ALTAREA (EPA:ALTA) - Q 1 2016 revenu of Altarea Cogedim

Transparency directive : regulatory news

25/04/2016 19:01

Paris, April 25, 2016, 6:30 PM                                  Press release

                   Q1 2016 revenue: EUR321 million (+16.2%)(1)
                  Strong growth driven by Property Development
                       Intense level of commercial activity
                                  Confirmed outlook

Commercial activity
* Sharp rise in Property Development new orders by +66% to EUR610 million(2)
* 35 new projects to feed the Property Development pipeline, representing more
  than EUR600 million in potential revenue
* Leases signed by the Retail REIT: strong increase (+29%(3))

Retail REIT
* Property Portfolio: very solid performance in the first quarter:
  o Tenants turnover up by +3.2% like-for-like(4)
  o Rents up by +3.1% like-for-like
* Development pipeline: successful opening of the Avenue 83 shopping & leisure
  center in Toulon-La Valette

Property Development
* Sharp growth in Residential sales: +49% to nearly 1,900 units (and +46% in
  value, to EUR435 million)
* Offices: new orders soared +155% to EUR175 million
* Property Development revenue up +17.6%(5)

Consolidated indicator
* Consolidated revenue: EUR321 million (+16.2%)(1)

                                          Unaudited figures at March 31, 2016

"The Group's businesses are still supported by the current environment of low
interest rates and abundant liquidity, combined with government incentive
schemes for Residential property.

This environment is favorable to both property investment for our property
development clients (Residential and Office) as illustrated by the sharp
increase in new orders during the quarter, as well as to the results of our
shopping center tenants, whose robust operational results confirm the upturn in
household consumption.

These robust business development results will have a visible impact on our
financial results in the forthcoming months, thus confirming our growth outlook
for 2016 FFO Group share, expected to be in the upper range of +15% to 20%
announced with our annual results."

Alain Taravella, Chairman and Founder of Altarea Cogedim

(1) Including the revenue earned by Pitch Promotion since it was acquired on
February 26, 2016, i.e., pro forma growth (including Pitch Promotion from
January 1, 2016) of +27.7% and growth of  +8.7% like-for-like (excluding Pitch
Promotion).
(2) Including the new orders recorded by Pitch Promotion in Q1 2016.
(3) 81 leases signed for a total of EUR10.8 million (+29% growth in signed rents
compared to Q1 2015).
(4) Change in tenants revenue on a like-for-like basis in Q1 2016, excluding
assets under refurbishment or sale.
(5) By including Pitch Promotion from February 26, 2016, i.e. pro forma growth
(including Pitch Promotion from January 1, 2016) of +31.6% and +8.5% growth
like-for-like (excluding Pitch Promotion).

I. OPERATIONAL BUSINESS

RETAIL REIT

* Property Portfolio: very solid performance in the first quarter (rents up
  +3.1% like-for-like)

2016 started with a sharp upturn for property portfolio assets, with a +3.0%(6)
increase in footfall and tenant revenue up +3.2% like-for-like(7), against a
backdrop of slight recovery in consumer spending (CNCC up +0.1%(8)).

                                                    (EUR millions)
Q1 2015 rental income                                        42.6
100% controlling interest in Qwartz                           3.3
Disposals                                                    (2.8)
Refurbishments                                               (0.0)
Leasehold rights like-for-like                               (0.8)
Change in invoiced rents like-for-like                        1.1     +3.1%
o/w France                                                    1.2     +3.8%
o/w International                                            -0.1     -1.0%
Total change in Rental income                                 0.8     +1.8%
Q1 2016 rental income                                        43.4

Invoiced rents were up +3.1% on a like-for-like basis at end March 2016, with
the intense asset management work offsetting the negative indexing of rents
(-0.1 point impact). Overall, rental income rose +1.8% to EUR43.2 million, with
the 100% controlling interest in Qwartz shopping center offsetting the impact of
the Italy-based assets portfolio disposal in 2015.

During the quarter, the Retail REIT signed 81 leases for a total of EUR10.8
million (+29% growth in signed rents compared to 2015). 39 leases concerned
French properties in operation (for a reversion rate of +20.1%) and 42 leases
concerned projects under development.

The Group's centers are proving their strong appeal by attracting top-tier
brands. This summer, Bercy Village will house the 1st French restaurant of the
American Five Guys chain, as well as the largest Va Piano restaurant in the
world. In Strasbourg, the Aubette shopping center welcomed the first Starbucks
coffee shop in Alsace.

* Development pipeline

On April 12, Altarea Cogedim inaugurated L'Avenue 83 in Toulon-La Valette, in
the leading Grand Var retail area. Spread over 51,000 sqm, this open-air center
features top retail brands (Primark, New Look, Pull & Bear, Nike, Habitat, etc.)
and premium leisure offers including a 16-screen Pathé cinema (including the
1st Laser IMAX screen in France) and a Pirate's Adventure park for children.

The first results of this center, 100% leased at opening, are exceeding
forecasts, and supporting a target footfall of more than 7 million visitors. The
huge success of the loyalty program is also worth noting (more than 20,000
customers registered in the first week), supplying data into the Digital
Factory9, which was successfully rolled out on the website. During this first
week, the website had nearly 100,000 visits and the mobile application exceeded
50,000 visits.

(6) Aggregate change in footfall in Q1 2016, for French assets at 100%,
excluding assets under refurbishment or sale.
(7) Change in tenants revenue on a like-for-like basis in Q1 2016, excluding
assets under refurbishment or sale.
(8) CNCC index for all shopping centers, on an aggregate comparable basis at the
end of February 2016.
(9) The Digital Factory is a unique tool for collecting and centralizing
customer data and information from the Group's multiple channels, for the
purpose of mining the data in real time (automated data analyses, reports, etc.)
and drawing up targeted asset management plans.

* Revenue: up + 9.0%

EUR millions excl. tax              03/31/2016    03/31/2015       Change
Rental income                             43.4          42.6         1.8%
Services and other(10)                     9.2           5.7        63.0%
Retail revenue                            52.6          48.3         9.0%

The +9.0% increase in Retail revenue reflects the increase in operating
portfolio rents, and the significant contribution of projects under development
(partner fees and property development margins).

PROPERTY DEVELOPMENT

* Highlights of the quarter

Altarea Cogedim has developed a multi-product offer unrivaled among developers:
in addition to its recognized know- how in residential property development, the
Group relies on its expertise as a developer and Retail operator to add real
value to key urban development structures such as convenience stores and leisure
facilities (cinemas, etc.). Altarea Cogedim therefore has a strong competitive
edge in helping metropolises successfully develop complete new districts,
providing all the services expected by end-users.

Thanks to this advantage, Altarea Cogedim added 35 new operations to its
Property Development pipeline this quarter, representing more than EUR600
million in potential revenue.

Altarea Cogedim also continues its development throughout France with a new
location in Bayonne in April: "Cogedim Pays Basque".

* Property Development New Orders: up sharply by +66% to EUR610 million(11)

The growth in Residential and Office new orders in Q1 2016 can be explained by
the integration of Pitch Promotion and the market share gains strategy
implemented by Cogedim.

New orders (incl. tax)         03/31/2016     03/31/2015     Change

Residential                      EUR435 m       EUR298 m       +46%
Nb units                      1,881 units    1,262 units       +49%
Offices                          EUR175 m        EUR69 m      +155%
TOTAL                            EUR610 m       EUR367 m       +66%

* Property Development Revenue: up +17.6%(12)(+8.5% like-for-like)

Q1 revenue includes Pitch Promotion as of February 26, 2016 (acquisition date).
Pro forma (including Pitch Promotion from January 1, 2016), the Property
Development revenue was up +31.6%.

EUR millions excl. tax         03/31/2016     03/31/2015     Change
Residential                         234.7          202,8      15.7%
Offices                              33.9           25,3      34.0%
Property Development Revenue        268.6          228,1      17.6%
o/w Pitch Promotion                  21.0             -          -

Housing development revenue is on the rise, in line with the increase in Group
reservations recorded since 2013.

The increase in Property Development revenue will be even higher by year end
2016, since Pitch Promotion's contribution to the first quarter was limited to
around 1 month (versus a full contribution in the forthcoming quarters).

(10) Including the revenue generated by the property margins on property
development contracts (EUR3.8 million in Q1 2016).
(11) Including the new orders recorded by Pitch Promotion in Q1 2016.
(12) By including Pitch Promotion from February 26, 2016.

* Residential: Significant increase in reservations in volume (+49% to nearly
  1,900 units) and in value (+46% to EUR435 million)

The very sharp like-for-like increase in Cogedim sales (by +34% with 1,687 units
signed, compared with 1,262 units in Q1 2015) is further strengthened by the
contribution of Pitch Promotion.

Reservations incl. tax (13)          03/31/2016         03/31/2015     Change
Sales to institutional investors  648 units   34%   514 units    41%    +26%.
Sales to individuals            1,233 units   66%   748 units    59%    +65%.
o/w individual investors          666 units   36%   418 units    33%    +59%
o/w homebuyers                    567 units   30%   330 units    26%    +72%
TOTAL reservations              1,881 units       1,262 units           +49%
EUR millions incl. tax             EUR435 m          EUR298 m           +46%
o/w Pitch Promotion               194 units                 -              -
                                    EUR60 m

These reservations were particularly driven by sales to individuals (+65%),
for both homebuyers and individual  investors. These results confirm the
excellent results of the French Government incentive schemes, Pinel Act
(extended until the end of 2017) and interest-free "PTZ+" loans notably.

* Residential: very strong visibility thanks to the backlog and the pipeline

EUR millions                           03/31/2016    12/31/2015        Change
Notarized revenues not recognized           1,013           959         +5.6%
Revenues reserved but not notarized         1,095           780        +40.4%
=> Backlog(14)                              2,108         1,739        +21.2%
Number of months of sales               22 months     21 months       +1 month
Property for sale                             713           717
Future offering                             5,515         5,195
=> Pipeline(15)                             6,228         5,912         +5.3%

Residential backlog's contribution to the capacity to generate revenue in 2016,
added to Q1 2016 revenue, already exceeds the 2015 revenue, which means that the
Group has excellent visibility over the year.

* Offices: new orders soared +155% to EUR175 million

EUR millions incl. tax                 03/31/2016    03/31/2015   Change
New orders (incl. tax)                     175          69        +155%

New orders mainly derive from two operations based in Paris (Ilot des Mariniers
and Rue de Tocqueville) brought by Pitch Promotion.

At March 31, 2016, the Office backlog totaled EUR496 million for off-plan and
property development contracts16, and EUR4 million for delegated project fees.

(13) Including share of reservations recorded by Pitch Promotion for Q1 2016.
(14) The residential backlog comprises revenues excluding tax from notarized
sales to be recognized on a percentage-of-completion basis and reservations to
be notarized. Including the Pitch Promotion backlog (EUR302 million).
(15) The pipeline consists of tax-inclusive revenues from properties for sale
and the land bank, which includes all plots on which preliminary sale agreements
have been signed. Excluding Histoire & Patrimoine, retail and Pitch Promotion
operations
(16) The office property off-plan/property development contract backlog
comprises revenues excluding tax from notarized sales to be recognized on a
percentage-of-completion basis. Including the Pitch Promotion backlog (EUR204
million).

II. FINANCIAL BUSINESS

ALTAREA COGEDIM Q1 2016 REVENUE(17)

EUR millions                     Q1 2016      Q1 2015    2016/2015

Rental income                       43.4         42.6         1.8%
Services and other                   9.2          5.7        63.0%
Shopping centers                    52.6         48.3         9.0%
Revenue                            234.6        203.2        15.5%
Services                             0.1         (0.3)        n/a
Residential                        234.7        202.8        15.7%
Revenue                             32.9         24.1        36.4%
Services                             0.9          1.1         n/a
Offices                             33.9         25.3        34.0%
Revenue(17)                        321.2        276.3        16.2%
o/w Pitch Promotion(18)             21.0            -           -

FINANCIAL POSITION

Net borrowing (bank and bonds) amounted to EUR2,641 million at March 31, 2016,
versus EUR2,442 million at December 31, 2015. The change can be primarily
explained by the acquisition of Pitch Promotion (financing for the acquisition
and integration of the debt).

2015 DIVIDEND

On April 15, 2016, the General Meeting of shareholders approved a dividend
payment of EUR11.00 per share for 2015, with the possibility of opting for
payment in new shares(19). The option began on April 19, 2016 and will end on
Tuesday April 26, inclusive.

(17) Including the revenue earned by Pitch Promotion since it was acquired on
February 26, 2016, i.e., pro forma growth (including Pitch Promotion from
January 2016) of +27,7% and growth of +8.7% like-for-like (excluding Pitch
Promotion).
(18) Pitch Promotion revenue from February 26, 2016.
(19) Based on a subscription price of EUR154.51 per share (i.e. a 10% discount
on the average price in the last 20 trading days prior to the GSM).

III. OUTLOOK

In addition to the projects secured during the quarter to feed the Property
Development pipeline (see above), Altarea Cogedim notably entered into exclusive
negotiations concerning two major mixed-use property development projects, one
in the Paris region and the other in a major regional metropolis, representing a
total surface area of 240,000 m2, for approximately EUR800 million in potential
revenue (Group share). As a result, the Group expects a very sharp growth in its
pipeline of property development projects during Q2 2016.

Furthermore, Altarea Cogedim submitted, together with its partners Predica and
APG, a bid to acquire the train station retail portfolio of "Grandi Stazioni",
currently under sale. The bid has been shortlisted after the first round, and
the consortium continues to work on the transaction and monitor the ongoing
process. Should Altarea Cogedim's consortium be successful, the operation would
be a unique opportunity for the Group to spur its growth on the travel retail
format, in which the Group is already the leader in France20.

The operational and financial results of this quarter confirm our growth
guidance for 2016 FFO Group share, which should be at the upper end of the +15
to +20% range. Our business development successes further confirm our medium
term prospects:  FFO Group share should continue to grow by around +5% to +10%
per year after 2016.

Lastly, Altarea Cogedim confirms its objectives to maintain a minimum dividend
distribution of EUR11 per share, while continuing to strengthen its equity base
to finance the growth of its activities, with a target Loan-To-Value of
approximatively 40%. The strengthening of its financial structure could be
combined with an increase in the free float of the Group, assuming favorable
market conditions and in accordance with the objectives of the Group's major
shareholders.

ABOUT ALTAREA COGEDIM - FR0000033219 - ALTA

Altarea Cogedim is a leading property group. As both a commercial land owner and
developer, it operates in all three classes of property assets: retail,
residential and offices. It has the know-how in each sector required to design,
develop, commercialize and manage made-to-measure property products. With
operations in France, Spain and Italy, Altarea Cogedim manages a shopping
center property portfolio of EUR4.4 billion. Listed in compartment A of Euronext
Paris, Altarea  had a market capitalization of EUR2.3  billion at March
31, 2016.

ALTAREA COGEDIM CONTACTS               CITIGATE DEWE ROGERSON CONTACTS
Eric Dumas, Chief Financial Officer    Nicolas Castex, Press Relations
Edumas@altareacogedim.com,             Nicolas.castex@citigate.fr,
Tel: + 33 1 44 95 51 42                Tel: + 33 1 53 32 78 94

Catherine Leroy, Analyst and
Investor Relations
Cleroy@altareacogedim.com,
Tel: +33 1 56 26 24 87

DISCLAIMER
This press release does not constitute an offer to sell or solicitation of an
offer to purchase Altarea shares. For more detailed information concerning
Altarea, please refer to the documents available on our website
www.altareacogedim.com.
This press release may contain declarations in the nature of forecasts. While
the Company believes such declarations are based on reasonable assumptions at
the date of publication of this document, they are by nature subject to risks
and uncertainties which may lead to differences between real figures and those
indicated or inferred from such declarations.

(20) In addition to the retail outlets of Gare de l'Est and Gare du Nord (in
operation), the Group is developing retail areas in the Paris-Montparnasse and
Paris-Austerlitz train stations.

ALTAREA COGEDIM Q1 2016 Revenue and Business Activity - Press release

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