Financial results for 2018 Q4
BALTIC HORIZON
FUND
Q4 WEBINAR
MAIN EVENTS 2018
� Apr 2018 – S&P mid-market rating of MM3 (corresponding to BB+/BB on a global scale)
� Apr 2018 – 30mln EUR unsecured bond maturing in 5y placed at 4,25% fixed coupon;
→ subscribed by 8 Baltic institutional investors (59% - LMV, 19% - INVL, 17% - SEB);
� May 2018 – c.a. 17mln EUR of bank loans repaid from bond proceeds; better margins and
non-amortizing structures obtained as a result;
� May 2018 – Q1 2018 financial results published;
� May 2018 – 0,024 EUR dividend declared for Q1 2018 (0,023 EUR previous quarter);
� June 2018 – AGM for buyback approval (up to 5mln EUR in 12 months);
� May 2018 – 0,87ha land plot adjacent to Domus Pro SC acquired for 1,7mln EUR for
development;
� August 2018 - 0,025 EUR dividend declared for Q2 2018
� August 2018 - Q1/M1 2018 financial results published;
� August 2018 – LNK acquisition in Riga completed
� October 2018 - 0,026 EUR dividend declared for Q3 2018
� December 2018 – Duetto II Office building signed (Vilnius heating, Sweco, Astra Zeneca,
Coca-Cola, Rimi)
Sustainable growth of
portfolio is expected
Sustainable dividend
story (Q4 12 m
rolling is 7,8%)
GNCF Q4 12m rolling
yield increased to
8,4%
BuybacH program on
hold
RECENT DEVELOPMENTS - 2018
2019Jan Feb Mar Apr May Jun Jul Aug
13 February:
Postimaja Shopping
Centre in Tallinn
acquisition for EUR
34.4m at 5.4%
completed
25 April:
Baltic Morizon EUR
30m EUR unsecured
bond issue assigned
'MM3' Mid-Market
Rating by S&P
Global
24 May:
Dividend of
EUR 0.024
per unit for
Q1 2018 paid
out
27 April:
30mln EUR
unsecured bond
maturing in 5y
placed
successfully at
4.25% fixed
coupon
19 February:
Dividend of
EUR 0.023 per
unit for Q4
2017 paid out
Sep Oct Nov Dec2018
12
November:
Private
placement
of new units
with the EUR
20m target
announced
16 May:
0,87ha land plot
adjacent to
Domus Pro SC
acquired for
1.7m EUR for
development
15 August:
LNK Centre
office building in
Riga acquisition
for EUR 17m at
6.5% yield
completed
5 September:
Dividend of
EUR 0.025
per unit for
Q2 2018 paid
out
22
November:
Dividend of
EUR 0.026
per unit for
Q3 2018 paid
out
Februarb
week 7:
Dividend of
EUR 0.027
per unit for
Q4 2018 to
be paid out
18 December:
Signed agreement to
acquire Duetto II
office building in
Vilnius for EUR
18.3m at 7.1% yield
3
PREPARING FOR NEW MARKET
OPPORTUNITIES
� Diversified cash flow Baltic listed REIT with key focus on high dividends and
long term value creation through active asset management
� Flexible market adjusted strategy following the main RE market trends
� Main focus on capital cities and retail / office segments
� Stabilized growth of fund by first and foremost focusing on value added
expansion opportunities within BM portfolio
� Further equity buffering through private placement for targeted acquisitions
Difficulties in getting
banH financing has
created marHet
opportunities
Investment yields at
a stand still
Growth by off-marHet
(in-Hind)
opportunities
New portfolio
manager and analyst
have joined the
management team
Property Europa SCUpmalas
BirojiDomus Pro G4S HQ Lincona Duetto I Duetto 1I
Coca-Cola Plaza
PiiritaSky
Supermarket
VainodesPostimaja
SCLNK
CentreTotal
CityVilnius CBD
Riga Vilnius Tallinn Tallinn Vilnius VilniusTallinn CBD1
Tallinn Riga Riga TallinnRiga
CBD1
Type Retail Office Retail/Office Office Office Office Office Cinema Retail Retail Office Retail Office
Rentablearea sq.m.
16,856 10,458 16,0782 9,179 10,870 8,498 8,509 8,664 5,427 3,254 8,052 9,141 7,453 122,439
Vacancy 4.4% 0% 1.6% 0% 1.5% 1,3% (0%3) 0%3 0% 6.2% (0%3) 0.7% 0% 4% 0% 1.5%
Rent,EUR/sq.m./month
14.5 12.7 9.5 10.59 10.22 11.5 12.3 9.7 12.5 11.0 13.2 16.8 12.0 12
NOI, EURm 2.4 1.7 1.7 1.2 1.2 1.1 1.3 1.0 0.9 0.4 1.5 1.5 1.1 17
Fair value, EURm
41.1 25.7 26.595 17.2 17.2 16.3 18.3 14.5 10.0 5.4 21.2 32.5 17.5 263.56
No. ofleases
72 9 37 1 13 7 6 1 18 18 3 14 4 203
WAULT4 3.9 3.0 3.9 3.9 4.7 3.3 5.2 4.2 6.4 3.7 14.9 6.4 6.6 5.14
Major tenants
STRONG PORTFOLIO WITH A TOTAL
VALUE OF EUR 260+ MILLION
5
Details of existing propertyportfolio
Source: Northern Morizon Capital
1 Central Business District 2 Retail: 11,247 sqm, MV: €17.46m; Office: 4,759 sqm, MV: €7.46m. 3 Pirita, Duetto I and Duetto II effective occupancy rate is 100% due to a rental guarantee. 4 Weighted average unexpired lease term weighted by lettable area. (WAULT
for the property portfolio weighted by income is 5.24 years.). 5 Includes land plot next to Domus Pro (Meraki). 6 Value including Duetto II, transaction expected to close by the beginning of March 2019
37%
29%
34%
Geographical allocation
Estonia
Latvia
Lithuania
43%
51%
6%
Segment allocation
Retail
Office
Leisure
BALTIC HORIZON’S 12 PROPERTY
PORTFOLIO BREAKDOWN
Geographical and
Segmental
diversification
5 properties with
expansion potential
5
RENTAL CONCENTRATION – 10
LARGEST
Largest tenant
accounts for only
7.8% of the portfolio
6
8%
7%
7%
6%
6%
4%
3%
2%2%2%
53%
Rimi
Latvian State Forestry
G4S Eesti
Forum Cinemas
SEB
Intrum Global Business Services
Exigen Services Latvia
M&M
New Yorker
Swedbank
Others
0%
5%
10%
15%
20%
25%
30%
35%
2021
Q1
2021
Q2
2021
Q3
2021
Q4
2022
Q1
2022
Q2
2022
Q3
2022
Q4
2023
Q1
2023
Q2
2023
Q3
2023
Q4
2024
Q1
2024
Q2
2024
Q3
2024
Q4
2025
Q1
Loan and hedge maturity
Loans Medges
Cocal cola Plaza
and Postimaja
Lincona Pirita
G4S
Europa
Upmalas Biroji Domus Pro Vainodes
SKY
Duetto
LNK
Bonds
0
5 000 000
10 000 000
15 000 000
20 000 000
25 000 000
30 000 000
35 000 000
40 000 000
45 000 000
2021.03 2021.09 2022.03 2022.09 2023.03 2023.09 2024.03 2024.09 2025.03
Maturity by separate loan
FINANCING SUMMARY
AS OF 31 DECEMBER 2018
57.3%
LTV
2.4%
Cost of debt
0.1%
Annual debt amortization
4.0 years
Weighted debt maturity
46%
18%
8%
28%
Diversification by creditor
SEB
Swedbank
Luminor
Bonds
57
,33
55
,83
51
,83
45
,83
39
,00
37
,00
36
,00
34
,17
33
,00
31
,00
27
,60
26
,50
25
,83
23
,50
22
,50
22
,00
21
,00
20
,83
20
,50
17
,50
16
,00
16
,00
15
,50
11
,37
-
10,00
20,00
30,00
40,00
50,00
60,00
Ge
ne
ve
Du
bli
n
Sto
ckh
olm
Mil
an
Osl
o
Mu
nic
h
Me
lsin
ki
Am
ste
rda
m
Be
rlin
Ma
dri
d
Mo
sco
w
Vie
nn
a
Bru
sse
ls
Kie
v
Co
pe
nh
ag
en
Wa
rsa
w
Pra
gu
e
Ath
en
s
Lisb
on
Ta
llin
n
Viln
ius
Bra
tisl
ava
Rig
a
Ba
ltic
Mo
rizo
n
OFFICES. TME BALTIC MARKET MAINTAIN LOW VACANCIES AND RENT
PRICES WMILE YIELDS EXCEED TMOSE IN OTMER EUROPEAN CAPITALS
� Baltic office market is fundamentally sound. Despite rapid economic growth and robust FDI, rental rates and vacancy remain relatively low while yields are above European and even CEE averages.
� Large gap in office stock per capita ratios between Baltics and the rest of Europe shows that office development in the region still has significant growth potential.
� Performance efficiency – lower than Baltic average rentrates transformed into higher thanBaltic average yields.
30.3
Source: Colliers International, SEB
Prime Office Yields, %
Prime Office Rent Rates €/sq. m./month Office Vacancy, %
12
,00
%
9,5
0%
8,0
0%
6,7
5%
6,5
0%
6,5
0%
6,2
5%
5,1
5%
4,8
5%
4,7
5%
4,6
0%
4,0
0%
4,0
0%
3,9
0%
3,7
5%
3,7
0%
3,7
0%
3,5
0%
3,4
0%
3,2
5%
3,0
5%
3,0
5%
3,0
0%
2,9
0%
2,5
0%
7,3
0%
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
Kie
v
Mo
sco
w
Ath
en
s
Rig
a
Ta
llin
n
Viln
ius
Bra
tisl
ava
Wa
rsa
w
Pra
gu
e
Lisb
on
Bru
sse
ls
Du
bli
n
Co
pe
nh
ag
en
Vie
nn
a
Osl
o
Me
lsin
ki
Am
ste
rda
m
Mil
an
Sto
ckh
olm
Ma
dri
d
Lon
do
n
Pa
ris
Mu
nic
h
Be
rlin
Ge
ne
ve
Ba
ltic
Mo
rizo
n
14
,00
%
12
,00
%
11
,70
%
10
,30
%
10
,20
%
9,2
0%
8,6
0%
8,5
0%
8,5
0%
8,3
0%
8,1
0%
7,5
0%
7,4
0%
7,0
0%
6,6
0%
6,5
0%
6,2
0%
6,2
0%
6,0
0%
5,7
0%
5,5
0%
5,2
0%
3,4
0%
3,3
0%
2,0
0%
2,4
0%
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
14,00%
Me
lsin
ki
Wa
rsa
w
Mil
an
Am
ste
rda
m
Ma
dri
d
Mo
sco
w
Lisb
on
Ath
en
s
Ta
llin
n
Bru
sse
ls
Du
bli
n
Pra
gu
e
Osl
o
Kie
v
Rig
a
Pa
ris
Bra
tisl
ava
Lon
do
n
Sto
ckh
olm
Co
pe
nh
ag
en
Ge
ne
ve
Vie
nn
a
Viln
ius
Mu
nic
h
Be
rlin
Ba
ltic
Mo
rizo
n
7.5%
Average
4.9%
9
RETAIL. TME BALTIC MARKET MAS LOW VACANCIES AND MIGM YIELDS
COMPARED TO OTMER EUROPEAN COUNTRIES
� Baltic population likes shopping centers with some entertainment inside. Impressive disposable income growth of more than 50% over the last decade in Baltics has predominantly benefited large shopping centers which remain a preferred pastime activity in the Baltics.
� Segment is experiencing some changes. Some new supply beingintroduced to market, but no major impact expected. The impact of e-trade on performance of shopping centers is slowly being monitoredand ease of access and adapting retail/entertainment offering at the major retail schemes is now a must. Center city shopping centers alsoenjoy growing number of tourists.
Average
Retail Yields, %
Disposable income growth, 2009-2017Retail Trade Volume Growth, 2010-2017
80,0
90,0
100,0
110,0
120,0
130,0
140,0
150,0
160,0
2010 2011 2012 2013 2014 2015 2016 2017
European Union Estonia Latvia Lithuania
9,5
0%
8,5
0%
8,0
0%
7,0
0%
6,5
0%
6,5
0%
6,4
0%
6,0
0%
6,0
0%
5,3
0%
5,0
0%
5,0
0%
5,0
0%
5,0
0%
4,8
0%
4,7
0%
4,5
0%
4,3
0%
4,1
0%
4,0
0%
4,0
0%
3,0
0%
6,1
7%
0,00%
1,00%
2,00%
3,00%
4,00%
5,00%
6,00%
7,00%
8,00%
9,00%
10,00%
Mo
sco
w
Be
lgra
de
Ath
en
s
Bu
cha
rest
Rig
a
Vil
niu
s
Ta
llin
n
Bu
da
pe
st
Bra
tisl
ava
Wa
rsa
w
Mila
n
Pra
gu
e
Vie
nn
a
Ma
dri
d
Du
bli
n
Mu
nic
h
Sto
ckh
olm
Co
pe
nh
ag
en
Be
rlin
Osl
o
Lon
do
n
Pa
ris
Ba
ltic
Mo
rizo
n
5.6%
-
20
40
60
80
100
120
140
160
2009 2010 2011 2012 2013 2014 2015 2016 2017
European Union Lithuania Latvia Estonia
Source: Eurostat, Colliers International
10
FINANCIAL RESULTS FOR Q4 2018
FINANCIAL PERFORMANCE
• In Q4 2018, NOI
amounted to EUR 3.9
million and was
higher than in Q4
2017 (EUR 2.9
million).
*The number of units excludes 255,969 units acquired by the Fund as part of the unit buy-back program
9
Euro ‘000 2018 Q4 2017 Q4 Change (%)
Net rental income 3,929 2,922 34.5%
Valuation gains / (loss) on investment
properties1,534 3,337 (54.0%)
Operating profit 4,685 5,357 (12.5%)
Net financing costs (806) (403) 100%
Profit before tax 3,879 4,954 (21.7%)
Net profit for the period 3,535 5,277 (33.0%)
Weighted average number of units
outstanding78,637,645* 69,011,121 13.9%
Earnings per unit (EUR) 0.04 0.08 (50%)
FINANCIAL RESULTS FOR Q4 2018
ASSETS AS OF 31/12/2018
• Total investment
value increased
from EUR 189
million to EUR 245
million after
Postimaja SC, LNK
BC acquisitions and
revaluations in
December
10
Euro ‘000 31.12.2018 31.12.2017
Non-current assets
Investment properties 245,160 189,317
Derivative financial instruments 9 89
Other non-current assets 596 146
Total non-current assets 245,765 189,552
Current assets
Trade and other receivables 2,734 1,568
Prepayments 154 108
Cash and cash equivalents 12,225 24,557
Total current assets 15,113 26,233
Total assets 260,878 215,785
FINANCIAL RESULTS FOR Q4 2018
EQUITY & LIABILITIES AS OF 31/12/2018
• In Q4 2018, the Fund
NAV to EUR 109,8
million. The increase
is related to an
increase in property
valuation and the
fund also made a EUR
2.04 million cash
distribution to its
unitholders (EUR
0.026 per unit).
11
Euro ‘000 31.12.2018 31.12.2017
Equity
Paid in capital 93,673 91,848
Own units (335) -
Cash flow hedge reserve (1,005) (56)
Retained earnings 17,472 15,184
Total equity 109,805 106,976
Non-current liabilities
Interest bearing loans and borrowings 140,401 96,497
Deferred tax liabilities 5,844 5,206
Derivative financial instruments 1,069 88
Other non-current liabilities 905 859
Total non-current liabilities 148,219 102,650
Current liabilities
Interest bearing loans and borrowings 106 1,590
Trade and other payables 2,397 4,202
Income tax payable - 14
Derivative financial instruments - 15
Other current liabilities 351 338
Total current liabilities 2,854 6,159
Total liabilities 151,073 108,809
Total equity and liabilities 260,878 215,785
FINANCIAL RESULTS FOR Q4 2018
SUMMARY
• IFRS NAV per unit
EUR 1.3988 (EUR
1.3862 as at
30/09/2018).
• EPRA NAV per unit
EUR 1.5101 (EUR
1.4853 as at
30/09/2018).
13
Euro ‘000 31.12.2018 31.12.2017 Change (%)
Investment property in use 245,160 189,317 29.5%
Gross asset value (GAV) 260,878 215,785 20.9%
Interest bearing loans 140,507 98,087 43.2%
Total liabilities 151,073 108,809 38.8%
Net asset value (NAV) 109,805 106,976 2.6%
Euro ‘000 30.09.2018 31.12.2018
IFRS NAV 109,345 109,805
Exclude deferred tax liability on investment properties 7,343 7,731
Exclude fair value of financial instruments 473 1,061
Exclude deferred tax on fair value of financial instruments (1) (56)
EPRA NAV* 117,160 118,541
Amount of units 78,878,6921 79.157.0942
EPRA NAV per unit 1.4853 1.5101
1. The number of units excludes 278,402 units acquired by the Fund as part of the unit buy-back program, but not cancelled as of
30/09/2018
2. The number of units excludes 255,969 units acquired by the Fund as part of the unit buy-back program, but not cancelled as of
31/12/2018
FINANCIAL DEBT STRUCTURE OF THE
FUND AS OF 31/12/2018
1. CC Plaza and Postimaja loan has an interest rate cap at 3.5% for the variable interest rate part.
2. Duetto loan has an interest rate cap at 1% for the variable interest rate part.
3. Amortised each month over the term of a loan/bond.
14
Property Maturity Currency
Carrying
amount
Euro’1000
% of
total
Fixed rate
portion
Lincona 31 Dec 2022 EUR 7,188 5.1% 95%
CC Plaza and Postimaja 12 Feb 2023 EUR 17,200 12.2% 100%1
Sky SC 1 Aug 2021 EUR 2,386 1.7% -%
Europa SC 5 Jul 2022 EUR 20,900 14.8% 88%
G4S Meadquarters 16 Aug 2021 EUR 7,750 5.5% 100%
Upmalas Biroji BC 31 Aug 2023 EUR 11,750 8.3% 90%
Pirita SC 20 Feb 2022 EUR 4,944 3.5% 124%
Duetto I 20 Mar 2022 EUR 7,300 5.2% 99%2
Domus Pro 31 May 2022 EUR 11,000 7.8% 66%
Vainodes I 13 Nov 2024 EUR 9,842 7.0% 50%
LNK 27 Sep 2023 EUR 700 0.5% -%
Total bank loans EUR 100,960 71.6% 86%
Less capitalized loan arrangement fees3 (208)
Total bank loans recognized in the
statement of financial positionEUR 100,752
5 year-unsecured bonds EUR 40,000 28.4% 100%
Less capitalized bond arrangement fees3 (245)
Total debt recognised in the statement of
financial positionEUR 140,507 100% 90%
BH UNITS SECONDARY TRADING
Over 4,500 investors
Improving liquidity in the
secondary marHet
OTC transactions
excluded
MarHet cap of approx.
104mln EUR turns around
in c.a. 6.4 years (based on
last 12 months trading
volume).
-
200
400
600
800
1 000
1 200
1 400
1 600
20
16
Ju
l
20
16
Au
g
20
16
Se
p
20
16
Oct
20
16
No
v
20
16
De
c
20
17
Ja
n
20
17
Fe
b
20
17
Ma
r
20
17
Ap
r
20
17
Ma
y
20
17
Ju
n
20
17
Ju
l
20
17
Au
g
20
17
Se
p
20
17
Oct
20
17
No
v
20
17
De
c
20
18
Ja
n
20
18
Fe
b
20
18
Ma
r
20
18
Ap
r
20
18
Ma
y
20
18
Ju
n
20
18
Ju
l
20
18
Au
g
20
18
Se
pt
20
18
Oct
20
18
No
v
20
18
De
c
20
19
Ja
n
20
19
Fe
b
Vo
lum
e,
tho
usa
nd
BH units secondary trading per month
Tallinn Stockholm
This material is provided to you for information purposes only. Before investing in any product managed by Northern Morizon Capital (NMC) or associated
companies, you should inform yourself about legal and tax consequences, foreign exchange restrictions or exchange control requirements that you may
encounter under the laws of your country. NMC has taking all reasonable care to ensure that the information contained in this document is reliable but no
guarantees, warranties or representations are made as to the accuracy or completeness of the information contained in this information document. Past
performance is no guide to future performance. Investors in funds or other products of NMC should be aware that such investments carry risk, that the value
of such investments can vary over time, and that you as investor may not get back the full amount invested. NMC urges all investors to seek professional
advice on the above-mentioned issues as well as other relevant issues before investing in our products.
DISCLAIMER
17