June Investor Presentation

Transcription

1 June 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 Business Overview: Where We Are Today! 70 High Quality Seniors Living Residences 1 with 10,092 beds/suites 15 Managed Residences with 1,665 Suites/Beds 37 Retirement Residences 27 Owned - 3,224 Suites 10 Managed Suites 40 Long Term Care Communities 35 Owned - 5,733 Beds 5 Managed Beds 8 Sienna Residential Care Residences 8 Owned - 1,135 Beds (945 Funded Beds 190 Private Pay) 3 Over 12,000 Dedicated Team Members 2 46 Years of Operations 1 Includes the partial ownership of Nicola Lodge (40% ownership interest) and Glenmore Lodge (61% ownership interest). 2 Team members includes approximately 1,400 managed team members.

4 S&P/TSX Composite Index Inclusion Inclusion in the S&P/TSX Composite Index is a reflection of our team s success in executing the Company s strategic growth strategy and shareholder value creation. ~200% Total shareholder return since IPO $1.1B Market Capitalization, up from $190M IPO $2.2B Enterprise Value, over 4x Size Growth 4 *Total Shareholder return as at June 11, 2018.

5 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Relative Performance: Total Return 120% 100% 80% 85.2% Total Return* / 13.1% CAGR 60% 40% 38.2% Total Return / 6.7% CAGR S&P/TSX Capped REIT 20% 0% (20%) Sienna Living S&P TSX Capped REIT Index (40%) 5 TSX:SIA, industry leading share performance *Total return is defined as investment return from dividends and stock price appreciation.

6 IPO IPO Relative Performance: Per Share 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* Consistently increasing cash flow to shareholders 6

7 Relative Performance: Value Creation Price/NTM AFFO Same Property NOI Growth Debt / EBITDA 15.6x 11.5x 4.0% 3.5% 3.8% 3.7% 10.0x 9.5x 9.8x 10.0x 9.4x 7.8x 7.9x 8.0x 7.9x 7.4x 2.3% 2.1% 0.9% 0.7% (0.2%) 0.2% Canadian REITs Sienna is trading at a discount to several Canadian REITs while having achieved consistently higher same property NOI growth and lower debt levels 7 *Price/NTM AFFO is as of June 7, 2018 and consensus next twelve month AFFO estimate.

8 Investment Highlights Significant demand with barriers to entry Why Sienna? Strong seniors living operating platform High Quality Portfolio in key markets Strong financial position with an A (low) bond rating Robust development pipeline supported by new long-term care beds in Ontario 8

9 Population (000 s) Demand for Seniors Living Favourable Demographics Canadians over the age of 75 7,000 Age 75 to 84 Age 85+ 6,000 5,000 30% 33% 4,000 28% 9 3,000 27% 67% 30% 70% 2,000 30% 72% 73% 1,000 70% 70% Ontario LTC waitlist of ~32,000 LTC average time to placement is 83 days for Ontario and 45 days for British Columbia Source: CANSIM table The Progressive Conservative Party of Ontario has promised 15,000 new long-term care beds over the next five years and 30,000 new beds over the next 10 years

10 Vision To awaken our communities to the positive possibilities of life s next chapters Mission To help you live fully, every day Values Respect Passion Teamwork Responsibility Growth Corporate Culture named one of Canada s Most Admired Corporate Cultures for Sienna joins a prestigious club of past winners: 10

11 Portfolio Transformation 2010 IPO NOI Mix Q Pro Forma NOI Mix Desired State Other 6% Funded 94% Funded 56% Retirement 44% 50% 50% Funded Retirement Total NOI $41.5M Total Beds/Suites: 4,423 ~5,000 Employees Total NOI ~$152.0M Total Beds/Suites 10,091 ~12,000 Employees Develop a National Platform and grow Retirement NOI mix to 50% of Company NOI 11

12 Operating Performance Retirement Results Net Operating Income ($M) Average Occupancy ~171% $32.7 ~15.6 % Occupancy growth 93.2% 93.8% growth since 2013 through organic growth and acquisition activities $26.1 since % $17.4 $ % $ % Meeting the Needs of Residents as their Health Needs Change Well Positioned to Meet the Needs of Residents as Their Health Needs Change

13 Operating Performance Long Term Care and Residential Care Results LTC / RC Occupancy (Average) Q % LTC / RC Consistent Annual NOI Growth (Approx.) 1% Outperform Provincial and National averages on publicly reported quality indicators 89% Residence and Family Satisfaction score in 2017 Quality and Resident Safety are our Top Priorities 13

14 Financial Overview

15 Financial Summary Consolidated Q $32.4M 18.0% Total NOI Q $27.5M Consolidated Same Property NOI Q Q $28.8M $27.4M 5.1% Retirement Q $7.8M 5.5% Same Property NOI Q $7.4M LTC/RC Same Property NOI* Q $19.7M Q $20.0M -1.4% 15 * Excluding prior year tax recovery adjustment of $1.3 million.

16 Shareholder Return Diluted Operating Funds Q $ % from Operations per share Q $ 0.30 Diluted Adjusted Funds from Operations per share Q $ 0.35 Q $ 0.35 Stable 16

17 Financial Position Interest Coverage Ratio Debt to Adjusted EBITDA 3.7x 3.8x 8.0x 7.9x 8.2x 3.4x 3.5x 7.4x Q Q1 Debt to Gross Book Value 55.6% 51.5% 49.6% 50.3% Q1 Continued focus on capital structure optimization 17 * Q Debt to Adjusted EBITDA reflects the full debt of the recent Ontario Portfolio acquisition closed on March 28 th, 2018 but only 4 days of this transactions EBITDA results during the quarter.

18 Growth Strategy

19 Growth Strategy STRATEGIC ACQUISITION Target: 50% private pay, retirement portfolio Focus on high quality seniors living residences across Canada Develop a national platform ORGANIC GROWTH Moderate growth from Retirement, and consistent performance for the funded business. DEVELOPMENT Development of excess land for retirement intensification Phase 1: Senior living campuses Redevelopment of 1,000 Class B&C beds and development of 400 retirement suites. OTHER & MANAGEMENT Expand third party management and other services 19

20 Strategic Acquisitions $600M Investment 1,908 Suites $299M Equity Raises $37M NOI contribution 15 high quality residences

21 2017 Strategic Acquisitions Glenmore Lodge Kelowna, BC Rosewood Retirement Residence Kingston, ON Kawartha Lakes Retirement Residence Bobcaygeon, ON Waterford Retirement Residences Barrie and Kingston, ON 118 beds 61% interest for purchase price of $20 million 7.0% cap rate 68 retirement suites $10M purchase price 7.25% cap rate 94 retirement suites $21M purchase price 7.1% cap rate Two high-end residences 384 retirement suites $164M purchase price 6.0% cap rate 21

22 2018 Strategic Acquisitions Kensington Place (Toronto, ON) Villa da Vinci (Vaughan, ON) Kingsmere (Alliston, ON) Martindale Gardens (Milton, ON) Doon Village (Kitchener, ON) Island View (Arnprior, ON) Heatherwood (St. Catharines, ON) Bearbrook (Ottawa, ON) Carolina Suites (Perth, ON) Qunite Gardens (Belleville, ON) 10 Properties for a Purchase price of $382 million 1,245 suites and 93% post-2000 construction 22

23 Development Ten Year Plan Number of Developed Suites TOTAL 2,239 LTC + 1,000 new RET suites Cost $640M to $800M 2,239 Class B and C long term care beds are eligible for redevelopment and SIA will leverage these 2,239 beds to build senior living campuses (IL/AL/LTC) In addition, SIA is applying for additional LTC beds 23 *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).

24 Development Pipeline Phase 1 Senior Living Campuses LTC RET Exis ting Ne w Pro- Forma Exis ting Ne w Pro- Forma Brantford, ON Stouffville, ON Keswick, ON Scarborough, ON North Bay, ON Other Projects (Location TBD) 480 TBD TBD 0 Total Be ds/s uite s 1, , *TBD Pending further feasibility review and regulatory approvals. Retirement Expansion 24 ~50 suite expansion currently underway at Island Park Retirement Residence, Campellford, ON On track to be completed by Q Island Park construction site

25 Growth Through Development Phase 1 Return Retirement Long Term Care Shareholder Value Creation Growth in RET Growth in LTC ~$ M NAV Increase 3, % 3,603 Current 10% Private Beds Class B/C ($18.00 PRD) Pro Forma 60% Private Beds Class A ($26.04 PRD) ~8-9% Development Yields Current Suites Pro Forma Suites ~$8M NOI Contribution 1,000 Total Beds 1,280 Total Beds ~$5M NOI Contribution 25

26 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: 26

27 Appendix Supplementary Information

28 Our Growth Story Continues Pre $190M IPO $229M in acquisitions, $103M of raised equity Growth of Company to 27 LTC (4,474 beds) and 6 RET (739 suites) $252M in acquisitions, $79M of raised equity and $46M of convertible debentures Acquisition of 8 LTC (1,235 beds), 2 RET (326 suites), and Management Business $320M in acquisitions, $138M of raised equity Acquisition of 7 RC (1,017 Beds), 3 RET (363 suites), and Management Business Sienna Branding $214M in acquisitions, $115M of raised equity Acquisition of 4 RET (545 suites) and 1 RC (256 beds) $382M in acquisitions, $184M of raised equity Acquisition of 10 RET (1,245 suites) Pro-forma Private Pay NOI Mix of 44% Growth Trajectory: Develop a National Platform and grow private pay mix to 50% of Company NOI Home Care business $2.8M in 2012 NOI Sold Home Care business for $16.5M (8.0x 2015 NOI) Cumulative Total: 4,474 LTC beds 739 RET suites Cumulative Total: 5,733 LTC beds 1,065 RET suites Cumulative Total: 5,733 LTC beds 1,017 RC beds 1,429 RET suites Cumulative Total: 5,733 LTC 1,273 RC beds 1,978 RET suites Cumulative Total: 5,733 LTC 1,273 RC beds 3,223 RET suites 28 $1.4B in acquisitions, $619M of equity, $46M of convertible debentures

29 Total Enterprise Value Growth 20% CAGR IPO to Pro-Forma ~$1.5B ~$1.8B ~$2.2B ~$500M 2010 ~$500M ~$600M ~$800M ~$1B ~$1.1B ~$1.2B ~$2.2B Pro-Forma 29 IPO Q Pro Forma Sienna continues to undergo transformational growth

30 IPO IPO Portfolio Performance Total Revenue Consolidated NOI $600M $500M $400M 14.7% CAGR, IPO to 2017 $140M $120M $100M 15.9% CAGR, IPO to 2017 $80M $300M $60M $200M $40M $100M $20M $0M $0M Revenue has more than doubled, and NOI more than tripled since IPO 30

31 Millions of Canadian Dollars Debt Overview Debt Composition As of March 31, 2018 Weighted Average Term: 4.1 Years Weighted Average Rate: 3.9% $1,000M $900M $800M $700M $600M $500M $400M $300M $200M $100M $0M Q Q Q Q Q Series B Debentures Credit Facilities Mortgages Convertible Debentures* *Convertible Debentures were redeemed/converted in Q Debt Overview Focus on building a debt maturity profile over time: Debt Ladder $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 Reduce Leverage $50,000 $ Thereafter DBRS A (low) Rating Reinforced 31

32 The warmth of human connection