Varia US Properties AG · SIX:VARN
Varia US Properties — FY2019 Earnings Presentation
26 slides from Varia US Properties's earnings presentation, Mar 26, 2020
Slide 1: Presentation Full-Year 2019 Results
PRESENTATION FULL-YEAR 2019 RESULTS 1 Strictly confidential
Slide 2: Important Notice
IMPORTANT NOTICE This presentation includes forward-looking information and Although we believe that its expectations reflected in any statements, including statements concerning the outlook for such forward-looking statement are based upon reasonable our business. These statements are based on curr
Slide 3: Agenda
AGENDA MARCH 26, 2020 Key achievements Financials FY 2019 Portfolio and growth strategy Outlook Q&A 3 Strictly confidential
Slide 4: Today's Speakers
TODAY’S SPEAKERS MANUEL LEUTHOLD PATRICK RICHARD ■ Chairman, ■ Executive Member of Varia US Properties AG the Board of Directors, Varia US Properties AG ■ Head of US Investments of Stoneweg SA, the Asset Manager of Varia US Properties AG 4 Strictly confidential
Slide 5: Key Achievements
KEY ACHIEVEMENTS 5 Strictly confidential
Slide 6: 2019 Key Achievements
2019 KEY ACHIEVEMENTS ■ PORTFOLIO OVERALL GROWTH AND VALUE-ADD IMPLEMENTATION ■ Acquisition of 3 promising assets according to the Company’s strategy ■ Successful sale of 2 non-strategic assets with a 34.1% respectively 78.9% net IRR ■ More than USD 16 million invested in maintenance and property en
Slide 7: Financials FY 2019
FINANCIALS FY 2019 7 Strictly confidential
Slide 8: 2019 Key Figures (1/2)
2019 KEY FIGURES (1/2) EFFECTIVE FAIR VALUE TOTAL GROSS PORTFOLIO INCOME 2018: USD 100.8 million INCOME ADJUSTMENT* 2018: USD 86.0 million 2018: USD 14.8 million USD million 99.4 USD million 40.0 USD million 139.5 TOTAL REPAIR, YEAR I OPERATING MAINTENANCE AND CAPEX EXPENSES MINOR REPLACMENTS 2018:
Slide 9: 2019 Key Figures (2/2)
2019 KEY FIGURES (2/2) OPERATING PROFIT EBITDA 2018: USD 38.9 million PROFIT FOR THE 2018: USD 50.6 million PERIOD 2018: USD 24.9 million USD million 80.0 USD million 42.8 USD million 40.9 EARNINGS NAV FUNDS FROM PER SHARE PER SHARE OPERATIONS (FFO) 2018: USD 2.79 2018: USD 37.14 (EBITDA LESS INTERE
Slide 10: Profit and Loss (Consolidated)
PROFIT AND LOSS (CONSOLIDATED) In USD million As of December 31, 2019 As of December 31, 2018 Rental income 88.9 76.3 Other income including insurance proceeds 10.5 9.8 Net gain from fair value adjustment (realized) 0.9 3.0 Net gain from fair value adjustment on invest. property 39.1 11.7 Total inco
Slide 11: Financial Position (Consolidated)
FINANCIAL POSITION (CONSOLIDATED) Assets in USD million As of December 31, 2019 As of December 31, 2018 Total current assets 35.3 47.8 Total non-current assets 926.8 776.7 Total assets 962.1 824.5 Liabilities and equity in USD million As of December 31, 2019 As of December 31, 2018 Total current lia
Slide 12: Portfolio and Growth Strategy
PORTFOLIO AND GROWTH STRATEGY 12 Strictly confidential
Slide 13: Portfolio Development in 2019
PORTFOLIO DEVELOPMENT IN 2019 ■ Portfolio value of USD 915.1 million ■ 53 assets ■ 10,896 units ■ 19 different states in the US ■ Florida down to 14% (2016: 41%) ■ All new properties are located in markets where Varia was already present, thus consolidating its footprint in selected markets ■ Larger
Slide 14: Portfolio 2019 Key Figures
PORTFOLIO 2019 KEY FIGURES AVERAGE GROSS EFFECTIVE GROSS MONTHLY POTENTIAL INCOME* RENT PER UNIT** INCOME* 2018: USD 94.0 million 2018: USD 760 2018: USD 101.0 million USD 769 USD million 117.6 USD million 109.2 AVERAGE MARKET OCCUPANCY LOAN-TO- VALUE PER UNIT RATE VALUE 2018: USD 78,823 2018: 93.7%
Slide 15: New Acquisitions Executed Over the Period
3 NEW ACQUISITIONS EXECUTED OVER THE PERIOD 15 Strictly confidential
Slide 16: New Acquisitions Executed Over the Period (Cont'd)
3 NEW ACQUISITIONS EXECUTED OVER THE PERIOD (CONT’D) EASTWOOD LYNNFIELD PLACE CROSSINGS CITY STATE ACQUISITION DATE CITY STATE ACQUISITION DATE Kansas City Missouri August 2019 Memphis Tennessee August 2019 NUMBER OF NET RENTABLE GROSS NUMBER OF NET RENTABLE GROSS UNITS AREA POTENTIAL INCOME UNITS A
Slide 17: Green Initiative
GREEN INITIATIVE ■ Main purpose of this initiative is to reduce water and energy consumption and utilities costs ■ This initiative will benefit the residents, the investors and the environment ■ To achieve this goal, in 2019, Varia ■ has fully deployed its water conservation program, installing new
Slide 18: Green Initiative (Cont'd)
GREEN INITIATIVE (CONT’D) ■ The green initiative will be further implemented in the next few years. In 2020, Varia will ■ replace toilets with low flow equipment and install more efficient air conditioning systems ■ test some smart home technologies (control thermostats and lights in the units) ■ fo
Slide 19: Outlook
OUTLOOK 19 Strictly confidential
Slide 20: The Market in 2020
THE MARKET IN 2020 ■ Positive market for multifamily investments and especially for workforce housing According to CBRE: “Suburban multifamily will continue to outperform in 2020. Buying or building in the suburbs will remain the best bet based on market performance and investment returns. Suburban
Slide 21: Outlook 2020
OUTLOOK 2020 MANAGEMENT → Optimization of portfolio management → Strive to maintain incomes and to reduce costs at property level during the lockdown period → Focus on maintaining occupancy, increase rent where and when possible and on limiting controllable expenses → Continue to implement the value
Slide 22: Financial Calendar
FINANCIAL CALENDAR ■ Annual General Meeting 2020 26 June 2020 ■ Half-Year Results 2020 27 August 2020 22 Strictly confidential
Slide 23: Q&A
Q&A 23 Strictly confidential
Slide 24: Appendix
APPENDIX 24 Strictly confidential
Slide 25: 2019 Normalized Figures
2019 NORMALIZED FIGURES 25 Strictly confidential
Slide 26: Summary
SUMMARY Well-performing multifamily property portfolio in the U.S. COMPANY Promising acquisition pipeline in growing urban submarkets Cash flow optimization through attractive financing and rehabilitation as well as solid cash flow generation allowing for high distribution to shareholders Bo