EPIC Suisse AG reports solid results for the first half-year 2024 with ongoing development projects running according to plan

Media release - Ad hoc announcement pursuant to Art. 53 LR

Zurich, 21 August 2024

EPIC Suisse AG reports solid results for the first half-year 2024 with ongoing development projects running according to plan

• Rental income in line with previous year period at CHF 32.6 million in H1 2024 (CHF 32.9 million in H1 2023)
• Vacancy rate at 4.8% for H1 2024 (4.4% for H1 2023)
• Continued long WAULT of 7.9 years as at 30 June 2024 (8.1 years as at 31 December 2023)
• Unrealised revaluation gain of CHF 8.7 million in H1 2024 with all sectors contributing to the revaluation uplift (unrealised revaluation loss of CHF 5.9 million in H1 2023)
• EBITDA including revaluation of properties amounted to CHF 34.8 million in H1 2024 (CHF 20.7 million in H1 2023) and, excluding revaluation of properties, to CHF 26.1 million (CHF 26.5 million in H1 2023)
• Value of the real estate portfolio increased by 2.8% to CHF 1’578.3 million as at 30 June 2024, primarily due to the advancement of the ongoing development projects (CHF 1’535.5 million as at 31 December 2023)
• Solid equity ratio of 49.3%
• Ongoing development projects, PULSE and Campus Leman (Building C), progressing according to expectations
• First rental contracts in our development project PULSE signed one year ahead of completion of construction and 3 floors out of 6 already pre-let in Campus Leman (Building C)

EPIC Suisse AG (SIX: EPIC) (the “Company” or “EPIC Suisse”) published today solid results for the first half of 2024 and positive updates on its two ongoing development projects, PULSE in Cheseaux-sur-Lausanne and Campus Leman (Building C) in Morges, both of which are scheduled for completion by the first half of 2025.

Stable rental income and vacancies

Following the substantial growth of over 6% in net rental income in fiscal year 2023 compared to the financial year 2022, the rental income from real estate properties in the first half-year 2024 amounted to CHF 32.6 million, remaining as expected in line with the level in the previous comparable period (CHF 32.9 million in H1 2023).

The net annualised rental income yield of properties in operation stayed at an attractive level of 4.5% for the first six months of 2024 (4.6% in H1 2023).

Real estate portfolio valued at CHF 1’578.3 million

The construction of the two development projects under way (PULSE and Campus Leman (Building C)) is progressing according to expectations and their capital expenditures were the main contributing factor to the 2.8% value increase of the real estate portfolio to CHF 1’578.3 million (CHF 1’535.5 million as at 31 December 2023). In addition, all sectors contributed to the portfolio total revaluation uplift of CHF 8.7 million, with the principal driver being the developments’ advancement. The real discount rates applied as at 30 June 2024 resulted in a weighted average of 3.39%, equivalent to the one of 31 December 2023.

The WAULT as at 30 June 2024 remained long at 7.9 years (8.1 years as at 31 December 2023), notwithstanding the passing of time effect of 0.5 years.

Profitability

EBITDA (including revaluation of properties) amounted to CHF 34.8 million for the first half of 2024 (CHF 20.7 million in H1 2023), and to CHF 26.1 million when excluding the revaluation of properties (CHF 26.5 million in H1 2023). 

Profit (including revaluation effects) reached CHF 22.9 million for the first half-year 2024 versus CHF 11.2 million for the previous comparable period. Profit (excluding revaluation of properties and derivatives and related deferred taxes as well as any related foreign exchange effects) amounted to CHF 19.9 million (CHF 20.9 million in H1 2023), reflecting principally a moderate increase in financing costs and a minor decrease in total income.  

Good progress on development projects

Construction of Campus Leman (Building C) is also expected to be completed in the first half of 2025, and the anchor tenant Incyte has committed to an additional floor in the building from its previously committed two floors, out of the building’s six floors. We are also encouraged by the ongoing discussions with other potential tenants who are showing interest in taking some areas in the building.

Sound capital base

As at 30 June 2024, the group’s equity stands at CHF 795.7 million with a net asset value per share of CHF 77.02 (CHF 804.9 million and CHF 77.92 respectively as at 31 December 2023). An increased dividend of CHF 3.10 per share was distributed to the shareholders on 8 May 2024 (CHF 3.00 previously), corresponding to a dividend yield of 4.7% based on the share price as at 31 December 2023.

The weighted average interest rate on mortgage-secured bank loans stayed low at 1.3% as at 30 June 2024, while their weighted average residual maturity stood at 4.3 years (1.3% and 4.5 years as at 31 December 2023, respectively).

Outlook

Assuming no materially adverse changes on our operations going forward, EPIC Suisse confirms a robust net rental income level for the full year 2024 in line with the previous year. We expect the lettings in our developments, PULSE and Campus Leman (Building C), to bring the next sizeable uplift in rental income.

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^[1] Excluding any rent-free periods or any other incentives

^[2] Excluding any early breaks or options

For selected key figures, please refer to the appendix of this press release as well as to the Half-Year Report 2024 for further information and a glossary of alternative performance measures (on page 50 of the report).

Contact information

Valérie Scholtes, CFO, EPIC Suisse AG, Phone: +41 44 388 81 00, E-mail: investors@epic.ch

Reporting

The Half-Year Report 2024 is available on the Company’s website under Media & Investors –
Financial Reports: https://ir.epic.ch/en/financial-reports/ 

About EPIC Suisse AG

EPIC Suisse AG is a Swiss real estate company with a high-quality property portfolio of CHF 1.6 billion in market value. It has a sizeable development pipeline and a strong track record in sourcing, acquiring, (re)developing and actively managing commercial properties in Switzerland. EPIC’s investment properties are mainly located in Switzerland's major economic hubs, specifically the Lake Geneva Region and the Zurich Economic Area. Listed on SIX Swiss Exchange since May 2022 (SIX ticker symbol EPIC; Swiss Security Number (Valorennummer) 51613168; ISIN number CH0516131684). More information: www.epic.ch

1. Rental income from real estate properties plus other income less direct expenses related to properties
2. Profit after tax before other comprehensive income excluding revaluation of properties and derivatives and related deferred taxes as well as any related foreign exchange effects
3. Profit after tax before other comprehensive income divided by the average IFRS NAV. The average IFRS NAV corresponds to ½ of the sum of the IFRS NAV at the beginning and at the end of the reporting period
4. Profit after tax before other comprehensive income excluding revaluation of properties and derivatives and related deferred taxes as well as any related foreign exchange effects divided by the average IFRS NAV. The average IFRS NAV corresponds to ½ of the sum of the IFRS NAV at the beginning and at the end of the reporting period
5. Ratio of net debt to the market value of total real estate properties including the right-of-use of the land
6. Reported vacancy rate adjusted for absorption and strategic vacancy in certain properties in operation (i.e. Zänti Volketswil, Biopôle Serine)

Disclaimer

This publication may contain specific forward-looking statements, e.g. statements including terms like "believe", "assume", "expect", "forecast", "project", "may", "could", "might", "will" or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of EPIC Suisse AG and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers should not rely on forward-looking statements. EPIC Suisse AG assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.

Alternative performance measures

This media release may contain references to operational indicators, such as reported vacancy rate, adjusted vacancy rate and WAULT, and alternative performance measures (APM) that are not defined or specified by IFRS Accounting Standards, including EBITDA (incl. revaluation of properties), EBITDA (excl. revaluation of properties), net operating income, return on equity (incl. revaluation effects), return on equity (excl. revaluation effects), profit (excl. revaluation effects), net loan to value (LTV) ratio. These APM should be regarded as complementary information to and not as substitutes of the Group’s consolidated financial results based on IFRS Accounting Standards. These APM may not be comparable to similarly titled measures disclosed by other companies. For the definitions of the main operational indicators and APM used, including related abbreviations, refer to the section “Alternative Performance Measures” on page 50 of the Company's Half-Year Report 2024.