Frey Sa · EURONEXT:FREY
Frey Sa — FY2018 Earnings Presentation
34 slides from Frey Sa's earnings presentation, 2019
Slide 1: 2018 Annual Results
2018 ANNUAL RESULTS
Slide 2: Contents
CONTENTS 1 – Market context p.4 2 – Operational performance p.10 3 – 2018 highlights p.16 4 – Financial performance p.21 5 – Outlook and strategy p.26
Slide 3: Disclaimer
Disclaimer This presentation has been prepared solely for information, to accompany the information disclosed to the public elsewhere, to which readers should refer. It does not constitute and should not be construed as an invitation, recommendation or offer to purchase, sell, exchange or subscribe
Slide 4: Market context
1 Market context 4
Slide 5: A retail industry undergoing structural changes
A retail industry undergoing structural changes changes An unusual year for retailers Events that were not particularly helpful for retail: strikes, weather, ‘yellow vest’ protesters Poor sector performance -1.7% -1.5% footfall Retailers’ sales revenue 2018 data - 12 months - CNCC RÉSULTATS RÉSULTAT
Slide 6: Continued growth of e-commerce
A retail industry undergoing structural Continued growth of e-commerce… Almost 1.5 billion orders (+21%) An average spend that continues to fall with the growing influence of day- to-day purchases (€60) Only 41% of sales revenue earned on physical goods €92.6 billion 9.7% +13.4% in revenue in 2018 o
Slide 7: Best results for renewed retailers
A retail industry undergoing structural changes Best results for renewed retailers... OC&C – Ranking of French people’s favourite retail brands at end 2018 1 2 3 …who meet consumers’ new aspirations RÉSULTATS RÉSULTATS FINANCIERS FINANCIERS 2018 2018 7 Résultats annuels 2018
Slide 8: Retailers under pressure and set to rationalise store networks
A retail industry undergoing structural changes Retailers under pressure… Certain sectors more affected Strategic alliances between e-retailers and & retail networks & and partnerships & Convergence between brick-and-mortar sales outlets and online sales: halo effect for last-mile logistics … and se
Slide 9: Decrease in acquisition volumes and expected drop in development volumes
A retail industry undergoing structural changes Decrease in acquisition volumes and expected drop in development volumes €4.4 billion invested ELAN law in France in 2018 (14% decrease over 10 years) Moratorium on the territorial revitalisation scheme (ORT) 22% 26% 29%* 80% of French territory affect
Slide 10: Operational performance
2 Operational performance 10
Slide 11: Outstanding performance of FREY's business model
Outstanding performance of ‘s business model IN A DEMANDING CONTEXT FREY’S 2018 PERFORMANCE Footfall (1) : +1.4% Poor retail performances Retailers sales revenue (1) : +1.2% Rents like-for-like (2) +2.8% Occupancy rate (2) 96.7% Retailers Leases signed (+26%) €10.8 m under pressure Works in progress
Slide 12: Frey gives more to visitors: practical, experience
The reasons for this outstanding performance Frey gives more to visitors more practical more of an experience places that are managed like entertainment venues RÉSULTATS FINANCIERS 2018 12 Résultats annuels 2018
Slide 13: Frey gives more to visitors: authenticity, welcome
The reasons for this outstanding performance Frey gives more to visitors more authenticity more of a welcome places that foster social ties RÉSULTATS RÉSULTATS FINANCIERS FINANCIERS 2018 2018 13 Résultats annuels 2018
Slide 14: Frey gives retailers more for less
The reasons for this outstanding performance Frey gives retailers more for less more unbeatable space for expression occupancy cost ratio ‘Showroom’ style stores where the last-mile 7.8%(1) logistics and omnichannel FREY occupancy cost ratio strategy can be integrated Retailers’ preferred lessor Ret
Slide 15: Know-how sought by municipalities for urban renewal
The reasons for this outstanding performance A know-how sought by municipalities for their urban renewal projects more diversity more urban life • MORE acceptable projects • Projects LESS in opposition to city centre areas RÉSULTATS RÉSULTATS FINANCIERS FINANCIERS 2018 2018 15 Résultats annuels 2018
Slide 16: 2018 highlights
3 2018 highlights 16
Slide 17: Shopping Promenade: first year of success
Shopping Promenade: first year of success 4.9 million 97.9 % New retailers arrived on site in 2018 visitors Occupancy rate RÉSULTATS FINANCIERS 2018 17 Résultats annuels 2018
Slide 18: The roll-out of Shopping Promenade in France
The roll-out of Shopping Promenade in France 3 major projects underway 119,000 m² Total GLA €245 m investments €19.5 m potential rental income RÉSULTATS FINANCIERS 2018 18 Résultats annuels 2018 * Data in a patrimonial approach. The total surface area of these projects (incl. Property development) i
Slide 19: Frey's return to the international scene
Frey’s return to the international scene Parc Vallès – Barcelona 47,000 m² (1) retail/leisure 13.2 million visitors in 2018 €5.9 m annual rental income 100% Occupancy rate 46 stores & restaurants 1 multiplex cinema RÉSULTATS FINANCIERS 2018 19 (1) 42,000 m² acquired in April 2018 and 5,000 m² in Feb
Slide 20: Creation of a 'mixed use' entity
Creation of a ‘mixed use’ entity New business unit specialised in identifying and designing mixed urban projects Direct sourcing & participation to auction process First success in Rennes in early 2019 A secured and efficient business model Offices / Housing / Co-living Co-working Hotel / Serviced r
Slide 21: Financial performance
4Financial performance 21
Slide 22: Ramp up of the property investment company
Ramp up of the property investment company Economic portfolio in operation 365,000 m² +18% €42.6 m +27% surface area annualised rental income 96.7% +170 bps €729.8 m +23% occupancy rate (EPRA) valuation (1) (1) The economic portfolio includes the assets in operation that are wholly-owned by FREY, to
Slide 23: Financial performance confirmed
Financial performance confirmed High value creation Acquisitions in 2017 and 2018: €5.7 m €32.8 m +38% Deliveries in 2017 and 2018 €2.7 m +2.8% on a like-for-like basis gross rental income Very strong growth in profit from €18.3 m +46% recurring operations Good control of overhead costs in a profit
Slide 24: Financial structure: more robust
Financial structure: more robust 2017 2018 37.7% 26.1% Loan to value(1) 1.29% for corporate facilities 1.95% 2.85% for other bank financing Average cost (2) 98.2% 5.9 years €325 m Debt coverage ratio Debt duration Liquidity (3) (1) Including stamp duty. (2) Average cost after hedging (including marg
Slide 25: NAV and shareholding
NAV and shareholding capital increase €202 m Free float 13.9% € +2.7 € 34.4 Sogecap Firmament Participations € -0.9 11.3% (Groupe Antoine Frey) Impact of 31.6% operations Cardif As. Vie Impact of capital 11.3% increase AG Real Estate Predica € 32.6 12.7% 19.2% Going concern NAV per share Shareholder
Slide 26: Strategy and outlook
5 Strategy and outlook 26
Slide 27: The e-commerce glass ceiling
The e-commerce glass ceiling Between 20-30% of French retail Due to its economic model and to its logistics constraints RÉSULTATS RÉSULTATS FINANCIERS FINANCIERS 2018 2018 27 Résultats annuels 2018
Slide 28: Retail is evolving
Brick-and-mortar retail is not going to disappear Retail is evolving A threat for certain real estate players but an opportunity for specialists like FREY RÉSULTATS FINANCIERS 2018 28 Résultats annuels 2018
Slide 29: Our strategy
Our strategy Capture the essence of FREY’s know-how… DESIGNING BUYING DEVELOPING TRANSFORMING the only operator BUILDING with genuine FINANCING end-to-end MANAGING retail property ENTERTAINING expertise SELLING …to become ‘the driver of retail transformation’ RÉSULTATS RÉSULTATS FINANCIERS FINANCIER
Slide 30: Pursue out-of-town retail regeneration projects
Capture the essence of our unique know-how A - Pursue out-of-town retail regeneration projects 111,000 m² 90,000 m² retail/leisure 74 stores 24 cafés and restaurants 1 multiplex 15,000 m²of office space 1 hotel with 102 rooms RÉSULTATS FINANCIERS 2018 30 Résultats annuels 2018
Slide 31: Acquire assets to convert into new concepts
Capture the essence of our unique know-how B - On an opportunistic basis, acquire assets sold by their owners, in order to convert them into brand new concepts Renovation-extension project over the next 3 years to capitalize on its excellent fundamentals and strengthen its leadership RÉSULTATS FINAN
Slide 32: Palais du Commerce in Rennes
Capture the essence of our unique know-how C - Promote the urban retail anchor by developing dense mixed projects Case study: Palais du Commerce in Rennes (18,000 m²) 5.000 m² of retail space 7 cafés and restaurants 4.200 m² of office & co-working space 1 105-room hotel managed by Marriott 1 cookery
Slide 33: Our medium-term strategic priorities
Our medium-term strategic priorities 1 2 3 Speed up Speed up Continue the the transformation the transformation internationalisation of out-of-town retail of major French cities of our model, areas with with dense mixed by focusing on Spain Shopping Promenade projects via Citizers and Portugal €989
Slide 34: Key figures as of 31/12/2018
Frey: an attractive model for investors ECONOMIC PORTFOLIO IN OPERATION Property development and investment company leader in the deep and liquid market for outdoor shopping centres €729.8 m and urban mixed use projects 365,000 m² €42.7 m Inventor of innovative and mixed property concepts Annualised