Swiss Prime Site Ag · SIX:SPSN
Swiss Prime Site — FY2022 Earnings Presentation
44 slides from Swiss Prime Site's earnings presentation, Feb 9, 2023
Slide 1: Annual Results 2022
ANNUAL RESULTS 2022 ZURICH, 9 FEBRUARY 2023
Slide 2: Agenda
AGENDA 1 KEY MESSAGES PAGE 3 2 FINANCIALS PAGE 10 3 PORTFOLIO & SUSTAINABILITY PAGE 22 4 OUTLOOK & AGM PAGE 41 Zurich | 9 February 2023 Annual results 2022 2
Slide 3: Solid results on all levels | Targets met (1/2)
KEY MESSAGES Solid results on all levels | Targets met (1/2) GROWTH IN OPERATING INCOME INCREASE IN RENTAL INCOME ▪ Increase by +3.3% to CHF 774.4 million ▪ Rental income from properties up by 1.1% to CHF 431.3 ▪ Solid growth in all segments; particularly strong in million (LfL: 1.9%) Asset Manageme
Slide 4: Solid results on all levels | Targets met (2/2)
KEY MESSAGES Solid results on all levels | Targets met (2/2) NEW FINANCING PAYS OFF STRONG BALANCE SHEET AND FFO ▪ Significant improvement in financial performance ▪ Stable equity ratio of 47.7%; real estate LTV significantly and flexibility reduced from 40.2% to 38.9% ▪ Extension of the credit faci
Slide 5: Key figures for 2022
KEY MESSAGES Key figures for 2022 ABSOLUTE PER SHARE RENTAL INCOME AUM EBITDA¹ PROFIT¹ FFO I DIVIDEND EPRA NTA R E AL E S T AT E AS S E T M AN AG E M E N T in CHF million in CHF million in CHF in CHF in CHF in CHF million in CHF billion 448.6 300.6 102.69 431.3 4.26 3.40² 426.7 7.7 428.1 293.7 100.9
Slide 6: Real estate market: well positioned with our prime portfolio
KEY MESSAGES Real estate market: well positioned with our prime portfolio TRANSACTIONS LETTINGS VALUATIONS ▪ Lower market activity in H2 2022 ▪ Continuously strong demand for ▪ No more uplifts expected from vs. first half and 2021, however still properties based on discount rate effects significant
Slide 7: Repositioning of the Jelmoli building
KEY MESSAGES Repositioning of the Jelmoli building Repositioning of the Jelmoli Building ▪ Heritage building at prime location with great potential ▪ Reduction of retail space of currently ~24 000 m2 to ~10 000 m2 and conversion of the upper floors into offices and public spaces (restaurant, gym etc
Slide 8: We create living spaces
WE CREATE LIVING SPACES
Slide 9: Agenda
AGENDA 1 KEY MESSAGES PAGE 3 2 FINANCIALS PAGE 10 3 PORTFOLIO & SUSTAINABILITY PAGE 22 4 OUTLOOK & AGM PAGE 41 Zurich | 9 February 2023 Annual results 2022 9
Slide 10: Top line growth supported by Asset Management growth
FINANCIALS Top line growth supported by Asset Management growth GROUP OPERATING INCOME in CHF million 2021 2022 ∆ ▪ Increase in rental income driven by vacancy Rental Income 426.7 431.3 +1% reduction and LfL growth (EPRA LfL growth: +1.9%) Development Income 52.0 24.8 -52% ▪ Lower income from develo
Slide 11: Expenses affected by non-cash writedowns from Jelmoli repositioning
FINANCIALS Expenses affected by non-cash writedowns from Jelmoli repositioning GROUP OPERATING EXPENSES in CHF million 2021 2022 ∆ ▪ Higher real estate costs mainly driven by higher Real estate costs -52.7 -55.8 +6% energy costs (e.g. at Jelmoli, for vacancies) Development costs -33.4 -21.7 -35% ▪ L
Slide 12: Strong EBIT growth on a comparable basis
FINANCIALS Strong EBIT growth on a comparable basis GROUP PROFITABILITY in CHF million 2021 2022 ∆ ▪ Revaluation effects predominantly realized in Total Operating Income 749.5 774.4 H1 2022 (CHF 166.6 million); stable H2 2022 Revaluation of investment property 301.9 169.7 ▪ Income from property sale
Slide 13: Increased FFO I per share and EPRA NTA per share
FINANCIALS 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 4.26 Operating result (EBIT) 102.69 4.01 100.93 + Depreciation on tangible & intangible assets - Revaluation from invest. pro
Slide 14: Growth in rental income of 1.9% on a EPRA like-for-like basis
FINANCIALS Growth in rental income of 1.9% on a EPRA like-for-like basis CHANGE IN GROUP NET RENTAL INCOME ▪ Rental income: increase by 1.1% to CHF 431.3 in CHF million million Completion Δ Existing properties¹ Modifications | Modernisations Purchases projects 431.3 ▪ EPRA LfL growth: +1.9% 426.7 Sa
Slide 15: Continuous portfolio enhancement with highly invested properties
FINANCIALS Continuous portfolio enhancement with highly invested properties PROPERTY PORTFOLIO GROWTH (FAIR VALU E) ▪ Total 176 properties (2021: 184) in CHF million Effects of owner-occupied − continuous optimisation as part of our capital Valuation gains¹ properties 13 088 recycling strategy → foc
Slide 16: Asset Management: very strong bottom line results
FINANCIALS Asset Management: very strong bottom line results ASSETS UNDER MANAGEMENT in CHF billion 10 7.7 3.0 3.6 ▪ AuM growth of CHF 4.1 billion − CHF 2.3 billion Akara acquisition AuM EARNINGS OVERVIEW − CHF 1.8 billion organic in CHF million 2020¹ 2021 2022 ∆² growth (+30% growth) Fee income 12.
Slide 17: Real Estate Services: steady growth Serviced Assets
FINANCIALS Real Estate Services: steady growth Serviced Assets SERVICED ASSETS in CHF billion 81 77 73 ▪ Serviced Assets growth of CHF 4.6 billion (+6%) leads to new record level ▪ Significant client wins and growth of existing clients (e.g. IFAM, CS, AXA) OVERVIEW FIGURES ▪ Overall high promoter ra
Slide 18: Continuous LTV reduction with a balanced funding mix
FINANCIALS Continuous LTV reduction with a balanced funding mix FINANCING PARAMETERS GROUP FINANCING STRUCTURE in CHF million 2020 2021 2022 86% unsecured Investment Properties 12'323 12'794 13'088 Unsecured Bonds Secured thereof unencumbered 40% Mortgages 28% 84% 86% 14% Financial Liabilities 5'164
Slide 19: Balanced maturity profile with liquidity headroom
FINANCIALS Balanced maturity profile with liquidity headroom LIQUIDITY DEBT MATURITY PROFILE Cash & Cash at nominal values in CHF million Include further Equivalents and extension options Available credit lines in CHF million 1 415 ▪ Different options for convertible bond expiring in June 2023, incl
Slide 20: We create living spaces
WE CREATE LIVING SPACES
Slide 21: Agenda
AGENDA 1 KEY MESSAGES PAGE 3 2 FINANCIALS PAGE 10 3 PORTFOLIO & SUSTAINABILITY PAGE 22 4 OUTLOOK & AGM PAGE 41 Zurich | 9 February 2023 Annual results 2022 21
Slide 22: Prime portfolio with focus on centres and commercial spaces
PROPERTY PORTFOLIO Prime portfolio with focus on centres and commercial spaces CHF 13.1 bn NW Property portfolio Switzer- land (up from CHF 12.8 billion) 14% Zurich & Central Switzerland 53% Berne 176 9% Number of properties (down from 184) Lake Geneva 1.7 million m 2 20% Rental floor space (stable)
Slide 23: Further increase in lettings in 2022
PROPERTY PORTFOLIO Further increase in lettings in 2022 NEWLY LET AND RE-LET SPACES in 1 000 m2 ▪ Space: Total 172 000 m2 [2021: 170 000 m2] 170 172 of commercial space newly let or re-let, of which 102 000 m2 are contract extensions Newly Let 128 ▪ Significant new wins: Adobe, Universal Music BSE 7
Slide 24: Record low vacancy through successful property management
PROPERTY PORTFOLIO Record low vacancy through successful property management VACANCY RATE in % (Group) 7.4% 6.7% 6.4% 6.1% 5.5% 5.2% 5.4% 5.1% 4.7% 4.8% 4.7% 4.7% 4.7% 4.6% 4.4% 4.3% 06/15 12/15 06/16 12/16 06/17 12/17 06/18 12/18 06/19 12/19 06/20 12/20 06/21 12/21 06/22 12/22 Zurich | 9 February 2
Slide 25: Office as the largest segment and broad tenant diversification
PROPERTY PORTFOLIO Office as the largest segment and broad tenant diversification PORTFOLIO BY TYPES OF USE¹ BROAD TENANT DIVERSIFICATION as at 31.12.2022 as at 31.12.2022 100% Total 2´050 tenants ~54% 6% ~ 48% 5% ~24% 5% Top 30 3% Pro-forma 46% after Jelmoli ~22% Top 5 ~ 22% repositioning and 3% pl
Slide 26: Retail share declining, defensive in nature through location and use
PROPERTY PORTFOLIO Retail share declining, defensive in nature through location and use TYPE OF USE CHARACTERISTICS RETAIL in %, evolution 2014 – 2022 in %, 2022 Residential & other Parking 19% Other ▪ 57% of rental income in absolute 6 Assisted living 5 7 «high-frequency» locations in the 5 7 Hotel
Slide 27: Highest density of prime locations and quality in the Swiss market
PROPERTY PORTFOLIO Highest density of prime locations and quality in the Swiss market PORTFOLIO MARKET MATRIX Wüest Partner as per 31.12.2022 high 2% 83% ▪ Quadrant I: 83% of portfolio value of portfolio value → classified as «top properties» by Wüest Partner III II I ▪ Quadrant IV: 14% of portfolio
Slide 28: Balanced lease expiry profile with early extensions, stable WAULT
PROPERTY PORTFOLIO Balanced lease expiry profile with early extensions, stable WAULT LEASE EXPIRY OF RENTAL CONTRACTS as at 31.12.2022 17% 14% 15% 10% 10% 9% 7% 6% 5% ~36% already 4% 4% extended extended already ~73% 1% <1 year >1 >2 >3 >4 >5 >6 >7 >8 >9 >10 Open-end WAULT 5.3 years Zurich | 9 Febru
Slide 29: Asset Management: Three strong pillars, Akara integrated
ASSET MANAGEMENT Asset Management: Three strong pillars, Akara integrated FUND MANAGEMENT ASSET MANAGEMENT REAL ESTATE ADVISORY – DISCRETIONARY – – FIDUCIARY – CHF 2.9 bn AUM CHF 3.7 bn AUM CHF 1.1 bn AUM SPSS-DEVELOPED INVESTMENT FUNDS FOR INVESTMENT FOUNDATIONS FOR THIRD PARTY CLIENTS ▪ Open-und c
Slide 30: Asset Management: Complementary investment profile
ASSET MANAGEMENT Asset Management: Complementary investment profile TOTAL FUND MANAGEMENT ASSET MANAGEMENT REAL ESTATE ADVISORY – DISCRETIONARY – – FIDUCIARY – AuM 7.7 2.9 3.7 1.1 (CHF bn) Rental Income 268 100 126 42 (CHF mln p.a.) Residential Retail 5%3% 4% 3% 6% 5% 3% Office 6% Commercial + 11% 1
Slide 31: We create living spaces
“=== WE"CREATE - LIVING SPACES) |
Slide 32: Effective capital recycling with value creation in the project pipeline
CAPITAL RECYCLING Effective capital recycling with value creation in the project pipeline Portfolio streamlining SALES CHF 317 million Retail portfolio, Building B, Plan-les-Ouates, Geneva Western Switzerland ▪ Sale of nine smaller properties predominantly in German speaking part; Espace Tourbillon
Slide 33: Accretive investments in prime development projects
DEVELOPMENT BUSINESS Accretive investments in prime development projects PROJECT PIPELINE AS PER 31.12.2022 ▪ Pipeline: High densification potential and utilisation in CHF million of reserves within the existing portfolio and ongoing «refreshing» of the landbank through acquisitions Reserves ▪ Proje
Slide 34: Scheduled projects under construction with high levels of pre-letting
DEVELOPMENT BUSINESS Scheduled projects under construction with high levels of pre-letting Müllerstrasse Alto Pont-Rouge Stücki Park I+II JED new build Tertianum BERN 131 Zurich Lancy Basel Schlieren Paradiso & Olten Berne Construction status Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing Occupancy
Slide 35: Selection of planned projects – central locations with attractive use
DEVELOPMENT BUSINESS Selection of planned projects – central locations with attractive use Steinenvorstadt Route de Meyrin 49 maaglive Albis Areal Hauptstrasse 2 Dreispitz Mitte Basel Geneva Zurich Zurich Brugg Münchenstein Building regulations Final Final In process Standard Standard Standard (dist
Slide 36: Our main priorities in the area of sustainability
SUSTAINABILITY Our main priorities in the area of sustainability 2040: GREEN CERTIFICATION CIRCULAR 1 STRATEGY 2 CLIMATE- 3 ECONOMY 4 FINANCE NEUTRAL FRAMEWORK ▪ Development projects are ▪ Energy and resource ▪ Re-development of existing ▪ All new financing «green», planned and built in management b
Slide 37: Certification strategy: very strong progress in 2022 – 75% target met
SUSTAINABILITY Certification strategy: very strong progress in 2022 – 75% target met CERTIFICATION OF SPACE (#153 PROPERTIES)¹ ALL DEVELOPMENT PROJECTS WILL BE CERTIFIED in % of space Cannot be certified (parkings etc.) Start of Name Location Label Status construction Stücki Park 1. Etappe Basel SGN
Slide 38: GRESB-results improvements from 2020 to 2022
SUSTAINABILITY GRESB-results improvements from 2020 to 2022 STANDING INVESTMENT BENCHMARK REPORT 2020 – 2022 62 62 74 85 2020 2021 2022 STANDING DEVELOPMENT BENCHMARK REPORT 2020 – 2022 64 78 88 2020 2021 2022 Zurich | 9 February 2023 Annual results 2022 38
Slide 39: We create living spaces
WE CREATE LIVING SPACES
Slide 40: Agenda
AGENDA 1 KEY MESSAGES PAGE 3 2 FINANCIALS PAGE 10 3 PORTFOLIO & SUSTAINABILITY PAGE 22 4 OUTLOOK & AGM PAGE 41 Zurich | 9 February 2023 Annual results 2022 40
Slide 41: Guidance 2023 – We deliver stability
OUTLOOK Guidance 2023 – We deliver stability FINANCIAL FFO stable LTV <40% OPERATIONAL Vacancy <4.3% AuM >8.5bn Group Asset Management Zurich | 9 February 2023 Annual results 2022 41
Slide 42: Key Proposals to the Annual General Meeting
ANNUAL GENERAL MEETING Key Proposals to the Annual General Meeting NEW ELECTION ▪ Election of Reto Conrad (1966, CH) as new independent member of the Board of Directors ▪ Mario F. Seris no longer stands for election DISTRIBUTION ▪ CHF 3.40 per share in the form of an ordinary dividend of CHF 1.70 (v
Slide 43: 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
Slide 44: Analyst and investor contact
Analyst and investor contact Media contact FLORIAN HAUBER MLADEN TOMIC Investor Relations Media Relations Head Treasury and Investor Relations Head Group Communications Business: +41 58 317 17 64 Business: +41 58 317 17 42 Mobile: +41 78 600 81 40 Mobile: +41 79 571 10 56 florian.hauber@sps.swiss ml