Wereldhave N.v. · EURONEXT:WHA
Wereldhave — H1 2018 Earnings Presentation
54 slides from Wereldhave's earnings presentation, 2018
Slide 1: H1 2018 Results
H1 2018 RESULTS Be uF WERELDHAVE
Slide 2: Company profile: key facts
CONVENIENCE SHOPPING CENTRES IN NORTH-WEST EUROPE COMPANY PROFILE KEY FACTS 1 16 • Numbers of shopping centres 30 7 • Average size 27,500m² • Numbers of shopping centre 73.9m visitors (H1 2018) 6 • Loan to value ratio1 42.2% • Occupancy shopping centres 96.1% • EPRA NIY shopping centres 5.0% • WALT2
Slide 3: Company profile: portfolio breakdown
CONVENIENCE SHOPPING CENTRES IN NORTH-WEST EUROPE COMPANY PROFILE PORTFOLIO BREAKDOWN 2% 23% 39% € 3.8 bn € 3.8 bn 15% 23% 98% Belgium Finland Shopping centres Offices France Netherlands 3
Slide 4: Highlights H1 2018
HIGHLIGHTS H1 2018 4
Slide 5: Highlights H1 2018
HIGHLIGHTS H1 2018 H1 2017 H1 2018 CHANGE Direct result per share 1.72 1.70 (0.02) Indirect result per share (0.03) (1.16) (1.13) FY 2017 H1 2018 CHANGE EPRA NAV per share 50.00 48.94 (2.1%) Full year DPS 3.08 2.52 (18.2%) LTV 40.7% 42.2% +150bps • Outlook FY 2018 direct result precised to € 3.33-3.
Slide 6: Highlights H1 2018: net rental income
HIGHLIGHTS H1 2018 NET RENTAL INCOME (€M) H1 2017 H1 2018 GROWTH LFL GROWTH Belgium 19.3 19.8 2% (3.4%) Negative impact from free-parking in Genk, and departure of two larger tenants in Nivelles and Genk. Pick up H2 2018. Finland 13.9 13.8 (1%) (0.6%) Slight negative impact from banks restructuring;
Slide 7: Operational Performance
OPERATIONAL PERFORMANCE 7
Slide 8: Leasing performance
LEASING PERFORMANCE # OF LEASING MGR OCCUPANCY LFL RENT COUNTRY REMARKS CONTRACTS VOLUME UPLIFT RATE GROWTH Belgium 40 8.1% 16.4% 96.7% (3.4%) Leasing to Decathlon in Nivelles positively impacts occupancy, LFL to follow in H2 Finland 43 9.6% (5.0%) 96.4% (0.6%) Negative MGR impact from 1 key tenant;
Slide 9: Slightly negative, mainly due to one-offs
SLIGHTLY NEGATIVE, MAINLY DUE TO ONE-OFFS IMPROVEMENT EXPECTED FOR THE FULL YEAR LFL NRI GROWTH LFL NRI GROWTH (% YOY) 7.6% 5.5% 4.9% 1.5% 1.4% 1.8% 1.0% 1.3% 1.0% 1.3% 0.4% 0.4% 0.8% 0.8% 0.0% -1.0%-1.1% -0.6% -0.7% -1.3% -2.7% -3.4% -3.9% -5.1% -7.0% Belgium Finland France Netherlands Shopping cen
Slide 10: Rising occupancy year-on-year
RISING OCCUPANCY YEAR-ON-YEAR OCCUPANCY EPRA OCCUPANCY RATE SHOPPING CENTRES (%) 96.7% 96.7% 96.8% 96.3% 96.4% 96.5% 96.2% 96.1% 95.9% 95.7% 95.7% 95.8% 95.5% 95.4% 95.5% 94.9% 94.4% 93.6% 93.3% 93.2% Belgium Finland France Netherlands Shopping centres H2 2016 H1 2017 H2 2017 H1 2018 10
Slide 11: Outperforming the market in all countries
OUTPERFORMING THE MARKET IN ALL COUNTRIES FOOTFALL CHANGE IN VISITORS (%) Versus H2 2016 H1 2017 H2 2017 H1 2018 Market H1 2018 market 6.5% 3.4% 2.7% 2.3% 2.7% 2.6% 1.4% 1.1% 1.4% 0.8% 0.7% 0.2% 0.4% 0.6% 0.8% 1.0% 0.6% -0.7% -1.2% -1.5%-1.9% -1.6% -2.4% -2.6% -4.1% Belgium* Finland* France Netherla
Slide 12: Soft sales due to warm weather conditions
SOFT SALES DUE TO WARM WEATHER CONDITIONS TENANT SALES 1 LIKE-FOR-LIKE TENANT SALES (%) 3.5% 1.3% 1.3% 1.5% 0.5% -1.0% -1.6% -1.8% -2.4% -3.6% Belgium Finland France Shopping centres 2016 2017 Year-to-May 2018 1 Excluding hypermarkets and supermarkets 12
Slide 13: Financial Performance H1 2018
FINANCIAL PERFORMANCE H1 2018 13
Slide 14: Stable direct result
STABLE DIRECT RESULT DIRECT RESULT BRIDGE (IN € M) € -0.7 €75.2 €74.5 €0.5 -€2.7 €0.7 -€0.6 €1.9 -€0.5 1 2 Direct result Disposals Indemnities Standing portfolio Like-for-like General cost Tax, Interest & other Direct Result H1 2017 Netherlands H1 2018 and Belgium MAIN MOVEMENTS IN STANDING PORTFOLI
Slide 15: NRI changed due to disposals and developments
NRI CHANGED DUE TO DISPOSALS AND DEVELOPMENTS NET RENTAL INCOME BRIDGE (IN € M) € -1.9 €99.2 -€2.7 -€0.6 €97.3 €1.9 -€0.5 1 2 Direct result H1 2017 Disposals Netherlands Indemnities Standing portfolio Like-for-like Direct Result H1 2018 and Belgium 1 H1 2017: Stadshagen in Zwolle, Oosterheem in Zoet
Slide 16: NAV slightly lower due to revaluations
NAV SLIGHTLY LOWER DUE TO REVALUATIONS EPRA NAV BRIDGE: H2 2017 TO H1 2018 (IN € PER SHARE) -€ 1.16 € 1.70 € 50.00 -€ 1.54 -€ 0.06 € 48.94 H2 2017 Direct result Indirect result Dividend Financial H1 2018 instruments / Deferred tax 16
Slide 17: Net asset value
NET ASSET VALUE NET ASSET VALUE (€ PER SHARE) 56.41 57.00 54.02 53.92 54.35 52.19 52.07 50.05 52.10 50.38 51.70 51.47 49.80 49.16 48.32 47.92 50.00 47.41 46.78 48.94 46.51 42.76 40.00 33.66 2013* 2014 2015 2016 2017 H1 2018 IFRS NAV EPRA NAV EPRA NNNAV Share price • 2013: Restructuring phase • 2014-
Slide 18: Lower indirect result due to revaluations
LOWER INDIRECT RESULT DUE TO REVALUATIONS INDIRECT RESULT BRIDGE (IN € M) -€44.9 -€0.3 -€1.5 -€45.5 €2.7 -€1.5 Valuation results Results on disposal General costs Other (financial) Tax Total indirect Customer Journey income and expenses result H1 2018 18
Slide 19: Revaluations
REVALUATIONS VALUE (€ M) REVALUATION H1 2018 NIY (%) EPRA NIY (%) 2017 H1 2018 €M % 2017 H1 2018 2017 H1 2018 Belgium 750 787 10.2 1.3% 5.5% 5.2% 5.3% 5.4% Finland 572 564 -18.3 -3.1% 4.9% 4.9% 4.7% 4.7% France 877 888 -4.1 -0.5% 4.7% 4.6% 4.6% 4.6% Netherlands 1,471 1,460 -25.8 -1.7% 5.4% 5.5% 5.3%
Slide 20: Revaluations: rents & yield shift
REVALUATIONS: RENTS & YIELD SHIFT BREAKDOWN OF VALUATION RESULT Belgium 1.3% 0.0% Finland -3.1% 0.0% France -1.5% 1.0% Netherlands -0.9% -0.8% Shopping centres -1.2% 0.2% Belgium offices -18.7% 11.9% Total portfolio -0.9% -0.3% Yield shift Market rent & capex 20
Slide 21: Financing
FINANCING 21
Slide 22: Debt profile
DEBT PROFILE 2017 H1 2018 COVENANTS POLICY Interesting bearing debt1 € 1,562m € 1,628m Average cost of debt 1.96% 1.90% Undrawn committed2 € 240m € 150m Cash position € 14m € 13m Fixed vs floating debt 82%/18% 80%/20% 75%/25% LTV 40.7% 42.2% <60% <40% ICR 6.6X 6.3X >2.0X >2.0X 1 Nominal value of int
Slide 23: Debt mix – liquidity profile improved
DEBT MIX – LIQUIDITY PROFILE IMPROVED Q4 2017 Q2 2018 1% 1%15% 16% 32% 36% € 1,562m € 1,628m • Extension RCF EUR 300m with one year until 2023 51% 48% • Refinanced EUR 30m facility in Belgium for five years EMTN Convertible bond USPP Bank loans (incl. RCF) • New RCF EUR 350m agreed in July 2018 for
Slide 24: Sustainable value creation
SUSTAINABLE VALUE CREATION GLOBALLY RECOGNIZED ESG PERFORMANCE PARTICIPANT CARBON DISCLOSURE PROJECT – CLIMATE CHANGE DJSI INCLUSION EUROPE GRESB FIVE STARS INDUSTRY TOP 10% INCLUDED IN GPR IPCM EPRA SUSTAINABILITY SUSTAINABILITY INDEX OEKOM RESEARCH BEST PRACTICES RECOMMENDATIONS ROBECOSAM SUSTAINA
Slide 25: Country Updates
COUNTRY UPDATES 25
Slide 26: Belgium: strong fundamentals in a less favourable market
STRONG FUNDAMENTALS IN A LESS FAVOURABLE MARKET BELGIUM MARKET SITUATION FOOTFALL GROWTH LFL TENANT SALES GROWTH • Steady growth of the economy (+1.6% for 2018 6.5% 2.1% 2.7% 1.3% and 20191) 1.4% 1.1% • Retail sales flattish on consumer confidence that -2.4% LTM Year to May 2H16 1H17 2H17 1H18 Marke
Slide 27: Belgium: performance and lease expiry
STRONG FUNDAMENTALS IN A LESS FAVOURABLE MARKET BELGIUM PERFORMANCE LFL NRI GROWTH CHANGE IN MGR 4.9% ROTATIONS & RENEWALS • LFL NRI growth -3.4% (index +1.5%), due to free 1.5% parking in Genk (-2.9% impact). Positive trend expected for H2 16.4% -1.0% -1.1% 4.6% • Vacancy in Nivelles has been solve
Slide 28: Belgium: recent shop openings
RECENT SHOP OPENINGS BELGIUM RING SHOPPING KORTRIJK SHOPPING NIVELLES • Electro Depot NIVELLES • 1,588 m2 • Decathlon • January 2018 • 1,615 m2 • May 2018 LES BASTIONS LES BASTIONS TOURNAI TOURNAI • Bershka • Armand Thiery • 657 m2 • 203 m2 • December 2017 • January 2018 28
Slide 29: Les Bastions & Carrefour
LES BASTIONS & CARREFOUR BELGIUM Les Bastions: • Added 15,000 sqm and full refurbishment • Opening 12 April 2018 • Shopping centre occupancy 98.0% • Footfall increased with 50% YTD Carrefour: • Carrefour expressed the desire to reduce size of hypermarkets in Belle-Île and Shopping1 to supermarkts; n
Slide 30: Finland: stable like-for-like driven by occupancy
STABLE LIKE-FOR-LIKE DRIVEN BY OCCUPANCY FINLAND MARKET SITUATION FOOTFALL GROWTH1 LFL TENANT SALES GROWTH 2.3% 2.7% 2.6% • The economic situation is showing cautiously optimistic trends, with unemployment set to 1.7% decrease further -2.6% -4.1% -2.4% • Retail sales are growing on record-high 2H16
Slide 31: Finland: performance and lease expiry
STABLE LIKE-FOR-LIKE DRIVEN BY OCCUPANCY FINLAND PERFORMANCE LFL NRI GROWTH CHANGE IN MGR 7.6% ROTATIONS & RENEWALS • LFL NRI growth -0.6% (index +0.4%), driven by 5.5% departure of bank branches in 1H18 0.0% 0.4% • General positive momentum still present; MGR -0.6% -5.0% -2.7% decline of 5% largely
Slide 32: Finland: recent shop openings
RECENT SHOP OPENINGS FINLAND ITIS ITIS HELSINKI HELSINKI • CAP Autokoulu • JD Sports • Driving school • 460 m2 • 62 m2 • February 2018 • April 2018 ITIS ITIS HELSINKI • Upgrading the Tallin HELSINKI square • M-Room • 55 m2 • April 2018 32
Slide 33: A stronger family orientation
A STRONGER FAMILY ORIENTATION FINLAND • Leisure component will be strengthened by the first IMAX® cinema in Finland (opening November 30, 2018) • Renewing the restaurant offer around the cinema with 8 units signed • Upgrade Tallin Square by installing a kids’ play area and terraces • Displays have b
Slide 34: France: three quarters of rising occupancy
THREE QUARTERS OF RISING OCCUPANCY FRANCE MARKET SITUATION FOOTFALL GROWTH LFL TENANTS SALES GROWTH 3.4% • Solid economic growth projected with 2% for 2018, labour market recovers on improved 0.8% 0.7% business confidence, resulting in decreasing -2.5% unemployment. Private consumption growth to -0.
Slide 35: France: stabilisation as expected during 2018
STABILISATION AS EXPECTED DURING 2018 FRANCE PERFORMANCE LFL NRI GROWTH CHANGE IN MGR ROTATIONS & RENEWALS • LFL NRI growth -3.9% (index +1.8%) improved 1.8% 1.4% versus 1H17 (-5.1%) and FY17 (-7.0%). Full year- 5.5% effects visible in H1 2018 of actions taken 2H17 -1.7% -3.9% • NRI decline 0% to -5
Slide 36: France: recent shop openings
RECENT SHOP OPENINGS FRANCE CÔTÉ SEINE ARGENTEUIL DOCKS VAUBAN • Action LE HAVRE • 1,164 m2 • Primark • May 2018 • 6,159 m2 • February 2018 RIVETOILE RIVETOILE STRASBOURG • Rituals STRASBOURG • 142 m2 • Factory & Co • May 2018 • 157 m2 • May 2018 36
Slide 37: France: development projects
DEVELOPMENT PROJECTS FRANCE Successful opening of the Primark in Docks Vauban • Opening 21 February 2018 • Positive impact on footfall (+30% YTD), sales and retailers Le Verrerie area (Saint Sever, Rouen) • Pre-leasing at 86% (e.g. Vapiano, KFC) • Demolition started in October 2017 • Opening schedul
Slide 38: The Netherlands: a healthier retail climate
A HEALTHIER RETAIL CLIMATE THE NETHERLANDS MARKET SITUATION FOOTFALL GROWTH 1.4% • Solid economic growth expected with GDP 0.2% 0.4% growth 2.9%/2.7%, and unemployment expected to drop to 3.8/3.4% for 2018/20191. Retail sales -1.5% solid on high consumer confidence and expected -1.9% wage growth 2H1
Slide 39: Investing in our centres drives long term value
INVESTING IN OUR CENTRES DRIVES LONG TERM VALUE THE NETHERLANDS PERFORMANCE LFL NRI GROWTH CHANGE IN MGR ROTATIONS & RENEWALS • LFL NRI growth +1.0% (index +1.3%) 1.3% 1.0% 0.8% 0.8% • Momentum positive in signed lease levels 0.4% -0.8% -2.9% • Occupancy +0.6% yoy to 96.8% FY16 1H17 FY17 1H18 Index
Slide 40: Netherlands: recent shop openings
RECENT SHOP OPENINGS THE NETHERLANDS DE KOPERWIEK CAPELLE AAN DEN IJSSEL PRESIKHAAF • ICI Paris XL ARNHEM • 148 m2 • Albert Heijn • April 2018 • 3,000 m2 • February 2018 EMICLAER CITYPLAZA AMERSFOORT NIEUWEGEIN • The Blueberry • Food & Beverage • Black Souls Coffee • 68 m2 • Food & Beverage • March
Slide 41: Redevelopments on track for completion in 2018-2019
REDEVELOPMENTS ON TRACK FOR COMPLETION IN 2018-2019 NETHERLANDS • Koningshoek (Maassluis): project moved into operational portfolio with pre-leasing at 97% • In de Koperwiek (Capelle a/d IJssel) pre-leasing 52%, completion expected 2019/2020 • Presikhaaf’s pre-leasing 69%, completion expected in 201
Slide 42: Outlook
OUTLOOK 42
Slide 43: Precised 2018 outlook direct result per share
PRECISED 2018 OUTLOOK DIRECT RESULT PER SHARE WITHIN THE PREVIOUS RANGE OUTLOOK DIRECT RESULT (€ PER SHARE) DIVIDEND (€ PER SHARE) € 3.45 € 3.43 € 3.01 € 3.08 € 3.08 € 3.23 € 3.33-3.38 € 2.87* € 2.87 € 2.86* € 2.97 € 2.52 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 • Outlook FY 2018
Slide 44: Optimising the Customer Journey
OPTIMISING THE CUSTOMER JOURNEY 44
Slide 45: Update on customer journey
UPDATE ON CUSTOMER JOURNEY UPDATE PROJECTS STATUS QUALITY & HASSLE DESIGN PRINCIPLES TAILORED TO LOCAL SITUATION FREE PARKING PILOTS LAUNCHED IN LES BASTIONS AND KOPERWIEK WAYFINDING DESIGN PRINCIPLES READY INSIDE & OUT PILOTS IN LES BASTIONS AND KONINGSHOEK QUALITY DESIGN PRINCIPLES READY RESTROOMS
Slide 46: Optimising the customer journey
OPTIMISING THE CUSTOMER JOURNEY • Annual investments expected around € 4-5m • Organisation is in place Focus points H2 2018: • Execution of pilot projects • Roll-out of Customer Journey 1.0 • Branding, marketing & communication • Customer Journey 2.0 in preparation New wayfinding > 46
Slide 47: Wereldhave
W WERELDHAVE
Slide 48: Appendices
APPENDICES 48
Slide 49: Top 10 properties
TOP 10 PROPERTIES VALUE PER JUNE 2018 1 2 3 4 5 Helsinki Nieuwegein Strasbourg Liège Rouen € 564m, 103,600 m² € 221m, 50,300m² € 194m, 28,700m² € 185m, 30,300m² € 182m, 37,300m² 6 7 8 9 10 Nivelles Rouen Arnhem Tournai Heerhugowaard € 166m, 29,200m² € 163m, 34,500m² € 150m, 39,100m² € 149m, 30,700m²
Slide 50: Tenant mix
TENANT MIX BREAK-DOWN BY CATEGORY TENANT MIX BY CATEGORY 4% Food 4% 13% Services 10% 5% F&B / Leisure 5% Fasion & Accessories 12% Health & Beauty Homeware & Household 10% Sport Multimedia & Electronics 7% Department & Variety 30% Shoe & Leatherware 50
Slide 51: Top 10 largest tenants
TOP 10 LARGEST TENANTS BREAK-DOWN BY GROSS RENTAL INCOME TENANT NAME % of rent 1 Hennes & Mauritz 4.1% 2 AholdDelhaize 3.2% 3 C&A 2.1% 4 Blokker 1.8% 5 A.S. Watson Group 1.8% 6 Stockmann 1.8% 7 HEMA 1.6% 8 Excellent Retail Brands 1.2% 9 Inditex 1.2% 10 Hudson’s Bay 1.0% Total top 10 20% 51
Slide 52: Development pipeline
DEVELOPMENT PIPELINE KEY COMMITTED DEVELOPMENT PROJECTS CAPEX CAPEX YIELD TOTAL PLANNED (IN €M) SPENT SPENT ON PRE-LET INVESTMENT DELIVERY (NET) 2018 COST RATE Itis Cinema 31 16 7 4.8% 100% Q4 2018 Saint Sever – Verrerie & refurb 26 9 4 9.0% 86% 2019 Koperwiek 32 20 7 5.4% 52% 2019 Presikhaaf 20 15
Slide 53: Reconciliation of EPRA NAV
RECONCILIATION OF EPRA NAV € 48.94 € 2.16 € -2.43 € 46.78 € 46.51 IFRS NAV EPRA adjustments EPRA NAV Triple adjustments EPRA NNNAV EPRA adjustments add back the liabilities related to: ▪ Fair value of interest rate derivatives ▪ Deferred tax Triple adjustments subtract the liabilities related to: ▪
Slide 54: aaa
aaa wy WERELDHAVE Bringing people together