FCR Immobilien AG Growing successfully with continuity and innovation Company presentation February 2020
Business model | Positioning FCR AG – one of the leading real estate investors in Germany Persuasive, innovative business model Clear profile focused on growth Positioning as a commercial real estate specialist with a primary focus FCR Immobilien AG is a Portfolio on shopping centres and retail parks at secondary locations holder dynamically growing Covering the entire value-creation chain (acquisition, active asset management, divestment) real estate investor Portfolio Rental income from highly profitable portfolio properties and from developer property sales operating nationwide. Stability and security through solid financing and substantial hidden reserves in the real estate portfolio Seller Continuing development of the business model focusing on potentials and earnings based on technical innovations Experienced management team Efficient corporate structure FCR Immobilien AG FCR Limited FCR FCR Verwaltungs partnership Service Innovation GmbH shares GmbH GmbH 81 property management companies Frank Falk Raudies Professor Dr Professor Dr ➢ Highly efficient, slim group/organisational structure; scale effects can Fleschenberg Founder and Franz-Joseph Kurt Faltlhauser Supervisory Board CEO Busse Deputy be realised to a significant extent Chairman of the Chairman of the Supervisory Board Supervisory • • • Registered office in Munich 30 employees AG (stock corporation) since 2014 Board 2
Business model | Positioning With clear guidelines for sustainable success Consistent acquisition Top brands as solvent Value creation through Financing as business driver management tenants strong tenancy management Focus on individual real Established professional Key value creation by Sale of properties after estate properties and player in a predominantly reducing vacancies and exploiting their portfolios in established semi-professional long-term tenancy appreciation potential micro-locations with high environment extensions (growth financing) initial returns (> 10%) Acquisition volumes Development and Intensive due diligence Non-recourse financing between € 1 and 25 million, expansion of tenancy combined with a detailed (variable) for key or up to € 100 million for agreements with tenants plan for the use of the components following very promising from the same group of acquired property acquisition opportunities companies (synergy effects) Anchor tenants with good Primary focus on credit ratings (fast-moving FCR’s investment strategy Properties are always commercial real estate consumer goods) are an focuses on short residual initially acquired with FCR (shopping centres, imperative; hardly any terms, added value and equity (fast time-to-market) supermarkets, retail parks) cannibalising effects from special circumstances online business FCR’s Basic Strategy 3
Market environment Over-the-counter retail is still stronger than e-commerce Turnover development of German retail trade (in € billion) Development of online turnover in Germany (in € billion) Excludes automotive trade, petrol stations, fuels and pharmacies *2019: Forecast Legend: bar -> turnover | yellow line -> nominal change to preceding years in percent Source: German Federal Statistical Office, HDE ▪ At €8.4 billion in absolute growth, over -the-counter retail outperformed e- commerce (€4.4 billion) ▪ Online retail growth rates continue to decline (2016: 10.8%, 2017: 10.6%, 2018: 9.0%) ▪ Online share in non-food retail is 14.9%, in contrast, only 1.0% in food retail Source: HAHN Retail Real Estate Report 2019/2020 | https://www.hahnag.de/hahn-gruppe/downloads 4
Strategy Expansion of market position through market penetration and development FCR growth strategies Markets Asset classes Consistent market penetration (Development of market Germany Commerce position) + FCR’s Basic Strategy Commerce Germany Selective, profit-oriented Hotels Austria market development Residential Italy (development of business Office model) Spain Logistics Continuous business development based on existing success factors: First-rate know-how – long-term experience – broad network 5
Real Estate portfolio Commercial real estate in Germany is the core of FCR FCR is represented in Germany in all FCR generates over 95% of its earnings With a share of approx. 84%, the federal states with properties. Top 3 in the German market. asset class “Retail” is still the are currently: Lower Saxony, Baden- undisputed leader in the FCR Württemberg and NRW. portfolio. 18,4% 16,3%15,9% 83,8% 12,9% 8,9%7,8%6,9% 2,3%2,2%2,2%1,2% 0,3% North-Rhine-… Lower Saxony Baden-Württemberg Thuringia Saxony-Anhalt Saxony Brandenburg Schleswig-Holstein Bavaria Rhineland-Palatinate Mecklenburg Berlin 7,4% 3,9% 3,6% 1,3% Outside Germany: Austria, Italy, Spain 4,7% Germany is FCR’s core market. In selective cases, FCR also acquires 95,3% properties in other European countries. Portfolio structure | Last updated: 31/10/2019 | Basis: annualised actual net rental income 6
Key portfolio indicators 2014 – 2019e Actual net rents are around €20 million Leasable space (in 000 m²) Number of properties Market value of portfolio 348 2019e: € 298 million 100 400 81 80 Actual net rental return p.a. 300 248 58 2019e: 9.2% 60 YOY YOY 41 200 140 40 (2018- (2018- Potential net rental return p.a. 2019e) 83 2019e) 18 100 2019e: 10.5% 12 20 + 40% + 40% 51 11 48 0 0 WAULT 2014 2015 2016 2017 2018 2019e 2014 2015 2016 2017 2018 2019e 2019e: 4.5 years Actual net rental income Potential net rentals (p.a., in € million) (p.a., in € million) 2014 – 2019e: 22,6 30 • Acquired properties: 105 19,8 20 • Sold properties: 24 17,7 20 14,8 10,9 YOY 2019e: YOY 9,5 6,3 10 10 (2018- (2018- • Acquired properties: 28 5,5 2019e) 3,9 2019e) 3,2 • Sold properties: 5 + 34% 1,2 + 28% 1,1 0 0 2014 2015 2016 2017 2018 2019e 2014 2015 2016 2017 2018 2019e 7
Key financial indicators 2014 – 2019e Profitable, fast-growing - and that for years EBITDA (in € million) Financial Calendar: Turnover (in € million) Publication of preliminary figures for 17,6 20 60,0 the 2019 financial year on February 46,2 19, 2020 with conference call 15 10,1 37,2 40,0 10 YOY YOY Press release 01/2020: 4,9 (2018- (2018- ▪ Former C&A building sold 20,0 16,4 3,7 12,7 5 2019e) 2019e) 3,1 12,1 1,5 ▪ 7 properties sold in 2019 + 24% + 74% 3,3 ▪ Earnings contribution of over 0 0,0 2014 2015 2016 2017 2018 2019e €12 million 2014 2015 2016 2017 2018 2019e EBIT (in € million) EBT (in € million) 12,3 15 6,7 8 6 7,4 10 4 YOY YOY 3,0 5 (2018- 3,7 (2018- 1,9 3,0 1,3 2 2019e) 2019e) 2,3 0,8 1,1 0,8 + 123% + 66% 0 0 2014 2015 2016 2017 2018 2019e 2014 2015 2016 2017 2018 2019e 2014-2018: audited consolidated annual financial statements 8
Key financial indicators 2016 – 2019e Significant growth in all key figures compared to 2018 FFO 2 EPRA-NAV (in € million) (including revenues from sales, in € million) 12 9,6 10 97,5 100 75,3 8 80 60 50,2 YOY 6 4,1 (2018- YOY 40 26,7 2019e) (2018- 4 FFOPS 20 + 30 % 2019e) (in €) 2,1 FFOPS FFOPS FFOPS + 134% (in €) (in €) 1,3 0 2 (in €) 1,00 0,49 2016 2017 2018 2019e 0,26 0,16 0 2016 2017 2018 2019e ▪ Paid-up registered share capital: 9.146.404,00 Euro * 2016-2018: audited consolidated annual financial statements ▪ FFOPS: share split adjusted EPRA-NAV: 97,5 Mio. Euro ▪ EPRA-NAV/share: 10,66 Euro 9
Financing / Accounting Strong growth is primarily financed through debt products Ratio - market value / debt burden / interest expense Financing strategy: (2019e, annualized, in € million) ▪ Determined exploitation of opportunities provided by low- Fair value 298 interest environment; exploitation of benefits of leverage effect Hidden ▪ Risk management: non- reserves: Book value recourse based financing 222 €76 million ▪ Preferred financing through local or regional providers Bond 67 Financing Banks 152 Accounting (HGB [German Total 219 Commercial Code]) Rental income ▪ Entered into balance sheet at 4,0 Bond (5.9%) € 19.8 million book value, hidden reserves are Interest expenses Banks (1.8%) 2,7 realised upon sale 6,7 Total (3.1%) 10
Financing / Accounting Conversion from HGB to IFRS Balance sheet 31.12.2017 31.12.2018 30.06.2019 (principal positions, in € million) Fixed assets 71.8 173.2 183.5 HGB Current assets 8.1 10.5 17.7 Equity 6.9 9.0 16.5 Liabilities 71.8 166.9 176.2 Balance sheet total 80.1 184.3 201.6 Fixed assets 71.8 239.4 251.7 Current assets 8.8 10.3 19.4 IFRS Equity 6.8 69.8 77.7 Deferred taxes 0 15.5 15.2 Liabilities 73.4 164.5 178.2 Balance sheet total 80.2 249.8 271.1 11
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