Investing in Communities I nve stor P r e se nta tion | M a rch 2 0 1 8
General You are advised to read this disclaimer carefully before reading, accessing or making any other use of the information included herewith. These materials are not an offer or the solicitation of an offer to purchase any securities or make any investment. This presentation includes information about Tricon Capital Group Inc. and its subsidiaries and investees (together, the “Company”) as of December 31 st , 2017, unless otherwise stated. These materials should also be reviewed in conjunction with the Company’s Financial Statements and Management Discussion and Analysis for the periods ending December 31 st , 2017. All dollar amounts are expressed in U.S. Dollars unless otherwise stated. The Company measures the success of its business in part by employing several key performance indicators that are not recognized under IFRS. These indicators should not be considered an alternative to IFRS financial measures, such as net income. As non-IFRS financial measures do not have standardized definitions prescribed by IFRS, they are less likely to be comparable with other issuers or peer companies. A description of the non-IFRS measures used by the Company in measuring its performance is included in its Management Discussion and Analysis available on the Company’s website at www.triconcapital.com and on SEDAR at www.sedar.com. This presentation may contain information and statistics regarding the markets in which the Company and its investees operate. Some of this information has been obtained from market research, publicly available information and industry publications. This information has been obtained from sources believed to be reliable, but the accuracy or completeness of such information has not been independently verified by the Company and cannot be guaranteed. Forward-Looking Statements This presentation may contain forward-looking statements and information relating to expected future events and the Company’s financial and operating results and projections, including statements regarding the Company’s growth and investment opportunities and the performance goals and expectations of its investees, including, in particular, targeted returns, that involve risks and uncertainties. Such forward-looking information is typically indicated by the use of words such as “will”, “may”, “expects” or “intends”. The forward- looking statements and information contained in this presentation include statements regarding expected or targeted investment returns and performance including project timing and cash flow; the ability of the Company to generate fee income from investments and the quantum of these fees; the ability to attract third-party investment; the timing and availability of new investment opportunities, future net income from investments; expectations for the overall growth in the business; the availability and quantum of debt reduction opportunities and the Company’s ability to avail itself of them; the timing and opportunity to divest of assets and investments and the impact of such divestiture on Company debt; and the intention to refinance TAH debt. These statements are based on management’s current expectations, intentions and assumptions which management believes to be reasonable having regard to its understanding of prevailing market conditions and the current terms on which investment opportunities may be available. Projected returns and performance fees are based in part on projected cash flows for incomplete projects. Numerous factors, many of which are not in the Company’s control, and including known and unknown risks, general and local market conditions and general economic conditions (such as prevailing interest rates and rates of inflation) may cause actual investment performance and fee income to differ from current projections. Accordingly, although we believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information. If known or unknown risks materialize, or if any of the assumptions underlying the forward-looking statements prove incorrect, actual results may differ materially from management expectations as projected in such forward-looking statements. Examples of such risks are described in the Company’s continuous disclosure materials from time-to-time, as available on SEDAR at www.sedar.com. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. 2
Tricon $4.6 Billion (C$5.8 billion) Capital Group Total Assets Under Management 1988 2010 30 years Founded Listed (TSX) of Investing in TSX: TCN Communities Toronto San Francisco Orange County Houston Principal investor Headquarters Regional Offices and asset manager Share Price (February 28, 2018) C$10.52 focused on the Quarterly Dividend (Annualized yield %) C$0.07 (2.7%) Basic Shares Outstanding 134.2 Million North American Market Capitalization C$1.4 Billion residential real Enterprise Value C$1.9 Billion estate industry All figures in U.S. dollars unless otherwise indicated Vistancia West Phoenix, AZ 3 Data presented as at December 31 st , 2017, except where otherwise noted.
Investments with a Multi-Family Residential Rental Focus $15 Founded in 1988 , Manufactured Housing Tricon has evolved into Communities a diversified housing Land Lease 2015 platform spanning a Single-Family range of demographics, Rental lifestyles, affordability INITIAL PUBLIC and ownership/ OFFERING rentership options. 2014 $10 2012 Land Development 2010 and Homebuilding / Master Planned 1988 Communities SHARE PRICE $5 11% 20% Outperformed TSX Index, annualized total return annualized total return Real Estate sub-index since entering SFR in and Financials sub-index since IPO in 2010 2012 total return since 2010 4
A Vast Residential Market Opportunity BC AB Canada 9% ON TRICON AUM NV CA U.S. vs CANADA IN NC AZ SC U.S. GA THP 91% TX TAH FL TLC TLR 133M 13M 16M 1.2M Housing is a major component of the economy , representing 3-4% of GDP and residential units residential units single-family annual housing ~20% of personal spending in the U.S. in the U.S. in Canada rentals in the U.S. starts in the U.S. 5 Source: U.S. Census, StatsCan & National Association of Realtors, John Burns Real Estate Consulting
The Great Millennial Demographic Shift Millennials represent the largest demographic cohort in the U.S. today and are expected to be a key driver of near-term household formation. Key U.S. Demographic Cohorts Catalyst to Household Formation In millions 26.5 YRS Women’s median age at first child birth 80M 92M 52M MILLENNIALS TO GO Baby Millennials 27.4 YRS Boomers (1980-2000) Women’s median age at first marriage 57M MILLENNIALS TO GO 31.5 YRS Women’s median age at first child birth +5 years (start of full-time school) 75M MILLENNIALS TO GO Annual Pace of 61M 440,000 Owners U.S. Household 750,000 Renters Formation: Gen X 6 Source: John Burns Real Estate Consulting and Goldman Sachs; annual pace of household formation is as of Q4/17.
Integrated Operating Businesses Tricon is creating integrated operating businesses within each investment vertical to better control its growth strategy and enhance investment returns for third-party investors and shareholders Viridian The Selby Fully internalized operating platform DALLAS-FORT WORTH, TX TORONTO, ON including acquisitions, leasing, customer service/call centre, maintenance, accounting and asset management TAH CHARLOTTE, NC Fully integrated investment and development platform Acquisition, construction oversight, marketing, builder program management and municipal bond finance Fully integrated investment, development and asset management platform with expertise in Institutional reporting and asset acquisitions, zoning/entitlement, building management capabilities design and construction TAH Cross Creek Ranch ATLANTA, GA 57 Spadina HOUSTON, TX TORONTO, ON 7
AUM at a Glance Tricon currently manages 30% $4.6 billion of AUM, LAND & HOMEBUILDING / MASTER PLANNED COMMUNITIES including $1.2 billion on behalf of third-party investors and $3.4 billion of principal investments and co-investments funded with our own 59% balance sheet 1 . Tricon invests across four complimentary housing verticals SINGLE-FAMILY RENTAL with a geographic focus on the U.S. sunbelt. $4.6B PRINCIPAL VS. 3 RD PARTY AUM AUM 27% 3 RD PARTY 8% 73% 3% MULTI-FAMILY RENTAL MANUFACTURED HOUSING PRINCIPAL 8 1. Any differences due to rounding
Shift Towards Recurring Revenue Focus on investments with recurring and predictable cash flows to drive consistent financial results, reduce risk and simplify valuation 60% Focus on longer-term master planned community $144M investments with stable revenue from Recurring rental revenue from Adjusted EBITDA recurring lot sales 15,218 single-family homes 12% before corporate overhead and TAH fair value gains in 2017 Recurring rental revenue from 3,065 6% manufactured housing community rental sites Developing five class A 8% 14% rental apartment buildings that will ultimately generate stable rental revenue PRIVATE FUNDS AND ADVISORY (PF&A) Diversified contractual fee stream from third-party asset management and development activities 9
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