first half 2014 results - patrimoine-commerce.com€¦ · the low cost retail park specialist 4...

FIRST HALF 2014 RESULTS September 30, 2014 SFAF Meeting

The low cost retail park specialist

Disclaimer

This document was prepared by Patrimoine & Commerce for the sole purpose of presenting its first half results

on 30 September 2014.

Since 1 January 2014 Patrimoine & Commerce has applied IFRS 10 and 11. Application has been backdated to

2013 and the comparative figures have been restated accordingly.

This document may not be copied or circulated, in whole or in part, without the Company’s prior approval.

Patrimoine & Commerce cannot be held liable if this document is used by any person who does not belong to

the Company.

This document contains no quantified results forecasts.

The Company makes no undertaking and provides no guarantee with regard to the achievement of its targets

or of any goals announced as part of its business plans.

Although the Company believes that its targets are reasonable, investors are reminded that the achievement

of these targets is subject to risks and uncertainties, including those described in the section entitled “Risk

factors” in the annual Registration Document


2

CONTENTS

�First half 2014 financial and operating results

�Vision and strategy:

"The leading low cost retail park company"

�Two transactions that boost the institutional standing

of Patrimoine & Commerce


3

First half 2014 key figures


4

Capitalisation

rate (5)7.5%

318,000 m²surface area (1)

46.2%

Assets68

Total asset

value (2) €520m

LTV (4)

Rental

income (3) €15.8m

(1) Total surface area of owned assets

(2) Excluding transfer taxes (incl. group share of Cherbourg and Studio Prod)

(3) H1 2014 gross rental income

(4) Adjusted for net disposals proceeds of assets held for sale, security deposits and hedges

(5) Annual rental income + vacant properties ERV / total value of assets excl. transfer taxes

FIRST HALF 2014

RESULTS

Results in line with forecasts


5

Key deliveries in 2014


6

Limoges Le Vigen (87)

Frouard (54)

Istres Hippopotamus (13)

Pontarlier (25)

Surface area 1,064 m²

Delivery date March 2014

Occupancy rate 100%

Rental income €0.1m

Surface area 2,700 m²

Delivery date March 2014

Occupancy rate 100%


Surface area 316 m²

Delivery date April 2014

Occupancy rate 100%


Surface area 740 m²

Delivery date January 2014

Occupancy rate 100%


Status of the asset sale programme

�1 asset sold €2.5m > Metz sold in July 2014

�2 assets under promise of sale €2.9m > Montbelliard

> Chasseneuil-du-Poitou

�Sales prices in line with appraisal values


7

Breakdown of retail rental income


8

Personal goods

37%

Household

goods

29%

21%

Culture &

entertainment

6%

7%

Health &

cosmetics

Food

Type of retail outlet

TOP 15 retailers(42% of total rental income)

The largest retailer accounts for 9% of retail rental income

Lease expiry schedule(end of lease)

€0

€1m

€2m

€3m

€4m

€5m

Tacit renewal 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 >20272026

Stable and reccuring income

> Occupancy rate 97.5%*

> Default rate c. 1%

> Lease indexation

• ICC 35%

• ILC 63%

• ILAT (offices) 2%

> Average rent

• Retail parks €116 per m²

• Shopping malls and centres €297 per m²

> Tenant turnover rate < 1%


9

* Based on rents of retail assets in operation for over 1 year (excluding strategic vacancy)

Increase in gross rental income


10

€m

Gross H1 2013

rental income

15.0

Gross H1 2014

rental income

Disposals

(0.1)

Deliveries

(0.5)

Indexation

Renegotiations

1.5

(0.1)

Strategic vacancy

15.8

+5.1%

Income statement (1/2)


11

€m6 months

H1 2014

6 months

H1 2013

Change

€m

Change

%

Gross rental income 15.8 15.0 0.8 +5.1%

Net rental income 15.5 14.8 0.7 +4.7%

Operating expenses (1.6) (1.7) 0.1 -4.9%

Normative EBITDA 13.9 13.1 0.8 +5.9%

As % of net rental income 90% 89%

Non-SIIC assets current tax (0.1) (0.2) 0.1 -46.8%

Net cost of debt (4.0) (3.2) (0.8) +26.5%

Funds From Operations ("FFO") 9.7 9.7 0.0 0.0%

FFO per share 1.00 1.00

Income statement (2/2)


12

€m6 months

H1 2014

6 months

H1 2013

Change

€m

Recurring funds from operations 9.7 9.7 (0.0)

Change in FV of properties 0.6 1.0 (0.4)

Increase in transfer taxes (2.1) - (2.1)

Change in FV of financial instruments (1.5) 1.7 (3.2)

Other income and expenses (1.5) (2.8) 1.3

Net income 5.2 9.6 (4.4)

Minority interests 0.4 0.6 (0.3)

Net income, Group share 4.8 9.0 (4.2)

€(5.3)m

Sound financial structure


13

Other Other58

Financial debt256

Minority interests12

222 Equity Group share

€m 548 548

490

Assets

June 2014

Investment

properties

Liabilities

June 2014

58

Sound financial ratios


14

Finance leases

€88.1m

Bonds

€30.0m

Borrowings

€131.5m

Gross debt€m 30/06/2014 31/12/2013

Net debt 1 226.5 217.0

Average maturity (years) 6.8 7.0

% debt hedged 79.4% 80.2%

Debt average interest rate 3.7% 3.9%

LTV 1 46.2% 45.8%

1 Adjusted for net disposals proceeds of assets held for sale, security deposits and hedges

More than 5

years

1 year 2 years 3 years 4 years 5 years

30.0

10.4 10.5 10.7 9.4 9.337.8

78.5

10.610.09.89.38.2

Bonds

Bank loans

Finance lease liabilities

€m

Stable debt repayment


15

* Excluding VAT bridging loan, developer loans and accrued interest

Change in NAV


16

NAV excl. TT

January 2014

NAV excl.TT

June 2014

Restated NAV

January 2014

Restatements Net income excl.

change in FV

Change in FV

of propertiesOther

224.8

213.4

221.9

8.2

0.6

(0.3)

(7.8)

(2.1)

(1.5)

Dividend

€m

+4%

NAV/share

€22.2

Transfer taxes

NAV/share

€23.1

Change in financial

instrument FV

PATRIMOINE &

COMMERCE

1- Strategy based on long-term

vision of retail property in

medium-sized French cities

From family business to

institutional real estate company


17

New expectations from

retailers and local authorities


18

Inevitable growth in suburban retail properties based on optimum models

combining footfall and low prices

> Ever increasing consumer demand for

low prices

> Growing competition from online

sales focusing on price

> Retailers seeking

• Lower property costs

• Footfall

• Space

> New business models

Retailers

> Control suburban developments so

as to:

(i) Meet consumer expectations

while protecting town centres

(ii) Generate tax revenue

> Redevelop town suburbs while

optimising traffic flows

> Tight budgetary constraints restricting

capacity for investment

Local authorities

Low cost retail parks, an appropriate solution

�Shopping centres located just outside towns

�Specific profile for low cost retail parks

> Very low charges

> High yield

• Higher than shopping centres and high street shops

> Low capex

• Reduced maintenance costs

• Immaterial “greening” investments


19

€15

/m²

Property charges

7.5%

A vast and fragmented market

�A vast market> 914 medium-sized towns totalling over 25 million

inhabitants(1)

> Higher proportion of the population living in the suburbs

> 3.4 million m² of planned retail parks built in France since 2000 (2)

> Patrimoine & Commerce accounts for c. 5% of this new market

�Fragmented portfolio of assets> Low individual values

> Assets owned by promoters, individuals or small local institutions

> An asset category ignored by major listed real estatecompanies


20

(2) Source: CNCC / C&W surveys

(1) Source: INSEE 2007 census (metropolitan France towns of 20,000-200,000 inhabitants)

Source: INSEE/ * metropolitan France

1962 2006

37%

33%

30% Rural areas 18%

28%

54%

Town centres

Suburbs

Breakdown of the French population

+46%

Patrimoine & Commerce, an institutional solution for

the retail parks model ramp-up

Located nationwide

Stable revenues

A tailoredmanagement

solution

Driver of consolidation


21

Occupancy rate c. 98%

Tenant turnover < 1%

220,000 m² acquired

since 2010

SIIC

Transparency

Rigour

PATRIMOINE &

COMMERCE

2- Two key transactions

that boost the Company’s

institutional standing

- Predica investment in P&C

- Acquisition of retail park

portfolio


22

Predica acquires equity stake

in Patrimoine & Commerce

> 20% stake acquired via a share issue

• Transaction value €47.4m

• Low dilution of NAV (3.0 %)

> Reputed institutional shareholder

> Increase in equity

> Changes in corporate governance

• 2 appointments to the Supervisory Board and

1 new member each for investment, audit and

remuneration committees


23

Vergely

family

Duval

family

24.3%

Robbe

family

Public float

20.5%

20.0%Predica

Suravenir

Banque Populaire

Val de France

13.4%

8.1%9.3%

4.4%

Acquisition of a €90m portfolio

> Core target assets in Western France

– Annual rental income: €6.3m

– Average capitalisation rate: 7.0%

– Occupancy rate: 100%

> Brand-new properties

– Average delivery: 2008

> 70% settled in cash and 30% in

P&C shares issued at NAV

> Transaction expanded tenant

base


24

Trimax portfolio: Le Mans - Val de Sarthe


25

32,485 m² retail park

18 tenants

€3.8m rental income

100% occupancy rate

Trimax portfolio: Le Mans - Val de Sarthe


26

Trimax portfolio: Alençon Ouest


27


8 tenants


100% occupancy rate

Trimax portfolio: Arçonnay


28


20 tenants


100% occupancy rate

Land

reserve

Literie

de

Fra

nce

Re

stau

ran

t

La F

arfo

uin

e

Fu

rnitu

re&

living

roo

m

Le Mans

Alençon

PATRIMOINE &

COMMERCE

3- A leading listed real estate

company specialising in retail

parks


29

A specialist retail property company for institutions

Assets focusing on retail parks

� Pro forma assets: €602m

� Pro forma rental income: c. €37m*

� Pro forma NAV: c. €280m

� Pro forma LTV: c. 45%


30

Retail parks

€424m Offices and

business

€27m

Shopping

malls and centres

€151m

70%

25%

5%

Patrimoine & Commerce

following Trimax

transaction

€602m

Appraisal value excluding transfer taxes and assets held for sale

including Group share of Cherbourg and Studio Prod

* H1 gross rental income x 2

+ Trimax portfolio rental income


A diversified development pipeline


31

Surface area 5,784 m² 100% leased

Tenants

La Rochelle (17) - May 2015

Surface area 7,698 m² 100% leased

Tenants

Annecy Epagny (74) - end 2014

�Committed pipeline c. €90m > Including Epagny, La Rochelle, Cergy

�Identified pipeline c. €100m


Stock market profile appealing to institutions

� Market track record appealing to institutions

> Capitalised at close to NAV

> Improved liquidity

• Market capitalisation: €265m

• Stock market performance: +52% since Jan 2013

• Daily volumes: +182% since Jan 2013


32

� Institutional shareholders

� Debt restructuring towards

REIT’s standards> Bonds

> Dynamic management of

debt

Average daily trading

volumes

12

24

800

600

400

200

15

18

21

Market price

(€)

+52%

Development of an institutional property company,

a low cost retail parks pure player


33

Total assets €164m

NAV €59m

Market cap €42m

Pro forma total assets €602m

Pro forma NAV €280m

Pro forma market cap €275m

Total assets x4

NAV x5

Market cap x6

Long-term objectives confirmed

�€1bn total assets by end 2016

�Yield of over 7.0%

�Loan To Value ratio around 50%


34

Bourg-en-Bresse retail park

APPENDICES


35

Structured and independent corporate governance

�Management ensured by Eric Duval

�Supervisory Board, chaired by Dominique Jouaillec

> 15 members (8 independent*)

� Investment Committee, chaired by Jean-Hubert Moitry


�Audit Committee, chaired by Christian Louis Victor


�Remuneration Committee, chaired by Humbert Le Fresnoy (Arkea Group)



36

* Pursuant to the Middlenext Code, Predica is not considered as independent

Summary balance sheet


37

€m 30/06/2014 31/12/2013 30/06/2013

Investment properties 490.2 473.7 446.8

Assets held for sale 3.4 4.9 35.3

Cash 6.8 18.3 15.6

Other 47.9 51.1 51.4

Total assets 548.4 547.9 549.2

Equity, Group share 221.9 224.8 215.2

Minority interests 12.4 12.3 11.6

Debts 255.8 257.7 261.9

Other 58.3 53.0 60.5

Total liabilities and equity 548.4 547.9 549.2

first half 2014 results - patrimoine-commerce.com€¦ · the low cost retail park specialist 4...

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