CPI Property S A : GROUP publishes half-year financial results for 2020

Press Release

Luxembourg, 31 August 2020

CPI PROPERTY GROUP publishes half-year financial results for 2020

CPI PROPERTY GROUP (hereinafter "CPIPG" the "Company" or together with its subsidiaries the "Group"), the largest owner of income-generating real estate in the Czech Republic, Berlin and the CEE region, hereby publishes its unaudited financial results for the first half of the 2020 financial year.

"CPIPG had a successful first half of 2020," said Martin Němeček, CEO. "Our property portfolio, rental income and occupancy grew as our team responded effectively to the challenges of COVID-19."

Key highlights for the first half of 2020 include:

• CPIPG's property portfolio increased to €9.8 billion (up 8% from year-end2019) as the Group made €928m of acquisitions, primarily offices in Warsaw and a 29.4% stake in Globalworth.
• Total assets increased to €11 billion. The Group's results also include a fair value adjustment of -€252 million (-2.8%) because of prudent revaluations of hotels and certain retail properties, plus the impact of a weaker CZK versus EUR.
• Net rental income was €164 million (up 13% versus H1 2019), because of acquisitions, higher occupancy at 94.8%, and 1.7% like-for-like growth in gross rental income. Net business income was €168 million (unchanged from H1 2019).
• Consolidated adjusted EBITDA was €164 million (up 15% versus H1 2019), and funds from operations (FFO) was €115 million (up 12%).
• The Group collected 93% of contracted rent before the impact of one-time COVID-19discounts, and 97% including discounts.
• Net Loan-to-Value (LTV) at 42.5% and Net ICR at 5.5x remain comfortably within the Group's financial policy.
• During the first half of 2020, the Group issued €1.19 billion equivalent of senior unsecured bonds in Euros, Sterling and Hong Kong Dollars. In January, CPIPG also issued SGD 150 million of perpetual hybrid bonds. The Group also signed a secured loan of €116 million.
• Proceeds from external financings were used for acquisitions and to repay about €850 million of bonds and schuldschein maturing in 2022, 2023, 2024 and 2025.

Notable events occurring after the end of H1 2020 include:

• In July, the Group increased the size of our secured loan facility in Berlin by €259 million.
• In August, the Group issued HUF 30 billion (about €86 million) of senior unsecured green bonds and acquired Concept Tower, an A+ office property in Warsaw.

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"The Group's capital structure, liquidity and operating performance have been robust throughout the COVID-19 outbreak," said David Greenbaum, CFO. "During the second half of 2020, CPIPG will continue taking proactive steps to ensure we are well-positioned to meet future opportunities and challenges."

CPIPG will host a webcast in relation to its financial results for the first half of 2020. The webcast will be held on Monday 7 September 2020 at 11:00am CET / 10:00am UK.

Please register for the webcast via the link below:

https://globalmeet.webcasts.com/starthere.jsp?ei=1361538&tp_key=9e53b7046e

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FINANCIAL HIGHLIGHTS

Performance		30-Jun-2020	30-Jun-2019	Change
Gross rental income	€ million	173	155	11%
Net rental income	€ million	164	145	13%
Total revenues	€ million	291	322	(9%)
Net business income	€ million	168	168	0%
Consolidated adjusted EBITDA	€ million	164	143	15%
Funds from operations (FFO)	€ million	115	103	12%
Net profit for the period	€ million	2	166	(99%)

Assets		30-Jun-2020	31-Dec-2019	Change
Total assets	€ million	10,962	10,673	3%
Property portfolio	€ million	9,826	9,111	8%
Gross leasable area	sqm	3,558,000	3,465,000	3%
Occupancy	%	94.8	94.3	0.5 p.p.
Like-for-like gross rental growth*	%	1.7	4.4	(2.7 p.p.)
Total number of properties**	No.	333	332	0%
Total number of residential units	No.	11,911	11,919	0%
Total number of hotel beds***	No.	12,248	12,416	(1%)

• Based on headline rent, excluding one-time discounts
• Excluding residential properties in the Czech Republic
• Including hotels operated, but not owned by the Group

Financing structure		30-Jun-2020	31-Dec-2019	Change
Total equity	€ million	5,392	5,469	(1%)
EPRA NRV (NAV)	€ million	4,865	5,100	(5%)
Net debt	€ million	4,174	3,300	26%
Net Loan-to-value ratio (Net LTV)	%	42.5	36.2	6.3 p.p.
Secured consolidated leverage ratio	%	10.1	9.6	0.5 p.p.
Secured debt to total debt	%	24.5	24.8	(0.3 p.p.)
Unencumbered assets to total assets	%	69.3	69.7	(0.4 p.p.)
Net ICR		5.5x	7.2x	(1.7x)

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CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT*

Six-month period ended

(€ million)	30 June 2020		30 June 2019
Gross rental income	172.8	155.2
Service charge and other income	60.5	64.8
Cost of service and other charges	(44.1)	(46.5)
Property operating expenses	(25.2)	(28.5)
Net rental income	164.0		145.0
Development sales	8.8	17.8
		(18.0)
Development operating expenses	(8.1)
Net development income	0.7		(0.2)
Hotel revenue	19.8	56.7
Hotel operating expenses	(24.6)	(41.1)
Net hotel income	(4.8)		15.6
Other business revenue	29.3	27.3
Other business operating expenses	(21.1)	(19.6)
Net other business income	8.2		7.7
Total revenues	291.2		321.8
Total direct business operating expenses	(123.1)		(153.7)
Net business income	168.1		168.1
Net valuation gain/(loss)	(11.0)	92.3
Net gain on disposal of investment property and subsidiaries	0.6	0.4
		(16.4)
Amortization, depreciation and impairment	(54.9)
Administrative expenses	(24.9)	(25.2)
		3.1
Other operating income	3.9
		(4.1)
Other operating expenses	(2.3)
Operating result	79.5		218.2
Interest income	8.9	5.7
Interest expense	(38.8)	(25.5)
Other net financial result	(6.0)	(11.8)
Net finance costs	(35.9)		(31.6)
Share of loss of equity-accounted investees (net of tax)	(14.9)	(0.4)
Profit before income tax	28.7		186.2
Income tax expense	(26.5)	(20.6)
Net profit from continuing operations	2.2		165.6

* The presented financial statements do not represent a full set of interim financial statements as if prepared in accordance with IAS 34

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