POLNORD SA. Investor presentation. Financial results review for the year ended 31 st December 2012 Company operations overview. Warsaw, 26 March 2013

Transcription

1 POLNORD SA Investor presentation Financial results review for the year ended 31 st December 2012 Company operations overview Warsaw, 26 March 2013

2 Disclaimer: This report has been prepared solely for information purposes and is not intended to incite to buy or sell any financial instruments. This report does not constitute an advertisement, offer or suggestion to purchase financial instruments. Sources of information used are considered by Polnord SA reliable and accurate, but there is no guarantee that they are complete and fully reflect the actual state. The presentation may contain forward-looking statements, which represent investment risk or source of uncertainty and may differ materially from actual results. Polnord SA is not responsible for the effects of decisions made on the basis of this study. Information contained in this presentation should not be treated as a source of knowledge sufficient to make an investment decision. Responsibility for the use of the information contained in the paper rests solely with the users of the presentation. This report is copyright protected. Copying, publishing or distribution requires written permission from Polnord SA.

3 AGENDA Profit and loss account and balance sheet of Polnord Capital Group Liabilities Sales New strategy - implementation Appendices 3

4 PROFIT AND LOSS ACCOUNT OF POLNORD CAPITAL GROUP Specification (thousands PLN) Change % 4Q2012 4Q2011 Change % Sales revenue ,0% ,7% Prime cost of sales ,2% ,6% Inventory revaluation allowance ,4% Gross profit (loss) on sales ,2% ,4% Revaluation of investment property ,8% General administrative and selling expenses ,9% ,6% Other operating revenue ,1% ,0% Other operating expenses ,8% ,6% Gross operating profit (loss) ,8% Financial revenue ,9% ,1% Financial expenses ,9% ,9% Result on sale/occasional purchase of subsidiary Share in profit of associated company ,0% Goodwill impairment loss ,5% Gross profit (loss) ,4% ,0% Income tax ,8% Net profit (loss) on continued operations ,7% ,5% Net profit (loss) on discontinued operations ,0% Net profit (loss) for the financial year ,7% ,7% Net operating cash ,1% Net cash from investing activities Net cash from financing activities ,3% ,1% Cash at the end of the period* ,6% * accounting for net foreign exchange differences 4

5 BALANCE SHEET OF POLNORD CAPITAL GROUP Specification (thousands PLN) Change % Specification (thousands PLN) Change % Non-current assets ,7% Equity ,5% Property, plant and equipment ,2% Lond-term liabilities ,1% Investment property ,8% Interest-bearing bank loans and borrowings ,1% Intangible assets ,1% Provisions ,0% Investments in associates* ,0% Other liabilities ,5% Financial assets ,7% Deferred income tax provision ,9% Deferred tax assets ,0% Accruals ,5% Long-term receivables ,2% Short-term liabilities ,4% Goodwill ,9% Trade and other liabilities ,3% Current assets ,8% Current long-term portion of bank loans and borrowings ,8% Inventory ,6% Short-term revolving loans Trade and other receivables ,7% Other short-term loans and borrowings ,5% Other short-term financial assets ,9% Liabilities due to VAT and other taxes ,9% Receivables due to VAT, income and other taxes ,5% Income tax liabilities ,0% Prepayments ,8% Accruals ,3% Cash and cash equivalents ,6% Advance payments received ,9% TOTAL ASSETS ,6% Provisions ,7% * measured with equity measures Total liabilities ,9% TOTAL EQUITY AND LIABILITIES ,6% 5

6 NET INTEREST-BEARING LIABILITIES Net liabilities [mln PLN] Net liabilities/equity [%] (right-hand scale) 800,0 100,0% 700,0 600,0 723,5 661,6 650,3 673,7 684,0 639,3 635,9 90,0% 80,0% 70,0% 500,0 60,0% 400,0 50,0% 300,0 40,0% 200,0 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q ,0% Net interest-bearing liabilities as of = 635,9 mln PLN, including interest-bearing liabilities = 705,9 mln zł, cash = 70 mln zł 6

7 UNITS DELIVERED szt Warszawa Trójmiasto Wrocław Szczecin Łódź Olsztyn Wydania roczne (prawa skala) szt Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q Razem: Data not weighted by Polnord s share in the project Uwaga: Wydania mieszkań bez ważenia udziałem w projektach 367 units delivered in 4Q 2012 in the year ended 31st December 2012 a total of 938 unitss have been delivered, ie. 3% more than during the previous year An increase in the numer of units delivered is expected in 2013, due to increased sales on projects in the segment of popular apartments

8 GROSS PROFIT ON SALES IN 4Q ,97 1,90 1,05 0,86 0,74 0,50-0,02-0,02-2,36 1-2,86 Project Units delivered Gdansk Dwa Potoki 113 Wroclaw Innova 89 Gdansk Ostoja Myśliwska ,15 11,97 Szczecin Ku Słońcu 21 Warsaw Ostoja Wilanów ,08 Olsztyn Tęczowy Las 19 Sopot Sopocka Rezydencja 15 Łodz City Park 14 Warsaw Królewskie Przedmieście 9 Warsaw Dobry Dom 7 Gdansk Wilanowska V 1 gross profit on sales is the result of the delivery of 367 units in 11 projects, in 7 locations excluding projects Sopocka Rezydencja and City Park gross profit on sales in 4Q 2012 = 17,2 mln PLN Total 1 : Not weighted by Polnord s share in the project 8

9 SALES amount Number of signed contracts (excluding reservations) * amount q09 4q09 1q10 2q10 3q10 4q10 1q11 2q11 3q11 4q11 1q12 2q12 3q12 4q Net sales in 4Q 2012 = 253 Sales in January and February 2013: 133 units gross, 120 units net Polnord s offer adjusted to initial assumptions of the new government program Apartment for the young ( Mieszkanie dla młodych ) 9

10 OFFER REVIEW Delivered in 4Q units Warszawa; 68; 15% Units in completed projects Sold, to be delivered 129 units Szczecin; 159; 36% Trójmiasto; 160; 36% Offer 443 units Łódź; 37; 8% Wrocław; 8; 2% Olsztyn; 11; 3% Units in projects in progress units Sold 386 units Offer 877 units Wrocław; 92; 10% Olsztyn; 77; 9% Szczecin; 158; 18% Warszawa; 401; 46% Offer as of r. = units Trójmiasto; 149; 17% 10

11 Osiedle Innova (Wrocław) - Etap 3 Ostoja Myśliwska (Gdańsk) - Etap 2 Dwa Potoki (Gdańsk) - Etap 1 Dwa Potoki (Gdańsk) - Etap 1b Osiedle Guderskiego (Gdańsk) - Etap 1, bud. 1-3 Ku Słońcu (Szczecin) - Etap 2, bud. 2 Osiedle Guderskiego (Gdańsk) - Etap 1, bud. 4-5 Os. Tęczowy Las (Olsztyn) - bud. 5 Śródmieście Wilanów (Warszawa) - bud. A Osiedle Innova (Wrocław) - Etapy 4, 5 Ku Słońcu (Szczecin) - Etap 2, bud. 1 Dwa Potoki (Gdańsk) - Etap 2 Ostoja Wilanów (Warszawa) - Etap 7 Śródmieście Wilanów (Warszawa) - bud. C 96 units 124 units 144 units 18 units 96 units 157 units 60 units RESIDENTIAL PROJECTS IN POLAND UNDER CONSTRUCTION AND IN PREPARATION IN units 170 units 184 units 158 units 162 units 326 units 162 units Os. Tęczowy Las (Olsztyn) - bud. 6 Osiedle Innova (Wrocław) - Etapy 6,7 Ostoja Wilanów (Warszawa) - Etap 6 bud. C2 Neptun (Warszawa-Ząbki) Dwa Tarasy (Gdańsk) Brama Sopocka (Gdynia) Śródmieście Wilanów (Warszawa) - bud. D Osiedle Moderno (Wrocław) Stacja Kazimierz (Warszawa) Units under construction and in preparation 149 units 112 units 184 units 600 units 290 units 120 units 180 units 158 units 450 units 4q12 1q13 2q13 3q13 4q13 1q

12 NEW STRATEGY - IMPLEMENTATION Large increase in volume of units sold Focus on residential market Increase in company value at low risk Further reduction of SG&A costs Systematic reduction of liabilities Strategic objective: POLNORD a leader among large residential developers present on the Warsaw Stock Exchange 12

13 PRIORITY NR 1: LARGE INCREASE IN VOLUME OF UNITS SOLD Actions taken since : Short investment cycle in the segment of popular apartments (high IRR) Excellent competence in residential projects we do, what we do best Quarterly sales equal to 20 25% of offer (quick rotation based on our experience from the project Dwa Potoki in Gdańsk) Objective: Annual sales including Fadesa exceeding units Liberalization of the S and T Recommendations in 2013 possibility of increase of supply of mortage loans Decreasing interest rates and new government program Apartment for the Young (Mieszkanie dla Młodych) - support for residential developers 1. New projects in the segment of popular apartments to begin II/IIIQ2013: Neptun - Ząbki near Warsaw Dwa Tarasy - Gdańsk Brama Sopocka Gdynia 2. Joint Venture with Waryński Group to realize a new investment project Stacja Kazimierz in Warsaw, Wola district (beginning of canstruction 4q2013 /1q2014) 3. Development of new distribution channels (contract with HomeBroker, planned cooperation with Lion House) 4. Improvement of cooperation between Polnord s sales network and brokers on the housing market 5. Intensificationof Internet marketing 6. New webpage 13

14 PRIORITY NR 2: FOCUS ON RESIDENTIAL MARKET Offer well adjusted to expectations and financial possibilities of clients Developer Act and selective approach of banks will induce market concentration Knowledge of local markets - possibility to acquire new, interesting residential projects Actions taken since : 1. New projects in the segment of popular apartments to begin II/IIIQ2013: Neptun - Ząbki near Warsaw Dwa Tarasy - Gdańsk Brama Sopocka Gdynia 2. Joint Venture with Waryński Group to realize a new investment project Stacja Kazimierz in Warsaw, Wola district (beginning of canstruction 4q2013 /1q2014) New projects in attractive locations, allowing a significant margin Objective: Offer by the end of 2013 to exceed units Entering new markets (Cracow, Lublin) a source of significant increase in the client base 3. Possibility to begin a new project in Lublin intial analysis and preparation of investment project on own property 4. Focus on dynamically expanding markets: Warsaw and the Tricity area. 14

15 PRIORITY NR 3: FURTHER REDUCTION OF SG&A COSTS Reduction of legal fees accordingly to the progress in obtaining compensatory damages from the city of Warsaw Significant limitation of general costs in the commercial segment (outsourcing) Precise budgeting and control of general costs Actions taken since : 1. Significant restructuring of remunerations of company authorities (reduction of remuneration of members of the Board of Directors, limitation of Management Board to 2 members). 2. Redundancy, renegotiation of existing contracts, withdrawal from outsourcing services. Reduction of maintanance costs of water and sewerage infrastructure in Wilanów after its acquisition by MPWiK Objective: SG&A costs in 2013 lower by 10% compared to 2012 Reduction of costs related to operations on the Russian market 3. Simplification of the structure of Polnord Capital Group (transparency of functions, improvement of efficiency of operations) 4. Improvement of efficiency of marketing activities and intensification of Internet marketing 15

16 PRIORITY NR 4: SYSTEMATIC REDUCTION OF LIABILITIES Actions taken since : Sale of Commercial Center CH Wilanów Liquidation of noncore assets, eg. in Russia Sale of commercial assets (office buildings) Cel: Reduction of liabilities by at least 70 mln PLN in 2013 to the level of 700 mln PLN Proceeds from compensatory damages Project-based loans repaid from proceeds from projects 1. Liquidation of non-core assets: sale of property in Warsaw, Wilanów and Tricity amounting to 15 mln PLN. 2. Proceeds from additional payments regarding compensatory damages (contract signed in Decemeber 2012 regaring additional payments in the amount of 25 mln PLN) 3. Tax optimizatoon 16

17 Office: ul. Śląska 35/ Gdynia tel fax Warsaw office: Al. Gen. Sikorskiego Warszawa tel fax polnord@polnord.pl Thank you. POLNORD SA Contact for investors: Agata Wiktorow-Sobczuk agata.wiktorow-sobczuk@olnord.pl tel

18 18 Appendices

19 INVENTORY INVENTORY Change 4Q12/3Q12 [mln PLN] [mln PLN] Units completed 20,28 122,6 Projects in progress -51,36 153,2 Units completed number* WA Ostoja Wilanów (49%) 64 SOP Sopocka Rezydencja 59 SZC - Ku Słońcu 159 LDZ City Park 37 WR Innova 8 WA Królewskie Przedmieście 1 GDA - Ostoja Myśliwska 64 GDA Dwa Potoki 36 WA Dobry Dom 3 OTL Tęczowy Las 11 GDA- Apartamenty Albatros 1 Total 443 Land bank ¹ -3,56 385,3 Projects in progress number* WA Ostoja Wilanów (49%) 232 Other -3,72 0,29 Total -38,36 661,4 GDA Dwa Potoki 149 SZC Ku Słońcu II 158 WR Osiedle Innova (49%) 92 OTL Tęczowy Las 77 WA Śródmieście Wilanów 169 Total * Data not weighted with Polnord s share in the project all inventory positions are valued (in accordance with MSR 2) in line with the historical cost principle 1 value of land bank does not include land classified as investment property Values include activated interest on land purchase loans 19

20 PROJECTS COMMISSIONED TO USE IN 2012 Dwa Potoki (Phases 1,1b, buildings1-5) location: Gdańsk Osiedle Tęczowy Las (building 4) location: Olsztyn Ostoja Myśliwska (Phase 2) location: Gdańsk Ku Słońcu (Phase 2, building 2) location: Szczecin begin: 2q2012; end: 4q2012 begin: 2q2011; end: 3q2012 begin: 3q2010 ; end: 4q2012 begin.: 2q2011 end: 4q2012 7,5 thousand m2 usable area 4,5 thousand m2 usable area 7,3 thousand m2 usable area 7,6 thousand m2 usable area 162 units 91 units 124 units 157 units offer: 36 units offer: 7 units offer: 14 units offer: 107 units Cost of land/1m2 usable area= 0,41k PLN Cost of land/1m2 usable area= 0,25k PLN Cost of land/1m2 usable area= 0,46k PLN Cost of land/1m2 usable area= 0,64k PLN Total commissioned to use: 58 thousand m2 usable area, units, offer: 348 units 20 Sales as of r, data not weighted by Polnord s share in the projects

21 PROJECTS COMMISSIONED TO USE IN 2012 CONT. Osiedle Innova (Phases 1, 2 i 3) location: Wrocław location: Łódź City Park (Phase 3) Sopocka Rezydencja location: Sopot Osiedle Guderskiego Phase 1, building 1-3 location: Gdańsk begin: 2q2010/4q2010/1q2011; end: 1q2012/2q2012/4q ,2 thousand m2 usable area 237 units offer: 8 units begin: 4q2011, end: 1q2012 4,7 thousand m2 usable area 88 units offer: 21units Cost of land/1m2 usable area= 1,07k PLN begin: 4q2009; end: 1q2012 9,7 thousand m2 usable area 162 units offer: 59 units Cost of land/1m2 usable area= 6,72k PLN begin: 1q2012; end: 4q2012 4,5 thousand m2 usable area 96 units offer: 96 units Cost of land/1m2 usable area= 0,56k PLN Total commissioned to use: 58 thousand m2 usable area, units, offer: 348 units 21 Sales as of r, data not weighted by Polnord s share in the projects

22 PROJECTS UNDER CONSTRUCTION Śródmieście Wilanów (building A) location: Warszawa begin.: 3q2011, end: 3q2013 9,5 thousand m2 usable area Śródmieście Wilanów (building C) location: Warszawa begin.: 3q2012; end: 3q ,6 thousand m2 usable area Ku Słońcu (Phase 2, building 1) location: Szczecin begin. 2q2012 end: 4q2013 7,5 thousand m2 usable area Osiedle Guderskiego (Phase 1, building 4-5) location: Gdańsk begin: 1q2012; end:1/2q2013 2,8 thousand m2 usable area 170 units 162 units 158 units 60 units offer: 67 units Cost of land/1m2 usable area=1,2k PLN offer: 102 units Cost of land/1m2 usable area= 1,2k PLN offer: 158 units Cost of land/1m2 usable area= 0,79k PLN offer: 60 units Cost of land/1m2 usable area= 0,56k PLN Total under construction: 71,7 thousand m2 usable area, units 22 Sales as of r, data not weighted by Polnord s share in the projects

23 PROJECTS UNDER CONSTRUCTION CONT. Dwa Potoki (Phase 2, building 6-9) location: Gdańsk Osiedle Tęczowy Las (building 5) location: Olsztyn Osiedle Innova (Phases 4, 5) location: Wrocław Ostoja Wilanów (Phase 7) location: Warsaw begin: 2q2012; end: 3q2013 7,1 thousand m2 usable area 162 units offer: 149 units begin: 1q2012; end: 3q2013 5,8 thousand m2 usable area 103 units offer: 77 units begin: 1q2012/1q2012; end: 4q2013/4q2013 4,5/4,5 thousand m2 usable area 92/92 units offer: 50/42 units begin.: 3q2011, end: 2q ,4 thousand m2 usable area 326 units offer: 241 units Cost of land/1m2 usable area =0,4k PLN Cost of land/1m2 usable area =0,19k PLN Cost of land/1m2 usable area =0,66k PLN Cost of land/1m2 usable area =0,84k PLN Total under construction: 71,7 thousand m2 usable area, units 23 Sales as of r, data not weighted by Polnord s share in the projects

24 PROJECTS IN PREPARATION IN 2013 ul. Powstańców Osiedle Tęczowy Las (building 6) Osiedle Innova (Phases 6, 7) Ostoja Wilanów (Phase 6, building C2) Neptun location: Olsztyn location: Wrocław Location: Warsaw location: Ząbki, Warsaw begin.: 2q2013; end: 1q2014 begin.: 1/1q2013; end: 4/3q2014 begin.: 1q2013; end: 4q2014 begin.: 3q2013; end: 3q2017 6,7 thousand m2 usable area 6,4 thousand m2 usable area 12,3 thousand m2 usable area 30 thousand m2 usable area 149 units 112 units 184 units 600 units Cost of land/1m2 usable area = 0,25k PLN Cost of land/1m2 usable area = 0,66k PLN Cost of land/1m2 usable area = 0,88k PLN Cost of land/1m2 usable area = 0,6k PLN Total in preparation: 173,5 thousand m2 usable area, units 24

25 PROJECTS IN PREPARATION IN 2013 CONT. ul. Przemyska ul. Sopocka Śródmieście Wilanów location: Gdańsk Dwa Tarasy begin.: 2q2013; end: 3q thousand m2 usable area 290 units Cost of land/1m2 usable area = 0,49k PLN location: Gdynia Brama Sopocka begin.: 2q2013; end: 2q2015 7,5 thousand m2 usable area 120 units Cost of land/1m2 usable area = 1,13k PLN location: Warsaw Śródmieście Wilanów, building D begin.: 3q2013; end: 2q2015 9,2 thousand m2 usable area 180 units Cost of land/1m2 usable area = 1,18k PLN Total in preparation: 173,5 thousand m2 usable area, units 25

26 PROJECTS IN PREPARATION IN 2013 CONT. Osiedle Moderno ul. Jana Kazimierza W Dolinie Port Praski Osiedle Moderno location: Wrocław begin. 4q2013, end:3q2014 7,2 thousand m2 usable area 158 units Cost of land/1m2 usable area = 0,63 k PLN Port Praski (negotiated) location: Warsaw begin.: 2014; end: thousand m2 usable area 800 units Stacja Kazimierz (JV with Waryński Group) location: Warsaw, Wola begin.: 4q2013/1q2014; end: thousand m2 usable area 450 units Osiedle W Dolinie" location: Gdańsk begin.: 4q2013;end: 4q2014 9,2 thousand m2 usable area 202 units Total in preparation: 173,5 thousand m2 usable area, units 26

27 GOVERNMENT PROGRAMS AID ON THE RESIDENTIAL MARKET Rodzina na Swoim Mieszkanie dla Młodych Beneficiaries Type od property: Married couples Single parents Singles apartments houses Married couples Single parents Singles ONLY apartments Segment of market supported: Primary and secondary markets ONLY primary market Max. area of apartment: 75 m2 75 m2 Area of apartment covered by the subsidy 50 m2 50 m2 Amount of subsidy half of mortage laon interest over a period of 8 years From 10% to 20% of apartment cost, paid at the moment of obtaining a mortage loan (substitute of own contribution) 10% - for singles and couples without children additional 5%, if the couple has children additional 5%, if a third or next child is born within 5 years of obtaining the mortage loan Polnord s residential offer is adjusted to suit the requirments set by government programs. 27