2014 Presentation of HALF-YEAR RESULTS 31 July 2014 AFFINE H1 - - PowerPoint PPT Presentation

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2014 Presentation of HALF-YEAR RESULTS 31 July 2014 AFFINE H1 - - PowerPoint PPT Presentation

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2014 Presentation of HALF-YEAR RESULTS 31 July 2014 AFFINE H1 2014 KEY TAKEAWAYS EPRA EARNINGS UP (+) Increase in gross rental income resulting from 100% integration of Bordeaux complex and logistics developments (-) Negative

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HALF-YEAR RESULTS

Presentation of 31 July 2014

2014

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SLIDE 2

H1 2014 KEY TAKEAWAYS

  • EPRA EARNINGS UP

(+) Increase in gross rental income resulting from 100% integration of Bordeaux complex and logistics developments (-) Negative contribution from Banimmo

  • LTV OF 48.3 %

AND COST OF DEBT DOWN TO 3.1 %

  • CHANGE IN PORTFOLIO

Hike in occupancy rate (91.5 %) €10.9m in improvements and developments €12.2m disposals New investments currently in advanced negotiations

  • EPRA NAV PER SHARE OF €23.7

(-) Net earnings of -€6.4m due to fair value adjustments (-) Dividend distribution (€8.1m)

AFFINE

2014 Half-year Results

2

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INVESTMENTS AND DISPOSALS

2014 Half-year Results

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€11M OF INVESTMENTS AND €12M OF DISPOSALS

INVESTMENTS AND DISPOSALS

2014 Half-year Results

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€11m: Development & Refurbishment

Bagnolet St Cyr en Val

€12m: Disposals

Saint Quentin Fallavier: €1.4m Montpellier: €0.2m Bron: €0.3m Gennevilliers Evry: €10.4m Troyes (Concerto)

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SLIDE 5

LYON – BD TCHÉCOSLOVAQUES

  • Refurbishment of 4 900,sqm offices space

2 buildings and parking lot for 122 cars Located on the extension of the Boulevard Vivier Merle, between the La Part-Dieu and Gerland districts Easy and improved service and enhanced attractiveness

2 métro stations, numerous bus routes Tram under progress

Marketing under process

INVESTMENTS AND DISPOSALS

2014 Half-year Results

5

Building TGV station La Part-Dieu

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SLIDE 6

RÉAUMUR, A PARTIAL RECONVERSION

  • 1,656 sqm totally refurbished

741 sqm of offices 606 sqm turned into residential 309 sqm of retails

  • Nearby the Marais district

Located at 100 m of the Arts et Métiers metro station

  • Works budget estimated at €4m
  • Completed by December 2014
  • Marketed or received offer: c. 70%

INVESTMENTS AND DISPOSALS

2014 Half-year Results

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Office Residential

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SLIDE 7

SAINT CYR EN VAL – 2ND PHASE – REFURBISHMENT BUILDING B

  • A 9,600 sqm warehouse

4 cells and 45 doors Temperature-controlled building (Pharmaceutical products)

  • Air conditioning système renovation

6 air con devices replaced on the roof

INVESTMENTS AND DISPOSALS

Résultats Annuels 2013

7

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SLIDE 8

PERFORMANCE OF THE PORTFOLIO

2014 Half-year Results

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46.2 (0.7) (1.1) (0.6) 0.8 44.5 31/12/2013 Refurbishment Disposal Like-for-like Acquisition 30/06/2014

HEADLINE RENTS: -1.3% LIKE-FOR-LIKE

  • Change in headline rents annualized (€m)

Total headline rents change: -3.6%

PERFORMANCE OF THE PORTFOLIO

2014 Half-year Results

9

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594 (12) +0 (9) +2 +8 583 31/12/13 Disposal Capital gain Like-for-like Capex Dev. Acq. 30/06/14

1.8% DECREASE OF THE PORTFOLIO VALUE

  • Change in fair value excluding TT (€m)
  • Breakdown of the 1.9% decrease in fair value on a like-for-like basis

Market rent effect (ERV): -1.0% Cap rate effect: +0.0% Miscellaneous: -1.0% (works, reversion, transfer taxes change …)

PERFORMANCE OF THE PORTFOLIO

2014 Half-year Results

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SLIDE 11

RISE OF OCCUPANCY RATE

  • Financial occupancy rates (EPRA)

PERFORMANCE OF THE PORTFOLIO

2014 Half-year Results

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Impact Baudry

  • 1.2 pt

Impact JdQ +0.8 pt

94.0% 92.2% 87.7% 89.0% 87.8% 90.9% 91.5% 2008 2009 2010 2011 2012 2013 H1 2014

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SLIDE 12

10 20 30 40 50 31/12/13 31/12/14 31/12/15 31/12/16 31/12/17 31/12/18 31/12/19 31/12/20 31/12/21 31/12/22 31/12/23 End of lease Fixed term

LEASE AVERAGE DURATION 5.5 YEARS

  • Schedule in rents (€m) according to lease duration

Average time up to next break option: 3.2 years Average time up to lease expiry: 5.5 years 9 new leases (19,800 sqm ; €0.9m) 19 renegociated leases (27,400 sqm ; €2.1m) 7 terminated leases (4,800 sqm ; €0.7m)

PERFORMANCE OF THE PORTFOLIO

2014 Half-year Results

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PORTFOLIO YIELD

  • Return by asset type

PERFORMANCE OF THE PORTFOLIO

2014 Half-year Results

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Portfolio Headline Potential Split in value yield yield Paris (Offices) 16.9% 5.6% 5.6% Offices (other regions) 35.4% 7.6% 8.5% Retail 22.1% 6.6% 7.9% Warehouses & Industrials 25.4% 9.0% 9.2% Total 100.0% 7.5% 8.1%

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SLIDE 14

BANIMMO

  • Repositionning property company

Portfolio: 19 buildings; Gross rental income: €4.9m; value: €355m.

  • Key events

Opening of Bagatelle 5,300 sqm shopping mall in Suresnes Acquisition of a plot of land allowing the development of 15,000 sqm

  • ffices in Namur (Belgium).

Development by Banimmo of 8,000 sqm of offices for BNP Paribas Fortis in Charleroi (Belgium) Disposal by Banimmo of 6,500 sqm of offices (€23.2m) under construction close to Brussels (Belgium) and which will be let to the Marsh & McLennan group

  • H1 2014 Results

Rental income €4.9m vs €4.7m Operational result (excl. associates): €2.3m vs €3.1m Significant negative accounting adjustments on the City Mall participation (-€5.7m). Net current result (excl. FV & City Mall): -€0.7m (NR: -€7.5m)

SUBSIDIARIES

2014 Half-year Results

14 More details on

www.banimmo.be

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DEVELOPMENT

  • Concerto European Developer

Delivery of a logistics platform in Aube for Devanlay (19,000 sqm) Signature with the Petit Bateau group for the development of a 43,500 sqm logistics platform Filing of building permits for the areas of

Cambrai (54,000 sqm) Honfleur (117 000,sqm)

Project under construction (10,700 sqm) for delivery in Sant Feliu (Spain)

  • Promaffine

Completion of 2 residential joint development in Nanterre and Marseilles

SUBSIDIARIES

2014 Half-year Results

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CONSOLIDATED ACCOUNTS

2014 Half-year Results

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CONSOLIDATED EARNINGS

CONSOLIDATED ACCOUNTS

2014 Half-year Results

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(€m) 30/06/13 31/12/13 30/06/14

Gross rental income 19.5 40.2 22.5 Net rental income 17.1 34.8 20.7 Other income 1.5 1.9 0.5 Corporate expenses (5.2) (10.0) (5.1) Current EBITDA

(1)

13.4 26.7 16.0 Current operating profit 13.3 26.5 16.0 Other income and expenses (0.4) 0.7 0.1 Net financial cost (5.6) (11.5) (5.7) Taxes (0.3) (0.5) (0.2) Associates (0.2) 1.9 (2.2) Miscellaneous 0.1 (0.1) (0.1) Net current profit 6.8 17.0 7.9 EPRA Earnings (Net current profit – Gs) 6.8 17.0 7.9 Value adjustments of properties & profit on disposals (10.5) (21.8) (9.6) Fair value adjustments of hedging instr. 3.7 4.0 (2.3) Adjustements for associates 0.2 (7.2) (1.9) Others (0.4) (0.9) (0.4) Net non-current profit – Gs (7.0) (25.8) (14.3) Net profit – group share (0.2) (8.8) (6.4)

(1) Current EBITDA represents the current operating profit excluding current depreciation and amortisation costs. This amount excludes the depreciation on Sant Feliu and appears under the other incomes and expenses. (2) Operating profit after value adjustments.

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256.0 (8.1) (9.4) (2.3) +7.9 (1.3) 242.8 31/12/2013 Dividends paid FV properties FV FI EPRA earnings Others 30/06/2014 €25.0 per share €23.7 per share

NET ASSET VALUE CHANGE

CONSOLIDATED ACCOUNTS

2014 Half-year Results

18

(€m)

Based on the Net Asset Value of Banimmo Excluding PSL (TSDI) Others: interest on convertibles and PSLConvertibles,etc NAV per share after dilution fromconvertibles

(€m) 30/06/13 31/12/13 30/06/14

Shareholders’ equity (before allocation) 337.2 326.2 310.3 PSL adjustment (73.2) (73.2) (73.2) Fair value adjustments to hedging instr. 7.8 7.2 10.0 Net deferred tax (1.7) (4.1) (4.3) EPRA NAV (excluding transfer tax) 270.1 256.0 242.8 EPRA NAV (including transfer tax) 304.7 290.5 278.7 EPRA NAV (excluding transfer tax) per share (€) 26.4 25.0 23.7

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FINANCING

2014 Half-year Results

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  • LTV of 48.3% (€m)

Average financing cost of 2.0%, or 3.1% hedging included (vs 1.9% & 3.4%) Floating interest rate risk hedged Implementation of €15m of new swaps and €60m of new caps in June

881 821 803 682 699 676 682 484 423 407 310 327 308 329 55.0% 51.5% 50.8% 45.5% 46.8% 45.7% 48.3% 0% 20% 40% 60% 80% 100% 120% 100 200 300 400 500 600 700 800 900 2009 2010 2011 2012 2013 H1 2013 H1 2013 Value Loan LTV

A CONTROLLED LTV FOR A RESUMPTION OF INVESTMENTS

FINANCING

2014 Half-year Results

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FAVOURABLE CREDIT ACCESS

  • Banks relationship diversified

6 main banks Average duration of 5.5 years Financing asset by asset with mortgages Amortizable over middle term

  • Financing in H1 2014

Mortgage loan: Refinancing Lyon Dauphiné (€6m) Development credit: Concerto financing (€4m drawn)

  • Refinancing of the 2015 debt service underway

FINANCING

2014 Half-year Results

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20 40 60 80 100 120 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Contractual amortisation Repayment at maturity Early repayment

A SMOOTHED DEBT PROFILE

  • Amortisation of debt (€m)

A financing policy aiming at smoothing the amortisation Repayment: around €30m p.a. on average Short term available credit lines of €19m

FINANCING

2014 Half-year Results

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STRATEGY & OUTLOOKS

2014 Half-year Results

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OUR STRATEGY [1/2]

  • Geographic concentration of investments

Grand Paris and regional cities (Bordeaux, Lille, Lyon, Marseille, Nantes, Toulouse) A coordinated approach with local communities Achieve economies of scale

  • Investing primarily in buildings

Providing relatively high yield

  • f an average size of €10m to €30m (offices, retails, logistic platforms)

Containing a potential for value creation by their location, rental situation

  • r restructuring
  • A sustained effort to improvement of assets

Higher standards in a "sustainable development" approach Management optimization by enhanced cost control Disposal of buildings that no longer meet the investment criterias

  • Becoming customer-oriented

Supplement the providing of premises with rental services Secure the loyalty of tenants to improve the profitability of properties

STRATEGY & OUTLOOKS

2014 Half-year Results

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16.9% 35.4% 22.1% 25.4% 0.2% Offices (Paris) Offices (Régions) Retail Warehouses and industrial Others

OUR STRATEGY [2/2]

  • Breakdown of the portfolio in value terms

STRATEGY & OUTLOOKS

2014 Half-year Results

25

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PRIORITIES FOR 2014

  • Active investment research

In line with our strategy By leveraging our access to credit And with a comfortable cash position

  • Improve rental performance

Lower rental expenses and administrative costs Reduce the vacancy rate

  • Seek partnerships

To broaden the range of investment from

  • ur experience of the real estate business
  • Enhance the quality of the portfolio

Disposal of buildings that no longer meet the investment criterias

STRATEGY & OUTLOOKS

2014 Half-year Results

26

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SLIDE 27
  • Affine
  • Liquidity contract:

Invest Securities

  • Website:

www.affine.fr

CONTACTS

2014 Half-year Results

27

Maryse Aulagnon Alain Chaussard Chairperson and CEO Vice-Chairman and Co-CEO + 33 (0)1 44 90 43 10 – info@affine.fr Frank Lutz Investor Relations + 33 (0)1 44 90 43 53 – frank.lutz@affine.fr

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APPENDIX

2014 Half-year Results

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CONSOLIDATED CASH FLOW

APPENDIX

2014 Half-year Results

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(€m) 30/06/13 31/12/13 30/06/14

Funds from operation 8.0 17.9 11.9 Funds from operation (excluding cost of debt and tax) 14.0 30.1 17.9 Change in WCR 2.2 1.3 (11.2) Taxes paid 0.0 (0.3) (1.0) Operating cash flow 16.2 31.1 5.7 Acquisitions & Investments (3.5) (27.1) (4.7) Disposals 3.8 8.3 12.2 Others 1.3 (1.2) 0.1 Investment cash flow 1.7 (20.1) 7.6 New loans 15.2 47.6 9.9 Loan repayments (25.7) (41.9) (18.0) Interest (5.6) (11.5) (5.8) Others (of which dividends) (8.4) (12.8) (8.2) Financing cash flow (24.6) (18.6) (22.0) Change in cash position (6.8) (7.6) (8.8)

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CONSOLIDATED BALANCE SHEET

APPENDIX

2014 Half-year Results

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(€m) 30/06/13 31/12/13 30/06/14

Properties 540.1 593.8 583.2

  • f which investment properties

518.5 550.4 431.9

  • f which property held for sale

21.7 43.4 151.3 Equity holdings 0.1 0.3 0.3 Equity affiliates 87.2 60.4 56.4 Cash 25.5 39.4 21.3 Other assets 94.9 85.5 80.0 Shareholders equity (before allocation) 337.2 326.2 310.3

  • f which convertibles

20.7 20.6 20.4

  • f which PSL

73.2 73.2 73.2 Bank debt 350.3 366.5 358.1 Other liabilities 60.2 86.7 72.8 Total balance sheet 747.7 779.4 741.2

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12 13 14 15 16 17 janv.-14 mars-14 mai-14 juil.-14 Affine Euronext IEIF SIIC France EPRA Europe 10 20 30 40 50 janv.-14 mars-14 mai-14 juil.-14

SHARE PRICE (€) AND AVG TRANSACTION VOL. (000)

APPENDIX

2014 Half-year Results

31

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SLIDE 32
  • A diversified portfolio of customer – Breakdown of rents

Overall, the group has 344 leases corresponding to an average rental income of €129,000 by tenant or €103,000 excluding the TOP 5

9% 3% 3% 3% 3% 79% SNCF Mairie Corbeil-Essonne TDF Distrib - Pharma Heidelberg France Others < 3%

344 Leases TOP 5

A DIVERSIFIED RISK ON TENANTS

APPENDIX

2014 Half-year Results

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SLIDE 33

LTV (NET DEBT / PORTFOLIO VALUE)

APPENDIX

2014 Half-year Results

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(€m) 30/06/13 31/12/13 30/06/14 Net financial debt 330 347 347 Debt allocated to lease financing (22) (20) (18) Debt allocated to investment securities Debt allocated to development business Debt for investment properties 308 327 329 Value of properties (incl. TT) 571 627 618 Property companies on equity basis 85 58 54 VEFA & Fixed assets adjustments 20 14 10 Adjusted portfolio value incl. taxes 676 699 682 LTV (net debt on portfolio value) 45.7% 46.8% 48.3%

LOAN VALUE

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SLIDE 34

10.7 9.8 12.2 13.4 8.1 14.4 20.6 10.8 10.8 9.3* 5 10 15 20 25 30 2006 2007 2008 2009 2010 2011 2012 2013 Cash Share

DIVIDEND

  • Affine, high yield property company

A 6.5% yield based on the share price of 31/12/2013 (€13.94) *In the assumption of the BRS conversion.

APPENDIX

2014 Half-year Results

34

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SLIDE 35

97.8% 83.6% 88.4% 100.0% 91.5% Warehouses and industrials Retail Offices (Regions) Offices (Paris) Total

VACANCY BY AREA

  • Financial occupancy rates (EPRA)

APPENDIX

2014 Half-year Results

35

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SLIDE 36

Holdaffine 35.2% Free float* 64.8%

(voting rights 51.3%) (voting rights 48.7%)

SHAREHOLDING

APPENDIX

2014 Half-year Results

36

  • Shareholding
  • Affine is listed on NYSE Euronext Paris

Annualised capital turnover rate of 47% based on the float Annualised capital turnover rate of 31%

30 Jun 14

Number of shares 9,051,431 Share price €14.60 Market capitalisation €132.2m Change in 2013 4.7% EPRA earnings per share €0.66 Ticker (Bloomberg / Reuters) IML FP / BTPP.PA

* Of which La Tricogne: 6.6% of capital and 4.8% of voting rights

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2 4 6 8 10 12 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Paris Régions

  • 10
  • 5

5 10 15 20 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Paris Régions

PARIS COMPARED TO REGIONS

  • Capital yield (%)
  • Regions present a total return more stable

A variability of 35 % less than the Paris one

APPENDIX

2014 Half-year Results

37

An average yield of 200 bps above Paris one

  • Rental yield (%)

Source: IPD Source: IPD

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POPULATION & TGV LINE

  • 2016 : LGV Est Europe

106 km of new TGV line Paris-Strasbourg: 1h50 vs 2h20

  • 2017 : LGV Bretagne

Pays de la Loire

182 km of new TGV line Paris-Rennes: 1h30 vs 2h10

  • 2017 : LGV Sud Europe Atlantique

302 km of new TGV line Paris-Bordeaux: 2h10 vs 3h00

  • Grand projets ferroviaires

du Sud Ouest APPENDIX

2014 Half-year Results

38 Current TGV Line TGV line under construction TGV line under study