PRESENTATION FULL-YEAR 2018 RESULTS 1 Strictly confidential - PowerPoint PPT Presentation

PRESENTATION FULL-YEAR 2018 RESULTS 1 Strictly confidential

IMPORTANT NOTICE This presentation includes forward-looking information and Although we believe that its expectations reflected in any statements, including statements concerning the outlook for such forward-looking statement are based upon reasonable our business. These statements are based on current assumptions, it can give no assurance that those expectations, estimates and projections about the factors expectations will be achieved. This presentation contains that may affect our future performance, including the non-GAAP measures of performance. We provide economic conditions in the property markets relevant to us. definitions of these measures and reconciliations between These expectations, estimates and projections are generally these measures and their IFRS counterparts as we believe identifiable by statements containing words such as are appropriate. “expects,” “believes,” “estimates,” “targets,” “plans,” “outlook” or similar expressions. There are numerous risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking information and statements made in this presentation and which could affect our ability to achieve any or all of our stated targets. The important factors that could cause such differences include, among others: – business risks associated with the volatile economic environment and political conditions – costs associated with natural disasters affecting our properties – changes in governmental regulations – changes in currency exchange and interest rates, and – such other factors as may be discussed from time to time in prospectuses 2 Strictly confidential

AGENDA APRIL 3, 2019 ▪ Key achievements ▪ Financials FY 2018 ▪ Portfolio and growth strategy ▪ Outlook ▪ Q&A 3 Strictly confidential

TODAY’S SPEAKERS MANUEL LEUTHOLD PATRICK RICHARD ■ ■ Delegate of the Board of Chairman, Directors, Varia US Varia US Properties AG Properties AG ■ Head of US Investments of Stoneweg SA, the Asset Manager of Varia US Properties AG 4 Strictly confidential

KEY ACHIEVEMENTS 5 Strictly confidential

2018 KEY ACHIEVEMENTS (1/2) ■ BUYOUT OF NON-CONTROLLING INTEREST (NCI) ■ Got full ownership on 100% of portfolio ■ Got full control on asset management and strategy implementation ■ Got full control on financial data ■ PORTFOLIO OVERALL GROWTH AND VALUE-ADD IMPLEMENTATION ■ Acquisition of 9 assets ■ Exchange of 6 assets against 30 minority interests participation ■ Successful sale of 1 asset with a 30.5% net IRR ■ GREEN INITIATIVE LAUNCH ■ Water and energy conservation program ■ Benefit resident, investor and environment 6 Strictly confidential

2018 KEY ACHIEVEMENTS (2/2) ■ TEAM REINFORCEMENT AND IMPROVED ORGANIZATION ■ 13 full time equivalent working in the US ■ 3 full time equivalent working in Geneva ■ New Yardi ERP system implemented ■ KEY FIGURES ■ Total income of USD 100.8 million (2017: USD 88.2 million) ■ EBITDA margin of 43.6% (2017: 40.3%) ■ Earnings per share of USD 2.79 (2017: USD 4.15) ■ Total portfolio value of USD 767.5 million (2017: USD 618 million) ■ Proposed distribution to the next AGM of CHF 2.50 per share 7 Strictly confidential

FINANCIALS FY 2018 8 Strictly confidential

2018 KEY FIGURES (1/2) TOTAL EFFECTIVE FAIR VALUE GROSS PORTFOLIO INCOME 2017: USD 88.2 million INCOME ADJUSTMENT** 2017: USD 65.8 million 2017: USD 22.4 million 86.0 14.7 100.8 USD USD USD million million million REPAIR, TOTAL YEAR I MAINTENANCE AND OPERATING CAPEX MINOR REPLACMENTS EXPENSES INVESTED 2017: USD 4.9 million 2017: USD 39.2 million 2017: USD 6.9 million 50.2 5.9 11.9 USD USD USD million million million ** Including USD 3 million of realized gain on property sold 9 Strictly confidential

2018 KEY FIGURES (2/2) OPERATING PROFIT EBITDA 2017: USD 26.5 million PROFIT FOR THE 2017: USD 48.9 million PERIOD 2017: USD 34.9 million 38.9 50.6 24.9 USD USD USD million million million EARNINGS NAV FUNDS FROM PER SHARE PER SHARE OPERATION (FFO) 2017: USD 4.15 2017: USD 34.38 (EBITDA LESS INTEREST EXPENSES) 2017: USD 12.9 2.79 37.14 20.9 USD USD USD 10 Strictly confidential

PROFIT AND LOSS (CONSOLIDATED) In USD million As of December 31, 2018 As of December 31, 2017 Rental income 76.3 59.9 Other income including insurance proceeds 9.8 5.8 Net gain from fair value adjustment (realized) 3.0 - Net gain from fair value adjustment on invest. property 11.7 22.4 Total income 100.8 88.2 Total operating expenses (50.2) (39.2) Operating profit 50.6 48.9 Financing expenses (18.0) (13.2) Profit before income tax 32.6 35.7 Income tax (7.7) (0.8) Profit for the period 24.9 34.9 Profit attributable to: Varia US Properties AG shareholders (in USD million) 24.9 28.1 Non-controlling interests (in USD million) - 6.8 NAV & Earnings per share Net asset value (NAV) per share (in USD) 37.14 34.38 Basic and diluted earnings per share (in USD) 2.79 4.15 11 Strictly confidential

EARNINGS PER SHARE 2018 2017 Operating profit less fair value adjustment 4.01 3.92 Realized gain on property 0.34 - Unrealized gain on properties 1.32 3.31 Debt costs (2.02) (1.95) Taxes (0.86) (0.13) NCI - (1.01) EPS 2.79 4.15 2018 2017 Operating profit less fair value adjustment 4.01 3.92 Realized gain on property 0.34 - Unrealized gain on properties Debt costs (2.02) (1.95) Taxes NCI - (1.01) EPS 2.33 0.96 12 Strictly confidential

FINANCIAL POSITION (CONSOLIDATED) Assets in USD million As of December 31, 2018 As of December 31, 2017 Total current assets 47.8 94.7 Total non-current assets 776.7 573.5 Total assets 824.5 668.2 Liabilities and equity in USD million As of December 31, 2018 As of December 31, 2017 Total current liabilities 17.2 47.3 Total non-current liabilities 472.9 350.6 Total liabilities 490.1 397.9 Equity attributable to Varia US Properties AG 334.3 247.6 shareholders Non-controlling interest (NCI) - 22.8 Total equity 334.3 270.4 Total liabilities and equity 824.5 668.2 13 Strictly confidential

PORTFOLIO AND GROWTH STRATEGY 14 Strictly confidential

PORTFOLIO DEVELOPMENT IN 2018 ■ Portfolio value of USD 767.5 million ■ 52 assets ■ 9,737 units ■ 19 different States in the US ■ Florida down to 15% (2017: 24%) ■ Most of new properties are located in markets where Varia was already present, thus consolidating its footprint in selected markets ■ Larger assets ■ Closer to metropolitan areas with a proven value-add strategy 15 Strictly confidential

PORTFOLIO 2018 KEY FIGURES AVERAGE GROSS EFFECTIVE GROSS MONTHLY POTENTIAL INCOME* RENT PER UNIT** INCOME* 2017: USD 78.1 million 2017: USD 716 2017: USD 83.9 million 760 101.0 94.0 USD USD USD million million AVERAGE MARKET OCCUPANCY LOAN-TO- VALUE PER UNIT RATE VALUE 2017: USD 74,950 2017: 94.3% 2017: 60.52% 78,823 93.7% 59.73% USD • According to Colliers International, appraiser of the Company’s investments ** This average does not include the property Brookwood that was acquired in December 2018 16 Strictly confidential

9 NEW ACQUISITIONS EXECUTED OVER THE PERIOD 17 Strictly confidential

POSITIVE EARLY PERFORMANCE OF THE NEW ASSETS 18 Strictly confidential

ADDING VALUE TO THE PORTFOLIO ▪ In 2018, a total of 600 units have been rehabbed for the amount of more than USD 2.7 million ▪ The average rehab cost per unit is USD 4,489 ▪ Investing in the common areas and in the unit rehab works ▪ An average rent increase of USD 98 per month has been achieved ▪ Average ROCE of 26% ▪ An additional USD 8.3 million has been spent in various deferred maintenance and property enhancement projects in common areas. 19 Strictly confidential

GREEN INITIATIVE ■ Varia is committed to deploy a portfolio wide green program that will improve the energy scorecard of the portfolio ■ Main purpose of this initiative is to save between 25% and 35% of the water and electricity consumption ■ This initiative will benefit the residents, the investors and the environment ■ To achieve this goal, ■ Varia will replace shower heads, toilet tanks and faucets with water conservation efficient solutions ■ Varia will implement an electricity conservation program which includes replacing regular bulbs with LED products as well as old appliances as refrigerators and dishwashers with more efficient ones ■ Investments will be financed with equity or with the proceed of refinancing ■ The green initiative will be further evaluated and implemented in the next few years 20 Strictly confidential

GREEN INITIATIVE 21 Strictly confidential

OUTLOOK 22 Strictly confidential