Skyline Investments Inc · TASE:SKLN
Skyline Investments — Q3 2017 Earnings Presentation
36 slides from Skyline Investments's earnings presentation, November 2017
Slide 1: Corporate Presentation
Corporate Presentation Financial Statements 30.09.2017 WWW.SKYLINEINVESTMENTS.COM November, 2017 Corporate Presentation
Slide 2: Cautionary Statement
Forward-looking information in this presentation is based on current Cautionary Statement estimates and assumptions made by the Company's management, including, without limitation, a reasonably stable North American economy, the strength of the U.S. lodging industry, and the competitive ability of t
Slide 3: 18 Cities in Canada and the US | 19 Income Producing Assets | 3,228 Guestrooms
18 CITIES IN CANADA AND THE US | 19 INCOME PRODUCING ASSETS| 3,228 GUESTROOMS | 3
Slide 4: Corporate Overview
Corporate Overview • Skyline specializes in hospitality real estate investments in Canada and the US, with a focus on income producing hospitality assets. • The Company owns 19* assets with 3,200 hotel rooms under management in 18 cities in the Canada and the US, as well as development lands with ri
Slide 5: Recent Activity
Recent Activity • November 2017: Skyline has completed the acquisition of 13 Individual Courtyard by Marriott hotels for $135M* USD. As part of the transaction, Skyline signed a new 20-year franchise agreement with Marriott International under which all 13 hotels will continue to operate as part of
Slide 6: Recent Activity
Recent Activity • July 2017: The company completed the sale of Port McNicoll for $42M and received the first payment of $4.2M. The $25.2M (60% of the transaction) will be spread over 72 monthly payments (6 years) of $350K, and the buyer will pay the remaining $12.6M (30% of transaction) at the end o
Slide 7: Current Ownership Structure
Current Ownership Structure Public 25.48% 3.46% Gil Blutrich 2.58% Blake Lyon 1.20% Alex Shnaider 1.02% ILDC 0.86% 70.31% 70.31% 29.69% SKYLINE CANADA ISRAEL LTD. 65.36% 29.69% * 74% of Mishorim is owned by Alex Shnaider and Gil Blutrich through a joint voting arrangement. ** Mishorim holds directly
Slide 8: Senior Team
Senior Team Gil Blutrich Blake Lyon CA, CPA Vadim Shub CA, CPA Chairman and CEO CFO President Founded Mishorim in 1990 and Skyline in Blake Lyon has an extensive experience in hotel Over 20 years of experience in managing 1998. Chairman, President and Main and resort asset management in Canada and f
Slide 9: Business Strategy – Increased Acquisition Program of Income Producing Assets
Business Strategy – Increased Acquisition Program of Income Producing Assets Skyline’s Strategy: • Optimization of cash flow from existing assets through our experience in operations. • Acquisition of accommodation properties to decrease seasonality and diversify our geographic presence. • Decreasin
Slide 10: Main Operating Assets in the United States
Main Operating Assets in the United States The Hyatt Regency Arcade, Cleveland, OH
Slide 11: 13 Courtyard by Marriott Hotels
Courtyard Ft. Myers-Cape Coral Courtyard Manassas Battlefield Park Ft. Myers, FL Manassas, Virginia 13 Courtyard by Marriott Hotels Courtyard Deerfield Chicago, Courtyard Tucson Airport Deerfield, IL Tucson, AZ Courtyard Birmingham Hoover, Courtyard Lexington North Hoover, AL Lexington, KY
Slide 12: 13 Courtyard by Marriott Acquisition
13 Courtyard by Marriott Acquisition • On November 14, 2017, Skyline has completed the acquisition of 13 individual business oriented select-service Courtyard by Marriott hotels for $135M USD. • Completion of the acquisition was a post balance sheet event that will be fully reflected in the balance
Slide 13: 13 Courtyard by Marriott Hotels
13 Courtyard by Marriott Hotels • The 13 hotels totaling 1,913 rooms are spread over 9 US states and are geographically diverse with strong locations in key Midwest, Southeast and Southwest markets. • All 13 buildings are almost identical, have the same layout, age and all of them are in excellent c
Slide 14: Benefits of the Acquisition
Benefits of the Acquisition • This acquisition is in accordance with the new company strategy and represents the largest transaction in Skyline’s history. • Skyline has researched significant number of potential acquisitions before focusing on these Courtyard hotels. • The Courtyard hotels were chos
Slide 15: All 13 Courtyard by Marriott Hotels are nearly identical
All 13 Courtyard by Marriott Hotels are nearly identical Huntsville Tucson Chicago-Arlington Heights 15
Slide 16: Hyatt Regency Arcade
Hyatt Regency Arcade Overview: • Historical heritage site built in 1890. Located in the central business district of Cleveland. The property includes a 293-room hotel, an indoor mall of about 4,200 sq.m., and conference rooms, spa, fitness club and restaurants. • Hyatt is currently under a 10-year c
Slide 17: Active Asset Management – Hyatt Room Renovations
Active Asset Management – Hyatt Room Renovations Before After 17
Slide 18: Renaissance Cleveland Hotel
Renaissance Cleveland Hotel Overview: • Historical heritage asset built in 1918. The property is located in the business center of downtown Cleveland US, near the city's main square. (sized 860,000 sq.f) • The property was purchased by Skyline for $19.1M USD, for which Skyline received a $3.5M USD f
Slide 19: Bear Valley
Bear Valley Overview: • Ski resort located in California. • The resort acquisition was purchased in 2014 for a total consideration of $3.7M USD. • Skyline management invested significant efforts to reduce operational costs, invested close to $3M USD in improvements, which along with a return to norm
Slide 20: Main Operating Assets in Canada
Main Operating Assets in Canada Horseshoe Valley Resort Barrie, ON
Slide 21: Deerhurst Resort
Deerhurst Resort Overview: • Luxury year round resort in the district of Muskoka, two hours from Toronto. • The Resort includes approx. 315 rooms (101 rooms owned by Skyline, 214 managed), two golf courses, conference rooms, spa, swimming pools, restaurants, and a private airport. • With approximate
Slide 22: Deerhurst Resort
Deerhurst Resor BIRGHCLIEF VILLAS © som z —_ oe i OAKRIDGE TODGE/LAKESIDE ALES OFFI ss TENNISVILW. ~GOLFVIEW Déerhurst Lakeside Goli Course THE GREENS: LOGATIONS OF ROOM TYPES Travellers’ Rooms— Mapleridge, Golfview & Tennisview Main Building Rooms - Pavi 4-Bedroom Suites — Summit Lodges: Lakeside R
Slide 23: Horseshoe Resort
Horseshoe Resort Overview: • A ski, golf, adventure park and hospitality resort operating year round, located one hour drive from Toronto. • The site includes a leading golf course in Canada, 25 alpine ski runs and 40km of cross-country trails, 163 hotel rooms (141 owned, 22 managed), and 5 restaura
Slide 24: Blue Mountain Village
Blue Mountain Village Overview: • The Village includes Ontario’s largest ski resort, retail shops, and restaurants operating throughout the four seasons. • Blue Mountain is located near Collingwood and Georgian Bay, two hours away from Toronto. • The Company, together with a partner (40%), holds hal
Slide 25: Land Sales and Development
Land Sales and Development Lakeside Lodge 25 Huntsville, ON
Slide 26: Land Sales and Development Assets
Land Sales and Development Assets Lakeside Lodge (Deerhurst): • 162-unit development on Deerhurst land to be sold, afterwards some will enter the rental pool as inventory. • As of today, 117 (72%) units have been sold for a revenue of $42M. • Total revenue and gross profit are expected to be $54M an
Slide 27: Land Sales and Development Assets
Land Sales and Development Assets Blue Mountain: • In the past 2 years, Skyline has sold several land plots at Blue Mountain Resort. • As of December 2016, the Company delivered 74 lots bringing in approx. $9M in revenue. • As of today, the Company has sold 194 units at $24.5M with an expected cash
Slide 28: Financial Information
Financial Information Blue Mountain Village Collingwood, ON
Slide 29: Financial Strength and Flexibility
Financial Strength and Flexibility* Strong Balance Sheet • Capital to balance ratio of 49%. • Net Debt to Net Assets ratio is 30%. Flexibility • As of September 30, 2017 the Company has: o A cash balance of $24M. o An unutilized low cost credit line of $17M. o Effective average loan duration of 4.4
Slide 30: Debentures rated Baa1.il from Midroog
Both of Skyline’s publically traded debentures are rated Baa1.il from Midroog, Moody’s Israeli subsidiary Primary Reasons for the Rating • “Properties that have been active for many years in relevant markets contribute to a company’s business profile. Skyline’s Canadian resorts have existed for deca
Slide 31: Net Asset Value
Net Asset Value NOI - Loan Balance Ownership BV 2015 NOI 2016 NOI NOI - LTM LTV Equity LTM/BV 9/2017 (6) Revenue generating assets Deerhurst Resort (1) 100% 74,900 4,390 3,885 5,333 7.1% 47,114 63% 27,786 Horseshoe Resort (2) 100% 54,000 4,078 2,747 4,032 7.5% - 0% 54,000 Blue Mountain Retail 60% 28
Slide 32: Summary of Periodic Results
Summary of Periodic Results Section 2016 1-9/16 1-9/17 ** Revenue from revenue generating assets 122,197 96,191 91,378 Revenue from sale of residential real estate and other 25,797 19,815 24,452 Total Revenue* 147,994 116,006 115,830 NOI from revenue generating assets 20,821 17,840 17,506 Total EBIT
Slide 33: Main Balance Sheet Parameters
Main Balance Sheet Parameters Section 31.12.2016 30.09.2017 ** Total Assets 519,753 577,258 Gross financial debt 130,985 191,716 Cash and equivalents 29,961 23,977 Net Debt 101,024 167,739 Shareholders equity 245,968 243,828 Non-controlling interest 41,404 39,964 Total Equity 287,372 283,792 Net Deb
Slide 34: Thank You!
Thank You! WWW.SKYLINEINVESTMENTS.COM Questions? Please contact Ben Novo-Shalem, Head of M&A and IR 416-368-2565 ext: 2222 |benn@skylineinvestments.com 34
Slide 35: Appendix
SKYLINE INVESTMENTS Appendix
Slide 36: List of Assets with no Financial Debt
List of Assets with no Financial Debt Name ** FMV Bear Valley Resort 14,241 Horseshoe Resort (3) 49,000 Excluded Lands surrounding Deerhurst Resort (1) 15,480 Excluded Lands surrounding Horseshoe resort (2) 19,079 Lands at Blue Mountain (60%) 14,898 Vendor's take back against Port McNicoll lands 34,