August Investor Presentation

Transcription

1 August 2018 Investor Presentation

2 Cautionary Note Certain information in this presentation and oral answers to questions may contain forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information, and certain material factors or assumptions were applied in drawing conclusions or making forecasts or projections as reflected in the forward-looking information. Additional information about the material factors, assumptions and/or risks that could cause actual results to differ materially from the conclusions, forecasts or projections in the forward-looking information, and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information are as disclosed in the company s disclosure documents filed on SEDAR from time to time, including but not limited to the company s most recent AIF ( 2

3 Our Company & Investment Highlights

4 Sienna at-a-glance $2.1B Enterprise Value $1.1B Market Cap Inc. is one of Canada's leading owners and operators of seniors' residences with high quality assets in great locations owned high quality residences (~10,100 beds) + 15 managed residences (~ 1,700 beds) Retirement Residences (RR) Long Term Care (LTC) Managed Residences (RR and LTC) M Annualized NOI $0.92 Annualized Dividend/Share ~200% Total Shareholder Return since IPO 12,000+ Dedicated Team Members

5 Enterprise value Transformative growth Pre $190M IPO $229M acquisitions $252M acquisitions 8 LTC (1,235 beds) 2 RET (326 suites) $320M acquisitions 7 RC (1,017 Beds) 3 RET (363 suites) $214M acquisitions 4 RET (545 suites) 1 RC (256 beds) $382M acquisitions 10 RET (1,245 suites) 44% private pay NOI Growth Strategy Sienna Branding Develop a National Platform and grow private pay mix ~$2.1B to 50% of ~$500M ~$600M ~$800M ~$1B ~$1.1B ~$1.2B ~$1.5B ~$1.8B company NOI IPO Q1 Q2 2018Pro Forma 5

6 Portfolio transformation 2010 IPO NOI Mix Q Pro Forma NOI Mix Other 6% Medium-term objective (by 2020) Funded 94% Funded 56% Retirement 44% 50% 50% Funded Retirement 6 Total NOI $41.5M Total Beds/Suites: 4,423 ~5,000 Employees Retirement (Private-pay) - Market-driven rates - Supply varies by market Total NOI ~$152.0M Total Beds/Suites 10,091 ~12,000 Employees Funded - Care is paid for by the government - Residents pay co-payment; rate is set annually by regulatory body - Eligibility determined by third party - Extensive wait lists

7 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Industry-leading share performance % % % % 80.00% included in S&P/TSX Composite Index in March % Total Return 17.3% CAGR 107.3% 15.7% CAGR 60.00% 40.00% S&P/TSX Low Volatility 64.4% 10.5% CAGR 62.3% 10.2% CAGR S&P/TSX Capped REIT 54.3% 9.1% CAGR 20.00% 0.00% % Extendicare Chartwell S&P/TSX Capped REIT S&P/TSX Low Volatility 7 Note: Total return is defined as investment return from dividends and stock price appreciation

8 Strong market fundamentals Increasing demand for Seniors Living for Canadians over the age of 75 Population (000 s) 7,000 Age 75 to 84 Age 85+ Market vacancy rates (Retirement) 14.0% 12.8% Ontario British Columbia 6,000 5,000 30% 33% 12.0% 10.0% 9.9% 4,000 28% 8.0% 7.2% 3,000 2,000 1, % 67% 30% 70% 30% 72% 73% 70% 70% % 4.0% 2.0% 0.0% % Source: CANSIM table Ontario LTC waitlist of ~32,000 LTC average time to placement is 146 days in Ontario Vacancy rates in Sienna s key Retirement markets (Ontario & British Columbia) have decreased significantly over the past 5 years 8

9 Our culture and values Vision To awaken our communities to the positive possibilities of life s next chapters Mission To help you live fully, every day Corporate Culture named one of Canada s Most Admired Corporate Cultures for Sienna joins a prestigious club of past winners: Values Respect Passion Teamwork Responsibility Growth 9

10 Senior Executive Team Lois Cormack Director, President & CEO Joanne Dykeman Executive Vice-President, Operations Michael Annable Executive Vice-President, People & Chief Administrative Officer Cristina Alaimo Vice-President, General Counsel Nitin Jain Chief Financial Officer & Chief Investment Officer Lisa Kachur Executive Vice-President, Operations Brian Richardson Chief Marketing Officer 10

11 Our Strategy & Goals Grow the company Retirement acquisitions Development of campuses (RR/LTC) Organic growth Enhance the operating platform Provide great resident experience Build a high performing team and great culture Maintain a strong balance sheet Optimize leverage Increase liquidity Maintain favourable credit rating 11

12 Why Sienna? Well established in a sector with significant demand and barriers to entry Strong seniors living operating platform High quality portfolio in key markets Strong financial position with an A (low) bond rating Robust development pipeline 12

13 Our Operations

14 IPO IPO Consistent improvements in operating metrics OFFO/Share AFFO/Share $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $ % CAGR - IPO to % Canadian REIT Industry CAGR for comparable period $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $ % CAGR - IPO to % Canadian REIT Industry CAGR for comparable period 14

15 Total NOI margin NOI margin growth 25% 24% 24% 23% 22% 21% 20% 20% 21% 19% 18% 18% 17% 16% Q Consistent margin uplift since 2015 as a result of increasing retirement portfolio (44% of total portfolio) with higher margins 15

16 Operating performance Retirement NOI ($M) ~366% growth since 2013 through organic growth and acquisition activities $56.3 LTC/RC NOI ($M) ~81% growth since 2013 through organic growth and acquisition activities $85.4 $87.3 $32.7 $63.2 $64.3 $72.0 $26.1 $48.1 $17.4 $19.7 $ H1 Annualized H1 Annualized 16 Meeting the needs of residents as their health needs change Well Positioned to Meet the Needs of Residents as Their Health Needs Change

17 Operating performance Long Term Care and Residential Care Results 98.1% LTC / RC Occupancy (Average) Outperform Provincial and National averages on publicly reported quality indicators Highest distinction awarded for BC Residential Care Communities 89% Residence and Family Satisfaction Score in 2017 Key focus on quality of care and resident safety 17

18 Financial Highlights

19 Financial summary Consolidated Q $39.4M H $71.8M 26.2% Total NOI Q $29.4M 33.9% H $56.9M Consolidated Same Property NOI Q $29.4M Q $30.5M 3.7% H $59.3M 4.4% H $56.8M Retirement Q $8.3M H $16.1M 5.8% Same Property NOI Q $7.8M 6.2% H $15.2M LTC/RC Same Property NOI* Q $22.2M Q $21.6M 2.8% H $42.0M H $41.6M 0.8% 19 * Excluding prior year tax recovery adjustment of $1.3 million received in Q

20 Increasing funds from operations Diluted Operating Funds Q $0.37 H $ % from Operations per share Q $ % H $0.63 Diluted Adjusted Funds from Operations per share Q $0.37 Q $ % H $ % H $0.72 Dividend Increase 2.0% to ~$0.92/share (annualized) 20

21 Series B Debentures Strong financial position Interest Coverage Ratio Debt to Adjusted EBITDA 4.0x 8.0x 7.9x 3.7x 3.4x 3.5x 7.4x 7.5x H % Debt to Gross Book Value H Debt Maturities $354M $356M 51.5% 49.6% 49.4% $142M $126M $33M $50M H Thereafter Continued focus on capital structure optimization 21

22 Growth Strategy

23 Executing on acquisition strategy Strategic M&A in 2017 and 2018 (YTD) $600M Investment 1,908 Suites $299M Equity Raises $37M NOI contribution 15 high quality residences 23

24 Recent acquisitions 2017 & 2018 (YTD) Property Beds/Suites Key metrics 10-property portfolio Various locations, ON 1,245 suites Purchase price of $382M 6.1% cap rate Waterford Retirement Residences Barrie & Kingston, ON Kawartha Lakes Retirement Residence Bobcaygeon, ON 384 suites 93 suites Purchase price of $164M 6.0% cap rate Purchase price of $21M 7.1% cap rate Waterford Retirement Residences Barrie and Kingston, ON Rosewood Retirement Residence Kingston, ON 68 suites Purchase price of $10M 7.25% cap rate Glenmore Lodge Kelona, BC 118 beds 77% (1) interest for purchase price of $26M 7.0% cap rate (1) Includes 16% interest acquired in 05/

25 Growth through development 10-Year Plan Development of senior living campuses (IL/AL/LTC) at an estimated cost of $640M - $800M 25 *Note: A portion of the LTC construction costs are funded by the MOHLTC with base funding of $16.65/bed/day for 25 years (~$340M for 2,239 beds).

26 Development Phase 1 Return Retirement Long Term Care Shareholder Value Creation Growth in RET Growth in LTC ~8-9% Development Yields 3, % 3,603 Current 10% Private Beds Class B/C ($18.00 PRD) Pro Forma 60% Private Beds Class A ($26.04 PRD) Driving a Meaningful NAV Increase Current Suites Pro Forma Suites ~$8M NOI Contribution 1,000 Total Beds 1,280 Total Beds ~$5M NOI Contribution 26

27 Development Pipeline Phase 1 Retirement Expansion ~50 suite expansion at Island Park Retirement Residence, Campellford on track to be completed by Q Senior Living Campuses Renewal of over 1,000 older beds and addition of over 500 new retirement suites to create senior living campuses Retirement LTC Existing 130 1,000 New Island Park (under construction) Proforma 510 1,280 27

28 Looking ahead Continued growth with 10 million seniors 2.3% by 2036 Strategic retirement acquisition opportunities in key Canadian markets Organic growth Development 28

29 Contact Information Inc. 302 Town Centre Blvd, Suite 300 Markham, ON L3R 0E8 t: (905) siennaliving.ca Lois Cormack President & Chief Executive Officer t: (905) e: Nitin Jain Chief Financial Officer & Chief Investment Officer t: (905) e: 29

30 The warmth of human connection