2008 annual results. Presentation on 18 February 2009

Transcription

1 2008 annual results Presentation on 18 February 2009

2 1 2008: Continued growth Sustained business activity Lettings up by 9% in a market down 14%, including the pre-letting of two buildings under construction (33,000 m²) Good operating performance and virtually no tenant default A cash-flow growth, in line with targets, similar to 2007 No revaluation impact on net profit Moderate debt levels and a robust financial structure Pace of development geared to market conditions

3 2 A good operating performance Rental income : % ( 155.4m) EBITDA: Cash flow : % ( 140.6m) % ( 105.6m) Net profit*: + 3.7% ( 38.9m) Pre-tax ordinary cash flow ( m) % Portfolio value and NAV reflect the rise in yields Portfolio value: - 2.5% or - 7.2% like-for-like 3.1bn Portfolio value and NAV (replacement value) 3.18bn 3.10bn 2.82bn NAV per share: (- 9.1%) (Replacement value) * N.B.: Property portfolio valued at amortised cost Portfolio NAV ( /share)

4 3 Lettings up 9.2%: strengths of a diversified property offering in tune with corporate demand Rise in lettings (106,900 m²) despite a 14% (1) decline in take-up in the Paris region Full year rental income of 21.6m ex. T&SC (+ 55% compared with 2007), including 5m contribution in major pre-lettings Grand Axe 2-16,000 m² - completion Q tenant Axa France - firm 9 year lease - 6.7m a year ex. T&SC ( 410 per m²) Miami (Orly-Rungis) tenant Ricoh France firm 6 year lease - 17,000 m² - 4.5m a year ex. T&SC ( 254 per m²) (1) Source: Immostat

5 4 Lettings at market rents +9.2% +55.4% 106,900 97,900 17,600 36, Average rent: 320 /m² ex. T&SC (2007: 227/m² ex T&SC) 80,300 70, Space (m²) Relets Rental income ( m a year ex. T&SC) New buildings & acquisitions Average rent: 142 /m² ex. T&SC (2007: 124/m² ex T&SC)

6 5 Rental income up 7.1% to 155.4m (+4.9% like-for-like) Steady, robust growth in rental income driven by: Improved portfolio operating conditions A robust tenant portfolio Buoyant rental values The average rent on the let portfolio rose by 5.5 % ( 160.9/m² at end 2007 ; 169.8/m² at end 2008) Growth in rental income 2008 / 2007 ( m) Indexation Occupancy Changes in scope Like-for-like

7 6 A very broad client base 750 tenants 960 leases Almost no tenant default (= 0.6 of revenue) Breakdown of client base by business sector (in space) Services 11% 3% Elec./telecoms IT 6% 6% 6% 33% Scientific activities Retailing Industry/Construction 13% Agri-foods/Textile 11% 11% Other Transport Average tenant turnover rate over the last 6 years ( ): 9%/year Lease terminations represent about 30 % of the theoretical exit options (1) (1) End of three-year break period or end of firm commitment period

8 7 A portfolio of 1,129,000 m² mainly in the three predominantly office areas of the Paris region Total portfolio: 1,129,000 m² Of which non-lettable: 58,500 m² (work in progress or planned) Good occupancy rate in the 3 predominantly office areas at 91.5% Occupancy rate of new or redeveloped buildings completed in (116,400m²) > 95 % Rise in average occupancy rate: 89.3% vs. 87.7% Trends in occupancy rate (1) 91,4% 91,5% 89,6% 88,7% 87,0% 86,1% Total portfolio Predominantly office (1) Physical occupancy rate of lettable space

9 Portfolio valued at 3.1bn (1) (-2.5%) Buildings in service 2.7bn 3,177.8m 2,824.5m 147,1 136,7 222,4 68,9 8 3,099.0m 146,2 284,5 Comprising 79% office space La Défense/A86 represents 40% of the buildings in service Average value per m²: 2,450 ( 2,600 at ) 2, , , Buildings in service Developments Land reserves Buildings under development 0.28bn An estimated value creation of 154.0m for an investment cost (incl. NBV) of 410.7m Land reserves (1) Replacement value (source: AtisRéal Expertise) 0.14bn Conservative valuation assumptions for the 1,000,000 m² of buildable land at Orly-Rungis Value creation on projects in progress ( m) 454,3 142,7 110,3 278,7 11,2 68,4 32,9 30,7 Value creation News buildings Redevelopment Construction cost Land/NBV

10 9 Buildings in service: 2.7bn Average net yield of 6.9%, up 90 bp compared with end % 6.0% 6.9% Change like-for-like: -7.2% The impact of the rise in average net yield (-14.0%) was partially offset by growth in rental income (+6.8%) Portfolio in service: 2.7bn Roissy Paris Nord m La Défense A86 1,106.4m 40% 13% 11% 36% Other 282.5m Orly-Rungis 935.9m The 90 bp rise in average net yield in 2008 applies to a property portfolio with no significant rental risk: Average rent of 170 per m² per year excl. T&SC A very broad spectrum of tenants Orly-Rungis La Défense / A86 Roissy-Paris Nord 2 Other Total Offices 6.9% 6.1% 7.3% 7.7% 6.6% Multi-purpose 8.0% 7.0% 7.3% 8.2% 7.7% Retail and services 7.6% 5.7% 8.0% - 7.4% Total 7.2% 6.1% 7.3% 7.9% 6.9% % 5.3% 6.4% 7.2% 6.0%

11 10 NAV affected by rise in yields Replacement value (-9.1% over 1 year, -6.8% in H2-08) ,06* ,77* , Liquidation value (excluding tax and after market value of financial instruments) (-12.0% over 1 year, % in H2-08) Revaluation of financial instruments has reduced liquidation NAV Transfer taxes Impact of valuing financial instruments at market value (*) Transfer taxes net of the impact of valuing financial instruments at market value Trends in replacement NAV 2007/ Potential capital gain Net profit Dividend Other 2008

12 11 A solid financial profile Moderate debt level: o LTV 31.7 % o ICR 3.37 x 982.5m utilised These ratios provide sufficient leeway compared to the most restrictive of the bank covenants The most restrictive thresholds only apply to a limited proportion of total debt o LTV < 0.40 applies to 24% of credit facilities o ICR > 3 applies to 35% of credit facilities

13 12 Excellent visibility in the near and medium term Financing resources secured Total authorised Remaining maturity 1,338.9m 5 years ( m) Maturity Mortgage repayment loans yrs Corporate credit lines yrs Total 1, yrs Bank overdrafts 78.5 N/A Total 1, m of available resources, including 310m in confirmed lines Limited refinancing needs Only 9% of facilities will need refinancing in 2009 ( 110m of a total 1,260m) Maturity of credit facilities at 31 December 2008 ( 1,260.4m)

14 13 Total cost of finance of 4.77%, lower than in 2007 (4.86%) Impact of hedges offset the rise in E3M Average 3m Euribor 4.22% 4.88% Margins and fees 0.57% 0.55% Cost of hedging 0.07% (0.66%) Total cost of finance 4.86% 4.77% Debt hedged At : hedging rate of 100%, Over the next 3 years ( ): Utilised borrowing capacity at end 2008 ( 982.5m) is 95% hedged at an average maximum cost of 4.55% Debt and interest rate hedging over 3 years T1 09 T2 09 T3 09 T4 09 T1 10 T2 10 T3 10 T4 10 T1 11 T2 11 T3 11 T4 11 Fixed Capped Variable Debt as of

15 14 Consolidated income statement millions % Rental income ,1 Property operating expenses (4,8) (5,1) - Net rental income ,7 Fee income Other administrative expenses (15,5) (14,2) EBITDA ,7 EBITDA margin 87.4% 87.2% (EBITDA/rental+fee income) Owner's expenses/rental income 3.1% 3.5% Other administrative expenses/rental+fee income 9.6% 9.4%

16 15 Consolidated income statement ( millions) % EBITDA 140,6 131, Depreciation, amortisation and provisions (59.8) (57.4) Bank interest (41.7) (37.4) Other components of cost of debt (0.4) (0.4) Change in market value of hedging instruments (4.4) (0.4) Cost of debt (46.5) (38.2) Capitalised interest Net financing cost (41.7) (36.1) Tax (0.2) (0.7) - Net profit Pre-tax ordinary cash flow per share Number of shares in issue at n (1) (1) Excluding treasury shares

17 16 Development: the investment programme continued according to the plan 2008 Investments 162.5m (2007: 125.1m) Development 120.1m New buildings o Completion of Olympe building m² at Evry o Started in 2007: 45,000 m² 113.5m Orly-Rungis «Miami»: 20,000 m² 85% pre-let (due to completion Q2 2009) Nanterre-Seine «Axe Seine» : 25,000 m² (due to completion Q4 2009) o Started in 2008 : 31,000 m² La Défense Nanterre Préfecture «Grand Axe 2» 16,000 m² fully pre-let (due to completion Q3 2010) Orly-Rungis «Montréal» : 15,000 m² (due to completion Q4 2010) Acquisition of a building at Nanterre-Seine (2,400 m²) 6.6m Existing property portfolio 42.4m Redevelopment and conversion to office space / Refurbishment and maintenance

18 Land reserves at Nanterre Seine strengthened TODAY 17 69,100 m² built 25,000 m² under development More than 80 tenants companies A workforce of Naxos 5,512 m² Nacelle 2,477 m² Axe Seine 25,000 m² under construction Niagara 4,104 m² Total 12,093 m² x 4,6 PROJECTS 60,000 m² + 11,000 m² Narval building

19 Silic \ Presentation on 18 February A tertiary area with large potential

20 19 A profitable and secured portfolio development programme A controlled pace of development and risk-taking New buildings are due to start as soon as the buildings under construction have been let Projects in progress are fully financed until completion A spread between gross yield and cost of debt higher than 250 bp m² of new buildings under construction at end-2008 Projected investment cost Forecast annual rental income 23.5m Gross return on investment (projected) 8.65 % 43 % of space under development is pre-let 272.0m (including land purchase: 33.5m) The 2 buildings in progress (40,000 m²) no pre-let, represent 3.5% of the total portfolio The project yield on projects in progress (8.65 %) is almost 400 bp higher than the cost of finance

21 20 Controlled projects ready to be launched between 2009 and 2011, depending on progress in letting the buildings already under construction Orly-Rungis o 6 buildings 118,100 m² o Projected investment cost 328m La Défense Nanterre-Seine o 1 building 11,000 m² o Projected investment cost 35m Lisses o 1 building 7,600 m² o Projected investment cost 15m Villebon Courtaboeuf o 1 building 6,200 m² o Projected investment cost 14m A fully let building for which the purchase undertaking has been signed La Défense Nanterre Préfecture m² - acquisition price: 23,2m excl. Transfer tax. An area with a confirmed potential Continuation of the Saint Denis project A new project on the drawing board Redevelopment of the Fresnes retail park

22 21 In a broadly unfavourable stock market, Silic shares have outperformed their benchmarks Shares down 33.7% excluding dividend 30.7% dividend reinvested Sharp swings in share price High on Low on Silic shares ended the year at 66.54, a discount of 43.9% to replacement NAV ( ) /12 /2007 Share price dividend reinvested and trading volumes (base 100 at ) 31/01 / /02 / /03 / /04 / /05 / /06 / /07 / /08 / /09 / /10 / /11 / /12 /2008 Monthly trading volumes EPRA Euro Zone Return Index SILIC Euronext "IEIF REIT Europe"

23 22 Trading in Silic shares: sharp drop 2008 / 2007 Volume of shares traded % Value of shares traded % 12,500,000 10,500,000 8,500,000 6,500,000 5,305,200 11,287, ,554, Member of the SBF 120, CAC Mid 100, CAC Mid and Small 190, GPR 250 indices 4,500, ,601,000 5,16 2,639, ,46 2,500, ,03 1,09 0,61 500, No. of shares traded Value ( m) Average daily trading ( m)

24 23 Dividend 4.30 (1) (+ 7.5%) Total dividend payout: 75.0m (1) : 71% of pre-tax ordinary cash flow Annualised yield on Silic shares (sold on ): over 3 years: % over 5 years:11.0 % over 10 years:11.5 % ,36 0,79 2,51 0,83 Trends in dividend payout (adjusted for the new number of shares) 2,66 0,89 2,85 0,95 3,02 0,17 3,17 3,50 3,73 4,00 4,30 (1) (1) AGM on 6 May 2009 Dividend payout ( ) 50% tax allowance

25 24 Outlook In an environment that will remain difficult, Silic will find support in: its high-quality rental offering; its robust financial structure; control over its growth potential Barring any further unexpected deterioration in the environment, Silic expects 2009 growth in rental income, EBITDA and cash flow to be in line with Under these conditions, the dividend growth policy should be maintained.

26 25 A P P E N D I C E S

27 26 Consolidated balance sheets Assets ( thousands) Investment property Owner-occupied property Investment property under development Plant & Equipment Intangible assets Financial assets Total non current assets Receivables - Trade receivables Over receivables Cash and cash equivalents Total current assets TOTAL ASSETS

28 27 Consolidated balance sheets Equity and liabilities ( thousands) Equity Share capital Consolidated reserves Net profit for the period Total Equity Minority interests Non current liabilities Financial liabilities Security deposits Provisions for liabilities and charges Tax and social security liabilities - - Total non current liabilities Trade payables Tax and social security liabilities Other current liabilities Total current liabilities Total Liabilities TOTAL EQUITY AND LIABILITIES

29 28 Consolidated income statement ( thousands) Gross rental income Service charge income Service charge expense (49 075) (46 900) (40 543) Other property operating expenses (1 169) (830) (85) Net rental income Fee income Staff costs (9 327) (8 520) (8 407) Other administrative expenses (6 178) (5 825) (5 254) Other income and expenses EBITDA Depreciation of properties (58 880) (56 793) (46 359) Other depreciation, amortisation and provisions (913) (580) (235) Operating profit Net financing cost (41 697) (36 062) (16 024) Other financial income and expense (1 119) Pre-tax profit Income tax (182) (767) (476) Net Profit Attributable to minority interests Attributable to equity holders of the parent

30 29 Consolidated statement of changes in equity ( thousands) Number of shares issued Shares outstanding Share capital No distributable reserves Distributable reserves and profits Other Total Equity At 1st january (2 522) Fair value adjustments Movements in share capital Dividends paid - On ordinary shares (60 801) (60 801) On treasury shares Movements in treasury shares - Acquisitions (92 486) (7 759) (7 759) Sales/Cancellation Stock options Net profit for the period (12 992) Other movements 13 (14) (1) At 31 December (5 843) Fair value adjustments Movements in share capital Dividends paid - On ordinary shares (65 152) (65 152) On treasury shares Movements in treasury shares - Acquisitions ( ) (37 696) (37 696) Sales/Cancellation ( ) (427) 225 (9 107) Stock options Net profit for the period (13 849) Other movements (2) (2) At 31 December (16 296) Fair value adjustments (48 738) (48 738) Movements in share capital Dividends paid - On ordinary shares (69 648) (69 648) On treasury shares Movements in treasury shares - Acquisitions ( ) (26 981) (26 981) Sales/Cancellation (255) Stock options Net profit for the period (18 841) Other movements 37 (37) - At 31 december (18 734)

31 30 Consolidated cash flow statement Uses (-) and sources (+) ( thousands) OPERATING ACTIVITIES Cash Flow Net rental income Fee income Operating expenses (15 504) (14 345) (13 661) Other income and expenses EBITDA Non-cash staff costs Net financial expense (36 825) (35 181) (16 480) Pre-tax ordinary cash flow Non operating income and expense Income tax (182) (767) (476) Net cash flow provided by operating activities Frais commerciaux et autres charges réparties Exit tax (125) (24 824) Change in w orking capital (3 346) INVESTING ACTIVITIES ( ) ( ) ( ) Sales of property Investment in property ( ) ( ) ( ) Other capital expenditure (915) (722) Impact of change of scope (1 608) Other investment (116) 10 (595) FINANCING ACTIVITIES (5 152) Increase in equity Net purchases/sales of treasury shares (2 693) (18 633) (3 111) Dividend payout (68 993) (64 861) (60 670) Increase in borrow ings CHANGE IN CASH AND CASH EQUIVALENTS (25 737) (12 656) Opening cash and cash equivalents (51 780) (26 043) (13 387) Closing cash and cash equivalents (30 746) (51 780) (26 043)

32