Earnings Release • Feb 24, 2019
Earnings Release
Open in ViewerOpens in native device viewer
1 March 2019, 7:00am, Antwerp (Berchem), Belgium: VGP NV ('VGP' or 'the Group'), a leading European provider of high-quality logistics and semi-industrial real estate, today announces the results for year ended 31 December 2018:
VGP's Chief Executive Officer, Jan van Geet, said: "Delivering record profits, 2018 was another intensive year for VGP. We managed to successfully transform VGP towards a truly Pan-European platform as we expanded into new key markets. We put significant effort in introducing a new matrix organisation to stay close to our clients across Europe and to allow for VGP's further geographic expansion. The significant increase of our land bank in 2018 laid the foundation for growth over the coming years."
Jan Van Geet added: "We successfully continued our growth path in early 2019 with the expansion into Portugal and several landmark projects in Germany. We expect our development activities to continue to grow in 2019 supported by solid client demand driven by e-commerce and changing business needs. Through our integrated business model, VGP is uniquely positioned to capture the growth opportunities across Europe."
1 Year-over-year inclusive of Joint Venture at 100% and when excluding the sale of Mango. The Mango building located in Barcelona (Spain) sold during 2018, represented € 7.6 million in annualised rent income.
2 Of the twelve countries in which the group is active, the JV currently covers Germany, Slovakia, Czech Republic and Hungary 3 Based on the closing share price of € 69.60 as at 28 February 2019
1 The Mango building located in Barcelona (Spain) sold during 2018, represented € 7.6 million in annualized rent income. The reported annualised committed leases for December 2017 is €82.8 million, or €75.2 million if excluding Mango
2 For Joint Venture at 100%
• Management Team has been strengthened through several new senior hires and a new matrix and country organisation has been successfully rolled-out to align with the enlarged organization and create a platform for continued future growth.
| Operations and results | 2018 | 2017 | Change (%) |
|---|---|---|---|
| Committed annualised rental income (€mm) | 104.1 | 82.8 | 25.7% |
| IFRS Operating Profit before tax (€mm) | 151.1 | 127.7 | 18.3% |
| IFRS net profit (€mm) | 121.1 | 96.0 | 26.1% |
| IFRS earnings per share (€ per share) | 6.52 | 5.17 | 26.1% |
| Dividend per share (€ per share) | 2.20 | 1.90 | 15.8% |
| Portfolio and balance sheet | 2018 | 2017 | Change (%) |
|---|---|---|---|
| Portfolio value, including joint venture at 100% (€mm) | 1,936 | 1,563 | 23.9% |
| Portfolio value, including joint venture at share (€mm) | 1,355 | 1,206 | 12.4% |
| EPRA NAV per share (€ per share) | 30.94 | 27.06 | 14.3% |
| IFRS NAV per share (€ per share) | 29.25 | 25.09 | 16.6% |
| Net financial debt (€mm) | 419.3 | 436.6 | (4.0)% |
| Gearing1 (%) | 34.6 | 42.3 | - |
1 Calculated as Net debt / Total equity and liabilities
2 Of the twelve countries in which the group is active, the JV currently covers Germany, Slovakia, Czech Republic and Hungary
VGP will host a conference call at 10:30 (CET) on 1 March 2019 The conference call will be available on:
• Belgium: 0800 58228 (toll free) / +32 (0)2 404 0659
A presentation is available on VGP website: http://www.vgpparks.eu/investors/en/reports-and-presentations/presentations
| Annual Report 2018 |
9 April 2019 |
|---|---|
| First quarter 2019 trading update | 10 May 2019 |
| General meeting of shareholders | 10 May 2019 |
| Dividend ex-date | 20 May 2019 |
| Dividend payment date | 22 May 2019 |
| Half year results 2019 | 23 August 2019 |
| Third quarter 2019 trading update | 22 November 2019 |
| Martijn Vlutters | Tel: +32 (0)3 289 1433 |
|---|---|
| (VP – Business Development & Investor Relations) |
|
| Petra Vanclova | Tel: +42 0 602 262 107 |
| (External Communications) | |
| Anette Nachbar | Tel: +49 152 288 10363 |
| Brunswick Group |
VGP is a leading pan-European developer, manager and owner of high-quality logistics and semiindustrial real estate. VGP operates a fully integrated business model with capabilities and longstanding expertise across the value chain. The company has a well-advanced development land bank of 5.6 million m² and the strategic focus is on the development of business parks. Founded in 1998 as a familyowned real estate developer in the Czech Republic, VGP with a staff of 180 employees today owns and operates assets in 12 European countries directly and through VGP European Logistics, a joint venture with Allianz Real Estate. As of December 2018, the Gross Asset Value of VGP, including the joint venture at 100%, amounted to €1.94 billion and the company had a Net Asset Value (EPRA NAV) of €575 million. VGP is listed on Euronext Brussels and on the Prague Stock Exchange (ISIN: BE0003878957).
For more information, please visit: http://www.vgpparks.eu
Forward-looking statements: This press release may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. VGP is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release considering new information, future events or otherwise. The information in this announcement does not constitute an offer to sell or an invitation to buy securities in VGP or an invitation or inducement to engage in any other investment activities. VGP disclaims any liability for statements made or published by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other press release issued by VGP.
During 2018 VGP continued its strong growth in all the markets where the Group is active. Development and letting activities continue to perform at record levels.
A fourth closing was made with VGP European Logistics (the 50/50 joint venture with Allianz Real Estate) in which the Joint Venture acquired 6 new parks from VGP, comprising of 13 logistic buildings and another 5 newly completed logistic buildings which were developed in parks previously transferred to the Joint Venture. The 6 parks are in Germany (3) and in the Czech Republic (3). The additional 5 buildings which were acquired by the Joint Venture are in Germany (3 buildings), in the Czech Republic (1 building) and in Hungary (1 building).
During the year a new head office was opened in Antwerp, Belgium, which houses the commercial and project team for the Benelux. Additional new offices were established in Milan (Italy), Porto (Portugal) and Vienna (Austria). VGP is now active in 12 countries and has the team and land bank to provide a full range of different solutions and services to multinational and local tenants. Through the further geographical expansion of our footprint VGP established itself as a truly pan-European specialised developer, owner and manager of high-quality logistic and light industrial buildings.
The signed annualised committed leases represent € 104.1 million1 at the end of December 2018 represent a total of 1,982,000 m² of lettable area. Of this total space 635,000 m² belong to the own portfolio (648,000 m² as at 31 December 2017) and 1,347,000 m² to the VGP European Logistics joint venture (1,009,000 m² at 31 December 2017).
During the year 2018 VGP delivered a total of 21 projects representing 505,000 m² of lettable area, with an additional 19 projects under construction representing 322,000 m² of future lettable area. A further 2 projects were already delivered during the first 2 months of 2019 totalling 45,000 m² of lettable area. On the back of the recorded strong demand for lettable space an additional 9 new projects, representing 178,000 m² of future lettable area, were started up after year-end. These projects represent a future annualised rent income of circa € 7.7 million.
The net valuation of the property portfolio as at 31 December 2018 showed a net valuation gain of € 98.6 million (against a net valuation gain of € 94.6 million per 31 December 2017).
The own investment property portfolio consists of 13 completed buildings representing 288,000 m² of lettable area whereas the Joint Venture property portfolio consists of 68 completed buildings representing 1,333,000 m² of lettable area.
Gearing level of the Group improved slightly to 34.6% as at 31 December 2018 (42.3% at 31 December 2017) despite raising of new debt during the second half of 2018.
1 Including VGP European Logistics (joint venture with Allianz Real Estate). As at 31 December 2018 the annualised committed leases for VGP European Logistics stood at € 70.9 million (2017: € 52.5 million).
| (in thousands of €) | 2018 | 2017 |
|---|---|---|
| Revenue1 | 30,336 | 28,224 |
| Gross rental income | 16,627 | 17,046 |
| Property operating expenses | (1,123) | (1,941) |
| Net rental income | 15,504 | 15,105 |
| Joint venture management fee income | 9,965 | 8,057 |
| Net valuation gains / (losses) on investment properties | 98,552 | 94,628 |
| Administration expenses | (18,167) | (19,353) |
| Share in result from joint venture after tax | 45,220 | 29,229 |
| Operating profit / (loss) | 151,074 | 127,666 |
| Net financial costs | (13,970) | (10,466) |
| Profit before taxes | 137,104 | 117,200 |
| Taxes | (15,998) | (21,205) |
| Profit for the year | 121,106 | 95,995 |
The net rental income increased with € 0.4 million to € 15.5 million after taking into effect the impact of the income generating assets delivered during 2018 offset by the fourth closing with the Joint Venture in April 2018 and the sale of the Mango building in September 2018.
Including VGP's share of the Joint Venture and looking at net rental income on a "look-through" basis net rental in total increased by € 10.8 million, or 33% compared to 31 December 2017 (from € 32.6 million for the period ending 31 December 2017 to € 43.4 million for the period ending 31 December 2018)2
During 2018 we saw continued strong leasing growth with letting activities performing at record levels.
The increase in demand for lettable area resulted in the signing of new lease contracts in excess of € 38.7 million in total of which € 32.6 million related to new or replacement leases (€ 7.9 million on behalf of VGP European Logistics) and € 6.1 million (€ 5.4 million on behalf of VGP European Logistics) were related to renewals of existing lease contracts.
During the year lease contracts for a total amount of € 3.7 million (€ 3.1 million on behalf of VGP European Logistics) were terminated and the sale of the Mango building resulted in a € 7.6 million decline of the annualised committed leases.
1 Revenue is composed of gross rental income, service charge income, property and facility management income and property development income.
2 See attached section 'Supplementary notes not part of the condensed financial information' for further details
Net, the annualised committed leases therefore increased to € 104.1 million as at the end of December 20181 (compared to € 82.8 million as at 31 December 2017).
Germany was the main driver of the growth in committed leases with € 13.0 million of new leases signed during the year (€ 5.2 million on behalf of VGP European Logistics).
The other countries also performed well with new leases being signed in the Czech Republic for € 9.1 million (€ 2.6 million on behalf of VGP European Logistics), in Spain for € 3.7 million (own portfolio), in Romania for € 1.4 million (own portfolio), in Latvia for € 1.9 million (own portfolio), in Hungary for € 1.5 million (€ 0.1 million on behalf of VGP European Logistics), Austria for € 1.1 million (own portfolio) and The Netherlands for € 0.9 million (own portfolio).
As at 31 December 2018, the weighted average term of the combined own and joint venture portfolio stood at 7.8 years2 . The own portfolio stood at 7.6 years3 and the Joint Venture portfolio stood at 7.8 years4 . The weighted average term stood at 10.2 years as at 31 December 2017 and decreased mainly due to the divestment of the Mango building during 2018.
The Group's completed property portfolio, including the own and Joint Venture property portfolio, reached an occupancy rate of 99.3% at the end of December 2018 compared to 100.0% at the end of December 2017.
The signed annualised committed leases of € 104.1 million at the end of December 2018 represent a total of 1,982,000 m² of lettable area. Of this total space 635,000 m² belong to the own portfolio (648,000 m² as at 31 December 2017) and 1,347,000 m² to the VGP European Logistics joint venture (1,009,000 m² at 31 December 2017).
As at 31 December 2018 the net valuation gains on the property portfolio reached € 98.6 million compared to a net valuation gain of € 94.6 million for the period ended 31 December 2017.
The low yields in real estate valuations continued to persist during the year.
The own property portfolio, excluding development land but including the buildings being constructed on behalf of the Joint Venture, is valued by the valuation expert at 31 December 2018 based on a weighted average yield of 6.29% (compared to 6.00% as at 31 December 2017) applied to the contractual rents increased by the estimated rental value on unlet space.
The (re)valuation of the own portfolio was based on the appraisal report of the property expert Jones Lang LaSalle.
The Joint Venture management fee income increased by € 2.0 million to € 10.0 million. The increase was mainly due to the growth of the Joint Venture portfolio and the development activities undertaken on behalf of the Joint Venture.
1 Including VGP European Logistics (joint venture with Allianz Real Estate). As at 31 December 2018 the annualised committed leases for VGP European Logistics stood at € 70.9 million compared to € 52.5 million as at 31 December 2017
2 The weighted average term of the committed leases up to the first break stands at 7.2 years as at 31 December 2018
3 The weighted average term of the committed leases up to the first break stands at 7.0 years as at 31 December 2018
4 The weighted average term of the committed leases up to the first break stands at 7.2 years as at 31 December 2018
Property and facility management fee income increased from € 4.4 million for the period ending 31 December 2017 to € 6.7 million for the period ending 31 December 2018. The development management fee income generated during the period was € 3.3 million compared to € 3.7 million for the period ending 31 December 2017.
VGP's share of the Joint Venture's profit for the period increased by € 16.0 million from € 29.2 million for the period ending 31 December 2017 to € 45.2 million for the period ending 31 December 2018, reflecting the increased income generating contribution of the Joint Venture portfolio and the contraction of the yields on the investment properties.
Net rental income at share increased to € 27.9 million for the period ending 31 December 2018 compared to €17.5 million for the period ended 31 December 2017. The increase reflects the underlying growth of the Joint Venture Portfolio resulting from the different closings made between the Joint Venture and VGP since May 2016.
At the end of December 2018, the Joint Venture (100% share) had € 70.9 million of annualised committed leases representing 1,347,000 m² of lettable area compared to € 52.5 million of annualised committed leases representing 1,010,000 m² at the end of December 2017.
The net valuation gains on investment properties at share increased to € 39.9 million for the period ending 31 December 2018 (compared to € 24.4 million for the period ending 31 December 2017). The VGP European Logistics portfolio, excluding development and the buildings being constructed by VGP on behalf of the Joint Venture, was valued at a weighted average yield of 5.31% as at 31 December 2018 (compared to 5.68% as at 31 December 2017) reflecting the further contraction of the yields during 2018. The (re)valuation of the Joint Venture portfolio was based on the appraisal report of the property expert Jones Lang LaSalle.
The net financial expenses of the Joint Venture at share for the period ending 31 December 2018 increased to € 12.4 million from € 5.5 million for the period ending 31 December 2017. For the period ending 31 December 2018, the financial income at share was € 0.3 million (€ 0.8 million for the period ending 31 December 2017). The 31 December 2017 financial income included a € 0.7 million unrealised gain on interest rate derivatives. (€ 2.7 million unrealised loss as at 31 December 2018). The financial expenses at share increased from € 6.3 million for the period ending 31 December 2017 to € 12.7 million for the period ending 31 December 2018 and included € 3.4 million interest on shareholder debt (€ 1.4 million as at 31 December 2017), € 5.8 million interest on financial debt (€ 5.1 million as at 31 December 2017), € 2.7 million unrealised losses on interest rate derivatives (€ 0.1 million as at 31 December 2017), € 1.6 million other financial expenses (€ 1.0 million as at 31 December 2017) mainly relating to the amortisation of capitalised finance costs on bank borrowings and a positive impact of € 0.8 million (€ 1.3 million per 31 December 2017) related to capitalised interests.
The administrative costs for the period were € 18.2 million compared to € 19.4 million for the period ended 31 December 2017, reflecting the discontinuance as from 1 January 2018 of the mid-term variable remuneration agreement of Little Rock SA1 partially offset by the continued growth of the VGP team
1 For further details please refer to the Remuneration Report on page 47 of the 2017 Annual Report.
in order to support the growth of the development activities of the Group and its geographic expansion. As at 31 December 2018 the VGP team comprised more than 180 people active in 12 different countries.
For the period ending 31 December 2018, the financial income was € 6.1 million (€ 9.7 million for the period ending 31 December 2017) and included € 5.7 million interest income on loans granted to VGP European Logistics (€ 5.3 million as at 31 December 2017), € 39k unrealised gain on interest rate derivatives (€ 3.5 million as at 31 December 2017) and € 0.3 million of net foreign exchange gains (compared to € 0.6 million gain as at 31 December 2017).
The reported financial expenses as at 31 December 2018 of € 20.1 million (€ 20.2 million as at 31 December 2017) are mainly made up of € 20.1 million expenses related to financial debt (€ 19.3 million as at 31 December 2017), € 1.5 million unrealised loss on interest rate derivatives (compared to a € 2.2 million loss as at 31 December 2017), € 1.6 million other financial expenses (€ 1.6 million as at 31 December 2017) and a positive impact of € 3.2 million (€ 3.0 million for the period ending 31 December 2017) related to capitalised interests.
As a result, the net financial costs reached € 14.0 million for the period ending 31 December 2018 compared to € 10.5 million at the end of December 2017.
Shareholder loans to VGP European Logistics amounted to € 143.3 million as at 31 December 2018 (compared to € 149.9 million as at 31 December 2017) of which € 101.9 million (€ 137.1 million as at 31 December 2017) was related to financing of the buildings under construction and development land held by the VGP European Logistics joint venture.
The development activities in 2018 can be summarised as follows:
During the year 21 projects were completed totalling 505,000 m² of lettable area and representing €26.6 million of annualised committed leases (€9.6 million for VGP's own account and €17.0 million for the Joint Venture).
For its own account VGP delivered 8 buildings totalling 197,000 m2 of lettable area:
For VGP European Logistics 13 buildings were delivered totalling 308,000m2 of lettable area:
• Czech Republic: 2 buildings in VGP Park Hradek nad Nisou of 15,000 m2 and 11,000 m2 respectively, 2 buildings in VGP Park Usti and Labem of 6,000 m2 each, 1 building in VGP Park Olomouc of 11,000 m2 , 1 building in VGP Park Jenec of 12,000 m2 and 1 building in VGP Park Cesky Ujezd of 13,000 m²;
• Germany: 1 building in VGP Park Hamburg of 13,000 m², 2 buildings in VGP Park Wetzlar each of 19,000 m2 , 2 buildings in VGP Park Berlin of 10,000 m2 and 26,000 m2 respectively and 1 building in VGP Park Frankenthal of 147,000 m².
At the end of December 2018, VGP had 19 buildings under construction for a total future lettable area of 322,000 m². The new buildings under construction, which are already pre-let for 65%1 , represent €16.4 million of annualised leases when fully built and let.
For its own account VGP had 15 buildings under construction totalling 285,000 m² of lettable area representing €14.5 million of annualised leases:
On behalf of the Joint Venture, VGP is constructing 4 new buildings totalling 49,000 m² of lettable area representing €1.9 million of annualised leases:
During the year, VGP continued to acquire new land plots to support the future development pipeline. In 2018, VGP acquired 1,689,000 m² of land with a future development potential of 781,000 m². Of these land plots, 444,000 m² (26%) is in Germany, 333,000 m² in Romania (20%), 267,000 m² (16%) in Netherlands 223,000 m² (13%) in Czech Republic, 189,000 m² (11%) in Spain, 146,000 m² (9%) in Hungary and with the remaining land plots being in Italy and Austria.
As at 31 December 2018, VGP had another 1.6 million m² of secured land plots which are expected to be purchased during the next 6-12 months, subject to obtaining the necessary permits. This brings the total owned and secured land bank to 4.45 million m² which represents a remaining development potential of 2.0 million m² of which 540,000 m² in Germany, 592,000 m² in the Czech Republic, 202,000 m² in Spain, 203,000 m² in Netherlands, 194,000 m² in Romania, 98,000 m² in Slovakia and 83,000 m² in Hungary, 23,000 m² in Italy and 46,000 m² in Austria. Included in the above is the remaining 149,000 m² development land bank held by the Joint Venture with a development potential of circa 59,000 m² of new lettable area.
Besides the owned and secured land bank, VGP has signed non-binding agreements and is currently performing due diligence investigations, on an exclusive basis, on the potential acquisitions of in total circa 1,100,000 m² of new land plots located in Italy, Spain, Germany, the Netherlands, Hungary and
1 Calculated based on the contracted rent and estimated market rent for the vacant space.
Czech Republic. VGP expects that a significant number of these land plots will be contractually locked in during the next 6 – 12 months.
The balance of the Disposal group held for sale decreased from € 442.0 million as at 31 December 2017 to € 275.0 million as at 31 December 2018. The net decrease is mainly driven by the fourth closing with VGP European Logistics joint venture at the end of April 2018.
The balance as at 31 December 2018 relates to the assets under construction and development land (at fair value) which are being / will be developed by VGP on behalf of VGP European Logistics, and included reclassified assets of VGP's investment properties, in the amount of € 120.4 million, which have been earmarked for the fifth closing with VGP European Logistic joint venture expected to occur in March 2019.
Under the joint venture agreement VGP European Logistics has an exclusive right of first refusal in relation to acquiring the income generating assets developed by VGP that are in Germany, the Czech Republic, Slovakia and Hungary. The development pipeline which is transferred to the Joint Venture as part of the different closings between Joint Venture and VGP is being developed at VGP's own risk and subsequently acquired and paid for by the Joint Venture subject to pre-agreed completion and lease parameters. The fair value of the asset under construction which are being developed by VGP on behalf of VGP European Logistics amounted to € 154.5 million as at 31 December 2018 (compared to € 194.9 million as at 31 December 2017).
During 2018 VGP successfully expanded and extended its bond financing profile following the completion of a €190 million bond in September 2018. The bond has a fixed rate of 3.5% and matures 19 March 2026. The proceeds were partly used to refinance the maturing € 75 million Dec-18 Bond (carrying a coupon of 5.1%), with the remaining balance to be used for the acquisition of development land in the existing and new markets i.e. the Netherlands, Italy, Austria and Portugal and to further finance the development of new projects on the Group's development land.
The financial debt increased from € 471 million as at 31 December 2017 to € 587 million as at 31 December 2018 of which € 15 million of outstanding bank debt.
The gearing ratio1 of the Group decreased from 42.3% at 31 December 2017 to 34.6% as at 31 December 2018. The gearing remains well within the Company's target maximum consolidated gearing of 65%.
1 Calculated as Net debt / Total equity and liabilities
In view the successful and sustainable evolution of the Group's results, the Board of Directors of VGP has decided to propose to the Annual General Meeting a distribution of a gross dividend of € 40.9 million equal to €2.20 per share for year 2018, compared to €1.90 per share distributed over the year 2017.
Based on the positive trend in demands for lettable area recorded by VGP during 2018, VGP expects to be able to continue expanding its rental income and property portfolio through the completion and start-up of additional new buildings in 2019. Development activities should continue to expand during 2019 supported by solid demand from potential tenants, e-commerce and as we leverage on the geographic expansion of VGP's footprint allowing VGP to provide pan-European as well as local solutions to a wide scale of potential multinational as well as local customers.
These development activities should be underpinned by the current owned as well as committed land bank on top locations across Europe which should provide a solid base to support and fuel the development activities for the next year.
We anticipate a >€ 190 million closing with VGP European Logistics joint venture by the end of March 2019.
Finally, we have a joint commitment with Allianz Real Estate to expand our JV structure beyond existing countries1 . These advanced discussions in respect of the set-up of a new joint venture are expected to be concluded during the first half of 2019, providing additional financial means to support the development activities of VGP.
1 Of the twelve countries in which the group is active, the JV currently covers Germany, Slovakia, Czech Republic and Hungary
For the year ended 31 December 2018
| INCOME STATEMENT (in thousands of €) | Note | 2018 | 2017 |
|---|---|---|---|
| Revenue1 | 5 | 30,336 | 28,224 |
| Gross rental income | 5 | 16,627 | 17,046 |
| Property operating expenses | 6 | (1,123) | (1,941) |
| Net rental income | 15,504 | 15,105 | |
| Joint venture management fee income | 5 | 9,965 | 8,057 |
| Net valuation gains / (losses) on investment properties | 7 | 98,552 | 94,628 |
| Administration expenses | 8 | (18,167) | (19,353) |
| Share in result of Joint Venture | 9 | 45,220 | 29,229 |
| Operating profit / (loss) | 151,074 | 127,666 | |
| Financial income | 10 | 6,101 | 9,730 |
| Financial expenses | 10 | (20,071) | (20,196) |
| Net financial result | (13,970) | (10,466) | |
| Profit before taxes | 137,104 | 117,200 | |
| Taxes | 11 | (15,998) | (21,205) |
| Profit for the period | 121,106 | 95,995 | |
| Attributable to: | |||
| Shareholders of VGP NV | 12 | 121,106 | 95,995 |
| Non-controlling interests | - | - |
| RESULT PER SHARE | Note | 2018 | 2017 |
|---|---|---|---|
| Basic earnings per share (in €) | 12 | 6.52 | 5.17 |
| Diluted earnings per share (in €) | 12 | 6.52 | 5.17 |
1 Revenue is composed of gross rental income, service charge income, property and facility management income and property development income.
For the year ended 31 December 2018
| STATEMENT OF COMPREHENSIVE INCOME (in thousands of €) | 2018 | 2017 |
|---|---|---|
| Profit for the year | 121,106 | 95,995 |
| Other comprehensive income to be reclassified to profit or loss in | ||
| subsequent periods | - | - |
| Other comprehensive income not to be reclassified to profit or loss in | ||
| subsequent periods | - | - |
| Other comprehensive income for the period | - | - |
| Total comprehensive income / (loss) of the period | 121,106 | 95,995 |
| Attributable to: | ||
| Shareholders of VGP NV | 121,106 | 95,995 |
| Non-controlling interest | - | - |
| ASSETS (in thousands of €) | N0TE | 2018 | 2017 |
|---|---|---|---|
| Intangible assets | 41 | 36 | |
| Investment properties | 13 | 468,513 | 392,291 |
| Property, plant and equipment | 742 | 507 | |
| Non-current financial assets | - | 322 | |
| Investments in joint venture and associates | 9 | 241,427 | 143,312 |
| Other non-current receivables | 9 | 41,461 | 12,757 |
| Deferred tax assets | 11 | 785 | 32 |
| Total non-current assets | 752,969 | 549,257 | |
| Trade and other receivables | 14 | 23,064 | 11,074 |
| Cash and cash equivalents | 15 | 161,446 | 30,269 |
| Disposal group held for sale | 20 | 274,939 | 441,953 |
| Total current assets | 459,449 | 483,296 | |
| TOTAL ASSETS | 1,212,418 | 1,032,553 |
| SHAREHOLDERS' EQUITY AND LIABILITIES N0TE (in thousands of €) |
2018 | 2017 | |
|---|---|---|---|
| Share capital | 16 | 62,251 | 62,251 |
| Retained earnings | 481,147 | 403,910 | |
| Other reserves | 69 | 69 | |
| Shareholders' equity | 543,467 | 466,230 | |
| Non-current financial debt | 17 | 564,375 | 390,067 |
| Other non-current financial liabilities | 60 | 1,966 | |
| Other non-current liabilities | 18 | 1,215 | 1,680 |
| Deferred tax liabilities | 11 | 16,692 | 11,750 |
| Total non-current liabilities | 582,342 | 405,463 | |
| Current financial debt | 17 | 22,479 | 81,358 |
| Trade debts and other current liabilities | 19 | 38,769 | 38,379 |
| Liabilities related to disposal group held for sale | 20 | 25,361 | 41,123 |
| Total current liabilities | 86,609 | 160,860 | |
| Total liabilities | 668,951 | 566,323 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,212,418 | 1,032,553 |
| STATEMENT OF CHANGES IN EQUITY (in thousands of €) |
Statutory share capital |
Capital reserve (see note 16) |
IFRS share capital |
Retained earnings |
Share premium |
Other equity |
Total equity |
|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2017 | 112,737 | (50,486) | 62,251 | 327,985 | 69 | - | 390,305 |
| Other comprehensive income / (loss) | - | - | - | - | - | - | - |
| Result of the period | - | - | - | 95,995 | - | - | 95,995 |
| Effect of disposals | - | - | - | - | - | - | - |
| Total comprehensive income / (loss) | - | - | - | 95,995 | - | - | 95,995 |
| Dividends to shareholders | - | - | - | - | - | - | - |
| Share capital distribution to shareholders | (20,070) | 20,070 | - | (20,070) | - | - | (20,070) |
| Balance as at 31 December 2017 | 92,667 | (30,416) | 62,251 | 403,910 | 69 | - | 466,230 |
| Balance as at 1 January 2018 | 92,667 | (30,416) | 62,251 | 403,910 | 69 | - | 466,230 |
| Other comprehensive income / (loss) | - | - | - | - | - | - | 0 |
| Result of the period | - | - | - | 121,106 | - | - | 121,106 |
| Effect of disposals | - | - | - | - | - | - | 0 |
| Total comprehensive income / (loss) | - | - | - | 121,106 | - | - | 121,106 |
| Dividends to shareholders | - | - | - | (35,308) | - | - | (35,308) |
| Share capital distribution to shareholders | - | - | - | - | - | - | - |
| Correction for reciprocal interest through associates¹ |
- | - | - | (8,561) | - | - | (8,561) |
| Balance as at 31 December 2018 | 92,667 | (30,416) | 62,251 | 481,147 | 69 | 0 | 543,467 |
¹ Correction for reciprocal interest relates to the elimination of the proportional equity component of the respective VGP NV shares held by VGP Misv Comm. VA. VGP NV acquired an additional 36% of VGP Misv Comm. VA during 2018.
| CASH FLOW STATEMENT (in thousands of €) | N0TE | 2018 | 2017 |
|---|---|---|---|
| Cash flows from operating activities | 21 | ||
| Profit before taxes | 137,104 | 117,200 | |
| Adjustments for: | |||
| Depreciation | 180 | 216 | |
| Unrealised (gains) /losses on investment properties | 7 | (64,156) | (90,272) |
| Realised (gains) / losses on disposal of subsidiaries and investment | |||
| properties | 7 | (34,396) | (4,356) |
| Unrealised (gains) / losses on financial instruments and foreign exchange | 1,161 | (4,011) | |
| Interest (income) | (5,738) | (5,619) | |
| Interest expense | 18,546 | 20,096 | |
| Share in (profit)/loss of joint venture and associates | 9 | (45,220) | (29,229) |
| Operating profit before changes in working capital and provisions | 7,481 | 4,025 | |
| Decrease/(Increase) in trade and other receivables | (24,556) | (7,308) | |
| (Decrease)/Increase in trade and other payables | (10,939) | 17,113 | |
| Cash generated from the operations | (28,013) | 13,830 | |
| Interest income | 35 | 393 | |
| Interest (expense) | (22,011) | (20,247) | |
| Income taxes paid | (1,046) | (762) | |
| Net cash from operating activities | (51,035) | (6,786) | |
| Cash flows from investing activities | 21 | ||
| Proceeds from disposal of tangible assets and other | 41 | 8 | |
| Proceeds from disposal of subsidiaries and investment properties | 438,364 | 155,715 | |
| Investment property and investment property under construction | (263,339) | (168,379) | |
| Distribution by / (investment in) joint venture and associates | 0 | 1,000 | |
| Loans provided to joint venture and associates | (78,094) | (89,819) | |
| Loans repaid by joint venture and associates | 7,752 | 11,200 | |
| Net cash used in investing activities | 104,724 | (90,274) | |
| Cash flows from financing activities | 21 | ||
| Dividends paid | (35,308) | - | |
| Net Proceeds / (cash out) from the issue / (repayment) of share capital | 0 | (20,070) | |
| Proceeds from loans | 17 | 188,357 | 157,444 |
| Loan repayments | 17 | (75,750) | (79,749) |
| Net cash used in financing activities | 77,299 | 57,625 | |
| Net increase / (decrease) in cash and cash equivalents | 130,988 | (39,434) | |
| Cash and cash equivalents at the beginning of the period | 30,269 | 71,595 | |
| Effect of exchange rate fluctuations | (251) | 426 | |
| Reclassification to (-) / from held for sale | 440 | (2,318) | |
| Cash and cash equivalents at the end of the period | 161,446 | 30,269 |
The financial information set out in this announcement is based on the consolidated financial statements which are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial information is in accordance with the accounting policies set out in the 2018 financial statements.
While the financial information included in these condensed financial statements has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRS by April 2019.
The chief operating decision maker is the person that allocates resources to and assesses the performance of the operating segments. The Group has determined that its chief operating decision-maker is the chief executive officer (CEO) of the Company. He allocates resources to and assesses the performance at business line and country level.
The segmentation for segment reporting within VGP is primarily by business line and secondly by geographical region.
Business decisions are taken based on various key performance indicators (such as rental income, - activity, occupancy and development yields) and are monitored in this way as VGP primarily focuses on (i) development activities; (ii) letting logistical sites; and finally (iii) asset- and property management (including facility management) mainly provided to the VGP European Logistics joint venture.
For management purpose, the Group also presents financial information according to management breakdowns, based on these functional allocations of revenues and costs. These amounts are based on several assumptions, and accordingly are not prepared in accordance with IFRS audited consolidated financial statements of VGP NV for the years ended 31 December 2018 and 2017.
The Group's investment or so-called rental business consists of operating profit generated by the completed and leased out projects of the Group's portfolio and the proportional share of the operating profit (excluding net valuation gains) of the completed and leased out projects of the Joint Venture's portfolio. Revenues and expenses allocated to the rental business unit include 10% of the Group's property operating expenses; other income; other expenses, after deduction of expenses allocated to property development; and share in result of the joint venture, excluding any revaluation result.
The Group's property development business consists of the net development result on the Group's development activities. Valuation gains (losses) on investment properties related to Germany, Czech Republic, Slovakia and Hungary are assumed to be for these purposes cash generating, as these assets are assumed to be sold to the Joint Venture at a certain point in time and hence crystallizing an effective cash inflow at the moment of such sale. Valuation gains/(losses) on investment properties related to Romania, Spain, Estonia and Latvia are excluded, as they are assumed to be non-cash generating, on the basis that these assets are assumed to be kept in the Group's own portfolio for the foreseeable future. In addition, 90% of total property operating expenses are allocated to the property development business, as are administration expenses after rental business and property management expenses.
Property and asset management revenue includes asset management, property management and facility management income. Associated operating, administration and other expenses include directly allocated expenses from the respective asset management, property management and facility management service companies. The administrative expenses of the Czech and German property management companies have been allocated on a 50:50 basis between the rental business and the property and management business.
Breakdown summary of the business lines
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Investment EBITDA | 42,351 | 32,867 |
| Property development EBITDA | 46,427 | 57,047 |
| Property management and asset management EBITDA | 6,848 | 5,825 |
| Total operating EBITDA | 95,626 | 95,740 |
| In thousands of € | For the year ended 31 December 2018 | |||
|---|---|---|---|---|
| Investment | Development | Property and asset management |
Total | |
| Gross rental income | 16,627 | - | - | 16,627 |
| Property operating expenses | (112) | (1,011) | - | (1,123) |
| Net rental income | 16,515 | (1,011) | - | 15,504 |
| Joint venture management fee income | - | - | 9,965 | 9,965 |
| Net valuation gains / (losses) on investment properties destined to the Joint Venture |
- | 61,248 | - | 61,248 |
| Administration expenses | (1,021) | (13,810) | (3,117) | (17,948) |
| Share of joint ventures' Adjusted operating profit after tax ¹ |
26,857 | - | - | 26,857 |
| EBITDA | 42,351 | 46,427 | 6,848 | 95,626 |
| Depreciation and amortisation | (27) | (126) | (66) | (219) |
| Earnings before interest and tax | 42,324 | 46,301 | 6,782 | 95,407 |
| Net financial costs - Own | (15,553) | |||
| Net financial costs - Joint venture and associates | (9,677) | |||
| Profit before tax | 70,177 | |||
| Current income taxes - Own | (1,046) | |||
| Current income taxes - Joint venture and associates | (697) | |||
| Recurrent net income | 68,434 | |||
| Net valuation gains / (losses) on investment properties – other countries ² |
37,304 | |||
| Net valuation gains / (losses) on investment properties - Joint venture and associates |
39,938 | |||
| Net fair value gain/(loss) on interest rate swaps and other derivatives |
1,583 | |||
| Net fair value gain/(loss) on interest rate swaps and other derivatives - Joint venture and associates |
(2,706) | |||
| Deferred taxes -Own | (14,952) | |||
| Deferred taxes -Joint venture and associates | (8,496) | |||
| Reported profit for the period | 121,106 |
¹ The adjustments to the share of profit from the joint venture (at share) are composed of € 39.9 million of net valuation gains/(losses) on investment properties, € 2.7 million of net fair value gain/(loss) on interest rate derivatives and € 8.5 million of deferred taxes in respect of these adjustments.
² Relates to developments in countries outside of the JV perimeter i.e. all countries except for Germany, Czech Republic, Slovakia and Hungary.
| In thousands of € | For the year ended 31 December 2017 | |||
|---|---|---|---|---|
| Property | ||||
| Investment | Development | and asset management |
Total | |
| Gross rental income | 17,046 | - | - | 17,046 |
| Property operating expenses | (194) | (1,748) | - | (1,942) |
| Net rental income | 16,852 | (1,748) | - | 15,104 |
| Joint venture management fee income | - | - | 8,057 | 8,057 |
| Net valuation gains / (losses) on investment properties destined to the Joint Venture |
- | 75,053 | - | 75,053 |
| Administration expenses | (647) | (16,258) | (2,232) | (19,137) |
| Share of joint ventures' Adjusted operating profit after tax ¹ |
16,663 | - | - | 16,663 |
| EBITDA | 32,867 | 57,047 | 5,825 | 95,740 |
| Depreciation and amortisation | (23) | (124) | (69) | (216) |
| Earnings before interest and tax | 32,844 | 56,923 | 5,756 | 95,524 |
| Net financial costs - Own | (13,912) | |||
| Net financial costs - Joint venture and associates | (6,169) | |||
| Profit before tax | 75,442 | |||
| Current income taxes - Own | (762) | |||
| Current income taxes - Joint venture and associates | (218) | |||
| Recurrent net income | 74,463 | |||
| Net valuation gains / (losses) on investment properties – other countries ² |
19,575 | |||
| Net valuation gains / (losses) on investment properties - Joint venture and associates |
24,427 | |||
| Net fair value gain/(loss) on interest rate swaps and other derivatives |
3,447 | |||
| Net fair value gain/(loss) on interest rate swaps and other derivatives - Joint venture and associates |
669 | |||
| Deferred taxes -Own | (20,443) | |||
| Deferred taxes -Joint venture and associates | (6,142) | |||
| Reported profit for the period | 95,995 |
¹ The adjustments to the share of profit from the joint venture (at share) are composed of € 24.4 million of net valuation gains/(losses) on investment properties, € 0.7 million of net fair value gain/(loss) on interest rate derivatives and € 6.1 million of deferred taxes in respect of these adjustments.
² Relates to developments in countries outside of the JV perimeter i.e. all countries except for Germany, Czech Republic, Slovakia and Hungary.
This basic segmentation reflects the geographical markets in Europe in which VGP operates. VGP's operations are split into the individual countries where it is active. This segmentation is important for VGP as the nature of the activities and the customers have similar economic characteristics within those segments.
| 31 December 2018 In thousands of € |
Gross rental income¹ |
Net rental income¹ |
Share of joint venture's operating EBITDA |
Operating EBITDA (Incl. JV at share) |
Investment properties Own |
Investment properties JV at share |
Capital expenditure² |
|---|---|---|---|---|---|---|---|
| Western Europe | |||||||
| Germany | 22,743 | 19,110 | 17,543 | 53,660 | 298,712 | 441,420 | 172,258 |
| Spain | 6,536 | 5,273 | - | 4,044 | 143,502 | - | 44,965 |
| Austria | 95 | 106 | - | 30 | 19,840 | - | 19,756 |
| Netherlands | - | - | - | (206) | 34,147 | - | 33,884 |
| Italy | - | - | - | (319) | 3,842 | - | 3,842 |
| 29,374 | 24,489 | 17,543 | 57,209 | 500,044 | 441,420 | 274,705 | |
| Central and Eastern Europe |
|||||||
| Czech Republic | 9,779 | 10,117 | 6,175 | 34,705 | 116,203 | 132,102 | 40,018 |
| Slovakia | 1,859 | 1,715 | 1,692 | 2,184 | 12,505 | 22,605 | 339 |
| Hungary | 2,271 | 2,206 | 1,872 | 998 | 5,522 | 28,154 | 2,930 |
| Romania | 3,687 | 3,367 | - | 3,221 | 63,291 | - | 15,614 |
| 17,596 | 17,405 | 9,739 | 41,108 | 197,521 | 182,860 | 58,901 | |
| Baltics | |||||||
| Latvia | 460 | 258 | - | 100 | 33,120 | - | 19,078 |
| Other³ | - | 1,265 | (425) | (2,791) | - | - | - |
| Total | 47,430 | 43,417 | 26,857 | 95,626 | 730,685 | 624,281 | 352,684 |
¹ Includes joint venture at share.
² Capital expenditures includes additions and acquisition of investment properties and development land but does not include tenant incentives, letting fees, and capitalised interest. Capital expenditure directly incurred for the own portfolio amounts to € 274.6 million and amounts to € 78.1 million on development properties of the Joint Venture.
³ Other includes the Group central costs and costs relating to the operational business which are not specifically geographically allocated.
| 31 December 2017 In thousands of € |
Gross rental income¹ |
Net rental income¹ |
Share of joint venture's operating EBITDA |
Operating EBITDA (Incl. JV at share) |
Investment properties Own |
Investment properties JV at share |
Capital expenditure² |
|---|---|---|---|---|---|---|---|
| Western Europe | |||||||
| Germany | 13,835 | 10,589 | 10,594 | 51,237 | 375,367 | 263,215 | 175,475 |
| Spain | 7,500 | 5,046 | - | 3,933 | 209,976 | - | 5,546 |
| 21,335 | 15,635 | 10,594 | 55,170 | 585,343 | 263,215 | 181,021 | |
| Central and Eastern Europe |
|||||||
| Czech Republic | 6,405 | 6,605 | 3,500 | 37,254 | 156,688 | 75,416 | 58,703 |
| Slovakia | 1,631 | 1,499 | 1,459 | 1,928 | 11,262 | 21,722 | 902 |
| Hungary | 1,735 | 1,731 | 1,510 | 2,752 | 9,101 | 22,725 | 5,620 |
| Romania | 3,058 | 2,716 | - | 2,685 | 45,660 | - | 5,365 |
| 12,829 | 12,551 | 6,469 | 44,619 | 222,711 | 119,863 | 70,590 | |
| Baltics | |||||||
| Estonia | 2,210 | 2,167 | - | 2,154 | - | - | 3,894 |
| Latvia | - | (79) | - | (220) | 14,535 | - | 5,463 |
| 2,210 | 2,088 | - | 1,934 | 14,535 | - | 9,357 | |
| Other³ | - | 2,364 | (400) | (5,983) | - | - | - |
| Total | 36,374 | 32,638 | 16,663 | 95,740 | 822,589 | 383,078 | 260,968 |
¹ Includes joint venture at share.
² Capital expenditures includes additions and acquisition of investment properties and development land but does not include tenant incentives, letting fees, and capitalised interest. Capital expenditure directly incurred for the own portfolio amounts to € 171.1 million and amounts to € 89.8 million on development properties of the Joint Venture.
³ Other includes the Group central costs and costs relating to the operational business which are not specifically geographically allocated.
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Rental income from investment properties | 14,164 | 16,759 |
| Straight lining of lease incentives | 2,463 | 287 |
| Total gross rental income | 16,627 | 17,046 |
| Joint Venture management fee income | ||
| Property and facility management income | 6,681 | 4,400 |
| Development management income | 3,284 | 3,657 |
| Service charge income | 3,744 | 3,121 |
| Total revenue | 30,336 | 28,224 |
The Group leases out its investment property under operating leases. The operating leases are generally for terms of more than 5 years. The gross rental income reflects the full impact of the income generating assets delivered during 2018. In addition, the 2018 rental income includes € 3.2 million of rent for the period 1 January 2018 to 30 April 2018 related to the property portfolio sold during the fourth closing at the end of April 2018. (compared to € 1.7 million of rent for the period 1 January 2017 to 31 May 2017 related to the property portfolio sold during the third closing at the end of May 2017). On 26 September 2018 the sale of Mango building located in Barcelona (Spain) was completed. The rental income of the Mango building for the period up to 26 September 2018 was € 5.6 million.
At the end of December 2018, the Group (including the Joint Venture) had annualised committed leases of € 104.1 million1 compared to € 82.8 million 2 as at 31 December 2017.
The breakdown of future lease income on an annualised basis for the own portfolio was as follows:
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Less than one year | 33,092 | 29,983 |
| Between one and five years | 118,267 | 109,260 |
| More than five years | 100,175 | 274,630 |
| Total | 251,534 | 413,873 |
Service charge income represents income receivable from tenants for energy, maintenance, cleaning, security, garbage management and usage of infrastructure which relates to the service charge expenses charged to the Group.
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Repairs and maintenance | (334) | (306) |
| Letting, marketing, legal and professional fees | (201) | (286) |
| Real estate agents | (1,067) | (417) |
| Other income / (expenses), net of service charge income | 479 | (933) |
| Total | (1,123) | (1,942) |
Other income / (expenses) showed a net expense balance of € 0.3 million (2017: € 1.6 million net expense balance) and are presented net of service charge income of € 0.8 million (2017: € 0.7 million).
1 € 70.9 million related to the JV Property Portfolio and € 33.2 million related to the Own Property Portfolio.
2 € 52.5 million related to the JV Property Portfolio and € 30.3 million related to the Own Property Portfolio.
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Unrealised valuation gains / (losses) on investment properties | 25,964 | 65,343 |
| Unrealised valuation gains / (losses) on disposal group held for sale | 38,192 | 24,929 |
| Realised valuation gains / (losses) on disposal of subsidiaries and | ||
| investment properties | 34,396 | 4,356 |
| Total | 98,552 | 94,628 |
The own property portfolio, excluding development land but including the assets being developed on behalf of the Joint Venture, is valued by the valuation expert at 31 December 2018 based on a weighted average yield of 6.29% (compared to 6.00% as at 31 December 2017) applied to the contractual rents increased by the estimated rental value on unlet space. A 0.10% variation of this market rate would give rise to a variation of the total portfolio value of € 9.0 million.
The table below presents a summary Income Statement of the Group's Joint Venture with Allianz Real Estate (VGP European Logistics) and the associates, all of which are accounted for using the equity method. VGP European Logistics is incorporated in Luxembourg and owns logistics property assets in Germany, the Czech Republic, Slovakia and Hungary. VGP NV holds 50% directly in VGP European Logistics S.à r.l. and holds another 5.1% in the subsidiaries of the Joint Venture holding assets in Germany.
| INCOME STATEMENT (in thousands of €) |
VGP European Logistics JV at 100% |
VGP European Logistics German Asset Companies at 100 % |
VGP European Logistics German Asset Companies at 5.1% |
VGP European Logistics JV at 50% |
2018 |
|---|---|---|---|---|---|
| Gross rental income | 57,746 | 37,847 | 1,930 | 28,873 | 30,803 |
| Property Operating expenses | |||||
| - underlying property operating expenses | (905) | (704) | (36) | (452) | (488) |
| - property management fees | (4,495) | (3,029) | (154) | (2,247) | (2,402) |
| Net rental income | 52,346 | 34,114 | 1,740 | 26,173 | 27,913 |
| Net valuation gains / (losses) on investment properties |
74,475 | 52,960 | 2,701 | 37,238 | 39,938 |
| Administration expenses | (2,038) | (730) | (37) | (1,019) | (1,056) |
| Operating profit / (loss) | 124,784 | 86,344 | 4,404 | 62,392 | 66,795 |
| Net financial result | (23,537) | (12,031) | (614) | (11,769) | (12,382) |
| Taxes | (17,233) | (11,319) | (577) | (8,616) | (9,194) |
| PROFIT FOR THE PERIOD | 84,014 | 62,994 | 3,213 | 42,007 | 45,220 |
| INCOME STATEMENT (in thousands of €) |
VGP European Logistics JV at 100% |
VGP European Logistics German Asset Companies at 100 % |
VGP European Logistics German Asset Companies at 5.1% |
VGP European Logistics JV at 50% |
2017 |
|---|---|---|---|---|---|
| Gross rental income | 36,328 | 22,831 | 1,164 | 18,164 | 19,328 |
| Property Operating expenses | |||||
| - underlying property operating expenses | (534) | (170) | (9) | (267) | (276) |
| - property management fees | (2,853) | (1,811) | (92) | (1,426) | (1,519) |
| Net rental income | 32,941 | 20,850 | 1,063 | 16,470 | 17,534 |
| Net valuation gains / (losses) on investment properties |
45,049 | 37,299 | 1,902 | 22,524 | 24,427 |
| Administration expenses | (1,672) | (690) | (35) | (836) | (871) |
| Operating profit / (loss) | 76,318 | 57,459 | 2,930 | 38,159 | 41,089 |
| Net financial result | (10,218) | (7,675) | (391) | (5,109) | (5,500) |
| Taxes | (11,942) | (7,635) | (389) | (5,971) | (6,360) |
| PROFIT FOR THE PERIOD | 54,158 | 42,149 | 2,150 | 27,079 | 29,229 |
| BALANCE SHEET (in thousands of €) |
VGP European Logistics JV at 100% |
VGP European Logistics German Asset Companies at 100 % |
VGP European Logistics German Asset Companies at 5.1% |
VGP European Logistics JV at 50% |
2018 |
|---|---|---|---|---|---|
| Investment properties | 1,162,881 | 840,001 | 42,840 | 581,441 | 624,281 |
| Other assets | 815 | - | - | 408 | 408 |
| Total non-current assets | 1,163,696 | 840,001 | 42,840 | 581,849 | 624,689 |
| Trade and other receivables | 12,315 | 6,096 | 311 | 6,158 | 6,469 |
| Cash and cash equivalents | 42,255 | 26,917 | 1,373 | 21,128 | 22,501 |
| Total current assets | 54,570 | 33,013 | 1,684 | 27,286 | 28,970 |
| Total assets | 1,218,266 | 873,014 | 44,524 | 609,135 | 653,659 |
| Non-current financial debt | 633,720 | 467,603 | 23,848 | 316,860 | 340,708 |
| Other non-current financial liabilities | 5,147 | - | - | 2,574 | 2,574 |
| Other non-current liabilities | 6,345 | 3,044 | 155 | 3,173 | 3,328 |
| Deferred tax liabilities | 75,097 | 47,083 | 2,401 | 37,549 | 39,950 |
| Total non-current liabilities | 720,309 | 517,730 | 26,404 | 360,156 | 386,560 |
| Current financial debt | 16,346 | 10,071 | 514 | 8,173 | 8,687 |
| Trade debts and other current liabilities | 31,636 | 22,892 | 1,167 | 15,818 | 16,985 |
| Total current liabilities | 47,982 | 32,963 | 1,681 | 23,991 | 25,672 |
| Total liabilities | 768,291 | 550,693 | 28,085 | 384,147 | 412,232 |
| Net assets | 449,975 | 322,321 | 16,439 | 224,988 | 241,427 |
| BALANCE SHEET (in thousands of €) |
VGP European Logistics JV at 100% |
VGP European Logistics German Asset Companies at 100 % |
VGP European Logistics German Asset Companies at 5.1% |
VGP European Logistics JV at 50% |
2017 |
|---|---|---|---|---|---|
| Investment properties | 715,067 | 500,887 | 25,544 | 357,534 | 383,078 |
| Other assets | 269 | - | - | 135 | 135 |
| Total non-current assets | 715,336 | 500,887 | 25,544 | 357,669 | 383,213 |
| Trade and other receivables | 11,843 | 10,596 | 540 | 5,922 | 6,462 |
| Cash and cash equivalents | 22,151 | 15,338 | 782 | 11,076 | 11,858 |
| Total current assets | 33,994 | 25,934 | 1,322 | 16,998 | 18,320 |
| Total assets | 749,330 | 526,821 | 26,866 | 374,667 | 401,533 |
| Non-current financial debt | 389,692 | 276,954 | 14,125 | 194,846 | 208,971 |
| Other non-current financial liabilities | - | - | - | - | - |
| Other non-current liabilities | 3,544 | 1,981 | 101 | 1,773 | 1,874 |
| Deferred tax liabilities | 53,752 | 36,536 | 1,863 | 26,876 | 28,739 |
| Total non-current liabilities | 446,988 | 315,471 | 16,089 | 223,495 | 239,584 |
| Current financial debt | 10,651 | 7,887 | 402 | 5,326 | 5,728 |
| Trade debts and other current liabilities | 23,852 | 19,265 | 983 | 11,926 | 12,909 |
| Total current liabilities | 34,503 | 27,152 | 1,385 | 17,252 | 18,637 |
| Total liabilities | 481,491 | 342,623 | 17,474 | 240,747 | 258,221 |
| Net assets | 267,839 | 184,198 | 9,392 | 133,920 | 143,312 |
VGP European Logistics recorded its fourth closing at the end of April 2018, with the acquisition of 6 new parks from VGP, comprising of 13 logistic buildings and another 5 newly completed logistic buildings which were developed in parks previously transferred to the Joint Venture. The 6 parks are in Germany (3) and in the Czech Republic (3). The additional 5 buildings which are being acquired by the Joint Venture are in Germany (3 buildings), in the Czech Republic (1 building) and in Hungary (1 building).
The Joint Venture's property portfolio, excluding development land and buildings being constructed by VGP on behalf of the Joint Venture, is valued by the valuation expert at 31 December 2018 based on a weighted average yield of 5.31% % (compared to 5.68% as at 31 December 2017) applied to the contractual rents increased by the estimated rental value on unlet space. A 0.10% variation of this market rate would give rise to a variation of the Joint Venture portfolio value (at 100%) of € 22.5 million.
The (re)valuation of the Joint Venture portfolio was based on the appraisal report of the property expert Jones Lang LaSalle.
VGP provides certain services, including asset-, property- and development advisory and management, for the VGP European joint venture and receives fees from the Joint Venture for doing so. Those services are carried out on an arms-length basis and do not give VGP any control over the relevant Joint Venture (nor any unilateral material decision-making rights). Significant transactions and decisions within the Joint Venture require full Board and/or Shareholder approval, in accordance with the terms of the Joint Venture agreement.
| in thousands of € | 2018 | 2017 |
|---|---|---|
| Shareholder loans to VGP European Logistics S.à r.l. | 37,739 | 11,539 |
| Shareholder loans to associates (subsidiaries of VGP European Logistics S.à r.l.) | 3,722 | 1,218 |
| Construction and development loans to subsidiaries of VGP European Logistics S.à r.l.) | 101,887 | 137,150 |
| Construction and development loans reclassified as assets held for sale | (101,887) | (137,150) |
| Total | 41,461 | 12,757 |
For further information, please refer to additional comments of note 20.
| in thousands of € | 2018 | 2017 |
|---|---|---|
| As at 1 January | 143,312 | 89,194 |
| Additions | 52,895 | 25,787 |
| Result of the year | 45,220 | 29,229 |
| Repayment of equity | - | (1,000) |
| Adjustments from sale of participations | - | 102 |
| As at the end of the period | 241,427 | 143,312 |
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Bank and other interest income | 34 | 45 |
| Interest income - loans to joint venture and associates | 5,702 | 5,300 |
| Fair value gain on interest rate derivatives | 39 | 3,547 |
| Net foreign exchange gains | 324 | 564 |
| Other financial income | 2 | 274 |
| Financial income | 6,101 | 9,730 |
| Bond interest expense | (19,332) | (18,769) |
| Bank interest expense – variable debt | (806) | (540) |
| Bank interest expense – interest rate swaps - hedging | 0 | (74) |
| Interest capitalised into investment properties | 3,230 | 2,966 |
| Fair value loss on interest rate derivatives | (1,524) | (2,210) |
| Other financial expenses | (1,639) | (1,569) |
| Financial expenses | (20,071) | (20,196) |
| Net financial costs | (13,970) | (10,466) |
| In number | 2018 | 2017 |
|---|---|---|
| Weighted average number of ordinary shares (basic) | 18,583,050 | 18,583,050 |
| Dilution | - | - |
| Weighted average number of ordinary shares (diluted) | 18,583,050 | 18,583,050 |
| Correction for reciprocal interest through associates | (732,478) | (401,648) |
| Weighted average number of ordinary shares (diluted and after correction for | ||
| reciprocal interest through associates | 17,850,572 | 18,181,402 |
| In thousands of € | 2018 | 2017 |
|---|---|---|
| Result for the period attributable to the Group and to ordinary shareholders | 121,106 | 95,995 |
| Earnings per share (in €) - basic | 6.52 | 5.17 |
| Earnings per share (in €) - diluted | 6.52 | 5.17 |
| Earnings per share (in €) – after dilution and correction for reciprocal interest | ||
| through associates | 6.78 | 5.28 |
Correction for reciprocal interest relates to the elimination of the proportional equity component of the respective VGP NV shares held by VGP Misv Comm. VA. VGP NV holds 78.83% in VGP Misv Comm. VA.
During the second half of 2018 and following the expiration of a 5 year-lock-up period certain members of the VGP team sold their respective VGP MISV shares to VGP NV. VGP NV acquired 330,830 VGP Misv shares for an aggregate amount of € 8.6 million. Following this acquisition of these shares, VGP NV currently holds 78.73% in VGP Misv Comm. VA.
| EPRA NAV – In thousands of € | 2018 | 2017 |
|---|---|---|
| IFRS NAV | 543,467 | 466,230 |
| Effect of exercise of options, convertibles and other equity interests | 0 | - |
| Diluted NAV | 543,467 | 466,230 |
| To exclude: | ||
| Fair value of financial instruments | 60 | 1,644 |
| Deferred tax | 31,390 | 34,942 |
| EPRA NAV | 574,917 | 502,816 |
| Number of shares | 18,583,050 | 18,583,050 |
| EPRA NAV per share (EUR/share) | 30.94 | 27.06 |
| EPRA NNNAV – In thousands of € | 2018 | 2017 |
|---|---|---|
| EPRA NAV | 574,917 | 502,816 |
| To include: | ||
| Fair value of financial instruments | (60) | (1,644) |
| Deferred tax | (31,390) | (34,942) |
| Fair value adjustment in respect of issued debt | 2,510 | (14,084) |
| EPRA triple net NAV (NNNAV) | 545,977 | 452,146 |
| Number of shares | 18,583,050 | 18,583,050 |
| EPRA NNNAV per share (EUR/share) | 29.38 | 24.33 |
| 2018 | |||||
|---|---|---|---|---|---|
| In thousands of € | Completed | Under Construction |
Development land |
Total | |
| As at 1 January | 152,611 | 95,005 | 144,675 | 392,291 | |
| Capex | 68,974 | 86,090 | 4,454 | 159,518 | |
| Acquisitions | - | 8,971 | 106,120 | 115,091 | |
| Capitalised interest | 2,631 | 359 | 240 | 3,230 | |
| Capitalised rent free and agent's fee | 2,817 | 1,176 | - | 3,993 | |
| Sales and disposal to Joint Venture | (134,066) | - | (5,160) | (139,226) | |
| Transfer on start-up of development | - | 40,945 | (40,945) | - | |
| Transfer on completion of development | 99,749 | (99,749) | - | - | |
| Net gain from value adjustments in | |||||
| investment properties | 958 | 36,649 | 3,639 | 41,246 | |
| Reclassification to (-) / from held for sale | (72,220) | (35,160) | (250) | (107,630) | |
| As at 31 December | 121,454 | 134,286 | 212,773 | 468,513 |
| 2017 | |||||
|---|---|---|---|---|---|
| In thousands of € | Under | Development | |||
| Completed | Construction | land | Total | ||
| As at 1 January | 265,813 | 125,989 | 158,460 | 550,262 | |
| Capex | 82,320 | 63,619 | - | 145,939 | |
| Acquisitions | - | - | 25,211 | 25,211 | |
| Capitalised interest | 1,732 | 1,226 | 8 | 2,966 | |
| Capitalised rent free and agent's fee | 2,025 | 231 | - | 2,256 | |
| Sales and disposal to Joint Venture | (148,810) | (12,186) | (3,244) | (164,240) | |
| Transfer on start-up of development | - | 34,437 | (34,437) | - | |
| Transfer on completion of development | 120,984 | (120,984) | - | - | |
| Net gain from value adjustments in | |||||
| investment properties | 8,861 | 53,105 | 3,377 | 65,343 | |
| Reclassification to (-) / from held for sale | (180,314) | (50,432) | (4,700) | (235,446) | |
| As at 31 December | 152,611 | 95,005 | 144,675 | 392,291 |
The table below includes the proportional consolidated income statement interest of the Group in the VGP European Logistics joint venture. The interest held directly by the Group (5.1%) in the German asset companies of the Joint Venture have been included in the 50% Joint Venture figures (share of VGP).
| 2018 | 2017 | |||||
|---|---|---|---|---|---|---|
| In thousands of € | Group | Joint Venture |
Total | Group | Joint Venture |
Total |
| Gross rental income | 16,627 | 30,803 | 47,430 | 17,046 | 19,328 | 36,374 |
| Property operating expenses | (1,123) | (2,890) | (4,013) | (1,941) | (1,795) | (3,736) |
| Net rental and related income | 15,504 | 27,913 | 43,417 | 15,105 | 17,534 | 32,639 |
| Joint venture management fee income |
9,965 | - | 9,965 | 8,057 | - | 8,057 |
| Net valuation gains / (losses) on investment properties |
98,552 | 39,938 | 138,490 | 94,628 | 24,427 | 119,055 |
| Administration expenses | (18,167) | (1,056) | (19,223) | (19,353) | (871) | (20,224) |
| Operating profit / (loss) | 105,854 | 66,795 | 172,649 | 98,437 | 41,089 | 139,526 |
| Net financial result | (13,970) | (12,382) | (26,352) | (10,466) | (5,500) | (15,966) |
| Taxes | (15,998) | (9,194) | (25,192) | (21,205) | (6,360) | (27,565) |
| Profit for the period | 75,886 | 45,220 | 121,106 | 66,766 | 29,229 | 95,995 |
The table below includes the proportional consolidated balance sheet interest of the Group in the VGP European Logistics joint venture. The interest held directly by the Group (5.1%) in the German asset companies of the Joint Venture have been included in the 50% Joint Venture figures (share of VGP).
| 2018 | 2017 | |||||
|---|---|---|---|---|---|---|
| In thousands of € | Group | Joint Venture |
Total | Group | Joint Venture |
Total |
| Investment properties Investment properties included in |
468,513 | 624,281 | 1,092,794 | 392,291 | 383,078 | 775,369 |
| assets held for sale | 262,172 | 262,172 | 430,298 | 430,298 | ||
| Total investment properties | 730,685 | 624,281 | 1,354,966 | 822,589 | 383,078 | 1,205,667 |
| Other assets | 43,029 | 408 | 43,437 | 13,654 | 135 | 13,789 |
| Total non-current assets | 773,714 | 624,689 | 1,398,403 | 836,243 | 383,213 | 1,219,456 |
| Trade and other receivables | 23,064 | 6,469 | 29,533 | 11,074 | 6,462 | 17,536 |
| Cash and cash equivalents | 161,446 | 22,501 | 183,947 | 30,269 | 11,858 | 42,127 |
| Disposal group held for sale | 12,767 | - | 12,767 | 11,655 | - | 11,655 |
| Total current assets | 197,277 | 28,970 | 226,247 | 52,998 | 18,319 | 71,317 |
| Total assets | 970,991 | 653,659 | 1,624,650 | 889,241 | 401,532 | 1,290,773 |
| Non-current financial debt | 564,375 | 340,708 | 905,083 | 390,067 | 208,971 | 599,038 |
| Other non-current financial | ||||||
| liabilities | 60 | 2,574 | 2,634 | 1,966 | - | 1,966 |
| Other non-current liabilities | 1,515 | 3,328 | 4,843 | 1,680 | 1,873 | 3,553 |
| Deferred tax liabilities | 16,692 | 39,950 | 56,642 | 11,750 | 28,740 | 40,490 |
| Total non-current liabilities | 582,642 | 386,560 | 969,202 | 405,463 | 239,584 | 645,047 |
| Current financial debt | 22,479 | 8,687 | 31,166 | 81,358 | 5,728 | 87,086 |
| Trade debts and other current liabilities |
38,469 | 16,985 | 55,454 | 38,379 | 12,909 | 51,288 |
| Liabilities related to disposal group | ||||||
| held for sale | 25,361 | 25,361 | 41,123 | 41,123 | ||
| Total current liabilities | 86,309 | 25,672 | 111,981 | 160,860 | 18,637 | 179,497 |
| Total liabilities | 668,951 | 412,232 | 1,081,183 | 566,323 | 258,221 | 824,544 |
| Net assets | 302,040 | 241,427 | 543,467 | 322,918 | 143,312 | 466,230 |
The annualised committed leases or the committed annualised rent income represents the annualised rent income generated or to be generated by executed lease – and future lease agreements.
First option to terminate a lease.
The gross rent as contractually agreed in the lease on the date of signing.
Is a ratio calculated as consolidated net financial debt divided by total equity and liabilities or total assets.
As a borrower, VGP wishes to protect itself from any rise in interest rates. This interest rate risk can be partially hedged using derivatives (such as interest rate swap contracts).
This is a valuation method based on a detailed projected revenue flow that is discounted to a net current value at a given discount rate based on the risk of the assets to be valued.
The European Public Real Estate Association, a real estate industry body, which has issued Best Practices Recommendations Guidelines in order to provide consistency and transparency in real estate reporting across Europe.
Estimated rental value (ERV) is the market rental value determined by independent property experts.
Is the capitalisation rate applied to the net income at the end of the discounted cash flow model period to provide a capital value or exit value which an entity expects to obtain for an asset after this period.
Day-to-day maintenance, alteration and improvement work. VGP employs an internal team of facility managers who work for the VGP Group and for third parties
The fair value is defined in IAS 40 as the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. In addition, market value must reflect current rental agreements, the reasonable assumptions in respect of potential rental income and expected costs.
International Accounting Standards / International Financial Reporting Standards. The international accounting standards drawn up by the International Accounting Standards Board (IASB), for the preparation of financial statements.
The use of derived financial instruments to protect debt positions against interest rate rises.
A transaction in which the parties swap interest rate payments for a given duration. VGP uses interest rate swaps to hedge against interest rate increases by converting current variable interest payments into fixed interest payments.
Means VGP European Logistics S.à r.l., the newly established 50:50 joint venture between the Issuer and Allianz.
The date on which a lease can be cancelled
The value of the total assets minus the value of the total liabilities.
Total financial debt minus cash and cash equivalents.
The occupancy rate is calculated by dividing the total leased out lettable area (m²) by the total lettable area (m²) including any vacant area (m²).
Independent property expert responsible for appraising the property portfolio.
The property investments, including property for lease, property investments in development for lease, assets held for sale and development land.
The weighted average term of leases is the sum of the (current rent and committed rent for each lease multiplied by the term remaining up to the final maturity of these leases) divided by the total current rent and committed rent of the portfolio
The sum of the contractual rent of a property portfolio to the acquisition price of such property portfolio.
Realised and non-realised changes in value compared to the most recent valuation of the expert, including the effective or latent capital gain tax payable in the countries where VGP is active.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.