February 28, 2020 9:00am MT / 11:00am ET Q4 2019 Conference Call
Forward Looking Statements and Non-GAAP Measures Forward Looking Statements This conference call presentation contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this conference call presentation, and other statements concerning Boardwalk’s objectives, its strategies to achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward- looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcome s or events. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. All forward -looking statements in this conference call presentation are qualified by these cautionary statements. Certain material factors, estimates or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in these statements and actual results could differ materially from such conclusions, forecasts or projections. Additional information on the material risks that could cause our actual results to differ materially from the conclusions, forecast or projections in these statements and the material factors, estimates or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information can be found in our annual information form and annual report that are available on our website and at www.sedar.com. Except as required by applicable law, Boardwalk undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Non-GAAP Measures Boardwalk’s condensed consolidated interim financial statements are prepared in accordance with International Financial Repor tin g Standards (“IFRS”) and with the recommendations of REALpac, Canada’s senior national industry association for owners and managers of investment real estate. The Trust uses cer tain financial measures to assess performance, which are not generally accepted accounting principles (“GAAP”) under IFRS. The following measures, Net Operating Income (“NOI”), Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”), Ad justed Cash Flow From Operations (“ACFO”), Operating Margins, Stabilized Revenue Growth, Stabilized Operating Expense Growth and Stabilized NOI Growth, as well as other measures discussed in this presentation, do not have a standardized definition prescribed by IFRS and are, therefore unlikely to be comparable to similar measures provided by other reporting issuers. Non-GAAP measures should not be considered an alternative to profit(loss), cash flow from operations, or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, profitability, cash flow and liquidity. For a full definition of these measures, please refer to the “N on- GAAP Financial Measures” in Boardwalk’s Management’s Discussion and Analysis for the three months and twelve months ended December 31, 2019. 2
Boardwalk REIT – Building On Our Track Record 11.1% 11.3% 1.9% 16.7% 13.3% 18.6% 16.7% Seven Consecutive Quarters of Growth in FFO per unit 3
Q4 Financial Highlights - Delivering Another Solid Quarter Q4 and FY 2019 FFO and AFFO 20.1% 17.5% 20.9% 16.8% Same Property Portfolio Performance 3M Dec-19 12M Dec-19 8.2% 11.6% 4.1% 4.3% -0.9% -4.0% Revenue Expense NOI Revenue Expense NOI Same Property figures exclude un- stabilized properties, sold assets, adjust for lease payments relating to IFRS 16 and is ‘apples to apples’ for the Trust’s new Asset Management Model 4
Boardwalk REIT – Delivering Growth & Offering Exceptional Value Exceptional Value Delivering Growth Significant FFO Per Unit Growth Current IFRS NAV of discount to NAV $63.72 / trust and comparable 2019 (12M) 2019 (3M) transactions unit 16.7% 16.3% Per Door Valuations > $200,000 Same Property Total Revenue Growth Average NOI Growth $182,000 2018 / 2019 Calgary and 2019 (3M / 12M) 2019 (3M / 12M) Edmonton IFRS NAV Transactions $162,000 4.5% / 4.8% 11.6% / 8.2% BEI Trading Value @ $50/Trust Unit 5
Rental Market Fundamentals – Current Environment Boardwalk strives to create value in all stages of the rental market Ontario (8% of total portfolio) Quebec (18% of total portfolio) Balanced supply and demand • Select incentives offered Grande Prairie (2% of total portfolio) • Low vacancy • Increasing rental rates with low availability • Increased competition for • Few incentives • apartment acquisitions Supply constrained • Increased new construction • Rising vacancy & increasing incentives • Rental rate decreases • Calgary (16% of total portfolio) Reduced new construction • Edmonton (38% of total portfolio) Counter-cyclical buying opportunities • Saskatoon (6% of total portfolio) Red Deer (3% of total portfolio) Fort McMurray (1% of total portfolio) Regina (8% of total portfolio) 6
Alberta Highlights – Rental Demand & Economic Improvement 26.3% increase in Net CMHC Forecast High housing Migration from January, 2020 Q3-2018 to Q3-2019 Vacancy Rates to affordability MLS Sales continue to decline in Volume increased and standard 2020 9.7% YoY of living Labour Market Declined 0.4% from Average Weekly Jan-19 to Jan-20 CMHC Earnings remain one Forecasting of the highest in continued rental Canada; increased Continued rate growth into 3.6% year over year diversification of 2020 and 2021 Annual Population industry with (November, 2019) Growth of 1.7% (Dec, growth in non- 2018 vs Dec 2019 resource sectors Sources: Alberta Economic Dashboard, CMHC Rental Market Reports 7
Boardwalk Strategy – BUILDING THE MOST SUSTAINABLE CULTURE AND BRAND 2019 Performance Total Revenue Growth of 4.8% Organic Growth Same Property NOI Growth of 8.2% SPNOI Margin Improvement of over 200 bps Repositioned/ Renovated 16% of Common Areas Brand and Product Diversification Renovated over 1,300 Apartment Units Repositioned a new Lifestyle Asset in Edmonton Sold 278 non-core units in Saskatchewan High-Grading & Geographic Expansion Acquired 124 newly constructed units in Edmonton Acquired 50% interest in Mississauga Development 99% CMHC Debt Solid Financial Foundation Debt (net of cash)/Assets: 47% Interest Coverage: 2.76x = FFO/Trust Unit Growth: 16.3% Unitholder Value 2019 Total Return: 25.9% NAV per Trust Unit: $63.72 8
Rent Trends on Renewals & New Rentals Continued positive traction on lease renewals and new leases, inline with seasonal expectations. Continuing to target 4-8% adjustments. Includes large number of Quebec lease renewals that traditionally occur in July 9
Occupancy, Rents, Incentives & Vacancy Loss Actual Occupancy Maintaining • High • Occupied rents Occupancy 96.6% 96.6% continue to rise 96.6% 96.2% 95.8% (Same Property) Q4-2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 • Revenue has • Incentives per increased for unit continue to eight decrease and consecutive the cumulative quarters impact on total incentives is trending down All values exclude sold properties; same store as reported. 10
Sequential Revenue Growth Q4 2019 Q3 2019 Q2 2019 Q1 2019 vs Q3 vs Q2 vs Q1 vs Q4 Stabilized Revenue Growth # of Units 2019 2019 2019 2018 Edmonton 12,906 0.3% 1.3% 1.8% 0.2% Revenue is increasing; through a focus on: Calgary 5,657 0.6% 1.0% 1.4% 2.2% - Reducing vacancy loss - Incentive reductions Red Deer 939 -0.6% 0.2% 2.2% 5.5% - Increasing market rents Grande Prairie 645 1.9% 2.4% 2.3% 2.2% Fort McMurray 352 -0.7% 1.3% 0.7% -0.7% Quebec 6,000 1.3% 1.0% 0.2% 1.2% Saskatchewan 3,685 1.8% 1.2% 0.9% 0.1% Ontario 2,585 1.9% 1.2% 1.9% 1.2% 32,769 0.8% 1.1% 1.3% 1.0% 11
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