Cls Holdings Plc · LSE:CLI
Cls — H1 2022 Earnings Presentation
33 slides from Cls's earnings presentation, August 2022
Slide 1: CLS Holdings plc H1 2022 results
Location Quality Flexibility CLS Holdings plc H1 2022 results
Slide 2: Contents
Contents Cover: Hansaallee 299, Düsseldorf 18 Portfolio & Sustainability Markets & Outlook Fredrik Widlund Chief Executive Officer 25 Appendices 03 Overview Fredrik Widlund Chief Executive Officer 08 Financials & Occupiers Andrew Kirkman Chief Financial Officer 2 CLS Holdings plc H1 2022 results
Slide 3: Overview
Overview Fredrik Widlund Chief Executive Officer Puro, Munich 3 CLS Holdings plc H1 2022 results
Slide 4: Operational focus and indexation driving performance
Overview Operational focus and indexation driving performance Property portfolio value EPRA NTA • Net rental income up 0.9%, new leases 4.5% above ERV, strong performance from hotel and student operations, 53% of leases index-linked £2.4bn 352.8p (31 Dec 2021: £2.3bn) (31 Dec 2021: 350.5p) • Valuati
Slide 5: Total valuation up
Overview Total valuation up UK Valuation movement in local currency UK Germany France • Total valuation up 0.5%, driven by government 3.0% 1.4% 1.6% leases, particularly those subject to indexation 3.8% 0.3% 0.1% ERV up 0.5% Equivalent yield down 8bps to 5.43% 8.4% 8.6% 0.3% 3.1% 0.3% Germany -0
Slide 6: Active portfolio management
Overview H1 2022 Acquisitions Disposals Active portfolio • 1 property • NIY 5.1%, RY 5.7% • Contracted rent £1.1m • 2 properties • NIY 6.0% • Contracted rent £0.8m management Germany • Kanzlerstrasse 8, Düsseldorf UK • Kings House, Bromley (completed April 2022) (completed January 2022) • Crosspoint
Slide 7: Tender buyback
Overview Tender buyback CLS share price premium/(discount) to NTA/NAV over the last 10 years • Driving shareholder value 20% • Key terms are: £25.5 million capital return – scaled to 10% maintain gearing at appropriate level 0% 1 in every 40 shares 250 pence per share and a 20.2% premium to -1
Slide 8: Financials & Occupiers
Financials & Occupiers Andrew Kirkman Chief Financial Officer Hygeia, Harrow 8 CLS Holdings plc H1 2022 results
Slide 9: Summary of key metrics
Financials Summary of key metrics EPRA NTA EPRA EPS EPRA EPS (pence) 13.1 12.0 12.2 11.3 352.8p (31 Dec 2021: 350.5p) 5.8p (30 Jun 2021: 5.4p) 5.8 +0.7% +7.4% 5.4 2018 2019 2020 2021 H1 2022 Cost of debt % of debt fixed Cost of debt (%) 2.43 2.42 2.26% (31 Dec 2021: 2.22%) 80% (31 Dec 2021: 85%) 2.2
Slide 10: NTA increase driven by earnings and FX
Financials NTA increase driven by earnings and FX Movement in EPRA NTA (pence per share) 10 CLS Holdings plc H1 2022 results
Slide 11: Improved earnings benefited from REIT conversion
Financials Improved earnings benefited from REIT conversion Movement in EPRA EPS (pence per share) 11 CLS Holdings plc H1 2022 results
Slide 12: Strong cash position whilst continuing to invest
Financials Strong cash position whilst continuing to invest Movement in liquid resources (£m) 12 CLS Holdings plc H1 2022 results
Slide 13: Growth through capex & acquisitions
Financials Growth through capex & acquisitions Movement in property portfolio¹ (£m) ² ¹ Comprises investment property, PPE and properties held for sale ² Includes movement in rent free debtor of £7.0m 13 CLS Holdings plc H1 2022 results
Slide 14: Proactive debt management
Financials Proactive debt management Loan maturity (£m) GBP EUR GBP ‘green’ loans Preserving debt maturity & low interest rates 350 • Debt maturity 4.0 years (31 Dec 2021: 4.4 years) 300 • Cost of debt 2.26% (31 Dec 2021: 2.22%) 250 • 3.1x interest cover ratio (30 Jun 2021: 3.2x) 200 150 100 Finance
Slide 15: Securing income
Occupiers Securing income 12 month quarterly EPRA vacancy 60 deals secured £4.4m of annual rent 4.5% above ERV 7.7% 7.8% 7.2% 6.9% (30 Jun 2021:53 deals secured £5.2m of annual rent 3.4% below ERV) 5.8% Lease extensions 42% Like-for-like contracted rent 30 June 30 September 31 December 31 March 30 J
Slide 16: High quality and diversified tenant base
Occupiers High quality and diversified tenant base Top 15 tenants (35% contracted rent) Tenant industries (% contracted rent) 1 2 3 Government 25.7% Commercial and professional 12.2% services UK UK Germany 4 5 6 Information technology 11.3% Consumer discretionary 10.4% Germany UK Germany 7 8 9 Commu
Slide 17: 53% of Group rent index-linked
Occupiers 53% of Group rent index-linked United Kingdom Germany France Percentage of rental income-index linked Percentage of rental income index-linked Percentage of rental income index-linked 30% 65% 100% • Leases are not generally index-linked • Majority of leases linked to German CPI • All lease
Slide 18: Portfolio & Sustainability
Portfolio & Sustainability Fredrik Widlund Chief Executive Officer Office Connect, Cologne 18 CLS Holdings plc H1 2022 results
Slide 19: Major projects
Portfolio Major projects Vauxhall Walk, “Coade” London Prescot Street, “Artesian” London Park Avenue, Lyon • New build 28,500 sq. ft energy efficient • Refurbishment of the entire 94,000 sq. ft • Refurbishment of 75,700 sq. ft office commercial office over 10 floors. Roof building. Reception/café an
Slide 20: Progress in 2022
Sustainability Progress in 2022 • 35 projects from the Net Zero Carbon (“NZC”) Sustainability-linked loans as proportion of Group debt H1 2022 buildings supplied with renewable electricity pathway completed, with another 76 in progress • £11m expected to have been invested in NZC 21% 92% projects by
Slide 21: Markets and Outlook
Markets and Outlook Fredrik Widlund Chief Executive Officer The Yellow, Dortmund 21 CLS Holdings plc H1 2022 results
Slide 22: CLS view
Markets CLS view United Kingdom Germany France • UK inflation, interest rates and cost of • German economy slowed down in H1 • The French economy was relatively flat living impacting overall sentiment with energy supply questions and in H1, less inflationary pressure interest rate rises impacting co
Slide 23: Significant portfolio opportunities
Outlook Significant portfolio opportunities • Focus on reducing vacancy to drive increased rental • Significant medium-term upside from letting income in coming year completed refurbishment and developments • Indexation also driving rental growth, 53% of • Longer term, larger development opportuniti
Slide 24: Key takeaways
Outlook Key takeaways Net initial yield vs. cost of debt • Robust financial delivery, EPRA NTA up 0.7% to 3 352.8p, EPRA EPS up 7.4% to 5.8p and interim / Equivalent yield / Net initial yield / Cost of debt Countries dividend up 10.6% to 2.60p 7.0% 6.5% • Valuations up 0.1% in local currency, UK & 6
Slide 25: Appendices
Appendices D’Aubigny, Lyon 25 CLS Holdings plc H1 2022 results
Slide 26: Overview
Appendices Overview Diversified portfolio 3 • CLS Holdings plc is a FTSE 250 property Countries investment company which has been listed on the London Stock Exchange since 1994 25 92 Lenders Properties • We are a supportive, progressive and sustainably focused commercial landlord that UK £1,171m 49%
Slide 27: Long-term growth
Appendices Long-term growth Total shareholder return Portfolio valuation (£bn) CLS FTSE 350 FTSE RE SS 600 2.4 2.3 550 2.2 500 2.0 1.9 1.8 450 1.6 1.5 400 1.3 350 1.1 300 250 200 150 100 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1 2022 EPRA
Slide 28: Sustainability portfolio ratings
Appendices Sustainability portfolio ratings • Net Zero Carbon pathway aligned with BREEAM In-Use ratings EPC¹ (UK) (Group) minimum energy efficiency standards 3% EPC B in the UK (already 2023 compliant) 60% 30% 40% Monitoring changing regulatory landscape 31% in Germany but low average age of po
Slide 29: United Kingdom
Appendices United Kingdom Value of property portfolio £1,171.1m Percentage of Group’s property interests 49% Number of properties 42 Number of tenants 219 31 EPRA vacancy rate 7.6% 10 Lettable space 1.9m sq. ft Government and major corporates 67.4% United Kingdom properties London 31 Weighted averag
Slide 30: Germany
Appendices Germany 8 4 Value of property portfolio £938.8m Percentage of Group’s property interests 39% 2 Number of properties 32 4 Number of tenants 377 3 EPRA vacancy rate 7.5% 7 Lettable space 3.6m sq. ft 39.2% Germany properties Hamburg 8 Dortmund 2 Government and major corporates Munich 7 Colog
Slide 31: France
Appendices France 2 Value of property portfolio £289.8m 11 Percentage of Group’s property interests 12% Number of properties 18 5 Number of tenants 153 EPRA vacancy rate 2.3% Lettable space 0.8m sq. ft 47.4% France properties Paris 11 Government and major corporates Lyon 5 4.9 years Lille 2 Total 18
Slide 32: Group statistics
Appendices Group statistics Weighted Valuation average ERV of increase EPRA unexpired lettable Contracted Contracted At 30 June Valuation¹ (local EPRA ‘topped up’ Equivalent EPRA lease term space rent rent 2022 (£m) currency) NIY² NIY³ yield⁴ vacancy (years) (£m) (£m) (per sq. ft) UK 1,171.1 0.5% 4.
Slide 33: Disclaimer
Disclaimer This document may contain certain ‘forward-looking statements’. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from those expressed or implied by such forwar