2016 results results financial year 2016 zurich, 2 …...mar 02, 2017 · zurich, 2 march 2017...

2016 results

Zurich, 2 March 2017

DRAFT10. Februar 2017

RESULTS

FINANCIAL YEAR 2016

ZURICH, 2 MARCH 2017

Zurich | 2 March 2017

Welcome address1

2016 highlights2

Key financial data 20163

Overview of property portfolio and project pipeline4

New initiatives, strategy and projections5

2016 results 2

Annual General Meeting outlook and Q&A6

2016 in short

Welcome address

Zurich | 2 March 2017 2016 results 3

Strategic priorities successfully put into effectStrategy

Healthy income growth achieved in a challenging environment2016 results

Unchanged dividend to be proposed to shareholders at General Meeting2017 General Meeting


Welcome address1

2016 highlights2

2016 results 4





Portfolio exceeds CHF 10 bn for 1st time

2016 highlights

Zurich | 2 March 2017 5

10 092 9 785 9 687

2014 2015 2016

453 443 446

2014 2015 2016

1 049 853995

2014 2015 2016

362 350 381

2014 2015 2016

10 0923.1%

4.2%

1 049

23.1%

5.5%

4532.2% 1.6%

362

3.5%-5.0%

PROPERTY PORTFOLIO

in CHF million

RENTAL INCOME

in CHF million

OPERATING INCOME

in CHF million

EBIT (adjusted*)

in CHF million

* excluding IAS 19 effects, revaluation gains and condominium sales

2016 results

Increase in net profit and net asset value

2016 highlights


285

285

236281

2014 2015 2016

46.6

46.6

39.646.4

2014 2015 2016

4.04 3.90 4.20

2014 2015 2016

72.43 69.06 71.15

2014 2015 2016

20.7%

1.4%700 Bp

20 Bp

3.6%-3.8%

4.04 72.434.9% 1.8%

NET PROFIT

in CHF million excl. revaluation effects

EQUITY RATIO

in %

EARNINGS PER SHARE

in CHF excluding revaluation effects

NET ASSET VALUE

in CHF per share after deferred taxes

Dynamic performance from all business fields

2016 highlights


Integration of new units

acquired is on track

Approval received for first

genuine PPP collaboration

in Richterswil

Expanded network from

67 to 71 facilities in 2016

Increased profitablity

Assisted Living

Increased turnover in a

challenging market

Stable footfall maintained

despite rebuilding work

Dynamised the business

model by successfully

introducing online shop

Developed additional

digital opportunities

Expansion at international

site Zurich airport

Retail

Profitable expansion

thanks to attractive

purchases

Expanded know how in

large-site transformation

and development

Professionally managed

vacancy rates

Time to market in project

pipeline shortened

Strengthened ties to

market and clients

Real Estate

Real Estate projects and transformations on track

2016 highlights


Secured planning permission for three projects in Geneva

Planning request submitted for Siemens site in Zurich

Green light from voters on Weltpoststrasse project in

Berne

«PPP» as role model in Richterswil

Doors opened at Motel One in Basel

New leases on a total of ~70 000 m2

Repositioned Schönburg Berne and Brandschenke-

strasse Zurich

Turnaround for Stücki and A1-Center

New purchases totalling over CHF 250 million

Real Estate

Wincasa grows thanks to innovation and customer proximity

2016 highlights


Renewal of property management contracts with major

clients

Acquisition of major new mandates such as Swisscanto

and Swisscom; enlarging client base

Takeover of «immoveris» with a strong regional presence

in Bern and Fribourg

Expanded assets under management

Launched a digital portal for tenants

Opened new large-site development business area

Wincasa

Jelmoli performs robustly and expands its network

2016 highlights


Launched online shopping portal «jelmoli.ch»

Expanded «Shoe World» for men and women, offering

widest selection in Switzerland

Opened luxurious new Bucherer shop

Increased turnover in a retail market facing major

challenges in 2016

Maintained footfall despite fewer tourists from Asia and

rebuilds

First steps towards expansion at international site Zurich

airport

Retail

Tertianum successfully integrates acquisitions, expands network

2016 highlights


Integration of the SenioCare homes

Acquired BOAS, thus establishing a presence in French-

speaking Switzerland

Added 4 new facilities, thus enlarging network to 71

facilities in all by year end 2016

Expanded to 1 800 apartments and 2 700 beds

Significantly raised profitability

Harmonising market profile under Tertianum brand from

early 2017

Assisted Living

Sustainability as a core pillar of our DNA

2016 highlights


Integration of roadmaps for all six core initiatives into the business plan process

Core initiatives

Development of a dedicated unit for Sustainability and Innovation

Appointment of Head of Sustainability and InnovationManagement

First GRI report published in 2016 annual report

GRI certificate received in February 2017Reporting

StakeholdersFinancial

excellence

Compliance and

social

commitment

Sustainable

investments and

services

Protecting the

environment

Attractive

working

environment

2016 objectives

2016 highlights


Innovative business model continued and strengthenedStrategy implementation

Vacancy management successfully optimised

Focus on modernisations and transformations

Continuing active and value-oriented portfolio and asset management

Property portfolio

Project development work intensified

Project completions result in additional rental income

Priority focus on Assisted Living projects

Project pipeline

Gradual reduction in financing costs in a low-interest-rate environment

Equity ratio maintained at ~45%, liability maturities balanced

Ensuring an attractive dividend policy

Financial management

Income and growth potential of business fields developed further

Potential Group-wide synergies identified and realised

Basis for sustainable performance secured

Business field management

Attractive dividend

* Based on share price at year-end 2016 and proposed dividend of CHF 3.70 to shareholders at General Meeting

2016 highlights


SHARE PRICE PERFORMANCE

Indexed since IPO

DIVIDENDS 2001 – 2016

in CHF4.4%*

1.60

2.00

2.402.50

2.80

3.10

3.40 3.403.50 3.50

3.60 3.60 3.603.70 3.70 3.70

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

LEBESNSRÄUME UND

PERSPEKTIVEN

SCHAFFEN

LEBESNSRÄUME UND

PERSPEKTIVEN

SCHAFFEN

WIR GESTALTEN

ZUKUNFT

WE SHAPE

THE FUTURE


Welcome address1

2016 highlights2


2016 results 16




445.9

453.0

-14.4

-5.0

-3.6 4.1

0.9

25.1

Rental income increased by 1.6 percent

Net rental income performance

in CHF million

«Package sale» of a portion of the

portfolio to the Swiss Prime Investment

Foundation in 2015, reduced rental

income in 2016

Impact of changes to existing properties

of some -1% only demonstrates high

quality of entire property portfolio

Assisted Living’s acquisition of

SenioCare added a substantial CHF

25.1 million to net rental income

Facts



Net rental

income

FY 2015

Net rental

income

FY 2016

Changes to

existing properties

Completed

projects

Acquisitions

Differential arising

from additionally

leased properties

(AL*)

Divestments

Modifications |

modernisations

Operating income incresed

Operating income increased

principally as a result of

acquisitions at Assisted Living

Real Estate and Retail

revenues stable

Reduction in conversion rate

under IAS 19 cut personal

costs by CHF 37.5 million

Substantial revaluation gains

and profits from disposals

recorded in 2015

Major acquisition/ integration

costs at Tertianum in 2016

Facts



Operating income by segment

in CHF million

Operating profit by segment

in CHF million

* past service costs

2014 2015 2016

Real Estate 491.9 586.2 469.9

Retail 0.9 -2.9 -2.4

Assisted Living 9.0 8.2 15.2

Consolidation -39.0 -38.0 -22.9

Operating profit (reported) 462.8 553.4 459.8

Adjustment effects

IAS 19* - -5.6 -37.5

Revaluation gains -113.2 -124.6 -60.5

Condominium sales - -42.2 -

Operating profit (adjusted) 349.5 381.1 361.8

534.0656.8

546.4

201.9

237.6406.0

172.3

156.4151.7

2014 2015 2016

Retail Assisted Living Real Estate

Profit excluding revaluation effects higher than in 2015

Swiss Prime Site Group income statement

in CHF million

Operating income rose 5.5%

Profit from revaluations demonstrates

high portfolio quality

Higher operating expenses attributable

to acquisitions

Optimisation of financing structure had

positive impact on financial expenses

Income tax expenses in line with

projections

Profit excluding revaluation effects rose

by 1.4%

Facts



2014 2015 2016

Operating income 852.7 995.2 1 049.5

Revaluations 113.2 124.6 60.5

Income from associates 12.9 12.1 8.6

Net result from investment property sales 2.1 30.9 24.9

Operating expenses -518.9 -609.4 -683.7

Operating profit (EBIT) 462.8 553.4 459.8

Financial expenses -100.0 -100.8 -86.0

Financial income 2.8 4.6 4.9

Income tax expenses -79.0 -102.2 -67.5

Profit (including minority interests) 286.7 355.1 311.2

Profit excluding revaluation effects 236.0 280.8 284.8

9 686.6

10 092.1

-59.9147.0

4.3 4.5 59.4

250.2

Property portfolio successfully expanded

Property portfolio (at fair value)

in CHF million

Acquisition of two new properties (net)

brings portfolio total to 184 properties

Five properties acquired (with a fair

value of CHF 250.2 million at year-end

2016)

Three properties sold (with a fair value of

CHF 59.9 million at year-end 2015)

Overall value of existing portfolio

increased due to market climate,

enhanced income levels, investments

and high quality of the properties

Further reduction in vacancy rates

projected

Facts



Fair value

FY 2015

Other existing

properties

Other

building land

Transformation &

modernisation

projects

Completed

projects

Acquisitions

Fair value

FY 2016

Divestments

4 956.0

5 176.6

-259.6 311.2

17.7

-0.8

151.9

0.2

Sound equity ratio of 46.6 percent

Shareholders’ equity

in CHF million

Dividend of CHF 3.70 per share

distributed in April 2016

Increase in revaluation gains on owner-

occupied properties

1.8 million new shares issued following

convertible bond conversions

ROE within long-term target range

Facts



Shareholders’

equity

FY 2015

Shareholders’

equity

FY 2016

* after deferred taxes

Profit, including

minority interests

Revaluation of

owner-occupied

properties*

Convertible bondsPension

fund revaluation*

Miscellaneous

Dividend

distribution

Financing for the long term

Financing structure optimisation had

positive impact on average liability

interest rate (-35 basis points)

Maturity profile lengthened to benefit

from current interest rate levels (+0.1

year)

Optimal 44.4% loan-to-value ratio is

inside target range



FactsFinancing structure

in CHF million

Financial liabilities

2015 2016

Ø interest rate (in %) 2.1 1.8

Ø maturity (in years) 4.4 4.5

Loan-to-value (in %) 44.0 44.4

in CHF million 2015 2016

Short-term 572.1 678.1

Long-term 3 689.5 3 802.0

Others 6.9 3.5

Total 4 268.5 4 483.6

4 268.5 4 483.6

3 119.5 3 031.2

940.7 1 191.5

189.6243.2

11.814.2

6.93.5

2015 2016

Other LT debt Long-term loans

Convertible Straight bonds

Mortgages

LEBENSRÄUME

SCHAFFEN | ZUKUNFT

GESTALTEN

WIR SCHAFFEN

LEBENSRÄUME

WE CREATE

LIVING SPACES


Welcome address1

2016 highlights2




2016 results 24


Rental income increased despite challenging

market environment

Average sales achieved premium of some 25%

over market value

Marked increase in rental income | Vacancy rate cut


Property portfolio and project pipeline

Comments

2016 results 25

2015 2016

Total (in CHF million) 9 686.6 10 092.1

of which under construction 346.7 307.3

Number of projects 182 184

of which new building projects 4 7

Rental income 445.9 453.0

Net property yield 3.9 3.7

Property sales result (net) 30.9 24.9

Real estate portfolio Vacancy rate

Vacancy rate cut significantly thanks to high quality of

investment properties and professional approach to portfolio

management

Objective: to cut vacancy rate further in 2017

Comments

Balanced maturities



2016 results 26

Contractual end of rental relationship in % of net rental income (Real Estate business field as of 31 December 2016)

10.2%

11.5%

9.2%

11.5%

13.9%

5.3%

5.2%

4.1%

2.9%

2.5%

23.7%

0 year

1 year

2 years

3 years

4 years

5 years

6 years

7 years

8 years

9 years

10 years

Attractive, well-diversified portfolio



German-speaking Switzerland remains key strategic

region in portfolio

Geneva office expanded in readiness for projected growth

Comments

Portfolio by region

1

2

3

56 7 8

Δ 2015 2016

1 Zurich 0%P 42%

2 Geneva -1%P 21%

3 Northwestern

Switzerland

0%P 14%

4 Berne 0%P 9%

5 Central Switzerland 2%P 7%

6 Eastern Switzerland -1%P 5%

7 Southern Switzerland 0%P 1%

8 Western Switzerland 0%P 1%

Portfolio by type of use

1

2

3

56 7 8

Δ 2015 2016

1 Offices 1%P 40%

2 Retail -1%P 33%

3 Assisted living 0%P 6%

4 Cinemas/restaurants 0%P 6%

5 Car parks 0%P 6%

6 Warehouses 0%P 5%

7 Residential 0%P 1%

8 Other 0%P 3%

2016 results 27

With over 2/3 of portfolio, office and retail space remain

the key property type

Nearly 80% of the portfolio is in the most attractive

quadrant of the Wüest Partner market matrix

Comments

With Motel One new hotel chain established in Switzerland

Innovative German hotel

chain as new partner

Focus on design and

budget

Concept creates attractive

new market segment

Excellent initial venue

opened in Basel in July

2016

Second hotel now being

realised in Zurich (opening

mid-2017)


Highlights


Further development of «Schönburg Berne»

Comprehensive project to

generate significant added

value for the city, the

district and residents of

Schönburg

Trendy budget design

hotel chain Prizeotel on

board as strong project

partner

Retail spaces (Coop) and

fitness centre complement

overall design

Building permit received

(02/17), construction to

commence in 2017


Highlights


NZZ Print site ready to greet a promising new future

Project will create a centre

for research, enterprise

and the transfer of

knowledge

Zühlke is both strong

anchor tenant and ideal

partner for this site

Perfect mix between

established businesses,

start-ups and events

Urban appeal of location

and flexibility of building

are important assets


Highlights


Developments at Stücki Basel point the way to the future

Convincing overall

concept

Arena Cinemas is ideal

partner for leisure

segment

Dependence on pure retail

sector reduced

Link to science park will

generate additional footfall

and synergies

Project implementation

scheduled for 2017 – 2021


Highlights


Bank building finds new life as news headquarter



Redevelopment and

comprehensive renovation

of a building from the

1970s

Minergie standard

Excellent location in the

city of Zurich

Ringier Axel Springer

Switzerland AG signed up

as anchor tenant

Occupancy rate > 90%

Highlights

New purchases with attractive potential



Fair value in CHF

62.1 millionFair value in CHF




78.1 million

BAARZUGERSTRASSE 57

LUCERNELANGENSANDSTRASSE 23

GENEVARUE DES ALPES 5

BAARGRABENSTRASSE 17 / 19

LUCERNE

SCHWEIZERHOFQUAI 6

Phases of realisation by project



WE OFFER NEW

PERSPECTIVES


Welcome address1

2016 highlights2




2016 results 36


New organisational structure aligned with the market

New initiatives, strategy and projections

Zürich | 2. März 2017 Resultate Geschäftsjahr 2016 37

CEO

Peter Lehmann

CEO

Oliver Hofmann

CEO

Luca Stäger

CEO

Martin Gut

CEO

Franco Savastano

CEO René Zahnd | CFO Markus Meier | Peter Lehmann | Oliver Hofmann | Franco Savastano | Luca StägerGroup management

Business field

Segment Real Estate Assisted LivingServices Real Estate

Income diversification

through development of

existing real-estate-related

business fields and the

synergies they generate

Swiss Prime Site Group’s 4 key strategic priorities



Investment in top-quality

properties with attractive

yields and potential for

capital appreciation

Focus on floorspace for

commercial use and

development projects in a

variety of regions

Innovation, sustainability

and digitalisation as the

key drivers of further heathy

growth

$1

10

10000

Increasing income

from existing

portfolio

Raise market profile

Modernisations

and transformations

Creating new

living spaces

Investment in

development projects

Generating develop-

ment profits from

the project pipeline

Real Estate continues to develop the «Prime» portfolio

Enhance sustainable income growth

from unique quality portfolio

Use «Prime» requirements with

regard to building quality, location,

interior features and building flexibility

to achieve gradual independence

from market cycles

Large-site development know how will

be major advantage in achieving

further market focus


Group effects


Focus

Vacancy rate

5.5 – 6.0%

Intensifying ties

to clients

Further increasing assets

under management

Enhancing

employee identification

with company

Digital leadership

Income growth and

diversification

Developing new

sources of income

Wincasa is a key source of market intelligence

Broad know how and substantial

expertise in real estate services

represents key opportunity in

saturated markets

National and geographic expansion

raises market profile

Strong, sustainable profitability and

efficient processes

Utilising smart data for innovations at

Group level

Front runner in the field of

digitalisation


Group effects


Focus

Operating

EBIT margin

~ 15%

Jelmoli, largest portfolio asset, contributes important retail know how

Strong, independent presence in one

of the largest and most important real

estate segments (Retail)

Developing and transferring know

how across Swiss Prime Site

Active, strategic management of the

principal property in the portfolio

Attractive, stable rental income


Group effects

* from Jelmoli-operated stationary floorspace


More services and

items per sales ticket

E-commerce accelerating

growth

Targeting

economies of scale

Raising property

values

Increasing share of

premium market

Enhancing brand

profile

Focus

Revenue growth

+1.5 – 2.0%*

Assisted Living provides demographic and political opportunity

Demographic evolution of society is

one of the key transformations of our

time

Geriatric and care sector has

extremely close links to core real

estate business

«PPP Private Public Partnership»

model provides future template for

optimal cost sharing within the

community

Major opportunity for market leaders

Swiss Prime Site and Tertianum to

gain additional market share (privately

owned units account for ~5% of

geriatric/care sector)


Group effects


Integration of the

units acquired in

2016

Clear brand strategy

initiated

Prioritising project

development (PPP)

Implementation of

new technologies

Enhancing care expertise

and employee development

Creating service

ecosystems

Focus

ROIC ~10%

Solutions offers 1st class real estate asset management for 3rd parties

Good access to residential sector,

which is not in scope of Swiss Prime

Site

Further income diversification

requiring limited capital commitment

Helps to project Group image, makes

new investment product know how

available throughout Group

Large, attractive portfolio of

institutional clients

(~250 pension funds)


Group effect


Launching

additional invest-

ment products

Acquisition of asset

management mandates

Successfully

positioned in market

Capitalising on acquisition

opportunites

Portfolio of Swiss Prime

Investment Foundation

(SPIF) expanded

Focus on residential

properties

Focus

Attractive

investment yield

Progress with core sustainability initiative



Financial

excellence

Sustainable

investments and

services

Compliance and

social

commitment

Attractive

working

environment

Protecting

the environment

First stakeholder panel in April 20172018 – 2020 business plan

congruent with sustainabilty roadmap

Leadership Training employee

development programme in

2017 First sustainability report (2017)

Long-term targets for energy use and

consumption of electricity and water at

properties in our portfolio

Holistisic approach to investments, as

demonstrated by comprehensive

Schönburg Berne modernisation

Stakeholders

Change in accounting standards from IFRS to FER from 2017



Balance sheet: owner-occupied properties to be reclassifed as investment properties

Balance sheet: goodwill/intangible assets and pension provision obligations to be eliminated

Income statement: no adjustment to pension obligations required (IAS 19 ceases to apply)

Income statement: no depreciation on owner-occupied properties and client base

Key effects on balance

sheet and income

statement

ReportingNew semi-annual reporting calendar

Still high transparency

GUIDENCEGUIDENCEGUIDANCE

Guidance for 2017



Higher operating incomeTop line

Lower vacancy ratesVacancy management

Enhanced operating profit (EBIT) excluding revaluationsProfitability

Further growth through project completions (Etzelgut and Meyrin) and new purchasesPortfolio

Attractive distribution to be maintainedDividend policy



2016 results 48


Welcome address1

2016 highlights2



Outlook 2017 Annual General Meeting

Annual General Meeting outlook and Q&A


All Board members standing for re-election for a further year, except Dr. Bernhard HammerBoard of Directors

New remuneration model for executive management introduced (including LTI)Compensation model

Unchanged dividend of CHF 3.70 recommended to shareholdersDividend

Swiss Prime Site AG Swiss Prime Site AG Swiss Prime Site AG

Frohburgstrasse 1 Prime Tower, Hardstrasse 201 54, Rue du Rhône

CH-4601 Olten CH-8005 Zurich CH-1204 Geneva

Tel.: +41 58 317 17 17

www.sps.swiss

Mladen Tomic

Media Relations

Head Corporate Communications

Business: +41 58 317 17 42

Mobile: +41 79 571 10 56

[email protected]

Markus Waeber

Investor Relations

Head Investor Relations

Business: +41 58 317 17 64

Mobile: +41 79 566 63 34

[email protected]

Headquarters Zurich Office Geneva OfficeCorporate calendar

Annual General Meeting 2017 11 April 2017

Results 1st half 2017 24 August 2017

Disclaimer

All the information contained in this presentation is provided for information purposes only and does not constitute a basis for any investment decision or a recommendation to buy

Swiss Prime Site AG securities. The contents of this presentation were carefully prepared and researched. Notwithstanding this, Swiss Prime Site AG makes no guarantee that the

information presented here is correct, complete or current. Furthermore, Swiss Prime Site AG accepts no liability for any direct or indirect losses, liability claims, costs, demands,

expenses or damages, whatever their nature, arising from or connected with the use of all or part of the information contained in this presentation.

This presentation can contain statements relating to the future using expressions such as «believes», «intends», «estimates», «assumes», «expects», «forecasts», «plans», «can»,

«could», «should» or similar terms. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which can result in the actual results,

financial situation, evolution or performance of Swiss Prime Site AG differing substantially from that directly or indirectly referred to in those forward-looking statements.

Given these uncertainties, potential investors should not rely on these forward-looking statements. Swiss Prime Site AG cannot guarantee that the opinions and forward-looking

statements contained in this presentation prove to be correct. For that reason, Swiss Prime Site AG assumes no responsibility or duty to update these forward-looking statements

publicly or to adapt them to reflect future events, developments or expectations relating to Swiss Prime Site AG to which these forward-looking statements originally referred.

2016 results results financial year 2016 zurich, 2 …...mar 02, 2017 · zurich, 2 march 2017...

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