AMASTEN LARGER, MORE PROFITABLE AND MORE REFINED Interim report Q1 2016 David Dahlgren, CEO
AMASTEN SNAPSHOT Business concept: Residential in prime locations 22% Mid-sized cities close by regional capitals Three regions provide risk diversification Focus: 50% SEK 4 Bn within three years Floated at Nasdaq's main market 2017 Currently listed at Nasdaq First North 28%
CURRENT PORTFOLIO Property value: SEK 2.1 Bn (+65% y/y) NOI yield: 5.1% (Q1) LTV ratio: 61% NAV/share: 4.07kr Portion of residential: 61% (66% incl. care homes, etc) Region Number of properties* Lettable area, sqm Number of apartments Occupancy incl. guarantees,% Sum 181 271 414 2 721 95% * The number of registered properties. Consist of 70 assets in management items.
FIRST QUARTER 2016 IN SUMMARY Acquisition in Härnösand (140 MSEK) Disposals for refining of portfolio (41 MSEK) Continued cost focus improve results in Q1 Q1 most expensive quarter for all residential property companies due to seasonal effects Financing for continued expansion and value creation Preparation for further refurbishment and leasing
ACQUISITION Q1 - HÄRNÖSAND 7 residential properties in prime location Complements existing portfolio 230 apartments for 140 MSEK 19 000 sqm 6% NOI yield 82% residential 2% vacancy Good technical standard Increased economies of scale in region North Double number of apartments Inhouse staff and local knowledge
DISPOSALS FOR REFINING Three disposals since begining of 2016 Skärblacka: 11.5 MSEK (6% over valuation) Landskrona: 9.4 MSEK (equal to valuation) Perstorp Perstorp: 20.0 MSEK (equal to valuation) Disposal motives Skärblacka Smaller objects Local presence too small Limited geographical connection to remaining portfolio Landskrona Limited upside in individual properties Does not meet required rate of return
FIRST QUARTER IN BRIEF (Q/Q IN %) Rental income full year, MSEK Operating surplus full year, MSEK 56 26 53 + 6 % 24 + 8% Q4 Q1 Q4 Q1 2015 2016 2015 2016 Profit from property management before tax full year, MSEK Profit for the period full year, MSEK 2 134 8 6 1 973 + 33 % +8 % Q4 Q1 2015 2016 Q4 Q1 2015 2016 Improving results from both existing portfolio and acquisitions
COST SAVINGS & INVESTMENTS PROVIDE RESULTS Rental income per sqm, SEK Property costs per sqm, SEK 809 883 511 452 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Operating surplus, % Operating surplus increases: 37% 46% Clear cost focus Operational optimization investments Rent increasing refurbishments Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Acquisitions with higher rents Renegotiations of rents
PROFIT FROM PROPERTY MANAGEMENT BEFORE TAX Profit from property management before tax, TSEK 8078 23% Central administration, share of rental income, % 3595 14% 17% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Administrative cost base decreases as share of rental income Capacity for continued growth with existing corporate over-head Increased operating surplus and value growth through strong organisation
NET ASSET VALUE & RETURN ON EQUITY Return targets: 10-12% on equity Return on Equity Q1 2016: 9,6% Distributed to: 60% Appreciations 40% Income from property management Net asset value increases steadily 4.07 SEK/share Increase by 4% under Q1 2016 Appreciation in the portfolio of 1% Growth and NOI improvements accelerates ROE trend Return on equity, % 9,6% 6,7% Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 10,4% NAV & shareprice, SEK 4,07 3,58 2,85 2,96 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Substansvärde Aktiekurs
STRUCTURAL LACK OF RENTAL APARTMENTS ACROSS SWEDEN Mid-sized cities provides higher NOI yield with limited risk 83% of municipalities lack apartments <1% vacancy in municipal housing companies in Amasten s regions Municipalities view on residential requirements, 2015 - Deficit - Balance - Surplus The deficit reduces the risk of vacancy Amasten rents 16 % below municipal housing companies Provides value opportunity through refurbishments Source: Boverket
PROFITABLE REFURBISHMENTS IN AMASTEN CITIES Good rental growth potential in medium size cities Improved outdoor environments in Olofström Lack of modern apartments Lower average rent levels compared to larger cities limits new production On-going refurbishments when tenants move Refurbish remaining empty apartments in 2016 Increase development of commercial space Balance between value growth and property management profit Refurbished apartment in Olofström Yield compression also in medium size cities Value enhancing investments more profitable Apartment standard improvments Economies of scale Refurbished apartments in Olofström provides 950-1 250 SEK/sqm/yr
GOOD INVESTMENT OPPORTUNITIES GOING FORWARD Natural counterpart for local sellers with Amasten as a credible long-term investor Increased number of discussion off-market Increased numbers of disposals in municipal housing companies expected Proven investment model ease acquisition financing
FAVORABLE INTEREST RATE OUTLOOK Swedish central bank (Riksbank) policy rate; Actual and Forecasts since 2010 % 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0.54 0,00-0,50-1,00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Repo Rate, Actual Riksbank s Forecast Fixed interest period: 1 year Credit term: 2,3 year
AMASTEN IN 2016 AND BEYOND Continued expansion Intensify value-add refurbishments Continued growth at the right yield Equipped to be twice as large Purify the portfolio Nasdaq Stockholm main market IPO 2017 Favorable outlook and acquisition opportunities A diversified real estate stock Unique exposure relative to other real estate companies
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APPENDIX
UPDATED EARNINGS CAPACITY Earnings capacity per 12 May, published 2016-05-12 MSEK Rental income 235 Property costs -109 Härnösand Operating surplus 125 Property yield 5,9% Administration costs -32 Operating profit (EBITA) 93 Net financial items -32 Income from property management 61 -Profit from prop. mgmt. attributable to preference shareholders 16 -Profit from prop. mgmt. attributable to common shareholders 45 -Profit from prop. mgmt. per common share, SEK 0,30 Including acquisition in Härnösand 140 MSEK Adjusted for disposal of Skärblacka 11,5 MSEK Landskrona 9,4 MSEK Perstorp om 20 MSEK
THE REPORT IN BRIEF Key figures in selection, MSEK Jan - Mar 2016 Jan - Mar 2015 Jan Dec 2015 Jan - Dec 2014 Rental income 56,2 37,6 169,1 88,4 Operating surplus 25,6 13,8 79,3 38,9 Net financial items 8,0 4,8 22,2 19,7 Profit for the period 18,0 8,9 66,4 38,9 Carrying amount, SEK/sqm 7 861 6968 7 848 6 910 Loan-to-value ratio, properties, % 61 58 60 59 Rents incl. guarantees, % 95 97 96 98
THE REPORT IN BRIEF Key figures in selection Jan - Mar 2016 Jan - Mar 2015 Jan - Dec 2015 Jan - Dec 2014 Property yield, % 5,1 4,3 5,20 4,90 NAV/common share (EPRA NAV), SEK 4,07 3,58 3,92 3,51 Equity/common share, SEK 3,76 3,40 3,67 3,35 Property value, MSEK 2 133 1 296 1 973 1 286 Profit for the period per common share 0,09 0,05 0,44 0,53 Outstanding shares 149 459 005 98 843 303 148 316 148 98 843 303 Average interest expense, % 2,52 2,45 2,70 3,43
FINANCIAL POSITION 2016-03-31 Balance sheet Property value 2.13 bn SEK Total equity 761 MSEK 200 MSEK in preference share capital 61 % LTV on property level 35 % Solidity Average interest expense 2.53 % (2,23) in Q1 Fixed interest period 1 year Credit term 2.3 year Average interest expense 2,5% 2,50% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 Genomsnittlig räntekostnad Loan maturity structure, portion % 57% 33% 10% 0-1 år 1-5 år Efter 5 år
AMASTEN A UNIQUE NICHE Stockholm Stock Exchange is dominated by commercial properties in the three major cities Amasten Stock Market Geography 15% 27% 85% 73% Other Major cities Other Major cities 9% Sector 31% 69% 91% Residential Commercially Residential Commercially Source: Remium and Amasten Amasten offers risk diversification towards other real estate companies High property yields for a residential focused property company Lower competition in medium size cities Low vacancy risk with residential focus
FOCUS ON STRONG MEDIUM SIZE CITIES Finspång: Siemens 2 800 employees Olofström: Volvo Cars 2 000 employees Gasturbine, modell SGT-750 (manufactures in Finspång) Karlskoga: Saab Dynamics 1 000 employees Härnösand: Com Hem 500 employees Automation and professionalism keep advanced production in Sweden
RESIDENTIAL RENTS BY REGION Residential rents 2014 & Average rental growth 2004-2014 1400 3,0% 1200 2,5% 1000 2,0% 800 1,5% 600 400 1,0% 200 0,5% 0 Stockholm Gothenburg Municipalities with > 75k pop Municipalities with < 75k pop Sweden 0,0% Residential rents 2014 Average rental growth 2004-2014
LOW VACANCIES IN MUNICIPAL HOUSING COMPANY Vacancy rate in municipal housing companies in September 2015 Average vacancy rate in municipal housing companies of <1,0% in Amasten s portfolio regions Total vacancy Sweden: < 1 % Total vacancy Stockholm: ca 0,5% 9 of 15 cities has a vacancy rate of 0,5% or less Vacancy municipal housing companies Vakansgrad i Allmännyttan Source: SCB.se
DEMOGRAPHIC BY REGION Population development 2000-2015 1,24 1,23 1,17 1,11 1,09 2000 2003 2006 2009 2012 2015 Amasten towns Sweden Sweden, excl Sthlm, Gbg, Malmö Stockholm Gothenburg Malmö The population trend in Amasten cities coincidence with Sweden excluding the major cities Rate of employment 2008-2014 75,9% 72,9% 74,1% 75,1% 75,1% 75,1% 75,1% 2008 2009 2010 2011 2012 2013 2014 Amasten towns Sweden Sweden excl Sthlm, Gbg, Malmö Stockholm Göteborg Malmö The employment rate in Amasten cities are very stable over time
RESIDENTIAL RENT DEVELOPMENT BY REGION 135 Rental development and consumer price index 130 125 Index 120 115 110 105 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Riket Sweden Stor-Stockholm Greater-Stockholm Stor-Göteborg Greater-Gothenburg Kommuner med > 75000 inv (exkl Stor-Stockholm och Stor-Göteborg) Kommuner Municipalities med with < 75000 <75k inv pop (exkl (excl. Stor-Stockholm Greater-Stockholm och Stor-Göteborg) and Greater-Gothenburg) KPI
BUSINESS MODEL HIGH INITIAL YIELD AND GROWTH POTENTIAL Acquisitions in regions with higher yields of 5-7 % Historical high real growth in residential rents Higher yield in portfolio combined with strong rental growth potential Lower rent level make tenants and the residents association less sensitive for rent increases
MEDIUM SIZE CITIES VERSUS LARGER CITIES Large cities Complex management Greater competition Higher yields in the favorable low interest rate environment More timing-dependent Medium size cities Simpler urban environment Lower overall costs Higher yields in the favorable low interest rate environment Solna, 22 Aug 2014
BE THE PREFERRED LANDLORD Good attitude Quick and professional service and assistance Regular and accessible information multilingual if needed Good properties and staff Good apartment standard compared to municipal housing companies Develop weak properties with potential Proud and professional staff going the extra mile Corporate Social Responsibility Accommodate people with care needs Enviromental investments
AMASTENS SHARES Common share (2016-03-31) Currently listed on First North Shares outstanding: 149 459 005 NAV per common share: 4,07 kr Among the10 largest shareholders are: Balder Kvalitena Länsförsäkringar Danske Capital SEK 3,1 3 2,9 2,8 2,7 2,6 Common share, closing price 2,5 01-jan 15-jan 29-jan 12-feb 26-feb 11-mar 25-mar The prefence share (2016-03-31) Currently listed on First North Shares outstandig: 800 000 Dividens 5 SEK/share per quarter (20 SEK/year) Existing price of SEK 270 provided annual dividend of 7.4% SEK 280 270 260 250 240 230 220 Preference share, closing price Number of shareholders: 14 364 210 200 01-jan 15-jan 29-jan 12-feb 26-feb 11-mar 25-mar
AMASTEN S DISCOUNT TO NAV 1,80 Shareprice/NAV per share* 1,00 21% 0,79 1,11 0,97 1,22 1,21 - Amasten Balder D. Carnegie & Co Heba Victoria Park Wallenstam * Shareprice per 2015-12-31 over latest reported NAV (september 2015). Higest discount among residential investment management companies Profit from property management per common share, 0,30 SEK
AMASTEN S PREFERENCE SHARE Yield 10,00% 9,2% 9,5% 7,50% 6,2% 6,8% 6,5% 6,5% 7,0% 7,0% 7,3% 7,2% 7,5% 8,1% 8,2% 8,5% 8,4% 5,4% 5,00% 2,50% 0,00% Highest interest on preference share among residential investment management companies
MEMBERS OF THE BOARD Rickard Backlund CHAIRMAN SINCE 2014 BORN 1950 MAIN OCCUPATION CEO at Cityhold Property AB EDUCATION Master of Science in Civil Engineering MISCELLANEOUS Rickard possesses long experience in the construction and real estate sector. He is currently CEO of Cityhold Properties AB and Senior Advisor of MSCI-IPD. He is also Chairman and advisor in the real estate company NP3 and CEO of Grön Bostad AB. Christian Hahne MEMBER OF THE BOARD SINCE 2014 BORN1945 MAIN OCCUPATION Vice VD i Erik Selin Fastigheter AB EDUCATION University studies in law and economics MISCELLANEOUS Long experience in the construction and real estate sector including CEO of Newsec Corporate Finance. Currently Executive Chairman of property AB Centur, Alnova Balcony AB brewery. He is also a board member of NP3 AB. Gert Persson MEMBER OF THE BOARD SINCE 2013 BORN 1950 EDUCATION Authorized real estate agent OTHER ASSIGNMENT Chairman of AB Valvet 1, Bjälklaget properties AB, Gråkulla Properties in Helsingborg AB, Treetage i Helsingborg AB, Treetage i Landskrona AB and the broker company Valvet mäklarfirma AB. BACKGROUND Gert Persson is a real estate agent since 1974 and runs his own company in brokerage and is the owner of various real estate companies. He is active and co-owner of the Valvet mäklarfirma AB since 1991. Elisabeth Norman MEMBER OF THE BOARD SINCE 2015 BORN 1961 MAIN OCCUPATION Entrepreneur within real estate EDUCATION BA University of Uppsala MISCELLANEOUS Part of a number of boards among which listed NP3. Other positions include governmental venture capital fund Inlandsinnovations portfolio. Previously property manager at TV4 and partner / CEO of RSD & Shopping Centre Development. Veronica Sjödin MEMBER OF THE BOARD SINCE 2013 BORN1960 MAIN OCCUPATION Management officer EDUCATION Upper secondary economics, education in teaching, Fastighetsägarna Syd MISCELLANEOUS Private Property Owner and Property Manager between 1995-2007. Boardmember HSB Northwest Skåne. Member of the rent tribunal 2005-2010. Boardmember Fastighetsägarna Syd 2004-2008. Elias Georgladis MEMBER OF THE BOARD SINCE 2016 BORN 1978 MAIN OCCUPATION Entrepreneur within real estate and construction EDUCATION Secondary education MISCELLANEOUS Extensive experience within construction an CEO of Sterner stenhus which is among the largest facade construction companies in Sweden. Experience from real estate, property management, development of own properties.
MANAGEMENT David Dahlgren CEO EMPLOYEED SINCE 2014 BORN 1973 Martin Sersé CFO EMPLOYEED SINCE 2015 BORN 1972 EDUCATION Economics Degree at University of Stockholm, Economics and Finance BACKGROUND Prior to Amasten David was Nordic CEO at Tavistock group. The property portfolio at Tavistock included at most 211 properties in Scandinavia with a property value of sek 6,5 billion and consisted of office, industrial and retail properties. Parts of the stock was listed on the London Stock Exchange. Prior to that, David worked as an Investment Manager at Aberdeen Property Investors for more than three years. He began his career in the financial industry in 1998. EDUCATION Master of Business Administration at the Stockholm School of Economics, law studies at Stockholm University BACKGROUND Most recently from his own consultancy firm and has been the CEO and CFO for the Nordic operations of CBRE Global Investors whose property investments in the Nordic region comprised a property value of approximately SEK10 billion. Martin has an extensive career in real estate and finance, and has previously also worked at SEB, Leimdörfer, Sveafastigheter and Aareal Bank. Olof Pergament Head of Property Management EMPLOYEED SINCE 1 sep 2014 BORN1981 Per Jönsson Accountant Officer EMPLOYEED SINCE 2013 BORN 1978 EDUCATION KTH M.Sc. Construction and Real Estate BACKGROUND Most recently AFA properties where he was the property manager for the residential portfolio. Before that he worked at ByggVesta and Aberdeen Asset Management. EDUCATION Economist from Kristianstad University and Lund University BACKGROUND Previously worked as en economist in the SEM SYSTEM group in Helsingborg. Before that Per was the CFO at S&H Technology AB.
OWNERSHIP STRUCTURE Largest shareholders Snapshot from 2016-03-31 Possession Portion Common shares Preferred shares Total Capital Votes Sterner Stenhus Fastigheter AB 25 053 528-25 053 528 16,7% 16,8% Melitho AB 12 500 000-12 500 000 8,3% 8,4% Länsförsäkringar Fondförvaltning AB 10 172 836 23 659 10 196 495 6,8% 6,8% Fastighets AB Balder 10 000 000-10 000 000 6,7% 6,7% Möller & Partners 8 698 045-8 698 045 5,8% 5,8% Immobilien Nordic AB 7 692 308-7 692 308 5,1% 5,1% Försäkringsaktiebolaget, Avanza Pension 4 739 244 129 478 4 868 722 3,2% 3,2% Nordnet Pensionsförsäkring AB 3 761 760 47 490 3 809 250 2,5% 2,5% Danske Capital Sverige AB 3 730 000 76 000 3 806 000 2,5% 2,5% Client Long 3 015 237-3 015 237 2,0% 2,0% Möllerholm Förädling och Förvärv. AB 2 207 966-2 207 966 1,5% 1,5% Möller & Partners AB 2 090 876-2 090 876 1,4% 1,4% Pension, Dancia 2 090 322-2 090 322 1,4% 1,4% Elgudden Invest AB 2 076 241-2 076 241 1,4% 1,4% Jensen Invest AB 2 000 000 20 000 2 020 000 1,3% 1,3% M2 Capital Management AB 1 900 000-1 900 000 1,3% 1,3% Sum 101 728 363 296 627 102 024 990 67,9% 68,0% Others 47 730 642 503 373 48 234 015 32,1% 32,0% Amasten total 149 459 005 800 000 150 259 005 100,0% 100,0%
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