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Eurosic : 2017 half-year results - Sharp increase in financial indicators following the acquisition of Foncière de Paris




Press Release

Paris, July 27, 2017

2017 HALF-YEAR RESULTS

Sharp increase in financial indicators following the acquisition of Foncière de Paris

  • €121.0 m in net rental revenue (+72% vs. June 2016)
  • €388.3 m for Group share of consolidated net income (+148% vs. June 2016)
  • €71.7 m in current cash flow, up 78% (€1.51 per share, +10% over June 2016)
  • Net triple NAV of €48.63 per share (+10% vs. December 31, 2016)
  • LTV down to 45.4% (vs. 47% at December 31, 2016)

Assets under management of more than €8.1 billion

  • Investment of more than c.€350 m in assets and projects: c.€250 m invested in the leisure and healthcare sectors in Europe, and c.€110 m in office assets
  • Continuation of the portfolio rotation policy with more than c.€300 m in disposals, including c.€270 m from mature office assets

Significant potential related to development operations

  • Delivery of 2 development operations in Paris and Lille over the period
  • 20 projects under development representing an investment of €2.3 billion, with a strong potential for VALUE creation and rents at delivery

Main Group indicators:

  6/30/2017 6/30/2016     6/30/2017 12/31/2016
Net rental revenue €121.0 m €70.3 m   AUM (2) €8,126 m €7,669 m
Consolidated net income (1) €388.3 m €156.9 m   EPRA NNNAV/share €48.6 €44.1
Current cash flow (1) €71.7 m €40.2 m   LTV (3) 45.4% 47.0%
Current cash flow per share €1.51 €1.38   ICR 5.5x 5.5x

 (1) Group share, (2) including transfer taxes, (3) Consolidated, inc. transfer taxes

The Board of Directors of Eurosic held on July 26, 2017 approved the half-year consolidated financial statements[1].


"The first half of 2017 confirmed the exceptional performance of Eurosic in 2016 thanks to the full impact of the integration of Foncière de Paris over the period. 
All asset classes took part to the improvement of the Group's results.  The financial indicators are making strong progress. 
Once again, we must thank all Group employees for the work accomplished, before Eurosic is combining with Gecina. 
I have no doubt that the momentum of these past five years will contribute to the development of the new European real estate leader within the office market born from this combination. "

Yan Perchet, Eurosic Chief Executive Officer

Combination with Gecina

On June 21[2], Gecina and Eurosic announced the signing of agreements between Gecina and certain Eurosic shareholders relating to the acquisition by Gecina of 94.8% of Eurosic's share capital[3], acquiring in cash 85.3% of the capital at €51.0 per share and per OSRA and exchanging 9.5% of Eurosic's capital at an exchange ratio[4] of 7 Gecina shares for 20 Eurosic shares. 

It is noted that on Gecina's request, Eurosic will sell its holdings in certain diversification companies that do not correspond with Gecina's strategy, to the Batipart Group for €463 million.

In accordance with the agreements of June 20, the Eurosic Board of Directors, in its meeting of July 26, 2017, took note of the report from the firm Ledouble[5] that contained the following conclusions:

"On completion of a multi-criteria assessment and with the current status of our works, which we will complete in anticipation of the submission of the fairness opinion, we are able to reach a conclusion for the attention of the Board of Directors on the fairness of:

  1. the terms of the disposal by Eurosic to Batipart of the diversification companies (€463 million sale price for the diversification companies) and on the absence of any unequal treatment of Eurosic shareholders resulting from the disposal of the diversification companies; and
  2. the terms of the offer (€51 for the cash offer of the Public Offer, 7 Gecina shares for 20 Eurosic shares or OSRA for the share offer of the public offer) in view of a mandatory squeeze-out (retrait obligatoire). "

The Eurosic Board of Directors approved the conclusions of this report as presented and unanimously confirmed its support for the combination with Gecina.

The sale of the blocks of Eurosic shares and of the disposal of the holdings in diversification companies should be realized by the end of August 2017, once the other conditions precedent are satisfied (primarily obtaining the approval from the Competition Authority).  This disposal will be approved by Eurosic's new Board of Directors following Gecina's acquisition of the control of Eurosic.

It is therefore noted that in accordance with applicable stock market regulations, Gecina will file a proposed purchase and exchange public offer for all the Eurosic shares not held by Gecina (the "Public Offer"). 

Finally, it is specified that "the fairness opinion under the terms of Article 262-1 of the AMF general regulations will be established by the independent appraiser before the filing with the AMF of the draft information memorandum in response, in order to allow the Board of Directors to give its reasoned opinion on the Public Offer. "

Significant events of the period

In the first half of 2017, the Eurosic group continued to implement its strategy.
                   

  • Following the acquisition of Foncière de Paris in 2016, Eurosic completed the mandatory squeeze-out of Foncière de Paris in January 2017, so that Eurosic now holds 100% of Foncière de Paris;
  • Within the diversification segment, the Eurosic group acquired assets or initiated investment projects representing a total of c.€250 m;
  • Within the office space division, the group acquired 11 assets for a total amount of c.€110 m (including fees and tax), representing rental surface area of nearly 54,000 sq.m located primarily in the French regional metropolitan areas;
  • The group continued its policy of proactive management of its portfolio by selling 6 office assets with a total area of over 41,000 sq.m for a total of c.€270 m and assets from the diversification segment (main assets of the EDF portfolio) for c.€10 m;
  • Finally, two office development projects were delivered: City'Zen in Lille (4,513 sq.m) and 14 Londres in the Paris 9th (5,537 sq.m).

The Combined Ordinary and Extraordinary Shareholders Meeting of May 23, 2017 approved a cash distribution of €2.30 per share. The pay-out was on May 30, 2017 for a total of €108.6 m.


Office Division Activity

As of June 30, 2017, the Eurosic Group managed a €6.0 billion portfolio of office space, consisting of 185 assets representing rental surface area of nearly 850,000 sq.m.

Characteristics OF THE OFFICE DIVISION at JUNE 30, 2017

Key data for offices

Number of assets 2016 June 2017
Operation 170 174
Development 13 11
  2016 June 2017
Rental surface area (sq.m) 838 782 849 358
Occupancy rate (in operation) 92,2% 92,9%

* Vacancy rate of 7.1%, including 0.3% in strategic vacancy (vacancy desired by the Group in order to complete a redevelopment program or a sale).

Office space distribution by geographic region[6]

  Md€ %
Paris 3,9 65%
Greater Paris / Ile-de-France 1,2 20%
Regions 0,9 15%
Italy 0,03 0,5%

Distribution of office assets between operation and development6

  Md€ %
Operations 4,6 77%
Development 1,3 23%

RESULTS OF THE OFFICE DIVISION

In €m 6/30/2017 6/30/2016 Change
(as a %)
Gross rental income 95.1 54.4 + 75%
Management and administrative income 5.2 4.7 + 11%
Gross revenue 100.3 59.0 + 70%
Property charges not recovered -14.8 -5.6 + 64%
TOTAL Net revenue 85.5 53.4 + 60%
Net revenue/gross revenue 85.2% 90.5%  

The net revenue of the Office division amounted to €85.5 m at June 30, 2017, up from €53.4 m for the same period in 2016. Net revenue rose 60% over the previous period because of the acquisitions (primarily the acquisition of Foncière de Paris in 2016).

Diversification Division activity

The Eurosic Diversification Division consists of a €1.9 bn portfolio and holds:

  • the assets of Eurosic Lagune, a long-term return vehicle dedicated to holding and managing assets, primarily in the leisure and health care sectors;
  • the Group's assets, excluding office properties and finance leasing, mainly including the hotel assets for which the Group holds the buildings and manages the businesses (seven assets) and operating lease assets for activities other than offices. These assets come primarily from the Foncière de Paris portfolio;
  • in addition, through its subsidiary Eurosic Investment Spain, the Group holds a portfolio of leisure assets in Spain, composed primarily of vacation residences and hotels operated by third parties.

The Diversification Division has a pipeline of nine projects in development, which represent over 222,000 sq.m of rental surface area.

Characteristics of the Diversification division at June 30, 2017

Key Diversification Data

Number of assets 2016 June 2017
Operation 74 75
Development 9 9

  2016 June 2017
Rental surface area (sq.m) 538 367 510 254
Occupancy rate (in operation) 96,4% 96,3%

* Vacancy rate of 3.7%, including 0.7% in strategic vacancy (vacancy desired by the Group in order to complete a redevelopment program or a sale).

Distribution of diversification assets by type[7]

  Md€ %
Leisure 0.9 48%
Healthcare 0.2 12%
Hotels 0.3 16%
Housing 0.2 11%
Leases to other activities 0.2 9%
Logistics 0.05 3%
Restaurants 0.04 2%

Distribution of diversification assets by geographic region7

  Md€ %
Paris 0.3 18%
Greater Paris / Ile-de-France 0.5 28%
Regions 0.5 28%
International 0.5 26%

Distribution of diversification assets between operations and development7

  Md€ %
Operations 1.5 79%
Development 0.4 21%

RESULTS OF THE DIVERSIFICATION DIVISION

In €m 6/30/2017 6/30/2016 Change
(in %)
Gross rental income 36.3 17.3 + 110%
Management and administrative income 1.7 0.0 -
Gross revenue 38.0 17.3 + 119%
Property charges not recovered -2.6 -0.4 -
Total net revenue from operating leases 35.4 16.9 + 109%
Net revenue/gross revenue 93.2% 97.4%  

The net revenue from operating leases of the Diversification Division totaled €35.4 m at June 30, 2017, up from €16.9 m for the same period in 2016. This revenue rose by more than 109% because of acquisitions during the period (primarily through Eurosic Lagune) and the acquisition of Foncière de Paris in 2016.

RESULTS OF THE HOTEL BUSINESS

In €m 6/30/2017 6/30/2016
Operating income 18.2 -
Operating expenses -17.4 -
Current operating income from the hotel business (excluding structural and amortization costs) 0.8 -

The current operating income from the hotel business line amounted to €0.8 m for the first half of 2017.


Finance-leasing business

The Eurosic Group manages a finance-lease portfolio repaid with a total VALUE of €0.3 bn as of June 30, 2017.

Characteristics of the finance-leasing portfolio

Key data for the finance-leasing business

  June 2017
Number of assets 119
Number of contracts 169

Distribution of the finance-lease portfolio by lessee's business 

  %
Hotels 54%
Offices 23%
Restaurants 9%
Commercial spaces 11%
Businesses 2%
Other 0.5%

Distribution of the finance-lease portfolio by geographic region

  %
Paris 22%
Greater Paris / Ile-de-France 41%
Regions 37%

Options were exercised on 9 assets under finance-leases during the first half for an amount of €27 m.

Results of the finance-lease business

In €m 6/30/2017 6/30/2016
Financial royalties and other income on finance leases 7.0 -
Operating expenses -0.1 -
Current operating income on finance lease transactions (excluding structural costs) 6.9 -


Projects in development

The Group has one of the largest pipelines of projects under development in the sector, with a total amount of final investment at 100% of more than €2.3 bn of which €1.5bn already disbursed (respectively € 1.6 billion and € 1.2 billion in proportion to ownership).

The remainder to be disbursed of € 0.4 billion (in proportion of ownership) is divided between offices and diversification assets

It is composed of:

  • 11 office properties representing nearly 150,000 sq.m of rental area;
  • 9 diversification assets for more than 220,000 sq.m of rental area.
Buildings under development Type Surface area Estimated delivery date % of interest at June 30, 2017
Three projects delivered in the 1st half of 2017        
City'Zen (Euralille) Offices 4,513 sq.m Q1 2017 100.0%
14 rue de Londres (Paris 9th) Offices 5,537 sq.m Q1 2017 33.3%
76 bis rue des Saints Pères Housing 140 sq.m Q1 2017 100.0%
Total SURFACE AREA delivered   10,190 sq.m    
Offices        
10 projects under development:      
Le Jade (Paris 15th) Offices 22,172 sq.m Q3 2017 100.0%
Montmorency Offices 14,080 sq.m Q3 2017 100.0%
Pantin Manufacture Offices 6,190 sq.m Q3 2017 100.0%
141 Haussmann (Paris 8th) Offices 1,729 sq.m Q3 2017 100.0%
127-129 rue de l'Université Offices 8,817 sq.m Q4 2017 100.0%
15 rue de Laborde (Paris 8th) Offices 18,500 sq.m Q2 2018 33.3%
Toulouse Plaine Bat. H (Toulouse) Offices 3,540 sq.m Q3 2018 100.0%
Carré Michelet (La Défense) Offices 36,336 sq.m Q4 2018 100.0%
Penthemont Offices 9,600 sq.m Q1 2018 100.0%
Tombe Issoire Offices 11,382 sq.m Q3 2019 50.1%
Total projects under development at June 30, 2017   132,346 sq.m    
1 project secured:        
Stream Building (Paris 17th) Offices 15,159 sq.m Q1 2020 33.3%
Total projects secured at June 30, 2017   15,159 sq.m    
Total offices   147,505 sq.m    
Diversification        
9 projects under development:        
Villages Nature Equipements (Val d'Europe) Leisure 23,000 sq.m Q3 2017 21.4%
Villages Nature Hébergements (Val d'Europe) Leisure 18,570 sq.m Q3 2017 50.0%
Calle Bailen, 37 - Madrid Housing 2,191 sq.m Q3 2017 66.0%
Courtyard Marriott Roissy Hotel 13,091 sq.m Q3 2017 100.0%
Festa Leisure 11,064 sq.m Q4 2017 66.0%
Bellechasse Hotel 2,900 sq.m Q1 2018 100.0%
Club Med Cefalù Leisure 26,558 sq.m Q2 2018 61.1%
Center Parcs Allgau Leisure 75,000 sq.m Q4 2018 57.4%
Ceretto Healthcare 50,000 sq.m Q4 2020 61.1%
Total Diversification   222,374 sq.m    
TOTAL DEVELOPMENT   369,879 sq.m    

The Group expects an average property rate of return on the development projects of around 6% on the office spaces and 7% on the diversification segment.

In addition, the development projects in the Diversification Division are entirely pre-leased.


Consolidated results of the first half of 2017

Detailed consolidated income statement
In k€
6/30/2017 6/30/2016 Change
Rental income IFRS 132,335 71,645 85%
Other services and fees 5,976 4,710 27%
Rental charges and unrecovered transfer taxes -17,346 -6,068 186%
Total net revenue from operating leases 120,965 70,287 72%
Financial royalties and other income on finance leases 6,951 -  
Operating expenses on finance lease transactions -95 -  
Current operating income on finance lease transactions (excluding structural costs) 6,856 - -
Hotel operating income 18,212 -  
Hotel operating expenses -15,729 -  
Amortization and depreciation on hotel operations -1,668 -  
Current operating income from the hotel business (excluding structural costs) 815 - -
Real estate margin 2,455 854 187%
General operating expenses -22,463 -12,972 73%
Other depreciation and impairments - 1317 -553 138%
Current operating income 107,312 57,615 86%
Change in fair VALUE of investment properties 297,471 126,961 +134%
Income (loss) from sale of investment properties 3,347 17,244 -81%
Effect of business combination 0 0 -
Operating income 408,130 201,820 102%
Financial income 5,167 3,710 43%
Financial expenses -26,984 -18,158 49%
Cost of net financial debt -21,817 -14,448 51%
Other financial income and expenses 63 0 -
Adjustment of VALUE of financial instruments 12,269 -31,016 -
Share of income of equity associates 12,629 15,132 -17%
Net income before tax 411,274 171,488 140%
Tax -3,048 - -
Consolidated net income 408,226 171,488 138%
Net income attributable to non-controlling interests -19,884 -14,622 36%
Consolidated net income (Group share) 388,341 156,866 148%
Diluted average number of shares (including OSRA) 64,870,587 37,625,582 72%
Consolidated net income/diluted share (€) 5.99 4.17 44%

The Eurosic Group recorded consolidated net income, Group share, of €388.3 m in the first half of 2017, an increase of +148% over the first half of 2016 (€156.9 m).

Net revenue from operating leases

Net revenue from operating leases includes the rents from assets with operating leases, and the management and administrative fees from which the expenses related to the buildings and land not reinvoiced to tenants are deducted.

In the first half of 2017, the Group generated net revenue of €121.0 m, up from €70.3 m over the same period in 2016, an increase of 72% (see Chapters 1.2, 1.3 and 1.4 for more details by division).

Property charges not recovered amounted to €-17.3 m

In €m 6/30/2017 6/30/2016 Change
(in %)
Offices 85.4 53.4 + 60%
Diversification 35.5 16.9 + 110%
Total net revenue 121.0 70.3 +72%

Current operating income on finance lease transactions

In the first half of 2017, the finance-lease business generated current operating income of €6.9 m.

Current operating income on the hotel business

In the first half of 2017, the hotel activity generated current operating income of €0.8 m.

General operating expenses

The Group's general operating expenses rose €9.5 m between H1 2016 and H1 2017 to total nearly €22.5 m, reflecting the Group's growth, particularly the acquisition of Foncière de Paris.

Current operating income

The Group recorded current operating income of €107.3m over the first half of 2017, compared with €57.6 m over the same period in 2016, a jump of +86%.

Operating income

Group operating income totaled €408.1 m, a 103% increase over the same period in 2016. It includes:

  • the €297.5 m increase in the fair VALUE of the assets over the period;
  • the income of €3.3 m from the disposal of investment properties.

Cost of financial debt

The cost of net financial debt was €21.8 m for the first half of 2017 (after capitalization of around €10 m in financial costs related to the development operations), compared with €14.4 m for the same period in 2016. This change results primarily from the increase in the amount of debt following the acquisition of Foncière de Paris.

Share of income of equity associates

The share of income of the equity associates was €12.6 m over the first half of 2017.

Net income attributable to non-controlling interests

The share of net income attributed to non-controlling interests amount to €19.9 m over the first half of 2017 versus €14.6 m over the same period in 2016. This increase was primarily driven by the growth of Eurosic Lagune and the arrival of partners in the capital of Eurosic Investment Spain in December 2016.

 

Current cash flow

The Group's current cash flow is one of the key indicators monitored by the Eurosic Group and represents the Group results restated for extraordinary or non-recurring events.

This indicator is determined from the group share of consolidated net income, restated for the following items:

  • non-recurring revenue (€-3.0 m);
  • operating expenses for non-recurring projects under development, smoothing of property taxes not reinvoiced (€+8.7 m);
  • real estate margin (€-2.5 m);
  • effect of the business combination and other non-recurring operating expenses (€+0.4 m);
  • income from disposal of property assets, excluding recurring sales (Garden portfolio) (€-1.5 m);
  • change in fair VALUE of the investment buildings (€-297.5 m);
  • change in fair VALUE of the financial instruments (€-12.3 m).

The share of income of equity associates and the share of income attributable to non-controlling interests (minority interests) are also adjusted for the change in fair VALUE of the investment building and the financial instruments in the amount of €-8.3 m and €+9.6 m respectively.

Current cash flow is determined after taking into account the cost of the OSRA in order to determine the sums available for the shareholders.

Current cash flow Group share thus amounted to €71.7 m at June 30, 2017, compared with €40.2 m at the same date in 2016, an increase of 78%. Current cash flow per share was €1.51 versus €1.38 at June 30, 2017, an increase of 10%.

 

Financial resources

Marked by a charged political and macro-economic calendar, the financial markets remained volatile in the first half of 2017. In this context, the Eurosic Group raised and refinanced over the period a total of €440 m in medium and long-term debt, thus securing very attractive financial terms over the long term.

The Group's financing structure presents solid indicators as of June 30, 2017:

  • the interest coverage ratio (ICR) by EBE remains stable at its historic high at 5.5x in H1-2017;
  • the consolidated debt ratio (LTV) is down to 45.4%, a drop due primarily to the increase in the VALUEs of the assets at constant consolidation;
  • the average maturity of the debt is 5.2 years, down from 5.4 years at December 31, 2016 (after allocation of the confirmed credit lines not used);
  • the average spot cost of the Group's debt (including the cost of hedges and confirmed lines of credit) remains stable at 2.0% at June 30, 2017 (2.0% at year-end 2016);
  • the Group holds €428 m in confirmed lines of credit no drawn as of June 30, 2017 (excluding authorized overdrafts).
     
     
     

Properties and NAV at 06/30/2017

Group property holdings

Properties under management including transfer taxes 6/30/2017 12/31/2016 Change (as a %) Like-for-like
€m % €m %
Offices  5,957  73% 5,652 74% 5% 7%
Paris  3,862  47% 3,730 49% 4% 6%
Greater Paris/Île-de-France  1,191  15% 1,202 16% -1% 8%
Regions and International  904  11% 720 9% 26% 9%
Diversification  1,912  24% 1,709 22% 12% 1%
Leisure and Healthcare  1,149  14% 961 13% 20% 1%
Hotels  267  3% 262 3% 2% 2%
Other  496  6% 486 6% 2% 2%
Other businesses 257  3% 309 4% -16% -3%
Group total 8,126 100% 7,669 100% 6% 5%


Net asset VALUE

The net triple EPRA Net Asset VALUE (EPRA NNNAV) is determined on the basis of:

  • consolidated equity under IFRS (applying the fair VALUE method);
  • addition of the market VALUE of the fixed-rate debt;
  • restatement for the unrealized gains or losses on the assets recognized at cost under IAS 2;
  • adjustment on transfer taxes and fees: including of the transfer taxes and fees corresponding to the most appropriate method of sale of the asset (either sale of the assets or sale of the securities of the company holding the asset).

In addition, in order to measure the amount of equity necessary to reconstitute the existing portfolio, the Group determined a reconstitution Net Asset VALUE that is calculated from the EPRA NNNAV, to which are added the estimated transfer taxes and fees without taking into account the revaluation to fair VALUE of the fixed-rate debt.

  6/30/2017 12/31/2016 Change
Consolidated shareholders' equity 3,063.4 2,809.9  
Receivable on OSRA holders 18.2    
Neutralization of the revaluation to fair VALUE of the financial instruments 8.7 21.0  
Unrealized gains/losses on assets recognized at cost 14.4 4.3  
Adjustment on transfer taxes and fees 57.8 56.0  
EPRA NAV 3,162.6 2,891.2  
EPRA NAV / diluted share €48.75 €44.62 9.3%
Revaluation to fair VALUE of the financial instruments -8.7 -21.0  
Revaluation of fixed-rate debt to fair VALUE 0.6 -12.3  
EPRA Triple Net Asset VALUE (EPRA NNNAV) 3,154.5 2,858.0  
EPRA NNNAV / diluted share €48.63 €44.11 10.3%
Neutralization of revaluation of fixed-rate debt to fair VALUE -0.6 12.3  
Transfer taxes 296.1 272.0  
Group share, reconstitution NAV 3,450.0 3,142.2  
Reconstitution NAV /diluted share €53.18 €48.50 9.7%
Diluted number of shares 64,870,587 64,793,183  

EPRA Indicators

Eurosic applies the EPRA recommendations regarding the indicators listed below. The EPRA best practice recommendations include, in particular, key performance indicators to promote transparency and comparability in the financial statements of real estate companies listed in Europe.

EPRA Earnings

EPRA Earnings is defined as the "recurring income from operating activities".

Passage from Group share of income to EPRA Earnings and current cash flow:

  6/30/2017 6/30/2016
Consolidated net income (Group share) 388,341 156,866
Adjustments to calculate EPRA net income (EPRA Earnings):    
(i) Change in fair VALUE of investment properties and other assets -297,471 -126,961
(ii) Gains or losses on disposals of assets or companies and other sales -3,983 -18,098
(iii) Gains or losses on sales of financial assets available for sale 0 0
(iv) Income taxes on capital gains or losses 0 0
(v) Impairment of goodwill / negative goodwill 0 0
(vi) Change in fair VALUE of financial instruments and derivative cancellation costs -12,022 31,016
(vii) Acquisition costs on acquisition of companies and other interests 0 0
(viii) Deferred taxes resulting from EPRA adjustments 0 0
(ix) Adjustment (i) to (viii) on companies held in partnership -8,283 -11,867
(x) Non-controlling interests in EPRA adjustments 9,624  8,380
EPRA net income (EPRA Earnings) 76,205 39,335
Average number of shares and OSRA 64,870,587 37,625,582
EPRA Earnings per Share (EPS) €1.17 €1.05
Change over 1 year 12% -
Specific adjustments to determine current  cash flow:    
(a) Non-recurring property charges 8,678 2,958
(b) Non-recurring corporate expenses 0 2,021
(c) Amortization and depreciation not related to current operations 417 487
(d) Cancellation of non-recurring fees -2,982 -1,262
(e) Non-recurring taxes 3,048 -
(f) Other - 1,224
(g) Cost of OSRA over the period -13,643 -4,536
Current  Cash flow, Group share attributable to common shares 71,723 40,228
Average number of shares excluding OSRA 47,374,441 29,164,044
Current cash flow per share €1.51 €1.38
Change over 1 year 10%  


About Eurosic
Eurosic is a listed real estate investment company (SIIC) that manages assets VALUEd at over €8.1 billion at the end of June 2017, primarily composed of office spaces, located in Paris, the Paris region and the major regional metropolitan areas.

Eurosic shares are listed on Euronext Paris, Compartment A under ISIN Code FR0000038200.

Investor Relations

EUROSIC
Nicolas Darius
Chief Financial Officer
+33 1 45 02 24 73
communication@eurosic.fr

Press Relations

DGM Conseil
+33 1 40 70 11 89

For more information:  www.eurosic.fr


Appendix 1 - Consolidated income statement at 06/30/2017

Detailed consolidated income statement
In K€
6/30/2017 6/30/2016 Change
Rental income IFRS 132,335 71,645 85%
Other services and fees 5,976 4,710 27%
Rental charges and unrecovered transfer taxes -17,346 -6,068 186%
Total net revenue from operating leases 120,965 70,287 72%
Financial royalties and other income on finance leases 6,951 -  
Operating expenses on finance lease transactions -95 -  
Current operating income on finance lease transactions (excluding structural costs) 6,856 - -
Hotel operating income 18,212 -  
Hotel operating expenses -15,729 -  
Amortization and depreciation on hotel operations -1,668 -  
Current operating income from the hotel business (excluding structural costs) 815 - -
Real estate margin 2,455 854 187%
General operating expenses -22,463 -12,972 73%
Other depreciation and impairments - 1317 -553 138%
Current operating income 107,312 57,615 86%
Change in fair VALUE of investment properties 297,471 126,961 +134%
Income (loss) from sale of investment properties 3,347 17,244 -81%
Effect of business combination 0 0 -
Operating income 408,130 201,820 102%
Financial income 5,167 3,710 43%
Financial expenses -26,984 -18,158 49%
Cost of net financial debt -21,817 -14,448 51%
Other financial income and expenses 63 0 -
Adjustment of VALUE of financial instruments 12,269 -31,016 -
Share of income of equity associates 12,629 15,132 -17%
Net income before tax 411,274 171,488 140%
Tax -3,048 - -
Consolidated net income 408,226 171,488 138%
Net income attributable to non-controlling interests -19,884 -14,622 36%
Consolidated net income (Group share) 388,341 156,866 148%
Diluted average number of shares (including OSRA) 64,870,587 37,625,582 72%
Consolidated net income/diluted share (€) 5.99 4.17 44%

Appendix 2 - Consolidated balance sheet at 06/30/2017

Balance Sheet Assets in k€ 6/30/2017 12/31/2016
Investment properties   6,000,590    5,540,525 
Hotel non-current assets   178,577    184,022 
Financial receivables on finance leases   231,618    273,034 
Investment in equity associates   209,532    205,205 
Goodwill   100,039    89,854 
Other property, plant and equipment   3,767    4,281 
Intangible non-current assets   346    26 
Derivative financial instruments   27,638    26,692 
Deferred tax assets   8,283    10,407 
Non-current assets   13,383    5,127 
Non-current assets   6,773,772    6,339,473 
Buildings in inventory   132,219    140,677 
Trade and other receivables   66,754    68,175 
Trade receivables on finance leases   1,220    1,420 
Tax receivables on companies   4,426    1,224 
Cash and cash equivalents   117,089    81,125 
Assets held for sale   67,294    121,468 
Total current assets   389,001    414,090 
TOTAL ASSETS   7,162,773    6,753,563 
Balance Sheet Liabilities in K€ 6/30/2017 12/31/2016
Capital   790,485    790,485 
Additional paid-in capital   769,318    877,963 
Legal reserve   26,311    26,311 
OSRA (*) 633,343 633,342
Consolidated reserves 455,621 93,687
Consolidated net income (Group share)   388,341    388,077 
Consolidated shareholders' equity (Group share)   3,063,420   2,809,866
Non-controlling interests   305,436    292,564 
TOTAL SHAREHOLDERS' EQUITY   3,368,855   3,102,430
Provisions for risks and charges   -    - 
Bank and bond debt   2,773,037    3,030,701 
Other financial debts   108,938    110,851 
Derivative financial instruments   36,339    47,663 
Deferred tax liabilities   3    1,736 
Non-current liabilities   2,918,317   3,190,950
Provisions for risks and charges   4,930    6,387 
Bank and bond debt   663,422    296,742 
Other financial debts   53,247    34,545 
Trade payables   20,114    21,817 
Other payables   129,942    98,882 
Liabilities held for sale   3,946    1,809 
Current liabilities   875,600   460,183
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   7,162,773    6,753,563


[1] The procedures for a limited review of the consolidated financial statements were performed. The auditors' report will be issued after completion of the procedures required for publication of the half-year financial report.

[2]     http://www.eurosic.fr/Eurosic-Rapprochement-amical-entre-Gecina-et-Eurosic_a1210.html
http://www.gecina.fr/sites/default/files/20170621_-_cp_gecina_en_-_vf.pdf

[3]     On a fully diluted basis of subordinated bonds redeemable in shares (OSRA), excluding treasury shares, i.e. a total of 64,732,509 shares

[4]     Exchange ratio before adjustment in order to take into account the impact of Gecina's share capital increase.

[5]     The firm Ledouble was appointed as independent appraiser during the Board of Directors' meeting of June 20.

[6] VALUE of the assets under management = VALUE of the assets and operations (at 100% including transfer taxes) managed by the Eurosic Group at June 30, 2017

[7] VALUE of the assets under management = VALUE of the assets and operations (at 100% including transfer taxes) managed by the Eurosic group at June 30, 2017

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