Stendoerren Fastigheter Ab Class B · OMXSTO:STEF_B
Stendoerren Fastigheter Ab Class B — Stendörren Fastigheter — Debt Investor Presentation (September 2019)
52 slides from Stendoerren Fastigheter Ab Class B's debt investor presentation, September 2019
Slide 1: Investor Presentation: Contemplated Issue of Hybrid Bonds
INVESTOR PRESENTATION CONTEMPLATED ISSUE OF HYBRID BONDS SEPTEMBER 2019
Slide 2: Important Information
IMPORTANT INFORMATION Acceptance of limitations: The information in this presentation (the “Material”) is furnished by Stendörren Fastigheter AB (publ), 556825-4741 (the “Company”) solely for the recipient’s information in connection with a potential issue by the Company of subordinated perpetual fl
Slide 3: Stendörren
STENDORREN
Slide 4: Agenda
AGENDA I. TRANSACTION SUMMARY 2. INTRODUCTION TO STENDÖRREN 3. PROPERTY PORTFOLIO 4. FINANCIAL INFORMATION 5. MARKET OVERVIEW 6. CONCLUDING REMARKS 7. RISK FACTORS 8. APPENDIX 4 Investor Presentation
Slide 5: Transaction Summary
TRANSACTION SUMMARY [] Aokaler sore git shillnad.
Slide 6: Indicative Main Terms
INDICATIVE MAIN TERMS Issuer Stendörren Fastigheter AB (publ) Nominal amount SEK 1,250,000 Framework amount SEK 1,500m Tenor Perpetual First Call Date 5 years Coupon to First Call Date STIBOR 3m + [∙]bps + 200bps (after 5 yrs) + 100bps (after 7 years) + 100bps (after 9 years) + 100bps (after 11 year
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS WELL EQUIPPED FOR THE FUTURE • Stendörren has a strong balance sheet with LTV of 59% and secured LTV of 46% SOLID FINANCIAL • Strong debt service capacity with 5.6% yield on cash flow properties, ICR of 2.3x1 and abolished dividend POSITION • Property value and lettable area ha
Slide 8: Financial Targets
FINANCIAL TARGETS 13% 2.3x* 32% ROE (LTM Q2 2019, AVERAGE), % ICR (LTM Q2 2019), x EQUITY RATIO (Q2 2019), % 50% 3.0 40% 35% 35% 40% 2.5 30% 2.0 2.0x 25% 30% 1.5 20% 20% 15% 1.0 10% 12% 10% 0.5 5% 0% 0.0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4* Q1* Q2* Q1 Q2
Slide 9: Introduction to Stendörren
INTRODUCTION TO STENDORREN [] Aohaler son git shillaad
Slide 10: Snapshot of Stendörren
SNAPSHOT OF STENDÖRREN PROPERTY VALUE1 LETTABLE AREA1 RENTAL VALUE2 OCCUPANCY RATE3 PROPERTY YIELD4 LOAN-TO-VALUE LEASE DURATION5 SEK SQ.M. SEK 87% 5.6% 59% 4.1 years 8.8bn 721,000 592m • Founded in 1995 as the commercial property arm of Kvalitena • Separated from Kvalitena in November 2014 and list
Slide 11: History and Milestones
HISTORY AND MILESTONES MORE THAN TWO DECADES IN THE SWEDISH PROPERTY MARKET Kvalitena was UBS replaced Acquired SEK 500m SEK 500m SEK 800m Stendörren Stendörren In July a Tap issue of SEK Signed the founded and Lehman properties divestment of acquisition acquisition of acquires several acquires seve
Slide 12: Corporate Governance
CORPORATE GOVERNANCE MANAGEMENT BOARD OF DIRECTORS Mikael Nicander Seth Lieberman – Chairman of the board CEO of Stendörren Fastigheter since 2019 Experience: 30 years of international experience from the real estate sector. Previously held senior Experience: 20 years in the real estate industry, in
Slide 13: Share and Ownership Overview
SHARE AND OWNERSHIP OVERVIEW MAIN SHAREHOLDERS AS PER 2019-06-30 SHARE PRICE DEVELOPMENT Ownership SEK thousands 160 Traded volume (rhs) Share price (lhs) 1,400,000 Number of shares % of 140 1,200,000 Owners A-shares B-shares Total Votes Capital 120 1,000,000 Stendörren Real Estate AB (EQT) 2,000,00
Slide 14: Targets and Strategy
TARGETS AND STRATEGY TARGETS STRATEGY CORPORATE TARGETS ACQUISITIONS Stendörren’s goal is to create a high risk-adjusted return for its • Acquire logistics, warehouses and industrial premises expected to shareholders by acquiring, developing and managing properties in the consistently deliver on the
Slide 15: Value Growth in Project Development
VALUE GROWTH IN PROJECT DEVELOPMENT PROJECT PROPERTIES 15% ”CASH FLOW FROM OUR CASH FLOW PROPERTY PORTFOLIO ENABLES US TO CARRY UP TO 15% OF PROPERTY VALUE IN BUILDING RIGHTS AND PROJECT DEVELOPMENT” CASH FLOW PROPERTIES BENEFITS 85% 1. PROJECT DEVELOPMENT IS CONDUCTED UNDER OWN MANAGEMENT 2. PROJEC
Slide 16: Sustainability
SUSTAINABILITY WORK ENVIRONMENT FOR EMPLOYEES, CORPORATE GOVERNANCE TENANTS AND SUPPLIERS COMMUNICATION / TRANSPARENCY DIVERSITY AND EQUALITY ANTI-CORRUPTION CORPORATE CULTURE AND LEADERSHIP SET REQUIREMENTS AND FOLLOW UP OF SUPPLIERS, TENANTS SATISFIED EMPLOYEES AND PARTNERS GREEN FINANCING HUMAN R
Slide 17: Property Portfolio
PROPERTY PORTFOLIO [] Aokaler sore git shillnad.
Slide 18: Property Portfolio Overview
PROPERTY PORTFOLIO OVERVIEW PROPERTY PORTFOLIO OVERVIEW • Stendörren has a property portfolio of SEK 8,754m, with a property yield of 5.6%1 as per 30 June 2019 • Rental value2 of SEK 592m with an economic occupancy rate of 87% as per 30 June 2019 • Top 10 tenants account for 26% of the rental income
Slide 19: Stendörren's Property Portfolio
STENDÖRREN’S PROPERTY PORTFOLIO 79% WITHIN THEGREATER STOCKHOLM REGION Greater Stockholm Mälardalen 19 Investor Presentation
Slide 20: Diversified Tenant Base
DIVERSIFIED TENANT BASE LARGEST TENANTS AS PER Q2 2019 LEASE MATURITY BY RENTAL INCOME Rental Rental Share of Lease SEKm # Tenant income, area, total rental maturity, 160 300 SEKm th. sq.m. income years 284 140 151 250 Coop Logistics AB 52 129 10% 3.5 120 142 Exploria AB 17 18 3% 8.5 100 200 178 185
Slide 21: Stendörren Property Portfolio
STENDÖRREN PROPERTY PORTFOLIO VAST MAJORITY OF THE PROPERTIES LOCATED IN THE GREATER STOCKHOLM REGION BOOK VALUE, BOOK VALUE # OF LETTABLE AREA, REGION NOI, SEKm OCCUPANCY SEKm /SQ.M. PROPERTIES ’000 SQ.M. Stockholm 6,939 (79%) 13,522 328 78 88% 513 Greater Stockholm Region Uppsala 281 (3%) 17,580 1
Slide 22: Financial Information
FINANCIAL INFORMATION [] Aokaler sore git shillnad.
Slide 23: Key Metrics
KEY METRICS GROWING PROPERTY PORTFOLIO DEBT SERVICE CAPACITY SOLID BALANCE SHEET Property value Net operating income Equity ratio SEKm SEKm NOI LTM¹ SEKm Equity Equity ratio 8,476 8,754 385 355 36% 35% 332 34% 35% 32% 32% 6,494 6,868 299 309 316 30% 32% 5,380 5,817 5,880 284 28% 2,780 2,903 246 2,39
Slide 24: Earnings Capacity
EARNINGS CAPACITY COMMENTS 12-MONTH RUN RATE • As of 30 June 2019 the property portfolio consisted of 122 properties Earnings capacity SEKm with a lettable area of 721,000 sq.m. Rental income 592 • 12 month rolling NOI for the portfolio amounts to approximately SEK Property expenses1 -156 436m Net o
Slide 25: Debt Funding
DEBT FUNDING DEBT FUNDING OVERVIEW LOAN MATURITY INTEREST FIXING1 0% SEKm SEKm 1,400 3,000 25% 1,200 2,500 1,000 2,000 800 1,500 600 1,000 75% 400 200 500 0 0 2019 2020 2021 2022 2023 >2023 2019 2020 2021 2022 2023 >2023 Bank debt Bonds Seller notes • Total interest bearing debt amounts to • Stendör
Slide 26: Balance Sheet Overview
BALANCE SHEET OVERVIEW BALANCE SHEET KEY METRICS 2019-06-30 SEKm Metric Data Investment properties 8,754 Property value, SEKm 8,754 Net debt, SEKm 5,297 Other non-current assets 234 Equity / Total assets 32% Total non-current assets 8,988 LTV 59% Other current receivables 113 Cash and bank balances
Slide 27: Market Overview
MARKET OVERVIEW [] Aokaler sore git shillnad.
Slide 28: Logistics
LOGISTICS STRONG UNDERLYING MARKET TURNOVER LOGISTIC PROPERTIES1 • 86% of Sweden’s population and businesses are situated in the urban areas, SEKbn with Stockholm metropolitan area accounting for approximately 2.3m 18 16 • Out of the most attractive logistics locations Stockholm stands out as the 15
Slide 29: Greater Stockholm in Focus
GREATER STOCKHOLM IN FOCUS STRONG MARKET REGION PRIME LOGISTICS RENT • The Greater Stockholm area has a current population of 2.3m and is SEKm/sq.m. the fastest growing capital in Europe, with its population expected to 1,400 1,200 grow by 11% by 2020 1,200 1,000 900 850 800 • Stockholm benefits fro
Slide 30: Concluding Remarks
CONCLUDING REMARKS [] Aobaler sore git skillaad
Slide 31: Concluding Remarks
CONCLUDING REMARKS STRONG FINANCIALS COUPLED WITH ESTABLISHED MARKET POSITION 1 Diversified tenant base (more than 800 tenants with 4.1 years to maturity) 2 Substantial potential for continued pick-up in rent as leases are renegotiated (>20% ytd per Q2 2019) 3 Active in the Greater Stockholm and Mäl
Slide 32: Risk Factors
RISK FACTORS [] Aokaler sore git shillnad.
Slide 33: Risk Factors
RISK FACTORS In this section, material risk factors are illustrated and discussed, including the Issuer’s economic and market risks, business risks, legal and regulatory risks, as well as structural risks relating to the Capital Securities, risks relating to the Capital Securities and risks related
Slide 34: Risk Factors (cont'd)
RISK FACTORS (CONT’D) For example, as per the end of 2018 an interest sensitivity test indicated that, if there would be an increase in STIBOR amounting to 0.5 per cent., such change would have an impact of approximately SEK 20 million in increased interest expenses (before taxes) for the Group on a
Slide 35: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 1.1.4 Geographical risks The supply and demand for properties and the return on property investments varies between different geographical markets and may develop differently within geographical markets. The Issuer’s Properties are located in the Greater Stockholm area (Storsto
Slide 36: Risk Factors (cont'd)
RISK FACTORS (CONT’D) Furthermore, as the Group has and is continually acquiring companies, the Group is exposed to integration risks due to the high number of acquisitions of new companies. The integration risks could, for example consist of increased merging costs, organisational costs, risks rela
Slide 37: Risk Factors (cont'd)
RISK FACTORS (CONT’D) property transactions below). Furthermore, any environmental contamination or environmental impact from operations undertaken on any of the properties owned by any Group Company is primarily the responsibility of the tenant that performs that operation although there will alway
Slide 38: Risk Factors (cont'd)
RISK FACTORS (CONT’D) As the Issuer’s business operations mainly consists of owning and managing light industrial and logistics properties in which the tenants are conducting business, the risk for environmental issues could be higher than compared to other types of commercial properties. Risk ratin
Slide 39: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 1.2.10 Reputational risk The Issuer is dependent on its good reputation. The Issuer’s reputation is important from many different aspects. It is for example important in relation to new and current tenants. As an example, operative problems or maintenance problems could damage
Slide 40: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 1.2.13 Risks relating to inadequate insurance The Group has insured its operations against usual losses and/or potential liability in relation to third party claims. Certain types of losses and/or damages are generally not covered by insurance policies due to such losses being
Slide 41: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 1.3.3 Changes in value of Properties The Issuer’s Properties are reported at fair value (verkligt värde) in the balance sheet and with changes in value in the profit and loss account. Different factors, for example changes in cash flow or the markets profitability requirements,
Slide 42: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 1.4 Legal and regulatory risks relating to the Issuer 1.4.1 New amended legislation The Issuer’s business is regulated by and must be conducted in accordance with several laws and regulations, (inter alia the Swedish Companies Act (aktiebolagslagen (2005:551)), the Swedish Land
Slide 43: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 1.4.3 Accounting risks The International Accounting Standards Board (“IASB”) published the discussion paper “Financial Instruments with Characteristics of Equity” in June 2018 (the “Discussion Paper”). The Discussion Paper sets out the IASB’s preferred approach to classificatio
Slide 44: Risk Factors (cont'd)
RISK FACTORS (CONT’D) In the event of a shortfall of funds on an Issuer Winding-up or Issuer Re-construction, there is a real risk that an investor in the Capital Securities will lose all or most of its investment and will not receive any return of the principal amount or any accrued and unpaid inte
Slide 45: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 2.1.4 The Issuer is not (and nor is any other Group Company) prohibited from pledging assets for other debt There is no restriction in the Terms and Conditions on the amount or type of assets that the Issuer or a Group Company can pledge, or otherwise use as security, for other
Slide 46: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 2.1.7 Redemption of the Capital Securities Upon the occurrence of an Accounting Event, a Substantial Repurchase Event, a Tax Event or a Withholding Tax Event the Issuer may redeem the Capital Securities in whole, but not some only, at any time together with any Deferred Interes
Slide 47: Risk Factors (cont'd)
RISK FACTORS (CONT’D) 2.3 Other risks relating to the capital securities 2.3.1 Holder representation and majority decisions by the Holders Under the Terms and Conditions, the Agent represents each Holder in all matters relating to the Capital Securities. The Terms and Conditions contain provisions t
Slide 48: Appendix
APPENDIX [] Aokaler sore git shillnad.
Slide 49: Equity Metrics Development
EQUITY METRICS DEVELOPMENT SEKm SEK/share 3,000 120 KEY METRICS Q2 2019 Q2 2018 Q2 2017 2,500 100 Share price, SEK 118.0 86.0 68.5 Book equity/share, SEK 103.1 90.0 76.3 2,000 80 EPRA NNNAV/share, SEK 109.0 94.3 77.6 Cash flow/share, SEK 1.83 11.89 3.94 1,500 60 Market cap, SEKm 3,322 2,421 1,892 1,
Slide 50: Income Statement
INCOME STATEMENT INCOME STATEMENT COMMENTS 2019-06-30 2017 2018 LTM Q2 2019 • LTM Q2 2019, rental income amounted to SEK Rental income 453 537 585 585m while the NOI amounted to SEK 387m Total income 453 537 585 • Profit from property management amounted to Operating expenses SEK 168m with financial
Slide 51: Balance Sheet
BALANCE SHEET BALANCE SHEET COMMENTS 2019-06-30 2017 2018 Q2 2019 • As of 30 June 2019, total assets amounted to Assets SEK 9,197m Intangible assets 1 6 5 Investment properties 6,494 8,476 8,754 • At the end of the period, total equity amounted to Land leases 225 SEK 2,903m, corresponding to an equi
Slide 52: Cash Flow
CASH FLOW CASH FLOW STATEMENT COMMENTS 2019-06-30 2017 2018 LTM Q2 2019 • LTM Q2 2019 cash flow from operating activities Profit from property management 161 174 168 amounted to SEK -135m Adjustments for non-cash flow affecting items 11 16 34 Taxes paid 2 -15 -7 • Cash flow from investment activitie
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