kungsleden presents the third quarter 2011
DESCRIPTION
Swedish property company Kungsleden presents the third quarter for 2011.TRANSCRIPT
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Welcome to Kungsleden
Third Quarter 2011
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Kungsleden in brief
Owns and manages properties with high and stable long-term returns
Returns more important than property type and location
Returns can not be judged without considering the property’s risk levels
639 (592) properties, of which 306 part-owned via Hemsö,
reported at SEK 26.5 (21.5) bn as of 30 September 2011
Commercial properties 52 per cent (45)
Public properties 42 per cent (48)
Modular buildings 6 per cent (7)
21,133 shareholders. 39 per cent of shares held by private individuals
and just over one-third by foreign shareholders.
Ten largest shareholders control 22.2 per cent of capital and votes
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Profit for calculating dividends
2011 2010
SEK m Jan-Sep Jan-Sep
Gross profit 1,386 1,160
Sales and administration costs -238 -191
Net financial position -650 -555
Sub-total 498 414
Realised items
Trading net on sale 34 12
Realised value changes, properties 11 2
Realised value changes, financial instruments -31 -4
Sub-total 14 10
Taxes payable -50 -45
Profit for calculating dividends 462 379
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Third quarter in brief
■ Gross profit increases 34 per cent to SEK 548 m, which is the best quarterly
figure to date. The primary explanation is growth of the portfolio.
■ Net sales up by 36 per cent to SEK 766 m
■ Module sales rise 47 per cent to SEK 70 m
■ Loss after tax of SEK -173 (180) m, explained by negative values of
financial instruments after falling market interest rates
■ Profit for calculating dividends of SEK 239 (160) m, with the acquisition from
NRP being a strong contributor to the increase
■ Three-year lease signed with home furnishings expo Hemmamässan on
15,000 sq.m. in Slagsta Strand, south of Stockholm
■ Five properties purchased for a value of SEK 306 m
■ One property sold for a value of SEK 133 m
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Transactions completed after the third quarter
Two properties acquired at the executive auction of Kefren’s properties
Commercial property in Växjö, southern Sweden
SEK 132 m at an initial property yield of 7.7 per cent
15,000 sq.m. leasable area
The two largest tenants are Växjö independent senior high school and civil
engineer Svevia AB, which together, represent over half of rental value.
Commercial property in Uddevalla, north of Gothenburg
SEK 20 m at a property yield of 8.8 per cent
3,900 sq.m. leasable area
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Current market conditions
Kungsleden’s lettings market
Lettings market remains positive in a resilient portfolio
Slight decrease in vacancies
Financial market
Continued turmoil on the international debt market
Primarily difficult on new lending
Swedish transaction market
Transaction volumes increased by 16 per cent to SEK 22 bn in the third
quarter
Kefren property auction attracts high interest, indicating a liquid market
despite debt turmoil
The property asset class is an attractive investment alternative in a low
interest environment
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The property portfolio, 2001 – Q3 2011
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Kungsleden’s properties—by type
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Third quarter 2011 in figures
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Rental revenues
increased by 20 per
cent.
Growth primarily
explained by the
purchase from NR
Nordic & Russia
Properties
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Sales revenues
increase by 67 per cent
due to more enquiries
for modules
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Gross profit up by 19
per cent due to
acquisitions
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Trading net rises to SEK
34 m. There were few
sales and the value
changes of SEK 11 m
were realised through
these sales
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Administration costs
increased because
Hemsö is now independent
Larger property portfolio
Higher transaction activity
Relocation of Kungsleden’s
and Hemsö’s offices
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Higher loan volume
after acquisitions in the
year
Newly raised bond loan
has higher interest
margin than bank
borrowings
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Negative value change
on financial instruments
due to falling long yields
Positive value change
on properties
corresponding to 2 per
cent of book value
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Corresponds to 26.3
per cent of profit before
tax
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Income Statement
SEK m
2011
Jan-Sep
2010
Jan-Sep
Rental revenues 1,900 1,577
Sales revenues, modular buildings 214 128
Net sales 2,114 1,705
Gross profit 1,386 1,160
Trading net 34 12
Sales and administration costs -238 -191
Net financial position -650 -555
Unrealised value changes -77 -20
Profit before tax 455 405
Tax -120 -88
Profit after tax for the period 335 317
Higher profits mainly
due to a larger property
portfolio
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Statement of Financial Position
SEK m 2011 2010
Assets 30 Sep 31 Dec
Goodwill 201 201
Properties 26,455 21,501
Receivables, etc. 1,319 2,045
Cash and cash equivalents 872 747
Total assets 28,847 24,494
Equity and liabilities
Equity 7,426 7,357
Interest-bearing liabilities 18,048 13,949
Non-interest-bearing liabilities 3,373 3,188
Total equity and liabilities 28,847 24,494
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Maturity structure, interest fixings
As of 30 September 2011
Loan, SEK
m
Interest
derivatives,
SEK m
Ave.
interest, %
Average fixed interest
term, years
2011 18,064 57 3.8
2012 400 3.7
2013 2,000 3.9
2014 2,400 3.8
2015 2,600 4.1
2016 850 3.3
2017 700 3.7
2018 3,850 4.1
2019 1,400 3.1
2020 1,200 3.4
2021 800 3.3
Total derivatives 16,257 4.8
Total loans 18,064 4.9
Market value of loans and
derivatives 1,165
Total 19,229
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Maturity structure, credits (including un-utilised
credit facilities)
As of 30 September 2011
Utilised
credits, SEK
m
Un-utilised
credits, SEK m
Total
credits, SEK m
2011 738 310 1,048
2012 8,587 2,900 11,487
2013 2,741 - 2,741
2014 2,455 - 2,455
2015 999 - 999
2016 2,054 - 2,054
2017 - - -
2018 311 - 311
2019 179 179
Total 18,064 3,210 21,274
Average conversion term, years 2.0 1.7
Equity ratio
30 Sep 11
26%
31 Dec 10
30%
30 Sep 10
28%
Loan to value ratio 68% 65% 64%
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Underlying profits, 2001 – Q3 2011
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The share 2010 to late-October 2011
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Total yield 2002 to late-October 2011
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Ten largest shareholders (per cent of votes &
capital)■ Pensioenfonds PGGM (NL) 3.4
■ Nordea fonder 3.0
■ SHB fonder 2.7
■ Länsförsäkringar fonder 2.4
■ Olle Florén and companies 2.3
■ Norwegian Government 2.2
■ Danske Invest fonder (Sweden) 1.8
■ AP4 1.8
■ SEB Fonder 1.3
■ AP2 1.3
22.2Source: SIS Ägarservice 30 Sep 2011
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Outlook for 2011
■ Despite debt turmoil in the surrounding world, good conditions in Sweden
with a fairly strong domestic economy
■ Limited vacancies and stable underlying cash flows
■ Focus on customer care, cash flow and enhancing the portfolio
■ Continue to investigate alternative funding sources
■ Active in the transaction market and search for attractive opportunities
■ Estimate of profit for calculating dividends of SEK 650 m reiterated
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Any questions?