Swiss Prime Site Ag · SIX:SPSN
Swiss Prime Site — FY2021 Earnings Presentation
44 slides from Swiss Prime Site's earnings presentation, Feb 17, 2022
Slide 1: Results Financial Year 2021
RESULTS FINANCIAL YEAR 2021 ZURICH, 17 FEBRUARY 2022
Slide 2: Agenda
AGENDA 1 HIGHLIGHTS FINANCIAL YEAR 2021 2 KEY RESULTS AND PROJECT PIPELINE 3 FINANCIALS 4 EXPECTATIONS 2022 AND OUTLOOK Zurich | 17 February 2022 Results Financial Year 2021 2
Slide 3: Investment Platform 2021: outperformance on all levels
SUMMARY Investment Platform 2021: outperformance on all levels SHARES BONDS FUNDS SPIF THIRD-PARTY WINCASA MANDATES #7 listed real estate Straight bonds, Non-listed funds for Real estate services for Swiss Prime Investment company in the convertible bonds and qualified Swiss investors; Asset managem
Slide 4: Results exceed set targets (1/2)
HIGHLIGHTS FINANCIAL YEAR 2021 Results exceed set targets (1/2) MAJOR GROWTH IN OPERATING INCOME SIGNIFICANT INCREASE IN RENTAL INCOME ▪ Rose by +5.1%* to CHF 744.9 million ▪ Rental income rose by 3.1%* (target: +2.5%) to CHF 426.7 ▪ Positive contribution from both segments million (L4L: 0.5%) ▪ Vac
Slide 5: Results exceed set targets (2/2)
HIGHLIGHTS FINANCIAL YEAR 2021 Results exceed set targets (2/2) SIGNIFICANT RISE IN PROFIT STRONG BALANCE SHEET AND FFO ▪ Company profit rose to CHF 507.4 million (25.2%*) ▪ Equity ratio rose to 48.3%, LTV reduced to 40.2% ▪ CHF 6.68 per share [CHF 5.33 per share] (net 39.3%) ▪ EPRA NTA rose to CHF
Slide 6: We create living spaces
WE CREATE LIVING SPACES
Slide 7: Agenda
AGENDA 1 HIGHLIGHTS FINANCIAL YEAR 2021 2 KEY RESULTS AND PROJECT PIPELINE 3 FINANCIALS 4 EXPECTATIONS 2022 AND OUTLOOK Zurich | 17 February 2022 Results Financial Year 2021 7
Slide 8: Real Estate: rental success and attractive transactions
KEY RESULTS Real Estate: rental success and attractive transactions NEWLY LET AND RE-LET SPACES ▪ Around 170 000 m2 [FY 2020: 85 000 m2] of office and retail in thousand m2 space newly let or re-let; of which 23 000 m2 reduction in PANDEMIC vacancies 200 ▪ Google as sole tenant of Müllerstrasse in Z
Slide 9: Attractive portfolio: high revaluation gains and low vacancies
KEY RESULTS Attractive portfolio: high revaluation gains and low vacancies PROPERTY PORTFOLIO 2020* 2021 VACANCY RATE in CHF million in % (Group) Total 12 322.6 12 793.5 9 7.4 8 6.6 6.7 6.4 of which projects | developments 829.5 1 006.9 7 6.1 5.5 5.2 5.4 5.1 185 184 6 4.7 4.8 4.7 4.7 4.7 4.6 Propert
Slide 10: Portfolio focused on centres, office and commercial use
KEY RESULTS Portfolio focused on centres, office and commercial use Southern Switzerland 1% Eastern REGIONS Switzerland Western Switzerland 1% CHF 12.8 bn 184 1.7 million m 2 Central as at 31 December 2021 Property portfolio # of properties Rental floor space Switzerland 4% 6% Berne 9% Zurich 46% No
Slide 11: Major tenants and balanced lease expiry structure of contracts
KEY RESULTS Major tenants and balanced lease expiry structure of contracts MAJOR TENANTS MAJOR OFFICE TENANTS LEASE EXPIRY OF RENTAL CONTRACTS in % rental income as at 31/12/2021 in % rental space as at 31/12/2021 as at 31/12/2021 Swisscom 7% ▪ WAULT 5.6 years Swiss Post 5% ▪ 2022: ~80% already exte
Slide 12: Significant expansion of Asset Management
KEY RESULTS Significant expansion of Asset Management ASSETS UNDER MANAGEMENT Assets under management increased organically by 20% from in CHF billion CHF 3.0 billion to CHF 3.6 billion: ~ 6.0 SPIF Real Estate Switzerland (AuM CHF 3.0 billion) ▪ Two capital increases of around CHF 340 million Swiss
Slide 13: Acquisition of Akara Group: expansion of product range
KEY RESULTS Acquisition of Akara Group: expansion of product range ▪ Acquisition of the owner-managed real estate asset manager Akara ▪ AuM: CHF 2.3 billion in assets under management (growth 2021: CHF ~ 0.7 billion) ▪ Signing: 15 December 2021 ▪ Closing: 10 January 2022 ▪ Customers: rapidly expandi
Slide 14: Asset management: attractive asset-light business model
KEY RESULTS Asset management: attractive asset-light business model Swiss Prime Investment Foundation (SPIF) ▪ SPIF Real Estate Switzerland: CHF 3.0 billion ▪ SPIF Living+ Europe launched in 2021 Real estate funds (open- and closed-ended) ▪ Swiss Prime Site Solutions IF Commercial: CHF 220 million ▪
Slide 15: Sustainability: our responsibility
KEY RESULTS Sustainability: our responsibility STAKEHOLDERS EMPLOYEES ▪ Rent waivers of CHF -4.8 million granted in 2021 ▪ Employee survey with high response rate (80%) ▪ Conducted 3rd stakeholder dialogue and positive results ▪ Code of Conduct for Suppliers and Environmental Policy ▪ Focus on the s
Slide 16: Green Bond investments with CO2 savings
KEY RESULTS Green Bond investments with CO2 savings GREEN BOND FUNDS USE 2021 ▪ Green Bond Report: in CHF million publication of the first report on the use of Green Bond funds CHF 569.5 million totalling CHF 600 million 30.5 600.0 563.5 5.2 0.8 ▪ Allocated funds: more than 94% of funds have already
Slide 17: We create living spaces
WE CREATE LIVING SPACES
Slide 18: Project pipeline: significant potential through densification and landbanking
PROJECT PIPELINE Significant potential through densification, utilisation and landbanking PROJECT PIPELINE ▪ Completed projects: projects completed totalling in CHF million around CHF 700 million; target rental income per annum of around CHF 30 million. Reserves ~500 ▪ Projects under construction: p
Slide 19: Scheduled projects under construction with high levels of pre-letting
PROJECT PIPELINE Scheduled projects under construction with high levels of pre-letting Tertianum Stücki Park I+II Alto Pont-Rouge Tertianum Müllerstrasse Tertianum Richterswil Basel Lancy Paradiso Zurich Olten Construction Construction status scheduled scheduled scheduled scheduled scheduled started
Slide 20: Planned projects with attractive uses
PROJECT PIPELINE Planned projects with attractive uses JED new build Route de Meyrin 49 Poststrasse maaglive Rheinstrasse Dreispitz Mitte Schlieren Geneva Uster Zurich Augst Münchenstein Design plan/building and BZO Design plan final Zone plan authorised District plan process BZO District plan final
Slide 21: We create living spaces
WE CREATE LIVING SPACES
Slide 22: Agenda
AGENDA 1 HIGHLIGHTS FINANCIAL YEAR 2021 2 KEY RESULTS AND PROJECT PIPELINE 3 FINANCIALS 4 EXPECTATIONS 2022 AND OUTLOOK Zurich | 17 February 2022 Results Financial Year 2021 22
Slide 23: Swiss Prime Site capital management
FINANCIALS Swiss Prime Site capital management CAPITAL MANAGEMENT CAPITAL RECYCLING ▪ Balance sheet structure: optimisation of ▪ Market environment: leveraging current market capital structure using clearly defined opportunities to sharpen portfolio focus (prime capital management principles OPTIMIS
Slide 24: Improve financial agility and strengthen balance sheet flexibility
FINANCIALS Improve financial agility and strengthen balance sheet flexibility PRINCIPLES 1 Balanced mix of 2 Flexibility 3 Financing costs 4 Homogeneity – 5 Refinancing 6 Best-in-class IR equity and borrowed by diversifying at the lower end of bank/capital market risks – minimise or for all investor
Slide 25: Sustainability-linked credit facilities totalling CHF 2.6 billion signed
FINANCIALS Sustainability-linked credit facilities totalling CHF 2.6 billion signed CHF 1.3 billion syndicated sustainability-linked credit facility ▪ Tenor: 6 years with extension option (1 year) Agent ▪ Credit margin linked to LTV and ISS ESG rating Amount CHF 2.6 billion Borrower Swiss Prime Site
Slide 26: Moody's assigns A3 rating with a stable outlook
FINANCIALS Swiss Prime Site: Moody’s assigns A3 rating with a stable outlook Swiss Prime Site AG: long-term issuer rating A3 with stable outlook Rating justification ▪ High quality real estate portfolio of CHF 12.8 Mrd. in central business locations with good diversification of types of use A3/stabl
Slide 27: We create living spaces
WE CREATE LIVING SPACES
Slide 28: Strong results financial year 2021 (1/2)
FINANCIALS Strong results financial year 2021 (1/2) OPERATING INCOME OPERATING EXPENSES in CHF million in CHF million 792.9 6.8 744.9 461.5 12.8 Other 42.4 72.4 AL 13.1 6.2 708.9 18.2 Asset management 379.7 389.2 AL 81.9 110.6 119.5 Retail 42.4 43.9 Other operating expenses 13.1 110.6 15.8 15.8 16.4
Slide 29: Strong results financial year 2021 (2/2)
FINANCIALS Strong results financial year 2021 (2/2) EBIT AND EBIT MARGIN ( EXCLUDING REV AL U AT IO NS ) PROFIT (EXCLUDING REV AL U AT IO N S AND ALL DEFERRED T AXES ) in CHF million and % in CHF million 558.9 476.6 396.6 352.5 289.5 271.5 53.2% 49.7% +12.5% 2020 2020 2021 +6.6% 2020 2020 2021 repor
Slide 30: Increase in rental income of 3.1% (L4L 0.5%)
FINANCIALS Increase in rental income of 3.1% (L4L 0.5%) CHANGE IN GROUP NET RENTAL INCOME ▪ Adjusted for Tertianum (January and February in CHF million 2020), increase in rental income of 3.1% or 424.7 COVID-19* 2.1 1.9 5.6 426.7 CHF 13.0 million 413.7 4.0 2.0 -11.0 -2.6 Δ Existing Modifications | P
Slide 31: Growth in property portfolio due to prime locations
FINANCIALS Growth in property portfolio due to prime locations PROPERTY PORTFOLIO GROWTH (FAIR VALU E) ▪ Total 184 properties (end of 2020: 185) in CHF million with a total value of CHF 12.8 billion Valuation effects 12 793.5 ▪ Revaluation gains of CHF 318.8 million or 2.6% of the portfolio value co
Slide 32: Extension of duration with lower interest charges and improved LTV
FINANCIALS Extension of duration with lower interest charges and improved LTV KEY BALANCE SHEET FIGURES 2021 FINANCING STRUCTURE in CHF million 5 164 5 148 CHF 5.0 0.75% 12.2x 540 39.3% secured billion Average Net debt/ 16.4% 1 702 Credit facilities CHF 5.1 Net LTV Net debt interest rate EBITDA 1 90
Slide 33: Significant increase in equity ratio and strong ROE of 8.2%
FINANCIALS Significant increase in equity ratio and strong ROE of 8.2% CHANGE IN SHAREHOLDERS’ EQUITY ▪ Strong increase in equity despite dividend in CHF million payout of CHF 3.35 per share in March 2021 (total CHF 254.5 million) Profit Miscellaneous 6 338.7 +0.2 ▪ Increase in the equity ratio of 0
Slide 34: Improvement of FFO and EPRA NTA per share
FINANCIALS Improvement of FFO and EPRA NTA per share FUNDS FROM OPERATIONS (FFO) EPRA NTA (NET TANGIBLE ASSETS) in CHF per share in CHF per share Calculation FFO I Operating result (EBIT) 100.84 + Depreciation on tangible & intangible assets 96.26 3.96 - Revaluation from invest. properties - Result
Slide 35: We create living spaces
WE CREATE LIVING SPACES
Slide 36: Income statement – indicative IFRS reconciliation
FINANCIALS Income statement – indicative IFRS reconciliation INCOME STATEMENT SWISS PRIME SITE GROUP ▪ Conversion from 1st half-year in CHF million 2021 IFRS 15 IFRS 16 IAS 19 IAS 16 2021 2022 FER POC Leases Employee benefits Ownder- occupied IFRS ▪ IFRS offers stakeholders a more properties compreh
Slide 37: Balance sheet – indicative IFRS reconciliation
FINANCIALS Balance sheet – indicative IFRS reconciliation BALANCE SHEET – SWISS PRIME SITE GROUP in CHF million 2021 FER IFRS 16 IAS 19 IAS 16 2021 IFRS Leases Employee Owner- benefits occupied properties Current assets 529.5 - 529.5 Non-current assets 12 600.9 293.2 80.2 12 974.3 Investment propert
Slide 38: Agenda
AGENDA 1 HIGHLIGHTS FINANCIAL YEAR 2021 2 KEY RESULTS AND PROJECT PIPELINE 3 FINANCIALS 4 EXPECTATIONS 2022 AND OUTLOOK Zurich | 17 February 2022 Results Financial Year 2021 38
Slide 39: We create living spaces
WE CREATE LIVING SPACES
Slide 40: Market overview
EXPECTATIONS 2021 AND OUTLOOK Market overview ECONOMY RATES / INFLATION REAL ESTATE ▪ GDP: SECO is forecasting growth ▪ SNB: the Swiss National Bank is ▪ Transaction market: signalling of 3.0% for 2022 and a fall in maintaining its expansionary continuing yield compression unemployment monetary poli
Slide 41: Guidance
EXPECTATIONS 2021 AND OUTLOOK Guidance EXPECTATIONS FINANCIAL YEAR 2022 AuM: CHF 19–20 billion Vacancies: < 4.6% Increase in FFO I: 3–5%* LTV: < 40% MEDIUM-TERM OBJECTIVES PROPERTY SERVICES Portfolio Volume of around CHF 12–13 billion Assets under management CHF > 10.0 billion Vacancies 2022+ 4% in
Slide 42: Proposals to the Annual General Meeting
EXPECTATIONS 2021 AND OUTLOOK Proposals to the Annual General Meeting ELECTIONS RELOCATION ▪ Election of Brigitte Walter (1959, D) as new ▪ Relocation of Swiss Prime Site AG headquarters from independent member of the Board of Directors and Olten to Zug member of the Audit and Investment Committee ▪
Slide 43: Analyst and investor contact
Analyst and investor contact Media contact MARKUS WAEBER MLADEN TOMIC Investor Relations Media Relations Head Group Investor Relations Head Group Communications Business: +41 58 317 17 64 Business: +41 58 317 17 42 Mobile: +41 79 566 63 34 Mobile: +41 79 571 10 56 markus.waeber@sps.swiss mladen.tomi
Slide 44: Disclaimer
DISCLAIMER Details published in this presentation are for information purposes only and should not form the basis for any investment decisions or recommendations to purchase Swiss Prime Site AG securities. The content of this presentation was diligently researched and compiled. However, Swiss Prime