Cibus

Country:
Sector:
Market cap (m):
Sweden
Construction and Real Estate
SEK 6,320.60
Bloomberg:
Reuters:
Website:
CIBUS SS
CIBUS.ST
Share price (close):
SEK 143.65

Latest Reports

29 AUG 2022
Commissioned Research: Flash comment: Issues successfully a SEK 700m three-year bond at 3-month STIBOR plus 595 bps
Cibus announced on Friday 26 August that it has issued senior unsecured notes in total of SEK 700m with a three year maturity with a floating interest rate of 3-month STIBOR plus 595 bps, replacing the SEK 600m 2023 bond with STIBOR plus 475 bps, i.e. an 120 bps higher spread. The majority of Cibus’ financing is secured bank loans (EUR 850m) with an average interest margin of 1.6% and maturity of 2.5 years, and here the company has seen minor changes in spreads. About 71% of the Company’s bank loans are interest-hedged. After the new bond issue, Cibus has EUR ~250m in bond financing, plus a EUR 30m hybrid. Assuming a 2 pp higher interest rate, Cibus has disclosed it would cut Cibus’ IFPM per share by 16%, assuming no increase in rents (all rents are CPI-indexed). We estimate that e.g. a 150 bps raise in average cost of debt (currently ~2.5%) and a 5% increase in rents would cut EPS by 16%. This news should be positive for Cibus given the current state of the credit market.

25 AUG 2022
Commissioned Research: Nordea Small & Mid Cap Days: Property valuations should remain stable even in a weaker environment with rising interest rates
Today (25 August), Cibus’ CEO Sverker Källgården and CFO Pia-Lena Olofsson presented at the Nordea Small & Mid Cap seminar. Our main conclusions are: 1) Cibus will continue to focus on the supermarket segment within grocery-anchored retail real estate and as virtually all its rents are CPI-linked and lease agreements are net leases, it means that Cibus will enjoy the full benefit from inflation in its top line while property cost inflation is passed on to the tenant. 2) Bankability is good for large grocery-anchored portfolios, and Cibus is able to acquire properties at 50-100 bps higher net yield level than its implied net yield. With average valuation yield at around 5.6-5.7% for the portfolio and virtually no yield compression having materialised over the past years, we see low risk for property values declining; on the contrary, CPI-linked rents should more likely support valuations positively. 3) Cibus expanded earlier this year to Denmark in addition to the exposure to Finland, Sweden and Norway. The company is looking into new markets, but we believe it is more likely that Cibus will continue to grow selectively in the current markets. However, as Cibus has grown in size to close to EUR 2bn, it gets more proposals also for portfolios outside of the Nordics. 4) The ambition to grow the portfolio to EUR 2.5-3bn by end of 2023 is more challenging given the state of the credit market, but Cibus is still targeting Investment Grade capacity by the end of 2023, meaning that LTV needs to be lowered somewhat from current 58%. Thus, new equity is needed to grow the portfolio significantly, as Cibus has done in recent years. Conclusion: Although the growth ambitions are challenging in the current environment, we believe Cibus is one of the more safe picks in the Nordic real estate sector as we see property values being stable also in a less benign environment.

22 JUL 2022
Commissioned Research: A slower M&A pace could be on the cards
Cibus's Q2 2022 income from property management (IFPM) was below consensus even when adjusting for EUR 2.5m in negative one-offs. Earnings capacity-based IFPM per share was unchanged q/q at EUR 1.34. Despite the significantly weakened sentiment in the real estate market, we expect Cibus to keep making add-on acquisitions in the Nordics, and Cibus has also mentioned expanding outside of the Nordics if a suitable opportunity arises. However, given the fact that the EPRA NRV premium has shrunk to 10%, we believe M&A will be even more selective as EPS accretion has become more challenging. We make minor estimate revisions after the Q2 report. Our fair value range is SEK 180-240 per share, based on a mix of P/EPRA NAV and peer valuations. Marketing material commissioned by Cibus.

21 JUL 2022
Commissioned Research: Flash comment: Q2 somewhat below expectations even when adjusting for negative one-offs
Cibus posted Q2 net operating income of EUR 25.2m, up 36% y/y on the back of acquisitions but 2% below our estimate and 3% below Infront consensus. Income from property management (IFPM) was EUR 13.6m, up 25% y/y but 18% below our estimate and 22% below consensus. However, IFPM included EUR 2.1m of negative exchange rate losses and EUR 0.4m costs from bridge financing for the Danish acquisition. Adjusting for these, IFPM was 2% below our estimate and 8% below consensus. Fair value changes were EUR 17m positive (~1% of portfolio). Earnings capacity-based IFPM per share was unchanged q/q at EUR 1.34. EPRA NRV was EUR 15.0 (SEK 157). Cibus is currently trading at a 13% premium to EPRA NRV. We conclude that the report was somewhat on the weak side even adjusting for one-offs. The declined EPRA NRV premium makes the compounder case less attractive as Cibus, in order to reach its growth targets and investment grade rating, will need to issue new shares. We expect a slightly negative share price reaction on the Q2 report.

13 JUL 2022
Commissioned Research: Growth target and EPS accretion tough to align
Cibus will report its Q2 results on 21 July. We expect net operating income (NOI) of EUR 25.6m, up 17% q/q and 38% y/y, owing in particular to the EUR 280m Danish acquisition that closed in April. We forecast income from property management (IFPM) of EUR 16.4m, up 12% q/q and 52% y/y. Cibus is trading at a ~10% premium to Q1 2022 EPRA NRV. We lower our fair value range to SEK 160-220 (220-280), based on a combination of P/EPRA NRV and peer group valuations, driven by a lower valuation for Cibus's compounder peers, higher interest rates and increased credit spreads. We also argue that the compounder case has weakened, as the EPRA NRV premium has shrunk considerably. The fair value range implies a 2023E P/EPRA NRV of 0.85-1.17x and an adjusted 2023E P/E of 11.7-16.0x. Marketing material commissioned by Cibus.

6 MAY 2022
Commissioned Research: Solid Q1 and M&A ambitions remain firm
Cibus's Q1 2022 income from property management (IFPM) was largely in line with Infront consensus. Earnings capacity-based IFPM per share increased from EUR 1.25 in Q4 2021 up to EUR 1.34, impacted by the inclusion of the EUR 280m acquisition in Denmark. We expect Cibus to keep making add-on acquisitions in the Nordics, and Cibus also mentioned expanding outside of the Nordics if a suitable opportunity arises. We make minor estimate revisions after the Q1 report. Our fair value range is SEK 220-280 per share, based on a mix of P/EPRA NAV and peer valuations. The EPS accretion from M&A is somewhat offset by Cibus likely aiming to lower LTV in order to reach an IG rating. We estimate this would require equity-like funding of EUR 410-660m to finance EUR 0.7-1.2bn in acquisitions and reach the targeted property value of EUR 2.5-3bn by the end of 2023. Marketing material commissioned by Cibus.

5 MAY 2022
Commissioned Research: Flash comment: Q1 report largely as expected, the company now eyes also markets outside of the Nordics
Cibus posted Q1 net operating income of EUR 21.8m, up 20% y/y on the back of acquisitions and 2% above our and 0% above Infront consensus estimates. Income from property management (IFPM) was EUR 14.6m, up 26% y/y and 3% above our estimate and 4% above consensus. IFPM included EUR 0.9m of positive exchange rate differences and adjusting for this, IFPM was 2% below consensus and 4% below our estimate. Fair value changes were EUR 27m positive (~2% of portfolio). Earnings capacity-based IFPM per share increased from EUR 1.25 at the end of Q4 2021 to EUR 1.34 at the end of Q1 owing announced M&A. Cibus is currently trading at a ~40% premium to EPRA NRV, which we find more than justified given the stable operations and strong dividend focus. Cibus has an edge to its mainly unlisted peers in that it can pay with its own shares, which makes Cibus an attractive compounder case in Nordic real estate, justifying the premium valuation. We conclude that the report was largely in line with expectations and Cibus is well-positioned to execute on its growth targets to increase its portfolio to EUR 2.5-3bn by the end of 2023. However, the increased volatility in the Swedish real estate credit market could continue to weigh on the shares.

25 APR 2022
Commissioned Research: Ambitious growth targets remain achievable
Cibus will report its Q1 results on 5 May. We expect net operating income (NOI) of EUR 21.4m, up 5% q/q and 18% y/y, owing to acquisitions conducted in the past year. We forecast income from property management (IFPM) of EUR 14.2m, up 11% q/q and 22% y/y. Cibus is trading at a ~70% premium to Q4 2021E EPRA NRV. At the end of 2021, the company announced a target to double its portfolio size by the end of 2023 and to enter the Danish market in early Q2 2022 via a EUR 280m acquisition. We lower our fair value range to SEK 240-300 (260-320), based on a combination of P/EPRA NRV and peer group valuations, driven by a lower valuation for Cibus's compounder peers. The fair value range implies a 2023E P/EPRA NRV of 1.36-1.70x (including dividends). Marketing material commissioned by Cibus.

11 APR 2022
Commissioned Research: Flash Comment: Cibus – Commissioned research: The Board withdraws the proposal to issue class D shares – dividend returned to EUR 0.99 per existing shares
Cibus announced on 11 April that the board of directors has decided to withdraw its proposal to issue class D shares through a bonus issue to existing shareholders. According to Cibus, discussions with the larger shareholders indicate that there is currently not sufficient support for the introduction of class D shares, nor the bonus issue. As a consequence, the dividend proposal for existing shares is returned to EUR 0.99 per share versus the combination of EUR 0.75 per class A share and EUR 0.96 per D share (four A shares would have entitled to on D share in the bonus issue). We had expected the introduction of class D shares to increase the financing flexibility for Cibus in its ambitious growth targets and would also have been a tool for the company to reach its investment grade (IG) readiness by the end of 2023. D shares have a fixed dividend and are thus priced as a bond while they are treated as 100% equity by rating agencies. Hence, without the option of D shares, Cibus will need to finance the equity part of its growth through common equity issuance, in which it has been successful in recent years by issuing shares at a substantial premium to EPRA NRV. D shares would have been a good tool to use in the case that Cibus’ share price would have been momentarily at a lower level as D shares would incur less dilution if common shares are trading at a low price. We do not need to change our estimates following today’s announcement as we have not included any unannounced M&A or the issuance of common or D shares in our estimates. Our fair value range is SEK 260-320 per Cibus share. Marketing material commissioned by Cibus.

28 MAR 2022
Commissioned Research: Entering Denmark with a EUR 280m acquisition
On 24 March, Cibus announced the acquisition of 34 supermarkets (76,600 m2) in Denmark for EUR 280m. The deal makes Cibus the largest Nordic player in the grocery-anchored real estate market with a portfolio of EUR ~1.8bn. The acquisition will be financed by the combination of newly issued shares, cash at hand, and debt. We estimate the acquisition will add 7-8% to adjusted EPS in 2022E-24E and increase dividend capacity accordingly. Including the acquisition and the issuance of 4.4 million new shares at SEK 217, we estimate that Cibus is trading at a ~55% EPRA NRV premium and an implied yield of ~4.7%. With this acquisition, Cibus strengthens its position as one of the most attractive Nordic real estate compounders. Marketing material commissioned by Cibus.

Equity analysts

Director
Senior Analyst, Sector Coordinator

Key persons

CEO: Sverker Källgården

CFO: Pia-Lena Olofsson

Chairman: Patrick Gylling

Numbers
Export to Excel
Nordea
EURm
2018
2019
2020
2021
2022E
2023E
2024E
Total revenues
28.9
60.2
74.4
93.8
120.4
129.1
131.4
NOI
23.4
48.6
61.4
76.3
99.9
108.0
110.2
NOI margin
81.0%
80.8%
82.5%
81.4%
83.0%
83.7%
83.8%
EBIT (adj.)
21.1
43.3
54.9
69.9
92.5
100.8
102.8
EBIT (adj.) margin
72.8%
72.0%
73.8%
74.6%
76.9%
78.0%
78.2%
PTP (adj.)
13.2
27.8
33.1
48.7
66.0
68.7
69.5
Net profit from cont oper (adj)
12.36
27.22
33.07
48.67
62.88
64.55
64.61
Shareholders´ Equity
328.7
332.9
458.0
583.3
729.6
755.7
775.2
Net interest bearing debt
460.6
516.6
785.5
875.9
1,081.5
1,065.1
1,053.1
Net gearing
140.1%
155.2%
171.5%
150.2%
148.2%
140.9%
135.8%
Net debt/EBITDA
21.9
11.9
14.3
12.5
11.7
10.6
10.2
Net operating cash flow
16.1
12.8
35.2
51.0
64.8
66.7
65.2
Diluted number of shares in issue, year-end (m)
31.1
31.1
40.0
44.0
48.4
48.4
48.4
Nordea Markets estimates published on Jul 22, 2022
Source: Company data, Nordea estimates
Per share data and multiples
Export to Excel
Nordea
EUR and %
2018
2019
2020
2021
2022E
2023E
2024E
NAVPS
10.7
10.9
10.6
11.8
15.9
17.5
19.0
EPS (adj.)
0.40
0.88
0.92
1.18
1.30
1.31
1.31
DPS
0.84
0.89
0.94
0.99
1.04
1.10
1.16
BVPS
10.6
10.7
11.5
13.3
15.1
15.6
16.0
P/E (adj.)
25.4
15.9
18.1
24.0
10.1
10.0
10.0
P/NAV
0.9
1.3
1.6
2.4
0.8
0.8
0.7
EV/EBITDA (adj.)
36.79
21.90
26.43
30.38
18.55
16.87
16.42
EV/EBIT (adj.)
36.79
21.90
26.43
30.38
18.55
16.87
16.42
P/BV
0.96
1.30
1.45
2.14
0.87
0.84
0.82
P/CE
19.4
33.7
18.9
24.5
9.8
9.5
9.7
Dividend yield
8.3%
6.4%
5.7%
3.5%
7.9%
8.4%
8.8%
RoE
8.4%
9.2%
8.7%
9.9%
14.9%
10.3%
9.5%
ROIC
4.2%
4.2%
4.1%
4.1%
4.4%
4.3%
4.4%
Nordea Markets estimates published on Jul 22, 2022
Source: Company data, Nordea estimates

Source: Refinitiv