Metrovacesa Sa · BME:MVC
Metrovacesa Sa — FY2002 Earnings Presentation
40 slides from Metrovacesa Sa's earnings presentation, March 2003
Slide 1: Summary of 2002 Results & Summary of Metrovacesa's Current Business Plan
Summary of 2002 Results & Summary of Metrovacesa’s Current Business Plan March 2003
Slide 2: Disclaimer
madrid\0660503 5/22/2003 5:49 PM Disclaimer This document contains market assumptions, different sourced information and forward-looking statements with respect to the financial condition, result of operations, business, strategy and the plans of Metrovacesa, S.A. and its subsidiaries Such forward-l
Slide 3: Content
madrid\0660503 5/22/2003 5:49 PM Content 1. 2002 Results Summary 2. New management organisation 3. Summary of Metrovacesa´s current business plan 4. 2003 Results Estimates & Conclusions 2
Slide 4: 1- 2002 Results Summary
madrid\0660503 5/22/2003 5:49 PM 1- 2002 Results Summary 3
Slide 5: 2002 Results Summary: Main Figures
madrid\0660503 5/22/2003 5:49 PM 2002 Results Summary: Main Figures € Million 2001 2002 Change % Total Revenues 413.9 460.0 11.1% Total EBITDA 167.0 168.0 0.6% EBIT 125.2 139.3 11.2% Net Income 100.3 125.0 24.7% GAV 3,403.0 3,598.0 5.7% NAV 2,408.6 2,460.6 2.2% NNAV(2) 2,055.6 2,109.5 2.6% Net Debt/
Slide 6: Rental Unit: Rents Growth
madrid\0660503 5/22/2003 5:49 PM Rental Unit: Rents Growth Rental Growth Breakdown % 20 Like-for-Like Rents 2001 €125.9m 16.9 Growth 14.3 Like-for-Like €5.9m 15 New Like-for-Like 9.8 €7.2m 10 Investments Growth 5.3% 5.9 Disposals €6.2m 5.1 5 3.3 Total Rents €132.8m 0.3 2002 0 Industrial Retail Parki
Slide 7: Evolution of Housing and Landbank Sales
madrid\0660503 5/22/2003 5:49 PM Evolution of Housing and Landbank Sales Housing Sales Land Bank Sales €m €m .5% % 250 0 100 6.1 GR: 2 GR: 13 C A 210.9 CA 84.0 200 80 76.9 166.7 170.3 150 60 100.1 95.0 100 40 20.3 50 20 14.3 2.7 0 0 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 6
Slide 8: Gross Contribution by Business Area
madrid\0660503 5/22/2003 5:49 PM Gross Contribution by Business Area 117.6 Rental 126.0 Housing Asset 27.3 26% Sales 51.6 9.1 Rental Services 50% Services 7.7 3% 63.6 Housing 63.8 Asset Sales 21% 0 20 40 60 80 100 120 140 €M 2002 Contribution Breakdown 2002 2001 7
Slide 9: Asset Valuation (NAV and GAV)
madrid\0660503 5/22/2003 5:49 PM Asset Valuation (NAV and GAV) € Million 2001 2002 Change % Rental Unit GAV 2,406.6 2,499.9 3.9% Housing Unit GAV 996.4 1,098.1 10.2% Total GAV 3,403.0 3,598.0 5.7% Equity 649.5 709.0 9.2% + Capital Gains Rental Unit 1,313.5 1.309.6 (0.3%) + Capital Gains Housing Unit
Slide 10: Valuation Details
madrid\0660503 5/22/2003 5:49 PM Valuation Details 1. Rental Assets(1) 2,169 100% 60% Offices 993 46% 28% Shopping Centres 579 27% 16% Hotels 158 7% 4% Retail 115 5% 3% Housing 206 9% 6% Car Parks 67 3% 2% Industrial 43 2% 1% Retirement Homes 8 0% 0% 2. Land Bank and Development for Rentals(1) 331 1
Slide 11: Rental Division Valuation Details
madrid\0660503 5/22/2003 5:49 PM Rental Division Valuation Details Valuation Details per Product Rents Potential Up-side Initial Yield Market Value Product Yield Rents m2 GLA Eur/m2 30% Offices 5.5% 6.7% 302,547 3,281 Shopping Centres 6.6% 7.3% 155,082 3,733 21% Hotels (1) 9.5% 9.5% 66,132 2,393 20%
Slide 12: Housing and Landbank Valuation Details
madrid\0660503 5/22/2003 5:49 PM Housing and Landbank Valuation Details 2002 Value Breakdown by Type Area per Region North Portugal Andalusia Final Land 7% 4% 16% Under Bank Levante Development 23% 2% 23% Galicia 3% Castilla 9% MT Land Bank LT Land Bank 13% Cataluña 41% Centre 19% 40% Land Bank Valu
Slide 13: Financial Overview
madrid\0660503 5/22/2003 5:49 PM Financial Overview Net Debt / GAV Ratio of 25.6%, far below the current European average 709.0 Equity 2,499.9 NAV - €2,460.6m Market Value Rental Assets 1,309.6 Capital Gains Rental Assets Capital Gains 442.0 Housing 1098.1 946.1 Market Value Housing Financial Debt
Slide 14: 2- New management organisation
madrid\0660503 5/22/2003 5:49 PM 2- New management organisation 13
Slide 15: Internal reorganisation
madrid\0660503 5/22/2003 5:49 PM Internal reorganisation Creation of “Executive Committee” and strategy and business area sub- committees Creation of a “Corporate Strategy Department” to implement the business plan, responsibilities for achieving business goals, monitor its implementation and re
Slide 16: New Executive Management Team
madrid\0660503 5/22/2003 5:49 PM New Executive Management Team (Former employer, Years in sector) Manuel González (Bami, 32) CEO (Bami, 30) Juan Suquet Carlos Vara (Metrovacesa, 12) Advisor to CEO - Finance Advisor to CEO - Operations José I. Aguirre Javier Moreno Alejandro Uriarte José Garaulet Car
Slide 17: Metrovacesa's management team best qualified to deliver shareholder value
madrid\0660503 5/22/2003 5:49 PM Metrovacesa´s management team best qualified to deliver shareholder value New management organisation combines best managerial skills and knowledge of their respective business segments Team combines best professionals from Metrovacesa and Bami together with new
Slide 18: Managers Coming From Bami Have Proven Strong Track Record
madrid\0660503 5/22/2003 5:49 PM Managers Coming From Bami Have Proven Strong Track Record Prior to start managing Bami (May 1997), the company had accumulated losses of €60m and annual sales of €18m The management team achievements since then include: Turn around to profitability in one year
Slide 19: 3- Metrovacesa's Current Business Plan
madrid\0660503 5/22/2003 5:49 PM 3- Metrovacesa´s Current Business Plan 18
Slide 20: Introduction
madrid\0660503 5/22/2003 5:49 PM Introduction Metrovacesa - Main Considerations Current Business Plan Foster growth of Metrovacesa Increasing focus on NAV growth Increase profitability growth Short term growth based on the housing division, while medium and long term growth based on the rent
Slide 21: Introduction: 2003-2007 Business Plan
madrid\0660503 5/22/2003 5:49 PM Introduction Metrovacesa - 2003-2007 Business Plan 5-year GAV growth of 35%-40%, implying a CAGR of 6%-7% By 2007 we expect development assets to represent 30%-35% of total GAV 5-year after-tax NAV growth of 30%-35%, implying an approximate CAGR of 6% 5-year
Slide 22: Introduction: 2003-2007 Business Plan
madrid\0660503 5/22/2003 5:49 PM Introduction Metrovacesa - 2003-2007 Business Plan Total Gross Margin increase of 60%-65%, with a CAGR of 9%-11% 2002 2007 Other Other 1% 4% Housing Rental Housing 39% 64% 32% Rental 60% 21
Slide 23: Introduction: 2003-2007 Business Plan
madrid\0660503 5/22/2003 5:49 PM Introduction Metrovacesa - 2003-2007 Business Plan 5-year EBITDA increase of 70%-75%, with an approximate 11% CAGR 5-year EBIT increase of 75%-80%, increasing at a CAGR of 12% 5-year Net Income growth of 85%-95% (CAGR of 14%) additional to 25% increase in 2002
Slide 24: Rental Division
madrid\0660503 5/22/2003 5:49 PM Rental Division 23
Slide 25: Business Plan - Rental Division
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Core Businesses Metrovacesa will focus on three strategic sectors believed to offer highest growth potential Office - focus on NAV growth assets through acquisitions and developments Shopping Centres - expansion through developme
Slide 26: Business Plan - Rental Division
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Market Overview Madrid Office Sector has reached Bottom of the Cycle Prime Madrid rents have fallen by 23% but vacancy remains high at 5.8% Madrid periphery markets are still vulnerable Offices Barcelona city centre markets hav
Slide 27: Business Plan - Rental Division
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Metrovacesa - 2003-2007 Business Plan 5-year Total Revenues increase of 60%-65%, with an approximate CAGR of 10%-12% Rental income growth of 55%-60% with a CAGR of 9%-10%, maintaining current levels of business mix 250 6% 200 8% 15
Slide 28: Business Plan - Rental Division
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Metrovacesa - 2003-2007 Business Plan Rental income growth of 55%-60% Estimated Rents Growth 175% 150% 45% 125% 16% 100% -43% 42% 160% 75% 50% 100% 25% 0% Rents 02 Like-for-Like Disposals Projects under New Rents 07 Development Inves
Slide 29: Business Plan - Offices
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Metrovacesa Business Plan - Offices Focus on NAV and cash flow growth and yield Accelerate rotation through disposition of mature and low yield assets Fine tuning existing expansion business plan Investment in high yield projec
Slide 30: Business Plan - Shopping Centres
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Metrovacesa Business Plan - Shopping Centres Dynamic development program Investment in high yield (10% to 12%) development program 50% of Metrovacesa development program for the next 5 years is in shopping centres Focus on real
Slide 31: Business Plan - Hotel
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division Metrovacesa Business Plan - Hotel Dynamic development program Investment in high yield (8% to 10%) development program Increase by 50% of current Metrovacesa hotel portfolio through development over the next 5 years Focus on mi
Slide 32: Business Plan - Rental Division - Projects
madrid\0660503 5/22/2003 5:49 PM Business Plan - Rental Division - Projects Offices (36.0% of total investments) Projects Investments(1) m2 Rents(1)(2) Rents/m2/year Yield (95%) Date Alvento 58,590 32,692 6,522 199.5 11.1% Oct-03 Las Rozas 48,699 23,318 3,849 165.0 7.9% Mar-04 Restaurador 5,253 3,03
Slide 33: Housing Division
madrid\0660503 5/22/2003 5:49 PM Housing Division 32
Slide 34: Business Plan - Housing Division: Market Overview
madrid\0660503 5/22/2003 5:49 PM Business Plan - Housing Division Market Overview The company expects a slowdown in housing starts price increase from 17% in 2002 to 10% - 14% in 2003 A slight decrease in housing starts also expected, following the trend since 2000. Housing starts are expected t
Slide 35: Main Drivers of the Housing Business
madrid\0660503 5/22/2003 5:49 PM Business Plan - Housing Division Main Drivers of the Housing Business Land bank management is key Ability to identify value opportunities early in the process Optimisation of building capacity on the plot Financial muscle allows “cherry-picking” in the good t
Slide 36: Business Plan - Housing Division
madrid\0660503 5/22/2003 5:49 PM Business Plan - Housing Division Metrovacesa Business Plan - Housing Division 85%- 90% increase in housing revenues (CAGR of 15%) Catch up gross margin of domestic peers Disposal of land bank with low development margin Rationalization of product portfolio an
Slide 37: Business Plan - Housing Division
madrid\0660503 5/22/2003 5:49 PM Business Plan - Housing Division Metrovacesa - 2003-2007 Business Plan 2003-2007 Housing Division Income Growth of 85%-90% Current land bank allows company to achieve 2003-2006 housing revenues business plan and 55% of 2007 forecasted 100% 80% 45% 60% 100% 100% 1
Slide 38: 4- 2003 Results Estimates & Conclusions
madrid\0660503 5/22/2003 5:49 PM 4- 2003 Results Estimates & Conclusions 37
Slide 39: 2003 Results Estimates
madrid\0660503 5/22/2003 5:49 PM 2003 Results Estimates 2003 Margin Estimates 2003 Estimated Results Results % Increment % Gross Margin/Sales Ingresos 2002(1) 2003 Division 2002 2003E Rents 132,764 1.5%-2.5% Housing 210,855 23%-25% Rental 92.4% 92%-93% Land Sales 86,351 25%-30% Services 28,693 -50%-
Slide 40: Conclusions
madrid\0660503 5/22/2003 5:49 PM Conclusions Management team is focused on value creation for shareholders through NAV growth, earnings and dividends Main action points are: Reorganisation of working teams and methods, introducing short and mid term objectives for each business unit Increase