Paris, February 17, 2017 - 8:00 a.m. Regulated information Cegereal 2016 Annual Results
EPRA earnings up 54.8%
" A number of important milestones were put in place this year, with the restructuring of the balance sheet, the major new acquisition and the renewal of the shareholder base, " said Cegereal's Chief Executive Officer Raphaël Tréguier. " In 2017, we are looking at growth opportunities in the office real estate sector."
- Key indicators
| In millions of euros | 2016 | 2015 | Change |
| IFRS rental income | 47.2 | 44.3 | +6.5% |
| IFRS net income | 41.3 | 81.0 | -49.0% |
| EPRA earnings | 28.2 | 18.2 | +54.8% |
| Net cash flows from operations | 34.8 | 22.5 | +54.9% |
| Portfolio value (excluding transfer costs) | 1,124 | 942 | +19.3% |
| Portfolio value (excluding transfer costs) like-for-like | 972 | 942 | +3.2% |
| EPRA NNNAV per share excluding transfer costs (in €) | 40.8 | 39.2 | +4.1% |
| Replacement NAV per share including transfer costs (in €) | 47.1 | 44.0 | +11.6% |
| Dividend (in € per share) | 2.1 | 2.0 | +5.0% |
| Total Share Return over the last 12 months | 9.2% | 17.3% |
Attesting to the value created during the year, the Total Share Return over the last 12 months came to 9.2%, with NAV growth of 4.1% for the period and a distribution ratio of 5.1%.
EPRA NNNAV stood at €40.8 per share, reflecting the rise in fair value of properties (positive impact of €2.3 per share), dividend distributions (negative impact of €2.0 per share), consolidated earnings growth (positive impact of €0.8 per share), rent-free periods granted to new tenants (positive impact of €0.24 per share) and changes in the fair value of bank debt (positive impact of €0.2 per share).
Replacement NAV was higher, with half of the increase resulting from the rise in transfer duties (from 6.5% to 7.5%) in valuations and half from the addition of the Hanami property to the portfolio.
EPRA earnings for the year amounted to €28.2 million, compared with €18.2 million in 2015, with net cash flows from operations climbing 54.9% to represent €34.8 million.
Given that the Hanami property was added to the portfolio on December 15, its impact on annual results was very limited. For example, its contribution to 2016 IFRS rental income was €0.4 million (corresponding to theoretical annualized rental income of €9.3 million).
IFRS net income amounted to €41.3 million for the year ended December 31, 2016. The value of the real estate portfolio like-for-like continued to rise (up 3.2%), but to a lesser extent than in 2015 (up 8.2%), leading to a 49.0% relative decline in IFRS net income.
- A renewed shareholder base
After Northwood, which held 98.44% of Cegereal's share capital following the tender offer that closed in late January 2016, new leading investors have become shareholders of the Company, enabling it to continue qualifying for the preferential tax treatment granted to REIT-style French listed real estate investment companies (SIICs).
Only 55% of Cegereal's capital is now held in concert [1] by the Northwood entities alongside GIC, which has become the Company's second leading reference shareholder with close to 25% of the capital.
- An optimized financial structure
Cegereal took advantage of favorable market conditions last summer to refinance a €405 million loan via a €525 million credit agreement, at the very competitive interest rate of 1.35%. The transaction, providing for a five-year loan with a two-year extension option, helped Cegereal reduce its finance costs by 45%.
In order to refinance the tax transparent holding company of the Rueil Malmaison acquisition, Cegereal entered into a credit agreement for €100 million on December 15, 2016. The loan carries interest at an average rate of about 1.50%.
Following these two transactions, Cegereal's debt ratio stood at 52.1%.
- A major new acquisition
Cegereal has added an exceptional asset to its portfolio with the acquisition of the Hanami campus in Rueil Malmaison, the green city in the Western Crescent of Greater Paris. The 30,000 sq.m complex is made up of eight buildings spread across 3.3 hectares on a landscaped site on the banks of the Seine. Leased to first class tenants, the campus has an occupancy rate of 96%.
With this fourth property in the portfolio, the estimated value of Cegereal's real estate assets surged 19.3% over the year to represent €1,124 million excluding transfer costs (€1,209 million including transfer costs or at "replacement value") at December 31, 2016, compared with €942 million a year earlier.
The portfolio's overall occupancy rate was 87% at December 31, 2016. Given that discussions regarding both the Arcs de Seine and Europlaza properties have reached an advanced stage, the occupancy rate should rise above 90 % in the very near future.
- Operating excellence recognized at the international level
In recognition of the commitment it has made in recent years to corporate social responsibility, as currently expressed through its collaborative Upgreen Your Business program, Cegereal was ranked number one in the 2016 Global Real Estate Sustainability Benchmark (GRESB) in the "listed office property companies in Europe" category.
In addition, Cegereal obtained ISO 14001:2004 certification for its environmental management system.
Lastly, Cegereal won two awards at the European Public Real Estate Association (EPRA) conference, thereby positioning itself among Europe's leaders in financial and extra-financial reporting.
- Amount to be distributed in dividends in 2017: €2.1 per share
At the Annual Shareholders' Meeting in April 2017, Cegereal intends to recommend paying a total of €2.1 in dividends per share in 2017. The dividend will be paid on July 13, 2017, subject to shareholders' approval.
Cegereal's Board of Directors met on February 16, 2017 to approve the audited consolidated financial statements for the year ended December 31, 2016.
The annual results presentation can be viewed on the Company's website:
Investor Calendar
- April 21, 2017 First-quarter 2017 revenue
- April 2017 Annual Shareholders' Meeting
- July 13, 2017 Payment of the 2016 dividend
- July 21, 2017 First-half 2017 results
- October 26, 2017 Third-quarter 2017 revenue
For more information, please contact:
| Media Relations Aliénor Miens / +33 1 53 32 84 77 alienor.miens@citigate.fr | Investor Relations Raphaël Tréguier / +33 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 at €1,209 million as of December 31, 2016 (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 ranks as "Sector Leader" 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 €495 million on February 13, 2017. www.cegereal.com
APPENDICES
IFRS Income Statement (consolidated)
| In thousands of euros, except per share data | ||
| 2016 | 2015 | |
| 12 months | 12 months | |
| Rental income | 47,196 | 44,310 |
| Income from other services | 13,991 | 11,349 |
| Building-related costs | (17,221) | (17,156) |
| Net rental income | 43,965 | 38,504 |
| Sale of building | ||
| Administrative costs | (3,663) | (4,976) |
| Other operating expenses | (716) | (5) |
| Other operating income | 9 | 65 |
| Increase in fair value of investment property | 34,292 | 62,736 |
| Decrease in fair value of investment property | (13,900) | |
| Total change in fair value of investment property | 20,392 | 62,736 |
| Net operating income | 59,987 | 96,323 |
| Financial income | 53 | 15 |
| Financial expenses | (17,972) | (14,719) |
| Net financial expense | (17,919) | (14,705) |
| Corporate income tax | (802) | (662) |
| CONSOLIDATED NET INCOME | 41,265 | 80,957 |
| of which attributable to owners of the Company | 41,265 | 80,957 |
| of which attributable to non-controlling interests | 0 | 0 |
| Other comprehensive income | ||
| TOTAL COMPREHENSIVE INCOME | 41,265 | 80,957 |
| of which attributable to owners of the Company | 41,265 | 80,957 |
| of which attributable to non-controlling interests | 0 | 0 |
| Basic earnings per share (in euros) | 3.09 | 6.06 |
| Diluted earnings per share (in euros) | 2.95 | 6.06 |
IFRS Balance Sheet (consolidated)
| In thousands of euros | ||||
| Dec. 31, 2016 | Dec. 31, 2015 | |||
| Non-current assets | ||||
| Property, plant and equipment | 61 | 61 | ||
| Investment property | 1,124,100 | 942,000 | ||
| Non-current loans and receivables | 22,949 | 28,928 | ||
| Financial instruments | 184 | |||
| Total non-current assets | 1,147,294 | 970,989 | ||
| Current assets | ||||
| Trade accounts receivable | 16,539 | 13,132 | ||
| Other operating receivables | 12,709 | 6,899 | ||
| Prepaid expenses | 354 | 96 | ||
| Total receivables | 29,602 | 20,127 | ||
| Cash and cash equivalents | 18,634 | 8,723 | ||
| Total cash and cash equivalents | 18,634 | 8,723 | ||
| Total current assets | 48,236 | 28,850 | ||
| TOTAL ASSETS | 1,195,530 | 999,839 | ||
| Shareholders' equity | ||||
| Share capital | 66,863 | 160,470 | ||
| Legal reserve and additional paid-in capital | 115,043 | 21,436 | ||
| Consolidated reserves and retained earnings | 359,877 | 305,447 | ||
| Net attributable income | 41,265 | 80,957 | ||
| Total shareholders' equity | 583,048 | 568,309 | ||
| Non-current liabilities | ||||
| Non-current borrowings | 576,951 | 402,664 | ||
| Other non-current borrowings and debt | 4,605 | 3,951 | ||
| Non-current corporate income tax liability | ||||
| Financial instruments | 920 | |||
| Total non-current liabilities | 582,476 | 406,615 | ||
| Current liabilities | ||||
| Current borrowings | 2,224 | 1,626 | ||
| Trade accounts payable | 5,832 | 3,150 | ||
| Corporate income tax liability | ||||
| Other operating liabilities | 7,985 | 4,573 | ||
| Prepaid revenue | 13,966 | 15,566 | ||
| Total current liabilities | 30,007 | 24,915 | ||
| Total liabilities | 612,483 | 431,530 | ||
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,195,530 | 999,839 | ||
IFRS Statement of Cash Flows (consolidated)
| In thousands of euros | ||||
| 2016 | 2015 | |||
| OPERATING ACTIVITIES | ||||
| Consolidated net income | 41,265 | 80,957 | ||
| Elimination of items related to the valuation of buildings: | ||||
| Fair value adjustments to investment property | (20,392) | (62,736) | ||
| 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) | 9 | 5 | ||
| Free share grants not vested at the reporting date | 102 | |||
| Fair value of financial instruments (share subscription warrants, interest rate caps and swaps) | 895 | |||
| Adjustments for loans at amortized cost | 2,949 | 775 | ||
| Cash flows from operations before tax and changes in working capital requirements | 24,828 | 19,001 | ||
| Other changes in working capital requirements | 376 | (2,975) | ||
| Working capital adjustments to reflect changes in the scope of consolidation | 134 | |||
| Change in working capital requirements | 511 | (2,975) | ||
| Net cash flows from operating activities | 25,339 | 16,026 | ||
| INVESTING ACTIVITIES | ||||
| Acquisition of fixed assets | (161,717) | (8,331) | ||
| Net decrease in amounts due to fixed asset suppliers | 621 | (384) | ||
| Net cash flows used in investing activities | (161,096) | (8,715) | ||
| FINANCING ACTIVITIES | ||||
| Increase in share capital | 0 | 0 | ||
| Change in bank debt | 181,000 | 0 | ||
| Issue of financial instruments (share subscription warrants) | 9 | |||
| Refinancing transaction costs | (8,542) | |||
| Purchases of hedging instruments | (168) | |||
| Net increase in current borrowings | (90) | |||
| Net decrease in current borrowings | (523) | |||
| Net increase in other non-current borrowings and debt | 654 | (215) | ||
| Net decrease in other non-current borrowings and debt | 0 | |||
| Purchases and sales of treasury shares | (43) | 252 | ||
| Dividends paid | (26,720) | (22,034) | ||
| Net cash flows used in financing activities | 145,668 | (22,087) | ||
| Change in cash and cash equivalents | 9,911 | (14,776) | ||
| Cash and cash equivalents at beginning of the period* | 8,723 | 23,499 | ||
| CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 18,634 | 8,723 | ||
French GAAP Income Statement
| In euros | |||||
| France | Exports | 2016 | 2015 | ||
| 12 months | 12 months | ||||
| Total | Total | ||||
| Sales of goods for resale | 0 | ||||
| Sales of manufactured products | 0 | ||||
| Sales of services | 70,000 | 46,667 | |||
| NET REVENUE | 0 | 0 | 70 , 000 | 46, 667 | |
| Change in finished goods and in-progress inventory | 0 | ||||
| In-house production | 0 | ||||
| Operating subsidies | 0 | ||||
| Reversal of depreciation and amortization charges, provisions for impairment and expense transfers | 30,141 | 27,155 | |||
| Other revenue | 0 | ||||
| Total operating revenue | 100, 141 | 73, 822 | |||
| Purchases of goods | 0 | ||||
| Change in inventories of goods held for resale | 0 | ||||
| Purchases of raw materials and other supplies | 0 | ||||
| Change in inventories (raw materials and other supplies) | 0 | ||||
| Other purchases and external charges | 2,130,369 | 1,745,487 | |||
| Taxes, duties and other levies | 2,611,034 | 129,284 | |||
| Wages and salaries | 792,428 | 649,380 | |||
| Social security charges | 334,152 | 266,126 | |||
| Fixed assets: depreciation and amortization | 0 | ||||
| Fixed assets: provisions for impairment | 0 | ||||
| Current assets: provisions for impairment | 0 | ||||
| Contingency and loss provisions | 20,347 | ||||
| Other expenses | 194,550 | 122,762 | |||
| Total operating expenses | 6,082, 881 | 2,913, 039 | |||
| OPERATING INCOME | (5,982, 740) | (2,839, 218) | |||
| Allocated income or transferred loss | 0 | ||||
| Loss incurred or transferred income | 0 | ||||
| Financial income from controlled entities | 0 | ||||
| Income from other securities and receivables | 0 | ||||
| Other interest income | 29,933 | 144 | |||
| Reversal of provisions for impairment, other provisions and expense transfers | 0 | 5,956 | |||
| Foreign exchange gains | 0 | ||||
| Net income on sale of short-term investment securities | 0 | ||||
| Total financial income/(loss) | 29, 933 | 6, 100 | |||
| Depreciation, amortization, provisions for impairment and other provisions | 0 | 0 | |||
| Interest expenses | 12,599 | 16,302 | |||
| Foreign exchange losses | 3 | ||||
| Net expenses on sales of short-term investment securities | 0 | ||||
| Total financial expenses | 12, 602 | 16 , 302 | |||
| NET FINANCIAL EXPENSE | 17, 331 | (10, 202) | |||
| RECURRING INCOME/(LOSS) BEFORE TAX | (5 , 965 , 409) | (2,849, 420) | |||
| In euros | ||||
| 2016 | 2015 | |||
| 12 months | 12 months | |||
| Non-recurring income on management transactions | 0 | |||
| Non-recurring income on capital transactions | 83,162 | 53,309 | ||
| Reversal of provisions for impairment, other provisions and expense transfers | 0 | |||
| Total non-recurring income | 83 , 162 | 53, 309 | ||
| Non-recurring expenses on management transactions | 0 | |||
| Non-recurring expenses on capital transactions | 281 | 5,111 | ||
| Depreciation, amortization and provisions for impairment | 0 | |||
| Total non-recurring expenses | 281 | 5, 111 | ||
| NET NON-RECURRING EXPENSE | 82, 881 | 48, 198 | ||
| Employee profit sharing | 0 | |||
| Corporate income tax | 802,365 | 661,939 | ||
| TOTAL INCOME | 213, 235 | 133, 230 | ||
| TOTAL EXPENSES | 6,898, 129 | 3,596, 391 | ||
| NET INCOME | (6,684, 893) | (3,463, 161) | ||
French GAAP Balance Sheet
| In euros | ||||||||||||
| ASSETS | Gross amount | Depr., amort. & prov. | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||
| 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 | 326,405,364 | 326,405,364 | 361,229,772 | |||||||||
| Other long-term investments | - | - | ||||||||||
| Loans | - | - | ||||||||||
| Other financial fixed assets | 725,947 | 725,947 | 643,078 | |||||||||
| FIXED ASSETS | 327,131, 311 | - | 327,131, 311 | 361,872, 850 | ||||||||
| 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 | 3,046,532 | 3,046,532 | 266,196 | |||||||||
| Subscribed capital, called up but not paid | - | - | ||||||||||
| Short-term investment securities | - | - | ||||||||||
| Cash and cash equivalents | 3,748,046 | 3,748,046 | 109,145 | |||||||||
| CURRENT ASSETS | 6,794, 577 | - | 6 , 794 , 577 | 375, 341 | ||||||||
| Prepaid expenses | 44,035 | 44 035 | 58,718 | |||||||||
| Adjustment accounts | - | - | ||||||||||
| TOTAL ASSETS | 333,969, 924 | - | 333,969, 924 | 362 , 306 , 909 | ||||||||
| In euros | ||||||||||||
| EQUITY AND LIABILITIES | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||||
| Capital | ||||||||||||
| Share capital (including paid-up capital: 66,862,500) | 66,862,500 | 160,470,000 | ||||||||||
| Additional paid-in capital | 99,004,926 | 5,388,776 | ||||||||||
| Revaluation reserve | 152,341,864 | 152,341,864 | ||||||||||
| Reserves | ||||||||||||
| Legal reserve | 16,047,000 | 16,047,000 | ||||||||||
| Statutory or contractual reserves | 0 | - | ||||||||||
| Regulated reserves | 0 | - | ||||||||||
| Other reserves | 10,670 | 30,188,422 | ||||||||||
| Retained earnings | ||||||||||||
| Retained earnings | 24,910 | 30,409 | ||||||||||
| Net income/(loss) for the year | (6,684,893) | (3,463,161) | ||||||||||
| Interim dividend | 0 | 0 | ||||||||||
| Investment subsidies | - | |||||||||||
| Regulated provisions | - | |||||||||||
| SHAREHOLDERS' EQUITY | 327,606, 977 | 361,003, 310 | ||||||||||
| Income from the issue of equity instruments | - | |||||||||||
| Contingent advances | - | |||||||||||
| OTHER EQUITY | - | - | ||||||||||
| Contingency provisions | ||||||||||||
| Loss provisions | 20,347 | |||||||||||
| CONTINGENCY AND LOSS PROVISIONS | 20 , 347 | - | ||||||||||
| Non-current borrowings and debt | ||||||||||||
| Convertible bonds | 0 | - | ||||||||||
| Other bonds | 0 | - | ||||||||||
| Bank borrowings | 0 | - | ||||||||||
| Miscellaneous borrowings and debt | 2,079,134 | 0 | ||||||||||
| Trade accounts payable and other current liabilities | ||||||||||||
| Advances/down payments received on orders in progress | - | - | ||||||||||
| Trade accounts payable | 3,769,534 | 823,375 | ||||||||||
| Tax and social liabilities | 493,932 | 480,224 | ||||||||||
| Amounts owed to fixed asset suppliers | 0 | |||||||||||
| Other liabilities | 0 | 0 | ||||||||||
| Prepaid revenue | 0 | 0 | ||||||||||
| LIABILITIES | 6,342, 600 | 1 , 303 , 599 | ||||||||||
| Adjustment accounts | 0 | 0 | ||||||||||
| TOTAL EQUITY AND LIABILITIES | 333,969, 924 | 362,306, 909 | ||||||||||
[1] Companies may maintain SIIC (REIT) status provided that one or several shareholders acting in concert within the meaning of Article L.223-10 of the French Commercial Code ( Code de commerce ) does not directly or indirectly hold 60% or more of their capital (see also Article 208C of the French Tax Code ( Code général des impôts )).
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