SOLON EIENDOM ASA
Q1 2017
Andreas Martinussen, CEO
Scott Danielsen, CFO
30 May 2017
Agenda
Highlights
Operational update
Financial update
Market
Summary
Highlights
– All time high sales value in Q1
– 87 % of units under construction sold (205 of 236)
– Land bank acquisitions with 128 units potential for Solon Eiendom
Key financials
Total sales value
Project margin
407
22
NOK million
per cent
Equity ratio
Units completed
29
1
per cent
not sold
Operational update
– 58 (41) units sold and 24 (11) units delivered in Q1
– 94 % of 2017 expected completions already sold
– 236 (206) units in production end Q1
– 71 % of revenue outside Oslo (greater Oslo area ex Bygdøy)
Subsequent events
– Dividend of NOK 50 million (NOK 1,03 per share) for 2016
approved at the May shareholders meeting
– Sale of all non-core real estate assets and reduction in interest
bearing debt
– Land bank acquisition with 115 units potential for Solon Eiendom
Total sales value and value per unit (NOKm)
450
25,0
407
400
20,0
323
350
300
246
15,0
230
250
177
200
10,0
9,2
150
100
6,0
5,5
7,0
6,1
5,0
50
0
0,0
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Sales per quarter (units)
168
146
125
62
35
26
11
2013
41
2014
2015
Q1
Q2
2016
Q3
Q4
58
2017
Expected completions per quarter (units)
86
59
46
–
49
–
4
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Expected completions
in Q4 2017 have been
reduced from 98 units
to 49 units
The 49 units have been
delayed to Q1 2018
Financial update
Revenue (NOK million)
691
–
–
225
–
93
Q1 2016
Q1 2017
2016
Revenue increased 143%
from Q1 2016 to Q1 2017
24 units delivered in Q1
2017 compared to 11
units in Q1 2016
Revenue in Q1 2017
includes other revenues
of NOK 14 million
EBIT (NOK million)
74
–
33
–
–
-3
Q1 2016
Q1 2017
2016
Increase in EBIT is mainly
due to increase in
number of delivered
units
Partially offset by Bionor
costs of NOK 5 million
included in Q1 2017
Bionor planned cash
burn reduction with full
effect from Q3 2017
Revenue and EBITDA (NGAAP, NOK million)
787
–
–
170
168
28
Q1 2016
130
26
Q1 2017
Revenue
2016
EBITDA
Project margin increased from
19 % in Q1 2016 og 22 % in Q1
2017
EBITDA margin in Q1 2017 15,3
% compared to 16,8 % in Q1
2016
Consolidated balance sheet (NOK million)
March 31
December 31
2017
2016
–
ASSETS
Non-current assets
361
347
Current assets
1 530
1 486
TOTAL ASSETS
1 891
1 833
EQUITY AND LIABILITIES
Non-current assets consist mainly
of one investment property
(Fjordveien, NOK 200 million) and
intangible assets (Bionor, NOK 120
million)
–
Fjordveien divested in Q2
–
Inventories NOK 1 292 million
Cash and bank NOK 152 million
Total equity
552
511
–
Non-current liabilities
673
702
–
Current liabilites
666
620
Total liabilities
1 339
1 322
TOTAL LIABILITIES AND EQUITY
1 891
1 833
Current liabilities: Interest bearing
debt NOK 404 million and
prepayments from customers
NOK 109 million
Interest bearing debt (NOK million)
18,2
174,9
–
464,6
–
378,8
–
Commercial
Construction
Land
Other
Total interest bearing debt NOK 1 037
million
Sale of non-core assets reduces interest
bearing debt by NOK 187 million in Q2
2017
NOK 50 million undrawn line of credit
BIONOR
■
Special mission engagement ended on May 22 without concrete solution
■
Management currently looking at various alternatives for the subsidiary
■
Planned cost reduction activities are anticipated to reduce the annual cash burn from NOK 24
million to NOK 14 million
16
Market
Solon buyers and effects of new mortgage regulation
Typical buyers
Effects of new regulation
Comment
Age 55 pluss moving from villa
to apartment.
Significant equity
Minor effect
Less affected by change in sentiment and
less sensitive to changes in interest rates
Minor effect
High income households (>1,5 MNOK) with
two individuals owning one apartment
each gives 20-30 % equity. Purchasing
power of 8 – 10 MNOK
Age 35 - 45 moving from
apartment to detached
houses. High income
Younger buyers moving out of
Oslo due to high prices
Positive effect
Loan cap at 5x annual income forces
buyers to look outside Oslo, i.e. Kolbotn
Market outlook
– Sales still strong in Solon projects
– Three successful sales launches YTD with 79,3 % sold on average
– Oppegård, where Solon are among the major residential
developers, has second highest price increase YTD with 3,7 %
– Still attractive deal flow on potential new properties
Strong sales outside Oslo
Skaret (Kolbotn) launched in February 2017
Sold units:
44 of 61
Prices:
NOK 70.000 / BRA-S
Typical buyers:
Age 55 pluss and movers from Oslo
Project margin:
~20 %
Sales still strong in Oslo (1)
Kollentunet (Voksenkollen) launched in April 2017
Sold units:
29 of 33 (townhouses)
Prices:
NOK 67.000 / BRA-S
Typical buyers:
Age 35 to 45, active lifestyle
Project margin:
~25 %
Side 21
Sales still strong in Oslo (2)
Jegerveien (Ris/Slemdal) 5 launched in May 2017
Sold units:
20 of 25 (townhouses)
Prices:
NOK 87.000 / BRA-S
Typical buyers:
Age 35 to 45, active lifestyle and high income
Project margin:
~25 %
Summary
Summary
– Project margins have improved
– Sold 94 % of 2017 expected completion
– Divestment of all non-core real estate assets (Q2)
– All time high sales in Q1 and the trend continues in Q2
Solon Eiendom AS
Org. nr. 990 578 532
Olav Vs gate 5, 0161 Oslo
—
www.soloneiendom.no