Sabra Health Care Reit, Inc. · NASDAQ:SBRA
Sabra Health Care Reit — Q1 2024 Earnings Presentation
32 slides from Sabra Health Care Reit's earnings presentation, May 9, 2024
Slide 1: Strategic. Disciplined. Opportunistic.
Strategic. Disciplined. Opportunistic. Investor Presentation | May 8, 2024
Slide 2: Disclaimers - Forward-Looking Statements
Disclaimers Forward-Looking Statements This presentation contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. These statements may be ident
Slide 3: Disclaimers - Tenant and Borrower Information
Disclaimers Tenant and Borrower Information This presentation includes information (e.g., EBITDARM Coverage and Occupancy Percentage) regarding certain of our tenants that lease properties from us and our borrowers, most of which are not subject to SEC reporting requirements. The information related
Slide 4: Uniquely Positioned to Thrive
LOREM IPSUM Heading Uniquely Positioned to Thrive Our passion for quality care and deep industry experience uniquely position Sabra to succeed in the dynamic healthcare real estate market. We have the size, know-how and resilient balance sheet necessary to deliver long-term value to shareholders. Ma
Slide 5: We know what happens inside our buildings matters most
STRATEGY “We know what happens inside our buildings matters most. That’s why we align ourselves with operators who skillfully and compassionately care for the residents and patients in the buildings we own.” -Rick Matros (he/him), Chief Executive Officer May 8, 2024 Investor Presentation 5
Slide 6: Portfolio Strategy
STRATEGY Portfolio Strategy Growing Demand > 80 population is expected to grow 4% per year through 2040 Drug overdose deaths have increased > 6x since 2000 Skilled Nursing Mission-Driven Senior Housing Needs-Based Passionate workforce Positive societal impact Behavioral Lifestyle enhancement Post-ac
Slide 7: Execution — Passion Meets Know-how
STRATEGY Execution — Passion Meets Know-how Unique, Accretive Investments - Utilize our operational and asset management experience to identify and capitalize on new opportunities where off-market price dislocation exists. Support Operator Expansion - Be the capital partner of choice for the expansi
Slide 8: 2024 Full-Year Guidance
STRATEGY IN ACTION 2024 Full-Year Guidance Sabra is reiterating 2024 earnings guidance ranges as follows: Per diluted common share: Net Income $ 0.53 — $ 0.57 FFO $ 1.33 — $ 1.37 Normalized FFO $ 1.34 — $ 1.38 AFFO $ 1.38 — $ 1.42 Normalized AFFO $ 1.39 — $ 1.43 Earnings guidance above assumes no 20
Slide 9: By consistently and deliberately executing our strategy, we deliver long-term value
STRATEGY IN ACTION “By consistently and deliberately executing our strategy, we deliver long-term value to our shareholders and provide the capital our tenants need to invest in their business and deliver quality care.” -Talya Nevo-Hacohen (she/her), Chief Investment Officer May 8, 2024 Investor Pre
Slide 10: Good for the Planet. Good for Our Stakeholders.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Good for the Planet. Good for Our Stakeholders. “The question for us is not how important our ESG principles are, but rather how we can effectively and efficiently integrate them into our business strategy in ways that are self-sustaining and accretive.” -Rick Ma
Slide 11: ESG Framework
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ESG Framework We understand that good governance underpins sustainability, strengthens the accountability of our Board and management team and supports the long-term interests of our stakeholders. Our ESG principles are intrinsically tied to our objective to driv
Slide 12: E-Initiative Roadmap
ENVIRONMENTAL, SOCIAL AND GOVERNANCE E-Initiative Roadmap Improving the environment starts with enabling our operators and is central to everything we do. We take a comprehensive, integrated and collaborative approach to environmental stewardship. May 8, 2024 Investor Presentation 12
Slide 13: Delos WISE Forum - Finding Solutions to Accelerate Change
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Delos WISE Forum - Finding Solutions to Accelerate Change As an extension of our WISE Initiative (Wellness in Senior Living Environment), Sabra helped organize and sponsor the inaugural WISE Forum bringing together like-minded REITs, along with industry leaders,
Slide 14: Committed to Diversity, Equity & Inclusion
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Committed to Diversity, Equity & Inclusion We believe a diverse workforce is essential to our continued success and gives us a competitive advantage. We integrated DE&I into our hiring process, which has proven to be successful in our hiring of top talent from di
Slide 15: Our Success Is Predicated on a Healthy Portfolio
PORTFOLIO Our Success Is Predicated on a Healthy Portfolio As of March 31, 2024 78% 90% 80% 409 Investments SNF/TC SH - Leased Average Occupancy Percentage BH/Hosp./Oth. 1 62 Relationships 35% Skilled Mix 1 7 Years Wtd. Avg. 1.79x 1.33x 3.77x SNF/TC SH - Leased BH/Hosp./Oth. 1 Remaining Lease Term E
Slide 16: Diverse Portfolio, Positioned to Perform
PORTFOLIO Diverse Portfolio, Positioned to Perform As of March 31, 2024 1 1 Relationship Concentration Asset Class Concentration Signature Healthcare, 8.9% Senior Housing - Managed, 16.5% The Ensign Group, 8.7% Avamere Family Other of Companies, 41.3% 8.0% Behavioral Health, 14.5% Signature Behavior
Slide 17: Favorable Supply and Demand Trends
PORTFOLIO Favorable Supply and Demand Trends Since 2000, the 85-or-older population has grown by 55%, compared to an 11% decline in skilled nursing beds over the same time frame. SNF Supply and Demand SNF Beds (000s) Population 85 or older (000s) 8,000 6,590 6,677 7,000 6,304 6,468 6,467 5,880 6,055
Slide 18: Medicaid and Medicare Rates
PORTFOLIO Medicaid and Medicare Rates As of March 31, 2024 1,2 2 Medicaid Average Daily Rate Medicare Average Daily Rate $300 $291 $850 $816 $282 $275 $800 $266 $764 $252 $738 $250 $750 CAGR: 4.0% $239 CAGR: 2.3% $713 $225 $700 $673 $221 $649 $194 $207 $200 $187 $650 $627 $182 $618 $605 $595 $597 $1
Slide 19: We invest in relationships with operators who are nimble
PORTFOLIO “We invest in relationships with operators who are nimble and poised to deliver excellent care now and in the future.” -Peter Nyland, Executive Vice President, Asset Management May 8, 2024 Investor Presentation 19
Slide 20: Advancing the Quality of Care
OPERATORS Advancing the Quality of Care We Work with Operators Who Are: • Committed to their mission • Nimble • Regional experts • In markets with favorable demographics • Well-positioned for the future of healthcare delivery May 8, 2024 Investor Presentation 20
Slide 21: We Support Our Operators
OPERATORS We Support Our Operators We Invest in Our Tenants’ Success: • Redevelopment / Adaptive Reuse • Expansion • Strategic development • Flexible equity and debt capital solutions May 8, 2024 Investor Presentation 21
Slide 22: Operator testimonial: Leo Brown Group
OPERATORS “What started with a single sale/leaseback transaction for a senior living community in Indiana has grown into a multi-state, multi- community relationship. We truly value the collaboration, insight and support we receive from Sabra. Sabra is who we think about first when it comes to a cap
Slide 23: Our strong balance sheet and ready access to capital
PERFORMANCE “Our strong balance sheet and ready access to capital allows us to thoughtfully finance investment opportunities and drive value for our shareholders.” –Michael Costa, Chief Financial Officer May 8, 2024 Investor Presentation 23
Slide 24: Prudent Balance Sheet Management
PERFORMANCE Prudent Balance Sheet Management As of March 31, 2024 • Term loans hedged to an Line of Credit average rate of 4.0%, resulting in 3% interest savings of about $16 Common Equity Value 58% million annually. Fixed Rate Bonds 29% • Ample liquidity of over CONSOLIDATED $900 million ensures we
Slide 25: Investment-Grade Credit Metrics
PERFORMANCE Investment-Grade Credit Metrics 1 Investment-Grade Sabra 1Q 24 2 peers range 3 Net Debt to Adjusted EBITDA 5.55x 4.37x - 6.86x Interest Coverage Ratio 4.06x 3.80x - 4.82x Debt as a % of Asset Value 37% 26% - 48% Secured Debt as a % of Asset Value 1% 0% - 9% We continue to focus on streng
Slide 26: Favorable Profile with Staggered Maturities
PERFORMANCE Favorable Profile with Staggered Maturities Debt maturity profile at March 31, 2024 (Dollars in millions) 6.6% 6.2% $1,200 5.1% 3.9% 3.2% 2.9% 2.9% 3.1% $1,000 2.9% 2.9% 2.9% $2 $800 $854 $600 $2 $2 $400 $2 800 500 541 $200 146 350 $2 $2 100 $2 $2 $2 $27 $0 2024 2025 2026 2027 2028 2029
Slide 27: Attractive Valuation Relative to Direct Peers
PERFORMANCE Attractive Valuation Relative to Direct Peers 1 2 Forward FFO multiples Dividend yield 16.8x 14.8x 8.6% 8.2% 12.7x 11.4x 11.8x 6.9% 7.1% 10.7x 5.6% 4.7% SBRA OHI AHR LTC NHI CTRE SBRA CTRE NHI LTC AHR OHI 3 Premium / discount to consensus NAV Portfolio composition (% Annualized Cash NOI)
Slide 28: Well-Positioned Portfolio
PERFORMANCE Well-Positioned Portfolio SNF concentration 1 Top five relationships SNF EBITDARM SH EBITDARM 1,3 1 concentration 1 Coverage Coverage 2.78x 2.82x 90% 68% 1.45x 62% 1.33x 71% 1.30x 1.31x 56% 1.23x 1.19x 1.79x 1.84x 54% 56% 44% 1.67x 1.69x 41% 38% 33% 7% 2 SBRA 2 AHR5 NHI LTC OHI CTRE SBRA
Slide 29: Appendix
Appendix Appendix May 8, 2024 Investor Presentation 29
Slide 30: Definitions
APPENDIX Definitions Adjusted EBITDA.* Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization (“EBITDA”) excluding the impact of merger-related costs, stock-based compensation expense under the Company's long-term equity award program, and loan loss reserves.
Slide 31: Definitions
APPENDIX Definitions Funds From Operations (“FFO”) and Adjusted FFO (“AFFO”).* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations, or FFO, as defined in accordance with the definition used by the Nati
Slide 32: Definitions
APPENDIX Definitions Occupancy Percentage. Occupancy Percentage represents the facilities’ average operating occupancy for the period indicated. The percentages are calculated by dividing the actual census from the period presented by the available beds/units for the same period. Occupancy includes
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