STEEN & STRØM Company presentation...Actively managed debt maturity profile 16 0 % 5 % 10 % 15 % 20...
20
Company presentation SEB IG Seminar Oslo, September 2 nd 2015 STEEN & STRØM
Transcript of STEEN & STRØM Company presentation...Actively managed debt maturity profile 16 0 % 5 % 10 % 15 % 20...
Company presentation
SEB IG Seminar
Oslo, September 2nd 2015
STEEN & STRØM
Focused shopping center owner/developer
2
9 11 12 1418 20 21 20 21 23 24
28 30 30 30 29 28 2926
21 21
30
35
52
57
58
3629
28 2827 25
2524 26 26
1513 13
13
13
-
-
10
20
30
40
50
60
70
80
-
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
# o
f sh
op
pin
g ce
nte
rs
Gro
ss r
ent
in M
NO
K
# of owned / partly owned centers # of managed centers Gross rent shopping centers
1997
Merger with Bøhler Gruppen
Enter Denmark Established in
Poland / Czech Republic
Exit Poland / Czech Republic
Sale of construction business and Mango stores
2000
Opening of Field’s (Bruun’s 2003)
Sale of Gresvig ASA
2004
Steen & Strøm acquired from Canica by APG and Klépierre
2008
Mngmt agreement with Storebrand terminated
2010
Sale of Stovner, Torvbyen, Markedet and Halden
2013
Sale of 5 centers in Sweden
Mngmt agreement with Danica terminated
2014
30bn NOK property value in Scandinavia
3
Norway
12 shopping centers
40 million visitors
11.5bn NOK in shopping center turnover
902 stores
321 000 sq.m. leasable area
Property value: 13.3bn NOK
Sweden
6 shopping centers
30 million visitors
8.4bn SEK in shopping center turnover
565 stores
224 700 sq.m. leasable area
Property value: 11.6bn SEK
Denmark
3 shopping centers
21 million visitors
3.7bn DKK in shopping center turnover
314 stores
130 300 sq.m. leasable area
Property value: 7.3bn DKK
Ownership and organisation
4
Klépierre
56,1% 43,9%
APG
Nordica Holdco
Storm Holding
Steen & Strøm
Denmark Norway Sweden
100%
100%
Reporting through BoD
Direct operational reporting
Separate Scandinavian organisation reporting to CEO of Steen & Strøm AS
Long-term ownership
S&S acquired in 2008
Klépierre A-/stable (S&P)
Simon Group A/stable (S&P)
S&S ~16% of Klépierre portfolio
Strong integration with Klépierre
Direct operational reporting
Integrated IT and management systems
Financial policy
Equity contribution of 1.5bn NOK in 2011
Klépierre/APG hold 3/2 seats on BoD
179 shopping centres
GAV of ~21bn EUR
Market cap of ~12bn EUR
205bn EUR under management
>20bn EUR in real estate investments
Portfolio developing positively
5
2,4 % 2,4 %
6,9 %
Norway Sweden Denmark
-1,6 %
7,3 %
4,3 %
Norway Sweden Denmark
0,8%
3,6%
0,8%
Norway Sweden Denmark
Change in net rental income
First six months 2015
Change in retailers’ sale
First six months 2015
Change in portfolio value
First six months 2015
* Figures are like-for-like based on current portfolio
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
jan.14 feb.14 mar.14 apr.14 mai.14 jun.14 jul.14 aug.14 sep.14 okt.14 nov.14 des.14 jan.15 feb.15 mar.15 apr.15 mai.15 jun.15
Growth in spite of new competition
6
LTM change in retailers sales for Norwegian centers*
+ -
* Excludes Økern
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
okt.14 nov.14 des.14 jan.15 feb.15 mar.15 apr.15 mai.15 jun.15
Strong performance after divestments
7
LTM change in retailers sales for Swedish centers*
+ -
* Excludes Galleria Boulevard
Strong first half of 2015
8
-3,0%
-2,0%
-1,0%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
jan.14 feb.14 mar.14 apr.14 mai.14 jun.14 jul.14 aug.14 sep.14 okt.14 nov.14 des.14 jan.15 feb.15 mar.15 apr.15 mai.15 jun.15
LTM change in retailers sales for Danish centers
+ -
Business environment
9
Challenges and Opportunities
Retailers’
bargaining power
Competition (high
investments)
Other channels
(internet, cross-
border)
Political
Demographics
Macro economy ->
purchasing power
Size matters
Public transport hubs
Attractive meeting places
Large cities
Growth cities
Clearly defined operating strategy
10
Focus on ownership, development and management of attractive shopping centers located in densely populated areas in Scandinavia
Most assets (minimum 90%) have to be shopping centers with stable cash flow
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
“We enrich modern shopping”
Existing centers Target investments areas
Executing the strategy - divestments
11
-
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Centerdivested
Averageremaining
portfolio
Center revenue, MNOK Sale of four Norwegian centers to Sektor
Sale of five Swedish centers to Thon
~2bn NOK
~3.25bn NOK
Executing the strategy - investments
12
Emporia, Malmö Nye Økern – Noor, Oslo
Galleria Boulevard, Kristianstad VIVA, Odense
Conservative financial policy
13
LTV* = 46%
IC** = 2.5x
Book equity ratio = 40% Current profile
Target profile
Metrics Funding Hedging
Strong liquidity position
Debt maturity profile 10 yrs
Excellent access to capital
Interest hedging = 51%
Average maturity: 3.8 yrs
LTV < 50%
IC > 2.5x
Book equity ratio >30%
Diversification of funding
resources
Increase volume of unsecured
debt
Increase the use of bonds
No large concentration
maturities
Minimum 5 yrs average
remaining debt duration
Hedging ratio: minimum 50%
Maturity: minimum 3 yrs
* Net debt / total property value as of year-end 2014; **EBITDA / net interest expenses as of year-end 2014
Steering targets continue to strengthen
14
* Operating result before valuation changes and extraordinary items
Net loan-to-value
Net interest-bearing debt / property value
Interest coverage
EBITDA* / net financial expenses
62 %60 %
55 % 56 %53 %
46 %
2 009 2010 2011 2012 2013 2014
1,8x
2,0x1,9x
2,0x 2,0x
2,5x
2 009 2010 2011 2012 2013 2014
Diversified funding
15
Funding mix
% of total outstanding debt
Share of secured debt by funding type
% secured debt of total
10 %
28 %
39 %
17 %
2 %3 % 1 %
Certificates
Bonds
Realkredit
Nykredit
Handelsbanken (bank)
Danske Bank (bank)
DNB (bank) 0 %
42 %
100 %
81 %
Certificates Bond Realkredit /Nykredit
Bank loans
Actively managed debt maturity profile
16
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
< 1yr 1-2yr 2-3yr 3-4yr 4-5yr 5-6yr 6-7yr 7-8yr 8-9yr >9yr
Certificates Bonds Realkredit Nykredit Bank loans % of total (ex CD's) % limit any single yearMNOK
Average maturity = 10.1yrs (11.2 yrs excluding CD's)
Debt maturity profile
Amount in MNOK and % of total outstanding debt maturing per year
Hedging >50% of rate exposure
17
Maturity profile of outstanding hedges
Outstanding hedges in MNOK and % of total debt
51 % 50 %
39 %
30 % 29 %
18 %
15 %
7 %5 % 5 %
0 %
10 %
20 %
30 %
40 %
50 %
60 %
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
30.06.2015 2015 2016 2017 2018 2019 2020 2021 2022 2023
NOK SEK DKK DKK fixed rate loans Hedging ratio
MNOK
Average maturity = 3.8 yrs
Active participant in bond market
18
* 7-year fixed rate
Ticker Issued Maturity Amount (m) Currency Spread / rate Security
SST44 14.09.2012 14.09.2017 725 NOK 170 Secured
SST32 08.11.2012 18.11.2016 625 NOK 140 Secured
SST38 26.04.2013 26.04.2017 390 NOK 130 Secured
SST43 11.11.2013 11.11.2016 300 NOK 125 Unsecured
SST48 21.02.2014 21.02.2018 400 NOK 110 Unsecured
SST49 21.02.2014 21.02.2019 300 NOK 122 Unsecured
SST52 22.05.2014 22.05.2017 500 NOK 75 Unsecured
SST59 08.12.2014 08.12.2017 500 SEK 77 Unsecured
SST 08.06.2015 08.06.2022 400 NOK 2.62%* Unsecured
Outstanding bond issues
Continually lower spread on new issues
First Norwegian real estate company to issue in SEK market
New issues on unsecured basis
Covenants: Equity ratio of 20% and Change-of-control
Key rating considerations
19
Strong business risk profile Conservative financial risk profile
Market risk
– Generally viewed as low risk industry
– Strong portfolio
– Significant scale within Scandinavia
– Capital requirement acts as barrier to entry
Cash flow risk
– Diversified tentant base
– Stable rental income and cash flow
– Minimal payment defaults in the past five years
– Low vacancy rate
Management and ownership
– Strong track-record as value creator
– One of the dominant retail players in Scandinavia
– Supportive ownership
Strong rating metrics
– 46% LTV and 2.5x interest coverage
– Klépierre LTV below 40%
Conservative investment strategy
– Lower investment pace
– High pre-letting requirement in new projects
Good liquidity
– 850 MNOK in unused credit facilities
– Unpledged assets of 3.4bn NOK
– Excellent access to bank funding and capital markets
Long and staggered debt maturity profile
Hedging >50% of interest rate exposure
Secured debt to pledged asset value <47%
S&S corporate rating: BBB+
Klépierre official rating: A-
Steen & Strøm AS Nils Henrik Aspeli Investment Manager Direct: +47 23 21 35 06 Mobile: +47 99 29 27 88 [email protected] www.steenstrom.com
