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Haya Real Estate 1Presentación Corporativa 1
Q1 2019
Earnings
Presentation
23 May 2019
Haya Real Estate 222
Disclaimer
The purpose of this presentation is purely informative. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including,
where relevant any fuller disclosure document published by Haya Real Estate, S.L. (together with any of its subsidiaries, “Haya Real Estate”). Any person at any time acquiring securities must do so only on the
basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such profession
or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this presentation. No investment activity should be undertaken on the basis of
the information contained in this presentation. In making the presentation available, Haya Real Estate gives no advice and makes no recommendation to buy, sell or otherwise deal in any securities or
investments whatsoever.
Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities.
This presentation contains forward-looking statements regarding Haya Real Estate’s financial position and plans for future operations. All statements other than statements of historical facts may be forward-
looking statements. These forward-looking statements speak only as of the date of the notice and are subject to a number of factors that could cause actual results to differ materially from any expected
results in such forward-looking statements. Haya Real Estate expressly disclaims any obligation or undertaking to update or revise any forward-looking statement (except to the extent legally required).
Haya Real Estate uses certain alternative performance measures (APMs), which have not been audited, Adjusted EBITDA and Free Cash Flow, to benchmark and compare performance, both between its own
operations and as against other companies for a better understanding of Haya Real Estate financial performance. These measures are used, together with measures of performance under the International
Financial Reporting Standards (IFRS), to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Haya Real Estate believes that EBITDA-based
and other measures are useful and commonly used measures of financial performance in addition to net profit, operating profit and other profitability measures under IFRS because they facilitate operating
performance comparison from period to period and company to company. By eliminating potential differences in results of operations between periods or companies caused by factors such as depreciation
and amortization methods, historic cost and age of assets, financing and capital structures and taxation positions or regimes, Haya Real Estate believes that EBITDA-based and other measures can provide a
useful additional basis for comparing the current performance of the underlying operations being evaluated. For these reasons, Haya Real Estate believes that EBITDA-based and other measures are regularly
used by the investment community as a means of comparison of companies in the industry. However, these measures are considered additional disclosures and in no case replace the financial information
prepared under IFRS. Moreover, the way Haya Real Estate defines and calculates these measures may differ to the way similar measures are calculated by other companies. Accordingly, they may not be
comparable.
Regarding any data which may have been provided by third parties, neither Haya Real Estate, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these
contents are exact, accurate, comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in
reproducing these contents in by any means, Haya Real Estate may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in case of any
deviation between such a version and this one, Haya Real Estate assumes no liability for any discrepancy.
Haya Real Estate 333
Today´s Presenters
Carlos Abad Rico
CEO & Director of the
Board
Bárbara Zubiría Furest
CFO
Haya Real Estate 444
Agenda
Business Review
01
02
03 Financial Review
Key Highlights
Haya Real Estate 555
Q1´19- Key Highlights1
✓ Transaction Volumes of €846.9MM in Q1’19, driving revenues to €59.7MM, 7% increase vs Q1´18
✓ New SLA contract signed in March 2019, for the management of the “Apple” REO portfolio (JVCo
between Cerberus and Santander). Over 24K new REO assets under management, or €2.2BN
✓ Negotiations with Sareb on potential new contract ongoing. Strong focus on service delivery under
existing contract.
✓ Strong focus in the quarter on preparing for the Divarian integration, with Business Purchase
Agreement signed in April. The culmination of this transaction consolidates Haya as the leader in
the Spanish real estate servicing market
✓ Results in the quarter impacted by growth in operating and personnel costs, driving Adjusted
EBITDA to €19.5MM. Costs increase linked to strong REO activity and transitorily impacted by
BBVA servicing through Divarian
Haya Real Estate 6Haya Real Estate
2. Business Review
Haya Real Estate 777
Divarian Integration2• Servicing business / operational assets and capabilities (and related cost base)
transferred to Haya
• Purchase price of 1€
• Divarian, as “Prop Co.”, will remain with core corporate functions
• Servicing contract (SLA) between Divarian and Haya, will be in effect on June
1st, for 8 years and similar terms to BBVA´s SLA
• Haya will directly service BBVA´s assets (currently subcontracted to Divarian)
Highlights
Key PrioritiesEnsure no business
disruption for both
BBVA and Divarian
Clearly defined
integration plan
focused on business
continuity to
decouple systems and
leverage on
combined
capabilities to
minimise business risk
Minimise
operational risk with
regular work stream
contact and frequent
team reviews
Strong
commercial focus
Secure retention
of key talent
• ~€10BN1 GBV (€6.0BN1
Appraisal Value)
• +60,000 REO units
• +340 employees
• +150 BPO FTEs
(1) Includes €1.3BN AuMs that will be transferred from BBVA to Divarian
Haya Real Estate 888
Business Rationale2
Consolidation of a company with a clear business and client service orientation, with new professional
opportunities
Creation of leading servicer in Spain with more than 221k REO assets under management
Diversified client base with long term contracts
Services which cover the entire value chain in the management of REDs and REOs
Complementary geographical presence and capillarity throughout the Spanish
territory with access to areas with higher volume of assets (Cataluña, Valencia, Madrid,
and Málaga)
Combination of technical, commercial and human strengths, which will allow the expansion
into new businesses (NPLs, Socimis/REITs) and new clients
Leader in
Spain
Merger of
Capabilities
Complementary
businesses
Haya Real Estate 999
Combined capabilities between HRE & Divarian2
• Independent multi-client servicer with a solid
financial track record
• Leader in debt management and real estate
assets (REDs and REOs)
• Revenues coming from a variety of clients
(Bankia, BBVA, Liberbank, Cajamar, ING, Sareb,
Cerberus and other investment funds)
• Integral management across the full loans and
real estates assets’ value chain
• Company dedicated to real estate assets
management
• Prop. Co. - Joint Venture between Cerberus
(80%) and BBVA (20%)
• Present across all national territory through 6
geographical divisions with significant capillarity
• Diversification of asset types (residential,
industrial, commercial, land)
20%80%
Aum (€M)
FTEs (#)
Aum (#)
Divarian + Haya
221,000
.
46,6831
< 700
Between 700 and 2.000
More than 2.000
1,240
90%
72% 28%
10%
AuM Location
(1) BBVA and Divarian perimeters included at appraisal value
Haya Real Estate
Haya Real Estate 101010
Sareb - Contract Status 2Existing servicing contract Delivery under Existing contract
#1 Ranked in latest client satisfaction survey
Strong compliance with SLA requirements
Top ranked in latest external KPI benchmark for
REDs
Very strong budget over achievement in
Q1´19 and top results achieved in 2018
• Existing contract matures in December 2019
• Will continue working with Sareb on business as usual
under existing contract terms until the maturity of the
contract, December 31st 2019.
• Six months notice of non-renewal expected on June
30th; otherwise, one year automatic renewal (end of
2020)
• Discussions on renewal process started in February
• Sareb has formally launched Project Esparta and
communicated to us their desired servicing business
model and strategy
• 2019 RED Volumes expected to be impacted by
Sareb’s recently communicated business strategy
(strong focus on margins), with growth to come from
REO Conversion and REOs
Strong and healthy client relationship based on high quality of service offered
Haya Real Estate 111111
• Reduce activity in loan portfolio
• Sharp reduction in institutional transactions (portfolio sales) due to greater
focus on margin
• Drive transformation from loans into real estate assets; double Transformation
from €1.8MM to €3.8MM (2019-2020)
• Shift in the volume mix (REOs vs REDs) due to the sharp increase in
Transformation
• Renegotiate current business model with servicers
• Greater efficiency in the sales cycle
• Specialist management by Sareb of certain areas
• Grater control over information via development of
internal platforms
• Five regional offices
• In-depth understanding of properties in local markets
• Offer tailored to demand in each region
• More efficient debtor management
• In-house and associated development
• Land planning management
• Specialist management of unique properties
• Boosting sales in difficult areas
Sareb – Future Strategy2
Sareb´s
recently
communicated
future business
strategy
Source: Sareb. “2018 Annual Activity Report” and “2019 business strategy” presentation
Loans
Efficiency
Maintain /
increase value
of Properties
Core
strategic
goals
Servicing
Regional
Management
Haya Real Estate 12Haya Real Estate
3. Financial Review
Haya Real Estate 131313
€46,683MM+18% YoY
Key Financial Highlights – Q1´19
Assets Under
Management
3
€846.9 MM-5% QoQ
Transaction
Volumes Q1´19
€193.5MM-29% QoQ
RED Volumes
Q1´19
Revenues Free Cash Flow2 Net Debt
REO Co. Volumes
Q1´19
REO Volumes
Q1´19
€329.6MM+11% QoQ
€323.8MM-1% QoQ
€59.7MMLTM €277.6MM
€2.8MMLTM €105.2MM
€455.0 MM
Avg. Volume serv. fee 3.47%
Avg. Mangmt. fee 0.21%
LTM Cash conversion 82%
Adjusted EBITDA1
€19.5MMLTM €127.7MM
LTM EBITDA margin 46% Leverage ratio 3.6x
(1) Adjusted EBTIDA is the sum of GAAP operating profit plus D&A, adding back €2.4MM of non recurring costs (2) Free Cash Flow is defined as Adjusted EBITDA less capital
expenditures and change in working capital.
Haya Real Estate 141414
Assets Under Management3
Total 39,652
AuMs increased by €7BN compared to December 2018 mainly due to the Divarian, Apple contribution and the inflows from existingcontracts partially offset by the natural evolution of the Sareb portfolio (closed perimeter)
Asset under Management evolution (GBV1) (€ MM)
RED REO
23,501
16,151
AuMs EoP 2018 Inflows from
existing
contracts
Apple portfolio Outflow REO Co Inflow REO Co Outflows from
recoveries /
sales
AuMs EoP Q1´19
Increase Decrease
719
176 (245) 220 (495)
23,677
18,252
Total 41,929
(794) 895
2,200
(299)
Divarian
4,7541
Total 46,683
(1) BBVA and Divarian perimeters included at appraisal value; (2) BBVA´s AuMs includes €1.3BN that will be transferred to Divarian
2,200
Haya Real Estate 151515
Divarian / BBVA transaction: Resulting SLAs3
(1) In effect from June 1, 2019; (2) Includes €1.3BN AuMs that will be transferred from BBVA to Divarian
AUMs
Perimeter
Term
REO/RED
Exclusivity
Upfront payment
Fee structure
Cerberus
(80%)
BBVA
(20%)
• €6.0BN2 (Appraisal value)
• ~€10BN (estimated GBV)
• +60,000 REO units
Stock + Future Flow Stock
• 8 years +2 yr extension • 8 years + automatic annual extensions
Termination fee
REO REO
- -
• Sales fee/Asset management fee/ Portfolio sales
fees/ Asset Inscription fees/ Rent fees
• Sales fee/Asset management fee/
• Portfolio sales fees/ Rent fees
1
• €1.6BN (Appraisal value)
• ~€2.6BN (estimated GBV)
• +14,000 REO units
Haya Real Estate 161616
272.0193.5
296.8
329.6
326.4
323.8
895.2
846.9
Q1 ´18 Q1´19
REDs REO Co REO
• BBVA contribution in Q1’19
with no corresponding impact
in Q1´18
• Strong performance in Sareb
(+74%) due to an increase in
retail REO sales
• Lower activity in Cajamar
and Bankia due to large
portfolios sold in Q1’18
(€62MM)
• Lower performance in
Liberbank impacted by
significant bulk REO sales in
Q1’18
Transaction Volumes3REDs Transaction
Volumes REO Conversion
Transaction Volumes REOs Transaction
Volumes
€193.5MM
-29%
• No recoveries in Bankia in
Q1‘19 due to novation of the
contract in April 2018 which
removed REDs from
perimeter
• Lower recoveries in Sareb
impacted by Sareb’s new
business strategy (strong
focus on margins)
• Strong performance in
Cerberus Servicing Contracts
due to new portfolio
awarded in H2 ’18
• Continued strong
performance in REO
Conversion mainly due to the
strong activity in Sareb
resulting in a sharp increase in
DILs and Bankruptcies closed
• Lower performance in
Cajamar in REOCo as a result
of less focus by client in DILs
during Q1’19 compared to
Q1’18
€329.6MM
+11%€323.8MM
-1%
Transaction volumes comparison
(€ MM)
(%) of total
(30%)(23%)
(39%)
(38%)
(36%)
(33%)
-5%
4,503 4,746LTM +5%
Haya Real Estate 171717
32.129.4
20.523.3
3.37.1
55.9
59.7
Q1 ´18 Q1´19Volume fee Management fee Other revenues
• Management fee increased by 14% mainly due to BBVA, Bankia, Liberbank and other clients contribution which
have offset the decline in Sareb due to the closed nature of the perimeter under management
3
• Volume fee decreased by 8% mainly due to :
• Decrease in REDs volume fee impacted by the novation of the Bankia contract and the lower activity in Sareb
• Decrease in REO Co fees impacted by Cajamar partially offset by the good performance in Sareb
• Increase in REOs volume fee impacted by BBVA contribution and the good performance in Sareb
• The average volume servicing fee as % of volumes was 3.47% mainly due to the weight decrease in REDs and in
REO Co which have contractually lower % volume fee
Revenues Comparison
Revenues
(€MM) Volume fee
Q1´19:
€29.4MM
Q1´18 :
€32.1MM
Management fee
Breakdown
by product
Other Revenues
• Other revenues increased by 116% mainly due to the onboarding fee of the Apple portfolio and ancillary
services rendered to Bankia and BBVA which are partially offset with the corresponding impact in operating
expenses (direct costs).
Revenues increased by 7% due to the increase in management fees and other revenues mainly impacted by the BBVA contribution during the
first three months of 2019
(37%)(39%)
(49%)(57%)
(6%) (12%)
(%) of total
3.47%3.59%
% average volume servicing fee
RED
41%
REO
Co
17%
REO
42%
RED
32%
REO Co
17%
REO
51%
+7%
262.8 277.6LTM +6%
Haya Real Estate 181818
• The new servicing contracts awarded in 2018 have
increased number of FTEs.
• Compliance, Internal Audit, Data and Process Quality,
Finance & Data Analytics departments have been
reinforced during 2018 which impacts the personnel in 2019.
• Increase in intermediation costs (channel costs) due to the
LTM strong performance in REOs volumes
• Increase in cost of agencies due to Bankia, Sareb and BBVA
contribution which are offset with the corresponding
revenues invoiced to the clients
• Increase in professional services impacted by certain
consultancy and business process outsourcing costs
associated to new onboardings
• Decrease in operating expenses mainly due to IT, temporary
workforce and customer support
• Nevertheless, during Q1´19 the operational expenses have
decreased compared to Q4´18 due to a reduction in
intermediation and professional services costs
147.8
4.4 6.3
13.025.2
9.8
127.7
LTM Q1´18
Adjusted EBITDA
Volume fee Management fee Other revenues Operating costs Personnel costs LTM Q1´19
Adjusted EBITDA
Adjusted EBITDA LTM decreased 14% year-over-year explained by an increase in operational and personnel costs due to the strongperformance in REOs and new FTEs hired
Adjusted EBITDA bridge3
(1) Adjusted EBTIDA is the sum of GAAP operating profit plus D&A, adding back €6.2MM of non recurring expenses .
1
% Adjusted EBITDA LTM margin
1 Operating costs impacted by:
Personnel costs impacted by:
Adjusted1 EBITDA Bridge (€ MM)
2
LTM 56% LTM 46%
20.1
1
2
Haya Real Estate 191919
448.2
455.0
2018 Q1´19
107.1
20.1
4.923.1
105.2
LTM Q1´18 FCF Adjusted EBITDA Capex Change in working
capital
LTM Q1´19 FCF
Free Cash Flow and Net Debt 3Free cash flow decreased LTM by 2% leaving a leverage ratio of 3.6x as of March 2019
(1) Free Cash Flow is defined as Adjusted EBITDA less capital expenditures and change in working capital. (2) Adjusted EBTIDA LTM is the sum of GAAP operating profit plus
D&A, adding back €6.2MM of non recurring costs.
Free Cash
Flow1
Comparison
LTM 2018 LTM 2019
Adjusted EBITDA2 147.8 127.7
Capital expenditures paid -8.4 -13.3
Change in working capital -32.3 -9.2
Free Cash Flow 107.1 105.2
% Cash Conversion: FCF1 / Adjusted EBITDA2
(€ MM)
72% 82%
(€ MM)
Free Cash Flow Main Highlights
Main
Highlights
• Leverage ratio of 3.6x
• Cash position as of Q1´19 of €18MM
• FCF in Q1’19 weaker due to working capital seasonality,
and capex associated to new Headquarter offices
• Working capital improvements LTM, with strong push in
collections still to come
Leverage ratio: Net debt / LTM Adjusted EBTDA2
3.4x 3.6x
(€ MM)
• Improvement in
collection process in
Sareb and Cajamar
• Contribution from new
clients such us
Liberbank
• €2.5MM capex
paid during Q1´19
due to the new
Headquarter
offices in Madrid
Haya Real Estate 20
Calle Medina de Pomar, nº 27. CP 28042, Madrid
901 11 77 88 | www.haya.es