Samhallsbyggnadsbolaget I Norden Ab Class B · OMXSTO:SBB_B
Samhallsbyggnadsbolaget I Norden Ab Class B — Debt Investor Presentation (January 2018)
45 slides from Samhallsbyggnadsbolaget I Norden Ab Class B's debt investor presentation, January 2018
Slide 1: Company Presentation
Oslo, Midtbygget (DNB HQ) COMPANY PRESENTATION January 2018
Slide 2: Important Information
IMPORTANT INFORMATION THIS PRESENTATION AND THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL AND MAY NOT BE REFERRED TO, QUOTED OR OTHERWISE DIRECTLY DISCLOSED BY YOU. BY REVIEWING THIS INFORMATION, YOU ARE ACKNOWLEDGING THE CONFIDENTIAL NATURE OF THIS INFORMATION AND ARE AGREEING TO ABIDE BY THE TE
Slide 3: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors |3
Slide 4: Company Overview
COMPANY OVERVIEW SBB in brief Property value per region: 64% in regions of big Nordic cities SBB was founded in March 2016 by Ilija Batljan who previously served as deputy CEO of Rikshem and has a long and successful background in the Oslo community services real estate segment Market Value, (%) 2
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Residential and Stable property portfolio targeted towards residential and community service properties community service characterised by low tenant dependency, high properties occupancy rate and long lease durations 2 Strong Swedish and Focused exposure to strong and re
Slide 6: Indicative Terms
INDICATIVE TERMS Issuer Samhällsbyggnadsbolaget i Norden AB (publ) Status Senior unsecured notes Volume Target first tranche of SEK [●]m. Framework amount of SEK 1,000m Tenor 3 years Use of proceeds General corporate purposes, including refinancing Coupon rate STIBOR 3m +[●] bps, quarterly interest
Slide 7: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors |7
Slide 8: Low-risk community service and residential properties complemented by development potential
LOW-RISK COMMUNITY SERVICE AND RESIDENTIAL PROPERTIES COMPLEMENTED BY RESIDENTIAL DEVELOPMENT POTENTIAL Community services properties Residential properties Other / building rights development SEK 13.6bn SEK 5.8bn 12% SEK 2.6bn 62% 26% Includes schools, elderly care, LSS-housing and Mainly constitut
Slide 9: Long term reliable partner for municipalities creates stable income
LONG TERM RELIABLE PARTNER FOR MUNICIPALITIES CREATES STABILE INCOME Income overview1) Long history of actively working with several History of municipalities in Sweden Clasification Rental Income, SEKm % of Total acquiring from First transaction completed only 6 months after Residential 509 34%
Slide 10: Ambition to become the most efficient real estate company in its niche
AMBITION TO BECOME THE MOST EFFICIENT REAL ESTATE COMPANY IN THE NORDIC IN ITS NICHE Share issue (cash / issue in kind) of SEK 360m (Sven- Olof Johansson Sold 202,000 increases his sqm of building Issues an shareholding Effnetplattformen rights where the additional SEK Acquires and Erik announces it
Slide 11: SBB's focus shifted from growth to value creation and key metrics improvements
SBB’S FOCUS SHIFTED FROM GROWTH TO VAULE CREATION AND KEY METRICS IMPROVEMENTS Solid growth during the 22 months through: Sole focus on residential and community service properties Residential properties in Sweden and community service properties in the Nordics Premium tenants with long leases Prope
Slide 12: Targets
TARGETS Objective The Company's objective is to acquire, manage and develop properties that will create a high risk-adjusted return for its shareholders Financial targets Operational targets Dividend policy3) NAV per share1) Income from building rights Renovate at least 600 apartments >12% SEK 250-4
Slide 13: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors | 13
Slide 14: Community service properties – long contracts with stable counterparties
COMMUNITY SERVICE PROPERTIES – LONG CONTRACTS WITH STABLE COUNTERPARTIES SEK 13.6bn 605,867 sqm SEK 862m SEK 690m 6.7 years 97% 5.1% portfolio value Lettable area Rental income1) NOI1) WAULT Occupancy rate Yield Distribution by region High predictability generated from Kristiansand Dalarna & Ber
Slide 15: Community service properties – lease maturity structure
COMMUNITY SERVICE PROPERTIES – LONG CONTRACTS WITH STABLE COUNTERPARTIES Lease maturity structure 40% 36% 7 years 35% Weighted Average Lease Limited contract Maturity 30% renewals during life of the bond 25% 20% 15% 13% 12% 12% 10% 8% 7% 5% 5% 3% 2% 1% 1% 0% 2017 2018 2019 2020 2021 2022 2023 2024 2
Slide 16: Community service – selected properties
COMMUNITY SERVICE – SELECTED PROPERTIES Oslo, Gullhaug Torg 4 Borlänge, Bordet 1 Borlänge, Spännaren 10 Tenant is the Norwegian ministry of justice Tenant is Kunskapsskolan Borlänge town hall, tenant is Borlänge municipality Sollentuna, Estländaren 10 Oskarshamn, Hälsan 22 Borgholm, Öland 4 (LSS) Te
Slide 17: Residential properties – low tenant dependency and high occupancy rate
RESIDENTIAL PROPERTIES – LOW TENANT DEPENDENCY AND HIGH OCCUPANCY RATE SEK 5.8bn 524,039 sqm SEK 493m SEK 246m SEK 941 98% 4.4% portfolio value Lettable area Rental income1) NOI1) Rental income / sqm Occupancy rate Yield2) Distribution by region Cities with an Northern Dalarna Sweden 25.3% underly
Slide 18: Residential – selected properties
RESIDENTIAL – SELECTED PROPERTIES Västervik, Fabrikanten 10-11 Karlstad, Letten 1,2,5 & 6 Borlänge, Lisshagen 4 Oskarshamn, Emmekalv 4:55 Ludvika, Oden 2 Skara, Yggdrasil 1 & 2 | 18
Slide 19: Property portfolio – market value development
PROPERTY PORTFOLIO – MARKET VALUE DEVELOPMENT Property portfolio development during the period 25,000 SEKm 2,3541) 118 -394 20,000 -177 15,000 12,579 22,052 10,000 5,000 7,572 ,0 Initial fair value Acquisitions Investments Divestments Translation Unrealised value Fair value at the 2016-12-31 gains/l
Slide 20: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors | 20
Slide 21: Management
MANAGEMENT Management team Ilija Batljan – CEO Joakim Bill – Transaction Manager Previous experience: Deputy CEO and Head of Business Development at Rikshem AB 2011 – 2016 20 Previous experience: Senior Business Developer at Rikshem AB, Analyst CBRE 7 Education: Ph.D. in Social Work (demographics, h
Slide 22: Board of Directors
BOARD OF DIRECTORS Board of Directors Lennart Schuss – Chairman of the board Hans Runesten – Member of the board Experience: Founding partner of Catella Corporate Finance Sweden Experience: Former CEO and current Chairman of Effnetplattformen AB Other significant assignments: Chairman of Gimmel Fast
Slide 23: The SBB Share
THE SBB SHARE Share performance, SEK Ownership2) 12 12 Owner Votes % Capital % Ilija Batljan Invest AB3) 23.5% 8.6% 10 10 Kvalitena AB2) 17.1% 8.4% Ilija Batljan (private and through companies) 16.9% 6.3% 8 8 Compactor Fastigheter AB2) 6.9% 5.6% Backahill AB 4.6% 3.5% 6 6 Michael Cocozza 3.3% 2.6% M
Slide 24: Scalable organisation facilitated by external property management
SCALABLE ORGANISATION FACILITATED BY EXTERNAL PROPERTY MANAGEMENT The Company has a scalable organisation model External property management CEO Country office Regional office Branch office Market & Legal Communication Örnsköldsvik Härnösand Ludvika Gävle Västerås Property Business Property Uppsala
Slide 25: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors | 25
Slide 26: Earnings capacity property portfolio as of September 2017
EARNINGS CAPACITY PROPERTY PORTFOLIO AS OF 30 SEPTEMBER 2017 Current earnings capability for the Group for 12 months 1,600 SEKm Surplus ratio: 67.8% 1,400 -488 1,200 1,000 -48 800 1,513 -483 600 1,025 400 494 200 0 Rental Income Property Costs NOI Central Administration Net Financials Operation Prof
Slide 27: Funding overview property portfolio as of September 2017
FUNDING OVERVIEW PROPERTY PORTFOLIO AS OF 30 SEPTEMBER 2017 Debt maturity structure Comments 4,500 SEKm SBB works actively with several funding sources in order to maintain a well diversified and 4,000 effective capital structure 3,924 3,500 Out of the SEK 2.1bn maturing within one year a large
Slide 28: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors | 28
Slide 29: Illustrative company structure overview
ILLUSTRATIVE COMPANY STRUCTURE OVERVIEW Comments Company structure (illustrative overview) Perpetual hybrid notes: SBB i Norden has instigated a written procedure in SEK 700m order to change the issuer from SBB i Norden to Samhällsbyggnadsbolaget i Norden AB (publ) Samhällsbyggnadsbolaget i Norden
Slide 30: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors | 30
Slide 31: Development of building rights
DEVELOPMENT OF BUILDING RIGHTS SBB's role in property development projects Realised building rights Value growth Two sales of building rights from the property Falkenberg Bacchus 1 Financial risk 700 condominiums 58,000 sqm Main focus area 100% of current building rights are sold February 20
Slide 32: Unrealised project development potential
UNREALISED PROJECT DEVELOPMENT POTENTIAL Current development portfolio (30 September 2017) Example projects Municipality Property BTA Residential, sqm Västerhaninge (Haninge) Zoning plan process Nyköping Raspen 1, 2, 3 122,500 Västerhaninge centrum, Haninge Nykvarn Kaffebryggaren 1 27,000 The area i
Slide 33: Income statement, balance sheet and cash flow statement
INCOME STATEMENT, BALANCE SHEET AND CASH FLOW STATEMENT Income statement, SEKm1) 1 Jan – 30 Sep 2017 Cash flow statement, SEKm 1 Jan – 30 Sep 2017 Rental income 954 Cash flow from operations 320 Property expenses including property administration -334 Cash flow from investing activities Net operatin
Slide 34: Agenda
AGENDA 1 Transaction overview 2 Introduction to SBB 3 Property portfolio 4 Organisation 5 Financials 6 Company structure 7 Appendix 8 Risk factors | 34
Slide 35: Risk Factors
RISK FACTORS Risk Factors Investments in notes always entail a certain degree of risk and this is also the case for an investment in the Notes. A number of factors, both within the Company’s control but also factors not controllable by the Company, affect, or could affect, the Company’s profit, fina
Slide 36: Risk Factors, cont'd
RISK FACTORS, CONT’D Rental income and rental development In the long term, rental income for commercial properties is affected by, inter alia, the supply and demand on the market. The Group’s rental income will be affected by the vacancies of the properties, contracted rental levels and that the te
Slide 37: Risk Factors, cont'd
RISK FACTORS, CONT’D The disposal of existing properties could also have a significant negative effect on the Group’s cash flow if such properties are sold at a low price. If the properties are sold to a lower price than expected, this could have a materially adverse effect on the Company’s and the
Slide 38: Risk Factors, cont'd
RISK FACTORS, CONT’D Environmental risks Property management includes environmental risks. According to Swedish legislation, the party that has conducted operations which have caused contamination is responsible for remediation of the contaminated property. If such party is not able to carry out or
Slide 39: Risk Factors, cont'd
RISK FACTORS, CONT’D Refinancing could turn out to be impossible or associated with heavily increased costs Refinancing risk is the risk that financial costs could be higher and/or the refinancing possibilities could be limited or non-existent when the Notes or other debt owed by the Company or any
Slide 40: Risk Factors, cont'd
RISK FACTORS, CONT’D Reputational risk The Company is dependent on its good reputation. The Company’s reputation is particularly important in relation to new and current tenants. As an example, operative problems or maintenance problems could damage the Company’s reputation, which could lead to diff
Slide 41: Risk Factors, cont'd
RISK FACTORS, CONT’D On 20 June 2017, a memorandum, proposing new interest deduction limitation rules regarding both internal and external interests, was published by the Swedish Ministry of Finance (Sw. Finansdepartementet). The proposal contains two alternative general rules for limiting interest
Slide 42: Risk Factors, cont'd
RISK FACTORS, CONT’D Risks relating to the Notes The value of the Notes depends on a number of economic, financial and political factors The value of the Notes depends on a number of interrelated factors, including economic, financial and political events in Sweden or elsewhere, including factors af
Slide 43: Risk Factors, cont'd
RISK FACTORS, CONT’D The Notes constitute direct, unconditional, unsubordinated and unsecured obligations of the Company and shall at all times rank pari passu and without any preference among them and pari passu with all direct, unconditional, unsubordinated and unsecured obligations of the Company
Slide 44: Risk Factors, cont'd
RISK FACTORS, CONT’D Secondary market and liquidity risk The Company will apply for listing of the Notes at Nasdaq Stockholm, or, if such admission to trading is not possible to obtain or maintain, admitted to trading on another Regulated Market after the Swedish Financial Supervisory Authority (Sw.
Slide 45: Risk Factors, cont'd
RISK FACTORS, CONT’D Conflicts of interest of the Joint Bookrunners Nordea Bank AB and DNB Bank ASA, filial Sverige (the “Joint Bookrunners”) may have engaged in, and may in the future engage in, investment banking and/or commercial banking or other services for the Company and/or the Group in the o
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