INTERIM REPORT Q3 2019 INVESTORS PRESENTATION
WHAT STANDS OUT? ✓ Good revenue growth and operational profit increase between years. ✓ Leasing functions proceeding well. ✓ Implementation of new strategy in progress. ✓ Green certification of Smáralind in final phase.
KEY FIGURES COMPARISON WITH THIRD QUARTER 2018 LEASING RATIO EBITDA RATIO OF LEASING REVENUES REVENUE GROWTH BETWEEN YEARS EBITDA INCREASE BETWEEN YEARS Operations 76% 97% 20% 29% (71%) (97.5%) (13%) (13%) AFTER TAX PROFIT YIELD OF INVESTMENT PROPERTIES REAL RETURN ON EQUITY ASSESSMENT CH. OF INVESMENT PROP. Profitability 1,398 m.kr. 5.3% 13.3% 1,077 m.ISK. (776 m.ISK.) (5,0%) (8,7%) ( 655 m.ISK.) INTEREST BEARING DEBTS LEVERAGE INTEREST BEARING DEBTS EQUITY RATIO Balance 60.9% 83.0 b.ISK. 136.2 b.ISK. 31.7% (61.5%) (78.6 b.ISK.) (127.8 b.ISK.) (31.5%)
THIRD QUARTER 2019 INCOME STATEMENT 3Q 2019 3Q 2018 %Δ Leasing income Operational results before assessment change Leasing revenues 2.306 2.304 2.290 2.251 2,304 1,922 19.9% 1.922 1.759 Revenues - operations in properties 146 134 9.0% 1.644 1.607 1.633 1.359 Revenues 2,450 2,056 19.2% Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Operational costs of investment properties -446 -452 -1.3% Operations in properties -156 -155 0.6% Operational costs of investment properties -602 -607 -0.8% Investment properties operational costs 23,5% Administrative costs -89 -90 -1.1% 21,6% 21,5% Operational profit before assessment change 1,759 1,359 29.4% 20,2% 19,4% Operational costs versus leasing revenues 76% 71% 3F-18 4F-18 1F-19 2F-19 3F-19 Assessment change of investment properties 1,077 655 Operational profit 2,836 2,014 40.8% Net financial expenses -1,088 -1,044 4.2% Administrative costs 5,0% Profit before tax 1,748 970 80.2% 4,8% 4,7% 4,3% 3,9% Income tax -350 -194 3F-18 4F-18 1F-19 2F-19 3F-19 Net profit of the period 1,398 776 80.2%
REGINN’S PROPERTY PORTFOLIO FUNCTION GROUPING 5% 17% Retail and service 33% Office Sport, education and entertainment Industrial and storage 13% Hotel 33% * Gouping of the property portfolio in regard to size in m 2 117 PROPERTIES 377.000 SQ. METRES
REGINN‘S 10 MOST VALUABLE PROPERTIES DIVERSIFIED AND WELL-KNOWN PROPERTIES 40% Egilshöll Smáralind Katrínartún 2 & Borgartún 8-16 Litlatún 3 Áslandsskóli Hafnartorg 57% Mjölnisholt 12-14 Ofanleiti 2 Hafnarstræti 83-89 *of Reginn´s property portfolio
FINANCING LOCATION OF PROPERTIES 5% NEW BOND SERIES Capital area Höfuðborgarsvæðið 13% • Movement of 10 b.ISK. portfolio under the general insurance scheme within the Akureyri Akureyri company‘s issuing framework. Creating a 5 b.ISK . margin for bond issuing. • Nágrannasveitarfélög Near the capital area • höfuðborgarsvæðisins The company is now preparing a bond issue before the end of the year, offering a new medium - term series. 83% • Reliable 21 b.ISK. portfolio located in the capital area and in large populated cores in the countryside • 24% of the portfolio is leased to public entities. AVAILABLE FOR PREPAYMENT OPTIONS IN 2020 • Possibility to refinance up to half of the company's loans >2024 23% • Various possibilities to view: 2019 • Green certification of properties opens possibilities for Green 48% bond issues '22-'23 17% • Foreign funding being studied '20-'21 • Specially covered portfolios 12%
COMPANY‘S LEASING ACTIVITIES EXTENSIVE AND GOOD PROGRESS IN LEASING ACTIVITIES
LEASING COMPANY’S LEASING RATIO STILL HIGH ANNUAL LEASED SPACE IN M 2 50.000 • Extensive leasing activity in summer and autumn. Leasing this year will exceed the 38.446 40.000 last few years. 30.000 New and renewed contracts of 38.446 m 2 • in hands. About 24% are renewed 20.000 contracts. 10.000 0 1F 2F 3F 4F 2017 2018 2019 • In recent years, the leasing ratio has fallen temporarily with the addition of new properties, LEASING RATIO 2015-2019 paralell with large scale restructuring projects. 98,0% • The leasing ratio is now 97% and rising. The ratio is 96,0% expected grow to 98% at the end of the year. 94,0% 92,0% 90,0% 1F 2015 1F 2016 1F 2017 1F 2018 1F 2019
ROAD AND COSTAL ADMINISTRATION – SUÐURHRAUN 3 COLLABORATIVE PROJECTS OF PUBLIC AND PRIVATE PARTIES • Reginn's offer was accepted following the tender of the Government Construction Contracting Agency and the Ministry of Finance. Design and completion inventory at final stage . Expected to sign a leasing contract in November. • Leasing contract for 20 years for the Road and Costal Adminstration headquarters. Structures of about 6,000 m 2 with over a half in a new construction. Operating site of 9,000 m 2 . • Various operating services are a part of the lease, such as maintenance and operation of systems and internal finishing. Site maintenance and operation including snow removal. The focus of the Government Construction Contracting Agency has been changing in this regard. The financial scope of the contract is: Annual income of 200 m.ISK. Total • commitment 2,200 – 2,500 m.ISK . Of this new investment amounts to 1.400 m.ISK. • The project is expected to be delivered to the lessee in the second half of 2020.
KATRÍNARTÚN 2, HÖFÐATORG KVIKA BANKI – WILL BE A CORE LESSEE • Lease contract is in place. Good progress in construction and plans for hand over in the coming weeks. Kvika will be at levels 7, 8 and 9. Lease contract for 10 years with option of extension. The size • of the project in total is about 3.500 m 2 . DIRECTORATE OF HEALTH MOVES TO LEVEL 6 • Contract was signed in October following the tender by the Government Construction Contracting Agency and the Ministry of Finance, and space is being modified. Hand over is scheduled now in November. Lease contract of 5 years with possibility of extension for 5 years. Leasing space size in total • about 1.500 m 2 NEW AND CHANGED TOWER • A number of new companies and institutions have now moved to the tower at Höfðatorg, and there is a considerable interest in operation space there. The restructuring of the 1 st and 2 nd levels is under way. There will be, among other things, • restaurants and various services, office hotels etc.
PUBLIC ENTITIES LEASING CONTRACTS HEALTH CARE – MENTAL HEALTH TEAM SOUTH, BÆJARLIND 1 - 3 IN KÓPAVOGUR • Reginn‘s offer was accepted following a tender by the Government Construction Contracting Agency and the Ministry of Finance. Design and negotiation is in progress. Expected signing of a lease contract in coming weeks and delivery to lessee in coming February / March. • Lease contract for 8 years with possible extension. Size of leasing space 420 m 2 . • With the Mental Health Team South, all mental health teams have moved into Reginn‘s properties. CHIEF OF POLICE at Suðurnes - BREKKUSTÍGUR 39 IN REYKJANESBÆR • Enlargement and modifications of facilities. • Contract signed in August. Construction and modifications in progress, planned hand over in 1Q 2020. • Leasing contracts for 10 years . The size of the project about 1.100 m 2 . Estimated financial scope of the two contracts: Annual revenue of 50 m.ISK. New investment • of 160 m.ISK.
CHANGED STRUCTURE AND MANAGEMENT REGINN‘S STRATEGY IN 2019
REGINN PLC. CEO Legal department / Compliancae Dagbjört E. Einarsdóttir, head lawyer Heiða Salvarsdóttir, compliance officier Retail and Services Public entities, PPP Commerciai and leasing projects. properties and the public market Egilshöll, schools and Finance Smáralind, Hafnartorg, kindergartens, office Offices, hotels, Accounting, settlement, plans Director Garðatorg, Litlatún, space leased to public and credit management. hostels. Industry, Jóhann Sigurjónsson Funding, refinancing. Hólagarður etc.. entities. warehouses and Information and analysis. storage spaces Director Director Director Baldur M. Helgason Sunna H. Sigmarsdóttir Páll V. Bjarnason Contract management, Business Property Operation, leasing and coordination Operations in properties development of leasing issues. Green solutions and marketing Other income. BMH SHS PVB Project management, larger projects Torfi Hjartarson
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