Swiss Prime Site Ag · SIX:SPSN
Swiss Prime Site — FY2023 Earnings Presentation
49 slides from Swiss Prime Site's earnings presentation, Feb 8, 2024
Slide 1: Annual Results 2023
RESULTS ANNUAL RESULTS 2023 2023FINANCIAL YEAR ZURICH, 8 FEBRUARY 2024 ZURICH, 8 FEBRUARY 2024 Prestigious new development «Alto» in Geneva with generous green outdoor spaces. Various perspectives of the building displayed in the presentations.
Slide 2: Agenda
Agenda 1. KEY MESSAGES 2. PORTFOLIO 3. FINANCE 4. PIPELINE & SUSTAINABILITY 5. OUTLOOK Annual Results 2023 2
Slide 3: We have focussed strategically and achieved our targets
KEY MESSAGES We have focussed strategically and achieved our targets Targets Strategic Portfolio focus Vacancies < 4.1% Operational AuMs ~ CHF 8.2 bn FFO I 1 stable Financial LTV < 40% 1 Excluding Wincasa … in a more challenging market environment Annual Results 2023 3
Slide 4: Continued strong lettings, faster-paced transaction market
KEY MESSAGES Continued strong lettings, faster-paced transaction market Transactions Lettings Valuations Active transaction market with larger Continued strong demand for central Discount rate effects result in slight transactions over the course of the year locations and high standard; weaker
Slide 5: Overview 2023 financial year (1/2)
KEY MESSAGES Overview 2023 financial year (1/2) Strategic Focus Portfolio & Sustainability Focus on core business of real estate investments, seizing Stable fair value of the property portfolio at CHF 13.1 bn; synergy potential between Real Estate and Asset Management revaluations of CHF -250 m
Slide 6: Overview 2023 financial year (2/2)
KEY MESSAGES Overview 2023 financial year (2/2) Operating Performance Financing Significant increase in rental income by +4.3% LfL to record LTV at 39.8%, slightly higher compared to 2022 [38.8%] due to high of CHF 438 m devaluations and targeted purchase in December 2023 Further reduction in
Slide 7: Key figures – 2023 financial year
KEY MESSAGES Key figures – 2023 financial year Absolute Per share RENTAL INCOME AUM EBIT¹ PROFIT¹ FFO I FFO II 2 EPRA NTA RE A L E STA TE A SSE T M A NA GE M E NT in CHF million in CHF million in CHF in CHF in CHF in CHF million in CHF billion 8.4 459.8 5.97 101.52 102.69 438.3 7.7 432.8 403.0 379.9
Slide 8: We create living spaces
WE CREATE LIVING WE CREATE LIVING SPACES SPACES
Slide 9: Agenda
Agenda 1. KEY MESSAGES 2. PORTFOLIO 3. FINANCE 4. PIPELINE & SUSTAINABILITY 5. OUTLOOK Annual Results 2023 9
Slide 10: Portfolio focus on business centres and larger properties
PORTFOLIO Portfolio focus on business centres and larger properties 13% Northwestern 54% Zurich and Central Switzerland Switzerland 9% CHF 13.1 bn Berne Property portfolio ( FY 2022 CHF 13.1 bn ) 20% Lake Geneva 159 Number of properties ( FY 2022: 17 6) 1.7 million m 2 Rental space ( stable ) Note:
Slide 11: Office as largest segment and broad tenant diversification
PORTFOLIO Office as largest segment and broad tenant diversification Portfolio by type of use¹ Broad tenant diversification as at 31.12.2 0 23 as at 31.12.2 0 23 Other 100% Total approx. 2 000 tenants Parking Residential 1% 3% 5% Assisted living 6% Office 44% Hotel / gastronomy ~52% 7% ~ 48% 6% Logi
Slide 12: Active portfolio management further enhances quality
PORTFOLIO Active portfolio management further enhances quality Portfolio Market Matrix Wüest P ar tn er as of 01.01. 2 0 24 high 2% 84% New/repositioned properties typical l y in quadr an t I of portfolio value › Zurich, Fifty-One, office (acquisition) › Zurich, Müllerstrasse 16/20, office (redevelo
Slide 13: Vacancies at record low through successful property management
PORTFOLIO Vacancies at record low through successful property management Vacancy Rate › Major new tenants in % 6.7% › Major contract extensions 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% 4.1% Strategic for 1.0% developments 4.0% 3.0% Operational 2015 2016 2017 2018 2019 20
Slide 14: Balanced lease expiry profile for rental contracts, stable WAULT
PORTFOLIO Balanced lease expiry profile for rental contracts, stable WAULT Lease Expiry of Rental Contracts as at 31.12.2 0 23 WAULT 5.0 years 18% 13% 12% 11% 9% 7% 7% 7% 6% 4% 4% 1% <1 year >1 >2 >3 >4 >5 >6 >7 >8 >9 >10 Open-ended Note: Presentation excluding the Jelmoli intercompany lease, which
Slide 15: Asset Management: growth in all product lines
ASSET MANAGEMENT Asset Management: growth in all product lines Fund Management Asset Management Real Estate Advisory – Discretionary – – Fiduciary – +0.3 +0.3 +0.1 vs. FY 2022 vs. FY 2022 vs. FY 2022 CHF 3.2 bn AuM CHF 4.0 bn AuM CHF 1.2 bn AuM Open-ended and closed-ended Complete asset manageme
Slide 16: Asset Management: diversified investments and complementary to own portfolio
ASSET MANAGEMENT Asset Management: diversified investments and complementary to own portfolio Total Fund Management Asset Management Real Estate Advisory – Discretionary – – Fiduciary – AuM 8.4 3.2 4.0 1.2 (CHF bn) Rental Income 290 104 144 42 (CHF m p.a., Dec. 23 run rate) Residential Retail Reside
Slide 17: Wir schaffen Lebensräume
WIR SCHAFFEN LEBENSRÄUME
Slide 18: Agenda
Agenda 1. KEY MESSAGES 2. PORTFOLIO 3. FINANCE 4. PIPELINE & SUSTAINABILITY 5. OUTLOOK Annual Results 2023 18
Slide 19: Operating income: record rental income despite capital recycling
FINANCE Operating income: record rental income despite capital recycling Consolidated operating income in CHF million FY 2022 FY 2023 ∆ y-o-y Increase of CHF 5.5 m in rental income to record high despite disposals under capital recycling (effect CHF 9.9 m in rent); main Rental income 432.8 438.3 +
Slide 20: Better cost management and more potential through streamlining
FINANCE Better cost management and more potential through streamlining Consolidated operating expenses in CHF million FY 2022 FY 2023 ∆ y-o-y Drop in real estate costs despite inflation and growth in rental income; better cost management for maintenance and insourcing Real estate costs -68.8 -64.6
Slide 21: Growth in operating profit
FINANCE Growth in operating profit Group profitability in CHF million FY 2022 FY 2023 ∆ y-o-y Negative revaluations of CHF -250.5 m (-1.9% of portfolio of CHF 13.1 bn) Total operating income 646.6 658.6 − Devaluations typically across all main use types and locations Revaluations (net) 169.7 -250.
Slide 22: FFO growth despite rising interest expense
FINANCE FFO growth despite rising interest expense Funds from Operations I (FFO I)¹ EPRA NTA (Net Tangible Asset) in CHF per shar e in CHF per shar e FFO I bridge in CHF m FY 2022 FY 2023 ∆ y-o-y EBIT (excl. revaluations) 379.9 403.0 +6.1% 102.69 101.52 4.26 4.12 Result from property sales -50.9 -13
Slide 23: Real Estate: growth in rental income of 4.3% on EPRA LfL basis
FINANCE Real Estate: growth in rental income of 4.3% on EPRA LfL basis Rental Income Bridge¹ in CHF million Increase in rental income of around CHF 5.6 m (+1.2%) to 456.8 CHF 457 m, record high Developments Redevelopments Acquisitions Despite sales with rents in the amount of CHF 9.9 m, few 451.
Slide 24: Asset Management: growth in a challenging market
FINANCE Asset Management: growth in a challenging market Earnings overview in CHF million FY 2022 FY 2023 ∆ y-o-y 2023 challenging environment overall, with restrained appetite for investment, especially by pension funds Fees 52.0 49.7 -4.4 % AuM growth of 9% compared to previous year, above ave
Slide 25: Stable asset base with accretive investments
FINANCE Stable asset base with accretive investments Property portfolio bridge (Fair Value) Total 159 properties (2022: 176) in CHF million Valuation − Increased efficiency through portfolio consolidation Investments result¹ (portfolio clusters, larger individual buildings) Effects from 293.6 -247
Slide 26: Broad financing base with continuous access
FINANCE Broad financing base with continuous access Financing parameters A3 Rating – Moody’s in CHF million stable 2022 2023 Consolidated financing structure Investment properties 13 088 13 075 86% unsecured of which unencumbered 86% 86% Financial liabilities Unsecured Bonds Secured 5 095 5 304 (Rea
Slide 27: Continuous rollover of maturities, high liquidity reserve
FINANCE Continuous rollover of maturities, high liquidity reserve Liquidity Debt Maturity Profile Cash an d cash A t n omin al values in CHF million equiva l en t s an d Successful extensions of credit lines by one committ e d cr edit lin es in CHF million year in each case, each with additional 1 4
Slide 28: We create living spaces
WE CREATE LIVING SPACES
Slide 29: Agenda
Agenda 1. KEY MESSAGES 2. PORTFOLIO 3. FINANCE 4. PIPELINE & SUSTAINABILITY 5. OUTLOOK Annual Results 2023 29
Slide 30: Successful continuation of our capital recycling strategy
PIPELINE Successful continuation of our capital recycling strategy 1 2 3 Funding Pipeline Optimising Mix¹ Enhancing Locations & Sustainability Sales in CHF m 2019 2020 2021 2022 2023 Office − Non-core 126 Sales 212 230 259 Office − Low 280 317 including Retail Retail BREEAM rating 1.2 bn closings in
Slide 31: Projects under construction largely completed, projects in planning to 2030
PIPELINE Projects under construction largely completed, projects in planning to 2030 Project Pipeline as at 31.12.2023 in CHF million Reserves › Pipeline: ~ 110 − High densification potential and land reserves within Committed In planning¹ the existing portfolio and ongoing «refreshing» of the 2024
Slide 32: Projects under construction with high levels of pre-letting
PIPELINE Projects under construction with high levels of pre-letting First tenants moved in Alto Pont-Rouge Stücki Park I+II Tertianum Paradiso JED new build BERN 131 Lancy Basel Lugano Schlieren Berne Basic fit-out completed Basic fit-out completed scheduled scheduled scheduled Construction status
Slide 33: Selection of planned projects – central locations with attractive use
PIPELINE Selection of planned projects – central locations with attractive use Steinenvorstadt Destination Jelmoli Route de Meyrin 49 maaglive Grand Passage YOND Campus Basel Zurich Geneva Zurich Geneva Zurich Legally valid Legally valid Building regulations Standard Standard district plan district
Slide 34: Significant progress in our sustainability strategy
SUSTAINABILITY Significant progress in our sustainability strategy 1 2 3 4 Certification Strategy Climate Neutrality 2040 Circular Economy Green Finance Framework 94% -10% emissions Milestone project Müllerstrasse CHF 425 m certifiable space vs. previous year 2022: 75% currently 15.2 kg CO2/m2 90% c
Slide 35: Significant reduction in emissions intensity – 2040 net zero target
SUSTAINABILITY Significant reduction in emissions intensity – 2040 net zero target CO 2 -Reduction Path Milestones in 2023 in k g CO 2 / m 2 Replacement of heating with renewable energy in Geneva, Rue du Rhône and Route de Malagnou 28 Portfolio disposals with gas/oil heating 26 Portfolio addit
Slide 36: We create living spaces
WE CREATE LIVING SPACES
Slide 37: Agenda
Agenda 1. KEY MESSAGES 2. PORTFOLIO 3. FINANCE 4. PIPELINE & SUSTAINABILITY 5. OUTLOOK Annual Results 2023 37
Slide 38: Guidance 2024: further profitable growth
OUTLOOK Guidance 2024: further profitable growth Financial Targets FFO I CHF 4.10–4.15 LTV < 40% per share Real Estate Portfolio Operational Targets Vacancies < 4.0% AuM > 9 bn Asset Management Annual Results 2023 38
Slide 39: Q&A
Q&A
Slide 40: Analyst and investor contact
Analyst and investor contact Media contact Florian Hauber Patrick Djizmedjian Head Treasury and Investor Relations Head Corporate Communications Business: +41 58 317 17 64 Business: +41 58 317 17 42 Mobile: +41 78 600 81 40 Mobile: +41 79 642 88 60 florian.hauber@sps.swiss patrick.djizmedjian@sps.sw
Slide 41: 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 42: Appendix
SWISS PRIME SITE | \ ) \ \’ | | al + S10 | a “4 APPENDIX __
Slide 43: 2022 figures restated for IFRS5 «Discontinued operations»
APPENDIX 2022 figures restated for IFRS5 «Discontinued operations» Consolidated income statement Funds from operations (FFO) 01.01.– 01.01.– 01.01.– Deconso- 31.12.2022 01.01.– Deconso- 31.12.2022 31.12.2022 lidation continuing 31.12.2022 lidation continuing in CHF m Total group Wincasa operations i
Slide 44: Two strong pillars with resilient business models
APPENDIX Two strong pillars with resilient business models Property Portfolio Asset Management (External Capital) 1% › Discretionary and fiduciary 15% › High-quality properties in the 30% best locations in Switzerland 44% fund management as well as 13% › Development pipeline with advisory services 5
Slide 45: Our investment proposition
APPENDIX Our investment proposition Largest listed Swiss real estate company; high quality property portfolio of more than CHF 13 billion fair value; 100% free float and high share liquidity Leading Complementary Asset Management franchise with CHF 8 billion Assets under Management Long-standing sus
Slide 46: Continuous improvement in ESG ratings
APPENDIX Continuous improvement in ESG ratings Corporate C «PRIME» AA 13.1 Low Risk A- + 1 level + 1 level -0.2 points + 1 level May 2023 June 2023 May 2023 May 2023 Property Portfolio Asset Management Standing Invest. Development «Investment Manager» 89 Points 97 Points Policy Governance & Strategy
Slide 47: 100% free float and high liquidity of the shares
APPENDIX 100% free float and high liquidity of the shares Major Shareholders Registered Share Data First day of trading April 5, 2000 Blackrock >10% # of shares outstanding 76.7 million Credit Suisse Funds Free float 100% 6.5% ISIN CH0008038389 UBS Fund Management 5% Ticker symbol SPSN Share class R
Slide 48: Swiss economic environment
APPENDIX Swiss economic environment Economic Indicators Swiss Purchasing Managers’ Index (PMI) 2023 2024 2025 80 Forecast Forecast Forecast Indicating expansion 70 Real GDP 1.3% 1.1% 1.7% Selected components 60 Private consumption 2.2 1.1 1.3 Construction industry -2.0 0.9 1.9 50 (Over- and undergro
Slide 49: Resilient Swiss economy with persistently lower Inflation
APPENDIX Resilient Swiss economy with persistently lower Inflation Employment Growth GDP Split Switzerland Inflation In dexed to 2000 Nomin al, Q3 2023 – P r oduction P er spect iv e Headl in e in fla t ion y-o-y 140 ~USD 91’000 GDP per Head 10% Top 5 per OECD Other Pharmaceuticals and 8% Hospitalit