Skyline Investments Inc · TASE:SKLN
Skyline Investments — Q1 2023 Earnings Presentation
31 slides from Skyline Investments's earnings presentation, Mar 31, 2023
Slide 1: Corporate Presentation
Corporate March 31, 2023 Presentation
Slide 2: Cautionary Statement
Cautionary Statement General This presentation has been prepared by Skyline Investments Inc. (the "Company“ or “Skyline”) as a general presentation about the Company. This presentation is not intended to replace the need to review the formal reports published by the Company to the public on the Tel-
Slide 3: Skyline's Vision & Mission
Skyline’s Vision & Mission We’re creating one of North America’s leading hospitality real estate investment companies, with a focus on value-add income producing select-service hotels mainly in suburbs of major metropolitan areas. Skyline seeks to create shareholder value and deliver superior risk a
Slide 4: Select Service Hotels
Select Service Hotels ▪ Select service is a segment of the hotel industry that focuses on mid-market business travelers during the week and family travel on the weekend, providing stable and predictable cash flow ▪ Select service hotels are typically smaller properties that are located in suburban m
Slide 5: Corporate Profile
Corporate Profile 17 Income Producing Assets 2,856 Guestrooms $601m/$312m Total Assets/Equity 52% Equity to Total Assets Ratio Baa1.il (Stable Outlook) Bond Rating
Slide 6: Select Senior Management
Select Senior Management Blake Lyon, Robert Waxman, Neha Kapelus, CPA, CA CPA, CA CPA, CA, CBV CEO CFO* VP, Finance Blake Lyon has extensive Robert Waxman has over 20 years of Neha Kapelus has over 15 years experience in hotel and resort experience in accounting, finance, of diverse experience leadi
Slide 7: Current Ownership Structure
Current Ownership Structure 49.5% Alex Shnaider 1.54% 27.46% Public Blake Lyon 1.2% 20.3% ILDC 7
Slide 8: Business Strategy
Business Strategy Skyline’s Strategy Acquisition Targets Acquisition of value-add, income producing Focus on the US and Canada select-service hotel properties Stabilized in-place income Investment in hotel renovations to improve earnings, cash flow and value Strong potential growth Continued monetiz
Slide 9: Portfolio Map and Acquisition Focus
Portfolio Map and Acquisition Focus 17 INCOME PRODUCING ASSETS | 2,856 HOTEL ROOMS | 16 CITIES IN THE US AND CANADA9
Slide 10: Main Operating Assets in the United States
Main Operating Assets in the United States The Hyatt Regency Arcade, Cleveland, OH
Slide 11: Courtyard by Marriott Hotels
14 Courtyard by Marriott Hotels Date of PROPERTIES Location Brand Management Service Level Acquisition OVERVIEW 10 States Courtyard by Aimbridge, Select Service Nov 14th, 2017/ (USD) Marriott Urgo July 11th, 2022 Number of Number of Acquisition Price Per Loan Balance Capital Credit Hotels Rooms Pric
Slide 12: Hyatt Regency Arcade
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Slide 13: Hyatt Regency Arcade
Hyatt Regency Arcade Improvements Overview ▪ Recently completed renovations of all rooms and meeting The historical Cleveland Arcade was built by John D. spaces. The renovation has improved the hotel’s Rockefeller in 1890 competitive advantage. The hotel is an attractive event destination and hosts
Slide 14: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel
Slide 15: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel Overview Improvements Historical Heritage asset established in 1918 as The Cleveland Hotel ▪ Skyline completed the full HVAC replacement. This was Notable visitors in the hotel’s history: Dwight D. Eisenhower, Gerald the top complaint from hotel guests and is also Ford, M
Slide 16: Transformational Transaction – Sale of Canadian Resorts
Transformational Transaction – Sale of Canadian Resorts • Skyline completed the majority sale of its Canadian resorts for an aggregate purchase price of CAD $210M in December 2021 • Freed Corp, through a newly formed subsidiary, Resort Communities LP ("Resort LP") then combined these assets with Mus
Slide 17: Other Legacy Assets Totaling CAD $173M
Other Legacy Assets Totaling CAD $173M Bear Valley Resort, California – CAD $26M gross book value ▪ 3 hours from San Francisco; 1,700 acres, 52 room hotel, expansion options Short-term equity and 29% interest in Resorts Residual interest in Deerhurst, Horseshoe, Communities LP – CAD $46M book value
Slide 18: First Quarter 2023 Operating Results
First Quarter 2023 Operating Results ▪ Q1 2023 same asset revenue1 increased by 5.8% to CAD $33.8M compared to CAD $32.0M in Q1 2022, due to higher RevPAR driven by an increase in ADR, and partially offset by a decrease in occupancy rate. Total revenue from hotels and resorts was $34.5 million compa
Slide 19: Recent Non-Operating Events
Recent Non-Operating Events ▪ On February 8, 2023, with Board approval, the Company donated the Keewatin passenger ship to a local charity under a special Canadian federal government donation program. The donation allowed Skyline to have the donation recognized in an amount yet to be determined by t
Slide 20: Summary of Periodic Results
Summary of Periodic Results CAD ‘000 Q1 2023 Q1 2022 YE 2022 Revenue from Hotels and Resorts 34,477 32,023 132,130 Sale of Residential Real Estate 4 267 1,570 Total Revenue 34,481 32,290 133,700 NOI from Hotels and Resorts 5,829 8,211 27,535 Total Adjusted EBITDA 3,819 6,188 19,727 FFO 2,085 5,254 9
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights CAD ‘000, except where noted March 31, 2023 December 31, 2022 Total Assets 600,794 609,347 1 Gross Debt 239,885 240,490 Cash and Equivalents 14,612 19,503 Net Debt 225,273 220,987 Shareholders’ Equity 275,525 280,458 Non-Controlling Interest 36,118 35,508 Total Equity 311,64
Slide 22: Skyline Going Forward
Skyline Going Forward New capital focus in 2023 and thereafter: ▪ Acquiring select-service hotels, which will provide more stable and predictable earnings and cash flow growth ▪ Select-service hotels are much more predicable due to their stable customer base of business travelers during the week, an
Slide 23: Share Price Discount to NAV
Share Price Discount to NAV NAV was 44 NIS per share1 compared to the share price on March 31, 2023 of 11.88 NIS, a discount of 73% Share price discount to NAV 45.22 44.18 43.61 44 38.74 39.52 38.83 40.18 35.51 36.24 34.20 34.04 34.04 73% 26.34 27.5 24.58 21.34 22.41 20.1 17.18 14.46 14.49 15.34 12.
Slide 24: Financial Strength and Opportunities
Financial Strength and Opportunities ▪ Total equity to total assets ratio of 52% ▪ Low LTV (47% for hotels and resorts) ▪ Cash balance of CAD $14.6M ▪ Additional net cash flow of CAD $96.6M during the next 3 years from VTBs ▪ In December 2021, Skyline completed the largest corporate transaction in i
Slide 25: Skyline's Value Proposition
Skyline’s Value Proposition ▪ Select-service focus on properties in both Canada and US ▪ Proven and experienced internal management team ▪ Strong relationship with Marriott ▪ Strategic partnerships providing ability to renovate assets in any state or province ▪ Diversified third-party hotel manageme
Slide 26: Thank You!
Thank You! Questions? Please contact Neha Kapelus| VP Finance 647-354-5159 | nehak@skylineinvestments.com WWW.SKYLINEINVESTMENTS.COM
Slide 27: Appendix
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Slide 28: Net Asset Value (in 000's CAD)
Net Asset Value (in 000’s CAD) Loan Balance Ownership BV TTM NOI NOI/BV LTV Equity March 31, 2023 Hotels and Resorts Hyatt Regency Arcade 100% 72,895 5,294 7.3% 22,358 31% 50,537 Renaissance Hotel 50% 83,905 1,509 1.8% 25,416 30% 58,489 Courtyard Hotels 100% 225,471 16,137 7.2% 137,992 61% 87,479 Be
Slide 29: Debt Composition and Maturities
Debt Composition and Maturities ▪ Bond B – Payments are current As of March 31, 2023 (CAD’000) ▪ Renaissance Loan – On October 07, 2022, the Company negotiated an extension with its current 1% Weighted Average Term Maturity – 3.70 years lender to June 2029, at an interest rate of SOFR 3% +2.75%. The
Slide 30: Asset Ownership Breakdown
Asset Ownership Breakdown Property Property Owner Manager Brand/Franchise Leased Bear Valley Skyline Skyline Independent None Hyatt Regency Skyline Hyatt Hyatt Regency None Cleveland Marriott Renaissance Skyline Aimbridge Marriott Renaissance None Cleveland Marriott Courtyard Skyline Aimbridge, Urgo
Slide 31: Expected Net Cash Flow from Vendor Take-Back Loans (VTB)
Expected Net Cash Flow from Vendor Take-Back Loans (VTB) VTB Loans (CAD’000) 2023 2024 2025 and thereafter Total Port McNicoll 1,800 2,400 23,191 27,391 Vetta Spa 25 34 740 798 Total - Development 1,825 2,434 23,931 28,189 Freed Transaction VTB 1,112 15,685 51,642 68,440 Total VTB Inflows 2,938 18,1