CORESTATE Capital Group - A Leading Real Estate Investment Manager H1 2017 Earnings Presentation
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CORESTATE Capital Group
A Leading Real Estate Investment Manager
H1 2017 Earnings Presentation
16 August 2017
Page 1 | CORESTATE Capital Holding S.A.Disclaimer
This presentation contains forward-looking statements that involve a number of 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 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.
All information on H1 2017 is unaudited.
Page 2 | CORESTATE Capital Holding S.A.Executive Management Team
Sascha Lars Thomas
Wilhelm Schnidrig Landschreiber
CEO CFO CIO & Co-Founder
Key Responsibilities: Key Responsibilities: Key Responsibilities:
• Strategy • Financing • Deal sourcing
• Equity raising and client relations • Investor Relations • Acquisition structuring
• Organisation & corporatefunctions • Accounting and consolidation • Transaction execution
• Real estate managementservices • Controlling and reporting • Asset disposals
• Human resources • Tax and investment structuring
• Risk management
Experience: Experience: Experience:
• >14 years of real estate investment and • 17 years of CFO experience on board / • >27 years of executing real estate
general management experience senior management level transactions
• Selected prior experience: Advisor to • Selected prior experience: Vonovia Finance • Selected prior experience: Cerberus
Cerberus Capital Management B.V, Vonovia SE, HypoVereinsbank AG Capital Management and UniCredit
Page 3 | CORESTATE Capital Holding S.A.CORESTATE at a Glance
Total assets under management Comprehensive local and international footprint
(AuM) of c. € 20 bn(1)
Mainoffices
Total transaction volume of more than € 30 bn(2) Secondary offices
Attractive and diversified offering across many Hamburg
asset classes, matching needs of different client London
Hanover Berlin
Magdeburg
types (institutional, family office and retail) Essen
Solingen
Leipzig
Gera
Luxembourg(HQ) Frankfurt
Neu-Isenburg
Excellent access to assets through Pullach
strong sourcing capabilities Zurich
(current pipeline worth € 4.9 bn) Baar Wollerau
> € 12 bn(2) equity raised from large
and broad client network Madrid
> 470 FTEs in 29 offices in 6 countries with
direct access to local real estate markets
Singapore
Expansion from a solid basis in Germany across
Europe enhances our long-term growth profile
Note: The key figures of the Hannover Leasing Group (HL) and Helvetic Financial Services AG (HFS) have already been taken into account in the corporate
figures of the CORESTATE Group on this page, if not indicated otherwise
(1) Forecast end of period 2017
(2) Since inception Page 4 | CORESTATE Capital Holding S.A.Agenda
1 H1 2017 Highlights
2 Update on Acquisitions
3 Outlook
4 Appendix
Page 5 | CORESTATE Capital Holding S.A.1 H1 2017 Highlights
Page 6 | CORESTATE Capital Holding S.A.H1 2017 – Key Highlights (1/3)
Reported figures do not include the HL and HFS acquisitions, unless indicated otherwise
Company Development: Pro Forma Assets Under Management Sourcing Pipeline
€ billion € billion
• Increased AuM to c. €20 bn(1,2) through
transformational acquisitions of Hannover 4,9 c. 20
Leasing (HL) and Helvetic Financial
11,6 1,7 4,9
Services (HFS)
• Substantially broadened product offering 3,2
across real estate equity and mezzanine
debt 3,5
• Sourcing pipeline increased to €4.9 bn(2),
enabling further organic growth (3) (1) (1) (1,2) (2)
H1 2017 HL HFS Post Pre HL & HFS Post
Acquisitions Acquisitions Acquisitions
Operations: Stand-alone Assets Under Management
• Significantly increased transaction volume € billion
through new and exclusive investment
3,5
mandates +52%
• Organic AuM growth of €1.2 bn on a year- 2,3
on-year basis Strong organic AuM growth
pre acquisitions of HL and HFS
• Continued focus on realising further
synergies and growth opportunities post HL
and HFS acquisition
H1 2016(3) H1 2017(3)
(1) Forecast end of period 2017
(2) Post acquisition of Hannover Leasing and Helvetic Financial Services
(3) As of 30 June Page 7 | CORESTATE Capital Holding S.A.H1 2017 – Key Highlights (2/3)
Reported figures do not include the HL and HFS acquisitions, unless indicated otherwise
Financials:
Aggregate Revenues(1) Recurring Fee Revenues(2)
• Aggregate revenues grew by 116% € million € million
organically to €48.6 m 48,6
• Strong growth of recurring fee revenues 2.2x 23,3
• Achieved high organic growth across key 22,5 1.8x
12,9
(adjusted) profitability metrics
• Dividend payout of €1.00 per share (70% of
adjusted 2016A net income) H1 2016 H1 2017 H1 2016 H1 2017
Guidance:
• Increased 2017E guidance during H1 Adj. EBITDA(3) Adj. Net Income(3)
2017 for the second time since the 2016 € million € million
financial report 26,0
22,8
• Increase in guidance primarily driven by
3.8x
contributions from HL and HFS 4.4x
acquisitions 6,8 5,1
H1 2016 H1 2017 H1 2016 H1 2017
(1) Include Revenue from Acquisition Related Fees, Asset and Property Management, Realised Promote Fees, Share of Profit and Loss from Associates
and Joint Ventures, and Total Income from Real Estate Operations / Warehousing
(2) Include Revenue from Acquisition Related Fees and from Asset and Property Management
(3) Adjusted for one-off items (i.e. M&A transaction-related expenses, etc.) Page 8 | CORESTATE Capital Holding S.A.H1 2017 – Key Highlights (3/3)
Continued Share Price Outperformance in 2017(1) Pro Forma Shareholder Structure(2)
% 1 Jul. 2017:
• Announcement HFS
300
acquisition
• Increase of 2017E earnings
guidance to €85-90 m
Other
+151% 9,0%
8 May 2017:
250 Flygon Holding
Increase of 2017E M. Graf zu
LLC
earnings guidance Hoensbroech
40,0%
to €36-37 m 9.0%
200 23 Feb. 2017: 5 Jul. 2017: S. Ketterer
9,0%
Number of
c. €23 m capital • Closing HFS
increase acquisition shares:
19 Dec. 2016:
• c. €345 m capital
21.0 m
Announcement Early Jul. 2017:
increase(3)
HL acquisition N. Ketterer
150 Closing HL
8,0%
acquisition
Management
+31%
4.0%
100 Free Float
21,0%
50
CORESTATE (CCAP) SDAX
(1) Dividend-adjusted, re-based to starting value of 100%, share price data from 30 December 2016 to 10 August 2017
(2) Post acquisition of Hannover Leasing and Helvetic Financial Services
(3) Based on June 30, 2017 CCAP closing price of €47 per share issued against contribution in kind of all of the shares in Helvetic Financial Services
Page 9 | CORESTATE Capital Holding S.A.2 Update on Acquisitions
Page 10 | CORESTATE Capital Holding S.A.Strong Strategic Rationale – HL and HFS Complement CORESTATE
Broad Range of Assets
Retail Residential Microliving Office Hotels Aviation
Broad Range of Investment Products
Real estate equity Real estate mezzanine / debt
Managed accounts Closed-ended funds Real estate special-AIF Open-ended funds Real estate mezzanine /
“Club deals“ debt funds
Broad Client Base
Institutional investors Semi-institutional clients Private clients Real estate companies
(Family offices / UHNWI) & developers
Page 11 | CORESTATE Capital Holding S.A.Achievement of Substantial Size Through HL and HFS Acquisition
Pro Forma AuM(1,2)
Post acquisition of HL and HFS,
CORESTATE will reach an AuM base of c.
Non-Strategic Strategic
20% 80% €20 bn(1,2)
Non-strategic
20%
Achievement of critical scale will help drive
further synergy potential
Aviation AuM:
7%
c. € 20 bn Combined asset base covers broad product
Real estate
Real estate
equity
range across attractive market segments
debt products products
21% 52%
Platform approach results in enhanced
visibility of sourcing pipeline
Non-strategic assets with expected runoff
until maturity
(1) Forecast end of period 2017
(2) Post acquisition of Hannover Leasing and Helvetic Financial Services
Page 12 | CORESTATE Capital Holding S.A.HL and HFS Will Be Fully Consolidated From Q3 2017 Onwards
IPO Hannover Leasing Acquisition BaFin approves Hannover Leasing Acquisition 1st-Time Consolidation of
HL and HFS(2)
Oct-16 Dec-16 Feb-17 Jun-17 Jul-17 Aug-17
Capital Increase Helvetic Financial Services Acquisition H1 Earnings
Announcement
• Strategic acquisition – the combined servicing • Strategic acquisition – broadens CORESTATE’s
platform positions CORESTATE to effectively exploit product portfolio with mezzanine/debt funding
the consolidation theme offering
• Adds c. € 11.6 bn of AuM(1) • Adds c. € 4.3 bn of AuM(1)
• High expected recurring revenue • Leading player in mezzanine financing in the German
residential & commercial real estate market
• Accretive to 2018 earnings
• Immediately earnings accretive
• Open- and closed-end funds
• Mezzanine/debt funds
• Allows CORESTATE to access a broader retail and
institutional investor base • Allows CORESTATE to access a broader institutional
investor base
• Portfolio includes offices, hotels and aviation
• Sustainable business in a regulated environment
• High expected synergy potentials (e.g. cross-selling)
(1) Forecast end of period 2017
(2) Both the Hannover Leasing and Helvetic Financial Services acquisition closed in early July 2017
Page 13 | CORESTATE Capital Holding S.A.Tangible Asset Pipeline Will Lead to Further Organic Growth
Large and Visible Pipeline
Pipeline CORESTATE Pre HL / HFS Acquisition(1) Pipeline CORESTATE Post HL / HFS Acquisition
HFS seed
assets
6%
Exclusive
Exclusive 16%
21%
Under review /
€ 3.2 bn LOI status / In Under review / € 4.9 bn LOI status / In
Opportunity due diligence Opportunity due diligence
identified 13% identified 25%
66% 53%
Unique deal access through complementary sourcing platform:
Highly experienced asset sourcing team
Collaborating with 1,500 local agents
Broad network of advisors, banks, real estate companies, servicers, and
insolvency receivers
CORESTATE’s strong sourcing capabilities lead to a large deal
pipeline with high volume of realisable investment mandates
(1) As of June, 2017
Page 14 | CORESTATE Capital Holding S.A.Pro Forma Balance Sheet Structure Post HL and HFS Acquisition
Preliminary Pro Forma Consolidated Balance Sheet as of Closing: c. € 1,200 m(1,2,3)
287 Other Liabilities(5)
Goodwill(4) 571
Non-Strategic Assets
215
Financing (Non-Recourse)(5)
62 RCF (Non-Recourse)
Alignment Capital Investments 60 19 Acquisition Debt (Non-Recourse)
150 Acquisition Debt (Recourse)
9 Corporate Debt (Recourse)
Other Assets(5) 290
Own Real Estate 39
457 Equity(4)
Assets in Warehouse 134
Cash & Cash Equivalents 105
Assets Equity & Liabilities
(1) Preliminary, subject to further review of Purchase Price Allocation (PPA), and Closing Accounts Mechanism for Hannover Leasing Transaction. (4) Based on June 30, 2017 CCAP closing price of € 47 / Share.
(2) CCAP, including Hannover Leasing, Helvetic Financial Services. (5) Includes non-strategic products from Hannover Leasing to be reduced over medium term and resulting from historic leasing structures.
(3) Hannover Leasing based on December 31, 2016 accounts.
Page 15 | CORESTATE Capital Holding S.A.3 Outlook
Page 16 | CORESTATE Capital Holding S.A.Strategy Outlook
CORESTATE aims to become the leading European real estate investment manager
Product Introduction of additional mid- and long-term investment products tailored towards
Offering our expanding institutional and retail client base
CORESTATE’s scalable business platform is well-positioned to play an active
Consolidation role as a consolidator
Successful integration management through recruitment of managers with relevant
Integration expertise and SAP implementation to integrate finance functions across the Group
Geographic Leverage our existing strong footprint in European core markets to increase our
Presence international presence
Page 17 | CORESTATE Capital Holding S.A.Confirmation of the 2017 Management Guidance
Aggregate Revenues Adj. EBITDA Adj. Net Income
€ million € million € million
170-180(2) 85-90(1,2)
115-120(1,2)
80-82
36-37(1)
42-43(1)
2017E 2017E 2017E 2017E 2017E 2017E
Latest Guidance Latest Guidance Latest Guidance Latest Guidance Latest Guidance Latest Guidance
Pre Acquisitions Post Acquisitions Pre Acquisitions Post Acquisitions Pre Acquisitions Post Acquisitions
CORESTATE confirms its 2017 full-year guidance with expected net
income before one-off items of €85–90 million
(1) Adjusted for one-off items (i.e. M&A transaction-related expenses, etc.)
(2) Post acquisition of Hannover Leasing and Helvetic Financial Services, which are consolidated from Q3 2017 onwards
Page 18 | CORESTATE Capital Holding S.A.4 Appendix
Page 19 | CORESTATE Capital Holding S.A.Balance Sheet (1/2)
Assets Comments
unaudited audited
(k€)
30.06.2017 31.12.2016 • Net increase in Investment in Associates and Joint
Ventures by 13.3% due to:
Non-Current Assets
• Project Highstreet: Real estate portfolio
Property, Plant and Equipment 1,358 1,235
comprising retail properties in mid-sized German
Intangible Assets 1,578 930 cities with a targeted aggregate gross asset
value of up to €210m
1 Investment in Associates and Joint Ventures 40,486 35,747
1 • Project Liver: Acquisition of the Grade A Royal
Other Financial Instruments 4,199 2,217 Liver Building office building in Liverpool
Long-term Loans to Associates 656 2,493 • Asset management mandates and sale of retail
portfolios to funds of the Bayerische
Deferred Tax Assets 2,696 2,363
Versorgungskammer (90 properties in German
Total Non-Current Assets 50,973 44,985 cities and sub-portfolios acquired as part of
HIGHSTREET projects)
Current Assets
Advance Payments for Property
1,900 1,305
Purchase Prices
• Warehousing transfer of commercial property holding
2 Inventories 41,133 15,905
2 subsidiaries to Project HIGHSTREET VII in June 2017
Receivable from Joint Venture & Associates 7,305 9,294
3 Trade Receivables 11,185 5,271 • Increase in Receivables due to higher extent of
3 business
Other Current Assets 10,519 5,636
4 Cash and Cash Equivalents 61,777 48,209
• Increase in cash holdings by 28.1% due to strong
Total Current Assets 133,818 85,619
4 operating performance and new equity issuance
Total Assets 184,792 130,605
Page 20 | CORESTATE Capital Holding S.A.Balance Sheet (2/2)
Liabilities & Equity Comments
unaudited audited
(k€)
30.06.2017 31.12.2016 • Issuance of 996,318 new shares (c.8% of share capital)
Equity
through placement by way of an accelerated book
1 building process in February 2017. Share count as of 30
1 Share Capital 1,021 946
June 2017: 13,606,999
1 Other Reserves 94,287 69,699
2 Net Profit / (Loss) for the Period 19,443 15,396
Subtotal Capital Accounts of shareholders of
114,751 86,040 • Ongoing strong momentum in business activities and
parent company
2 earnings providing a further boost to the CORESTATE’s
Non-controlling Interests 586 405
equity capital
Total Equity 115,337 86,446
Non-Current Liabilities
Long-term Financial Liabilities to Banks 13,983 14,126 • Loan facility for the acquisition of real estate assets in
3 Europe
Net Employee defined Benefit Liabilities 94 102
3 Other non-current Liabilities 29,567 9,730
Total Non-Current Liabilities 43,643 23,957
4 • Increase in trade payables due to higher extent of
Current Liabilities business activities
Short-term Financial Liabilities to Banks 2,629 4,004
Short-term Liabilities to Associates 283 948
4 Trade Payables 11,966 7,266
Current Income Tax Liabilities 1,085 1,050
Other Current Liabilities 9,848 6,934
Total Current Liabilities 25,812 20,202
Subtotal Liabilities 69,455 44,159
Total Equity and Liabilities 184,792 130,605
Page 21 | CORESTATE Capital Holding S.A.Income Statement
Comments
unaudited unaudited
(k€) 01.01.2017– 01.01.2016– • Strong increase in acquisition related fees due to
30.06.2017 30.06.2016 successful placement of Highstreet retail as well as
Revenue from Acquisition Related Fees 9,073 3,129
1
1 residential asset based investment products
Revenue from Asset and Property Management 14,263 9,806
Revenue from Promote Fees realised 13,140 (191)
Revenue from Real Estate 36,476
2
Investment Management
12,744 • Real estate investment management revenues
2 providing an attractive and stable source of earnings
Management expenses (16,351) (12,116)
Earnings from Real Estate
20,125 629
Investment Management
• Increase in total expenses reflects expansion of
Net Rental Income 1,007 172
CORESTATE’s property management business and can
Revenue from Service Charges 499 -
Net Gain from Selling Property Holding Companies 3 predominantly be attributed to real estate investment
5,359 8,543
Total Income from Real Estate
management, acquisition related, and other one-off
6,865 8,715 expenses
Operations / Warehousing
Expenses from Real Estate Operations /
(935) (84)
Warehousing
Earnings from Real Estate Operations /
5,930 8,631
Warehousing
Earnings from Alignment Capital 5,268 775
3 General, Administrative and Other Expenses (8,664) (3,261)
EBITDA 22,659 6,773
Depreciation and Amortisation (337) (167)
EBIT 22,322 6,606
Net Financial Income / (Expenses) (2,047) (1,847)
EBT 20,275 4,759
Income Tax Expenses (620) (1,104)
Net Profit / (Loss) for the Period 19,656 3,655
Attributable to equity holders of parent company 19,443 3,554
Attributable to non-controlling interests 212 101
Page 22 | CORESTATE Capital Holding S.A.Cash Flow Statement
Comments
unaudited unaudited
(k€) 01.01.2017– 01.01.2016– • Issuance of 996,318 new shares (c.8% of share capital)
30.06.2017 30.06.2016
Earnings before Taxes (EBT) 20,275 4,759
1 through placement by way of an accelerated book
building process in February 2017
Adjustments:
Depreciation and Amortisation 332 168
Share of results from Associates and Joint Ventures (5,255) (1,031)
• Dividend of €1 per share corresponding to dividend ratio
Total Other Adjustments 672 100 2 of c.70% based on 2016 adjusted net profit
Total Adjustments (4,252) (763)
Operating Cash Flows before changes in Working Capital 16,023 3,996
Changes in Working Capital:
Net increase / (Decrease) from Inventories and Advance Payments (68,738) 2,963
Change in Receivables and Other Assets (non-investing activities) (53,500) 8,353
Changes in Liabilities that are not attributable to Financing Activities 113,785 12,165
Total changes in Working Capital (8,453) 23,481
Cash Flows from Operations 7,570 27,477
Income Taxes Received / (Paid) (760) (403)
Net Cash Flows from Operating Activities 6,810 27,075
Inflow / (Outflow) for Alignment Capital 517 (5,332)
Purchases and Additions of Tangible and Intangible Assets (738) (322)
Net Cash Flows generated from / (used in) Investing Activities (222) (5,654)
1 Net Proceeds from Issuance of New Share Capital 22,122 -
2 Dividend Payments (13,659) -
Sale / (Acquisition) of Non-controlling Interests - (108)
Proceeds / (Repayment) of Loans and Borrowings (1,322) (7,485)
Net Interest Received / (Paid) (161) (2,356)
Net Cash Flows (used in) / from Financing Activities 6,980 (9,948)
Net Increase in Cash and Cash Equivalents 13,568 11,473
Cash and Cash Equivalents at beginning of Period 48,209 12,447
Net Increase in Cash and Cash Equivalents 13,568 11,473
Cash and Cash Equivalents at end of Period 61,777 23,920
Page 23 | CORESTATE Capital Holding S.A.Investor Contact
CORESTATE Capital Holding S.A.
CORESTATE Capital Group
4, rue Jean Monnet | L-2180 Luxembourg
corestate-capital.com
IR Contact
Alexander Groschke
Phone: 0049 69 3535630106
Alexander.Groschke@corestate-capital.com
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