Paris, February 18, 2016 - 8:00 a.m.
Regulated information
Cegereal - Annual Results
2015: A decisive year with NAV up 12.6% and
the entrance of Northwood Investors
"2015 was a decisive year for Cegereal. Our operating performance, combined with our ongoing commitment to environmental responsibility, positions us as one of the most attractive, forward-looking players in the French office property market. In addition, we are pleased to welcome a new shareholder, Northwood Investors, who wants to support our Company in its growth projects and make Cegereal a benchmark office property company in France," said Raphaël Tréguier, Cegereal's Chief Executive Officer.
- Northwood Investors' successful tender offer
In the fourth quarter of 2015, Northwood Investors acquired Commerz Real's 59.78% interest in Cegereal. Following this transaction, Jérôme Anselme was appointed Deputy Chief Executive Officer of Cegereal and five new members were chosen to serve on the Board of Directors. Their appointments will be submitted to shareholders for ratification at the General Shareholders' Meeting on February 18, 2016. Marie-Flore Bachelier, former CFO of Mercialys, also joined as independent Director, alongside Richard Wrigley and Alec Emmott, and was appointed Chairman of the Audit Committee.
In accordance with applicable rules and regulations, Northwood filed a tender offer for the remaining Cegereal shares, which closed on January 25, 2016. As a result, Northwood now holds 98.44% of Cegereal's share capital. Northwood has announced its intention to allocate significant resources to Cegereal to support its growth strategy while maintaining its REIT status. The company's shares will not be delisted.
- Portfolio value up 8.15%
As expected, the return of institutional investors to the high-quality office segment in greater Paris continued and led to a drop in the capitalization rate for real estate assets in the inner suburbs.
This trend helped lift the appraisal value of Cegereal's real estate portfolio by a net 8.15% year-on-year to €942 million excluding transfer costs (more than €1 billion including transfer costs, also known as "replacement value") as of December 31, 2015. This compares with €871 million excluding transfer costs at the previous year-end and €902 million excluding transfer costs as of June 30, 2015.
EPRA NNNAV came to €39.2 per share, up 12.6% from the year before. This increase primarily reflects the rise in the fair value of properties (positive impact of €5.3 per share), dividend distributions (impact of €1.65 per share), consolidated earnings growth (positive impact of €0.7 per share), rent-free periods granted to new tenants (positive impact of €0.1 per share) and changes in the fair value of bank debt (negative impact of €0.2 per share).
As of December 31, 2015, the three properties' appraisal values excluding transfer costs were as follows:
- Europlaza: €361 million (up 8.4%)
- Arcs de Seine: €379 million (up 9.2%)
- Rives de Bercy: €202 million (up 5.8%)
- Key indicators
| In millions of euros | 2015 | 2014 | Change |
| IFRS rental income | 44.3 | 44.7 | - 1.0% |
| IFRS net income | 81.0 | 42.4 | +90.9% |
| EPRA earnings | 18.2 | 23.7 | -23.1% |
| Net cash-flows from operations | 22.5 | 18.3 | +22.5% |
| EPRA NNNAV per share excluding transfer costs (in €) | 39.2 | 34.8 | +12.6% |
| Replacement NAV per share including transfer costs (in €) | 44.0 | 39.3 | +12.1% |
| Portfolio value (excluding transfer costs) | 942 | 871 | +8.2% |
| Dividend (in € per share) | 2.0 | 1.65 | +21.2% |
The net cash-flows from operations deducted all IFRS adjustments from the EPRA earnings, such as tenant incentives linearization granted over the last years.
2015 EPRA earnings were €18.2 million (versus €23.7 million in 2014) with net cash-flows from operation increasing by 22.5% to €22.5 million, mainly due to the reduction of the tenant incentives granted over the last years.
The IFRS net income almost doubled largely as a result of the compression in the valuation yields assumed in the appraisal values which led to a change of up to €62.7 million (versus €18.7 million in 2014).
Cegereal refinanced all of its debt in 2012 at a reduced rate of 3.15% and does not have any repayment obligations until August 2017. Its loan to value stood at 43.0% as of December 31, 2015.
- Strong rental activity
While the rental market for large properties was sluggish in 2015, Cegereal made the most of its ability to provide flexible solutions for tenants and continued to turn in a strong letting performance for the Arcs de Seine and Europlaza buildings. During the year, eight new leases were signed for a total of 10,400 sq.m.
Arcs de Seine: 100% occupancy rate
This standout property in Paris's Telecommunication Valley on the banks of the Seine has been fully let since April 2015 (the occupancy rate stood at 97% as of December 31, 2014). Arcs de Seine is the fourth office complex in France to hold both HQE Exploitation and BREEAM In-Use "Very Good" certification. The property was entirely renovated in 2012.
In January 2015, Cegereal signed two new six-year leases, the first with Amgen on 2,800 sq.m. and the second with Exclusive Networks on 1,400 sq.m. In April, Boursorama, an Arcs de Seine tenant since 2012, leased an additional 1,400 sq.m., raising the occupancy rate to 100%.
Europlaza: "Garden Tower" a success
The private gardens at the base of the tower were inaugurated in the spring of 2015. The new renovated "garden floors" were completed in September and have been very actively marketed since then.
In 2015, five leases were signed on a total of 4,800 sq.m., including two renewals (Gartner and Software on 1,300 sq.m. each) and one extension (Gas Natural on 700 sq.m.). The La Défense tower's two new tenants, KPMG (900 sq.m.) and Robert Half (600 sq.m.), have raised the occupancy rate to 82% from 77% as of end-2014.
Rives de Bercy: the final property in the portfolio to obtain dual certification (HQE and BREEAM "Very Good")
The new nine-year lease signed as part of the Go Green program in January 2013 with Crédit Foncier, the building's long-standing sole tenant, includes stringent mutual undertakings by the owner and the tenant to meet environmental targets.
In January 2015, Rives de Bercy (32,000 sq.m.) officially obtained BREEAM In-Use International "Very Good" certification alongside its HQE Exploitation certification delivered by independent organization Certivéa in December 2014.
- Continued commitment to CSR/Upgreen Your Business
Cegereal demonstrated its active commitment to corporate social responsibility (CSR) in early 2015 by inviting all of its stakeholders to take part in the Upgreen Your Business collaborative program. The successful completion of the Go Green project made Cegereal France's first fully "green" REIT in 2014.
In 2015, the international GRESB index ranked Cegereal third among listed office property companies for responsible management and sustainable development thanks to a 28% improvement in its overall performance.
- Amount to be distributed in dividends in 2016: €2.0 per share
At the Annual Shareholders' Meeting on May 2016, Cegereal intends to recommend paying a total of €2.0 in dividends per share in 2016. The dividend will be paid on July 20, 2016, subject to shareholders' approval.
Cegereal's Board of Directors met on February 17, 2016 to approve the audited consolidated financial statements for the year ended December 31, 2015.
The annual results presentation and video can be viewed on the Company's website: www.cegereal.com.
Investor Calendar
- April 15, 2016 First-quarter 2016 revenue
- May 2016 Annual Shareholders' Meeting
- July 20, 2016 Payment of the 2015 dividend
- July 22, 2016 First-half 2016 results
- October 2016 Third-quarter 2016 revenue
Media Relations
Aliénor Miens / +33 (0)1 53 32 84 77
alienor.miens@citigate.fr
Investor Relations
Raphaël Tréguier / +33 (0)1 42 25 76 36
raphael.treguier@cegereal.com
About Cegereal
Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio's appraisal value is estimated by independent valuers DTZ Eurexi at €1 billion as of December 31, 2015 (replacement value).
To date, Cegereal is the first French property company with a fully certified portfolio from an environmental point of view (HQE and BREEAM "Very Good") and benefits from the Green Star rating in the international benchmark GRESB.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €476 million on December 31, 2015.
www.cegereal.com.
APPENDICES
IFRS Income Statement (consolidated)
| in thousands of euros, except per share data | ||
| 2015 | 2014 | |
| 12 months | 12 months | |
| Rental income | 44,310 | 44,746 |
| Income from other services | 11,349 | 13,173 |
| Building-related costs | (17,156) | (16,341) |
| Net rental income | 38,504 | 41,579 |
| Sale of building | ||
| Administrative costs | (4,976) | (3,057) |
| Other operating expenses | (5) | 0 |
| Other operating income | 65 | |
| Increase in fair value of investment property | 62,736 | 42,637 |
| Decrease in fair value of investment property | (23,933) | |
| Total change in fair value of investment property | 62,736 | 18,704 |
| Net operating income | 96,323 | 57,226 |
| Financial income | 15 | 17 |
| Financial expenses | (14,719) | (14,533) |
| Net financial expense | (14,705) | (14,515) |
| Corporate income tax | (662) | (312) |
| CONSOLIDATED NET INCOME | 80,957 | 42,398 |
| of which attributable to owners of the Company | 80,957 | 42,398 |
| of which attributable to non-controlling interests | 0 | 0 |
| Other comprehensive income | ||
| TOTAL COMPREHENSIVE INCOME | 80,957 | 42,398 |
| of which attributable to owners of the Company | 80,957 | 42,398 |
| of which attributable to non-controlling interests | 0 | 0 |
| Basic and diluted earnings per share (in euros) | 6.06 | 3.18 |
IFRS Balance Sheet (consolidated)
| in thousands of euros | ||
| Dec. 31, 2015 | Dec. 31, 2014 | |
| Non-current assets | ||
| Property, plant and equipment | 61 | |
| Investment property | 942,000 | 871,000 |
| Non-current loans and receivables | 28,928 | 30,941 |
| Total non-current assets | 970,989 | 901,941 |
| Current assets | ||
| Trade accounts receivable | 13,132 | 6,469 |
| Other operating receivables | 6,899 | 6,276 |
| Prepaid expenses | 96 | 107 |
| Total receivables | 20,127 | 12,852 |
| Cash and cash equivalents | 8,723 | 23,499 |
| Total cash and cash equivalents | 8,723 | 23,499 |
| Total current assets | 28,850 | 36,351 |
| TOTAL ASSETS | 999,839 | 938,292 |
| Shareholders' equity | ||
| Share capital | 160,470 | 160,470 |
| Legal reserve and additional paid-in capital | 21,436 | 21,436 |
| Consolidated reserves and retained earnings | 305,447 | 284,831 |
| Net attributable income | 80,957 | 42,398 |
| Total shareholders' equity | 568,309 | 509,135 |
| Non-current liabilities | ||
| Non-current borrowings | 402,664 | 401,889 |
| Other non-current borrowings and debt | 3,951 | 4,166 |
| Non-current corporate income tax liability | ||
| Total non-current liabilities | 406,615 | 406,055 |
| Current liabilities | ||
| Current borrowings | 1,626 | 1,716 |
| Trade accounts payable | 3,150 | 2,148 |
| Corporate income tax liability | 295 | |
| Other operating liabilities | 4,573 | 5,045 |
| Prepaid revenue | 15,566 | 13,898 |
| Total current liabilities | 24,915 | 23,102 |
| Total liabilities | 431,530 | 429,157 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 999,839 | 938,292 |
IFRS Statement of Cash Flows (consolidated)
| in thousands of euros | ||
| 2015 | 2014 | |
| OPERATING ACTIVITIES | ||
| Consolidated net income | 80,957 | 42,398 |
| Elimination of items related to the valuation of buildings: | ||
| Fair value adjustments to investment property | (62,736) | (18,704) |
| Indemnity received from lessees for the replacement of components | ||
| Elimination of other income/expense items with no cash impact: | ||
| Depreciation of property, plant and equipment (excluding investment property) | 5 | |
| Adjustments for loans at amortized cost | 775 | 1,091 |
| Cash flows from operations before tax and changes in working capital requirements | 19,001 | 24,785 |
| Other changes in working capital requirements | (2,975) | (629) |
| Change in working capital requirements | (2,975) | (629) |
| Net cash flows from operating activities | 16,026 | 24,156 |
| INVESTING ACTIVITIES | ||
| Acquisition of fixed assets | (8,331) | (3,296) |
| Net decrease in amounts due to fixed asset suppliers | (384) | 874 |
| Net cash flows used in investing activities | (8,715) | (2,422) |
| FINANCING ACTIVITIES | ||
| Increase in share capital | ||
| Change in bank debt | 5,000 | |
| Refinancing transaction costs | ||
| Net increase in current borrowings | (90) | (60) |
| Net increase in other non-current borrowings and debt | (215) | 697 |
| Net decrease in other non-current borrowings and debt | ||
| Purchases and sales of treasury shares | 252 | 134 |
| Dividends paid | (22,034) | (20,025) |
| Net cash flows used in financing activities | (22,087) | (14,254) |
| Change in cash and cash equivalents | (14,776) | 7,480 |
| Cash and cash equivalents at beginning of the period | 23,499 | 16,018 |
| CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 8,723 | 23,499 |
French GAAP Income Statement
| in euros | ||||
| France | Exports | 2015 | 2014 | |
| 12 months | 12 months | |||
| Total | Total | |||
| Sales of goods for resale | ||||
| Sales of manufactured products | ||||
| Sales of services | 46,667 | |||
| NET REVENUE | 0 | 0 | 46,667 | - |
| Change in finished goods and in-progress inventory | ||||
| In-house production | ||||
| Operating subsidies | ||||
| Reversal of depreciation and amortization charges, provisions for impairment and expense transfers | 27,155 | 21,208 | ||
| Other revenue | 1 | |||
| Total operating revenue | 73,822 | 21,209 | ||
| Purchases of goods | ||||
| Change in inventories of goods held for resale | ||||
| Purchases of raw materials and other supplies | ||||
| Change in inventories (raw materials and other supplies) | ||||
| Other purchases and external charges | 1,745,487 | 1,488,996 | ||
| Taxes, duties and other levies | 129,284 | 50,810 | ||
| Wages and salaries | 649,380 | 258,734 | ||
| Social security charges | 266,126 | 121,105 | ||
| Fixed assets: depreciation and amortization | ||||
| Fixed assets: provisions for impairment | ||||
| Current assets: provisions for impairment | ||||
| Contingency and loss provisions | ||||
| Other expenses | 122,762 | 127,967 | ||
| Total operating expenses | 2,913,039 | 2,047,612 | ||
| OPERATING LOSS | (2,839,218) | (2,026,403) | ||
| Allocated income or transferred loss | ||||
| Loss incurred or transferred income | ||||
| Financial income from controlled entities | 68,300,000 | |||
| Income from other securities and receivables | ||||
| Other interest income | 144 | 4,797 | ||
| Reversal of provisions for impairment, other provisions and expense transfers | 5,956 | |||
| Foreign exchange gains | ||||
| Net income on sale of short-term investment securities | ||||
| Total financial income | 6,100 | 68,304,797 | ||
| Depreciation, amortization, provisions for impairment and other provisions | 5,956 | |||
| Interest expenses | 16,302 | 499,078 | ||
| Foreign exchange losses | ||||
| Net expenses on sales of short-term investment securities | ||||
| Total financial expenses | 16,302 | 505,034 | ||
| NET FINANCIAL INCOME/(EXPENSE) | (10,202) | 67,799,763 | ||
| RECURRING INCOME/(LOSS) BEFORE TAX | (2,849,420) | 65,773,360 | ||
| in euros | ||||
| 2015 | 2014 | |||
| 12 months | 12 months | |||
| Non-recurring income on management transactions | ||||
| Non-recurring income on capital transactions | 53,309 | 78,336 | ||
| Reversal of provisions for impairment, other provisions and expense transfers | ||||
| Total non-recurring income | 53,309 | 78,336 | ||
| Non-recurring expenses on management transactions | ||||
| Non-recurring expenses on capital transactions | 5,111 | |||
| Depreciation, amortization and provisions for impairment | ||||
| Total non-recurring expenses | 5,111 | - | ||
| NET NON-RECURRING INCOME | 48,198 | 78,336 | ||
| Employee profit sharing | ||||
| Corporate income tax | 661,939 | 312,460 | ||
| TOTAL INCOME | 133,230 | 68,404,342 | ||
| TOTAL EXPENSES | 3,596,391 | 2,865,106 | ||
| NET INCOME/(LOSS) | (3,463,161) | 65,539,236 | ||
French GAAP Balance Sheet
| in euros | ||||||||
| ASSETS | Gross amount | Depr., amort. & prov. | Dec. 31, 2015 | Dec. 31, 2014 | ||||
| Uncalled subscribed capital | - | |||||||
| Intangible fixed assets | ||||||||
| Start-up costs | - | |||||||
| Research and development costs | - | |||||||
| Licenses, patents and similar concessions | - | |||||||
| Goodwill | - | |||||||
| Other intangible fixed assets | - | |||||||
| Advances/down payments on intangible assets | - | |||||||
| Property, plant and equipment | ||||||||
| Land | - | |||||||
| Buildings | - | |||||||
| Plant, machinery and equipment | - | |||||||
| Other property, plant and equipment | - | |||||||
| Property, plant and equipment in progress | - | |||||||
| Advances and down payments | - | |||||||
| Financial fixed assets | ||||||||
| Receivables from controlled entities | 361,229,772 | 361,229,772 | 387,709,685 | |||||
| Other long-term investments | - | |||||||
| Loans | - | |||||||
| Other financial fixed assets | 643,078 | 643,078 | 788,846 | |||||
| FIXED ASSETS | 361,872,850 | - | 361,872,850 | 388,498,531 | ||||
| Inventories and work in progress | ||||||||
| Raw materials and other supplies | - | |||||||
| Manufactured products in progress | - | |||||||
| Services in progress | - | |||||||
| Semi-finished and finished goods | - | |||||||
| Goods held for resale | - | |||||||
| Advances/down payments on orders | - | |||||||
| Receivables | ||||||||
| Trade accounts receivable | - | |||||||
| Other receivables | 266,196 | 266,196 | 21,067 | |||||
| Subscribed capital, called up but not paid | - | |||||||
| Short-term investment securities | - | |||||||
| Cash and cash equivalents | 109,145 | 109,145 | 460,028 | |||||
| CURRENT ASSETS | 375,341 | - | 375,341 | 481,095 | ||||
| Prepaid expenses | 58,718 | 58,718 | 87,792 | |||||
| Adjustment accounts | - | - | ||||||
| TOTAL ASSETS | 362,306,909 | - | 362,306,909 | 389,067,418 | ||||
| in euros | ||||||||
| EQUITY AND LIABILITIES | Dec. 31, 2015 | Dec. 31, 2014 | ||||||
| Capital | ||||||||
| Share capital (including paid-up capital: 160,470,000) | 160,470,000 | 160,470,000 | ||||||
| Additional paid-in capital | 5,388,776 | 5,388,776 | ||||||
| Revaluation reserve | 152,341,864 | 152,341,864 | ||||||
| Reserves | ||||||||
| Legal reserve | 16,047,000 | 16,047,000 | ||||||
| Statutory or contractual reserves | - | |||||||
| Regulated reserves | - | |||||||
| Other reserves | 30,188,422 | - | ||||||
| Retained earnings | ||||||||
| Retained earnings/(accumulated losses) | 30,409 | (3,256,815) | ||||||
| Net income/(loss) for the year | (3,463,161) | 65,539,236 | ||||||
| Interim dividend | 0 | (10,029,375) | ||||||
| Investment subsidies | - | |||||||
| Regulated provisions | - | |||||||
| SHAREHOLDERS' EQUITY | 361,003,310 | 386,500,686 | ||||||
| Income from the issue of equity instruments | - | |||||||
| Contingent advances | - | |||||||
| OTHER EQUITY | - | - | ||||||
| Contingency provisions | - | |||||||
| Loss provisions | - | |||||||
| CONTINGENCY AND LOSS PROVISIONS | - | - | ||||||
| Non-current borrowings and debt | ||||||||
| Convertible bonds | - | |||||||
| Other bonds | - | |||||||
| Bank borrowings | - | |||||||
| Miscellaneous borrowings and debt | - | 1,806,957 | ||||||
| Trade accounts payable and other current liabilities | ||||||||
| Advances/down payments received on orders in progress | - | - | ||||||
| Trade accounts payable | 823,374 | 357,837 | ||||||
| Tax and social liabilities | 480,224 | 401,938 | ||||||
| Amounts owed to fixed asset suppliers | - | |||||||
| Other liabilities | - | |||||||
| Prepaid revenue | - | |||||||
| LIABILITIES | 1,303,598 | 2,566,732 | ||||||
| Adjustment accounts | - | |||||||
| TOTAL EQUITY AND LIABILITIES | 362,306,909 | 389,067,418 | ||||||
