Earnings Release • Feb 19, 2015
Earnings Release
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February 19, 2015
+5.4% adjusted for the impact of non-strategic assets sold
188 million euros of investments secured, 40 million euros of sales completed, and ongoing liability management
| In million euros In million euros |
Dec 31, 13 Dec 31, 13 |
Dec 31, 14 14 | Change (%) (%) |
|---|---|---|---|
| Gross rentals | 588.9 | 571.0 | -3.0% (+0.5% like-for-like) |
| EBITDA | 480.3 | 467.6 | -2.6% |
| Recurrent Recurrentnet income (Group Share) net income (Group Share) net (Group Share) |
311.1 | 316.6 | +1.8% (+5.9%corrected for non corrected for non-strategic sales corrected for non strategic sales sales)* |
| Per share in EUR | 5.10 | 5.17 | +1.3% (+5.4% corrected for non-strategic sales)* |
| Diluted EPRA triple net NAV (block) | 102.2 | 101.2 | -1.0% |
| Dividend per share | 4.60 | 4.65** | +1.1% |
* Excluding impact of non-strategic assets sold (Hotels in 2013 and Beaugrenelle in 2014, assumption for an LTV of 40% on these sales)
** Subject to approval by the General Meeting on April 24, 2015
In 2014, Gecina achieved good operational performances in an office market that remained under pressure. The Group's occupancy rate, Group's rate,which was already high in 2013, further improved, which was already high in 2013, further improved, which already further improved, increasing increasing by 90bp to reach 96.4% in ncreasing by 90bp to reach 96.4% in 2014,closer to its historical highs, andsignificantly higher than the average for the Paris Region market.. Organic rental growth continued to be positive (+0.5%), reflecting the quality of the Group's office portfolio, in the most resilient areas such as the Central Business District, as well as in markets that are rebounding such as the Western Crescent.
In 2014, In 2014, recurrent net income grew +1.8% recurrent net +1.8%, despite the sales of non-strategic assets (Hotels in 2013 and Beaugrenelle in 2014). Restated for the impact of t Restated impact of these two sales, sales, hese sales, recurrent net income recurrent income growth was at around 5.9% for the year, buoyed by the good operational p 5.9% erformances achieved and the reduction in the average cost of debt (-40bp) to 3.6% including undrawn credit lines (average cost of drawn debt reached 3.0% down -50bp).
The group expects an occupancy rate close to current levels and a reduction in the average cost of debt by the same amount seen in 2014. At this stage, 188 million euros of investments have been secured, thanks to the acquisition of the City 2 building in Boulogne-Billancourt, let to Solocal Group, which will be delivered end 2015. In addition, the company will be ramping up its rotation program, aiming to sell approximately 800 million euros of nonstrategic and/or mature assets over the year. Based on these elements, net income (Group share) net income (Group share)income share) will be stable be stablebe stable in2015, with growth of with over2% when restated for the impact of restated for the of Beaugrenelle Beaugrenelle's sale 's sale.
Moreover, considering the Group's capacity for investment, with an LTV of 36.7%, significantly lower than the target of 40%, Gecina is looking to make further in Gecina is to investments which vestments which could enable it to revise its 2015 targets targets upward during the year upward during year year.
Bernard Michel, Gecina's Chairman: "Gecina aims to Bernard Michel, consolidate its leading position on the Paris office market. Our shareholders, renewed and stabilized, share this clear strategic ambition with us, focused on the long-term, combining the drive to establish sustainable value creation dynamics and respect for the company's human values and its strong CSR commitments".
Philippe Depoux, Gecina's Chief Executive Officer: "In a complex market environment, I am both proud of the performance achieved in 2014 and confident as we look ahead to 2015 with a clear roadmap. We will be rolling out a dynamic investment policy and further strengthening value creation within our portfolio, continuing to develop a range of new-generation buildings that are flexible and mixed, responsible and comfortable, supporting the performance and wellbeing of our user customers".
Gross rental income came to 571 million euros in 2014. On a like-for-like basis, rental income is up +0.5%. More specifically, this increase reflects the positive impact of indexation (+0.9%), while the negative impact of renegotiations and relettings remained very limited in terms of like-for-like rental trends for the Group as a whole (-0.4%).
On a current basis, rents are down -3% in relation to 2013. This contraction primarily reflects the loss of rent due to sales (Hotels in 2013 and Beaugrenelle in 2014) and the redevelopments launched (-37.4 million euros) coming in higher than the combined revenues from acquisitions and project deliveries (+16.7 million euros) and like-for-like growth (+2.7 million euros).
| Gross rental income Gross rental |
Dec 31, 13 | Dec 31, 14 31, 14 | Change (%) | |
|---|---|---|---|---|
| In million euros | Current basis | Like-for-like | ||
| Group total | 588.9 | 571.0 | -3.0% | +0.5% |
| Offices | 345.0 | 348.9 | +1.1% | +0.4% |
| Traditional residential | 131.5 | 126.1 | -4.1% | +0.5% |
| Student residences | 9.3 | 9.1 | -2.1% | -0.4% |
| Healthcare | 74.0 | 73.4 | -0.8% | +1.0% |
| Beaugrenelle | 18.8 | 12.7 | NA | NA |
| Other (hotels, logistics) | 10.3 | 0.7 | NA | NA |
Rental income on offices offices is up +0.4% like-for-like, benefiting from the continued positive impact of indexation (+0.8%) and offsetting the still moderate impact of relettings and renegotiations.
On a current basis, office rental income is up +1.1%, thanks in particular to the full-year impact of the acquisitions made in 2013, the reduction in the vacancy rate achieved in 2013 and consolidated in 2014, as well as the acquisition of the "Le France" building in June 2014.
By end-2014, Gecina had let nearly 84,000 sq.m of offices, factoring in new lettings, relettings, renegotiations and renewals, representing around 27 million euros of annualized economic rent.
| Gross rental income – Gross rental –Offices OfficesOffices |
Dec 31, 13 31, 13 | Dec 31, 14 14 | Change (%) | |
|---|---|---|---|---|
| (in million euros) | Current basis | Like-for-like | ||
| Offices (excl. Beaugrenelle) (excl. |
345.0 | 348.9 | +1.1% | +0.4% |
| Paris CBD - Offices | 100.6 | 102.6 | +2.0% | +1.1% |
| Paris CBD – Retail units | 33.7 | 35.3 | +4.9% | +3.2% |
| Paris excl. CBD | 42.1 | 43.3 | +2.8% | -2.8% |
| Western Crescent | 119.5 | 116.3 | -2.7% | 0.0% |
| Other | 49.2 | 51.5 | +4.6% | -0.2% |
With zero indexation expected, and reversionary potential to remain slightly negative, organic office rental income could contract slightly in 2015.
Rental income from traditional residential assets shows +0.5% like-for-like growth, buoyed by the positive impact of indexation (+1.0%), as well as the impact of relettings, up +0.5%. The tenant rotation rate for 2014 came to 15.1%, in line with the level for 2013. Like-for-like growth has been negatively affected by a slight drop in the occupancy rate, although it remains high at 97.7%.
Healthcare rental income is up +1.0% like-for-like, thanks to indexation (+1.1%), offsetting the 0.6% contraction resulting from the marginal reductions in rent granted in return for extended leases.
Lastly, Gecina recorded rent on the Beaugrenelle shopping center until this asset's sale was completed in April 2014. Rent for the year totaled 12.7 million euros.
The average financial occupancy rate for 2014 was 9 financial rate 6.4%, an improvement compared with the already high levels from 2013 (95.5%) and 2012 (93.4%). This increase is consistent with the Group's objectives for 2014.
This improvement has been driven primarily by the performance on offices, with the occupancy rate climbing 170 basis points over the year to 95.3% in 2014, versus 93.6% in 2013, thanks to significant reletting operations (Horizons, Portes de la Défense and Newside).
In 2015, the financial occupancy rate is expected to remain close to the level from 2014.
| Average financial occupancy rate rate | Dec 31, 13 | Sep 30, 14 | Dec 31, 14 |
|---|---|---|---|
| Offices (excl. Beaugrenelle) | 93.6% | 95.4% | 95.3% |
| Diversification | 98.7% | 98.3% | 98.3% |
| Group total | 95.5% | 96.4% | 96.4% |
The Group's recurrent net income (Group share) climbed +1.8% in 2014 to 316.6 million euros, despite the sales of the hotels in 2013 and the Beaugrenelle shopping center in 2014. Restated for these two divestments, growth represents nearly 5.9%.
The rental margin margin came to 91.8% at end-2014, up 40bp from December 31, 2013 and 100bp from end-2012, primarily reflecting the impacts of the lower vacancy rate on the office portfolio.
| Group | Offices Offices Offices | Residential Residential |
Healthcare Healthcare |
|
|---|---|---|---|---|
| Rental margin at Dec 31, 2013 | 91.4% | 93.0% | 81.8% | 99.1% |
| Rental margin at Dec 31, 2014 | 91.8% | 94.1% | 83.0% | 99.2% |
Net financial expenses are down -9.9% year-on-year financial expenses to 146.6 million euros, primarily thanks to a reduction in the average cost of debt (-40bp over 2014 versus 2013), as well as a reduction in the average volume of debt by around 200 million euros. Gross financial expenses fell by -14.3% over the year, excluding the impact of capitalized financial expenses (which totaled 4.5 million euros, down -9.2 million euros following the delivery of major assets in 2013). Overall, the average cost of debt is 3.6%, compared with 4.0% in 2013.
Recurrent minority interests primarily concern the Recurrent interests Beaugrenelle shopping center, sold in April 2014, in which Gecina had a 75% stake.
Recurrent net income (Group share) is up +1.8% vers Recurrent (Group share) us 2013 to 316.6 million euros, in line with the revised forecast from October 2014, which anticipated an increase in this indicator. For reference, one year ago Gecina forecast "recurrent net income (Group share) to be stable in 2014 […] based on an
assumption for proceeds from the sale of the Beaugrenelle shopping center to be reinvested during the second half of 2014". Although these proceeds were not reinvested in 2014 due to a particularly competitive investment market, the growth achieved is significantly higher than the initial target, mainly thanks to a marked reduction in the average cost of the Group's debt.
Recurrent net income represents 5.17 euros per share for 2014, versus 5.10 euros per share for 2013, up +1.3%.
| In million euros In million |
Dec 31, 13 Dec 31, |
Dec 31, 14 Dec 31, |
Change (%) |
|---|---|---|---|
| Gross rental income Gross rental income |
588.9 | 571.0 | -3.0% |
| Expenses on properties | (140.0) | (142.7) | +1.9% |
| Expenses billed to tenants | 89.5 | 96.0 | +7.3% |
| Net rental income income | 538.4 | 524.3 | -2.6% |
| Services and other income (net) | 7.6 | 8.4 | +11.7% |
| Salaries and management costs | (65.7) | (65.1) | -0.8% |
| EBITDA | 480.3 | 467.6 | -2.6% |
| Net financial expenses | (162.7) | (146.6) | -9.9% |
| Recurrent gross income income | 317.6 | 321.0 | +1.1% |
| Recurrent minority interests | (2.3) | (1.2) | NA |
| Recurrent tax | (4.2) | (3.3) | -22.9% |
| Recurrent net income (Group Share) net income (Group Share) |
311.1 | 316.6 | +1.8% |
Gecina has continued to optimize its liabilities focusing on three priorities: improving the flexibility of its financial structure, consolidating its financial ratios and extending its financing maturities. In this context, Standard & Poor's and Moody's have upgraded their ratings for Gecina to BBB+ / outlook stable BBB+ / stableandBaa1 / outlook stable, once again recognizing the in-dep stable th financial restructuring process carried out over the past few years. Gecina's balance sheet structure will enable it to support its ambitions for external growth in the future.
Net debt represented 3,881 million euros at end- million end-2014, with a loan to value ratio (LTV) of 36.7% excluding transfer taxes (34.7% including transfer taxes), down -200bp from the end of 2013. In addition, Gecina had 1.8 billion euros of available lines at the end of 2014, making it possible to cover all the credit maturities for 2015 and 2016.
The average cost of debt including undrawn lines dr average of including dropped dropped-40bp over the year to 3.6%, compared with 4.0% in 2013. The average cost of drawn debt is also down, from 3.5% in 2013 to 3.0% in 2014. This reduction is the result of an active liability optimization policy, benefiting from the full-year impact of the renewals, renegotiations and early repayments made at the end of 2013, as well as the 500 million euro bond issue in July 2014, with a coupon of 1.75% and a maturity of seven years. This issue, allocated for the redemption of the bonds maturing in September 2014 (with a 4.50% coupon), helped bring down the average cost of debt over the year and will contribute towards further reductions in this cost over 2015.
Since the start of 2015, Since the start 2015, Gecina has continued moving forward with its optimization work, including a 500 million euro, 10-year bond issue in January, based on a coupon of 1.5%. Gecina has also renegotiated and renewed almost 1 billion euros of undrawn credit lines and mortgage facilities.
As a result of these refinancing operations, repayments and renewals in 2014 and early 2015,the average the average maturity of debt has increased significantly of significantly significantly, moving from 4.9 years at end-2013 to 6.2 years at February 15, 2015 (5.0 years at end-2014).
For 2015, Gecina expects its average cost of debt to fall by a similar amount to 2014, giving an average cost including undrawn credit lines of nearly 3.2%.
| Ratios | Covenant | Dec 31, 14 |
|---|---|---|
| Loan to value (block) | < 55% | 36.7% |
| EBITDA (excluding disposals) / net financial expenses | > 2.0x | 3.2x |
| Outstanding secured debt / net asset value of portfolio (block) | < 25% | 11.2% |
| Net asset value of portfolio (block), in million euros | > 6,000 – 8,000 | 10,369 |
| (1) Loan to value (block, including transfer taxes): 34.7% |
Lastly, considering the current level of Gecina's share price, the company has decided to redeem the ORNANE bonds - which may be redeemed in cash and/or converted into new and/or existing shares - from March 2010 ahead of schedule. In accordance with the terms from the prospectus for this issue, Gecina
will be communicating specifically on the conditions for this redemption shortly.
Gecina completed completed 613 million euros eurosof sales of sales (Group share) over 2014, with an average net exit yield of 4.1%.
These sales primarily concerned the Beaugrenelle shopping center (for 516 million euros, Group share), with an exit yield of 4.1%. The Group also completed 80 million euros of unit residential sales, achieving a net yield of 3% and a 33% premium compared with the block appraisal values from end-2013. Lastly, one healthcare facility was sold for 6 million euros, 7% higher than its end-2013 appraisals.
Since January 1, 2015, 74 million euros of assets have been sold or are subject to preliminary sales agreements, including 16 million euros of residential assets. In particular, Gecina has completed the sale of the BMW building in Madrid for 41 million euros, with an 18% premium versus the latest appraisals. With this sale, Gecina has divested its last office building in Spain.
Alongside this, 277 million euros were invested invested invested in 2014, including 133 million euros to acquire the "Le France" building in Paris' 13th arrondissement, with a net yield of 6.45%, and 95 million euros for the development pipeline. Capex represented 47 million euros (including work generating additional rent).
At the end of December 2014, 221 million euros were still to be invested for the development pipeline, with 97 million euros in 2015, 68 million euros in 2016, 45 million euros in 2017 and the rest in 2018. The various projects underway are expected to generate 30 million euros of annualized headline rents (net).
On February 16, 2015, Gecina acquired the City 2 building in Boulogne-Billancourt from BNP Paribas Real Estate for 188 million euros million euros (including commissions and fees). The building is currently being redeveloped and will be delivered end 2015. It will offer nearly 28,500 sq.m and be let in full to Solocal Group on a firm 10 firm 10-year lease year lease from April 2016. 2016.
The CityLights service sector hub, which the building is part of, is ideally located next to the Pont de Sèvres metro station on Line 9, as well as the future Line 15, which is scheduled to be delivered in 2020 as part of the Grand Paris project. City 2 will therefore have direct connections to central Paris, as well as eventually the La Défense business district. The whole CityLights hub, which will offer more than 80,000 sq.m of offices and services, will represent an outstanding service sector gateway for the city of Boulogne and western Paris.
This asset, with its redevelopment overseen by Dominique Perrault Architecture, is aiming for HQE® Exceptional and BREEAM® Excellent certification, as well as BBC energy efficiency.
The portfolio value (block) came to 10,341 million euros, down -4.1% on a current basis (as a result of the sales made in 2014), and up +0.8% on a comparable basis compared with December 31, 2013.
On a comparable basis, the office portfolio value increased by +1.5% over the year, reflecting a +5.9% increase in value for the Paris CBD portfolio (+4.4% for offices, +9.0% for retail outlets), offsetting to some extent a slight downturn in the revised values for the other regions. These appraisals reflect a slight compression of capitalization rates over 2014, by 18bp for offices to 6.05%. Overall, the rent effect is negligible for the portfolio as a whole, as well as for the office portfolio. The average yield rate on Gecina's portfolio, notably including the residential portfolio on a block value basis and the healthcare portfolio, comes to 5.74%, indicating a very slight compression by 10bp year-on-year.
| Breakdown by segment Breakdown by segment |
Appraised values values | Net capitalization rate rate | Like-for-like change | like change like change |
||
|---|---|---|---|---|---|---|
| In million euros | 2014 | 2013 | 2014 | 2013 | Dec. 2014 vs. Jun 2014 |
Dec. 2014 vs. Dec 2013 |
| Offices Offices | 6,482 | 6,908 | 6.05% | 6.23% | +1.6% | +1.5% |
| Paris CBD - Offices | 1,803 | 1,732 | 5.65% | 5.90% | +2.6% | +4.4% |
| Paris CBD - Retail units | 894 | 821 | 3.74% | 4.06% | +10.2% | +9.0% |
| Paris excl. CBD | 838 | 1,391 | 7.63% | 7.64% | -1.0% | -2.1% |
| Western Crescent | 2,130 | 2,149 | 6.60% | 6.71% | -1.1% | -1.8% |
| Other | 817 | 815 | 6.86% | 6.77% | -0.1% | -0.4% |
| Residential (block) Residential (block) |
2,750 | 2,797 | 4.44% | 4.38% | -0.4% | -0.9% |
| Healthcare Healthcare |
1,106 | 1,071 | 7.00% | 7.01% | +0.7% | +0.4% |
| Logistics Logistics | 4 | 6 | NA | NA | NA | NA |
| Group total Group total |
10,341 | 10,781 | 5.74% | 5.84% | +1.0% | +0.8% |
| Total value: unit appraisals | 10,913 | 11,368 | +0.8% | +0.6% |
Diluted EPRA triple net NAV (block) represents 101.2 euros per share, down very slightly from the end 2 share of 2013 (-1%), but up 3.4% over the second half of 2014. This -1 euro change reflects the following impacts:
| - | Dividend payment: | -4.6 euros |
|---|---|---|
| - | Impact of recurrent income: | +5.1 euros |
| - | Value adjustment on assets: | +0.7 euros |
| - | Value adjustment on financial instruments: | -2.1 euros |
| - | Others | -0.1 euros |
As indicated above, the marginal year-on-year contraction in the triple net NAV is primarily attributable to changes in the value of financial instruments.
Diluted unit NAV came to 110.0 euros per share at December 31, 2014, compared with 111.1 euros per share at December 31, 2013.
| Dec 31, 13 | Jun 30, 14 | Dec 31, 14 | |||||
|---|---|---|---|---|---|---|---|
| Amount / number of shares |
€ per share | Amount / number of shares |
€ per share | Amount / number of shares |
€ per share | ||
| Fully diluted number of shares | 61,658,902 | 61,947,641 | 61,967,103 | ||||
| Shareholders' equity under IFRS Shareholders' under IFRS + Impact of exercising stock options |
6,246 48 |
6,035 54 |
6,269 50 |
||||
| Diluted NAVNAV Diluted NAV |
6,293 | 6,089 | 6,318 | ||||
| + Fair value reporting of properties, if amortized cost option is adopted - Fair value of financial instruments - Deferred taxes due to the effects of entry into the SIIC system |
37 140 (2) |
38 106 |
45 74 3 |
||||
| = Diluted EPRA NAV = Diluted NAV |
6,468 | €104.9 | 6,233 | €100.6 | 6,440 | €103.9 | |
| + Fair value of financial instruments + Fair value of liabilities + Deferred taxes due to the effects of entry into the SIIC system |
(140) (31) 2 |
(106) (66) |
(74) (93) (3) |
||||
| = Diluted EPRA triple net NAV = Diluted triple NAV |
6,299 | €102.2 | 6,061 | €97.8 | 6,269 | €101.2 |
With a stronger balance sheet and a shareholding structure that has now stabilized, Gecina is effectively positioned to build its future. The Group can now roll out its strategy from a long-term perspective, rolling out an active portfolio rotation approach, with a "total return" focus.
Gecina's strategy aims to consolidate its leading position for offices in Paris, Europe's number one office market, convinced of the sound economic outlook for the Paris region, as well as the potential for development over the medium and long term thanks in particular to the "Grand Paris" project.
The Group is organizing its strategy around the following four main areas:
Gecina aims to capitalize on the expertise built up by its teams (Asset Management, Project Management, Letting, Lease Management, etc.), as well as the flexibility and agility offered by its balance sheet today in order to position itself on the investment market, targeting assets requiring work or large-scale portfolios and assets. The Group will harness its ability to capitalize on value-creating investment opportunities, while managing the real estate cycle and execution risks effectively.
Since setting up an Asset Management Department, which has been operational since early 2014, Gecina has carried out in-depth studies on nearly 62% of its current portfolio. This process has made it possible to identify investment projects representing nearly 1.3 billion euros at end-2014, which the Group aims to move forward with over the medium term, with an expected net yield of nearly 7%. These programs are based on operations to develop, redevelop, restructure or reposition assets. This total of 1.3 billion euros gives the following breakdown:
These medium-term investments take the Group's pipeline up to nearly 1.7 billion euros, including 440 million euros currently under development.
Over the medium term, Gecina wants to clearly establish its core focus, further strengthening its specialization in offices, with a minimum target for office assets to make up 80% of its portfolio. In time, the Group aims to reduce its exposure to diversification assets to less than 20% of the total portfolio (versus 38% today).
The Group continues its progressive disposal plan of its residential portfolio, and has rolled out a new approach for unit-based residential sales, formalized in a plan covering 18% of its portfolio, under which "vacant units" will be sold as tenants naturally free up assets. The premiums achieved on these sales compared with the appraisal values (block) are expected to average out at over 35%.
An analysis is also underway on the Group's non strategic portfolio, which may result in the company considering several options.
In addition, the Group is considering the disposal of certain mature office assets in a buoyant market environment.
4- Developing a range of differentiating services for the Group's properties, in line with tenants' needs and environmental requirements
The "New Generation" buildings that Gecina wants to offer must be connected and open to the city, responsible (particularly from an environmental perspective), flexible, mixed, focused on employee wellbeing and provide quality services. With this in mind, the company has confirmed the importance of the CSR process and once again set out the Group's objectives in this field for 2016. In 2014, Gecina also set up a new "Communications and Marketing" department aiming to promote differentiating services that the Group intends to offer in the future, as well as to further strengthen Gecina's brand image, while effectively meeting tenants' expectations faced with the challenges for "tomorrow's offices".
Since the start of 2015, Gecina has already invested 188 million euros, with its acquisition of the City 2 building, which will be delivered end 2015 and made available to the tenant in April 2016. Alongside this, the company plans to sell off nearly 800 million euros of non-strategic and/or mature assets in 2015.
Based on these elements, net income (Group share) is expected to be stable as a minimum for 2015, with growth of over 2% when restated for the impact of Beaugrenelle's sale, thanks in particular to a further reduction in the average cost of debt, combined with its occupancy rate remaining close to the current level.
Moreover, considering the Group's capacity for investment, with an LTV of 36.7%, significantly lower than the target of 40%, Gecina is looking to make f is to further investments investments urther investmentswhich could enable it to revise its which could it its targets upwards for 2015. 2015
A proposal will be submitted at the general meeting on April 24, 2015 to approve a cash payout of payout 4.65euros per share euros in relation to 2014 2014. This payout corresponds to 90% of recurrent net income for 2014.
Gecina owns, manages and develops property holdings worth 10.3 billion euros at December 31, 2014, with 90% located in the Paris Region. The Group is building its business around France's leading office portfolio and a diversification division with residential assets, student residences and healthcare facilities. Gecina has put sustainable innovation at the heart of its strategy to create value, anticipate its customers' expectations and invest while respecting the environment, thanks to the dedication and expertise of its staff.
Gecina is a French real estate investment trust (SIIC) listed on Euronext Paris, and is part of the FTSE4Good, DJSI Europe and World, Stoxx Global ESG Leaders, Euronext 100 and Vigeo indices. In line with its commitments to the community, Gecina has created a company foundation, which is focused on protecting the environment and supporting all forms of disability.
www.gecina.fr
Tel: +33 (0)1 40 40 52 22 Tel: +33 (0)1 40 40 62 45 [email protected] [email protected] Virginie Sterling Armelle Miclo Tel: +33 (0)1 40 40 62 48 Tel: +33 (0)1 40 40 51 98 [email protected] [email protected]
1- FINANCIAL STATEMENTS
At the Board meeting on February 19, 2015, chaired by Bernard Michel, Gecina's Directors approved the financial statements at December 31, 2014. The audit procedures have been performed on these accounts, and the certification reports have been issued after verifying the information contained in the annual report, included in the reference document.
| In million euros In euros |
2013 | 2014 | Change (%) Change (%) |
|---|---|---|---|
| Gross rental income | 588.9 | 571.0 | -3.0% |
| Expenses on properties | (140.0) | (142.7) | +1.9% |
| Expenses billed to tenants | 89.5 | 96.0 | +7.3% |
| Net rental income Net rental income |
538.4 | 524.3 | -2.6% |
| Services and other income (net) | 7.6 | 8.4 | +11.7% |
| Salaries and management costs | (65.7) | (65.1) | -0.8% |
| EBITDA | 480.3 | 467.6 | -2.6% |
| Gains from disposals | 46.2 | 14.0 | -69.6% |
| Change in fair value of properties | (44.2) | 21.1 | NA |
| Depreciation | (5.4) | (5.3) | -2.2% |
| Net impairments and provisions | (5.5) | 0.7 | NA |
| Operating income Operating |
471.3 | 498.0 | +5.7% |
| Net financial expenses | (162.7) | (146.6) | -9.9% |
| Financial impairment and depreciation | (0.6) | 0.0 | NA |
| Change in value of financial instruments and debt | 28.1 | (68.3) | NA |
| Net income from equity affiliates | 0.3 | 0.1 | -60.3% |
| Pre-tax income tax income tax income |
336.4 | 283.3 | -15.8% |
| Current tax | (4.2) | (3.3) | -22.9% |
| Non-current tax | 1.7 | 0.2 | NA |
| Exit tax | (3.8) | (2.7) | NA |
| Deferred tax | (2.4) | 3.4 | NA |
| Non-recurrent minority interests | (11.4) | 1.6 | NA |
| Recurrent minority interests | (2.3) | (1.2) | NA |
| Consolidated net income (Group share) Consolidated net share) |
314.0 | 281.3 | -10.4% |
| Recurrent net income - Recurrent net -total share total share share |
313.4 | 317.8 | +1.4% |
| Recurrent net income - Recurrent net -Group share Group share Group share |
311.1 | 316.6 | +1.8% |
| Average number of shares over the period | 60,991,382 | 61,260,603 | +0.4% |
| Undiluted recurrent net income per share Undiluted -Group share share net income per Group |
5.10 | 5.17 | +1.3% |
| ASSETS In million euros |
Dec 31, 13 Dec | Dec 31, 14 | LIABILITIES LIABILITIES In million euros |
Dec 31, 13 | Dec 31, 14 |
|---|---|---|---|---|---|
| Non-current assets current assets current assets |
10,588.0 | 10,201.4 | Capital and reserves Capital reserves |
6,245.5 | 6,279.0 |
| Investment properties | 10,337.6 | 9,827.2 | Share capital | 471.5 | 473.3 |
| Buildings under refurbishment | 151.8 | 276.0 | Additional paid-in capital | 1,877.4 | 1,890.7 |
| Buildings in operation | 64.0 | 62.7 | Consolidated reserves | 3,582.5 | 3,623.3 |
| Other tangible fixed assets | 4.2 | 5.5 | Consolidated net profit | 314.0 | 281.4 |
| Intangible fixed assets | 3.4 | 3.3 | Capital and reserves attributable to owners of the parent owners the parent |
6,245.5 | 6,268.7 |
| Long-term financial investments Share in equity-accounted companies |
12.0 3.7 |
11.8 3.5 |
Non-controlling interests | 0.0 | 10.4 |
| Non-current financial instruments | 10.8 | 11.0 | Non-current liabilities current liabilities current liabilities |
3,274.8 | 3,614.7 |
| Deferred tax assets | 0.4 | 0.4 | Non-current financial debt Non-current financial instruments |
3,089.8 150.6 |
3,501.1 84.6 |
| Current assets assets | 411.5 | 344.8 | Deferred tax liabilities | 5.5 | 2.1 |
| Properties for sale | 219.9 | 169.1 | Non-current provisions Non-current taxes due & other |
28.9 | 26.8 |
| Inventories | 7.4 | 6.4 | employee-related liabilities | 0.0 | 0.0 |
| Trade receivables and related | 89.1 | 84.8 | |||
| Other receivables | 55.9 | 48.6 | Current liabilities Current liabilities |
1,479.1 | 652.5 |
| Prepaid expenses | 27.0 | 22.6 | Current financial debt | 1,168.3 | 393.5 |
| Current financial instruments | 0.0 | 0.0 | Current financial instruments | 0.0 | 0.0 |
| Cash & cash equivalents | 12.3 | 13.3 | Security deposits | 65.1 | 58.6 |
| Trade payables and related Current taxes due & other employee |
155.9 | 109.6 | |||
| related liabilities | 45.9 | 37.8 | |||
| Other current liabilities | 43.9 | 53.0 | |||
| TOTAL ASSETS | 10,999.5 | 10,546.2 | TOTAL LIABILITIES TOTAL LIABILITIES |
10,999.5 | 10,546.2 |
| Like-for-like change | Indexes | Business plan | Vacancy | Other |
|---|---|---|---|---|
| +0.4% | +0.8% | -0.7% | 0.0% | +0.3% |
| Capex with additional | |||||
|---|---|---|---|---|---|
| Like-for-like change | Indexes | Business plan | rent | Vacancy | Other |
| +0.5% | +1.0% | +0.5% | 0.0% | -0.7% | -0.2% |
| Capex with | ||||
|---|---|---|---|---|
| Like-for-like change | Indexes | additional rent | Business plan | Other |
| +1.0% | +1.1% | +0.5% | -0.6% | 0.0% |
Gecina's tenants operate across a very wide range of sectors responding to various macroeconomic factors. Services, which account for 36% of office rents, are themselves split between several sectors.
Breakdown of tenants by sector (offices - based on annualized rents):
| 2014 | |
|---|---|
| Services | 36% |
| Luxury goods - retail | 14% |
| Industry | 14% |
| Local government | 10% |
| Technology and telecoms | 6% |
| Banking | 5% |
| IT | 4% |
| Insurance | 3% |
| Other | 3% |
| Real estate | 3% |
| Media - television | 2% |
Gecina's top 20 tenants represent 38% of the Group's annualized rental income, with none of them accounting for more than 10% of the total (5.9% for Générale de Santé, the Group's leading tenant).
Volume of rental income by three-year maturity for leases:
| In million euros million llion euros |
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | > 2021 |
|---|---|---|---|---|---|---|---|---|
| Offices | 60 | 88 | 47 | 42 | 32 | 17 | 34 | 36 |
| Healthcare | 0 | 3 | 0 | 9 | 12 | 5 | 14 | 31 |
| Total | 60 | 91 | 47 | 51 | 44 | 22 | 48 | 67 |
| In million euros | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | > 2021 |
|---|---|---|---|---|---|---|---|---|
| Offices | 20 | 41 | 23 | 59 | 53 | 23 | 59 | 79 |
| Healthcare | 0 | 3 | 0 | 9 | 6 | 5 | 11 | 39 |
| Total | 20 | 44 | 23 | 68 | 59 | 28 | 70 | 118 |
Volume of rental income by maturity for end of leases:
Gecina had 3,895 million euros in gross financial debt at December 31, 2014, compared with 4,258 million euros at end-2013, down 363 million euros, while net financial debt represented 3,881 million euros at end-2014, down 365 million euros, primarily linked to sales net of investments for the year.
The main characteristics of the debt are as follows:
| In million euros In euros |
Dec 31, 2013 31, 2013 | Dec 31, 201 31, 2014 |
|---|---|---|
| Gross financial debt | 4,258 | 3,895 |
| Net financial debt | 4,246 | 3,881 |
| Gross nominal debt | 4,143 | 3,778 |
| Unused credit lines | 2,195 | 2,090 |
| Average maturity of debt (in years, restated for available credit lines) | 4.9 | 5.0 |
| LTV | 38.7% | 36.7% |
| LTV (including transfer taxes) | 36.7% | 34.7% |
| ICR | 3.0x | 3.2x |
| Secured debt / portfolio value | 11.7% | 11.2% |
Breakdown of debt:
| Dec 31, 2014 2014 | |
|---|---|
| Bonds and convertible bonds | 60% |
| Corporate loans | 1% |
| Mortgage loans | 31% |
| Commercial paper | 8% |
The following table presents the schedule for Gecina's financing facilities at December 31, 2014, with 2,090 million euros of unused credit lines:
| In million euros euros | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 + |
|---|---|---|---|---|---|---|
| Maturities | 596 | 1,119 | 671 | 512 | 850 | 1,831 |
All the credit maturities for the next two years were covered by unused credit lines at December 31, 2014. In addition, 85% of the debt has a maturity of over three years, while nearly half the debt has a maturity in excess of five years.
Gecina's financial position at December 31, 2014 is compliant with the various limits likely to affect the conditions for repayment or early repayment clauses in the various credit agreements.
The following table presents the position for the main financial ratios covered under the agreements:
| Ratios | Benchmark standard standard |
Position at at Dec 31, 14 31, 14 |
|---|---|---|
| Loan to value (block) | < 55% | 36.7% |
| EBITDA (excluding disposals) / net financial expenses | > 2.0x | 3.2x |
| Outstanding secured debt / net asset value of portfolio (block) | < 25% | 11.2% |
| Net asset value of portfolio (block), in million euros | > 6,000 – 8,000 | 10,369 |
| In million euros In euros |
IFRS |
|---|---|
| Offices (excl. Beaugrenelle) | 335 |
| Traditional residential | 121 |
| Student residences | 10 |
| Healthcare | 73 |
| Total | 539 |
A proposal will be submitted at the General Meeting on April 24, 2015 to approve a cash payout of 4.65 euros per share in relation to 2014. This payout corresponds to 90% of recurrent net income for 2014.
This document does not constitute an offer to sell or a solicitation of an offer to buy Gecina securities and has not been independently verified.
If you would like to obtain further information concerning Gecina, please refer to the public documents filed with the French securities regulator (Autorité des marchés financiers, AMF), which are also available on our internet site. This document may contain certain forward-looking statements. Although the Company believes that such statements are based on reasonable assumptions on the date on which this document was published, they are by their very nature subject to various risks and uncertainties which may result in differences. However, Gecina assumes no obligation and makes no commitment to update or revise such statements.
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