EMPOWERING BUSINESS, UNLOCKING POTENTIAL Leading owner and - PowerPoint PPT Presentation

EMPOWERING BUSINESS, UNLOCKING POTENTIAL Leading owner and operator of business parks, offices and industrial complexes in Germany CAPITAL MARKETS DAY 16 MAY 2019 1

Disclaimer This document may contain certain ‘forward - looking statements’. This presentation is published solely for information purposes. This Such statements reflect current views on, among other things, our markets, presentation does not constitute an offer to sell or the solicitation of an offer activities, projections, objectives and prospects. By their nature, forward- to subscribe for or buy any security, nor a solicitation of any vote or looking statements involve risk and uncertainty because they relate to future approval in any jurisdiction, nor shall there be any sale, issuance or transfer events and circumstances. Actual outcomes and results may differ of the securities referred to in this presentation in any jurisdiction in materially from any outcomes or results expressed or implied by such contravention of applicable law. No representation or warranty, either forward-looking statements. Any forward-looking statements made by or on express or implied, is provided in relation to the accuracy, completeness or behalf of Sirius Real Estate Limited speak only as of the date they are reliability of the information contained herein. The distribution of this made, and no representation or warranty is given in relation to them presentation in jurisdictions other than the UK may be restricted by law and (whether by Sirius Real Estate Limited or any of its associates, directors, regulation and therefore any persons who are subject to the laws of any officers, employees or advisers), including as to their completeness or jurisdiction other than the UK should inform themselves about, and observe, accuracy or the basis on which they were prepared. Nothing in this any applicable requirements. All opinions expressed in this presentation are presentation should be construed as a profit forecast or profit estimate. subject to change without notice and may differ from opinions expressed elsewhere. Other than in accordance with our legal and regulatory obligations (including under the JSE Listings Requirements, the UK Financial Conduct All numbers provided are as at 30 September 2018 unless otherwise stated. Authority’s Listing Rules, the Disclosure Rules and Transparency Rules and the Market Abuse Regulation), Sirius Real Estate Limited does not undertake to update forward-looking statements to reflect any changes in Sirius Real Estate Limited’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. 2

Welcome and Housekeeping 3

Introductions Andrew Coombs, Group CEO Simon French, Chief Economist, Panmure Gordon Diarmuid Kelly, Finance Director, Sirius Facilities GmbH Kremena Wissel, Marketing Director, Sirius Facilities GmbH Rüdiger Swoboda, Managing Director, Sirius Facilities GmbH 4

Agenda Introduction & Welcome Summary 12:15 10:30 Andrew Coombs, Group CEO Andrew Coombs, Group CEO Economic Outlook 12:20 Q&A 10:35 Simon French, Chief Economist, Panmure Gordon Sirius Strategy 12:30 Lunch 11:00 Andrew Coombs, Group CEO Sirius - AXA RE Joint Venture - Titanium 11:30 • Commercial Rationale, Diarmuid Kelly, Finance Director • Data Driven Asset Management, Kremena Wissel, Marketing Director • Field Operations, Rüdiger Swoboda, Joint Managing Director 5

Economic Outlook Simon French Chief Economist, Panmure Gordon 6

ECONOMIC OUTLOOK SIRIUS REAL ESTATE, CMD Simon French ¦ Chief Economist

E C O N O M I C O U T L O O K Global growth set to pick up later in 2019 Europe faces modest trend growth Key Themes 7 US Presidential Election 2019 2020 6 Chinese Stimulus 5 4 Weak Productivity GDP, YoY % 3 Lack of spare capacity 2 1 Popularism 0 Source IMF Private and Confidential Page 8

E C O N O M I C O U T L O O K Recent slowdown has underlying theme Slowdown since Q1 2018 A story of two German economies 60 3% 65 58 60 2% Output PMI 56 55 54 50 1% 52 45 50 0% 40 May 2016 May 2017 May 2018 May 2019 May May May May 2016 2017 2018 2019 Global PMI Germany, PMI German GDP, YoY % (RHS) Services Manufacturing Source: Markit, De Statis Private and Confidential Page 9

E C O N O M I C O U T L O O K Germany exposed to international trade volumes Global trade has recently gone into reverse High sensitivity to global trade 6% 50 40 4% 30 20 2% 10 0 0% Exports, % of GDP -2% Exports, % of GDP (Goods) Jan 2013 Jan 2015 Jan 2017 Jan 2019 Source: CPB, Eurostat Private and Confidential Page 10

E C O N O M I C O U T L O O K Forget the clichés about Germany Services are 70% of the German economy… And a similar share of employment… 100 75 50 25 0 Employment Share Services Manufacturing Services Industry Agriculture Construction Agriculture Source: De Statis Private and Confidential Page 11

E C O N O M I C O U T L O O K Autos. Part of the story – but not the whole story ZEW: General VS Autos Autos as % of GDP 60 500 100 442 40 375 75 20 Auto Sales, €bn 0 % of GDP 250 50 -20 -40 125 25 13,5 -60 2010 2013 2016 2019 0 0 Automobile, Profitability Total Auto Sales % of GDP (RHS) All Sectors, Profitability Source: ZEW, Destatis Private and Confidential Page 12

E C O N O M I C O U T L O O K Consumer confidence underpinned by falling unemployment… Consumer Confidence hovering around 20Y high Unemployment in a decade- long decline…. 12 20 GFK CONSUMER CLIMATE SURVEY 10 15 8 Unemployment Rate, % 10 6 5 4 0 2 -5 0 2001 2005 2009 2013 2017 Q1 2001 Q1 2009 Q1 2017 Source: Eurostat, GfK Private and Confidential Page 13

E C O N O M I C O U T L O O K German households deleveraging and building resilience… Household debt is steadily falling…. Savings ratio steady, in contrast to other G7 economies… 75 11 10 70 Household Savings Ratio Hhld debt, % of GDP 9 65 8 60 7 55 6 2000 2006 2012 2018 50 Germany G7, Ex Germany 2000 2006 2012 2018 Source: De Statis Private and Confidential Page 14

E C O N O M I C O U T L O O K With healthy public finances… Public sector debt less than 60% of GDP.. German state running a steady fiscal surplus… 120 2,5 100 0 PS Debt, % of GDP 80 PS Deficit, % of GDP 60 -2,5 40 -5 20 0 -7,5 1999 2004 2009 2014 2019 1999 2004 2009 2014 2019 Germany Eurozone, ex Germany Germany Eurozone, ex Germany Source: Eurostat Private and Confidential Page 15

E C O N O M I C O U T L O O K 2008-14 German Economy GDP, recovered faster… Hours responded to the economic crisis 108 100 Hours per Worker 104 99 100 2008=100 98 96 97 92 96 Q1 2008 Q1 2011 Q1 2014 2008 2009 2010 2011 Germany Eurozone, Ex Germany Germany EU, Ex Germany Unemployment rate barely broke downward trajectory Effective policy levers key to resilience 14 12 10 Une. Rate, % 8 6 Reduced Reduced 4 Kurzarbeit 2 Hours “Scarring” 0 Q1 2007 Q1 2010 Q1 2013 Germany Eurozone Source: Eurostat Private and Confidential Page 16

E C O N O M I C O U T L O O K Corporate sector underpinned by low costs… Insolvencies falling; accommodative credit conditions… Cost of construction new CRE picking up… 12000 8 8% 7 6% 10000 6 5 4% 8000 4 2% 3 6000 2 0% 1 4000 0 -2% Q1 2000 Q1 2006 Q1 2012 Q1 2018 2007 2010 2013 2016 2019 Insolvencies per quarter Industrial Buildings, YoY % Office Buildings, YoY % Average Corporate Borrowing Rate, % (RHS) Core CPI, YoY % Source: Eurostat, De Statis Private and Confidential Page 17

E C O N O M I C O U T L O O K Key Risks 1.Incomplete Monetary Union 2.Global Trade Conflict 3.Competitive Devaluation 4.Unfavourable Demographics 5.Ideological policymaking 6.Merkel Transition 7.Change at the ECB Private and Confidential Page 18