Lumo Homes Plc · OMXHEX:LUMO
Lumo Homes — Kojamo — H1 2020 Earnings Presentation
48 slides from Lumo Homes's earnings presentation, Aug 20, 2020
Slide 1: Half-Year Report 1–6/2020
Picture: Arkkitehtitoimisto Helin & Co, Voima Graphics Oy 20 August 2020 Half-Year Report 1–6/2020 Jani Nieminen, CEO Erik Hjelt, CFO Kojamo plc
Slide 2: Agenda
Agenda • Summary of January–June 2020 • Financial development • Outlook, financial targets and dividend policy Kojamo plc's Half-Year Report January–June 2020 2
Slide 3: Summary of January–June 2020
Summary of January–June 2020 Kojamo plc's Half-Year Report January–June 2020 3
Slide 4: Impact of COVID-19 pandemic on Kojamo's operations
Impact of COVID-19 pandemic on Kojamo’s operations • The current situation in Finland is relatively good • Restrictions have been mainly removed • Anticipation of the second wave has begun • The impact of the pandemic on Kojamo has been limited • Our operations have continued almost without disturba
Slide 5: Operating environment
Operating environment Business environment key figures 8.5 9.0 8.8 6.7 2.5 1.7 1.0 General operating environment 0.3 1.1 1.4 0.9 • Finland’s GDP has significantly decreased, but the -6.0 economy has started recovering at the second half of 2019 2020E 2021E 2022E the year as the restrictions have beg
Slide 6: Operating environment
Operating environment Industry key figures 2020E 2019 28,000 38,700 Residential start-ups, units Building permits granted, annual*, units 35,479 40,281 Construction costs, change % n/a 1.0 Industry operating environment Prices of old dwellings in the whole 1.0 1.2 • The pandemic has increased the sl
Slide 7: Operating environment
Operating environment Development of household sizes (% of all households) 45% Pandemic does not have a long-term impact on 40% the rental market 35% • In a longer term, migration keeps the demand for rental 30% apartments especially close to good connections high. 25% The significance of location a
Slide 8: Of the portfolio's fair value 98.8% in the seven largest Finnish growth centres
Of the portfolio’s fair value 98.8 % in the seven largest Finnish growth centres Apartment distribution, % 4.0% 2.3% Number of 4.7% Helsinki commercial 5.0% region Number of Fair Fair value Fair premises Financial apart- value, (EUR value 6.3% Tampere Region and other occupancy ments, (EUR thousand
Slide 9: Key figures 1–6/2020
Key figures 1–6/2020 total revenue net rental income funds from operations (FFO) 190.5 M€ 124.9 M€ 71.5 M€ (184.6 M€, +3.2 %) (117.7 M€, +6.2%) (66.4 M€, +7.6%) fair value of investment profit excluding properties gross investments changes in value 1) profit before taxes 6.5 Bn€ 179.0 M€ 77.0 M€ 125
Slide 10: Almost 2,400 apartments under construction
Almost 2,400 apartments under construction • During the review period, 18 (4) apartments were sold, 45 (99) acquired and 201 (383) completed • During the period, construction of 1,265 (648) apartments was started Development of apartment portfolio, units Apartments under construction, units +79.1% 2
Slide 11: Over 4,500 apartments in the production pipeline
Over 4,500 apartments in the production pipeline • Record-high number of Projects under construction 2,380 apartments under Lumo One, Lauri Korpisen katu 8, Niittykatu 15, Työpajankatu 17A, Höyrykatu 8, Runoratsunkatu 11, construction Vantaa Espoo Helsinki Helsinki Espoo • Co-operation agreements on
Slide 12: Strong production pipeline
Strong production pipeline Under construction Co-operation agreements* Metropolia development project properties Metro track Railway track *Apartments that are a part of co-operation agreements, but have been started are listed as ’Under construction’ Q3/ Q4/ Estimate of completions, units*** 2020 2
Slide 13: Our Digital Roadmap will guide us from today to year 2023
Our Digital Roadmap will guide us from today to year 2023 according to our strategy • Kojamo is a frontrunner thanks to the direct rental in its webstore. Now we will focus on Customer experience and servitisation direct rental service as the main rental channel • We will strengthen our position by
Slide 14: Lumo builds customer experience in a new way
Lumo builds customer experience in a new way Services of a new customer Services during tenancy Agreements from the webstore 50% Over 49% 48% 37% 18,000 Personal open house Lumo janitors agreements 24% 0– 250 € Affordable security deposit Benefits from partners 7% Move and installation service Perso
Slide 15: Kojamo's sustainability programme is proceeding
Kojamo’s sustainability programme is proceeding • We conducted a materiality analysis of sustainability in May–June 2020 as part of the development of our -7.5% sustainability programme Target for intensifying • The materiality analysis helps us ensure that our energy consumption during sustainabili
Slide 16: Financial development
Financial development Kojamo plc's Half-Year Report January–June 2020 16
Slide 17: Total revenue increased
Total revenue increased • Total revenue increased mainly due to growth of property portfolio as well as Like-for-Like rental income growth Total revenue, M€ Profit before taxes, M€ Changes in value* Profit excluding changes in value 375.3 1 031,3 351.5 358.8 337.0 +3.2% 289.7 277.3 266.7 190.5 872.4
Slide 18: Net rental income and FFO increased
Net rental income and FFO increased • The positive development of net rental income continued • The growth was supported by the growth of apartment portfolio, Like-for-Like rental income growth and lower maintenance costs than in the comparison period Net rental income, M€ Funds From Operations (FFO
Slide 19: Occupancy rate on a good level despite of COVID-19 pandemic
Occupancy rate on a good level despite of COVID-19 pandemic • COVID-19 pandemic has temporarily had an impact on the increase of supply as well as migration • After the review period, number of new agreements has increased significantly in July and in the beginning of August Financial occupancy rate
Slide 20: Strong success in investments
Strong success in investments • We have started the construction of many new property development projects in central locations in the Helsinki region Gross investments and sales of Modernisation investments and investment properties, M€ repairs, M€ Gross investments Sales of investment properties M
Slide 21: The value of investment properties was EUR 6.5 billion
The value of investments properties was EUR 6.5 billion • The shift from transaction-based valuation technique to yield-based valuation technique as of 31 December 2019 significantly increased the fair value of the investment properties • The fair value has developed positively during the review per
Slide 22: Plot and real estate development reserve 30 Jun 2020
Plot and real estate development reserve 30 Jun 2020 To be completed during 2020 Owned plots and Pajalantie 23 F, Apartments Binding develop- Järvenpää under preliminary ment construction agreements projects1) In total Investment / actual costs incurred 282.1 - 154.6 436.7 Karibiankuja 4, Uuno Kaila
Slide 23: Equity ratio and Loan to Value (LTV)
Equity ratio and Loan to Value (LTV) • Equity ratio and Loan to Value (LTV) strengthened significantly Equity ratio, % Loan to Value, (LTV), % 46.9 47.1 46.0 45.9 46.9 43.0 41.9 43.3 42.6 40.7 41.3 40.5 2016 2017 2018 2019 30 Jun 30 Jun 2016 2017 2018 2019 30 Jun 30 Jun 2019 2020 2019 2020 The share
Slide 24: EPRA NAV per share improved
EPRA NAV per share improved • Key figures per share improved significantly • According to EPRA’s guidelines, we will adopt revised features of the Net Asset Valuation metrics in the 2020 financial statements Equity per share, € 1) EPRA NAV per share, € 1) 31.2% 31.5% 12.51 12.53 15.49 15.62 9.54 9.5
Slide 25: Kojamo's liquidity on a good level
Kojamo’s liquidity on a good level The issuance of EUR 500 million bond Situation as at 30 June 2020 • Kojamo has successfully issued a EUR 500 million bond EUR 449.2 million (139.1) under its EMTN programme on 27 May 2020 Cash and cash equivalents • The proceeds of the issuance of the Notes will be
Slide 26: Versatile capital structure
Versatile capital structure The Group’s loan distribution Financing key figures 30 June 2020 % Average interest rate fixing period, years years 3 6 4.8 5 Loan portfolio 3,151 M€ 2.5 4.8 4 Average loan maturity, years 3 Bonds 1,687 M€ 2 Average interest rate, % 2 2% 3% 0% 1.7 1 1.5 0 Loans from finan
Slide 27: Strategic targets 2020–2023
Strategic targets 2020–2023 Key figure Actual 1–6/2020 Strategic target Annual growth of total revenue, % 3.2 4–5 Annual investments, M€ 179.0 200–400 FFO/total revenue, % 37.5 > 36 Loan to Value (LTV), % 42.6 < 50 Equity ratio, % 43.3 > 40 Net Promoter Score (NPS) 37 40 Kojamo plc's Half-Year Repor
Slide 28: Outlook, financial targets and dividend policy
Outlook, financial targets and dividend policy Kojamo plc's Half-Year Report January–June 2020 28
Slide 29: Outlook for Kojamo in 2020 (specified)
Outlook for Kojamo in 2020 (specified) Kojamo estimates that in 2020, the Group’s total revenue will increase by 2–5 per cent year-on-year (previously 2–6 per cent). In addition, the company estimates that the Group’s FFO for 2020 will amount to between EUR 146–158 million, excluding non-recurring c
Slide 30: Effects of the COVID-19 pandemic on Kojamo's outlook
Effects of the COVID-19 pandemic on Kojamo’s outlook The management expects the Group’s operating activities to continue undisrupted for the most part Operations • The webstore enables the renting of apartments to continue almost as normal • Rental receivables are not expected to grow significantly
Slide 31: Dividend policy
Dividend policy Dividend history Kojamo’s objective is to be a stable 62% 60% dividend payer whose annual dividend 0.51 payment will be at least 60 per cent of 0.34 0.29 0.29 0.22 FFO, provided that the Group’s equity 0.16 0.22 ratio is 40 per cent or more and taking 2015 2016* 2017 2018 2019 accoun
Slide 32: Summary
Summary The first half of the year Strong progress in We are in a good position was strong and total property development to continue our operations revenue, net rental income investments, and record- and growth despite of and FFO increased high number of apartments COVID-19 pandemic under construct
Slide 33: Thank you!
Interim Report for January– September 2020 to be published on Thank you! 5 November 2020 Contact details: CEO Jani Nieminen, tel. +358 20 508 3201 Kojamo’s Capital Markets Day will be postponed until spring CFO 2021 Erik Hjelt, tel. +358 20 508 3225 We arrange a virtual Investors’ Manager, Investor
Slide 34: Appendix
Appendix Kojamo plc's Half-Year Report January–June 2020 34
Slide 35: Change in the valuation technique of investment properties as at 31 December 2019
Change in the valuation technique of investment properties as at 31 December 2019 Kojamo shifted from a transaction-based valuation technique to a yield-based valuation technique in the valuation Change of its investment properties The change in the valuation technique will make the company more com
Slide 36: New strategy period 2020–2023
New strategy period 2020–2023 • Our strategy has proved to be strong, and we will continue to implement it going forward • The Board of Directors has approved updated strategic targets and focal points for 2020–2023 • We seek strong growth with optimised financing structure and profitable business t
Slide 37: Our strategy 2020–2023
Our strategy 2020–2023 Megatrends Mission Values We create better urban housing. Urbanisation & internationalisation Happy to serve Vision Ageing population & We are the property market frontrunner and smaller family sizes the number one choice for our customers. New technologies & Strategic focal p
Slide 38: Strategic focal points 2020–2023
Strategic focal points 2020–2023 Delivering the We offer easy and effortless services We seek profitable growth with multi- best customer for our customers and create added Strong growth channel approach and optimised experience value through services financing structure We create competitiveness an
Slide 39: Our corporate responsibility is reflected in our mission of creating better urban housing
Our corporate responsibility is reflected in our mission of creating better urban housing • Responsibility and sustainable development is one of Kojamo’s strategic focal points • We conducted a materiality analysis of sustainability in spring 2020. The results of the materiality analysis provide the
Slide 40: Sustainability is visible in our every day life
Sustainability is visible in our every day life -1.2% Hydro- specific water consumption -7.5% power- (l/m3) Anti-grey 90 Our goal to intensify certified energy consumption economy EUR million during 2017–2025, of property electricity at -1.4% tax footprint which we have 100% energy models achieved o
Slide 41: Kojamo's ten largest shareholders (as at 30 June 2020)
Kojamo’s ten largest shareholders (as at 30 June 2020) Number of % of Development of the number Shareholder shares shares 7,185 Nominee-registered and direct foreign of the shareholders 6,506 87,751,533 35.5 shareholders 5,197 Ilmarinen Mutual Pension Insurance 4,354 34.1 % 35.5 % 1. 28,037,814 11.3
Slide 42: Key figures
Key figures 4–6/2020 4–6/2019 Change, % 1–6/2020 1–6/2019 Change, % 2019 Total revenue, M€ 94.8 93.1 1.9 190.5 184.6 3.2 375.3 Net rental income, M€ 68.9 66.8 3.1 124.9 117.7 6.2 247.3 Net rental income margin, % 72.7 71.8 65.6 63.8 65.9 Profit before taxes, M€ 73.5 85.9 -14.4 125.2 124.8 0.3 1,031.
Slide 43: Consolidated income statement
Consolidated income statement M€ 4–6/2020 4–6/2019 1–6/2020 1–6/2019 1–12/2019 Total revenue 94.8 93.1 190.5 184.6 375.3 Maintenance expenses -17.1 -17.8 -50.2 -51.7 -91.1 Repair expenses -8.8 -8.5 -15.4 -15.2 -36.9 Net rental income 68.9 66.8 124.9 117.7 247.3 Administrative expenses -9.9 -10.5 -20
Slide 44: Balance sheet
Balance sheet M€ 30 June 2020 30 June 2019 31 December 2019 ASSETS Non-current assets Intangible assets 0.1 0.2 0.2 Investment properties 6,484.0 5,279.5 6,260.8 Property, plant and equipment 30.6 31.2 30.9 Investments in associated companies 2.4 2.2 2.4 Financial assets 0.7 0.6 0.7 Non-current rece
Slide 45: Balance sheet
Balance sheet M€ 30 June 2020 30 June 2019 31 December 2019 EQUITY AND LIABILITIES Equity attributable to shareholders of the parent company Share capital 58.0 58.0 58.0 Share issue premium 35.8 35.8 35.8 Fair value reserve -54.8 -49.4 -44.7 Invested non-restricted equity reserve 164.4 164.4 164.4 R
Slide 46: Financial key figures
Financial key figures 30 Jun 2020 31 Mar 2020 31 Dec 2019 30 Sep 2019 30 Jun 2019 Equity ratio, % 43.3 45.3 46.9 42.0 41.9 Interest cover 4.3 4.3 4.3 4.4 4.4 Loan to Value (LTV), % 42.6 39.5 40.5 46.7 46.9 Hedging ratio, % 87 85 88 90 89 Average interest rate, %1) 1.7 1.8 1.8 1.8 1.8 Average loan ma
Slide 47: Development of housing production
Development of housing production Granted building permits, units Start-ups, units 43,945 44,376 48,722 38,424 43,269 36,877 40,432 38,076 32,127 32,402 n/a 28,000 23,474 20,938 18,739 17,960 19,498 20,694 18,857 15,310 16,248 17,371 17,257 15,127 5,597 8,232 7,109 7,919 5,129 5,044 7,943 6,745 5,71
Slide 48: Important information
Important information This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securitites in any jurisdiction. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitme