Lumo Homes Plc · OMXHEX:LUMO
Lumo Homes — Kojamo — Q3 2020 Earnings Presentation
45 slides from Lumo Homes's earnings presentation, Nov 5, 2020
Slide 1: Interim Report 1–9/2020
5 November 2020 Interim Report 1–9/2020 Jani Nieminen, CEO Erik Hjelt, CFO Kojamo plc
Slide 2: Agenda
Agenda • Summary of January– September 2020 • Financial development • Outlook, financial targets and dividend policy Kojamo plc's Interim Report January–September 2020 2
Slide 3: Summary of January–September 2020
Summary of January– September 2020 Kojamo plc's Interim Report January–September 2020 3
Slide 4: Operating environment
Operating environment Business environment key figures 8.0 8.2 8.0 6.7 2.6 1.0 1.7 General operating environment 0.4 1.1 1.2 1.4 -4.5 • The COVID-19 pandemic has contracted the Finnish economy less than most European economies and the 2019 2020E 2021E 2022E economy has started gradually recover duri
Slide 5: Operating environment
Operating environment Industry key figures 2020E 2019 Residential start-ups, units 28,000 38,700 Building permits granted, annual*, units 34,996 39,140 Construction costs, change, % n/a 1.0 Industry operating environment Prices of old dwellings in the whole 1.0 1.2 country, change, % • Urbanisation
Slide 6: Operating environment
Operating environment Development of household sizes (% of all households) 45% Pandemic does not have a long-term impact on 40% the rental market 35% • In a longer term, migration keeps the demand for rental 30% apartments especially close to good connections high. 25% The significance of location a
Slide 7: Of the portfolio’s fair value 98.8% in the seven largest Finnish growth centres
Of the portfolio’s fair value 98.8% in the seven largest Finnish growth centres Apartment distribution, % 4.0% 2.3% Number of 4.7% commercial 5.0% Helsinki Number of Fair Fair value Fair region premises Financial apart- value, (EUR value 6.2% Region and other occupancy ments, (EUR thousand / (EUR /
Slide 8: Key figures 1–9/2020
Key figures 1–9/2020 total revenue net rental income funds from operations (FFO) 286.8 M€ 193.8 M€ 113.5 M€ (280.3 M€, +2.3%) (187.2 M€, +3.5%) (106.1 M€, +7.0%) fair value of investment profit excluding properties gross investments changes in value 1) profit before taxes 6.6 Bn€ 264.1 M€ 124.0 M€ 1
Slide 9: The number of apartments under construction has doubled
The number of apartments under construction has doubled • During the review period, 18 (482) apartments were sold, 45 (117) acquired and 340 (710) completed • During the period, construction of 1,556 (855) apartments was started Development of apartment portfolio, units Apartments under construction
Slide 10: Even stronger project pipeline
Even stronger project pipeline • Over 2,500 apartments Projects under construction under construction, all in Lumo One, Lauri Korpisen katu 8, Niittykatu 15, Työpajankatu 17A, Höyrykatu 8, Runoratsunkatu 11, the Helsinki region Vantaa Espoo Helsinki Helsinki Espoo • Co-operation agreements on the co
Slide 11: Strong production pipeline
Strong production pipeline Under construction Co-operation agreements* Metropolia development project properties Metro track Railway track * Apartments that are a part of co-operation agreements, but have been started are listed as ’Under construction’ Q4/ Estimate of completions, units*** 2020 2020
Slide 12: Lumo builds customer experience in a new way
Lumo builds customer experience in a new way Services of a new customer Services during tenancy Agreements from the webstore 50% 49% 47% Over 20,000 37% agreements Personal open house Lumo janitors 24% 0– 250 € Affordable security deposit Benefits from partners 7% Move and installation service Perso
Slide 13: Our sustainability work is proceeding
Our sustainability work is proceeding • EPRA (European Public Real Estate Association) recognised Kojamo’s financial statements for 2019 with a gold award for the second consecutive year and Kojamo’s sustainability report for 2019 with a silver award • Kojamo also received a Most Improved award for
Slide 14: Financial development
Financial development Kojamo plc's Interim Report January–September 2020 14
Slide 15: Total revenue and profit before taxes increased
Total revenue and profit before taxes increased • Total revenue increased mainly due to growth of property portfolio as well as Like-for-Like rental income growth Total revenue, M€ Profit before taxes, M€ Changes in value* Profit excluding changes in value 375.3 +2.3% 1 031,3 351.5 358.8 337.0 280.3
Slide 16: Net rental income and FFO increased
Net rental income and FFO increased • The growth was supported by the growth of apartment portfolio, Like-for-Like rental income growth and lower maintenance costs than in the comparison period Net rental income, M€ Funds From Operations (FFO), M€ and € / share 247.3 +3.5% Funds From Operations (FFO
Slide 17: Occupancy rate on a good level despite of COVID-19 pandemic
Occupancy rate on a good level despite of COVID-19 pandemic • COVID-19 pandemic has temporarily had an impact on the increase of supply as well as migration • The number of new agreements has been increasing Financial occupancy rate, % Tenant turnover, % excluding internal turnover 28.6 28.8 29.6 97
Slide 18: Strong progress in investments
Strong progress in investments • Gross investments exceed the level of the whole year 2019 Gross investments and sales of Modernisation investments and investment properties, M€ repairs, M€ Gross investments Sales of investment properties Modernisation investments Repairs 696.0 68.4 67.6 61.0 -1.4%
Slide 19: The value of investments properties was EUR 6.6 billion
The value of investments properties was EUR 6.6 billion • The shift from transaction-based valuation technique to yield-based valuation technique as of 31 December 2019 significantly increased the fair value of the investment properties • The fair value has developed positively during the review per
Slide 20: Plot and real estate development reserve 30 Sep 2020
Plot and real estate development reserve 30 Sep 2020 To be completed during 2020 Owned plots and Pajalantie 23 F, Apartments Binding developme Järvenpää under preliminary nt construction agreements projects1 In total Investment / actual costs incurred 326.8 - 145.8 472.6 Uuno Kailaan katu 6, Espoo C
Slide 21: Equity ratio and Loan to Value (LTV)
Equity ratio and Loan to Value (LTV) • Equity ratio and Loan to Value (LTV) strengthened significantly Equity ratio, % Loan to Value, (LTV), % 47.1 46.0 46.7 45.9 46.9 40.5 42.1 43.0 44.1 40.7 41.3 42.0 2016 2017 2018 2019 30 Sep 30 Sep 2016 2017 2018 2019 30 Sep 30 Sep 2019 2020 2019 2020 The share
Slide 22: EPRA NAV per share improved
EPRA NAV per share improved • Key figures per share improved significantly • According to EPRA’s guidelines, we will adopt revised features of the Net Asset Valuation metrics in the 2020 financial statements Equity per share, € 1) EPRA NAV per share, € 1) +31.3% +31.3% 12.51 12.76 15.49 15.90 9.54 9
Slide 23: Versatile capital structure
Versatile capital structure The Group’s loan distribution Financing key figures 30 September 2020 % Average interest rate fixing period, years years 3 6 4.7 5 Loan portfolio 3,076 M€ 4.6 2.5 Average loan maturity, years 4 Bonds 3 EUR 1,688 million 2 Average interest rate, % 2 2% 2% 0% 1.8 1 Loans fr
Slide 24: Strategic targets 2020–2023
Strategic targets 2020–2023 Key figure Actual 1–9/2020 Strategic target Annual growth of total revenue, % 2.3 4–5 Annual investments, M€ 264.1 200–400 FFO/total revenue, % 39.6 > 36 Loan to Value (LTV), % 42.1 < 50 Equity ratio, % 44.1 > 40 Net Promoter Score (NPS) 36 40 Kojamo plc's Interim Report
Slide 25: Outlook, financial targets and dividend policy
Outlook, financial targets and dividend policy Kojamo plc's Interim Report January–September 2020 25
Slide 26: Outlook for Kojamo in 2020
Outlook for Kojamo in 2020 Kojamo estimates that in 2020, the Group’s total revenue will increase by 2–5 per cent year-on-year. In addition, the company estimates that the Group’s FFO for 2020 will amount to between EUR 146–158 million, excluding non-recurring costs. The outlook takes into account t
Slide 27: Dividend policy
Dividend policy Dividend history Kojamo’s objective is to be a stable 62% 60% dividend payer whose annual dividend 0.51 payment will be at least 60 per cent of 0.34 0.29 0.29 0.22 FFO, provided that the Group’s equity 0.16 0.22 ratio is 40 per cent or more and taking 2015 2016* 2017 2018 2019 accoun
Slide 28: Summary
Summary Total revenue, net rental Strong progress in Urbanisation continues income and FFO property development and need for new increased investments, number of apartments grows. We are apartments under in a good position to construction doubled from continue our growth comparison period Kojamo plc
Slide 29: Thank you!
Financial Statements Release for 2020 to be published on Thank you! 18 February 2021 Contact details: CEO Jani Nieminen, tel. +358 20 508 3201 Welcome to join Kojamo’s first Investors’ Day on Wednesday CFO 2 December 2020. Erik Hjelt, tel. +358 20 508 3225 The event will be held in virtual Manager,
Slide 30: Appendix
Appendix Kojamo plc's Interim Report January–September 2020 30
Slide 31: Change in the valuation technique of investment properties as at 31 December 2019
Change in the valuation technique of investment properties as at 31 December 2019 Kojamo shifted from a transaction-based valuation technique to a yield-based valuation technique in the valuation Change of its investment properties The change in the valuation technique will make the company more com
Slide 32: New strategy period 2020–2023
New strategy period 2020–2023 • Our strategy has proved to be strong, and we will continue to implement it going forward • The Board of Directors has approved updated strategic targets and focal points for 2020–2023 • We seek strong growth with optimised financing structure and profitable business t
Slide 33: Our strategy 2020–2023
Our strategy 2020–2023 Megatrends Mission Values We create better urban housing. Urbanisation & internationalisation Happy to serve Vision Ageing population & We are the property market frontrunner and smaller family sizes the number one choice for our customers. New technologies & Strategic focal p
Slide 34: Strategic focal points 2020–2023
Strategic focal points 2020–2023 Delivering the We offer easy and effortless services We seek profitable growth with multi- best customer for our customers and create added Strong growth channel approach and optimised experience value through services financing structure We create competitiveness an
Slide 35: Our Digital Roadmap will guide us from today to year 2023
Our Digital Roadmap will guide us from today to year 2023 according to our strategy • Kojamo is a frontrunner thanks to the direct rental in its webstore. Now we will focus on Customer experience and servitisation direct rental service as the main rental channel • We will strengthen our position by
Slide 36: Our corporate responsibility is reflected in our mission of creating better urban housing
Our corporate responsibility is reflected in our mission of creating better urban housing • Responsibility and sustainable development is one of Kojamo’s strategic focal points • We conducted a materiality analysis of sustainability in spring 2020. The results of the materiality analysis provide the
Slide 37: Sustainability is visible in our every day life
Sustainability is visible in our every day life -1.2% Hydro- specific water consumption -7.5% power- (l/m3) Anti-grey 90 Our goal to boost certified energy consumption economy EUR million during 2017–2025, of property electricity at -1.4% tax footprint which we have 100% energy models achieved of pr
Slide 38: Kojamo’s ten largest shareholders (as at 30 Sep 2020)
Kojamo’s ten largest shareholders (as at 30 Sep 2020) Number of Development of the number Shareholder shares % of shares Nominee-registered and direct foreign of the shareholders 104,045,568 42.1 shareholders 8,273 1. The Finnish Industrial Union 24,809,561 10.0 7,185 2. Ilmarinen Mutual Pension Ins
Slide 39: Key figures
Key figures 7–9/2020 7–9/2019 Change, % 1–9/2020 1–9/2019 Change, % 2019 Total revenue, M€ 96.3 95.7 0.6 286.8 280.3 2.3 375.3 Net rental income, M€ 68.9 69.5 -1.0 193.8 187.2 3.5 247.3 Net rental income margin, % 71.5 72.6 67.6 66.8 65.9 Profit before taxes, M€ 72.8 66.6 9.4 198.0 191.4 3.5 1,031.3
Slide 40: Consolidated income statement
Consolidated income statement M€ 7–9/2020 7–9/2019 1–9/2020 1–9/2019 1–12/2019 Total revenue 96.3 95.7 286.8 280.3 375.3 Maintenance expenses -17.9 -17.3 -68.1 -69.0 -91.1 Repair expenses -9.6 -8.9 -24.9 -24.1 -36.9 Net rental income 68.9 69.5 193.8 187.2 247.3 Administrative expenses -8.8 -8.6 -29.
Slide 41: Balance sheet
Balance sheet M€ 30 Sep 2020 30 Sep 2019 31 Dec 2019 ASSETS Non-current assets Intangible assets 0.1 0.2 0.2 Investment properties 6,595.4 5,376.4 6,260.8 Property, plant and equipment 29.6 31.0 30.9 Investments in associated companies 1.6 2.2 2.4 Financial assets 0.7 0.6 0.7 Non-current receivables
Slide 42: Balance sheet
Balance sheet M€ 30 Sep 2020 30 Sep 2019 31 Dec 2019 EQUITY AND LIABILITIES Equity attributable to shareholders of the parent company Share capital 58.0 58.0 58.0 Share issue premium 35.8 35.8 35.8 Fair value reserve -55.1 -61.1 -44.7 Invested non-restricted equity reserve 164.4 164.4 164.4 Retained
Slide 43: Financial key figures
Financial key figures 30 Sep 2020 30 Jun 2020 31 Mar 2020 31 Dec 2019 30 Sep 2019 Equity ratio, % 44.1 43.3 45.3 46.9 42.0 Interest cover 4.2 4.3 4.3 4.3 4.4 Loan to Value (LTV), % 42.1 42.6 39.5 40.5 46.7 Hedging ratio, % 89 87 85 88 90 Average interest rate, %1) 1.8 1.7 1.8 1.8 1.8 Average loan ma
Slide 44: Development of housing production
Development of housing production Granted building permits, units Start-ups, units 43,945 44,376 48,722 38,424 43,269 36,877 40,432 38,076 32,127 32,402 n/a 28,000 23,474 20,938 18,739 17,960 19,498 20,694 18,857 15,310 16,248 17,371 17,257 15,127 5,597 8,232 7,109 7,919 5,129 5,044 7,943 6,745 5,71
Slide 45: Important information
Important information This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securitites in any jurisdiction. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitme