Overall goal
Fabege’s overall goals are to use our size, strength and focus to create and realise values and provide our shareholders with the best overall return among property companies listed on the Stockholm Exchange. The total return on Fabege’s share in 2011 was minus 28 per cent (calculated as share price performance including reinvested dividends).
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Financial Objectives
The company’s key financial criteria adopted by the Board are profitability, as measured by the return on equity, equity/assets ratio and interest coverage ratio. Fabege aims to be one of the most profitable listed property companies long-term. The target is to maintain an equity/assets ratio of at least 30 per cent and an interest coverage ratio of at least 2.0 including realised changes in value. At 31 December 2011, return on equity was 9.9 per cent, the equity/assets ratio was 39 per cent and the interest coverage ratio was 2.2.
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Equity/assets ratio |
Interest coverage ratio |
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Portfolio efficiency and efficiency objectives
A key objective for Fabege is generating strong net lettings. Retaining existing customers through a high retention rate is profitable. New lettings are important for reducing the vacancy rate and for enabling project investments in conversions and new builds. Net lettings amounted to SEK 130m in 2011.
Fabege aims to retain a high level of cost-efficiency and to be the leading player in comparison with other Swedish property companies. To improve its operational efficiency and achieve its financial goals, the company continuously implements various forms of process improvements.
Fabege aims to create an atmosphere where ideas and initiatives for developing processes and procedures are harnessed and converted into action. Work on process improvements continued in 2011. Another long-term aim is to improve the surplus ratio to 70 per cent. In 2011, Fabege’s surplus ratio was 68 per cent (67). Fabege believes that the target of 70 per cent will be achieved as of 2013.
Fabege aims to annually invest about SEK 1,000-1,500m in the company’s project portfolio. The investment is to generate a return of at least 20 per cent through value growth. In 2011, SEK 1,457m was invested. The return on invested capital was 29 per cent. Fabege aims to create a high overall return of its property portfolio through acquisitions, property development and sales. In 2011, the total return (net operating income and value changes in relation to the average property value) was 8.8 per cent.
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Environmental and energy objectives
Since 2002, an overriding environmental and efficiency objective has been to reduce the company’s year-on-year energy consumption by an average of 5 per cent. A future objective is to reduce energy consumption by 20 per cent from the 2009 level by 2014, which corresponds to an annual average reduction of 4 per cent. In 2011, the accumulated reduction was 9 per cent.
Customer mix objectives
Fabege has about 1,500 leases in its commercial portfolio. To minimise its risks, Fabege aims to achieve a balanced mix of stable customers from various market segments. The company’s 15 largest tenants in terms of value account for approximately 30 per cent of the total contracted lease value, and, in most cases, its leases have a duration that significantly exceeds the average in the company's proprietary portfolio.
Customer relation objectives
Fabege aims to increase profitability by becoming a more customer-oriented organisation. The target is to achieve a topranking in the satisfied customer index (SCI) survey and to be the natural choice for existing and potential customers. During the year, the company conducted a customer survey that resulted in a number of activities aimed at better meeting customers’ requests and requirements. The objective is to identify and capitalise on Fabege’s development potential in terms of off ering customers a superior product and service and thus forging stronger customer relations.
Employee satisfaction goals
Fabege aims to be an attractive employer – where co-workers have a sense of commitment, participation, and are able to develop and grow. The boundaries and objectives for each employee’s area of responsibility should be clearly defined and established. Our employees’ activities
should be based on the company’s core values.
In January 2012, an employee-satisfaction survey was conducted. Fabege’s goal was to maintain the same high level as in prior surveys. Th e performance rating was 3.9, reflecting an improvement in comparison with the corresponding survey in 2009.
Business focus in 2012
- Increase profi tability by becoming a more customer-oriented company.
- Strengthen cash flow in the investment property portfolio.
- Continue to maintain a rapid pace in the development of the portfolio.
- Create value growth through projects and “good properties in attractive locations.”
- Significant improvement in overall earnings.