Lumo Homes Plc · OMXHEX:LUMO
Lumo Homes — Kojamo — Q3 2023 Earnings Presentation
45 slides from Lumo Homes's earnings presentation, Nov 2, 2023
Slide 1: Interim Report 1–9/2023
2 November 2023 Interim Report 1–9/2023 Jani Nieminen, CEO Erik Hjelt, CFO Kojamo plc
Slide 2: Agenda
Agenda • Summary of January– September 2023 • Financial development • Outlook and financial targets Kojamo plc`s Interim Report January–September 2023 2
Slide 3: Summary of January–September 2023
Summary of January– September 2023 Kojamo plc`s Interim Report January–September 2023 3
Slide 4: Operations developed as predicted
Operations developed as predicted • Total revenue and net rental income increased • Occupancy rate improved and tenant turnover decreased • Balance sheet remained strong and financing figures good • Saving programme is progressing according to the plan • Valuation yields of the investment properties
Slide 5: Operating environment
Operating environment General operating environment Industry key figures 2023E 2022 • The situation of global economy is twofold; In the United Residential start-ups, units <16,000 37,200 States, economic growth has surprised positively, while in Europe, the outlook is becoming bleaker of which non-
Slide 6: Operating environment
Operating environment The situation in the rental market has improved Population growth forecast 2022–2040, % • Urbanisation, decreasing average household size and Helsinki 22.4 demand focusing on central locations support the demand for Capital region* 25.9 rental apartments in the long term Jyväsk
Slide 7: Housing production need 2020–2040
Operating environment Housing production need 2020–2040, % Housing production and demand • The amount of construction has decreased 22 Helsinki Tampere sharply, and the volume of renovation 43 3 ~35,000 Oulu Turku construction is estimated to shrink in the current 3 apartments / 4 year Jyväskylä Kuo
Slide 8: Key figures 1–9/2023
Key figures 1–9/2023 total revenue net rental income funds from operations (FFO) 328.6 M€ 221.6 M€ 128.9 M€ (305.4 M€, +7.6%) (207.6 M€, +6.7%) (120.0 M€, +7.5%) fair value of investment profit excluding changes in properties gross investments value 1) profit/loss before taxes 8.2 Bn€ 161.3 M€ 143.9
Slide 9: Ongoing development projects
Ongoing development projects Kojamo’s projects on map • 779 apartments*** under construction in the Helsinki region and Turku • Costs of completing these is EUR 27.1 million • Owned plots enable starts of about 2,400 apartments • For the time being, we will not make new investment decisions due to t
Slide 10: Housing stock and customer distribution
Housing stock and customer distribution Housing stock by apartment type, % • Kojamo’s housing stock meets the 5.1 demand nicely 23.7 studios 22.0 • All age groups are well represented one bedroom among the tenants two bedroom three bedroom or larger 49.2 Customers by household type, % Customers by a
Slide 11: Key figures of sustainability 1–9/2023
Key figures of sustainability 1–9/2023 STRATEGIC FOCAL POINT 2020–2023: RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT We create better urban housing Result Target Result Target CO2 emissions per apartment, My Lumo – utilisation rate, % 85 90 t CO2e/apartment, reduction -15.3 -4.0 %* NPS 51 40 Energy co
Slide 12: Financial development
Financial development Kojamo plc`s Interim Report January–September 2023 12
Slide 13: Total revenue and net rental income increased
Total revenue and net rental income increased • Total revenue increased due to the growth of property portfolio as well as due to the development of rents and the financial occupancy rate • Net rental income increased due to higher total revenue but was weakened by higher property maintenance costs
Slide 14: Profit before taxes and FFO
Profit before taxes and FFO • FFO grew compared to previous year. The increase in FFO was attributable to the improvement in net rental income and the profit from the repurchase of bonds Profit before taxes, M€ Funds From Operations (FFO), M€ and € / share Profit excluding changes in value Changes i
Slide 15: Financial occupancy rate improved
Financial occupancy rate improved • Financial occupancy rate was 92.7 (91.7) % for the review period • Tenant turnover decreased from last year Financial occupancy rate, % Tenant turnover, % excluding internal turnover 32.5 33.3 97.2 31.1 96.4 29.6 93.9 23.8 92.0 92.7 22.1 91.7 2019 2020 2021 2022 1
Slide 16: Development of Like-for-Like rental income
Development of Like-for-Like rental income The past 12 months compared to the previous 12-month period Development of Like-for-Like rental income as at 30 September 2023 +0.1% +0.0% +1.9% +1.8% Impacts of Impact of Other Like-for-Like rents and water charges occupancy rate impacts rental income grow
Slide 17: Investments
Investments • We will not make new investments nor will we launch new modernisation projects for the time being • Ongoing projects will be completed as agreed • We will focus repairs to support renting of apartments Gross investments and sales of Modernisation investments and investment properties,
Slide 18: The value of investment properties was EUR 8.2 billion
The value of investment properties was EUR 8.2 billion • Valuation yields of the investment properties were increased on average Fair value of investment properties, M€ * by 0.07 percentage points during the -7.7% third quarter • No significant comparable transactions 8,857.1 8,327.5 8,150.2 8,171.4
Slide 19: Equity ratio and Loan to Value (LTV) at a strong level
Equity ratio and Loan to Value (LTV) at a strong level • Equity ratio and Loan to Value (LTV) remained strong • Good buffer to the limit of Baa2 rating Equity ratio, % Loan to Value (LTV), % 43.7 44.3 49.0 48.7 40.5 41.4 39.9 46.9 45.6 45.3 45.0 37.7 2019 2020 2021 2022 30 Sep 30 Sep 2019 2020 2021
Slide 20: High hedging ratio reduced the impact of rising interest rates
High hedging ratio reduced the impact of rising interest rates on financing costs • After the review period, EUR 200 million bond was paid off • New syndicated financing agreement totalling EUR 425 million signed in October which will cover the loans maturing in 2024 The Group’s liquidy, M€ Financin
Slide 21: Key figures per share
Key figures per share • Fair value decrease of the investment properties at the year end had a negative impact on key figures per share Equity per share, € EPRA NRV per share, € -15.5% -15.6% 22.04 22.63 19.53 19.11 17.25 17.96 17.21 15.55 15.18 16.00 12.51 13.39 2019 2020 2021 2022 30 Sep 30 Sep 20
Slide 22: Outlook and financial targets
Outlook and financial targets Kojamo plc`s Interim Report January–September 2023 22
Slide 23: Outlook for Kojamo in 2023 (specified)
Outlook for Kojamo in 2023 (specified) Kojamo estimates that in 2023, the Groupʼs total revenue will increase by 7–8 per cent (previously 7–9 per cent) year-on-year. In addition, Kojamo estimates that the Group’s FFO for 2023 will amount to between EUR 162–168 million, excluding non-recurring costs
Slide 24: Strategic targets 2020–2023
Strategic targets 2020–2023 Actual Actual Actual Actual Key figure Target 1–9/2023 2022 2021 2020 Annual growth of total 7.6 5.5 2.0 2.3 4–5 revenue, % Annual investments, M€ 161.3 501.6 356.9 371.2 200–400 FFO/total revenue, % 39.2 38.9 39.1 39.5 > 36 Loan to Value (LTV), % 44.3 43.7 37.7 41.4 < 50
Slide 25: Summary
Summary Operations developed as Rental market has been Uncertainty in financial anticipated. Total revenue active and property and net rental income transaction markets Positive development of increased has continued occupancy rate continued Our balance sheet has Saving programme is remained strong
Slide 26: Thank you!
Financial Statements for 2023 to be published on Thank you! 15 February 2024 Contact details: CEO Jani Nieminen, tel. +358 20 508 3201 CFO Erik Hjelt, tel. +358 20 508 3225 Director, Treasury & Investor Relations Niina Saarto, tel. +358 20 508 3283 www.kojamo.fi Kojamo plc`s Interim Report January–S
Slide 27: Appendix
Appendix Kojamo plc`s Interim Report January–September 2023 27
Slide 28: Saving programme
Saving programme • We launched a saving programme in August which aims to achieve total savings of EUR 43 million in costs and investments in 2024, of which the share of costs is estimated to be EUR 18 million • The change negotiations started as part of the saving programme were concluded. As a res
Slide 29: Immigration and its impact
Immigration and its impact • If immigration remains at the current level, it would maintain the slow growth of the population and the working-age population • Immigration is heavily focused on the capital region and other large cities 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2010 201
Slide 30: Kojamo's apartment portfolio
Kojamoʼs apartment portfolio Apartment distribution, % Number of commercial Fair 3.6 4.5 Helsinki region Number Fair Fair 4.2 premises value, Financial Share of of apart- value, value, 5.1 Region and other (EUR occupancy revenue, ments, (EUR (EUR / leased thousand rate, %3) % 5.5 Tampere region unit
Slide 31: 779 apartments under construction
779 apartments under construction • During the review period, 0 (985) apartments were acquired, 73 (0) sold and 1,025 (1,100) completed • During the period, construction of 0 (437) apartments was started Development of apartment portfolio, units Apartments under construction, units +3.1% -61.3% 40,1
Slide 32: 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 33: Strategic focal points 2020–2023
Strategic focal points 2020–2023 Delivering the Strong growth Operational best customer excellence experience We offer easy and effortless We seek profitable growth with We create competitiveness and services for our customers and multi-channel approach and profitability through industry- create add
Slide 34: 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 Customer experience and servitisation Scalability of operations, employee experience NPS 60 Digital services Digitalisation of properties and services 85% My Lumo - utilisation rate Knowledge-based management and AI
Slide 35: Key sustainability figures 2022
Key sustainability figures 2022 Total energy consumption Carbon footprint 35.3 8.9 3.9 1.0 kWh/m3 (37.7) MWh/apartment (9.8) kg CO2e/m3 (4.4) t CO2e/apartment (1.1) Share of renewable Apartments completed Apartments under Waste recycling rate energy of energy since 2016 with an E-value construction
Slide 36: Sustainability is visible in our every day life
Sustainability is visible in our every day life Sustainable cities The most competent A responsible personnel and a corporate citizen We commit to complying with the UN Sustainable Development Goals and to use carbon-neutral energy in our properties by 2030 dynamic place to work Anti-grey economy 10
Slide 37: Sustainability commitments and reporting
Sustainability commitments and reporting Our sustainability Our sustainability reporting and Our commitments recognitions memberships We aim to use carbon- We participated the global neutral energy in our GRESB sustainability 78/100* assessment properties by 2030 We apply EPRA’s Sustainability We co
Slide 38: Dividend policy
Dividend policy Kojamo’s objective is to be a stable Dividend history dividend payer whose annual dividend payment will be at least 60 62% 60% 60% 61% 60% per cent of FFO, provided that the Group’s equity ratio is 40 per cent or 0.29 0.34 0.37 0.38 0.39 more and taking account of the company’s finan
Slide 39: Kojamo's ten largest shareholders
Kojamoʼs ten largest shareholders (as at 30 September 2023) Number of Development of the number of the shareholders Shareholder shares % of shares 13,201 13,635 12,128 12,047 12,587 Nominee-registered shareholders 81,388,419 33.0 1. Heimstaden Bostad AB 49,389,283 20.0 Ilmarinen Mutual Pension Insur
Slide 40: Key figures
Key figures 7–9/2023 7–9/2022 Change, % 1–9/2023 1–9/2022 Change, % 2022 Total revenue, M€ 111.5 105.4 5.7 328.6 305.4 7.6 413.3 Net rental income, M€ 83.1 78.2 6.3 221.6 207.6 6.7 280.1 Net rental income margin, % 74.6 74.1 67.4 68.0 67.8 Profit/loss before taxes, M€ -88.5 90.8 -197.5 7.2 248.6 -97
Slide 41: Consolidated income statement
Consolidated income statement M€ 7–9/2023 7–9/2022 1–9/2023 1–9/2022 2022 Total revenue 111.5 105.4 328.6 305.4 413.3 Maintenance expenses -21.4 -19.5 -85.7 -76.2 -103.1 Repair expenses -7.0 -7.7 -21.3 -21.6 -30.2 Net rental income 83.1 78.2 221.6 207.6 280.1 Administrative expenses -10.5 -9.8 -32.4
Slide 42: Balance sheet
Balance sheet M€ 30 Sep 2023 30 Sep 2022 31 Dec 2022 Non-current assets Intangible assets 0.6 0.9 0.7 Investment properties 8,171.4 8,857.1 8,150.2 Property, plant and equipment 28.1 28.4 28.4 Investments in associated companies 1.8 1.6 1.5 Financial assets 0.7 0.7 0.7 Non-current receivables 6.5 6.
Slide 43: Balance sheet
Balance sheet M€ 30 Sep 2023 30 Sep 2022 31 Dec 2022 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 42.5 40.2 43.0 Invested non-restricted equity reserve 164.4 164.4 164.4 Retained earnings 3,451.1 4,140.4
Slide 44: Financial key figures
Financial key figures 30 Sep 2023 30 Jun 2023 31 Mar 2023 31 Dec 2022 30 Sep 2022 Equity ratio, % 45.0 45.3 44.5 45.3 48.7 Interest cover 3.4 3.6 3.7 3.9 3.9 Coverage ratio 3.9 4.1 3.7 3.8 3.9 Loan to Value (LTV), % 44.3 43.8 42.9 43.7 39.9 Hedging ratio, % ¹⁾ 86 86 84 84 92 Average interest rate, %
Slide 45: 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