Pro Kapital Grupp AS · OMXTSE:PKG1T
Pro Kapital Grupp AS — IPO Roadshow (August 2012)
35 slides from Pro Kapital Grupp AS's IPO roadshow presentation, August 2012
Slide 1: Pro Kapital Grupp Investor Presentation
PRO KAPITAL GRUPP Investor Presentation August, 2012
Slide 2: Important Notice
Important Notice This Presentation has been prepared by Aktsiaselts Pro Kapital Grupp (the “Company” or “PKG”) for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. This Presentation does not constitute or form part of, and should not be
Slide 3: Agenda and Presenting Today
Agenda 1. Introduction to the Case 2. Market Background 3. Company Overview Appendices Presenting Today Mr. Paolo Vittorio Michelozzi Mr. Allan Remmelkoor CEO of Pro Kapital Grupp COO of Pro Kapital Grupp since 2001 since 2008 3
Slide 4: 1. Introduction to the Case
Introduction to the Case wa ay oo A Sess: es, re — eA ’ B PROKAPITAL a ; j , da\
Slide 5: Term Sheet of the Offering
Term Sheet of the Offering Type of offering and Public offering of new common shares with nominal value of €0.2 per share securities Timing of the offering Offering period ending on September 7 Pricing Price range of €1.90 – 2.05 per share, offering price set following the book-building 37,0
Slide 6: Unique Opportunity in the Growing Baltic Real Estate Market
Unique Opportunity in the Growing Baltic Real Estate Market… Opportunity to capitalize on recovering Baltic real estate Track record of market Pure exposure on successful project Baltic macro development recovery Conservative Strong project balance sheet portfolio …Providing Baltic Macro Exposure 6
Slide 7: Growing Real Estate Company in the Baltics
Growing Real Estate Company in the Baltics AS Pro Kapital Grupp (“PKG” or “Company”) develops, manages and sells real estate in the capitals of Baltic States mainly focusing on development of Projects in PKG’s portfolio retail and upscale residential properties Project Appraised value Real estat
Slide 8: Priority Projects to be Developed by PKG
Priority Projects to be Developed by PKG PKG is planning to use proceeds of the offering for the following 3 projects (assumptions applied by Newsec) Parameter Peterburi Rd Shopping Centre Tallinas St. Residential Complex Tondi Quarter Location Tallinn, Estonia Riga, Latvia Tallinn, Estonia Projec
Slide 9: 2. Market Background
2. Market Background
Slide 10: Baltic Macro Environment is Improving
Baltic Macro Environment is Improving… Baltic economies are recovering Sovereign debt levels are under control (2011) Increasing exports together with internal devaluation and regained competitiveness have been driving growth 180% Government’s debt, % of GDP Foreign investors’ attitude towards
Slide 11: Baltic Real Estate Market Presents Growth Opportunities
Baltic Real Estate Market Presents Growth Opportunities… Activity in the Baltic real estate market is mainly concentrated in the Average apartment price in city centre (€/m2, 2011)1 capitals – Tallinn, Riga and Vilnius Premium locations for residential projects include city centres of Tallinn, 8
Slide 12: Residential Real Estate in Tallinn, Riga and Vilnius
Residential Real Estate in Tallinn, Riga and Vilnius… Residential real estate market in Tallinn, Riga and Vilnius is recovering, Average apartment price (€/m²)1 with the number of transactions and prices gradually increasing Average apartment price in Tallinn increased by 9% in 2010 and by 16% i
Slide 13: Affordability of Residential Real Estate in Baltics
Affordability of Residential Real Estate in Baltics… Increasing affordability of residential real estate1 in the Baltics implies Size of an affordable apartment (m2) high potential of the residential real estate market in these countries Households in Tallinn have the highest purchasing power fo
Slide 14: Retail Real Estate Market in Tallinn
Retail Real Estate Market in Tallinn… Retail sales have picked up in Estonia Rent levels in shopping centres in 2011 (€/m2/month) Rising consumer confidence has increased retail trade in real terms by 9% yoy in the first half of 2012 50 42 40 The total retail space in Tallinn has seen marginal
Slide 15: Existing and Planned Shopping Centres in Tallinn
Viru Keskus Opened in 2004 GLA of 23,000 m2 Owned by a group of investors CBD Rocca Al Mare Old Town Panorama Opened in 1999; expanded in 2009 Planned shopping centre with GLA of GLA of 53,000 m2 55,000 m2 Owned by Citycon Status: Start of construction in 2012 Kristiine Shopping Cent
Slide 16: 3. Company Overview
3. Company Overview PROKAPITAL
Slide 17: Strong Project Development Track Record
Strong Project Development Track Record PKG is one of the leading real estate development and management companies in the Baltic region The Company was established in 1994, making it one of the first major players in the Estonian real estate market In 1997 and 1998 PKG expanded to Latvia and L
Slide 18: Book Value and Appraised Value of PKG Property
Book Value and Appraised Value of PKG Property The figure below represents a reconciliation of Company’s portfolio appraised value by illustrating the difference between net book and net appraised values of the portfolio Bridge From Book to Appraised Value of Property1 200,000 180,000 160,000 2,14
Slide 19: Robust Financial Performance Coupled with Low Leverage
Robust Financial Performance … Inventories and investment property, which include finished real Balance sheet1 estate and real estate under construction, represent the largest part of the Company’s balance sheet (74% as of June 30, 2012) € million 2007 2008 2009 2010 2011 H1 2012 Non-current asset
Slide 20: PKG is Managed by Experienced Team
PKG is Managed by Experienced Team Key Personnel Paolo Vittorio Michelozzi Allan Remmelkoor Ruta Juzulenaite Ervin Nurmela CEO COO CFO Head of the Legal Department With PKG 18 years With PKG 15 years First year with PKG With PKG 5 years Has managed development of Previous experience in V
Slide 21: Strong Supervisory Council and Corporate Governance
Strong Supervisory Council and Corporate Governance Supervisory Council Emanuele Bozzone Giuseppe Prevosti Renato Lorenzo Bullani Chairman Member Member In the Supervisory Council since July 2010 In the Supervisory Council since July 2010 In the Supervisory Council since July 2010 Founder an
Slide 22: Selected Completed Development Projects (1)
Selected Completed Development Projects (1) Domina Shopping Centre Kristiine Shopping Centre Domina Shopping Centre is one of the first and largest shopping Kristiine Shopping Centre is the one of the first and largest centres in Riga, located on one of Riga’s main streets shopping centres in Ta
Slide 23: Selected Completed Development Projects (2)
Selected Completed Development Projects (2) Kuģu street 26 Pulkveža Brieža street 11 Kuģu street 26 is a residential building situated next to the Pulkveža Brieža street 11 is an apartment building developed river Daugava with an exceptional view of the classical Riga in the same complex with Do
Slide 24: Indicative Offering Timetable
Indicative Offering Timetable Monday, August 27 Start of the offering period Friday, September 7 End of the offering period Key dates of the Monday, September 10 Pricing and allocation offering Thursday, September 13 Settlement Friday, September 14 Start of trading 24
Slide 25: Appendices
Appendices SP. S\yaea ey = i = , D> 8S . — — ees PROKAPITAL
Slide 26: Basics of Real Estate Accounting
Basics of Real Estate Accounting Real estate is classified in the following way according to IFRS Inventories include buildings completed and construction in progress (residential developments) Tangible assets include land and buildings used in a company’s operations (offices, hotels) Invest
Slide 27: Current Project Portfolio
Current Project Portfolio The current project portfolio is listed in the table below Project Type GSA/GLA Development Description Means of exit Peterburi Rd Development of a large commercial project located in Tallinn Lasnamäe Sale of the property after Shopping Centre Commercial 77,880 m2 2012 –
Slide 28: History and Track Record
History and Track Record The completed (e.g. exited) projects are listed in the table below Project Type GSA/GLA Development Description Means of exit Domina Domina Shopping was one of the largest shopping centres in Riga when Sold to German investors in Commercial 48,500 m2 2001-2007 Shopping Cen
Slide 29: Tallinn Project Map
Kalaranna Ilmarine District1 PK Ilmarine Hotel CBD Jegorovi Pro Kapital Business Centre Old Town Rüütli 13 Vene 19 Domina City Hotel Demini Kristiine Shopping Centre Peterburi Rd Shopping Centre Tondi Quarter Map: Google Maps Completed projects Development projects 1 Ilmarine district includes on-go
Slide 30: Riga Project Map
Zvaigznes Tallinas Domina Shopping Centre Domina Inn Riga Pulkveža Brieža 11 Stabu 19 Old Town Kliversala Vecpilsētas 8A Kuģu 26 Map: Google Maps Completed projects Development projects Source: Company 30
Slide 31: Vilnius Project Map
Old Town Domina Plaza Saltiniu Namai1 Saltiniu Namai 2 Map: Google Maps Completed projects Development projects Source: Company 31
Slide 32: Organizational Structure
Organizational Structure Supervisory Council 6 members PKG employs 142 people in total (40 people Management Board excl. property management and hotel staff) CEO CFO and Chief Legal COO Counsel (2) Estonia (441) Latvia (37) Lithuania (9) Germany (52) Administration Operating Manager Operating Manage
Slide 33: Strategy of PKG (1)
Strategy of PKG (1) PKG is a real estate development company adding value throughout the project development lifecycle The Company does not focus on long term ownership of cash-flow-generating assets but does maintain some on its balance sheet in order to cover operating costs and counterbalance
Slide 34: Strategy of PKG (2)
Strategy of PKG (2) Tallinn Riga Vilnius Residential -High focus -Some focus Retail -No focus Hotels Residential developments There is significant market potential in all three Baltic capitals, especially in the premium segment, which is less exposed to fluctuations in economy The Company is f
Slide 35: Project Development Life-Cycle
Project Development Life-Cycle Acquisition of Planning of the Execution of the Sales and marketing landplots project project Targeting landplots in Strategic planning of the Execution of the construction For retail properties PKG premium locations of the project (type of real estate, phase i