Q3 2020 CONFERENCE CALL November 6, 2020
CAUTIONARY STATEMENTS This presentation contains forward-looking information that reflects the current expectations, estimates and projections of management about the future results, performance, achievements, prospects or opportunities for Chartwell and the seniors housing industry. Forward-looking statements are based upon a number of assumptions and are subject to a number of known and unknown risks and uncertainties, many of which are beyond our control, and that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking statements. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are more fully described in the “Forward -Looking Information and COVID-19 Risks” section in Chartwell’s Q3 2020 MD&A, the "Risks and Uncertainties" section in Chartwell's 2019 MD&A, and in materials filed with the securities regulatory authorities in Canada from time to time, including but not limited to our most recent Annual Information Form. In this presentation we use a number of performance measures that are not defined in generally accepted accounting principles (“GAAP”) such as Net Operating Income (“NOI”), Funds from Operations (“FFO”), Internal Funds from Operations (“IFFO”), “Adjusted Resident Revenue”, “”EBITDA”, Adjusted EBITDA”, “Net Debt to Adjusted EBITDA Ratio”, “Debt to Gross Book Value”, “Liquidity”, “Imputed Cost of Debt”, “Lease -up- Losses”, “Adjusted Development Costs”, “Unlevered Yield”, “Stabilized NOI” “Adjusted NOI”, and any related per unit amounts to measure, compare and explain the operating results and financial performance of the Trust (collectively, the “Non -GAAP Financial Measures”) . These Non- GAAP Financial Measures do not have standardized meanings prescribed by GAAP and, therefore, may not be comparable to similar measures used by other issuers. The Real Property Association of Canada (“REALPAC”) issued white papers with recommendations for calculations of FFO, Adjusted Funds from Operations (“AFFO”), and Adjusted Cash Flow from Operations (“ACFO”) (the “REALPAC Guidance”) . Our FFO definition is substantially consistent with the definition adopted by REALPAC. Please refer to the “Additional Information on Non-GAAP Financial Measures” section of our Q3 2020 MD&A for details. In this presentation we use various financial metrics and ratios in our disclosure of financial covenants such as “Interest Coverage Ratio ”, “ Unencumbered Property Asset Value” . These metrics are calculated in accordance with the definitions contained in our credit agreements and the trust indenture governing our outstanding debentures, and may be described using terms which differ from standardized meanings prescribed by GAAP. These metrics may not be comparable to similar metrics used by other issuers. Please refer to the “Liquidity and Capital Resources – Financial Covenants” section of our Q3 2020 MD&A for details. 2
WE ARE #CHARTWELLSTRONG 3
#CHARTWELLSTRONG 4
RESPONDING TO WAVE 2 • Lessons learned from Wave 1 • Infection Prevention & Control (IPAC) Specialists • PPE Strategy • LTC partnerships with hospitals, public health and provincial health officials • 24/7 Hotline providing support to our homes • National recruitment campaign >1,800 new hires • Ontario LTC Commission on Covid-19 • MLTC funding announcement 5
SALES AND MARKETING 6
THE CHARTWELL EXPERIENCE 7
Q3 2020 SUMMARY Q3 Q3 2019 Change Same property adjusted NOI down 17.2% 2020 in Q3 2020. Net income/(loss) ($ millions) ($6.8) ($0.8) ($6.0) Lower occupancy. Investments in resident and staff safety FFO ($ millions) $38.0 $53.7 ($15.7) result in unfunded pandemic expenses approximately $4.1M net. FFO per unit $0.17 $0.25 ($0.08) Increased rental rate. Reduced marketing, food, supplies and Average occupancy – same property 83.3% 89.7% (6.4pp) R&M. Adjusted NOI – same property $62.9 $75.9 ($13.0) FFO down 29.2% in Q3 2020. ($ millions) 8
Q3 2020 ADJUSTED NOI AND OCCUPANCY Same Property ($M, except Occupancy) • Ontario : Lower occupancies, pandemic-related Adjusted NOI Occupancy expenses net of funding, higher property tax, utilities Q3 Q3 Inc/(Dec) Q3 Q3 Change 2020 2019 $ % 2020 2019 and office expenses, partially offset by rental rate Retirement: increases in line with competitive market conditions, Ontario 30.8 37.7 (6.9) (18.3%) 77.5% 83.8% (6.3pp) and lower food and marketing expenses. Western Canada 13.6 15.1 (1.5) (9.9%) 88.3% 95.0% (6.7pp) Quebec 12.2 15.6 (3.4) (21.8%) 86.7% 91.2% (4.5pp) • Western Canada : Lower occupancies, higher Total Retirement 56.6 68.4 (11.8) (17.3%) 82.5% 88.3% (5.8pp) property tax, staffing costs and office expenses Long term care 6.3 7.5 (1.2) (16.0%) 88.3% 98.8% (10.5pp) partially offset by rental rate increases in line with Total Same Property 62.9 75.9 (13.0) (17.2%) 83.3% 89.7% (6.4pp) competitive market conditions, funding to partially defray additional expenses related to the pandemic, Same Property Occupancy Trending and lower food and marketing expenses. • Quebec : Lower occupancies, higher property taxes, 98.8% 98.7% 98.5% 98.5% 98.5% 98.4% pandemic-related expenses net of funding and 96.0% 92.6% 95.0% 95.0% 94.9% 94.7% 94.5% staffing costs partially offset by rental rate increases 92.4% 88.3% 91.7% 91.2% 91.3% 91.2% 91.1% in line with competitive market conditions and lower 90.1% 88.8% 88.3% food and marketing expenses. 86.7% 86.7% 86.0% 84.9% 84.3% • 84.1% 83.8% LTC : Lower preferred revenue, nursing, care and pandemic-related expenses not fully funded. 79.2% 77.5% Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Ontario Western Quebec LTC 9
OCTOBER 2020 OCCUPANCY AND RENT UPDATE One month One month One month One month Mid-June to Mid-July retirement residences open for ended ended ended ended July 31, August 31, Sept 30, Oct 31, move ins and personalized tours. 2020 2020 2020 2020 In the month ended October 31, 2020, same property Same property occupancy 82.9% 82.4% 82.2% 81.9% occupancy declined 30 basis points compared to the Change from the previous month (0.5pp) (0.2pp) (0.3pp) month ended September 30, 2020. Through October we saw increase over previous month in move-in activity with a decrease in move-out activity. Our tenant credit quality remains strong given the typical investment profile of Canadian seniors in our target customer demographic. Substantially all October and November rent and service charges have been collected, consistent with our past experience. 10
FINANCIAL POSITION & CREDIT METRICS AT SEPT 30, 2020 • Liquidity (1) – $357.8 million Net Debt to Adjusted EBITDA (3) Interest Coverage Ratio (3) • Unencumbered Assets Value (2) - $928.8 million 3.5 9.1 8.3 7.8 3.2 6.9 3.1 3.0 TED BY DBRS BBB(low) RA Debt to Gross Book Value (4)(5) 2017 2018 2019 2020 2017 2018 2019 2020 52.6% 51.7% 49.3% 45.0% 2017 2018 2019 2020 Demonstrated ability to rationalize capital structure (1) Includes cash and available credit facilities. (2) Represents value of 37 properties. (3) Rolling 12 months ended September 30, 2020 for 2020 and 12 months ended December 31, for periods 2017-2019. (4) As at the end of September for 2020 and as at the end of December for, periods 2017-2019, includes proforma adjustments. (5) Previously used Debt to Capitalization, however in light of the current market conditions, this metric has been removed. 11
LIQUIDITY UPDATE AT NOVEMBER 5, 2020 Significant Liquidity and Conservative Capital Structure Liquidity (1) - $408.6 million • Cash - $61.6 million • Credit facilities - $347.0 million • Cash in Equity Accounted JVs - $14.1 million (1) Includes cash and available credit facilities. 12
THANK YOU
Recommend
More recommend
