YEAR RESULTS YEAR RESULTS 19 February 2014 AFFINE MILESTONE - - PowerPoint PPT Presentation

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YEAR RESULTS YEAR RESULTS 19 February 2014 AFFINE MILESTONE - - PowerPoint PPT Presentation

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Presentation of Presentation of YEAR RESULTS YEAR RESULTS 19 February 2014 AFFINE MILESTONE 2009-2013 CHANGES LTV reduction Occupancy rate improved 55.0% 51.5% 50.8% 92.2% 46.8% 45.5% 90.9% 89.0% 87.8% 87.7% 2009

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SLIDE 1

YEAR RESULTS

Presentation of

YEAR RESULTS

Presentation of 19 February 2014

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SLIDE 2
  • Occupancy rate improved

92.2% 87.7% 89.0% 87.8% 90.9% 2009 2010 2011 2012 2013

  • LTV reduction

55.0% 51.5% 50.8% 45.5% 46.8% 2009 2010 2011 2012 2013

MILESTONE – 2009-2013 CHANGES

AFFINE

  • Average size of the building increased

8.3 8.8 8.7 9.2 10.5 2009 2010 2011 2012 2013 14.3 13.1 12.0 10.9 10.0 2009 2010 2011 2012 2013

  • Corporate expenses reduced

2013 Full-year Results

2 (€m) (€m)

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SLIDE 3

KEY TAKEAWAYS

  • CHANGE IN PORTFOLIO

Rents up 0.9% on a like-for-like basis Significant hike in occupancy rate (90.9%) €25.5m in acquisitions and €7.8m in disposals €19.9m in improvements and developments

  • CONTROLLED LTV OF 46.8%

AND COST OF DEBT DOWN TO 3.4% AFFINE

  • DECLINE IN EPRA EARNINGS

(-) Rental income down due to disposals in 2012 (-) End of residential development projects (+) Sharp drop in financial costs (+) Decrease in corporate expenses

  • EPRA NAV PER SHARE OF €25.0

(-) 3.8% reduction in fair value of buildings (-) Net earnings of -€8.8m due to fair value adjustments, particularly for Banimmo

  • DIVIDEND OF €0.9 PER SHARE

2013 Full-year Results

3

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SLIDE 4

INVESTMENTS AND DISPOSALS

2013 Full-year Results

4

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SLIDE 5

€45M OF INVESTMENTS AND €8M OF DISPOSALS

INVESTMENTS AND DISPOSALS

€20m: Development & Enhancement €25m: acquisition

Paris - Réaumur Troyes (Concerto) St Cyr en Val Arcachon

2013 Full-year Results

5

€8m: Disposals

Plaisir Croissy-Beaubourg Noisy-le-Grand Bordeaux Paris - Réaumur Troyes (Concerto) Arcachon

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SLIDE 6

SAINT CYR EN VAL – RENOVATION

INVESTMENTS AND DISPOSALS

  • A 39,000 sqm warehouse

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

  • Air conditioning système renovation

17 air con devices replaced on the roof

2013 Full-year Results

6

  • Fast and coordinated intervention

Use of a Super Puma helicopter ERDF maintenance

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SLIDE 7

RÉAUMUR, A PARTIAL RECONVERSION

  • 1,656 sqm totally refurbished

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

INVESTMENTS AND DISPOSALS

Bureaux

  • Nearby the Marais district

Located at 100 m of the Arts et Métiers metro station

  • Works budget estimated at €4m

2013 Full-year Results

7

Appartement

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SLIDE 8

BORDEAUX – PURCHASE OF BANIMMO’S 50%

  • Jardins des Quais

Advantage: outlets and restaurants located in the heart of town Easy and improved service and enhanced attractiveness

3 stops on the tramway B line & a parking lot for 632 cars Opening of the bridge Chaban-Delmas (March 2013) Development of the ‘’Bassins à Flot’’ urban development zone

INVESTMENTS AND DISPOSALS

B

24,900 sqm spread over 5 buildings:

8,200 sqm of retail space 4,200 sqm of bars and restaurants 12,500 sqm of office space 632 parking lots

Marketing finalised: OR 99%

2013 Full-year Results

8

H15 H16 H17 H18 H19 B B B Bordeaux

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SLIDE 9

PERFORMANCE OF THE PORTFOLIO

2013 Full-year Results

9

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SLIDE 10

40.8 0.4 46.2 (0.4) 5.4

HEADLINE RENTS: +0.9% LIKE-FOR-LIKE

  • Change in headline rents annualized (€m)

PERFORMANCE OF THE PORTFOLIO

31/12/2012 Disposal Like-for-like Acquisition 31/12/2013

Total headline rents change: +13.2%

2013 Full-year Results

10

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SLIDE 11

549 594 (8) (0) (18) +10 +10 +25 +25

8.1% INCREASE OF THE PORTFOLIO VALUE

  • Change in fair value excluding TT (€m)

PERFORMANCE OF THE PORTFOLIO

31/12/2012 Disposal Capital gain Lfl Capex Dev. Acquisitions Others 31/12/2013

  • Breakdown of the 3.8% decrease in fair value on a like-for-like basis

Market rent effect (ERV): -3.9% Cap rate effect: -0.5% Miscellaneous: 0.6% (works, reversion, …)

2013 Full-year Results

11

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SLIDE 12

95.4% 94.0% 94.5% 94.0% 92.2% 89.0% 90.9%

MARKED RISE OF OCCUPANCY RATE

  • Financial occupancy rates (EPRA)

PERFORMANCE OF THE PORTFOLIO

87.7% 89.0% 87.8% 2005 2006 2007 2008 2009 2010 2011 2012 2013

2013 Full-year Results

12

Impact Baudry:

  • 1.2 pt

Impact JdQ: +0.8 pt

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SLIDE 13

20 30 40 50

LEASE AVERAGE DURATION 4.8 YEARS

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

PERFORMANCE OF THE PORTFOLIO

10 20

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

Average time up to next break option: 2.3 years Average time up to lease expiry: 4.8 years 35 new leases (23,900 sqm ; €1.3m) 35 renegociated leases (42,400 sqm ; €3.9m) 19 terminated leases (10,600 sqm ; €1.6m)

2013 Full-year Results

13

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SLIDE 14

PORTFOLIO YIELD

  • Return by asset type

PERFORMANCE OF THE PORTFOLIO

Portfolio Headline Potential Split in value yield yield Paris (Offices) 15.6% 5.1% 5.1% Offices (other regions) 38.1% 7.4% 8.4%

2013 Full-year Results

14

Retail 21.2% 6.7% 7.7% Warehouses & Industrials 24.8% 8.8% 9.3% Total 100,0% 7.3% 8,0%

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SLIDE 15

BANIMMO

  • Repositionning property company

Portfolio: 19 buildings; Gross rental income: €9.9m; value: €366m.

  • Key events

Sale of 12,000 sqm of retail in Eragny in the Paris Region (€18.7m) Development by Banimmo of 6,500 sqm of offices in Brussels to Marsh & Mc Lennan Sale by Banimmo of 6,800 sqm of offices next to Antwerpen (Belgium)

PERFORMANCE OF THE PORTFOLIO

More details on

www.banimmo.be

Sale by Banimmo of 6,800 sqm of offices next to Antwerpen (Belgium) JV creation with McArthur Glen for a project in Ghent (€180m) Acquisition of 14,000 sqm of offices in Antwerpen (€12.7m) Signature of 2 sales agreements for retails(€21.8m) Development of 7,400 sqm of offices in Ghent for Deloitte Sale of 50% stake in Jardins des Quais (€25m)

  • Results 2013

Significant negative accounting adjustments on certain assets, in particular, the City Mall participation (-€14.5m). Operational result: €7.2m vs €10.2Mio Net current result: -€4.2m vs €2.2m Intrinsic net value: €12.31 vs €15.08 per share Mainly owing to non recurrent adjustments

2013 Full-year Results

15

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SLIDE 16

BANIMMO - THE LOOP

PERFORMANCE OF THE PORTFOLIO

  • Scheme of 52,800 sqm

32,000 sqm McArthurGlen Outlet Centre 14,500 sqm leisure 6,300 sqm big box store

  • Scheme

Development and investment through a joint-venture (50/50) between Banimmo and McArthurGlen

Outlet Center Flanders Expo Veld 3 Tetris Business Park Ghent Deloitte

2013 Full-year Results

16

and McArthurGlen Construction of a built-to-suit office building for Deloitte (7,400 sqm - end 2015)

  • Timing

Conditions precedent: June 2014 Obtaining necessary permits by year-end Start construction: beginning of 2015 Delivery and opening of outlet centre: end 2016

  • Investment

Total investment of about €180m

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SLIDE 17

DEVELOPMENT

  • Concerto European Developer

Delivery of 2 logistics platforms

Sunclear (21,000 sqm) Eurodif (25,000 sqm)

Signature with the Devanlay group for the development of a 19,000 sqm logistics platform Filing of building permits for the areas

PERFORMANCE OF THE PORTFOLIO

Filing of building permits for the areas

  • f Cambrai and Honfleur

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

  • Promaffine

Completion of 2 residential joint development in Nanterre and Marseilles

2013 Full-year Results

17

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SLIDE 18

AUBE’S LOGISTICS PARK

PERFORMANCE OF THE PORTFOLIO

  • Location

1h30 from Paris 45 min from Vatry airport 1h00 from Nogent-sur-Seine’s harbor (axe Seine) A5 (Paris-Chaumont-Lyon line) A26 (Calais-Marseille line)

Devanlay Eurodif Project in progress

2013 Full-year Results

18

  • Project

Logistics hub: 250 Hectares Potential rent: 40 € HT HC / m² / an Firm lease: 9 years

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SLIDE 19

CONSOLIDATED ACCOUNTS

2013 Full-year Results

19

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SLIDE 20

CONSOLIDATED EARNINGS

CONSOLIDATED ACCOUNTS

(€m) 31/12/11 31/12/12 31/12/13

Gross rental income 48.3 46.4 40.2 Net rental income 43.1 41.3 34.8 Other income 3.6 4.3 1.9 Corporate expenses (12.0) (10.9) (10.0) Current EBITDA

(1)

34.7 34.6 26.7 Current operating profit 34.6 34.5 26.5 Other income and expenses 0.4 (0.1) 0.7 Net financial cost (18.2) (16.9) (11.5)

2013 Full-year Results

20 Net financial cost (18.2) (16.9) (11.5) Taxes 0.0 (0.1) (0.5) Associates 2.6 2.5 1.9 Miscellaneous (0.4) 0.3 (0.1) Net current profit 18.9 20.2 17.0 EPRA Earnings (Net current profit – Gs) 18.4 20.1 17.0 Value adjustments of properties & profit on disposals 1.6 (15.1) (21.8) Fair value adjustments of hedging instr. (2.3) (1.5) 4.0 Adjustements for associates (1.3) 0.9 (7.2) Others (1.3) 0.4 (0.9) Net non-current profit – Gs (3.2) (15.4) (25.8) Net profit – group share 15.3 4.7 (8.8)

(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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SLIDE 21

NET ASSET VALUE CHANGE

CONSOLIDATED ACCOUNTS

(€m) 31/12/11 31/12/12 31/12/13

Shareholders’ equity (before allocation) 348.4 351.4 326.2 PSL adjustment (73.4) (73.2) (73.2) Fair value adjustments to hedging instr. 14.3 12.6 7.2 Net deferred tax (1.7) (2.1) (4.1) EPRA NAV (excluding transfer tax) 287.6 288.8 256.0 EPRA NAV (including transfer tax) 326.5 324.0 290.5

288.8 (10.8) (18.4) +4.0 +17.0 (24.6) 256.0 31/12/2012 Dividends paid FV properties FV FI EPRA earnings Others 31/12/2013 €28.2 per share €25.0 per share

2013 Full-year Results

21

(€m)

EPRA NAV (excluding transfer tax) per share (€) 29.0 28.2 25.0

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

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SLIDE 22

HIGH POTENTIAL YIELD

  • Total shareholder return

2013: 20.1 % Year-to-date: 10.8 %

  • Capital yield

EPRA NAV: €25.0 Share price 31/12/13: €13.94 Discount on EPRA NAV: 42%

CONSOLIDATED ACCOUNTS

11 12 13 14 15 16 Affine Euronext IEIF SIIC France EPRA Europe

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

Discount on EPRA NAV: 42% Share price 14/02/14: €15.44 Discount as at 14/02/13: 38%

  • Dividend yield

Dividend: €0.9 Yield: 6.5% Yield as at 14/02/13: 5.8%

2013 Full-year Results

22

10 janv.-13 mars-13 mai-13 juil.-13 sept.-13 nov.-13 janv.-

* Cf slide 39

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SLIDE 23

FINANCING

2013 Full-year Results

23

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SLIDE 24

881 821 803 682 699 484 423 407 80% 100% 120% 500 600 700 800 900 Value

A CONTROLLED LTV FOR A RESUMPTION OF INVESTMENTS

  • LTV of 46.8% (€m)

FINANCING

423 407 310 327 55.0% 51.5% 50.8% 45.5% 46.8% 0% 20% 40% 60% 100 200 300 400 500 2009 2010 2011 2012 2013 Value Loan LTV

Average financing cost of 1.9%, or 3.4% hedging included (vs 2.5% & 3.8%) Floating interest rate risk hedged Hedging optimization with €55m of new swaps and €62m of new caps in June

2013 Full-year Results

24

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SLIDE 25

FAVOURABLE CREDIT ACCESS

  • Banks relationship diversified

6 main banks Average duration of 5.7 years Financing asset by asset with mortgages Amortizable over middle term

  • Financing in 2013

3 credits for an amount of €18m

FINANCING

3 credits for an amount of €18m

2 refinancing St Etienne Molina (€11m) Concerto financing (€7m)

1 Finance lease of €30m for Jardins des Quais

  • Refinancing of the 2014 debt service underway

2013 Full-year Results

25

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SLIDE 26

40 60 80 100 120

A SMOOTHED DEBT PROFILE

  • Amortisation of debt (€m)

FINANCING

20 40 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 financing policy aiming at smoothing the amortisation Repayment: around €30m p.a. on average Short term available credit lines of €19m

2013 Full-year Results

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SLIDE 27

STRATEGY & OUTLOOKS

2013 Full-year Results

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SLIDE 28

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)

STRATEGY & OUTLOOKS

  • 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

  • Becoming customer-oriented

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

2013 Full-year Results

28

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SLIDE 29

Lille Paris

15.6% 24.8% 0.2%

OUR STRATEGY [2/2]

  • Breakdown of the portfolio in value terms

STRATEGY & OUTLOOKS

Paris

Main cities

Toulouse Nantes Bordeaux Marseille Lyon

38.1% 21.2% Offices (Paris) Offices (Régions) Retail Warehouses and industrial Others

2013 Full-year Results

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SLIDE 30

8 10 12 Paris Régions 10 15 20 25 Paris Régions

PARIS COMPARED TO REGIONS

  • Capital yield (%)

STRATEGY & OUTLOOKS

  • Rental yield (%)

2 4 6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

  • 10
  • 5

5 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

  • Regions present a total return more stable

A variability of 35 % less than the Paris one

2013 Full-year Results

30

An average yield of 200 bps above Paris one

Source: IPD Source: IPD

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SLIDE 31

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

STRATEGY & OUTLOOKS

Reduce the vacancy rate

  • Seek partnerships

To broaden the range of investment from

  • ur experience of the real estate business

2013 Full-year Results

31

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SLIDE 32
  • Affine

CONTACTS

Maryse Aulagnon Alain Chaussard Chairperson and CEO Vice-Chairman and Co-CEO + 33 (0)1 44 90 43 10 – info@affine.fr

  • Liquidity contract:

Invest Securities

  • Website:

www.affine.fr

2013 Full-year Results

32

Frank Lutz Investor Relations + 33 (0)1 44 90 43 53 – frank.lutz@affine.fr

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SLIDE 33

APPENDIX

2013 Full-year Results

33

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SLIDE 34

CONSOLIDATED CASH FLOW

APPENDIX

(€m) 31/12/11 31/12/12 31/12/13

Funds from operation 19.7 17.9 17.9 Funds from operation (excluding cost of debt and tax) 38.8 33.3 30.1 Change in WCR 10.1 (16.4) 1.3 Taxes paid (0.6) (0.0) (0.3) Operating cash flow 48.3 16.8 31.1 Acquisitions & Investments (25.5) (20.5) (27.1) Disposals 47.2 131.2 8.3

2013 Full-year Results

34 Disposals 47.2 131.2 8.3 Others 1.6 0.8 (1.2) Investment cash flow 23.3 111.5 (20.1) New loans 24.2 35.9 47.6 Loan repayments (59.6) (123.8) (41.9) Interest (19.4) (16.5) (11.5) Others (of which dividends) (18.4) (15.7) (12.8) Financing cash flow (73.0) (120.2) (18.6) Change in cash position (1.4) 8.2 (7.6)

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SLIDE 35

CONSOLIDATED BALANCE SHEET

APPENDIX

(€m) 31/12/11 31/12/12 31/12/13

Properties 672.2 549.3 593.8

  • f which investment properties

520.8 522.0 550.4

  • f which property held for sale

151.4 27.3 43.4 Equity holdings 0.3 0.1 0.3 Equity affiliates 85.8 89.6 60.4 Cash 23.3 32.6 39.4

2013 Full-year Results

35 Other assets 99.4 90.7 85.5 Shareholders equity (before allocation) 362.2 351.4 326.2

  • f which convertibles

20.8 20.8 20.6

  • f which PSL

73.4 73.2 73.2 Bank debt 450.0 360.9 366.5 Other liabilities 68.8 49.8 86.7 Total balance sheet 881.0 762.2 779.4

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SLIDE 36

12 13 14 15 16 17 Affine Euronext IEIF SIIC France EPRA Europe

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

APPENDIX

10 11 12 janv.-13 mars-13 mai-13 juil.-13 sept.-13 nov.-13 janv.-14 10 20 30 40 50 janv.-13 mars-13 mai-13 juil.-13 sept.-13 nov.-13 janv.-14 2013 Full-year Results

36

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SLIDE 37

8% 3% 3% 3% 3% SNCF TDF Mairie Corbeil-Essonne

357 TOP 5

A DIVERSIFIED RISK ON TENANTS

  • A diversified portfolio of customer – Breakdown of rents

APPENDIX

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

357 Leases TO

Overall, the group has 295 leases corresponding to an average rental income of €129,000 by tenant or €104,000 excluding the TOP 5

2013 Full-year Results

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SLIDE 38

LTV (NET DEBT / PORTFOLIO VALUE)

APPENDIX

(€m) 31/12/11 31/12/12 31/12/13 Net financial debt 435 334 347 Debt allocated to lease financing (27) (23) (20) Debt allocated to investment securities Debt allocated to development business Debt for investment properties 407 310 327

LOAN

2013 Full-year Results

38

Debt for investment properties 407 310 327 Value of properties (incl. TT) 709 580 627 Property companies on equity basis 84 88 58 VEFA & Fixed assets adjustments 10 14 14 Adjusted portfolio value incl. taxes 803 682 699 LTV (net debt on portfolio value) 50.8% 45.5% 46.8%

VALUE

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SLIDE 39

9.8 13.4 14.4 20.6 15 20 25 30 Cash Share

DIVIDEND

  • Affine, high yield property company

APPENDIX

10.7 9.8 12.2 13.4 8.1 14.4 10.8 10.8 9.3* 5 10 15 2006 2007 2008 2009 2010 2011 2012 2013

A 6.5% yield based on the share price of 31/12/2013 (€13.94) *Subject to approval by the General Meeting of shareholders on 30 April 2014 and in the assumption of the BRS conversion.

2013 Full-year Results

39

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SLIDE 40

100.0% 90.9% Offices (Paris) Total

VACANCY BY AREA

  • Financial occupancy rates (EPRA)

APPENDIX

100.0% 95.1% 86.8% 87.2% Others Warehouses and industrials Retail Offices (Regions)

2013 Full-year Results

40

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SLIDE 41

Holdaffine 35.3% Free float* 64.7%

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

SHAREHOLDING

APPENDIX

  • Shareholding

Annualised capital turnover rate of 46% based on the float Annualised capital turnover rate of 29%

(voting rights 48.7%)

2013 Full-year Results

41

  • Affine is listed on NYSE Euronext Paris

31 Dec 13

Number of shares 9,033,959 Share price €13.94 Market capitalisation €125.9m Change in 2013 10.5% EPRA earnings per share €1.44 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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SLIDE 42

Metz Caen Rouen Rennes Strabourg Nantes Lille Paris

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

APPENDIX

Poitiers Montpellier Toulouse Bordeaux Marseille Lyon

  • 2017 : LGV Sud Europe Atlantique

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

  • Grand projets ferroviaires

du Sud Ouest

2013 Full-year Results

42 Current TGV Line TGV line under construction TGV line under study