CONDENSED CONSOLIDATED FINANCIAL STATEMENTS for the period 4 January to 31 December 2016 Echo Polska Properties N.V.(Incorporated in The Netherlands) (Company number 64965945) | JSE share code: EPP | ISIN: NL0011983374 | (“EPP” or “the Company” or “the Group”) www.echo-pp.com
Disclaimer This document has been prepared and issued by and is the sole responsibility of the management of Echo Polska Properties N.V. (the “Company” or “EPP”) and its subsidiaries. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the Company’s business, financial condition and results of operations. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and words of similar meaning, reflect the Directors’ beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. The information on which these statements has been based has not been reviewed or reported by EPP’s auditors. This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers, Java Capital or any of its directors or employees or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information. 2
Contents 1. Strategy & Investment case 2. Financial review 2016 3. Polish macroeconomics 4. Portfolio overview 4.1 Retail 4.2 Office 4.3 Developments 5. Prospects 3
1. Strategy & Investment Case www.echo-pp.com
EPP at a glance DUAL LISTINGS ON LTV OF WARSAW DEVELOPMENT PROJECT LuxSE AND 52.7% (56.7% post IPO ) 70% INTEREST IN PLANNED: JSE MAIN BOARD Target of 50% 110 000m² Towarowa • Dominant mixed use scheme DISTRIBUTABLE INCOME YIELDING PORTFOLIO AT IPO • Targeted completion in 2021 € 71 million (€64 million €1. 2 billion forecast at IPO) 10 Retail (78% by value) Distributable income for 6 Office projects - 14 buildings (22% by value) 12 months to 31 Dec 2017 CURRENT & ANNOUNCED NET ASSET VALUE FORWARD YIELD OF ACQUISITIONS YIELDING PORTFOLIO € 683 milion 8.0%* €1. 6 billion 12% increase in NAV per share 15 Retail (74% by value) *Forward yield to 12 months ended 31 Dec 2017. post IPO 9 Office projects - 18 buildings (26% by value) Assuming a price of R18.50 and an EUR/ZAR rate of €1.16 per share, NAV excludes deferred tax R13.70. 5
EPP Team Management HADLEY DEAN CHIEF EXECUTIVE OFFICER MICHAŁ MACIEJ DROZD JACEK BAGIŃSKI RAFAŁ KWIATKOWSKI WOJCIECH KNAWA CHIEF FINANCIAL ŚWIERCZYŃSKI OUTGOING CHIEF CHIEF OPERATING EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR FINANCIAL OFFICER OFFICER OFFICER Property Management Asset Management 6
EPP Team Structure MANAGEMENT BOARD FINANCE & TRANSACTION & PROPERTY ASSET MANAGEMENT COMMUNICATIONS/IR ACCOUNTING LEGAL MANAGEMENT Controlling Acquisitions Retail Operations Retail Leasing Marketing & PR Planning Compliance Office Operations Office Leasing Administration Treasury Legal Integration Team Innovations HR Reporting Corporate Facility Management EPP University Budgeting Governance Analysis & Reporting Transactions IT Strategic partnership with Echo Investment SA, >100 employees Griffin RE and Redefine 7
Highlights post listing VACANCY (GLA): OVERSUBSCRIBED CAPITAL RAISE OF WINNER OF €100 million RETAIL 1.7% (as of Dec 2016) BEST SHOPPING CENTRE OF PROPERTY THE YEAR – Galeria Echo MANAGEMENT OFFICES 4.3% (as of Dec 2016) AT 7.5% FORWARD YIELD RETAIL PROPERTY MANAGER COMPANY OF THE OF THE YEAR – Grzegorz YEAR 2017 Footfall increase (yoy) 3.4 % Czekaj ANNUAL CEE SUCCESSFULLY EXECUTED OR Portfolio value increase 3.3% EUROBUILD AWARDS 2016 RETAIL AWARDS SECURED ACQUISITIONS TO DATE (€41million) € 418 million RESPONSE TO CHANGES IN TAX LEGISLATION ON TRACK TO DELIVER SINCE LISTING INCREASED PORTFOLIO BY 35% IN VALUE AND FY17 DPS FORECAST: • COMPLETION OF INTERNAL RESTRUCTURE € cents 10.8 • PREPARATION FOR REIT REGIME 42% IN GLA 8
EPP vision Creating a Polish national champion that leverages its scale and relationships to provide a leading and largest cash-generating property group that will deliver consistently high returns to our shareholders. Asset Development Acquisitions Management & Extensions 9
EPP Investment Case • 4Ps (Pure Polish Property Play) • €1 .6 billion quality portfolio of modern buildings throughout Poland • High growth, stable Polish economy, strong credit metrics • Retail bias complemented by offices • Targeting strong compounded growth in NAV and dividend per share • Attractive and secure yields • Strong proprietary pipeline • Experienced management team • Strategic partners (Echo Investment SA, Griffin RE and Redefine Properties) 10
2. Financial review 2016 www.echo-pp.com
Financials at a glance € cents 3.14 DPS (for the 4 month period to 31 Dec 2016) Distributable Earnings (for the 4 month period to € 18.4 million 31 Dec 2016) Total NAV 1 €6 83 million €1.16 NAV per share Total assets €1 509 million €797 million Market capitalisation 1.85% Cost of debt LTV 52.7% 2 1 NAV excluding deferred tax 2 Value includes the investment in joint venture – Towarowa and unrestricted cash 12
Summary statement of comprehensive income Actual for the PLS for the Variance to year ended year ended PLS 31 Dec 2016 31 Dec 2016 EUR million 95.3 94.0 1.3 Rental income and recoveries (29.2) (29.9) 0.7 Property expenses 66.1 64.1 2.0 Net property income (0.4) (0.2) (0.2) Other income / (expenses) (12.5) (9.6) (2.9) Administrative expenses and corporate costs 53.1 54.2 (1.1) Profit from operations (18.0) (19.4) 1.4 Finance income / (expenses) 0.0 0.3 (0.3) Amortisation of debt structuring fee (0.9) (0.8) (0.1) Tax (0.3) (0.2) (0.1) Prepaid rental income 34.0 34.3 (0.3) Distributable income attributable to shareholders 18.4 18.0 2.2% Distributable earnings for the period 1 Sept to 31 Dec 2016 2.44 2.43 0.5% Dividend for the period to 31 Aug 2016 (cents) 3.14 3.07 2.2% Dividend for the period 1 Sept to 31 Dec 2016 (cents) 13
Summary statement of comprehensive income Actual for the Actual for the 6 month PLS for the period ended period ended year ended 30 Jun 2016 31 Dec 2016 31 Dec 2016 EUR million 38.5 56.8 94.0 Rental income and recoveries (12.3) (17.0) (29.9) Property expenses 26.2 39.8 64.1 Net property income (0.9) 0.5 (0.2) Other income / (expenses) (5.7) (6.8) (9.6) Administrative expenses and corporate costs 19.6 33.5 54.2 Profit from operations (9.9) (8.1) (19.4) Finance income / (expenses) - - 0.3 Amortisation of debt structuring fee (0.6) (0.3) (0.8) Tax (0.1) (0.2) (0.2) Prepaid rental income 9.0 25.0 34.3 Distributable income attributable to shareholders 14
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