Q1 2018 Earnings Presentation - Haya Real Estate
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Q1 2018 Earnings Presentation 24 May 2018 Haya Real Corporativa Presentación Estate 1 1
Disclaimer The purpose of this presentation is purely informative. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Haya Real Estate, S.L. (together with any of its subsidiaries, “Haya Real Estate”). Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such profession or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making the presentation available, Haya Real Estate gives no advice and makes no recommendation to buy, sell or otherwise deal in any securities or investments whatsoever. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. This presentation contains forward-looking statements regarding Haya Real Estate’s financial position and plans for future operations. All statements other than statements of historical facts may be forward- looking statements. These forward-looking statements speak only as of the date of the notice and are subject to a number of factors that could cause actual results to differ materially from any expected results in such forward-looking statements. Haya Real Estate expressly disclaims any obligation or undertaking to update or revise any forward-looking statement (except to the extent legally required). Haya Real Estate uses certain alternative performance measures (APMs), which have not been audited, Adjusted EBITDA and Free Cash Flow, to benchmark and compare performance, both between its own operations and as against other companies for a better understanding of Haya Real Estate financial performance. These measures are used, together with measures of performance under the International Financial Reporting Standards (IFRS), to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Haya Real Estate believes that EBITDA-based and other measures are useful and commonly used measures of financial performance in addition to net profit, operating profit and other profitability measures under IFRS because they facilitate operating performance comparison from period to period and company to company. By eliminating potential differences in results of operations between periods or companies caused by factors such as depreciation and amortization methods, historic cost and age of assets, financing and capital structures and taxation positions or regimes, Haya Real Estate believes that EBITDA-based and other measures can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated. For these reasons, Haya Real Estate believes that EBITDA-based and other measures are regularly used by the investment community as a means of comparison of companies in the industry. However, these measures are considered additional disclosures and in no case replace the financial information prepared under IFRS. Moreover, the way Haya Real Estate defines and calculates these measures may differ to the way similar measures are calculated by other companies. Accordingly, they may not be comparable. Regarding any data which may have been provided by third parties, neither Haya Real Estate, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these contents are exact, accurate, comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in by any means, Haya Real Estate may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in case of any deviation between such a version and this one, Haya Real Estate assumes no liability for any discrepancy. Haya Real Estate 22 2
Today´s Presenters
Carlos Abad Rico Bárbara Zubiría Furest
CEO & Director of the CFO
Board
Haya Real Estate 33 3
Agenda
01 Key Highlights
02 Business Review
03 Financial Review
04 Annex
Haya Real Estate 44 41. Key Highlights
Haya RealHaya
EstateReal Estate 51 Key Highlights
✓ In Q1 ´18, our transaction volumes increased by +40% (€895MM), allowing 12% growth in revenues
(€55.9MM) and 6% growth in Adjusted EBITDA (€24.4MM)
✓ Strong free cash flow generation in Q1 ´18 (€20.2MM, +59% YoY) driven by lower capex and an
improvement of in working capital, resulting in a cash conversion above 80% in the quarter
✓ Leverage ratio below 3.0x
✓ Assets under management at €39.8BN with new contract wins in the quarter. We continue to
develop our institutional asset management business
✓ In April, we have been awarded the new Bankia contract with a tenor of 10 years, including the
REOs of Bankia’s recently merged entity Banco Mare Nostrum (BMN). Bankia REDs to be managed
by Bankia directly
Haya Real Estate 66 62. Business Review
Haya RealHaya
EstateReal Estate 72 Strategic Update
2018
1 2 3 4 5 6 7
Institutional
Future of Bankia / Liberbank Investors and Capital
Cajamar BMN Integration
BBVA
Sareb contract New Servicing Markets
Business
Strong performance Haya awarded Initiating joint Haya has been Continuing
in Q1 ´18 across all Excellent the new Integration planning activities awarded two new preparatory works
business lines. Sareb operational servicing plans on for the servicing of servicing contracts for a potential IPO.
is exploring performance in contract with schedule. Focus BBVA´s future REO with institutional Specific timetable
alternative scenarios Q1 ´18 across all Bankia/BMN in a on improving flows. Set up of investors. Continued will depend on
which include the business lines very competitive commercial Cerberus/BBVA JV focus to capture new market conditions
potential sale of our process in April activity Co yet to be business in the and visibility over
portfolio 2018 completed market Sareb and BBVA
Haya Real Estate 88 82 Bankia / BMN Contract
The novation of the Bankia contract proves our capacity to renew our existing contracts with our core clients
• As a result of the Spanish government’s plan to add value to the bank, Bankia bought BMN (savings bank located in the
Mediterranean region), effective Jan 1st 2018
• Bankia has entrusted in Haya Real Estate the management of all its real estate assets, including the BMN´s REOs portfolio
✓ Key contract for the company’s long-term strategy
✓ 10 years contract (expires April, 2028) for the management and commercialization on a exclusive basis of Bankia´s REO stock
and future flow with €5.7BN of assets under management at the beginning of the contract
Contract ✓ Bankia´s prohibition to lend to real estate developers has been lifted
Highlights
✓ HRE has been awarded the contract in a very competitive process demonstrating our capacity to retain core clients
✓ Pre-eminent position to capture new business due to our long-term relationship and our excellent service
✓ Upfront payment of €108MM to be financed through operating cash flows
Haya Real Estate 99 92 BBVA/Cerberus transaction
BBVA/Cerberus transaction extends HRE´s success in securing new contracts
Servicing contract: BBVA & Haya
• Agreed form subject to the closing of the
Servicing contract for future REOs inflows
Cerberus/BBVA JV transaction
• 8 yr. with a potential extension of two additional
years
• No upfront payment will be required
REOs stock in
Spain @ cut-off • Preparatory activities with BBVA / Anida have begun
date
Potential servicing contract: JV Co & Haya
• Cerberus/BBVA JV transaction has been approved by
JV Co Servicing contract for the JV Co stock TBD Anti-trust/Competition Authorities
~€11,000MM – €13,000MM1 • JVCo management bodies are pending to entrust
servicing of acquired stock
• Haya is well positioned to participate in the servicing
80% 20%
of the JV Co due to demonstrated experience, track
record and relationship with Cerberus/BBVA
10 10
(1) Depends on final perimeter agreed between BBVA & Cerberus
Haya Real Estate 102 Sareb – Potential Scenarios
1 May ´18 Significant
Cerberus
Potential new servicing contract ✓ Protection mechanisms:
Sareb decides to portfolio Sale • Portfolio sales above the
Buyers Potential new servicing contract threshold agreed in the
sell a significant Other Retain Haya as servicer
contract will increase the
portfolio Portfolio Sale Migration period
funds avg. portfolio sale
Commission Does not retain Haya as servicer
commission
2 Sareb cancels ✓ Make whole payment:
Sareb decides to May ´18 the contract Dec ´19 • The indemnity will be
Migration period calculated by an
cancel the contract
independent expert, with
before Dec. 2019 Early termination make whole payment: value of the a penalty factor to be
contract for the remaining life applied
3 May ´18
Jun ‘19
Dec ´19
Sareb decides to or before ✓ No upfront payment expected
renew the contract × Potential reduction in fees
Negotiations Potential new contract with new terms
with new terms
HRE & Sareb
4 Sareb decides not May ´18 Jun ´19 Dec ´19 ✓ Absolute focus on operational
Migration period
to renew the excellence to Sareb to maximize
contract at its We continue
Notice of
We continue our renewal options
maturity working with Sareb working with Sareb
termination
Leverage ratio under any scenario not to exceed 3.5x in 2020
Haya Real Estate 11 11
112 New business update
• Two new servicing agreements
3 potential portfolio sales in
1
•
New servicing awarded by two different institutional
Non Binding Offer or Binding
New investors
agreements with servicing
Potential
Offer phases
institutional • In both cases, we continue to service Opportunities
agreements • 1 strong HPM lead (250
portfolios sold by our clients
investors assets with potential to grow
• Our knowledge of the NPAs allows us to
up to 5,000)
offer our services to potential buyers
2 Insurance • Rental management business
• New contract awarded with an insurance company
companies
• Identifying new opportunities in the market with other insurance companies
3
• Negotiations in place to offer:
Developers • Land identification
• Due diligence and administration
• REOs commercialization for their non core portfolio
4 Other
opportunities
•
•
•
Ancillary services with current clients: tax, residential mortgage debt and property management
Managing ad-hoc REO commercialization
Land development: 50 new land plots analysed in Q1 ´18; potential purchases: family offices, private bankers
Haya Real Estate 12 12
123. Financial Review
Haya RealHaya
EstateReal Estate 133 Q1 2018 Key Financial Highlights
RED Volumes
€272.0 MM
+2% YoY
Assets Under Transaction
Management Volumes
REO Co. Volumes
€39,807 MM €895.2 MM €296.8 MM
+0.9% YoY +40% YoY +104 YoY
REO Volumes
€326.4 MM
+46% YoY
Revenues Adjusted EBITDA Free Cash Flow Net Debt
€55.9 MM €24.4 MM €20.2 MM €414 MM
+12% YoY +6% YoY +59% YoY
Avg. Volume serv. fee 3.59% EBITDA margin 44% Cash conversion 83% Leverage ratio 2.8x
Avg. Mangmt. fee 0.20%
Haya Real Estate 14 14
143 Assets Under Management
AuMs decreased by €352MM compared to December 2017 mainly due to natural evolution of the Sareb portfolio (closed perimeter)
partially offset by the inflows from the existing contracts during the fist quarter of 2018
Asset under Management evolution (GBV)
(€ MM)
(251) 227 RED REO
435
Increase Decrease
82
(631)
104
Total 40,159 74 (392) Total 39,807
11,918
12,053
28,241
27,754
AuMs EoP 2017 Inflows from Inflows in Outflow REO Co Inflow REO Co Outflows from AuMs 1Q ´18
new contract existing recoveries
wins contracts
Haya Real Estate 15 15
153 Terms of New Bankia Contract
Main Terms AuMs evolution proforma
(€ MM)
• Current stock
Total 39,807 Total 39,920
REOs
Portfolio
• Future inflow Bankia
14,107
12,053
+€3.7BN from Bankia
AuMs €5.7BN +€2.0BN from BMN Bankia
+ Future flow
1,941 2,054
• Indefinite tenor with a period of 27,754
Tenor 10 years 3,685 25,813
exclusivity due to April, 2028 Very low remaining
actionable perimeter + 17,376 assets 5,739
< 2% revenues + 600 bank branches
contribution in 2017
• Financed through operating cash flows 1,941
Upfront • Deferred payment
payment €108MM
• €40.8MM paid in April AuMs Bankia Q1 ´18 Bankia REDs BMN Future inflows Bankia Q1 ´18 AuMs
Q1 ´18 Q1 ´18
• €20.0MM expect to pay in July proforma
Proforma
• €46.8MM expect to pay In October
Haya Real Estate 16 16
163 Transaction volumes
Transaction volumes increased by 40% compared to Q1 ´17 due to the overall strong performance in all of our contracts
Transaction volumes comparison
(€ MM)
REO
895.2 • REO volumes increased by 46% due to:
+40%
• Overall strong performance in the contracts and the inclusion of €75MM coming from the Liberbank
contract
326.4 • Portfolio sales in Bankia and Cajamar with no corresponding impact in 2017
637.2
REO Co.
223.6
• REO Conversion volumes increased by 104% impacted by:
296.8 • Strong activity in Sareb resulting in a sharp increase in number of claims filed during the period
145.8 • Large deeds in lieu and foreclosures in Cajamar
RED
267.8 272.0
• RED volumes increased by 2% impacted by:
• Lower recoveries in Sareb, offset by stronger performance in Bankia and in other clients
Q12017
Q1 ´17 Q12018
Q1 ´18
RED REO Co REO
Haya Real Estate 17 17
173 Revenues
Revenues increased by 12% due to the increase in volume and management fees mainly impacted by the strong performance in REOs, REO
Conversion and the Liberbank contribution during Q1 ´18
Revenues Comparison
(€MM)
Volume fee
+12% • Volume fee increased by 20% mainly due to:
55.9 • strong performance in REOs due to the Liberbank contribution
3.3 (6%) • improvement in REO Co due to high transaction volumes in Sareb and Cajamar
49.7 • The average volume servicing fee as % of volumes was 3.59% due to the product mix and the portfolio sales
which have contractually lower commissions
3.9 (8%)
20.5
REO RED
(37%) Breakdown REO
Q1 ´17: 36% RED Q1 ´18: 42% 41%
19.1 by product 53%
€26.7MM REO Co €32.1MM REO Co
(38%) 11% 17%
Management fee Other Revenues
• The management fee increased by 7% due to the • The other revenues decreased by 16%
32.1 Liberbank and other clients contribution, which (€0.6MM) impacted by lower activity in
26.7 (57%) have offset the decline in Sareb due to the closed Advisory and Securitization business lines
(54%) nature of the perimeter under management
4.19% 3.59%
• In the context of the CNMV review of our 2017 Financial Statements due to the IPO preparatory works, we have
Revenues from changed the accounting policy applied to Sareb´s upfront payment, treating it in 2017 as an intangible asset, and
Q12017
Q1 ´17 Q12018
Q1 ´18 Sareb contract amortized over the contract term, in consistency with the accounting treatment given to other contracts.
Therefore, no adjustment to revenues is required and prior periods have been restated for comparative purposes
Volume fee Management fee Other revenues
(%) of total % average volume servicing fee
Haya Real Estate 18 18
183 Adjusted EBITDA bridge
Adjusted EBITDA increased by 6% compared to Q1 ´17 explained by a strong performance in REO Co, REOs and the Liberbank
contribution
Adjusted1 EBITDA Bridge
(€ MM)
1.4
(0.6) 1 Operating costs impacted by:
(4.2)
5.4 • New costs associated to the Liberbank
(0.6) contract
1
• Higher related direct costs (litigation) due
2 to REO Conversion transaction volumes
increase
• Higher opex due to temporary external
workforce and professional services and
24.4
23.0 new commercial campaigns
43.7%
46.4%
2 Personnel costs impacted by:
LTM 50.8% LTM 60.2%
• Liberbank contract acquisition, partially
offset by lower severance costs.
1Q
Q12017
´17 Volumen fee Management fee Other revenues Operating costs Personnel costs Q12018
1Q ´18
% Adjusted EBITDA margin
(1) Adjusted EBTIDA is the sum of GAAP operating profit plus D&A, adding back €2.1MM costs estimated to have been incurred in
Haya Real Estate
connection with the IPO exploratory activities
19 19
193 Free Cash Flow and Net Debt Position
Free cash flow increased by 59% (€20.2MM) and the leverage ratio is 2.8x as of March 2018
Free Cash Flow Net Debt
(€ MM)
Q1 ´17 Q1 ´18
• Repayment of €18MM of Liberbank´s VAT facility
Free Cash • Leverage ratio in Q1´18 below 3.0x
Adjusted EBITDA2 23.0 24.4 Main
Flow1
Highlights • The Bankia´s upfront payment of €108MM will be
Comparison Capital expenditures paid -5.9 -4.9
Change in working capital -4.4 0.7 financed through the operating cash flows:
Free Cash Flow 12.7 20.2
(€ MM) (€ MM)
443.1
5.1 414.1
1.0
1.4
Improvement in
20.2
working capital due to 3.0x 2.8x
the higher collections
12.8
partially offset by higher
55% payments 83%
1Q 2017 Adjusted
EBITDA Capital expenditures Change in working 1Q 2018 2017 Q12018
1Q ´18
Q1 ´17 EBITDA
Q1 ´18
capital
% Cash Conversion: FCF / Adjusted EBITDA2 Leverage ratio: Net debt / Adjusted EBTDA2
(1) Free Cash Flow is defined as Adjusted EBITDA less capital expenditures and change in working capital. (2) Adjusted EBTIDA is the sum of GAAP operating profit
Haya Real Estate plus D&A, adding back €2.1MM costs estimated to have been incurred in connection with the IPO exploratory activities
20 20
204. Annex
Haya RealHaya
EstateReal Estate 214 Q1 ´18 Key Metrics
(€ MM)
Q1 ´17 Q1 ´18 (%)
Total transaction volumes 637.2 895.2 40.5%
Revenues 49.7 55.9 12.4%
Volume fee 26.7 32.1 20.3%
Management fee 19.1 20.5 7.2%
Other revenues 3.9 3.3 -16.1%
Operating expenses 26.6 31.4 18.0%
P&L
Other operating expenses1 14.3 18.5 29.4%
Personnel Cost 12.4 13.0 4.8%
Adjusted EBITDA2 23.0 24.4 6.0%
Adjusted EBITDA margin 46.4% 43.7% -5.7%
Adjusted EBIT1 5.5 2.0 -64.0%
Adjusted EBIT margin 11.2% 3.6% -68.0%
Assets under management 40,159 3 39,807 -0.9%
Average volume servicing fee 4.19% 3.59% -14.4%
Other Average management servicing fee 0.20% 0.20% 0.3%
Key
Metrics Free cash flow 12.7 20.2 58.8%
Net debt position 443.1 3 414.1 -6.5%
Leverage ratio 3.0x 3 2.8x -7.9%
(1) Other operating expenses adjusted by €2.1MM costs estimated to have been incurred in connection with the IPO exploratory
activities (2) Adjusted EBTIDA is the sum of GAAP operating profit plus D&A, adding back €2.1MM costs estimated to have been
Haya Real Estate incurred in connection with the IPO exploratory activities (3) Figures as of December, 2017 22 22
22Calle Vía de los Poblados nº3. Parque Empresarial Cristalia, Edificio nº9, CP 28033, Madrid
901 11 77 88 | www.haya.es
Haya Real Estate 23You can also read
