Inmobiliaria del Sur S A : Group Insur 9M Results Presentation

Grupo Insur

Results Presentation 9M 2020

October 28th 2020

"	Legal Notice
This presentation is the exclusive property of INMOBILIARIA DEL SUR. S.A. (INSUR). Its total or partial reproduction
	is strictly prohibited and it is covered by current law. Offenders will legally prosecuted both in Spain and abroad.
	The use, copy, reproduction or sale of this publication may only be undertaken with the explicit authorization in
	writing by INSUR. This document has been drawn-up by INSUR, exclusively for use in the presentation of results of
	the Grupo Consolidado Inmobiliaria del Sur S.A. corresponding to the 9M 2020 Results.
	This document is purely informative and does not constitute an acquisition, exchange or sales offer, nor an
	invitation to form a purchase offer on securities issued by the Company. Except for financial information included in
	this document (which has been taken from the 9M 2020 Consolidated Accounts of Inmobiliaria del Sur S.A. the
	document contains statements on intentions, expectations and future prospects. All declarations, except those
	based on past data, are future declarations, including those regarding our financial position, business strategy,
	management plans and objectives for future operations. These intentions, prospects or forecasts are subject, as
	such, to risks and uncertainties which may determine that what actually occurs does not correspond to them.
	These risks include the evolution and competition of the real estate sector, preferences and expenditure and
	investment trends of consumers and their access to credit, economic, financing and legal conditions, plus others.
	The risks and uncertainties that could possibly affect information provided are difficult to predict. The information
	included in this document has not been checked or revised by INSUR auditors. The Company assumes no obligation
	to revise or publicly update these declarations in the event of changes or unforeseen events that may affect them.
	The Company provides information on them and other factors that may affect future declarations, the business and
	financial results of INSUR Group, in the documents presented before the Spanish National Stock Exchange
	Commission. Anyone interested is invited to consult these documents.
	INSUR, its subsidiaries or other companies of the group or companies in which INSUR has an interest, will not be
	held responsible, regardless of whether negligence of any other circumstance is involved, for damage or loss that
	may arise from the improper use of this document or its contents.

2

• Rationale behind the use of the proportionate method

Grupo INSUR (Insur) , whose parent company is Inmobiliaria del Sur, S.A., develops two main activities, housing development and rental.

The rental activity is carried out by Insur Patrimonial, S.L.U. (IPAT), fully owned by Insur, as well as by other companies which are also fully owned by IPA.

The housing development activity is conducted through a company fully owned by Insur, Insur Promoción Integral, S.L.U., (IPI), which in turn holds shares in different companies. In order to increase the activity and also to diversify the risks, a significant part of this business is carried out through joint ventures in companies where Grupo Insur has a significant stake (usually 50%). With a view of increasing the quality of the houses, obtaining better customization options and a stricter control on the works, the Group develops the construction activity both for its fully owned developments and for the JV´s. This instrumental activity is carried out by IDS Construcción y Desarrollos, S.A.U, which is fully owned by IPI.

As the Group does not have the control over the JVs, in the sense that it cannot decide unilaterally the financial and activity policies, but it shares these decisions with the rest of the partners, these JVs are consolidated by the equity method as stablished in the IFRS 11. Accordingly, the consolidated financial statements do not include the proportional part of the Group in the assets, liabilities, incomes and expenditures of such JVs. The Group is fully involved in the management of these JVs which consolidate by the equity method, not just because it holds at least the 50% of the equity, but because it carries the operating management based on the management, construction and marketing contracts undersigned, as these JVs lack from human and material resources.

Therefore, since the activities of these companies are monitored internally on a proportional basis, based on the percentage of ownership in each one, the Parent's directors consider that for a better understanding and analysis of its consolidated business and, above all, of the true magnitude of its activities, the volume of assets managed and the size of its financial and human resources, it is more appropriate to present this information using the proportional consolidation method

At the end of this presentation can be found a conciliation between the financial statements consolidated by both methods.

3

Executive Summary. 9M 2020 Highlights

Figures by proportionate method

• EBITDA and Net Profit show excellent performance due to the

REVENUES

105.4 M€ +68.3%

EBITDA

22.2M€ +113.5%

HOMEBUILDING

RENTALS

CONSTRUCTION

ASSET

MANAGEMENT

OPERATING PROFIT

19.7 M€ +134.5%

NET PROFIT

11.6 M€ +1.079,5%

81.0 M€ +298.9%

9.7 M€ -0.2%

12.4 M€ -57.4%

2.3 M€ -32.8%

	concentration of deliveries within the last semester
•	Housebuilding: good performance after the end of the lockouts
	thanks to the recovery of sales and deliveries
•	Rental income are affected mainly by the lack of rents of the
	República Argentina 23 Building in Seville (being converted into a
	hotel)
• Construction and management are temporarily affected by the delay
	in the start of the developments through JVs
• The Group has implemented measures in order to ease the impact of
	Covid-19 since the beginning
• The AGM will take place on the 3rd of April. In that meeting, the Board
	will propose a significant reduction of the complementary dividend
	(25%) despite the good results of the 9M 2020
•	On October 28th, the Group purchased an additional 40% of the
	investee IDS Madrid Manzanares, reaching a 90% stake. The
	application of IFRS 3 on business combinations to the takeover of this

NET FINANCIAL DEBT	189,8 M€
	-3.4% vs Dec 19

M€ = Million €

company will result in the recording of a profit after tax of 15.4

million euros in 4Q 2020.

4

Executive Summary. 9M 20 Results

M€

All figures by proportionate method

+68.3%

		105.4	+298.9%
			81.0
		62.6				-57.4%
											9M 19
				-0.2%		-32.8%
				29.2				9M 20
			20.3
			9.7	9.7	12.4
				3.4	2.3
		R e v e n u e s	H o u s e b u i l d i n g	R e n t a l s	C o n s t r u c t i o n	A s s e t
							M a n a g e m e n t
M€	+113.5%	+164.3%
		+134.5%
		22.2	22.1		19.7	+1,079.5%
						+1,078.1%
						15.4
		10.5						11.6				9M 19
		8.4	8.4
										9M 20

E B I T D A

A d j u s t e d E B I T D A O p e r a t i n g P r o f i t

P B T

N e t P r o f i t

-1.6-1.2

REVENUE BREAKDOWN

Housebuilding	Rentals
Construction	Asset Management
	2%
12%
9%

64%

PRESALES	OCCUPANCY RATE
100% Owned and JVs in their participation %

M€

148.5	79.9	84.5%	88.3%
9M 19	9M 20	9M 19	9M 20
-46.2%	+3.8p.p.	5

Housebuilding

• Proportional method
• Owned developments and total JVs

			Revenues*
M€
			76.6	65.0		81.0
43.1	39.9	46.0
					20.3
2 0 1 5	2 0 1 6	2 0 1 7	2 0 1 8	2 0 1 9	9 M 1 9	9 M 2 0

• 9M 20 commercial sales reached 65.7 M€ (39.7 M€ adjusted by percentage of participation)
• The Group currently has 1.742 houses under development of which 584 are under construction, 94 are completed and 444 already sold
• Presales amount to 128.7 M€ (79.9 M€ adjusted by the % of participation)
• The Group has 57.2 M€ (25.7 M€ 100% owned and 31.5 M€ JVs) of presales of finished developments and with first occupation license to be obtained before Dec 31st.

Presales breakdown

																											100% owned and total JVs		100% Owned and JVs in their
																												-47.3%					participation %
						Presales**
																				244.4
												197.5	196.9		128.7				128.7					-46.2%
		M€
					135.4																							148.5	79.9
												155.8	153.9
																			191.9
	69.9	76.2	80.2
												101.6									96.0
	16.4	23.5																					101.6
					55.2																								52.8
	53.5	52.7				41.7				43.0
									27.1					52.5				52.5
													27.1			27.1
		2 0 1 5		2 0 1 6		2 0 1 7				2 0 1 8			2 0 1 9			9 M 2 0
							9M 19	9M 20		9M 19	9M 20
								100% owned			JV																100% owned		JV	6

Ongoing developments and land portfolio

	Ongoing Developments		Land Portfolio
	1,742 ongoing units	2,486 units
▪ 94 housing units completed of which 38 are pending to be	▪ 87,706 sqm of buildable plots for residential
delivered and 56 pending to be sold.	use, 816 units
▪ 33 ongoing developments (17 in West Andalucía, 6 in Costa del	▪ 30,000 sqm of buildable plots for hotel use.
Sol, 7 in Madrid, 1 in Cáceres and 2 in Granada) totaling 1,648	▪ 8,238 sqm of buildable plots for tertiary use.
units:	▪ Long-term purchase options on 10 plots with a
▪ 152 housing units underway directly by Insur with a	building potential of 191,140 sqm (1,670
development potential of 19,646 sqm.	housing units).
▪ 1,496 housing units underway through JVs (with Insur holding a
50% share), with a development potential of 190,045 sqm.	Ongoing					Land
			developments					portfolio

TOTAL OF 4,228 UNITS

7

Finished developments

Figures as of September 2020

	100% owned developments
	Development	Location	Units	Sold units
	Altos Castilleja VII	Castilleja de la Cuesta (Sevilla)	1	1
	Antonio Mairena	Sevilla	3	1
	Conde de Zamora	Córdoba	17	1
	Plaza del Teatro	Málaga	16	11
	Altos del Retiro	Churriana (Málaga)	12	5
			49	18 (37%)
JV developments
	Development	Location	Units	Sold units
	Pineda Parque I	Sevilla	9	2
	Alminar	Marbella (Málaga)	14	2
	Selecta Atenas	Dos Hermanas (Sevilla)	1	1
	Selecta Olimpia	Dos Hermanas (Sevilla)	2	2
	Selecta Costa Conil	Conil de la Frontera (Cádiz)	8	4
	Boadilla Garden	Boadilla del Monte (Madrid)	7	7
	Santa Ana III	Dos Hermanas (Sevilla)	4	2
			45	20 (44%)
					8
	TOTAL		94	38 (40%)

Developments under construction

Figures as of September 2020
	100% owned developments
	Development	Location	Units	Sales Volume	Estimated	Sold
	(M€)	delivery	units
	Residencial 75 Aniversario	Sevilla	48	33.6	2020	29
			48	33.6		29 (60%)

JV developments
Development	Location	Units	Sales Volume	Estimated	Sold
(M€)	delivery	units
Elements Fase I	Marbella (Málaga)	52	18.2	2020/2021	24
Selecta Hermes	Dos Hermanas (Sevilla)	116	22.9	2020/2021	93
Selecta Salobreña Fase 1	Granada	55	9.8	2021	27
Pineda Parque II	Sevilla	80	26.8	2021/2022	23
Selecta Ares	Dos Hermanas (Sevilla)	76	17.8	2021	66
Mirador del Olivar	Valdemoro (Madrid)	53	13.7	2021	30
Selecta Extremadura Cáceres	Cáceres	80	19.4	2021/2022	52
Selecta Mykonos	Dos Hermanas (Sevilla)	24	9.2	2022	10
		536	137.8		325 (61%)
TOTAL		584	171.4		354 (61%)

9

Projects under development

100% owned developments				* Under commercialization
			Figures as of September 2020
Development	Location	Units	Estimated construction start date	Sold units
Santa Aurelia I	Sevilla	52	2020	8
Santa Aurelia II	Sevilla	52	2021
JV developments		104		8 (8%)
Development	Location	Units	Estimated construction start date	Sold units
Selecta Apolo 1ªf*	Dos Hermanas (Sevilla)	37	2020	13
Terrazas de Santa Rosa 1ª*	Córdoba	46	2020	17
QuintEssence I*	Marbella (Málaga)	24	2021	2
Selecta Salobreña Fase 2	Salobreña (Granada)	55	2021
Boadilla Essences II	Boadilla del Monte (Madrid)	16	2021
Selecta Apolo 2ªf	Dos Hermanas (Sevilla)	33	2021
Selecta Apolo 3ªf	Dos Hermanas (Sevilla)	38	2021
Selecta Ares II*	Dos Hermanas (Sevilla)	76	2021	5
Monte de la Villa Unique I a*	Villaviciosa de Odón (Madrid)	10	2021	3
Monte de la Villa Unique II a	Villaviciosa de Odón (Madrid)	16	2021
Terrazas de Santa Rosa 1b	Córdoba	46	2021
QuintEssence II	Marbella (Málaga)	56	2021
Selecta Bermes	Sevilla	42	2021
Elements Fase II*	Marbella (Málaga)	66	2022	4
Monte de la Villa Unique I b	Villaviciosa de Odón (Madrid)	12	2022
Monte de la Villa Unique II b	Villaviciosa de Odón (Madrid)	20	2022
Monte de la Villa Exclusive	Villaviciosa de Odón (Madrid)	32	2022
BA-8	Dos Hermanas (Sevilla)	102	2022
QuintEssence III	Marbella (Málaga)	48	2022
Calle Juglar	Sevilla	56	2022
Terrazas de Santa Rosa II	Córdoba	95	2022
Elements Fase III	Marbella (Málaga)	34	2023
		960		44 (5%)
TOTAL		1,064		52 (5%)
				10

Rentals

• During 9M 20, 4,643.35 sqm have been sold and there have been contract terminations of 4,666.76 sqm
• Occupancy rate rises to 88.3% . 8,350.54 sqm of the 15,748.54 sqm pending to be rented correspond to spaces that are being renewed
• The annualized rental income of the contracts in force at 30th September 2020 (including incomes derived from the parking activity, the contract of the hotel at Av. Rep Argentina 23 in Seville and the 90% of the rental of the North Building at Rio 55 in Madrid) amounts to 17.5M€
• In 2021, contracts for an area of 8,827.72 sqm and an annualized income of 1.3M will be terminated
• The License of First Occupation for Río 55 at Madrid was obtained on July 15th
• The acquisition of the additional 40% of the stake in IDS Madrid Manzanares S.A. (owner of the Río 55 North Building) took place on October the 28th

			Revenues
M€
					-0.2%
11.8			12.1	13.6
10.5	10.4		9.7	9.7
2 0 1 5	2 0 1 6	2 0 1 7	2 0 1 8	2 0 1 9	9 M 1 9	9 M 2 0

					Square meters sold
GAV of the assets aimed both at rental and own use
amounts to 346.0 M€
(valuation at 30/09/20 estimated from CBRE valuation at		SQM
31/12/19 and revised with additions at cost value and
disposals due to deliveries)
134,213 sqm office and commercial					14,100			14,107				16,380
		11,763
premises portfolio and more than 2,500	10,590
parking spots																		4,643
	2 0 1 5	2 0 1 6	2 0 1 7			2 0 1 8	2 0 1 9				9 M 2 0

11

Construction and Project Management

	12.4M€ CONSTRUCTION REVENUES			2.3 M€ MANAGEMENT REVENUES
	-57.4% DECREASE						-32.8% DECREASE
Main projects currently managed:
								FOC: (73 units):
								▪ Selecta Conil: 73 units (71 already delivered)
			▪	Selecta Entrenúcleos (Sevilla), 2.100 units
DESARROLLOS METROPOLITANOS DEL SUR,	▪	Selecta Conil (Conil de la Frontera), 73 units		UNDER CONSTRUCTION (351 units):
▪	Selecta Salobreña (Granada), 110 units		▪ Selecta Hermes: 116 units
S.L.
▪	Selecta Cáceres (Cáceres), 80 units		▪ Selecta Ares: 76 units
			▪	Selecta Avenida Jerez (Sevilla): 44 units		▪ Selecta Cáceres: 80 units
								▪ Selecta Salobreña I: 55 units
								▪ Selecta Mykonos: 24 units
IDS RESIDENCIAL LOS MONTEROS, S.A.	▪	Los Monteros (Marbella): 276 units		UNDER CONSTRUCTION (52 units) :
	▪ Elements I: 52 units
IDS PALMERA RESIDENCIAL, S.A.	▪	Pineda Parque (Sevilla): 80 units		UNDER CONSTRUCTION (80 units) :
	▪ Phase II: Block 4 and 5: 80 units
			▪	Boadilla Essences (Boadilla del Monte, Madrid), 48	FOC (32 units):
IDS BOADILLA GARDEN RESIDENCIAL, S.A.	▪ Boadilla Essences I: 32 units (25 already
	units
					delivered)
IDS MEDINA AZAHARA RESIDENCIAL, S.A.	▪	Terrazas de Santa Rosa (Córdoba), 187 units		UNDER DEVELOPMENT
IDS MONTEVILLA RESIDENCIAL, S.A.	▪	Monte de la Villa (Villaviciosa de Odón, Madrid), 58	UNDER DEVELOPMENT
	units
HACIENDA LA CARTUJA, S.L.	▪	Monte de la Villa (Villaviciosa de Odón, Madrid), 32 units	UNDER CONSTRUCTION (53 UNITS)
▪	Mirador del Olivar (Valdemoro), 53 units		▪ Mirador del Olivar: 53 units

FOC: First Occupation Certificate

12

NAV, GAV, LTV & debt

INSUR GAV *		INSUR NAV**				LTV evolution %
	38.9	36.2	36.5	38.6	39.0	36.2
24%

408.6M€			327.5*M€
		341.2
76%				1Q 2019	333.8	333.4
				330.9
Real Estate development	Rental	325.7
							2017	2018	2019	1T 20	1S 20	1H 20
INSUR GAV**								Net financial debt evolution
		FY 2018	FY 2019	1Q 2019	1H 2020	9M 2020	M€		196.4	208.1	213.7
							195.3	184.8	189.8

34%

524.2 M€

66%

Real Estate development

Rental

• valuation at 30/09/20 estimated from CBRE valuation at 31/12/19 and revised with additions at cost value and disposals due to deliveries
• • Proportionate method

2017

2018

2019

1T 20

1S 20

1H 20

13

Share evolution

Share Price 9M 2020

In the 9M 2020 the share Price (ISUR) dropped by 36%. In that same period, the Ibex 35 decreased by 31% and the Ibex Small Caps decreased by

7%. The share closed at 6.7 € which implies a market cap of 113.7 M€ at the 30th September 2020

Market Cap September 2020	NAV September 2020	Discount vs NAV
			14
113.7 M€	334.4 M€	66%

Conciliation between equity method and proportionate method

Consolidated P&L M €

	9M 2020				9M 2019
Equity method	Adjustments Proportionate			Equity method	Adjustments	Proportionate

	Revenues	66.3	39.1	105.4		80.6	(18.0)	62.6
a	Housebuilding	27.9	53.1	81.0	10.5	9.8	20.3
	Rentals	9.3	0.4	9.7	9.6	0.1	9.7
b	Construction	25.1	(12.7)	12.4	56.5	(27.3)	29.2
	Asset Management	4.0	(1.7)	2.3	4.0	(0.6)	3.4
c	Results from entities valued using
the equity method	8.7	(8.7)	(0.0)	0.6	(0.6)	(0.0)
	EBITDA	18.6	3.6	22.2		10.3	0.3	10.5
	Result on the sale of investment
	property	0.1	-	0.1	2.1	-	2.1
	Adjusted EBITDA	18.5	3.6	221	8.2	0.3	8.4
	Operating profit	16.2	3.5	19.7	8.1	0.3	8.4
	Financial result	(3.7)	(0.5)	(4.2)	(9.8)	(0.2)	(10.0)
	Profit before tax	12.5	3.0	15.4		(1.7)	0.1	(1.6)
	Adjusted net profit	11.6	-	11.6	(1.2)	-	(1.2)
	Net profit	11.6	-	11.6		3.2	-	3.2

Main adjustments:

1. Housebuilding revenues: it increases as it adds the revenue figure of the JVs in the proportion in which Grupo Insur participates in them
2. Construction revenue: this figure is composed by the incomes generated by the works in the JV developments. When consolidating by the proportionate method, the incomes corresponding to the % of the participation of the Group in these companies are eliminated.
3. In the consolidated P&L under the proportionate method, the results of the joint ventures are included as operating profit, financial result and income tax expense, in the percentage that the Group owns in those JVs, remaining as results from entities valued using the equity method the results corresponding to the associated companies

15

Conciliation between equity method and proportionate method

Consolidated balance sheet M €

	30/09/2020					31/12/2019
Equity method	Adjustments	Proportionate			Equity method	Adjustments	Proportionate

	Property, Plant and Equipment	152.0	15.7	167.7	146.6	0.1	146.7
a	Financial investments in JVs	44.3	(42.8)	1.4	42.8	(41.0)	1.8
b	Inventory	85.3	69.9	155.2	100.5	100.8	201.3
	Debtors and other receivables	17.3	(1.3)	16.0	29.5	(8.3)	21.2
	Other assets	49.9	(4.5)	45.4	43.1	(2.1)	41.0
	Cash and equivalents	54.2	17.8	71.9	33.7	16.3	50.0
	TOTAL ASSETS	403.0	54.6	457.6		396.3	65.8	462.1
	Net equity	118.7	-	118.7	107.2	-	107.2
c	Amounts owed to credit institutions	213.3	31.9	245.2	179.1	40.6	219.7
	Other financial liabilities	7.6	-	7.6	26.7	-	26.7
d	Trade and other payables	28.9	15.5	44.4	43.5	15.0	58.5
Other liabilities	34.5	7.2	41.7	39.7	10.2	50.0
	TOTAL EQUITY AND LIABILITIES	403.0	54.6	457.6		396.3	65.8	462.1

Main adjustments:

1. Financial investments in JVs: the cost of the financial investments in JVs on the assets of the consolidated balance according to the equity method is replaced by the assets and liabilities that these JVs incorporate in the proportionate balance sheet, in the participation held by the Group in them.
2. Inventory: the proportionate method of consolidating the JVs implies the incorporation of the inventory figure in the proportion in which the Group participates in these companies.
3. Amounts owed to credit institutions: the proportionate method of consolidating the Jvs implies the incorporation of the debt figure in the proportion in which the Group participates in these companies
4. Trade and other payables : the integration of the JVs implies the incorporation of their accounts payable in the proportion in which the Group participates in these companies

16

María Pérez-Mosso

Head of IR

Tel: [phone] [e-mail]