Cegereal Continues Its Growth With a 30.6% Increase in EPRA Earnings

2019 Annual Results – Regulated Information

  • Rental income up 19.5%
  • Portfolio value up 3.9%
  • European leader in CSR
  • €2.3 per share dividend distribution

PARIS--()--Regulatory News:

Cegereal (Paris:CGR):

Key indicators

In millions of euros

2019

2018

Change

IFRS rental income

63.4

53.0

+19.5%

EPRA earnings

40.0

30.7

+30.6%

Portfolio value (excluding transfer duties)

1,464

1,409

+3.9%

Occupancy rate

96.9%

96.1%

+0.8 pts

LTV ratio

52.6%

54.7%

-2.1 pts

EPRA NNNAV per share excluding transfer duties (in €)

43.7

41.0

+2.4%

Jérôme Anselme, Cegereal’s Chief Executive Officer commented: “This year once again, Cegereal’s teams have enabled the Company to deliver a record performance both operationally and financially, with EPRA earnings coming out at €40 million. Illustrated in particular by the arrival of the European Banking Authority’s teams and the significant extension of KPMG France’s lease in Europlaza tower, our solid rental activity demonstrates our capacity to attract and build strong relationships with clients. Our strength lies in our capacity to offer a user experience uniting connectivity, convenience, flexibility and respect for the environment. 2020 will see us roll out the same strategy and continue to focus on our objective of increasing the value of our portfolio and our Company”.

Record 96.9% occupancy rate

The highlights of 2019 included the extension of KPMG France’s lease in Europlaza tower, in which the firm now occupies 12,600 sq.m, reaffirming the property’s continued appeal, as well as the arrival of Salto, the French VoD platform developed by television channels TF1, M6 and France Télévisions, at Arcs de Seine.

In total, leases have been renewed, extended or signed on 45% of the portfolio’s surface area in the last three years. This successful rental activity has pushed the portfolio occupancy rate to 96.9%, demonstrating the effectiveness of Cegereal’s strategy, both in terms of asset management and the close relationship the Company has with its tenants. Four out of five assets are now fully leased.

Benefiting from the many signings in 2019, Cegereal’s rental income climbed 19.5% to €63.4 million in 2019, with the December 2018 acquisition of the Passy Kennedy building contributing €9.9 million. On a like-for-like basis, rental income grew 2.2% year-on-year.

The estimated value of Cegereal’s property portfolio (excluding transfer duties) amounted to €1,464 million, up 3.9% compared with 2018. This increase was driven by the signing of leases under market-beating conditions, as well as by the desirable location of the portfolio’s different properties.

Improvement in all financial indicators

The Company’s operational and financial performance was positively impacted by its excellent rental activity as well as the full-year impact of income generated by the Passy Kennedy building. Cegereal’s EPRA earnings totaled €40.0 million in 2019, a sharp 30.6% increase on 2018.

Net attributable income came in at €80.8 million in 2019, compared with €33.4 million in 2018, mainly due to the increase in the portfolio value.

Consolidated net debt stood at €769 million at December 31, 2019, representing an LTV ratio of 52.6%, while the average maturity of the Group’s borrowings stood at 3.5 years with an average interest rate of 1.3%.

EPRA NNNAV stood at €695.1 million or €43.7 per share at end-December, up 8.7% from €639.6 million or €41 per share at December 31, 2018. This increase reflects the growth in IFRS consolidated net income to €80.8 million, mainly thanks to the €55.4 million increase in the portfolio value, offset by the dividend distribution of €36.6 million.

No. 1 in Europe in CSR

Each year since its creation, Cegereal has proven its strong engagement in respect of environmental, social and governance (ESG) issues. Its commitment and the transparency of its non-financial reporting have been commended by ratings agencies such as the European Public Real Estate Association (EPRA) and the Carbon Disclosure Project (CDP), as well as the Global Real Estate Sustainability Benchmark (GRESB), which has placed the Company in the top 3 since it first participated in the benchmark. With a score of 95/100, Cegereal reached a new milestone in 2019, climbing to number one in Europe and number three worldwide, all sectors combined.

The in-depth work carried out during the year to analyze and control the environmental indicators of each of the Company’s buildings paid off, resulting in a reduction in the portfolio’s energy consumption and greenhouse gas emissions by 30% and 42%, respectively, since 2013. In addition, its entire portfolio has achieved NF HQETM Exploitation and BREEAM In-Use International certification.

Cegereal also stands out in how it manages biodiversity across its portfolio: the Company promotes the development of the flora and fauna housed in the portfolio’s 37,300 sq.m of green space.

2020 dividend distribution: €2.3 per share

Cegereal’s recurring cash flow rose to €42.9 million, up from €35.2 million in 2018. At the next General Shareholders’ Meeting, Cegereal will recommend paying another significant dividend distribution of €2.3 per share.

* * *

Cegereal’s Board of Directors met on February 27, 2020 to approve the audited consolidated financial statements for the year ended December 31, 2019.

The annual results presentation can be viewed on the Company’s website: www.cegereal.com

About Cegereal

Created in 2006, Cegereal is a listed property company that invests in prime office properties in Greater Paris. The total value of the portfolio is estimated at €1,464 million at December 31, 2019 (excluding transfer duties).

Thanks to its strong commitment to environmental, social and governance issues, Cegereal achieved first place among listed companies in Europe in the 2019 Global Real Estate Sustainability Benchmark (GRESB) ranking. Its entire portfolio has achieved NF HQETM Exploitation and BREEAM In-Use International certification.

Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €658.5 million at February 27, 2020.

www.cegereal.com

APPENDICES

IFRS Income Statement (consolidated)

In thousands of euros, except per share data

 

 

 

2019

2018

 

12 months

12 months

 

Rental income

63 369

53 026

Income from other services

20 045

15 010

Building-related costs

(31 621)

(31 002)

Net rental income

51 793

37 034

 

Sale of building

0

0

Administrative costs

(3 885)

(4 039)

Other operating expenses

(13)

(89)

Other operating income

165

0

Increase in fair value of investment property

60 710

12 501

Decrease in fair value of investment property

(14 480)

(800)

Total change in fair value of investment property

46 230

11 701

 

Net operating income

94 289

44 607

 

Financial income

0

6

Financial expenses

(13 529)

(11 508)

Net financial expense

(13 529)

(11 502)

 

Corporate income tax

0

0

 

CONSOLIDATED NET INCOME

80 760

33 106

of which attributable to owners of the Company

80 760

33 106

of which attributable to non-controlling interests

0

0

 

Other comprehensive income

 

TOTAL COMPREHENSIVE INCOME

80 760

33 106

of which attributable to owners of the Company

80 760

33 106

of which attributable to non-controlling interests

0

0

 

Basic earnings per share (in euros)

5,10

2,40

Diluted earnings per share (in euros)

4,92

2,27

IFRS Balance Sheet (consolidated)

In thousands of euros

 

 

 

Dec. 31, 2019

Dec. 31, 2018

 

Non-current assets

 

Property, plant and equipment

38

47

Investment property

1 463 920

1 408 520

Non-current loans and receivables

23 146

20 230

Financial instruments

34

597

Total non-current assets

1 487 138

1 429 393

 

Current assets

 

Trade accounts receivable

9 720

7 747

Other operating receivables

11 607

14 726

Prepaid expenses

292

116

Total receivables

21 620

22 589

 

Cash and cash equivalents

44 880

53 367

Total cash and cash equivalents

44 880

53 367

 

Total current assets

66 499

75 957

TOTAL ASSETS

1 553 637

1 505 350

 

Shareholders' equity

 

Share capital

79 532

78 006

Legal reserve and additional paid-in capital

66 462

93 277

Consolidated reserves and retained earnings

503 513

470 500

Net attributable income

80 760

33 106

Total shareholders’ equity

730 268

674 889

 

Non-current liabilities

 

Non-current borrowings

763 974

763 321

Other non-current borrowings and debt

10 087

9 543

Non-current corporate income tax liability

0

0

Financial instruments

682

791

Total non-current liabilities

774 743

773 655

 

Current liabilities

 

Current borrowings

3 468

3 152

Trade accounts payable

12 349

24 996

Corporate income tax liability

0

0

Other operating liabilities

10 437

9 698

Prepaid revenue

22 373

18 960

Total current liabilities

48 626

56 806

 

Total liabilities

823 369

830 461

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES

1 553 637

1 505 350

IFRS Statement of Cash Flows (consolidated)

In thousands of euros

 

 

 

2019

2018

OPERATING ACTIVITIES

Consolidated net income

80 760

33 106

 

Elimination of items related to the valuation of buildings:

Fair value adjustments to investment property

(46 230)

(11 701)

Annulation des dotations aux amortissement

Indemnité perçue des locataires pour le remplacement des composants

0

0

Elimination of other income/expense items with no cash impact:

Depreciation of property, plant and equipment (excluding investment property)

9

11

Free share grants not vested at the reporting date

0

0

Fair value of financial instruments (share subscription warrants, interest rate caps and swaps)

427

473

Adjustments for loans at amortized cost

2 362

2 247

Contingency and loss provisions

0

0

Corporate income tax

Penalty interest

 

Cash ows from operations before tax and changes in working capital requirements

37 329

24 136

Other changes in working capital requirements

(8 277)

19 621

Working capital adjustments to reflect changes in the scope of consolidation

 

Change in working capital requirements

(8 277)

19 621

 

Net cash ows from operating activities

29 052

43 757

INVESTING ACTIVITIES

Acquisition of fixed assets

(9 170)

(227 422)

Net increase in amounts due to fixed asset suppliers

(1 745)

2 620

 

Net cash ows used in investing activities

(10 915)

(224 802)

FINANCING ACTIVITIES

Capital increase

11 204

79 901

Capital increase transaction costs

0

(794)

Change in bank debt

(1 500)

147 000

Issue of financial instruments (share subscription warrants)

0

0

Refinancing/financing transaction costs

(102)

(1 930)

Net increase in liability in respect of refinancing

(420)

420

Purchases of hedging instruments

0

(796)

Net increase in current borrowings

236

134

Net decrease in current borrowings

0

0

Net increase in other non-current borrowings and debt

544

3 615

Net decrease in other non-current borrowings and debt

0

0

Purchases and sales of treasury shares

(28)

(42)

Dividends paid

(36 557)

(54 813)

 

Net cash ows from nancing activities

(26 625)

172 694

Change in cash and cash equivalents

(8 488)

(8 351)

Cash and cash equivalents at beginning of period*

53 367

61 718

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

44 880

53 367

* There were no cash liabilities for any of the periods presented above.

French GAAP Income statement

In euros

 

 

 

Dec. 31, 2019

Dec. 31, 2018

 

12 months

12 months

Sales of services

248 750

249 160

NET REVENUE

248 750

249 160

Reversal of depreciation and amortization charges, impairment and expense transfers

0

235 610

Other revenue

22 559

1 886

Total operating revenue

271 309

486 656

Purchases of raw materials and other supplies

0

0

Other purchases and external charges

1 901 020

2 564 773

Taxes, duties and other levies

39 809

80 181

Wages and salaries

340 980

714 151

Social security charges

175 048

300 884

Fixed assets: depreciation and amortization

3 561

1 955

Contingency and loss provisions

0

0

Other expenses

196 229

191 927

Total operating expenses

2 656 646

3 853 871

 

 

 

OPERATING LOSS

(2 385 337)

(3 367 215)

Financial income from controlled entities

3 022 000

3 353 425

Other interest income

0

6 347

Foreign exchange gains

0

0

Total financial income

3 022 000

3 359 772

Interest expenses

104 731

85 396

Foreign exchange losses

0

0

Total financial expenses

104 731

85 396

 

 

 

NET FINANCIAL INCOME

2 917 269

3 274 376

 

RECURRING LOSS BEFORE TAX

531 932

(92 839)

Non-recurring income on capital transactions

42 347

68 222

Reversal of impairment, provisions and non-recurring expense transfers

0

194 056

Total non-recurring income

42 347

262 278

Non-recurring expenses on management transactions

5 000

0

Non-recurring expenses on capital transactions

11 352

213 895

Total non-recurring expenses

16 352

213 895

 

 

 

NET NON-RECURRING INCOME

25 995

48 383

Corporate income tax

0

0

 

 

 

TOTAL INCOME

3 335 656

4 108 706

TOTAL EXPENSES

2 777 729

4 153 162

 

 

 

NET LOSS

557 927

(44 456)

French GAAP Balance Sheet

In euros

ASSETS

Gross amount

Depr., amort. & prov.

Dec. 31, 2019

Dec. 31, 2018

 

 

 

 

Property, plant and equipment

 

 

 

 

Other property, plant and equipment

10 776

5 705

5 071

4 753

 

Financial fixed assets

Receivables from controlled entities

235 004 686

235 004 686

242 004 686

Loans

-

-

-

Other financial fixed assets

791 653

791 653

801 745

 

FIXED ASSETS

235 807 115

5 705

235 801 410

242 811 184

 

Receivables

Trade accounts receivable

233 134

233 134

241 992

Other receivables

68 291 960

68 291 960

73 376 973

 

Cash and cash equivalents

2 236 722

2 236 722

14 762 019

 

CURRENT ASSETS

70 761 815

70 761 815

88 380 984

 

Prepaid expenses

-

-

11 206

 

TOTAL ASSETS

306 568 930

5 705

306 563 225

331 203 374

In euros

 

 

EQUITY AND LIABILITIES

 

 

Dec. 31, 2019

Dec. 31, 2018

 

 

 

 

 

Capital

 

 

 

Share capital (including paid-up capital: 66,862,500)

79 532 200

78 006 250

Additional paid-in capital

 

 

59 463 926

86 278 764

Revaluation reserve

 

 

152 341 864

152 341 864

 

 

 

 

Reserves

 

 

 

Legal reserve

 

 

7 800 625

7 800 625

Other reserves

 

 

0

122 849

Retained earnings

 

 

 

Retained earnings

 

 

27 867

14 006

Net loss for the year

 

 

557 927

(44 456)

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

299 724 408

324 519 901

 

 

 

 

 

OTHER EQUITY

 

 

-

-

 

 

 

 

 

Loss provisions

 

 

0

0

 

 

 

 

 

CONTINGENCY AND LOSS PROVISIONS

 

 

-

-

 

 

 

 

 

Non-current borrowings and debt

 

 

 

Miscellaneous borrowings and debt

5 793 854

5 630 705

 

 

 

 

Trade accounts payable and other current liabilities

 

 

 

Trade accounts payable

721 770

758 313

Tax and social liabilities

323 194

294 455

Amounts owed to fixed asset suppliers

0

0

 

 

 

 

LIABILITIES

 

 

6 838 817

6 683 473

 

 

 

TOTAL EQUITY AND LIABILITIES

 

 

306 563 225

331 203 374

Reconciliation of Alternative Performance Measures (APM)

Cegereal recurring cash flow APM

 

In thousands of euros

2019

2018

Net income under IFRS

80 760

33 106

Restatement of changes in fair value of investment property

-46 230

-11 701

Other restatements of changes in fair value

454

475

Restatement of other fees

5 061

8 794

EPRA earnings

40 046

30 674

IFRS adjustments (rent-free periods, etc.)

602

2 256

Restatement of deferred finance costs

2 260

2 247

Cegereal recurring cash flow

42 908

35 177

 

EPRA NNNAV APM

 

In thousands of euros

2019

2018

Shareholders’ equity under IFRS

730 268

674 889

Portion of rent-free periods

-28 614

-27 315

Market value of loans

-771 837

-772 432

Carrying amount of loans

765 240

764 507

NNNAV PER SHARE

695 057

639 649

 

LTV ratio APM

 

In thousands of euros

2019

2018

Gross amount of balance sheet loans (statutory financial statements)

769

771

Fair value of investment property

1 464

1 409

LTV ratio (%)

52,6%

54,7%

Occupancy rate APM

The occupancy rate is the ratio of space for which the Company receives rent under a lease agreement to the total amount of available space.

Taking into account the upcoming arrivals (KPMG particularly), Cegereal’s overall occupancy rate is up sharply at 96.9%.

At December 31, 2019, i.e., before the effective date of these new leases, the occupancy rate stood at 93.9%, versus 92.3% one year earlier.

Contacts

For more information, contact:

Media Relations
Aliénor Miens/Alexandre Dechaux
+33 7 62 72 71 15
cegereal@citigatedewerogerson.com

Investor Relations
Charlotte de Laroche
+33 1 42 25 76 38
info@cegereal.com

Contacts

For more information, contact:

Media Relations
Aliénor Miens/Alexandre Dechaux
+33 7 62 72 71 15
cegereal@citigatedewerogerson.com

Investor Relations
Charlotte de Laroche
+33 1 42 25 76 38
info@cegereal.com