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STEEN & STRØM
COMPANY PRESENTATION
2 2017 Steen & Strøm /
Agenda points
Strong portfolio of tier 1 assets
Strong and supportive ownership
Conservative financial profile
A- assigned rating from S&P
3 2017 Steen & Strøm /
The Company
Asset portolio
Investment focus
Operations
SCANDINAVIA
Stockholm
4
Denmark Norway Sweden
Shopping
centers
3 10 5
Visitors,
million
22 38 27
Shopping
center
turnover
595
million €
1.3
billion €
847
million €
Number
of stores
310 785 505
Leasable
area, sqm
130 300 275 000 231 300
2017 Steen & Strøm /
Key figures 2016
• 18 shopping centers in Denmark,
Norway and Sweden
• 90 million visitors
• 2.7 billion euro in shopping center
turnover
• 1 700 stores
• 636 000 sq.m. leasable area
Oslo
Copenhagen
Clearly defined operating and investment strategy
5 2017 Steen & Strøm /
Ownership, development and
management of attractive shopping
centers in Scandinavia.
Assets located in densely populated
areas with strong demographics and
growth.
Target no.1 centers in catchment area
with limited options for new competitors.
Asset rotation – active divestment and
reinvestment strategy with focus on
large centers in urban areas.
Investment focus Development Management focus
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.
Low exposure to development projects
(<5% of assets) and low investment pace
going forward.
Active renegotiation and retenanting to
achieve high reversion at each center.
Business plans include 3-year leasing,
marketing and development plans that
act as road map.
Thorough benchmarking ahead of each re-lease to secure right tenant at right
rent level (OCR).
Active strategy to increase reinvoicing
potential.
ROI – Return on Investment
OCR – Occupancy Cost Ratio
Asset rotation strategy to continually optimize portfolio
6 2017 Steen & Strøm /
Focus on strengthening portfolio and reducing leverage
Divestment of smaller, rural, primarily car-based centers or assets meeting increased competition.
Sales proceeds from divestments mainly used for debt redemption.
New investments focused on 3-4 largest cities in each country, public transportation connectivity and high-growth areas.
0
500
1 000
1 500
2 000
Markedet
Torvbyen
Lillestrøm
Oslo City
Turnover (million)
Åsane
Stovner
Etage
MittiCity
Torp Mirum
Sollentuna
Avg. Sweden
Avg. Norway
Halden Familia
Sweden Norway
Sale of 4
Norwegian
centers to
Citycon for
~2bn NOK
2013
Sale of 5
Swedish
centers to
Olav Thon
for ~3.2bn
SEK
2014
Acquisition
of Oslo City
for ~3.3bn
NOK
2015
Sale of
Åsane and
Torp to
Thon and
Lillestrøm to
DNB (~3bn
NOK)
2016
Økern
develop-
ment
~1.5bn
NOK
Future
Emporia,
Malmö
Galleria Boulevard,
Kristianstad
Økern Sentrum,
Oslo
Oslo City,
Oslo
Strong portfolio of major shopping centers
7 2017 Steen & Strøm /
No. 1 retail destinations within catchment
Urban locations with good connectivity
Newer shopping centers with high standard
High occupancy rate
EPRA occupancy rate
95,1%96,4%97,2%
Sweden
Total: 96.5%
Norway Denmark
Focus on Tier 1 shopping centers
16,4%13,9%13,6% Total: 14.2%
Norway Sweden Denmark
0,0%
0,3%
0,5%
Total: 0.3%
Norway Sweden Denmark
Occupancy cost ratio
Late payments rate
Low vacancy
Sustainable OCR
Low late payments
EPRA – European Public Real Estate Association
Good operational performance: Like-for-like turnover evolution
8 2017 Steen & Strøm /
9,29,18,9
8,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
9,5
bn NOK +8%
2016 2015 2014 2013
LFL portfolio
7,57,3
6,96,6
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
bn SEK
+14%
2016 2015 2014 2013
LFL portfolio
3,73,6
3,43,4
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
2,2
2,4
2,6
2,8
3,0
3,2
3,4
3,6
3,8
2014 2013
bn DKK +9%
2016 2015
LFL portfolio
ex Oslo City
Excludes effect of Vinterbro renovation and Kristianstad (successive development)
Good operational performance: Like-for-like NRI growth
9 2017 Steen & Strøm /
2,0%2,5%
3,7%
1,5%
2,0%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
5,5%
6,0%
2,7%
0,2%
2015
3,5%
Avg. 4.0%
Q1 2017
5,7%
2016
Average indexation
NRI like-for-like growth above indexation
4,3%
6,4%
1,8%
1,2%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
5,5%
6,0%
6,5%
2015
6,4%
0,0%
4,4%
0,1%
Avg. 4.6%
Q1 2017
3,0%
2016
Average indexation
NRI like-for-like growth above indexation
1,8% 1,9% 2,1%
5,2%5,7%
3,1%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
5,5%
6,0%
6,5%
7,0%
7,5%
8,0%
2015
7,6%
7,0%
Avg. 6.6%
Q1 2017
5,2%
2016
Average indexation
NRI like-for-like growth above indexation
NRI – Net Rental Income
Main tenants are recognized brands with low credit risk
10 2017 Steen & Strøm /
Top 10 brands in each country
~33% of total turnover
NOR top 10 # stores GTO
(MNOK)
TO sqm (NOK)
Coop 3 918.6 61,442
H&M 11 592.4 33,438
Meny 5 537.9 50,632
Vinmonopolet 4 449.9 188,489
Apotek 1 6 288.4 158,629
Cubus 9 222.4 30,102
Elkjøp 1 194.0 103,542
Clas Ohlson 5 170.4 46,935
Kappahl 8 164.9 24,446
XXL 1 160.9 43,044
Total 53 3,699.8 49,813
SWE top 10 # stores GTO
(MSEK)
TO sqm (DKK)
ICA 3 789.4 55,024
Willy’s 2 373.4 50,661
H&M 4 331.5 40,879
Stadium 6 302.1 33,356
Clas Ohlson 4 196.4 33,917
Telenor 4 148.1 298,618
Kappahl 4 136.7 29,098
Apoteket 4 131.6 116,180
Kicks 5 125.2 115,526
Jula 1 122.6 43,603
Total 37 2,657.0 48,406
DEN top 10 # stores GTO
(MDKK)
TO sqm (DKK)
H&M 4 289.9 37,044
Elgiganten 1 253.1 98,546
Kvickly 2 145.1 28,627
Magasin 1 141.1 21,448
Bahne 2 78.9 25,754
Sportmaster 3 75.9 35,261
Imerco 3 56.8 48,764
Zara 1 52.2 40,386
Sport 24 3 47.3 22,741
Toys R’ Us 1 47.1 42,464
Total 21 1,187.3 35,421
~33% of total turnover ~33% of total turnover
Total current portfolio value with SST ownership: ~37bn NOK
11 2017 Steen & Strøm /
Portfolio valuation on 100% basis
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
5,5%
6,0%
7,0
16,0
17,0
8,0
15,0
14,0
13,0
10,0
11,0
18,0
12,0
9,0
5,0
6,0
4,0
3,0
2,0
1,0
0,0
15,1
11,2
3,9
Q4 2016 Q2 2017
12,4
10,4
3,4
2,7 2,7
10,9 11,2
17,1
13,0
Q2 2016
3,5
14,7
bn NOK
2,6
Q4 2015
9,8
Q2 2015
Divested assets
New assets
Average cap rate
Current portfolio
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
5,5%
3,0
2,0
4,0
0,0
1,0
7,0
10,0
8,0
11,0
6,0
12,0
13,0
14,0
5,0
9,0
Q2 2017
12,4
11,2
1,2
12,4
bn SEK
10,4
1,2
Q4 2016
12,0
1,3
Q4 2015
12,5
Q2 2015
11,6
13,3
Q2 2016
Average cap rate Current portfolio
Divested assets
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
5,5%
1,0
0,0
0,5
4,0
2,0
8,0
3,0
5,5
3,5
7,5
5,0
4,5
7,0
2,5
6,5
1,5
6,0
Q2 2017 Q4 2016
7,7
bn DKK
Q2 2016
7,6
Q4 2015
7,2
Q2 2015
7,0
7,8
Current portfolio Average cap rate
12 2017 Steen & Strøm /
Ownership
Corporate structure
Integration
Support
Group structure and ownership
13 2017 Steen & Strøm /
Group corporate structure
Klépierre APG
Steen &
Strøm AS
S&S Holding
AB
S&S Holding
A/S
Swedish
propco’s
Danish
propco’s
Norwegian
propco’s
56.1% 43.9%
100% 100%
Strong owners with real estate competence
~150 shopping centers in 57 cities in 16
countries.
22.8bn EUR property portfolio.
Simon Group largest shareholder (20.3%).
Pension fund for government and
education employees in the Netherlands.
344bn EUR under management (one of
top five pension funds in the world).
More than 27bn EUR invested in real
estate.
Propco – SPVs with ownership of individual assets
Active ownership and support
14 2017 Steen & Strøm /
Klépierre holds 3 of 5 seats on
the Board of Directors (CEO,
CFO and COO in Klépierre).
APG holds 2 of 5 seats
(Managing Director and
Head of Listed European Real
Estate at APG).
All major company decisions
are made by the Board.
Board and management Operations Financial policy Supportive ownership
All investment / operational
decisions are made by
Klépierre management or the
Board (low threshold ~1m
EUR).
All leasing contracts are
validated by Klépierre
management.
Fully integrated IT and ERP
systems with Klépierre.
Direct operational reporting
on all levels to Klépierre.
Financial policy decided on
Board level and executed in
coordination with Klépierre.
Separate funding in SST, but
all major funding decisions
made by Klépierre or by the
Board.
Strict focus on long-term
credit targets: LTV below 40%,
Net debt to EBITDA below
8.5x and IC minimum 3x.
Klépierre and APG
contributed equity of 1.5bn
NOK to SST in 2011 and 1.3bn
NOK in 2015.
Dividend policy based on
actual capacity with strict
credit targets.
Payment to shareholders will
not conflict with upholding
rating.
Klépierre and APG are long-
term owners of Steen &
Strøm.
15 2017 Steen & Strøm /
Funding
Financial policies
Credit metrics
General financial policies and overview
16 2017 Steen & Strøm /
Current credit steering targets
LTV below 40%.
IC above 3x.
Net debt to EBITDA below 8.5x.
Adj. Debt-to-debt plus equity below 50%;
Adj. EBITDA interest coverage above 2.4x
(S&P definitions commensurate with A-
rating)
Shareholder distribution
Based on actual dividend capacity up
towards 70% of FFO.
Dividend adjusted to meet credit steering
targets and uphold rating (A-).
LTV: 33%
IC: 4.8x
Equity ratio: 55%
Hedging ratio: 67%
Hedging duration:
3.6 years
Debt duration: 11
years
Liquidity management
Sufficient credit lines and liquidity to cover
short-term needs.
Excess liquidity steered towards zero.
Excellent access to funding from external
sources or owners if necessary.
Funding policies
Target all new funding on unsecured basis.
Funding obtained in capital markets or
with strong credit institutions in
Scandinavia with investment grade rating.
Target maximum 20% of outstanding loans
with maturity less than one year.
Target interest rate hedging ratio of
minimum 60% with average maturity
above 3 years.
Loan covenants limited to min. 20% equity
share and change of control.
Figures as of 30.06.2017
S&S funding policies checked by group financial profile
17 2017 Steen & Strøm /
Loan-to-value
33%
38%
Klépierre Steen & Strøm
Klépierre funding policies and link to Steen & Strøm
Group LTV target of 35% - 40% at any time
Group hedging target of >70% at any time
Limited use of secured financing (mainly Swedish / Danish mortgage loans remaining)
Maintain sufficient and qualitative liquidity – group liquidity resources of EUR 3.1bn in cash, RCFs and undrawn overdraft facilities
Interest coverage
4,8x
6,0x
Klépierre Steen & Strøm
Net debt to EBITDA
8,1x8,9x
Steen & Strøm Klépierre
Hedging ratio
67%
92%
Steen & Strøm Klépierre
Steen & Strøm makes up 17-18% of Group NRI and asset values. The financial risk profile of the company is strongly linked to
Klépierre and the official public credit rating of A- for the Group
RCF – Revolving Credit Facility
Credit metrics continue to strengthen (1/2)
18 2017 Steen & Strøm /
12,212,4
16,1
13,9
16,616,315,715,815,5
-21%
2009 2010 2011 2012 2016 2013 2014 2015 Q2-17
Net interest bearing debt (bn NOK)
33%34%
43%46%
53%56%55%
60%62%
-47%
2012 2011 2015 2014 2013 Q2-17 2016 2010 2009
Net loan to value (%)
Strong debt reduction and improvement in LTV
Credit metrics continue to strengthen (2/2)
19 2017 Steen & Strøm /
55%
51%
45%
41%
36%
31%32%
28%27%
2016 2013 2012 2009 Q2-17
+99%
2015 2014 2011 2010
Book equity ratio(%)
4,8x
3,9x
2,4x2,3x
2,0x1,9x2,0x1,8x
2015 2014 2016 2013 2011 2010 2009 2012
+167%
Interest cover ratio(x)
Solidity and interest cover strengthened
Diversified funding base
20 2017 Steen & Strøm /
8,6
Currency
12,8
4,2
12,8
4,2
12,8
3,6
5,0
1,9
10,9
12,8
Security
3,4
SEK
DKK
Loan type Fixed / Floating
1,6
7,9
NOK
CDs
Bonds
Real-kredit
39%
Floating
Unsecured
Secured
28%
33%
12%
27%
61%
15%
85%
33%
67%
LTV steering target Lowest funding cost 60% min. hedging 67% unsecured -> 2020
Fixed
Total gross debt as of Q2-17 in bn NOK
53% pledged assets with expected 27% in 2020
21 2017 Steen & Strøm /
Property values as per Q2-17, excluding projects and building rights
36 97436 974
7 797
12 372
15 101
9 893
7 797
10 068
0
100%
81%
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Property value (MNOK)
Total expected 2020 (NOK) Total current (NOK) Sweden (SEK)
19 642
0%
53%
27%
Norway (NOK)
% pledged
Denmark (DKK)
Of which property value of pledged Total property value % pledged of total assets
Situation after refinancing in
September 2017
Situation after refinancing of
Swedish realkredit loans until 2020
Commitment to new funding on unsecured basis
22 2017 Steen & Strøm /
% of total debt that is secured
Refinancing: 620 MNOK secured bond
(Gulskogen) 600 MNOK secured Realkredit
loan (Farmandstredet)
0%
33%
57%
67%
Refinancing DKK -> future Current Refinancing NOK -> Sep 2017 Refinancing SEK -> 2020
Refinancing: 3.1bn SEK Realkredit /
Nykredit loans (Emporia, Marieberg, Allum)
Refinancing: 3.2bn DKK Realkredit /
Nykredit loans (Field’s, Bruun’s, Bryggen)
*Following the September-17 refinancing Secured Debt to Total Asset Values = 18.3%
Average debt maturity of 11 years
23 2017 Steen & Strøm /
Annual debt maturity in bn NOK (as of Q2-17)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0 >9yr
3,5
8-9yr
0,4
7-8yr
0,4
6-7yr
1,3
0,8
0,5
5-6yr
0,9
0,4
0,5
4-5yr
0,8
0,4
0,5
3-4yr
0,3
2-3yr
0,3
1-2yr
0,9
0,6
0,3
< 1yr
4,0
0,8
1,6
1,6
Realkredit Bonds CP % of total ex CDs
Weighted duration = 11.0 years (12.5 years excluding CPs)
CP – Commercial Paper
Current hedging ratio of 67%
24 2017 Steen & Strøm /
Hedging ratio and fixed margin duration. Outstanding loans and hedges in bn NOK
62%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
8
13
12
11
10
9
7
6
5
4
3
2
1
0 2019
5,5
7,6
41%
43%
2018
7,5 7,9
59%
7,7
8,8
72%
60%
Q2 2017
8,5
2017
67%
0,9
5,5
9%
7%
2021
12,8
2,7
6,4
17% 21%
2020
4,3
7,2
22%
34%
2025
3,5
5%
0%
2024
3,9
5%
0%
2023
0,5
4,2
5% 4%
2022
Outstanding hedges Outstanding loans Fixed margin Interest hedge
Weighted duration of hedges and fixed loans = 3.6 years
25 2017 Steen & Strøm /
Official rating
Rating rationale
Impact on S&S
Assigned A- rating from S&P
26 2017 Steen & Strøm /
Attractive and robust quality of assets
Strategic locations in strong catchment areas, benefiting
from strong macroeconomic fundamentals
Well balanced portfolio between Norway, Sweden and
Denmark
High footfalls
Low vacancy
Large number of tenants (10 largest tenants represents less
than 33% of rental income) with high retention
Limited development risk (<5% of assets)
LTV less than 40% / debt to debt plus equity ratio 46%
Stand-alone rating rationale Core subsidiary of Klépierre
Integral to the group’s current identity and future strategy
17% of group’s net rental income
SST assets outperform group’s average
Sole investment vehicle for the Nordic market with strong fundamentals
Leverage and financial discipline commensurate with
Klépierre
History of support and capital injections
Change of control in loan documentation
Steen & Strøm as a public rated entity
Disciplinary effect on capital structure and funding of investments
S&P debt to debt plus equity threshold of 50%
S&P adj. EBITDA to interest coverage above 2.4x
Further alignment of funding policies with Klépierre (A-)
Access to wider range of funding sources and maturities
APPENDIX
27 2017 Steen & Strøm /
Portfolio overview
28 2017 Steen & Strøm / Following the September-17 refinancing Net Operating Income (NOI) from encumbered assets = 48.2%
All figures in local currency
Center Country City Ownership Co-owner
Asset
value
Net leasable
area*
Gross rent
F2017
Net rent
F2017 Footfall
Financial
occupancy
Pledged assets
following Sep
refinancing
(%) (million) (sqm) (million) (million) (m people) (%)
Oslo City Norway Oslo 100 % 3 861 22 729 183,0 170,2 10,6 99,0% Unencumbered
Gulskogen Norway Drammen 100 % 2 126 38 704 106,6 103,7 3,2 98,8% Unencumbered
Farmandstredet Norway Tønsberg 100 % 2 026 32 249 108,9 100,1 4,7 99,0% Unencumbered
Metro Norway Lørenskog 50 % Storebrand 1 664 51 337 92,5 79,6 3,9 96,4% Unencumbered
Vinterbro Norway Ås 100 % 1 446 41 648 87,4 73,3 3,2 98,0% Unencumbered
Amanda Norway Haugesund 100 % 890 14 542 55,4 50,8 2,6 98,8% Unencumbered
Arkaden Norway Stavanger 100 % 784 19 818 51,1 42,6 4,6 97,3% Unencumbered
Maxi Norway Hamar 100 % 740 20 760 45,3 39,4 1,5 90,6% Unencumbered
Nordbyen Norway Larv ik 50 % KLP 659 15 955 38,9 34,5 1,4 98,4% Unencumbered
Nerstranda Norway Tromsø 100 % 589 11 701 35,2 31,2 2,1 95,8% Unencumbered
Emporia Sweden Malmö 100 % 5 390 65 585 226,4 201,8 7,0 93,6% Encumbered
Allum Sweden Gothenburg 100 % 2 458 50 288 118,8 106,9 5,5 94,8% Encumbered
Marieberg Sweden Örebro 100 % 2 221 32 008 107,0 102,4 4,6 94,1% Encumbered
Kupolen Sweden Borlange 100 % 1 673 49 042 99,8 89,2 4,3 94,3% Unencumbered
Galleria Boulevard Sweden Kristianstad 100 % 631 20 448 37,8 25,1 5,8 71,9% Unencumbered
Field's Denmark Copenhagen 100 % 4 466 74 710 227,3 202,7 8,3 91,8% Encumbered
Bruun's Denmark Aarhus 100 % 2 814 32 636 150,5 141,5 10,9 98,0% Encumbered
Bryggen Denmark Vejle 100 % 517 19 173 39,1 24,7 3,2 79,2% Encumbered
*Physical shop / office lease area. Excludes storage, common areas, parking areas etc.
Disclaimer
29 2017 Steen & Strøm /
This document has been prepared by Steen & Strøm (“The Company”). This document is not to be reproduced or distributed, in whole or in
part, by any person other than the Company. The Company takes no responsibility for the use of these materials by any person. The
information contained in this document has not been subject to independent verification and no representation, warranty or undertaking,
express or implied, is made as to, and no reliance may be placed on, the fairness, accuracy, completeness or correctness of the information or
opinions contained herein. Neither the Company nor its shareholders, its advisors, its representatives or any other person shall be held liable for
any loss arising from any use of this document or its contents or otherwise arising in connection with this document. In the event of any
discrepancies between the information contained in this document and the public documents, the latter shall prevail. This document does not
constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase any securities, and this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in any jurisdiction.