Icade Sa · EURONEXT:ICAD
Icade Sa — H1 2011 Earnings Presentation
58 slides from Icade Sa's earnings presentation, Jul 27, 2011
Slide 1: First-Half Results 2011
First-Half Results 2011 27 July 2011
Slide 2: Disclaimer
Disclaimer This document is not an offer or a request for an offer to sell or exchange securities, or a recommendation to subscribe, buy or sell Icade securities. Distribution of this document may be limited in certain countries by legislation or regulations. As a result, any person who comes into p
Slide 3: Solid key indicators
Solid key indicators Strong growth in net current cash flow (+23%) NAV up over H1 2011 (+3%) €100m €4,208m €4,352m €4,117m €81m €1.62 €1.94 €80.4 €81.4 €83.9 / share / share / share / share / share June 2010 June 2011 June 2010 Dec 2010 June 2011 Net current cash flow up 22.6% due to a significant i
Slide 4: Highlights of the 1st half of 2011
Highlights of the 1st half of 2011 Letting to Ingenico of the LINK office building (10,200m2) in the 15th arrondissement in Paris, for a 10 years committed lease, helping boost the financial occupancy rate Continued asset management and diversification portfolios in the commercial portfolio from 91.
Slide 5: Highlights of the 1st half of 2011 (continued)
Highlights of the 1st half of 2011 Continued arbitrage in the non-strategic portfolios with the finalisation of the sale of an office building in Munich (Germany) for €72.5m arbitrage in the non-strategic Continued and the completion of the sale of the property management business portfolios in Spai
Slide 6: Sustainable development
Sustainable development Sustainable development at Icade: a long-term strategy 2005 Delivery of the first private commercial HQE® (1) building in France: the 270 2007 Icade brings together its offices in its new HQE® headquarters, Millénaire 1 2008 Completion of the first ever full Bilan Carbone® (2
Slide 7: Sustainable development
Sustainable development Property Investment: improvement in environmental quality of new and existing buildings In operation: 187,000m² (+110% over 1 year) of HQE® or equivalent (BREEAM®) certified buildings such as Millénaire 1 and 2, 270 building, Metropolitan, LINK, H2O… Icade operates the first
Slide 8: Sustainable development
Sustainable development Initial findings of Bilan Carbone® Changes 2007 to 2009 (2007) On a like-for-like basis the Bilan Carbone® figure has been reduced Embodied energy (construction & works) by 6% over 2 years (2007: and operating energy represents 84 kg CO2/m²; 2009: 79 kg CO2/m²) virtually all
Slide 9: Activity
1 Activity 2 Results 3 Strategy and outlook 4 Appendices
Slide 10: French commercial property market
French commercial property market Commercial property commitments Paris region rental values in France since 2003* 1990-2010* 800 700 687€ 13,4 600 511€ 10,9 500 400 393€ 300 10,1 5,4 306€ 6,4 200 4,4 12,9 14,0 7,4 5,1 100 5,0 5,7 5,9 7,1 0 2,5 3,6 4,4 91 93 95 97 99 01 03 05 07 09 Q 11 2003 2004 20
Slide 11: Location of business parks & offices in the Paris region
Commercial property Location of business parks & offices in the Paris region Shopping centre Aubervilliers Le Millénaire Courbevoie Aubervilliers Tour EQHO La Défense St Denis Nanterre Puteaux Paris 19° St Denis BUSINESS PARKS La Défense Le Millénaire SCOR Aubervilliers Paris 19th Nanterre La 18 17
Slide 12: Analysis of asset portfolio
Commercial property Analysis of asset portfolio Total value of commercial portfolio (excluding transfer duties) at 30 June 2011: €5,971m Asset portfolio Asset portfolio by asset type by location Strategic Inner and outer suburbs Western Crescent €1,635 m €1,021m Offices, France €2,384m 27% 17% 40% B
Slide 13: Main features of the portfolio
Commercial property Main features of the portfolio Portfolio Net yield value Financial Average (excluding excl. Rentable Rented occupancy Annualised committed transfer duties(1) space space rate IFRS lease term duties) At 30 June 2011 (€m) (m²) (m²) (%) rent (€m) (years) (%) Offices, France 2,384 29
Slide 14: Rental management and tenant base
Commercial property Rental management and tenant base Rental management Rental income by business sector Offices and business parks: 20 largest tenants LINK (Paris 15th): all office space let to Ingenico (10,200 m² - with effect from 1 November 2011) Advisory 10.8% 9,1% Insurance Building 521 (Auber
Slide 15: Marketing of properties in operation
Commercial property Marketing of properties in operation Potential Space to let annual rent Properties in operation City (m²) (€m) H2O Rueil-Malmaison 5,500 7 avenue Messine Paris 2,200 13.0 Factory Boulogne 14,000 Other offices, France 13,800 Total offices, France 35,500 Building 521 Aubervilliers
Slide 16: Main capital expenditure made in 1st Half 2011
Commercial property Main capital expenditure made in 1st Half 2011 Acquisition of properties, including: €20m 1 clinic (Vitry) €14m Let to Vedici Retail and shopping centres: 2 stores operated by €6m Let to Mr Bricolage Mr Bricolage (Bessine, Ruffec) Value enhancement including: €59m Tour EQHO (form
Slide 17: Clinics
Commercial property Clinics Le Bourget Breakdown by type of operator as % Drancy Villeneuve d’Ascq of portfolio value Le Chesnay Bry / Marne MÉDI-PARTENAIRES 20.1% Arras Valenciennes VEDICI Charenton Trappes 24.9% Nogent / Marne Soissons (ESM) HARPIN 8.8% Brest Chartres Champigny / Marne Laval Vitry
Slide 18: Clinics: third-party equity for Icade Santé
Commercial property Clinics Plans to raise third-party equity for Icade Santé up to institutional investors Desire to continue the expansion of Icade Santé by leveraging on the experience of dedicated teams already in place at Icade. Maintaining an allocation to this sector in line with its current
Slide 19: Income statement - Investment
Investment Income statement Commercial Public and Residential Offices Business parks Shopping centres Warehouses Total Property Healthcare property €m June June June June June June June June June June June June June June June June 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011
Slide 20: French residential property development market
Residential development French residential property development market A marked downturn in sales in 1st quarter of 2011. Sales of 22,200 units in 1st quarter of 2011 were 17.2% lower than on the 1st quarter of 2010 (Sources: MEEDDAT/SESP, SOeS & FPI) Residential units Downturn in sales due to: 0 20
Slide 21: Key indicators remain at high levels
Residential development Key indicators remain at high levels Breakdown by client Backlog €M 1 000 843 811 28.1% 800 673 First-time buyers 650 600 518 Private investors 36.8% 35.1% (individuals or similar) 400 Institutional investors 200 0 2007 2008 2009 2010 S1 2011 Number of reservations: 2,108 uni
Slide 22: Controlled exposure to market risk
Commercial and public-sector development Controlled exposure to market risk Commercial and public-sector development revenues (€m) Intragroup revenues (€m) 300 60 53 250 250 50 200 177 177 PM, engineering and other 40 36 150 30 24 Commercial and retail 100 20 50 Public and healthcare 10 0 0 June 200
Slide 23: Commercial development deals
Commercial and public-sector development Commercial development deals Balard - Ministry of Defence (Paris 15th) Under the PPP agreement won by the Opale-Défense consortium (Bouygues and Exprimm) for the regrouping of the Army General Staff and Headquarters on the Balard site: Co-development contract
Slide 24: Commercial property development deals
Commercial and public-sector development Commercial property development deals Ambre (Lyon 7th) Signature on 30 June of off-plan sale to Suravenir, the life assurance branch of the Crédit Mutuel Arkea group, Lyon 7th of the Ambre building for €38m located on avenue Jean Jaurès (co-development with A
Slide 25: Residential property development designed for seniors
Residential development Residential property development designed for seniors Icade positions itself at all stages Les Villages d’Or of the residential journey A partnership with Icade for the development of serviced residential units for seniors Groups of buildings in the city centre close to all s
Slide 26: Income statement - Property development
Property development Income statement €m Residential(1) Commercial(1) TOTAL (2) Change (%) June 2010 June 2011 June 2010 June 2011 June 2010 June 2011 Revenues 264 349 178 177 438 523 +20% EBITDA 1 24 19 4 20 28 +40% EBITDA margin +0.8 0.4% 6.8% 10.7% 2.5% 4.6% 5.4% (EBITDA/Revenues) points Operatin
Slide 27: Services: growth and diversification in client portfolio
Services Growth and diversification in client portfolio Tour CB Miroir Manage: Tour Crystal (La Défense, 92) (La Défense, 92) Tour First (Paris 15th) Property management Revenue: €17m 900 buildings / sites managed 5,500,000m² of commercial and residential buildings Major clients: CNP, CDC, Tour Mont
Slide 28: Income statement - Services
Services Income statement Discontinued €m Core businesses(1) businesses(2) TOTAL Change (%) June 2010 June 2011 June 2010 June 2011 June 2010 June 2011 Revenues 48 49 3 0 51 49 -5% EBITDA 1 3 1 0 1 3 +135% EBITDA margin +3.7 0.9% 6.2% na na 2.5% 6.2% (EBITDA/Revenues) points Operating profit 0 2 1 0
Slide 29: Results
1 Activity 2 Results 3 Strategy and outlook 4 Appendices
Slide 30: Key figures
Key figures €m 30/06/10 30/06/11 % €m 31/12/10 30/06/11 Revenues 651 717 +10.2% Net financial debt 2,292 2,401 EBITDA 141 164 +16.2% Appraisal value 6,129 6,284 Profit on disposals 902 34 -96.2% Loan To Value (LTV) 37.4% 38.2% Operating profit 970 123 -87.3% Net Asset Value (NAV) 4,208 4,352 Net fin
Slide 31: Analysis of net current cash flow
Analysis of net current cash flow €m €1.94 per share +14.7 +3.7 €1.62 per share +8.1 +1.7 (8.1) +21.4 (23.0) 100.3 81.8 NCCF June Residential Commercial Development Services Central, intra- Financial Tax NCCF June 2010 investment investment group and income 2011 other costs Net current cash flow up
Slide 32: Focus on G&A costs
Focus on G&A costs Change in G&A costs Breakdown by division (recurrent costs - €m) of G&A costs in June 2011 Holding 50 46 1% 45 44 Services -4% 16% Property 40 Investment 30% 35 30 25 20 15 10 5 Property Development 0 53% June 2010 June 2011 Good control over G&A costs First-Half Results 2011 32
Slide 33: Portfolio appraisal value
Portfolio appraisal value Total asset value €m (excluding transfer duties) +2.5% (1) (1) +0.4% (1) 6,284 6,102 6,129 302 372 381 247 252 259 1,096 894 1,035 327 370 434 Commercial 1,330 Commercial Commercial 88% 94% 1,416 95% 1,507 2,195 2,307 2,384 Residential 12% 732 Residential 6% 361 Residential
Slide 34: Appraisal value in Commercial Property: analysis of changes
Appraisal value in the Commercial Property division Analysis of changes €m (excluding transfer duties) 5,971 5,768 6 120 155 14 302 381 (72) (19) 247 259 (1) 1,096 1,035 Total disposals: Total acquisitions Change in value on 434 370 -€73m and investment: like-for-like portfolio: €140m €136m 1,416 1,
Slide 35: Appraisal value: changes on a like-for-like basis
Appraisal value in the Commercial Property division Changes on a like-for-like basis Appraisal values (excluding transfer duties) Yield (excluding transfer like-for-like duties)(3) of which of which interest Business rate Plan 30/06/11 6 months effects (1) effect(2) 30/06/11 6 months Offices, France
Slide 36: Analysis of change in EPRA triple net NAV
Analysis of change in EPRA triple net NAV €/share (group share) +0.8 +0.4 +0.7 +3.5 (0.5) +0.9 83.9 81.4 (3.3) Dec 2010(1) 2011 dividend Consolidated income Change Change Change Change Other June 2011 in capital gains in gains on in fair in tax liability on the portfolio development value of on unre
Slide 37: Debt structure
Debt structure 31/12/10 30/06/11 LTV (Loan To Value) 37.4% 38.2% Net debt (€m) 2,292 2,401 Average term of debt 4.5 years 4.0 years Average cost 3.93% 3.98% (average 3-month Euribor in 2010: 0.81%) (average 3-mth Euribor H1 2011: 1.25%) Hedging 89% 94% (average hedge term: 3.6 years) LTV and average
Slide 38: Debt structure
Debt structure Hedging (€m) Maturity (€m) 2400 1000 1900 1400 900 400 -100 418 324 291 -600 169 -1100 82 108 26 -1600 -2100 S2 2011 2012 2013 2014 2015 2016 2017 2018 S1 2011 2012 2013 2014 2015 2016 2017 2018 Debts to lending establishments Hedge floating rate debt CFH TF Swap Cap-Collar Unhedged d
Slide 39: Strategy and outlook
1 Activity 2 Results 3 Strategy and outlook 4 Appendices
Slide 40: Focus on the Pipeline
Focus on the Pipeline 2011-2015 Total commercial property investments (identified and committed) ~ €0.6bn Main Total Investments Gross Space Completion Yield investments investment (1) H2 2011-2015 Rental Tour EQHO (formerly Descartes) 79,000 m2 Q2 2013 €690m €242m c.€43m 6.2% Work in progress HQE®
Slide 41: Summary of investment flows - Pipeline 2011-2015
Summary of investment flows Pipeline 2011-2015 Breakdown by year Breakdown by and asset type major project €m Tour EQHO 113 (formerly 66 63 Offices Descartes) S2 2011 2012 2013 2014 240 Villejuif 205 31 5 122 10 10 (Métropolitan) S2 2011 2012 2013 2014 S2 2011 2012 2013 2014 2015 Le Business parks B
Slide 42: La Tour EQHO: transformation of an existing tower
La Tour EQHO, Transformation of an existing tower into a model of design and sustainability A tower transformed, a renaissance, a whole new product A new luminous facade, highly contemporary, making a real architectural statement Modification of access and redesign of lobbies Total replacement of te
Slide 43: Icade and business parks: a fast-changing landscape
Icade and business parks A fast-changing landscape Parc des Portes de Paris in 2003 A move towards the tertiary sector... 180,000m² built or renovated in the last 5 years Opening in April 2011 of the largest shopping centre to be built in France for 10 years First buildings marketed before opening i
Slide 44: Focus on Parc du Millénaire
Icade and business parks Focus on Parc du Millénaire: a showcase for Icade’s expertise AUBERVILLIERS M6 Planned creation of future head office Floor space: 17,200 m2 Shopping centre Millénaire M5 Le Millénaire Occupancy rate: 72% 5&6 Occupants: La DIRECCTE Annualised rent: €5.7m SAINT Yield: 6.9% DE
Slide 45: Expertise scalable across the entire portfolio
Icade and business parks Expertise scalable across the entire portfolio Future head office SAINT DENIS Parc des Portes de Paris Le Millénaire Floor space: 310,000 m² Shopping Centre Occupancy rate: 89% Floor space: 56,000 m² Valuation: €2,133/m² Occupancy rate: 97% AUBERVILLIERS Valuation: €6,785/m2
Slide 46: Icade and business parks
Icade and business parks Parc du Total Le Millénaire Parc des Parc du Millénaire (inc. Parc du Business Shopping Portes de Paris Pont de Flandre Millénaire 5 & 6) Mauvin parks Centre Floor area 310,000 m2 78,000 m2 75,600 m2 22,000 m2 485,000 m2 56,000 m2 (offices + light industrial areas) Valuation
Slide 47: Other measures: built-in growth
Built-in growth Full-year effect of marketing (H2O, Commercial Millénaire 2...) and acquisitions (CLL, +€29.4m Investment clinics…) made in 2010 and 2011 net of disposals of which or 9.7% of commercial €22.5m Secured increase rent in 2010 Secured increase Rent expected from deliveries in 2011 captur
Slide 48: Outlook
Outlook Continued concretisation of areas of improvement in net current cash flow, producing a strong increase in the current year and next year Acceleration of value creation in business parks Ability to generate organic growth LTV to be held at around 40% First-Half Results 2011 48
Slide 49: Appendices
1 Activity 2 Results 3 Strategy and outlook 4 Appendices
Slide 50: Transition from operating profit to net profit
Transition from operating profit to net profit (group share) June 2010 June 2011 Change €m €m % Operating profit - Property investment 960 99 -90% Operating profit - Property development 20 32 +63% Operating profit - Services 1 2 +314% Icade holding company and intra-group operating profit -10 -10 +
Slide 51: Rental income trends
Rental income trends Change at 30 June at 30 June Change (%) €m 2010 2011 (%) like-for-like Offices 49 58 +17.8% +5.0% Business parks 44 47 +6.8% +5.8% Shopping centres 7 10 +34.5% -2.1% Public and Healthcare 32 38 +21.9% +0.6% Warehouses 9 12 +28.5% -0.5% Total commercial property investment 141 16
Slide 52: Analysis of net current cash flow June 2010 – June 2011
Analysis of net current cash flow June 2010 – June 2011 €m June 2010 June 2011 % EBITDA 141 164 +16.2% Net financial items -52 -47 -9.6% Exit tax accretion effect 1 0 na Underlying financial items -51 -47 -7.2% Corporate income tax(1) -11 -25 +126.1% Tax on provision for impairment of client contrac
Slide 53: EPRA triple net NAV (group share)
EPRA triple net NAV (group share) €m 4,208 4,352 Or €81.4 per share Or €83.9 per share 159 149 1,240 1,424 +3.1% 2,842 2,789 (33) (10) Dec 2010 June 2011 Unrealised gains Property Development / Services Shareholders’ equity (+ FMV of debt and impact of dilution) Unrealised gains on property assets n
Slide 54: Analysis of EPRA Triple Net NAV
Analysis of EPRA Triple Net NAV (group share) €m + 407 + 63 (2,401) (1) 6,284 4,352 Porfolio value (excluding Enterprise value of Enterpirse value of service Net financial debt Other (unrealised tax Triple Net NAV transfer duties) development companies companies liabilities, dilution, etc.) First-Ha
Slide 55: EPRA Net Asset Value (group share)
EPRA Net Asset Value (group share) Change over Change over 6 months full year 30/06/11 31/12/10 (%) 30/06/10 (%) EPRA triple net NAV 4,352 4,208 +3.4% 4,117 +5.7% group share (€m) Number of shares 51,847,239 51,707,430 51,198,224 (fully diluted) EPRA single net NAV 86.1 84.8 +1.5% 84.5 +1.9% per sha
Slide 56: Yields
Yields (1) Excluding transfer duties 10.7% 10,6% 10,5% 9,8% 7,6% 8,3% 7,2% 8,0% 7,8% 7,7% 6,8% 6,8% 7,5% 7,4% 6,5% 7,3% 7,1% 7,1% 7,0% 7,0% 7,0% 7,0% 6,8% 6,7% Offices Business parks Shopping centres Public and Warehouses Total commercial Healthcare property 31/12/2009 30/06/2010 31/12/2010 30/06/20
Slide 57: Revenues and EBITDA
Revenues and EBITDA €m Revenues EBITDA +10% 717 651 +16% -16% 179 25% 141 164 212 33% 101% 140 86% 523 73% 142 -1% 438 67% +20% -5% +40% 28 17% 51 8% 49 7% 1 20 14% +135% 3 (51) (34) -5% (7) -5% -8% (22) -16% - x% - x% June 2010 June 2011 June 2010 June 2011 Property investment Property development
Slide 58: Support functions
Support functions June 2010 June 2011 Property Property Intra- Holding Property Property Intra- Holding (€m) investment development Services group company ICADE investment development Services group company ICADE Revenues 212 438 51 -51 0 651 179 523 49 -34 0 717 Operating costs -61 -391 -42 37 - -4