Foncière de Paris SIIC: 2014 Full-year financial statements

Release - February 13th, 2015

2014 full-year financial results

Paris, February 13^th, 2015 - The Board of Directors of Fonciere de Paris met on February 10^th, 2015 to approve the Company's financial statements established according to the international accounting standards IFRS, for 2014 financial year from January 1^st to December 31^st, 2014. It presented its report on the financial statements to the Supervisory Board on February 13^th, 2015. Audit procedures were carried out by Statutory Auditors and their report will be currently issued. This press release should be read with all available information. The update of its reference document will be released at the latest in April 2015 on the Company's website www.fonciere-de-paris.fr

TARGETED ACQUISITIONS: €100m investments in Paris "intra-muros", i.e an acquisition of 22,000 sq.m. of office spaces in Paris XVIth, XVIIth and XIXth

INCREASING OCCUPANCY RATE FROM 93.3% TO 95,1%

€80M OF RENTAL REVENUE AND AN ESTIMATED PORTFOLIO ASSET OF €1.3 BILLION ON MARKET VALUE

• Increase of the consolidated operating profit as at 31 December 2014: €61m (+24%)
• Increase of the stock of unrealised gains close to € 200m as at 31 December 2014 (+27%)
• Growth of the net value asset on a diluted basis: € 118.69 per share at December 31^st, 2014, versus € 111.17 per share at December 31^st, 2013 (+6.8%)

EXTENDED DEBT MATURITY AND DECREASED FINANCIAL COST

• Spot financing cost after hedging: 2.61% as at December 31^st, 2014 vs 3.17% as at December 31^st, 2013
• Issuing of a bond of € 100m beginning July 2014, split into two tranches of € 50m each with 2020 (2.99%) and 2021 (3.3%) terms, increasing the average debt maturity to 3.4 years

INCREASED DIVIDEND TO €6.1 (vs €6 in 2013)

ACTIVITIES
             

• Rental Business Activity: Financial occupation rate reached 95.1% on December 31^st, 2014 compared to 93.3% on December 31^st, 2013.
   
  • During the period, the Company rented or re-commercialised approximatively 13,500 sq.m. of the existing portfolio.
  • The financial occupancy rate increased from 93.3% on December 31^st, 2013 to 95.1% on December 31^st, 2014. It reaches 97% in Paris where almost €1 billion in assets are concentrated, and represent 76.5% of the total portfolio of Foncière de Paris.
     
  • On December 31^st, 2014, the average lease maturity is of 4.2 years.

• FONCIERE DE PARIS INVESTED € 100m IN PARIS INTRA MUROS IN 2014

Foncière de Paris concentrated its acquisitions on properties located in Paris intra-muros. These assets, today mostly rented, offer a medium term value creation.

• PARIS 16th - Bd DE MONTMORENCY- EADS HEAD OFFICE-

                  In June 2014, Foncière de Paris purchased the former EADS Head Office located in Paris 16th. This building representing a total space of 14,100 sq.m. with 120 parking places is entirely rented to EADS for a two year term. It will then be refurbished.
                   

• PARIS 19th - 218, AVENUE JEAN JAURES - DIAPASON BUILDING -

                  This building represents a surface of 6,300 sq.m. mostly let and generates an immediate return of 7.6%.
                   

• PARIS 17th - 251, Bd PEREIRE - MAILLOT 2000 BUILDING -

                  Fonciere de Paris purchased an additional space (1,150 sq.m.) to be refurbished in a building where it already holds over 7,000 sq.m. of rented offices.
                   
Two sales were finalised in the second semester of 2014 (Building Lendit-Lumière, 5,400 sq.m. in Saint Denis and the Company's proportionate share of 32.5% of the capital in the SCI Saints Pères Fleury*) and generated €13.7m of net capital gains.

*This SCI of which Fonciere de Paris only held 32.5%, owns the former Ecole des Ponts et Chaussée, located rue des Saints Pères (approximatively 9,200 sq.m.) now rented to Science Po with a long term lease agreement.

ASSET PORTFOLIO: € 1.3bn OF REAL ESTATE PORTFOLIO VALUE

• The value of the portfolio appraised as of December 31^st, 2014 is of € 1.3bn vs € 1.24bn as of December 31^st, 2013. This change is mainly due to:
  • € 100m acquisitions performed during the period (cf. supra)
  • An increase of unrealised capital gains from € 157m at December 31^st, 2013 to € 200m at December 31^st, 2014
  • Peripheral asset disposals for an amount of € 4.6m and capital gain of € 1.9m
  • € 13m investments in the construction of the Coruscant Building in Saint Denis, for the balance.

FINANCIAL DATA: NEARLY € 80m IN RENTAL INCOME

• The consolidated turnover amounted to € 113.3m at December 31^st, 2014, split as following:
  •  € 79.4m from rental income (€75.7m in 2013), in line with the annual target of € 80m, excluding dividends on shares held in Foncière des 6ème et 7ème and on Eurosic that amounted to € 9m.
  • € 21.4m from lease payments for credit-leasing,
  • € 12.5m from hotel activity income.
     
• The operating profit reached € 61m as at December 31^st, 2014 versus € 49 M as at December 31^st, 2013 (pro-forma on 12 months).
   
• The net consolidated profit is of € 33.6m not comparable to the pro-forma one of December 31^st, 2013 (€88.6m). Consolidated current cash-flow amounts to € 52m, i.e. € 7.84 per share.
   
• The net income (résultat social), used to determine the dividend, reaches € 41.1 M after taking into account the termination fees of € 6.4m on swaps, i.e. € 6.21 per share.
   
• The consolidated shareholders' equity, including income, amounts to € 565m. Are added to this amount almost € 200m (vs € 157m as at December 31^st, 2013) of unrealised capital gains on the rental business assets and € 73m OSRAs. The amount of the revalued capital equity and quasi-equity amounts to € 836m versus € 791m on December 31^st, 2013 (pro-forma).
   

• The Revalued Net Asset for the six month period of Foncière de Paris, amounts on a diluted basis to € 118.69 per share, excluding transfer duties on December 31^st, 2014 vs to €111.17 per share excluding transfer duties on December 31^st, 2013.

REFINANCING: DURING THE PERIOD, FONCIERE DE PARIS EXTENDED ITS DEBTS MATURITY WHILE REDUCING ITS AVERAGE COST

• The long-term financial debt passed from € 801m as at December 31^st, 2013 to € 877m as at December 31^st, 2014, the short term-debt from € 233m to € 179m between December 31^st, 2013 and December 31^st, 2014. On December 31^st 2014, the Company held € 408m of undrawn credit lines.
   
• During the second semester, the Company purchased € 157m swaps paying an amount of € 6.4m booked into expenses in 2014. After the impact of this transaction, the Company is still hedged at 80% at an average rate of 2.41%. The spot cost of refinancing at December 31^st, 2014, passed to 2.61% compared to 3.17% on December 31^st, 2013.
   
• The Loan To Value ratio (net debt/asset revaluation) amounts to 44% vs 43% at December 31^st, 2013.
   
• Due to the bond issue on July 10^th, 2014, and the signing of new credit lines confirmed since the beginning of the financial year, the debt maturity is of 3.4 years, compared to 2.9 years end of December 2013.

DIVIDEND INCREASING SLIGHTLY

• At the General Meeting of Shareholders the payment of a dividend of € 6.1 per share will be proposed, versus € 6 in 2013, confirming the Company's distributive capacity. This represents a dividend yield of 6.1% on the stock price at December 31^st, 2014 and of 5.5% on the stock price at February 10^th, 2015.

MERGER PROJECT WITH FONCIERE DES 6EME ET 7EME ARRONDISSEMENTS DE PARIS: A RELUTIVE TRANSACTION AND A CONSOLIDATED ASSET PORTFOLIO OF APPROX. € 3 BILLION

•   On November 4^th, 2014, the Supervisory Board of Fonciere de Paris, on proposal of the Management Board and the Board of Directors of Foncière des 6ème et 7ème Arrondissements de Paris met and approved the principle of a merger of Foncière de 6ème et 7ème Arrondisements de Paris into Fonciere de Paris (see Press Release of 4 November 2014).

• Mr. Kling and Ledouble were appointed Merger Auditors on November 24^th 2014.

• Specialised on the real estate market of offices in Paris, the new group will reach a consolidated portfolio asset of approximatively € 3 billion based on current value. This transaction will bring to the shareholders of the two listed companies the following assets:

• This merger is expected to be accretive (relutive) due to the cancellation of 17.6% of capital of Foncière des 6ème et 7ème Arrondissement de Paris currently held by Foncière de Paris.

-          A crystal-clear strategy: the high quality portfolio concentrated up to 90% in Paris, Boulogne-Billancourt and Levallois-Perret

• Reinforced means in order to assure a long term development on equivalent assets.

• In the future, the simplification of organisation of these two entities should optimise value creation for the shareholders and assure sustained and regular increase of the dividend.

 FINANCIAL AGENDA

• March 5^th, 2015: Foncière de Paris Supervisory Board and Foncière des 6ème et 7ème Arrondissements de Paris Board of directors (exchange parity of the merger).
  

• May 12^th, 2015: Both companies will hold an Annual General Meeting (on 2014 dividend) and an Extraordinary General Meeting (on the Merger treaty)

ABOUT FONCIERE DE PARIS

Foncière de Paris is listed on Euronext Paris since 1987 (code ISIN: FR0000034431) under real-estate FTSE classification.

www.fonciere-de-paris.fr

Contacts

Fonciere de Paris
François Thomazeau / Olivier Riché / Arnaud Pomel
Séverine Farjon - farjon@foncieredeparis.fr - Phone: +33 (0)1 53 70 77 77-

Key Figures

Consolidated balance sheet - In thousands of euros

NB        In the consolidated financial statements established according to the international standards IFRS, investment properties assets are booked in historical value, which means that €198m latent capital gains are not taken into account.

Consolidated Income Statement - In thousands of euros