Mobimo achieves operating targets for 2023 with solid result

Ad hoc announcement pursuant to Art. 53 LR

Mobimo achieves operating targets for 2023 with solid result

• Net rental income rises significantly to CHF 125.7 million – an increase of 4.7% on the previous year (CHF 120.0 million), largely driven by the successful completion of the major Manegg and Tiergarten development projects in Zurich.
• For the first time, there was a slight year-on-year depreciation in the value of investment properties, primarily commercial properties. However, the moderate change in value of -1.5% reflects the quality of the broadly diversified portfolio.
• Increase in energy-consuming space with sustainability certificate by 60% compared to the previous year. Further reduction in energy and emissions intensity.
• The election of Dr. Markus Schürch to the Board of Directors will be proposed to the Annual General Meeting. Daniel Crausaz will not be running for re-election. The renewal process on the Board of Directors will continue over the next few years.

Lucerne, 9 February 2024 – Mobimo looks back on an operationally gratifying year in 2023. The economic environment, marked by inflation and interest rate volatility, was challenging for the real estate market. Nevertheless, the operating targets communicated at the beginning of the year were achieved. The positive drivers behind the 2023 results were the increase in rental income, the realisation of development profits through the successful sale of projects and condominiums, and protecting the equity base.

The operating result (EBIT) for 2023 was CHF 127.0 million excluding revaluation (prior year: CHF 137.2 million) or CHF 77.0 million including revaluation (prior year: CHF 181.5 million). Net profit came in at CHF 90.0 million excluding revaluation (prior year: CHF 102.3 million) or CHF 46.6 million including revaluation (prior year: CHF 135.3 million). This equates to earnings per share excluding revaluation of CHF 12.40 (prior year: CHF 14.39). The Board of Directors will propose an unchanged dividend of CHF 10.00 per share at the General Meeting on 26 March 2024, in a continuation of its consistent distribution policy.

New builds deliver growth in rental income

Mobimo was able to further increase its rental income and its rental income base in the year under review. Rental income for 2023 was CHF 125.7 million, which is significantly higher than in the prior year (CHF 120.0 million), up 4.7%. This increase was largely due to the completion of the two major development projects Zurich, Manegg and Zurich, Tiergarten. On the other hand, there were effects from higher rents in the portfolio and some one-off effects in commercial properties.

Rents will continue to be adjusted where contracts allow. Commercial rents, which are predominantly indexed, were adjusted for inflation, and the increases in the reference interest rate announced on 1 June and 1 December 2023 were fed into or replicated in residential rents. The main effect of the rent increases in the residential segment will not become apparent until the 2024 financial year due to the time lag. Mobimo will continue to strengthen rental income for the long term through active, market-oriented contract management across the entire portfolio. The vacancy rate as at the reporting date was low, at 4.1% (prior year: 4.3%). Strengthening the earnings base is all the more important now that the financing costs have risen by around 25% to CHF 20.5 million due to higher interest rates (prior year: CHF 16.3 million).

Profits from value-adding development

Profit from development projects and sales of properties was CHF 27.2 million in 2023 (prior year: CHF 42.4 million). Marketing of the “Edenblick” project in Oberägeri was successfully launched in summer 2023, and construction started in the fourth quarter. Mobimo is realising 90 sought-after condominium apartments spread across ten buildings. As at the reporting date, notarised purchase agreements or reservations had already been made for 45 apartments. Demand for high-quality condominiums and projects remains unabated, also reflecting the high quality of the products offered by Mobimo. Mobimo also has a solid track record of translating its development activities into attractive development profits.

With a considerable development pipeline worth around CHF 1.5 billion, Mobimo is in a promising position to create further value over the coming years. In the fourth quarter, a separate purchase agreement was notarised for part of the RAD site in Zurich Oerlikon. After the transfer of ownership, which is expected to take place in 2025, Mobimo will develop the 11,000 m² site into a mixed residential and working neighbourhood over the following years.

Sustained trend reversal for property values

Real estate market transactions decreased in response to the turnaround in interest rates, although activity has rallied slightly since the second half of the year. Slightly lower prices were again recorded in the commercial and office sectors, meaning that the value correction seen in the first half of 2023 – the first in years – continued in the second half. Nevertheless, the broadly diversified portfolio of properties in good locations is proving robust even in the face of current market changes. The appreciation gains from the investment properties under construction continue to cushion the corrections for existing office and commercial space. Overall, the value of the portfolio depreciated slightly, by 1.5%. The value of the entire property portfolio as at the end of 2023 was CHF 3.6 billion (prior year: CHF 3.7 billion).

Mobimo continues to have a solid balance sheet, remains sustainably financed and is maintaining a consistently high equity ratio, which came in at 48.9% (prior year: 49.4%) with a moderate leverage ratio (EPRA LTV) of 42.3% (previous year: 42.3%). Mobimo is protecting its equity by means of planned portfolio adjustments and targeted capital recycling in order to be prepared for the challenging market development. In 2023, the sales of the residential property Schaffhausen, Hochstrasse and of the hotel and commercial property in Cham, Brunmatt were part of this strategy.

Further progress on sustainability

Mobimo was able to further reduce CO₂ emissions (-2.8%), energy intensity (-1.5%) and emissions intensity (-2.4%) year on year in 2023. Due to the methodical adjustment to the REIDA calculation method widely used in Switzerland, the absolute energy and environmental indicators also improved significantly. However, Mobimo’s percentage reduction targets are unaffected by this. In 2023, the proportion of energy-consuming space certified with a sustainability rating increased by 15 percentage points to 40% of the portfolio. This brings Mobimo a significant step closer to the target of 50% by 2030, while at the same time continuously improving data transparency and quality. This year, for the first time, the comprehensive sustainability report will be published on the same day as the annual report.

Change in the Board of Directors

After 15 years on Mobimo’s Board of Directors, Daniel Crausaz has decided not to stand for re-election at the upcoming General Meeting. With his deep financial expertise, he has played a key role in Mobimo’s success in recent years. The Board of Directors would like to thank Daniel Crausaz wholeheartedly for his valuable contribution. It is pleased to propose Dr. Markus Schürch (born 1971, Swiss citizen) to the General Meeting for election as a new member of the Board of Directors. Markus Schürch is CFO of Belimo, a company specialising in building technology. With his extensive expertise in the areas of finance, capital markets and corporate services and his connection to real estate, his professional prowess and personal qualities will make him a real asset to Mobimo’s Board of Directors.

The ongoing renewal process is to be continued. In the interests of a healthy balance between continuity and renewal, the gradual replacement of the longest-serving members of the Board of Directors, Brian Fischer, is currently planned for the 2025 Annual General Meeting and Peter Schaub for the 2026 Annual General Meeting.

Outlook

Mobimo is confident about 2024, even against the backdrop of the current market changes. Rental income is expected to remain stable overall in 2024, with a constant vacancy rate of less than 4.5% for the whole portfolio. Income from developments and sales of promotion is expected to be slightly above the 2023 level in the current financial year. Mobimo is strategically well-positioned and remains resilient, both in the portfolio and developments and as a company. With its high standards of quality and sustainability, Mobimo is convinced that the company is consistently creating added value for all its stakeholder groups.

Detailed reporting:

›› You can see the 2023 Annual Report here.

›› Analysts and press conference on the 2023 annual results:

Daniel Ducrey (CEO) and Jörg Brunner (CFO) will present the results (in German). The conference can be followed live as a web stream with audio and video signal via the following link (registration required). It will also be possible to ask questions online (including in English and French). 

Upcoming events:

26 March 2024:  Annual General Meeting 2024

18 April 2024: Capital market day

2 August 2024: Publication of 2024 half-year financial results

If you have any questions, please contact:

Contact for analysts and investors:

Stefan Feller, Head of Investor Relations

ir@mobimo.ch

+41 44 397 11 97

Contact for media:

Anthony Welbergen, Head of Corporate Communication

medien@mobimo.ch

+41 44 397 11 86

www.mobimo.ch

About Mobimo:

With a broadly diversified real estate portfolio that has a total value of approximately CHF 3.6 billion, Mobimo Holding AG is one of the leading real estate companies in Switzerland. Its portfolio comprises residential and commercial properties, along with development properties both for the company's own portfolio and for third parties. The properties are in first-class locations in German-speaking and French-speaking Switzerland. The buildings are characterised by balanced diversification and diligent management. Mobimo uses its development projects to strengthen its income base and boost the intrinsic value of its portfolio. The company also creates investment opportunities for third parties through its development services. Mobimo has around 170 employees.