2011 first-half earnings

Transcription

1 2011 first-half earnings Bernard Michel Non-executive chairman Christophe Clamageran Chief executive officer Gilles Bonnier Chief financial officer Paris, July 27, 2011

2 H snapshot in mn June 30, 11 June 30, 10 Change (%) Gross rentals % EBITDA % Financial expenses (95.1) (69.7) +36.4% Recurrent income % per share (in ) % Consolidated net income (Group share) % NNNAV per share (in ) % Average number of shares (undiluted) % Stabilization of organic growth in a difficult office market, impact of one-off costs for 1.5m Rental income +3.8% on a comparable basis, stable excluding the AON penalty 1.5m of one-off expenses related to the closure of the Lyon branch Cost of debt increasing to 4.16% in line with expectations Recurrent income -7.8% in H Gecina is expecting to meet its 2011 guidance (7% decline in recurrent income) Further increase in portfolio value and NNNAV in H Portfolio value +0.8% vs. end-2010 on a current basis, up +2.6% on a comparable basis NNNAV / share +17.6% vs. June 2010, +2.5% over H Impact of yield compression of +2.6%, neutral impact of rents on the like-for-like growth 2

3 Operating trends 1page

4 Rental income: stable organic growth excluding the AON penalty +3.8% like-for-like growth in rents (incl. AON penalty) Stable financial occupancy rate vs. June 2010 Change (%) 100,0% in mn June 30, 10 June 30, 11 Current Comparable 90,0% Offices % +5.3% 80,0% Residential % +1.9% 70,0% Healthcare % +2.1% 60,0% Logistics % -1.7% 50,0% Hotels % +3.0% TOTAL gross rents % 38% 3.8% 40,0% 0% Offices 94.7% 96.2% +1.6% n/a 30,0% Residential 84.0% 82.6% -1.7% n/a 20,0% Healthcare 99.3% 97.5% -1.8% n/a 10,0% Logistics 81.7% 71.0% -13.1% n/a Hotels 99.9% 9% 101.0% 0% +1.1% 1% n/a 0,0% TOTAL rental margin 91.3% 91.5% +0.2% n/a (14.4) , H Like-for-like Invest. Asset restruct. Disposals H change 94,6% 94,9% 96,4% 97,6% 97,0% 96,8% 75,0% 77,4% 100% 100% Group Offices Residential Logistics Hotels / healthcare June-30, 10 June-30, 11 H H rental income = m 4

5 Office market: sluggish environment Take-up in H up 3% vs. H No strong catalyst so far for a rebound in rental values Slowdown recorded d in Q Gecina granted lower incentives in H vs % 12% 10% 8% 6% 4% 2% 0% 2,3% 13,2% Take-up and vacancy in the Paris Region 5,2% 2,0% ,7% Take up 000 sq.m / sqm / year Prime rents in euros % Take-up Paris region vacancy % Employment in France (YoY) H H Paris CBD La Défense Western Crescent Paris Region 30 Low level of investment during H Investors are focused on core and secured assets Investment in France 27,0 Certain supply > 5,000 sq.m down 12% at end-june 2011 vs. March 2011 at 1.1 million sq.m scarcity of new supply Future supply > 5,000 sq.m bn ,0 12,1 8,7 9,5 9,5 7,1 3,5 5,1 24 2,4 1,5 0,9 1,6 1,6 0,5 15,7 23,1 12,5 11,0 7,6 4,4 sq q. m Q Source: CBRE, INSEE, JLL Certain Probable Potential 5

6 Offices: a challenging market Impact of the AON penalty, limited activity on renegotiations and lettings Financial occupancy rate up: 97% vs. 95.3% at end-2010 Like-for-like growth in rents: +5.3%, down -1.3% excluding AON ( 10.5m impact) Impact of disposals on current rents (- 6.3 m) Rental margin high at 96.2%, 95.1% excluding AON ( 1.3m impact) Limited it activity it on renewals and renegotiations (40,500 sq.m) 10 6% lower level of incentives and overall -4.2% decline for incoming-outgoing rent p d, c g d to letting vacant areas EUR m Office lease schedule (end of contracts) 21% 11% 14% H2 2011: improvement for indexation, main challenge linked End of leases Cumulated weight Positive indexation expected from Q Financial occupancy rate expected to reach 90% spot at end-2011 impact of the Horizons, Mercure, Défense Ouest, Portes de La Défense buildings Positive impact of developments and acquisitions during 2011/ m of annualized rents from Anthos 16 m of annualized rents from Portes d Arcueil 2012: completion of 95,000 sq.m of developments URm E % 47% 62% 84% 97% 100% Office lease schedule (break-up options) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 93% 96% 99% 100% 100% 85% 77% 90% 80% 63% 70% 48% 60% 50% 31% 40% 30% 20% 6% 10% 0% Break-up options Cumulated weight 6

7 Residential: strong cash flow generation H1 2011: strong underlying trend Financial occupancy rate down slightly to 96.8%, impact of deliveries during H and stopping of marketing on assets earmarked for sale Organic rental income growth of 1.9%, with a positive impact of indexation Optimized turnover (15.6%) making it possible to both capture reversionary potential and limit capex Incoming / outgoing rent differential +9.5% during H vs. +8.3% during 2010 Average time to re-let of 32 days in Paris and the Paris Region, stable vs Stable spread between Gecina s block valuation and the notaries unit valuation vs. end % 47% /sq q.m H Paris residential - Notaries Paris residential (block value) Gecina Paris residential (detail) Gecina Source: Chambre des notaires de Paris 7

8 Healthcare: strong operating trend, delisting of Gecimed 2.1% organic growth in rental income Positive impact of indexation Additional rents generated by capex Slight decline in rental margin caused by a delay between completion of Gien and Le Havre developments and their letting in 2010 H will be impacted by the completion of the acquisition i i of 30 nursing homes for 230m 13.9m of annualized rents in 2011 Delisting of Gecimed Gecina owns 98.9% of Gecimed following the public buyout offer Squeeze-out done on July Cost of buying out the shares: 2.6m No other impact Gecimed will keep its SIIC status even when non-listed 8

9 Other divisions Hotels (3% of rents): steady growth H rents +3.0% like-for-like vs. H Positive impact of indexation and additional rents generated by capex Average residual length of leases: 6.5 years (firm) lion sq.m mill 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Source: CBRE Weak level of take-up in H and high level of supply on logistics H Take-up Available supply Logistics (4% of rents): improvement in the occupancy rate Market oversupply with 3.5 m sq.m available (61% Class A buildings) Slowdown in take-up during Q after a good start in Q Negative indexation and downside in renegotiations and renewals have impacted organic rental income growth The Mory Group, which accounts for 13% of the logistics portfolio floor space and 13.5% of this division s potential rents has filed for bankruptcy Gecina has let 41,000 sq.m in July 2011, which will considerably reduce this division s vacancy to less than 16% Spain Assets for sale 9

10 Financing and cash flow 1page

11 H recurrent cash flow and net income In million euros June 30, 2011 June 30, 2010 Change (%) 1 Gross rental income % 2 Expenses on properties (77.0) (75.3) +2.3% 1 Expenses billed to tenants % AON penalty for 10.5m (breach of Net rental income % the lease) Services and other income % 3 Salaries and management costs (39.2) (37.8) +3.5% 2 AON penalty (building refurbishment) EBITDA % for 1.3m Gains from disposals % Change in fair value of properties % Depreciation (2.2) (2.2) -0.4% 3 1.5m related to the closing of Lyon Net provisions and amortization (7.1) 1.1 n/a Operating income % 4 Net financial expenses (95.1) (69.7) +36.4% Financial depreciation and provisions (0.2) (9.5) -97.7% 4 Increase in the cost of debt to 4.16% 5 Change in fair value of financial instruments 2.9 (151.0) n/a Net income from equity affiliates 0.7 (21.5) n/a Pre-tax income % 5 Positive impact of the fair value of 38m Current tax (2.0) (1.9) n/a concerning derivatives 6 Non current tax n/a Exit tax n/a Deferred tax 1.2 (3.6) n/a Minority interests 0.9 (0.1) n/a Consolidated net income (group share) % EBITDA % Net financial expenses (95.1) (69.7) +36.4% Recurrent income % Average number of shares (million) 61,045,825 60,898, % Recurrent income per share (undiluted) % Negative change of 35m linked to the Ornane bond issue 6 Settlement of tax dispute ( 44.5m) 11

12 Financing: cautious balance sheet management Improvement reflected in Gecina s ratings Standard and Poor s: Moody s: BBB- Outlook Stable Baa3 Outlook Stable Ratios Covenant Dec. 31, 2010 June 30, 2011 Loan to value ratio (block) < 50% - 55% 44.3% 43.9% EBITDA exl. disposals/financial expenses > 2,25x 3,09x 2.70x Secured debt/block value < 20% 16.9% 16.6% Portfolio value (block, mn) > LTV in line with 45% internal limit Amount ( m) and cost (%) Cost of debt: 4.16%, in line with yearly guidance 48,0% 46,0% 44,0% 42,0% 40,0% 38,0% 36,0% 45,7% 44,3% 43,9% ,29% ,62% ,5% 4,0% 4,16% 3,5% 3,0% 34,0% 32,0% ,5% 30,0% June-10 Dec-10 June June - 10 Dec - 10 June ,0% 12

13 Financing: further diversification in H1 Breakdown by type of financing at end-2010 Breakdown by type of financing at June 30, 2011 Leasing Bonds Bank financing Bonds 6% 22% 72% 31% Bank financing 63% Leasing 6% Debt schedule at June 30, 2011 Debt maturity: 3.5 years at June 30, 2011 vs. 3.9 years at end % 35% 30% EURm % 20% 17% 11% 25% 20% 15% 10% Debt maturities over the next 3 years slightly down, from 57% at end-2010 to 53% of total debt at end-june m of unused credit lines at end June % 5% > 5 years 0% Amount ( M) % of debt 13

14 Hedging structure Gecina s debt is 95% hedged for 2011 Sensitivity to a +50bp interest rate shift + 4 m in net financial expenses Sensitivity i i to a -50bp interest rate shift - 1 m in net financial expenses Hedging structure EUR ' Firm hedges (fixed interest rates + swap) Optional hedges 14

15 Asset rotation & developments 1page

16 Investments & acquisitions 432M investments during H Offices 400 m Residential 26 m Healthcare 7 m Completed projects: 75% Ongoing projects: 19% Capex: 6% 6% 2% Completed projects: Horizons: 308m Mercure: 7m Residential: 10m 92% 16

17 Development pipeline: average 6.8% net yield on cost Project Location Delivery date Area (sq.m.) Invest. ( M) Already invested ( M) To be invested ( M) Est. yield (net) Neuilly - Charles de Gaulle Haut-de-Seine (92) Q , % 4.3% Paris - Montmartre Paris 09 Q , % Paris - Rue de Lisbonne Paris 08 Q , % Montrouge Haut-de-Seine (92) Q , % La Garenne Haut-de-Seine (92) Q , % Gennevilliers Haut-de-Seine (92) Q , % Lyon - Velum Lyon Q , % Beaugrenelle Paris 15 Q , % 7.5% Total offices 137,078 1, % Lançon student residence Paris 13 Q , % Eco quartier Ville d'avray Haut-de-Seine (92) Q , % La Traverse student residence Haut-de-Seine (92) Q , % Total residential 16, % Annemasse Haute-Savoie (74) Q , % Total Healthcare 23, % 6.3% GROUP 176,965 1, % 17

18 Disposals: major achievements during H1 559M disposals during H Offices 32% Logistics 20% Average 3.1% premium vs. end-2010 appraisal Residential (unit) 17% Residential (block) 31% 16.4% premium on residential unit sales Lower than the historical 25% premium, as buildings put up for sale are valued closer to their unit-by-unit value Average 6.0% exit yield 6.4% exit yield on offices 4.5% exit yield on residential Further 78m of assets under preliminary sales agreements 18

19 Disposals: major achievements during H1 Disposal of the Lyon residential portfolio (block) to an investment fund: 172m 5 buildings totaling 80,200 sq.m, i.e. 73% of Gecina s total residential portfolio in Lyon Net exit yield: 4.6% taking into account a 100% occupancy rate vs. 86% occupancy rate on this portfolio on the sale date, as the process to market these properties stopped while the sale was underway Lyon branch was closed in July 2011: one-off elements Disposal of the Origami building at a record price to a private investor : 86m 4,759 sq.m office building, totally redeveloped in 2010 and fully let to Barclays Capital under a 12-year lease this building had reached maturity for Gecina Net exit yield: 4.7%, i.e. 18,000 per sq.m Disposal of a logistics portfolio to Carval fund: 114m 21 assets for a total t of 395,000 sq.m 26% of Gecina s logistics portfolio Net exit yield: 6.2% excluding the cost of vacancies Other divestments Residential unit-by-unit sales: 93m 8 office buildings concerning small or mid-size assets: 94m 19

20 Valuation and NAV 1page

21 Portfolio valuation: +2.6% on a comparable basis Breakdown by segment Block value Change on current basis Change on constant basis mn H FY 2010 H vs. end-2010 H vs. H H vs. end-2010 Offices % +15.4% -0.2% Residential % +8.8% +9.0% Healthcare % +7.2% +0.7% Logistics % -46.4% -7.8% Hotels % +2.6% +0.4% Sub-total % +9.2% +2.6% Equity affiliates 7 7 na na na Group Total % +9.2% +2.6% Group Total Unit value % +8.8% +2.7% +2.6% on comparable basis +2.6% yield contraction Neutral impact of rental values 21

22 Higher valuation driven by residential, developments & acquisitions (542) 761 EUR ' (1) (1) Net yields by division (H vs. 2010) 6,1% 6,1% 6,9% 6,9% 8,1% 8,8% 7,1% 7,1% 57% 5,7% 56% 5,6% 4,4% 4,1% Offices Residential Healthcare Logistics Hotels Group Dec-10 June-11 22

23 NNNAV: +2.5% vs. end 2010 despite 4.4 /share payout In million euros June 30, 2011 Dec. 31, 2010 June 30, 2010 Shareholders' equity (Group) 6, , ,303.1 Unrealized capital gains Unrealized capital gain (loss) on debt (9.4) (7.0) Tax and sundry (1.2) (1.9) (0.9) Undiluted NAV 6, , ,321.8 Number of shares (excl. treasury stock) 61,066,889 60,988,537 60,912,271 Undiluted NAV per share (in ) Undiluted NAV 6, , ,321.8 Impact of stock options Diluted NAV - block 6, , ,338.9 Diluted number of shares (excl. treasury stock) 62,054,700 61,810,839 61,479,927 Diluted NAV per share (in ) NNNAV growth vs. June % NNNAV growth vs. end % 120,0 100, = ,0 60,0 40,0 20,0 Dividend Recurrent income Val. adjust. assets Other ,0 Dec-31, 10 June 30, 11 23

24 Outlook for page

25 Outlook Markets: sluggish market on offices, strong underlying trend on residential Indexation: back to positive territory from Q on offices Offices: market remains under pressure (take-up and investment) Residential: gradual capture of positive reversionary potential Healthcare: strong underlying demand Gecina s operating and financial performance: Continuing optimization of the cost of debt, confirmation of an average cost of debt of 4.15% for 2011 Further disposals, adapted according to market environment. Investments will be monitored in line with disposals Guidance on recurrent income of -7% in 2011 is confirmed 25

26 Appendices 1page

27 No change in the capital structure Breakdown at June 30, 2011 Metrovacesa 27% Individual shareholders Treasury stocks 5% 3% Non-resident institutionals 23% Resident institutionals 3% Predica 8% Mr. Rivero 16% Mr. Soler 15% June 30, 11 Dec 31, 10 Number of shares issued Stock options Treasury stock Diluted number of shares

28 Consolidated balance sheet ASSETS June 30, Dec. 31, June 30, LIABILITIES June 30, Dec. 31, June 30, In million euros In million euros Fixed assets Capital and reserves Investment properties Capital Buildings under refurbishment Issue, merger & capital contrib.premiums Buildings in operation Consolidated reserves Other tangible fixed assets Consolidated net profit Intangible fixed assets Group shareholders' equity Long-term financial investments Minority interests Equity affiliates Financial instruments Non-current liabilities Deferred tax Financial debt Financial instruments Current assets Deferred tax liabilities Properties for sale Provisions for liabilities and charges Inventories Taxes due & other employee-related liabilities Rent due and other receivables Other receivables Current liabilities Prepaid expenses Short term financial debt Financial instruments Financial instruments Cash & Cash equivalents Security deposits Trade payables Taxes due & other employee-related liabilities Other liabilities TOTAL ASSETS TOTAL LIABILITIES

29 2011 financial diary October 24 Third quarter business 29

30 Disclaimer This document does not constitute an offer to sell or a solicitation of an offer to buy GECINA securities and has not been independently verified. If you would like to obtain further information concerning GECINA, please refer to the public documents filed with the French securities regulator (Autorité des marchés financiers, AMF), which are also available on our internet site. This document may contain certain forward-looking statements. Although the Company believes that such statements are based on reasonable assumptions on the date on which this document was published, they are by their very nature subject to various risks and uncertainties which may result in differences. However, GECINA assumes no obligation and makes no commitment to update or revise such statements. 30