H1 2015 RESULTS ANALYSTS CALL Aspr pria Uh Uhlenh enhor orst st – Hambu burg (DE)
TABLE OF CONTENTS - Company Strategy - Portfolio - Healthcare Segment - Office Segment - Financial Resources - H1 2015 Earnings - Outlook and Guidance - Appendices 2 Q1 2015 RESULTS – ROADSHOW PRESENTATION
H1 2015 HIGHLIGHTS - Pursuing growth in healthcare in line with strategy: • € 82 million of new investments in Healthcare segment in H1 2015 • Healthcare segment represents now 43.4% of the total portfolio vs. 39.5% for offices - Office segment is resilient : • Total lettings/renegotiations of 24,000m² of offices representing € 16.3 million of guaranteed revenues • Reconversions of offices in residential are completed and 100% of the units sold - Timely access to capital markets: • Private Placement of bonds for € 190 million • Successful capital increase with preferential rights for € 285.4 million - Optimizing financial structure: • Debt ratio down to 43% • Cost of debt reduced to 2.8% and average debt maturity increased to 4.5yr • S&P rating upgrade from BBB- to BBB (stable outlook) - Solid financial results: • Net current result (excl. IAS 39) of € 3.35 (vs. € 3.39 at 30.06.2014) • Current cash flow per share: € 3.06 (+12% compared to 2014) 3 H1 2015 RESULTS – ANALYSTS CALL
COMPANY STRATEGY Nu Nursi sing ng Home e Orchi hidée ée – Ittre e (BE)
STRATEGIC FOCUS Driven by Driven by Healthcare real estate demography economics Offices in Brussels in Europe • Comprehensive & • Acquisitions in new pro-active local markets (namely the operating platform Netherlands & • Renovation Germany) programs to • Greenfield projects in upgrade the quality more mature markets • Reconversion to (Belgium and France) alternative usages • Further diversification • Arbitrage within a per country, per portfolio kept medical specialty and above critical size per operator Managed by a 115 people strong team with a deep knowledge of markets and a constant commitment to efficiency 5 H1 2015 RESULTS – ANALYSTS CALL
RISK PROFILE 11 YEARS Average lease duration 24% 43% Office space Healthcare real let to public Moderate estate sector Risk Profile & Sustainability of earnings 95.5% 43% Occupancy Debt ratio rate Li Living ngst ston one e I buildi ding ng - Brus usse sels (BE) 6 H1 2015 RESULTS – ANALYSTS CALL
PORTFOLIO Nu Nursi sing ng home e Damiaa aan – Tremel elo o (BE)
PORTFOLIO AT 30.06.2015 Fair value of total portfolio: € 3,274 million Portfolio breakdown by segment: Portfolio breakdown by location: Others Germany Property of Netherlands 1% 2% distribution 7% networks Healthcare 16% real estate France 43% 15% Belgium Offices 76% 40% 8 H1 2015 RESULTS – ANALYSTS CALL
AVERAGE RESIDUAL LEASE LENGTH Average residual lease length of 11 years, well above European peers 35 29 30 25 21 20 15 13 15 11 10 7 6 5 5 0 Healthcare Healthcare Healthcare Healthcare Offices Pubstone Cofinimur I Total BE FR NL DE 9 H1 2015 RESULTS – ANALYSTS CALL
PORTFOLIO YIELDS AT 30.06.2015 Stable yields across segments in H1 2015 Gross yield: 6.9%/Net yield: 6.4% 7.7% 8% 6.9% 6.6% 7% 6.4% 6.4% 6.3% 6.3% 6.3% 6% 5% 4% 3% 2% 1% 0% Healthcare Offices Distribution networks Total Gross yield Net yield 10 H1 2015 RESULTS – ANALYSTS CALL
PORTFOLIO GROWTH & VALUATION Portfolio investment value:+2.3% Portfolio valuation on a LFL basis:-0.3% Evolution of portfolio investment value (in M € ): Unrealized gain/loss on a LFL basis 3.600 1,0% 0.7% 0,5% 3.400 98 20 -0.1% 5 6 0,0% 3.406 Healthcare Offices Distribution Total 3.329 networks -0,5% -0.3% 3.200 -1,0% 3.000 -1,5% -1.4% Portfolio Investments Divestments Writeback Change in Portfolio investment of lease investment investment -2,0% value at payments value value at 31.12.2014 sold 30.06.2015 11 H1 2015 RESULTS – ANALYSTS CALL
OCCUPANCY RATE Stable occupancy rate: 95.5% (vs. 95.2% at 31.12.2014) Occupancy rate for Brussels office market at 30.06.2015*: 89.9% 100% 99.2% 98.5% 90% 95.5% 90.8% 80% 70% 60% 50% 40% 30% 20% 10% 0% Healthcare real estate Offices Property of distribution Total networks * Source: DTZ 12 H1 2015 RESULTS – ANALYSTS CALL
MAIN TENANTS Top 10 tenants: 69% of rental income 1 st tenant: KORIAN-MEDICA Group Public sector > 10% of rental income 18% 15.5% 16% 13.8% 14% 12% 9.7% 10% 8% 5.8% 5.4% 6% 4.7% 4.2% 3.7% 3.6% 2.9% 4% 2% 0% 13 H1 2015 RESULTS – ANALYSTS CALL
HEALTHCARE SEGMENT CONTINUOUS GROWTH IN LINE WITH STRATEGY Reval alidat ation on clini nic – Baden den Baden den (DE)
THE NETHERLANDS - Acquisition of two medical office centers • Assets located in Almere (2,380m²) and Voorschoten (1,320m²) • Investment: € 5.7 million • Operator: DC Groep • 15 year “triple net” lease • Initial yield: 7.45% - Acquisition of a facility for disabled people(Lopik) • New construction (2,883m²) • Investment: € 3.3 million • Operator: Philadelphia Zorg • 15 year “double net” lease • Initial yield: 6.85% Me Medi dical al offi fice center er - Almer ere (NL NL) 15 H1 2015 RESULTS – ANALYSTS CALL
GERMANY - Acquisition of two high-end sport and wellness centres • Assets located in Hamburg (7,800m²) and Hanover (10,000m²) • Investment: € 53.6 million • Operator: Aspria Group • 30 year “double net” lease • Initial yield: 7.6% Aspr pria Ma Masc schs hsee- Hanov over er (DE) - Sport and wellness facilities located in prestigious locations - Extension of healthcare operations in Germany with high quality partner Aspr pria Uh Uhlenh enhor orst st- Hambu burg (DE) 16 H1 2015 RESULTS – ANALYSTS CALL
PROJECTS DELIVERIES IN BELGIUM - Den Brem: • Nursing home located in Rijkevoorsel • Extension: +36 beds • Operator: Armonea • 27year “triple net” lease • Delivered in Q1 2015 • Investment: € 3 million • Initial yield: 6.30% - Maison Saint Ignace: • Nursing home located in Brussels • Renovation Den Brem- Rijkev evoorsel el (BE) • Operator: Senior Assist • 27year “triple net” lease • Delivered in Q2 2015 • Investment: € 0.8 million • Initial yield: 6.28% 17 H1 2015 RESULTS – ANALYSTS CALL
OFFICE SEGMENT RESILIENT OFFICE ACTIVITY IN H1 2015 Off ffice e buildi ding Garden den Square – Anver ers (BE)
OFFICE PORTFOLIO ACTIVITY Good resilience of the office portfolio 90.8% occupancy rate (vs. 90.4% at 31.12.2014) Arbitrage opportunities - Letting activity • During the first 6 months of 2015, Cofinimmo signed leases for 24,000m² of office space, i.e. € 16.4 million of guaranteed revenues, net of rent-free periods. • Occupancy rate at 90.8% (above Brussels office market) - Divestment • Sale of the Parabole building – Brussels CBD • Price agreed of € 5.5 million, above investment value 19 H1 2015 RESULTS – ANALYSTS CALL
OFFICE RECONVERSIONS PROJECTS - Reconversion of obsolescent offices into other uses, offering better capital recovery than renovations as offices - Reconversion in residential (24,000 sqm) • Reconversion works for Woluwe 34 and Livingstone I buildings have been delivered in H1 2015 • 100% of the residential units sold • Proceeds received in H1 2015: € 14 million - Reconversion in healthcare property (7,000 sqm) • Reconversion of Woluwe 106-108 office building into a nursing home • Investment: € 13 million • Signature of a 27 years long lease with the healthcare operator Vivalto • Planning permission under progress • Yield on cost (book value + works): 5.88% • Expected delivery date: Q3 2017 Woluwe 34 – Brussels (BE) 20 H1 2015 RESULTS – ANALYSTS CALL
FINANCIAL RESOURCES CONTINUOUS BALANCE SHEET OPTIMISATION Woluwe 34 – Brussels (BE)
TIMELY ACCESS TO CAPITAL MARKETS (1) - Private Placement for € 190 million: • 7yr bond • Fixed coupon of 1.93% Bonds In M € : 300 250 200 191 150 173 100 190 140 50 100 50 50 0 2009 2010 2011 2012 2013 2014 2015 Non convertible Convertible 22 H1 2015 RESULTS – ANALYSTS CALL
TIMELY ACCESS TO CAPITAL MARKETS (2) - Successful capital increase with preferential rights for € 285.4 million: • Issue price : € 95 per share • Dividend entitlement from 13.05.2015 • 1 new share for 6 existing shares • 84.3% taken by existing shareholders • Market capitalisation after the rights issue: > € 2 billion Equity In M € : 300 250 200 150 285 44 100 72 98 32 50 69 92 75 63 38 33 31 22 19 11 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Contribution in kind of assets Sale of treasury shares Stock dividend Rights issue 23 H1 2015 RESULTS – ANALYSTS CALL
FINANCIAL DEBT - Diversified sources of funding with debt Debt breakdown capital market (69%) and credit facilities ( € 1,464 million): (31%) - Proactive management of credit lines: • Extension of several credit lines for a total 207 Bank facilities 14% amount of € 297 million 457 Non convertible • € 959.9 million available under committed 31% bonds & LT commercial paper credit lines 390 Convertible bonds 27% - Rating upgrade by S&P from BBB- to BBB Short-term for the long term and from A3 to A2 for 410 commercial paper & 28% others the short term (stable outlook) 24 Q1 2015 RESULTS – ROADSHOW PRESENTATION
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