Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q2 2021 Earnings Presentation
32 slides from Global Net Lease's earnings presentation, Aug 5, 2021
Slide 1: Global Net Lease Second Quarter 2021 Investor Presentation
Global Net Lease Second Quarter 2021 Investor Presentation
Slide 2: Company Highlights
COMPANY HIGHLIGHTS High - Quality, Mission Critical, Net Lease Focused Portfolio : Featuring high portfolio occupancy of 99.7% and complete second quarter original Cash Rent collection rate of 100% (1) , highlighting strong overall operating performance 1 Fortified Balance Sheet: Including $500 mill
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Portfolio Overview Q2’21 Q2’20 Properties 311 296 Square Feet (millions) 38.2 34.6 Tenants 134 126 Industries 48 46 Countries 10 9 Leased 99.7% 99.6% Weighted Average Remaining Lease Term (1) 8.5 years 8.9 years % of SLR derived from Investment Grade Tenants (2)(3) 63.5% 65.0%
Slide 4: Complete Original Cash Rent Collection
4 100% 98% 99% 100% 100% 100% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Quarterly Original Cash Rent Collection Rate (3) COMPLETE ORIGINAL CASH RENT COLLECTION Note: Second quarter Cash Rent collection as of July 31, 2021. Excludes Cash Rent collected after July 31, 2021 that would apply to second quarter
Slide 5: Well Balanced Portfolio Supports Continued Growth
5 Financial Services 12% Auto Manufacturing 12% Healthcare 6% Technology 6% Consumer Goods 5% Aerospace 4% Freight 4% Logistics 4% Metal Processing 4% Energy 3% Engineering 3% Pharmaceuticals 3% Automotive Parts 3% All Other 23% Investment Grade 64% Non - Investment Grade 36% Telecommunications 4% W
Slide 6: Attractive Portfolio in Line with Investment Grade Rated Peers
6 ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS Geographic and well diversified tenant base that is leased to primarily Investment Grade rated tenants as compared to GNL investment grade rated peers Weighted Average Remaining Lease Term (2) Occupancy Rate Percentage Investment Grade
Slide 7: Reaching and Exceeding Pre-Pandemic Performance Levels
7 Significant Upside Potential $60.1 $73.2 Q4'19 Q1'21 REACHING AND EXCEEDING PRE - PANDEMIC PERFORMANCE LEVELS 1. Cash Rent collected includes both contractual rents and deferred rents paid during the period. See Slide 4 for further detail s. 2. For Q2’21 Net Loss per Share was ($0.14) and for Q1’2
Slide 8: Well Diversified Tenant Base
8 Tenant Rating Country Property Type % of SLR (1) Caa2 U.K. Industrial 6% Baa2** U.S. / Canada Distribution 4% Baa1 U.S. / Italy Industrial / Distribution 4% Baa3* U.K. Office 3% Aaa** U.S. Office 3% Aa3 NETH Office 3% Baa3* U.S. Industrial / Distribution 3% Baa1 U.S. Industrial 3% Aa1** FIN Indust
Slide 9: Focus on High-Quality Tenants
9 Office Distribution Industrial FOCUS ON HIGH - QUALITY TENANTS Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) U.S. Luxembourg Germany The Netherlands Canada Finland U.K. France Spain Italy AA+ AAA AAA AAA AAA AA+ AA AA A BBB Moody’s: A1 Moody’s: Aaa Moody’s: Aa3 Moody’s: Aa3 Moo
Slide 10: Differentiated Investment Strategy
10 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing • Focus on U.S. and strong sovereign debt rated countries in Continental Europe • Strategically located industrial and distribution facilities • Mission critical, single tenant net l
Slide 11: Acquisition Activity and Pipeline
11 *Represents Moody’s Implied Rating’ ** Represents Tenant or Guarantor Parent Rating even if not a guarantor on the lease. 1. Represents the contract purchase price and excludes acquisitions costs which are capitalized per GAAP. For the three months e nde d June 30, 2021, capitalized acquisition c
Slide 12: Case Study: McLaren Group Sale Leaseback
12 Transaction Overview Tenants McLaren Services Limited (2) McLaren Automotive (1) Property Type Industrial Location Woking , United Kingdom Purchase Price (1) $236.3 Square Feet 841,000 Lease Term (years) 20 Years Weighted Average Annual Rent Escalator 1.25% to 4.00% x McLaren Group is a leading l
Slide 13: Case Study: McLaren Group Sale Leaseback (Cont.)
13 State - of - the - Art, Mission - Critical Campus : The award - winning campus serves as the world headquarters for McLaren and is well geographically located near Central London and Heathrow Airport, and hosts approximately 1,000 workers CASE STUDY: MCLAREN GROUP SALE LEASEBACK (CONT.) GNL’s $23
Slide 14: Global Geographic Balance
14 GLOBAL GEOGRAPHIC BALANCE Note: Metrics as of June 30, 2021 unless otherwise noted. 1. Refer to basis for metric calculation included in the footnotes on page 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on page 3. U.S. and Canada Number of Assets: 239 Weighted Ave
Slide 15: Portfolio Enhancement
15 Office 48% Industrial/Distribution 47% Retail 5% United States & Canada 60% Europe 40% Office 43% Industrial/Distribution 52% Retail 5% PORTFOLIO ENHANCEMENT Continued Focus Towards Industrial and Distribution Properties and Balanced Geographic Diversification United States 65% Europe 35% Propert
Slide 16: Lease Extensions and Expansions
16 Year - to - date, GNL completed three lease extensions and one tenant expansion project and executed two LOIs, that in total, relate to leases that encompass 880,000 square feet and $6.8 million of annual base rent (1) , if the LOIs lead to definitive agreements Year - to - Date Lease Extensions
Slide 17: Management and Board
17 • Joined GNL as an Independent Board Member on March 2017 • Currently serves as an independent director and member of the audit committee for Xerox Holdings Corporation, Chewy, Inc. and Roman DBDR Tech Acquisition Corp., where he also chairs the audit committee • Previously served as CEO of Orbit
Slide 18: Second Quarter 2021 Key Highlights
18 $38.1 $42.8 Net Loss Common Stock Dividends AFFO ($2.4) Net Loss Common Stock Dividends AFFO Q2’21 Net Loss, AFFO (4) and Common Stock Dividends ($mm) Second Quarter 2021 Key Highlights • Year - to - date closed and pipeline acquisitions of $388.0 million with a weighted average Going - in Cap Ra
Slide 19: Continued Focus on Driving Earnings Growth
19 $3,173 $3,421 $3,763 $4,319 $4,566 1/1/2017 1/1/2018 1/1/2019 1/1/2020 1/1/2021 CONTINUED FOCUS ON DRIVING EARNINGS GROWTH Historical Revenue Growth Core Funds From Operations (1) Real Estate Assets at Cost Adjusted Funds From Operations (1) $259 $282 $306 $330 $398 2017 2018 2019 2020 Q2'21 Annu
Slide 20: Key Debt Metrics and Maturity
20 $0 $0 $315 $370 $83 $690 $168 $293 $ 500 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2021 2022 2023 2024 2025 Thereafter Mortgages Credit Facility Unsecured Notes 1% 4% 6% 12% 9% 6% 2% 10% 50% KEY METRICS Metric Q2’2021 Net Debt to Enterprise Value (1) 51.4% Net Debt to Adjusted EBITDA (annualize
Slide 21: Enhanced Capital Structure
21 5.2 5.1 5.4 5.1 4.7 3.2% 3.1% 3.3% 3.3% 3.4% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Weighted-Average Maturity Weighted-Average Interest Rate ENHANCED CAPITAL STRUCTURE Strong balance sheet comprised of $500 million of unsec
Slide 22: Comprehensive Hedging Program
22 COMPREHENSIVE HEDGING PROGRAM Hedging Foreign Currency Exchange Risk • Provides protection against a weakening in the value of EUR and GBP versus the U.S. Dollar associated with the Company’s foreign property operations Interest Rate Swaps: Fixing Interest on Floating Rate Debt • Cost effective t
Slide 23: Forward-Looking Statements
23 The statements in this presentation that are not historical facts may be forward - looking statements . These forward - looking statements involve risks and uncertainties that could cause actual results or events to be materially different . In addition, words such as “may,” “will,” “seeks,” “ant
Slide 24: Risk Factors
24 RISK FACTORS The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward - looking statements . • We may be unable to acquire properties on advantageous terms or our p
Slide 25: Risk Factors (Continued)
25 RISK FACTORS (CONTINUED) • In owning properties we may experience, among other things, unforeseen costs associated with complying with laws and regulations and other costs, potential difficulties selling properties and potential damages or losses resulting from climate change . • We depend on our
Slide 26: Disclaimers
26 DISCLAIMERS • This presentation includes estimated projections of future operating results . These projections were not prepared in accordance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentat
Slide 27: Definitions
27 DEFINITIONS • Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an ap
Slide 28: Definitions (Continued)
28 DEFINITIONS (CONTINUED) • In calculating Core FFO, we start with FFO, then we exclude certain non - core items such as acquisition, transaction and other costs, as well as certain other costs that are considered to be non - core, such as debt extinguishment costs, fire loss and other costs relate
Slide 29: Definitions (Continued)
29 DEFINITIONS (CONTINUED) • Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management's analysis of the operating performance of the Company . Additionally, fair value adjustments, which are based on the impact of current market f
Slide 30: Non-GAAP Reconciliations
30 NON – GAAP RECONCILIATIONS Three Months Ended June 30, 2021 June 30, 2020 March 31, 2020 EBITDA: Net income $ 2,588 $ 5,530 $ 9,601 Depreciation and amortization 39,702 33,984 33,533 Interest expense 24,018 17,529 16,440 Income tax expense 1,930 691 959 EBITDA 68,238 57,734 60,533 Impairment char
Slide 31: FFO and AFFO Reconciliations
31 FFO AND AFFO RECONCILIATIONS Three Months Ended June 30, 2021 June 30, 2020 March 31, 2020 December 31, 2019 Funds from operations (FFO): Net (loss) income attributable to common stockholders (in accordance with GAAP) $ (2,428) $ 966 $ 5,038 $ 9,263 Impairment charges 6,707 — — — Depreciation and
Slide 32: Annual FFO and AFFO Reconciliations
32 ANNUAL FFO AND AFFO RECONCILIATIONS Twelve Months Ended December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 20,731 $ 1,082 $ 34,535 $ (7,775) Impairment charges — 5,0