PRESENTATION FOR INVESTORS. May 2018

Transcription

1 PRESENTATION FOR INVESTORS 1 May

2 2 AGENDA Market environment Financials Residential projects Commercial property Attachments

3 3 UPWARD TREND ON HOUSING MARKET MAINTAINED Flats for sale and sold yearly compared with the offer Average prices of flats for sale a trend Source: REAS, aggregate for main biggest markets (Warsaw, Wrocław, Gdańsk, Sopot, Gdynia, Cracow, Poznań, Łódź) Source: NBP as at 31/12/2017 Source; Bankier.pl, as at 31/03/2018 Number of building permits granted, constructions started and flats delivered by developers on a quarterly basis Source: GUS Sales in 1Q of 2018 correspond closely to sales in 4Q of 2017 with considerably lower new supply, it is only 2.5 per cent lower than record highs in 2017 In 1Q of 2018, the number of flats delivered was 10.6 per cent higher than last year, the number of flats for which building permits were granted and the construction of which was begun was also higher by 10.8 per cent Flat prices were on average by 8.4 per cent higher than in 1Q of 2017, which was caused by higher construction costs and increasing land prices Good prospects for 2018 situation in the market environment (a very good economic situation, increasing salaries, decreasing unemployment and the persistence of low interest rates) is still an important factor that generates the demand

4 DYNAMICS OF DEMAND FOR AND CHANGE IN SUPPLY OF FLATS Time of selling flats on offer a trend Source: based on data of Emmerson Events on local housing market Change 1Q of 2018 / 4Q of markets Change 1Q of 2018 / 1Q of 2017 Sales -2.5% -2.4% Placed on the market for sale -9.6% -6.8% Sales in the previous four quarters -0.6% 8.8% Placed on the market in the previous four quarters -1.6% -1.4% Offer at the end of the quarter -7.3% -11.1% Including ready, but not sold -18.4% -25.8% An average price of flats placed on the market in the quarter [gross] -0.3% 9.6% An average price of flats sold in the quarter [gross] 0.7% 5.4% An average price of flats in the offer [gross] 1.8% 8.4% Record short time of selling flats on offer for all four Company s markets Small share of finished flats in developers offer is below 10% High availability of flats maintaining - Stimulants to demand A fall in unemployment A wage increase Low interest rates - Supply restrictions Limited supply of attractive land Administration-related barriers General contracting market Decrease in offered flats and ready, but unsold flats at the end of the quarter Source: REAS, aggregate for main biggest markets (Warsaw, Wrocław, Gdańsk, Sopot, Gdynia, Cracow, Poznań, Łódź) 4

5 5 OFFICE MARKET SITUATION Office market in biggest cities (as at 31/03/2018) Gdańsk / Gdynia / Sopot: Supply (sq m): 743,500 Vacancies (%): 7.7 Demand (sq m): 13,400 Rents: EUR per sq m Under construction (sq m): 45,700 After an exceptionally successful year 2017, the office market continues to boom In 2017, lease agreements were executed for the area of 1,471,100 sq m (increase by 11 per cent compared with 2016), which included both Warsaw (820,100 sq m, compared with 754,900 sq m in 2016) and regional markets (651,000 sq m). Transaction rents in the biggest cities remain steady The total demand in 1Q of 2018 on the main office markets (excluding Warsaw) was 127,100 sq m. In 1Q of 2018, the office area of 129,100 sq m was delivered, the area of 1.1 million sq m is currently under construction in regional cities, whereas a decrease in vacancies (which is 9.3 per cent) shows that there is demand for new projects. Wrocław: Supply (sq m): 942,400 Vacancies (%): 8.3 Demand (sq m): 24,100 Rents: EUR per sq m Under construction (sq m): 36,600 Warsaw: Supply (sq m): 5,279,100 Vacancies (%): 10.8 Demand (sq m): 202,100 Rents: EUR per sq m Under construction (sq m): 23,700 Supply vs. Vacancy Rate in 1Q of 2018 Source: JLL, PORF, 1Q of 2018 Katowice: Supply (sq m): 477,400 Vacancies (%): 12.1 Demand (sq m): 17,200 Rents: EUR per sq m Under construction (sq m): 18,200 Cracow: Supply (sq m): 1,128,100 Vacancies (%): 9.1 Demand (sq m): 42,600 Rents: EUR per sq m Under construction (sq m): 28,500 Supply Vacancy Ratio Source: Colliers International based on PORF

6 6 AGENDA Market environment Financials Residential projects Commercial property Attachments

7 7 LC CORP GROUP SUMMARY 1Q 2018 Housing sector 649 units sold 702 units delivered 1357 units in the offer Commercialisation sector The fair value measurement of Retro Office House, impact on gross financial result: kpln A decrease in the fair value measurement of Arkady Wrocławskie in the amount of kpln Commercialisation of Retro Office House at a level of 97,0 per cent Commercialisation of Wola Retro at a level of 31,8 per cent LC Corp Group - results Adjusted consolidated net profit of mpln 65,6 (1Q 2018) vs mpln 54,0 (1Q 2017) Consolidated net profit of mpln 78,3 (1Q 2018) vs mpln 11,0 (1Q 2017) Separate net profit of LC Corp S.A. of mpln 41,8 (1Q 2018) vs mpln 18,9 (1Q 2017) An increase in the fair value measurement of investment properties in the amount of kpln An increase in the measurement of loan liabilities for loans taken out in EUR in the amount of kpln The overall impact of the change in the EUR exchange rate and fair value of real properties on the consolidated financial result of the Group in 1Q of 2018 amounted cumulatively to kpln and as a consequence, increased the consolidated gross profit.

8 8 STRONG MARKET POSITION AND HIGH EFFICIENCY In the forefront of apartment sales in Poland (by number of apartments) Developers listed on the WSE Outstanding profitability of the residential business (gross margin) - - Source: PAP Biznes (as at 10/04/2018) (*) development agreements, preliminary sales agreements and non-refundable reservations in total (**) sales weighted by the Polnord s share in subsidiaries High cost effectiveness ((selling costs + administrative expenses) / revenue)) Focused on project effectiveness for years Since 2009, no project budget has been exceeded. Since 2009, all projects have been successfully completed, generating higher-than-expected margins. Since 2009, all purchased land has been developed, with the projects yielding higher-than-budgeted revenues. Long-established presence in the key markets (Warsaw, Wrocław, Gdańsk, Kraków) experience in project development and sales. - -

9 9 FINANCIAL PERFORMANCES 1Q 2018 Systematic growth of income from sales (mpln) High gross sales margins (mpln) 34% 24% EBITDA 1 (mpln) Net profit and adjusted net profit 2 (mpln) 23% 31% 22% 1 EBITDA adjusted for: (i) result of property revaluation, (ii) write-downs of inventories 2 Net profit adjusted for: (i) result of the revaluation of property and foreign currency loan, (ii) write-downs of inventories, (ii) others

10 10 HIGH-VALUE AND HIGH-YIELD ASSETS Investment property (mpln) NOI of investment property (mpln) Inventory value (mpln) - inventories include land, projects under construction and ready housing units, but not sold yet

11 11 SELECTED FINANCIAL DATA (mpln) Q Q Q 2018/ 1Q 2017 Revenues 449,9 547,0 706,2 192,2 258,1 + 34,3% EBITDA 155,2 204,7 90,3-12,0 109,4 - Net Profit 108,9 113,1 80,2 11,0 78, ,0% Adjusted net profit 90,3 118,0 145,5 54,0 65,6 + 21,6% Assets 2 890, , , , ,3 + 10,2% Equity 1 364, , , , ,9 + 8,4% Interest-bearing debt 840,6 850,1 814,1 820,9 735,7-10,4% ROA 3,8% 3,5% 2,4% 0,4% 2,3% + 543,1% ROE 8,0% 8,1% 5,5% 0,8% 5,1% + 554,2% ND/E ratio 61,6% 60,9% 56,2% 58,3% 48,2% - 17,3%

12 12 STABLE FINANCIAL SITUATION Debt ratios decrease 1 Bond maturity structure (mpln) Total PLN 400m No significant maturities in respective years Conservative approach to long-term liquidity 1 Financial liabilities do not include the liabilities connected with the purchase of Sky Tower Net financial debt divided into sectors (mpln) (as at 31/03/2018) Bank loans (mpln) No Project Balance Total repayment date 1 Arkady Wrocławskie 102, Wola Center 176, Sky Tower 208, Silesia Star etap I 42, Silesia Star etap II 54, Retro Office House - k. inwest. 54, Retro Office House - k. VAT 1, Kredyt inwestycyjny 50, Kredyt inwestycyjny 38, TOTAL 727,9 1 ( loan and bond debts attributable to the sector cash of the sector)/balance sheet value of investment property 2 ( loan and bond debts attributable to the sector cash of the sector)/balance sheet value of inventories Liabilities connected with the purchase of Sky Tower (mpln) 80,8 Interest-free liabilities. 2 instalments still to be paid off, payable at the end of each year: 2018, 2019.

13 13 AGENDA Market environment Financials Residential projects Commercial property Attachments

14 DEVELOPER INDUSTRY 1Q 2018 vs 1Q 2017 number of premises sold by selected companies listed on the WSE 14 1Q Q 2017 year-to-year change year-to-year change Robyg ,5% ,3% Dom Development ,2% ,3% Atal ,4% ,4% LC Corp (*) ,4% ,0% J.W. Construction (*) ,2% ,5% Echo Investment ,4% ,3% Lokum Deweloper ,8% ,1% Polnord (**) ,0% ,8% Budimex Nieruchomości ,1% ,8% Vantage Development ,7% ,3% Archicom ,8% ,9% Inpro ,8% ,5% Marvipol ,1% ,0% Ronson ,0% ,7% i2 Development ,5% ,0% Wikana ,5% ,0% Total ,2% ,1% Source: PAP Biznes (as at 10/04/2018) (*) development agreements, preliminary sales agreements and non-refundable reservations in total (**) sales weighted by the Polnord s share in subsidiaries

15 HOUSING UNITS SOLD IN 1Q 2018 housing sector as at 31/03/2018 CITY 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q 2018 SALE WARSZAWA WROCŁAW KRAKÓW GDAŃSK ŁÓDŹ cumulatively in the year quarter cumulatively year to year +17% 2706 housing units sold and not delivered, including 142 finished housing units 15

16 HOUSING UNITS DELIVERED 1Q 2018 housing sector as at 31/03/2018 CITY 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q 2018 DELIVERY WARSZAWA WROCŁAW KRAKÓW GDAŃSK ŁÓDŹ cumulatively in the year quarter cumulatively year to year +40% 16

17 HOUSING UNITS IN OFFER housing sector as at 31/03/2018 CITY in of f er as at added in 2018 to be added in 2018 to be added af ter 2018 OFFER WARSZAWA WROCŁAW KRAKÓW GDAŃSK ŁÓDŹ 5 KATOWICE

18 EXPANDING INVESTMENT PORTFOLIO IN 1Q 2018 as at 31/03/ Location acquired / tender won Housing unit usable floor area (sq.m.) estimated number of flats preliminary contract concluded Housing unit usable floor area (sq.m.) estimated number of flats TOTAL Housing unit usable floor area (sq.m.) GDAŃSK KRAKÓW WROCŁAW WARSZAWA TOTAL Three promised land purchase contracts were executed, which related to land properties located in Wrocław (Granitowa street and Dożynkowa street) and in Gdańsk (Letnicka street). Monitoring of offers / Seeking new locations Activation of projects from the investment portfolio depending on a market situation

19 19 AGENDA Market environment Financials Residential projects Commercial property Attachments

20 20 HIGH VALUE AND FURTHER GROWTH POTENTIAL PLN 1.9bn carrying value PLN 1.3bn NAV mpln 24 NOI for 1Q 2018 Significant potential for value and NOI growth with new projects: Retro Office House and Wola Retro Warszawa Wrocław Katowice 6 projects completed 1 project under construction 198,000 sq.m. Usable Floor Area Presence in 3 cities

21 INVESTMENT PORTFOLIO commercial real estate as at 31/03/ CITY PROJECT STATUS GAV [mpln] NAV [mpln] NOI [mpln] Usable Floor Area [sq.m.] Office Retail Usable Floor Usable Floor Area Area [sq.m.] [sq.m.] WARSAW office building WOLA CENTER COMPLETED 439,4 259,4 7, WARSAW office building WOLA RETRO UNDER CONSTRUCTION 72,3 72, WROCŁAW center ARKADY WROCŁAWSKIE COMPLETED 365,8 263,8 5, WROCŁAW office building SKY TOWER COMPLETED 514,2 304,8 6, (*) in reconstruction WROCŁAW office building RETRO OFFICE HOUSE COMPLETED 235,3 179, KATOWICE office building SILESIA STAR - Etap I COMPLETED 144,8 102,0 2, KATOWICE office building SILESIA STAR - Etap II COMPLETED 122,7 68,7 1, TOTAL 1 894, ,7 23, Retro Office House in Wrocław handed over for operation Commercialisation at a level of 97,0 per cent The alteration of Sky Tower 12,400 sq m under alteration, the final date of conversion into office space: 4Q of 2020, projected Usable Floor Area: 33,732 sq m Office Usable Floor Area, 20,495 sq m Retail Usable Floor Area, which means an increase in the area rented by 2,094 sq m Progress of works for Wola Retro in Warsaw according to schedule

22 22 AGENDA Market environment Financials Residential projects Commercial property Załączniki

23 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME LC CORP GROUP 23 PLN'000 1Q Q 2018 Sales revenue Revenue from sales of services Revenue from sales of goods and products Cost of sales ( ) ( ) Gross profit on sales Gain/(loss) on disposal of non-financial fixed assets 1 1 Revaluation of investment property (83 621) Write-downs of inventories - - Selling and distribution cost (3 822) (4 173) General administrative expenses (4 410) (7 194) Other operating income (expenses) Operating profit (12 229) Financial income Financial expenses (8 138) (14 530) Gross profit Income tax (tax burden) (1 152) (17 864) Net profit

24 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS LC CORP GROUP 24 PLN'000 1Q Q 2018 A. Fixed assets Intangible assets Property, plant and equipment Tangible assets Tangible assets under construction Non-current receivables Land classified as fixed asset Investment property Long-term prepayments Deferred tax assets B. Current assets Inventory Trade and other receivables Income tax receivable Short-term financial assets Cash and other cash equivalents Short-term prepayments C. Fixed assets held for sale - - Total assets

25 CONSOLIDATED STATEMENT OF FINANCIAL POSITION LIABILITIES LC CORP GROUP 25 PLN'000 1Q Q 2018 A. Equity I. Equity attributable to shareholders of the parent Share capital Other capital Net profits / losses II. Minority interest - - B. Non-current liabilities Non-current financial liabilities Non-current liabilities on account of the acquisition of a subsidiary Provisions Deferred income tax reserve C. Current liabilities Current financial liabilities Current liabilities on account of the acquisition of a subsidiary Current trade and other payables Income tax liabilities Provisions Accrued expenses and revenue Total liabilities

26 STATEMENT OF COMPREHENSIVE INCOME LC CORP S.A. 26 PLN'000 1Q Q 2018 Operating income Revenue from sale of services, products and goods Revenue from interest and discounts Revenue from dividend Other financial income Other operating income Operating expenses (12 605) (29 522) Operating expenses value of goods sold (5 598) (22 147) Costs of interest and discounts (5 714) (6 367) Other financial expenses (1 293) (1 003) Other operating expenses (0) (5) Gross profit Income tax Net profit / (loss)

27 STATEMENT OF FINANCIAL POSITION ASSETS LC CORP S.A. 27 PLN'000 1Q Q 2018 A. Fixed assets Intangible assets Property, plant and equipment Tangible assets Tangible assets under construction Non-current investments Non-current loans and receivables Long-term prepayments Deferred tax assets B. Current assets Inventory Trade and other receivables Income tax receivable Short-term financial assets Cash and other cash equivalents Short-term prepayments C. Fixed assets held for sale - - Total assets

28 STATEMENT OF FINANCIAL POSITION LIABILITIES LC CORP S.A. 28 PLN'000 1Q Q 2018 A. Equity Share capital Balance of called-up share capital not paid Reserve funds Other reserve funds Other capital Retained profit/(loss carried forward) B. Non-current liabilities Non-current financial liabilities Non-current liabilities on account of the acquisition of a subsidiary Provisions Deferred income tax reserve 0 0 C. Current liabilities Current financial liabilities Current liabilities on account of the acquisition of a subsidiary Current trade and other payables Income tax liabilities Provisions Accrued expenses and revenue Total liabilities

29 29 SHAREHOLDERS 15,17% 41,18% 14,13% 13,37% 5,93% 10,22% SHARES COUNT NAME % QTY. OFE PZU Złota Jesień 15, Nationale-Nederlanden Powszechne Towarzystwo Emerytalne poprzez Nationale-Nederlanden Otwarty Fundusz Emerytalny i Nationale-Nederlanden Dobrowolny Fundusz Emerytalny 14, ALTUS Towarzystwo Funduszy Inwestycyjnych S.A. 13, Aviva OFE AVIVA BZ WBK 10, Aegon Otwarty Fundusz Emerytalny 5, Remaining shareholders 41, , Shareholders of LC Corp S.A. having more than 5% of shares. The information dated 24th January 2018.

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31 THANK YOU 31