Metrovacesa S A : 13/05/2020 – Results Presentation 1Q FY2020 (PDF)
05/13/2020 | 01:55am EST
Results 1Q2020
May 13th, 2020
Serenity Collection (Estepona, Málaga)
Disclaimer
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2.
Agenda
Table of Contents
Highlights of the Quarter
Business Update
Financial Overview
Closing remarks Appendices
Today's Presenters
Jorge Perez de Leza CEO
Borja Tejada CFO
Juan Carlos Calvo IR
3.
Residencial Amura (Valencia)
1. Highlights of thequarter
Highlights of the quarter
Continued operational progress in 1Q20
Strong financial situation, reinforced in 1Q20
Covid-19 outbreak means reduced visibility
3,747 units in construction(510 added in 1Q) and 5,501 in commercialisation
Pre-salesbacklog increased to 2,248 units and €630m of future revenues
During 1Q20: 263 units pre-sold, 146 units delivered and €49m in land sales
Cash position of €292m in March, a substantial rise in 1Q, with net LTV of 3%
Positive FCF of €25m generated in the first quarter
No material debt repayments in 2020(1) and additional debt facilities signed in April
A disuptive event since early March. Still toosoon to evaluate the impact on earnings, cashflow or timetables
Key priorities for MVC are: cash preservation and conservative approach; business continuity to minimise the impact; health and safety preservation for all stakeholders
Note:
5.
(1) €7m debt repayment due in 2020
Covid-19: update and initiatives
Commercial initiatives
Contruction Works
• Points of sale reopened this week, after 8 weeks
• All sites are operational since April 13th.
closed
Works were halted only for 2 weeks
Employees and structure
•MVC's team is working remotely with good
productivity
#MVC Digital: 360º virtual tours, remote signing of reservations and contracts, etc.
#PromueveConfianza: deferral of two monthly payments for existing clients, incentives for new reservations, etc.
#BeSafe: insurance policy covering existing clients, from Covid-related situations
Progress is lower than 100%, due to stricter safety protocols, but it is gradually improving
New starts: decision to commence on new projects when the development financing is in place
•Safety procedures during the restriction period
and for the gradual comeback period
• €10,160 donation to charities, half from
employees and half from MVC
• Cost-cutting initiatives: freeze on new hirings,
reduction in non-essential general expenses
Cash preservation initiatives
Corporate decisions
Full withdrawal of the corporate loan available
New loans signed: €30m in April
Case-by-casereview of land capex commitments
Prioritising the use of project financing instead of advances from clients
Decision ondividend postponed until 2H2020 due to limited visibility
Share buyback plan remains in place
Guidance on 2020 free cashflow is supended, due to limited visibility
Annual General Meetingcalled for May 25th, available via remote access
#PromueveConfianza campaign
MVC is reacting and it is well prepared to face the situation
#MVC Digital: virtual tours
6.
Citrea (Málaga)
2. Business update
Mirador de Montserrat (Barcelona)
Key operational data as of March, 2020
Business
8,054 activeunits
€307k/unit
5,501 unitsand
active
ASP (1)
93 developments under
134 developments
commercialization
Sales Backlog (2)
2,248 €630m
Sold units €280k/unit ASP (1)
3,747
units under construction
146
units delivered in Q1
59
developments under construction
€255k/unit
263
€255k/unit
ASP (4)
units sold in Q1(3)
ASP
€49m
Land Sales
Financials
6.0 million sqm
c.36,500
81.1%(6)
Buildable
buildable
Fully
area
units (5)
permitted
€2.7Bn
€17.90 per share
3%
GAV Dec. 19
NAV Dec. 19
LTV
Increase of 1.2% /GAV due to Arpo land plot (Madrid)
Notes:
Average Selling Price, not including future HPA
Defined as cummulative pre-sales (reservations + contracts) minus deliveries
Reservations + contracts signed in the period, net of cancellations
Excluding some units from the historical portfolio
Estimated number of units may vary in time depending on the type of projects and maximum buildability
Current percentage, calculated on Dec 2019 appraisal values
8.
Residentialpre-sales: 263 units sold in Q1, backlog of 2,248 units
Pre-sales in the period: 263 units in 1Q20
Sales backlog split by province
# units
Rest
Madrid
31%
11%
Seville
Barcelona
1,511
6%
15%
512
888
Valencia
9%
263
FY17
FY18
FY19
1Q20
Málaga
28%
Under commercialization:
Sales backlog:
1Qpre-sales: comparatively stronger figures in January and February, followed by a weak March, already impacted by Covid-19
Improved visibility in thepre-salesbacklog: 2,248 units with €630m of future revenues. A growing proportion of the total portfolio in commercialization (41%).
5,501 units (ASP of €300k), 41% is already pre-sold
2,248 units (ASP €280k/unit)
# units
% pre-sold
# units
sales value in € m
40%
41%
Unsold
24%
5,378
5,501
€135m
€271m
€67m
(€33m)
€630m
Sold
€597m
3,840
263
146
3,247
3,253
44%
2,248
2,131
1,222
2,931
541
909
681
909
2,131
2,248
Dec. 17
Dec. 18
Dec. 19
Sales
Deliveries
Sales
541
Q1 20
Q1 20
backlog
FY17
FY18
FY19
Q1 20
Q1 20
Note / Definitions: Pre-sales: number of reservations plus contracts signed in a period of time, net of cancellations; Sales backlog:balance of accumulated pre-sales minus deliveries at a certain date;
9.
Units under commercialisation: total number of units in projects under commercialisation, including sold and unsold units; Active units:units in projects launched internally, including projects already
under commercialisation and projects in design phase (prior to commercialisation)
Residential active units:8,054 as of March
Active units Accum. March 2020(1)
# units
€1,730m
€792m
(€62m)
€2,460m
€46m
(€33m)
€2,473m
2,686
7,962
238
8,054
5,565
(289)
(146)
Active units
Launches
Deliveries Active units
Launches
Deliveries
Active units
Dec'18
FY19
FY19
Dec'19
1Q20
1Q20
Mar'20
Figures as of March 2020:
Totalactive units reached 8,054 with an average selling price (ASP) of €307k/unit
134 active developments:
93 under commercialization (5,501 units)
59 under construction (3,747 units)
Launches: 238 units launched in Q1
Active Units by Status
Active Units - Split by regional office (2)
# units
136
134
# of developments
8,054
West
7,962
Levante
commercialisation
Andalusia
3,747
15%
102
3,383
17%
in5,501
Construction
5,575
Commercialization
Design phase
1,329
Total
48
2,511
Center-
8,054 units
1,995
134 projects
2,141
1,754
North
East
24%
Andalusia
955
2,584
32%
267
2,563
1,735
919
Catalonia
FY17
FY18
FY19
Q120
27%
Active Units - Split by province
Madrid
4%
Barcelona
Rest
17%
38%
Málaga
23%
Seville
7% Valencia
11%
Notes:
(1) Active units: units in projects launched internally, including projects already under commercialisation and projects in design phase (prior to commercialisation)
(2) Center-North: Madrid, Navarre, Galicia, Basque Country, Canary Islands and Castilla-Leon; Levante: Valencian Community, Murcia and Ibiza; Catalonia: Catalonia and Mallorca; West Andalusia: Cordoba, Seville,
10.
Huelva, Cadiz; East Andalusia: Costa del Sol and Almeria
Construction & licenses as of March
Total units in construction (work in progress)
(# units)
Current units in construction, split by # of months from starting date
(# units)
3,747
3,383
1,329
955
FY17
FY18
FY19
March 20
1.615
990
676
466
0 to 6
6 to 12
12 to 18 > 18 months
months
months
months
3,747 units (59 projects)are currently under construction (WIP & finished product)
Total volume of contracted works is €528m, signed with 27 construction companies
Usual lead time is 20-24 months from construction start to delivery
New construction starts
(# units)
Building licenses granted & requested
(# units)
Requested
2,341
Granted
• In 1Q20: 394 units (9 projects)
received a building licence and
287 units (5 projects) requested
license
• 510 units initated
1,249construction works in 1Q 20
510
FY18FY191Q20
3,364
3,306
3,034
1,503
287
394
FY 18
FY 19
1Q 20
• 2,238 units (37 projects) under
licensing process now, with
avg. of 6 months into the
process
11.
Deliveries in 1Q 2020
146 units delivered in the first quarter
This compares to 14 units delivered in 1Q 2019, and represents the majority of the tail deliveries pending at the end of last year
A number of units were planned for delivery in March, but they had to be rearranged due to the outbreak of Covid-19. These should be made shortly after the restrictions are lifted
Still early to evaluate the impact of Covid-19 on the agenda of deliveries for the full year 2020
Villas de Miramadrid (Paracuellos, Madrid)
Details on 1Q deliveries
Split by regional office: 40% in Centre-North, 38% in Easter Andalusia, 18% in Catalonia and 4% in Levante
Average selling price (ASP) of delivered units is €255k(1), with a gross margin of 16%, a margin that is expected to improve in following quarters
Serenity Views (Estepona, Málaga)
Notes
12.
(1) Excluding a few units sold as historical stock, which are not fully comparable in terms of pricing
€49m revenues in 1Q20 compared to €25m in 1Q19 (+96%)
Equals to 46% of the full-year sales in 2019
Sale price in line with appraisal values (GAV)
Very significant in terms of cash flow generation, although with a limited impact on earnings: book value was in line with GAV
Two transactions made: one major plot in Valdebebas, plus one small residential plot in Logroño (€1m), a non-core location for
MVC
Valdebebas land sale
Land with a buildable area of 34,800 sqm for office use, sold for €48m. Located in the emerging district of Valdebebas, Madrid city, next to the subway station and close to the airport. MVC still owns an adjacent plot for 23,300 sqm
The transaction was closed in early March, just before the Covid-19 restrictions were introduced
13.
Land management: 306 units converted to FP in 1Q
Arpo, Pozuelo de Alarcón, Madrid
45,148 sqm for 256 units (11% of total area)
Fully-permittedstatus since January 2020
A landmark location, since Pozuelo is Spain's higher Income-per- capita municipality. With 240 Ha, Arpo is the largest urban development project in the municipality
MVC owns 11% of the total area, and this represents c.2% of our FP residential GAV(1)
Current status: final rezoning plan was approved in January 2020. Urbanization plan is expected before year-end, and urbanization works should start in early 2021
A turnkey 11,250 sqm office project located in Madrid city.
To be delivered in late 2022
Continued land sales
Sale of land in Valdebebas in 1Q
15.
Residencial Oasis (Algeciras, Cádiz)
3. Financial Overview
Financial Accounts: highlights 1Q 2020
Profit & Loss
Total revenues:€81.4m
Residential deliveries:
Land Sales:
Villas de la Calderona (Bétera, Valencia)
€48.8m
€32.6m
• 146 units
• 98% commercial
• Gross margin: 16%
• 2% residential
EBIT: €(2.7)m
Net Profit: €(6.2)m
Mirador de Montserrat (Barcelona)
Financial situation
LTV ratio:3%
Net debt: €90m
Cash: €292m
€209m fully available
€83m advances from clients
not considered for net debt
17.
Net Debt: a very sound financial situation
Net Debt of €90m, small change vs YE19
7890
Dec2019Mar2020
Net Debt
A very sound financial situation
Low LTV ratio of 3%
Cash position of €292m at March 2020, up from €139m at Dec2019
No significant debt maturies in the near term (€7m in 2020)
The corporate loan expires in Dec.2022
Cash preservation measures recently taken
Full withdrawal of the remaining unused corporate loan facility
€30m of new loans signed in April (€18m project loans and €12m corporate loan)
The total amount of available project loan facilities is €325m in March
Cash position of €292m
Gross Debt of €302m
292
302
152
76
139
209
54
226
72
83
99
67
Dec 2019
Mar 2020
Dec2019
Mar2020
Cash restricted
Cash unrestricted
Corporate loan
Developer loans
18.
Free Cash Flow for shareholders
Free Cash Flow available for shareholders: a simplified definition consistent with our FCF guidance
1Q 2020 (€ m)
+ EBITDA
(2.5)
+ Book value of land sold
49.3
+ Book value of land in residential deliveries
10.5
- Net financial expenses paid
(1.7)
- Corporate taxes paid
(0.0)
- Contractual repayment of corporate debt
(7.3)
- Other working capital changes
(22.9)
= Adjusted Free Cash Flow
25.4
Comments
Cash recovered from land sales, not included in Ebitda
Land component in the cost-of-goods-sold. It represents cashflow generation assuming no need to replenish the land bank
Based on the corporate loan agreement, 15% of land revenues will be used to anticipate repayment of this loan
Includes €34.2m in deferred collection of land revenues, to be collected in 2020, and the cash collection of some sales booked in 2019
Free cashflow available for shareholders. It is before capex in construction WIP (€48m in 1Q) or capex in land urbanization (€3m in 1Q), which are financed with other sources: clients' advances and developer loans (non-recourse)
19.
Residencial Novolérez (Pontevedra)
4. Closing remarks
Closing remarks
MVC is setting the ground for a solid post-Covid performance
A prudent management approach during the pandemia period focused on preserving liquidity
Containment of operational risks
Cash preservation policies
Strong financial situation
Low LTV ratio (3%) and €292m in cash
No significant debt maturities this year
Positive cash flow generation and good access to financing
No need to finance land purchases to secure projects for following years
▪ Large and high-quality land bank: greater flexibility
▪ Asset-backed values
▪ Well-diversified geographical presence: c.70% located
▪ Current stock price values our land portfolio at
in the top 6 provinces and 81% fully-permitted
just c.€140 per sqm or 7% of the GDV (1),
▪ Addressing multiple buyer profiles and price ranges
compared to 23% in the appraisal value
▪ Exposure to the commercial office segment
▪ Active management in land transformation
Spain's housing market has more solid fundamentals this time
▪ No apparent imbalances in the housing market
▪ Developers and banks are in better shape
House prices are 30% below previous peaks with adequate affordability ratios
New construction volume is contained
Developers have generally lower debt levels than in previous cycles
The banking sector has liquidity and solvency
Notes
21.
(1) Gross Development Value (GDV) refers to the current market value of a finished building, as estimated by the external appraisers
Llull (Barcelona)
Appendices
Financial accounts 1Q 2020
Other data
Profit and Loss Account
Summary P&L
A
(€m)
1Q 2019
1Q 2020
Revenues
28.9
81.4
Residential Development
3.5
32.6
Land Sales
25.4
48.8
COGS
(24.9)
(76.6)
COGs Developments
(2.5)
(27.5)
COGs Land Sales
(22.3)
(49.0)
Others
(0.2)
(0.1)
B
Gross Profit
4.0
4.9
% Gross Margin
14%
6%
Commercial Cost
(1.0)
(1.8)
Wages & Salaries
(3.2)
(4.0)
C Overheads
(2.1)
(1.7)
EBITDA
(2.3)
(2.6)
(Impairment)/revaluation/ depreciation
(0.5)
(0.1)
EBIT
(2.8)
(2.7)
% EBIT margin
-10%
-3%
D Net financial results
(1.4)
(3.1)
Others
0.0
(0.3)
EBT
(4.2)
(6.0)
Income Tax
(0.5)
(0.1)
Net Income
(4.7)
(6.2)
Key considerations
Total revenues of €81m
Residential revenues of €33m: 146 units delivered
Land sales of €49m, plot in Madrid
Gross margin of €5m
16% margin in residential development
Operating expenses rising with the increase in activity
191 full-time employees at the end of the period
Interest on senior debt: €3.1m
•€1.4m equity swap, and increase in withdrawal of corporate loan
23.
Balance Sheet
Summary Balance Sheet
(€m)
Dec. 2019 (1)
Mar. 2020
Investment property (1)
334.1
334.2
Other non- current assets
254.0
254.1
A
Total non-current assets
558.1
588.4
Inventory
1,902.3
1,886.5
Land
1,215.5
1,167.3
B
WIP & finished product
686.8
719.2
Cash
139.7
291.5
C
Other current assets
43.2
68.2
Total current assets
2,090.2
2,251.6
Total Assets
2,678.4
2,840.0
D
Provisions
10.1
9.8
Bank debt
95.0
223.0
Other non-current liabilities
23.4
25.0
Total non-current liabilities
128.4
257.8
Provisions
19.0
17.8
D
Bank debt
53.5
75.0
E
Other current liabilities
136.6
154.7
Total current liabilities
209.1
247.5
Equity
2,340.8
2,334.7
Total Equity and Liabilities
2,678.4
2,840.0
Key considerations
AIncrease in WIP due to new launches and investment in Capex
Increase in withdrawal of corporate loan (€135m), plus delivery of projects and sale of land
Increase in receivables related to deferred collection of land sales (€47m) to be collected within the year 2020
Corporate loan €135m withdrawn, partially repaid (€7m), net of arrangement fees (€3.6m)
Developer loan €75m withdrawn, prioritizing its use over client
downpayments
E Increase in debt with construction companies as more projects are in WIP (45 days of avg payment period)
Share buyback update:
€3.1m invested, 335,830 shares acquired to date
Notes:
(1) Audited financial statements for December 201924.
(1) Booked at fair market value (IFRS)
Some projects examples
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Residencial Citrea (Málaga)
Amura (Valencia)
Pórtico Simón Verde (Sevilla)
Complex with 5 blocks for 84 units, with terraces and views to the ocean
Metrovacesa SA published this content on 13 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2020 05:54:03 UTC
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