Toivo Group Oyj · OMXHEX:TOIVO
Toivo Group Oyj — Investor Presentation (February 2022)
25 slides from Toivo Group Oyj's investor presentation, February 2022
Slide 1: Toivo: 3-in-1 Residential Company
TOIVO 3-in-1 Residential Company FEBRUARY 2022 STRICTLY PRIVATE & CONFIDENTIAL
Slide 2: Disclaimer
Disclaimer The information in this presentation may include “forward-looking statements.” These statements may not be based on historical facts, but are statements about future expectations. When used in this presentation, the words “aims”, “anticipates”, “assumes”, “believes”, “could”, “estimates”,
Slide 3: Meeting you today
Meeting you today MARKUS MY LLY MÄKI SAMULI NIEMELÄ CEO CFO • M. Sc. in Business • M. Sc. in Business • Founder of Toivo Group • CFO at Toivo Group since • 12 years of experience as an 2019 investor, builder, project • 11 years of financial developer and manager in the experience, previously Finnish
Slide 4: Toivo Introduction and Investment Highlights
TOIVO INTRODUCTION AND INVESTMENT HIGHLIGHTS
Slide 5: Toivo's portfolio
i] Toivo’s portfolio TOIVO'S oe hrerage age 1 yeor BUSINESS MODEL Fy Small and efficient —» Average apartment size 42 m? xe) Helsinki, Turku, Tampere “=> 98% of apartments Be Affordable —> Average rent 825€/month 3.OWNERSHIP 2) High occupancy rate => ~99% — Low maintenance cost Be + 2.4€/m? 2.CONSTR
Slide 6: Toivo's business model enables margin contribution from three different sources
TOIVO’S BU SIN ESS MOD EL EN ABLES MAR GIN C ON TR IBUTION FR OM TH R EE D IFFER ENT SOU R C ES 1. DEVELOPMENT 2. CONSTRUCTION 3. OWNERSHIP Plot procurement Planning guidance Rental Zoning development Construction permit acquirement Management Product development Construction contracting Maintenance
Slide 7: Optimized property development process
1 OPTIMIZED PROPERTY DEVELOPMENT PROCESS SOURCES OF ~10-16% DEVELOPMENT MARGIN Property development is Structured approach in sourcing Detailed planning enabling cost a complex project with the best development opportunities control and margin optimization several stakeholders 20 Plot Authorities Se
Slide 8: Property development key figures
1 PROPERTY DEVELOPMENT KEY FIGURES KEY FIGURES 1,2321) 444 4) 7532) total apartments developed 1773) ~28% average development + 5) construction margin ~2,000 PROPERTY 6) PLANNING CONSTRUCTION OWNERSHIP apartments in pipeline DEVELOPMENT ZONING PERMIT CONSTRUCTION OWNERSHIP 1-3 YRS 1 YR 1 YR 50+ YRS
Slide 9: Experienced team driving value creative construction process
EXPERIENCED TEAM DRIVING VALUE CREATIVE CONSTRUCTION 2 PROCESS SOURCES OF ~10-16% CONSTRUCTION MARGIN SELECTED EXAMPLES OF THE TOIVO TEAM VALUE CREATIVE CONSTRUCTION PROCESS ~17,000 Developed apartments Markus Myllymäki Urho Myllymäki Heikki Myllymäki Extensive industry expertise Deep-rooted partner
Slide 10: Examples of Toivo development projects
2 EXAMPLES OF TOIVO DEVELOPMENT PROJECTS Kartanonlehto & Piha Toivo Studios Wood, Teracce & Rock Nalle • Location: Espoo • Location: Espoo • Location: Espoo • Location: Kirkkonummi • # of apartments: 127 • # of apartments: 101 • # of apartments: 101 • # of apartments: 92 Uluru Augustus Rupatus & Rat
Slide 11: Modern portfolio with high quality rental
3 MODERN PORTFOLIO WITH HIGH QUALITY RENTAL SOURCES OF STRONG OWNERSHIP MARGIN ATTRACTIVE AND FOCUS ON BEST-IN-CLASS RENTAL AND MARKETING MODERN APARTMENTS AFFORDABLE SMALL & EFFICIENT Average apartment size Average age 1 year Average rent 825€/month ~42m2 ATTRACTIVE MICRO- COMPLEMENTARY LOCATIONS I
Slide 12: Efficient property management
3 EFFICIENT PROPERTY MANAGEMENT OPTIMIZED PROPERTY DEVELOPMENT AND LOW MAINTENANCE FEE ENABLE SIGNIFICANTLY HIGHER RENTAL INCOME TRADITIONAL PLAYERS Toivo takes an active approach to optimise property maintenance Due to relatively high value of properties, there are inefficiencies in the market Digi
Slide 13: Finnish housing market
FINNISH HOUSING MARKET
Slide 14: The Finnish housing market offers an attractive operating environment
THE FINNISH HOUSING MARKET OFFERS AN ATTRACTIVE OPERATING ENVIRONMENT HEALTHY FINNISH HOUSING MARKET ADVANTAGES OF THE FINNISH HOUSING MARKET Strong population growth in the capital region and other Small homes increasingly Unregulated rental market creates an popular efficient operating environment
Slide 15: Toivo's business model is unique in the Finnish market
TOIVO’S BUSINESS MODEL IS UNIQUE IN THE FINNISH MARKET FINNISH MARKET YIELD PROFILE THE TOIVO MODEL IS DIFFICULT TO REPLICATE Requires significant • 3-5 years to complete a development 4.4% 6.3% amount of time project and initialize cash generation 1.3%1) 2.5%1) 3.3%1) Net rental yield of Yield on i
Slide 16: Toivo has a very attractive portfolio compared to traditional real estate players
TOIVO HAS A VERY ATTRACTIVE PORTFOLIO COMPARED TO TRADITIONAL REAL ESTATE PLAYERS Category Business model Develop – Construct – Own Buy & Hold Buy & Hold Average age (years) 1 ~313) >306) Average size (m2) 42m2 2) 56m2 4) 53m2 7) Location split (% in broader Helsinki 98%2) 76%4) 95%8) region1), Turk
Slide 17: Toivo model achieves significantly higher equity efficiency
TOIVO MODEL ACHIEVES SIGNIFICANTLY HIGHER EQUITY EFFICIENCY COMPARED TO TRADITIONAL BUY & HOLD HIGH LEVEL EXAMPLE OF 40M€ EQUITY INVESTMENT Develop – Construct – Own Buy & Hold Illustrative 333M€ Portfolio 100M€ Portfolio 60% LTV 200M€ loan 13.9M€ 4.2M€ rental income rental income ~1,600 ~500 apartm
Slide 18: Financial highlights
FINANCIAL HIGHLIGHTS
Slide 19: Solid financial track record
SOLID FINANCIAL TRACK RECORD OPER ATIN G PR OFIT LON G-TERM N AV C A PITA L EFFIC IEN C Y 28,000 41,169 EURk EURk 31% 1) 20,000 ROE 20213) 15,818 2) 13,489 7,189 4,182 1) 7,705 41% LTV 2021 2019 2020 2021 2022 guidance 2019 2020 2021 1) Unaudited; 2) Audited; 3) Calculated using weighted equity Sour
Slide 20: Strong pipeline for rapid expansion
STRONG PIPELINE FOR RAPID EXPANSION PIPELIN E IN PR IME LOC ATIONS PIPELIN E B Y N U MB ERS LOC ATION A N D STAT U S 1) ~2,000 5% 4% apartments 6) Completed 91% Under construction ~80,000m 1) Helsinki Tampere Turku 2 Train Metro Agreements lettable area §PIPELIN E D EVELOPMENT 114 38% Apartments com
Slide 21: Financial targets, dividend policy & 2022 outlook
FINANCIAL TARGETS, DIVIDEND POLICY & 2022 OUTLOOK FIN A N C IA L TA R GETS A N D D IVID EN D POLIC Y • Fair value of investment properties to reach EUR 500m by end Growth of 2026 • Significant growth in long-term NAV per share annually Capital structure • LTV below 60% • Annual dividend will be low
Slide 22: Appendix
APPENDIX
Slide 23: Income statement
INCOME STATEMENT IFRS EURk 20191) 20202) 20211) Revenue 3,074 4,250 13,574 Profit/loss on fair value of investment properties 2,870 5,627 13,252 Other operating income 0 68 4 Materials and services -666 -858 -8,475 Personnel expenses -531 -654 -1,060 Depreciation, amortization and impairment losses
Slide 24: Balance sheet
BALANCE SHEET A SSET S EQU IT Y A N D LIA B ILIT IES IFRS IFRS EURk 20191) 20202) 2021 1) EURk 2019 1) 20202) 20211) Assets Equity and liabilities Non-current assets Share capital 1,000 1,000 1,000 Investment properties 31,110 57,022 97,649 Subordinated debt 11,079 15,661 16,921 Right-of-use assets
Slide 25: Cash flow statement
CASH FLOW STATEMENT IFRS IFRS EURk 2019 1) 2020 2) 2021 1) EURk 2019 1) 20202) 20211) Cash flow from operations Cash flow from investing Acquisition of investment properties -13,558 -18,361 -34,002 Net Income 3,411 5,127 12,071 Acquisition of tangible assets -55 -192 -28 Adjustm ents: Acquisition of