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NOTES to the consolidated financial statements

Accounting Principles

Investis Holding SA (“the Company”) is based in Zurich, Switzerland. Its shares have been traded on the SIX Swiss Exchange since 30 June 2016 (IREN). The consolidated financial statements, prepared as at 31 December 2018, include Investis Holding SA and all its direct or indirect subsidiaries and joint ventures (Investis Group) as well as its shareholdings in associated companies.

The business activity of the Investis Group includes the long-term holding of residential and commercial properties as well as comprehensive real estate services in the areas of property management and facility services.

Basis of accounting

The consolidated financial statements of Investis Holding SA have been prepared in accordance with Swiss GAAP FER as a whole and with the special provisions for real estate companies specified in article 17 of the SIX Swiss Exchange’s Directive on Financial Reporting. They give a true and fair view of the assets, liabilities, cash flows and earnings of Investis Group.

The consolidated financial statements have been prepared applying the principle of historical cost accounting or fair value. Please refer to the “Key accounting and valuation principles” in this chapter for the valuation principles of individual balance sheet items. The income statement is presented by nature. The financial statements have been drawn up on the basis of going concern values.

Assets realised or consumed in the ordinary course of business within twelve months or held for sale purposes are classified as current assets. All other assets are included in non-current assets. Liabilities to be settled in the ordinary course of business or falling due within twelve months from the balance sheet date are classified as current liabilities. All other liabilities are classified as non-current liabilities.

First-time application of Swiss GAAP FER standards

In the year under review the Swiss GAAP FER accounting principles have not been changed.

Consolidation principles

The consolidated financial statements are based on the individual financial statements of the Group companies, which were prepared as at 31 December 2018 and drawn up according to uniform accounting policies. The relevant accounting principles are described below. The consolidated financial statements are presented in Swiss francs (CHF). Unless otherwise stated, all amounts are stated in thousands of Swiss francs (CHF 1,000). Due to rounding, parts of an item that has been broken down may add up to more or less than 100% of the total item.

The consolidated financial statements include all subsidiaries that are directly or indirectly controlled by Investis Holding SA. Investis Group controls a subsidiary if it is exposed to the fluctuating returns of the investment or if it holds rights to these returns and has the ability to influence these returns given its power over the subsidiary. This is the case where the Investis Group holds more than 50% of the voting rights of an entity or where the Investis Group has been granted management of an entity contractually or is exercising control by other means. These entities are fully consolidated; assets, liabilities, income and expenses are incorporated in the consolidated accounts and all intercompany balances are eliminated.

Joint ventures are entities which Investis Group jointly controls with one or more joint venture partners, and whereby Investis Group is heavily involved in the management. Joint ventures are consolidated proportionally.

Associates are all companies on which Investis Group exerts significant influence but does not have control. This is generally evidenced when Investis Group holds voting rights and share capital ownership of between 20% and 50% of a company. Investments in associated companies are recognised using the equity method. Ownership of shares in organisations where Investis has voting rights of less than 20% of the total is recognised as financial assets at acquisition cost, less any necessary write-downs.

Capital consolidation is based on the purchase method. Companies acquired by the Investis Group are included in the consolidated financial statements from the date of obtaining control. The net assets previously recognised by the acquired subsidiary are revalued at acquisition date using uniform Group accounting principles and then consolidated. Any difference between the higher purchase price and the net assets acquired (goodwill) is off-set against retained earnings. Where an off-set takes place with retained earnings, the impact of this theoretical capitalisation and amortisation over the estimated useful life of five years is disclosed separately in the notes.

In a business acquisition achieved in stages (including transactions with minorities) the goodwill is determined on each separate transaction and off-set against retained earnings.
Goodwill arising from acquisitions of associates is recognised as part of the investment.

Companies sold are excluded from the scope of consolidation as of the date on which the Group ceases to have control, with any gain or loss recognised in income. Non-controlling interests in equity and profit are presented separately in the consolidated balance sheet and the consolidated income statement.

Changes in the consolidated companies are disclosed in Note 1.

Translation of foreign currencies

All Group companies prepare their financial statements in CHF.

KEY ACCOUNTING AND VALUATION PRINCIPLES

Cash and cash equivalents

Cash and cash equivalents include cash on hand, current accounts with banks, as well as fixed-term deposits with a maturity of less than three months, and are shown at nominal value. Positions in foreign currencies are translated at the spot rate on the balance sheet date.

Securities

Securities include investments in shares and bonds and include longer-term fixed-term deposits and money market investments with a maturity of more than three months. They are valued at fair value.

Trade receivables and other receivables

Trade receivables and other receivables are stated at nominal value. Provisions for doubtful debts are made in cases where the Group faces a risk of not collecting the outstanding amount. Changes in provisions are recognised in the income statement.

Properties held for sale

Investment properties leased out but intended for sale are classified under current assets as properties held for sale and valued at cost.

Development properties (projects) intended for sale are accounted for at the lower of cost (incl. interest incurred during the construction phase) or fair value and are recognised under current assets. The costs include the plot of land as well as the directly attributable construction costs in line with the construction progress. Discounts are recorded as a reduction in construction costs. 

Properties reclassed from investment properties under construction (non-current assets, valued at fair value) are subsequently valued at the lower of this value (including construction costs after reclassification) or fair value.

Investment properties

The portfolio consists of the following categories:
– Residential properties
– Commercial properties
– Properties under construction
– Undeveloped plots of land

Investment properties are held for long-term investment purposes with the aim of realising revenues from the letting of properties. Investment properties are accounted for at fair value and as such are not subject to depreciation. The fair values are updated and calculated using the discounted cash flow (DCF) method on an annual basis by an independent property appraiser based on the individual risk profile per property. Single-family houses and condominiums are valued by the independent property appraiser using a sales comparison approach. In accordance with the provisions of Swiss GAAP FER, increases and decreases in value are recognised in the income statement in the period in which they occur, after consideration of any resulting deferred taxes. Investment properties under construction and undeveloped plots of land are recorded at fair value from the date on which their fair value can be reliably determined. Investis has defined the existence of a final construction permit, plus a definite construction project in which costs and revenues can be determined reliably, as mandatory requirements for a reliable market valuation. If the conditions for a reliable assessment of market value are not yet present, investment properties under construction and undeveloped plots of land are accounted for at cost. Provided they do not lead to an increase in market value, investments and refurbishments are recorded as an expense in the period in which they are incurred.

Borrowing costs for the financing of properties under construction and undeveloped plots of land are capitalised. Other borrowing costs are charged to financial expenses.

Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation and impairment. The depreciation is on a straight-line basis over their estimated useful lives: three to ten years for office and other equipment.

Intangible assets

Acquired intangible assets are stated at cost less amortisation and impairment. The amortisation is on a straight-line basis over their estimated useful lives: three to five years for intangible assets. Internally generated intangible assets are not capitalised.

Investments in associated companies

Ownership interests of more than 20% in companies in which the Investis Group has no control are classified as investments in associated companies and are valued and accounted for using the equity method.

Financial assets and financial assets of related parties

These items include long-term loans and other long-term receivables that are stated at their nominal value.

Deferred tax assets

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which temporary differences or unused tax losses can be utilised.

Impairment of assets

If there is any indication of impairment, an impairment test is performed immediately. If the carrying amount exceeds the recoverable amount, an impairment loss is recognised in the income statement. As the goodwill is already charged against equity at the date of the acquisition, an impairment of the goodwill does not affect the income statement but leads to a disclosure in the notes only.

Trade payables and other liabilities

Trade payables and other liabilities are recognised at their nominal values. They are recognised under current liabilities unless a broader economic perspective requires them to be assigned to non-current liabilities.

Short-term and long-term financial debt

Mortgages and fixed advances that are not repaid within twelve months, but are renewed, are regarded financially as long-term borrowings and disclosed as such in the balance sheet. Amortisations due within twelve months are disclosed as current financial liabilities. Financial debt is stated at its nominal value.

Bond emission costs, reduced by the amount of the premium, are charged in full to the income statement upon issue of the bonds.

Provisions

Provisions are recognised only if the company has a present obligation to a third party as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and the obligation can be sufficiently reliably estimated. Provisions are presented as being either short- or long-term in accordance with their expected due dates.

Deferred tax liabilities

Deferred taxes are calculated by applying the balance sheet liability method for any temporary difference between the carrying amount according to Swiss GAAP FER and the tax basis of assets and liabilities. They include deferred taxes on revaluation of investment properties.

The current income tax rates are applied in cantons with a two-tier system. In cantons with a single-tier system there is a separate property gains tax with speculation surcharges or deductions for the period of ownership, depending on the holding period. For properties that are intended for sale, the actual holding period will apply. For the remaining properties, a holding period of 20 years or the effective holding period will apply, provided it is more than 20 years. Liabilities for deferred taxes are not discounted.

The tax rates applied in the financial year and preceding years lie between 17% and 24%.

Pension liabilities

All companies in the Investis Group are members of independent collective pension plan foundations with defined contribution plans. The capitalisation of possible economic benefits (stemming from a surplus in the pension institution) is neither intended nor do the conditions for this exist. A financial obligation is carried as a liability if the conditions for the establishment of a provision are met.

Equity

Treasury shares (own equity instruments held by the Group) are accounted for as a reduction of equity at acquisition cost and are not subsequently remeasured. When shares are sold out of treasury shares, the resulting profit or loss is recognised in the capital reserves, net of tax.

Share-based compensation

Share-based compensation to members of the Board of Directors and the Executive Board are stated at fair value and recognised in personnel expenses in the period in which the service is performed. Share-based compensation is disclosed in chapters 4.2 (for the Board of Directors) and chapter 4.3.3 (for the Executive Board) of the Compensation Report.

Financial result

This item includes interest income and expenses, exchange rate differences, gains and losses on securities and other financial income and expenses.

Derivative financial instruments

Investis has no derivative financial instruments outstanding at the balance sheet date.

Transactions with related parties/shareholders

Related parties include natural or legal persons who could exert a significant direct or indirect influence on financial and operating decisions affecting Investis Holding SA. Organisations that are directly or indirectly controlled by a related party are also classified as related parties. Major transactions with related parties are disclosed in Note 23.

Segment information

The following operating and reporting segments have been identified based on the management structure as well as the reporting to the Executive Board and the Board of Directors:
– Properties: invests primarily in Swiss residential properties
– Real Estate Services: provides comprehensive real estate services in Switzerland

Segment reporting is prepared to operating profit (EBIT) level since this key figure is used for management purposes. All operating assets and liabilities that can be assigned to the segments, either directly or on a reasonable basis, are reported in the respective segment. There are no differences between the accounting and valuation principles used for segment reporting and those used for the preparation of the consolidated financial statements.

The position “segment elimination” contains transactions between segments.

Contingent liabilities and other obligations

Contingent liabilities as well as other obligations for which a provision has not been recorded are assessed at each balance sheet date and are disclosed in the notes to the financial statements. If contingent liabilities or other obligations could lead to an outflow of funds without a useable inflow of funds, and this outflow of funds is probable and can be estimated, a provision is recorded.

Appraisals

The preparation of financial statements requires judgement and assumptions to be made. This will affect the reported asset values, liabilities and contingent liabilities at the balance sheet date, as well as income and expenses during the reporting period. If assumptions that were made at the date of the financial statements to the best of management’s knowledge and belief differ from the actual circumstances, the original assessments and assumptions will be adjusted in the reporting year in which the circumstances change.

Risk management

The Investis Group has a risk management programme. Every year a risk analysis is carried out to compile and document all business risks in accordance with uniform criteria. The identified risks are then assessed according to their probability of occurrence and their potential scope. Financial implications as well as general effects are taken into account when determining the potential impact on the Group. Such risks are then either borne, avoided, reduced or passed on by the measures decided upon by the Board of Directors.

1. Acquisitions and disposals of consolidated companies

 

 

 

 

2018

 

 

2017

In CHF 1,000

 

 

Acquisitions

Disposals

 

 

Acquisitions

 

Société dʼinvestissements immobiliers SII SA

Others

Total

Total

Hauswartprofis

Others

Total

Cash and cash equivalents

106

406

512

100

5,942

689

6,630

Trade and other current receivables

19

158

178

370

899

181

1,080

Investment properties and properties held for sale

130,616

5,474

136,090

18,900

-

90,750

90,750

Fixed assets

-

210

210

-

1,223

-

1,223

Financial assets

-

6

6

-

-

30

30

Trade and other current liabilities

–1,754

–225

–1,980

–228

–1,877

–2,052

–3,930

Non-current liabilities

–22,357

–906

–23,263

–1,388

–286

–24,454

–24,740

Net assets acquired/disposed of

106,630

5,124

111,753

17,754

5,900

65,144

71,044

Goodwill (recognised in equity)

-

36

36

-

14,720

95

14,814

Recognised income from disposal of properties

 

 

 

6,529

 

 

 

Purchase/selling price

106,630

5,160

111,790

–24,283

20,619

65,239

85,858

Cash and cash equivalents acquired/disposed of

–106

–406

–512

100

–5,942

–689

–6,630

Purchase price consideration paid/received in prior years

–10,800

-

–10,800

1,500

-

-

-

Purchase price consideration for acquisitions in prior years

 

 

5,000

 

 

 

5,000

Cash outflow on acquisitions

 

 

105,478

 

 

 

84,228

Cash inflow from disposals

 

 

 

–22,683

 

 

 

Transactions In 2018

On 1 February 2018, Investis Properties SA acquired 100% of the shares in the real estate
company Société d’investissements immobiliers SII SA, Geneva, and merged it into the
acquiring company.

On 1 February 2018, 100% of the shares in Domus Flavia Investments AG, Geneva, were
sold.

On 3 July 2018, Investis Properties SA acquired 100% of the shares in the real estate company Carmat S.A., Lausanne.

On 23 August 2018, Investis Investments SA increased its shareholding in the company La Foncière de la Dixence SA from 75% to 83%.

On 28 August 2018, 100% of the shares in Hotel Investissements et Management SA, Fribourg, were sold.

On 20 November 2018, Investis Investments SA acquired 60% of the shares in the company C.T. Creative Technologies SA, Martigny. The company provides services in the area of property management software solutions. 

Non-cash effects in 2018

With the signing of the purchase price agreement for the acquisition of Société dʼinvestissements immobiliers SII SA, Geneva, a deposit of CHF 10.8 million was paid in December 2017. As the transaction was completed only in February 2018, the corresponding cash outflow was reported as increase in other receivables in the net cash from operating activities (cash flow) in the Annual Financial Statements 2017.

With the signing of the purchase price agreement for the sale of Domus Flavia Investment AG, Geneva, a deposit of CHF 1.5 million was received in December 2017. As the transaction was completed only in February 2018, the corresponding cash inflow was reported as increase in other payables in the net cash from operating activities (cash flow) in the Annual Financial Statements 2017.

GROUP INTERNAL MERGERS in 2018

As at 1 January 2018 following Group companies were merged:

  • Casamar AG, Geneva, Jalu SA, Lens, Investis Patrimoine SA, Lens, Les Résidences Privées SA, Lens, Parallax SA, Geneva, Serge Spaggiari SA, Perly-Certoux, Transimo SA, Fribourg, and WEGRA Holding AG, Auenstein, were merged into Investis Properties SA, Lens.
  • Hauswartprofis Baar GmbH, Baar, Hauswartprofis Mägenwil AG, Mägenwil, Hauswartprofis ZH AG, Dübendorf, and Treos AG, Volketswil, were merged into hauswartprofis AG, Mägenwil.
  • Minas-Tirith SA, Wollerau, was merged into Investis Investments SA, Lens.

TRANSACTIONS IN 2017

On 9 January 2017, Investis Properties SA acquired 100% of the shares in the real estate company Alaïa Invest SA, Lens.

On 10 January 2017, Investis Investments SA acquired 100% of the shares in Wegra Holding AG, which holds 100% of the operating subsidiaries of “Hauswartprofis”. The company provides services in the area of facility services and strengthens the respective activity offered by the Real Estate Services segment in the greater Zurich area.

On 10 March 2017, Investis Properties SA acquired 100% of the shares in the real estate company Domus Angelo Sàrl, Luxembourg.

On 1 May 2017, Investis Properties SA acquired 100% of the shares in the real estate company Jalu SA, Geneva.

On 7 July 2017, Investis Properties SA acquired 100% of the shares in the real estate company Parallax SA, Geneva.

On 14 July 2017, Investis Properties SA acquired 100% of the shares in the real estate company Casamar AG, Geneva.

On 15 September 2017, Valotel SA acquired 100% of the shares in the real estate company Hotel Investissements et Management SA, Fribourg.

On 21 November 2017, Investis Investments SA increased its shareholding in the proportional consolidated company La Foncière de la Dixence SA from 50% to 75%. Hence, the company is fully consolidated as of 31 December 2017.

2. Segment reporting

Segment Information 2018

                  

In CHF 1,000

Properties

Real Estate Services

Corporate

Eliminations

Investis Group

Revenue 1)

54,983

147,832

-

–5,324

197,491

Direct expenses

–16,504

–13,320

-

5,311

–24,514

Personnel expenses

–1,357

–103,853

–3,372

-

–108,582

Other operating expenses

–2,169

–21,085

–1,431

14

–24,672

 

 

 

 

 

 

Operating profit before revaluations, disposal of properties, depreciation and amortisation

34,953

9,574

–4,803

0

39,724

 

 

 

 

 

 

Income from revaluations

24,157

 

 

 

24,157

Income from disposal of properties

12,770

 

 

 

12,770

Operating profit before depreciation and amortisation

71,880

9,574

–4,803

0

76,651

 

 

 

 

 

 

Depreciation and amortisation

–16

–1,872

–187

-

–2,076

Operating profit (EBIT)

71,864

7,701

–4,990

0

74,575

 

 

 

 

 

 

Total segment assets as at 31 December 2018 2)

1,357,418

56,170

21,151

–11,086

1,423,653

Total segment liabilities as at 31 December 2018 2)

48,593

28,880

768,754

–11,086

835,142

 

 

 

 

 

 

Headcount as at 31 December 2018

10

1,368

13

 

1,391

FTE as at 31 December 2018

9

1,154

11

 

1,175

FTE (full-time equivalent, average over the period)

9

1,149

11

 

1,169

1) Revenue is generated exclusively in Switzerland.

2) The assets and liabilities shown under “Corporate” include the corporate items from the balance sheet and the financial assets/liabilities and tax assets/liabilities of the Investis Group.

Segment information 2017

            

In CHF 1,000

Properties

Real Estate Services

Corporate

Eliminations

Investis Group

Revenue 1)

47,492

147,637

-

–5,142

189,987

Direct expenses

–12,814

–14,178

-

5,129

–21,863

Personnel expenses

–599

–101,902

–3,606

-

–106,108

Other operating expenses

–1,685

–21,817

–1,216

13

–24,706

 

 

 

 

 

 

Operating profit before revaluations, disposal of properties, depreciation and amortisation

32,394

9,740

–4,823

0

37,311

 

 

 

 

 

 

Income from revaluations

24,953

 

 

 

24,953

Income from disposal of properties

696

 

 

 

696

Operating profit before depreciation and amortisation

58,042

9,740

–4,823

0

62,959

 

 

 

 

 

 

Depreciation and amortisation

–4

–1,900

–185

-

–2,088

Operating profit (EBIT)

58,039

7,839

–5,007

0

60,871

 

 

 

 

 

 

Total segment assets as at 31 December 2017 2)

1,142,532

75,790

31,175

–11,275

1,238,222

Total segment liabilities as at 31 December 2017 2)

19,708

54,462

606,338

–11,275

669,233

 

 

 

 

 

 

Headcount as at 31 December 2017

9

1,397

14

 

1,420

FTE as at 31 December 2017

9

1,126

13

 

1,147

FTE (full-time equivalent, average over the period)

4

1,126

13

 

1,143

1) Revenue is generated exclusively in Switzerland.

2) The assets and liabilities shown under “Corporate” include the corporate items from the balance sheet and the financial assets/liabilities and tax assets/liabilities of the Investis Group.

3. Revenue from letting of properties

Duration of existing fixed leases of commercial properties

The duration of existing fixed leases of commercial properties was:

 

Annualised rental income

In CHF 1,000

31.12.2018

31.12.2017

Less than one year

102

492

1–5 years

2,585

3,109

More than 5 years

1,600

1,631

Most important tenants

The five most important tenants measured according to property income were (in alphabetical order):

  • As of 31.12.2018: Hospice Général, Permanent Mission of India to the UN in Geneva, Valotel Management (Fribourg) Sàrl, Valotel Management (Rothrist) AG and Valotel Management (Sion) SA
  • As of 31.12.2017: Hospice Général, Permanent Mission of India to the UN in Geneva, Valotel Management (Fribourg) Sàrl, Valotel Management (Rothrist) AG and Valotel Management (Sion) SA

Share of annualised rental income (%)

31.12.2018

31.12.2017

Most important tenant

1.4%

1.5%

Second to fifth most important tenants

3.3%

3.1%

Five most important tenants

4.7%

4.6%

4. Personnel expenses

In CHF 1,000

2018

2017

Wages and salaries

89,519

88,100

Share-based compensation

651

652

Social security expenses

9,792

9,668

Pension benefit expenses

5,146

5,271

Other personnel expenses

3,474

2,416

Total personnel expenses

108,582

106,108

There are no pension funds with a surplus or deficit (full-value insurance) or employer contribution reserves.

5. Other operating expenses

In CHF 1,000

2018

2017

Rent and utilities

7,259

6,983

Administrative expenses

12,990

12,997

Other operating expenses

4,423

4,726

Total other operating expenses

24,672

24,706

6. Income from disposal of properties

In CHF 1,000

2018

2017

Sales proceeds, net

53,996

23,346

Investment costs

–45,683

–20,366

Gross profit from disposal of properties

8,312

2,980

Accumulated valuation losses

4,458

–2,284

Total profit on disposal of properties

12,770

696

Of which profits on disposal of properties held for sale

5,806

135

Of which profits on disposal of residential properties

396

178

Of which profits on disposal of commercial properties

6,568

384

For details of the properties sold see Note 11 and Note 12.

7. Financial result

In CHF 1,000

2018

2017

Interest income

56

53

Share of results of associates

-

125

Other financial income

60

445

Total financial income

116

623

 

 

 

Interest expenses

–2,978

–2,663

Share of results of associates

–423

-

Other financial expenses

–539

–1,397

Total financial expenses

–3,939

–4,060

 

 

 

Total financial result

–3,823

–3,437

In 2018, other financial expenses include CHF 0.4 million (2017: CHF 0.8 million) for the issuance of bonds and CHF 0 million (2017: CHF 0.6 million) for unrealised losses on securities.

8. Income taxes

In CHF 1,000

2018

2017

Current income taxes

15,388

2,193

Deferred income taxes

989

–2,364

Total income taxes

16,376

–170

The difference between the expected income tax expense and the income tax expense shown in the income statement can be explained as follows:

In CHF 1,000

2018

2017

Profit before taxes

70,752

57,434

Expected Group tax rate

23%

23%

Expected income taxes

16,273

13,210

 

 

 

Non-deductible expenses

195

265

Tax-free income

–21

–27

Use of non-capitalised tax losses carried forward

–644

–974

Non-capitalisable tax losses for the period

105

207

Expenses/income which are taxed at a lower/higher tax rate

–135

–477

Impact of changes in tax rate on deferred tax items recognised

-

–12,318

Tax effects for prior periods

603

–57

Effective income tax charge

16,376

–170

Effective tax rate

23%

–0%

Deferred income taxes are calculated for each subsidiary using the local tax rates.  In 2018, the non-capitalised tax assets from losses carried forward decreased from CHF 1.0 million in 2017 to CHF 0.5 million. Deferred income tax assets relate to deferred income taxes on temporary differences. Accrued expenses and other liabilities include accrued taxes of CHF 5.8 million (2017: CHF 0.7 million). In 2017, the anticipated deferred taxes decreased as a result of the determined tax rate changes; this resulted in a positive tax effect of CHF 12.3 million.

Due to the release of deferred tax liabilities the total income taxes resulted in an income in 2017.

In 2017, deferred taxes in the amount of CHF 10.8 million had to be reversed due to an announcement by Canton Vaud on 1 November 2017, that corporate tax reform would be implemented on the cantonal level at the beginning of 2019. This reform sets the new corporate tax rate in the Canton of Vaud at 13.79% as from 1 January 2019.

9. Earnings per share and net asset value

Earnings per share are calculated by dividing the net profit attributable to Investis Holding SA shareholders by the weighted average number of outstanding shares entitled to dividends. For both periods under review there were no dilutive effects.

Weighted average number of shares

 

 

2018

2017

Shares issued as at 1 January

 

12,800,000

12,800,000

Effects of change in holdings of treasury shares

 

–67,813

–2,969

Weighted average number of shares as at 31 December

 

12,732,187

12,797,031

Earnings per share

 

 

2018

2017

Net profit attributable to Investis Holding SA shareholders

in CHF 1,000

54,331

57,456

Weighted average number of shares

 

12,732,187

12,797,031

Earnings per share (basic/diluted)

in CHF

4.27

4.49

Net asset value per share

 

 

31.12.2018

31.12.2017

Equity attributable to the shareholders of Investis Holding SA

in CHF 1,000

587,348

568,002

Number of shares

 

12,800,000

12,800,000

NAV per share (basic/diluted)

in CHF

45.89

44.38

Net asset value per share excluding deferred taxes with regard to properties

 

 

31.12.2018

31.12.2017

Equity attributable to the shareholders of Investis Holding SA

in CHF 1,000

587,348

568,002

Deferred taxes with regard to properties

 

175,447

147,625

Net asset value excluding deferred taxes with regard to properties

 

762,795

715,626

Number of shares

 

12,800,000

12,800,000

NAV per share excluding deferred taxes with regard to properties (basic/diluted)

in CHF

59.59

55.91

10. Trade receivables

In CHF 1,000

31.12.2018

31.12.2017

Trade receivables

17,293

14,442

Receivables from property accounts

1,086

970

Receivables from related parties

139

530

Provision for doubtful debts

–1,248

–1,427

Total trade receivables

17,271

14,516

Receivables from property accounts mainly include expenses for properties that were paid shortly before the balance sheet date but not yet reimbursed by the owners.

11. Properties held for sale

In CHF 1,000

2018

2017

Acquisition costs as at 1 January

35,805

18,141

Changes in scope of consolidation

7,850

6,529

Increases

28,601

15,172

Capitalisation of borrowing costs

-

19

Disposals

–9,063

–11,383

Reclassifications

6,283

7,328

Acquisition costs as at 31 December

69,476

35,805

In 2018, the two properties “Rue de Zurich 35” in Geneva and “Rue du Vieux-Chêne 20–22” in Chêne-Bougeries were acquired as part of the takeover of Société d’investissements immobiliers SII SA with the intention to resale. The increases relate to ongoing construction activities of the properties “Saanen”, “Hérémence” and “Chemin des Chantres 8” in St.-Sulpice. The properties "Rue de Zurich 35", “Rue du Vieux-Chêne 20–22”, one apartment in the jointly held (50%) property “Rue du Prado 19” in Lens and one apartment of "Hérémence" were sold. The property “Chemin des Chantres 8” was reclassed from investment properties under construction and the property “Route de Crans 87a” in Lens was reclassed from residential properties.

In 2017, the residential properties “Chemin du Marquisat 15” in St.-Sulpice, “Chamblandes; PPE” in Pully and one apartment in the jointly held (50%) property “Le Prado” in Lens were sold. The land “Saanen”, previously undeveloped plots of land, was reclassified as property held for sale.

On 21 November 2017, Investis increased its stake in the company La Foncière de la Dixence SA from 50% to 75%. Thus, the consolidation method changed from proportional consolidation to full consolidation, which resulted in an addition from changes in scope of consolidation of CHF 6.5 million. The project company is in charge of planning and financing the Dixence Resort development project in Hérémence. 

12. Investment properties

In CHF 1,000

Residential properties

Commercial properties

Properties under construction

Undeveloped plots of land

Total investment properties

Market value as at 1 January 2017

841,961

113,129

64

7,328

962,481

 

 

 

 

 

 

Acquisition costs as at 1 January 2017

332,905

97,747

64

7,328

438,044

Changes in scope of consolidation

61,243

22,857

122

-

84,221

Increases

18,513

360

11,304

1,673

31,849

Disposals

–4,017

–4,965

-

-

–8,982

Reclassifications

–3,211

-

3,211

–7,328

–7,328

Acquisition costs as at 31 December 2017

405,432

115,999

14,701

1,673

537,804

 

 

 

 

 

 

Revaluation as at 1 January 2017

509,056

15,382

-

-

524,438

Gains on valuations

37,336

625

-

-

37,962

Losses on valuations

–8,319

–4,126

–563

-

–13,008

Disposals

–2,187

–97

-

-

–2,284

Reclassifications

–689

-

689

-

0

Revaluation as at 31 December 2017

535,197

11,785

126

-

547,108

Market value as at 31 December 2017

940,629

127,784

14,826

1,673

1,084,912

 

 

 

 

 

 

Market value as at 1 January 2018

940,629

127,784

14,826

1,673

1,084,912

 

 

 

 

 

 

Acquisition costs as at 1 January 2018

405,432

115,999

14,701

1,673

537,804

Changes in scope of consolidation

128,240

–19,939

-

-

108,301

Increases

60,139

1,489

15,254

-

76,882

Disposals

–8,033

–7,388

–1,261

-

–16,682

Reclassifications

–2,536

-

–3,621

-

–6,157

Acquisition costs as at 31 December 2018

583,242

90,162

25,073

1,673

700,149

 

 

 

 

 

 

Revaluation as at 1 January 2018

535,197

11,785

126

-

547,108

Gains on valuations

32,395

552

-

-

32,947

Losses on valuations

–5,655

–3,135

-

-

–8,790

Disposals

1,092

2,327

-

-

3,419

Changes in scope of consolidation

-

1,039

-

-

1,039

Reclassifications

-

-

–126

-

–126

Revaluation as at 31 December 2018

563,029

12,567

-

-

575,597

Market value as at 31 December 2018

1,146,271

102,729

25,073

1,673

1,275,746

Increases consisted of value-enhancing renovations, purchases of buildings and investments. 

In 2018, one residential property (Route de Pliany 16–18 in Crans-Montana), one commercial property (Chemin Lambien in Sion) and one property under construction (Route du Lac in Granges-Paccot) were sold. Additionally, the consolidated Group company “Domus Flavia Investments AG” and with it one commercial property (Rue Peillonnex 39 in Chêne-Bourg) was disposed.

In 2017, six residential properties (Avenue Général-Guisan 40 in Pully, Chemin Fagne 1 in Bière, Route de Tsarbouye 61 in Crans-Montana, Route du Pont du Diable 3 in Lens, Rue de la Télérésidence 2 in Lens and one building plot of Route de Crans 87 in Lens) and one commercial property (Chemin de Planchy 15/15a in Bulle) were sold.

The valuation of investment properties was carried out by Wüest Partner AG in accordance with national and international standards and guidelines.

13. Tangible fixed assets and intangible assets

In CHF 1,000

Tangible fixed assets

Intangible assets

Net carrying amount as at 1 January 2017

4,812

908

 

 

 

Acquisition costs as at 1 January 2017

10,428

3,776

Changes in scope of consolidation

2,562

-

Additions

2,293

1,107

Disposals

–3,427

–494

Acquisition costs as at 31 December 2017

11,855

4,390

 

 

 

Accumulated depreciation/amortisation as at 1 January 2017

5,615

2,869

Changes in scope of consolidation

1,339

-

Depreciation/amortisation

1,426

663

Disposals

–1,732

–476

Accumulated depreciation/amortisation as at 31 December 2017

6,647

3,055

Net carrying amount as at 31 December 2017

5,207

1,335

 

 

 

Acquisition costs as at 1 January 2018

11,855

4,390

Changes in scope of consolidation

11

263

Additions

1,317

1,004

Disposals

–775

–88

Acquisition costs as at 31 December 2018

12,408

5,569

 

 

 

Accumulated depreciation/amortisation as at 1 January 2018

6,647

3,055

Changes in scope of consolidation

3

61

Depreciation/amortisation

1,543

533

Disposals

–736

–77

Accumulated depreciation/amortisation as at 31 December 2018

7,458

3,572

Net carrying amount as at 31 December 2018

4,950

1,997

All intangible assets were acquired.

14. Goodwill arising from acquisitions

The goodwill resulting from acquisitions is charged against equity at the acquisition date. The theoretical amortisation is based on a straight-line method over a useful life of five years. The theoretical capitalisation of the goodwill would affect the results of the consolidated financial statements as follows:

Theoretical movements in goodwill

In CHF 1,000

2018

2017

Acquisition costs

 

 

Acquisition costs as at 1 January

65,977

51,163

Additions

36

14,814

Acquisition costs as at 31 December

66,013

65,977

 

 

 

Accumulated amortisation as at 1 January

40,011

28,308

Amortisation for the period

11,519

11,704

Accumulated amortisation as at 31 December

51,531

40,011

Theoretical values ​​as at 31 December

14,483

25,966

Effect on consolidated income statement

In CHF 1,000

2018

2017

Net profit as per financial statements

54,376

57,604

Amortisation of goodwill

–11,519

–11,704

Theoretical net profit including goodwill amortisation

42,857

45,900

Effect on consolidated balance sheet

In CHF 1,000

31.12.2018

31.12.2017

Equity

 

 

Equity as per financial statements

588,511

568,989

Theoretical value of goodwill

14,483

25,966

Theoretical equity when reporting goodwill

602,994

594,955

15. Non-current financial assets

In CHF 1,000

31.12.2018

31.12.2017

Financial assets of related parties

-

15,000

Total financial assets of related parties

-

15,000

 

 

 

Investments in associates 1)

4,675

3,648

Other financial assets

4,789

934

Total other financial assets

9,464

4,582

 

 

 

Total non-current financial assets

9,464

19,582

1) Including goodwill arising from the acquisition in the amount of CHF 4.0 million (2017: CHF 3.0 million) which was recognised as part of the investment in associates.

On 1 March 2018, Investis Investments SA has taken a 28.6% equity stake in PropTech Partners SA (Neho), a start-up company based at the EPFL (Federal Institute of Technology Lausanne). Through its minority stake in Polytech Ventures Holding SA, Investis Investments SA was already indirectly invested in the company and is at balance sheet date the beneficial owner of 40% of this company. 

On 27 April 2018, Investis Investments SA acquired a 40% shareholding in YetiVisit SA, in Bulle. This start-up company is working in the field of digital real estate services.

On 26 April 2018, Investis Investments SA acquired a 10.7% shareholding in Lausanne-based Vanguard Internet SA, which offers digital facility services under the “Batmaid” brand.

On 4  June 2018, Investis Investments SA has purchased 10.8% of the share capital of Flatfox AG, a Zurich-based start-up company active in the field of digital services for property management.

On 9 October 2017, Investis Investments SA made a strategic investment by acquiring 50% of the shares in the Venture Capital firm Polytech Ventures Holding SA. Polytech Ventures evaluates industry needs in the field of digitalisation, develops disruptive business models on the basis of this evaluation, and supports innovative start-up companies.

Transactions involving related parties and companies are described in Note 23.

16. Other liabilities

In CHF 1,000

31.12.2018

31.12.2017

Liabilities from property accounts

33,424

23,773

Others

22,289

20,211

Total other liabilities

55,713

43,984

The liabilities from property accounts mainly comprise rental income that was received shortly before the balance sheet date but not yet forwarded to the owners of the relevant properties, or that was used for expenses relating to these properties.

17. Financial liabilities

In CHF 1,000

31.12.2018

31.12.2017

Amortisation obligations on mortgages

-

160

Loans from third parties

-

5,000

Current mortgages

23,480

6,532

Current bonds

140,000

-

Current financial liabilities

163,480

11,692

 

 

 

Mortgages

2,151

9,665

Bonds

380,000

420,000

Loans from third parties

4,001

4,916

Non-current financial liabilities

386,153

434,581

Total financial liabilities

549,633

446,273

Mortgages and bonds due for repayment within the next twelve months are reported under current financial liabilities.

In 2018, a CHF 100 million bond, maturing on 12 June 2020, with a coupon of 0.35%, was issued on 12 June 2018.

In 2017, a CHF 140 million bond maturing on 14 February 2019 was issued on 14 February 2017. The coupon is 0.25%. A further bond of CHF 180 million, maturing on 3 October 2022, with a coupon of 0.75%, was issued on 3 October 2017.

As at the balance sheet date, the following bonds are outstanding:

ISIN

CH 033 764 551 6

CH 035 259 586 9 1)

CH 036 153 322 4

CH 037 347 679 2

Trading currency

CHF

CHF

CHF

CHF

Issuing volume

100 million

140 million

180 million

100 million

Listing

SIX Swiss Exchange

SIX Swiss Exchange

SIX Swiss Exchange

SIX Swiss Exchange

Coupon

0.55%

0.25%

0.75%

0.35%

Tenor

5 years

2 years

5 years

2 years

Payment date

15 November 2016

14 February 2017

3 October 2017

12 June 2018

Redemption date

15 November 2021

14 February 2019

3 October 2022

12 June 2020

1) Refinanced with a coupon of 0.773% for a tenor of 2 years (14 February 2019 – 15 February 2021).

Properties in the amount of CHF 233.7 million (31.12.2017: CHF 245.3 million) were pledged to secure mortgages and available credit lines. Unused credit lines totalled CHF 171 million at 31 December 2018 (31.12.2017: CHF 201 million).

As at the balance sheet date, amounts falling due are as follows:

In CHF 1,000

31.12.2018

31.12.2017

Rollover mortgages

18,400

2,594

Due within the first year

145,080

6,532

Due within the second year

102,151

145,080

Due within the third year

100,000

2,151

Due within the fourth year

180,000

100,000

Due within the fifth year and beyond

-

180,000

Total mortgages and bonds

545,631

436,357

 

 

 

Loans from third parties 1)

4,001

9,916

Total other financial liabilities

4,001

9,916

 

 

 

Total financial liabilities

549,633

446,273

1) Loans from third parties as at 31 December 2018 have no fixed maturity and are interest-free. As at 31 December 2017, they included an unsettled purchase price consideration for the Privera Group acquisition (September 2014) of CHF 5 million, which was interest-free and amortised annually by CHF 5 million, for the last time in 2018.

Interest maturity periods are as follows (composition until next interest rate adjustment):

In CHF 1,000

Interest rates as at 31.12.2018

31.12.2018

31.12.2017

Up to one year

 

165,631

16,357

Up to 2 years

 

100,000

140,000

Up to 3 years

 

100,000

-

Up to 4 years

 

180,000

100,000

Up to 5 years and beyond

 

-

180,000

Total mortgages and bonds

0.25%─0.73%

545,631

436,357

 

 

 

 

Loans from third parties

 

4,001

9,916

Total other financial liabilities

0.0%

4,001

9,916

 

 

 

 

Total financial liabilities

 

549,633

446,273

The weighted average interest rate for all mortgages and bonds amounted to 0.5% (2017: 0.7%).

18. Provisions

In CHF 1,000

2018

2017

Provisions as at 1 January

2,164

2,091

Changes in scope of consolidation

-

255

Increase

96

222

Use

–178

–33

Release

–732

–372

Provisions as at 31 December

1,349

2,164

The position includes mainly provisions for lease commitments (CHF 0.7 million, 2017: CHF 0.9 million), for warranties (CHF 0.3 million, 2017: CHF 0.3 million) and for pending legal cases and disputes (CHF 0.3 million, 2017: CHF 0.8 million).

19. Deferred taxes

In CHF 1,000

2018

2017

Deferred tax assets

81

56

Deferred tax liabilities

154,977

145,579

Deferred tax liabilities as at 1 January (net)

154,896

145,523

Changes in scope of consolidation

21,638

11,737

Changes recognised in the income statement

989

–2,364

Deferred tax liabilities as at 31 December (net)

177,523

154,896

Deferred tax assets

116

81

Deferred tax liabilities

177,639

154,977

Deferred taxes are calculated using the local applicable tax rates for each subsidiary (see Note 8).

20. Equity

As at 31 December 2018, the share capital consists of 12,800,000 registered shares at a par value of CHF 0.10 each and remains unchanged from 31 December 2017. 

Conditional share capital

Article 3a of the Company’s Articles of Association sets out that the Company’s share capital shall be increased by a maximum amount of CHF 30,000 through the issuance of no more than 300,000 fully paid-up registered shares with a nominal value of CHF 0.10 by way of the exercise of options or similar rights belonging to employees and members of the Board of Directors and the Executive Board in accordance with the applicable regulations and resolutions of the Board of Directors.

Article 3b of the Company's Articles of Association sets out that the share capital may be increased by the issuance of up to 1,280,000 fully paid-in registered shares with a nominal value of CHF 0.10 each, up to CHF 128,000, by means of the exercise of conversion rights and/or warrants granted in connection with newly or already issued bonds or similar debt instruments of the Company or its group companies to company creditors and/or investors.

Retained earnings

Retained earnings are only distributable on a limited basis:

  • The retained earnings of Investis Holding SA pursuant to a resolution of the Annual General Meeting
  • The retained earnings of subsidiaries in accordance with local fiscal and statutory requirements, first to the respective parent company

The non-distributable statutory and legal reserves amount to CHF 6.1 million (2017: CHF 7.0 million).

Treasury Shares

In 2018, Members of BoD and EB received part of their compensation in shares (total 12,382 shares, 2017: 0). See compensation report

In 2017, Investis Holding SA acquired treasury shares for the first time.

 

 

2018

 

2017

 

Quantity

Value in CHF 1,000

Quantity

Value in CHF 1,000

Net carrying amount as at 1 January

20,000

1,135

-

-

Purchase of treasury shares 1)

89,766

5,504

20,000

1,135

Use of treasury shares 2)

–12,382

–649

-

-

Loss on use of treasury shares recognised in capital reserves

 

–54

 

-

Net carrying amount as at 31 December

97,384

5,936

20,000

1,135

1) In the year under review, Investis Holding SA acquired 89,766 (2017: 20,000) registered treasury shares at an average price of CHF 61.31 (2017: CHF 56.75).

2) In the year under review, Investis Holding SA used 12,382 (2017: -) registered treasury shares at an average price of CHF 52.39 (2017: CHF -).

21. Contingent assets and liabilities

There are no material contingent assets or liabilities on the balance sheet date.

22. Pledged assets and off-balance sheet lease/rental obligations

In CHF 1,000

31.12.2018

31.12.2017

Pledged assets

 

 

Nominal charges on real estate property

233,718

245,260

Of which as security for own liabilities

25,631

16,357

 

 

 

Off-balance sheet lease/rental obligations 1)

 

 

Up to 1 year

6,880

5,877

From 1 year up to 5 years

12,973

16,286

Over 5 years

216

1,460

Total

20,069

23,623

1) In 2018, the classification of the years was revised (prior year has been adjusted accordingly).

23. Transactions with related parties

Business transactions with related parties are based on standard commercial contractual forms and conditions. All transactions are included in the 2018 and 2017 consolidated financial statements. There are loans and services from and to related parties. The respective balances from financial receivables are reported separately in these financial statements (see Note 10 and Note 15).

Among the companies controlled by members of the Boards of Directors is the investment firm Be Capital SA, which is controlled by Stéphane Bonvin.

In 2018, the commercial property “Chemin Lambien” in Sion was sold for CHF 5.1 million to a company controlled by Stéphane Bonvin.

In 2018, the financial assets of related parties (2017: CHF 15.0 million) were fully repaid. In 2017, the financial assets were repaid by CHF 15.0 million. As at 31 December 2018 the trade receivables from Be Capital SA amounted to CHF 0.1 million (2017: CHF 0.5 million).

The consolidated income statement contains rental revenue amounting to CHF 1.4 million (2017: CHF 1.6 million) from the letting of three hotels in Fribourg, Rothrist and Sion to companies controlled by Stéphane Bonvin.

In January 2017, the company Be Capital SA sold its 25% shareholding in Alaïa Invest SA to Investis Properties SA for CHF 0.03 million.

In 2017, the residential properties “Chemin du Marquisat 15” in St-Sulpice and “Chamblandes; PPE” in Pully were sold for CHF 10.6 million to companies controlled by Stéphane Bonvin.

24. Events after the balance sheet date

On 14 February 2019, Investis Holding SA issued a CHF 140 million fixed-rate bond with a coupon of 0.773% and a tenor of two years (until 15 February 2021). The proceeds were used to refinance the CHF 140 million bond expiring on 14 February 2019.

On 28 February 2019, Investis successfully completed the sale, announced on 6 February 2019, of its 100% subsidiary Régie du Rhône Crans-Montana SA, Lens, to Crans Montana Aminona Immobilier S.A. (CMA Immobilier SA).

On 25 March 2019, Investis sold half of its shares in the project company La Foncière de la Dixence SA, Lens, to mjd Développement SA, Nendaz. Following this sale, Investis continues to hold 41.7% of the project company.

The Board of Directors approved the consolidated annual financial statements for publication on 26 March 2019. These statements are also subject to approval by the Annual General Meeting of Investis Holding SA on 29 April 2019.

No other events occurred between 31 December 2018 and the date of approval of the consolidated financial statements, which would require adjustments to the carrying amounts of the Group’s assets and liabilities as at 31 December 2018 or disclosure in this section.

25. Group companies

 

 

 

31.12.2018

31.12.2017

 

 

Domicile

Original currency

Share capital in CHF 1,000

Ownership interest 1)

Ownership interest 1)

Footnote

Properties

 

 

 

 

 

 

Investis Properties SA

Lens

CHF

1,650

100%

100%

C

Valotel SA

Lens

CHF

2,000

100%

100%

C

Domus Angelo S.à.r.l.

Luxembourg (LUX)

EUR

200

100%

100%

C

Alaïa Invest SA

Lens

CHF

100

100%

100%

C

Carmat S.A.

Lens

CHF

50

100%

 

C

OR omiresidences Sàrl

Lens

CHF

20

100%

100%

C

La Foncière de la Dixence SA

Lens

CHF

300

83%

75%

C 2)

Raffaele Investissement SA

Lens

CHF

100

50%

50%

Q

Domus Flavia Investments AG

Geneva

CHF

 

 

100%

C 3)

Hotel Investissements et Management AG

Lens

CHF

 

 

100%

C 3)

Investis Patrimoine SA

Lens

CHF

 

 

100%

C 4)

Serge Spaggiari SA

Perly-Certoux

CHF

 

 

100%

C 4)

Jalu SA

Lens

CHF

 

 

100%

C 4)

Parallax SA

Geneva

CHF

 

 

100%

C 4)

Casamar AG

Geneva

CHF

 

 

100%

C 4)

Les Résidences Privées SA

Lens

CHF

 

 

100%

C 4)

 

 

 

 

 

 

 

Real Estate Services

 

 

 

 

 

 

Privera AG

Muri bei Bern

CHF

4,000

100%

100%

C

Régie du Rhône SA

Lancy

CHF

3,000

100%

100%

C

Régie du Rhône Crans-Montana SA

Lens

CHF

100

100%

100%

C

Hauswartprofis AG

Mägenwil

CHF

200

100%

100%

C

Synergie Services Facility Management SA

Lancy

CHF

100

100%

100%

C

AGD Renovationen AG

Neuenhof

CHF

500

53%

53%

C

Chauffage-Assistance SA

Geneva

CHF

100

100%

100%

C

Clim-Assistance SA

Geneva

CHF

100

100%

100%

C

SoRenova SA

Lens

CHF

100

100%

100%

C

C.T. Creative Technologies SA

Martigny

CHF

250

60%

 

C

WEGRA Holding AG

Auenstein

CHF

 

 

100%

C 4)

Hauswartprofis Mägenwil AG

Mägenwil

CHF

 

 

100%

C 5)

Hauswartprofis ZH AG

Dübendorf

CHF

 

 

100%

C 5)

Hauswartprofis Baar GmbH

Baar

CHF

 

 

100%

C 5)

Treos AG

Volketswil

CHF

 

 

100%

C 5)

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

Investis Holding SA

Zurich

CHF

1,280

n.a.

n.a.

C

Investis Investments SA

Lens

CHF

1,000

100%

100%

C* )

Investis Management SA

Lens

CHF

100

100%

100%

C

Investis SA

Lens

CHF

100

100%

100%

C

Volki-Land AG

Volketswil

CHF

50

100%

100%

C

Insite Management SA

Echandens

CHF

120

42%

42%

E

Polytech Ventures Holding SA

Ecublens

CHF

143

50%

50%

E

PropTech Partners SA

Ecublens

CHF

140

40%

 

E

YetiVisit SA

Bulle

CHF

167

40%

 

E

Minas-Tirith SA

Wollerau

CHF

 

 

100%

C 6)

Transimo SA

Fribourg

CHF

 

 

100%

C 4)

C) Consolidated

Q) Joint venture, consolidated proportionally

E) Included in the consolidated financial statements using the equity method

*) Investment held directly by Investis Holding SA

1) Ownership interest is equal to voting rights

2) Until 21 November 2017 quota consolidated

3) Sold in 2018

4) As at 1 January 2018 merged into Investis Properties SA

5) As at 1 January 2018 merged into Hauswartprofis AG

6) As at 1 January 2018 merged into Investis Investments SA