Financial targets

In the financial targets of Fabege we are listing; return of equity, loan-to-value ratio, equity/assets ratio, interest coverage ratio, surplus ratio, return of projects and transaction profit.

Targets

Results 2015

Return on equity

 
Fabege aims to sustainably be one of the most profitable listed property companies in terms of return on equity. The return on equity was 21.4 per cent, with contributions made by all parts of the operation,i.e. Property Management, Property Development and Transactions. The negative return for 2012 was due to provisions of SEK1.9bn for ongoing tax cases.

Loan-to-value ratio

 
Fabege has tightened its loan-to-value ratio target from the previous figure of max. 60 per cent, to no more than55 per cent.
The loan-to-value ratio dropped to 52 percent as a result of rising property values and Fabege’s active efforts to achieve a ratio of max. 55 per cent.

Equity/assets ratio

 
The target is to maintain an equity/assets ratio of at least 30 per cent.
The equity/assets ratio increased to 39 per cent in 2015 as a result of the strengthening of the balance sheet through strong earnings fromoperationsand rising property values.

Interest coverage ratio

 
The interest coverage ratio is to be at least 2.0, including realised changes in value.
The interest coverage ratio is above the target of 2.0, an effect of strong net operating income combined with low market interest rates.

Surplus ratio

 
Surplus ratio target of 70 percent. In2015, it was decided that the surplus ratio should amount to 75 per cent within five years.
The surplus ratio has improved steadily, partly owing to growing revenue, an increasingly modern portfolio and continued cost efficiency. The result for 2015 exceeded the target and was 72 per cent.

Return on projects

 
Fabege aims to annually invest at least SEK 1.5bn in the company’s own project portfolio. In the years immediately ahead, annual investments are estimated to amount to at least SEK 2bn. New projects are to generate a return on invested capital of at least 20 per cent through value growth. In 2015, investments in projects and development properties slightly exceeded SEK2bn, generating a yield of 29 per cent. This mainly derived from value growth in major ongoing projects.

Transaction profit

 
Fabege aims to increase efficiency in the portfolio through sales. Transactions are to generate a return of at least 10 percent in relation to the carrying amount. In 2015, two properties were sold for a total purchase consideration of SEK 26m.This generated a return of 44 per cent in relation to the carrying amount.