Quarterly Report • Jul 14, 2022
Quarterly Report
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AB Sagax is a property company whose business concept is to invest in commercial properties, primarily in the warehouse and light industrial segment
Profit from property management for 2022, meaning profit before revaluations and tax, based on the current property portfolio, announced acquisitions and divestments and current exchange rates, is expected to amount to SEK 3,300 M. The previously submitted forecast was for profit of SEK 3,200 M and was presented when the year-end report for 2021 was published.
| Selected key performance indicators1, 2) | |||||||
|---|---|---|---|---|---|---|---|
| Jan-Jun 2022 |
Jan-Jun 2021 |
Jan-Dec 2021 |
Jan-Dec 2020 |
Jan-Dec 2019 |
Jan-Dec 2018 |
Jan-Dec 2017 |
|
| Profit from property management per Class A and B share after dilution, SEK |
4.69 | 3.86 | 7.99 | 6.62 | 5.51 | 4.31 | 3.70 |
| Change compared with preceding year, % | 22 | 18 | 21 | 20 | 28 | 16 | 24 |
| Earnings per Class A and B share after dilution, SEK | 5.08 | 13.13 | 30.04 | 10.78 | 12.13 | 9.24 | 8.85 |
| Dividend per Class A and B share, SEK | – | – | 2.15 | 1.65 | 1.30 | 1.00 | 0.90 |
| Net debt/EBITDA, multiple | 7.5 | 7.0 | 5.8 | 6.4 | 6.6 | 7.4 | 8.1 |
| Interest coverage ratio, multiple | 8.3 | 7.1 | 6.5 | 5.7 | 4.9 | 4.2 | 3.7 |
| Debt ratio at the end of the period, % | 45 | 45 | 42 | 43 | 44 | 47 | 50 |
| Properties' market value at the end of period, SEK M | 52,004 | 41,722 | 46,067 | 37,548 | 32,625 | 29,024 | 23,771 |
| Property yield, % | 5.7 | 6.1 | 6.0 | 6.3 | 6.4 | 6.8 | 6.9 |
1) Definitions of key performance indicators are provided on pages 32–33
2) The calculation of alternative performance measures is provided on pages 34–35
AB Sagax is a property company whose business concept is to invest in commercial properties, primarily in the warehouse and light industrial segment.
The overriding objective is the long-term generation of the maximum possible risk-adjusted return to the company's owners. To achieve this objective, Sagax has set the following business targets:
The table and charts below illustrate the outcome for the past five years in relation to the financial targets.
Sagax invests primarily in warehouse and industrial purposes properties. Properties designed as warehouses and for light industries are
| Financial targets | ||
|---|---|---|
| Outcome rolling 12 months |
Five-year average |
|
| Return on equity, measured over a five-year period, should not fall below 15% per year |
24% | 24% |
| Profit from property management per Class A and B share should increase by a minimum of 15% on an annual basis |
18% | 21% |
attractive investment opportunities, since they generate a high yield combined with a low rate of new production and stable occupancy rates. Sagax invests in add-on acquisitions and in existing properties. Property acquisitions and investments in the existing portfolio aim to increase cash flow and diversify rental revenue, thereby reducing the company's operational and financial risks.
Sagax's financial structure is designed with a clear focus on operating cash flow and interest coverage ratio. This is expected to create both excellent prerequisites for expansion and an attractive return on equity.
The company has three classes of shares: Class A, B and D common shares. The Class D shares attract investor categories that value steady ongoing dividends.
Sagax pursues efficiency and sustainability in its management strategy. The management strategy includes clearly prioritising reputable customers with high credit ratings and obtaining long leases. This is regarded as being advantageous since it reduces the risk of vacancies, while leading to lower costs for letting premises and adapting premises to tenant needs. The company mainly enters into triple net leases and is thus only affected to a limited extent by changes in consumption or changed rates for such utilities as heating, water and sewage.
The aim of Sagax's sustainability activities is to avoid short-term gains arising at the expense of negative longer-term consequences. The company's investing activities, management and funding are conducted to achieve the best possible long-term – meaning sustainable – outcome. The planning, governance and monitoring of sustainability activities follow Sagax's organisational structure with well-defined delegation of responsibilities and authorities. Sustainability activities are based on applicable legislation and internal policies.
Sagax has identified the following focus areas:
Heating premises and the use of electricity account for the largest share of properties' energy use. Sagax continuously takes action to reduce its energy consumption.
Sagax works actively to combat all forms of corruption, and has a whistle-blower function available on the Sagax website and a Code of Conduct for Suppliers.
Sagax's business model is characterised in all areas by a long-term approach. Short-term gains are subordinate to the company's long-term value creation. Accordingly, sustainability work is integrated into the business model.
The development of the company is dependent on highly skilled employees. For this reason, it is important that the company is an attractive employer that can attract and has the ability to retain highly skilled personnel. Sagax employees are expected to assume responsibility for their work duties and serve as good representatives of the company's values and culture.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Profit from property management, rolling 12 months Cash flow from operating activities before change in
The Jasperintie 334 property in Pirkkala, Finland was acquired in the second quarter and was included in the Finland market segment. The property encompass a total of 21,000 square metres of land and 4,300 square metres of lettable area. The premises are fully let to five different tenants.
The profit/loss and cash-flow items below refer to the January to June 2022 period. The comparative items refer to the year-earlier period. Amounts for the balance-sheet items and comparative figures refer to the position at the end of the current period and end of the year-earlier period.
Profit from property management rose 19% to 1,620 M (1,364), of which joint ventures and associated companies accounted for SEK 391 M (344). The increase in profit from property management was attributable to property acquisitions and higher profit from property management in joint ventures and associated companies. Profit from property management per Class A and B share after dilution rose 21% to SEK 4.69 (3.86).
Changes in the value of properties increased profit by SEK 3,113 M (2,753), of which SEK 1,255 M (985) from joint ventures. The changes in value were primarily due to higher inflation expectations and thus higher expected rental revenue.
Revaluation of financial instruments had an impact on profit of SEK –2,194 M (751), of which SEK 248 M (59) from joint ventures. The revaluation of listed shares accounted for SEK –2,730 M (550). The revaluation of financial instruments attributable to joint ventures amounted to SEK 189 M (132) pursuant to IFRS 9, while fixed income derivatives accounted for SEK 343 M (97) and other financial instruments for SEK 4 M (–27).
Rental revenue rose 19% to SEK 1,787 M (1,506). Revenue was primarily positively affected by property acquisitions. Revenue was also impacted positively by SEK 42 M compared with the year-earlier period due to the EUR strengthening against the SEK.
During the period, rental revenue in comparable portfolios increased 4.3% (2.0) excluding currency effects. The market segments with the largest increases were Spain with 11.3%, Sweden with 4.7% and Finland with 4.7%. Rental revenue for other market segments increased 1.6% in comparable portfolios excluding currency effects.
Other revenue amounted to SEK 12 M (15).
The economic occupancy rate amounted to 96% (95). During the period, the vacancy value rose SEK 73 M (82) due to tenants vacating premises and declined SEK 86 M (76) due to new lettings. Fixed-term rent discounts for new tenants increased SEK 12 M (1) to SEK 49 M (34) on an annual basis at the end of the period. Property acquisitions during the period impacted the vacancy value by SEK 9 M (1). In total, the vacancy value increased SEK 4 M (6) to SEK 147 M (165) at the end of the period.
Profit after tax for the period was SEK 1,742 M (4,303).
Rental revenue
Economic occupancy rate
Rental revenue, comparable portfolios
currency effects, compared to the same period previous year
At the end of the period, notice of termination had been served for leases with a rental value of SEK 156 M (88), of which leases with notice of vacating the premises accounted for SEK 151 M (85) and leases terminated for of renegotiation for SEK 5 M (3). Of the leases for which notice had been received, vacancies corresponding to a rental value of SEK 55 M will occur in 2022. Lettings of premises that have not yet been occupied reduces the adjusted vacancy value by SEK 40 M (42).
Operating and maintenance costs amounted to a total of SEK 209 M (164). Expenses for property tax increased to SEK 89 M (76). Other property expenses rose to SEK 39 M (29). The increase was primarily due to property acquisitions and price increases for heating and electricity.
Central administration costs amounted to SEK 77 M (64), corresponding to 4.3% (4.2) of the period's rental revenue. The increase in costs is the consequence of a larger organisation.
At the end of the period, Sagax had 91 (84) employees. Functions such as property caretaking and on-call operations are outsourced. Sagax has offices in Stockholm, Helsinki, Rotterdam, Paris and Barcelona.
| Country | Total |
|---|---|
| Sweden | 35 |
| Finland | 29 |
| France | 11 |
| Netherlands | 9 |
| Spain | 7 |
| Total | 91 |
| Vacancy changes | ||
|---|---|---|
| 2022 | 2021 | |
| Amounts in SEK M | Jan-Jun | Jan-Dec |
| Opening vacancy for each year | 135 | 159 |
| Vacancies | 73 | 134 |
| New lettings | –86 | –159 |
| Change in discounts provided | 12 | 2 |
| Vacancy value, acquired properties | 9 | 11 |
| Vacancy value, sold properties | – | –14 |
| Change in exchange rates | 4 | 2 |
| Closing vacancy value | 147 | 135 |
| Terminated for renegotiation | 5 | 2 |
| Terminated lease, not vacated | 151 | 105 |
| Letting, not occupied | –40 | –34 |
| Adjusted closing vacancy value | 263 | 207 |
| Leases terminated for vacancy | ||
|---|---|---|
| No. of | Rental value, | |
| Year of vacancy | leases | SEK M |
| 2022 | 46 | 55 |
| 2023 | 36 | 72 |
| 2024 | 6 | 14 |
| 2025 | 2 | 2 |
| 2026 | – | – |
| >2026 | 2 | 8 |
| Total | 92 | 151 |
| Segment | Rental value, SEK M |
Vacancy value, SEK M1) |
Economic vacancy rate1) |
Lettable area, sqm |
Vacant area, sqm |
Vacancy rate by area |
|---|---|---|---|---|---|---|
| Sweden | 912 | 49 | 5% | 903,000 | 17,000 | 2% |
| Finland | 1,520 | 52 | 3% | 1,374,000 | 52,000 | 4% |
| France | 571 | 12 | 2% | 563,000 | 11,000 | 2% |
| Netherlands | 468 | 21 | 4% | 589,000 | 22,000 | 4% |
| Spain | 313 | 11 | 4% | 461,000 | 32,000 | 7% |
| Germany | 97 | 2 | 2% | 77,000 | 5,000 | 6% |
| Rest of Europe | 10 | – | 0% | 6,000 | – | – |
| Total | 3,891 | 147 | 4% | 3,974,000 | 139,000 | 3% |
1) The vacancy value and economic vacancy rate take into account both vacancies and provided discounts.
Profit from joint ventures and associated companies for the period amounted to SEK 1,530 M (1,179), of which profit from property management accounted for SEK 391 M (344), changes in the value of fixed income derivatives for SEK 248 M (59) and changes in the value of properties for SEK 1,255 M (985). Other changes in value amounted to SEK 29 M (–9). Profit was charged with tax of SEK 392 M (200). Refer also to page 13 for more information.
Interest-bearing liabilities increased to SEK 30,967 M (24,193).
Financial expenses amounted to SEK 229 M (204). The average interest rate was 1.5% (1.6) on 30 June 2022 due to refinancing and new borrowing at lower interest rates.
Financial income of SEK 85 M (49) pertained to dividends primarily from holdings in Nyfosa interest on bonds and other financial investments.
Sagax obtains external valuations to determine the properties' market value. The valuations are carried out by independent valuation companies and updated on a quarterly basis, except for five German properties that are only valued externally at year end. As of 30 June, 99% of the properties had been valued by authorised property appraisers. For other properties, the market value was determined as the acquisition price or internal valuations were applied. The value growth for the properties amounted to SEK 1,858 M (1,768), of which unrealised changes in value amounted to SEK 1,866 M (1,764).
| Amounts in SEK M | Jan-Jun 2022 |
|---|---|
| New lettings/Renegotiations | 264 |
| Vacancies/Renegotiations | –50 |
| General change in market value | 1,652 |
| Total | 1,866 |
The change in the value of financial instruments amounted to SEK –2,194 M (751), of which SEK 248 M (59) referred to joint ventures.
The change in value attributable to fixed income derivatives amounted to SEK 343 M (97), of which SEK 248 M (59) referred to joint ventures.
Revaluation of listed shares resulted in an unrealised change in value of SEK –2,730 M (550), of which SEK –2,462 M pertained to the holding in Nyfosa AB.
Revaluation of financial instruments regarding joint ventures amounted to SEK 189 M (132) in accordance with IFRS 9.
Other financial instruments were revalued by SEK 4 M (–27).
Sagax recognised a current tax expense of SEK 42 M (56). The deferred tax expense amounted to SEK 392 M (300). The Group's deferred tax liabilities at the end of the period amounted to SEK 3,561 M (2,762).
Cash flow from operating activities before changes in working capital amounted to SEK 1,643 M (1,249). Changes in working capital had a positive impact of SEK –96 M (–263) on cash flow. Investing activities had an impact of SEK –4,218 M (–3,966) on cash flow, while cash flow from financing activities amounted to SEK 2,694 M (2,977). In total, cash and cash equivalents rose SEK 20 M (–3) during the period.
The Parent Company, AB Sagax, is responsible for stock market issues, such as financial reporting and stock market information. Services between Group companies are charged on commercial terms and conditions and in accordance with market-based pricing. Intra-Group services comprise management services and internal interest charging. The Parent Company's management fees from Group companies amounted to SEK 39 M (31).
Profit from property management for 2022, meaning profit before revaluations and tax, based on the current property portfolio, announced acquisitions and divestments and current exchange rates, is expected to amount to SEK 3,300 M. The previously submitted forecast was for profit of SEK 3,200 M and was presented when the year-end report for 2021 was published.
Current earnings capacity is reported in conjunction with interim reports and year-end reports.
The table below shows the company's earnings capacity on a 12-month basis on 1 July 2022. It is important to note that this capacity cannot be compared with a forecast for the forthcoming 12 months because it does not contain assessments about, for example, future vacancies, the interest rate scenario, currency effects, rent development or changes in value.
| Amounts in SEK M | 1 Jul 2022 | 1 Jan 2022 |
|---|---|---|
| Rental value | 3,891 | 3,459 |
| Vacancy | –147 | –135 |
| Rental revenue | 3,744 | 3,324 |
| Property expenses | –655 | –563 |
| Net operating income | 3,089 | 2,761 |
| Central administration | –160 | –147 |
| Joint ventures and associated companies | 793 | 780 |
| Net financial items | –444 | –354 |
| Lease expenses | –29 | –28 |
| Profit from property management | 3,250 | 3,012 |
| Tax | –585 | –542 |
| Profit after tax | 2,665 | 2,470 |
| – of which, holders of Class D shares | 253 | 252 |
| – of which, holders of Class A and B shares | 2,412 | 2,218 |
| Run rate yield, % | 5.9 | 5.9 |
| Net debt/run rate EBITDA, multiple | 6.8 | 5.4 |
The rental value is based on contractual rental revenue on an annual basis, with addition for estimated market rents for vacant premises. Property expenses are based on actual outcomes over the past 12 months adjusted for the holding period. Central administration costs are based on actual outcomes over the past 12 months. Net financial items are calculated based on interest-bearing liabilities and assets on the balance sheet date. Expenses for interest-bearing liabilities are based on the Group's estimated average interest rate, plus financing costs allocated over time and costs attributable to credit facilities that were unutilised on the balance sheet date. Lease expenses essentially pertain to site leasehold fees that are based on actual outcomes over the past 12 months adjusted for the holding period. Dividends attributable to the company's holdings of listed shares were not taken into account in the earnings capacity. Tax is calculated at the standard tax rate of 18% (18).
Shares in profit in joint ventures and associated companies are calculated in accordance with the same assumptions as for Sagax, taking into account the size of the participations.
On 30 June 2022, the property portfolio comprised 748 (693) properties with a lettable area of 3,974,000 square metres (3,615,000). At the end of the period, the rental value and contractual annual rent amounted to SEK 3,891 M (3,265) and SEK 3,744 M (3,100), respectively. This corresponds to an economic occupancy rate of 96% (95).
During the period, Sagax invested SEK 2,583 M (2,456), of which property acquisitions accounted for SEK 2,263 M (2,213).
Properties were acquired with a total lettable area of 201,000 square metres. The largest investment referred to a portfolio of 18,000 square metres of lettable area in the France segment. A total of SEK 321 M (243) was invested in the existing property portfolio. SEK 29 M of the investments for the period were made against rent supplements, SEK 86 M was invested in conjunction with new lettings, SEK 135 M in conjunction with new production and SEK 71 M pertained to property maintenance.
A total of SEK 17 M was invested in solar power facilities and other energy-saving investments.
The Group has agreed to acquire 26 properties in France, eight in Finland and one in the Netherlands for which possession will be taken after the end of the period. The total investment will amount to SEK 622 M. The acquired properties encompass a total of 62,000 square metres of lettable area. Refer also to page 29 for additional information.
Two properties were divested in Finland during the period with a combined value of SEK 6 M.
The yield for the period in relation to market value amounted to 5.7% (6.1).
| Market value | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Segment | SEK M | Share | SEK per sqm |
No. of properties |
Lettable area, sqm | Vacant area, sqm |
Rental value, SEK M |
Economic occupancy rate |
Contractual annu al rent, SEK M |
| Sweden | 14,652 | 28% | 16,200 | 113 | 903,000 | 17,000 | 912 | 95% | 864 |
| Finland | 16,906 | 33% | 12,300 | 213 | 1,374,000 | 52,000 | 1,520 | 97% | 1,468 |
| France | 6,977 | 13% | 12,400 | 167 | 563,000 | 11,000 | 571 | 98% | 559 |
| Netherlands | 7,109 | 14% | 12,100 | 126 | 589,000 | 22,000 | 468 | 96% | 447 |
| Spain | 4,990 | 10% | 10,800 | 120 | 461,000 | 32,000 | 313 | 96% | 302 |
| Germany | 1,234 | 2% | 16,000 | 7 | 77,000 | 5,000 | 97 | 98% | 95 |
| Rest of Europe | 135 | 0% | 22,600 | 2 | 6,000 | – | 10 | 100% | 10 |
| Total | 52,004 | 100% | 13,100 | 748 | 3,974,000 | 139,000 | 3,891 | 96% | 3,744 |
| Amounts in SEK M | Property acquisitions |
Existing portfolio |
Total | Share of total investments |
Divestments | Net investments |
|---|---|---|---|---|---|---|
| Sweden | 90 | 83 | 174 | 7% | – | 174 |
| Finland | 483 | 166 | 649 | 25% | –6 | 643 |
| France | 1,140 | 16 | 1,156 | 45% | – | 1,156 |
| Netherlands | 200 | 15 | 215 | 8% | – | 215 |
| Spain | 297 | 40 | 337 | 13% | – | 337 |
| Germany | 52 | – | 52 | 2% | – | 52 |
| Rest of Europe | – | – | – | – % | – | – |
| Total | 2,263 | 321 | 2,583 | 100% | –6 | 2,578 |
Sagax has a diverse lease structure, which better allows the company to maintain an even occupancy rate. To reduce the risk of lower rental revenue, Sagax endeavours to create long-term relationships with the company's existing tenants and to achieve favourable diversification in terms of the length and size of its leases.
Sagax's annual rent at the end of the period was distributed between 2,246 leases (1,880). The table below presents the size of Sagax's leases in relation to the Group's annual rent at the end of the period. The table shows that 2,237 leases (1,868) each had an annual rent of less than 1% of the Group's annual rent. The total annaul rent for these leases accounted for 85% (80) of Sagax's annual rent. In addition, Sagax has seven leases (ten) with an annual rent corresponding to 1–2% of the Group's annual rent. Combined, these leases amount to 9% (14) of Sagax's annual rent. Only two (two) of Sagax's leases had an annual rent that accounted for more than 2% of the Group's annual rent. These leases together represented 6% (6) of the Group's annual rent.
Sagax's tenants operate in a variety of sectors. 15% (15%) of rental revenue derives from companies in the manufacturing industry. 14% (18) of rental revenue comes from tenants with food-related operations and 12% (11) in the automotive-related industry, including sales, service and manufacturing. Diverse tenant industries is considered to lower the risk of vacancies and rent losses. The main sectors are presented in the pie chart below.
According to Sagax's management strategy, the company strives to secure long-term leases and an even distribution of contract maturities over the years. This is deemed to reduce the risk of significant variations in the Group's occupancy rate. Leases representing 48% of the annual rent expire in or after 2026. 9-18% of annual rent expires every year between 2022 and 2025.
| Share of | Annual rent | Average | ||||
|---|---|---|---|---|---|---|
| contractual annual rent |
SEK M | Share, % | No. of leases |
annual rent, SEK M |
Lease term, years |
|
| >2% | 210 | 6 | 2 | 105 | 8 | |
| 1–2 % | 351 | 9 | 7 | 50 | 6 | |
| <1% | 3,183 | 85 | 2,237 | 1 | 4 | |
| Total | 3,744 | 100 | 2,246 | 2 | 5 |
| Lease terms | |||
|---|---|---|---|
| Year of expiry | Area, sqm | SEK M | Share |
| 2022 | 313,000 | 336 | 9% |
| 2023 | 446,000 | 454 | 12% |
| 2024 | 451,000 | 480 | 13% |
| 2025 | 796,000 | 667 | 18% |
| 2026 | 318,000 | 317 | 8% |
| >2026 | 1,511,000 | 1,490 | 40% |
| Total | 3,836,000 | 3,744 | 100% |
Sagax prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). The company has decided to measure its properties at fair value according to the Fair Value Method, pursuant to Level 3 of IFRS 13.
Sagax obtains external valuations to determine the properties' market value. The valuations are carried out by independent valuation companies and updated on a quarterly basis.
On 30 June 2022, the total market value of Sagax's 748 (693) properties was SEK 52,004 M (41,722). Exchange rate fluctuations during the period resulted in property values denominated in EUR and DKK increasing by SEK 1,492 M (207).
The recognised unrealised change in value amounted to SEK 1,866 M (1,764) for the period, and was primarily due to higher inflation expectations and thus higher expected rental revenue.
The valuations were carried out in accordance with generally accepted international valuation methods. As of 30 June 2022, 99% of valuation objects were valued by authorised property appraisers from independent valuation companies.
The principal method of appraisal used was cash flow calculations in which the present value of net operating income, investments and residual values was calculated. The calculation period was adjusted to the remaining term of existing leases and varies between five and 20 years. As a rule, the calculation period is ten years. For more information, see Sagax's 2021 Annual Report, page 92.
The discount rate for the present value calculation of cash flows (4.5– 16.0%), the discount rate for the present value calculation of residual values (4.5–16.0%) and the yield requirement for the residual value calculations (3.8–14.0%) are based on transactions carried out and on individual assessments of the risk level and market position of each property.
The discount rate for the present value calculation of cash flows and residual values for the property portfolio was 7.4% (7.3) and 7.5% (7.4), respectively. The weighted yield requirement was 6.2% (6.4) on 30 June 2022. By comparison, the yield reported by Sagax for the period was 5.7% (6.1). A comparison of the yield reported over time and the yield requirement used in valuations is provided below.
| SEK M | No. of | |
|---|---|---|
| Property portfolio, 31 December 2021 | 46,067 | 673 |
| Acquisition of properties | 2,263 | 76 |
| Investments in the current portfolio | 321 | |
| Divestment of properties | –6 | –2 |
| Subdivisions, property | 1 | |
| Currency translation effect | 1,492 | |
| Unrealised changes in value | 1,866 | |
| Property portfolio, 30 June 2022 | 52,004 | 748 |
Finland 39% (SEK 1,520 M) Sweden 23% (SEK 912 M) France 15% (SEK 571M)
In addition to the directly owned property portfolio, Sagax has invested in joint ventures and associated companies since 2010. The accumulated investments amounted SEK 3.1 billion, which has generated an accumulated dividend of SEK 2.4 billion for Sagax. The market value of investments in joint ventures and associated companies with listed shares amounted to SEK 3.2 billion and the carrying amount to SEK 2.7 billion at the end of the period. The carrying amount of joint ventures and associated companies that are not listed amounted to SEK 8.4 billion. The investment objective is to get access to markets that Sagax does not have the capacity to reach, but which are considered attractive.
The total value of the commitment related to ownership of joint ventures and associated companies amounted to SEK 11,151 M (8,090), of which 91% comprised Hemsö Fastighets AB, Söderport Property Investment AB and NP3 Fastigheter AB. These investments contributed a total of SEK 391 M (344) to profit from property management during the period and SEK 531 M to the cash flow. Sagax's share of changes in the value of properties amounted to SEK 1,255 M (985) and of changes in the value of derivatives to SEK 248 M (59).
Via Hemsö Intressenter AB, Sagax indirectly owns 15% of Hemsö, with the remaining share owned by the Third Swedish National Pension Fund. Hemsö conducts operations in Sweden, Germany and Finland. Operations consist of owning, managing and developing public properties. 94% of rental revenue derives from tax-financed operations. For more information, refer to the company's website, www.hemso.se.
Sagax owns 50% of Söderport, and the remaining share is owned by Nyfosa AB. Söderport's operations consist of owning, managing and developing properties in Sweden. On behalf of Söderport, Sagax handles the financial administration and most of the property management.
75% of Söderport's rental revenue of SEK 972 M was located in Stockholm on 30 June 2022. Söderport's economic vacancy amounted to SEK 61 M (45), SEK 24 M (18) comprised rent discounts provided for new lettings. This corresponds to a vacancy rate of 6% (5). Söderport also owns 78.1% of Torslanda Property Investment AB, which is thus included as a subsidiary in Söderport's consolidated financial statements.
Sagax owns 50% of Fastighetsaktiebolaget Ess-Sierra, with the remainder owned by NP3 Fastigheter AB. The operations entail owning and managing properties for building materials retail. The lettable area amounts to 184,000 square metres, of which the main part comprises warehouse premises/building materials retail. Most of the properties are situated in university and regional towns.
Sagax owns 21.8% of the votes and 15.3% of the capital in NP3. NP3 is a property company focusing on commercial investment properties with high yields mainly in northern Sweden. The company's property portfolio encompassed 480 properties with a total property value of SEK 19.2 billion and a rental value of SEK 1,655 M on 30 June 2022. NP3 is listed on Nasdaq Stockholm, Large Cap. The market value of Sagax's properties amounted to SEK 2,574 M and the carrying amount to SEK 2,085 M. For more information, refer to the company's website, www.np3fastigheter.se.
Sagax owns 24.4% of the votes and 22.6% of the capital in Emilshus. Emilshus acquires, develops and manages commercial properties in Småland and nearby growth regions. The company's property portfolio encompassed 117 properties with a total market value of SEK 6.3 billion on 30 June 2022. The market value of Sagax's properties amounted to SEK 611 M and the carrying amount to SEK 652 M. For more information, refer to the company's website, www.emilshus.com.
| Hemsö | Söderport | Ess-Sierra | ||||
|---|---|---|---|---|---|---|
| Jan–Jun 2022 | Jan–Jun 2021 | Jan–Jun 2022 | Jan–Jun 2021 | Jan–Jun 2022 | Jan–Jun 2021 | |
| Sagax's participating interest, % | 15 | 15 | 50 | 50 | 50 | 50 |
| Rental revenue, SEK M | 1,980 | 1,751 | 443 | 428 | 46 | 42 |
| Profit from property management, SEK M | 1,184 | 1,018 | 256 | 248 | 33 | 30 |
| Profit for the period, SEK M | 4,790 | 2,981 | 1,061 | 898 | 110 | 60 |
| Sagax share of profit comprehensive income, SEK M | 667 | 414 | 497 | 488 | 55 | 30 |
| Sagax's share of profit from property management, SEK M | 152 | 127 | 120 | 116 | 16 | 15 |
| 30 Jun 2022 | 30 Jun 2021 | 30 Jun 2022 | 30 Jun 2021 | 30 Jun 2022 | 30 Jun 2021 | |
| No. of properties | 466 | 421 | 84 | 84 | 39 | 37 |
| Carrying amount of properties, SEK M | 84,683 | 69,619 | 14,269 | 12,884 | 1,617 | 1,500 |
| Lettable area, sqm | 2,311,000 | 2,155,000 | 769,000 | 783,000 | 184,000 | 203,000 |
| Lease term, years | 9.7 | 9.5 | 4.4 | 4.7 | 6.1 | 6.3 |
| Economic vacancy rate, % | 2 | 2 | 6 | 5 | – | – |
| Interest-bearing liabilities, SEK M | 46,361 | 43,096 | 6,994 | 6,652 | 872 | 843 |
| Loan maturity, years | 6.4 | 6.7 | 1.9 | 2.7 | 2.4 | 3.4 |
| Fixed interest, years | 5.7 | 6.4 | 2.9 | 3.1 | 1.2 | 2.0 |
| Market value of derivatives, SEK M | 237 | 32 | 95 | -174 | – | – |
| Carrying amount, SEK M | 5,329 | 3,660 | 2,762 | 2,204 | 323 | 279 |
Consolidated equity amounted to SEK 32,231 M (25,497) on 30 June 2022. Increases in equity during the period were the result of comprehensive income of SEK 2,072 M, transactions totaling SEK 15 M linked to incentive plans and a share dividend of SEK 935 M.
Sagax's interest-bearing liabilities at the end of the period amounted to SEK 30,967 M (24,193). An amount corresponding to SEK 28,999 M (19,181) of liabilities was recognised in EUR.
Interest-bearing liabilities attributable to listed bonds amounted to SEK 27,382 M (21,176). The remaining interest-bearing debt comprised commercial paper of SEK 2,561 M (1,318) and liabilities to banks of SEK 1,024 M (1,699).
Unsecured liabilities corresponded to 94% (88) of interest-bearing liabilities.
The interest coverage ratio at the end of the period amounted to 8.3 (7.1) times and the debt ratio to 45% (45). Net interest-bearing debt for
the past 12 months was 7.5 (7.0) times EBITDA and 6.8 (6.8) times run rate EBITDA, see page 9 for more information.
A total of SEK 5,262 M (9,339) in loans was raised, of which SEK 3,117 M (7,065) in the form of bond loans under the framework of Sagax's EMTN programme. Repayments during the period totalled SEK 1,790 M (5,115). Exchange rate fluctuations increased interest-bearing liabilities by SEK 1,117 M (124).
Net interest-bearing debt amounted to SEK 24,056 M (18,714).
The average remaining fixed interest and loan maturity terms were 3.7 years (4.4) and 4.1 years (4.4), respectively, at the end of the period. The average interest rate on interest-bearing liabilities was 1.5% (1.6), including the effect of derivatives.
Sagax has SEK 27,077 M (19,446) in loans at fixed interest rates. The company has interest-rate caps and interest-rate swaps with a total nominal value of SEK 1,430 M (3,817), of which interest-rate swaps with an average interest rate of 0.5% (1.1) accounted for SEK 262 M (1,531).
| Fixed interest | Loan maturity | Interest-rate swaps | ||||||
|---|---|---|---|---|---|---|---|---|
| Year of expiry | SEK M | Interest rate | Share | SEK M | Share | SEK M | Interest rate | |
| 2022 | 2,561 | 1.1% | 8% | 66 | 0% | – | – | |
| 2023 | 1,452 | 0.6% | 5% | 761 | 2% | 262 | 0.5% | |
| 2024 | 5,754 | 2.0% | 19% | 6,972 | 23% | – | – | |
| 2025 | 4,291 | 2.3% | 14% | 4,938 | 16% | – | – | |
| 2026 | 3,186 | 1.8% | 10% | 3,186 | 10% | – | – | |
| > 2026 | 13,824 | 1.0% | 44% | 15,044 | 49% | – | – | |
| Total/average | 31,0681) | 1.4%2) | 100% | 30,967 | 100% | 262 | 0.5% |
1) Fixed interest exceeds interest-bearing liabilities by SEK 101 M. 2) Based on fixed interest amount.
| Net debt | ||
|---|---|---|
| Amounts in SEK M | 30 Jun 2022 | 30 Jun 2021 |
| Interest-bearing liabilities | 30,967 | 24,193 |
| Interest-bearing assets | –758 | –564 |
| Listed shares | –6,049 | –4,893 |
| Cash and cash equivalents | –104 | –22 |
| Net debt | 24,056 | 18,714 |
commercial paper programmes amounted to SEK 7,318 M (5,801). No additional collateral needs to be pledged to utilise these credit facilities.
Sagax's working capital amounted to SEK 359 M (1,504) on 30 June. At the same date, unutilised credit facilities including back-up facilities for
| Listed bonds, 30 June 2022 | ||||||
|---|---|---|---|---|---|---|
| Nominal amount, | ||||||
| Maturity | SEK M | Liability, SEK M | Effective interest | Interest terms | Maturity date | ISIN code |
| 2019-20231) | 500 | 500 | 1.64%1) | Stibor 3M+0.90% | 16 Jun 2023 | XS2093119175 |
| 2019-20232) | 250 | 250 | 1.18% | 1.13% | 16 Jun 2023 | XS2093119845 |
| Total/average | 750 | 749 | 1.48% | |||
| Nominal amount, | ||||||
| Maturity | EUR M | Liabilities, EUR M | Effective interest | Coupon rate | Maturity date | ISIN code |
| 2018-20242) | 500 | 499 | 2.10% | 2.00% | 17 Jan 2024 | XS1877540465 |
| 2019-20252) | 400 | 402 | 2.05% | 2.25% | 13 Mar 2025 | XS1962543820 |
| 2022-20262) | 300 | 298 | 1.78% | 1.62% | 24 Feb 2026 | XS2447539060 |
| 2020-20272) | 300 | 298 | 1.26% | 1.12% | 30 Jan 2027 | XS2112816934 |
| 2021-20282) | 500 | 496 | 0.88% | 0.75% | 26 Jan 2028 | XS2291340433 |
| 2021-20292) | 500 | 500 | 1.01% | 1.00% | 17 May 2029 | XS2342227837 |
| Total/average | 2,500 | 2,494 | 1.49% | |||
| 1) STIBOR adopted 16 Jun 2022. 2) Fixed-rate loans. |
||||||
| Derivative contracts, 30 June 2022 | ||||||
| Amounts in SEK M | Nominal amount |
Years to maturity |
Market value 30 Jun 2022 |
Market value 31 Dec 2021 |
Change for the period |
|
| Nominal interest-rate swaps | 262 | 0.5 | 8 | –74 | 82 | |
| Interest-rate caps | 1,168 | 1.1 | 3 | 0 | 3 | |
| Currency futures | – | – | – | 2 | –2 | |
| Total | 1,430 | 1.0 | 11 | –72 | 83 | |
| Financial covenant in EMTN programme |
30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 | |
|---|---|---|---|---|
| Rating according to Moody's Investor Services | Baa3, Positive outlook | Baa3, Stable outlook | Baa3, Positive outlook | |
| Net debt/Total assets | <65% | 36% | 34% | 27% |
| Interest coverage ratio | >1.8x | 11.3x | 9.1x | 9.4x |
| Secured liabilities/total assets | < 45% | 3% | 2% | 0% |
Sources of financing
Unsecured liabilities 94% (SEK 29,090 M) Secured liabilities, 6% (SEK 1,877 M)
Sagax values signed leases and site leaseholds in accordance with IFRS 16 and recognises the right-of-use asset as an asset with a corresponding liability. Sagax's leases and site leaseholds at the end of the period amounted to SEK 387 M (371).
Interest-bearing non-current receivables amounted to SEK 710 M (530) and comprised convertible debentures issued by the French company Groupe BMG valued at SEK 552 M (486) maturing on 31 December 2024, a bond issued by Emilshus AB valued at SEK 44 M (44) expiring on 9 December 2022 and promissory notes valued at SEK 114 M (–) issued in connection with the sale of property in 2021.
In addition to the directly owned property portfolio, Sagax invests in other listed property companies for the purpose of reaching markets that Sagax does not have the capacity to reach, but which are considered attractive.
Listed shares are recognised at the closing price on the balance sheet date and amounted to SEK 3,475 M (2,777) of which the shares in Nyfosa AB were recognised at SEK 2,921 M (2,719), the shares in Cibus Nordic Real Estate AB at SEK 438 M (–). Dividends of SEK 60 M were received during the period.
| Amounts in SEK M | 2022 Jan-Jun |
2021 Jan-Jun |
2022 Apr-Jun |
2021 Apr-Jun |
2021 Jan-Dec |
Rolling 12 months |
|---|---|---|---|---|---|---|
| Rental revenue | 1,787 | 1,506 | 902 | 775 | 3,100 | 3,381 |
| Other revenue | 12 | 15 | 6 | 1 | 23 | 21 |
| Operating expenses | –171 | –128 | –74 | –54 | –250 | –294 |
| Maintenance costs | –37 | –36 | –19 | –18 | –74 | –75 |
| Property tax | –89 | –76 | –46 | –39 | –153 | –166 |
| Other property expenses | –39 | –29 | –19 | –15 | –73 | –83 |
| Net operating income | 1,462 | 1,252 | 751 | 649 | 2,573 | 2,783 |
| Central administration | –77 | –64 | –42 | –34 | –147 | –160 |
| Profit from joint ventures and associated companies | 1,530 | 1,179 | 843 | 709 | 2,718 | 3,068 |
| – of which, profit from property management | 391 | 344 | 204 | 183 | 713 | 753 |
| – of which, changes in value | 1,502 | 1,044 | 823 | 600 | 2,572 | 3,022 |
| – of which, tax | –392 | –200 | –213 | –66 | –558 | –748 |
| – of which, other | 29 | –9 | 29 | –9 | –9 | 39 |
| Financial income | 85 | 49 | 46 | 39 | 113 | 150 |
| Financial expenses | –229 | –204 | –119 | –104 | –419 | –444 |
| Financial expense, interest component of leases | –14 | –13 | –7 | –7 | –28 | –29 |
| Profit including changes in value of joint ventures and associated companies |
2,759 | 2,199 | 1,473 | 1,252 | 4,809 | 5,368 |
| – of which, profit from property management | 1,620 | 1,364 | 834 | 727 | 2,805 | 3,054 |
| Properties, realised | –8 | 4 | –2 | 1 | 6 | –6 |
| Properties, unrealised | 1,866 | 1,764 | 996 | 386 | 3,870 | 3,972 |
| Financial instruments, realised | 2 | 0 | 2 | 0 | –10 | –8 |
| Financial instruments, unrealised | –2,444 | 692 | –2,073 | 508 | 1,868 | –1,268 |
| Profit before tax | 2,176 | 4,660 | 396 | 2,147 | 10,543 | 8,058 |
| Deferred tax | –392 | –300 | –213 | 22 | –624 | –698 |
| Current tax | –42 | –56 | –22 | –23 | –112 | –116 |
| Profit for the period | 1,742 | 4,303 | 161 | 2,146 | 9,807 | 7,244 |
| Other comprehensive income – items that may be reversed to profit and loss: |
||||||
| Translation differences for foreign operations | 807 | 129 | 588 | –198 | 282 | 960 |
| Share of other comprehensive income for joint ventures | 21 | 6 | 14 | –3 | 8 | 24 |
| Translation differences, hedge accounting | –480 | –55 | –370 | 104 | –141 | –566 |
| Tax on items that may be reversed | –18 | –3 | –24 | 1 | 6 | –9 |
| Comprehensive income for the period | 2,072 | 4,380 | 369 | 2,050 | 9,963 | 7,653 |
| Earnings per Class A and B share, SEK | 5.09 | 13.16 | 0.31 | 6.56 | 30.09 | 22.02 |
| Earnings per Class A and B share after dilution, SEK | 5.08 | 13.13 | 0.31 | 6.55 | 30.04 | 21.98 |
| Earnings per Class D share, SEK | 1.00 | 1.00 | 0.50 | 0.50 | 2.00 | 2.00 |
| Average no. of Class A and B shares, millions | 317.7 | 317.3 | 317.7 | 317.3 | 317.5 | 317.6 |
| Average no. of Class A and B shares after dilution, millions | 318.2 | 318.1 | 318.3 | 318.1 | 318.0 | 318.2 |
| Average number of Class D shares, millions | 126.3 | 126.1 | 126.3 | 126.3 | 126.2 | 126.3 |
| Amounts in SEK M | 2022 30 Jun |
2021 30 Jun |
2021 31 Dec |
|---|---|---|---|
| Investment properties | 52,004 | 40,935 | 46,067 |
| Investment properties for sale | – | 787 | – |
| Leases, right-of-use assets | 357 | 343 | 355 |
| Joint ventures and associated companies | 11,152 | 8,090 | 9,818 |
| Derivatives | 5 | – | – |
| Interest-bearing non-current receivables | 710 | 530 | 676 |
| Other fixed assets | 180 | 156 | 103 |
| Total fixed assets | 64,409 | 50,841 | 57,020 |
| Listed shares | 3,475 | 2,777 | 4,772 |
| Other current assets | 852 | 636 | 596 |
| Cash and bank balances | 104 | 22 | 84 |
| Total current assets | 4,431 | 3,435 | 5,452 |
| Total assets | 68,840 | 54,276 | 62,472 |
| Equity | 32,231 | 25,497 | 31,079 |
| Non-current interest-bearing liabilities | 28,329 | 21,142 | 23,368 |
| Deferred tax liabilities | 3,561 | 2,762 | 3,087 |
| Derivatives | 0 | 73 | 74 |
| Lease liability, right-of-use assets | 387 | 371 | 390 |
| Other non-current liabilities | 250 | 164 | 195 |
| Total non-current liabilities | 32,526 | 24,512 | 27,114 |
| Commercial paper | 2,561 | 1,699 | 2,891 |
| Other current interest-bearing liabilities | 77 | 1,351 | 95 |
| Other current liabilities | 1,444 | 1,216 | 1,293 |
| Total current liabilities | 4,082 | 4,267 | 4,279 |
| Total equity and liabilities | 68,840 | 54,276 | 62,472 |
| Amounts in SEK M | 2022 Jan-Jun |
2021 Jan-Jun |
2022 Apr-Jun |
2021 Apr-Jun |
2021 Jan-Dec |
Rolling 12 months |
|---|---|---|---|---|---|---|
| Profit before tax | 2,176 | 4,660 | 396 | 2,147 | 10,543 | 8,060 |
| Changes in value of financial instruments | 2,442 | –692 | 2,071 | –508 | –1,858 | 1,276 |
| Change in value of properties | –1,858 | –1,768 | –994 | –387 | –3,876 | –3,966 |
| Profit from joint ventures and associated companies | –1,530 | –1,179 | –843 | –709 | –2,718 | –3,069 |
| Dividend from joint ventures and associated companies | 531 | 310 | 396 | 310 | 373 | 594 |
| Dissolution of allocated borrowing costs | 25 | 19 | 14 | 10 | 41 | 47 |
| Other items not included in cash flow | –37 | –10 | –22 | –4 | –13 | –41 |
| Tax paid | –105 | –90 | –46 | –24 | –146 | –161 |
| Cash flow from operating activities before | ||||||
| changes in working capital | 1,643 | 1,249 | 973 | 835 | 2,346 | 2,740 |
| Cash flow from changes in current receivables | –67 | –101 | –36 | 6 | –71 | –36 |
| Cash flow from changes in current liabilities | –30 | –162 | 135 | 115 | 103 | 236 |
| Cash flow from operating activities | 1,546 | 986 | 1,072 | 956 | 2,379 | 2,939 |
| Acquisition of properties | –2,263 | –2,213 | –1,299 | –1,167 | –4,824 | –4,874 |
| Property sales | –2 | 257 | 3 | 49 | 867 | 608 |
| Investments in existing properties | –321 | –243 | –168 | –123 | –658 | –737 |
| Acquisition of listed shares | –1,426 | –1,489 | –1,189 | –1,052 | –1,949 | –1,885 |
| Acquisition of financial instruments | – | –7 | – | – | –7 | 0 |
| Acquisition of joint ventures and associated companies | –11 | –153 | –11 | –61 | –214 | –72 |
| Divestments of joint ventures and associated companies | 3 | – | 3 | – | – | 3 |
| Capital contribution and new share issue to joint ventures and associated companies |
–123 | –121 | –83 | –100 | –271 | –273 |
| Dividend to joint ventures and associated companies | –40 | – | –16 | – | – | –40 |
| Increase in other fixed assets | –36 | –16 | –16 | –16 | –16 | –36 |
| Decrease in other fixed assets | – | 20 | – | 1 | 50 | 30 |
| Cash flow from investing activities | –4,218 | –3,966 | –2,776 | –2,469 | –7,023 | –7,275 |
| Issue of Class B shares | 39 | 36 | 39 | 36 | 36 | 39 |
| Redemption of preference shares | – | –572 | – | –572 | –572 | – |
| Dividend paid to shareholders | –809 | –666 | –746 | –595 | –792 | –935 |
| Incentive plan | –24 | –24 | –24 | –24 | –24 | –24 |
| Borrowings | 5,262 | 9,339 | 2,112 | 4,055 | 13,997 | 9,921 |
| Repayment of loans | –1,790 | –5,115 | –3 | –1,369 | –7,880 | –4,555 |
| Revaluation of financial instruments | 16 | –8 | 16 | – | –21 | 2 |
| Decrease in other non-current liabilities | –11 | –25 | – | –25 | –52 | –38 |
| Increase in other non-current liabilities | 11 | 11 | 12 | 11 | 11 | 11 |
| Cash flow from financing activities | 2,694 | 2,977 | 1,406 | 1,518 | 4,703 | 4,420 |
| Cash flow for the period | 22 | –3 | –298 | 5 | 59 | 84 |
| Exchange rate differences in cash and cash equivalents | –2 | – | – | – | – | –2 |
| Change in cash and cash equivalents | 20 | –3 | –298 | 5 | 59 | 82 |
| Cash and cash equivalents at beginning of period | 84 | 24 | 402 | 17 | 24 | 22 |
| Cash and cash equivalents at end of period | 104 | 22 | 104 | 22 | 84 | 104 |
| Other contributed |
Reserves, translation |
Profit earned incl. net profit |
|||
|---|---|---|---|---|---|
| Amounts in SEK M | Share capital | capital | differences | for the period | Total equity1) |
| Equity, 31 December 2020 | 808 | 3,542 | 338 | 17,765 | 22,452 |
| Profit for the period, January-June 2021 | – | – | – | 4,303 | 4,303 |
| Other comprehensive income, January-June 2021 | – | – | 77 | – | 77 |
| Comprehensive income for the period | – | – | 77 | 4,303 | 4,380 |
| Transactions with shareholders | |||||
| Issue of Class B shares, incentive plan | 1 | 36 | – | – | 36 |
| Redemption of preference shares | –29 | – | – | –543 | –571 |
| Transaction costs | – | – | – | –1 | –1 |
| Dividends | – | – | – | –776 | –776 |
| Transactions with shareholders | –28 | 36 | – | –1,320 | –1,312 |
| Other transactions | |||||
| Redemption of incentive plan | – | – | – | –30 | –30 |
| Incentive plan | – | – | – | 7 | 7 |
| Other transactions | – | – | – | –23 | –23 |
| Equity, 30 June 2021 | 780 | 3,578 | 415 | 20,725 | 25,497 |
| Profit for the period, July-December 2021 | – | – | – | 5,504 | 5,504 |
| Other comprehensive income, July-December 2021 | – | – | 78 | – | 78 |
| Comprehensive income for the period | – | – | 78 | 5,504 | 5,582 |
| Other transactions | |||||
| Redemption of incentive plan | – | – | – | –1 | –1 |
| Other transactions | – | – | – | –1 | –1 |
| Equity, 31 December 2021 | 780 | 3,578 | 493 | 26,228 | 31,079 |
| Profit for the period, January-June 2022 | – | – | – | 1,742 | 1,742 |
| Other comprehensive income, January-June 2022 | – | – | 330 | – | 330 |
| Comprehensive income for the period | – | – | 330 | 1,742 | 2,072 |
| Transactions with shareholders | |||||
| Issue of Class B shares, incentive plan | 1 | 38 | – | – | 39 |
| Dividends | – | – | – | –935 | –935 |
| Transactions with shareholders | 1 | 38 | – | –935 | –896 |
| Other transactions | |||||
| Redemption of incentive plan | – | – | – | –31 | –31 |
| Incentive plan | – | – | – | 7 | 7 |
| Other transactions | – | – | – | –24 | –24 |
| Equity, 30 June 20221) | 781 | 3,616 | 823 | 27,011 | 32,231 |
1) Equity is attributable in its entirety to the Parent Company's shareholders.
| 2022 | 2021 | 2021 | |
|---|---|---|---|
| Amounts in SEK M | Jan-Jun | Jan-Jun | Jan-Dec |
| Net sales | 51 | 43 | 88 |
| Administration costs | –53 | –47 | –107 |
| Loss before financial income and expenses | –3 | –4 | –19 |
| Profit from participations in Group companies | – | – | 1,154 |
| Profit from participations in joint ventures | – | 95 | 96 |
| Financial income | 419 | 283 | 745 |
| Financial expenses | –214 | –269 | –751 |
| Profit before tax and appropriations | 202 | 105 | 1,224 |
| Appropriations | – | – | 106 |
| Tax | –1 | –1 | –2 |
| Profit for the period | 202 | 104 | 1,328 |
| 2022 | 2021 | 2021 | |
|---|---|---|---|
| Amounts in SEK M | 30 Jun | 30 Jun | 31 Dec |
| Tangible fixed assets | 1 | 1 | – |
| Receivables from Group companies | 1,614 | 1,298 | 1,725 |
| Other financial fixed assets | 13,164 | 9,309 | 13,080 |
| Total fixed assets | 14,779 | 10,608 | 14,805 |
| Cash and bank balances | –69 | 0 | 31 |
| Receivables from Group companies | 22,039 | 17,936 | 19,308 |
| Other current assets | 75 | 158 | 77 |
| Total current assets | 22,045 | 18,094 | 19,416 |
| Total assets | 36,824 | 28,703 | 34,220 |
| Equity | 3,491 | 2,989 | 4,213 |
| Untaxed reserves | 30 | 30 | 30 |
| Non-current interest-bearing liabilities | 9,166 | 10,262 | 8,992 |
| Liabilities to Group companies | 18,365 | 10,534 | 14,829 |
| Deferred tax liabilities | 4 | 4 | 4 |
| Total non-current liabilities | 27,535 | 20,800 | 23,825 |
| Current interest-bearing liabilities | 2,535 | 1,699 | 2,983 |
| Liabilities to Group companies | 2,903 | 2,776 | 2,885 |
| Other current liabilities | 331 | 409 | 284 |
| Total current liabilities | 5,769 | 4,884 | 6,152 |
| Total equity, untaxed reserves and liabilities | 36,824 | 28,703 | 34,220 |
| Changes in value, properties | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Profit items per segment | Rental revenue1) | Net operating income | Unrealised | Realised | Total yield | |||||
| Amounts in SEK M | 2022 Jan-Jun |
2021 Jan-Jun |
2022 Jan-Jun |
2021 Jan-Jun |
2022 Jan-Jun |
2021 Jan-Jun |
2022 Jan-Jun |
2021 Jan-Jun |
2022 Jan-Jun |
2021 Jan-Jun |
| Sweden | 431 | 407 | 365 | 353 | 722 | 385 | 0 | 5 | 1,087 | 742 |
| Finland | 689 | 596 | 547 | 480 | 223 | 831 | –8 | 0 | 762 | 1,311 |
| France | 258 | 185 | 199 | 149 | 193 | 205 | – | – | 392 | 354 |
| Netherlands | 217 | 168 | 193 | 154 | 516 | 253 | – | 0 | 708 | 406 |
| Spain | 143 | 102 | 129 | 91 | 246 | 118 | – | – | 375 | 210 |
| Germany | 45 | 42 | 44 | 41 | –31 | –26 | – | – | 13 | 15 |
| Rest of Europe | 5 | 5 | 5 | 5 | –2 | –2 | – | – | 3 | 3 |
| Non-specified | – | – | –19 | –21 | – | – | – | – | –19 | –21 |
| Total | 1,787 | 1,506 | 1,462 | 1,252 | 1,866 | 1,764 | –8 | 4 | 3,321 | 3,020 |
| Market value | Investments | Acquisition | Divestment | |||||
|---|---|---|---|---|---|---|---|---|
| Asset items per segment | properties | properties | properties | properties | ||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| Amounts in SEK M | 30 Jun | 30 Jun | 30 Jun | 30 Jun | 30 Jun | 30 Jun | 30 Jun | 30 Jun |
| Sweden | 14,652 | 12,775 | 83 | 80 | 90 | 122 | – | –249 |
| Finland | 16,906 | 14,419 | 166 | 121 | 483 | 893 | –6 | –3 |
| France | 6,977 | 4,565 | 16 | 15 | 1,140 | 258 | – | – |
| Netherlands | 7,109 | 4,936 | 15 | 20 | 200 | 365 | – | – |
| Spain | 4,990 | 3,840 | 40 | 6 | 297 | 576 | – | – |
| Germany | 1,234 | 1,093 | – | – | 52 | – | – | – |
| Rest of Europe | 135 | 95 | – | – | – | –– | – | – |
| Total | 52,004 | 41,722 | 321 | 243 | 2,263 | 2,213 | –6 | –252 |
1) All rental revenue pertains to external tenants.
| 2022 | 2021 | 2021 | 2020 | Jan-Dec | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|
| Jan-Jun | Jan-Jun | Jan-Dec | Jan-Dec | 2019 | Jan-Dec | Jan-Dec | |
| Property-related key figures1) | |||||||
| Property yield, % | 5.7 | 6.1 | 6.0 | 6.3 | 6.4 | 6.8 | 6.9 |
| Surplus ratio, % | 82 | 83 | 83 | 83 | 83 | 83 | 83 |
| Occupancy rate by area, % | 97 | 95 | 96 | 95 | 95 | 95 | 95 |
| Economic occupancy rate, % | 96 | 95 | 96 | 95 | 95 | 95 | 94 |
| Lettable area at the end of the period, 000 sqm | 3,974 | 3,615 | 3,759 | 3,480 | 3,022 | 2,850 | 2,489 |
| No. of properties at the end of the period | 748 | 693 | 673 | 673 | 553 | 512 | 495 |
| Financial key figures1) | |||||||
| Return on total capital, % | 6 | 6 | 6 | 7 | 7 | 7 | 7 |
| Return on equity, % | 11 | 36 | 37 | 18 | 24 | 24 | 30 |
| Average interest rate, % | 1.5 | 1.6 | 1.4 | 1.8 | 1.9 | 2.2 | 3.0 |
| Fixed interest period incl. derivatives, years | 3.7 | 4.4 | 4.0 | 3.4 | 3.5 | 3.0 | 2.1 |
| Loan maturity, years | 4.1 | 4.4 | 4.3 | 3.4 | 3.8 | 3.6 | 3.1 |
| Equity/assets ratio, % | 47 | 47 | 50 | 48 | 48 | 46 | 42 |
| Debt ratio, % | 45 | 45 | 42 | 43 | 44 | 47 | 50 |
| Net debt/run rate EBITDA, multiple | 6.8 | 6.8 | 5.4 | 6.4 | 6.6 | 7.1 | 7.7 |
| Net debt/EBITDA, multiple | 7.5 | 7.0 | 5.8 | 6.4 | 6.6 | 7.4 | 8.1 |
| Interest coverage ratio, multiple | 8.3 | 7.1 | 6.5 | 5.7 | 4.9 | 4.2 | 3.7 |
| Interest coverage ratio, EMTN programme, multiple | 11.4 | 9.1 | 9.4 | 6.4 | 5.3 | 4.3 | 4.0 |
| Data per Class A and B share1) | |||||||
| Price of Class B share at the end of the period, SEK | 188.70 | 254.20 | 305.00 | 169.60 | 136.20 | 65.70 | 49.10 |
| Net asset value, SEK | 102.50 | 78.89 | 97.92 | 66.38 | 56.77 | 44.22 | 35.04 |
| Equity, SEK | 87.45 | 66.35 | 83.93 | 55.19 | 46.86 | 35.70 | 27.15 |
| Equity after dilution, SEK | 87.36 | 66.28 | 83.84 | 55.09 | 46.78 | 35.67 | 27.13 |
| Earnings, SEK | 5.09 | 13.16 | 30.09 | 10.80 | 12.15 | 9.24 | 8.86 |
| Earnings after dilution, SEK | 5.08 | 13.13 | 30.04 | 10.78 | 12.13 | 9.24 | 8.85 |
| Profit from property management, SEK | 4.70 | 3.87 | 8.01 | 6.63 | 5.51 | 4.31 | 3.71 |
| Profit from property management after dilution, SEK | 4.69 | 3.86 | 7.99 | 6.62 | 5.51 | 4.31 | 3.70 |
| Cash flow, SEK | 4.77 | 3.54 | 6.59 | 6.10 | 4.86 | 3.95 | 3.27 |
| Cash flow after dilution, SEK | 4.76 | 3.53 | 6.58 | 6.09 | 4.86 | 3.95 | 3.26 |
| Dividend per share, SEK | – | – | 2.15 | 1.65 | 1.30 | 1.00 | 0.90 |
| No. at end of period, millions | 318.0 | 317.7 | 317.7 | 317.3 | 317.1 | 316.8 | 316.5 |
| No. at end of period after dilution, millions | 318.4 | 318.0 | 318.0 | 317.9 | 317.5 | 317.1 | 316.7 |
| Average no., millions | 317.7 | 317.3 | 317.5 | 317.1 | 316.9 | 316.7 | 316.5 |
| Average no. after dilution, millions | 318.2 | 318.1 | 318.0 | 317.7 | 317.3 | 316.9 | 317.0 |
| Data per Class D share1) | |||||||
| Share price at the end of period, SEK | 23.05 | 33.25 | 33.40 | 32.05 | 36.35 | 31.70 | 29.92 |
| Equity, SEK | 35.00 | 35.00 | 35.00 | 35.00 | 35.00 | 35.00 | 35.00 |
| Earnings, SEK | 1.00 | 1.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 |
| Dividend per share, SEK | – | – | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 |
| No. at end of period, millions | 126.3 | 126.3 | 126.3 | 125.8 | 107.8 | 101.9 | 63.6 |
| Average no., millions | 126.3 | 126.1 | 126.2 | 118.4 | 105.7 | 83.0 | 43.1 |
1) Definitions of key performance indicators are provided on pages 32–33
At the end of the period, Sagax had 23,220 (20,385) shareholders. Sagax's market capitalisation amounted to SEK 62,942 M (85,075).
Due to the exercise of warrants under the 2019/2022 incentive plan, Sagax issued 366,422 Class B common shares in June. A total of 446,281,346 shares were outstanding at the end of the period, of which 2,000,000 were Class B treasury shares. Sagax has three classes of shares: Class A, B and D common shares. The shares are listed on Nasdaq Stockholm, Large Cap.
According to the Articles of Association, each Class D share is entitled to five times the total dividend on Class A and B shares, although not more than SEK 2.00 per share annually.
Sagax has three warrant plans for the company's employees. In total, Sagax's employees hold warrants corresponding to 0.4% of the number of Class A and B shares outstanding. The company's CEO and Board Members do not participate in the plans. These plans are valid for three years, and encompass the periods 2020-2023, 2021-2024 and 2022- 2025. The subscription price corresponds to the price paid for the Class
B share at the start of the warrant plan, converted using the average share price trend for the listed property companies in accordance with Carnegie's Real Estate Index (CREX) during the corresponding period. Accordingly, the warrants will have a value on condition that the price performance of the Sagax share exceeds the average for the listed property companies during each three-year period.
Profit from property management per Class B share after dilution on a rolling 12-month basis amounted to SEK 8.82 (7.31), which, compared with the share price of the Class B share at the end of the period, corresponded to a multiple of 21.4 (34.8).
Equity per Class A and B share after dilution amounted to SEK 87.36 (66.28). Net asset value per Class A and B share amounted to SEK 102.50 (78.89). The share price for the Class B share at the end of the period was 216% (384) of equity per Class B share and 184% (322) of NAV per Class B share.
| Price paid, SEK | Turnover rate on an annual basis, % |
Average trading volume per trading day, SEK M |
||||
|---|---|---|---|---|---|---|
| 30 June 2022 | 30 Jun 2021 | 30 June 2022 | 30 Jun 2021 | 30 June 2022 | 30 Jun 2021 | |
| Class A shares | 189.50 | 259.00 | 12 | 3 | 2.7 | 0.6 |
| Class B shares | 188.70 | 254.20 | 34 | 44 | 102.5 | 107.8 |
| Class D shares | 23.05 | 33.25 | 71 | 55 | 10.9 | 9.3 |
| 2022 30 Jun |
2021 30 Jun |
2021 31 Dec |
2020 31 Dec |
2019 31 Dec |
2018 31 Dec |
2017 31 Dec |
|
|---|---|---|---|---|---|---|---|
| Share price at the end of period, SEK | 188.70 | 254.20 | 305.00 | 169.60 | 136.20 | 64.70 | 49.10 |
| Profit from property management after dilution1), SEK | 8.82 | 7.31 | 7.99 | 6.62 | 5.51 | 4.30 | 3.70 |
| Cash flow after dilution, SEK1)2) | 7.82 | 6.04 | 6.58 | 6.09 | 4.86 | 3.94 | 3.26 |
| Equity after dilution, SEK | 87.36 | 66.28 | 83.84 | 55.11 | 46.78 | 35.67 | 27.13 |
| Net asset value, SEK | 102.50 | 78.89 | 97.92 | 66.38 | 56.77 | 44.22 | 35.04 |
| Share price/Profit from property management1), multiple | 21.4 | 34.8 | 38.2 | 25.6 | 24.7 | 15.0 | 13.3 |
| Share price/Cash flow, multiple1)2) | 24.1 | 42.1 | 46.4 | 27.9 | 28.0 | 16.4 | 15.1 |
| Share price/Equity, % | 216 | 384 | 364 | 308 | 292 | 182 | 181 |
| Share price/Net asset value, % | 184 | 322 | 311 | 255 | 240 | 147 | 140 |
1) Profit from property management and cash flow pertains to rolling 12 months.
2) Cash flow pertains to cash flow from operating activities before changes in working capital.
Share price in relation to equity and Net asset value
| No. of shares | No. of shareholders |
Shareholder category | No. | Share of voting power |
Shareholders by country |
No. | Share of voting power |
|---|---|---|---|---|---|---|---|
| 1–500 | 16,634 | Private individuals | Sweden | 21,776 | 94% | ||
| 501–1 000 | 1,902 | residing in Sweden | 21,050 | 9% | USA | 50 | 0% |
| 1,001–2,000 | 1,433 | Private individuals | |||||
| 2,001–5,000 | 1,382 | residing abroad | 109 | 0% | UK | 74 | 1% |
| 5,001–10,000 | 681 | Companies/institutions in Sweden |
726 | 76% | Ireland | 32 | 0% |
| 10,001–50,000 | 808 | Luxembourg | 34 | 0% | |||
| 50,001– | 380 | Companies/institutions abroad |
1,335 | 15% | Other | 1,254 | 4% |
| Total | 23,220 | Total | 23,220 | 100% | Total | 23,220 | 100% |
| No. of shares | Percentage of | |||||
|---|---|---|---|---|---|---|
| Class A shares | Class B shares | Class D shares | Share capital | Votes2) | ||
| David Mindus and companies | 10,848,800 | 66,917,112 | 1,192,228 | 17.7% | 25.8% | |
| Staffan Salén and companies | 4,264,928 | 32,970,660 | 95,600 | 8.4% | 11.0% | |
| Fourth Swedish National Pension Fund | 805,716 | 15,116,471 | 9,385,293 | 5.7% | 4.7% | |
| Rutger Arnhult and companies | 4,483,441 | 3,633,033 | 16,201,602 | 5.4% | 9.4% | |
| Third Swedish National Pension Fund | – | 24,227,658 | – | 5.4% | 3.5% | |
| SEB Fonder | – | 12,095,550 | – | 2.7% | 1.8% | |
| Avanza Pension | 48,632 | 451,667 | 11,543,470 | 2.7% | 1.8% | |
| Vanguard | – | 6,208,255 | 4,130,971 | 2.3% | 1.5% | |
| Länsförsäkringar Fonder | – | 8,711,993 | 568,218 | 2.1% | 1.4% | |
| Handelsbanken Fonder | – | 6,412,099 | 785,566 | 1.6% | 1.0% | |
| BlackRock | – | 7,185,374 | 7,827 | 1.6% | 1.0% | |
| Erik Selin and companies | 1,175,000 | 3,813,712 | 2,012,177 | 1.6% | 2.6% | |
| Swedbank Robur Fonder | 500,000 | 6,132,177 | – | 1.5% | 1.6% | |
| Filip Engelbert and companies | 241,000 | 1,869,784 | 4,200,000 | 1.4% | 1.2% | |
| Norges Bank | – | 3,318,204 | 2,554,943 | 1.3% | 0.9% | |
| ODIN Fonder | – | 3,690,294 | – | 0.8% | 0.5% | |
| Second Swedish National Pension Fund | – | 3,369,404 | – | 0.8% | 0.5% | |
| Johan Thorell and companies | 203,254 | 2,332,540 | 354,164 | 0.6% | 0.7% | |
| Folksam | – | 2,872,784 | – | 0.6% | 0.4% | |
| Lannebo Fonder | – | 2,739,997 | – | 0.6% | 0.4% | |
| Total 20 largest shareholders | 22,570,771 | 214,068,768 | 53,032,059 | 64.9% | 71.9% | |
| Other shareholders | 4,262,083 | 77,118,395 | 73,229,270 | 34.6% | 28.1% | |
| Sub-total | 26,832,854 | 291,187,163 | 126,261,329 | 99.6% | 100.0% | |
| Shares held by AB Sagax | – | 2,000,000 | – | 0.4% | 0.0% | |
| Total | 26,832,854 | 293,187,163 | 126,261,329 | 100.0% | 100.0% | |
| – of which, Board and employees | 16,675,242 | 110,390,605 | 4,684,821 | 29.5% | 41.1% |
1) Ownership structure at 30 June 2022 is based on information from Euroclear Sweden and Modular Finance. 2) Voting rights for treasury shares held by AB Sagax have been excluded.
| Voting rights and proportion of share capital | |||||
|---|---|---|---|---|---|
| Class of share | No. | Voting rights per share |
No. of votes | Proportion of votes |
Proportion of share capital |
| Class A shares | 26,832,854 | 1.0 | 26,832,854.00 | 39% | 6% |
| Class B shares | 293,187,163 | 0.1 | 29,318,716.30 | 43% | 66% |
| Class D shares | 126,261,329 | 0.1 | 12,626,132.90 | 18% | 28% |
| Total | 446,281,346 | 68,777,703.20 | 100% | 100% |
To prepare the accounts based on generally accepted accounting policies, company management must make judgements and assumptions that affect asset and liability items, revenue and expense items recognised in the accounts and other information provided. The actual outcome may differ from these judgements. Sagax is also exposed to various risks that may be of significance to the company's future business, earnings and financial position.
The valuation of investment properties can be significantly affected by the judgments and assumptions made by company management. To reduce the risk of incorrect valuations, Sagax has engaged authorised external valuation companies to assess the market value of the majority of the properties as of 30 June 2022. When valuing properties, the constant existence of uncertainties regarding the assumptions made must be taken into account.
Sagax prioritises leasing to tenants with a high credit rating and long-term leases, despite these entailing slightly lower immediate earnings. The intention is to reduce the risk of rent losses and the risk of vacancies.
The geographic distribution of Sagax's property portfolio and the industries of its tenants are highly diversified. Sagax's lease structure of many small leases help reduce the risks of vacancies and rent losses.
Sagax's financial expenses comprise the single largest expense for the Group. To reduce Sagax's exposure to rising interest rates, the Group has a significant amount of its interest expenses from fixed-rate loans. To limit interest-rate risk for loans at floating interest rates, interest-rate swaps and interest-rate caps are used. Sagax's funding primarily com-
| Sensitivity analysis for property values | |||||||
|---|---|---|---|---|---|---|---|
| –20% | –10% | 0% | +10% | +20% | |||
| Value change, SEK M | –10,401 | –5,200 | 0 | 5,200 | 10,401 | ||
| Debt ratio, % | 53 | 49 | 45 | 42 | 39 |
| Sensitivity analysis for property values | ||||||
|---|---|---|---|---|---|---|
| Change | Value change, SEK M | |||||
| Yield requirement | +/– 0.25% points | –1,621/+1,759 | ||||
| Cost of capital | +/– 0.25% points | –1,102/+1,131 | ||||
| Rental revenue | +/– 5% | +2,226/–2,301 | ||||
| Property expenses | +/–5% | –302/+308 |
prises equity and interest-bearing liabilities. Sagax endeavours to secure a long, average remaining term of interest-bearing liabilities to limit its refinancing risk, defined as the risk that refinancing existing debt cannot take place on reasonable terms. The company's long-term funding comprises listed bonds and bank loans. The complete terms and conditions for the bond loans are available at www.sagax.se.
The amounts in the consolidated balance sheet are partly exposed to exchange rate fluctuations, particularly for the EUR. Net exposure on 30 June 2022, assets less liabilities in EUR, amounted to SEK 6,611 M (8,351). In preparing the consolidated financial statements, the balance sheets of the Group's foreign operations are translated from their functional currencies into SEK based on the exchange rates applying on the balance sheet date: EUR 1 was equivalent to SEK 10.68 and DKK 1 was equivalent to SEK 1.44. Revenue and expense items are translated at the average exchange rate for the period: EUR 1 was equivalent to SEK 10.45 and DKK 1 was equivalent to SEK 1.41. In accordance with IAS 21, the currency effects for foreign operations and hedge accounting are recognised in Other comprehensive income. Other currency effects are recognised in profit or loss.
Uncertainty regarding the macroeconomic climate has increased as a result of Russia's invasion of Ukraine. Sagax dos not conduct any operations in Ukraine or in Russia. Accordingly, Sagax is indirectly impacted by the war and its consequences. The company is monitoring developments to identify and, if possible, address any risks.
Sagax's other risks are described in the 2021 Annual Report, on pages 45-48.
| Sensitivity analysis for changes in the occupancy rate | ||||||
|---|---|---|---|---|---|---|
| –10% | –5% | 0% | +5% | +10% | ||
| Occupancy rate, % | 87 | 91 | 96 | N/A | N/A | |
| Interest coverage ratio, % | 753 | 790 | 827 | N/A | N/A |
Sagax's exposure to material risks in the company's operations is presented below.
| Sensitivity analysis on 30 June 20221) | ||||||
|---|---|---|---|---|---|---|
| Effect on profit from | ||||||
| Amounts in SEK M | Change | property management, annual basis |
Effect on profit after tax, annual basis |
Effect on equity | ||
| Economic occupancy rate | +/–1% point | +/–39 | +/–32 | +/–32 | ||
| Rental revenue | +/– 1% | +/–37 | +/–30 | +/–30 | ||
| Property expenses | +/– 1% | –/+6 | –/+5 | –/+5 | ||
| Interest expenses for liabilities in SEK including fixed income derivatives | +/–1% point | –14/+8 | –11/+6 | –11/+6 | ||
| Interest expenses for liabilities in EUR including fixed income derivatives | +/–1% point | –15/+12 | –12/+10 | –12/+10 | ||
| Change in SEK/EUR exchange rate2) | +/– 10% | +/–190 | +/–152 | +/–661 | ||
| Changed rent level for contract maturity in 2022 | +/– 10% | +/–34 | +/–27 | +/–27 |
1) Excluding shares in profit of joint ventures and associated companies.
2) Sagax's net exposure to the SEK/EUR exchange rate comprises assets and liabilities recognised in EUR, in addition to revenue and expenses in EUR.
This condensed interim report has been prepared in accordance with International Accounting Standards (IAS) 34 Interim Financial Reporting. The term "IFRS" in this report means application of the International Financial Reporting Standards (IFRS), as adopted by the EU, and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC). The accounting policies and calculation methods are the same as those applied in the 2021 Annual Report and are to be read together with this Annual Report.
Sagax's segment division was changed as of 1 January 2022. The former segments that belonged to the same country have been merged into one segment. This means that properties that previously belonged to the Rest of Europe segment are now included in the segments for their respective countries. The former market segments Stockholm and Rest of Sweden are now included in the Sweden segment. Helsinki, University cities in Finland and Rest of Finland belong to the Finland segment. The former Paris segment and the properties situated in the rest of France and that were previously reported in the Rest of Europe segment have formed the France segment. Madrid & Barcelona and the properties situated in the rest of Spain and that were previously reported in the Rest of Europe segment have formed the Spain segment. The German properties that were previously included in the Rest of Europe segment are now included in the Germany market segment. The Netherlands segment is unchanged compared with prior periods and the Danish properties are reported as previously in the Rest of Europe segment. Comparative figures have been restated according to the new segment division.
There are no amendments to IFRS in 2022 that are deemed to have any material impact on the company's financial statements.
Rounding-off differences may occur.
On 14 July, it was announced in a press release that Sagax had acquired a total of 18 properties for a corresponding SEK 623 M based on six separate transactions. The properties comprise a lettable area of 66,900 square metres, primarily comprising premises for warehouses and industrial purposes. The annual rent corresponds to SEK 60 M. The occupancy rate is 95% and the remaining average lease term is 3.9 years.
Of these acquisitions, property corresponding to SEK 471 M has been taken into possession. Possession of the remaining SEK 152 M is expected to be taken in the third and fourth quarters of 2022. The acquisitions will be recognised in the following Sagax segments: Finland (SEK 350 M), France (SEK 124 M), Spain (SEK 121 M) and the Netherlands (SEK 28 M). For property acquisitions in France, the relevant municipality has pre-emption rights. These rights correspond to SEK 124 M.
The Board of Directors and CEO give their assurance that this interim report provides a fair overview of the company's and the Group's operations, financial position and earnings and describes significant risks and uncertainties faced by the company and the companies included in the Group.
Stockholm, 14 July 2022 AB SAGAX (publ) Corporate Registration Number 556520-0028
Chairman of the Board Board member Board member
Staffan Salén Johan Cederlund Filip Engelbert
David Mindus Johan Thorell Ulrika Werdelin CEO and Board member Board member Board member
This year-end report has not been reviewed by the company's auditors.
This constitutes information that AB Sagax (publ) is legally obliged to publish under the EU's Market Abuse Regulation and the Swedish Securities Market Act. The information was released for publication on 14 July 2022 at 2:30 p.m. (CEST).
Interim Report January-September 2022 27 October 2022 Year-end Report 2022 13 February 2023 Annual General Meeting 2023 9 May 2023
1) Payment is made on the third banking day following the record date for Swedish issuers. Sagax is unable to affect this date.
David Mindus, CEO +46 8 545 83 540, [email protected]
Agneta Segerhammar, CFO +46 8 545 83 540, [email protected]
Visit us at www.sagax.se.
Sagax applies the European Securities and Market Authority's (ESMA) Guidelines on the Alternative Performance Measures. Alternative performance measures refer to financial measures of historical or future earnings trends, financial position, financial results or cash flows that are not defined or stated in the applicable rules for financial reporting, which in Sagax's case is IFRS. The basis of the alternative performance measures provided is that they are used by company management to assess the financial performance and thus are considered to provide valuable information to shareholders and other stakeholders.
The table below presents definitions of Sagax's key performance indicators. The calculation of alternative performance measures is described separately on the following pages.
| Key performance indicators | Description | Reason for alternative performance measure |
|---|---|---|
| Cash flow per Class A and B share |
Profit before tax adjusted for items not included in cash flow less tax paid in relation to the average number of Class A and B shares. Dividends on Class D shares for the period have also been deducted from profit before tax. Dividends received from joint ventures and associated companies have been added to profit before tax. |
The KPI shows the amount of cash flow for the period that can be considered to be attributable to owners of Class A and Class B shares. |
| Debt ratio | Interest-bearing liabilities at the end of the period in relation to total assets at the end of the period. |
The KPI shows financial risk. |
| Dilution | Dilution due to outstanding warrants has been calculated, in line with IAS 33, as the number of Class A and B shares to be issued to cover the difference between the strike price and market price for all potential Class A and B shares (warrants) outstanding, insofar as it is probable that they will be utilised. |
Not an APM. |
| Earnings per Class A and B share |
Profit in relation to the average number of Class A and B shares after taking into account the portion of profit for the period represented by dividends on Class D shares. |
IFRS performance measure. |
| Earnings per Class D share | Class D shares are entitled to five times the total dividend on Class A and B shares, although not more than SEK 2.00 per share annually. |
The KPI shows the shareholders' share of profit. |
| EBITDA | Net operating income less central administration costs plus dividends received from joint ventures and associated companies. |
Sagax uses EBITDA so that the EBITDA/Net debt KPI shows financial risk. |
| Economic occupancy rate | Contractual annual rent directly after the end of the period as a percent age of rental value directly after the end of the period. |
The KPI shows the economic degree of utilisation of the Group's properties. |
| Equity/assets ratio | Equity in relation to total assets. | The KPI shows financial risk. |
| Equity per Class A and B share | Equity at the end of the period in relation to the number of Class A and B shares at the end of the period after taking into account equity attributable to Class D shares. |
The KPI shows the owner's share of equity. |
| Equity per Class D share | Equity at the end of the period in relation to the number of common shares at the end of the period. Equity is restricted to SEK 35.00 per Class D share. |
The KPI shows the owner's share of equity. |
| EURIBOR | EURIBOR, or the Euro Interbank Offered Rate, is a daily reference rate based on the average of the interest rates at which euro interbank term deposits are being offered by one prime bank to another within the EMU zone. |
Not an APM. |
| Fixed income derivatives | Agreements on lending rates that may include the factors of time, inflation and/or maximum interest rates. Usually signed to hedge interest rates for interest-bearing loans. |
Not an APM. |
| IFRS | International Financial Reporting Standards (IFRS), to be applied for consolidated financial statements by companies whose securities are listed on a regulated market. |
Not an APM. |
| Interest coverage ratio | Profit from property management, excluding profit from joint ventures and associated companies but including dividends from joint ventures, after reversal of financial expenses in relation to financial expenses. |
The KPI shows financial risk. |
| Interest coverage ratio, EMTN programme |
Profit from property management after reversal of financial income and expenses as a percentage of net financial items. |
The KPI shows financial risk. |
| Interest-rate swaps | An agreement between two parties to swap interest rate conditions on loans in the same currency. The swap entails that one party exchanges its floating interest rate for a fixed rate, while the other party receives a fixed rate in exchange for a floating rate. The purpose of an interest-rate swap is to reduce interest-rate risk. |
Not an APM. |
| Joint ventures | Partnership form whereby several owners have a shared controlling influence. |
Not an APM. |
| Key performance indicators | Description | Reason for alternative performance measure |
|---|---|---|
| Net asset value | Recognised equity according to the balance sheet with reversal of reserves for fixed income derivatives, deferred tax on temporary differences on property values and deferred tax on reserves for fixed income derivatives. |
An established indicator of the Group's net asset value that facilitates analyses and comparisons with EPRA NAV. |
| Net debt | Interest-bearing liabilities less interest-bearing assets, cash and cash equivalents, and listed shares. |
The KPI shows the Group's indebtedness. |
| Net debt according to EMTN programme |
Interest-bearing liabilities less listed securities and cash and cash equivalents. |
The KPI shows the Group's indebtedness. |
| Net debt according to EMTN programme/Total assets |
Interest-bearing liabilities less listed securities and cash and cash equivalents in relation to total assets. |
The KPI shows financial risk. |
| Net debt/Total assets | Interest-bearing liabilities less interest-bearing assets, cash and cash e quivalents, and listed shares as a percentage of total assets. |
The KPI shows financial risk. |
| Net investments | The net of property acquisitions and investments in the current property portfolio, as well as sales of properties. |
The KPI shows the investment volume. |
| Occupancy rate by area | Contracted area directly after the end of the period as a percentage of total lettable area directly after the end of the period. |
The KPI shows the occupancy situation. |
| Profit from property management |
Profit excluding changes in value and tax. | An indicator of the earnings generation in the operations, excluding changes in value. |
| Profit from property manage ment per Class A and B share after dilution |
Profit from property management for the period reduced by dividends on Class D shares, divided by the average number of Class A and B shares after dilution. |
An indicator of the earnings generation of the assets, excluding the changes in value accruing to holders of Class A and B shares. |
| Property | Pertains to properties held under title or site leasehold. | Not an APM. |
| Property yield | Net operating income for the period (including property administration) with add-back of site leasehold fees, recalculated to 12 months, adjusted for the holding periods of the properties during the period as a percentage of the carrying amounts of the properties at the end of the period. |
The KPI shows the earnings generation of the operations before financial expenses and central administration costs are taken into account. |
| Rental revenue, comparable portfolios |
Rental revenue from properties that were included in the portfolio for the entire reporting period and the entire comparative period. Project properties and properties that were acquired or sold are not included. |
The KPI shows the trend in rental revenue excluding non-recurring effects, such as prematurely vacating premises, not impacted by acquired and sold properties. |
| Rental value | The contractual annual rent applicable directly after the end of the period, with supplements for estimated market rents for vacant premises. |
The key performance indicator shows the Group's income potential. |
| Return on equity | Profit for the period, recalculated to 12 months, as a percentage of aver age equity (opening and closing balances) divided by 2 for the period. |
The KPI shows how shareholders' capital yields interest during the period. |
| Return on total capital | Profit for the period, recalculated to 12 months, after net financial items after reversal of financial expenses as a percentage of average total assets for the period. |
The KPI shows the ability to generate earnings on the Group's assets, excluding financing costs. |
| Run rate EBITDA | Net operating income according to current earnings capacity less central administration costs plus dividends received from joint ventures and associated companies. |
Sagax uses EBITDA so that the EBITDA/Net debt, run rate KPI shows financial risk. |
| Run rate yield | Net operating income (including property administration) according to current earnings capacity with add-back of site leasehold fees, as a per centage of the carrying amounts of the properties at the end of the period. |
The KPI shows the earnings generation of the operations before financial expenses and central administration costs are taken into account. |
| Secured liabilities/Total assets | Liabilities secured with pledged assets as a percentage of total assets. | The KPI shows financial risk for bond holders. |
| STIBOR | STIBOR, or Stockholm Interbank Offered Rate, a daily reference rate based on the average of the interest rates at which banks offer to lend unsecured funds to other banks in SEK in the Swedish wholesale money market. |
Not an APM. |
| Surplus ratio | Net operating income for the period as a percentage of rental revenue for the period. |
The KPI shows the profitability of the properties. |
| Total return on shares | Total of the change in the share price during the period and the dividend paid during the period as a percentage of the share price at the end of the preceding year. |
The KPI shows the total return that accrues to shareholders. |
| Total yield on property | Total of yield and property revaluations during the period as a percentage of the closing property value adjusted for revaluations for the period. |
The KPI shows earnings generation and value growth for the properties for a period. |
| Triple net lease | A type of lease whereby the tenant pays, in addition to the rent, all costs incurred on the property that would normally have been paid by the property owner. These include operating expenses, maintenance, property tax, site leasehold fees, insurance, property caretaking, etc. |
Not an APM. |
| Amounts in SEK M | 2022 | 2021 | 2021 |
|---|---|---|---|
| unless otherwise stated Return on equity |
Jan-Jun | Jan-Jun | Jan-Dec |
| Profit after tax | 1,742 | 4,303 | 9,807 |
| Addition for translation to annual | |||
| value | 1,742 | 4,303 | – |
| Average equity | 31,655 | 23,974 | 26,766 |
| Return on equity | 11% | 36% | 37% |
| Return on total capital | |||
| Profit from property management | 1,620 | 1,364 | 2,805 |
| Addition for translation to annual | |||
| value | 1,620 | 1,364 | – |
| Financial expenses | 242 | 217 | 447 |
| Addition for translation to annual value |
242 | 217 | – |
| Profit before financial expenses | 3,725 | 3,162 | 3,252 |
| Average total capital | 65,637 | 50,449 | 54,725 |
| Return on total capital | 6% | 6% | 6% |
| Occupancy rate by area Contracted area, '000s sqm |
3,836 | 3,429 | 3,625 |
| Total lettable area, | |||
| '000s sqm | 3,974 | 3,615 | 3,759 |
| Occupancy rate by area | 97% | 95% | 96% |
| Debt ratio Interest-bearing liabilities |
30,967 | 24,193 | 26,354 |
| Total assets | 68,840 | 54,276 | 62,472 |
| Debt ratio | 45% | 45% | 42% |
| Property yield | |||
| Net operating income | 1,462 | 1,252 | 2,573 |
| Add-back of site leasehold fees | –12 | –12 | –26 |
| Addition for translation to annual value |
1,450 | 1,240 | – |
| Holding adjustment, acquisitions/divestments |
33 | 69 | 139 |
| Currency translation to closing rate |
53 | –1 | 44 |
| Adjusted net operating income | 2,987 | 2,548 | 2,730 |
| Carrying amount of properties | 52,004 | 41,722 | 46,067 |
| Property yield | 5.7% | 6.1% | 6.0% |
| EBITDA rolling 12 months | |||
| Net operating income | 2,783 | 2,478 | 2,573 |
| Central administration | –160 | –139 | –147 |
| Dividends from joint ventures and associated companies |
594 | 329 | 373 |
| EBITDA | 3,217 | 2,668 | 2,799 |
| Equity per Class A and B share | |||
| Equity Equity attributable to Class D |
32,231 | 25,497 | 31,079 |
| shares | –4,419 | –4,419 | –4,419 |
| Equity attributable to Class A and B shares |
27,812 | 21,078 | 26,660 |
| No. of shares | 318,020,017 317,653,595 317,653,595 | ||
| No. of shares after dilution | 318,360,134 318,018,916 317,984,595 | ||
| Equity per Class A and B share, SEK |
87.45 | 66.35 | 83.93 |
| Equity per Class A and B share after dilution, SEK |
87.36 | 66.28 | 83.84 |
| Amounts in SEK M | 2022 | 2021 | 2021 |
|---|---|---|---|
| unless otherwise stated | Jan-Jun | Jan-Jun | Jan-Dec |
| Economic occupancy rate | |||
| Contractual annual rent | 3,744 | 3,100 | 3,324 |
| Rental value | 3,891 | 3,265 | 3,459 |
| Economic occupancy rate | 96% | 95% | 96% |
| Run rate yield | |||
| Net operating income according to current earnings capacity |
3,089 | 2,568 | 2,761 |
| Add-back of site leasehold fees | –24 | –24 | –26 |
| Adjusted net operating income | 3,065 | 2,544 | 2,735 |
| Carrying amount of properties | 52,004 | 41,722 | 46,067 |
| Run rate yield | 5.9% | 6.1% | 5.9% |
| Run rate EBITDA | |||
| Net operating income according to current |
|||
| earnings capacity | 3,089 | 2,568 | 2,761 |
| Central administration | –160 | –139 | –147 |
| Dividends from joint ventures | |||
| and associated companies | 594 | 329 | 373 |
| Run rate EBITDA | 3,523 | 2,758 | 2,987 |
| Profit from property management | |||
| Profit after tax | 1,742 | 4,303 | 9,807 |
| Tax | 826 | 556 | 1,294 |
| Changes in value | –948 | –3,505 | –8,297 |
| Profit from property management | 1,620 | 1,354 | 2,805 |
| Profit from property management per Class A and B share after dilution | |||
| Profit from property management | 1,620 | 1,354 | 2,805 |
| Dividends attributable to Class D shares |
–126 | –126 | –253 |
| Adjusted profit from property management |
1,494 | 1,228 | 2,552 |
| Profit from property management | |||
| per Class A and B share after | |||
| dilution, SEK | 4.69 | 3.86 | 7.99 |
| Profit from property management per Class A and B shares, rolling 12 months | |||
| Profit from property management, | |||
| rolling 12 months | 3,060 | 2,575 | 2,805 |
| Dividends attributable to Class D shares, rolling 12 months |
–253 | –253 | –253 |
| Adjusted profit from property management |
2,807 | 2,322 | 2,552 |
| No. of Class A and B shares after dilution, rolling 12 months |
318,194,884 317,909,512 318,010,050 | ||
| Profit from property management | |||
| per Class A and B share, current period, rolling 12 months |
8.82 | 7.31 | 7.99 |
| Profit from property management | |||
| per Class A and B share, preced | |||
| ing period, rolling 12 months | 7.31 | 6.09 | 6.62 |
| Annual percentage growth rate, rolling 12 months |
21% | 20% | 21% |
1) The preceding period has been adjusted based on the assumption that the exchange rate is the same as in the current period.
| Amounts in SEK M unless otherwise stated |
2022 Jan-Jun |
2021 Jan-Jun |
2021 Jan-Dec |
|---|---|---|---|
| Rental revenue, comparable portfolios | |||
| Rental revenue | 1,788 | 1,506 | 3,100 |
| Acquired and sold properties | –266 | –86 | –558 |
| Currency adjustment1) | – | 27 | – |
| Other adjustment | –13 | – | –6 |
| Rental revenue, comparable portfoli os excluding currency effects |
1,509 | 1,447 | 2,535 |
| Cash flow per Class A and B share | |||
| Profit before tax | 2,176 | 4,660 | 10,543 |
| Items not affecting cash flow | –427 | –3,321 | –8,051 |
| Tax paid Dividends attributable to Class D shares |
–105 –126 |
–90 –126 |
–146 –253 |
| Cash flow | 1,518 | 1,123 | 2,093 |
| Cash flow per Class A and B share after dilution, SEK |
4.77 | 3.53 | 6.58 |
| Net debt | |||
| See page 14. | |||
| Net debt according to EMTN programme | |||
| Interest-bearing liabilities | 30,967 | 24,193 | 26,354 |
| Cash and cash equivalents and listed shares |
–6,153 | –4,915 | –9,464 |
| Net debt according to EMTN programme |
24,814 | 19,278 | 16,890 |
| Net debt according to EMTN programme/Total assets | |||
| Net debt according to EMTN | |||
| programme | 24,814 | 19,278 | 16,890 |
| Total assets | 68,840 | 54,276 | 62,472 |
| Net debt according to EMTN programme/ |
|||
| Total assets | 36% | 36% | 27% |
| Net debt/EBITDA | |||
| Net debt | 24,056 | 18,714 | 16,214 |
| EBITDA rolling 12 months | 3,217 | 2,668 | 2,799 |
| Net debt/EBITDA | 7.5x | 7.0x | 5.8x |
| Net debt/run rate EBITDA | |||
| Net debt | 24,056 | 18,714 | 16,214 |
| EBITDA, run rate Net debt/EBITDA run rate |
3,523 6.8x |
2,758 6.8x |
3,006 5.4x |
| Net debt/Total assets | |||
| Net debt | 24,056 | 18,714 | 16,214 |
| Total assets | 68,840 | 54,276 | 62,472 |
| Net debt/Total assets | 35% | 34% | 26% |
| Earnings per Class A and B share1) | |||
| Profit after tax | 1,742 | 4,303 | 9,807 |
| Dividends attributable to Class D shares |
–126 | –126 | –253 |
| Adjusted profit after tax | 1,616 | 4,177 | 9,554 |
| Earnings per Class A and B share | |||
| after dilution, SEK | 5.08 | 13.13 | 30.04 |
1) IFRS performance measure.
| Amounts in SEK M | 2022 | 2021 | 2021 |
|---|---|---|---|
| unless otherwise stated | Jan-Jun | Jan-Jun | Jan-Dec |
| Interest coverage ratio | |||
| Profit from property management Reversal of profit from property |
1,620 | 1,364 | 2,805 |
| management joint ventures and associated companies |
–391 | –344 | –713 |
| Dividend from joint ventures and associated companies |
531 | 310 | 373 |
| Financial expenses | 242 | 217 | 447 |
| Adjusted profit from property management |
|||
| before financial expenses | 2,002 | 1,547 | 2,912 |
| Interest coverage ratio | 8.3x | 7.1x | 6.5x |
| Interest coverage ratio, EMTN programme | |||
| Profit from property management | 1,620 | 1,364 | 2,805 |
| Net financial items | 156 | 168 | 334 |
| Profit from property management before net financial items |
1,776 | 1,532 | 3,139 |
| Interest coverage ratio | 11.4x | 9.1x | 9.4x |
| Equity/assets ratio | |||
| Equity | 32,230 | 25,497 | 31,079 |
| Total assets | 68,840 | 54,276 | 62,472 |
| Equity/assets ratio | 47% | 47% | 50% |
| Net asset value | |||
| Equity | 32,231 | 25,497 | 31,079 |
| Equity attributable to Class D shares | –4,419 | –4,419 | –4,419 |
| Reversal of derivatives | –5 | 73 | 74 |
| Reversal of deferred tax | 3,834 | 2,998 | 3,383 |
| Reversals due to | |||
| joint ventures | 990 | 941 | 1,019 |
| Net asset value | 32,631 | 25,090 | 31,136 |
| NAV per Class A and B share after dilution, SEK |
102.50 | 78.89 | 97.92 |
| Secured liabilities/Total assets | |||
| Secured liabilities | 1,877 | 1,240 | 189 |
| Total assets | 68,840 | 54,276 | 62,472 |
| Secured liabilities/Total | |||
| assets | 3% | 2% | 0% |
| Surplus ratio | |||
| Net operating income | 2,783 | 2,478 | 2,573 |
| Rental revenue | 3,381 | 2,987 | 3,100 |
| Surplus ratio | 82% | 83% | 83% |
AB Sagax is a property company whose business concept is to invest in commercial properties, primarily in the warehouse and light industrial segment. Sagax's property holdings on 30 June 2022 amounted to 3,974,000 square metres, distributed between 748 properties. AB Sagax (publ) is listed on Nasdaq Stockholm, Large Cap. More information is available at www.sagax.se.
AB Sagax (publ), Engelbrektsplan 1, SE-114 34 Stockholm, Sweden Corp. Reg. No. 556520-0028 Tel: +46 8 545 83 540 www.sagax.se
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