STEEN & STRØM Company presentation

Transcription

1 STEEN & STRØM Company presentation SEB Oslo, 1. September 2016

2 39 bn NOK property value in Scandinavia Denmark 3 shopping centers 22 million visitors 3.5bn DKK in shopping center turnover 310 stores sq.m. leasable area Property value: 8.5bn DKK (22%) Norway 13 shopping centers 50 million visitors 13.0bn NOK in shopping center turnover 990 stores sq.m. leasable area Property value: 16.2bn NOK (41%) Sweden 6 shopping centers 31 million visitors 8.3bn SEK in shopping center turnover 565 stores sq.m. leasable area Property value: 14.3bn SEK (37%) 2

3 Ownership and organization Long-term ownership S&S acquired in 2008 by Klépierre (56.1%) and APG (43.9%) Klépierre A-/stable (S&P) Owned 20.3% by Simon Group A/stable (S&P) S&S ~18% of Klépierre portfolio Change of Control (A- official rating) 179 shopping centres GAV of ~22bn EUR Market cap of ~13bn EUR Owned 20.3% by the world s largest shopping center owner Simon Property Group A/Stable (S&P) Strong integration with Klépierre Direct operational reporting Integrated IT and management systems Financial policy Equity contribution of 1.5bn NOK in 2011 and 1.3bn NOK in 2015 Klépierre/APG hold 3/2 seats on BoD 205bn EUR under management >20bn EUR in real estate investments 3

4 Clearly defined operating strategy We enrich modern shopping Focus on ownership, development and management of attractive shopping centers located in densely populated areas in Scandinavia Securing the right balance between stabilized assets and development projects Development risk is limited due to pre-let requirements, normally turn-key construction contracts and increased ROI target Asset rotation active divestment and development strategy with focus on large centers in urban areas Seek to optimize the total portfolio of leading shopping centers and maximize the profitability of each property Existing centers Target investments areas 4

5 2Q 2016 MNOK 2Q 15 2Q 16 % change Gross rental income ,3% Net rental income ,1% Change in fair value Yield 5.13% 5.00% EBITDA ,9% Net cost of debt Average interest rate 2.6% 2.5% Investment properties Strong portfolio Good reversion on existing leases Continual focus on opex and rebilling Trimmed organization Low interest cost Lower investment pace 5

6 Portfolio developing positively in 2016 Change in net rental income Like-for-like Q Change in retailers sale YTD June 2016 Change in portfolio value First six months ,6% 6,7% 6,3% 4.0% 4.2% 5,1% 5,6% 2,8% 2.0% Norway Sweden Denmark Norway Sweden Denmark Norway Sweden Denmark * Figures are like-for-like based on current portfolio 6

7 Executing the Strategy: Asset Rotation 7

8 Divesting smaller rural shopping centers Sale of four Norwegian centers to Sektor Center revenue, MNOK Center Divested Average Remaining Portfolio ~2bn NOK Sale of five Swedish centers to Thon ~3.3bn NOK ,5 1 1,5 8

9 and investing in large urban areas 9

10 Financial Policy and Funding 10

11 Steering targets continue to strengthen Net loan-to-value Net interest-bearing debt / property value Interest coverage EBITDA* / net financial expenses Klépierre / APG acquires SST in July 2008 Sale of 4 Norwegian centers Sale of 5 Swedish centers Acquisition of Oslo City 62% 60% 55% 56% 53% 3,4x 46% 42% 41% 2,5x 1,8x 2,0x 1,9x 2,0x 2,0x 2, Q * Operating result before valuation changes and extraordinary items. Net cost of debt ex currency translation effects 11

12 Further improvement in LTV expected Net loan-to-value Net interest-bearing debt / property value FCF ~200 MNOK after capex and dividend for debt repayment Planned asset disposals of >1.5bn NOK w/ debt repayment 41% 40% 39% LTV Q2-16 FCF Q2->Q Asset disposals 12

13 Diversified funding Funding mix % of total gross outstanding debt (ex credit lines) Share of secured debt by funding type % secured debt of total 3 % 1 % 7 % 9 % Certificates Bonds 100% 91% 17 % 25 % Realkredit Nykredit 42% Handelsbanken (bank) Danske Bank (bank) 38 % DNB (bank) 0% Certificates Bond Realkredit / Nykredit Bank loans Total gross external drawn debt ~16.6bn NOK In addition unused credit lines ~0.9bn NOK 48% unsecured NOK debt; 26% on group level Unpledged properties of 5.4bn NOK that are 100% owned 1.74bn NOK secured bonds to be refinanced as unsecured 13

14 Actively managed debt maturity profile Debt maturity profile Amount in MNOK and % of total outstanding debt maturing per year Average maturity = 9.3yrs (10.0 yrs excluding CD's) 30 % 25 % % % % % 0 < 1yr 1-2yr 2-3yr 3-4yr 4-5yr 5-6yr 6-7yr 7-8yr 8-9yr >9yr 0 % MNOK Certificates Bonds Realkredit Nykredit Bank loans % of total (ex CD's) % limit any single year 14

15 Hedging currently 44% of rate exposure Maturity profile of outstanding hedges Outstanding hedges in MNOK and % of total debt % 44 % Average maturity = 3.6 yrs 50 % 45 % % 29 % 28 % 40 % 35 % 30 % % MNOK - 15 % 12 % 2 % 0 % 0 % NOK SEK DKK DKK fixed rate loans NOK fixed rate loans Hedging ratio 20 % 15 % 10 % 5 % 0 % 15

16 Peer comparison (Figures in NOK Last Twelve Months Q1-16) Steen & Strøm Olav Thon Eiendomsselskap Entra EBITDA 1,278 1,970 1,453 Cost of Debt Total Assets 39,366 47,315 34,063 Investment Property Incl. Associates and JV s 37,900 45,334 31,947 Net Debt 16,100 19,445 14,515 Equity 17,595 18,389 13,575 Key Credit Metrics Loan to Value (LTV) 42% 43% 45% Equity / Total Assets 45% 39% 40% EBITDA Interest Coverage (ICR) 3.4x 3.0x 2.6x Net Debt / EBITDA 12.6x 9.9x 10.0x Net Debt / EBITDA incl. OC* 11.2x *Including forecast EBITDA for Oslo City Steen & Strøm s LTV below both Olav Thon Eiendomsselskap and Entra Further improvement in ICR and net debt to EBITDA with Oslo City contribution in

17 Active participant in bond market Outstanding bond issues Ticker Issued Maturity Length Amount (m) Currency Spread / rate Security SST Y 725 NOK 170 Secured SST Y 625 NOK 140 Secured SST Y 390 NOK 130 Secured SST Y 300 NOK 125 Unsecured SST Y 400 NOK 110 Unsecured SST Y 300 NOK 122 Unsecured SST Y 500 NOK 75 Unsecured SST Y 500 SEK 77 Unsecured SST Y 400 NOK 79 Unsecured First Norwegian real estate company to issue bonds in SEK market Looking to potentially enter the Swedish CP market New issues on unsecured basis Covenants: Equity ratio of 20% and Change-of-control * 7-year fixed rate at 2,62% 17

18 Key rating considerations Strong business profile Market risk Generally viewed as low risk industry Strong portfolio Significant scale within Scandinavia Cash flow risk Diversified tenant base Stable rental income and cash flow Low vacancy rate Attractive development portfolio Management and ownership Strong track-record as value creator One of the dominant retail players in Scandinavia Supportive ownership Conservative financial risk profile Strong rating metrics Conservative investment strategy Lower investment pace High pre-letting requirement in new projects Good liquidity Long and staggered debt maturity profile Hedging ~50% of interest rate exposure Secured debt to pledged asset value ~42% 18

19 Appendix: shopping center portfolio Asset Country Currency City Ownership share Net lettable area (sqm) Annual turnover (m) Annual gross rent (m) Annual net rent (m) Lillestrøm Torv Norway NOK Lillestrøm 100 % ,1 42,1 Maxi Norway NOK Hamar 100 % ,7 41,0 Metro Norway NOK Lørenskog 50 % ,8 78,3 Nordbyen Norway NOK Larvik 50 % ,7 33,5 Vinterbro Norway NOK Vinterbro 100 % ,7 71,0 Nerstranda Norway NOK Tromsø 100 % ,3 31,6 Åsane Norway NOK Bergen 49,9% ,2 98,0 Gulskogen Norway NOK Drammen 100 % ,0 100,5 Arkaden Norway NOK Stavanger 100 % ,4 42,1 Amanda Norway NOK Haugesund 100 % ,9 48,8 Farmandstredet Norway NOK Tønsberg 100 % ,3 94,5 Oslo City Norway NOK Oslo 100 % ,8 161,1 Økern (development property) Norway NOK Oslo 50 % n.a. n.a. 22,6 15,2 Allum Sweden SEK Gothenburg 100 % ,9 100,8 Emporia Sweden SEK Malmö 100 % ,2 203,5 Kupolen Sweden SEK Borlänge 100 % ,3 78,8 Marieberg Sweden SEK Örebro 100 % ,2 81,4 Torp Sweden SEK Uddevalla 100 % ,7 56,7 Galleria Boulevard Sweden SEK Kristianstad 100 % ,8 24,6 Field's Denmark DKK Copenhagen 100 % ,3 220,0 Bruun's Denmark DKK Århus 100 % ,0 126,8 Bryggen Denmark DKK Vejle 100 % ,0 19,5 19

20 Steen & Strøm AS Bjørn Tjaum CFO Direct: Mobile: