LEADING IN PAN-EUROPEAN REAL ESTATE - Company Presentation | November 2019 - PATRIZIA
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Equity Story A leading global partner for real estate investment in Europe Strong track record built over the past 35 years More than More than 35 42bn Top 10 years of real estate assets under investment manager experience management (EUR) in Europe1 Strong local presence: Strong performance: Strong potential: 24 11% 548m offices globally average IRR for available liquidity serving our clients investments in Europe for investments (EUR)2 Data as at 9M 2019 | 1 According to leading industry ranking by PropertyEU and Institutional Real Estate, both issued in 2019 |2 Adjusted for temporary consolidation of warehoused assets and liabilities for Living Cities residential fund, see slide 40 PATRIZIA | © 2019 3
Equity Story PATRIZIA‘s growth driven by client demand AUM growth directly translates into growing and strongly recurring management fees +23.0% p.a. 320.2 307.0 – 330.0 Total service fee 70 income1 300 60 50 211.9 180.0 – 185.0 +26.0% p.a. 188.6 175.3 Management fees1 40 165.2 140.0 150 30 117.5 89.1 93.2 45.0 +30.5% p.a. 72.8 81.5 41.0 20 68.1 – AUM growth 50.1 44.0 35.6 21.9 10 18.6 14.6 16.6 11.8 6.9 0 0 2012 2013 2014 2015 2016 2017 2018 2019e AUM (EUR bn) Management fees (EUR m) Total service fee income (EUR m) 1 Fee income growth below AUM growth as DAWONIA management fee is not linked to AUM PATRIZIA | © 2019 4
Equity Story Predictable management fees and diversified client base 69% of our AUM have a maturitiy of more than 10 years Maturity breakdown of AUM1 Equity commitments by clients2 76% 2% 11% 61% 18% 29% 69% 20% 7% >10 years/unlimited 5–10 years 2–5 years
Equity Story Attractive products across all asset and risk classes Our pan-European investment strategies are designed to best serve our clients’ needs EUR sqm 42.6 bn 18.4 m 47 % Assets under Real estate assets Active investment management under management strategies 11% 6% 0.2% 5% 4% 25% 4% 8% 34% 5% AUM by AUM by AUM by geography sector risk style 53% 12% 21% 64% 22% 24% Germany UK & Ireland Office Residential Core Core plus Logistics & France & Belgium Nordics Retail Industrial Value add Opportunistic Other (Healthcare, Netherlands Other Infrastructure Hotel, etc.) Data as at 9M 2019; AUM based on total real estate/infrastructure under management and administration; AUM by risk style based on vehicle level breakdown PATRIZIA | © 2019 6
Equity Story A critical success factor: Local & sector expertise Creating alpha in today’s market requires insights, patience, local knowledge & active management capabilities Outstanding screening and execution skills Pan-European transactions, asset and development teams Helsinki Stockholm > 6,000 deals screened Copenhagen Manchester (2018) Dublin Hamburg Amsterdam Thames Valley Berlin Warsaw London Frankfurt Brussels Augsburg (HQ) Paris Munich > 75 transactions made 3 ~ days on average 1 transaction Milan (2018) completed every 3 days Madrid Information as at Q2 2019. ⚫ Local Asset & Development Management professionals (incl. local country teams). ⚫ Transactions professionals PATRIZIA | © 2019 7
Equity Story Real estate investment management market is growing We are benefiting from the structural growth market for real estate investment management Demographic change Our clients’ capital is Aging population threatens conventional pension growing systems Lower for longer Increasing allocations to Low interest rate environment is here to stay real estate Consolidation Clients reduce number of Clients focus on selected pan-European platforms investment managers with broad product offering PATRIZIA | © 2019 8
Equity Story Leading investment managers benefit from structural growth Investors are consolidating the number of managers they invest with EUR 32bn of AUM needed to be +113% amongst the Top 10 in six years EUR 15bn of AUM needed to be amongst the Top 10 ✓ With EUR 42bn+ PATRIZIA is currently well positioned ✓ Ready for further growth in order to stay relevant for our clients 2012 2018 Source: www.irei.com; only assets in Europe PATRIZIA | © 2019 9
Equity Story Proven track record of accretive acquisitions Rockspring and TRIUVA are now part of the ONE PATRIZIA world Net purchase price reconciliation| EUR m Run-rate EBIT reconciliation| EUR m 35.4 22.0 349.3 40.0 313.9 18.0 Purchase Extraordinary Net purchase Recurring M&A Run-rate price performance/ price EBIT acquired efficiencies2 EBIT acquired transaction fees 2018 of acquired entities after taxes (25% M&A EBIT assumption)1 multiple 7.9x ROCE3 12.7% ROE4 14.3% 1 Not included in acquisition pricing | 2 Efficiencies realised, run-rate from 2019 | 3 Return on capital employed | 4 Return on equity based on equity ratio of 67% and tax rate assumption of 25% PATRIZIA | © 2019 10
Equity Story Mean bond-yield-spreads remain at historic highs Real estate continues to be an attractive asset class vs bonds DISCOUNT PREMIUM 600 BP 400 BP 200 BP 0 BP -200 BP -400 BP -600 BP 2019 Q2 1980 Q1 1982 Q1 1984 Q1 1986 Q1 1988 Q1 1990 Q1 1992 Q1 1994 Q1 1996 Q1 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1 2010 Q1 2012 Q1 2014 Q1 2016 Q1 2018 Q1 Office Spread BP Retail Spread BP Logistics Spread BP • The gap between prime yields and the corresponding national 10-year government bond yields is historically high • Although it is unlikely that this gap will continue to increase, it will nevertheless remain at a level making European real estate an attractive investment opportunity, even with rising interest rates Data as at 30.06.2019 | Source: PATRIZIA, Refinitiv, PMA PATRIZIA | © 2019 11
Equity Story Investment pressure continues Global under-allocation to real estate to drive growth By type of investor Allocations Average allocation to real estate | as % of overall portfolio Increase 50.0% Maintain 40.7% Current allocation Target allocation Decrease 9.3% 11.1% Investment style preferences 10.3% 9.7% Value add 51.1% 7.8% Core 39.1% 7.0% 6.5% Opportunistic 9.8% 2019e A minimum of EUR 72.4bn of new capital is expected to be invested into global real estate in 2019 Insurance Pension Fund SWF/Govt' Inst Company Source: ANREV / INREV / PREA Investment Intentions Survey 2019; survey among 154 institutional investors, managing EUR 730.1bn real estate AUM PATRIZIA | © 2019 12
Equity Story Global clients with a strong European base Partnerships with a diverse mix of global institutional investors foster our understanding of clients’ needs Pension funds 1% 8% Insurance 6% companies 11% > 350 46% Savings banks Banks, endowments institutional investors & corporates 27% Private investors Other 10% Germany 13% 20 UK & Ireland > 11% geographies Rest of Europe 66% Rest of World Data as at 9M 2019 ⚫ PATRIZIA capital markets offices ⚫ Acquisition of Japan-based KENZO Capital Corporation, published on 09.01.2019, closing on 01.11.2019 ◼ Markets with existing institutional investors and/or PATRIZIA capital markets operations PATRIZIA | © 2019 13
Equity Story Leading capital raising activity in the market PATRIZIA has invested significantly in its capital raising capabilities over the past years and is now reaping the rewards Institutional equity raised | EUR m 54% 3,000 3.000 2,500 2.500 of equity raised New from existing clients clients 2,000 2.000 1,500 1.500 EUR bn ~12 1,000 1.000 500 Existing clients of equity raised 2015-2019e 0 2015 2016 2017 2018 2019e Data as at 9M 2019; Leading: Positioned among Top 3 based on own competitor research | Equity raised including predecessor companies PATRIZIA | © 2019 14
Equity Story Actively driving digitalisation is key Joint PATRIZIA at the forefront of innovation & technology Forces About Cognotekt • AI (Artificial Intelligence) service provider using state-of-the-art Natural Language Processing to translate language into mathematical formulas • With this approach Cognotekt operates with 100% accuracy, when extracting data or classifying documents • Cognotekt’s services have already proven to be successful in other industries, including the insurance sector Joint forces: Cognotekt, EVANA and PATRIZIA • Strategic investment in Cognotekt in July 2019 follows the investment in EVANA in October 2018 and enables PATRIZIA to further leverage its AI competency • PATRIZIA fosters the collaboration of two complementary businesses, building a cutting-edge solution with benefits for its clients and the whole real estate industry • EVANA, the leading document, data and workflow platform will be supplemented with Cognotekt’s AI to extract data and classify documents with the highest accuracy and elimination of false positives usually corrupting the data sets Workflow Document classified & or data extracted Document will be stored into EVANA automatically and data extracted Manual rework accelerated by Document will be stored into Cognotekt’s relevance Document EVANA and data extracted Document not classified classification & or data not extracted PATRIZIA | © 2019
Equity Story Giving back to society is part of our DNA In 2019 PATRIZIA is celebrating the 20th anniversary of its Children Foundation Environment • Improved footprint of property portfolio (e.g. EUR 14bn portfolio running on renewables) • Sustainable construction (i.e. LEED, DGNB, BREEAM) for new build and existing portfolios • Green PropTech collaborations PATRIZIA Children Foundation • Foundation fully engaged since 1999 • Every single donated EUR goes into building schools & hospitals (children’s homes) around the world • Volunteering programme for PATRIZIA staff • Access to education & healthcare for over 200,000 children • PAT Art Lab Corporate responsibility • Member in best-practice associations (e.g. INREV, GRESB, ULI) • Regular employee surveys since 2010 • Continued professional development of staff • Innovation lab to future proof business https://www.patrizia.foundation/en/ Data as at 9M 2019 PATRIZIA | © 2019 16
Equity Story Stronger for clients and shareholders PATRIZIA share performance | as at 08.11.2019 PATRIZIA on the capital market Closing price L6M YTD L12M • PATRIZIA is listed in the Prime Standard segment of 30.00 30.00 € Deutsche Börse AG and member of the SDAX, DIMAX, EUR 18.66 +0.3% +11.8% +1.2% 25.00 25.00 € MSCI World Small Cap and other indices1 20.00 20.00 € • Initial listing on 31 March 2006 15.00 • Market capitalisation as at 08.11.2019: EUR 1.7bn 15.00 € • Average daily trading volume: ~80,000 shares 10.00 10.00 € 5.00 5.00 € EUR/share 0.00 0.00 € 2013 2014 2015 2016 2017 2018 2019 Analyst recommendations | as at 08.11.2019 Shareholder structure | as at 08.11.2019 7 1.40% 8.05% First Capital Partner GmbH 2 ∅ target price: Union Investment Privatfonds GmbH 3 EUR 21.86 Allianz SE 4 30.57% 51.81% 2 resulting upside6: Other institutional shareholders +17.1% Private shareholders 0 3.15% PATRIZIA AG 5 BUY HOLD SELL 5.02% Source: Thomson Reuters, PATRIZIA share register | 1 CDAX, Classic All Share, DAX International Mid 100, DAXplus FAMILY 30, DAXsector Financial Services, DAXsubsector Real Estate, Prime All Share, S&P GIVI Global Index, S&P Global BMI, S&P Intrinsic Value Weighted Global Index , S&P Low Beta Global Index | 2 First Capital Partner is attributable to CEO Wolfgang Egger | 3 According to the voting rights notification of 31 October 2018 | 4 According to the voting rights notification of 2 August 2019 | 5 Treasury shares | 6 Based on closing price of EUR 18.66 PATRIZIA | © 2019 17
Equity Story Growing dividends in line with our business Increase in dividend per share by 8.0% y-o-y • Dividend for 2018 of EUR 0.27 per share all cash. Based on the FY 2018 net profit attributable to shareholders the proposal equals a pay-out ratio of 48% (up from 43% last year) → i.e. part of cash to be retained for further inorganic growth while shareholders participate in profit growth via cash dividend • Future dividend policy is based on y-o-y growth in management fees and AUM with FY 2018 dividend of EUR 0.27 per share as starting point • Management fees reflect PATRIZIA’s most stable and recurring income stream, AUM represent a key financial performance indicator of the Group Dividend per share (EUR) Dividend policy FY 2019 onwards 0.27 X% Y% +8.0% Basis for 0.25 dividend proposal FY 2017 FY 2018 Growth in management Growth in AUM fees (y-o-y) (y-o-y) PATRIZIA | © 2019 18
Equity Story Strategy 2023 | A clear strategy… Our aspiration for the next 3 – 5 years Expand investment opportunities Broad diversification through more geographies, more real assets & real estate debt Strengthen footprint Leading market insights through more international offices & more sector expertise Build efficient platform Best-in-class back-office & reporting based on smart IT, AI & automated services Drive innovations Early mover through anticipating market trends and changing tenant & client behaviour Enhance stability Reliable partner based on strong balance sheet, strong brand & increasing recurring income PATRIZIA | © 2019 19
Equity Story …makes PATRIZIA stronger for clients & shareholders Our aspiration for the next 3 – 5 years ✓ 1 Real assets investment manager ✓ 2 More diversified product offering ✓ 3 Larger international client base ✓ 4 Early mover in automation & technology ✓ 5 Stable income & higher company value PATRIZIA | © 2019 20
Equity Story Strategic Agenda | Expansion across 4 quadrants Leverage existing platform offering governance, research, capital raising and market services – bolt on boutiques Core Core + Value-add Opportunistic Equity Real Estate Debt Private Public Equity Infrastructure Debt Expansion into additional segments is the natural next step in the evolution of PATRIZIA Equity = Strategies that target investment in real assets equity tranche; Secondaries = Strategies that target investment in secondary units of existing real assets funds/partnerships/joint ventures/or other relevant investment structures; Debt = Strategies that target investment in real assets debt tranche PATRIZIA | © 2019 21
Equity Story Over 3-5 years AUM could increase by ~15% p.a. incl. M&A… AUM of EUR 60bn organically and EUR 80bn incl. M&A are achievable EUR ~80.0bn Illustrative example EUR ~60.0bn EUR 44.0 – 45.0bn 3-5 years 2019e Strategic target PATRIZIA | © 2019 22
Equity Story … and directly translate into growth of fee income Management fees could increase by 8 – 10% p.a. organically Illustrative example Performance fees EUR 72.0 – 80.0m (hist. Ø: EUR 60.0m p.a.) Transaction fees (hist. Ø: EUR 55.0m p.a.) EUR 55.0 – 65.0m EUR ~250.0m EUR 180.0 – 185.0m Management fees 3-5 years 2019e Strategic target PATRIZIA | © 2019 23
Equity Story Strategy for our clients spurs further growth Organic and inorganic growth lead to stronger platform Status Quo Measure Mid-term target Assets under Management EUR 44.0 – 45.0bn Grow 8 – 10% p.a. organically EUR 60.0bn EUR 60.0bn Structural growth market Mergers & Acquisitions EUR 44.0 – 45.0bn Grow 15.0% p.a. (in)organically +20.0bn Active industry disruptor Total EUR 80.0bn Improve qualitiy of earnings by Quality of earnings 57.0%1 growing share of management >70.0%1 Increase share of recurring fees earnings Stable EBITDAR margin, Efficiency EBITDAR margin²: 35 – 39% Scalability but higher quality earnings Digitalisation and scalability Total cost ratio: 0.48 – 0.53% Innovation & digitalisation Total cost ratio:
Agenda • Equity Story • Financials 9M 2019 • Appendix PATRIZIA | © 2019 25
Financials 9M 2019 Highlights On track to deliver full-year guidance with improved earnings quality 9M 2019 Assets under management | EUR bn • Assets under management (AUM) increased by 3.8%1 to EUR 42.6bn y-t-d +3.8% 44.0 – 45.0 41.0 42.6 • PATRIZIA clearly outperformed the transaction market as at Principal investments 9M 2019 by showing double-digit growth in transaction volume; 1.2 0.1 1.3 0.1 transaction activity is expected to remain high in Q4 2019 with Fund of funds several closings coming up • Total service fee income up 11.5%, driven by higher management 39.8 41.2 Funds under (EUR 141.6m; +10.9%) and performance fees (EUR 68.6m; +37.3%) management • Operating income of EUR 97.7m flat y-o-y, but with further improved earnings quality; total service fee income growth compensated for lower income from the sale of phase-out principal 31.12.2018 30.09.2019 2019e investments (EUR 22.5m in 9M 2018 vs EUR 10.7m in 9M 2019) • Continued efficiency improvements as net operating expenses are growing much slower than total service fee income Operating income | EUR m (+4.1% vs +11.5%) 120.0 – 130.0 98.1 97.7 Full-year guidance confirmed -0.4% • Organic net AUM growth of EUR 3.0 – 4.0bn (i.e. 7.0% – 10.0%) • Total AUM expected between EUR 44.0 – 45.0bn • Operating income guidance of EUR 120.0 – 130.0m 9M 2018 9M 2019 2019e 1 All percentage rates in this section of the presentation refer to the comparable period of the previous year, unless stated otherwise PATRIZIA | © 2019 26
Financials 9M 2019 Operating income Strong operating income of EUR 97.7m with improved earnings quality Highlights Composition 9M 2019 | EUR m • Total service fee income up 11.5% to EUR 233.7m (9M 2018: EUR 209.7m) due to: • Strong management fees with 10.9% growth y-o-y -49.8% +4.1% due to organic and inorganic growth (Rockspring) +37.3% 19.1 • Transaction fees still 26.5% lower y-o-y, but positive acceleration to continue in Q4 2019 68.6 • Performance fees up 37.3% y-o-y due to strong -26.5% -147.2 outperformance generated for our clients +10.9% 23.5 • Net sales revenues and co-investment income of EUR 19.1m down significantly y-o-y in line with -2.7% strategic transformation: -0.4% -7.9 • Principal investments contributed EUR 10.7m after EUR 22.5m in 9M 2018 141.6 due to lower disposal volume of phase-out 98.1 97.7 principal investments • Co-investments contributed EUR 8.4m after extraordinary strong EUR 15.5m 9M 2018 9M 2019 in 9M 2018 Operating Manage- Trans- Perfor- Net sales Net D&A, Operating • Net operating expenses up 4.1%, but still well income ment action mance revenues operating financial income below the growth rate of management fees fees fees fees and co- expenses 1 result and (+10.9%) and total service fee income (+11.5%) investment other items income Total service fee income EUR 233.7m; +11.5% change y-o-y 1 Inter alia netted against other operating income of EUR 3.5m PATRIZIA | © 2019 27
Financials 9M 2019 Total service fee income PATRIZIA continues to grow while still delivering superior investment performance for clients Highlights Total service fee income | EUR m • Total service fee income up 11.5% to EUR 233.7m driven by: 330.0 • Organic growth in assets under management and – 100%2 consolidation of Rockspring (31.03.2018) 320.2 307.0 • Superior investment performance for clients 80.0 268.6 – 24% • Management fees up 10.9% to EUR 141.6m due to organic growth 92.5 72.0 in assets under management and additional management fees 233.7 generated by Rockspring 65.0 211.9 • Recurring management fees contributed 60.6% to 103.4 – 19% 188.6 52.4 68.6 total service fee income 55.0 • Fees are partly included in revenues (EUR 134.5m) and 29.2 66.9 partly in income from participations (EUR 7.1m) 140.0 25.0 23.5 117.5 19.7 185.0 70.3 51.8 • Transaction fees nearly doubled from H1 2019 (EUR 12.1m) to 13.4 58.7 – 57% 9M 2019 (EUR 23.5m) and pipeline is well filled for Q4 2019 52.2 180.0 175.3 • Acquisition fees: EUR 12.1m vs disposal fees: EUR 11.4m 54.1 141.6 • Performance fees of EUR 68.6m partly included in: 81.5 89.1 93.2 68.1 • Revenues (EUR 50.4m) 50.1 • Income from participations (EUR 18.3m) 2013 2014 20151 2016 2017 2018 9M 2019e • Full-year guidance confirmed 2019 • Total service fee income of EUR 307.0m – EUR 330.0m Management fees Transaction fees Performance fees SÜDEWO performance fee 1 EUR 165.2m excluding SÜDEWO performance fee | 2 At mid-point of guidance range PATRIZIA | © 2019 28
Financials 9M 2019 Transaction fees Transaction activity picked up in Q3 2019 and further acceleration is expected in Q4 2019 Highlights Transaction volume (closed/signed) | EUR bn • Strong acceleration of signed transaction volume q-o-q, closed signed e.g. residential in Germany and Dublin, logistics in France and Ø EUR 7.2 8.0 office in Germany; overall market volumes recovering since Q1 5.5bn 6.0 5.1 5.2 — 4.8 3.0 4.6 • For several transactions that were signed in Q3 2019 closing is 0.5 4.1 2.5 6.0 expected to follow in Q4 2019 with positive impact on AUM 0.7 1.9 2.8 2.0 • Growth in transaction fees also picked up in Q3 2019 and is 4.3 4.2 3.5 3.4 3.2 2.5 2.6 expected to continue to accelerate until year-end • Acceleration of transaction activity is expected to continue in Q4 2019 with positive impact on transaction fees; consequently 2013 2014 2015 2 20162 2017 2018 3 9M 2019e our 2019 full-year guidance is confirmed Acquisitions Disposals 2019 European transaction volume| EUR bn1 Transaction fees | EUR m • Lower transaction activity across all sectors 70.3 Ø EUR 56.6m 54.1 58.7 22.2 52.2 51.8 52.4 65.0 311.0 311.3 270.0 266.0 17.0 26.7 — 233.0 17.7 20.3 21.7 189.0 55.0 23.5 103.8 48.1 37.1 34.5 32.0 31.4 30.7 11.4 12.1 2013 2014 2015 2016 2017 2018 H1 2013 2014 2015 2016 2017 2018 9M 2019e 2019 Acquisition fees Disposal fees 2019 1 Source: PATRIZIA, RCA all property including: DE, UK, IE, DK, SE, NO, FI, NL, BE, FR, ES, PT, AT, IT, PL, CZ, HU and LX | 2016 transaction volume includes sale of Harald portfolio worth EUR 1.1bn; 2015 2 includes sale of SÜDEWO and acquisition of Harald portfolio totalling EUR 2.5bn | 3 In addition EUR 0.5bn mandates transferred to PATRIZIA that are not included in transaction volume, but increased AUM PATRIZIA | © 2019 29
Financials 9M 2019 Profitability and costs Continued efficiency improvements propel profitability and cost ratios AUM vs total cost ratio | EUR bn vs % EBITDAR margin (+/- principal investments) | EUR m, LHS vs % 50 1% 44.0 – 45.0 180 50.0% 1.21% 45.2% 45 42.9% 1.14% 1% 160 41.8% 45.0% 40 42.6 38.7% 41.0 3740.0% – 41% 0.97% 0.98% 140 34.8% 35 1% 33.9% 35 – 39% 39.0% 39.2% 35.0% 0.82% 120 30.4% 36.2% 30 0.80% 1% 30.0% 100 23.8% 28.8% 25 25.0% 0.53% 20 0.47%1 1% 80 21.9 20.0% 18.6 60 18.2% 15 0.53% 0% 15.0% 16.6 14.6 – 40 13.3% 10 11.8 10.0% 0.48% 0% 9.6% 20 8.1% 5 6.9 5.0% 0 0% 0 0.0% 3 2012 2013 2014 2015 2016 2017 2018 9M 2019e 2012 2013 2014 20152 2016 2017 2018 9M 2019e 2019 2019 AUM EBITDAR incl. principal EBITDAR 2lalalaexcl. principal Total cost ratio (in %) Margin (in %) investments investments Margin (in %) 2lalala • Scalability of operating platform continuously improves cost ratio • Margin transformation of business model nearly completed, • Total cost ratio = Net operating expenses (incl. staff costs) divided i.e. from volatile principal investment to stable service fee income by average AUM • Normalised margin expected in FY 2019 after peak in FY 2018 1 Annualised value | 2 2015 excluding SÜDEWO exit fee | 3 2016 excluding Harald profit PATRIZIA | © 2019 30
Financials 9M 2019 Solid financial position Ample cash position to drive further growth and strategic development • Strong balance sheet ratios and capital structure to facilitate further profitable growth • Total available liquidity as at 30.09.2019 amounts to EUR 261.2m or EUR 547.9m adjusted • The 9M 2019 balance sheet and liquidity KPIs are influenced by the consolidation of temporarily warehoused assets and liabilities for PATRIZIA’s new Living Cities residential fund launched in November 2019 Strong balance sheet Significant liquidity EUR m 30.09.2019 EUR m 30.09.2019 Total assets ⚫ 2,070.5 Bank balances, cash, ⚫ 376.1 Equity (excl. non-controlling deposits and securities 1,199.7 interests) - Regulatory reserve for asset –26.1 Equity ratio ⚫ 57.9% management companies - Transaction related liabilities Cash and cash equivalents ⚫ 209.1 and blocked cash ⚫ –88.6 + Deposits and securities +167.0 - Liquidity in closed-end funds –0.3 business property companies – Bank loans ⚫ –243.4 – Bonded loans –300.0 = Available liquidity ⚫ 261.2 = Net debt ⚫ –167.2 Available liquidity adjusted 547.9 Net equity ratio1 ⚫ 64.5% (for Living Cities) Net equity ratio adjusted 79.3% (for Living Cities) ⚫ Influenced by temporary consolidation of warehoused assets and liabilities for Living Cities residential fund, see slide 40 for more details 1 Net equity ratio: Equity (excl. non-controlling interests) divided by total net assets (total assets less liabilities covered by cash in hand) PATRIZIA | © 2019 31
Financials 9M 2019 Guidance 2019e Full-year operating income guidance of between EUR 120.0m and EUR 130.0m confirmed Assumptions 2019e Income composition FY 2019e | EUR m • Total service fee income: EUR 307.0 – 330.0m 64% 69% • Management fees: EUR 180.0 – 185.0m 90% based on increased assets under management 30.0 with majority of acquisitions to close in H2 2019 80.0 • Transactions fees: EUR 55.0 – 65.0m 39% – • Performance fees: EUR 72.0 – 80.0m 72.0 65.0 • Net sales revenues and co-investment income: 78% – EUR 30.0m 55.0 -222.0 – 72% 185.0 78% • Net operating expenses: EUR 207.0 – 222.0m -207.0 – 141.4 180.0 • Transaction volume: EUR 6.0 – 8.0bn -11.0 130.0 – • Assets under management: EUR 44.0 – 45.0bn 120.0 FY 2018 FY 2019e Operating Manage- Trans- Perfor- Net sales Net D&A, Operating income ment action mance revenues operating financial income fees fees fees and co- expenses result and investment other items income Total service fee income % figure shows 307.0 – 330.0 9M 2019 vs 2019e at mid-point PATRIZIA | © 2019 32
Agenda • Equity Story • Financials 9M 2019 • Appendix PATRIZIA | © 2019 33
Appendix Our competitive edge Excellent market access and local knowledge are key to our strong investment performance for clients • Transactions worth EUR ~39bn completed since 2012 ‘Turn to’ real estate investment Transactions • Transaction market expected to remain active resulting in a manager estimated transaction volume of EUR 6.0 – 8.0bn for FY 2019 • EUR ~14bn of equity raised since 2012 Direct access to institutional Fundraising • >350 institutional investors, largely invested in multiple products investors worldwide • Broad range of direct and indirect investment opportunities • EUR 14.9bn of credit volume under management as at 9M 2019 Financing • More than 100 financial institutions providing debt funding Best-in-class financing capabilities • 100% performing loans since PATRIZIA was established in 1984 • Consistently producing positive and competitive returns Investment for institutional, private and (semi-)professional investors Strong investment track record Track Record • Superior returns for value-add and private equity investments • Multi-fund platform offering clients geographical, asset and Product risk diversification across investment products Attractive product offering across Offering • Investments through regulated funds, separate accounts all asset and risk classes and co-investment vehicles • Integrated pan-European asset management team with more than 150 professionals in more than 15 European countries European network with Expertise • More than 35 years of experience with real estate only experienced local teams • Top provider of German Spezialfonds (BVI 2018) Data as at 9M 2019 PATRIZIA | © 2019 34
Appendix Our footprint 19 offices and 5 client relationship hubs across 18 countries guarantee close proximity to our clients and assets Global fundraising… …for European real assets Amsterdam Copenhagen Helsinki London Augsburg (HQ) New York Paris Stockholm Seoul Tokyo Hong Kong Copenhagen Manchester Hamburg Dublin Amsterdam Warsaw Berlin Melbourne Thames Valley London Brussels Frankfurt Luxemburg Augsburg (HQ) Paris 28% Munich Fund Management & 25% Services Corporate 795 Milan 22% Asset & Development 11% Management Transaction Management staff1 4% Madrid Capital Markets & Client 10% Services Other Data as at 9M 2019 ⚫ PATRIZIA capital markets offices ⚫ Acquisition of Japan-based KENZO Capital Corporation, published on 09.01.2019, closing on 01.11.2019 ◼ Markets with PATRIZIA management & capital markets operations PATRIZIA real estate investment & management offices | 1 FTE PATRIZIA | © 2019 35
Appendix Product overview Direct & indirect investment opportunities allow our clients to achieve their individual portfolio objectives Commingled Funds Club Deals/JVs Separate Accounts Multi Manager Products Management Mandates • Open-/closed-ended • Targeted business • Individual, nimble • Indirect real estate • Advisory services funds strategy strategies investing across the • Asset, development • Specific themes • Small club of like-minded • Designed to achieve globe management and/or • Institutional, private and institutional partners specific objectives of • Allows broad platform for direct real (semi-)professional institutional investors diversification of clients’ estate investments or investors real estate exposure funds PanEuropean Gran Via 21 European Diversified 1 PMM Global IV Madame Tussauds Europe, commercial Spain, retail & hotel Europe, diversified Global, diversified London, leisure Data as at 9M 2019 PATRIZIA | © 2019 36
Appendix PATRIZIA GrundInvest PATRIZIA’s closed-end funds business for private and (semi-)professional investors is developing fast Investment volume1 | EUR m • Since its foundation in 2014, PATRIZIA 800 Dresden GrundInvest has launched 12 closed-end Die Stadtmitte Mülheim Sustained funds accounting for EUR 747m of AUM 700 Berlin Landsberger Allee growth • More than 6,500 participations were 600 Frankfurt Smart Living made by private and (semi-)professional Frankfurt/Hofheim investors 500 Garmisch-Partenkirchen 400 Mainz Rheinufer 300 München Leopoldstraße • The average pay-out for the 2018 200 Kopenhagen Südhafen financial year across all funds was 4.8% Den Haag Wohnen Excellent before tax 100 Stuttgart Südtor performance • Nine out of ten funds offered investors a 0 Campus Aachen pay-out above the original forecast 2016 1 2 3 4 5 6 7 8 9 10 2019 11 Distribution by real estate sector1 • September: start of syndication of the 6% new fund „Die Stadtmitte Mülheim“ 6% Office 2 Residential 3 32% 12% New • October: launch of a new fund dedicated explicitly to semi-professional investors Retail Hotel products • 2020: Expansion of target group to semi- 17% Parking Other 4 professional investors across Europe 27% 1 Data as at 9M 2019 | 2 Offices and doctor´s offices | 3 Traditional residential and alternative residential, incl. senior housing, student housing, etc. | 4 Including storage areas, gastronomy, etc. PATRIZIA | © 2019 37
Appendix Yield development Investors have seen significant nominal yield compression of real estate investments in recent years Office Retail Logistics Yield range Yield range Yield range European Prime Yield European Prime Yield European Prime Yield Long-term mean Long-term mean Long-term mean 10.0% 10.0% 10.0% 10.0 % 10.0% 10.0% 9.5% 9.5% 9.5% 9.5 % 9.5% 9.5% 9.0% 9.0% 9.0% 9.0 % 9.0% 9.0% 8.5% 8.5% 8.5% 8.5 % 8.5% 8.5% 8.0% 8.0% 8.0% 8.0 % 8.0% 8.0% 7.5% 7.5% 7.5% 7.5 % 7.5% 7.5% 7.0% 7.0% 7.0% 7.0 % 7.0% 7.0% 6.5% 6.5% 6.5% 6.5 % 6.5% 6.5% 6.0% 6.0% 6.0% 6.0 % 6.0% 6.0% 5.5% 5.5% 5.5% 5.5 % 5.5% 5.5% 5.0% 5.0% 5.0% 5.0 % 5.0% 5.0% 4.5% 4.5% 4.5% 4.5 % 4.5% 4.5% 4.0% 4.0% 4.0% 4.0 % 4.0% 4.0% 3.5% 3.5% 3.5% 3.5 % 3.5% 3.5% 3.0% 3.0% 3.0% 3.0 % 3.0% 3.0% 2.5% 2.5% 2.5% 2.5 % 2.5% 2.5% 2006 Q4 2000 Q4 2002 Q4 2004 Q4 2006 Q4 2008 Q4 2010 Q4 2012 Q4 2014 Q4 2016 Q4 2018 Q4 2000 Q4 2002 Q4 2004 Q4 2008 Q4 2010 Q4 2012 Q4 2014 Q4 2016 Q4 2018 Q4 2000 Q4 2002 Q4 2004 Q4 2006 Q4 2008 Q4 2010 Q4 2012 Q4 2014 Q4 2016 Q4 2018 Q4 Data as at 30.06.2019 | Source: PATRIZIA, PMA PATRIZIA | © 2019 38
Appendix Top 10 EU investment managers Investors’ preference for diversification drives European consolidation EUR 23.7bn Increase by +96% EUR 46.5bn Average AUM Average AUM of the Top 10 in 2012 of the Top 10 in 2018 Pos. Investment Manager AUM (EUR) Pos. Investment Manager AUM (EUR) 1 AXA Real Estate 42bn 1 Swiss Life Asset Managers 69bn 2 CBRE Global Investors 39bn 2 AXA Investment Managers – Real Assets 66bn 3 Aviva Investors 28bn 3 Blackstone 46bn 4 Aberdeen Asset Management 23bn 4 Aberdeen Standard Investments 46bn 5 IVG Immobilien AG 20bn 5 Credit Suisse Real Estate Investment Mgt. 45bn 6 AEW Global 19bn 6 CBRE Global Investors 45bn 7 UBS Global Asset Management (UK) 17bn 7 PATRIZIA1 42bn 8 RREEF Real Estate 17bn 8 Aviva Investors 39bn 9 Prudential Property Investment Managers 17bn 9 Deka Immobilien Investment/WestInvest 36bn 10 LaSalle Investment Management 15bn 10 M&G Real Estate 32bn Source: www.irei.com; only assets in Europe | 1 PATRIZIA as at 9M 2019, including a small portion of non-European assets via PATRIZIA Multi Managers; ranking adjusted accordingly PATRIZIA | © 2019 39
Appendix Excursus | Living Cities PATRIZIA Living Cities Residential Fund Temporary consolidation of assets and liabilities on PATRIZIA’s balance sheet • Open-ended institutional real estate fund with a pan-European • As at November 2019 Living Cities holds a portfolio of EUR 650m in core strategy and an initial target volume of EUR 1bn in assets high quality assets • Living Cities is targeting residential assets in Europe’s most • Temporary consolidation due to timing between signing/closing of exciting metropolitan areas real estate transactions and closing of fundraising/clients’ board approvals; PATRIZIA expects deconsolidation before end of Q4 2019 • City selection guided by PATRIZIA’s proprietary European Cities Ranking • A number of existing and new institutional investors from Europe and Asia have committed to the fund so far, with further parties • Focus on long term buy-to-hold strategies including multi-family in advanced due diligence housing (both BTR1 and PRS2), co-living, retirement and student housing • Assets include an income-producing German residential portfolio valued at over EUR 400m and consisting of nine apartment buildings • Target LTV at fund level: 35% in six of Germany’s leading cities, all built after 2000 • Launch of fund in November 2019 with EUR 650m of assets • Two apartment developments, in Munich and Copenhagen, have and an acquisition pipeline of approx. EUR 1.5bn also been forward purchased by the fund for a total consideration of EUR 205.4m, delivery in 2020 1 BTR = built-to-rent | 2 PRS = private rented sector PATRIZIA | © 2019 40
Appendix Excursus | FY 2018 net profit attributable to shareholders Net profit 2018 burdened by reorganisation expenses and amortisation of fund management contracts Reconciliation FY 2018 | EUR m 141.1 -22.3 1.7 Retained profit -36.7 for further growth EUR 27.1m -26.0 120.8 Dividend Pay-out ratio 58.1 -6.5 payment totalling of 51.7 EUR 24.6m 47.6% (0.27 * 91,059,631 (EUR 24.6m / shares outstanding) EUR 51.7m) FY 2018 Operating Reorgani- Other EBITDA Amortisation Other Net profit Non- Net profit income sation items1 of fund items2 controlling attributable expenses management interests to contracts shareholders • Reorganisation expenses and amortisation of fund management contracts are the two most important single items explaining the difference between Operating income and net profit attributable to shareholders. • The increase in amortisation of fund management contracts (as part of other intangible assets) stems from the recent acquisition activity. As an identifiable asset within the purchase price allocation, PATRIZIA amortises the value of fund management contracts over time (between 1 – 29 years depending on length of contract). As at 31.12.2018 PATRIZIA accounted EUR 163m worth of fund management contracts. These amortisations will continue to impact the Group’s net profit going forward, are however a non-cash item and hence adjusted in PATRIZIA’s operating income calculation. 1 For a detailed reconciliation between operating income and EBITDA see PATRIZIA‘s 2018 Annual Report, page 40 2 Inter alia including depreciation of property, plant and equipment, financial result and taxes PATRIZIA | © 2019 41
Appendix Capital allocation Assets under Invested capital Invested capital Participations 30.09.2019 Management (fair value) (at cost) EUR m EUR m EUR m in % Third-party business 35.928.7 0.0 Co-investments 6.572.7 527.4 152.6 Residential 5.560.1 507.4 135.7 Dawonia GmbH 4.503.1 149.0 1 52.2 5.1 1 Dawonia performance fee claims 274.6 0.0 0.1 WohnModul I SICAV-FIS 1.057.1 62.1 62.1 10.1 Harald 21.5 1 21.3 5.1 Other 0.1 0.1 0.0 Commercial Germany 1.010.3 18.5 15.2 Alliance 198.7 5.3 1 5.2 5.1 1 Seneca 177.4 6.0 4.9 5.1 PATRoffice 1.3 1.5 1 1.1 6.3 sono west 48.5 1.0 0.0 28.3 TRIUVA/IVG logistics 365.2 3.9 1 3.3 2.1 TRIUVA/IVG commercial 219.2 0.8 1 0.7 11.0 Commercial international 2.3 1.5 1.7 Citruz Holdings LP (UK) 2.3 0.1 1 0.3 10.0 First Street Development LTD (UK) 1.4 1.4 10.0 Principal investments 60.5 50.8 Other balance sheet items 660.4 2 Tied-up investment capital 42.561.9 1.238.5 Available liquidity 261.2 Total investment capital 42.561.9 1.499.7 of which debt (bonded loans) 300.0 of which equity PATRIZIA 1.199.7 (without non-controlling interests) 1 Net of deferred taxes from valuation according to IFRS 9 | 2 Incl. goodwill, fund management contracts (included in other intangible assets) and Living Cities residential fund, see slide 40 for more details PATRIZIA | © 2019 42
Appendix Reconciliation of operating income EUR k 9M 2019 9M 2018 Change EBITDA 95.104 83.904 13.3% Amortisation of other intangible¹ assets, software and -31.473 -6.954 352.6% rights of use, depreciation of property, plant and equipment EBIT 63.631 76.950 -17.3% Finance income/expenses -2.965 -3.250 -8.8% Result from currency translation 82 1.370 -94.0% EBT 60.749 75.070 -19.1% Changes in value of derivatives 0 51 -100.0% Amortisation of other intangible assets¹ 19.954 2.701 638.8% Realised changes in value of investment property (net) 3.960 8.015 -50.6% Reorganisation expenses 9.354 14.252 -34.4% Expenses/income from unrealised currency translation -643 -2.004 -67.9% Operating income from participations (IFRS 9) 4.337 0 0.0% Operating income 97.709 98.086 -0.4% 1 In particular fund management contracts transferred as part of the recent acquisitions PATRIZIA | © 2019 43
Appendix Consolidated income statement EUR k Q3 2019 Q3 2018 9M 2019 9M 2018 Revenues 63.096 79.889 242.920 239.995 Income from the sale of investment property 25 71 273 662 Changes in inventories -2.708 -4.355 -23.130 -26.058 Other operating income 3.469 3.943 9.514 12.140 Income from the deconsolidation of subsidiaries 585 138 585 317 Total operating performance 64.466 79.687 230.162 227.056 Cost of materials -1.717 -1.701 -3.209 -8.632 Cost of purchased services -3.326 -3.196 -11.278 -10.148 Staff costs -29.736 -32.928 -92.677 -89.850 Other operating expenses -17.075 -19.650 -47.472 -53.714 Impairment losses for trade receivables and contract assets -26 394 -486 -1.137 Income from participations 3.698 3.566 29.126 23.395 Earnings from companies accounted for using the equity method 0 2.101 292 11.562 Cost from the deconsolidation of subsidiaries 0 -376 0 -376 EBITDAR 16.285 27.897 104.458 98.156 Reorganisation expenses -2.842 -13.009 -9.354 -14.252 EBITDA 13.443 14.888 95.104 83.904 Amortisation of other intangible assets¹ and software, rights of use, depreciation of property, plant and equipment -7.725 -2.477 -31.473 -6.954 Earnings before interest and taxes (EBIT) 5.717 12.411 63.631 76.950 Financial income 521 437 1.384 1.170 Financial expenses -1.336 -1.341 -4.349 -4.420 Result from currency translation 205 108 82 1.370 Earnings before taxes (EBT) 5.107 11.615 60.749 75.070 Income taxes -2.452 -2.172 -14.760 -15.454 Net profit for the period 2.655 9.444 45.989 59.616 1 In particular fund management contracts transferred as part of the recent acquisitions PATRIZIA | © 2019 44
Appendix Consolidated balance sheet | Assets 30.09.2019 30.09.2019 31.12.2018 EUR k ⚫ adjusted A. Non-current assets Goodwill 201.714 201.714 201.109 Other intangible assets1 147.179 147.179 166.562 Software 10.286 10.286 11.396 Rights of use 23.113 23.113 0 Investment property 3.241 3.241 8.308 Equipment 5.992 5.992 5.890 Associated companies accounted using the equity method 67.348 67.348 76.141 Participations 538.543 538.518 499.241 Non-current borrowings and other loans 27.969 27.969 27.513 Deferred taxes 17.022 17.022 6.102 Total non-current assets 1.042.407 1.042.382 1.002.262 B. Current assets Inventories 462.547 ⚫ 47.547 71.534 Securities 2.011 2.011 3.011 Current tax assets 17.929 17.929 15.585 Current receivables and other current assets 336.465 ⚫ 296.515 355.456 Cash and cash equivalents 209.147 ⚫ 407.260 330.598 Total current assets 1.028.098 ⚫ 771.261 776.184 TOTAL ASSETS 2.070.505 ⚫ 1.813.642 1.778.446 ⚫ Influenced by temporary consolidation of warehoused assets and liabilities for Living Cities residential fund, see slide 40 for more details 1 In particular fund management contracts transferred as part of the recent acquisitions PATRIZIA | © 2019 45
Appendix Consolidated balance sheet | Equity and liabilities 30.09.2019 30.09.2019 31.12.2018 EUR k ⚫ adjusted A. Equity Share capital 91.060 91.060 91.060 Capital reserves 155.222 155.222 155.222 Retained earnings Legal reserves 505 505 505 Currency translation difference -12.376 -12.376 -15.605 Revaluation reserve according to IFRS 9 84.348 84.348 49.503 Consolidated unappropriated profit 880.986 880.986 862.421 Non-controlling interests 16.878 ⚫ 12.500 10.682 Total equity 1.216.622 ⚫ 1.212.244 1.153.788 B. Liabilities NON-CURRENT LIABILITIES Deferred tax liabilities 117.909 117.909 110.387 Long-term bank loans 163.394 ⚫ 0 0 Retirement benefit obligations 21.573 21.573 21.724 Bonded loans 300.000 300.000 300.000 Non-current liabilities 19.605 ⚫ 16.498 16.836 Leasing liabilities 15.619 15.619 0 Total non-current liabilities 638.100 ⚫ 471.599 448.947 CURRENT LIABILITIES Short-term bank loans 80.000 ⚫ 0 0 Other provisions 15.316 15.316 23.530 Current liabilities 71.146 ⚫ 65.163 99.963 Short-term leasing liabilities 7.569 7.569 0 ⚫ Influenced by temporary Tax liabilities 41.752 41.752 52.218 consolidation of warehoused assets Total current liabilities 215.783 ⚫ 129.799 175.711 and liabilities for Living Cities residential fund, see slide 40 for TOTAL EQUITY AND LIABILITIES 2.070.505 ⚫ 1.813.642 1.778.446 more details PATRIZIA | © 2019 46
Appendix Financial calendar 2019 November 14 ➢ Quarterly Statement for the first nine months of 2019 November 14 ➢ Capital Markets Day 2019 (for institutional investors and equity analysts) 2020 February 18 ➢ Preliminary results 2019 March 19 ➢ Annual Report 2019 May 14 ➢ Quarterly Statement for the first quarter of 2020 July 1 ➢ Annual General Meeting 2020 August 6 ➢ Interim Report for the first half of 2020 Invitations and dial-in numbers are provided in advance. For further information, please visit: www.patrizia.ag. PATRIZIA | © 2019 47
Appendix Contact KARIM BOHN MARTIN PRAUM Member of the Senior Managing Director Management Board | CFO Head of Investor Relations PATRIZIA AG T +49 821 50910-402 Fuggerstrasse 26 F +49 821 50910-399 86150 Augsburg M +49 151 19685445 Germany investor.relations@patrizia.ag LAURA WALZ MAXIMILIAN GERBER Senior Associate | Investor Relations Associate | Investor Relations T +49 821 50910-347 T +49 821 50910-351 F +49 821 50910-399 F +49 821 50910-399 M +49 151 41411174 M +49 151 24506188 investor.relations@patrizia.ag investor.relations@patrizia.ag Disclaimer The information contained herein is directed only at professional clients and intended solely for use by the recipient. No part of this document or the information herein may be distributed, copied or reproduced in any manner, in whole or in part, without our prior written consent. This document is for information and illustrative purposes only. It does not constitute advice, a recommendation or a solicitation of an offer to buy or sell shares or other interests, financial instruments or the underlying assets, nor does this document contain any commitment by PATRIZIA AG or any of its affiliates. Whilst prepared in good faith, the information contained in this document does not purport to be comprehensive. PATRIZIA AG and its affiliates provide no warranty or guarantee in relation to the information provided herein and accept no liability for any loss or damage of any kind whatsoever relating to this material. The information herein is subject to change without notice. This document contains specific forward-looking statements that relate in particular to the business development of PATRIZIA AG and the general economic and regulatory environment and other factors to which PATRIZIA AG is exposed to. These forward-looking statements are based on current estimates and assumptions by the Company made in good faith, and are subject to various risks and uncertainties that could render a forward-looking estimate or statement inaccurate or cause actual results to differ from the results currently expected. PATRIZIA AG does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this publication. Due to commercial rounding of figures and percentages small deviations may occur. 14 November 2019, PATRIZIA AG PATRIZIA | © 2019 48
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