Significant goals achieved along the announced strategy

Transcription

1 Significant goals achieved along the announced strategy 1H2017 results Milan, 18 th July 2017

2 1H 2017 CONFERENCE CALL SPEAKERS Alexei Dal Pastro General Manager Barbara Pivetta CFO 2

3 AGENDA > STRATEGIC POSITIONING AND MARKET ENVIRONMENT PAGE 4 > 1H 2017 ACTIVITY PAGE 9 > 1H 2017 FINANCIAL HIGHLIGHTS PAGE 16 > STRATEGY AND OUTLOOK PAGE 23 > ANNEX PAGE 27 3

4 Strategic positioning and market environment 4

5 STRATEGIC POSITIONING AND MARKET ENVIRONMENT : QUICK FACTS AND FIGURES The leading office properties player in Milan PROPERTY PORTFOLIO TELECOM PORTFOLIO 0.9Bn 25% 3.7Bn 4.3Bn total share MILAN PORTFOLIO GREEN BUILDING 37% 2.3Bn 62% LTV 46.1% Weight of offices 90.8% Yield (topped-up) 5.5% Occupancy rate 94.8% Excluding TI 92.1% Group share figures 5

6 Sqm '000 STRATEGIC POSITIONING AND MARKET ENVIRONMENT SPARKLING LETTING MARKET AND ROBUST INVESTMENT VOLUMES: CONFIRMED SUPPORTIVE ENVIRONMENT Milan office take-up is up by 29% vs. last year driven by demand for grade-a offices Milan office take-up evolution by building grade /sqm prime rent 12.2m sqm stock ,000 sqm +8% YoY 10.6% vacancy rate Stable vs % >75% non Grade-A H 2017 Grade A green Grade A other Grade B+C Source: Cushman & Wakefield preliminary data, CBRE reseach (1) Including outer-milan and hinterland Good take-up focused on Grade A offices (65% of total) Increase in prime rents Outperforming submarkets featured by sparkling dynamic Stable stock of offices including developments Robust investment volume trend continues 3.6bn Investments in Italy In line with 1H % Office Prime Yield Yield compression trend 0.9bn Office Invest. in Milan Slight reduction 6

7 STRATEGIC POSITIONING AND MARKET ENVIRONMENT THE LEADING OFFICE PROPERTIES PLAYER IN MILAN Strong focus on CBD and most dynamic areas of Milan 2.3bn property portfolio in Milan Milan office sub-markets: 1H 2017 data M3 M5 Centre CBD Hinterland M1 M1 M2 Take-up 7k sqm Vacancy rate 7.9% Prime rent 420 sqm Take-up 73k sqm Vacancy rate 7.6% Prime rent 530 sqm Take-up 29k sqm Vacancy rate 13.7% Prime rent 220 sqm M5 Semi-centre Porta Nuova 29% Periphery M1 M4 CBD Centre M4 11% Centre & Semi-centre 2.3bn market value 60% CBD & Porta Nuova M2 Periphery Rented portfolio Developments Acquisitions closed in 1H 2017 Semi-centre Take-up 34k sqm Vacancy rate 4.9% Prime rent 320 sqm Source: Cushman & Wakefield preliminary data and company data. Break down by area excludes assets under preliminary disposal agreement. Group share BENI M4 currently STABILI under construction M3 Periphery Take-up 59k sqm Vacancy rate 15.0% Prime rent 240 sqm 7

8 Financial achievements Operating achievements STRATEGIC POSITIONING AND MARKET ENVIRONMENT 1H2017: SUCCESSFULLY PURSUING STRATEGIC OBJECTIVES Closing of 40% stake disposal of Telecom Italia portfolio (equivalent to ~ 618m asset disposal) Swift and targeted capital rotation acquisition of Creval portfolio ( 118m) & significant assets disposals (~ 199m) Outstanding new pre-letting on major projects in Milan delivering on development pipeline via Cernaia and Symbiosis (committed projects > 58% pre let) A very active 1H2017 achieving our targets Achievement of an investment grade rating with S&P (BBB- with stable outlook) Buy-back of 270m convertible bond More than 230m of new financing committed to secure 2018 maturities 8

9 1H 2017 activity 9

10 1H 2017 ACTIVITY 1H 2017: CONTINUING TO DELIVER GOOD LETTING RESULTS Occupancy and leasing activity Diversified and secure tenant base Total portfolio Excluding TI +470bps 95.5% 94.8% 92.1% 91.6% 93.5% 87.4% YE 2015 YE H YE 2015 YE H H 2017 WALB 2 : 7.2 yrs group share 20 NEW CONTRACTS FOR 1.5m ANNUALIZED RENTS ON 5,100 SQM 12 3 RENEWALS FOR 9.6m ANNUALIZED RENTS ON 31,900 SQM 5 PRELETTING FOR 4.0m ANNUALIZED RENTS ON 12,100 SQM 3 (1) Group share (2) Including leases renewed after 30/06/2017 (6.9 yrs not including) (3) Including renewals and preletting signed after 30 th June

11 1H 2017 ACTIVITY MILAN VIA CERNAIA Major pre-let in central Milan New lease contract signed with Amundi for the entire building years firm lease starting from October m topped up rent (~ 460/weighted sqm ) 100% indexation to CPI Highest quality standard complete refurbishment Leed Platinum Certification Work progress: 65% completion ~5.4% yield on cost 57m Total cost Semi-centre Porta Nuova Vs. 5.2% expect. CBD Centre 11

12 1H 2017 ACTIVITY SYMBIOSIS PROJECT New pre-let signed on 1,015 sqm GLA New lease contract signed with CIR Food for the building B ground floor to be dedicated to food service firm years firm lease starting from October 2018 Top up rent 0.55m ( 540/weighted sqm) 100% indexation to CPI Present in 16 Italian regions 82 million meals produced per year > 500m turnover > 11,000 employees On top of 16,000 sqm prelet to Fastweb signed in April 2016 HQ Total cost of 92m Yield on cost 7.1% Advanced additional pre-letting negotiations ongoing Vs. 6.8% expect. Semi-centre Porta Nuova CBD Centre 12

13 1H 2017 ACTIVITY DEVELOPMENT PIPELINE FULLY ON TRACK Capex ongoing supported by outstanding pre-letting results YE 2016 Pre-letting 1H 2017 Pre-letting Key metrics of development committed pipeline MILAN Via Cernaia GLA: 8,300 sqm Delivery: 4Q 2017 MILAN Symbiosis GLA: 20,600 sqm Delivery: 4Q 2018 New New Advanced negotiations 80% 100% 85% 58% pre-let MILAN Via Colonna GLA : 3,500 sqm Delivery: 1Q 2018 New MILAN - Monte Titano Advanced negotiations 50% 83m capex to be spent 332m total budget 1 GLA: 6,000 sqm Delivery: 1Q 2018 TURIN Corso Ferrucci GLA: 45,600 sqm First delivery: 3Q 2017 (further deliveries to follow pre-letting status) 100% 22% 100% 29% 74% in Milan 6% target yield on cost MILAN Principe Amedeo GLA: 7,000 sqm Delivery: 2Q 2018 Not yet acquired -Acquired- Ongoing marketing activities (1) Including the value of the land; excludes additional 460m of development pipeline not yet committed 13

14 1H 2017 ACTIVITY ASSET ROTATION: REFOCUSING ON CORE OFFICES IN MILAN 1H 2017 asset acquisitions and disposals Acquisitions Growth potential Recurring cash-flow 194m 6.0% 1 yield Milan, Via Principe Amedeo Milan, Via Marostica Creval portfolio (82% in Milan) Acquisition price: 41.9m Potential yield: 5.2% GLA: 7,000 sqm Trophy asset in premium location being refurbished Acquisition price: 24.7m Gross Yield: 6.9% GLA: 10,480 sqm Occupancy: 100% Acquisition price: 117.8m Gross Yield: 6.0% GLA: 21,700 sqm Occupancy: 100% Tenants diversification Mature asset Non-strategic assets Disposals 817m 5.9% Telecom Italia portfolio SICAF Milan, Via San Nicolao Outside Milan and retail properties yield Completed disposal of 40% SICAF stake already announced Gross yield 6.3% Disposal price in line with appraisal value Disposal price: 114.6m Gross yield: 4.7% GLA: 11,705 sqm Disposal of a mature asset taking advantage of positive market momentum 4 assets disposal for a total price of 39.2m 5 assets preliminary disposal signed for 45.5m 2 Disposal of office outside Milan and retail (1) Gross yield including potential yield on Milan, via Principe Amedeo (2) Of which 39.9m signed in

15 1H 2017 ACTIVITY CREVAL PORTFOLIO Reinforcement in Milan through a value accretive acquisition ACQUISITION PRICE (INCLUDING TAXES) 118m 6.0% gross yield Semi-centre Porta Nuova CBD Centre Milan, Piazza San Fedele Milan, Corso Magenta 17 properties for a total GLA of 21,700 sqm More than 82% portfolio value in Milan (71% on top three assets) Other assets being well-located bank branches (retail and offices) with expected good liquidity Properties fully let to Credito Valtellinese Group under double net lease agreements with 10.8 yrs WALT Increased exposure to Milan Further diversify tenant base Proactive capital rotation strategy Enhance cash flow visibility 15

16 1H 2017 Financial highlights 16

17 1H 2017 FINANCIAL HIGHLIGHTS 1 RENTAL INCOME: +2.9% L-F-L ON TOTAL PORTFOLIO NON TI Strong growth driven by pro-active asset management 30/06/ /06/2017 Δ Δ L-f-L ( m) ( m) ( m) (%) Office TI (0.5) +0.0% Office Non - TI % Total Office % Retail (0.4) +1.9% Total portfolio % Total portfolio (excluding TI) % L-f-L growth -1.5% Occupancy rate (excl. TI) 84.7% -4.1% 87.4% +0.2% +1.5% 91.6% L-f-L Excl. Telecom Italia: growth +2.9% Office non TI 92.1% +3.1% H Rental income evolution ( m) (1.3) (1.0) (0.1) Rental income H Acquisitions Rental activity Disposals Rental releases Other Rental income H

18 1H 2017 FINANCIAL HIGHLIGHTS RECURRING NET INCOME: +8.4% Strong recurring cash flow generation confirmed Actual Actual m 30/06/ /06/2017 Δ Δ% Rental income % Not recovered rental expenses (16.7) (16.3) +0.5 (2.6)% Net rental income % Margin % 83.1% 84.0% +0.9pts Net service revenues n.s. G&A costs (8.4) (12.2) (3.7) +44.0% Net financing costs (23.2) (18.8) +4.4 (19.1)% Income/(cost) from associates 1.0 (0.2) (1.2) (125.3)% Income tax (0.2) (0.3) (0.1) +66.1% Minority 0.0 (0.7) (0.7) n.s. Recurring net income % Recurring net income/ share % Rental income + 3.0m (+1.5% L-f-L) Neutral impact of Revalo consolidation (improved rental costs and service revenues offset by additional G&A) Improved net financing costs of 4.4m Change in fair value of assets (11.5) Change in fair value of ORNANE convertion Option gross tax effect 49.7 (23.4) (73.1) Change in fair value of financial instruments and effective interest rate impact (4.1) (4.9) (0.8) Deferred tax and other tax (7.4) Exceptional items 0.0 (6.8) (6.8) Early repayments of bonds and loans, derivates and other non recurring items (12.9) (21.0) (8.1) Net income to Minorities 0.1 (1.8) (1.9) Net income (90.2) Net income/ share (0.04) Recurring net income evolution ( m) (3.7) (1.2) (0.8) Real estate portfolio write-ups 42.7m (+1.2% L-f-L Group share) m mainly buyback of the CB due Recurring net income H Total net revenues Operating costs Financing activity Income/(cost) from associates Taxes and minorities Recurring net income H

19 1H 2017 FINANCIAL HIGHLIGHTS BALANCE SHEET Improved financial profile Debt metrics 31/12/ /06/2017 Consolidated Group share Net accounting debt ( m) 2,230 2,196 1,896 Breakdown of debt ( m) Convertible bonds 9% SICAF bank debt 36% LTV (Group share) % 47.2% 46.1% Cost of debt 2.44% 2.14% 2.15% Straight bonds 32% Average maturity years 4.5 years 4.1 years ICR 2.6x 2.6x 2.7x Unsecured bank debt 11% Secured bank debt 12% Debt maturity ( m) 3 87M 10-yrs new bank debt signed and ~ 150m of new 8-yrs financing committed to be finalised 532 Bank debt Convertible bonds Straight bonds SICAF bank debt (1) Accounting Net Debt/Portfolio IAS Value including transfer taxes (4%) and disposals preliminary agreements and receivables/ (payables) for sales (2) Based on long-term debt (3) Based on nominal value of outstanding debt 19

20 1H 2017 FINANCIAL HIGHLIGHTS INVESTMENT GRADE RATING ACHIEVED [ ] Beni Stabili Siiq is one of the largest office property landlords in Italy, [ ]. The company owns good-quality assets, mostly located in Milan's business districts, and maintains a prudent financial policy. BBB- Stable outlook We are therefore assigning our 'BBB-' long-term corporate credit rating to Beni Stabili. The stable outlook reflects our view that Beni Stabili should continue to generate stable and predictable income in a recovering Italian office market, and be able to keep its debt-to-debt-plusequity ratio around 45%, with EBITDA interest coverage remaining above 2.5x, on a group-share basis, over the next two years. [ ] Confirmation of Beni Stabili business and financial solidity Wider access to debt capital markets to maintain an optimal mix of funding sources Opportunity to optimise cost of debt 20

21 1H ACTIVITY FINANCIAL HIGHLIGHTS PROPERTY PORTFOLIO: +1.2% GROUP SHARE Strong and resilient investment allocation Market value - group share 31/12/ /06/2017 Δ L-f-L Δ L-f-L ( m) ( m) ( m) (%) Office portfolio (No TI) 1,804 1, % TI Portfolio 1, % Retail & Others (0.2)% Development % TOTAL 4,094 3, % Milan L-f-L GROWTH +3.1% 1 Market value evolution ( m) 4, ,682.5 (657.4) Market value 31/12/16 Acquisitions Sales Capex & Other Valuation Market value 30/06/17 (1) Excluding TI portfolio and development 21

22 1H 2017 FINANCIAL HIGHLIGHTS NET ASSET VALUE: +3.8% NNNAV GROWTH EXCLUDING DIVIDEND 31/12/ /06/2017 Δ Δ% EPRA Gross NAV m 1, ,887.7 (36.6) (1.9)% per share (0.016) (1.9)% EPRA NNNAV m 1, ,830.1 (4.7) (0.3)% per share (0.002) (0.3)% Main changes due to : Dividend payment CB buy-back cancellation of future dilution Positive RNI Positive real estate write ups EPRA NNNAV evolution ( m) , ,830.1 (74.9) (23.4) (17.1) (15.7) NNNAV 31/12/2016 Recurring net income Dividends Appraisals Change in fair value of convertible bond option Mark-to-market of hedging instruments Breaking Costs for repurchased CB2019 Other one-off and non cash items NNNAV 30/06/

23 Strategy and outlook 23

24 STRATEGY AND OUTLOOK THE UNDISPUTED LEADER IN MILAN OFFICES Confirmed strategic guidelines and improved financial targets 2020 target 1 DIVERSIFY tenant base WEIGHT OF TELECOM ITALIA 20% Focus on MILAN WEIGHT OF MILAN 80% Increase GREEN WEIGHT OF GREEN PROPERTIES 50% LTV 40-45% 2017 RNI target: raised by 5% to around / share 24

25 STRATEGY AND OUTLOOK CALENDAR 3Q 2017 revenues 7 th NOVEMBER

26 Q&A STRATEGY AND OUTLOOK 26

27 Annex 27

28 ANNEX REAL ESTATE PORTFOLIO DETAILS As of 30/06/2017 GROUP SHARE # of assets GLA Financial occupancy Market value Passing rents Topped-up rents Topped-up yield (' 000 sqm) ( M) ( M) ( M) (% of MV) TI offices % % Other offices % 1, % Total offices 217 1, % 2, % Retail % % Other assets % SUBTOTAL 250 1, % 3, % Development TOTAL GROUP SHARE ,514 3, TOTAL CONSOLIDATED 1,940 4, (1) sqm of GLA is in Group Share 28

29 ANNEX DEVELOPMENT PIPELINE Committed projects Location Project type Surface Expected delivery % pre-let Capex to be spent 1 % completion Target yield Total budget 2 Rent (sqm) (%) ( m) (%) (%) ( m) ( m) Ferrucci Turin Refurbishment 45, % % 5.7% Colonna Milan Refurbishment 3, % % 5.1% Cernaia Milan Refurbishment 8, % % 5.4% Monte Titano Milan Refurbishment 6, % % 5.0% Symbiosis A + B Milan Construction 20, % % 7.1% P. Amedeo Milan Refurbishment 7, % 5.2% TOTAL 91,000 58% % 5.9% Managed projects 3 Location Project type Surface Expected delivery Total budget 2 Total budget 2 (sqm) ( m) ( m) Symbiosis (Other blocks) Milan Construction 101, c.370 c.26 Via Schievano Milan Construction 31, c.90 c.7 TOTAL 133,300 c.460 c.33 (1) Includes construction costs, technical costs, urbanization fees, financial costs, home technical costs and various fees (2) Including land cost and financial costs (3) Figures subject to changes as project analysis progresses 29

30 ANNEX IAS PROFIT & LOSS m 30/06/ /06/2017 Δ % change Net rental revenues Disposals (0.1) (0.2) (0.1) Net service revenues Gross operating margin % Staff Costs (3.9) (5.9) (2.0) Overheads (5.0) (13.3) (8.3) Other revenues and income/(other costs and charges) (2.6) (3.3) (0.7) Operating profit before property write-ups/(write-downs) (5.4) (7.6)% Property write-ups/(write-downs) (11.5) EBIT (16.9) (13.6)% Net financial income/(charges) 13.8 (64.2) (78.0) Income/(charges) from associates and other entities (0.1) (0.4) (0.3) EBT (95.2) (68.7)% Current tax (2.9) (0.3) 2.6 Deferred tax (4.7) Minority profit/(loss) 0.1 (2.6) (2.7) Net result, before Ornane's accounting impacts and anticipated repayment of loans and derivatives impacts (90.3) (68.9)% Per share data Net group income / share Net group income / share, diluted

31 ANNEX BALANCE SHEET ASSETS ( m) 31/12/ /06/2017 Δ EQUITY & LIABILITIES ( m) 31/12/ /06/2017 Δ Investment properties 3,612 3, Total group equity 1,863 1, Properties under development Minority interest Operating properties and other assets Total consolidated equity 1,864 2, Derivatives Other non-current assets Borrowings 2,153 1, Total non-current assets 4,077 4, Derivatives Other non-current liabilities Trading properties Total non-current liabilities 2,217 1, Other current assets Cash and cash equivalents Borrowings Total current assets Other current liabilities Total current liabilities Assets held for sale Total liabilities 2,376 2,376 0 Total assets 4,240 4, Total consolidated equity and liabilities 4,240 4, TOTAL CONSOLIDATED EQUITY ( m) Balance at 31/12/2016 1,863.9 Capital increase 0.0 Distribution of dividends and capital reserves (75.3) Result of the period (excl. minorities) 43.3 Net fair value gain/(loss) on hedging derivatives, after tax effect 13.8 Other Balance at 30/6/2017 2,

32 ANNEX IAS CASH FLOW STATEMENT m 30/06/ /06/2017 Recurring net income Cash items excluded in Recurring net income (4.7) (8.0) Minorities (0.0) 0.7 Cash flow from operating activities after taxes Other assets/other liabilities 8.4 (0.9) Investments (including capex) (59.8) (203.4) Disposals Dividend from investments Distributed dividend (54.4) (74.9) Increase/(decrease) in borrowings, including early unwinding of derivatives (45.9) (54.3) Other 0.0 (0.4) Net increase/(decrease) in cash and equivalents (48.3) 27.8 Cash and equivalents at the beginning of period Cash and equivalents at the end of period

33 ANNEX DETAILED EPRA NET ASSET VALUE CALCULATION 31/12/ /06/2017 m / share m / share Market value investment properties and operating properties 3, ,693.2 Market value properties under development Market value trading properties Market value held for sale assets Other assets (excluding deferred taxes on real estate assets) 60.8 (217.5) Net financial position (2,230.3) (2,195.6) Gross NAV 1, , Deferred taxes on real estate assets (14.2) (13.3) NNAV 1, , MtM derivatives (29.5) (19.9) MtM CB 2019 / 2021 Convertion Option (15.5) (13.8) MtM borrowings (12.2) (8.1) MtM convertible bond (20.1) (2.7) Taxes EPRA NNNAV 1, ,

34 ANNEX PROPERTY PORTFOLIO IN MILAN A prime portfolio including several trophy assets in central Milan 2.3bn property portfolio in Milan 29% Periphery 11% Centre & Semi-centre 2.3bn market value Break down by area excludes properties currently under preliminary disposal agreement for 152m. Group share M1 34 M1 M5 M % CBD & Porta Nuova Porta 28 2 Nuova Semi-centre CBD M M Centre 27 M5 9 Periphery M1 42 M3 M M4 Milan assets 1 Via Marco Aurelio Viale Certosa Piazza Sigmund Freud 26 Via Dante 7 3 Via Lorenteggio Via Cesare Balbo 8 4 Via Schievano E Via Mantegna 11 5 Milanofiori - strada 8 29 Via Bettinelli 3 6 Via Messina Piazza S. Fedele 2 7 Via Scarsellini Galleria del Corso 4 8 Via Tonale Via Folli 17 9 Via Adamello (Symbiosis) 33 Viale Jenner Via Montebello Via Cascina Bellaria 4 11 Via Boscovich Corso Sempione Via Bernina 7 36 Via V. Colonna 4 13 Piazza Monte Titano Corso Monforte Via Strada 7 38 Via Eritrea 48/8 15 Corso Italia Via Marcora Via San Nicolao Via Verri 4 17 Via Cornaggia 6 41 Via Scarsellini Via Marostica 1 42 Via Brenta 3 19 Via Cernaia 8 43 Via Plinio Via Dell'Unione 1 44 Via Arese 5/7 21 Via Parini 6 45 Via Mercato 3 22 Via Principe Amedeo 5 46 Largo P. Grassi 1 23 Via Rombon Piazza San Fedele 4 24 Via Amedei 8 Rented portfolio Developments 34

35 DISCLAIMER This document has been prepared by Beni Stabili SpA Siiq (the Company ) solely for the purposes of this presentation. This document may not be reproduced or distributed in whole or in part by any other person than the Company. The Company takes no responsibility for the use of this document by any person and for any purposes. The information contained in this document has not been subject to independent verification and no representation, warranty or undertaking, express or implied, is made as to the accuracy, completeness or correctness of the information or opinions contained herein. This presentation may contain forwards-looking information and statements about the Company. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding plans, performance. In any case, investors and holders of the Company are cautioned that forward-looking information and statements are subject to various risk and uncertainties many of which are difficult to predict and subject to an independent evaluation by the Company; that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking statements. No representation, warranty or undertaking is made by the Company in order to the implementation of these forward looking statements. These risks and uncertainties include, but are not limited to, those contained in this presentation. Except as required by applicable law, the Company does not undertake any obligation to update any forward-looking information or statements. Neither the Company, its shareholders, its advisors or representatives nor any other person shall have any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection with this document. This document does not constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase any securities, and this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in any jurisdiction. Under all circumstances the user of this document shall solely remain responsible for his/her own assumptions, analyses and conclusions. 35

36 IR contacts Barbara Pivetta Tel.: Barbara Ciocca Tel.: Milan Via Carlo Ottavio Cornaggia Milano Tel.: +39 (0) Rome Via Piemonte Roma Tel.: +39 (0)