Investor Presentation Preliminary FY 2006 results. 26 February 2007

Transcription

1 Investor Presentation Preliminary FY 26 results 26 February 27 1

2 Transaction volume and traded apartment development 6 Transaction volume (EUR m) Transaction volume increased strongly due to expansion of the institutional investor trading business % Four successful portfolio transactions in 26 incl. disposal of first portfolio to the Forum Partner Joint Venture , % % +4% Private Investors Institutional Investors Number of traded apartments (total) 12,946 Positive development of disposal in the landmark development and YOO business Strong increase in number of traded apartments, whereas most units were traded in the institutional investors business (97%). 12, 1, 8, 8,47 +53% Institutional Investors : 12,592 units (25: 8,171 units) Private Investors : 354 units (25: 299 units) 6, 4, +346% 2, 1,

3 Revenue development Revenue development (EUR m) Total initial annual ground lease income (year-end end in EUR m) % % P Revenue split (EUR m) P Sales to thi rd parties Rental income Ground lease income T otal re v e nue Total revenues increased by 122% yoy to EUR 122m. Strongest revenue contributor was sales to third parties (84% of total revenues) Ground leases income increased to EUR 4m (+115% yoy). The initial annual ground lease cash flow at the end of December 26 amounted to EUR 9.4m Strong growth in rental income (+313% yoy) due longer holding period of portfolios in 26 3

4 EBIT and Net income development EBIT development (EUR m) Net income development (EUR m) % % % % P P Further strong increase in EBIT (+11% yoy) and Net income (+95% yoy) in FY 26. EBIT margin (as percentage of transaction volume) remained strong at 13.8% (25: 1.2%) Costs for postponed IPO of Vivacon German Properties PLC (c. EUR 4m) were fully expensed 4

5 Key efficiency parameters Number of employees (average) EBIT margin *) (%) % % 61 16% 14% 12% 1% 8% 6% 14.6% 1.2% 13.8% 2 4% 1 2% P % P *) EBIT margin as percentage of transaction volume 1,4 EBIT per employee (average) in EUR 1,29 7% Return on Equity **) (%) 66% 1,2 1, 984 6% 5% 48% 51% % 6 3% 4 2% 2 1% P % P **) EBT / Shareholders equity at beginning of the year 5

6 Impact of valuation and accounting changes Change of accounting and valuation of landmark and YOO projects from IAS 11 (percentage of completion methodology) to revenue recognition in accordance with IAS 18 and thereby reflection of IFRIC discussions during the year 26. The discussions will lead to the fact that the so called "Precompletion real estate sales" will not fall under IAS 11 anymore according to the company interpretation. The change from IAS 11 to IAS 18 results into a periodical change of revenues and earnings into 27 and onwards. In addition Vivacon has adjusted the presentation of 25 figures for a portfolio disposal in 24, which was unwound and the portfolio sold on to an institutional investor in 25. Herewith, the company follows an economic view. In the past Vivacon always reflected the actual legal structure in its accounts. There is no transaction volume and earnings impact but solely a revenue impact. Portfolio revenues 25 decline by EUR 22.4m as a result of the accounting change. As a result of the ongoing high volatility of Vivacon shares, the company changed the method for calculation the cost of the 25 stock option program (increase of implied volatility from 26.9% p.a. to 45% p.a.). The change to a reflection of a long-term historic volatility of Vivacon AG results in an increase of personnel expenses of EUR.6m in 25. 6

7 Impact of valuation and accounting changes As with any other real-estate company, which is active in the project development business, Vivacon was effected by an interpretation change of IFRIC in 26 concerning pre-completion sales of real estate properties. As a consequence, Vivacon adopted IAS 18 in its 26 numbers and also retroactively for comparison reasons 25 accounts as follows: Ac c o u ntin g imp ac t (EUR m) 25 f ig u re s T ransacti on v olum e R e v e nue s ne t i ncom e S tatus Q uo Change from IAS 11 to IAS Unwound portfoli o transacti on Change of ESOP volatility R e s tated f i gure change in % % -36% -8% Under continuing IAS 11 accounting rules, the results would look as follow: Ac c ountin g adjustme nt (EUR m) 26 f igure s T r ans acti on v olum e R e v e nue s ne t i ncom e S tat us Q uo Change from IAS 11 to IAS R e s t ate d f i gure change in % % -1% -5% 7

8 Institutional Investor Business 4 major portfolio transactions in FY 26 June 26 EUR 91m transaction 2,366 units Combined freehold and leasehold disposal. Initial annual ground rents amount to some EUR.5m November 26 EUR 18m transaction 5,133 units Combined freehold and leasehold disposal. Initial annual ground rents amount to some EUR 1.4m. September 26 EUR 11m transaction 2,256 units Disposal to an international investor Initial annual ground rents amount to some EUR.9m September 26 EUR 1m transaction 2,79 units 1 st project with Joint Venture partner Forum Partners Initial annual ground rents amount to some EUR.4m First acquisition of ground lease commercial properties in December 26. Initial annual ground lease cash flow amounts to EUR 1.3m Due to the further very positive market environment and growth perspectives of the company as well as the currently owned c. 4,3 apartments, Vivacon expects further growth in the Institutional Investor business in FY 27 8

9 Unique sourcing effectiveness leading to lower acquisition multiples Historic acquisition multiples paid by Vivacon vs. opportunity funds f in Germany Purchase price as a multiple of net rent (x) 2.x 18.x 16.x 14.x 12.x 1.x 11.x Observed Opportunity Investor Transactions 13.x GSW (Cerberus Whitehall) GAGFAH (Fortress) Vivacon AG Transactions 1.9x 14.x TKI (Morgan Stanley) 12.x RSE/WCM (Blackstone) 12.2x 11.5x 18.x 14.x Nileg (Fortress) 14.x Viterra (Terra Firma) GHG (Oaktree) Baubecon (Cerberus) 12.2x 1.7x 11.x 9.3x 16.x 13.6x 12.x 1.7x 1.9x 11.4x 1.3x 14.x WOBA (Fortress) 11.5x 11.x 11.2x 12.1x 11.x 9.7x 11.1x 14.9x Immeo (Fonciere des Regions) 13.1x 13.1x 13.7x GBH (GAGFAH) 11.9x 11.4x 11.2x 9.9x 1.1x avg.. multiple: 14.1x avg. gross yield: 7.1% avg.. multiple: 11.3x avg. gross yield: 8.8% 8.x Jan-4 Apr-4 Aug-4 Nov-4 Feb-5 May-5 Sep-5 Dec-5 Mar-6 Jul-6 Sept-6 Dec-6 Avg. acq. multiple in 24: 1.9x Avg. acq. multiple in 25: 11.6x Avg. acq. multiple in 26: 11.2x Source: Vivacon AG, Investing in German Residential Property Morgan Stanley 9

10 Sourcing process and volumes Opportunities offered Desktop Due Diligence LOI / Due Diligence Acquisition ~1,62 portfolios ~6, units ~26 portfolios ~1, units ~4 portfolios ~15, units 36 portfolios 12,795 units Offered about 6, units in % were immediately declined as key requirements like unit size, acquisition multiple or location were not met Of the remaining units, Vivacon declined another large number following further screening and desktop due diligence Detailed due diligence and signing of LOI to secure exclusivity for the portfolio Vivacon acquired 36 portfolios with 12,795 units 1

11 Private Investor Business Landmark business Notarized volume (EUR m) 19% Am Karlsbad, Berlin Wilde 13, Düsseldorf Kloster Geistingen, Hennef Sales progress 77% 87% % 2% 4% 6% 8% 1% 99% All three landmark projects that newly started in 26 developed positively with a high sales rate Promising new landmarks projects are in the pipeline for FY 27. January 27: Leipzig. 16 units with a total project volume of EUR 16m February 27: Mühlheim/Ruhr. 65 units with a total project volume of EUR 16m Notarized volume (EUR m) Sales progress YOO business % 29.2 Yoo Munich Yoo Hamburg 19% 8% Start of construction of YOO Hamburg was in June 26 and selling start of YOO Munich was in October % 2% 4% 6% 8% 1% 11

12 Two successful securitization transactions in 26 In 26 Vivacon AG placed two securitizations of ground lease receivables with a total volume of EUR m. Out of the total volume approximately EUR 2m belongs to the Forum JV, of which Vivacon participates by 5%. German Ground Lease Finance 26-I German Ground Lease Finance 26-II Dat e March 26 December 26 Issue volume: EUR 62m EUR 117.5m Term: 3 years (expected maturity) 7 years (expected maturity) Aaa (1%) from Fitch Rating: Aa2 (1%) from Moody's Aaa (65%) and Aa3 (35%) from Moody s Underlying cashflow: c. EUR 2.8m c. EUR 4.9m Number of rental units: 4,144 1,934 Mult iple 22.2x 24.1x 12

13 Outlook Due to the further very positive market environment and growth perspectives of the company, Vivacon expects an increase in Net income to the range of EUR 54-58m and an EPS growth to EUR in FY27. This growth is supported by some 4,3 apartments which are already currently owned by Vivacon in the Institutional Investor business The increase in cash from the securitization should be used for the operating business. In addition Vivacon plans to offer a first-time dividend of EUR.4 per share 13

14 Strategy Trading Intermediary in German residential market Private Institutional Asset management Landmark YOO Aggressively expand market share in the opportunistic trading of residential units. Potential build-up of a larger scale portfolio over time. Increase of asset management activities by potential build-up of large scale residential portfolio and therewith increasing recurring revenues and earnings Defend market leading position in the niche landmark conversion segment. Strong order backlog and interesting new projects gives confidence for 27 Exploit full potential of Philippe Starck designed apartments in major cities. Start of second project in Munich with sales volume of EUR 56m Develop into a key intermediary in the German residential real-estate estate market 14

15 Disclaimer Disclaimer These materials are not an offer for sale of any securities. This document contains certain forward-looking statements relating to the business, financial performance and results of Vivacon and/or its subsidiaries and/or the industry in which Vivacon and its subsidiaries operate. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words believes, expects, predicts, intends, projects, plans, estimates, aims, foresees, anticipates, targets, and similar expressions. Such statements reflect Vivacon s currents views respect to future events and are subject to risks and uncertainties. These forward-looking statements are based on Vivacon s current plans, estimates, projections and expectations. These statements are based on certain assumptions that, although reasonable at this time, may prove to be erroneous. Prospective investors should not place undue reliance on these forward-looking statements. If certain risks and uncertainties materialize, or if certain underlying assumptions prove incorrect, events described in this document as anticipated, believed, estimated or expected, and Vivacon may not be able to achieve its financial targets and strategic objectives. Vivacon does not intend, and does not assume any obligations, to update industry information or forward-looking statements set forth in this document. 15