Green Bond Akademiska Hus Welcome! Catarina Fritz CFO and Vice - - PowerPoint PPT Presentation

Green Bond Akademiska Hus

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Welcome!

Catarina Fritz CFO and Vice President Mia Edofsson Sustainability Officer Karin Blomstrand Head of Treasury Emil Rundell Deputy Treasurer

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Our mission:

Akademiska Hus Aktiebolag will own, develop and manage properties for colleges and universities where the primary focus is on education and research. Akademiska Hus will contribute to long-term sustainable development of university and college campuses. Akademiska Hus will contribute to the creation of more student accommodation including construction and management of student accommodation.

Market position

SEK 87 bn property fair value

• 95 % in university cities

3.3 million square metres

• 95 % in university cities

SEK 6,1 bn property income 60 % market share, estimated space, whole country

• Approx. 65 % in university cities
• Approx. 30 % in university colleges

cities Remaining 40 % of the market is highly fragmented

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Financial targets

• Capital structure: Equity ratio in the range 35 to 45 per cent (2018: 45.8%)

Definition: Equity divided by total assets.

• Profitability: A yield on operating capital of at least 6.0 per cent. (2018: 5.5%)

Definition: Operating profit excluding changes in value of financial derivatives divided by the average operating capital.

• Dividend policy: Dividend between 40 and 70 per cent of the profit for the

year after tax following a reversal of changes in value and deferred tax related thereto.

A decision regarding a dividend shall take into account the company's implementation of its strategy, the financial position and its capital structure

• bjective set by the owner.

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Akademiska Hus – key strength factors

• 100 % owned by the Kingdom of Sweden

Government bill, December 2013: “Akademiska Hus will continue to be wholly owned by the Kingdom of Sweden.”

• Ownership clause EMTN: Majority owned by the Kingdom of

Sweden

• The government nominates the board members and sets

financial targets.

• Market leader: 60 percent
• Stable and high quality tenant base – Government authorities
• S&P AA rating, stable outlook, and A1+, since Sept 1996

Moody’s P-1 short term rating, since Jan 2017

Sustainability

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We regularly develop strategic long-term campus plans in close cooperation with our customers

Akademiska Hus’ analytical model for a sustainable campus

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Sustainable campuses - an asset for the entire community

Together with academia, industry and the community, we develop competitive campuses that:

• Provide spaces for creative meetings, expected or unexpected,

between academia, industry and the community.

• Interact and integrate with the surrounding community

through offering a mix of classrooms, shops, housing, cafés.

• Promote inclusion people with different attributes and life

experiences.

• Strengthen the ecosystem.
• Optimize spaces between buildings to create value from the

greenery, art and culture on campus.

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Flexible environments that support learning and research for the future

• We want to create the right conditions and be a source of

inspiration for Sweden’s centres of education in digitalized knowledge environments and campuses

• In many locations, our buildings are test beds for

innovation, research and development

• Through innovation partnerships, we want to develop

products, services and practices that make it more efficient and more fun to be in our premises

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Our sustainability work – at the forefront of the industry

Collaborate more with

• ur customers in
• rder to join forces

and invest in sustainable choices Vision for a zero carbon footprint, which will be achieved through climate-neutral internal operations and property operations by 2025 and climate-neutral project

• perations by 2045

Reduce the amount of delivered energy by 50 per cent by 2025, using 2000 as the comparison year, for more energy-smart buildings

Business overview

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Accumulated value property portfolio, 1993 - 2019 Q1

500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000

• 20,000
• 10,000

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000

Square meters SEKm

Acquisitions from the state Other acquisitions Sales Investments Change in property value Square meters

Income statement

Amounts in KSEK 1.000

2018 2017 2016

Total property management income 6 117 5 806 5 666 Total property management expenses

• 2 178
• 1 977
• 1 999

NET OPERATING INCOME 3 938 3 829 3 667 Central administration costs

• 78
• 67
• 85

Net interest expense

• 268
• 188
• 308

EARNINGS BEFORE CHANGES IN VALUE AND TAX 3 593 3 574 3 274 Changes in value, properties 2 585 4 979 3 682 Changes in value, financial instrumenst

• 360
• 242
• 241

PROFIT BEFORE TAX 5 818 8 311 6 715 Tax

• 504
• 1 858
• 1 566

PROFIT FOR THE YEAR 5 314 6 453 5 149

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Lease maturity and structure

Average maturity of lease contracts, 1998 – 2019 Q1

1 2 3 4 5 6 7 8 9 10

Years

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Vacancy rate, 2010 – 2019 Q1

0% 1% 2% 3% 4% 5% 6% 7% 8% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Q1 % of rent % of area Vacancy rate (%)

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Project portfolio

Interest coverage ratio, 2008-2019 Q1

100 200 300 400 500 600 700 800 900 1000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1

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%

Green Financing

Program and credit facilities as of 31 March 2019

Facilities, Programs Limit, currency Limit, million Used Used, SEK m Usage, % CP Program SEK 4,000 ECP Program EUR 1,200 279 2,900 23 EMTN Program EUR 4,000 2,940 28,000 73 MTN Program SEK 8,000 650 650 8 Sum 31 248 Committed credit facilities in Banks, total: SEK 5,500m (Usage 0%)

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Financial Policy

Risk Policy 2019-04-30

Interest rate risk

• Long bond portfolio: maximum 20 per cent of the

total portfolio

• Index-linked bond portfolio: maximum 5 per cent of

the total portfolio

• Basic portfolio, average fixed interest period: within

the range of 3–6 years 16.6 % 2.7 % 4.06 years Refinancing risk

• Maturity mandate: the proportion of loans

maturing within each 12-month period may not exceed 40 per cent of the total portfolio 18.9 % Counterparty risk

• Exposure to counterparty risk is managed by limit

system based on the counterparties’ ownership and rating, and the term of the commitment

• In derivative transactions, ISDA and CSA

agreements are required, which reduces the counterparty risk substantially Fulfilled Fullfilled Foreign currency risk

• When financing in foreign currencies, foreign

currency risk must be eliminated. This is made using foreign exchange swaps or cross currency swaps. Fullfilled

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The Green Bond Framework of Akademiska Hus

• The framework put emphasis on Akademiska

Hus unique situation as a long term owner of University premises in Sweden.

• Through our sustainability ambitions we

increase the value and benefit of our business, and contribute to several of the UN goals.

• Investments covered by this framework

primarily contribute to goal number 4, 7, 11, 12, 13 and 15.

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From Global goals to Local action

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Green Terms

• Majority of allocations to

new projects

• Projects and assets eligible for Green Bonds will be

identified through the standard investment process.

• They will be evaluated by the Green Business Council

(GBC).

• A consensus decision is required by the GBC to allocate

net proceeds.

• The Sustainability Officer effectively holds a veto in the

process.

• The net proceeds will be credited to an earmarked

account (the “Green Account”).

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• An annual report will be published and will detail the

allocation of green bond net proceeds and adherence to the Green Terms.

• An external auditor of Akademiska Hus (or a similar

party) will investigate and report whether an amount equal to the Green Bond net proceeds have been allocated to the Eligible Green Projects and Assets that Akademiska Hus has communicated in the Reporting.

Evaluation & Selection Reporting & Transparency

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Second Opinion - Cicero

From Cicero Secon Opinon: “Based on our review, we rate the Akademiska Hus green bond framework Dark Green. “ “Included in the overall shading is an assessment of the governance structure of the green bond framework. CICERO Shades of Green finds the governance procedures in Akademiska Hus’ framework to be

• Excellent. “

“Akademiska Hus green bond framework provides a strong, forward-thinking approach to green financing for emission reduction and climate resilience initiatives.”

Use of Proceeds - Examples

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Questions?

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Appendix

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Market position

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10 Largest Customers, Annual rent 2018

SEKm %

Karolinska Institutet 719 11.7 Lund University 586 9.6 Uppsala University 551 9.0 Royal Institute of Technology 541 8.8 Stockholm University 525 8.6 Swedish University of Agricultural Sciences 365 6.0 University of Gothenburg 356 5.8 Linköping University 354 5.8 Umeå University 276 4.5 Chalmersfastigheter 202 3.3 4 476 73.0

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Net operating income and investments, 2003 – 2019 Q1

2,000 4,000 6,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 R SEK m

Net operating income Investments

Statement of financial position

Amounts in KSEK 1.000

2018 2017 2016 Total non-current assets 87 933 81 715 75 420 Total current assets 5 544 8 842 7 010 TOTAL ASSETS 93 477 90 557 82 430 Total Equity 42 832 39 186 34 152 Total non-current liabilities 40 435 38 148 33 973 Total current liabilities 9 210 13 223 14 305 TOTAL EQUITY AND LIABILITES 93 477 90 557 82 430

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Fixed Interest period and Maturity Years, 2019-03-31

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• An arena for innovation within the built

environment.

• 11 700 sqm office building at the Chalmers

Johanneberg Campus, Gothenburg.

• Will be completed in fall 2019.
• Certification: Miljöbyggnad GULD.
• Resource efficient with low carbon footprint

and low energy demand. (< 35kWh/sqm, excluding energi use of tenants)

• Wooden structure and innovative and

sustainable solutions such as battery storage, solar panels etc.

A Working Lab – Johanneberg Science Park

Our most intelligent building ever!

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• Akademiska Hus currently have 40 solar parks on
• ur campuses, generating over 2.5 million kWh
• f sustainable electricity annually for Swedish

centres of education.

• In 2019, the solar power capacity will increase to
• ver 5 million kWh per year.

Example from Uppsala, SLU: “The solar panel initiative will strengthen the Ultuna Campus as a sustainable development site, and at the same time making a positive contribution to Akademiska Hus’ ambitious energy target.”

Johan Tjernström, Business Developer

Solar panels – part of a sustainable and future proof solution

• Akademiska Hus currently have 40 solar parks on
• ur campuses, generating over 2.5 million kWh
• f sustainable electricity annually for Swedish

centres of education.

• In 2019, the solar power capacity will increase to
• ver 5 million kWh per year.

Example from Uppsala, SLU: “The solar panel initiative will strengthen the Ultuna Campus as a sustainable development site, and at the same time making a positive contribution to Akademiska Hus’ ambitious energy target.”

Johan Tjernström, Business Developer

Solar panels – part of a sustainable and future proof solution

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Humanisten - University of Gothenburg

• 16 600 sqm of new building and 19 400 sqm of

renovation of an existing building.

• Construction started in november 2016 and will be

finalized by 2019/2020.

• Certification:

Miljöbyggnad GULD (New building) Miljöbyggnad SILVER (Existing property)

• A project in the sustainability forefront through high

ambitions in energy efficiency and indoor quality.

A creative venue for art, culture and humanities

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Humanisten - University of Gothenburg

• 16 600 sqm of new buildning and 19 400 sqm of

renovation of an existing building.

• Construction started in november 2016 and will be

finalized by 2019/2020.

• Certification:

Miljöbyggnad GULD (New building) Miljöbyggnad SILVER (Existing property)

• A project in the sustinablity forefront through high

ambitions in energy efficiency and indoor quality.

A creative venue for art, culture and humanities

Akademiska Hus has high ambitions to contribute towards the shift for a more fossil-free society. Supportive infrastructure for clean transportation is therefore a part of our Green Bond Framework. Example from Campus Umeå: The super bike path is a cycle path that is straighter and wider than a traditional cycle path and where the bicycle always has priority over other vehicles. “The goal is simply to get safer and more environmentally friendly walking and cycling routes”

Olov Bergström, Real Estate developer

Sustainable mobility and a ”Super bicycle path”

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• Finalized during summer 2019.
• Certification: Miljöbyggnad GULD
• Energy, indoor environment and materials

have been sustainably optimized.

• Some material has been reused in the

construction, others have been sold or reused in other productions.

• Lighting and ventilaton is controlled on

demand.

• The roof is equipped with solar panels

Studenthus Valla - University of Linköping

New hub to spur co-creation between academia and the society