Slide 1: Presentation Full-Year 2018 Results
PRESENTATION FULL-YEAR 2018 RESULTS 1 Strictly confidential
Slide 2: Important Notice
IMPORTANT NOTICE This presentation includes forward-looking information and Although we believe that its expectations reflected in any statements, including statements concerning the outlook for such forward-looking statement are based upon reasonable our business. These statements are based on curr
Slide 3: Agenda
AGENDA APRIL 3, 2019 ▪ Key achievements ▪ Financials FY 2018 ▪ Portfolio and growth strategy ▪ Outlook ▪ Q&A 3 Strictly confidential
Slide 4: Today's Speakers
TODAY’S SPEAKERS MANUEL LEUTHOLD PATRICK RICHARD ■ Chairman, ■ Delegate of the Board of Varia US Properties AG Directors, Varia US Properties AG ■ Head of US Investments of Stoneweg SA, the Asset Manager of Varia US Properties AG 4 Strictly confidential
Slide 5: Key Achievements
KEY ACHIEVEMENTS 5 Strictly confidential
Slide 6: 2018 Key Achievements (1/2)
2018 KEY ACHIEVEMENTS (1/2) ■ BUYOUT OF NON-CONTROLLING INTEREST (NCI) ■ Got full ownership on 100% of portfolio ■ Got full control on asset management and strategy implementation ■ Got full control on financial data ■ PORTFOLIO OVERALL GROWTH AND VALUE-ADD IMPLEMENTATION ■ Acquisition of 9 assets ■
Slide 7: 2018 Key Achievements (2/2)
2018 KEY ACHIEVEMENTS (2/2) ■ TEAM REINFORCEMENT AND IMPROVED ORGANIZATION ■ 13 full time equivalent working in the US ■ 3 full time equivalent working in Geneva ■ New Yardi ERP system implemented ■ KEY FIGURES ■ Total income of USD 100.8 million (2017: USD 88.2 million) ■ EBITDA margin of 43.6% (20
Slide 8: Financials FY 2018
FINANCIALS FY 2018 8 Strictly confidential
Slide 9: 2018 Key Figures (1/2)
2018 KEY FIGURES (1/2) EFFECTIVE FAIR VALUE TOTAL GROSS PORTFOLIO INCOME 2017: USD 88.2 million INCOME ADJUSTMENT** 2017: USD 65.8 million 2017: USD 22.4 million USD million 86.0 USD million 14.7 USD million 100.8 TOTAL REPAIR, YEAR I OPERATING MAINTENANCE AND CAPEX EXPENSES MINOR REPLACMENTS 2017:
Slide 10: 2018 Key Figures (2/2)
2018 KEY FIGURES (2/2) OPERATING PROFIT EBITDA 2017: USD 26.5 million PROFIT FOR THE 2017: USD 48.9 million PERIOD 2017: USD 34.9 million USD million 50.6 USD million 24.9 USD million 38.9 EARNINGS NAV FUNDS FROM PER SHARE PER SHARE OPERATION (FFO) 2017: USD 4.15 2017: USD 34.38 (EBITDA LESS INTERES
Slide 11: Profit and Loss (Consolidated)
PROFIT AND LOSS (CONSOLIDATED) In USD million As of December 31, 2018 As of December 31, 2017 Rental income 76.3 59.9 Other income including insurance proceeds 9.8 5.8 Net gain from fair value adjustment (realized) 3.0 - Net gain from fair value adjustment on invest. property 11.7 22.4 Total income
Slide 12: Earnings per Share
EARNINGS PER SHARE 2018 2017 Operating profit less fair value adjustment 4.01 3.92 Realized gain on property 0.34 - Unrealized gain on properties 1.32 3.31 Debt costs (2.02) (1.95) Taxes (0.86) (0.13) NCI - (1.01) EPS 2.79 4.15 2018 2017 Operating profit less fair value adjustment 4.01 3.92 Realized
Slide 13: Financial Position (Consolidated)
FINANCIAL POSITION (CONSOLIDATED) Assets in USD million As of December 31, 2018 As of December 31, 2017 Total current assets 47.8 94.7 Total non-current assets 776.7 573.5 Total assets 824.5 668.2 Liabilities and equity in USD million As of December 31, 2018 As of December 31, 2017 Total current lia
Slide 14: Portfolio and Growth Strategy
PORTFOLIO AND GROWTH STRATEGY 14 Strictly confidential
Slide 15: Portfolio Development in 2018
PORTFOLIO DEVELOPMENT IN 2018 ■ Portfolio value of USD 767.5 million ■ 52 assets ■ 9,737 units ■ 19 different States in the US ■ Florida down to 15% (2017: 24%) ■ Most of new properties are located in markets where Varia was already present, thus consolidating its footprint in selected markets ■ Lar
Slide 16: Portfolio 2018 Key Figures
PORTFOLIO 2018 KEY FIGURES AVERAGE GROSS EFFECTIVE GROSS MONTHLY POTENTIAL INCOME* RENT PER UNIT** INCOME* 2017: USD 78.1 million 2017: USD 716 2017: USD 83.9 million USD 760 USD million 101.0 USD million 94.0 AVERAGE MARKET OCCUPANCY LOAN-TO- VALUE PER UNIT RATE VALUE 2017: USD 74,950 2017: 94.3% 2
Slide 17: New Acquisitions Executed Over the Period
9 NEW ACQUISITIONS EXECUTED OVER THE PERIOD 17 Strictly confidential
Slide 18: Positive Early Performance of the New Assets
POSITIVE EARLY PERFORMANCE OF THE NEW ASSETS 18 Strictly confidential
Slide 19: Adding Value to the Portfolio
ADDING VALUE TO THE PORTFOLIO ▪ In 2018, a total of 600 units have been rehabbed for the amount of more than USD 2.7 million ▪ The average rehab cost per unit is USD 4,489 ▪ Investing in the common areas and in the unit rehab works ▪ An average rent increase of USD 98 per month has been achieved ▪ A
Slide 20: Green Initiative
GREEN INITIATIVE ■ Varia is committed to deploy a portfolio wide green program that will improve the energy scorecard of the portfolio ■ Main purpose of this initiative is to save between 25% and 35% of the water and electricity consumption ■ This initiative will benefit the residents, the investors
Slide 21: Green Initiative
GREEN INITIATIVE 21 Strictly confidential
Slide 22: Outlook
OUTLOOK 22 Strictly confidential
Slide 23: The Market in 2019
THE MARKET IN 2019 ■ Positive market for multifamily investments and especially for workforce housing According to CBRE: “The multifamily sector will continue to attract high levels of investments and debt capital, and workforce housing will remain an appealing investment strategy given its favorabl
Slide 24: Outlook 2019
OUTLOOK 2019 MANAGEMENT → Optimization of portfolio management → Reduce the number of property management companies to increase efficiency and organizational leverage → Focus on increasing rents to market, reducing vacancies and limiting controllable expenses PORTFOLIO → Divestment of non strategic
Slide 25: Financial Calendar
FINANCIAL CALENDAR ■ Annual General Meeting 2019 30 April 2019 ■ Half-Year Results 2019 29 August 2019 25 Strictly confidential
Slide 26: Q&A
Q&A 26 Strictly confidential
Slide 27: Appendix
APPENDIX 27 Strictly confidential
Slide 28: 9 Acquisitions in 2018 (1/3)
9 ACQUISITIONS IN 2018 (1/3) RIVER OAKS TIERRA POINTE CITY STATE ACQUISITION DATE CITY STATE ACQUISITION DATE Tucson Arizona January 2018 Albuquerque New Mexico January 2018 NUMBER OF NET RENTABLE GROSS NUMBER OF NET RENTABLE GROSS UNITS AREA POTENTIAL INCOME UNITS AREA POTENTIAL INCOME 300 212,074
Slide 29: 9 Acquisitions in 2018 (2/3)
9 ACQUISITIONS IN 2018 (2/3) WOODRIDGE VILLAGE AT MAYFIELD CITY STATE ACQUISITION DATE CITY STATE ACQUISITION DATE Cincinnati Ohio May 2018 Cleveland Ohio June 2018 NUMBER OF NET RENTABLE GROSS NUMBER OF NET RENTABLE GROSS UNITS AREA POTENTIAL INCOME UNITS AREA POTENTIAL INCOME 336 254,600 m2 3,070,
Slide 30: 9 Acquisitions in 2018 (3/3)
9 ACQUISITIONS IN 2018 (3/3) BROOKWOOD CITY STATE ACQUISITION DATE Tucson Arizona December 2018 NUMBER OF NET RENTABLE GROSS UNITS AREA POTENTIAL INCOME 272 19,211 m2 2,467,420 USD 30 Strictly confidential
Slide 31: Summary
SUMMARY ▪ Well-performing multifamily property portfolio in the U.S. COMPANY ▪ Promising acquisition pipeline in growing urban submarkets ▪ Cash flow optimization through attractive financing and rehabilitation as well as solid cash flow generation allowing for high distribution to shareholders ▪ Bo