Altarea Sca · EURONEXT:ALTA
Altarea Sca — Altarea Cogedim — H1 2017 Earnings Presentation
55 slides from Altarea Sca's earnings presentation, 2017
Slide 1: 2017 Half-year results: Leading developer in French gateway cities
2017 Half-year results LEADING DEVELOPER IN FRENCH GATEWAY CITIES
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: Agenda
AGENDA INTRODUCTION ALTAREA, BUILDING GATEWAY CITIES RETAIL RESIDENTIAL OFFICE PROPERTY FINANCIAL PERFORMANCE OUTLOOK APPENDICES 3
Slide 4: Introduction
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Slide 5: Growth(s)
GROWTH(S) RESIDENTIAL Increased sales Upscaling results RETAIL OFFICE PROPERTY Performance improvement Business model ramp up across all operational indicators (new orders, rentals, deliveries) FINANCE Strengthening financial resources (debt and equity) 2017 HALF-YEAR RESULTS 5
Slide 6: Growth(s): key figures
GROWTH(S) Retail NRI FFO/share (1) €88.8m +3.7% €7.58 +9.0% vs 30/06/16 Property Development New Orders (Residential and Offices) Going-concern NAV/share (2) €1,869m (incl. tax) +55% €160.0 +20.6% vs 30/06/16 Residential sales LTV 4,822 units +21% 37.4% vs 37.2% at 31/12/16 vs 30/06/16 (1) After dil
Slide 7: Building gateway cities
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Slide 8: A tailor made approach to each gateway city
A TAILOR MADE APPROACH TO EACH GATEWAY CITY Targeting gateway cities A comprehensive answer 1. Urban areas: strengthening the existing urban fabric Lille Strasbourg Rennes Paris Nantes Lyon Bordeaux Grenoble Annecy Montparnasse Austerlitz Issy Coeur de Ville Montpellier Bayonne Toulouse Nice 2. Grea
Slide 9: Paris inner city: Montparnasse district
PARIS INNER CITY: MONTPARNASSE DISTRICT Montparnasse Rail Station 1 Raspail 3 18,200 m² GLA of retail surface area 10,000 m² GLA 3 4 1 2 7 floors/5 floors underground Delivered: end of 2015 Campagne Première 2 Vaugirard 4 133 residential units 29,000 m² GLA 90 shops 1,900 parking spaces 1 nursery De
Slide 10: Greater Paris: Building the new Massy
GREATER PARIS: BUILDING THE NEW MASSY Place du 1 2 Illuminance Grand Ouest 100,000 m² mixed-use area 13,000 m² 1 3 3 2 280 residential units 195 parking spaces 27 convenience stores Delivery: 2017 850 residential units Domaine de Coulanges / OZ 3 1 conference centre 1 hotel 633 residential units 1 m
Slide 11: Grand Lyon: Villeurbanne – La Soie
GRAND LYON: VILLEURBANNE – LA SOIE Carré de soie 1 3 View One 2 1 2 Shopping and leisure centre 15,500 m² GLA 3 3 12,500 m² of offices 51,000 m² GLA 1,300 m² of retail units Delivery: 2017 3 Existen’ciel Evidence Jardins de la soie Reflets de soie Respire 152 residential units + 6 retail units 123 r
Slide 12: Retail
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Slide 13: Retail
RETAIL Portfolio: high-performing assets Pipeline: strong creation of embedded value 42 €111m €4.7bn 5.05% 17 €1.9bn 7.6% average portfolio capitalisation pipeline assets projects net investment value value rate return OUR TENANTS OUR RENTAL INCOME 146 +3.7% +65% Leases signed net rental income pipe
Slide 14: Portfolio: excellent performance
PORTFOLIO: EXCELLENT PERFORMANCE Tenants sales Rental income on a like-for-like basis 4.1% 2.3% 1.5% 2.0% 1.1% 1.0% 1.5% 1.3% 2014 2015 2016 H1 2017 2014 2015 2016 H1 2017 2017 HALF-YEAR RESULTS 14
Slide 15: Enhancing the customer experience
ENHANCING THE CUSTOMER EXPERIENCE Leisure New brands & new concepts Digital Multiplex, fitness centres, theme Fashion, homeware, restaurant, Digital Wave Cap 3000 ADETEM’s award of Excellence in marketing parks, bowling alleys, etc. leisure, etc. (Customer Experience Silver award) 2017 HALF-YEAR RES
Slide 16: Cap 3000: extension underway
CAP 3000: EXTENSION UNDERWAY April 2017 2018 2019 Opening of 9 stores over 2,100 m²: New iconic entry Delivery of the extension’s main completion of refurbishments & launch of extension works and high-end mall section (+150 stores in total) 2017 HALF-YEAR RESULTS 16
Slide 17: Montparnasse rail station: letting started
MONTPARNASSE RAIL STATION: LETTING STARTED A real urban hub for long-distance passengers, commuters, workers 90 million users in 2020 and residents of this key district 18,200 m² GLA of retail surface area 90 shops 1,900 parking spaces 30 restaurants 50% of the retail units opened by the end of 2018
Slide 18: Property development
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Slide 19: Property development (offices & residential)
PROPERTY DEVELOPMENT (OFFICES & RESIDENTIAL) New orders Operating income and margin x2,1 1,869 x2,3 74.6 1,204 47.0 33.0 9.2% 874 7.7% 6.6% H1 2015 H1 2016 H1 2017 H1 2015 H1 2016 H1 2017 (in €m) 2017 HALF-YEAR RESULTS 19
Slide 20: Residential
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Slide 21: Residential: business and financial performance
RESIDENTIAL: BUSINESS AND FINANCIAL PERFORMANCE COMMERCIAL NEW ORDERS BACKLOG LAUNCHES €641m +27% revenue (excl. tax) 1,406 1,199 2,929 €41.6m €m (incl. tax) €m (incl. tax) €m (excl tax) operating income +25% +7% +25% +11% 6.5% 5,863 units 4,822 units vs 31/12/2016 margin (operating income/revenue)
Slide 22: New orders: €1,199m, +25%
NEW ORDERS: €1,199M, +25% All dwellings All customers (2) (in value) +21% +41% Private 54% Institutional 18% High-end 57% investors investors Entry-level/mid- 77% range 5% Other (1) 46% Social housing 1st-time buyers 43% (base 4,822 units) €249k (incl. tax) 76% 24% average price detail block sales (
Slide 23: Strong embedded growth
STRONG EMBEDDED GROWTH Today’s portfolio creates tomorrow’s new orders and the day forward’s revenue Current portfolio A 2-year lag between new orders and revenue 1 199 8.5 8.1 New orders 961 36,290 units 2-year lag 5.9 34,542 641 640 units 535 506 440 451 26,507 Revenue units 368 2015 2016 H1 2017
Slide 24: Office property
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Slide 25: Office property: business and financial performance
OFFICE PROPERTY: BUSINESS AND FINANCIAL PERFORMANCE PIPELINE NEW ORDERS DELIVERIES €166m +57% Revenue (excl. tax) 4,629 669 11 €33m €m (excl. tax) €m (incl. tax) offices operating income x2.4 851,800 m² 160,500 m² 110,000 m² figures at 100% x2.8 x1.9 19.8% margin figures at 100% (operating income/re
Slide 26: Significant lettings
SIGNIFICANT LETTINGS ≥ €60m of rents (all combined together) and 115 300 m² Pont d’Issy – Issy-les-Moulineaux Kosmo – Neuilly-sur-Seine Richelieu – Paris 2ème 56,500 m² 27,000 m² 31,800 m² Off-plan sale agreement signed Works initiated Off-plan sale agreement signed Works started in September 2016 B
Slide 27: A unique model
A UNIQUE MODEL Medium-term Investor Developer Service provider 54 projects 851,800 m² €4.6bn potential value at 100% LANDSCAPE (1) – La Défense FHIVE – rue des archives 52 Champs-Elysées Restructuring towards a medium-term disposal For 100% external investors / users Direct investment or For project
Slide 28: Medium-term investor: very strong embedded value creation
MEDIUM-TERM INVESTOR: VERY STRONG EMBEDDED VALUE CREATION KOSMO PONT D’ISSY TOUR ERIA LA PLACE Neuilly-sur-seine Issy-les-Moulineaux La Défense Bobigny 8 projects 262,600 m² €1.9bn cost price 2017 2021 figure at 100% 6.6% return 30% average share of Group interests RICHELIEU LANDSCAPE (1) ISSY CŒUR
Slide 29: Developer: recurring activity flow
DEVELOPER: RECURRING ACTIVITY FLOW For projects in which the Group acts For 100% external investors / users as medium-term co-investor 51 projects (Off-plan/property sale agreement) 802,300 m² Bordeaux Belvédère Bordeaux Belvédère Pont d’Issy €2.3bn revenue (excl. tax) 43 projects 8 projects 539,700
Slide 30: Service provider: secured additional income
SERVICE PROVIDER: SECURED ADDITIONAL INCOME For projects in which the Group acts For 100% external investors / users as medium-term co-investor 3 DMC projects 49,500 m² 16 Matignon 52 Champs-Elysées The Group earns fees for: • Delegated mandate • Disposals contract • Asset management • Development •
Slide 31: The office of the future
THE OFFICE OF THE FUTURE in the heart of a district To serve user… … and stakeholders Design buildings adapting Opening buildings up to the city to usages (halls, gardens, terraces) Embody the corporate brand Optimise employee comfort Mixing spaces Design sustainable buildings (retail, showroom, caf
Slide 32: Financial performance
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Slide 33: Very strong improvement in results
VERY STRONG IMPROVEMENT IN RESULTS Revenue €912.3m +26.1% Strong growth of property development revenue Recurring net result (FFO) €115.4m +25.5% 7.58 €/share +9.0% FFO/share dilution impact Going concern NAV €2,567.8m +28.8% 160.0 €/share +20.6% in one year Retail value creation Loan To Value 37.4%
Slide 34: Revenue: €912.3m, +26.1%
REVENUE: €912.3M, +26.1% +56.8% -0.8% €718M +26.1% €912M +26.6% H1 2016 H1 2017 2017 HALF-YEAR RESULTS 34
Slide 35: Recurring net result (FFO): €115.4m, +25.5%
RECURRING NET RESULT (FFO): €115.4M, +25.5% +22.9% +1.6% €115.4M €92.0M +25.5% X2.5 H1 2016 H1 2017 2017 HALF-YEAR RESULTS 35
Slide 36: Net debt
NET DEBT Property CAPEX Dividend FFO 37.4% development 71.9 16.7 (115.4) Other LTV 2,578.3 (+20 bps vs 31/12/2016) 3.6 176.0 2,425.5 5 years 5 months duration 1.77% average cost 31/12/2016 30/06/2017 (in €M) 2017 HALF-YEAR RESULTS 36
Slide 37: Enhanced financial resources
ENHANCED FINANCIAL RESOURCES Equity Inaugural bond issue (unrated) €157.1m New step toward the credit market €500m payment of scrip dividend July 2017 91.69% subscription rate Confidence of major European investors in the Group’s unique model (REIT and developer) 7 years maturity 1,021,555 new share
Slide 38: FFO/share: growth superior to dilution
FFO/SHARE: GROWTH SUPERIOR TO DILUTION +11.6% average per year €7.58 +€1.54 €6.96 (€0.92) +19% €6.28 €5.46 -13% €7.58 CI FFO/share dilution +9% H1 2014 H1 2015 H1 2016 H1 2017 2017 HALF-YEAR RESULTS 38
Slide 39: Going-concern NAV: +€12.6/share through value creation
GOING-CONCERN NAV: +€12.6/SHARE THROUGH VALUE CREATION OVER THE HALF-YEAR €1.0 €160.0 €159.6 (€ 11.5) €4.0 €7.6 Other Value ( inc. financial (€ 0.7) €147.4 creation instruments Shopping & deferred Dividend Equity FFO tax) centers €160.0 transactions NAV/share 20.6% (in one year) NAV/share 31/12/2016
Slide 40: Outlook
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Slide 41: Guidance and outlook
GUIDANCE AND OUTLOOK 2017 targets confirmed Operational targets Outlook 10,000+ recurring units Strong visibility 2018 - 2019 ≥ €16.0 FFO/share 40-45% Lease and sale LTV ≥ €11.5 dividend/share Dividend growth Implementing the pipeline 2017 HALF-YEAR RESULTS 41
Slide 42: Appendices
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Slide 43: Glossary (1/4)
GLOSSARY (1/4) AltaFund: A discretionary investment fund, created in 2011, with €650 million in equity of which Altarea Cogedim is one of the contributors alongside leading institutional investors. In March 2015, the Group increased its AltaFund capital allocation from €100 million to €150 million,
Slide 44: Glossary (2/4)
GLOSSARY (2/4) Future offering (residential): Land portfolio consisting of controlled projects (through preliminary sales agreements, almost exclusively in unilateral form) which have not yet begun. (incl. taxes value when expressed in euros). Gateway cities: Major conurbation concentrating the loca
Slide 45: Glossary (3/4)
GLOSSARY (3/4) Pipeline (surface area): Shopping centres and convenience stores: m² GLA created. Offices: floor area or usable area. Residential: SHAB (properties for sale and future offering). Pipeline (value): Estimated market value on the delivery date. Shopping centres: potential market value in
Slide 46: Glossary (4/4)
GLOSSARY (4/4) Residential supply: Optional agreements for land signed and valued as potential residential orders (incl. taxes). Retail pipeline rental income: Gross rent estimated at 100%. Retailer revenue: Change in retailer revenue with the same locations over the first 5 months of the year. Excl
Slide 47: Building gateway cities
BUILDING GATEWAY CITIES Secured pipeline Surface Potential (by metropolitan area) areas (m²)(a) value (€m)(b) Grand Paris 1,827,400 9,985 Métropole Nice-Côte d'Azur 149,700 1,374 Marseille-Aix-Toulon 261,700 1,019 (a) Shopping centres and convenience stores: m² GLA created. Offices: floor area or us
Slide 48: Retail REIT - standing assets and pipeline
RETAIL REIT - STANDING ASSETS AND PIPELINE Assets in operation Projects under development Value assessed by Gross rent GLA in m² Gross rent Net investments 30 June 2017 GLA in m² specialist current (€m)(d) created Estmated (€m) (€m)(f) (€m)(e) Controlled assets (fully consolidated)(a) 720,800 192.6
Slide 49: Retail REIT
RETAIL REIT Change in net rental income In €m Net rental income at 30 June 2016 85.6 S1 2017 2016 2015 Occupancy cost ratio(a) 9,9% 9,9% 9,9% Acquisitions 0.9 Bad debt ratio(b) 2,0% 2,4% 1,9% Centres under refurbishment (a) (0.5) Financial vacancy(c) 2,6% 2,7% 2,9% Like-for-like change 2.7 +4.1% (a)
Slide 50: Net asset value
NET ASSET VALUE GROUP NAV 30/06/2017 30/06/2016 Published 31/12/2016 Published Change/ In €m Change €/share(d) In €m €/share (d) In €m €/share (d) share Consolidated equity, Group share 1,775.9 110.8 1,459.0 97.1 1,620.9 107.8 Other unrealised capital gains 637.0 406.3 636.5 Restatement of financial
Slide 51: Income statement
INCOME STATEMENT Changes in value, Funds from operations In €m Retail Residential Offices estimated expenses TOTAL (FFO) and transaction costs Revenue 105.1 640.8 166.4 912.3 912.3 Change vs 30/06/2016 (0.8)% +26.6% x1.6 +26.1% Net rental income 88.8 – – 88.8 88.8 Net property income 0.7 61.9 33.0 9
Slide 52: Group net financial debt: €2,578m
GROUP NET FINANCIAL DEBT: €2,578M Breakdown of gross debt at 3,228m€ Bonds 35% & treasury notes Maturity schedule for Group debt 800 Mortgage 37% 10% Property 700 Development debt 600 18% 500 Corporate 400 bank 300 200 Duration and average cost 100 3,52% 0 6.0 5 years 5 2017 2018 2019 2020 2021 2022
Slide 53: Loan to value (LTV)
LOAN TO VALUE (LTV) LTV calculation, at 30/06/2017 In €m Gross debt 3,228 Cash and cash equivalents (650) Consolidated net debt 2,578 Shopping centres at value (FC)(a) 4,231 Shopping centres at value (EM securities) and Other(b) 392 Investment properties valued at cost(c) 480 Offices Investments(d)
Slide 54: Detailed balance sheet (1/2)
DETAILED BALANCE SHEET (1/2) In €m 30/06/2017 31/12/2016 NON-CURRENT ASSETS 5,163.3 5,034.9 Intangible assets 258.7 257.9 o/w goodwill 155.3 155.3 o/w brands 89.9 89.9 o/w client relations 2.8 5.5 o/w other intangible assets 10.7 7.2 Property, plant and equipment 16.5 14.2 Investment properties 4,35
Slide 55: Detailed balance sheet (2/2)
DETAILED BALANCE SHEET (2/2) In €m 30/06/2017 31/12/2016 EQUITY 2,979.4 2,758.3 Equity attributable to Altarea SCA shareholders 1,777.9 1,620.9 Capital 245.3 229.7 Other paid-in capital 563.2 588.3 Reserves 793.4 635.1 Income associated with Altarea SCA shareholders 176.0 167.8 Equity attributable t