Post on 20-Jul-2020
Corporate Presentation
March/April/May 2020
2
Disclaimer
This presentation contains forward-looking statements that are subject to various risks and uncertainties. Such statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, as well as uncertainties and contingencies that are subject to change.
Actual results can differ materially from those anticipated in the forward-looking statements of CORESTATE Capital Holding S.A. (the “Company”) as a result of a variety of factors, many of which are beyond the control of the Company, including those set forth from time to time in the Company’s press releases and reports and those set forth from time to time in the Company’s analyst and investor calls and discussions. The company does not assume any obligation to update the forward-looking statements contained in this presentation.
This presentation does not constitute an offer to sell or a solicitation or offer to buy any securities of the Company, and no part of this presentation shall form the basis of or may be relied upon in connection with any offer or commitment whatsoever. This presentation is being presented solely for information purposes and is subject to change without notice.
Extent and impact of the corona pandemic on the course of business in 2020 cannot yet be conclusively assessed. The company is therefore monitoring further developments and their impact on business activities very closely and will always present reliable information transparently in a timely manner.
€ = Euro; $ = (US)Dollar; % = percentage; a = actual; acc. = according; adj. = adjusted; aggr. = aggregated; approx. = approximately;c(a) = circa; e = expected; (F)Y = (financial) year(s); H = half year(s); LTM = last twelve months; M = month(s); Q = quarter(s); tba = to be announced k = thousand(s); m = million(s); bn = billion(s)
Glossary
3
A Fully Integrated and Specialized Real Estate Investment Manager
€ >28bn Assets underManagement
€ >6.0bnDeal Pipeline in
selected countries
BB+ (positive)
Corporate CreditRating
~800 FTEs | 42 Offices | 7 Countries
c € 1.3bn Fund Volume in Real Estate
Mezzanine
>55%EBITDA Margin
4
Attractive Offerings for our Clients in Various Asset Classes
Fundraising, Reporting, Risk Management, Financing etc.
Retail(>70.000)
Clients /Investors
Semi Institutional (>300)
Institutional(>100)
Key product range
integratedPlatform
* after costs
Office Residential Micro Living Retail Mezzanine
3.5% - 4% 4% - 4.5% 5% - 5.5% 5% - 6% 11% - 13%
Still underinvested asset allocation to (German) Real Estate (Δ c -30%)
Products
Return*
Asset & Property Management
Marketleader
Marketleader
One
-Sto
p-Sh
op
5
Corestate’s Embedded Growth Strategy
Strong upside potential from both organic and inorganic sources
OrganicDriversOrganicDrivers
InorganicInorganic
Diversified Products
Recurring income and strong cash flow from innovative and platform synergies
Urbanization Demographic
changes
Institutional & Retail Investors
Structural under allocation to European real estate
Interest rate environment
Micro Living
Flexible workforceBologna Protocol
Loan
Private debt
Stable demand in large cities
Regulation
Additional bolt-on or add-in M&A
Fragmented AM market in Europe
Firepower (FCF generation & leverage capacity)
Digitalization/StandardizationRegulationClient demand
Mid-termgrowth perspectives
+€ 3-5bnAuM p.a.
+5-10% AuM p.a.
6
Diversified Geographic Exposure and Expected Near-term Expansion
Short-term expansion expectations
Madrid
Portugal
London
Oxford
ZurichWollerau
LuxemburgMunich
Vienna
Frankfurt
Leipzig
HamburgIreland
Hungary
Poland
Denmark
Norway
Sweden
Italy
c €1.9bn
BeNeLux c €1.8bn
c €0.4bn
c €0.4bn
c €3.3bn
RoW c €3.2bn
c €0.2bn
Micro Living
c €16.6bn
Main offices
Headquarters
7
Ample Room for External Growth
Strict set of acquisition criteria drives approach to external growth
Sector consolidation driven by trend to bigger asset managers and increasing regulatory costs (AIFMD)
European Real estate AM market is fragmented: >90 asset managers with AuM below € 10bn
Comprehensive and integrated multi-boutique platform enables an efficient and flexible dock process of new asset manager
new asset class
cross-selling
opportunities
EPS accretionhigh % ofrecurring revenues
Real estate &complemen-tary AuMs
new investors
new geography
8
Highlights of FY 2019
>10% organic growth on RE AuMs in 2019
Strong performance in the backdrop of a robust market and a transformational year
STAM acquisition closed and integration on track
Guidance outperformed or achieved on all levels Accomplished corporate transformation & institutionalization Supported by solid HFS performance
Internationalization in products and clients Next important steps in European asset expansion Several new institutional clients successfully onboarded
Realignment of governance & management structure
9
Corporate Governance Structure
Enlargement and regular electionof the Supervisory Board
Dr. Georg Allendorf (proposed as new chairman)c 30 years expertise in real estate investments and asset management
Frm. Managing Director at DWS, Head of Real Estate Europe; former Head of Real Estate at R+V Versicherung
Several board seats incl. Honorary Board Member of INREV & Fellow of RICS
Micha Blattmann will step down as his statutory term ends
Other candidates for Supervisory Board Timothy Blackwell, frm. Head of REIM at Credit Suisse AM
Olaf Klinger, Chief Financial Officer of Symrise AG
Dr. Gabriele Apfelbacher, frm. partner at Cleary Gottlieb Steen & Hamilton
Marc Driessen, frm. MD of Hansainvest and ManagementBoard of HSH Real Estate
Nils HuebenerCIO since 1 April 2020
>20 years expertise in real estate investments
Former Global CIO at BNP Paribas Real Estate Investment Management, former Head of RE Mgt. (global) at SEB AM; former Head of RE Transactions Western and Southern Europe at Deutsche Bank RE
As CIO esp. in charge of Equity Raising, Research and Investment Management
Thomas Landschreiber will remain with the company
New CIO and Member of the Management Board
10
28%
26%
Assets under Management – Dedicated to Growth
Other
Micro Living
Office
Retail
Residential
non Real Estate
€ 20.7bn
FY-2019FY-2018
29% 26%
15%5%
€ 22.8bn RE
€ 3.5bn non RE
€ 28.3bn*
* incl. STAM on a pro forma basis as of after closing
€ 2bn STAM*
€ 25.3bn
25%
18%
22%
€ 4.7bn
6%+10.1%
+28%
FY-2017FY-2016
c € 3bn
€ 21.9bn
30%
23%
7%
€ 5.7bn
7%
33%
€ 16.2bn +440%
Assets under Management
+10.1% net organic growth in RE AuMs in FY-2019
STAM acquisition will add € 2bn in AuMs
Planned decrease in non-Real Estate AuMs of € -1.2bn
11
Real Estate Debt –Highly Diversified with Focus on Favourable Locations
Regional break down of current outstanding financings (in m€)
Uses of mezzanine funds at the end of FY-2019
284
177131 108 74 65 55 43 29
73 18 17
232
c 70% of lending volume goes to Top7 cities in Germany
Total committed fund volume: c € 1.3bn
Predominantly German residential
# of financed projects: 61
Ø size of mezzanine financing: c € 21.4m
Residential 70%
Retail16%
Office 14%
61projects
12
Pension Schemes 50%
Insurers 23%
Pension Funds 12% Investment Funds 8%
Others3)
7%
Overview HFS Stratos Funds
Historic Mezzanine Fund Volumes
Avg. performance2) since inception around 12.0% p.a.
Interest-bearing share of committed fund volume c 80%
Very visible investment pipeline for the upcoming quarters
Stable Investor Base
c 70institutional
clients
Committed 1)
Key Performance Parameter3) Others incl. Banks, Foundations etc…
Outstanding performance driven by efficient deployment of funds in combination with cautious volume increase
1) Average commitment of fund volume to projects2) Based on reported performance of IAF Stratos II & IV acc. to BVI standard
414
758
9621,108 1,155
c1,3
200
400
600
800
1.000
1.200
1.400
201412,8%99.2%12.8%
201513,2%98.6%13.2%
201612,7%98.7%12.7%
201712,0%99.3%12.0%
201811,1%99.2%11.1%
201913%
99.1%13%
13
130
175
303
Adj. Net Profit
EBITDA
Aggr. Revenues
All Figures Within or Above Guidance
Full year figures of 2019 (in €m)
Guidance285 - 295
Guidance165 - 175
Guidance 130 - 140
Revenues affected by shifted client transactions to FY2020
EBITDA influenced by compensatory extraordinary items
one-off expenses for M&A and transformational set-up costs
positive impact from released provision (expired M&A related liabilities)
Year end leverage ratio of 2.7x in-line with target range of 2x to 3x
14
Outlook 2020, Dividend and New Distribution Policy
Financial Guidance 2020
As extent and impact of the corona pandemic on the course of business in 2020 cannot yet be conclusively assessed, Corestate does not give a financial guidance for 2020 as of yet
The company is monitoring further developments and their impact on business activities very closely and will always present reliable information and, as soon as possible, a new guidance for 2020 transparently in a timely manner
Dividend & Distribution Policy
To secure full financial flexibility and further de-risk the company, Corestate proposes to the Annual General Meeting that the dividend for financial year 2019 be waived as a one-time event
Starting with the distribution for the fiscal year 2020, Corestate plans to pay out at least 30% of the Earnings per Share in 2021
The objective is to reduce the Company´s net financial debt in the medium term
Appendix
16
Def
initi
on o
fcle
aran
dam
bitio
usES
G ta
rget
s nvi-
ronment
ocial
Issues
over-
nance
Appendix: 2019 Client Initiatives: Sustainability, Transparency and Digitization
+30% of women in managementby 2025
Corestate Foundation and employeecharity day
Supervisory Board extension and independence
Compliance and Transparency(Inrev, UNPRI, ethics declaration)
First ESG Report published in 6/2019 -20% CO2 emissions by 2025 +30% energy efficiency by 2025 -20% water consumption by 2025 -20% residual waste by 2025
Long term Commitments Client Services and Digitalization
Launch of compelling new homepage with client foucs
Launch of own digital distribution platform
17
Appendix: Long-dated Fund Maturity Profile
Notes: (1) Maturities are defined as the contractual end of the AM contract. It is expected that most of the contracts are renewed or a transfer of the assets into another CORESTATE vehicle takes place..
12% 13%
6%
1%
5%
2% 3%1% 1%
2% 2%
46%
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2030+
Real Estate Equity Funds Real Estate Debt Funds Non Real Estate
HFS funds in evergreen structure
Maturities by type of funds (1)
18
(€ m) FY 2019 FY 2018
Revenue from Acquisition Related Fees 35.1 31.7Revenue from Asset and Property Management 192.4 99.1Revenue from Promote and Sales Fees realized 8.8 0
Revenue from Real Estate Investment Management 236.2 131
Management expenses (95.2) (51.7)Earnings from Real Estate Investment Management 141.0 79.3Net Rental Income 11.2 13.8Revenue from Service Charges 3.5 0.3Net Gain from Selling Property Holding Companies 18.7 51.8Income from other Warehousing activities 0 6.3Total Income from Real Estate Operations / Warehousing 33.4 72.3Expenses from Real Estate Operations / Warehousing (19.2) (18.3)Earnings from Real Estate Operations / Warehousing 14.2 54Earnings from Alignment Capital 21.6 13.3General and Administrative Expenses (24.7) (20.9)Other Income 22.8 2.8EBITDA 175.0 128.4Depreciation and Amortisation (31.1) (19.3)EBIT 143.9 109.1Net Financial Expenses (23.5) (17.5) EBT 120.4 91.7Income Tax expenses (11.6) (11.2)Net Profit for the Period 108.8 80.4of which attributable to equity holders 108.5 80.6
Appendix – FY 2019 Profit & Loss Statement
19
(€ m) 31 Dec 2019 31 Dec 2018
Non-Current AssetsGoodwill 567.1 567.1Other Financial Instruments 172.2 93.7Intangible Assets 109.6 132.4Investment in Associates and Joint Ventures 126.5 88Other Non-Current Assets 104.9 103.7
Total Non-Current Assets 1.080.3 984.9
Current AssetsInventories 62.3 91.8Cash and Cash Equivalents 103.2 194.4Other Current Assets 172.6 119.6Total Current Assets 338.1 405.8Total Assets 1.418.4 1.390.7Total Equity 676.3 621.0Long-term Financial Liabilities to Banks 17.0 69.7Other Long-term Financial Liabilities 520.3 514.5Other Non-Current Liabilities 35.2 29.4Total Non-Current Liabilities 572.5 626.1Current LiabilitiesShort-term Financial Liabilities to Banks 37.7 0.5Other Short-term Provisions 13.9 33.4Other Current Liabilities 117.9 57.7Total Current Liabilities 169.5 143.7Total Equity and Liabilities 1.418.4 1.390.7
Appendix – Balance Sheet as of 31 December 2019
20
Appendix –Shareholder Structure and Research
€ 56
€ 40
€ 25
€ 38
€ 65
€ 50
€ 28
€ 47€ 40
Average target price c €44 (100% Buy)
23 April 2020 23 April 2020 29 Feb 2020 25 Feb 2020
Buy
Hold
Sell
24 April 2020 25 March 202028 Feb 2020 24 April 202024 March 2020
Shareholder Structure (acc. to latest public filing)
Dr. Kai G. KlingerChief Markets Officer
Phone: +49 69 3535630-106ir@corestate-capital.com
Investor Contact
Please note that these dates could be subject to change
Financial Calendar 2020
2
3
4
5
6
Fully integrated real estate investment manager with € >28bn AuM
Solid macro backdrop and strong recurring fee income streams provide stability
€ >6bn pipeline drive superior organic AuM growth
Growing allocation to real estate provides fundraising base
External growth opportunities from sector consolidation
Strong profitability and attractive dividends
Key Investment Proposition
IR-Contact and Financial Calendar 2020
1
25 February Publication preliminary results for FY 2019
24 March Annual financial report 2019
12 May Publication results for Q1
tba Annual General Meeting
11 August Publication results for H1
10 September Capital Markets Day
11 November Publication results for first nine months