Swiss Prime Site Ag · SIX:SPSN

Swiss Prime Site — H1 2022 Earnings Presentation

44 slides from Swiss Prime Site's earnings presentation, Aug 25, 2022

  1. Slide 1: Results – First half-year 2022

    RESULTS – FIRST HALF-YEAR 2022 ZURICH, 25 AUGUST 2022

  2. Slide 2: Agenda

    AGENDA 1 MARKET VIEW 2 HIGHLIGHTS – FIRST HALF-YEAR 2022 3 KEY RESULTS 4 FINANCE 5 EXPECTATIONS AND OUTLOOK Zurich | 25 August 2022 Results – First half-year 2022 2

  3. Slide 3: Good locations and properties remain in demand!

    MARKET VIEW Good locations and properties remain in demand! ECONOMY INTEREST RATES / REAL ESTATE INFLATION ▪ GDP: SECO is forecasting growth of ▪ Transaction market: Sustained 2.6% for 2022 and a further ▪ Policy rate: The Swiss National activity with stable yields decrease in unemployment Bank (SNB

  4. Slide 4: Agenda

    AGENDA 1 MARKET VIEW 2 HIGHLIGHTS – FIRST HALF-YEAR 2022 3 KEY RESULTS 4 FINANCE 5 EXPECTATIONS AND OUTLOOK Zurich | 25 August 2022 Results – First half-year 2022 4

  5. Slide 5: Highlights – First half-year 2022 (1/2)

    HIGHLIGHTS – FIRST HALF-YEAR 2022 Swiss Prime Site: Strong figures in the first half of 2022 (1/2) ASSETS UNDER MANAGEMENT OPERATING INCOME in CHF billion in CHF million 18.7 20.0* 378.9 15.7 369.7 +7.0% HY 2021 FY 2021 HY 2022 +2.5% HY 2021 HY 2022 RENTAL INCOME VACANCY RATE in CHF million in % 213

  6. Slide 6: Highlights – First half-year 2022 (2/2)

    HIGHLIGHTS – FIRST HALF-YEAR 2022 Swiss Prime Site: Strong figures in the first half of 2022 (2/2) PROFIT FFO I in CHF million in CHF per share 251.5 267.4 1.95 2.09 +6.3% HY 2021 HY 2022 +7.2% HY 2021 HY 2022 LOAN-TO-VALUE (LTV) EPRA NTA in % in CHF per share 42.0 97.73 100.78 40.5 -1.5 pp HY 2021

  7. Slide 7: Agenda

    AGENDA 1 MARKET VIEW 2 HIGHLIGHTS – FIRST HALF-YEAR 2022 3 KEY RESULTS 4 FINANCE 5 EXPECTATIONS AND OUTLOOK Zurich | 25 August 2022 Results – First half-year 2022 7

  8. Slide 8: Dynamic letting situation in the first half of 2022

    KEY RESULTS Dynamic letting situation in the first half of 2022 NEWLY LET AND RE-LET SPACES ▪ Space: Total 102 000 m2 [HY 2021: 47 000 m2] in 1 000 m2 commercial space let or re-let PANDEMIC ▪ Key new tenants: Adobe, Arxada, NBE Therapeutics 200 and Swiss Post 190 ▪ Projects: High level of pre-letti

  9. Slide 9: High operating revaluations and low vacancies

    KEY RESULTS High operating revaluations and low vacancies REAL ESTATE PORTFOLIO FY / HY 2021 HY 2022 VACANCY RATE in CHF million restated in % (Group) Total 12 793.5 13 066.4 9 7.4 8 6.6 6.7 6.4 of which projects | developments 1 006.9 997.7 7 6.1 5.5 5.2 5.4 5.1 184 179 6 4.7 4.8 4.7 4.7 4.7 Proper

  10. Slide 10: Tenant survey shows steady demand for space

    KEY RESULTS Tenant survey shows steady demand for space OVERALL SATISFACTION SPACES (Very) satisfied Neutral Not satisfied (at all) Don't know/not specific No change Expansion Reduction ▪ 85% of tenants are very satisfied with Swiss ▪ 82% of tenants want to retain the leased space as Prime Site prop

  11. Slide 11: We create living spaces

    WE CREATE LIVING SPACES

  12. Slide 12: Portfolio: Focus on centres and commercial spaces

    KEY RESULTS Portfolio: Focus on centres and commercial spaces REGIONS* CHF 13.1 bn 179 1.7 million m 2 as at 30.06.2022 Property portfolio Number of properties Rental floor space NW Switzer- land 14% Zurich & Central Switzerland 52% Berne 9% TYPES OF USE* as at 30.06.2022 Lake Geneva 20% Map source:

  13. Slide 13: Stable tenant structure, balanced lease expiries

    KEY RESULTS Stable tenant structure, balanced lease expiries MAJOR TENANTS LARGEST OFFICE TENANTS LEASE EXPIRY OF RENTAL CONTRACTS in % rental income as at 30.06.2022 in % of net rental income as at 30.06.2022 as at 30.06.2022 ▪ WAULT 5.5 years ▪ 2022: ~88% already extended Swisscom 7% Schweizerisch

  14. Slide 14: Significant potential through densification, utilisation and landbank

    KEY RESULTS Significant potential through densification, utilisation and landbank PROJECT PIPELINE ▪ Completed projects: Projects completed totalling in CHF million around CHF 700 million; target rental income per annum of around CHF 32 million. ~ 350 Reserves ▪ Projects under construction: Projects

  15. Slide 15: Scheduled projects under construction with high levels of pre-letting

    KEY RESULTS Scheduled projects under construction with high levels of pre-letting Stücki Park I+II Alto Pont-Rouge Tertianum Müllerstrasse Tertianum JED new build Basel Lancy Paradiso Zurich Olten Schlieren Construction Building permit Construction status Scheduled Scheduled Scheduled Scheduled star

  16. Slide 16: Selection of planned projects with attractive uses

    KEY RESULTS Selection of planned projects with attractive uses BERN 131 Steinenvorstadt Route de Meyrin 49 maaglive BEYOND Dreispitz Mitte Bern Basel Geneva Zurich Zurich Münchenstein Design plan / building and BZO BZO District plan final Design plan final BZO District plan process zoning regulation

  17. Slide 17: Acquired projects in Berne and Basel

    KEY RESULTS Acquired projects in Berne and Basel BERN 131, Berne Steinenvorstadt, Basel ▪ Utilisation: Flexible office and commercial space, energy ▪ Utilisation: Total renovation and conversion of a retail generation using photovoltaics on the roof and facade, property to residential with services,

  18. Slide 18: Effective and attractive capital recycling

    KEY RESULTS Effective and attractive capital recycling Portfolio streamlining SALES CHF > 290 million Retail portfolio, 9 smaller properties Building, Plan-les-Ouates, Geneva Western Switzerland ▪ Sale of nine smaller existing properties and Building B in Espace Tourbillon in Plan-les-Ouates as well

  19. Slide 19: We create living spaces

    WE CREATE LIVING SPACES

  20. Slide 20: Diversified range of services from Swiss Prime Site Solutions

    KEY RESULTS Diversified range of services from Swiss Prime Site Solutions REAL ESTATE FUNDS ASSET MANAGEMENT & ADVISORY EXECUTIVE MANAGEMENT HY 2022: HY 2022: HY 2022: + CHF 400 + CHF 300 + CHF 500 million million million ▪ SPSS IF Commercial: CHF 0.3 billion ▪ SPIF Real Estate Switzerland: CHF 3.3

  21. Slide 21: Growth of assets under management

    KEY RESULTS Growth of assets under management ASSETS UNDER MANAGEMENT ▪ Fund management: Strong growth due to the acquisition in CHF billion of the Akara Group (AuM: CHF 2.4 billion) and launch of the first real estate fund (AuM: CHF 0.3 billion) ▪ Asset management: Increase in assets under manageme

  22. Slide 22: Increase in recurring income at Swiss Prime Site Solutions

    KEY RESULTS Increase in recurring income at Swiss Prime Site Solutions INCOME DISTRIBUTION STRUCTURE ▪ Recurring income: Proportion of recurring income at in CHF million and % 53% from management fees and services/development fees; targeted increase to 65% 28.0 ▪ Non-recurring income: Growth of seve

  23. Slide 23: Clear strength of asset management

    KEY RESULTS Clear strength of asset management Asset-light business model – real estate asset management for third parties Strong, consistent growth of both products and services Total CHF 6.9 billion asset under management (+ CHF 1.2 bn compared to 2021) Two-thirds of income from funds business Pro

  24. Slide 24: We create living spaces

    WE CREATE LIVING SPACES

  25. Slide 25: Agenda

    AGENDA 1 MARKET VIEW 2 HIGHLIGHTS – FIRST HALF-YEAR 2022 3 KEY RESULTS 4 FINANCE 5 EXPECTATIONS AND OUTLOOK Zurich | 25 August 2022 Results – First half-year 2022 25

  26. Slide 26: Results – First half-year 2022 (1/2)

    FINANCE Results – First half-year 2022 (1/2) OPERATING INCOME OPERATING EXPENSES in CHF million in CHF million 378.9 192.0 195.2 369.7 8.9 12.0 Other 18.5 24.3 Other operating expenses 8.3 27.2 Asset management 46.0 11.3 12.0 Depreciation 57.4 Retail 56.9 59.5 Real estate services 87.1 36.3 94.8 Per

  27. Slide 27: Results – First half-year 2022 (2/2)

    FINANCE Results – First half-year 2022 (2/2) EBIT AND EBIT MARGIN ( EXCLUDING REV AL U AT IO NS ) PROFIT in CHF million and % in CHF million 214.2 198.8 267.4 251.5 57.9% 52.5% -7.2% HY 2021 HY 2022 +6.3% HY 2021 HY 2022 ▪ Temporary effect of comparatively slightly lower profits of sales and ▪ Stric

  28. Slide 28: Growth in rental income of 1.9% on a like-for-like basis

    FINANCE Growth in rental income of 1.9% on a like-for-like basis CHANGE IN GROUP NET RENTAL INCOME ▪ Rental income: Rose by 0.3% to CHF 214.2 in CHF million million Completion ▪ EPRA L4L growth: +1.9% Δ Existing Modifications | projects 214.2 213.4 properties* Modernisations Purchases Sales 1.1 -2.1

  29. Slide 29: Strong portfolio growth due to attractive locations

    FINANCE Strong portfolio growth due to attractive locations PROPERTY PORTFOLIO GROWTH (FAIR VALU E) ▪ Total 179 properties (2021: 184): Continued in CHF million Effects of focus planned owner-occupied properties Valuation gains +7.4 13 066 ▪ Revaluation gains of 1.3% of the portfolio +168.1 value In

  30. Slide 30: Recurring income above costs

    KEY RESULTS Recurring income above costs RECURRING FEES AND COST COMPARISON ▪ Total fees: Increased revenues due to numerous in AuM basis points transactions in HY 2022 ▪ Recurring fees: Increase in spread to costs from 9.2 in 81.3 fiscal 2021 to 11.2 basis points in HY 2022 (costs incl. share of no

  31. Slide 31: Strong increase in EBIT and EBIT margin in asset management

    KEY RESULTS Strong increase in EBIT and EBIT margin in asset management EBIT and EBIT margin ▪ EBIT: Strong increase in EBIT to CHF 17.1 million by in CHF million and % combining organic and acquisitional growth 60 80.00% ▪ Akara EBIT proportion: CHF 5.7 million 50.0 ▪ EBIT margin: Operational growt

  32. Slide 32: Lower interest costs and LTV with balanced lease expiry profile

    FINANCE Lower interest costs and LTV with balanced lease expiry profile LEASE EXPIRY PROFILE FINANCING STRUCTURE in CHF million In CHF billion and % (excluding leasing) KEY FIGURES Financial year HY 2021 HY 2022 Average interest rate 0.94% 0.70% Average contractual 5.8 years 5.0 years term LTV prope

  33. Slide 33: Increase in return on equity

    FINANCE Increase in return on equity CHANGE IN SHAREHOLDERS’ EQUITY AND RETURN ON EQUITY ▪ Increase in equity despite distribution to in CHF million and % shareholders of CHF 3.35 per share in March and June 2022 (total CHF 257.0 million) 6 409.7 Dividend payout Comprehensive Capital increase Miscel

  34. Slide 34: Increased FFO I per share and EPRA NTA per share

    FINANCE Increased FFO I per share and EPRA NTA per share FUNDS FROM OPERATIONS I (FFO I) EPRA NTA (NET TANGIBLE ASSETS) in CHF per share in CHF per share Calculation FFO I Operating result (EBIT) 100.78 + Depreciation on tangible & intangible assets 97.73 2.09 - Revaluation from invest. properties -

  35. Slide 35: We create living spaces

    WE CREATE LIVING SPACES

  36. Slide 36: Agenda

    AGENDA 1 MARKET VIEW 2 HIGHLIGHTS – FIRST HALF-YEAR 2022 3 KEY RESULTS 4 FINANCE 5 EXPECTATIONS AND OUTLOOK Zurich | 25 August 2022 Results – First half-year 2022 36

  37. Slide 37: Increase in 2022 guidance

    EXPECTATIONS AND OUTLOOK Increase in 2022 guidance EXPECTATIONS FINANCIAL YEAR 2022 AuM: CHF > 20 billion Vacancy rate: < 4.4% Increase in FFO I: ≥ 5%* LTV: < 40% MEDIUM-TERM OBJECTIVES PROPERTY SERVICES Portfolio Volume of CHF 12–13 billion Assets under management > CHF 10 billion Vacancies 2022+ 4

  38. Slide 38: Analyst and investor contact

    Analyst and investor contact Media contact MARKUS WAEBER MLADEN TOMIC Investor Relations Media Relations Head Group Investor Relations Head Group Communications Business: +41 58 317 17 64 Business: +41 58 317 17 42 Mobile: +41 79 566 63 34 Mobile: +41 79 571 10 56 markus.waeber@sps.swiss mladen.tomi

  39. Slide 39: Disclaimer

    DISCLAIMER Details published in this presentation are for information purposes only and should not form the basis for any investment decisions or recommendations to purchase Swiss Prime Site AG securities. The content of this presentation was diligently researched and compiled. However, Swiss Prime

  40. Slide 40: Appendix

    APPENDIX

  41. Slide 41: Swiss Prime Site – attractive investment case

    APPENDIX Swiss Prime Site – attractive investment case ▪ Resilient Swiss economy as a stable basis for real estate investments (safe haven) Swiss market leader ▪ Clear Swiss market leader with AuM of CHF >20 billion (of which own assets of CHF >13 billion) ▪ Highly stable cash flows with 99.5% colle

  42. Slide 42: Outperformance of Swiss Prime Site shares

    APPENDIX Outperformance of Swiss Prime Site shares 600 ▪ Outperformance of SPSN Swiss Prime Site shares in the current year (YTD) and since the IPO show an 500 outperformance (+2.5% YTD) compared to the real estate sector (REAL: -0.1% YTD) and the stock 400 market (SPI: -12.1% YTD) ▪ Good protection

  43. Slide 43: Improved ESG ratings from Sustainalytics and Inrate

    APPENDIX Improved ESG ratings from Sustainalytics and Inrate RATING AGENCY & BENCHMARK RATING 13.3 Low Risk A C- A- «Green Star» (0-10: Negligible (AAA to CCC) (A+ to D-) (A+ to D-) Investment: 74 10-20: Low Development: 78 20-30: Medium 30-40: High) DATE 27 July 2022 31 May 2022 5 October 2021 2 Ju

  44. Slide 44: We create living spaces

    WE CREATE LIVING SPACES

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