VGP NV

Earnings Release • Mar 1, 2015

Press Release Regulated Information

2 March 2015

Annual results 2014

• Profit for the year of € 49.4 million (+ € 25.1 million against 2013)
• 117.4% increase of committed annualised rent income to € 22.6 million as at the end of December 2014 (compared to € 10.4 million as at 31 December 2013), with an additional € 1.3 million lease contracts being signed during the first weeks of 2015 and a further € 6.8 million lease agreements being under final negotiations
• 108.0% growth in gross rental income (+ € 5.0 million) to € 9.6 million
• The signed committed lease agreements at year end represent a total of 404,732 m² of lettable area with the weighted average term of the committed leases standing at 7.8 years at the end of December 2014 (7.6 years as at 31 December 2013)
• 14 projects under construction representing 171,455 m² of future lettable area, with 3 additional projects (45,950 m²) being started-up during Q1-2015
• 943,000 m² of new development land acquired of which 842,000 m² located in Germany with another 863,000 m² land plots targeted and already partially committed to expand land bank and support development pipeline
• Net valuation gain on the investment portfolio reaches € 53.9 million (against € 27.9 million at the end of 2013)
• The fair value of the investment property and the investment property under construction (the "property portfolio") as at 31 December 2014 increased with 84.3% to € 416.1 million (compared to € 225.8 million as at 31 December 2013)

Summary

2014 proved to be a vintage year for VGP.

During the year of 2014 VGP recorded a strong growth in all the markets where the Group is active, and demands for lettable area gained momentum during the second half of 2014 and is continuing throughout the first months in 2015.

Germany firmly established itself as the main source of growth for the VGP Group with a significant rise in development and leasing activities. In other markets, such as Estonia, Romania and Czech Republic development and leasing activities were also buoyant.

During the year 10 projects totalling 132,645 m² of lettable area were delivered. At the end of the year 14 projects were under construction representing 171,455 m² lettable area with another 5 projects totalling 96,000 m² of lettable area (97% pre-let) to be started-up during the first half of 2015.

VGP's activities during the year 2014 can be summarised as follows:

• The operating activities resulted in a profit for the year of € 49.4 million (€ 2.66 per share) for the financial year ended 31 December 2014 compared to a profit of € 24.3 million (€ 1.31 per share) for the financial year ended 31 December 2013).
• The increase in demand of lettable area resulted in the signing of new lease contracts in excess of € 12.7 million in total of which € 12.2 million related to new or replacement leases and € 0.5 million were related to renewals of existing lease contracts.
• The Group's property portfolio reached an occupancy rate of 94.0% at the end of December 2014 compared to 96.9% as at 31 December 2013.
• The investment property portfolio consists of 17 completed buildings representing 268,232 m² of lettable area with another 14 buildings under construction representing 171,455 m² of lettable area.
• The net valuation of the property portfolio as at 31 December 2014 showed a net valuation gain of € 53.9 million against a net valuation gain of € 27.8 million per 31 December 2013.
• As at 31 December 2014 the financial income continued to benefit from the interest income on loans made available to associates until 22 October 2014 (when these loans were repaid). The interest expenses saw the full year impact of the interest on the 2 bonds issued during 2013. This resulted in a net financial expense of € 7.7 million as at 31 December 2014 against a net financial income of € 0.7 million as at 31 December 2013.
• On 22 October 2014 VGP and its joint venture partners completed the sale of the Czech VGP CZ I and VGP CZ II portfolios. With this transaction VGP sold its remaining 20% stake in these 2 Czech portfolios.

Key figures

CONSOLIDATED INCOME STATEMENT – ANALYTICAL FORM (in thousands of €)	2014	2013
NET CURRENT RESULT
Gross rental income	9,596	4,613
Service charge income / (expenses)	431	(90)
Property operating expenses	(1,513)	(728)
Net rental and related income	8,514	3,795
Property and facility management income	3,161	3,390
Property development income	246	485
Other income / (expenses) - incl. administrative costs	(7,089)	(4,850)
Share in the result of associates	14,473	1,526
Operating result (before result on portfolio)	19,305	4,346
Net financial result1	(6,220)	903
Revaluation of interest rate financial instruments (IAS 39)	(1,455)	(201)
Taxes	(2,167)	(953)
Net current result	9,463	4,095
RESULT ON PROPERTY PORTFOLIO
Net valuation gains / (losses) on investment properties	53,920	27,872
Deferred taxes	(14,024)	(7,665)
Result on property portfolio	39,896	20,207
PROFIT FOR THE YEAR	49,359	24,302

RESULT PER SHARE	2014	2013
Number of ordinary shares	18,583,050	18,583,050
Net current result per share (in €)	0.51	0.22
Net result per share (in €)	2.66	1.31

Gross rental income up 108.0% to € 9.6 million

The gross rental income reflects the full impact of the income generating assets delivered during 2014. The gross rental income for the financial year ending 31 December 2014 increased by 108.0% from € 4.6 million for the period ending 31 December 2013 to € 9.6 million for the period ending 31 December 2014.

Committed annualised rent income increases to € 22.6 million

During 2014 VGP continued to successfully sign new and or renew existing leases on the back of the pick-up in demand of lettable area.

¹ Excluding the revaluation of interest rate financial instruments.

The annualised committed leases increased to € 22.6 million as at the end of December 2014 (compared to € 10.4 million as at 31 December 2013).

The committed annualised rent income represents the annualised rent income generated or to be generated by executed lease – and future lease agreements.

Germany was the main driver of the increases in committed leases with more than € 9.3 million of new leases signed during the year. In the other countries new leases totalling € 2.9 million were signed during the year i.e. in Estonia € 1.5 million, in the Czech Republic € 0.8 million and finally in Romania € 0.6 million.

The sustained demand in lettable area throughout the first weeks of 2015 resulted in the signing of € 1.3 million of additional leases. In addition there are a significant number of new leases under negotiation and VGP expects to sign another € 6.8 million new leases during the next few weeks.

The signed committed lease agreements represent a total of 404,732 m² of lettable area with the weighted average term of the committed leases standing at 7.8 years at the end of December 2014 compared to 7.6 years as at 31 December 2013.

Property and facility management and property development income reaches € 3.2 million

The property and facility management income and property development income decreased slightly during the year from € 3.4 million as at 31 December 2013 to € 3.2 million as at 31 December 2014.

The property and facility management and property development income is generated by providing services to the associated companies and to other third parties.

The sale of the VGP CZ I and VGP CZ II portfolios which occurred on 22 October 2014 should not have a significant impact on this income in the short term, as VGP has been retained by the new owners of these portfolios to provide property and facility management services for the future.

Net financial expenses increase to € 7.7 million

As at 31 December 2014 the financial income continued to benefit from the interest income on loans made available to associates until the 22 October 2014 (when these loans were repaid). The interest expenses saw the full year impact of the interest on the 2 bonds issued during 2013. This resulted in a net financial expense of € 7.7 million as at 31 December 2014 against a net financial income of € 0.7 million as at 31 December 2013.

All loans to associates (€ 49.8 million) were repaid to VGP following the sale of the VGP CZ I and VGP CZ II portfolios on 22 October 2014. The repayment of these loans will significantly reduce the future interest income.

The financial debt increased from € 170.6 million as at 31 December 2013 to € 198.8 million as at 31 December 2014. The increase was mainly driven by an increase in bank debt.

Evolution of the property portfolio

The fair value of the investment property and the investment property under construction (the "property portfolio") as at 31 December 2014 increased with 84.3% to € 416.1 million compared to € 225.8 million as at 31 December 2013. The increase of the property portfolio was due to the acquisition of new development land and to the start-up of new projects during the year.

The total property portfolio, excluding development land, is valued by the valuation expert at 31 December 2014 based on a market rate of 7.81% (compared to 8.72% as at 31 December 2013) applied to the contractual rents increased by the estimated rental value on unlet space.

Completed projects

During the year 10 buildings were completed totalling 132,645 m².

In the Czech Republic: 1 building of 5,234 m² in VGP Park Tuchomerice, 1 building of 13,538 m² in VGP Park BRNO, 1 building of 18,225 m² in VGP Park Hradek nad Nisou, 1 building of 5,351 m² in VGP Park Usti nad Labem and 1 building of 8,711 m² in VGP Park Plzen. In Estonia: 1 building of 21,806 m² and another building of 21,600 m² were delivered in our VGP Park Nehatu. In Romania 1 building of 7,375 m² was delivered and finally in Germany 2 additional buildings were delivered: 1 building of 6,400 m² in VGP Park Bingen and 1 building of 24,404 m² in VGP Park Hamburg.

Projects under construction

At the end of December 2014 VGP has the following 14 buildings under construction: In Germany: 3 buildings in VGP Park Hamburg, 2 buildings in VGP Park Rodgau, 1 building in VGP Park Höchstadt and 1 building in VGP Park Berlin. In the Czech Republic: 1 building in VGP Park BRNO, 1 building in VGP Park Plzen and 2 buildings in our new VGP Park Olomouc. In the other countries: 1 building in VGP Park Nehatu (Estonia), 1 building in VGP Park Malacky (Slovakia) and finally 1 building in VGP Park Timisoara (Romania). The new buildings under construction on which several pre-leases have already been signed, represent a total future lettable area of 171,455 m².

Land bank

During the year 2014 VGP continued to prepare the development pipeline for future growth through the acquisition of 943,000 m² development land of which 843,000 m² was located in Germany, 54,000 m² in the Czech Republic and 46,000 m² in Estonia.

VGP has currently a land bank in full ownership of 2,950,280 m². The land bank allows VGP to develop besides the current completed projects and projects under construction (439,687 m²) a further 842,000 m² of lettable area of which 571,000 m² in Germany, 90,000 m² in the Czech Republic, and 181,000 in the other countries.

Besides this VGP has another 863,000 m² of new land plots under option, subject to permits, of which 162,000 m² in Germany, 637,000 m² in the Czech Republic and 64,000 m² in the other countries. These land plots have a development potential of approx. 354,000 m² of new projects. These remaining land plots are expected to be acquired during the course of 2015.

As a result the total secured land bank amounts to 3,813,280 m² with a total development potential of 1,636,000 m² of lettable area.

Financing

During the year VGP was able to increase its committed bank facilities with € 66 million, from € 79.8 million as at 31 December 2013 to € 145.6 million as at 31 December 2014. The committed facilities were drawn for 34% as at the end of December 2014 and have an average term of 4.4 years.

Additional comments on the 31 December 2014 consolidated financials

Taxes

Taxes increased from € 8.6 million as at 31 December 2013 to € 16.2 million as at 31 December 2014. The change in the tax line is mainly due to the variance of the fair value adjustment of the property portfolio and has therefore no cash effect.

Outlook 2015

Based on the serious efforts made over the past 2 years to substantially increase our land bank and the positive trend in the demands for lettable area recorded by VGP during 2014 and the continuing trend seen during the first months of 2015, and provided there are no unforeseen events of economic and financial markets nature, VGP should be able to continue to substantially expand its rent income and property portfolio through the completion and start-up of additional new buildings.

Financial calendar

Annual report 2014	7 April 2015
General meeting of shareholders	8 May 2015
2015 half year results	31 August 2015

For more information

Mr Jan Van Geet	Mr Dirk Stoop
CEO	CFO
Tel. + 42 0602 404 790	Tel.+32 52 45 43 86
E-mail: jan.van.geet@vgpparks.eu	E-mail: dirk.stoop@vgpparks.eu

Profile

VGP (www.vgpparks.eu) constructs and develops high-end semi-industrial real estate and ancillary offices, which are subsequently rented out to reputable clients on long term lease contracts. VGP has an in-house team which manages all activities of the fully integrated business model: from identification and acquisition of land, to the conceptualisation and design of the project, the supervision of the construction works, contracts with potential tenants and the facility management of its own real estate portfolio.

VGP is quoted on Euronext Brussels and the Main Market of the Prague Stock Exchange.

Brussels and the Main Market of the Prague Stock Exchange.

FINANCIAL ACCOUNTS¹

1. CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2014

INCOME STATEMENT (in thousands of €)	2014	2013
Revenue	15,114	9,836
Gross rental income	9,596	4,613
Service charge income	2,110	1,349
Service charge expenses	(1,679)	(1,439)
Property operating expenses	(1,513)	(728)
Net rental income	8,514	3,795
Property and facility management income	3,161	3,390
Property development income	246	485
Net valuation gains / (losses) on investment properties	53,920	27,872
Administration expenses	(6,556)	(4,567)
Other income	348	458
Other expenses	(881)	(741)
Share in result of associates	14,473	1,526
Operating profit / (loss)	73,225	32,218
Financial income	2,880	3,587
Financial expenses	(10,555)	(2,885)
Net financial result	(7,675)	702
Profit before taxes	65,550	32,920
Taxes	(16,191)	(8,618)
Profit for the year	49,359	24,302
Attributable to:
Shareholders of VGP NV	49,359	24,302
Non-controlling interests	-	-

RESULT PER SHARE	2014	2013
Basic earnings per share (in €)	2.66	1.31
Basic earnings per share – after correction of reciprocal interest
through associates (in €)	2.71	1.34

¹ The statutory auditor has confirmed that his audit procedures, which have been substantially completed, have not revealed any material adjustments which would have to be made to the accounting information disclosed in this press release. The consolidated financial statements have been prepared in accordance with IFRS as adopted by the European Union.

2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2014

STATEMENT OF COMPREHENSIVE INCOME (in thousands of €)	2014	2013
Profit for the year	49,359	24,302
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	49,359	24,302
Attributable to:
Shareholders of VGP NV	49,359	24,302
Non-controlling interest	-	-

3. CONSOLIDATED BALANCE SHEET For the year ended 31 December 2014

ASSETS (in thousands of €)	2014	2013
Goodwill	631	631
Intangible assets	57	51
Investment properties	416,089	225,804
Property, plant and equipment	370	297
Investments in associates	0	982
Other non-current receivables	17	49,114
Deferred tax assets	258	135
Total non-current assets	417,422	277,014
Trade and other receivables	6,822	10,242
Cash and cash equivalents	43,595	79,226
Total current assets	50,417	89,468
TOTAL ASSETS	467,839	366,482

SHAREHOLDERS' EQUITY AND LIABILITIES (in thousands of €)	2014	2013
Share capital	62,251	62,251
Retained earnings	153,097	103,737
Other reserves	69	69
Shareholders' equity	215,417	166,057
Non-current financial debt	193,034	159,658
Other non-current financial liabilities	1,656	201
Other non-current liabilities	1,122	943
Deferred tax liabilities	27,329	11,753
Total non-current liabilities	223,141	172,555
Current financial debt	5,722	10,895
Trade debts and other current liabilities	23,559	16,975
Total current liabilities	29,281	27,870
Total liabilities	252,422	200,425
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	467,839	366,482

4. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2014

STATEMENT OF CHANGES IN EQUITY (in thousands of €)	Statutory share capital	Capital reserve ¹	IFRS share capital	Retained earnings	Share premium	Total equity
Balance as at 1 January 2013	120,356	(58,105)	62,251	88,940	69	151,260
Other comprehensive income / (loss)	-	-	-	-	-	-
Result of the period	-	-	-	24,302	-	24,302
Effect of disposals	-	-	-	-	-	-
Total comprehensive income / (loss)	-	-	-	24,302	-	24,302
Dividends to shareholders	-	-	-	-	-	-
Share capital distribution to shareholders	(7,619)	7,619	-	(7,619)	-	(7,619)
Correction for reciprocal interest through associates ²	-	-	-	(1,886)	-	(1,886)
Balance as at 31 December 2013	112,737	(50,486)	62,251	103,737	69	166,057
Balance as at 1 January 2014	112,737	(50,486)	62,251	103,737	69	166,057
Other comprehensive income / (loss)	-	-	-	-	-	-
Result of the period	-	-	-	49,359	-	49,359
Effect of disposals	-	-	-	-	-	-
Total comprehensive income / (loss)	-	-	-	49,359	-	49,359
Dividends to shareholders	-	-	-	-	-	-
Share capital distribution to shareholders	-	-	-	-	-	-
Correction for reciprocal interest through associates ²	-	-	-	-	-	-
Balance as at 31 December 2014	112,737	(50,486)	62,251	153,097	69	215,417

¹ Capital reserve relates to the elimination of the contribution in kind of the shares of a number of Group companies and the deduction of all costs in relation to the issuing of the new shares and the stock exchange listing of the existing shares from the equity of the company, at the time of the initial public offering ("IPO").

² 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 43% of VGP Misv Comm. VA during the course of 2013.

5. CONSOLIDATED CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2014

CASH FLOW STATEMENT (in thousands of €)	2014	2013
Cash flows from operating activities
Profit before taxes	65,550	32,920
Adjustments for:
Depreciation	178	106
Unrealised (gains) /losses on investment properties	(58,160)	(27,872)
Realised( gains) / losses on disposal of subsidiaries and investment properties	4,241	-
Unrealised (gains) / losses on financial instruments and foreign exchange	1,407	56
Net interest paid / (received)	4,131	(2,293)
Share in result of associates	(9,248)	(1,526)
Operating profit before changes in working capital and provisions	8,099	1,391
Decrease/(Increase) in trade and other receivables	7,561	(1,424)
(Decrease)/Increase in trade and other payables	(12,654)	8,302
Cash generated from the operations	3,006	8,269
Net Interest paid / (received)	(4,131)	2,293
Income taxes paid	(417)	(95)
Net cash from operating activities	(1,542)	10,467
Cash flows from investing activities
Proceeds from disposal of subsidiaries	0	-
Proceeds from disposal of tangible assets	3,324	31
Acquisition of subsidiaries	(406)	(4,091)
(Loans provided to) / loans repaid by associates	49,812	(3,356)
Investment property and investment property under construction	(112,221)	(89,811)
Net cash from investing activities	(59,491)	(97,227)
Cash flows from financing activities
Gross dividends paid
Net Proceeds / (cash out) from the issue / (repayment) of share capital	0	(7,619)
Proceeds from loans	26,862	155,322
Loan repayments	(1,612)	(928)
Net cash from financing activities	25,250	146,775
Net increase / (decrease) in cash and cash equivalents	(35,783)	60,015
Cash and cash equivalents at the beginning of the period	79,226	19,123
Effect of exchange rate fluctuations	152	88
Cash and cash equivalents at the end of the period	43,595	79,226
Net increase / (decrease) in cash and cash equivalents	(35,783)	60,015