Vantage Development S.A. CC Group Small & MidCap Conference 5th Edition. 26 March 2015

Transcription

1 Vantage Development S.A. CC Group Small & MidCap Conference 5th Edition 26 March 2015

2 2014 The best year in the history of Vantage Development 2014 Financial results Record revenues of PLN 61.8 million (an increase of 38% y/y) Record EBITDA: PLN 11.5 million (an increase of 198% y/y) Housing segment 255 apartments sold (an increase of 41% compared to 181 in 2013), of which 107 units were sold in 4Q14 (an increase of over 100% compared to 52 in 4Q13). 249 units transferred (an increase of 15% compared to 216 in 2013). Development of the residential offer to more than 380 apartments at the end of 2014 (46% increase compared to 260 at the end of 2013). Tenancy segment Increase in revenue from the rental of commercial space (to PLN 8.2 million in 2014 from PLN 6.0 million in 2013) due to higher revenues from office and service complex Delta 44 and putting Promenada Zita projects into service. In 2014 premises with an area of over 10 thousand m2 were rented. Launch of projects with a total leasable area of nearly 16 thousand m2. 2

3 Increase in apartment sales of 37% y/y to 255 units in Launch of three residential projects involving 374 units in Increase in sales of apartments to 107 in 4Q14 (+107% y/y) Presale in 2014 at the level of 255 apartments (up by 41% y/y). Planned increase in sales of apartments to 450 in 2015 (+76% y/y) Sale of apartments on a quarterly basis, 1Q % Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q Transfer of 102 apartments in 4Q14 due to the of the Promenady Wrocławskie II. Transfer of apartments on a quarterly basis, 1Q Q Increase in notary sales to 249 apartments in (+15% y/y). At the end of 2014 the company had 122 apartment sold, but not yet transferred Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q

4 Development of the commercial real estate portfolio Completion of the first stage of the Promenada Zita in 4Q14 (leasable area 5,690m2). Project Leasable area (m2) Level of lease (%) Book value at the end of 4Q14 (PLNm) Launch of projects with a total leasable area of nearly 16 thousand m2: Promenady Zita II (Wrocław), Galaktyka (Wrocław), Grona Park (Zielona Góra). Increase in the level of space leased to nearly 20 thousand m2. Promenady Epsilon % 53,2 Delta % 25,5 Zita B % 39,9 Grona Park % 16,5 Galaktyka % 27,4 3,0 100% Maintenance of gross margin on sales of the lease segment at 75% in 4Q14. Potential for growth in revenue from the lease segment due to of the subsequent stages of Zita office building and retail properties: Grona Park and Galaktyka. 2,5 2,0 1,5 1,0 0,5 0,0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 80% 60% 40% 20% 0% Przychody Revenuesz from najmu rent (PLNm, (PLNm,left lewa oś) axis) Rentowność Lease segment segmentu profitability najmu (%,right prawa axis) oś) 4

5 Record results due to growing sales (PLNm) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q y/y, % Sale of apartments % Transfer of apartments % Revenues % Real estate development % Commercial activity % Gross profit on sales % gross profit on sales margin (%) 32.7% 47.3% 14.3% 12.6% 19.8% 21.9% 48.3% 20.8% 16.1% 22.7% - Real estate development 18.1% -12.8% -24.1% 10.2% 16.7% 0.9% 24.4% 17.8% 9.0% 16.6% - Commercial activity 56.6% 84.5% 56.3% 73.6% 67.7% 75.1% 78.8% 78.1% 66.4% 75.2% - Profit Source: from Emitent revaluation % Operating profit % Net profit % Net profit margin (%) -76.1% 230.6% -92.3% 4.3% 6.3% -47.6% -13.8% 41.1% 10.4% 16.1% - In 2014, the Group achieved record revenues in the amount of PLN 61.8 million. EBITDA reached PLN 11.5 million, which constitutes an increase of 198% compared to the result achieved in Change in assets and provisions for deferred income tax increased the company's result by PLN 3.8m in Net profit amounted to nearly PLN 10 million in 2014, which represented an increase of 114% compared to net profit in

6 Wrocław housing market Average offer price of apartments in the Wroclaw housing market (PLN) * Volume of apartment sales in Wroclaw (pcs.) * Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Increase in the number apartments sold by about 18% y/y in 2014 (sale of apartments at approximately units on a quarterly basis in 2014). Stabilization of average offer price of apartments at PLN/m2. Current housing offer in the amount of units (including approximately located in completed projects). Average sales period of offer at the level of around 15 months. We expect that in 2015 the volume of housing sales will increase with the stabilization of the average offer price. * Data based on Emmerson s reports CONFIDENTIAL DOKUMENT DOCUMENT POUFNY 6

7 Mokotów housing market Average offer price of apartments in the Mokotów district housing market (PLN) * Volume of housing sales in the Mokotów district (pcs.) * Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Dynamic growth of sales of apartments in Warsaw's Mokotów (+ 28% y/y in the whole 2014). Stabilization of offer prices in the range of PLN/m2. Current housing offer of nearly apartments, including less than 500 available in completed projects. Average sales period of offer at the level of around 5 quarters. We expect that in 2015 the volume of housing sales will increase with the stabilization of the average offer price. * Data based on Emmerson s reports CONFIDENTIAL DOKUMENT DOCUMENT POUFNY 7

8 Surge in the number of apartments in the offer, land bank with an investment in Warsaw Residential offer at the end of 4Q14 amounted to 380 apartments (compared to 260 at the end of 2013). Approximately 25% of the offer is located in the completed projects. In 4Q14 a draft Patio House offering 65 apartments was introduced to the offer Number of units in the offer (pcs.) Pozostała Remainingoferta offer Promenady II+III Centauris III Patio House The company plans to launch five investments in 2015 for nearly 800 apartments. 0 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Potential usable space that can be built on the land bank of the Issuer (thousand sq.m.) Currently, the company has a land bank which allows the realization of approx. 167 thousand m2 of usable space. In addition, the company is in the process of finding land for new investments, among others in Warsaw and Wrocław. 2,7 7,7 15,3 6,5 Promenady Wrocławskie Centauris WUWA 2 Konstruktorska 135,0 Dąbrowskiego 40 8

9 Residential projects Promenady Wrocławskie Usable space m2 Number of apartments Number of apartments sold Commercial area m2 Term Settlement date I 11, Q Q 2014 II 11, Q Q 2016 III 9, Q Q 2016 Centauris Usable space m2 Number of apartments Number of apartments sold Commercial area m2 Term Settlement date II 6, Q Q 2014 III 5, Q Q 2016 IV 7, Q Q 2017 WUWA 2 Usable space m2 Number of apartments Number of apartments sold Commercial area m2 Term Settlement date I 2, Patio House Usable space m2 Number of apartments Number of apartments sold Commercial area m2 Term Settlement date I 3, Q Q 2016 Dąbrowskiego Usable space m2 Number of apartments Number of apartments sold Commercial area m2 Term Settlement date I 6, Q Q

10 First investment in the Warsaw market (Konstruktorska 9) Purchase of land in the Warsaw market as an element of the strategy of geographical diversification. Purchase of plot financed with funds from the bond issue. In progress In progress planned Kostruktorska 9 Plot has land development decision, building permit is expected to be obtained at the beginning of 3Q15. Construction and implementation of the project for the first phase of sales in 3Q15. Vantage Development has already signed a contract with the general contractor - Karmar SA (59.5 million PLN, PLN/m2 of usable space) Description value Cost of land purchase (PLNm) 21.5 Size of the plot (thous. M2) 7,200 Land value/size of the plot(pln) 2,916 Usable space (thous. M2) 15,3 Value of the land/usable space(pln) 1,403 Number of units planned(pcs.) around 345 Planned price per metre PLN 8 thousand Cost of a general contractor (PLNm) 59,5 Cost of general contractor/usable space (PLN) 3,967 10

11 Key Wrocław project: Promenady Wrocławskie Land size: 2.65 hectares built, 1.96 hectares in progress, hectares of land remaining for use (approx. 140 thousand. M2 of usable space). Book valuation of undeveloped land for investment: PLN million at the end of 3Q14. Inventory valuation at the level of PLN 71.6 million at the end of 3Q14. Planned closure of the project in stages until Stage II - the deliveries in 4Q14. Stage III - the planned commencement of deliveries in 3Q15. Stage IV - the planned construction in 2Q15, Zita I - put into use in the 4Q14, Zita II - planned putting for use in 4Q15. Average gross residential prices: PLN 5,800 6,000/m2. Average rent for office projects: EUR 12/m2. 11

12 Office real estate market Headline rental rates for the best office space in selected cities in Poland (EUR/ m2 / month) in 2014 Lublin Szczecin Łódź Poznań Katowice Trójmiasto Wrocław Kraków Warszawa(outside the centre) Warszawa (centre) Source: DTZ Research Q Q Q According to estimates made by Jones Lang LaSalle in 2014 demand for office space was at a higher level than in the corresponding period of the previous year and reached 95.4 thousand m2 to 71.4 thousand m2 in Net demand in 2014 exceeded 74.5 thousand m2, which is an increase of 21% compared to the same period a year earlier. The Wrocław market, on which the Issuer has focused so far, is attractive compared to other major Polish cities. The evidence of this is continuously low vacancy rate %. 12

13 Office projects Promenady Epsilon Usable space m 2 Usable space leased m 2 Number of parking spaces Date of Date of settlement Book value (PLNm, ) Debt (PLNm, ) 7,132 7, completed settled 53,2 41,6* Promenady Zita Usable space m 2 Usable space leased m 2 Date of Date of settlement Book value (PLNm, ) Debt (PLNm, ) I 5,690 4,265 completed ~2Q ,9 22,6 II 6,340 - ~4Q 2015 ~2Q ,6 0,0 III 10,200 - ~4Q 2016 ~2Q ,7 0,0 Delta 44 Usable space m 2 Usable space leased m 2 Number of parking spaces Date of Date of settlement Book value (PLNm, ) Debt (PLNm, ) 4,213 3, completed settled 25,5 11,8 * In October 2014 the company signed a leaseback agreement with mleasing in the amount of PLN 41.6m and repaid investment loan in BZ WBK 13

14 Commercial projects Grona Park Commercial usable space [m 2 ] Office usable space [m 2 ] Leased usable space [m 2 ] Date of Date of settlement Book value (PLNm, ) Debt (PLNm, ) Q Q ,5 0,0 Galaktyka Park Commercial usable space [m 2 ] Office usable space [m 2 ] Leased usable space [m 2 ] Date of completio n Date of settlement Book value (PLNm, ) Debt (PLNm, ) Q Q ,4 12,5 14

15 A solid foundation for growth in 2015 Planned introduction of five new investments to housing offer in 2015 for nearly 800 apartments. Planned transfers under the three housing projects (a total of 350 apartments to hand over). Completion of further stages of Zita office building and two retail projects in Wroclaw and Zielona Gora. Number of units 4Q Q Q Q Q Q Q Q Q 2016 Centauris III 103 transfers Centauris IV + V 134 construction transfers Promenady II 222 transfers Promenady III 205 transfers Promenady IV 293 construction transfers Promenady V 188 construction Patio House 65 construction transfers WUWA 2 60 construction Dąbrowskiego construction transfers Konstruktorska I 169 construction transfers Zita C Zita D+A Galaktyka Grona Park 15

16 Financial debt Debt structure at the end of 4Q14 (PLNm) Short-term bonds, 10,3mln PLN Leasing, 42,3mln PLN Long-term loans, 81,7mln PLN Debt repayment schedule in the years (PLNm) Long-term bonds, 55,7mln PLN Short-term loans, 1,6mln PLN Obligacje Bonds Kredyty Loans Bonds Value at the end of 3Q14 [PLNm] Interest rate (%) Date of issue Date of redemption Series A 9,9 N/A Series D 19,7 WIBOR3M+5.5% Series E 13,1 WIBOR3M+4.95% Series F 23,1 WIBOR3M +4.3% Credit Indicators (PLN m) Gross debt 64,4 101,3 191,6 Net debt 52,8 49,9 156,4 Net debt/ebitda (x) -7,0 12,9 13,6 Net debt/assets (x) 0,14 0,11 0,28 Net debt/equity(x) 0,18 0,16 0,48 Equity/assets (x) 0,76 0,67 0,59 Interest coverage ratio (x) -2,3 1,2 3,2 16

17 ATTACHMENTS 17

18 Appendix 1: Issuer's financial data - P & L and CF (1/2) P&L, PLN ' Revenues EBITDA (14 324) (7 541) Depreciation EBIT (14 440) (7 757) Financial income Including interest Financial costs (6 803) (4 086) (4 683) (5 536) Including interest (6 585) (3 423) (3 026) (3 494) Net profit (995) (4 519) Net margin (4,1%) (31,6%) 10,4% 16,1% RPP, PLN ' Cash flows from operating activities Net profit / (loss) 336 (4 519) Corrections (1 007) (66 266) Depreciation Profit / (loss) of individual shareholders (1 331) (223) - - Profit / (loss) from foreign exchange differences Interest and participation in profits Profit / (loss) from investment activities (411) 841 (4 394) (7 591) Change in inventories (5 161) (4 724) (33 003) Change in receivables (3 654) (1 249) (15 986) (219) Change in reserves (19 993) (2 425) (1 787) (3 453) Change in current liabilities excluding credits and loans (24 189) Change in prepayments (756) (4 237) (3 163) (1 387) Other corrections (66) Operating cash flow (5 526) (56 306) RPP, PLN ' Investment cash flow Income Disposal of financial assets Disposal of investments in real estate Other investment income Outcome (16 309) (24 621) (23 727) (47 365) Acquisition of property, plant and equipment and intangible assets (219) (61) (208) (1 316) Investments in real estate and intangible assets (14 836) (23 926) (21 099) (45 904) Expenses on financial assets (1 254) - (2 420) (145) Other investment expenses - (634) - - Investment cash flow (14 986) (11 211) (21 178) (41 041) Financial cash flow Income Net proceeds from issue of shares / capital contributions Loans and advances Issuance of debt securities Other financial income Outcome (10 025) (27 800) (65 596) ( ) Purchase of own shares Dividends and other distributions to shareholders Repayment of borrowing (5 736) (23 021) (58 425) (96 854) Redemption of debt securities (12 016) Expenses from other financial liabilities Expenditure on leasing (228) (79) (37) (9 734) Interests (4 061) (4 700) (5 763) (7 184) Other financial expenses - - (1 371) (735) Financial cash flow Net cash flows (4 979) (16 193) Cash and cash equivalents at beginning of period Change in cash level (4 979) (16 193) Cash and cash equivalents at the end of period

19 Appendix 1: Issuer's financial data - BS (2/2) B&S, PLN ' Assets Fixed assets Intangible assets Tangible Fixed Assets Working investment property Investment property not working Long-term loans Remaining assets Long-term prepayments Total fixed assets Current assets Stock Short-term receivables for supplies and services from area units for supplies and services from non-area units other short-term investments Cash Short-term loans Financial assets Short-term prepayments Total current assets Total assets B&S, PLN ' Liabilities Equity Share capital Profit/(loss) from previous years Net profit/(loss) 336 (4 519) Accumulated other Comprehensive income (1 936) (695) (6) (2 499) Treasury shares (6 860) Total equity Minority interests Provisions for liabilities Total long-term liabilities Loans and advances Debt securities Liabilities for finance lease Other long term liabilities Prepayments for purchase of premises Total current liabilities From supplies and services Loans and advances Debt securities Other financial liabilities Prepayments for purchase of new premises Prepayments and accrued income Total liabilities

20 Appendix 2: The structure of assets Investment property working Valuation by 4Q14 (PLN m) % of assets Promenady Epsilon 53,2 9,7% Delta 44 25,5 4,6% Investment property working in progress Zita 58,2 10,6% Grona Park 16,5 3,0% Galaktyka Park 27,4 5,0% Investment property not working Promenady Wrocławskie 146,5 26,6% Real Estate Serock k. Warszawy 1,5 0,3% Gamma Office 9,6 1,7% Słoneczne Sady 11,6 2,1% Dąbrowskiego 40 6,2 1,1% Investment plot, ul. Ślężna 116/2 6,6 1,2% Valuation of shares in Centauris 16,7 3,0% Stock 101,0 18,3% TOTAL 550,8 100% Investment properties working include completed commercial real estate, generating income from the lease (PLN 8,2 million 2014) Projected investment in commercial projects in 2015 at about 40 million PLN. A key asset of the company remains the land on which further stages of the Promenady Wrocławskie project will be completed (144 million PLN, nearly 30% of assets). CONFIDENTIAL DOKUMENT DOCUMENT POUFNY 20

21 Reservations The foregoing has been prepared solely for information purposes and is not intended to incite to purchase or sell any financial instruments. Development does not constitute an advertisement, offer or offer to purchase financial instruments. It uses sources of information that Vantage Development SA considers to be reliable and accurate, but there is no guarantee that they are exhaustive and fully reflect the actual situation. The presentation may contain forward-looking statements, which constitute investment risk or source of uncertainty and may differ materially from actual results. Vantage Development SA is not responsible for the consequences of decisions that have been taken on the basis of this study. This study should not be treated as a source of knowledge sufficient to make an investment decision. Responsibility for any use of the information contained in the study rests solely on the person using this study. The development is protected under the Law on Copyright and Related Rights. The reproduction, publication or distribution requires the written consent of Vantage Development SA. 21

22 Contact Iwona Kowalska tel. (71) Dariusz Pawlukowicz ul. Dąbrowskiego Wrocław 22