eurazeo investor day

Transcription

November 27, 2012
EURAZEO INVESTOR DAY
FONCIA Transformation Plan
François DAVY
Speakers
CEO
Previously member of the Executive Board
of Adecco Group Worldwide
Prior to Adecco, various top management
positions at La Poste, Motorola
and Cadbury Schweppes
President of Employment Committee at Medef
(French Association of Employers)
Olivier FROC
Managing Director Finance / IT /
International
Line VISSOT-WEIL
Previously with PWC,
Union Financière de France (UFF),
Groupe FONCIA (CFO)
Head of Marketing & Operations
Previously with Colgate-Palmolive and Carglass
France
Co-founded and managed BT3, Clean Tech start up,
award-winner of the Ministry of Research‘s 2011
national competition
Philippe COUPAT
Director, FONCIA Coupat (Lyon)
Previously President of Regie Coupat and Chabot Immobilier
Groupe FONCIA: President of FTL Lyon (Brokerage & Renting)
2
Agenda
1
INVESTMENT CASE - REMINDER
p.4
2
FONCIA AT A GLANCE
p. 7
3
FONCIA BUSINESSES
p. 15
4
TRANSFORMATION PLAN
p. 32
5
APPENDIX
p. 51
3
Agenda
1
p.4
2
FONCIA AT A GLANCE
p. 7
3
FONCIA BUSINESSES
p. 15
4
TRANSFORMATION PLAN
p. 32
5
APPENDIX
p. 51
4
Service Communication / Marc Audineau
A very attractive investment opportunity

France’s leader in Residential Real Estate Services (‘RRES’)
•
•
•

1st player in Lease Management / Renting, Joint-Property Management and 5th in
Real Estate Brokerage
Very fragmented market: three largest companies hold only 26% of Joint-Property
Management and 21% of Lease Management markets
Network of 520 branches(a) in France with national coverage and homogenous
standards
Recurring revenues generated from a large and resilient client base
•
•
•
85% of revenues generated through recurring activities
Very large client base: 1 million joint-property dwellings and 250,000 lease
management properties in France
Very long-term client relationships: 95% retention rate in Joint-Property
Management
(a) As of 2012
5
A very attractive investment opportunity

Strong cash flow generation
•
•
•
•

High profitability margins and 90% EBITDA to cash transformation rate
Positive Working Capital generation
Limited maintenance capex
Moderate acquisition debt
A primary LBO offering opportunities for significant transformation
•
•
•
•
Untapped organic growth potential: improving quality of service, optimizing
network performance, cross-selling to existing customer base
Build-up opportunities in high-potential areas
Upside potential in Brokerage market
International expansion started in Germany, Switzerland and Belgium
A recurring activity offering
significant value creation potential
6
Agenda
1
p.4
2
FONCIA AT A GLANCE
p. 7
3
FONCIA BUSINESSES
p. 15
4
TRANSFORMATION PLAN
p. 32
5
APPENDIX
p. 51
7
What are FONCIA businesses?
Shared areas
(Roof, Façade,
Lift, Parking,
Heating system…)
• FONCIA manages building areas
jointly-owned by apartment owners
(financial and technical standpoints)
 “Joint-Property Management”
Rented
apartments
• FONCIA manages landlord’s rented
apartments, and, in particular, helps
find new tenants
 “Lease Management”
 “Renting”
All
apartments
• FONCIA can help owners sell their
apartment, and handle the whole
sale process
 “Brokerage”
FONCIA serves all the needs of apartment owners
8
85% of FONCIA Group revenues come from
recurring and predictable businesses
FONCIA key data in France (2011A)
Lease Management: 250K units
10.0% market share
€ 155M revenue
Revenue split by activity (2011A)
Total Group revenue: €595M
(2011)
85% recurring
8%
Renting: 63K units/year
6.5% market share
€ 63M revenue
8%
15%
11%
Joint-Property Management: 1M units
12.5% market share
€ 189M revenue
Real Estate Brokerage: 11K units sold
2.5% market share
€89M revenue
26%
32%
LM
Renting
JPM
Brokerage
Related Services
International
Note: Client Account Income (€8.8M) included in Lease Management (€4.0M) and Joint-Property Management (€4.8M) revenues
9
Strong historical growth: Group size has tripled
since 2002 while network is being optimized
Group Revenue (€M)
Total number of branches
603
609
609
(excluding Client Account Income)
x 2.9
585
453
575
461
343
351
236
167
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
527
416
277
210
499
586
288
239
199
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Note: Including French and International branches and franchisees
10
FONCIA network covers all significant cities
 French network of 520 branches in
2012, including 100 franchisees
 FONCIA mainly operates in cities above
50K inhabitants
• Smaller cities do not ensure critical
size and typically have lower sale
prices
• Strong opportunity in reinforcing market
shares in most attractive areas,
in particular:
• Inner Paris
• Some key Paris suburbs, e.g.
Neuilly/Levallois, Versailles
• Some large cities outside Paris
area, e.g. Nantes, Lille
11
3 subsidiaries have strong links with FONCIA network:
strong differentiation factors
Subsidiaries linked to FONCIA network: €50M revenue
 IT systems for JointProperty Management and
Lease Management
 Clients: FONCIA (c. 30%
of revenue) and 300 other
 Most efficient IT system on the market
 Product Roadmap defined with
FONCIA, to ensure lead time for
FONCIA on key new features
 Inventories of fixtures,
regulatory diagnostics
 95% of revenue through
FONCIA
 Largest player in its field, providing
FONCIA with cost advantage
and optimized processes
 Revenue growth ensured by increased
regulation
 Insurance broker
 95% of revenue through
FONCIA
 Largest player in its field, providing
FONCIA with cost advantage
and optimized processes
 Strong ability to develop new products
12
3 real estate related subsidiaries
with strong development potential
Subsidiaries totally independent from FONCIA network: €10M revenue
 Real Estate Asset
Management
 Assets under Management:
€680M
 New fund launched in 2013, with
objective of €100M/year in net new
assets
 Franchising of real estate
brokerage activity
 100 branches
 Development reinforced in cities
with no FONCIA branches
 Lease Management volumes brought
by franchisees to be developed
 Unit-by-unit sale of buildings
owned by institutional owners
 Focus on Paris
 8 deals brokered in 2012, providing
good visibility for the coming years
13
International subsidiaries total €50M in revenue,
mostly in Switzerland
Switzerland
 23 branches(a)
 Focus on Lease
Management
 Leading position in Swiss
French Lease Management
market
Germany
 13 branches in major
cities(a)
 Focus on Joint-Property
Management, operated
similarly to France JointProperty Management
activity
Belgium
 4 branches in major cities(a)
 Focus on Joint-Property
Management, operated
similarly to France JointProperty Management
activity
 Secondary activity in real
estate brokerage
(a) As of 2012
14
Agenda
1
p. 4
2
FONCIA AT A GLANCE
p. 7
3
FONCIA BUSINESSES
p. 15
4
TRANSFORMATION PLAN
p. 32
5
APPENDIX
p. 51
15
Total French private housing market is 25M units*
(2012)
Segments
Individual
houses
16M
Apartments
9M
Key trends & growth
Owner
occupied
19.5M units
Rented
5.5M units
14.5M units
1.5M units
5M units
4M units
 Steady growth over the past 15
years of housing market
(+1.1%/year)
 Historically, average of 300K newly
built units/year
 500K newly built units/year would be
required to meet growing household
needs
(*) excluding social housing (5M units), empty units, overseas territories
16
Lease Management (‘LM’) is a €1.5Bn market,
with steady growth
LM: 5.5M units
of which 2.5M through professionals
Individual
houses
16M
Owner
occupied
19.5M units
Rented
5.5M units
14.5M units
1.5M units
Key trends & growth
 Volumes are driven by housing
market growth, % of investors and
intermediation rate
• Tax incentive have historically
encouraged private investors to
invest in residential real estate
 Intermediation rate is historically
stable and could evolve positively
through:
• Increased awareness of service
• Increased regulation
Apartments
9M
5M units
4M units
 Steady fees as % of rent
 Price growth driven by rent increase
• IRL index growth of 1.6%/year on
average since 2002
17
FONCIA is the leader of a very fragmented LM market
LM market: 2.5M units,
€1.5Bn revenue
Market shares
(in volume)
Other 71%
Immo de France 3%
Urbania 2.5%
Citya 2,5%
.
Key trends
 National players account for 29%
of market
 71% of market controlled by
regional/local companies, with a high
number of very small players (<€2M
revenue)
• Strong consolidation potential
Century 21 4%
Nexity 7%
FONCIA 10%
 Emerging competitors:
• Brokers try and leverage their brand and
network (c. 100K units for Century 21)
Source: Companies’ available public information
18
LM provides broad product offering
with upside potential
Missions
Base
fees
perimeter
Additional
fees
Cross-sell




Management of accounts
Management of technical maintenance
Assessment of apartment value
Advice on renovation works
and supervision (incl. RFPs)
 Search for new tenants
(cf. Renting)
Drivers of revenue and margin
 1 year renewable contracts, with churn <10%
 Evolution of rents is an important driver of
revenues as fees are structured as a % of rents
 Finding new tenants rapidly is critical
for fees generation and client retention
 Growing regulation (e.g. energy diagnostics)
helps add value to professional LM services
 Preparation of tax sheets
 “GLI” – Protection against unpaid rent
 “GO” – Protection against vacancy
 HR costs represent 80% of direct costs
 Cross-sell towards Real Estate Brokerage
 “GLI” is a key ancillary:
• Equipment rate c. 50%, with growth potential
• FONCIA pricing is very competitive vs.
market average
 Average yearly fee: c. €600/unit (c. 8% of rent)
19
Renting is a €0.9Bn market, with steady
average growth
Renting: 1.5M units/year
of which 0.9M through professionals
Owner
occupied
19.5M units
Rented
5.5M units
Individual
houses
16M
14.5M units
1.5M units
Apartments
9M
5M units
4M units
Key trends & growth
 Volumes are driven by apartments
under LM and tenant mobility rates
 Tenant mobility rate varies slightly in
a given year
• Rate is linked to number of Real
Estate Brokerage transactions and
more generally to global economic
outlook
 Fees (a % of rent) vary with local
market rents
20
FONCIA is the leader of the Renting market
Renting market: 0.9M rentals,
€0.9Bn revenue
Market shares
(in volume)
Key trends
 National players account for 27%
of market
 However, acquisitions are not a strong
growth lever, due to volatility of sales
force
 c. 90% of volumes coming from
apartments under FONCIA LM
 Renting leaders include both JPM/LM
specialists and Real Estate Brokers
21
Tenant annual mobility rate varies slightly
around its historical average
Tenant annual mobility rate 1998-2012
40%
35%
29.3%
30%
27.9%
30.2%
29.3%
29.0%
29.0%
29.3%
28.1%
27.4%
26.9%
25%
26.0%
27.6%
26.7%
27.0%
25.9%
20%
15%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: CLAMEUR – based on data from major LM companies
22
FONCIA Renting offers strong potential
Missions
Rental
fees
perimeter
 Assessment of optimal level of rent
 Management of advertisement
for property to rent
 Visits with potential tenants
 Analysis of tenant file
and negotiations
 Administrative set-up: contract, payment
method
 c. 90% of revenue remains linked to LM portfolio
• Rentals outside LM offer significant growth
potential through proper incentives of sales
force
 HR costs represent >80% of direct costs
• Mostly variable pay ensuring margin as a %
of revenue is protected
 Cross-sell of products and services
can be pushed further
Cross-sell
 Development of LM – identification
of new landlords
 Home insurance
 Consumer credit
• e.g. home insurance still limited to c. 50% of
tenants
 Average fee: €1,000/rental
23
Joint-Property Management (‘JPM’) is a €1.4Bn market,
with steady growth
JPM market: 9M units
of which 8M through professionals
Key trends & growth
Owner
occupied
19.5M units
Rented
5.5M units
 Volumes have been growing at a
steady rate over the past 15 years,
driven by overall construction of
collective units (+1.2%/year)
Individual
houses
16M
14.5M units
1.5M units
 Professionally-managed jointproperty rate remains high at 90%
(only smaller buildings could be
directly managed by owners)
Apartments
9M
5M units
4M units
 Prices increase with inflation
24
FONCIA is the leader of a very fragmented JPM
market
JPM market: 8M units,
€1.4Bn revenue
Market shares
(in volume)
Key trends
 National players account for 31% of
market
 69% of market controlled by regional /
local companies, with a high number of
very small players (<€2M revenue)
• Strong consolidation potential
 Limited emerging competitors:
• Innovative competitors with limited
success so far in a low-churn market but
forcing incumbents to improve their level
of service
25
JPM key profit drivers are operational
efficiency and price management
Missions
Base
fees
perimeter
 Management of accounts
 General Assembly: preparation, meeting
management, minutes
 Management of building maintenance through
third party
 Optimization of property charges (e.g.
negotiating with suppliers)
 On demand interactions with representatives
of Joint-Property
Additional  Recovery and litigation
fees
 Supervision of works
 Management of insurance claims
Cross-sell
 Cross-sell towards Real Estate Brokerage
 Building insurance
 Regulatory diagnostics
 1-3 year renewable contracts, with churn <5%
 Additional fees are under scrutiny from
regulators and consumer groups. However,
pricing is also an upside for FONCIA:
• Some high-value tasks remain under-priced
(e.g. insurance claims)
• No historical pricing strategy means some
segments can be re-priced
• Latest benchmarks show competitors are
more expensive than FONCIA on average
 Profitability depends on operational efficiency
• Critical size in city served
• IT efficiency
• HR Training and support
 Average yearly fee: c. €180/unit
26
Real Estate Brokerage is a €3Bn market
Brokerage market: 600K-850K units/year
of which 350K-450K through professionals
Owner
occupied
19.5M units
Rented
5.5M units
Key trends & growth
 Long-term growth driven by housing
market growth but cyclical market
• Between 600K and 850K annually
 Sale prices are fluctuant with local
demand / supply dynamics
Individual
houses
16M
14.5M units
Apartments
9M
5M units
1.5M units
 Professionally managed brokerage rate
tends to grow (from c. 50% to c. 55%
over 10 years) and fees as a % of sale
price remain stable
4M units
• Internet has become the main
advertising channel for professionals,
but has not undermined the value they
add for clients
27
FONCIA is #5 in Brokerage market with strong room for
improvement
Brokerage market: 400K sales,
€3Bn revenue
Market shares
(in volume)
Other 69%
Square Habitat 2.5%
FONCIA 2.5%
Guy Hoquet 3.5%
Laf orêt 4.5%
Century 21 9%
Orpi 9%
Key trends
 National players account for 30% of
markets, with franchise model dominant
 However, acquisitions are not a strong
growth lever due to volatility of sales
force
 Emerging competitors:
• Retail Banks have played down their
ambitions, Square Habitat (Crédit Agricole)
remains the only significant bank-owned
network
• Low-cost branch-free brokers networks are
emerging, though with minimal volumes and
poor quality
• Branches and Internet are seen
by would-be sellers as complementary
channels of access to buyers
28
Real Estate Sales volumes historically vary
in a 600K to 850K range
Number of Residential Real Estate sales in France
(1996-2012E, ‘000s)
Volumes (1996-2012E, ‘000s)
Normative range: 600K to 850K
Average annual growth of
underlying market: 1%
2012E vs 2011: -24%
43
43
43
46
51
55
59
66
76
88
99 105
106
98 104
110
Prices (1996-2011, base 100 for
Q1 2010)
x2 between 2001 and 2007
E
Source: CGEDD, Notaires de France – October 2012 forecast for 2012 estimate
29
Brokerage performance is strongly driven
by geography and cross-sell
Missions
Rental
fees
perimeter
Cross-sell
 Search for brokerage mandate:
• Local advertising
• Door-to-door / local connections
• Opportunities brought by JPM and LM
 Assessment of optimal sale price
 Advertisement for property to sell
 Visits with potential buyers and negotiations
 Contracts set-up
 Cross-sell towards LM
 Mortgage
 Regulatory diagnostics
 Local average sale price is critical: geographic
mix is being optimized
 HR costs represent >80% of direct costs
•
Mostly variable pay ensures margin as a % of
revenue is protected
 Cross-sell from LM and JPM (c. 50% of current
volumes) is a key driver of performance and can
be optimized
 Today, 6% of cross-sell opportunities from JPM
towards Brokerage captured: each extra % point
means +€2.5M revenue
 Today, 20% of cross-sell opportunities from LM
towards Brokerage captured : each extra % point
means +€1M revenue
 Average fee: €8,000/sale (4.5% to 5.0% of sale price)
30
On average, each local branch generates €3.5M
revenue with a staff of 40-45 FTEs
LM
JPM
2,500 units
€1.5M revenue
7 FTEs
10,000 units
€1.8M revenue
12 FTEs
Renting
Brokerage
550 rentals/year
€0.5M revenue
4 FTEs
100 sales/year
€0.75M revenue
6 FTEs
Accounting
Support
(EAs, reception)
10 FTEs
 LM & JPM staff located in main branch
and up to 2 secondary branches
 Up to 4 proximity branches
 Staff size highly variable between
branches
 Branches dedicated to Renting and
Brokerage exist in largest cities
 Accountants in main branch only
1-3 FTEs
Management
1-3 FTEs
 Branch Head and up to 2 branch
managers
31
Agenda
1
p. 4
2
FONCIA AT A GLANCE
p. 7
3
FONCIA BUSINESSES
p. 15
4
TRANSFORMATION PLAN
p. 32
5
APPENDIX
p. 51
32
Create a virtuous cycle to become the undisputed
leader of the Residential Real Estate Services market
Staff motivation
and retention
Critical size and
improved
operational
efficiency
Cross-selling
and new
products
Improved
quality of
services
Client
satisfaction and
retention
33
Transformation Plan:
ongoing projects on 5 key dimensions
Human
Resources
New
organization
Career
development
and training
Compensation
aligned with
strategy
Operational
Efficiency
Paperless
workflows
Improved IT
efficiency
Clients
Improved level
of service and
churn
management
Improved sales
Reduced
external costs
Innovative and
unique offers
Brokerage
Business
External
growth
Reallocate
workforce
towards high
potential areas
Identification of
“high potential
geographies”
Hire Managers
Screening
process
Cross-selling
Compensation
model redefined
Business case
and return
analysis
Focus on 20 core “attractive areas”
34
Human
Resources
Talent as a key asset to grow
OBJECTIVE:
Develop organic growth through a more stable and motivated workforce
New Organization
Improved career
development and
training
 New responsibilities for Regions
 Simplified decision-making and redefined priorities for HQ
 Detection of high-potential staff and retention plans
 Definition of grades and career development steps
 Bespoke training priorities re-defined for 2013-2014
 Training modules reviewed and extended, including behavioral / sales
Compensation
aligned with
strategy
 New profit-sharing scheme for all staff
 New compensation system for 150 branch heads and 600 brokerage
staff
 Implementation of cross-selling incentive schemes
KPIs: turnover, employee satisfaction
35
New Organization built along key Principles
Alignment of
Network & HQ
Simplified
decision-making
 Increased involvement of Network in decision-making
 Increased responsibility of Network on performance
 Increased support of HQ to Network
 Accelerated decision-making in Committees
 Fewer layers of Management
 Improved teamwork on action plans
 No more duplicated tasks
Simplified action
 No more bureaucracy
 Priority on action and performance measurement
36
New Organization built on 3 pillars
CEO
François DAVY
Human Resources
Network
François DAVY
6 Regions
Increased responsibility
of Region Heads
 Full accountability on Region P&L
 Increased accountability on HR
 Members of Group Executive
Committee
Marketing
and Operations
Line VISSOT-WEIL
Marketing
Finance, IT
and International
Olivier FROC
Finance &
Procurement
Operations and
Network Support
Priorities:
Priorities:
 Quality and Client service
 Innovation
 Network support




IT
International
User-friendly Network IT
Cost-efficient IT
External growth in coordination with Network
Improved teams (new Head of IT and
procurement, stronger profiles in Finance)
37
Staff Turnover has been decreasing over 2012
12-month average staff turnover
(base 100 in December 2011, excl. Brokerage Reps)
100
98
95
91
December 2011
March 2012
June 2012
September 2012
Gradual improvement to be sustained and
accelerated over the coming quarters
38
Operational
Efficiency
Processes and costs to be optimized
OBJECTIVE: Drive costs down, eliminate low value-added tasks
in branches and remain ahead of competition
 Mailings to clients: optimization of volume and cost
Paperless
workflows
Improved IT
efficiency
Reduced external
costs
 Paperless workflows for bill handling
 Electronic filing and paperless workflows for 5 key processes
 Improved user-friendliness of JPM & LM software
 Improved efficiency of hardware
 Full-web IT system
 Reduction of external IT staff
 Branches lease optimization
 Purchasing optimization
KPIs: units managed/FTE, paper & mailing costs,
network costs/revenue, HQ costs/revenue
39
Paper & Mailings:
Strong optimization possible
Mailings sent
to clients:
13M/year
 Several on-going digitalization
projects to:
•
•
Number of printers
& copiers:
1,200
Paper sheets used:
80M/year
Postage costs:
€25M/year
Reduce costs
Limit time spent on mailings by
branch staff
 Digital communication (email,
internet) benefits strong cost
optimization and service quality
enhancement
•
•
•
Improved tracking of actions
and events occurring with
clients
Reduced time to answer client
questions
Direct client contact focused on
value-added issues
40
Paperless workflows
workshops

2. Payment methods
• Supplier invoices paid by debit
• New payments methods for customers (credit card,
direct debit)
• Checks treatment optimized (>5M checks
received/year)

Illustrative: up to 30% of time
can be freed for some profiles
1. Documents and mailings
• Digitalization and/or outsourcing of mailings to
clients (e.g. >3M mailings to JPM clients for
General Assembly notifications and minutes)
• Invoicing digitalization (>2M bills handled/year)

Paperless workflows:
Description
3. Simplified processes / organization
• Insurance claims processes
• Works management processes
• Concierge and janitor compensation process
Major productivity
improvement program
launched within branches
Time freed up for JPM assistants
30,0%
Other
3%
25,0%
Task D
5%
20,0%
Task C
5%
15,0%
Task B
7%
10,0%
5,0%
Task A
10%
0,0%
41
Paperless workflows:
Status
Results & impact
 70% of JPM General Assembly
mailings outsourced
 85% of bills scanned and seamlessly
integrated in IT system (2,500 bills
per day)
 % of time freed up as of Q4 2012:
•
•
Accountants: 6%
JPM assistants: 9%
On track to reach
overall target
Ongoing actions
 Deploy additional projects in 2013:
•
•
•
Reduction of mail volume
Outsourcing of other mail items
Electronic archiving and additional
paperless workflows
 Redefine staff profiles and roles to
fully leverage additional time freed
up
Significant change for the network,
critical for organic growth
42
Improved IT efficiency is critical to improve productivity
and staff satisfaction
Fixing IT inefficiencies



Network representatives involved in
governance of IT
Several types of improvements worked
upon:
• LM & JPM software (e.g. automated
reports to owners)
• Technical improvements (e.g.
system updates during the night)
• Printing and response times
Overall limited Capex impact
Impact on user-friendliness is a
key criterion to decide on the
launch of new projects
Illustrative: selection process for
LM & JPM software improvement
24 priority actions defined among c. 50 potential
improvements discussed with network staff
Impact on staff
efficiency
3
5
11
9
2
4
11
4
1
5
4
0
1
2
3
43
Frequency
Focus on organic revenue growth
Clients
OBJECTIVE: Increase revenue through
higher client service quality and commercial focus
Improved level of
service and churn
management
Improved sales
New and
innovative offers




myFoncia client extranet
Acceleration of time to rent (LM)
Management of customer calls
Customer satisfaction measure (NPS)
 New sales approach (JPM)
 Client acquisition strategy (LM)
 Cross-sell strategies (all businesses)
 All-inclusive offer (JPM)
 Insurance: non-occupant owner, protection
KPIs: organic growth (volume), prices/unit,
cross-sell %, client satisfaction
44
Zoom – myFoncia
Objectives

Improve client satisfaction and retention
through better communication:
•
•

Improve productivity of FONCIA staff:
•
•
•

Access to all documents
Direct communication with staff
More e-payments hence fewer checks to handle
Fewer incoming calls hence less time
answering basic client questions
Easier communication with JPM and LM
providers
Develop revenue through push actions:
•
•
E-marketing to cross-sell products
Direct sales (e.g. insurance products)
Illustrative: access to information
is a key driver of JPM client
satisfaction
(% answers to the question
“What has been the main
reason(s) for you not to
renew your FONCIA JPM
mandate?” )
Relationship with FONCIA
staff
Day-to-day management
of building
Overall maintenance
charges
Pricing
Management of
renovation works
Management of accounts
Meet client expectations and define
new standards for our industry
Includes speed of
action, information on
actions, accessibility
of staff
49%
47%
33%
32%
29%
23%
Source: survey on 300 former clients, October 2011, up to 3 answers
per client
45
Zoom – myFoncia
Illustrative: for a tenant, access to
balance of accounts, payment
solutions and all documents
Illustrative: for a landlord, access to all
documents and accounts for all his/her
tenants
46
Zoom – myFoncia
Results & impact
 200,000 users after 5 months
(launched June 30, 2012)
•
•
17% of tenants and landlords
13% of JPM clients
 5% of total clients are now paying
through myFoncia on a regular basis
 Positive feedback from network,
with a decrease in number of
incoming calls
Significant volumes in 5 months
despite limited push
Ongoing actions
 Develop usage:
•
•
•
Renewed client communication
Benchmarking of branches
Improve attractiveness of e-payment
(debit card and bank transfer)
 Release additional services by mid2013 including:
•
•
•
Access to JPM and LM external
providers
Detailed renting activity for landlords
Direct contact with branch staff
Major impact for both clients and
staff over the next 18 months
47
Upside potential to be captured
in Brokerage
Brokerage
Business
OBJECTIVE: Roll-out an ambitious action plan
Skew sales force towards
most attractive geographical areas


Focus recruitment on wealthiest areas
Limit replacement of brokers in lower
priority areas
Increase number of Managers


Optimize cross-sell


Set-up financial incentives for all staff, in
particular LM & JPM staff
Set-up joint processes between Brokerage
and LM & JPM to identify opportunities
Analysis proves dedicated Managers
increase performance
Increase manager positions to efficiently
drive sales force effort
Redefine compensation model


Improved compensation for best
performers
Improved compensation for new brokers,
in order to limit turn-over
Progressive roll-out started in September 2012
48
Disciplined external growth
External growth
OBJECTIVE: Focus external growth on
high potential geographies and improve processes
Key rules applied:
Lille
IdF
Strasbourg

Focus on attractive geographies

Strengthening of existing FONCIA presence

Primary focus on LM, secondary focus on
JPM

Normalized investment case process, with
commitment from local management
Rennes
Tours
Nantes
Bordeaux
Lyon
Grenoble
Nice
Toulouse
Montpellier
Cannes / Antibes
Toulon / Hyères
Aix-en-Provence
Marseille
Focus on selected cities, with
screening process redefined for
both Network and HQ
Valuation based on expected
profitability and not merely volumes
(as is common practice in the industry)
49
Conclusion
 FONCIA operates on fundamentally sound markets
Solid
business
•
•
•
Slow but steady growth, with limited cyclicality
Fragmented markets, with some segments under-served
Strong operational margins
 Size is a competitive advantage that has yet to be fully leveraged
•
•
Exclusive and differentiating offers
Industrialized processes, bringing lower internal costs
 Organic growth is critical to our success and requires:
Strong
transformation
potential
•
•
Outstanding client service
Stable, motivated and efficient workforce
 In such fragmented markets, external growth remains an opportunity
as long as:
•
•
Focus is on the right geographies & targets
Investment process is well controlled
Ambition: 5 – 10% EBITDA Organic Growth / year
50
APPENDIX
Key terms of the transaction
Transaction
Purchase of 98.11% of FONCIA from BPCE for €711m
Valuation
Enterprise value: €1,017m
Consortium
Equity investment of ~€236m(1) for each of Eurazeo(2) and Bridgepoint
 Governance shared equally between Eurazeo and Bridgepoint
BPCE
Reinvestment of BPCE of €200m, including €80m of pari passu equity instruments and
€20m equity instruments capped at 10% IRR and €100m of redeemable bonds in shares
if Eurazeo gets a return above 2.7x
Financing
Prudent all-senior bank financing of €395m (maturity: 2017/2018), including a tranche
in fine of €300m and additional available financing facilities of €90m to finance the
company’s development
1) Before management investment
2) €197m for Eurazeo and €39m for Eurazeo Partners
52
H1 2012 Financials
Decrease in revenues by 3.7% vs. H1 2011
H1 2012 Revenue Breakdown
 Good resilience of the RRES activities driven by an
(€m)
H1-12A
H1-11A % var.
increase in Lease Management while Joint-Property
Management remained stable. Renting activity was
weak but peak season yet to come (July to
September)
Core RRES France(1)
204.0
205.4
-0.7%
Brokerage Activity
37.1
46.1
-19.5%
 Decrease in Brokerage business due to lower
Total France
241.1
251.5
-4.1%
International
24.4
24.3
+0.4%
Other and Interco
21.3
21.9
-2.7%
Total
286.7
297.7
-3.7%
volumes
Stable adjusted EBITDA
 Decrease in EBITDA by 8.8% vs. H1 2011
 Adjusted for the exceptional items in H1 2012
(strong increase in advertising investments),
EBITDA stands at €48.8m, in line with 2011, thanks
to tight cost management
International
Other and interco
Core Real Estate
Services France
 Adjusted EBITDA margin up by 60bps vs. 2011
 Very good results from the advertising campaign:
Brokerage
+19 points in brand awareness
Recurring
revenue: 87%
Continuous deleveraging with net debt
at €359m vs. €388m at closing (July 26, 2011)
53
H1 2012 Financials
H1-2012
H1-2011
Reported
change
Like-for-like
change
Revenue
286.7
297.7
-3.7%
-4.0%
EBITDA
44.6
48.9
% margin
15.6%
16.4%
-8.8%
-9.9%
48.8
48.9
% margin
17.0%
16.4%
-0.2%
-1.4%
Net debt
359.3
387.9(1)
-7.4%
n.a.
January – June (€m)
Adjusted EBITDA
EBITDA adjusted for exceptional items (strong
increase in advertising spend): €48.8m
(1) Net debt at closing (July 26, 2011)
54

eurazeo investor day

Transcription

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