Allreal Holding Ag · SIX:ALLN
Allreal — H1 2023 Earnings Presentation
37 slides from Allreal's earnings presentation, Aug 30, 2023
Slide 1: Allreal Group: Analysts' and media conference
Allreal Group: Analysts’ and media conference Wednesday, 30 August 2023 Solid results in the first half of 2023 Stephan Widrig CEO Marc Frei Head of Finance
Slide 2: Agenda
Half-year Report 2023 Agenda • Half-year results for 2023 • Real Estate highlights • Development and Realisation highlights • New management continues strategy • Questions and discussion 30 August 2023 Allreal Group – first half of 2023 2
Slide 3: Agenda
Half-year Report 2023 Agenda • Half-year results for 2023 • Real Estate highlights • Development and Realisation highlights • New management continues strategy • Questions and discussion 30 August 2023 Allreal Group – first half of 2023 3
Slide 4: Half-year results for 2023 Overview
Half-year results for 2023 Overview • Net profit in line with expectations • Higher rental income in the Real Estate division and only slight devaluations in the portfolio • Gross margin in Projects & Development division in line with target value • Capital recycling an important part of the financi
Slide 5: Group: Net profit in line with expectations
Half-year results for 2023 – Group Net profit in line with expectations CHF million • As expected, net profit excl. revaluation effect is 82.7 81.8 below the previous year’s level –18.5% 66.7 –46.4% • Net profit incl. revaluation effect falls disproportionately as a result of the slight 44.3 devalua
Slide 6: Higher financial expense and lower earnings from Projects & Development
Half-year results for 2023 – Group Higher financial expense and lower earnings from Projects & Development CHF million CHF million H1 2023 H1 2022 Change 29.2 Net rental income 108.5 106.8 +1.6% –10.6% 26.1 Real estate earnings 104.5 96.0 +8.9% Completed project volume P&D division 143.0 155.5 –8.0%
Slide 7: Distribution potential remains high
Half-year results for 2023 – Group Distribution potential remains high CHF per share • The net profit excl. revaluation effect meant that more than half of the 7.00 distribution of the previous year had already been earned in the first half of 2023 • The distribution of CHF 7.00 per share in April 2
Slide 8: Higher rental income generated
Half-year results for 2023 – Real Estate Higher rental income generated CHF million +0.6 108.5 106.8 +2.7 –0.1 +1.6% –0.3 +1.7 –1.2 Change in vacancy rates Change in other losses investment real estate Portfolio disposals in Adjustment of rents under construction Reclassification of Increase in rent
Slide 9: Strong operating profit for Real Estate division
Half-year results for 2023 – Real Estate Strong operating profit for Real Estate division Real estate earnings Real estate expenses • Real estate earnings rise thanks to higher rental 104.5 income, profit from the sale of investment real +8.9% 96.0 estate and slightly lower real estate expenses 27.4
Slide 10: Performance of the portfolio is stable
Half-year results for 2023 – Real Estate Performance of the portfolio is stable • In relation to the portfolio CHF million value, the slightly Residential Commercial Investment real Total revaluation 5097.2 5094.3 negative revaluation –0.1% real estate real estate estate under effect construction ef
Slide 11: Lower income from sales limits P&D division's result
Half-year results for 2023 – P&D division Lower income from sales limits P&D division’s result Share of completed project volume CHF million • One-off effects resulting in first half of 2023 (%) from, among other 34.9 things, the sale of a –49.6% development reserve boosted the result in the corresp
Slide 12: Gross margin for third-party projects on target
Half-year results for 2023 – P&D division Gross margin for third-party projects on target Order backlog (CHF million) 694 • At 9.9%, the gross margin for third-party projects was in line with the 608 611 target of 10% 510 • The secured order backlog as at the cut-off date corresponds to capacity uti
Slide 13: Capital recycling strategy is being continued
Half-year results for 2023 – key financial figures Capital recycling strategy is being continued • Very stable key financial Limit 30.06.23 31.12.22 31.12.21 figures in a multi-year comparison Equity ratio >35% 44.3% 45.6% 44.1% • Sale of a commercial Net gearing <150% 106.0% 99.9% 103.7% property i
Slide 14: Balanced financing structure
Half-year results for 2023 – key financial figures Balanced financing structure 800.0 2.50% Breakdown of financial liabilities 700.0 701 2.00% 600.0 325 49% 500.0 1.50% CHF 2.69 400.0 billion 150 1.00% 300.0 148 159 243 182 200.0 200 0.50% 100 100.0 135 100 100 Short and long-term mortgage 78 30 45
Slide 15: Outlook for the annual results
Half-year results for 2023 Outlook for the annual results • For the financial year 2023, Allreal expects rental income to increase slightly compared with the previous year as a result of the rise in the reference interest rate and the linking of commercial rents to the national consumer price index
Slide 16: Agenda
Half-year Report 2023 Agenda • Half-year results for 2023 • Real Estate highlights • Development and Realisation highlights • New management continues strategy • Questions and discussion 30 August 2023 Allreal Group – first half of 2023 16
Slide 17: Balanced portfolio with a focus on commercial real estate and attractive residential use
Real Estate highlights Balanced portfolio with a focus on commercial real estate and attractive residential use Mix of uses for yield-producing properties Commercial real estate tenants CHF 108.5 CHF 82.6 million million Office and services 56% Canton of Zurich 15% Residential 24% Generali S
Slide 18: Residential: limited supply, rising demand
Real Estate highlights Residential: limited supply, rising demand Current Ø 2023 2024 economic GDP (real) 0.8% 1.6% forecasts for Switzerland Inflation rate 2.3% 1.6% Unemployment rate 2.0% 2.2% Source: FPRE (August 2023) Permanent resident 12000000 population of Switzerland 8000000 4000000 0 2020 2
Slide 19: Commercial real estate with excellent transport connections in Zurich and Geneva
Real Estate highlights Commercial real estate with excellent transport connections in the urban centres of Zurich and Geneva Escher-Wyss site, Zurich-West Toni site, Zurich-West Richti site, Wallisellen ZH Bellerivestrasse 30, Zurich Riesbach Rte de St. Julien, Plan-les-Ouates GE Lindbergh-Allee 1,
Slide 20: Very low vacancy rate thanks to active real estate management
Real Estate highlights Very low vacancy rate thanks to active real estate management Yield-producing Residential Commercial properties real estate real estate 2.0 1.7 1.8 1.5 1.6 1.6 1.2 1.0 0.8 Viaduktstrasse, Basel Missionsstrasse, Basel as a percentage as at 30.06.2022 (cumulative from gross targ
Slide 21: Long-term commercial leases
Real Estate highlights Long-term commercial leases • The weighted remaining as a percentage of target rental income for commercial real estate (rounded) term (WAULT) of fixed- 22 term leases for commercial real estate 18 16 was 4.9 years as at the 14 cut-off date compared 1111 with 5.1 years as at 1
Slide 22: Ongoing renewal of yield-producing properties
Real Estate highlights Ongoing renewal of yield-producing properties Commercial building at Bellerivestrasse 36, Zurich Riesbach Commercial building at Vulkanstrasse 106, Zurich Altstetten 30 August 2023 Allreal Group – first half of 2023 22
Slide 23: In-house construction and development expertise for portfolio
Real Estate highlights In-house construction and development expertise for portfolio Avenue de l’Amandolier 21, Geneva: Construction of a new apartment building with 16 rental apartments and 9 underground parking spaces. The total floor space amounts to 1,549 m2. Annual target rental income: CHF 0.4
Slide 24: Agenda
Half-year Report 2023 Agenda • Half-year results for 2023 • Real Estate highlights • Development and Realisation highlights • New management continues strategy • Questions and discussion 30 August 2023 Allreal Group – first half of 2023 24
Slide 25: Potential for growth thanks to good development pipeline
Development and realisation highlights Potential for growth thanks to good development pipeline Investment volume Development of own 2024 2025 2026 projects Av. du Curé-Baud, Grand-Lancy GE Inzlingerstrasse, Riehen BS* Am Strubenacher, Zumikon ZH Baarermatte, Baar ZG CHF ≈2.0 Eggen, Lucerne* billion
Slide 26: Development projects with condominiums: Higher yield, short-term result fluctuations
Development and realisation highlights Development projects with condominiums: Higher yield, short-term result fluctuations • Joint development of a site of around 4,600 m2 with a third party • 63 condominiums and 43 rental apartments • 85% of condominiums already reserved; notarisations start in th
Slide 27: Added value as a result of sustainability-related innovation
Development and realisation highlights Added value as a result of sustainability-related innovation • Repurposing of an office building in the Canton of Zug into a major residential complex • Equivalent of 6kg of CO2 per m2 of the energy reference area each year as a top benchmark • Sustainability f
Slide 28: Rieter site: short-term earnings and considerable additional long-term potential
Development and realisation highlights Rieter site: short-term earnings and considerable additional long-term potential in a very good location • Acquisition of a 75,000 m2 site in a prime location with considerable additional long- term potential • Stable rental income as soon as ownership is trans
Slide 29: Escher-Wyss site: many years of experience in developing sites
Development and realisation highlights Escher-Wyss site: Allreal has many years of experience in developing sites 2002 2023 2016 2017 2020 2014 2014 2021 2015 • Allreal acquired the 60,000 m2 Escher-Wyss site in • Renovation of protected buildings 2002 • New buildings with office and residential use
Slide 30: Development and construction expertise supports portfolio expansion in Western Switzerland
Development and realisation highlights Development and construction expertise on site supports portfolio expansion in Western Switzerland Investment volume: Investment volume: around CHF 16 million around CHF 12 million Start of construction: Start of construction: 2023 2023 Rue Edouard-Rod, Geneva
Slide 31: Challenging construction projects for third parties on track
Development and realisation highlights Challenging construction projects for third parties on track Construction sum: Construction sum: around CHF 62 million > CHF 200 million . Project due to be Project due to be completed: completed: 2024 2025 (final lot) Rieter Campus, Winterthur ZH Höfe Adliswil
Slide 32: Agenda
Half-year Report 2023 Agenda • Half-year results for 2023 • Real Estate highlights • Development and Realisation highlights • New management continues strategy • Questions and discussion 30 August 2023 Allreal Group – first half of 2023 32
Slide 33: Change at the top
New management continues strategy Change at the top Stephan Widrig • CEO of Allreal Group since May 2023 • At the listed Flughafen Zürich AG from 1999 to 2023, with the last 8 years as CEO; Head of the Real Estate department prior to that • Born in 1972, with a master’s degree from the University of
Slide 34: Integrated business model creates added value
New management continues strategy Integrated business model creates added value • As a professional player in the real estate industry with a healthy portfolio, Allreal considers itself to be well equipped to successfully overcome even the more challenging cycles in the real estate market Developmen
Slide 35: Capital market information: Dates and schedule
Capital market information Dates and schedule Annual results for 2023 28 February 2024 Annual general meeting 2024 19 April 2024 Half-year results for 2024 28 August 2024 30 August 2023 Allreal Group – first half of 2023 35
Slide 36: Agenda
Half-year Report 2023 Agenda • Half-year results for 2023 • Real Estate highlights • Development and Realisation highlights • New management continues strategy • Questions and discussion 30 August 2023 Allreal Group – first half of 2023 36
Slide 37: uilds value
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