10th Annual General Meeting. Vienna, 20 May 2011

Transcription

1 10th Annual General Meeting Vienna, 20 May 2011

2 Market overview and company development 2010 Earnings performance and balance sheet indicators 2010 Implementation of strategy Overview 1 st Quarter 2011 Outlook 2011

3 HIGHLIGHTS FISCAL YEAR Strongest operating results in company history + Earnings before interest, taxes, depreciation and amortisation (EBITDA) up 76 % to EUR million + Earnings before interest and taxes (EBIT) increased by 9% to EUR million + Revenues amounted to EUR million. + Funds from operations (FFO), at EUR 53.6 million, below prior-year level (EUR 72.6 million; considering special effects the FFO was at the level of 2009) + Group profit for the year up 8% to EUR 25.7 million + Increase in rental income and double-digit profit margins in sales business + Rental income up 16% to EUR 188 mill. organic rental growth and ECO rents + Proceeds on property sales EUR million due to strong demand by private investors (previous year: EUR million) + Selling margins significantly improved on the previous year (+ 30% to 13% IFRS margin) + Solid balance sheet and financing structure, also taking into account takeover of ECO % equity ratio and Loan-to-Value (LTV) ratio of 59% EBITDA Revenues in EUR mill. in EUR mill % % Group profit for the year in EUR mill

4 RESULTS FINANCIAL YEAR 2010 HIGH-QUALITY AND STABLE-VALUE PROPERTY PORTFOLIO Property indicators in A G CEE Total Number of objects number 409 1, ,811 Rental units/ parking spaces number 7,299 / 6,779 16,906 / 4, / ,194 / 11,894 Total usable space sqm 954,679 1,405,184 93,186 2,453,049 Property assets EUR mill. 1, , ,238.3 Vacancies - strategic / actual Average rent residential % EUR/sqm/ month 1.59 / / / / Yield % Like-for-Like (without ECO) 3.6% increase of rental income + Consolidation of ECO brings positive rental income + Significant reduction of vacancies due to active asset management in the conwert portfolio Property assets by region A 5.4% G Other regions 44.5% 50.1% Development property assets Yield rose to 5.18% in 2010 (2009: 4.88%) + Austria: 4.36% (2009: 3.86%) + Germany: 6.25% (2009: 5.91%) Austria Germany Other regions Total 4

5 RESULTS FINANCIAL YEAR 2010 LONG-TERM INCREASE IN RENTS IN THE RESIDENTIAL SEGMENT Development average rents per sqm and month in EUR Development of vacancies in % % Retail/Offices Appartments Strategic vacancies Total vacancies Average residential rent at EUR 5.19/sqm per month (+2%) Increases for new rentals of apartments /sqm in Austria and 5.36/sqm in Germany Total vacancies down 11% to 15% + Significant reduction by 30% in Germany + Without ECO portfolio vacancies at 12% Strategic vacancies reduced to 5% + Rising demand increasingly leads to activation of strategic vacancies Actual vacancies at 10% + Completion of developments will reduce vacancies further + ECO portfolio let to higher degree or sold 10

6 RESULTS FINANCIAL YEAR 2010 SUCCESSFUL SALES PROGRAM IMPLEMENTED + Proceeds on the sale of properties of EUR million due to strong demand from private investors + Sales margin improved significantly on the previous year (+ 30% on 13% IFRS margin) + Profit therefore at record level of EUR 38 million + Overall 2,057 residential units sold (2009: 1,715) freehold flats (2009: 395) + 70 apartment buildings (2009: 65) with 1,600 apartments + Sales in Germany again exceed EUR 100 million + Sales business characterised by strong sales of individual apartments + Selling prices 13% above valuation and 28% above investment costs + ECO sales also carried out with positive IFRS margins 6

7 RESULTS FINANCIAL YEAR 2010 STABLE REVENUES FROM PROPERTY SERVICES Property management in 1,000 sqm Service revenues in EUR million ,103 4,138 4,191 2,589 2,765 2,863 1,514 1,373 1, RESAG alt+kelber Service revenues increased significantly by 23% 40% of total service revenues from third parties (2009: 52%) New mandates for third parties in Germany + Management for second closed-end DWS residential property fund 57,618 managed units with 4.19 mill. sqm (2008: 55,781 units with 4.14 mill. sqm) + approx. 45% or 1.88 mill. sqm in third-party business Broker: 6,687 rental units brokered (2009: 7,609 units) + Thereof 54% in third-party business EUR 3.32 bn. assets under management (2009: EUR 3.34 bn.) Internal Property Services Property Services for third parties 7

8 Market overview and company development 2010 Earnings performance and balance sheet indicators 2010 Implementation of strategy Overview 1 st Quarter 2011 Outlook 2011

9 OVERVIEW CONSOLIDATED INCOME STATEMENT 2010 in Change Rental income EUR mill % Proceeds on sale of properties EUR mill % Service revenues EUR mill % Revenues EUR mill % Earnings before interest and tax, depreciation and amortisation (EBITDA) EUR mill % Net gain from fair value adjustments EUR mill % Significant increase in rental income by 16% EBITDA soared by 76% to EUR million EBIT up 9% to EUR million Earnings before interest and tax (EBIT) EUR mill % Financial results EUR mill Earnings before tax (EBT) EUR mill % Group profit for the year EUR mill % Funds from Operations (FFO) 1) EUR mill % Net Rental Income (NRI) 2) EUR mill % 1) FFO: FFO: Earnings before tax (EBT) minus the net gain from fair value adjustments + difference between cash gains on sale to IFRS gains on sale + depreciation + non-cash parts of financial result and investment costs 2) NRI: net rental income is gross rental income of a period less operational costs passed on and direct property expenses /income. 9

10 OVERVIEW BALANCE SHEET INDICATORS 2010 Balance sheet indicators in Change Non-current assets EUR mill. 2, , % Current assets EUR mill ,6 +32% Total assets EUR mill. 3, , % Equity EUR mill. 1, , % Non-current liabilities EUR mill. 1, , % Current assets EUR mill % Equity and liabilities EUR mill. 3, , % Loan-to-Value (LTV) % Equity ratio % Gearing % Book value (NAV) / share EUR % Balance sheet total significantly increased on the previous year + Non-current and current assets increased significantly + Equity ratio at 37.5% due to takeover of ECO Business- Immobilien AG + Goodwill reduced by 27% from EUR mill. to EUR mill. due to impairment + Intangible assets reduced from EUR 42.7 million to EUR 4.6 million due to impairment 10

11 OVERVIEW OF FINANCING STRUCTURE Cash-effective average interest rate 4.16% after hedging + Approx years average terms of all loans incl. convertible and bonds + Broad and long-term spread of borrowings + Low prolongation volume in the following years + 85% of loan volume hedged against interest risks + Buyback Convertible at nominal value of EUR 34.3 mill. (average price 61%) Prolongation in EUR mill. Financial expenses in EUR mill. Liabilities to banks in EUR mill banks < EUR 47 mill. 6 banks Range: EUR 47 mill. EUR 68 mill. 5 banks Range: EUR 73 mill. EUR 260 mill. 11

12 Market overview and company development 2010 Earnings performance and balance sheet indicators 2010 Implementation of strategy Overview 1 st Quarter 2011 Outlook 2011

13 NEW STRATEGIC ORIENTATION IMPLEMENTATION + Concentration on core residential business + Refocusing on the development, letting and rental of residential properties as core business + Commercial properties will gradually be sold + Geographic focus + Targeted reduction of property portfolio in Austria and exit from Eastern Europe + Business in Germany will be optimised and strengthened, portfolio will be increased especially in Berlin and West German metropolitan areas + Expansion of service business + Intensified cooperation with institutional investors in Germany and Austria + Implementation of a new organisation structure + Streamlining of the organisation + Using synergies by combining organisation units in Austria and Germany + Improving efficiency by cost savings and better cost to revenue ratio + Improvement of transparency and Corporate Governance + New code of conduct implemented and published + Comprehensible strategy as indicator of future developments communicated + External evaluation 2010 of the Code of Corporate Governance + Related-party transactions prohibited 13

14 NEW STRATEGIC ORIENTATION IMPLEMENTATION IN Q1/ Reduction of the property portfolio in Austria and Germany by EUR 50 million + Sale of properties worth EUR 40.1 million in Austria + Sales in the Czech Republic amounting to EUR 9.6 million + Sale of residential and commercial properties amounting to EUR 100 million in Germany with effect on revenues in Q2 + New acquisition in Berlin with 1,690 residential units and 160 commercial units + Properties in highly sought-after central locations in the western part of Berlin + Attractive development and value increasing potential + Sustainable potential for increasing rents + Expansion of service business with institutional partners + Second DWS residential property fund with a volume of EUR 160 million will be taken into management in May Negotiations with core Austrian fund promoter to manage institutional residential real estate portfolio 14

15 Market overview and company development 2010 Earnings performance and balance sheet indicators 2010 Implementation of strategy Overview 1 st Quarter 2011 Outlook 2011

16 HIGHLIGHTS 1st QUARTER Strong operating growth in comparison with the prior-year quarter + Rental revenues up 37 % from EUR 39.2 million to EUR 53.9 million + Revenues rose by 37% to EUR million + EBITDA up 21% to EUR 30.2 million + EBIT improved by 24% to EUR 27.6 million + Group profit after income tax rose from EUR 4.1 million to EUR 6.0 million + Increase in NAV + Book value / share (NAV) increased significantly by 2.2% to EUR per share + Improved balance sheet structure + Equity ratio increased to 38.4% (12/2010: 37.5%) + Loan-to-value ratio (LTV) of 58.5% + Positive development of proceeds on sale of properties + Q1-proceeds on property sales 44% higher than in Q1/2010 (from EUR 45.3 million to EUR 65.3 million) + Profit margin of 11.4% + Q2 proceeds on property sales of EUR 99.3 million already concluded in Q1 16

17 FINANCIAL INDICATORS 1st QUARTER 2011 Balance sheet indicators in 1-3/ / Equity EUR mill. 1, , ,330.1 Fremdkapital EUR mill. 2, , ,220.6 Equity ratio % Loan-to-Value (LTV) % Key company figures in 1-3/ / Rental income EUR mill Proceeds on sale of properties EUR mill Service revenues EUR mill Revenues EUR mill Earnings before interest and tax, depreciation and amortisation (EBITDA) EUR mill Funds from Operations (FFO) 1) EUR mill Stock exchange indicators in 1-3/ / Basic earnings / share EUR (0.29) Diluted earnings / share EUR (0.29) Book value (NAV) / share EUR ) FFO: FFO: Earnings before tax (EBT) minus the net gain from fair value adjustments + difference between cash gains on sale to IFRS gains on sale + depreciation + non-cash parts of financial result and other costs 17

18 STUCTURE OF CONWERT / MARKET ESTIMATES + Consortium led by Petrus Advisers long-term core shareholder + holds 18% of the stocks + Running share buyback programme Development of the conwert share EUR 11.40, 18/05/2011 Market Cap. roughly 1 billion -28% discount to NAV Shareholder Structure Petrus Advisers 18 % Analyst Research after communication new strategy Bank Recommen. PT Aurel-BGC Buy CA Cheuvreux Outperform Credit Suisse Buy Deutsche Bank Buy DZ Bank Buy Erste Group Hold Institutional 50 % Per March 2011 Retail 32 % HSBC Neutral J.P. Morgan Neutral Rabobank Buy RCB Buy Silvia Quandt Buy SRC Research Buy UniCredit Buy Consensus Per NAV as of 31/03/2011 EUR per share 18

19 Market overview and company development 2010 Earnings performance and balance sheet indicators 2010 Implementation of strategy Overview 1 st Quarter 2011 Outlook 2011

20 MARKET OUTLOOK 2011 Financial market environment favourable for conwert + Currently still low interest level + Uncertainty in financial markets: fear of inflation + Institutional preference for tangible assets, especially residential properties Economic environment in conwert core markets favourable + General upward business trend + Falling unemployment rate Positive demographic development of the residential market in Vienna + Population growth in metropolitan areas + Rising number of households, higher per capita demand for sqm + New construction significantly below need for residential space, cuts of subsidies Persisting strong demand for closed-end property funds in Germany + Growth opportunities in the segment funds management 20

21 TARGETS 2011 Reduction of existing gap between NAV and share price + Admission to the ATX as of 21 March 2011 contributes to making share more attractive + Intensive investor contact and convincing strategy will bring further trust by investors Focus on increasing value and profitability Implementation of now strategic orientation + Concentration on the core residential business and the core markets Austria and Germany + portfolio expansion in German metropolitan areas, sale of apartment buildings in Vienna + Consistent expansion of long-term service business with institutional investors Increase conwert s earnings power further + Tapping potential to increase rents and reduce vacancies further + Reduce debt level + Targeted sales in line with strategic reorientation Further improvement of productivity Neutral valuated EBIT of + 15% and NAV growth of 2.5% - 3% Sustainable dividend policy based on a high-profit business model 21

22 DISCLAIMER This presentation includes various forecasts and expectations as well as statements concerning the future development of the conwert Group. These statements are based on assumptions and estimates, and may be connected with known and/or unknown risks and uncertainties. Actual developments and results as well as the financial, earnings and asset position of the Group may therefore differ materially from these expectations and assumptions. The reasons for such variances may include market fluctuations, the development of property prices and rents as well as financial markets and foreign exchange rates, changes in national or international laws and regulations or fundamental changes in the economic and political environment. For this reason, future-oriented statements are only related to the day on which they are made. conwert will accept no obligation to revise or adjust such statements to reflect new information or future results. MAY 2011