Zug Estates Group Financial Year 2015 Tobias Achermann, CEO Gabriela Theus, CFO March 11, 2016
2015 in a nutshell Gratifying result Operating income before depreciation and revaluation CHF 39.2 Mio. +4.0% Net income CHF 67.1 Mio. +48.7% Fair value of portfolio CHF 1.2 Mrd. +7.0% Distribution per share 1 CHF 20.50 +10.8% Overall earnings per share 17.6% 1 Proposal of the board of directors Suurstoffi site, Risch Rotkreuz Letting in line with strong development momentum Defined development pipline accounting for an investment volume of >CHF 400 million for the Suurstoffi site Zug Estates Group 3
2015 Net income up by 49% in CHF million 2012 1 2013 2014 2015 Δ Property income 29.0 34.7 37.4 39.1 4.4% Hotel & catering income 20.7 20.2 20.6 19.7-3.9% Other operating revenue 3.8 4.2 4.1 4.2 2.6% Total operating revenue 53.5 59.1 62.1 63.0 1.6% Revaluation of investment properties (net) Income from sale investment properties 50.0 26.9 21.8 50.5 131.5% Total income 103.5 86.0 83.9 113.5 35.3% EBITDA 78.9 60.1 59.5 89.6 50.8% EBITDA excluding income from revaluation 28.9 33.2 37.7 39.2 4.0% EBIT 75.2 56.5 55.9 86.3 54.6% EBIT excluding income from revaluation 25.2 29.6 34.1 35.9 5.3% Net income 57.9 44.8 45.1 67.1 48.7% Net income excluding income from revaluation 18.2 20.7 24.0 24.1 0.3% 1 Pro forma figures Zug Estates Group 4
CHF million % Profitable revenue growth Revenue and income in CHF million or % 75 90 Other real estate income 50 49.6 53.4 54.9 54.0 59.1 56.0 62.1 63.0 60.0 62.4 60 Income from Hotel & catering Income from MEG Metalli Current rental income Operating income before depreciation and revaluation in % operating income 25 30 0 2011 2012 2013 2014 2015 0 Excluding real estate transactions, rental revenue would have been about CHF 1 million higher Zug Estates Group 5
CHF million % Dynamic portfolio growth continues Market values in CHF million or % 1'200 1'189 100.0 Operating properties (at market value) 1'111 Undeveloped plots Investment properties under construction 1'000 999 75.0 Investment properties Year-on-year change 904 800 50.0 600 15.7 10.5 11.3 7.0 25.0 400 2012 2013 2014 2015 0.0 Zug Estates Group 6
Focus on Zug region Portfolio by site Based on fair value* as at December 31, 2015 Zug City Center site 67% Suurstoffi site, Risch Rotkreuz 33% Other 1% Focusing of the portfolio Disposal of an industrial site in Oberentfelden (Aargau) effective March 1, 2015 Decision to sell further non-strategic apartments in Baar Consolidation of Suurstoffi site creates ideal conditions for developing Lucerne University s Suurstoffi campus Total portfolio: CHF 1 189 million * with the exception of pre-investments and undeveloped plots carried at cost Zug Estates Group 7
Residential proportion rises to nearly 30% Portfolio by use Based on projected rental revenue* as at December 31, 2015 Tenant structure Investment properties, based on projected rental revenue as at December 31, 2015 Hotel & catering 13% Parking 9% Education & culture 2% Other 3% Residential 29% Novartis Migros* UBS 8.2% 7.2% 5.7% 26.9% (avg. weighted residual term: 8.0 years) Dosenbach-Ochsner 3.0% Office 20% Retail 24% H&M Rest, incl. vacancies 2.8% 73.1% * From point of view of real estate business unit * Various companies of the Migros Group Zug Estates Group 8
Decline in vacancies Vacancy rate (on reference date) in % Breakdown of vacancies as at December 31, 2015 8.0 6.0 4.4 6.4 5.4 Other 17% Other voids before initial renting 2% Residential 9% Sales 1% Office space 10% 4.0 2.7 2.0 1.4 Parking space before inital renting 16% 0.0 2012 2013 2014 H1 2015 2015 Parking space 6% Office space rented as of 2016 39% Voids before initial renting and strategic voids as at December 31 Vacancy rate at December 31 Zug Estates Group 9
Revaluation of investment properties reflects above-average quality of portfolio CHF million Project development Change in projected rental revenue Change in discount rate Other effects Revaluation of investment properties (net) Discount rate (real), in % Factors influencing revaluation 2015 mainly market-based 150 Discount rates real 6.0 109.9 5.5 100 5.0 4.5 4.3 4.1 4.0 50-70.2 4.0 3.5 18.7 3.5 0-7.9 50.5 3.0 2012 2013 2014 2015 Bandwidth Weighted average Zug Estates Group 10
Strong equity base as solid foundation for planned growth drive % CHF million Equity and investments in CHF million or % 100 90.6 92.5 100 Investments in the portfolio (right-hand axis) Equity ratio (left-hand axis) 75 69.5 75 63.6 64.1 60.9 60.8 50 47.5 50 25 25 0 2012 2013 2014 2015 0 Zug Estates Group 11
Systemic risk minimized by long-term fixed interest rates and low level of borrowing Selected key figures As at December 31, 2015 Maturity structure of financial liabilities As at December 31, 2015 in CHF million 2012 2013 2014 2015 Cash and cash equivalents 75.7 23.8 24.2 55.2 short-term 0 45 Interest-bearing debt 250.0 250.0 320.0 350.0 1-5 years 100 100 - In % of total assets 26.4% 25.5% 29.4% 29.4% - Avg. interest rate 2.6% 2.6% 2.2% 2.5% 5-10 years 40 90 - Avg. residual term 10.5 Y 9.5 Y 7.6 Y 9.2 Y - Interest coverage 4.1 x 4.7 x 5.1 x 4.5 x over 10 years 135 160 0 50 100 150 200 2014 2015 CHF million Zug Estates Group 12
35.9 15.0 41.5 16.5 48.7 18.5 49.0 20.5 90.0 91.8 114.4 1'162 1'335 1'310 1'244 1'387 136.7 1'469 1'445 1'600 CHF CHF Payout increases by 10.8% Income and payout per series B registered share Stock market price and NAV per series B registered share As at December 31 160 1'800 120 1'350 80 900 40 450 0 2012 2013 2014 2015 Net income (1) Net income excluding revaluation (1) Payout from capital reserves (2) 0 2012 2013 2014 2015 Stock market price NAV at market value (3, 4) 1 In relation to number of shares on average outstanding (series A registered shares converted) 2 Payable in the following year; 2015: proposal of the board of directors 3 The NAV at market value includes properties used for operational purposes at market value and corresponding deferred taxes 4 In relation to number of shares outstanding (series A registered shares converted) Zug Estates Gruppe 13
Dez 14 Mrz 15 Jun 15 Sep 15 Dez 15 CHF Total return per share at 17.6% Performance series B registered shares 1 500 1 400 Performance in 2015 ZUGN + 16.16 % SXI + 2.68 % SPI + 2.67 % 1 300 1 200 1 100 1 000 ZUGN SXI, adjusted SPI, adjusted Zug Estates Group 14
Segment report 2015 in CHF million Real estate Hotel & catering Corporate & eliminations Total operating revenue 49.1 20.0-6.0 63.0 Total operating expenses - 10.5-18.5 5.2-23.9 Revaluation Income from sale of investment properties 50.5 0.0 0.0 50.5 EBITDA 89.0 1.4-0.8 89.6 EBIT 86.8 0.4-0.9 86.3 2014 in CHF million Real estate Hotel & catering Corporate & eliminations Total operating revenue 47.5 20.6-6.0 62.1 Total operating expenses - 10.6-19.4 5.6-24.4 Revaluation Income from sale of investment properties 21.8 0.0 0.0 21.8 EBITDA 58.7 1.2-0.4 59.5 EBIT 56.1 0.2-0.4 55.9 EBIT hotel & catering incl. operating properties: CHF 4.3 million (previous year: CHF 3.4 million) EBITDA return at fair value of operating properties: 6.4% (unchanged) Zug Estates Group 15 Total Total
Metalli Living hub Revenue per unit area of shopping centers in the region Data for 2015 Source: GfK Metalli, Zug Zugerland, Steinhausen Mythen Center, Schwyz Emmen Center, Emmen Sihlcity, Zürich 7'000 9'000 11'000 Revenues, in CHF per m 2 Metalli shopping mall Annual turnover of CHF 171 million (previous year: -0.3%) High revenues per unit area Strong catchment area 110 000 residents and workers can be reached within 10 minutes Successful lettings in 2015 1 700 m 2 office and retail space Enhanced offering Rituals from April 2016 The Butcher from May 2016 Zug Estates Group 16
Suurstoffi construction of third phase began in fall 2015 Serviced apartments 152 rental apartments with 1.5 to 5.5 rooms 8 units for student accommodation (52 rooms) Additional workplaces 9 500 m 2 of office and commercial space, of which some 38% let Anchor tenant GfK Negotiations on further approx. 2 700 m 2 of office space at advanced stage Continuation of carbon-free energy concept Visualization Suurstoffi 16-20, Risch Rotkreuz Investment volume approx. CHF 110 million Zug Estates Group 17
Suurstoffi Home to Lucerne University of Applied Sciences and Arts as of 2016 Long-term rental agreement with Lucerne University of Applied Sciences and Arts HSLU Definitive location from 2019 Transitional solution from summer 2016 Construction of Suurstoffi campus proceeding in two stages with focus on IT and finance Adaption of development plan including a higher plot ratio an additional residential space planned by the end of 2016 Public competition for the new building next to the train station; results due in spring 2016 Zug Estates Group 18
Suurstoffi Residential tower block from 2018 70-meter tall residential tower at center of site Approx. 90 apartments with spacious, greened external areas Approx. 2 500 m 2 of office and commercial space Sale of freehold apartments planned to be on arm's-length basis; pricing not yet decided Construction start 2016 Move-in 2018/19 Visualization Suurstoffi 37/39, Risch Rotkreuz Zug Estates Group 19
Suurstoffi Plans under way for Suurstoffi 22 office building Visualization Suurstoffi 22, Risch Rotkreuz Office building for 600 workplaces Building permit in 2016 envisaged Development as required, possible as of end 2016 Tallest wooden building in Switzerland planned with a composite masonry-andtimberwork design Investment volume approx. CHF 55 million Zug Estates Group 20
Suurstoffi completed by 2020 2015-2017 2016-2018 152 rental apartments Accom. for 52 students Approx 500 workplaces 2017-2019 Approx. 90 condominium apartments Approx. 100 workplaces Suurstoffi Rotkreuz campus of Lucerne University of Applied Sciences and Arts 2018-2020 Approx. 700 workplaces 2016-2018 Approx. 600 workplaces Zug Estates Group 21
Portfolio value expected to be approx. CHF 1.5 billion by 2020 Value of portfolio in CHF million 1'600 100% 1'200 800 612 676 781 904 999 1'111 1'189 75% 50% 400 24% 21% 23% 25% 27% 25% 29% 25% 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0% Investment properties Undeveloped plots Residential share (based on projected rental revenue) Investment properties under construction Operating properties (at market value) Zug Estates Group 22
Targeted strengthening of organization with a view to planned growth drive Employees by business unit Full-time equivalents Real estate business unit 2015 41.7 110.7 Hotel & catering business unit 2014 40.9 116.3 0 25 50 75 100 125 150 175 Zug Estates Group 23
Financial year 2016 Outlook Rise in rental income Declining vacancies Preparations for imminent, major growth drive result in higher costs Decline in catering income and rising profitability for hotel & catering business unit Operating income before depreciation and revaluation on a par with previous year Revaluation of investment properties (net) lower than previous year Zug Estates Group 24
Disclaimer The financial data as well as the other information presented herein constitute selected information. The information in this presentation does not constitute an offer or invitation and may not be construed as a recommendation by us to purchase, hold or sell shares of Zug Estates Holding AG. This information or any copy thereof may not be sent or taken to or distributed in any jurisdiction in which such transmission or distribution is unlawful. This document may contain certain forward-looking statements. By their nature, forward-looking statements are subject to known or unknown risks and uncertainties that could cause actual results and occurrences to differ materially from the expectations contained or implied in the forwardlooking statements. Zug Estates Gruppe 25