INVESTORS' REPORT LC CORP GROUP 3Q 2017 1
2 CHANGES IN OWNERSHIP In September, Leszek Czarnecki sold all his shares in LC Corp S.A. to dispersed institutional investors A positive market assessment share prices rose substantially Expected better access to debt financing Changes in the Supervisory Board Current shareholding structure SHARES COUNT NAME % QTY. OFE PZU Złota Jesień 15,17% 67908 000 Nationale-Nederlanden Powszechne Towarzystwo Emerytalne poprzez Nationale-Nederlanden Otwarty Fundusz Emerytalny i Nationale-Nederlanden Dobrowolny Fundusz Emerytalny 14,13% 63 226 784 ALTUS Towarzystwo Funduszy Inwestycyjnych S.A. 13,37% 59 829 016 Aviva OFE AVIVA BZ WBK 9,76% 43 700 000 Nordea Otwarty Fundusz Emerytalny 5,15% 23043080 Remaining shareholders 42,42% 189851 431 100% 447558 311 Shareholders of LC Corp S.A. having more than 5% of shares. The information dated 31st October 2017.
3 ANOTHER GOOD QUARTER Housing sector The greatest number of delivered flats/ 668 units/ Verygoodlevelof flatsales/477 units/ The following have been added to the offer: Na Woli Stage VI /Warsaw, 147 units/ Krzemowe Stage III /Warsaw, 130 units/ Między Parkami /Wrocław, 164 units(59 units were added in the 2Q 2017)/ Słoneczne Miasteczko Stage VII /, 108 units/ Świętokrzyska Park Stage III /Gdańsk, 65 units/ Commercialisation sector The commercialisation process of Retro Office House continued The construction of the Wola Retro office building and its commercialisation started A verygoodfinancialresultadjustedfor the impactof EURexchange ratefor threequartersof 2017 cumulatively: Net profit of PLN 100.6 m (3Q of 2017) vs PLN 84.6 m (3Q of 2016); Adjustednet profit of PLN 135.8 m (3Q of 2017) vs PLN 71.5 m (3Q of 2016); -A decreasein the fair valueof investment propertiesin the amountof PLN 45,793,000. -A decreasein the measurementof loanliabilitiesfor loanstakenout in EURin the amountof PLN 21,038,000. - The overallimpactof the changein the EURexchange rateon the consolidated financial performance of the Group for 3 quarters of 2017 amounted cumulatively to PLN 24,755,000 and as a consequence, reducedthe consolidatedgrossprofit by the saidamount.
DYNAMIC IMPROVEMENT OF FINANCIAL PERFORMANCE Systematic growth of income from sales (mpln) High gross sales margins (mpln) 38% 63% EBITDA 1 (mpln) Net profit and adjusted net profit 2 (mpln) 1 EBITDA adjusted for: (i) result of property revaluation, (ii) write-downs of inventories 2 Net profit adjusted for: (i) result of the revaluation of property and foreign currency loan, (ii) write-downs of inventories, (iii) discount of liabilities in connection with the purchase of Sky Tower (iiii) others 4
5 HIGH-VALUE AND HIGH-YIELD ASSETS Investment property (mpln) Includes Retro Office House and Wola Retro, both of which are measured at historical cost and Silesia II, which has not earned the target NOI yet NOI of investment property (mpln) Inventory value (mpln) -inventories include land, projects under construction and ready housing units, but not sold yet
6 HIGH EQUITY AND LOW DEBT Stability of debt ratios at a conservative level 1 Net financial debt divided into sectors (mpln) (as at 30/09/2017) 1 Financial liabilities do not include the liabilities connected with the purchase of Sky Tower Bank loans (mpln) No Project Balance 30.09.2017 Repayment date 1 Arkady Wrocławskie 122,2 2017-12-31 2 Wola Center 190,0 2022-12-15 3 Sky Tower 218,3 2022-12-20 4 Silesia Star etap I 46,7 2025-12-31 5 Silesia Star etap II 57,4 2025-12-31 6 Retro Office House - k. inwest. 18,9 2029-05-30 7 Retro Office House - k. VAT 0,4 2019-10-31 8 Kredyt inwestycyjny 50,1 2018-12-31 9 Kredyt inwestycyjny 38,1 2018-12-31 TOTAL 742,0 1 ( loan and bond debts attributable to the sector cash of the sector)/balance sheet value of investment property 2 ( loan and bond debts attributable to the sector cash of the sector)/balance sheet value of inventories Bond maturity structure (mpln) Total PLN 305m Liabilities connected with the purchase of SkyTower (mpln) 116.0 Interest-free liabilities. 3 instalments still to be paid off, payable at the end of each year: 2017, 2018, 2019.
7 INVESTMENT PORTFOLIO commercial real estate as at 30/09/2017 CITY PROJECT STATUS NAV [mpln] Usable Floor Area [sq.m.] Office Retail Usable Floor Usable Floor Area Area [sq.m.] [sq.m.] WARSZAWA Biurowiec WOLA CENTER COMPLETED 265,9 33 335 31 606 1 728 WARSZAWA Biurowiec WOLA RETRO UNDER CONSTRUCTION 54,7 24 050 24 050 WROCŁAW Centrum ARKADY WROCŁAWSKIE COMPLETED 347,1 38 608 10 054 28 555 WROCŁAW Biurowiec SKY TOWER COMPLETED 301,4 51 935 26 772 25 163 WROCŁAW Biurowiec RETRO OFFICE HOUSE UNDER CONSTRUCTION 65,4 20 916 18 282 2 634 KATOWICE Biurowiec SILESIA STAR - Etap I COMPLETED 102,0 14 964 13 894 1 070 KATOWICE Biurowiec SILESIA STAR - Etap II COMPLETED 68,7 13 496 12 394 1 102 TOTAL 1 205,1 197 304 137 052 60 252
8 HOUSING UNITS SOLD IN 2017 housing sector as at 30/09/2017 ŁÓDŹ GDAŃSK KRAKÓW WROCŁAW 4 46 1 110 140 85 108 82 163 152 104 1 74 113 82 141 116 277 293 3 67 55 105 1 45 88 138 66 99 68 240 219 235 ŁÓDŹ GDAŃSK KRAKÓW WROCŁAW WARSZAWA WARSZAWA 1Q 2Q 3Q 4Q 1Q 2Q 3Q CITY 1Q Q1 2Q Q2 3Q Q3 4QQ4 2016 1Q Q1 2Q Q2 3Q Q3 Q4 2017 SALE 461 430 550 651 2092 553 399 477 1429 WARSZAWA 163 152 277 293 885 240 219 235 694 WROCŁAW 108 82 116 141 447 138 68 99 305 KRAKÓW 140 85 82 113 420 105 66 88 259 GDAŃSK 46 110 74 104 334 67 45 55 167 ŁÓDŹ 4 1 1 6 3 1 4 cumulatively in the year 461 891 1441 2092 553 952 1429 quarter cumulatively year to year +20% +7% -1%
9 HOUSING UNITS DELIVERED IN 2017 housing sector as at 30/09/2017 1 2 3 111 40 10 1 2 274 133 ŁÓDŹ 275 415 3 97 159 ŁÓDŹ GDAŃSK KRAKÓW WROCŁAW WARSZAWA 347 9 208 3 138 25 8 30 15 33 4 1Q 2Q 3Q 4Q 99 7 230 36 138 52 1Q 2Q 3Q GDAŃSK KRAKÓW WROCŁAW WARSZAWA CITY 1Q Q1 2Q Q2 3Q Q3 4QQ4 2016 1Q Q1 2Q Q2 3Q Q3 2017 DELIVERY 166 635 99 493 1393 503 344 668 1515 WARSZAWA 4 208 33 347 592 52 138 230 420 WROCŁAW 15 275 30 133 453 36 7 159 202 KRAKÓW 138 40 8 2 188 415 99 274 788 GDAŃSK 9 111 25 10 155 97 3 100 ŁÓDŹ 1 3 1 5 3 2 5 cumulatively in the year 166 801 900 1393 503 847 1515 quarter cumulatively year to year +203% +6% +68%
10 HOUSING UNITS ADDED TO THE OFFER IN 2017 housing sector as at 30/09/2017 65 130 545 ŁÓDŹ GDAŃSK KRAKÓW WROCŁAW WARSZAWA 115 244 486 230 104 165 108 385 65 160 147 65 ŁÓDŹ 108 GDAŃSK 59 105 KRAKÓW 296 277 WROCŁAW WARSZAWA 1Q 2Q 3Q 4Q 1Q 2Q 3Q CITY 1Q Q1 2Q Q2 3Q Q3 4QQ4 2016 1Q Q1 2Q Q2 3Q Q3 2017 NEW OFFER 359 1226 499 493 2577 372 355 555 1282 WARSZAWA 244 486 165 385 1280 147 296 277 720 WROCŁAW 545 545 59 105 164 KRAKÓW 130 104 108 342 160 108 268 GDAŃSK 115 65 230 410 65 65 130 ŁÓDŹ cumulatively in the year 359 1585 2084 2577 372 727 1282
11 EXPANDING INVESTMENT PORTFOLIO IN 2017 Location acquired / tender won Housing unit usable floor area (sq.m.) preliminary contract concluded Housing unit usable floor area (sq.m.) TOTAL GDAŃSK 14670-14670 KRAKÓW 12725 72000 84725 WARSZAWA - 12862 12862 WROCŁAW 12137 33521 45658 TOTAL 39532 118 383 157915 Systematicallylargersharein the housingmarket in Warsaw, Wrocław,, Gdańsk Monitoring of offers/ Seeking new locations Activationof projectsfrom the investment portfolio dependingon a market situation
12 SELECTED FINANCIAL DATA (mpln) 3Q 2016 2016 3Q 2017 3Q 2017/ 3Q 2016 Revenues 363,8 547,0 581,5 + 59,9% EBITDA 140,8 204,7 125,7-10,7% Net Profit 84,6 113,1 100,6 + 18,9% Adjusted net profit 71,5 118,0 135,8 + 90,0% Assets 3174,4 3197,1 3277,9 + 3,3% Equity 1365,9 1396,2 1467,7 + 7,5% Net liabilities 913,1 900,7 886,5-2,9% ROA 2,7% 3,5% 3,1% + 15,1% ROE 6,2% 8,1% 6,9% + 10,6% Net liabilities/equity 66,9% 64,5% 60,4% - 9,7%
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME PLN'000 3Q 2017 3Q 2016 Sales revenue 581,550 363,755 Revenue from sales of services 107,518 106,570 Revenue from sales of goods and products 474,032 257,185 Cost of sales (365,294) (221,476) Gross profit on sales 216,256 142,279 Gain/(loss) on disposal of non-financial fixed assets (1) 37 Revaluation of investment property (61,104) 25,509 Write-downs of inventories 0 (971) Selling and distribution cost (11,354) (10,179) General administrative expenses (17,948) (18,191) Other operating income (expenses) (957) 1,589 Operating profit 124,892 140,073 Financial income 23,188 3,078 Financial expenses (24,112) (34,225) Gross profit 123,968 108,926 Income tax (tax burden) (23,357) (24,305) Net profit 100,611 84,621 13
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - ASSETS PLN'000 3Q 2017 3Q 2016 A. Fixed assets 1,929,880 1,880,609 1. Intangible assets 440 256 2. Property, plant and equipment 5,881 5,473 2.1. Tangible assets 5,842 5,416 2.2. Tangible assets under construction 39 57 3. Non-current receivables 5,028 7,118 4. Land classified as fixed asset 86,250 86,233 5. Investment property 1,823,929 1,765,941 6. Long-term prepayments 643 34 7. Deferred tax assets 7,709 15,554 B. Current assets 1,348,007 1,293,801 1. Inventory 922,424 915,817 2. Trade and other receivables 36,896 31,903 3. Income tax receivable 7 159 4. Short-term financial assets 4,543 13,811 5. Cash and other cash equivalents 372,773 325,013 6. Short-term prepayments 11,364 7,098 C. Fixed assets held for sale - - Total assets 3,277,887 3,174,410 14
15 CONSOLIDATED STATEMENT OF FINANCIAL POSITION - LIABILITIES PLN'000 3Q 2017 3Q 2016 A. Equity 1,467,725 1,365,871 I. Equity attributable to shareholders of the parent 1,467,725 1,365,871 1. Share capital 447,558 447,558 2. Other capital 919,556 833,692 3. Net profits / losses 100,611 84,621 II. Minority interest 0 0 B. Non-current liabilities 1,087,104 1,203,702 1. Non-current financial liabilities 900,742 984,221 2. Non-current liabilities on account of the acquisition of a subsidiary 75,963 111,976 3. Provisions 22 22 4. Deferred income tax reserve 110,377 107,483 C. Current liabilities 723,058 604,837 1. Current financial liabilities 156,758 53,942 2. Current liabilities on account of the acquisition of a subsidiary 40,044 40,044 3. Current trade and other payables 132,271 100,798 4. Income tax liabilities 9,039 5,255 5. Provisions 1,488 1,056 6. Accrued expenses and revenue 383,458 403,742 Total liabilities 3,277,887 3,174,410
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