STRONG OPERATING PROFIT IN A CAUTIOUS MARKET INTERIM REPORT Q3 2017 - - PowerPoint PPT Presentation

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STRONG OPERATING PROFIT IN A CAUTIOUS MARKET INTERIM REPORT Q3 2017 - - PowerPoint PPT Presentation

Oct 02, 2023 144 likes •408 views

STRONG OPERATING PROFIT IN A CAUTIOUS MARKET INTERIM REPORT Q3 2017 Mattias Roos, President & CEO Casper Tamm, Director of Finance Stockholm, November 15, 2017 Q3 HIGHLIGHTS An eventful quarter Strategic JV with Partners Group,

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STRONG OPERATING PROFIT IN A CAUTIOUS MARKET

INTERIM REPORT Q3 2017

Mattias Roos, President & CEO Casper Tamm, Director of Finance Stockholm, November 15, 2017

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SLIDE 2

Q3 HIGHLIGHTS

  • An eventful quarter

– Strategic JV with Partners Group, project valued at 7.6 SEKbn

  • High interest in our projects

– 1,100 sales starts to mid-Nov 2017 – 27.7% more units sold in first 9 months – 97.1% sales rate in projects in production end-Q3

  • Solid financial profile, well above financial

targets

– Debt/equity ratio of 57.8%

  • Highly equipped for continued growth

and earnings performance

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SLIDE 3

ACQUIRED BUILDING RIGHTS AS PER NOVEMBER 15, 2017

Building rights Municipality Acquired Täby Turf 180 Täby Q1 Täby Market 90 Täby Q1 Bromma Boardwalk 260 Stockholm Q1 East Side Spånga 250 Stockholm Q2 Akalla City 175 Stockholm Q2 Spånga Studios 60 Stockholm Q2 Ritsalen, Rotebro 150 Sollentuna Q3 Riddarplatsen, Jakobsberg 370 Järfälla Q3 Hägersten 250 Stockholm Q4

Managed entirely by SSM

Municipality Off market

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SOLID PORTFOLIO PROVIDES CONFIDENCE IN LONG-TERM STABLE GROWTH

  • No. of building rights
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58% OF PORTFOLIO IN STOCKHOLM MUNICIPALITY

6,677

Portfolio split by municipality in Greater Stockholm as per November 15, 2017.

Stockholm Nacka Solna Täby Sollentuna Sundbyberg

Bromma Boardwalk

Jakobsberg

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SLIDE 6

1,414 5,013

0% 20% 40% 60% 80% 100% 2,000 4,000 6,000 8,000 dec 14 mar 15 jun 15 sep 15 dec 15 mar 16 jun 16 sep 16 dec 16 mar 17 jun 17 sep 17 Bulding rights in construction phase Building rights in planning phase % sold apartments under construction

  • No. of building rights and units in construction

STRONG PIPELINE & PLATFORM WITH POTENTIAL FOR FURTHER GROWTH

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SLIDE 7

FINANCIAL UPDATE

Casper Tamm

Director of Finance

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SLIDE 8

INCREASE IN KEY RATIOS

EBIT

124.9 MSEK

(63.1) EBIT margin

120.0%

(33.3%) Earnings per share

2.95 SEK

(1.52)

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SLIDE 9

IMPACT OF JV WITH PARTNERS GROUP IN Q3

  • 112.6 MSEK
  • First reversal of profit elimination

recognized in the balance sheet totaling 10.3 MSEK

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WELL ABOVE OUR FINANCIAL TARGETS >2 >20% 0%

EBIT margin

>2 >25%

Return

  • n equity

>3 >30% 0%

Equity ratio

>2 >2x

Interest coverage ratio Outcome Q3 2017 LTM 34.2% 31.7% 57.8% 5.3x

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SLIDE 11

0% 10% 20% 30% 40% 50% 60% 70% 80% 200 400 600 800 1,000 1,200 1,400 1,600

Q4 2014 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3

Revenue in joint ventures Group revenue JV revenue % of total revenue

SOLID DEVELOPMENT OVER A LONGER TIME PERIOD REVENUES, LTM

MSEK 200 400 600 800 1,000 1,200 1,400 1,600

Q4 2014 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3

Building rights in construction phase

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1

SOLID DEVELOPMENT OVER LONGER PERIOD, LTM

0% 10% 20% 30% 40% 50%

  • 50

100 150 200 250

Q4 2014 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3

EBIT EBIT margin Gross margin MSEK 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Q4 2014 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3

JV revenue % of total revenue

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SLIDE 13

STABLE EARNINGS – INCOME STATEMENT

MS MSEK 2017 Q3 LTM 2016 2015 Net sales 666.2 650.0 351.1 Expenses for production and management

  • 546.1
  • 502.8
  • 299.0

Gross profit 120.0 147.1 52.1 Sales and administration expenses

  • 80.6
  • 36.4
  • 27.1

Participations in joint ventures 65.2 76.4 76.9 Other income 122.9 Operating ng profit 227.6 187.1 102.0 Financial income 13.9 11.9 10.0 Financial expenses

  • 45.3
  • 49.5
  • 19.2

Net financi cial l items

  • 31.4
  • 37.6
  • 9.2

Pre-tax profit 196.2 149.5 92.8 Tax

  • 3.9
  • 4.8

2.8 Earning ngs for the period 192.4 144.7 95.6

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SLIDE 14

299 503 546 27 36 54 19 50 45 27

2015 2016 2017 Q3 LTM

GROUP COST TIED TO OPERATIONS

Expenses for production and management Sales and administration expenses Financial expenses Items affecting comparability

MSEK

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SLIDE 15

FLEXIBLE COST BASE

  • Development of city plan can be adjusted to suit SSM's planning
  • Mainly variable production costs
  • Outsourced labour only
  • Low fixed costs
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SLIDE 16

BALANCE SHEET OVERVIEW

Assets, ts, MSEK 2017-09 09-30 30 2016-12 12-31 31 2015-12 12-31 31 Holdings in joint ventures 265.5 187.2 130.2 Receivables from joint ventures 293.7 69.1 22.1 Other long-term receivables 197.8 203.8 71.0 Total al financi ancial al assets ts 757 57.0 460. 0.1 223.3 Other fixed assets 1.0 1.8 7.0 Total al fixe xed d assets ts 758. 8.0 461.9 230.3 0.3 Project properties 276.7 208.8 115.0 Total inventories 276.7 208.8 115.0 Accounts receivable 51.5 29.4 1.7 Recognized, non-invoiced revenue 43.2 163.4 61.9 Other receivables 197.9 84.5 68.8 Prepaid costs and accrued income 9.1 24.0 13.9 Liquid funds 333.2 63.9 52.7 Total al current nt assets ts 911.6 .6 57 574.0 314.1 .1 Total al assets ts 1,669.6 .6 1,035.8 5.8 544.4

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SLIDE 17

115 209 277 152 259 559 202 448 438 75 120 396 2015 2016 2017 Q3

Other assets Receivables on projects in production Joint ventures Project properties

CAPITAL TIED UP IN PROJECTS

MSEK

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FLEXIBLE PROJECT PORTFOLIO

  • 5,263 apartments sales started or under development
  • 22% designated as rental units
  • Possibility to convert additional 18% into rental units
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SLIDE 19

LOW LEVEL OF UNSOLD APARTMENTS FOR PROJECTS IN PRODUCTION

55.5

MSEK

2018 –2019 2020 –2022

89.3

MSEK MSEK

2017

Value of unsold apartments in production Q3 2017

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SLIDE 20

BALANCE SHEET OVERVIEW

Liab abili litie ties s and equity ty, MS MSEK 2017-09 09-30 30 2016-12 12-31 31 2015-12 12-31 31 Shareholders’ equity Share capital 39.3 30.1 30.1 Paid-up capital 506.9

  • Profit brought forward including profit for the year

419.3 271.2 143.3 Equity ty attribut tributab able le to Parent nt Comp mpany any sharehol eholde ders rs 965. 5.5 301.3 .3 173.4 Minority interest 0.0 0.0 0.1 Total al equity ty 965. 5.5 301.3 .3 173.5 Long-term liabil ilit itie ies Bond issues 392.8 390.7 196.8 Liabilities to credit institutions 162.3 132.8 99.5 Provisions 12.3 14.4 5.0 Other long-term liabilities 0.9 50.7 1.7 Total al long-term erm liabi bili litie ties 568. 8.3 588. 8.6 303.1 .1 Cu Current t liabil iliti ties Accounts payable – trade 58.1 43.3 28.6 Other liabilities 77.7 102.7 39.2 Total al current nt liabil bilities ities 135. 5.8 146.0 67.8 Total al liabil bilities ties and equity ity 1,669.6 .6 1,035.8 5.8 544.4

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RETURN ON EQUITY & EQUITY RATIO, LTM

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 Q4 2015 Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 Q1 Q2 Q3 Equity ratio LTM return on equity

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  • 200

400 600 800 1,000 1,200 1,400 1,600 2014 Q4 2015 Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 Q1 Q2 Q3

Shareholders' equity Bond Bank debt

MSEK

STRONG FINANCING PROFILE

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SLIDE 23

CASH FLOW IMPACTED BY INCREASE IN BUILDING RIGHTS

MSEK 2017 Q3 LTM 2016 2015 Cash flow before changes in operating capital 69.1 144.4 16.6 Cash flow from changes in operating capital Increase/decrease in project properties

  • 362.2
  • 195.3
  • 12.1

Increase/decrease in accounts receivable

  • 49.1
  • 27.7
  • 1.2

Increase/decrease in other current receivables 33.5

  • 25.3
  • 44.1

Increase/decrease in supplier liabilities 37.6 14.8 29.4 Increase/decrease in current liabilities 25.4 69.7

  • 3.9

Total change in operating capital

  • 314.9
  • 163.8
  • 31.8

Cash flow from current activities

  • 246.0
  • 19.4
  • 15.2

Cash flow from investment activities

  • 68.9
  • 213.9
  • 49.1

Cash flow from financing activities 609.0 244.5 88.3 Increase/decrease in liquid funds 294.0 11.2 24.0 Liquid funds, opening balance 39.1 52.7 28.7 Liquid funds at end of the period 333.2 63.9 52.7

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SLIDE 24

SOLID FINANCIAL PROFILE

Flexible cost structure Strong capital base Attractive project portfolio

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