Investing in Communities Q4 2018 Earnings Presentation February 28, 2019
Disclaimer General You are advised to read this disclaimer carefully before reading, accessing or making any This presentation may contain information and statistics regarding the markets in which other use of the information included herewith. These materials are not an offer or the the Company and its investees operate. Some of this information has been obtained from solicitation of an offer to purchase any securities or make any investment. This market research, publicly available information and industry publications. This information presentation includes information about Tricon Capital Group Inc. and its subsidiaries and has been obtained from sources believed to be reliable, but the accuracy or completeness investees (together, the “Company”) as of December 31, 2018, unless otherwise stated. of such information has not been independently verified by the Company and cannot be with the Company’s Financial These materials should also be reviewed in conjunction guaranteed. Statements and Management Discussion and Analysis for the periods ending December 31, 2018. 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 Company’s Management Discussion and Analysis available on the website at www.triconcapital.com and on SEDAR at www.sedar.com. Forward-Looking Statements This presentation may contain forward-looking statements and information relating to Projected returns and performance fees are based in part on projected cash flows for expected future events and the Company’s financial and operating results and projections, incomplete projects. Numerous factors, many of which are not in the Company’s control, including statements regarding the Company’s growth and investment opportunities and and including known and unknown risks, general and local market conditions and general the performance goals and expectations of its investees, including, in particular, targeted economic conditions (such as prevailing interest rates and rates of inflation) may cause returns, that involve risks and uncertainties. Such forward-looking information is typically actual investment performance and fee income to differ from current projections. indicated by the use of words such as “will”, “may”, “expects” or “intends” . The forward- Accordingly, although we believe that our anticipated future results, performance or looking statements and information contained in this presentation include statements achievements expressed or implied by the forward-looking statements and information are regarding expected or targeted investment returns and performance including project based upon reasonable assumptions and expectations, the reader should not place undue timing and cash flow; the ability of the Company to generate fee income from investments reliance on forward-looking statements and information. If known or unknown risks and the quantum of these fees; the ability to attract third-party investment; the timing and materialize, or if any of the assumptions underlying the forward-looking statements prove availability of new investment opportunities, future net income from investments; incorrect, actual results may differ materially from management expectations as projected expectations for the growth in the business; and the availability and quantum of debt in such forward-looking statements. Examples of such risks are described in the reduction opportunities and the Company’s ability to avail itself of them. These statements Company’s continuous disclosure materials from time-to-time, as available on SEDAR at are based on management’s current expectations, intentions and assumptions which www.sedar.com. The Company disclaims any intention or obligation to update or revise management believes to be reasonable having regard to its understanding of prevailing any forward-looking statements, whether as a result of new information, future events or market conditions and the current terms on which investment opportunities may be otherwise, unless required by applicable law. available. 1
Financial Review Wissam Francis - Executive Vice President & Chief Financial Officer 2
Q4 2018 IFRS Results For the three months ended December 31 (in millions of U.S. dollars) Q4 2018 Q4 2017 % YoY PF&A Revenue $ 9.6 $ 7.3 30% TAH Investment Income 38.2 45.7 (17%) THP Investment Income 1.9 1.2 57% Includes: (in millions of TLR Investment Income 10.7 6.0 79% U.S. dollars) Q4 2018 Q4 2017 % YoY Total Revenue $ 60.3 $ 60.2 0% Salaries $ (4.1) $ (3.9) 5% Compensation Expense (8.6) (4.8) 81% AIP 2.7 1.5 83% G&A Expense (2.7) (2.1) 27% LTIP (7.3) (2.4) 209% Interest Expenses (6.9) (7.2) (4%) Total $ (8.6) $ (4.8) 81% Other (Expenses) / Income 1 1.6 (20.6) NMF Realized and Unrealized FX gain (0.4) (0.9) (54%) Total Operating Expenses $ (17.0) $ (35.6) (52%) Income from Discontinued Operations $ - $ 1.1 NMF Net Income $ 43.3 $ 25.7 68% Diluted Earnings Per Share $ 0.23 $ 0.19 21% Bridge to Non-IFRS Results For the three months ended December 31 Includes TAH 2017-2 securitization transaction costs incurred in Q4 2017 (in millions of U.S. dollars) Q4 2018 Q4 2017 % YoY (in millions of U.S. dollars) Q4 2018 Q4 2017 % YoY Net Income $ 43.3 $ 25.7 68% Net Change in FV of Derivative $ (8.6) $ 13.4 NMF Non-recurring adjustments 3.3 19.3 (83%) Accrued LTIP Expense 6.6 1.8 267% Non-cash adjustments (0.5) 14.5 NMF FX Loss/(Gain) 3.8 1.2 230% Adjusted Net Income $ 46.1 $ 59.5 (22%) Other (2.3) (1.9) 24% 1. Includes non-controlling interest and tax adjustments. 3
Q4 2018 Non-IFRS Results For the three months ended December 31 Key Variance Drivers (in millions of U.S. dollars) Q4 2018 Q4 2017 % YoY Driven by new TAH JV and development fees from TLR CA PF&A Revenue, net of NCI $ 9.0 $ 6.4 39% TAH Adjusted EBITDA 61.2 83.5 (27%) (in millions of U.S. dollars) Q4 2018 Q4 2017 YoY $ % YoY THP Adjusted EBITDA 2.5 1.4 78% NOI $ 41.4 $ 34.7 $ 6.7 19% TLR Adjusted EBITDA 11.4 9.1 26% FV Gain 24.8 51.3 (26.5) (52%) TLC Adjusted EBITDA - 1.5 NMF Increase in fair value gain from The Selby nearing substantial Adjusted EBITDA before overhead $ 84.1 $ 101.9 (17%) completion and The Taylor achieving development milestones Adjusted Compensation Expense (1.8) (2.8) (38%) Adjusted G&A Expense (2.7) (2.1) 27% Excludes accrued LTIP expense of $6.6M in Q4 2018 and $1.8M in Q4 2017 per IFRS results Adjusted EBITDA $ 79.7 $ 97.0 (18%) Adjusted Interest Expenses (27.3) (26.5) 3% Adjusted Other Expenses 1 (1.4) (0.9) 63% Adjusted Tax Expense (4.9) (10.1) (52%) Adjusted Net Income $ 46.1 $ 59.5 (22%) Diluted Earnings Per Share $ 0.30 $ 0.39 (23%) 1. Includes adjusted stock option expense and adjusted amortization expense. 4
Prudent Use of Leverage Overall Leverage Profile 1 Cash Generation Recourse Non-Recourse Debt/Assets 2017 2018 2019 2020 Debt/Assets Tricon American Homes Disposition of non-core homes Corporate TAH THP TLR Completed Tricon Lifestyle $2.0B $0.3B $0.1B $0.1B $0.4B Communities Divestiture of 14 19% 59% 0% 46% park portfolio $3.2B $1.7B Tricon Lifestyle Debt Assets Debt Assets Rentals U.S. Sale of assets 11% excluding convertible debentures upon stabilization (in progress) TAH Debt Profile 1 Tricon Housing Partners Strong net cash flow profile LTV Ratio Fixed Rate Debt 66% 73% Tricon American Homes Operating cash flow • 63% T 59% H Tricon Lifestyle Rentals P Operating cash flow Private Funds and Advisory Recurring fee income related to third-party capital in all verticals Q4 2017 Q4 2018 Q4 2017 Q4 2018 1. All Debt figures are presented net of cash. 5
Operational Review Gary Berman – President and Chief Executive Officer 6
Track Record of Growth 2016 2017 2018 AUM $3.0B + 56% $4.6B + 22% $5.7B Fees $26.6M $25.4M $30.3M - 4% + 19% TAH Managed 7,765 15,218 17,442 + 96% + 15% Homes TLR Units ~1,300 ~1,300 ~3,200 N/A + 75% (Canada + U.S.) Adjusted $114.8M $269.7M $364.0M + 35% + 135% EBITDA Adjusted $0.58 $1.10 $1.45 + 90% + 32% Diluted EPS 7
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