1. No category

FIRST HALF 2014 RESULTS
September 30, 2014 SFAF Meeting
The low cost retail park specialist
2
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
The low cost retail park specialist
3
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
The low cost retail park specialist
4
First half 2014 key figures
68
318,000
Assets
€520m
46.2%
Total asset
value (2)
LTV
(4)
surface area (1)
€15.8m
7.5%
Rental
income (3)
Capitalisation
rate (5)
(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
The low cost retail park specialist
m²
5
FIRST HALF 2014
RESULTS
Results in line with forecasts
The low cost retail park specialist
6
Key deliveries in 2014
Pontarlier (25)
Surface area
Delivery date
Occupancy rate
Rental income
2,700 m²
March 2014
100%
€0.3m
Istres Hippopotamus (13)
Surface area
Delivery date
Occupancy rate
Rental income
316 m²
April 2014
100%
€0.1m
The low cost retail park specialist
Frouard (54)
Surface area
Delivery date
Occupancy rate
Rental income
740 m²
January 2014
100%
€0.1m
Limoges Le Vigen (87)
Surface area
Delivery date
Occupancy rate
Rental income
1,064 m²
March 2014
100%
€0.1m
7
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
The low cost retail park specialist
8
Breakdown of retail rental income
TOP 15 retailers
(42% of total rental income)
Type of retail outlet
Household
goods
Personal goods
29%
37%
Food
7%
6%
21%
Health &
cosmetics
Culture &
entertainment
The largest retailer accounts for 9% of retail
rental income
The low cost retail park specialist
9
Stable and reccuring income
Occupancy rate
Default rate
Lease indexation
>
>
>
97.5%*
c. 1%
• ICC
• ILC
• ILAT (offices)
35%
63%
2%
Average rent
>
• Retail parks
• Shopping malls and centres
€116 per m²
€297 per m²
Tenant turnover rate
>
< 1%
Lease expiry schedule
(end of lease)
€5m
€4m
€3m
€2m
€1m
€0
Tacit renewal 2015
2016
2017
2018
2019
2020
2021
2022
2023
* Based on rents of retail assets in operation for over 1 year (excluding strategic vacancy)
The low cost retail park specialist
2024
2025
2026
>2027
10
Increase in gross rental income
€m
1.5
+5.1%
(0.5)
(0.1)
(0.1)
15.8
15.0
Gross H1 2013
rental income
Deliveries
Disposals
The low cost retail park specialist
Strategic vacancy
Indexation
Renegotiations
Gross H1 2014
rental income
11
Income statement (1/2)
6 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%
9.7
9.7
0.0
0.0%
1.00
1.00
€m
Funds From Operations ("FFO")
FFO per share
The low cost retail park specialist
12
Income statement (2/2)
6 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)
€m
The low cost retail park specialist
€(5.3)m
13
Sound financial structure
548
€m
Investment
properties
548
222
Equity Group share
12
Minority interests
490
256
Other
58
Assets
June 2014
The low cost retail park specialist
58
Liabilities
June 2014
Financial debt
Other
14
Sound financial ratios
€m
30/06/2014
31/12/2013
226.5
217.0
6.8
7.0
79.4%
80.2%
3.7%
3.9%
46.2%
45.8%
Net debt 1
Average maturity (years)
% debt hedged
Debt average interest rate
LTV 1
1 Adjusted
for net disposals proceeds of assets held for sale, security deposits and hedges
The low cost retail park specialist
Gross debt
Bonds
€30.0m
Finance leases
€88.1m
Borrowings
€131.5m
15
Stable debt repayment
€m
Bonds
30.0
Bank loans
Finance lease liabilities
78.5
8.2
10.4
1 year
9.3
9.8
10.0
10.6
10.5
10.7
9.4
9.3
3 years
4 years
5 years
2 years
* Excluding VAT bridging loan, developer loans and accrued interest
The low cost retail park specialist
37.8
More than 5
years
16
Change in NAV
NAV/share
€23.1
(0.3)
€m
NAV/share
0.6
€22.2
8.2
(7.8)
Dividend
(2.1)
Transfer taxes
(1.5)
Change in financial
instrument FV
+4%
221.9
224.8
213.4
NAV excl. TT
January 2014
Restatements
Restated NAV
January 2014
The low cost retail park specialist
Net income excl.
change in FV
Change in FV
of properties
Other
NAV excl.TT
June 2014
17
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
The low cost retail park specialist
18
New expectations from
retailers and local authorities
Retailers
>
Ever increasing consumer demand for
low prices
>
Growing competition from online
sales focusing on price
>
>
Retailers seeking
• Lower property costs
• Footfall
• Space
Local authorities
>
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
New business models
Inevitable growth in suburban retail properties based on optimum models
combining footfall and low prices
The low cost retail park specialist
19
Low cost retail parks, an appropriate solution
Shopping centres located just outside towns
Specific profile for low cost retail parks
> Very low charges
Property charges
€15
/m²
> High yield
• Higher than shopping centres and high street shops
> Low capex
• Reduced maintenance costs
• Immaterial “greening” investments
The low cost retail park specialist
7.5%
20
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
Breakdown of the French population
30%
> Low individual values
> Assets owned by promoters, individuals or small local
institutions
> An asset category ignored by major listed real estate
companies
(1) Source:
INSEE 2007 census (metropolitan France towns of 20,000-200,000 inhabitants)
/ C&W surveys
(2) Source: CNCC
The low cost retail park specialist
18%
28%
33%
Town centres
+46%
54%
37%
Fragmented portfolio of assets
Rural areas
1962
Suburbs
2006
Source: INSEE/ * metropolitan France
21
Patrimoine & Commerce, an institutional solution for
the retail parks model ramp-up
Located
nationwide
Stable
revenues
Occupancy rate c. 98%
Tenant turnover < 1%
SIIC
Transparency
Rigour
A tailored
management
solution
The low cost retail park specialist
Driver of
consolidation
220,000 m² acquired
since 2010
22
PATRIMOINE &
COMMERCE
2- Two key transactions
that boost the Company’s
institutional standing
- Predica investment in P&C
- Acquisition of retail park
portfolio
The low cost retail park specialist
23
Predica acquires equity stake
in Patrimoine & Commerce
> 20% stake acquired via a share issue
Public float
Duval
family
• Transaction value €47.4m
20.5%
• Low dilution of NAV (3.0 %)
> Reputed institutional shareholder
Predica
20.0%
The low cost retail park specialist
Vergely
family
4.4% 9.3%
Suravenir
• 2 appointments to the Supervisory Board and
1 new member each for investment, audit and
remuneration committees
13.4%
8.1%
> Increase in equity
> Changes in corporate governance
24.3%
Banque Populaire
Val de France
Robbe
family
24
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
The low cost retail park specialist
25
Trimax portfolio: Le Mans - Val de Sarthe
32,485 m² retail park
18 tenants
€3.8m rental income
100% occupancy rate
The low cost retail park specialist
26
Trimax portfolio: Le Mans - Val de Sarthe
The low cost retail park specialist
27
Trimax portfolio: Alençon Ouest
11,919 m² retail park
8 tenants
€1.0m rental income
100% occupancy rate
The low cost retail park specialist
28
Trimax portfolio: Arçonnay
Restaurant
La Farfouine
Furniture&living room
Literie de France
Le Mans
Alençon
Land
reserve
The low cost retail park specialist
20,780 m² retail park
20 tenants
€1.5m rental income
100% occupancy rate
29
PATRIMOINE &
COMMERCE
3- A leading listed real estate
company specialising in retail
parks
The low cost retail park specialist
30
A specialist retail property company for institutions
Assets focusing on retail parks
Patrimoine & Commerce
following Trimax
transaction
€602m
Shopping
malls and centres
€151m
25%
Retail parks
€424m
70%
Pro forma assets: €602m
5%
Offices and
business
€27m
Pro forma rental income: c. €37m*
Pro forma NAV: c. €280m
Pro forma LTV: c. 45%
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
The low cost retail park specialist
31
A specialist retail property company for institutions
A diversified development pipeline
Committed pipeline c. €90m
> Including Epagny, La Rochelle, Cergy
Identified pipeline c. €100m
Annecy Epagny (74) - end 2014
La Rochelle (17) - May 2015
Surface area 7,698 m² 100% leased
Surface area 5,784 m² 100% leased
Tenants
Tenants
The low cost retail park specialist
32
A specialist retail property company for institutions
Stock market profile appealing to institutions
24
Market price
(€)
+52%
21
18
15
12
Average daily trading
volumes
800
600
400
200
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
The low cost retail park specialist
Institutional shareholders
Debt restructuring towards
REIT’s standards
> Bonds
> Dynamic management of
debt
33
Development of an institutional property company,
a low cost retail parks pure player
x4
NAV
x5
Market cap x6
Total assets
Total assets
NAV
Market cap
€164m
€59m
€42m
The low cost retail park specialist
Pro forma total assets €602m
Pro forma NAV
€280m
Pro forma market cap €275m
34
Long-term objectives confirmed
€1bn total assets by end 2016
Yield of over 7.0%
Loan To Value ratio around 50%
Bourg-en-Bresse retail park
The low cost retail park specialist
35
APPENDICES
The low cost retail park specialist
36
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
> 7 members (5 independent*)
Audit Committee, chaired by Christian Louis Victor
> 4 members (1 independent*)
Remuneration Committee, chaired by Humbert Le Fresnoy (Arkea Group)
> 5 members (3 independent*)
* Pursuant to the Middlenext Code, Predica is not considered as independent
The low cost retail park specialist
37
Summary balance sheet
€m
30/06/2014
31/12/2013
30/06/2013
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
12.4
12.3
11.6
Debts
255.8
257.7
261.9
Other
58.3
53.0
60.5
548.4
547.9
549.2
Investment properties
Minority interests
Total liabilities and equity
The low cost retail park specialist