - Nice 2018 HALF-YEAR RESULTS / 26
Slide 27: June 2018 key figures
30 June 2018 Key figures Consolidated €1,095.6m Recurring net result €124.2m 7.77 revenue (FFO) €/share +20.1% +7.6% +2.6% LTV 38.5% Going concern €2,747.3m 171.2 NAV €/share +240 bps +7.0% +6.0% excl. dividend 2018 HALF-YEAR RESULTS / 27
Slide 28: IFRS 15: a limited impact on financial statements
IFRS 15 (1) A limited impact on financial statements Land included in the percentage of completion calculation Faster revenue recognition FFO Consolidated revenue Opening equity Group share -€6.6m -€1.6m +€51.0m (i.e. ~€630m in revenue) +€45.7m Group share (1) IFRS 15 (Revenue from Contracts with
Slide 29: FFO Group share: €124.2m (+7.6%)
FFO Group share: €124.2m (+7.6%) FFO per share: €7.77 (+2.6%) In € millions Residential Strong growth Business Property Sale of Kosmo Retail Arbitration Financial costs 2017 base effect Dilution per share 2017 scrip dividend 2018 HALF-YEAR RESULTS / 29
Slide 30: NAV per share: €171.2 (+7.0% year on year)
NAV per share: €171.2 per share (+7.0% year on year) 174,0 €/share 2,8 171,2 (4,3) €/share 0,8 2,6 (12,5) Office Development Retail Other (2) 161,5 7,8 property Margin (1) 160,0 €/share Investment €/share Dividend FFO 2017 H1 2018 30/06/2017 31/12/2017 Without 30/06/2018 dividend (1) Development mar
Slide 31: Net debt: €2.8 billion
Net debt: €2.8 billion In € millions LTV ICR (27) (124) Sale 38.5% 9.0x (10) CAPEX FFO +240 bps -0.3x H1 2018 Others WCR Property development Duration Average cost Dividend 4 yrs 9 mths 1.77% 31/12/2017 30/06/2018 2018 HALF-YEAR RESULTS / 31
Slide 32: 1st credit rating: BBB (outlook stable)
1st credit rating: BBB (outlook stable) Altarea Cogedim: Altareit (property Inaugural bond issue 1st credit rating development branch): for Altareit 1st credit rating Investment Grade Investment Grade €350m at 7 years BBB (outlook stable) BBB (outlook stable) Fixed coupon: 2.875% The “property owner
Slide 33: Conclusion
06. CONCLUSION Quartier de la Soufflerie, Toulouse (31) 2018 HALF-YEAR RESULTS / 33
Slide 34: Our medium term objectives
Our medium term objectives Urban Exceed 10% Implement our Deliver entrepreneur market share twofold the pipeline in France business strategy Travel retail and large Confirm our leader Expand our Strengthen shopping centres position geographical coverage Property development openings Capitalise on ou
Slide 35: Glossary
05. Glossary 2018 HALF-YEAR RESULTS / 35
Slide 36: Glossary 1/2
Glossary 1/2 Areas eligible for Pinel Act tax scheme: The "high-demand areas" correspond to areas A bis, A and B1. At 30 June 2018, only 320 units (i.e. 0.8% of the Residential pipeline) are located in area B2, and half of those are in French Genevois, which has strong appeal. AltaFund: A discretion
Slide 37: Glossary 2/2
Glossary 2/2 NAV: Net asset value New Orders – Business Property: New Orders at 100%, with the exception of jointly controlled operations (New Orders In Group share including taxes). (accounted for by the equity method). New Orders – Residential: New orders net of withdrawals in € including tax when
Slide 38: Appendices
06. Appendices 2018 HALF-YEAR RESULTS / 38
Slide 39: Leading property developer in France
Leading property developer in France Secured pipeline (by activity) Portfolio of large mixed-use projects Secured Pipeline Surface areas Business Potential value(M€) (b) Large projects Residential Total At 30 June 2018 (m²) (a) Retail (m²) Property at 100% (units) (m²) (a) Retail 595,100 3,337 (m²)
Slide 40: Business Property: a unique model
Business Property: a unique model On-going operations and pipeline at 30/06/2018 Nb Surface area (m²) at 100% Potential value (€m) at 100% Investments (a) 7 231,700 2,653 Property developer (property development or off-plan sales contracts)(b) 44 959,900 1,687 Office Share 33 379,100 1,284 Logistic
Slide 41: Retail REIT – Portfolio
Retail REIT – Portfolio Portfolio at 30 June 2018 Change in net rental income Current gross rent Value assessed by En M€ Change Figures at 100% Nb GLA (in m²) (€m) (d) specialist (€m) (e) Net rental income 31 December 88.8 Controlled assets(a) 30 687,600 198.2 4,273 2016 Equity assets(b) 6 102,500 2
Slide 42: Group financial debt
Group financial debt Breakdown of gross debt at 3,735 M€ Maturity schedule for group debt Mortgage debt 29% Credit markets (a) 49% 8% Property development debt 14% Corporate and bank debt (a) Includes €912 millions in treasury notes. Duration and average cost 3,52% 2,80% 6,0 4 years 9 Mortgage Corpo
Slide 43: Net asset value (NAV)
Net asset value (NAV) 30/06/2017 GROUP NAV 30/06/2018 31/12/2017 Change/ € millions Change €/share € millions €/share € millions €/share share Consolidated equity, Group share 1,822.4 113.5 1,777.9 110.8 1,904.8 118.7 Other unrealised capital gains 763.2 637.0 722.1 Restatement of financial instrume
Slide 44: Loan To Value (LTV)
Loan To Value (LTV) At 30/06/2018 € millions Gross Debt 3,735 Cash and Cash equivalents (934) Consolidated net debt 2,801 Shopping centres at value (FC) (a) 4,273 Shopping centres at value (EM affiliates' securities) and Other (b) 376 Investment properties valued at cost (c) 556 Office Property inve
Slide 45: Income statement
Income statement Changes in value, Funds from In €m Retail Residential Business property Other Corporate estimated expenses TOTAL operations (FFO) and transaction costs Revenue 105.1 798.5 191.8 0.2 1,095.6 – 1,095.6 Change vs 30/06/2017 +0.1% +24.6% +15.2% N/A +20.1% +20.1% Net rental income 84.2 –
Slide 46: Detailed balance sheet (1/2)
DETAILED BALANCE SHEET (1/2) € millions 30/06/2018 31/12/2017 NON-CURRENT ASSETS 5,400.0 5,437.9 Intangible assets 260.5 258.5 o/w goodwill 155.3 155.3 o/w brands 89.9 89.9 o/w client relations – – o/w other intangible assets 15.4 13.3 Property. plant and equipment 20.1 18.5 Investment properties 4,
Slide 47: Detailed balance sheet (2/2)
DETAILED BALANCE SHEET (2/2) € millions 30/06/2018 31/12/2017 EQUITY 3,060.4 3,164.7 Equity attributable to Altarea SCA shareholders 1,822.4 1,904.8 Capital 245.3 245.3 Other paid-in capital 406.2 563.2 Reserves 1,098.7 773.2 Income associated with Altarea SCA shareholders 72.3 323.0 Equity attribut