Paris, February 16, 2018 - 8:00 am
2017 Annual Results - Regulated information

IFRS net income up a sharp 51.2%

"2017 was a particularly active year for Cegereal, with leases signed for 41,000 sq.m of office space, and the remaining space at the Hanami campus taken up. We also continued to pay special attention to improving returns on our assets, and are continuing to invest, in order to anticipate our tenants' new expectations. Backed by institutional investors, Cegereal is ready to pursue its growth strategy and carry out further acquisitions, said Cegereal's Chief Executive Officer, Jérôme Anselme. 

  • Key indicators

       

In millions of euros 2017 2016 Change
IFRS rental income 51.3 47.2 +8.6%
IFRS net income 62.4 41.3 +51.2%
EPRA earnings 32.7 28.2 +15.9%
Net cash flows from operations 35.8 34.8 +3.0%
Portfolio value (excluding transfer costs) 1,169 1,124 +4.0%
Occupancy rate 91.4% 87.0% +4.4 pts
Debt ratio 53.4% 52.1% +1.2 pt
EPRA NNNAV per share excluding transfer duties (in €) 43.8 40.8 +7.3%
Replacement NAV per share including transfer duties (in €) 50.4 47.1 +7.0%
Ordinary dividend per share (in €) 2.2 2.1 +4.8%
Special dividend per share (in €) 1.9    
Total Share Return over the last 12 months 12.5% 9.2% +3.3 pts

        

The Total Share Return over the last 12 months came to 12.5%, with NAV growth of 7.3% and a distribution ratio of 5.1%.

EPRA NNNAV was up 7.3%, primarily driven by an increase in the portfolio value. The indicator stood at €43.8 per share, reflecting the rise in fair value of properties (positive impact of €3.4 per share), dividend distributions (negative impact of €2.1 per share), consolidated earnings growth (positive impact of €1.3 per share), rent-free periods granted to new tenants (positive impact of €0.2 per share) and changes in the fair value of bank debt (positive impact of €0.2 per share).

In 2017, rental income totaled €51.3 million, up 8.6% from €47.2 million in 2016, of which €9.5 million was contributed by the Hanami property.

EPRA earnings for the year amounted to €32.7 million, up 15.9% like for like from €28.2 million in 2016, with Hanami accounting for €5.2 million of the total.

Net cash flows from operations climbed 3% to €35.8 million, fueled by the strong performance of Cegereal's rental activity. The Hanami property represented €3.8 million of the total.

IFRS net income amounted to €62.4 million in 2017, up a sharp 51.2% from €41.3 million in 2016, thanks to improvements in the cost of debt in 2016 and 4.0% growth in the portfolio value.

  • A RECORD YEAR FOR RENTAL ACTIVITY

Cegereal's rental business enjoyed strong momentum in 2017, with extensions, renewals and new leases signed for 41,000 sq.m, or nearly 25%, of the total portfolio.

The most notable signings were as follows:

  • Arcs de Seine: Huawei leased additional space in the building for a minimum term of six years, offsetting the early departure of Boursorama and bringing the total office space leased by Huawei to 11,700 sq.m. The building's occupancy rate stood at 98.4% at the year-end.
  • Europlaza: My Money Bank took up a portion of the space vacated by GE Capital during the year (3,000 sq.m), and KPMG signed a firm nine-year lease for 2,500 sq.m of space in the building's "garden floors". Cegereal is currently in discussions regarding the 8,000 sq.m of soon-to-be-renovated vacant space in the upper floors of the tower, which is expected to be leased in the near future. The building's occupancy rate stood at 73.7% at December 31, 2017.
  • Hanami: Axens signed a firm six-year lease for the eighth and final building at the Hanami campus, representing 2,900 sq.m of office space. The office complex, Cegereal's most recent acquisition, is now fully leased.

Thanks to its marketing initiatives during the year, Cegereal's occupancy rate stood at 91.4% at December 31, 2017, up from 87% at end-2016. The impact of the additional revenue generated by the rental activity will be fully felt in 2018.

In 2018, Cegereal will continue to offer its tenants optimized office space featuring premium amenities and a commitment to the highest environmental standards.

  • RECOGNITION AND AWARDS FOR CEGEREAL'S CSR PERFORMANCE

Cegereal once again received recognition for the excellence of its financial and non-financial reporting. The Company won two Gold Awards at the annual conference of the European Public Real Estate Association (EPRA) and, for the third year in a row, was positioned among the top 3 in the Global Real Estate Sustainability Benchmark (GRESB) ranking, coming in at second in the "listed office property companies in Europe" category.

  • A healthy balance sheet

At December 31, 2017, Cegereal's debt ratio stood at 53.4%, compared with 52.1% at end-December 2016. Thanks to the refinancing carried out in 2016, Cegereal reduced the average cost of its debt to 1.4% at December 31, 2017.

  • Special dividend distribution in 2018: €4.1 per share

In light of its strong performance, at the Annual Shareholders' Meeting to be held in April 2018, Cegereal intends to recommend paying a total dividend of €4.1 per share, comprising an ordinary dividend of €2.2 per share and a special dividend of €1.9 per share.

Cegereal's Board of Directors met on February 15, 2018 to approve the audited consolidated financial statements for the year ended December 31, 2017.

The annual results presentation can be viewed on the Company's website:

www.cegereal.com

Investor Calendar

  • April 24, 2018       Annual Shareholders' Meeting
  • April 25, 2018       First-quarter 2018 revenue
  • May 4, 2018         Payment of the 2017 dividend
  • July 26, 2018        First-half 2018 results

For more information, contact:

Media Relations
Aliénor Miens / +33 6 64 32 81 75
alienor.miens@citigatedewerogerson.com   		Investor Relations
Charlotte de Laroche / +33 1 42 25 76 38
info@cegereal.com

About Cegereal

Created in 2006, Cegereal is a commercial property company that invests in prime office properties in Greater Paris. The portfolio's appraisal value is estimated at €1,257 million at December 31, 2017 (replacement value).
From an environmental point of view, Cegereal's portfolio benefits from the "Green Star" rating in the international GRESB benchmark.
Cegereal is a REIT listed on Euronext Paris since 2006, in compartment B (ISIN: FR0010309096). The Company had a market capitalization of €505 million on February 15, 2018.
www.cegereal.com



APPENDICES

IFRS Income Statement (consolidated)

In thousands of euros, except per share data      
  2017 2016
  12 months 12 months
    
 Rental income 51 259  47 196 
 Income from other services 16 166  13 991 
 Building-related costs (29 416)  (17 221) 
 Net rental income 38 008  43 965 
   
 Sale of building 0  0 
 Administrative costs (4 765)  (3 663) 
 Other operating expenses (10)  (716) 
 Other operating income 175  9 
    
 Increase in fair value of investment property 41 978  34 292 
 Decrease in fair value of investment property (4 800)  (13 900) 
 Total change in fair value of investment property 37 178  20 392 
   
Net operating income   70 587   59 987
    
Financial income 597  53 
Financial expenses (10 542)  (17 972) 
Net financial expense (9 945)  (17 919) 
   
 Corporate income tax 1 765  (802) 
   
CONSOLIDATED NET INCOME   62 408   41 265
of which attributable to owners of the Company62 408  41 265 
of which attributable to non-controlling interests0  0 
   
 Other comprehensive income   
   
TOTAL COMPREHENSIVE INCOME   62 408   41 265
of which attributable to owners of the Company  62 408   41 265
of which attributable to non-controlling interests0  0 
   
Basic earnings per share (in euros)   4,67   3,09
Diluted earnings per share (in euros)   4,37   2,95


IFRS Balance Sheet (consolidated)

In thousands of euros      
  Dec. 31, 2017 Dec. 31, 2016
   
Non-current assets  
    
Property, plant and equipment 56  61 
Investment property 1 169 400  1 124 100 
Non-current loans and receivables 21 591  22 949 
Financial instruments 31  184 
Total non-current assets 1 191 078  1 147 294 
   
Current assets  
   
Trade accounts receivable 18 481  16 539 
Other operating receivables 10 200  12 709 
Prepaid expenses 347  354 
Total receivables 29 029  29 602 
   
Cash and cash equivalents 61 718  18 634 
Total cash and cash equivalents 61 718  18 634 
    
Total current assets 90 747  48 236 
  TOTAL ASSETS   1 281 825    1 195 530 
    
Shareholders' equity  
    
Share capital 66 863  66 863 
Legal reserve and additional paid-in capital 77 600  115 043 
Consolidated reserves and retained earnings 410 662  359 877 
Net attributable income 62 408  41 265 
Total shareholders' equity 617 532  583 048 
    
Non-current liabilities  
    
Non-current borrowings 616 043  576 951 
Other non-current borrowings and debt 5 929  4 605 
Non-current corporate income tax liability   
Financial instruments 548  920 
Total non-current liabilities 622 519  582 476 
    
Current liabilities  
    
Current borrowings 2 979  2 224 
Trade accounts payable 11 589  5 832 
Corporate income tax liability 0   
Other operating liabilities 9 644  7 985 
Prepaid revenue 17 561  13 966 
Total current liabilities 41 774  30 007 
   
Total liabilities 664 293  612 483 
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES   1 281 825    1 195 530 


IFRS Statement of Cash Flows (consolidated)

In thousands of euros    
  2017 2016
     
OPERATING ACTIVITIES    
Consolidated net income   62 408    41 265 
     
Elimination of items related to the valuation of buildings:   
Fair value adjustments to investment property (37 178)  (20 392) 
     
Elimination of other income/expense items with no cash impact:    
Depreciation of property, plant and equipment (excluding investment property)   9    9 
Free share grants not vested at the reporting date   -    102 
Fair value of financial instruments (share subscription warrants, interest rate caps and swaps) (219)   895 
Adjustments for loans at amortized cost   1 752    2 949 
Contingency and loss provisions   -   
Corporate income tax paid (1 765)   
Penalty interest (165)   
    
  Cash flows from operations before tax and changes in working capital requirements    24 841    24 828 
     
Other changes in working capital requirements 14 380 376 
Working capital adjustments to reflect changes in the scope of consolidation   134 
   
 Change in working capital requirements   14 380    511 
     
 Net cash flows from operating activities   39 221    25 339 
     
INVESTING ACTIVITIES    
Acquisition of fixed assets (8 126)  (161 717) 
Net increase in amounts due to fixed asset suppliers 493  621 
     
 Net cash flows used in investing activities  (7,633)  (161,096)
     
FINANCING ACTIVITIES    
Change in bank debt 37 875  181 000 
Issue of financial instruments (share subscription warrants)   9 
Refinancing transaction costs (508)  (8 542) 
Purchases of hedging instruments   (168) 
Net increase in current borrowings 729   
Net decrease in current borrowings   (523) 
Net increase in other non-current borrowings and debt 1 323  654 
Purchases and sales of treasury shares 130  (43) 
Dividends paid (28 053)  (26 720) 
     
 Net cash flows from financing activities   11 496    145 668 
     
 Change in cash and cash equivalents   43 084    9 911 
     
  Cash and cash equivalents at beginning of the period   18 634    8 723 
     
 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD   61 718   18 634


French GAAP Income Statement

In euros          
 

 

 		 2017
12 months		 2016
12 months
         
  Sales of services     85 544 70 000
NET REVENUE   85 544   70 000
         
  Reversal of depreciation and amortization charges, provisions for   impairment and expense transfers 58 434 30 141
Total operating revenue        143 978   100 141
     
  Purchases of raw materials and other supplies 49 0
  Other purchases and external charges 1 769 653 2 130 369
  Taxes, duties and other levies 41 960 2 611 034
  Wages and salaries 871 904 792 428
  Social security charges 367 612 334 152
  Fixed assets: depreciation and amortization 189 0
  Contingency and loss provisions 235 610 20 347
  Other expenses 175 512 194 550
Total operating expenses       3 462 489   6 082 881
     
OPERATING LOSS       (3 318 511)   (5 982 740)
     
  Financial income from controlled entities 1 332 000 0000
  Other interest income 165 006 29 933
  Foreign exchange gains 432 0
Total financial income       1 497 438   29 933
     
  Interest expenses 34 619 12 599
  Foreign exchange losses     852 3
Total financial expenses       35 471   12 602
     
NET FINANCIAL INCOME        1 461 967   17 331
   
RECURRING LOSS BEFORE TAX       (1 856 544)   (5 965 409)
         
  Non-recurring income on capital transactions 19 982 83 162
Total non-recurring income       19 982   83 162
         
  Non-recurring expenses on management transactions 1 680 0
  Non-recurring expenses on capital transactions 4 178 281
Total non-recurring expenses       5 858   281
         
NET NON-RECURRING INCOME       14 125   82 881
         
  Employee profit sharing 0 0
  Corporate income tax (1,765,185) 802 365
TOTAL INCOME        1 661 398   213 235
TOTAL EXPENSES        1 738 632   6 898 129
         
NET LOSS       (77 234)   (6 684 893)


French GAAP Balance Sheet

In euros    
 ACTIF Gross amount Depr., amort. & prov. Dec. 31, 2017 Dec. 31, 2016
         
Uncalled subscribed capital   -      -   
Intangible fixed assets   -       
  Start-up costs   -      -   
  Research and development costs   -      -   
  Licenses, patents and similar concessions   -      -   
  Goodwill   -      -   
 Other intangible fixed assets   -      -   
  Advances/down payments on intangible assets   -      -   
    -       
Property, plant and equipment   -       
 Land   -      -   
 Buildings   -      -   
  Plant, machinery and equipment   -      -   
  Other property, plant and equipment   3 996    189    3 807   
  Property, plant and equipment in progress   -      -   
 Advances and down payments   -      -   
    -       
Financial fixed assets   -       
  Receivables from controlled entities   299 050 733      299 050 733    326 405 364 
  Other long-term investments   -      -   
 Loans   -      -   
 Other financial fixed assets   673 967      673 967    725 947 
         
FIXED ASSETS   299 728 696   189   299 728 507  327 131 311
         
Inventories and work in progress        
  Raw materials and other supplies   -      -   
  Manufactured products in progress   -      -   
  Services in progress   -      -   
  Semi-finished and finished goods   -      -   
 Goods held for resale   -      -   
         
Advances/down payments on orders       -   
         
Receivables        
  Trade accounts receivable   -      -   
 Other receivables   2 103 079      2 103 079    3 046 532 
  Subscribed capital, called up but not paid   -      -    - 
         
Short-term investment securities   -      -    - 
Cash and cash equivalents   998 862      998 862    3 748 046 
         
CURRENT ASSETS   3 101 941   -    3 101 941   6 794 577
         
Prepaid expenses   52 460      52 460    44 035 
Adjustment accounts   -      -   
         
 TOTAL ASSETS   302 883 097   189  302 882 908   333 969 924

In euros  

 
 EQUITY AND LIABILITIES Dec. 31, 2017 Dec. 31, 2016
     
Capital    
  Share capital (including paid-up capital: 66,862,500) 66 862 500 66 862 500
  Additional paid-in capital 70 922 676 99 004 926
  Revaluation reserve 152 341 864 152 341 864
     
Reserves    
  Legal reserve 6 686 250 16 047 000
  Statutory or contractual reserves   -   -
  Regulated reserves   -   -
  Other reserves 2 711 437 10 670
Retained earnings    
  Retained earnings   29 421 24 910
  Net loss for the year   (77 234)   (6 684 893)
  Interim dividend   - 0
     
Investment subsidies    
Regulated provisions    
     
SHAREHOLDERS' EQUITY   299 476 914   327 606 977
     
Income from the issue of equity instruments   -   -
Contingent advances   -   -
     
OTHER EQUITY   -    - 
     
Contingency provisions    
Loss provisions 235 610 20 347
     
CONTINGENCY AND LOSS PROVISIONS   235 610   20 347
     
Non-current borrowings and debt    
  Convertible bonds   -  
  Other bonds   -  
  Bank borrowings   -  
  Miscellaneous borrowings and debt 2 112 261  2 079 134
 

Trade accounts payable and other current liabilities		    
  Advances/down payments received on orders in progress   -  
  Trade accounts payable 718 155 3 769 534
  Tax and social liabilities 338 969 493 932
  Amounts owed to fixed asset suppliers 999  
  Other liabilities   -  
  Prepaid revenue   -  
     
LIABILITIES   3 170 384   6 342 600
     
Adjustment accounts   -   -
     
 TOTAL EQUITY AND LIABILITIES   302 882 908   333 969 924
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Source: Cegereal SA via Globenewswire