Skyline Investments Inc · TASE:SKLN
Skyline Investments — FY2017 Earnings Presentation
43 slides from Skyline Investments's earnings presentation, March 2018
Slide 1: Corporate Financial Statements Presentation 31.12.2017
Corporate Financial Statements Presentation 31.12.2017
Slide 2: Cautionary Statement
Cautionary Statement This presentation has been prepared by Skyline Investments Inc. (the "Company") 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-Aviv Stock Exchange.
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 income producing properties. Skyline seeks to create shareholder value and deliver superior risk adjusted returns through the acquisition of income producing propert
Slide 4: Corporate Profile
Corporate Profile 19 Income Producing Assets 3,180 Guestrooms 78.7% EBITDA Increase Since 2015 $714M/$295M Total Assets/Equity 41.4% Equity to Total Assets Ratio Baa1.il Credit Rating 3,000 Units for Development 4
Slide 5: 2017 Highlights
2017 Highlights EBITDA increased by 18.4% to approx. CAD $23M 5-year agreement for a credit line of CAD $20M, using Horseshoe Resort as collateral The largest acquisition in Skyline history of 13 Courtyard by Marriott hotels for USD $135M Establishment of formal M&A and IR Departments The largest pu
Slide 6: Business Strategy
Business Strategy INCREASED ACQUISITION PROGRAM OF INCOME PRODUCING ASSETS Skyline’s Strategy Acquisition Targets Acquisition of hospitality properties to Focus on the US and Canada further decrease seasonality and diversify our geographic presence. Stabilized in-place income Continued monetization
Slide 7: Portfolio Map
Portfolio Map 18 CITIES IN THE US AND CANADA | 19 INCOME PRODUCING ASSETS | 3,180 HOTEL ROOMS
Slide 8: Senior Team
Senior Team Gil Blutrich Blake Lyon CA, CPA Vadim Shub CA, CPA Chairman and President CEO CFO Founded Mishorim in 1990 and Skyline in Blake Lyon has an extensive experience Over 20 years of experience in managing 1998. Chairman, President and Main in hotel and resort asset management in funds for pu
Slide 9: Current Ownership Structure
Current Ownership Structure 49.40% Gil Blutrich* 2.63% 25.50% Public Blake Lyon 1.19% Alex 20.26% ILDC 1.02% Shnaider * 74% of Mishorim is owned by Alex Shnaider and Gil Blutrich through a joint voting arrangement. ** Mishorim holds directly and indirectly 49.40% of Skyline Investments Inc. shares.
Slide 10: Summary of Periodic Results (in 000's CAD)
Summary of Periodic Results (in 000’s CAD) Section 2015 2016 2017 Revenue from revenue generating 91,073 122,197 121,794 assets Revenue from sale of residential real 5,590 25,797 30,769 estate and other Total Revenue 96,663 147,994 152,563 NOI from revenue generating assets 15,570 20,821 22,006 Tota
Slide 11: Main Balance Sheet Parameters (in 000's CAD)
Main Balance Sheet Parameters (in 000’s CAD) Section 31.12.2016 31.12.2017 Total Assets 519,753 714,139 Gross financial debt 130,985 316,462 Cash and equivalents 29,837 25,897 Net Debt 101,148 290,565 Shareholders equity 245,968 255,020 Non-controlling interest 41,404 40,977 Total Equity 287,372 29
Slide 12: Net Asset Value (in 000's CAD)
Net Asset Value (in 000’s CAD) Proforma Proforma Loan Balance Ownership BV 2016 NOI 2017 NOI LTV Equity NOI(6) NOI/BV 12/2017 (5) Revenue generating assets Deerhurst Resort (1) 100% 74,326 3,885 5,566 5,566 7.5% 51,279 69% 23,047 Horseshoe Resort 100% 54,237 2,747 4,219 4,219 7.8% - 0% 54,237 Blue M
Slide 13: Financial Strength and Flexibility
Financial Strength and Flexibility Strong Balance Sheet Expected Increase in Cash Flow Equity to Total Assets ratio of 41.4% Expected increase in revenues and cash flow due Net Debt to Net CAP ratio of 49.5% to the acquisition of 13 Courtyard by Marriott hotels in November 2017. Flexibility
Slide 14: List of Assets with no Financial Debt
List of Assets with no Financial Debt Book Value Name (000’s CAD) Bear Valley Resort 14,578 Excluded Lands surrounding Deerhurst Resort (1) 15,480 Excluded Lands surrounding Horseshoe resort (2) 12,422 Lands at Blue Mountain (60%) 10,897 Vendor's take back against Port McNicoll lands 35,499 Remaini
Slide 15: Main Operating Assets in the United States
Main Operating Assets in the United States The Hyatt Regency Arcade, Cleveland, OH
Slide 16: USA - Economy and Hotel Market
USA - Economy and Hotel Market In 2017, GDP grew by 2.3%, the highest growth rate since 2014. 2018 GDP is expected to grow by an additional 2.6%. In 2017, the U.S. hotel industry recorded record growth according to STR. In 2017, Occupancy increased 0.9% to 65.9%, and a 2.1% ADR increase to $12
Slide 17: 13 Courtyard by Marriott Hotels
13 Courtyard by Marriott Hotels Courtyard Birmingham Hoover, Courtyard Manassas Battlefield Park Hoover, AL Manassas, Virginia Courtyard Tucson Airport Arlington CourtyardHeights Toledo Airport, OH Tucson, AZ Deerfield
Slide 18: Courtyard by Marriott Hotels
Courtyard by Marriott Hotels Date of PROPERTIES Location Brand Management Service Level Acquisition OVERVIEW 9 States Courtyard by Aimbridge Select Service November (USD) Marriott 14th, 2017 Number of Number of Acquisition Price Per Five Year Capital Credit Hotels Rooms Price Room Mortgage Line 13 1
Slide 19: Courtyard by Marriott Hotels
Courtyard by Marriott Hotels Acquisition Rationale The 13 almost identical hotels totaling 1,913 rooms are spread over 9 US states and are geographically diverse with strong locations in key Midwest, Southeast and Southwest markets. Previous owner invested USD $40M in renovations between 2012-20
Slide 20: All 13 Courtyard by Marriott Hotels are nearly identical
All 13 Courtyard by Marriott Hotels are nearly identical Huntsville Tucson Chicago-Arlington Heights 20
Slide 21: Hyatt Regency Arcade
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Slide 22: Hyatt Regency Arcade
Hyatt Regency Arcade Improvements Overview Recently completed renovations of all rooms. The The historical Cleveland Arcade was built by John D. renovation is expected to improve the hotel’s competitive Rockefeller in 1890. advantage. The hotel is an attractive event destination and hosts 60 The
Slide 23: Hyatt Regency Arcade
Hyatt Regency Arcade Active Asset Management – Hyatt Room Renovations Before Renovation After Renovation 23
Slide 24: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel
Slide 25: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel Overview Improvements Historical Heritage asset established in 1918 as The Cleveland Hotel. Skyline has begun the 1st phase of significant Notable visitors in the hotel’s history: Dwight D. Eisenhower, Gerald renovations which will continue for the next 3 years. Ford, M
Slide 26: Bear Valley
Bear Valley SKYLINE IN VES TM EN TS BEAR VALLEY \ SKYLIN
Slide 27: Bear Valley
Bear Valley Overview Improvements A ski resort in Southern California, three and a half hours from In 2017, a new modern ski lift was added for USD $5.5M. San Francisco. Since the acquisition invested USD $3.2M in equipment Acquired on December 2014 for USD $3.7M from the and improvements Compan
Slide 28: Main Operating Assets in Canada
Main Operating Assets in Canada
Slide 29: Canada - Economy and Hotel Market
Canada - Economy and Hotel Market Canada’s GDP grew by 3% in 2017, the fastest pace since 2011. Hotel occupancy reached 65.9%, the most since 1999. The weak Canadian dollar and rising occupancy rates are giving hoteliers more latitude to push for ADR increases According to HVS, 2018 RevPAR i
Slide 30: Deerhurst
Deerhurst SKYLINE DEERHUIRST SORT
Slide 31: Deerhurst
Deerhurst Overview Future Potential World-class four-season resort located in Muskoka near Increasing NOI by streamlining operations. Toronto, Canada. The new 162-room Lakeside Lodge is currently under Construction of a new 162-room lodge will increase room construction. inventory. Improving o
Slide 32: Horseshoe Resort
Horseshoe Resor A SKYLINE RESOR BARRIE
Slide 33: Horseshoe Resort
Horseshoe Resort Overview Improvements An all-season resort based around the Horseshoe Ski Mountain, In 2016, a new modern ski lift was added for CAD $5M. one of the closest Ski Resort to Toronto, Canada. The Company began renovating the 44-unit Slopeside The Horseshoe Adventure Park and Horsesh
Slide 34: Blue Mountain Village
Blue Mountain Village SKYLINE BLUE MOUNTAIN VILLAGE DEVELOPMENTS BLUE MOUNTAIN 7 Y \A7 <5; i > Aa % «4 4 Nees a
Slide 35: Blue Mountain Village
Blue Mountain Village Overview Future Potential A ski resort, hotel and leisure destination near Toronto, Canada; Selling land to local developers. continuously active throughout the year; Blue Mountain is the 3rd Sale and/or development of commercial space. busiest ski resort in Canada. Const
Slide 36: Land Sales and Development
Land Sales and Development Lakeside Lodge Huntsville, ON
Slide 37: Projects in Advanced Stage of Sale
Projects in Advanced Stage of Sale(1) Main Projects Under Development (CAD 000’s) Expected Net Gross Profit Cash Gross Profit Number Units Sales Expected Expected Revaluation Rate Proceeds Date of Project Location Type Ownership (2) Including of Units Sold Rate Revenue Gross Profit Gains Including u
Slide 38: Lakeside Lodge
SKYLINE IN V ES TM ENTS Lakeside Lodge
Slide 39: Slopeside Lodge
Slopeside Lodge 39
Slide 40: Thank You!
Thank You! Questions? Please contact Ben Novo-Shalem | Head of M&A and IR 416-368-2565 ext: 2222 | benn@skylineinvestments.com WWW.SKYLINEINVESTMENTS.COM
Slide 41: Appendix
Appendix
Slide 42: Asset Ownership Breakdown
Asset Ownership Breakdown Property Property Owner Manager Brand/Franchise Leased Deerhurst Skyline Skyline Independent None Horseshoe Valley Skyline Skyline Independent None Bear Valley Skyline Skyline Independent None Hyatt Regency Skyline Hyatt Hyatt Regency None Cleveland Marriott Renaissance Sky
Slide 43: Credit rating: primary reasons for the rating
Skyline’s publically traded debentures are rated Baa1.il from Midroog, Moody’s Israeli subsidiary Primary Reasons for the Rating ‟ Properties that have been active for many years in relevant markets contribute to a company’s business profile. Skyline’s Canadian resorts have existed for decades which