PATRIZIA. The European Real Estate Investment Company. Company Presentation. May 2017

Transcription

1 PATRIZIA The European Real Estate Investment Company Company Presentation May 2017 PATRIZIA Immobilien AG PATRIZIA Bürohaus Fuggerstrasse Augsburg T F immobilien@patrizia.ag

2 PATRIZIA is the leading listed European real estate investment firm Top 3 15 markets European real estate dealmaker* with local operations across Europe EUR 19bn 33 years >200 EUR 700m assets under management experience in real estate institutional clients globally available for further growth * PropertyEU dealmakers ranking, last published on March 3,

3 PATRIZIA continues on its growth path ASSETS UNDER MANAGEMENT (in EUR billion) TOTAL RECURRING FEE INCOME (in EUR million) Q1/17 EQUITY RAISED (in EUR billion) Q1/17 New equity raised Equity raised in previous years accumulated * Excluding EUR 103.4m of exceptional fee income from SÜDEWO * 2016 Q1/17 ASSET MANAGEMENT FEE INCOME (in EUR million) Q1/17

4 PATRIZIA s business model is focused on real estate investments DIRECT ACCESS TO EQUITY AND ASSETS Fundraising >200 Investors Broad and long-term oriented institutional investor base Rapidly growing share of international investors, particularly from Asia PATRIZIA Product Development 50 Funds/SPVs Multi-fund platform to meet diverse clients needs Potential alignment of interests through co-investments by PATRIZIA Deal Sourcing 19bn Assets Unique access to the attractive European real estate market Investment expertise across all segments and risk styles 4

5 Risk PATRIZIA s expertise spans a variety of assets and deal structures EUR 19.1BN AUM ACROSS THE RISK - RETURN SPECTRUM MANAGING ALL MAJOR SEGMENTS EUR 0.4bn (2%) Opportunistic 2% 3% 2% 2% 3% Office Retail 34% Residential EUR 6.8bn (36%) Value add EUR 11.9bn (62%) Core/Core+ Return 38% 16% Light Industrial Logistics Hotel Nursing care Other INVESTING ACCORDING TO CLIENTS NEEDS Commingled Funds (Institutional) Separate Accounts Strategic pooling of equity with a focus on geography, sector and style Tailored solutions for individual direct mandates EUR 9.9bn (52%) Investment solutions for a small Club Deals EUR 0.7bn (4%) number of institutional investors Principal Investments Commingled Funds (Retail) Investments on PATRIZIA s own account Investment solutions for a pool of retail investors EUR 8.0bn (41%) EUR 0.1bn (1%) EUR 0.4bn (2%) GEOGRAPHICAL BREAKDOWN OF ASSETS 7% 10% 3% 5% 8% 67% Germany UK & Ireland Netherlands Nordics France & Belgium Other 5

6 PATRIZIA is invested in highly attractive European markets PRESENCE IN GROWING AND STABLE AREAS 0.4% 1.4% 0.6% 1.0% 1.0% LOW COUNTRY RISKS IN CORE GEOGRAPHIES PATRIZIA offices 1.6% 1.4% 2.4% 1.8% 1.7% 1.9% 1.3% 0.8% 0.9% 1.5% Germany UK & Ireland* Netherlands Nordics* France & Belgium* Real GDP CAGR: 10A-15A 15A-20E x% 10-year government bond yield Source: IMF, Bloomberg LOW UNEMPLOYMENT RATES IN KEY COUNTRIES 67% 10% 7% 5% 3% 4.3% 5.3% 6.7% 6.5% 9.6% Germany UK & Ireland* Netherlands Nordics* France & Belgium* Unemployment rate (2015A) x% PATRIZIA geographical breakdown of assets Source: IMF Source: S&P Note: Nordics includes Denmark, Finland, Norway and Sweden; * Weighted average based on 2015A GDP 6

7 Public Pension Fund Superannuation Scheme Private Sector Pension Fund Sovereign Wealth Fund Endowment Plan Insurance Company Foundation UK North America Switzerland Australia South Korea Netherlands Germany Denmark Japan Investors worldwide are currently under-allocated to real estate INVESTMENT PRESSURE BY TYPE OF INVESTOR Average allocation to real estate (as % of overall portfolio) INVESTMENT PRESSURE BY COUNTRY Average allocation to real estate (as % of overall portfolio) 10.1% 9.0% 9.1% 8.6% Current Allocation Target Allocation 9.9% 9.6% 9.3% Ø 9.1% 7.9% 8.1% 7.7% 7.4% Ø 7.2% 6.1% 5.9% 5.3% Current Allocation Target Allocation 20.8% 15.0% 12.9% 12.3% 13.4% 11.5% 10.7% Ø 11.7% 10.6% 10.3% 10.3% 8.9% 8.1% 7.7% Ø 8.6% 7.4% 6.8% 7.3% 5.2% 4.0% Source: Brookfield Financial Source: INREV 7

8 PATRIZIA continues to drive growth from its competitive strength Large track record as independent European investment firm Resulting position of competitive advantage Transactions Fundraising Financing Transactions worth EUR 25.3bn completed since 2012 More than 8.5 million sqm and 700 properties under management Consistently ranked among top 3 European dealmakers (PropertyEU) EUR 8.5bn of equity raised since 2012 Above 200 institutional clients, largely invested in multiple products Broad range of investment vehicles from open to closed end and public to private EUR 8.9bn of financing volume since 2010 More than 100 financial institutions providing debt funding 100% performing loans since PATRIZIA was established in 1984 Turn to real estate investment manager Direct access to institutional clients worldwide Best-in-class financing capabilities Investment Track Record Product Offering Expertise Consistently producing positive and competitive returns for institutional clients Superior returns for value-add and private equity investments Multi-fund platform offering clients geographical, asset and risk diversification across investment products Investments through regulated funds, single asset mandates and co-investment vehicles Integrated pan-european asset management team with 90 professionals across 15 European countries More than 30 years of experience with real estate only One of Germany s top providers of institutional funds (BVI 2015) 8 Strong investment track record Attractive product offering across all asset classes and risk profiles European network with experienced local teams

9 and has four major strategic initiatives for growth I MARKETS II PRODUCTS III INVESTORS IV ACQUISITIONS Continue European expansion Build out PATRIZIA s pan-european investing platform and thereby grow AUM and fee income Underlying principle all business is local Broaden product portfolio Further extend the PATRIZIA product range in terms of sectors and risk Expand product offering for institutional and retail clients Expand international client base Strengthen PATRIZIA s reputation outside Europe and obtain more investment on a global basis Leverage the new offices in New York and Asia/Pacific Capture relevant opportunities Prudently consider corporate M&A opportunities to integrate suitable geographies and/or assets Keep an eye out for attractive co-investment opportunities VISION PATRIZIA the global provider of European real estate assets 9

10 Further increase PATRIZIA s market share within Europe AUM DEVELOPMENT BY GEOGRAPHY Fully develop the German core market Transaction volumes in Germany remain at a high level Thus there still is considerable growth potential in PATRIZIA s largest market Further penetrate existing international markets Since first starting its internationalisation in 2010, PATRIZIA has opened branch offices in 8 European countries and realised investments in 11 other countries But considering the fact that the majority of AUM is still located in Germany, substantial growth potential remains in these markets Systematically monitor new European markets PATRIZIA consistently screens the remaining European countries, such as Poland and Italy, for suitable entry opportunities The focus being on those locations where the biggest international investors wish to invest European markets with PATRIZIA operations UK & Ireland Q1/ Rest of World Q1/ Nordics Q1/ Germany Q1/ PATRIZIA investment hubs

11 Expand product range and client base DIVERSIFICATION OF ASSET CLASSES Broaden PATRIZIA s product portfolio into various dimensions in order to offer clients a broad range of products and investment strategies Segments: Stronger diversification over property types and segments; strengthen new areas such as logistics Risk profiles: Develop more value add products and thereby diversify the portfolio risk Target group: Expand product offer beyond large institutional clients; e.g. further establish funds for private investors Besides, shift to larger volume and sustainable products vs. transaction oriented one-off opportunities PATRIZIA Logistics Management Europe 2015: launch of first pan-european logistics real estate fund Initial target investment volume: EUR 500m Market with high growth potential due to continuing e-commerce trend COMPLETION OF CLIENT REACH Funds for institutional investors + Funds for private investors Only low investments required Specific underlying properties In the long-term expansion of asset classes from real estate to real assets and thus grow product portfolio beyond real estate Individual mandates for institutional investors Direct investments for private investors 11

12 PATRIZIA s new retail fund business is developing fast New business Attractive conditions In 2016 PATRIZIA started selling real estate funds to private investors; typically each fund consists of one specific property with existing rental or lease contracts With investments as little as EUR 10,000 now also private investors can benefit from PATRIZIA s institutional expertise and generate average pay-outs around 5% before taxes Stuttgart Südtor City quarter with a diverse mix of uses Equity: ~ EUR 55m Strong demand The first two funds with over EUR 75 million of equity were fully placed within the first year; three other funds are currently on sale and two more in preparation CURRENT INVESTMENT VOLUMES OF PRIVATE FUNDS * (in EUR million) "Campus Aachen" "Stuttgart Südtor" "Den Haag Wohnen" "Kopenhagen Südhafen" "München Leopoldstraße" "Mainz Rheinufer" "Die Stadtmitte Mühlheim" Q Q Q Q Q e 2018e Kopenhagen Südhafen new group of buildings with127 residential units Equity: ~ DKK 263m München Leopoldstr. Modern office building in top location Equity: ~ EUR 33m * Shown in the quarter/year where placement starts 12

13 Further expand the access to international blue-chip investors PATRIZIA s international client base is growing strongly, but still offers plenty of unexploited fundraising potential Therefore PATRIZIA has intensified its international fundraising and marketing activities In 2016 new fundraising offices were opened in Paris, New York and Melbourne, and additional offices in Hong Kong and Japan will follow soon EQUITY OF EUR 8.5BN RAISED (in EUR billion) Q1/17 New equity raised Equity raised in previous years accumulated 0.2 EQUITY COMMITMENTS BY GEOGRAPHY (in %) 5% 4% German investors European investors Rest of world investors 91% BREAKDOWN BY CAPITAL TYPE (in %) 7% 2% 5% Pension funds Insurance companies Savings banks 26% Banks, Banks Endowments and Corporates Retail investors 42% 18% Other 13

14 PATRIZIA sees attractive opportunities both east and west of Europe USA / CANADA Complementary risk profiles to European investors least interest in core strategies and significant interest in opportunistic strategies Market with the largest investment potential worldwide in 2016 ~ USD 64bn of aggregate capital was raised by private real estate funds Working with North American investors fits well with PATRIZIA s plan to offer more value add products steep learning curve expected 54% Core Value add Opportunistic 87% 85% 80% 89% 88% 77% 57% 62% The Americas EMEA APAC ASIA / PACIFIC Similar risk profiles of Asian and European investors strong preference for core and value add strategies Knowing the European market well, PATRIZIA is the perfect partner for Asians wishing to invest in Europe good understanding of needs and products First successful deals with Taiwanese and Korean investors support the case large transactions (~ EUR 1.3bn) with great visibility Source: Brookfield Financial, Cornell University/Hodes Weill 14

15 Successful transformation of volatile investment to stable fee income Fee income from investment management services is consistent and sustainable Sales proceeds from own assets held on the balance sheet are steadily diminishing Co-investment income continues to deliver attractive return on equity Development in operating income demonstrates the reliability and scalability of the fee streams from the investment management business and underlines PATRIZIA s track record PROFIT & LOSS HIGHLIGHTS adjusted* adjusted* adjusted* in EUR million Q1/16 Q1/17 Management fees Transaction fees Performance fees Total Service fee income DEVELOPMENT OF INCOME STREAMS Service fee income Investment income 31% 24% 18% 15% 19% 19% 42% Net sales revenues and Co-investment income Net operating expenses incl. Personnel expenses EBITDAR % 69% 76% 82% 85% 81% 81% Reconciliation to Operating EBT Operating EBT * 2015 excluding SÜDEWO exit fee; 2016 excluding Harald profit 15

16 PATRIZIA The European Real Estate Investment Company HIGHLIGHTS Q fully on track to achieve 2017 guidance Strong AuM growth of EUR 0.5bn achieved Robust operating income of EUR 9.3m Asset management fees increased Tailwind from strong Q drives operating performance and demonstrates scalability of European investment management platform 2017 Guidance confirmed Total outstanding transaction pipeline of EUR 1.5bn signed, but not yet completed transactions are a good start into an encouraging 2017 Operating income guidance 2017 confirmed at EUR 60-75m AuM expected to grow by about EUR 2bn net to EUR 20.6bn ASSETS UNDER MANAGEMENT (in EUR billion) 6.9 OPERATING INCOME (in EUR million) % Q1/ Q1/16* Q1/ e * Adjusted for Harald 16

17 Q results good progress to achieve full years financial goals OPERATING INCOME (in EUR million) Third Party Business Fees Opex Management Income Regulated Funds Institutional Investors Private Investors Co-Investments Single Asset Mandates Q1/16 Q1/17 Equity Investments Return on Equity Opex Investment Income Co-Investments Principal Investments Q1/16* Q1/17 Adjusted Total** * Investment income: EUR 210.2m in 2016 including Harald Operating income: EUR 214.8m in 2016 including Harald ** Total operating income reduced by corporate expenses of EUR 9.4m in Q1/16 and EUR 5.8m in Q1/17 17 Q1/16* Q1/17

18 Promising fee income confirms scalability of PATRIZIA s platform FEE INCOME DEVELOPMENT Total fee income of EUR 31.0m in Q Management fees increased in line with AuM growth Guidance for performance fees of EUR 29m-38m confirmed, which as usual will kick-in later in the year Outstanding transaction pipeline of EUR 1.5bn will further accelerate income streams Future top line growth prospects are promising due to already signed deals further European expansion of platform broadening of national and international investor base TOTAL FEE INCOME (in EUR million) Management fees Transaction fees Performance fees % 22.9 Q1/16 Q1/ CAGR %** +17.2% +25.8% * 2016 * Excluding SÜDEWO exit fee; **CAGR:

19 Rise in AuM increases recurring asset management fee income ASSET MANAGEMENT FEES STEADILY IMPROVING PATRIZIA receives recurring service fees for managing real estate assets from more than 200 international investors Fee income is steadily growing, as assets under management are further broadening on a pan-european basis and across all asset classes Strong growth of asset management fees overcompensated loss of property management fees Progressive increase in asset management fees demonstrates the reliability and scalability of PATRIZIA s integrated investment management platform ASSETS UNDER MANAGEMENT (in EUR billion) ASSET MANAGEMENT FEE INCOME (in EUR million) Q1/ Q1/17 19

20 with transaction fees remaining a consistent part of total income TRANSACTION FEES OF EUR 8.1M IN Q Transactions of EUR 0.9bn completed in Q1 2017, broadly in line with annual long term average Promising deal pipeline ahead: signed transactions worth EUR 1.5bn to be completed mainly in 2017 Transaction volume in 2016 includes EUR 1.1bn from the sale of the Harald-portfolio TRANSACTION VOLUME (in EUR billion) Q1/17 Acquisitions 7.2 Sales Ø EUR 4.9bn TRANSACTION FEES (in EUR million) Q1/17 Acquisition fees Sales fees Ø EUR 54.5m 20

21 and performance fees emphasising PATRIZIA s track record PERFORMANCE FEES AS RELIABLE PART OF ANNUAL FEE STREAM Third party funds and co-investments generate performance fees upon exceeding pre-determined return hurdles PERFORMANCE FEES (in EUR million) Return hurdles largely relate to realised annual cash returns during investment period and at exit As more and more investments turn into their harvesting period, performance fees have become recurring in nature Guidance for performance fees of EUR 29m-38m in 2017 confirmed, which as usual - will kick-in later in the year CAGRe adjusted* +25.7% Non-Realised Profits In addition to annual performance fees from third party business, PATRIZIA owns a pipeline of at least EUR 300m unrealised performance fees and investment income (from co-investments) from potential future disposals e Performance fee SÜDEWO exit Performance fees * CAGR on performance fees, excluding performance fee for SÜDEWO exit 21

22 Well positioned to capture opportunities via balance sheet strength Strong balance sheet ratios and capital structure to facilitate further substantial profitable growth Issuance of bonded loan of EUR 300m significantly increases financial flexibility and growth options Total available cash now amounts to about EUR 700m Options to deploy cash very carefully include: Continue European expansion Consider corporate M&A opportunities prudently Take advantage of investment opportunities, if they arise as co-investment Increase in shareholder value and high degree of financial discipline remain priority Strong Balance Sheet in EUR million Total Assets 1,037.3 Equity (excl. minorities) Equity ratio 72.9% Bank Loans Bonded Loan Cash and cash equivalents = Net cash (-)/net debt (+) Net equity ratio 83.5% in EUR million Bank balances and cash Transaction-based liabilities Harald Regulatory reserve investment companies (KVGs) Significant Liquidity 11.4 = Available cash 31 March Bonded Loan = Total available cash May Pro-forma equity ratio 56.5% Pro-forma net equity ratio 83.5% 22

23 Bonded loan further strengthens PATRIZIA s growth options RATIONALE Rationale Terms at a glance Issuance is strengthening PATRIZIA s financial firepower Including the company s current liquidity, deployable cash increases to EUR 700m in EURm 5yrs 7yrs 10yrs TOTAL Volume 91.5m 124.0m 84.5m 300.0m fix 76.0m 89.0m 69.0m 234.0m variable 15.5m 35.0m 15.5m 66.0m Favourable bond conditions reflect PATRIZIA s strong cash flow profile Fixed coupon 1.14% 1.60% 2.16% Var. Margin 0.90% 1.10% 1.30% Ø1,50% Management sees multiple opportunities for both co-investments and external growth With the cash on hand, PATRIZIA is able to guarantee transaction security as a competitive edge Management is committed to remain highly disciplined deploying the cash position Accretion of long-term shareholder value remains main goal Average coupon of 1.50% Debt Maturity Profile 140 In EURm Mortgage debt* Bonded Loan 2017 Bonded Loan 2013 * Relates to warehoused assets for retail funds 23

24 Outlook for 2017 confirmed Operating Income of EUR 60m - 75m ASSUMPTIONS Asset management fees based on average AuM of EUR 19.5bn EUR 20.5bn INCOME BRIDGE (in EUR million) Transaction volume: EUR 4.0bn EUR 5.5bn Investment income: remaining principal investments and income from participations Net opex include additional costs for fundraising and marketing (estimated at EUR 7m) Further potential upside Higher transaction volume and performance fees Deployment of about EUR 700m cash EUR 300m of unrealised profits from performance fees and investment income from co-investments, which will emerge in case of future disposals 2016 Base Operating Income* Management Fees** Transaction Fees Performance Fees Investment Income 2017 Net Operating Expenses EBITDAR D&A and Financial Result Base Operating Income * Adjusted for non-recurring effects like Harald and SÜDEWO ** 2017 fees will be comparatively EUR 10m lower due to the sale of the property management business 24

25 PATRIZIA s strategic bridge to the future ASSETS UNDER MANAGEMENT (in EUR billion) Completed transformation to a leading European Real Estate Investment Manager Deploy cash Realise M&A ~30 VISION PATRIZIA the global provider of 19.1 Continue European expansion Broaden product portfolio Expand international client base European real estate assets Q1/ and beyond 25

26 PATRIZIA Investment highlights 1 Leading listed European real estate investment firm 2 Broad institutional client base and strong fundraising momentum globally 3 High quality services across the entire property value chain 4 Excellent track record in sought after European property investment market 5 Growing AuM provide growing and sustainable contractual fee income 6 Attractive earnings potential through performance fees and return on equity 7 Strong balance sheet and significant liquidity offer further opportunities 26

27 Appendix 27

28 Consolidated Income Statement Q Quarter Quarter 2016* in EUR k Revenues 40,949 62,009 Income from the sale of investment property Changes in inventories -4,798-14,893 Other operating income 6, Income from the deconsolidation of subsidiaries Total operating performance 42,429 48,565 Cost of materials -3,410-2,637 Cost of purchased services -3,529-3,379 Staff costs -20,413-21,393 Other operating expenses -10,395-9,995 Income from participations 5,915 3,172 Earnings from companies accounted for using the equity method EBITDAR 10,641 15,127 Reorganisation expenses EBITDA 10,140 15,127 Amortisation of fund management contracts, depreciation of software and fixed assets -1,355-1,650 Earnings before finance income and income taxes (EBIT) 8,785 13,477 Finance income Finance costs ,139 Currency result Earnings before income taxes (EBT) 8,149 12,664 Income tax -2,281-2,191 Net profit for the period 5,868 10,473 * Adjusted for Harald 28

29 Consolidated Balance Sheet 31 March 2017 assets ASSETS in EUR k A. Non-current assets Goodwill Other intangible assets 34,918 35,416 Software 10,712 10,772 Investment property 10,709 12,226 Equipment 4,477 4,460 Participations in associated companies 85,967 85,923 Participations 102, ,033 Loans 7,020 7,015 Long-term tax assets Deferred taxes Total non-current assets 256, ,813 B. Current assets Inventories 237, ,931 Securities Short-term tax assets 10,280 11,941 Current receivables and other current assets 77,950 99,311 Bank balances and cash 454, ,219 Total current assets 780, ,446 TOTAL ASSETS 1,037, ,259 29

30 Consolidated Balance Sheet 31 March 2017 equity/liabilities EQUITY AND LIABILITIES in EUR k A. Equity Share capital 83,956 83,956 Capital reserve 184, ,005 Retained earnings Legal reserves Non-controlling shareholders 1,691 1,691 Currency translation differences -10,114-10,803 Consolidated unappropriated profit 497, ,679 Total equity 757, ,033 B. Liabilities NON-CURRENT LIABILITIES Deferred tax liabilities 17,915 17,992 Retirement benefit obligations Bonded loan 22,000 22,000 Non-current liabilities 5,479 6,866 Total non-current liabilities 46,087 47,506 CURRENT LIABILITIES Short-term bank loans 110,500 53,200 Bonded loan 0 5,000 Short-term financial derivatives 0 0 Other accruals 19,910 27,627 Current liabilities 72,278 75,343 Tax liabilities 30,885 33,550 Total current liabilities 233, ,720 TOTAL EQUITY AND LIABILITIES 1,037, ,259 30

31 Financial calendar 2017 March 14 Financial Statements 2016 May 10 Interim report for the first quarter of 2017 June 22 Annual General Meeting, Augsburg August 9 Interim report for the first half of 2017 November 7 Interim report for the first nine months of 2017 Conference calls about financial reports are usually held at 3 pm CET. Invitations and dial-in numbers are provided in advance. To stay informed, visit 31

32 Contact details KARIM BOHN CFO MICHAEL TEGEDER HEAD OF IR LAURA WANZL MANAGER IR PATRIZIA Immobilien AG PATRIZIA Bürohaus Fuggerstrasse Augsburg PATRIZIA Immobilien AG PATRIZIA Bürohaus Fuggerstrasse Augsburg PATRIZIA Immobilien AG PATRIZIA Bürohaus Fuggerstrasse Augsburg T F M michael.tegeder@patrizia.ag T F M laura.wanzl@patrizia.ag Disclaimer This document does not constitute an offer or invitation to purchase or subscribe for any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon. This document contains specific forward-looking statements that relate in particular to the business development of PATRIZIA and the general economic and regulatory environment and other factors to which PATRIZIA is exposed. These forward-looking statements are based on current estimates and assumptions by the Company made in good faith, and are subject to various risks and uncertainties that could render a forward-looking estimate or statement inaccurate or cause actual results to differ from the results currently expected. PATRIZIA does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this publication. 32