Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Q2 2024 Earnings Presentation
60 slides from Phillips Edison &'s earnings presentation, Jul 26, 2024
Slide 1: Investor Presentation
July 2024 Investor Presentation
Slide 2: Safe Harbor and Non-GAAP Disclosures
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 PECO | N A S D A Q L I S T E D Safe Harbor and Non-GAAP Disclosures
Slide 3: PECO at a Glance
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 PECO | N A S D A Q L I S T E D PECO at a Glance Source: Company data as of June 30, 2024; Dividend yield as of June 28, 2024 and is based on an annualized rate of $1.17 per share
Slide 4: Our Focused and Differentiated Strategy
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 PECO | N A S D A Q L I S T E D Our Focused and Differentiated Strategy ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Source: Company data as of June 30, 2024
Slide 5: PECO Continues to Deliver Market-Leading Operating and Financial Results
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 PECO | N A S D A Q L I S T E D PECO Continues to Deliver Market-Leading Operating and Financial Results • • • • • • • • • • 1. Excludes exercise of options. Other companies may define/calculate 3. Peer group include REG, ROIC, BRX, KIM
Slide 6: PECO Continues to Deliver Market-Leading Operating and Financial Results
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 6 PECO | N A S D A Q L I S T E D PECO Continues to Deliver Market-Leading Operating and Financial Results . . Note: 1. Excludes exercise of options. Other companies may 2. Peer group includes ROIC, BRX, KRG and IVT Unless otherwise noted
Slide 7: How PECO Defines Quality
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 7 PECO | N A S D A Q L I S T E D How PECO Defines Quality PECO’s focus on the #1 or #2 PECO retains a healthy and grocer is well-positioned in the diverse mix of National, market with a Locally Smart® Regional and Local Neighbors merchand
Slide 8: PECO Delivers Regular Income and Strong Returns
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 8 PECO | N A S D A Q L I S T E D PECO Delivers Regular Income and Strong Returns Sources: 1. Company filings as of July 2, 2024 2. Calculated using June 2021 dividend 3. Company annual filings 4. Multiple is based on share price at market
Slide 9: Grocery-Anchored Portfolio
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Grocery-Anchored Portfolio 9
Slide 10: Grocery-Anchored Centers Benefit from Macroeconomic Trends that Provide Strong Tailwinds for PECO
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 0 PECO | N A S D A Q L I S T E D Grocery-Anchored Centers Benefit from Macroeconomic Trends that Provide Strong Tailwinds for PECO • • • ‒ • ‒ • • ‒ • • • • • Sources: 1. % of ABR as of June 30, 2024 4. Estimate as of June 30, 2024 2. T
Slide 11: Strategic Presence in Suburban Markets
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 1 PECO | N A S D A Q L I S T E D Strategic Presence in Suburban Markets • • • • Sources: 1. Based on total ABR in market for wholly-owned portfolio as of June 30, 2024 2. Placer.ai based on population growth in U.S. cities since 2018
Slide 12: PECO Aligns with Leading Grocer Demographics
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 2 PECO | N A S D A Q L I S T E D PECO Aligns with Leading Grocer Demographics AVERAGE 3-MILE AVERAGE 3-MILE MEDIAN POPULATION HOUSEHOLD INCOME (thousands) (thousands) $87 $81 $76 67 63 58 Sources: Synergos Technologies, Inc, Calculated
Slide 13: PECO Continues to See a Resilient Consumer
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 3 PECO | N A S D A Q L I S T E D PECO Continues to See a Resilient Consumer • • • • Sources: PECO data is based on Q4 2023, Synergos Technologies, Inc; Calculated using KLI Retrieval 1. Motio Research, March 2024 2. Census Bureau as of
Slide 14: PECO's Grocery-Anchored Advantage
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 4 PECO | N A S D A Q L I S T E D PECO’s Grocery- Anchored Advantage PECO GROCER SALES PSF GROWTH (4) 2019 2020 2021 2022 2023 Q2 2024 Sources: 1. Based on the most recently reported sales data available 2. Company data as of June 30, 20
Slide 15: Local Neighbors
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 5 PECO | N A S D A Q L I S T E D Local Neighbors 4% 9% 27% 34% • 13% • • 13% • 73% 27% Source: Company data; Total portfolio ABR as of June 30, 2024
Slide 16: Strong Local Neighbors
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 6 PECO | N A S D A Q L I S T E D Strong Local Neighbors
Slide 17: Math Behind Local Neighbors
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 7 PECO | N A S D A Q L I S T E D Math Behind Local Neighbors • • • • Source: Company data as of June 30, 2024
Slide 18: Retailers Growing with PECO
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 8 PECO | N A S D A Q L I S T E D Retailers Growing with PECO
Slide 19: Suburban Market Advantage
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 1 9 PECO | N A S D A Q L I S T E D Suburban Market Advantage • • • • • Source: Placer.ai
Slide 20: Suburban Market Advantage
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 0 PECO | N A S D A Q L I S T E D Suburban Market Advantage • • • Note: Trailing twelve months visits per month by market size (June 2023 – May 2024) Source: Placer.ai – updated as of June 30, 2024
Slide 21: Highly Diversified Neighbor Mix Led by Top Grocers and Necessity-Based Retailers
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 1 PECO | N A S D A Q L I S T E D Highly Diversified Neighbor Mix Led by Top Grocers and Necessity-Based Retailers Neighbor Location Count % ABR(1) Neighbor Location Count % ABR(1) 64 5.9% 5 0.7% 61 5.4% 36 0.7% 32 4.0% 9 0.5% 23 3.6% 21
Slide 22: Investments
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Investments 22
Slide 23: Strong Acquisition Volume that Drives Growth
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 3 PECO | N A S D A Q L I S T E D Strong Acquisition Volume that Drives Growth Source: Company data as of July 18, 2024 1. Ridgeview Marketplace and one development land parcel was acquired subsequent to quarter end
Slide 24: Development and Redevelopment Activity Provides Long-Term Growth Opportunities
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 4 PECO | N A S D A Q L I S T E D Development and Redevelopment Activity Provides Long-Term Growth Opportunities • • • Source: 1. As of June 30, 2024
Slide 25: Balance Sheet
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Balance Sheet 25
Slide 26: PECO is Among the Lowest Levered Shopping Center REITs
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 6 PECO | N A S D A Q L I S T E D PECO is Among the Lowest Levered Shopping Center REITs • • • Sources: 1. As reported in March 31, 2024 quarterly filings (mix of TTM and LQA leverage); data based on Company filings. Other companies may
Slide 27: PECO's Strong and Flexible Balance Sheet Position
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 7 PECO | N A S D A Q L I S T E D PECO’s Strong and Flexible Balance Sheet Position • • • • • • • • • $1,500 $1,250 $1,000 $732 $750 $21 $500 $47 $323 $700 $250 $105 $240 $201 $162 $201 $0 $26 $38 $2 $17 $1 $3 2024 2025 2026 2027 2028 20
Slide 28: Performance and Long-Term Growth
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Performance and Long-Term Growth 28
Slide 29: PECO's Cycle-Tested Performance
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 2 9 PECO | N A S D A Q L I S T E D PECO’s Cycle-Tested LEADING PERFORMANCE Performance • • • Sources: Company data
Slide 30: PECO's Cycle-Tested Performance
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 0 PECO | N A S D A Q L I S T E D PECO’s Cycle-Tested LEADING PERFORMANCE Performance • • Source: Company data
Slide 31: PECO's Strong Historical Performance
G RGORCOECRY E RYC ECNETNERED . C. OCM T ERED UN OMM UINT IYT YF OFCOUCSUESDE D | 3 1 PECO | N A S D A Q PECO | N A S D A Q L I S T E D PECO’s Strong LEADING PERFORMANCE Historical Performance 97.4% 97.4% 97.5% 96.3% • 95.4% 94.7% • 2019 2020 2021 2022 2023 Q2 2024 8.2% • 4.5% 4.2% 3.7% 3.75% • 2019
Slide 32: Strong Operating Environment
G RGORCOECRY E RYC ECNETNERED . C. OCM T ERED UN OMM UINT IYT YF OFCOUCSUESDE D | 3 2 PECO | N A S D A Q PECO | N A S D A Q L I S T E D Strong Operating LEADING PERFORMANCE Environment 34.4% 32.2% 25.2% 15.7% 13.3% 8.2% 2019 2020 2021 2022 2023 Q2 2024 20.5% 16.2% 14.6% 8.5% 8.1% 6.7% 2019 2020 2021
Slide 33: Roadmap to Our Long-Term Growth
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 3 PECO | N A S D A Q L I S T E D Roadmap to Our Long-Term Growth Source: Company data
Slide 34: Growth Beyond Occupancy
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 4 PECO | N A S D A Q L I S T E D Growth Beyond Occupancy Source: Company data
Slide 35: PECO's Investments Enhance Our Long-Term Value
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 5 PECO | N A S D A Q L I S T E D PECO’s Investments Enhance Our Long-Term Value
Slide 36: PECO Delivers Higher Same-Center NOI Growth Over Time with Lower Capex
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 6 PECO | N A S D A Q L I S T E D PECO Delivers Higher Same-Center NOI Growth Over Time with Lower Capex Sources: 1. As reported in annual filings 2. Green Street Strip Center Insights - April 2024 Note: Unless otherwise noted peers incl
Slide 37: Maximizing AFFO Growth and Free Cash Flow Generation
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 7 PECO | N A S D A Q L I S T E D Maximizing AFFO Growth and Free Cash Flow Generation • • • • • • • Source: As reported in S&P Global Capital IQ Pro Note: Peers include REG, ROIC, BRX, KIM, KRG, FRT and AKR
Slide 38: Long Term Targets
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 3 8 PECO | N A S D A Q L I S T E D Long Term Targets Same-Center NOI Mid-5x Net-Debt-to- Growth of 3% - 4% Adjusted-EBITDAre Mid-to-High-Single-Digit $200M to $300M Core FFO Growth per Net Acquisitions per Share Year
Slide 39: Corporate Responsibility
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Corporate Responsibility 39
Slide 40: Corporate Responsibility and Sustainability
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 0 PECO | N A S D A Q L I S T E D Corporate Responsibility and Sustainability ENVIRONMENTAL OVERSIGHT & PEOPLE COMMUNITY STEWARDSHIP ETHICS • • • • • • • • • • • • • • • • • • •
Slide 41: Appendix
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Appendix 41
Slide 42: Glossary of Terms
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 2 PECO | N A S D A Q L I S T E D Glossary of Terms
Slide 43: Appendix: Non-GAAP Reconciliations
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Appendix Non-GAAP Reconciliations 43
Slide 44: Non-GAAP Measures
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 4 PECO | N A S D A Q L I S T E D Non-GAAP Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Measures Net income $ 16,986 $ 16,209 $ 36,612 $ 34,845 Adjusted to exclude: Fees and management income (2,522) (2,546)
Slide 45: Non-GAAP Measures
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 5 PECO | N A S D A Q L I S T E D Non-GAAP Three Months Ended March 31, 2024 2023 Measures Net income $ 19,626 $ 18,636 Adjusted to exclude: Fees and management income (2,565) (2,478) Straight-line rental income(1) (2,365) (2,580) Net am
Slide 46: Non-GAAP Measures
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 6 PECO | N A S D A Q L I S T E D Non-GAAP Year Ended December 31, 2023 2022 Measures Net income $ 63,762 $ 54,529 Adjusted to exclude: Fees and management income (9,646) (11,541) Straight-line rental income(1) (10,185) (12,265) Net amor
Slide 47: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 7 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, Measures 2022 2021 Net income $ 54,529 $ 17,233 (Cont’d) Adjusted to exclude: Fees and management income (11,541) (10,335) Straight-line rental income(1) (12,265) (9,404) N
Slide 48: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 8 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, Measures 2021 2020 (Cont’d) Net income $ 17,233 $ 5,462 Adjusted to exclude: Fees and management income (10,335) (9,820) Straight-line rental income(1) (9,404) (3,356) Net
Slide 49: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 4 9 PECO | N A S D A Q L I S T E D Year End December 31, Non-GAAP 2020 2019 Measures Net income (loss) $ 5,462 $ (72,826) (Cont’d) Adjusted to exclude: Fees and management income (9,820) (11,680) Straight-line rental income(1) (3,356) (9,
Slide 50: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 0 PECO | N A S D A Q L I S T E D Year End December 31, Non-GAAP 2019 2018 Measures Net (loss) income $ (72,826) $ 46,975 (Cont’d) Adjusted to exclude: Fees and management income (11,680) (32,926) Straight-line rental income (9,079) (5,1
Slide 51: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 1 PECO | N A S D A Q L I S T E D Non-GAAP Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Measures Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders (Cont’d) Net income $ 16,986 $ 16,20
Slide 52: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 2 PECO | N A S D A Q L I S T E D Non-GAAP Three Months Ended March 31, Measures 2024 2023 (Cont’d) Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders Net income $ 19,626 $ 18,636 Adjustments: Depreciation and amo
Slide 53: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 3 PECO | N A S D A Q L I S T E D Year End December 31, Non-GAAP 2023 2022 Measures Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders Net income $ 63,762 $ 54,529 (Cont’d) Adjustments: Depreciation and amortizati
Slide 54: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 4 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, 2022 2021 Measures Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders (Cont’d) Net income $ 54,529 $ 17,233 Adjustments: Depreciation and amortizati
Slide 55: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 5 PECO | N A S D A Q L I S T E D Non-GAAP Measures Three Months Ended June 30, 2024 2023 Six Months Ended June 30, 2024 2023 (Cont’d) Calculation of EBITDAre Net income $ 16,986 $ 16,209 $ 36,612 $ 34,845 Adjustments: Depreciation and a
Slide 56: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 6 PECO | N A S D A Q L I S T E D Non-GAAP Measures 2024 Three Months Ended March 31, 2023 (Cont’d) Calculation of EBITDAre Net income $ 19,626 $ 18,636 Adjustments: Depreciation and amortization 60,206 58,498 Interest expense, net 23,33
Slide 57: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 7 PECO | N A S D A Q L I S T E D Non-GAAP Year Ended December 31, 2023 Year Ended December 31, 2022 Measures Calculation of EBITDAre (Cont’d) Net income Adjustments: $ 63,762 $ 54,529 Depreciation and amortization 236,443 236,224 Intere
Slide 58: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 8 PECO | N A S D A Q L I S T E D June 30, 2024 December 31, 2023 Non-GAAP Net debt: Measures Total debt, excluding discounts, market adjustments, and deferred financing expenses $ 2,090,144 $ 2,011,093 (Cont’d) Less: Cash and cash equiv
Slide 59: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 5 9 PECO | N A S D A Q L I S T E D March 31, 2024 December 31, 2023 Non-GAAP Net debt: Measures Total debt, excluding discounts, market adjustments, and deferred financing expenses $ 2,056,059 $ 2,011,093 (Cont’d) Less: Cash and cash equi
Slide 60: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S E D | 6 0 PECO | N A S D A Q L I S T E D December 31, 2023 December 31, 2022 Non-GAAP Net debt: Measures Total debt, excluding discounts, market adjustments, and deferred financing expenses $ 2,011,093 $ 1,937,142 (Cont’d) Less: Cash and cash e
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