PRELIMINARY INDICATION FOR FULL YEAR 2012 RESULT

Transcription

1 PRELIMINARY INDICATION FOR FULL YEAR 2012 RESULT JANUARY 2013

2 AGENDA OVERVIEW OF EXTRAORDINARY EFFECTS AND IMPACT ON 2012 RESULT 1 2 EBT TARGET OF 50 MIO IN 2012 WRITE DOWN OF GOODWILL AND INTANGIBLE ASSETS 2. 3 NEGATIVE VALUATION RESULT OF CEE AND ECO PORTFOLIOS UPDATE ON KWG APPENDIX conwert is a fully integrated property company focusing on residential properties and apartment buildings in Austria and Germany. This focus is complemented by a commercial property portfolio. conwert owns, develops, lets and sells (older) high-quality properties in inner-city locations in rapidly growing regions. conwert s business model is based on three pillars: portfolio asset management, the development and sale of properties and the property service segment. The company s core competencies comprise asset management, portfolio development and property services, which range from property management to sales and the privatisation of apartments. conwert relies on a transparent corporate culture and a clear strategy for the implementation of its objectives. A code of conduct applicable to all employees of the Group lays down the ethical principles of entrepreneurship and governs the behaviour of employees when dealing with one another and with the stakeholders.

3 Company Presentation JANUARY WHAT TO TAKE AWAY FROM THIS PRESENTATION + Apart of extraordinary non-cash effects target of 50 million EBT probably met with positive fair value adjustments of conwert s residential property assets in Germany and Austria + Extraordinary non-cash effects will weigh on result of Intangible write-down: million goodwill, 2.2 million other intangible assets million of negative fair value adjustments for CEE assets + App. 25 million of negative fair value adjustments for individual ECO office properties in Austria and Germany + 8 million provisions for integration of KWG and restructuring of derivatives + Positive fair value adjustments of conwert s residential property assets of million in Germany and 5-10 million in Austria + Integration of KWG will have positive effect on NAV of ~ 0.50 per share upon initial consolidation + Expected synergies from KWG transaction ~ 10 mill. full-year effect

4 EXTRAORDINARY EFFECTS EXPECTED TO WEIGH ON RESULT 2012 Write down of goodwill and intangible assets Valuation of CEE and office properties Other provisions and extraordinary effects Impact on 2012 result (117) million (40-45) million (25) million (8) million up to (195) million + conwert s focus on asset management and recurring cash flow in the future will lead to a reduction of sales and the sales margin going forward + This will result in a one-off write-down of goodwill and other intangible assets + Negative non-cash effect in 2012 result of presumably 117 million + Continued difficult market environment has impact on CEE and office properties + Focus on residential properties in core markets in Germany and Austria results in particular focus on disposal program for non-core assets going forward + Non-cash extraordinary losses from fair value adjustments for CEE ( million) and for ECO assets in Germany and Austria (app. 25 million) + Provisions for extraordinary costs associated with the integration of the KWG acquisition will be made in Q4 + One-off non-cash costs through the restructuring of the interest rate hedging positions + conwert s target of 50 million EBT met before extraordinary non-cash effects + Bottom line impact of extraordinary negative effects of up to 195 million + EBT 2012 incl. one-off effects app. (140) million + Recurring FFO in 2012 expected to be positive Company Presentation JANUARY

5 EBT 2012 (excl. and incl. one-off effects) (Values in million) 22.5 ~15 ~5 ~8 ~50 (114.8) (2.2) (40-45) (25) (8) (140) EBT Q Gains from fair value adjustments expected Q for Germany Gains from fair value adjustments expected Q for Austria Operational result Q EBT expected for 2012 Goodwill write down Intangible assets write down Revaluation CEE Revaluation ECO Other provisions and one-off charges EBT expected after negative one-off effects Company Presentation JANUARY

6 IMPACT ON NAV 2012 (Values in / share) 18.1 ~(1.4) ~0.4 ~16.1 ~(0.8) NAV Q Goodwill and other intangibles Property revaluations Profit Q Preliminary NAV 2012 expected Company Presentation JANUARY

7 Company Presentation JANUARY EBT TARGET OF 50 MILLION IN According to preliminary figures, conwert has achieved its target of 50 million EBT in The EBT result will include positive revaluation effects on conwert s core residential portfolio in Germany and Austria of ~ 20 million in Q app million positive revaluation effects in Germany + app million positive revaluation effects in Austria + Sales target for 2012 of 450 million most likely achieved + Final transaction still needs to close, but will have limited impact on earnings

8 Company Presentation JANUARY WRITE-DOWN OF GOODWILL AND INTANGIBLE ASSETS + conwert s focus on asset management and recurring cash flow in the future will lead to a significant reduction of sales and the sales margin going forward + Acquisition of app. 60% majority-stake in KWG is decisive milestone in this transformation process to become a leading German/Austrian asset manager with a focus on residential properties + Valuation of conwert s goodwill is based on the sales result and the sales margin respectively + Consequently, the goodwill position of million will fail its impairment test and will therefore have to be written down + Moreover, 2.2 million of other intangible assets will also have to be written off + The extraordinary write-down of goodwill and intangible assets will presumably result in up to 117 million in non-cash charges in 2012

9 Company Presentation JANUARY NEGATIVE VALUATION RESULT OF CEE AND ECO PORTFOLIO + The property transaction market for CEE and commercial properties has been weak over the last years + conwert expects continued weakness in the CEE economies in the coming years + Indicative valuations suggest write-downs of million for CEE properties + app. 25 million for individual ECO office properties in Austria and Germany

10 Company Presentation JANUARY UPDATE ON KWG ACQUISITION + conwert acquires 61.4% of KWG outstanding shares for + ~ 3.8 million CWI shares valued at / share + ~ 42 million in cash + conwert grants option to vendor to purchase 1 million CWI shares at 10 / share + Vendor will purchase further 1 million CWI shares in market + conwert has initiated a share buyback programme million CWI shares will be bought until March conwert has the right to buy its own shares OTC as well as over the market. All purchases will be published on the CWI website

11 Company Presentation JANUARY UPDATE ON KWG ACQUISITION % of German stock listed KWG Kommunale Wohnen AG (9,700 units) with market cap of roughly 100 million acquired on 21 December Implied acquisition price of 620 / m² and implied acquisition yield of 8.4% (11.9x) + KWG CEO Stavros Efremidis to join conwert s Executive Board in February and will be responsible for the operating business in the core market Germany + Why KWG + German conwert portfolio increases by roughly 66% to 24,500 units + Significant Cash generation going forward FFO contribution of min. 3 million in 2013 and min. 5 million in following year + Focus on complementary metropolitan regions + Lucky-buy in Q because of attractive acquisition valuation expected between million + Significant potential of synergies, app. 10 million first full year effects + Closing of transaction expected within next couple of days

12 IMPACT OF KWG ACQUISITION ON CONWERT conwert standalone conwert + KWG Property value 2.4 billion 2.8 billion % Germany ~51% ~58% % Residential ~54% ~61% Residential units in Germany ~14,800 ~24,500 Profit & Loss impact Rental income 2013e million million Lucky Buy 2013e million Synergies 2013 Synergies million ~ 10 million expected positive NAV / share impact of ~ 0.5 / share Company Presentation JANUARY

13 Company Presentation JANUARY OVERVIEW + Publicly listed, integrated German property company with diversified portfolio in urban regions + Covers entire value chain by a trim and cost-efficient organisational structure centralised purchasing as well as construction, asset and property management + Portfolio delivers high yield regarding rent and has significant potential for value increase + Specialised in micro locations in metropolitan regions and medium-sized towns, respectively + Two portfolio segments: core portfolio investment portfolio + Experienced management team: Stavros Efremidis, CEO Torsten P. Hoffmann, CFO Key figures Number of properties 9,722 Total usable space (in sqm) 605,530 Vacancies 13.2% NAV / share app. 10 LTV (in %) 60.0

14 KWG-PORTFOLIO + Focus on North Rhine-Westphalia (NRW), predominant emphasis on the administrative district Dusseldorf (Wuppertal, Dusseldorf, Bochum and adjacent cities) + Portfolio nearly doubled in Acquisition of 2,910 properties from the former Towerportfolio: 609 in Berlin and 2,301 in NRW + Average purchase price: 480 / sqm Bremen Hamburg Schleswig- Holstein Lower Saxony Mecklenburg-Western Pomerania Saxony- Anhalt Berlin Brandenburg + Total annual net cold rent will presumably increase from 19.5 million in 2012e to 32 million in 2013e North Rhine- Westphalia Hesse Thuringia Saxony Portfolio distribution Rhineland- Palatinate Location Share (in %) Space (in 1,000 sqm) Saarland Bavaria NRW Baden- Wuerttemberg Berlin Lower Saxony / North Saxony / Thuringia Total ~605 Core Portfolio Investment Portfolio Property Management Company Presentation JANUARY

15 APPENDIX

16 CONSERVATIVE FINANCIAL STRUCTURE Low prolongation volume in the coming years + Cash-effective interest rate of 4.64% after hedging + Approx. 11 years average term of all loans incl. convertible bond + Broad and long-term distribution of debt financing + After purchase offer, only 74.2 million of Convertible Bond 1 (127.6 million ) were still outstanding only 21.0 million remain outstanding after exercise of put option Financial liabilities (in mill. ) HoldCo debt Mortgage debt 1,640 75¹ 128¹ 74¹ % Convertible Bond % Convertible Bond 2 4.5% Convertible Bond 3 Retail Bond 36 banks < 24.5 million 7 banks Range: million 6 banks Range: million 7 year prolongation profile (in mill. ) Q Strike price: ¹ Share of debt of convertible bond Strike price: Strike price: Mortgage-backed bonds Bond Convertible Bonds Company Presentation JANUARY

17 CAPITAL MARKET ENVIRONMENT Performance of the conwert share conwert ATX NAV conwert 1 Closing price 15 January / share Considerable discount to book value 9.77 / share Analyst research 12 analysts in total 2 Hold Buy 1 Underweight 9 Selected recommendations Bank Deutsche Bank Erste Group Goldman Sachs HSBC J.P. Morgan Kepler Recommendation Hold Hold Neutral Neutral Neutral Buy Raiffeisen Centro Hold Westend Brokers Buy + EPRA NAV as of 30 September 2012: Average target price: Current share price 1 : Shares: 81.5 mill. + Treasury shares: 3.86 mill. (4.5% of o/s) + EBT guidance (incl. valuation result): 50 million + Sales guidance 2012: 450 million Company Presentation JANUARY

18 DISCLAIMER This presentation includes various forecasts and expectations as well as statements concerning the future development of the conwert Group. These statements are based on assumptions and estimates, and may be connected with known and/or unknown risks and uncertainties. Actual developments and results as well as the financial, earnings and asset position of the Group may therefore differ materially from these expectations and assumptions. The reasons for such variances may include market fluctuations, the development of property prices and rents as well as financial markets and foreign exchange rates, changes in national or international laws and regulations or fundamental changes in the economic and political environment. For this reason, future-oriented statements are only related to the day on which they are made. conwert will accept no obligation to revise or adjust such statements to reflect new information or future results.