Professional Documents
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2016 Roadshow Presentation
2016 Roadshow Presentation
largest Belgian
listed real estate
developer
ROADSHOW PRESENTATION
Disclaimer
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This Presentation contains statements and estimates about anticipated future performances. Such statements and estimates are based on various assumptions and
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1
CONTENTS
03 ‒ Introduction
08 ‒ Merger benefits
21 ‒ Attractive project pipeline
27 ‒ Valuation & exchange ratio
31 ‒ Corporate governance
33 ‒ Appendices
1
Introduction
Meet the team
Founder and CEO of Allfin Joined IMMOBEL in Joined IMMOBEL in February CFO of Allfin Group since
Group (2001-present) September 2015 2016 2009
Chairman of Urban Land Previously Chief Commercial Previously worked for real Previous positions include CFO
Institute Belgium Officer at Home Invest (2013- estate investor Teychené at Group Staels and consultant
2015) Previous positions include CFO at VGD Auditors
Started his career at Deloitte and member of the Executive Member of the Institute of
Corporate Finance Real Estate Committee at Ascencio, Senior Chartered Accountants
(2005-2013) Manager at Deloitte and CFO (IEC/IAB)
at CFE’s International Real
Estate Division
4
The new Immobel
Company overview Business segmentation
Largest Belgian listed real estate developer with projected total assets Landbanking 8.2%
surpassing EUR 920m 27.3% Office
Core – Residential
segments:
– Office
– Landbanking
2.1% Retail
– Retail
Key – Belgium 4.6%
Other
geographies
– Luxembourg Residential 57.8%
– Poland
c. 94 total staff
Geographical breakdown
Poland 11.7%
Projected consolidated 2015 figures, after IFRS
Note: Geographical and business segmentation based on accumulated Expected Gross Margin over the period 2016-2019
55.6%
(1) Including adjustments for carve-out, step acquisition, transaction costs
(2) Including €7.5m minorities Belgium
5
Key strengths of the combined entity
Largest Belgian
1 listed real estate
developer
6
2
Sharing of best practices
Increased portfolio
diversification &
derisking
Belgium: 62.6%
Belgium: 50.9%
Geographical scope [1] Poland: 28.9%
Luxembourg: 49.1%
Luxembourg: 8.6%
Headquarter: Belgium Headquarter: Belgium
Offices
Local offices: Poland Local offices: Luxembourg
NAV ’15 EUR 194m EUR 148m[2]
Net profit ’15 EUR 0.7m EUR 24.4m[2]
Reported net financial
EUR 241m EUR 73m[2]
debt ‘15
Adjusted net financial
EUR 248m[3] EUR 45m[3]
debt ’15
Project Pipeline 450,000m 350,000m
Equity Valuation EUR 201.0m EUR 286.5m
Staff 50 44
(1) Segmentation based on accumulated Expected Gross Margin over the period 2016-2019; (2) After carve-out; (3) For further details of adjusted net financial debt refer to section 6
7
2
Merger benefits
Merger benefits
9
Business diversification
4.2%
8.2% Office
27.3%
59.2% Retail
16.4%
Other residential
Office
Residential
Retail 57.8%
Other residential Landbanking
10
Geographical diversification
28.9%
11.7%
62.6%
8.6%
Belgium Belgium
32.7% 55.6%
Luxembourg Luxembourg
Poland Poland
Segmentation based on accumulated Expected Gross Margin over the period 2016-2019
11
Portfolio risk
Merged Immobel[1]
Polvermillen Landbanking
Gross margin (% of revenues)
O-Sea
Lebeau
Mobius
Granary Island
Rac4
• On a standalone basis, Immobel has considerably large projects relative to the total portfolio, and a limited
number of projects in some years
• Following the increased size of the combined entity, exposure to large projects decreases, and a more stable
dispersion of the projects throughout the years is established
(1) Size of the bubbles reflects the total project cost (adjusted for ownership) relative to company portfolio
Note that projects are shown on their expected year of final completion, Landbanking is expected to generate a margin every year, but is only shown in 2025.
12
Portfolio rotation of key projects in development
Polvermillen
O’Sea
Chambon Solvay Lebeau Riverview Infinity
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
CBD One
Brussels Universalis Black Pearl
Galerie Kons
Tower Park Cedet
• Some of Immobel’s flagship projects have been in the portfolio for many years. Allfin’s portfolio has, in
general, a faster rotation which should beneficially impact return on equity
• Sharing of best practices including, a. o. the implementation of the dynamic management of Allfin’s current
portfolio to increase the quality of the Merged Immobel portfolio
13
Largest listed Belgian real estate developer
800k Development
[x]k
300 pipeline (m2)
>400 EURm
295[1]
150 660k
• The merger will create the largest
listed development company in
100
n.a. Belgium with an attractive
development portfolio
127
50
73
14
Strengthened financial position
FY 15 FY15
300
123.4%
250
241
200
350 108.3%
194
EURm
150
300
320
295[1]
100 250
200
EURm
50
150
0
NFD Equity 100
50
FY 15 0
NFD Equity
200
49.1%
150
• Allfin currently has a stronger financial profile,
148
100
• After the merger, the merged Immobel will be able
to reduce its financial debt in order to strengthen
73
50
its financial situation
0
NFD Equity
16
Higher return on equity and strengthened gross margin
Return on 10%
equity 0%
RoE GM RoE EGM
(Expected) 0%
Gross Margin RoE EGM
17
Higher return on equity – key driver of shareholder value
4.0x
y = 13.56x - 0.051
3.5x R² = 78%
3.0x
Price/Book multiple
2.5x
2.0x
Significant relationship is
1.5x observed between ROE[1] and
Price/Book for the group of
selected Western European listed
1.0x real estate developers, implying
that Real Estate developers
0.5x with higher average ROE have
their book values higher priced
by the market.
0.0x
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Return on equity (%)
Historically, Immobel’s ROE has been mostly in the range of 5-10%. With the merger with Allfin, which in general has a
faster rotation of its portfolio, the new Immobel is expected to significantly improve its Return on Equity, thereby
driving shareholder value.
(1) Five years average basis (13A-17E period), source: Factset, May 2016
18
Dividend & investment capacity
19
Growth opportunities
20
3
Attractive project
pipeline
Attractive project pipeline
Estimated Estimated
Surface > 55 Surface > 350
11,000 Stake 100% sales 110,000 Stake 50% sales
(in m2) EURm (in m2) EURm
value value
Estimated Estimated
Surface Not Surface > 80
60,000 Stake 100% sales 18,700 Stake 50% sales
(in m2) disclosed (in m2) EURm
value value
22
Attractive project pipeline
Cedet Landbanking
Located in Warsaw CBD. The final and As at December 31st, 2015, the Company owns
enforceable building permit was granted in a large portfolio (147 projects) of land in
June 2014, allowing a development of 15.000 different stages of development for a total of
m² of Offices and 7,000 m² Retail 366 ha (the Company’s share)
Estimated Book
Surface > 100 Surface Average
22,400 Stake 100% sales 366 14.4 years value 91 EURm
(in m2) EURm (in ha) rotation
value (2015)
Galerie Kons
Located in the city of Luxembourg, right in
front of the railway station. Long-term lease
signed with ING Bank, which will establish its
new Luxembourg head office there
Offices,
Acquisition Luxem-
2013 Location Type Retail &
date bourg
Residential
Estimated
Surface > 160
22,700 Stake 33% sales
(in m2) EURm
value
23
Allfin: solid project track record
156
Evolution equity value (EURm)[1]
140
K-POINT PULLMAN HOTEL
LUXEMBOURG BRUSSELS
8,200 m² offices South City Station
+ 1,040 m² retail 228 rooms, Large F&B 120
CHAMBON
BRUSSELS
24,400 m² residential
13,071 m² offices
2,491 m² retail
MONTOYER 70 TWIN GARDEN SAINTCLETTE BELL’ART PROJECT AIRE/LE
BRUSSELS BRUSSELS BRUSSELS BRUSSELS LAVANDIER
3,600 m² offices 5,000 m² offices 9,300 m² offices 12,000 m² residential LUXEMBOURG
8,700 m² offices 97 AIRE 5,570 m² offices
7 retail units Lavandier 3.950 m²
2002 2004 2005 2006 2007 2008 2010 2011 2012 2013 2014 2015
CRESCENDEAU
VERTIGO VERVIERS
MONDRIAN 20,900 m² retail
BRUSSELS CORTENBERGH 71 LUXEMBOURG ERNEST
19,270 m² offices BRUSSELS 43 24,000 m² offices BRUSSELS
MIPIM Award 7,280 m² offices 17,000 m² residential
NOORTHEYE SHOPPING
BREDENE
LAVALLÉE 12,500 m² retail BELVIEW
BRUSSELS BRUSSELS
10 18,000 m² offices 29,000 m² residential
1,700 m² retail
(1) 2004-2012 BE GAAP; 2013-2015 IFRS 5,000 m² offices
24
Attractive project pipeline
O’Sea Polvermillen
Residential development located in Ostend,
targeting multiple type of residential users. It Residential and office development situated in
consists of a residential tower, houses, service the city centre of Luxembourg
flats, crèche, retail
Estimated Estimated
Surface > 330 Surface > 160
80,000 Stake 100% sales 27,000 Stake 100% sales
(in m2) EURm (in m2) EURm
value value
Infinity Chambon
Mixed development situated on the Kirchberg Urban renovation project with 3 iconic
Plateau and redefining Luxembourg’s city buildings dating from 1890, 1930 and 1945
skyline. Composed by a residential tower, an (former CGER/ASLK headquarters) situated
office building and a shopping area in the city centre of Brussels
Estimated Estimated
Surface > 190 Surface > 160
33,000 Stake 100% sales 50,000 Stake 100% sales
(in m2) EURm (in m2) EURm
value value
25
Attractive project pipeline
Acquisition Acquisition
2014 Location Brussels Type Mixed 2016 Location Brussels Type Residential
date date
Estimated Estimated
Surface > 170 Surface > 35
40,000 Stake 100% sales 8,000 Stake 100% sales
(in m2) EURm (in m2) EURm
value value
Ernest Riverview
Urban renovation project of the former Solvay Residential development in Nieuwpoort.
headquarter in the most expensive commune in Delivery is scheduled for Q3 2017. As at
Brussels (Ixelles). The project is developed in March 30th, 2016, 47% of the apartments and
partnership with BPI (50/50) 41% of the parking units have been sold
Estimated Estimated
Surface > 200 Surface > 30
50,000 Stake 50% sales 11,000 Stake 100% sales
(in m2) EURm (in m2) EURm
value value
26
4
Valuation &
exchange ratio
Valuation – basis of preparation (1/2)
Framework Advisors Comments
Defining a common Immobel and Allfin have requested PWC to define a consistent and
methodology common methodology to develop the business plans of both companies
All banks have drawn up valuation reports on both Allfin and Immobel:
BNP Paribas was appointed by the Board of Directors of Immobel
Valuation reports KBC Securities was appointed by the Committee of Independent
Directors of Immobel
ING was appointed by the Board of Directors of Allfin
Note: Allfin and Immobel were respectively assisted by Allen & Overy and Linklaters as their legal advisors
28
Valuation – summary overview & exchange ratio
Based on the DCF as the
primary valuation method,
the standalone valuations
of Immobel and Allfin 296
300.0
result in retained equity € 286.5m
valuation ranges of €190m 279
- 213m and €279m - 250.0
€296m, and agreed equity 213 217
209 206
valuations of €201m and
€287m, respectively. 200.0 184 € 201.0m
190
150.0 158
119
100.0
DCF NAV Broker target Previous Share price DCF NAV
price transactions 12M
(1) As % of total shares issued. As long as the treasury shares will not be placed on the financial market, A3 Capital (Marnix Galle) will own 67% of the shares outstanding of the new entity
29
Valuation – summary overview & exchange ratio
(1) As % of total shares issued. As long as the treasury shares will not be placed on the financial market, A3 Capital (Marnix Galle) will own 67% of the shares outstanding of the new entity.
30
5
Corporate
governance
Board of directors
Member Function Previous
• CFO of Allfin Group and Member of the Institute of Chartered Accountants (IEC/IAB)
Hilde De Valck Director • Previous professional experience include CFO at Group Staels and consultant at VGD
Auditors
• Joined Deminor in 1991 and had numerous assignments for the Board of Directors of
Pierre (Independent)
various companies, including Modulart, DBAssociates, Cercle de Lorrainem Domaine
Nothomb Director du Pont d’Oye, Epsylon and several Deminor group companies
32
Appendices
Financing - overview
FY’15, €m Projected
consolidated figures
34
Valuation – net financial debt (31/12/2015)
Immobel Allfin
(1) Advances due to partners (1.2) (1+2) Immobel shares at fair value 45.4
(2) Net debt in Associates (external debt) (2.7) (3) Dividends on Immobel FY 15 shares -
(3) General provisions (excl. VAT RAC I) (2.5) (4) Withholding tax Immobel dividend FY14 0.2
(4) VAT risk - RAC (Belair) - (5) Fair value financial instruments (1.1)
(5) Provision for vacancy tax - (6) Current accounts with shareholders (4.8)
(6) Dividends paid - (7) Accrued interest charges (1.3)
(7) Acquisition price Astene - (8) Accrued interest income 0.6
(8) Activated debt-issuance costs (0.8) (9) Activated debt issuance costs (0.5)
(10) Carve-out non core assets -
(9) Current accounts (1.2)
(11) Dividend Allfin re-carve out -
(10) Guarantee Okraglak (payable) (0.4)
(12) Dividend Allfin FY15 -
(11) Accrued interests (0.2)
(13) Earn-out project Bull's Eye (2.3)
(12) Dividends (0.2)
(14) Minority interests -
(13) Derivative financial instrument (0.1)
(15) Earn-out project Crescendo 0.7
(14) Guarantee Oostduinkerke (receivable) 1.1
(16) Liquidation bonus project forward 0.1
(15) Grants and allow ances 1.1
(17) Tax losses carried forward 1.0
(16) Cash in escrow -
(18) Potential tax and legal exposures -
(17) Advances to receive from partners 0.7
Sub-total Cash- Debt- like items 37.8
(18) Management bonuses (0.3)
(19) Tax loss carried forward - Adjusted net financial debt (44.5)
(20) Potential tax and legal exposures -
Sub-total Cash- Debt- like items (6.7)
35
Balance sheet
EURm (before IFRS 11 adjustments) FY14 FY15 Comments
Intangible assets 0.2 0.2
• Tangible fixed assets mainly consist of a
Tangible fixed assets 3.8 3.8
freehold of Trefond Jennifer
Financial fixed assets 0.8 0.4 • Financial fixed assets relate to 2
Fixed assets 4.8 4.4 investments under equity method (Graspa
Property Development Inventories 423.5 456.8
Development and DHR Clos du Chateau)
Trade receivables & other assets 36.8 25.6
Cash & cash equivalents 32.0 24.5
• Inventory in FY15 comprises €241.2m for
Current assets office development, €124.9m for residential
Total assets 497.1 511.3 development and €90.7m for landbanking
Share capital 60.3 60.3 portfolio.
Retained earnings 136.2 133.6 • Accounts receivable and payables relate to
Reserves 0.2 0.5 sale of residential units, rents and ongoing
Third party interest - - projects development
Total equity and minority interests 196.7 194.4 • Other assets include VAT, advances granted
Provisions & deferred taxes 4.2 4.0 to associates and escrow account
Financial debt 263.2 265.4
• Other liabilities mainly include customer
LT financial debt 164.5 155.0
prepayments, current account with
ST financial debt 99.4 110.4
Trade payables & other debts 32.3 47.4
Universale, corporate income taxes,
Total liabilities 300.4 316.9 remuneration and social security taxes
Total shareholders’equity and liabilities 497.1 511.3 • Financial debt is related to 2 bonds
(€100m), corporate credit lines (€65.0m),
other financial debt for project financing
(€98.6m) and other financial debt (€2.6m).
• Provisions cover for potential project-related
penalties and claims
36
Income statement
EURm FY14 FY15 Comments
Operating income 183.1 103.6 • The main sales contributors in FY15 are the land of the
Turnover 173.0 96.6 Gateway office, the residential development of Bella
Other operating income 10.0 7.0 Vita and landbanking activities.
Operating expenses -151.8 -93.2 • FY15 gross margin driven primarily by sale of the land
Costs of property development inventories -130.0 -72.1 of Gateway office, residential units of Lindepark and
Services and other operating expenses -13.3 -11.6 Belair III and sales in the landbanking business unit.
Personnel expenses -6.5 -6.8 • Other operating income mainly includes rental income
EBITDA 33.5 13.4 from properties available for sale or awaiting
Depreciation, amortisation and others write-offs -2.3 -2.9 development
EBIT 31.2 10.5 • Services and other operating expenses in FY15
Financial income 0.5 0.3
primarily comprise third-party fees, sales commissions,
maintenance and utility costs, and local and property tax
Financial expenses -10.1 -9.2
• Increase in personnel expenses resulted from one-off
EBT 21.4 1.3
severance payments as a result of changes in the
Taxes -1.4 -0.6
executive management in FY15.
Net profit after tax 20.0 0.7
• Depreciation and amortisation increased in FY14 and
Dividend -9.9 0.0 FY15 as a result of write-offs/impairments accounted on
some projects (e.g. West Side). Depreciation remains
stable at €0.3m.
• Interest expenses mainly include interests paid on bank
financing (€5.1m) and on bonds (€6.6m, offset by
capitalised interest (€3.4m).
37
Balance sheet
EURm (before IFRS 11 adjustments) FY14 FY15 Comments
Intangible assets 0.0 0.0
Tangible fixed assets 3.2 3.0
• Financial fixed assets include the (pre-merger)
Financial fixed assets 59.0 59.0
participation in Immobel and the project in Miami
Other LT assets 31.5 32.8 • Other LT assets represent LT receivables which could be
Deferred tax assets 4.5 1.5 considered cash-like, including a bond portfolio as well as
Fixed assets 98.2 96.3 current accounts and loans provided
Inventory 185.6 199.6 • Inventory reflects the real estate assets held for sale or
Trade receivables & other assets 19.2 16.2 under construction. Largest assets include Lebeau Sablon,
Cash & cash equivalents 72.7 96.1 Chambon and O’Sea
Current assets 277.5 311.9 • Accounts receivable and payables are mainly project
Total assets 375.7 408.2 related, with the former depending on the instalment
Share capital 37.0 37.0 agreed at purchase and the latter depending on the
Retained earnings 102.5 103.4
progress of the project
Third party interest 7.8 9.1
• Other assets include VAT, rent incentives to certain
tenants, a deferred financing fee for the Lebeau project
Total equity and minority interests 147.3 149.5
and a preypayment for the Polvermillen projects
Provisions & deferred taxes 5.7 6.7
• Other liabilities mainly include customer prepayments, a
Financial debt 196.1 189.3
current account and VAT liabilities
LT financial debt 194.7 162.7
• Long term debt is related to financing on SPV level
ST financial debt 1.4 26.6
(€62.1m), the loan to purchase the Immobel shares
Trade payables & other debts 26.6 62.7
(€54.8m) and the bond loan (€35.3m)
Total liabilities 228.4 258.7
Total shareholders’equity and liabilities 375.7 408.2
38
Balance sheet – carve-out
FY15 Comments
EURm (before IFRS 11 adjustments) FY15
Post carve-out
Note: Post carve-out before IFRS 11 and before preliminary PPA adjustments and before transaction costs
39
Income statement
FY15 Comments
EURm (before IFRS 11 adjustments) FY14 FY15
Post carve-out
Operating income 178.4 117.0 117.1
• The most significant gross margin contributors
Turnover 174.4 111.2 111.2
in FY15 are Vesalius, Flint, Lake Front and
Other operating income 4.0 5.8 5.9
Chambon
Operating expenses -141.5 -77.8 -77.8 • FY gross margin decreases compared to FY14 due
Costs of property development inventories 134.0 69.2 69.2 to the impact of the sale of the Belview project and
Services and other operating expenses 5.5 7.2 7.2 parts of the Chambon and BEP projects in FY14
Personnel expenses 1.1 1.4 1.4 • Other operating income mainly includes rental
EBITDA 36.9 39.2 39.3 income from Lebeau Sablon
Depreciation, amortisation and others write-offs -8.2 -0.5 -0.5
• Services and other operating expenses mainly
include consultancy costs for experts, lawyers etc.
EBIT 28.7 38.7 38.8
The decrease of these costs in FY 15 is mainly due
Financial income 5.1 4.3 17.6
to an exceptional sales commission related to the
Financial expenses -9.6 -10.7 -10.7 sale of Belview in FY14
EBT 24.2 32.3 45.7 • Personnel expenses increased in FY15 as the FTE
Taxes -4.0 -6.8 -6.9 base in Belgium gradually increased
Net profit after tax 20.2 25.5 38.8 • FY14 financials include a write-off of the Laios
Result of companies consolidated by the equity participation and depreciation of Vemaco goodwill
0 0.2 0.2 • Interest expenses gradually increased due to an
method
Dividend 0 0.0 -13.3 increased average debt at the holding level as a
Consolidated profit 20.2 25.7 25.7 result of the acquisition of the Lebeau project as
well as the Immobel shares at the end of Q3 2014
Attributable to the result of third parties 1.1 1.3 1.3
Result of the Group 19.1 24.4 24.4
Note: Post carve-out before IFRS 11 and before preliminary PPA adjustments and before transaction costs
40