aedifica...results: h1 2012/2013 highlights occupancy rate: 97,3% for unfurnished portfolio and at...
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Aedifica
19 February 2013
Half year results 2012/2013
Table of contents
Strategy
Achievements
Portfolio analysis
Financials
Outlook
Conclusion 2
Strategy
Aedifica
Belgian REIT market cap of €436m* free float of 88%
Investing in the residential market Focussing on demographical evolution
(ageing; growing population) Year-end: 30 June Withholding tax at 15%
4
* As of 15 February 2013
Demographic evolution Growing population - Brussels
5
Source: Bureau fédéral du plan
6
Demographic evolution Growing population - Antwerp
Source: Bevolkingsprognoses Antwerpen 2009-2030 (Stad Antwerpen)
Year
Num
ber o
f res
iden
ts
Scenario 1: Positive migration + increasing fertility. Scenario 2: Positive migration + stable fertility. Scenario 3: stable migration + stable fertility. Scenario 4: stable migration + decreasing fertility.
Source: Pacolet, J. et al. (2004) in Het grijze goud (Itinera Institute 2010)
Demographic evolution Ageing
7
Growth strategy in Belgium
8
Furnished apartments in Brussels
Senior housing
in Belgium
Unfurnished apartments in the city
Cash flow (triple net leases) + growth potential
Value play* + higher rental income
for furnished apartments
* Expected capital gains through arbitration of apartments on the long term. ** Including the goodwill and the book value of furnishings.
Hotels in Belgium
Weight: 23% Yield: 5.2% EBIT: 75%
Weight: 10% Yield: 8.2%** EBIT: 43%
Weight: 54% Yield: 5.9% EBIT: 100%
Weight: 13% Yield: 6.5% EBIT: 99%
Achievements
SPO December 2012
Public capital increase in cash with preferential right of €99,8 million in December 2012 (2,697,777 new shares issued)
Successful operation among existing shareholders + entry of new (institutional) shareholders
10
Investments: H1 2012/2013
11
18 December 2012 Acquisition of a plot of land in Beringen (Province of Limburg) for a development project of a rest home • €17.4m development project
(110 beds + 17 assisted-living apartments)
20 December 2012 Acquisition of a rest home in Sart-lez-Spa (Province of Liège) • €4.1m invested amount (80 beds) • €3.0m extension project (20 assisted-
living apartments) Résidence Les Cheveux d’Argent
Residentie Sporenpark
© 2
012-
A33
Arc
hite
cten
Portfolio 31 December 2012 Total portfolio volume
€619m including projects on balance sheet + €134m committed investments in pipeline (95% senior housing; 95% pre-let)
Total portfolio outlook = €753m including projects on balance sheet & committed investments in pipeline
Average remaining lease maturity: 18 years
5th largest Belgian REIT in terms of fair value (Based on “Belgian REIT Overview” by Bank Degroof, February 2013)
14th largest real estate portfolio in Belgium (36th in 2006) (Investors Directory 2013, Expertise BVBA edited in January 2013)
12
Results: H1 2012/2013 highlights
Occupancy rate: 97,3% for unfurnished portfolio and at 80,8% for furnished apartments
Debt-to-assets ratio: 35.1%
Rental income, operating margin and result excl. IAS 39 and IAS 40: above expectations and prior year
Positive variation of marketable investment property at fair value: +€9m or +1,51% (in income statement)
Unchanged dividend expectations for FY 2012/2013: €1,78/share
New tax regime applicable to dividends of residentiel REITs: Withholding tax at 15% European-wide playing field
New website
13
Portfolio analysis
Breakdown: Segments
15
Unfurnished apartment buildings (543 apartments in 24 sites)
Furnished apartment buildings (295 apartments in 9 sites)
Senior housing (3.335 beds & 102 other units in 38 sites)
6 hotels (521 rooms) and other
(As of 31 December 2012)
23%
10% 54%
13%
Marketable property at fair value (€598m)
Geographical breakdown
16
Marketable property at fair value
47%
17%
36%
(As of 31 December 2012)
Breakdown: Buildings
17
(As at 31 December 2012)
Breakdown: Main tenants
18
Based on contractual rents
31 December 2012Orpea 18%Senior Living Group 18%Armonea 11%Soprim@ 4%Other senior housing 2%Subtotal senior housing 53%Martin's Hotels 8%Different Hotel Group 4%Subtotal hotels 12%Other types of tenants 35%TOTAL 100%
Breakdown: Lease maturity
19
≥ 27 years
15 years
< 15 years
68% irrevocable
18 years Marketable property at fair value
Initial lease maturity
Average remaining lease maturity
67%
1%
32%
(As of 31 December 2012)
Breakdown: Age of buildings
20
Other contracts Buildings between 0-10 years
Other contracts Buildings > 10 years
Triple net contracts 68% 15%
17%
Marketable property at fair value
(As at 31 December 2012)
Occupancy rate - Furnished apartments* (10% of portfolio)
21
*Definition Furnished : rented days QTD / total number of days QTD. YTD December 2012: 80,8%; YTD June 2012: 82,3%; YTD December 2011: 84,3%.
07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
Volatility due to short-term contracts
Occupancy rates between 70%-93%
22
*Definition Total portfolio (excl. furnished apartments) : (contractual + guaranteed rents) / (contractual rents + ERV for unlet spaces)
Very high and stable occupancy rates 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
95.6% 94.8% 95.6% 96.3% 96.8% 97.2% 97.4% 97.1% 96.3% 96.3% 96.6% 96.5% 96.9% 96.0% 97.4% 97.6% 97.4% 97.9% 97.9% 97.9% 97.8% 97.4% 97.3%
Occupancy rate - Portfolio excl. furnished apartments* (90% of portfolio)
Occupancy rates between 95%-98%
Yields on fair value
23
Unfurnished apartment buildings
Furnished apartment buildings
Senior Housing
Hotels and
other
Weighted average
6.1%
Gross = Net
(As of 31 December 2012)
* Including the goodwill and the book value of furnishings.
*
Segment EBIT margins*
24
75% 48% 100% 96% - 71%
74% 52% 100% 98% - 75%
TOTAL
FY 2008/2009
FY 2010/2011
Total EBIT margin higher than prior years and expectations
Unallocated & inter-segment
Residential or mixed buildings
Buildings with
furnished apartments
Senior housing
Hotels &
other
70% 54% 100% 98% - 68% FY 2007/2008
77% 44% 100% 99% - 73% FY 2009/2010
* EBIT / net rental income
77% 45% 100% 99% - 76% FY 2011/2012
(As of 31 December 2012)
75% 43% 100% 99% - 77% HY 2012/2013
Limited decrease
Valuation of property: 2008 2012
25
Positive trend since January 2010
* Excluding initial FV of acquisitions, and excluding MTM on development projects.
Resilience Increase
Increase
€k %Unfurn. -5,282 -4%Furn. -2,569 -6%Senior 13 0%Other -1,415 -4%Total -9,253 -3%
FY 2008/2009
€k %Unfurn. -1,282 -1%Furn. -622 -1%Senior 1,684 1%Other -963 -2%Total -1,183 0%
FY 2009/2010
€k %Unfurn. 930 1%Furn. 622 1%Senior 6,072 2%Other 1,191 2%Total 8,815 2%
FY 2010/2011
€k %Unfurn. 2,245 2%Furn. 787 1%Senior 5,991 2%Other 45 0%Total 9,068 2%
FY 2011/2012
Increase
€k %Unfurn. 680 1%Furn. 613 1%Senior 6,702 2%Other 868 1%Total 8,863 2%
HY 2012/2013
Project or renovation(in € million)
Address Estimated inv.
Inv. as of 31 December
2012
Future inv.
Date of completion
Comments
I. In progressSeniorerie La Pairelle Phase II Wépion 2.2 0.8 1.4 2012/2013 Renovation and extension of a rest home.Residentie Sporenpark Beringen 17.4 1.9 15.5 2014/2015 Construction of a new rest home.Résidence Palace - Parkings Brussels 0.2 0.1 0.1 2014/2015 Acquisition of 6 parking spaces to be built.Edelweis Begijnendijk 2.9 0.8 2.1 2013/2014 Extension of the rest home.Rue Haute Brussels 1.4 0.0 1.4 2013/2014 Renovation of a residential building with 20 apartments and 1 commercial
groundfloor.Wemmel Zijp Wemmel 19.8 7.4 12.4 2013/2014 Construction of a new rest home.Koning Albert I Dilbeek 11.3 4.0 7.3 2013/2014 Renovation and extension of a rest home.Eyckenborch Gooik 8.7 1.0 7.7 2013/2014 Extension of a rest home.
II. Subject to outstanding conditionsTervuren Tervuren 24.0 0.0 24.0 2014/2015 Construction of a new rest home.Eburon Tongeren 0.9 0.0 0.9 2013/2014 Extension of the hotel and renovation of the existing arches.Résidence du Lac Brussels 3.5 0.0 3.5 2015/2016 Construction of an apartment building.Au Bon Vieux Temps Mont-Saint-Guibert 6.6 0.2 6.4 2013/2014 Construction of a rest home.Klein Veldeken Asse 6.1 0.0 6.1 2013/2014 Extension of an assisted-living builging.Marie-Louise Wemmel 3.3 0.0 3.3 2014/2015 Renovation and reconversion of a rest home.Résidence Aux Deux Parcs Jette 0.7 0.0 0.7 2012/2013 Extension of the rest home.Résidence Cheveux d'Argent Spa 3.0 0.0 3.0 2014/2015 Extension of the rest home.Larenshof Laarne 7.4 0.0 7.4 2013/2014 Extension of the rest home and construction of a new assisted-living
builging.III. Land reservesTerrain Bois de la Pierre Wavre 1.8 1.8 0.0 - Land reserve.Platanes Brussels 0.2 0.2 0.0 - Land reserve.
IV. Acquisitions subject to outstanding conditionsKrentzen Olen 18.0 0.0 18.0 2013/2014 New rest home with 122 units.Overbeke Wetteren 13.0 0.0 13.0 2013/2014 New rest home with 113 units.
Total 152.4 18.2 134.2 Capitalised costs - 0.6 -Changes in fair value - 1.4 -Roundings - 0.1 -
On balance sheet 20.3
Development projects
26
(As of 31 December 2012)
Pre-let : 95%
Financials
Income Statement – business driven
28
14% increase of result excl. IAS 39 & IAS 40, ahead of expectations
*
Income Statement - analytical scheme Var.(x €1,000)Rental income 18,037 16,728 8%Rental-related charges -69 -28Net rental income 17,968 16,700 8%Operating charges -4,152 -4,041Operating result before result on portfolio 13,816 12,659 9%Operating margin % 77% 76%Financial result excl. IAS 39 -5,597 -5,467Corporate tax -29 -19Profit excl. IAS 39 & IAS 40 8,190 7,173 14%Number of dividend rights at year end 8,715,113 7,152,854Result per share excl. IAS 39 & IAS 40 (€/share) 0.94 1.00 -6%
31 December 2012
31 December 2011
Rental income
29
-3%
16,728 - 107 - 138 + 1.170 + 384 18,037
8% increase, of which -1% like-for-like
-11% +3% -3% Like-for-like:
Result excl. IAS 39 & 40
30
-107 -138
+1,541 -553 -145 8,190
7,173 -45 -3
-91 +671 -10 -103
Result excl. IAS 39 & 40 vs expectations
31
8,190
Income Statement – market driven
32
Non cash
Income Statement - analytical scheme(x €1,000)Profit excl. IAS 39 & IAS 40 8,190 7,173IAS 40 impact : gains on disposals of investments properties 54 0IAS 40 impact 9,926 6,139IAS 39 impact -1,792 -6,699Profit (o.p.) 16,378 6,613Weighted average number of shares outstanding (IAS 33) 7,558,301 7,130,466Net result per share (g.s. - IAS 33 - €/share) 2.17 0.93
31 December 2012
31 December 2011
Investment property under IAS 40
33
30 Jun 2007
30 Jun 2008
31 Dec 2007
31 Dec 2008
Growth through additions (in balance sheet)
Δ FV YoY = -€9,253k = -2,6%
Δ FV YoY = €6,058k = 1,9%
344 247
Δ Fair value (in income statement)
€m
30 Jun 2009
351
Δ FV YoY = -€1,183k = -0,28%
31 Dec 2009
423
30 Jun 2010
Δ FV YoY = €8,815k = 1,78%
31 Dec 2010
30 Jun 2011
504
Marketable property at fair value
31 Dec 2011
30 Jun 2012
583
Δ FV YoY = €9,069k = 1,58%
598
31 Dec 2012
Δ FV YoY = €8,863k = 1,51%
Hedging policy
34
Economic stability and foreseeability of interest cash outflows...
... even in spite of accounting volatility
Business driven: Avg effective interest rate of 4,0%, lower than expectations, lower than H1 PY (4,4%) and lower than FY PY (4,2%)
Market driven: Change in FV of derivatives (non cash items) under IAS 39 in 2012/2013: -€1,792k in result (vs. -€6,699k in PY) -€2,795k in equity (vs. -€9,295k in PY)
Hedging: MTM swaps under IAS 39
35
MTM < 0
MTM > 0
FY 2007/2008
FY 2008/2009 FY 2009/2010
FY 2010/2011
FY 2011/2012
HY 2012/2013
Consolidated balance sheet
36
Assets
June 2012
Investment property
Other assets included in debt-to-assets ratio
Dec 2012
Equity & Liabilities
Equity
Liabilities included
in the debt- to-assets ratio
Other liabilities
June 2012
Dec 2012
16,337
592,717
267,576
37,595
303,921 Other assets
38
(As at 31 December 2012)
7
618,777
9,071
365,461
220,642
41,752
Debt-to-assets ratio
37
49.9%
June 2012
Headroom * : - Debt increase of €156m without investments
or €390m with investments
- Drop of MTM of buildings of 42%
* Based on bank covenant of max. 60%. Based on legal max. of 65%, headroom is respectively €187m, €535m and 46%.
35.1%
Dec 2012
SPO 2012
33%
Credit facilities
38
Credit facilities
(As of 31 December 2012)
Credit facility Amount(€m)
Maturity
Club deal 100 July 2013Bilateral credit facility 30 August 2013Bilateral credit facility 30 June 2014Bilateral credit facility 15 August 2014Bilateral credit facility 30 October 2015Bilateral credit facility 30 June 2016Bilateral credit facility 30 July 2016Bilateral credit facility 15 August 2016Bilateral credit facility 30 January 2017Investment credit 2 2021Total credit facilities 312Less: debt 31.12.2012 -212Headroom 100
Net asset value
39
31 December 2012 30 June 2012 Var.
Net asset value based on fair value 36.95 37.29Dividend paid in November 2012 0.00 -1.85IAS 39 impact 4.05 4.94Net asset value after deduction of dividend, excl. IAS 39 41.00 40.38 2%
4%
Net asset value per share (in €)Based on fair value of investment properties
Nav after detachment of coupon No.10: - incl. IAS 39: €36.39 - excl. IAS 39: €40.44.
Premium at 14 Feb. 2013: 19% vs NAV at FV incl. IAS 39 7% vs NAV at FV excl. IAS 39
Value potentially not reflected in the NAV
40
Belgian REIT → highly regulated framework Assessment: Apartment buildings: valued as a whole vs individual units Senior housing: yield compression Inflation-linked contracts
Capital gains potential Pipeline: Committed Pre-let
Track record of successful financing (equity and debt)
Dividend track record
41
2007 2008 2009 2010 2011 2012 f 2013*
Capital increase of 15 October 2010
Theoretic dilution of DPS after rights issue
FY 2012/2013 dividend expectations* : €1.78/share
* Expectations 2012/2013 (see section 5.3.2 of the Securities note relating to the capital increase of 7 December 2012)
Capital increase of 7 December 2012
Shares & shareholders
Share price since IPO
43
(14 February 2013)
Spot Var. (%)Aedifica 44,03 18,43
BEL MID 3.414,53 -7,47
EPRA Belgium 984,55 -30,47
EPRA Europe 1.474,13 -44,79
Total return since IPO
44
(14 February 2013)
Var. (%)Aedifica total return 57,83 55,54
Bel real estate 1.311,68 16,01
EPRA B. total return 2.314,06 7,15
EPRA E. total return 1.485,33 -30,87
Shareholding*
45
(Since 15 October 2010)
Jubeal Fondation
Free float
* A total of 9,874,985 shares are listed on NYSE Euronext Brussels.
6,37%
88,17%
Wulfsdonck Investment via Finasucre
5,46%
Market cap & liquidity
2nd highest free float of all sicafi
4th largest liquidity amongst all sicafi (Daily average: €330k at end of Jan. 2013; €230k at end of June 2012)
5th largest market cap amongst all sicafi (± €436m)
46
Corporate governance
Transparency
NV/SA
Management in the box
Belgian Code 2009 on
Corporate Governance
Board of directors
10 directors • 8 non executive directors of
which 4 independent ones • 2 executive directors
Audit committee
Appointments &
remuneration committee
Investment committee
47
Outlook
Outlook H2 2012/2013 Furnished apartments: occupancy in Q3 slightly ahead of
expectations but market remains volatile
Hotels: most sensitive segment to economic situation
Senior housing: completion of buildings under construction (Dilbeek phase I on 18 Jan. 2013; Wépion phase II expected before year-end)
Execution of pipeline + construction works starting in Beringen, Jette and Laarne (phase III)
New investments expected in senior housing segment
Divestments of apartments: new threshold of 80% residential investments to be achieved in 2015 (current level at 79%)
49
Key priorities for future growth Existing pipeline :
€152m (horizon 2016)
• €18m already on balance sheet
• €48m in execution, not yet on balance sheet
• €86m subject to conditions precedent
• 95% senior housing
• 95% pre-let
50
Key priorities for future growth Objective for future investments :
Enhance triple net cash flows (continued focus on senior housing)
Add value-driven investments (focus on apartments in major Belgian cities)
Reap fruits of maturity (capital recycling through disposal of selected buildings)
Exploring new segments and foreign markets
51
Conclusion
Conclusion 1. Performance 2012/2013 Successful capital increase Continued ambition to grow, with focus on demographically
interesting segments Uncertain market environment Dividend expectations: €1.78 per share
53
Conclusion 2. Attractiveness for shareholders:
Strong underlying demographic trends (ageing ; growing population in major cities)
Diversification: fair value history of portfolio showing resilience and long term growth potential
Average remaining lease duration: 18 years long term inflation-linked cash flows
Dividend track record
54
New Website!
55
www.aedifica.be
Stefaan Gielens - Chief Executive Officer
Jean Kotarakos - Chief Financial Officer
Martina Carlsson - Control & Communication Manager
Aedifica SA/NV
Public REIT under Belgian Law
Avenue Louise 331 1050 Brussels
Tel: +32 (0)2 626 07 70 - Fax: +32 (0)2 626 07 71
info@aedifica.be
www.aedifica.be
Forward looking statement To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forward-looking statements contained in this presentation is subject to risks and uncertainties because of a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations; changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals; regulatory approval processes and other unusual items. Consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "believes," "may," "could" ,"estimates", "intends", "targets", "objectives", "potential", “outlook", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update any forward-looking statements. This presentation is directed to financial analysts and institutional investors and is not to be considered as an incentive to invest or as an offer to acquire shares. The information herein is extracted from the Company annual and half-year reports and press releases but does not reproduce the whole content of these documents. Only the French annual and half-year report and press releases form legal evidence.
58
Appendix
Belgian REIT (“sicafi / vastgoedbevak”)
Investment property : maximum 20% in one (group of) asset(s) Appraisal: At fair value on a quarterly basis by an independant expert No depreciation of properties
Dividend: at least 80% of cash flow paid out as dividend Leverage: limited to 65% of total assets (bank convenant: 60%) Tax status: Exit tax Limited corporate tax Withholding tax for residential REITs at 15%
60
Triple net leases
Definition Right known as “emphythéose/erfpacht” in
Belgium: Real estate contract Temporary right for tenant to fully make use of the
building Term between 27 and 99 years, irrevocable
Usual additional contractual provision The tenant incurs operating charges, R&M and
vacancy risk Yearly indexation (full CPI or health CPI)
61
Nov. 2005: Creation of Aedifica Dec. 2005: Filed as Sicafi/Vastgoedbevak + 1st acquisitions Oct. 2006: IPO
Portfolio = €186m*
Oct. 2010: SPO Portfolio = €423m*
Nov. 2012: SPO Portfolio = €594m* Pipeline = €132m
Milestones
62 * Marketable property at fair value (i.e. excl. development projects)
€186m
€435m
€606m €619m
31.12.2012
Geographical breakdown (1)
63
Unfurnished apartment buildings
Furnished apartment buildings
Geographical breakdown (2)
64
Senior housing Hotels and other
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