Samhallsbyggnadsbolaget I Norden Ab Class B · OMXSTO:SBB_B
Samhallsbyggnadsbolaget I Norden Ab Class B — Merger or Acquisition (March 2021)
45 slides from Samhallsbyggnadsbolaget I Norden Ab Class B's merger presentation, Mar 15, 2021
Slide 1: Creating an Even Stronger Social Infrastructure Champion in Europe
CREATING AN EVEN STRONGER SOCIAL INFRASTRUCTURE CHAMPION IN EUROPE 15 March 2021 Skellefteå Perseus 6 – Cultural centre Linköping Adjunkten 2 – Elderly care Sigtuna 2:227 – Pre-school
Slide 2: Disclaimer
DISCLAIMER IN REVIEWING THIS PRESENTATION AND ITS CONTENTS, YOU ARE AGREEING TO ABIDE BY THE TERMS OF THIS DISCLAIMER. THIS PRESENTATION AND ITS CONTENTS ARE BEING MADE AVAILABLE TO EACH RECIPIENT SOLELY FOR ITS INFORMATION AND IS SUBJECT TO AMENDMENT. This presentation has been prepared and issued
Slide 3: A Combination of SBB and Offentliga Hus Has a Compelling Strategic Rationale
A COMBINATION OF SBB AND OFFENTLIGA HUS HAS A COMPELLING STRATEGIC RATIONALE Clear industrial logic – combination of the two largest listed social infrastructure 1 property companies in the Nordics creating an even stronger European champion Enduringly attractive market dynamics – social infrastruct
Slide 4: Key Proposed Terms of the Transaction
KEY PROPOSED TERMS OF THE TRANSACTION ■ Samhällsbyggnadsbolaget i Norden AB’s (“SBB”) public mandatory offer to the shareholders of Offentliga Hus i Norden AB (“Offentliga Hus”) to acquire all common Transaction shares in Offentliga Hus (the “Offer”) ■ Total Offer consideration consists of a combina
Slide 5: Agenda and Indicative Timeline
AGENDA AND INDICATIVE TIMELINE Agenda Indicative timeline of public mandatory offer Preliminary date Event 20 January 2021 ▪ Public mandatory offer announcement 15 March 2021 ▪ Publication of offer document I. Update on SBB pp. 6–25 16 March 2021 ▪ Acceptance period begins 13 April 2021 ▪ Acceptance
Slide 6: I. Update on SBB
I. Update on SBB Borlänge Spännaren 10 – Municipality and department properties
Slide 7: SBB Overview and Key Highlights
SBB OVERVIEW AND KEY HIGHLIGHTS Company snapshot Company snapshot Portfolio book value by country Major city regions ✓ SBB operates in the world’s safest real estate asset class – community service properties in the Nordics where tenants are government-funded and highly regulated Swedish residential
Slide 8: SBB Pillars of Strategy
SBB PILLARS OF STRATEGY Key pillars to deliver attractive returns Portfolio has grown from SEK 23.0bn to SEK 90.2bn over 4 years… GAV (SEKbn) 90.2 79.5 Unique and difficult to replicate SEK 90.2bn and fastest growing 25.2 23.0 long-term relationships with low-risk European social municipalities and
Slide 9: Strong Track-Record of Delivery: EPS, Dividend and Balance Sheet
STRONG TRACK-RECORD OF DELIVERY: EARNINGS PER SHARE, DIVIDEND AND STRONG BALANCE SHEET Delivery first Earnings per share (SEK) ◼ Earnings per share has increased by 210% since 2018 ◼ Dividend per Class A and B shares has increased by 900% since 2017 6.41 ◼ Strong increase in shareholders’ equity per
Slide 10: SBB's Journey to Becoming the Social Infrastructure Champion in Europe
SBB’S JOURNEY TO BECOMING THE SOCIAL INFRASTRUCTURE CHAMPION IN EUROPE Selected company milestones Selected properties Agreements for the sale of 46 SBB launches Vision Pending acquisition of properties for an agreed property 2030 setting clear goals Offentliga Hus to create value exceeding SEK 1bn
Slide 11: SBB Creates Value from AAA Assets
SBB CREATES VALUE FROM “AAA” ASSETS Sovereign credit risk exposure in community service segment Operates in the world’s safest real estate asset class Government and government- Sovereign credit rating backed tenants AAA (Stable) AAA (Stable) Aaa (Stable) The first private member ever of Public Hous
Slide 12: Property Management as the Foundation of SBB's Business Model
PROPERTY MANAGEMENT AS THE FOUNDATION OF SBB’S LEADING BUSINESS MODEL WITH A BEST-IN-CLASS TEAM Experienced asset management team Local market presence ✓ Local market presence in all of SBB’s major investment markets ✓ In-house asset mgmt. and property mgmt. capabilities further strengthened through
Slide 13: World-Class Team Unlocking Three Value-Add Strategies
WORLD-CLASS TEAM UNLOCKING FULL POTENTIAL TO SBB’S SHAREHOLDERS THROUGH THREE VALUE-ADD STRATEGIES BEYOND TRADITIONAL PROPERTY MANAGEMENT The Social Infrastructure Champion in Europe Committed to value-add strategies Property Property Real estate development renovations & sustainability transactions
Slide 14: SBB's Leading Business Model: Value-Add Strategies
SBB’S LEADING BUSINESS MODEL: VALUE-ADD STRATEGIES Realising value of Strategic acquisitions Long-term value creation non-core/mature assets Maximising Value-add shareholder strategies value Real estate transactions Property development Property renovations & sustainability Real estate transactions
Slide 15: Markets Yet to Appreciate SBB's Business Model
MARKETS ARE YET TO FULLY APPRECIATE THE UNIQUE NATURE OF SBB’S BUSINESS MODEL CAPTURING THE VALUE-ADD STRATEGIES Value creation from value-add strategies (SEKm) FFO uplift from value-add strategies ▪ Applying tax of 10% ▪ Subtracting dividends to hybrids, FFO/share: SEK 2.8 mandatory convertibles, D
Slide 16: Value-Add Strategies: Property Development
SBB’S VALUE-ADD STRATEGIES PROPERTY DEVELOPMENT The Social Infrastructure Champion in Europe Krister Karlsson Deputy CEO and Property Development Manager Industry experience 35 years Property Property Real estate renovations development transactions & sustainability Jenny Asmundsson Head of Public T
Slide 17: Property Development
PROPERTY DEVELOPMENT No. 1 property developer in the Nordic region Utilising building rights to create value throughout the value chain Top Nordic property developers by building rights on own balance sheet (no. of residential units, c. 70 sq.m. per apartment) Project portfolio Sell building rights
Slide 18: Value-Add Strategies: Property Renovations & Sustainability
SBB’S VALUE-ADD STRATEGIES PROPERTY RENOVATIONS & SUSTAINABILITY The Social Infrastructure Champion in Europe Property Property Real estate renovations development transactions & sustainability Strong sustainability delivery 100% renewable electricity2 ✓ SEK +600m ✓ 95% total social impact of to
Slide 19: Property Renovations & Sustainability
PROPERTY RENOVATIONS & SUSTAINABILITY Significant renovations upside potential with a clear ESG focus Significant avg. rental uplift after renovations in residential portfolio Average rent (SEK) per sq.m.: +SEK 421 after renovation4 Energy reduction from renovations average ~28%1 Stockholm prime,
Slide 20: Value-Add Strategies: Real Estate Transactions
SBB’S VALUE-ADD STRATEGIES REAL ESTATE TRANSACTIONS The Social Infrastructure Champion in Europe Property Property Real estate renovations development transactions & sustainability Oscar Lekander Carl Lundh Mortimer Business Development Project Development Manager Manager Industry experience Industr
Slide 21: Real Estate Transactions
Frequent acquisitions and excellent capital recycling REAL ESTATE TRANSACTIONS with flexible approach to realise maximal value Clear M&A strategy in the world’s safest real estate class Significant transaction volume since inception Yearly transaction volume (SEKbn) Strategic acquisitions 64.5 Struc
Slide 22: Value-add strategies in practice: Tellus 1
WORLD-CLASS TEAM UNLOCKING FULL POTENTIAL TO SBB’S SHAREHOLDERS THROUGH THREE VALUE-ADD STRATEGIES BEYOND TRADITIONAL PROPERTY MANAGEMENT The Social Infrastructure Champion in Europe Committed to value-add strategies Property Property Real estate development renovations & sustainability transactions
Slide 23: Strong Management Team and Board of Directors
STRONG MANAGEMENT TEAM AND BOARD OF DIRECTORS Active and hands-on management team with exceptional experience and track-record 25 years Management team’s average years of experience Ilija Batljan Lars Thagesson Krister Karlsson Eva-Lotta Stridh CEO and Founder Deputy CEO and COO Deputy CEO and Prope
Slide 24: Overview of the SBB Class B Share
OVERVIEW OF THE SBB CLASS B SHARE SBB’s delivery on its promises and strong growth journey has been reflected in strong share price performance Share price (SEK) EPRA NRV1 (SEKbn) 35 40,000 COVID-19 related EPS CAGR 2017-2020 +86% market turbulence 30 NRV CAGR 2017-2020 +74% 35,000 Dividend CAGR 201
Slide 25: Targets
TARGETS Objective SBB’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 policy Income from Profit from property mgmt1 property development Growth Target Target 31 Dec 2020 Target 3
Slide 26: II. Strategic Rationale
II. Strategic rationale Borlänge Spännaren 10 – Municipality and department properties
Slide 27: Offentliga Hus – The Partner of Choice
OFFENTLIGA HUS – THE PARTNER OF CHOICE Company snapshot Portfolio book value by country Major city regions ✓ Offentliga Hus’ portfolio consists of properties in the world’s safest real estate asset class – community service properties in Sweden ✓ Present in ~70 municipalities with focus on high valu
Slide 28: Property Portfolio of Community Service Properties with AAA Tenants
A PROPERTY PORTFOLIO OF ATTRACTIVE COMMUNITY SERVICE PROPERTIES WITH STABLE CASH FLOWS FROM "AAA" TENANTS Sovereign credit risk among top 10 tenants Selected properties from portfolio Contracted annual Tenants Category Credit rating2 rental income (%) 1 Corporation BBB 7.2% Backed by AAA Government
Slide 29: A Combination of SBB and Offentliga Hus Has a Compelling Strategic Rationale
A COMBINATION OF SBB AND OFFENTLIGA HUS HAS A COMPELLING STRATEGIC RATIONALE Clear industrial logic – combination of the two largest listed social infrastructure 1 property companies in the Nordics creating an even stronger European champion Enduringly attractive market dynamics – social infrastruct
Slide 30: Combined Portfolio: Creating an Even Stronger European Champion
1 CLEAR INDUSTRIAL LOGIC – COMBINATION OF THE TWO LARGEST LISTED SOCIAL INFRASTRUCTURE PROPERTY COMPANIES IN THE NORDICS CREATING AN EVEN STRONGER EUROPEAN CHAMPION COMBINED PORTFOLIO: CREATING AN EVEN STRONGER EUROPEAN CHAMPION IN SOCIAL INFRASTRUCTURE GAV (SEKbn) 152.0 The Social Infrastructure Ch
Slide 31: Community Service Properties Offer Unique Characteristics
2 ENDURINGLY ATTRACTIVE MARKET DYNAMICS – SOCIAL INFRASTRUCTURE PROPERTY SEGMENT WITH HIGHLY FAVOURABLE MARKET FUNDAMENTALS CONTINUING TO PRESENT ATTRACTIVE AND FALLING YIELDS AT VERY LOW RISK COMMUNITY SERVICE PROPERTIES OFFERS UNIQUE CHARACTERISTICS: VERY LOW RISK ASSET CLASS SUPPORTED BY HIGH DEM
Slide 32: Combined Portfolio Gains Increased Scale and Geographical Coverage
3 PORTFOLIO COMPLEMENTARITY BENEFITS – STRENGTHENED FOOTPRINT IN SWEDEN WITH PORTFOLIO COMPLEMENTARITY IN LOCATIONS AND TENANTS COMBINED PORTFOLIO GAINS INCREASED SCALE AND GREATER GEOGRAPHICAL COVERAGE SBB Offentliga Hus SBB + Offentliga Hus Other Other 6% Other 7% 17% Critical scale achieved in Re
Slide 33: Combined Portfolio Provides Clear Focus on Low Risk Community Service Sector
3 PORTFOLIO COMPLEMENTARITY BENEFITS – STRENGTHENED FOOTPRINT IN SWEDEN WITH PORTFOLIO COMPLEMENTARITY IN LOCATIONS AND TENANTS COMBINED PROPERTY PORTFOLIO PROVIDES A CLEAR FOCUS ON THE VERY LOW RISK COMMUNITY SERVICE SECTOR Combined portfolio overview Tenant turnover in community service properties
Slide 34: Synergies Driving Shareholder Return
4 SIGNIFICANT VALUE CREATION POTENTIAL – UNLOCKING FULL VALUE OF OFFENTLIGA HUS’ PORTFOLIO THROUGH LEADING PLATFORM FOR ACTIVE PROPERTY MANAGEMENT AND VALUE-ADD STRATEGIES: DEVELOPMENT, RENOVATIONS & SUSTAINABILITY AND TRANSACTIONS, IN ADDITION TO MEANINGFUL OPERATIONAL AND FINANCIAL SYNERGIES SYNER
Slide 35: Aligned Sustainability Frameworks, Accelerating Environmental Initiatives
5 STRATEGIC SUSTAINABILITY FIT – ALIGNED SUSTAINABILITY FRAMEWORKS, ACCELERATING ENVIRONMENTAL INITIATIVES TOWARDS BECOMING THE WORLD’S MOST SUSTAINABLE PROPERTY COMPANY ALIGNED SUSTAINABILITY FRAMEWORKS, ACCELERATING ENVIRONMENTAL INITIATIVES TOWARDS A MORE SUSTAINABLE WORLD Vision 2030 – to become
Slide 36: Strong Profit with Financial Upside
STRONG PROFIT WITH FINANCIAL UPSIDE Key portfolio metrics + Portfolio book value (SEKbn) 90.2 9.3 99.5 Lettable area (m sq.m.) 4.0 0.5 4.5 Net initial yield 4.3%1 4.3% 4.3% Economic occupancy 93.6% 93.0% 93.5%9 9.02 5.23 8.69 Lease maturity (years) (effectively perpetual) (effectively perpetual) (ef
Slide 37: Increased Size and Execution on Operational and Financial Targets
INCREASED SIZE AND EXECUTION ON OPERATIONAL AND FINANCIAL TARGETS Key financial metrics + Market cap (SEKm) 43,5171 3,9322 47,449 Enterprise value (SEKm) 100,9703 9,6414 110,611 EPRA NRV (SEKm) 37,505 3,3785 40,883 Passing rent (SEKm) 4,839 603 5,442 Reported earnings capacity Net operating income (
Slide 38: III. Attraction of the Offer
III. Attraction of the Offer Borlänge Spännaren 10 – Municipality and department properties
Slide 39: Overview of the Offer
OVERVIEW OF THE OFFER The Offer at a glance Two alternative means of remuneration 1 2 Valuation of SEK 15.41 per Offentliga Hus share1 Total offer value of c. SEK 3.9bn CASH OFFER SHARE OFFER Implied premium Implied premium Implied premium of 20.9% of 15.9% of 15.0% ▪ The cash offer consists of a ▪
Slide 40: Overview of the Offentliga Hus Share
OVERVIEW OF THE OFFENTLIGA HUS SHARE Overview of Offentliga Hus’ share price development since IPO Share IPO – 17 Dec 2020 Volume 17 Dec – 12 Mar 2021 price Offentliga Hus -4.9% (’000) (SEK) Offentliga Hus +20.9%1 OMX Stockholm +4.2% OMX Stockholm Real Estate PI +1.4% 16.0 Real Estate PI 50,000 45,0
Slide 41: Strong Support Among Offentliga Hus' Major Shareholders
STRONG SUPPORT AMONG OFFENTLIGA HUS’ MAJOR SHAREHOLDERS Major shareholders have already sold their shares to SBB… …representing a majority of the capital and votes Offentliga Hus according to SBB as of 15 March and Holdings as of 28 February 2021 Capital 72.9% # Owner Shares / Votes Verified current
Slide 42: Class D Shares Offer Predictable and Stable Yields
CLASS D SHARES OFFER PREDICTABLE AND STABLE YIELDS Class D share - overview Yield development of SBB’s Class D shares since listing % yield ✓ Class D shares offer investors a predictable and 12% stable yield COVID-19 ✓ SBB value dividend policy for Class D shares of 5x the upside 10% total dividend
Slide 43: The Offer Represents a Valuation at the Higher End of the Peer Universe
THE OFFER REPRESENTS A VALUATION AT THE HIGHER END OF THE PEER UNIVERSE Overview of peers’ valuation in relation to the Offer’s implied P/EPRA NAV P / EPRA NAV 289% +22% 174% 161% 135% 132% 123% 117% 116% 114% 112% 112% 110% 96% 96% 92% 94% 91% 90% 88% 79% 77% 68% 67% Significant premium implied in
Slide 44: Appendix
i. Appendix Borlänge Spännaren 10 – Municipality and department properties
Slide 45: Overview of the SBB Class D Shares
OVERVIEW OF THE SBB CLASS D SHARES SBB Class D share – key characteristics Strong ownership base for the Class D share Owner Class D share Value (SEKm) Structure Seniority Pari passu with common equity Læringsverkstedet Gruppen AS 44,197,779 1,325.9 essentials Quarterly payments, five times the divi
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