Green Bond Akademiska Hus Welcome! Catarina Fritz CFO and Vice - PowerPoint PPT Presentation

Green Bond Akademiska Hus

Welcome! Catarina Fritz CFO and Vice President Mia Edofsson Sustainability Officer Karin Blomstrand Head of Treasury Emil Rundell Deputy Treasurer 2

Our mission: Akademiska Hus Aktiebolag will own, develop and manage properties for colleges and universities where the primary focus is on education and research. Akademiska Hus will contribute to long-term sustainable development of university and college campuses. Akademiska Hus will contribute to the creation of more student accommodation including construction and management of student accommodation. 3

Market position SEK 87 bn property fair value • 95 % in university cities 3.3 million square metres • 95 % in university cities SEK 6,1 bn property income 60 % market share, estimated space, whole country • Approx. 65 % in university cities • Approx. 30 % in university colleges cities Remaining 40 % of the market is highly fragmented 4

Financial targets • Capital structure: Equity ratio in the range 35 to 45 per cent (2018: 45.8%) Definition: Equity divided by total assets. • Profitability: A yield on operating capital of at least 6.0 per cent. (2018: 5.5%) Definition: Operating profit excluding changes in value of financial derivatives divided by the average operating capital. • Dividend policy: Dividend between 40 and 70 per cent of the profit for the year after tax following a reversal of changes in value and deferred tax related thereto. A decision regarding a dividend shall take into account the company's implementation of its strategy, the financial position and its capital structure objective set by the owner. 5

Akademiska Hus – key strength factors • 100 % owned by the Kingdom of Sweden Government bill, December 2013: “Akademiska Hus will continue to be wholly owned by the Kingdom of Sweden.” • Ownership clause EMTN: Majority owned by the Kingdom of Sweden • The government nominates the board members and sets financial targets. • Market leader: 60 percent • Stable and high quality tenant base – Government authorities • S&P AA rating, stable outlook, and A1+, since Sept 1996 Moody’s P -1 short term rating, since Jan 2017 6

Sustainability

We regularly develop strategic long-term campus plans in close cooperation with our customers Akademiska Hus’ analytical model for a sustainable campus 8

Sustainable campuses - an asset for the entire community Together with academia, industry and the community, we develop competitive campuses that: • Provide spaces for creative meetings, expected or unexpected, between academia, industry and the community. • Interact and integrate with the surrounding community through offering a mix of classrooms, shops, housing, cafés. • Promote inclusion people with different attributes and life experiences. • Strengthen the ecosystem. • Optimize spaces between buildings to create value from the greenery, art and culture on campus. 9

Flexible environments that support learning and research for the future • We want to create the right conditions and be a source of inspiration for Sweden’s centres of education in digitalized knowledge environments and campuses • In many locations, our buildings are test beds for innovation, research and development • Through innovation partnerships, we want to develop products, services and practices that make it more efficient and more fun to be in our premises 10

Our sustainability work – at the forefront of the industry Vision for a zero carbon footprint, which will be achieved through climate-neutral internal operations and property operations by 2025 and climate-neutral project operations by 2045 Collaborate more with our customers in order to join forces and invest in Reduce the amount of sustainable choices delivered energy by 50 per cent by 2025, using 2000 as the comparison year, for more energy-smart buildings 11

Business overview

Accumulated value property portfolio, 1993 - 2019 Q1 SEKm Square meters 110,000 3,500,000 100,000 3,000,000 90,000 80,000 2,500,000 70,000 60,000 2,000,000 50,000 40,000 1,500,000 30,000 20,000 1,000,000 10,000 0 500,000 -10,000 -20,000 0 Acquisitions from the state Other acquisitions Sales Investments Change in property value Square meters 13

Income statement Amounts in KSEK 1.000 2018 2017 2016 Total property management income 6 117 5 806 5 666 Total property management expenses -2 178 -1 977 -1 999 NET OPERATING INCOME 3 938 3 829 3 667 Central administration costs - 78 - 67 - 85 Net interest expense - 268 -188 -308 EARNINGS BEFORE CHANGES IN VALUE AND TAX 3 593 3 574 3 274 Changes in value, properties 2 585 4 979 3 682 Changes in value, financial instrumenst - 360 - 242 - 241 PROFIT BEFORE TAX 5 818 8 311 6 715 Tax -504 -1 858 -1 566 PROFIT FOR THE YEAR 5 314 6 453 5 149 14

Lease maturity and structure Average maturity of lease contracts, 1998 – 2019 Q1 Years 10 9 8 7 6 5 4 3 2 1 0 15

Vacancy rate, 2010 – 2019 Q1 Vacancy rate (%) 8% 7% 6% 5% 4% 3% 2% 1% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Q1 % of rent % of area 16

Project portfolio 17

Interest coverage ratio, 2008-2019 Q1 % 1000 900 800 700 600 500 400 300 200 100 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 18

Green Financing

Program and credit facilities as of 31 March 2019 Facilities, Limit, Limit, Programs currency million Used Used, SEK m Usage, % CP Program SEK 4,000 0 0 0 ECP Program EUR 1,200 279 2,900 23 EMTN Program EUR 4,000 2,940 28,000 73 MTN Program SEK 8,000 650 650 8 Sum 31 248 Committed credit facilities in Banks, total: SEK 5,500m (Usage 0%) 20

Financial Policy Risk Policy 2019-04-30 • Interest rate risk Long bond portfolio: maximum 20 per cent of the 16.6 % total portfolio • Index-linked bond portfolio: maximum 5 per cent of 2.7 % the total portfolio • Basic portfolio, average fixed interest period: within 4.06 years the range of 3 – 6 years • Refinancing risk Maturity mandate: the proportion of loans 18.9 % maturing within each 12-month period may not exceed 40 per cent of the total portfolio • Counterparty risk Exposure to counterparty risk is managed by limit Fulfilled system based on the counterparties’ ownership and rating, and the term of the commitment • In derivative transactions, ISDA and CSA Fullfilled agreements are required, which reduces the counterparty risk substantially • Foreign currency risk When financing in foreign currencies, foreign currency risk must be eliminated. This is made using foreign exchange swaps or cross currency swaps. Fullfilled 21

22

23

The Green Bond Framework of Akademiska Hus

From Global goals to Local action • The framework put emphasis on Akademiska Hus unique situation as a long term owner of University premises in Sweden. • Through our sustainability ambitions we increase the value and benefit of our business, and contribute to several of the UN goals. • Investments covered by this framework primarily contribute to goal number 4, 7, 11, 12, 13 and 15. 25

Green Terms • Majority of allocations to new projects 26

Evaluation & Selection Reporting & Transparency • Projects and assets eligible for Green Bonds will be • An annual report will be published and will detail the identified through the standard investment process. allocation of green bond net proceeds and adherence to the Green Terms. • They will be evaluated by the Green Business Council • An external auditor of Akademiska Hus (or a similar (GBC). party) will investigate and report whether an amount • A consensus decision is required by the GBC to allocate equal to the Green Bond net proceeds have been net proceeds. allocated to the Eligible Green Projects and Assets that • The Sustainability Officer effectively holds a veto in the Akademiska Hus has communicated in the Reporting. process. • The net proceeds will be credited to an earmarked account (the “Green Account”). 27

Second Opinion - Cicero “Akademiska Hus green bond framework provides a From Cicero Secon Opinon: strong, forward-thinking approach to green financing “Based on our review, we rate the Akademiska Hus for emission reduction and green bond framework Dark Green. “ climate resilience initiatives .” “Included in the overall shading is an assessment of the governance structure of the green bond framework. CICERO Shades of Green finds the governance procedures in Akademiska Hus’ framework to be Excellent . “ 28

Use of Proceeds - Examples

30

Questions? Follow us on social media:

Appendix 32

Market position 33

10 Largest Customers, Annual rent 2018 SEKm % Karolinska Institutet 719 11.7 Lund University 586 9.6 Uppsala University 551 9.0 Royal Institute of Technology 541 8.8 Stockholm University 525 8.6 Swedish University of Agricultural Sciences 365 6.0 University of Gothenburg 356 5.8 Linköping University 354 5.8 Umeå University 276 4.5 Chalmersfastigheter 202 3.3 4 476 73.0 34