June 11, 2019 Please note that the investor must not use this material as a basis for investment decisions
Disclaimer This material is provided to you for information purposes only. You should not rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever. Northern Horizon Capital AS (NHC) has taken all reasonable care to ensure that the information contained in this presentation is reliable but no guarantees, warranties or representations are made as to the accuracy or completeness of the information contained in this document. This presentation includes description of Baltic Horizon Fund (“Baltic Horizon”). It is furnished to you solely for your information and you may not reproduce it (or any part of it) or redistribute it (or any part of it) to any other person or otherwise divulge, directly or indirectly, its contents to any person. This presentation does not constitute or form part of, and should not be construed as, an offer, solicitation, financial promotion or invitation to subscribe for, underwrite or otherwise acquire, any units of Baltic Horizon. This presentation includes forward-looking statements. These statements may be identified by such words as “aim”, “target”, “expect”, and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions and address matters that involve risks and uncertainties. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. You should not place undue reliance on forward-looking statements. NHC undertakes no obligation to update, or correct any inaccuracies which may become apparent after the date of this presentation. When reviewing the information, please note that past performance is no guide to or guarantee of future performance. You should be aware that ideas and potential opportunities discussed herein carry risk, that the value of described assets can vary over time, and that potential investors may not get back the full amount invested. NHC urges all persons considering investment opportunities to seek professional legal, regulatory, accounting, tax or other type of advice, as may be appropriate, on all relevant issues in considering investments in securities. This presentation is private and confidential and is being made available to the recipient on the express understanding that it will be kept confidential and that the recipient shall not copy, reproduce, distribute or pass to third parties this presentation in whole or in part at any time. This presentation is not intended for distribution to or use by, any person or entity that is a citizen, resident, registered or located in any state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. For more information to potential investors in specific jurisdictions please see disclaimer slides at the end of section V of this presentation. 2
Baltic Horizon listed on June 2016: the first most diversified Baltic publicly traded evergreen real estate fund EfTEN Real Vehicle Baltic Horizon Eastnine Estate Fund III AIF with REIT like AIF with LLC Type contractual structure LLC (Aktiebolag) legal structure (Estonian) Inception 1) June 2016 2017–2020 Oct 2017 Tax transparent Company income Tax on dividend Tax Legend colour (tax on investor level) tax on profits (tax on fund level) Stockholm Tallinn Investor base Swedish/Baltic Swedish Baltic (majority) Baltic Horizon NAV (MEUR) 110 232 51 Eastnine Directly owned 264 278 103 properties (MEUR) EfTEN Office 50% Office 29% Office 97% Investment properties Retail 44% Retail 42% Retail 3% Other 6% Logistics 30% Legend size Dividends 7–9% Dividends 4–6% Dividends 6–8% Strategy 2) ROE 12–15% ROE 13–15% ROE 15% 100 MEUR LTV 50%/max 65% LTV max 65% LTV max 65% Market cap (MEUR) / 50 MEUR 107 / 21% 193 / 33% 52 / 7% liquidity (churn p.a.) 3) Nasdaq Sthlm Nasdaq Sthlm – Market place Nasdaq Tallinn – Nasdaq Tallinn 1) Inception refers to strategy to own investment properties directly in the Baltics without an exit (evergreen structure). 2) Eastnine has a target payout-ratio of 50% of the profit from property management (Sv. förvaltningsresultat). Catella estimates that this translates to 4-6% dividend on NAV. Eften Real Estate Fund III AS can pay out up to 80% of free cash flow in dividends and decision is up to the general meeting. Last dividend was 6,1% on paid in capital. 3) Market capitalization as of 13 November 2018. Liquidity calculated as the total number of shares/units traded over a period 13 November 2017–13 November 2018 divided by the average number of shares/units outstanding for the period. Not: Only listed vehicles with more than 100 MEUR in directly owned investment properties have been include (Invalda thus excluded). Eastnine announced on February 14 that it has acquired I, II and III of S7 in Vilnius for 128.3 MEUR. This is not included in the figures above. Source: Company webpages; NHC 3
Baltic Horizon: April 2019 FINANCIALS: PORTFOLIO: Property value 3 : EUR 263,5m Net lettable area : 122,439 NAV 4 : EUR 110m + EUR 25m Vacancy 1 : <2.0% (April) WAULT 2 : 5.14 years LTV : 50% / max 65% Net initial yield : 6.5% NOI: EUR 17m+ 2018 div payout: EUR 8,8m Div yield 2018: 7,8% STP rating: MM3 (BB/BB+) INVESTORS: Geographical allocation Segment allocation Total investors: 5000+ Units outstanding: ca 100m 6% Trading churn: ca 15% p.a. 34% Largest ivestors: Swedish 37% Retail Estonia 43% Church Pension Fund, SEB Office Latvia pension funds, Muirfield 51% Invest, ETON, EIKOS, VIG Leisure Lithuania 29% 1 % of net lettable area. . 2 Weighted average unexpired lease term weighted by lettable area. (WAULT for the property portfolio weighted by income is 5.24 years.) 3 Detailed overview over portfolio property values is presented on the next page. 4 Net Asset Value of the Fund as per IFRS financial statements. 5 The EPRA NAV measure is designed to reflect the fair value of net assets of an entity that invests in real estate with a long-term investment strategy. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value of financial derivatives and deferred taxes on property valuation gains, are therefore excluded. 6 The gross asset value shall be determined based on the aggregate of the Gross Property Value and the market value of all other consolidated assets of the Fund and the SPVs (excluding shares of SPVs holding real estate). 4
FINANCING SUMMARY AS OF 31 DECEMBER 2018 Maturity by separate loan 45 000 000 57.3% 2.4% 40 000 000 Bonds LTV Cost of debt 35 000 000 30 000 000 25 000 000 Europa 20 000 000 Cocal cola Plaza 0.1% 4.0 years and Postimaja 15 000 000 Upmalas Biroji Domus Pro 10 000 000 Vainodes Annual debt Weighted debt G4S Duetto Lincona 5 000 000 Pirita amortization maturity SKY LNK 0 2021.03 2021.09 2022.03 2022.09 2023.03 2023.09 2024.03 2024.09 2025.03 Diversification by creditor Loan and hedge maturity 35% 30% 25% SEB 28% 20% Swedbank 15% 46% Luminor 10% Bonds 5% 8% 0% 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 2024 2025 18% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Loans Hedges 8
Strong portfolio with a total value of EUR 263.5 million Details of existing propertyportfolio Coca- Sky Europa Upmalas Domus Vainodes Postimaja LNK Property Total G4S HQ Lincona Duetto I Duetto 1I Cola Piirita Supermar SC Biroji Pro SC Centre Plaza ket Vilnius Tallinn Riga City Riga Vilnius Tallinn Tallinn Vilnius Vilnius Tallinn Riga Riga Tallinn CBD CBD1 CBD1 Retail/Offic Type Retail Office Office Office Office Office Cinema Retail Retail Office Retail Office e Rentable 16,078 2 122,439 16,856 10,458 9,179 10,870 8,498 8,509 8,664 5,427 3,254 8,052 9,141 7,453 area sq.m. 1,3% 6.2% Vacancy 0% 3 1.5% 4.4% 0% 1.6% 0% 1.5% 0% 0.7% 0% 4% 0% (0% 3 ) (0% 3 ) Rent,EUR/ sq.m./mon 12 14.5 12.7 9.5 10.59 10.22 11.5 12.3 9.7 12.5 11.0 13.2 16.8 12.0 th NOI, EURm 17 2.4 1.7 1.7 1.2 1.2 1.1 1.3 1.0 0.9 0.4 1.5 1.5 1.1 Fair value, 263.5 6 26.59 5 41.1 25.7 17.2 17.2 16.3 18.3 14.5 10.0 5.4 21.2 32.5 17.5 EURm No. of 203 72 9 37 1 13 7 6 1 18 18 3 14 4 leases WAULT 4 5.14 3.9 3.0 3.9 3.9 4.7 3.3 5.2 4.2 6.4 3.7 14.9 6.4 6.6 Major tenants Source: Northern Horizon Capital 1 Central Business District 2 Retail: 11,247 sqm, MV: €17.46m; Office: 4,759 sqm, MV: €7.46m. 3 Pirita, Duetto I and Duetto II effective occupancy rate is 100% due to a rental guarantee. 4 Weighted average unexpired lease term weighted by lettable area. (WAULT for the property portfolio weighted by income is 5.24 years.). 5 Includes land plot next to Domus Pro (Meraki). 6 Value including Duetto II, transaction expected to close by the beginning of March 2019 6
Rental concentration – 10 largest 8% Rimi Latvian State Forestry 7% G4S Eesti Forum Cinemas 7% Largest tenant accounts SEB for only 7.8% of the Intrum Global Business Services 6% portfolio Exigen Services Latvia 53% H&M 6% New Yorker 4% Swedbank 3% Others 2% 2% 2% 7
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