AA-/stable/F1+ SEMAPA : investors overview (Fitch …...2018 september SEMAPA : investors overview Société d'Etude, de Maîtrise d'ouvrage et d'Aménagement Parisienne , "Subsidiary"

2018 september

SEMAPA : investors overview Société d'Etude, de Maîtrise d'ouvrage et d'Aménagement Parisienne , "Subsidiary" of the City of Paris

About Us Our Activities Financial information Funding

AA-/stable/F1+

(Fitch Ratings 2018 june)

LEI n°969500Q869XE939A9978

Prospectus EMTN : visa AMF n° 18-0040

DPF NEuCP 05/2018

Semapa: a subsidiary of the City of PARIS

Equity structure: the City of Paris has 92% of the capital :

- municipal authority : 66%, the Department of Paris : 26% (becoming

on 2019 January 1st “The City of Paris “)

- The Region Île-de-France : 8%

Semapa is a “Public Local Company” :

- Provides services ‘in-house’ (Contrats de ‘quasi régie’ in French).

- Can be entrusted with missions without competition.

The Regional Chamber of Accounts has the right to review

Semapa.

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Semapa: a subsidiary of PARIS

The status of Local Public Company

Its legal status was established by a couple of laws

(2006 and 2010) inspired by European jurisprudence

on ‘in-house’ competition.

Its structure is similar to the German ‘Stadtwerke’.

Its legal status is very close to the Local Mixed

Economy Company (established by the 1983 Act).

3 3


Legal characteristics of the company

The legal form for the ‘Public Society of Local Development’

(SPLA) created by the Development Act of 13/07/2006.

Semapa is a special kind of Public Limited Company (Société

Anonyme in French) governed by private law (no obligatory

deposits with the Treasury, no public accountant).

The control exercised over the PLC by the shareholders is

similar to that exercised over their own departments.

Shareholdership is reserved exclusively for the local public

authorities (the minimum number of shareholders is 2 (art

L.1531-1 CGCT)).

The SPL is a ‘contracting authority’, subject to European

competition legislation.

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Strong involvement of the City of Paris

Equipment and construction programs are determined by the

City of Paris.

Subsidies or participations by the City of Paris contribute to

the overall balance of operations.

In case the City of Paris modifies the programs, the economic

balance must remain unchanged. Ex: In 2003, the programs

were modified following a change in orientation related to the

2001 local elections.

When an economic imbalance occurred (eg in 1997 following

the real estate crisis of the 1990s), the city restored the

equilibrium by reducing the equipment (expenses) to be

realized

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Institutional Framework

Semapa carries out urban development projects that fall within the competence of the City of Paris.

These projects:

Happen within the framework of administrative contracts.

Are usually defined as Concessions Agreements according to Article 300-1 of the Code of Urban Development or within the framework of mandates.

& are always asigned by Semapa’s public shareholders (local authorities).

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The activity of development and planning law

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Building permits are generally issued by the

municipalities

Within the metropolitan area of Greater Paris,

the urban planning competence is exercised by

the territorial public establishments (EPT)

The City of Paris has all the skills of a

municipality, a department, and an EPT as well.

7


Partnership Framework for Paris Rive Gauche (PRG)

PRG is a project carried out under an agreement

between the City of Paris and the SNCF (French

National Railway Company).

A Partnership Agreement was signed in 1991 and

renewed in 2011

The land rights, land prices and the timing of

transactions being determined in advance, the risk is

reduced on these charges (approximately 40% of

total charges).

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Semapa’s Business Lines

Land Management (acquisitions, disposals).

Public Works (roads, networks, structures).

Urban Design and Architecture Studies.

‘Operational Urban Planning’: Regeneration of urban

neighborhoods through the delivery of facilities

funded by the sale of land and volumes.

Financing of these operations.

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General Managing

Board of Directors

Directorate of Infrastructures

and Construction

Directorate of

Planning and

Urban

Developpement

Corporate

Communication

Directorate

Land and Legal

Administration and

Finance

Simplified flowchart of Semapa

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Business Model & Activities

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SEMAPA 11

PRG - Secteur Austerlitz

Economic model & developer’s main tasks

The developer performs two main tasks :

- The implementation of a construction program.

- The delivery of public facilities.

Which are economically interlinked :

- The constructability of the construction program generates

revenues through the sale of equipped land to developers.

- The construction of public facilities and spaces represents the

charges that the revenues are supposed to cover, topped up by subsidies

provided by the local authority.

Semapa achieves added value through the purchase and

resale of the land which is thereafter used to cover the

development charges

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SEMAPA activities

The main operations in progress

ZAC Paris Rive Gauche : Urban Development

Concession ; construction program 2.4 million m² of

land, budget €Bn 4.4.

ZAC Bedier : Urban Development Concession,

construction program: 74,000 m², budget : €M 86.

ZAC Paul Bourget: Urban Development Concession,

construction program: 66,000 m², Budget : €M 95.

ZAC Porte de Vincennes : Urban Development

Concession, construction program: 38,000 m², Budget :

€M 94.

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SEMAPA activities

key processes Urban design falling under the scope of the ZAC: Semapa defines the urban

patterns, public spaces and constructible land plots (case studies, calls for projects /

competition) and monitoring of the whole process (from authorization to realization).

Implementation of public works (case studies, draft proposals, APS, APD, PRO,

DCE, markets, conditions, DOE, DGD), followed by a public facilities program.

Land acquisitions: planning, plot division, land surveying, decommissioning of

publicly owned land, follow up to the land register (land plots acquired or to be

acquired)

Sale of building rights (land plots assigned to a construction program): sheet lot,

consultation, negotiation, pre-contract, act of sale.

Annual budget monitoring (reported to the City): Realised and forecasted income

and expenses.

Financing of the project cycle by debt guaranteed up to 80% by the City of Paris.

Accountability reporting at the end of concession: justification of the implementation

of of facilities and buildings, justification of the land register (acquisitions and

disposals).

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SEMAPA activities

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SEMAPA

Paris Rive Gauche : principaux chiffres

Concession of approximately

130 ha of land from the

Austerlitz train station to Ivry.

Total budget: €Bn 4.4,

Duration: 1991-2028

- Land acquisitions and development: €Bn 1.6 ;

- Transport networks and equipment: €Bn 1.9 ;

- Sale of building rights (2,400,000 m²): €Bn 3.4 ;

- Land transferred to the City of Paris: €Bn 0.5 ;

- Participations: €Bn 0.3 ;

- Financing via External Debt : €Bn 0,4.

activities

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SEMAPA activities

Paris Rive Gauche : the operation plan

PRG program equipment

17

SEMAPA

Semapa provides all the roads, networks,

open spaces, parks and other facilities

necessary for the life of the inhabitants of

the neighborhood.

The program includes: ;

- Higher education buildings and

facilities;

- Diverse range of public facilities.

The area contains about 50 ha of railway

land, about 50% of which will be covered

with concrete slabs on which buildings,

roads and other facilities will be built.

activities

Land Use (PRG)

Housing: 585,000 m²

- 7,500 housing units or about 20,000

inhabitants.

- 6,000 are family dwellings of which 3,000 are

social housing units and 3,000 private;

- 1,500 are student housing units of which 750

social and 750 private.

Public facilities: 665,000 m²

- The National Library of France: 250,000 m²;

- Higher education facilities: 210,000 m²;

- Railway installations: 150,000 m²;

- neighborhood facilities: 55,000 m².

Offices: 745,000 m²

- Hosting approximately 60,000

professionals.

Commercial/Industrial land

use: 405,000 m²

- Craftwork;

- Liberal activities;

- Retail;

- Research etc.

Green space: 98,000 m²

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SEMAPA activities

Examples of ongoing projects (PRG)

19

SEMAPA

B3A: A ‘Duo’ of skyscrapers:

- Two sky rise buildings, one 180m and the other 122m

high.

- Designed by Ateliers Jean Nouvel / Ivanhoe Cambridge

/ Hines.

- Located at the corner of the Bruneseau Street and the

General Jean Simon boulevard.

- Together they make up a ‘duo’ symbolising the link

between the city and its neighborhoods and between

the urban space and its users.

T6C: A building-bridge called ‘Panorama’

- Designed by Marc Mimram / Icade.

- Located in front of the National Library of

France, ‘Panorama’ stands above the railway.

- The crossing distance (58m) and the space

between the railway and the ground level of the

public space being insufficient in this location,

the aboveground construction cannot be

supported with the usual concrete slabs.

activities

Main tasks and processes Land acquisition

Construction of facilities (roads, networks, including bridges, galleries ...,

gardens & other public spaces, as defined by the program of the ZAC

(record of achievement)

Preparation of the plots of land destined for sale (demolition works,

depollution, earthworks ...) including the coverage of railways where

needed.

Sale of the plots of land or (volume) with permission / possibility to build a

defined program (offices, housing ..., utilities) by the City (building program

of the ZAC)

Sale of public right-of-ways (land under roads ...) to the City, whether

against payment or free of charge.

Transfer, free of charge, of the facilities (roads, bridges ...) to the City, with

some exceptions (example: buildings).

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SEMAPA activities

Accounts and financial information

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SEMAPA 21

PRG - Secteur Tolbiac

Income statement summary 2017 (€ mln)

22 SEMAPA accounts

PRG Rungis Paul

Bourget

Porte de

Vincennes Bédier

Vincent

Auriol Company

Total

2017

Turnover (goods) 143.9 0.1 5.6 0.6 1.1 17.9 - 169.3

Turnover (services) - - - - - - 0.0 0.0

Subsidies from the concession granting

authority - - - - - - - -

Inventories (11.0) 0.0 5.2 1.0 1.9 -11.1 - (14.0)

Resumption of provisions, transfer of

operating expenses - - - - 11.0 - - 11.0

Transfer of projected expenses - - - - 2.1 - 2.1

Transfer of expenses (the concession

holder’s compensation) - - - - - - 9.5 9.5

Total operating income 133.0 0.1 10.8 1.6 14.0 8.9 9.6 178.0

Expenses on concessions 132.8 0.0 1.6 1.6 (0.1) 3.8 - 139.7

Provisions on concessions - 0.1 9.2 0.0 3.1 2.9 - 15.4

Other expenses and external expenses - - - - - - 2.0 2.0

Taxes - - - - - - 0.2 0.2

Staff costs - - - - - - 6.6 6.6

Transfer of products - - - - 11.0 - - 11.0

Amortization & Provisions 0.1 - - - 2.1 0.2 2.5

Total operating expenses 133.0 0.1 10.8 1.6 14.0 8.9 9.0 177.4

Financial & exceptional result 0.0 - - - - - 0.1 0.1

Employee profit sharing - - - - - - (0.1) (0.1)

Income tax - -

Net result 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6

P&L diagram

23 SEMAPA accounts

2017 summary balance sheet : assets

24 SEMAPA accounts

Assets (€mln) PRG Rungis Bédier BVA P. Bourget P.

Vincennes Mandats Sté

Counterpar

ty loans

Total

2017 Total

2016

Fixed assets 2.4 - - - - - - 0.7 - 3.1 3.3

Inventories 169.5 0.0 1.9 0.0 9.5 2.1 - - - 183.0 197.0

Suppliers, advances

19.6 - - - - - - - - 19.6 14.7

Receivables 181.1 0.0 0.0 19.5 10.3 0.0 - - - 211.0 143.9

Tax 8.2 0.0 0.1 0.1 0.0 0.0 - 0.0 - 8.5 7.1

IDF Region,

receivables - - - - - - 74.2 - - 74.2 74.2

Receivables, others

0.0 - - - - - - 0.6 - 0.6 0.4

Premium issue loan - - - - - - - - 0.4 0.4 0.4

Cash and equivalents -282.7 12.3 9.8 -4.8 12.1 -2.1 0.2 10.2 440.7 195.7 241.7

Total assets 98.0 12.4 11.8 14.8 31.9 0.1

74.4 11.5 441.1 696.1 682.8

2016 summary balance sheet : liabilities

25 SEMAPA accounts

liabilities (€mln) PRG Rungis Bédier BVA P.

Bourget

P.

Vincennes Mandats Sté emprunts

Total

2017

Total

2016

Equity - - - - - - - 8.4 - 8.4 7.9

Provision for risks &

charges 0.0 0.0 0.0 2.1 - - - 1.1 - 3.2 12.1

Issuance of debt

securities 0.0 - - - - - - - 341.0

341.0 256.0

Loans and debts / ets.

credit - - - - - - - - 100.1 100.1 150.4

Customers (advances

received) 18.4 - 0.0 0.0 0.9 0.0 - - - 19.3 6.8

Payables

47.8 0.2 0.1 8.0 21.3 0.0 - 0.1 - 77.6 75.9

Social and tax debts

0.3 0.0 0.0 1.7 0.0 0.0 - 1.8 - 3.7 21.1

Other debts 0.8 0.1 - - - - - 0.1 - 1.1 1.1

Advances received from

City of Paris 30.5 - - - - - - - - 30.5 55.8

Advances received from

the Reg. AROUND - - - - - - 74.4 - - 74.4 74

Neutralization of RIP - 12.2 11.6 2.9 9.7 0.0 - - - 36.4 21

Prepaid income 0.3 - - - - - - - - 0.3 0.3

Total liabilities 98.0 12.4 11.8 14.8 31.9 0.1 74.4 11.5 441.1 696.1 682.8

Operations total EPPC 2017 % of progress 2017

(invoiced products)

periode

Paris Rive Gauche 4 365 M€ 67%

1991-2028

Bédier Porte d’Ivry 86 M€ 69%

2006-2018

bd Vincent Auriol 23 M€ 67%

2013-2020

Paul Bourget 62 M€ 28%

2014-2021

Porte de Vincennes 92 M€ 0%

2015-2022

Bercy Charenton 961 M€ 0% 2018-2032

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Operations and economic issues

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SEMAPA accounts

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Business plan & projected financial flows (cl, 2017)

SEMAPA accounts

ACCUMULAT

ED2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

ZAC PARIS RIVE GAUCHE 2 935.8 151.2 80.7 268.9 162.5 110.3 110.9 79.6 84.1 80.4 179.7 57.5

ZAC JOSEPH BEDIER - PORTE D'IVRY 60.7 7.0 0.0 0.0 0.0 18.6

ZAC PAUL BOURGET 26.8 16.5 47.8 0.0 4.0 0.0

ZAC, 90 BD VINCENT AURIOL 17.9 0.0 9.0 0.0 0.0 0.0

ZAC PORTE DE VINCENNES 0.6 2.5 26.4 11.5 34.5 18.1

ZAC BERCY CHARENTON 0.0 0.0 2.6 30.6 144.3 64.3 134.2 170.8 79.9 125.4 49.3

TOTAL PRODUCTS 3 041.8 177.2 163.8 283.0 231.7 291.4 175.3 213.8 254.8 160.3 305.1 106.8

ZAC PARIS RIVE GAUCHE 3 109.1 227.9 188.4 129.2 105.7 112.8 97.0 49.6 39.6 118.1 42.9 67.4

ZAC JOSEPH BEDIER - PORTE D'IVRY 51.0 8.8 0.8 7.1 0.0 18.6

ZAC PAUL BOURGET 26.6 3.2 7.2 10.0 5.4 42.8

ZAC, 90 BD VINCENT AURIOL 14.9 4.8 3.4 0.5 -1.3 4.4

ZAC PORTE DE VINCENNES 2.7 5.3 16.4 7.2 5.3 56.8

ZAC BERCY CHARENTON 2.2 84.4 178.1 103.8 57.6 68.8 96.9 63.4 56.2 31.8 54.4

TOTAL CHARGES 3 204.3 252.2 300.7 332.0 218.9 293.0 165.8 146.5 103.0 174.2 74.7 121.9

ZAC PARIS RIVE GAUCHE -137.3 107.9 -15.7 -180.3 -34.7 7.4 205.1 47.4 0.0 0.0 0.0 0.0

ZAC JOSEPH BEDIER - PORTE D'IVRY -2.6 2.6 0.0 0.0 0.0 0.0

ZAC PAUL BOURGET 11.9 11.6 -5.2 -6.0 -12.4 0.0

ZAC, 90 BD VINCENT AURIOL -7.7 12.5 -3.2 -1.6 0.0 0.0

ZAC PORTE DE VINCENNES 0.0 4.9 -4.9 0.0 0.0 0.0

ZAC BERCY CHARENTON

THIRD PARTY Accounts -135.6 139.6 -29.0 -187.8 -47.1 7.4 205.1 47.4 0.0 0.0 0.0 0.0

TOTAL VAT INCIDENCE -0.1 0.1 0.0 0.0 0.0 0.0 1.3 -1.3 0.0 0.0 0.0 0.0

CUMULATIVE CASH FLOW

BEFORE BORROWING (N+(N-1)) -298.1 -233.5 -399.3 -636.1 -670.4 -664.7 -448.7 -335.4 -183.5 -197.4 33.0 17.9

Rating, funding, City guarantee

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SEMAPA 28

PRG - Secteur Masséna

Financial rating Semapa

Ratings Semapa : directly linked to those of the City of Paris

Short-term rating : 'F1 +' : best rating, identical to the City

of Paris

Long-term rating : 'AA-‘, ‘outlook stable, 1 notch below

that of the City of Paris

financial rating prepared with the City of Paris in a

coordinated agenda, 1st rating 2014/07/21

Semapa’s EMTN program rated by Fitch 'AA-/F1+' with

or without City of Paris’ guarantee

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SEMAPA funding

30

bonds or bank loans can benefit from an explicit

80% guarantee from the City of Paris, as stipulated

in the Prospectus (signed by the City as guarantor)

The explicit guarantee requires a specific

deliberation of the City for each guaranteed issue.

This deliberation, which can only take place in view

of the precise characteristics of the issue

concerned, takes place after the issue.

The City provides a guarantee covering up to 80% of the debt

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SEMAPA funding

Guarantee of the City

Deliberation by the Council of Paris 2018 DFA

37 added to deliberation 2016 DFA 15

Guarantees the outstanding debt to be issued

(2018-2032) to 504 €Mn (80% of 630 €Mn

Covers the medium / long term financing ;

does not guarantee ST funding

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SEMAPA funding

Monitoring and control by the City

The City has over its subsidiary to control similar to that

exercised over its own departments, under the SPLA Act

(control specified by the bylaws)

City's guarantee subject to the audit of the ratios

"Galland Act" for development (guaranteed percentage :

80%, annuity limited to 5% of actual operating revenues)

financial rating prepared with the City of Paris in a

coordinated agenda

bond issuance prepared with the City of Paris

Quarterly forecasts and reports.

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SEMAPA funding

Issue of securities financing (EMTN)

Bond program EMTN approved by the AMF (Financial

markets regulator) ; 1st Prospectus 2015/03/30, now n°18-

0040 on 2018/02/15

Arranger: HSBC France

Maximum amount of 340 ME

Expected emission rate: 1 consultation per year (in January -

February), which may include several programs; durations: 2

to 10 years

Amounts issued since 2015 : EMTN 160, NSV 80

Indicative margin levels approx. OATs + 0.50%, or Eur +

0.35%

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SEMAPA funding

Issuing commercial paper (NEuCP Program)

Securities not guaranteed by the City of Paris

Program covered by the Banque de France; financial

documentation of 2018/08/02

Arranger: HSBC France

maximum amount 250 ME

Issues within the limit of the back up, currently 160 ME

Outstanding amounts usually between 100 and 160 ME,

authorisation by the Banque de France on 2014/11/21

34 34

SEMAPA funding

35 35 SEMAPA funding

Financing at 30/06/2018 by maturity (end-of-year outstanding, ME)

36

The financing requirement stems directly from:

- The nature of the urban planning activity.

- The magnitude of the operations, especially PRG.

As an urban planner, SEMAPA needs to:

- Finance the facilities (construction works for roads and networks (…) and land

acquisitions) before it can collect revenues from building rights (sale of the plots of land)

or subsidies (envisaged by the convention).

The financing requirement (WCR) amounts to several hundred €Mn, resulting from:

- The amount of expenses (tens of €Mn).

- The duration of the project lifecycle: several years.

- Financing strategy cannot be based solely on equity or on advances from

shareholders; external funding is therefore necessary.

History :

- 1992-1996 : banking pools guaranteed by the City of Paris 473 €Mn

- Refinancing of the residual (142 €Mn), Additional financing provided by banks in 2010

(215 €Mn) and in 2014 (150 €Mn).

- Direct Funding in 2015 (70 €Mn), 2016 (80 €Mn and in 2017 (60 €Mn)

Financing requirement - Context

SEMAPA funding

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SEMAPA

Information & contact :

SEMAPA 69/71 rue du Chevaleret

75013 PARIS Tel : (33) + 1 44 06 20 00

www.semapa.fr

Annual Reports and financial documents http://www.semapa.fr/Publications/Documents-financiers

Chief Financial Officer :

Mr. Dominique ADAM

http://www.semapa.fr/

http://www.semapa.fr/

http://www.semapa.fr/Publications/Documents-financiers


