Azrieli Group Ltd. · TASE:AZRG
Azrieli — Q2 2024 Earnings Presentation
46 slides from Azrieli's earnings presentation, August 2024
Slide 1: Capital Market Presentation
CAPITAL MARKET PRESENTATION 30 June 2024 Financial Statements June 2024 |
Slide 2: Disclaimer
Disclaimer The information included in this presentation is merely a summary and does not exhaust all of the information Slide 16 – The Company’s estimations regarding the projected increase in the results of the data center segment about the Company and its operations, nor is it a substitute for in
Slide 3: Azrieli Group / Business Card
Azrieli Group / Business Card ~81% Israel’s largest real Traded on the capital of the value of the investment and estate company market since 2010 under-construction income- producing real estate (on a consolidated basis) is attributed to Free float: 30.1% real estate in Israel The Company’s stock i
Slide 4: Azrieli Group / Property Portfolio
Azrieli Group / Property Portfolio(1) Malls and retail centers Offices 22 malls and retail centers 365,000 m2 Senior Homes 16 office and other space in Rental Housing Israel 649,000 m2 8 office properties overseas 245,000 m2 4 senior homes 115,000 m2 1,141 Apts. 3 rental housing properties 34,000 m2
Slide 5: Azrieli Group / Properties Breakdown
Azrieli Group / Properties Breakdown, NIS in millions(1) Hotels 1% 32% Real estate in Israel, Offices and other 541 16,910 space Rental 4% 30% housing Real estate in in Israel 1,930 Israel Malls 15,744 3% Income- producing 17% properties in the U.S. 1,898 Data centers 8,816 Cash, Holdings, 7% 6% Oth
Slide 6: Azrieli Group / Q2 2024 Highlights
Azrieli Group / Q2 2024 Highlights FINANCIAL HIGHLIGHTS • Same Property NOI, up ~5% year-over-year • NOI in the quarter totaled NIS ~553 million, v. NIS ~559 million year-over-year. The decrease is due to the sale of Compass. Offset by the sale of Compass, NOI up ~5% year-over-year due to increase i
Slide 7: Operating Segments
OPERATING SEGMENTS Financial Statements June 2024 | 7
Slide 8: Azrieli Group / Malls and Retail Centers
Azrieli Group / Malls and Retail Centers INNOVATION & GLA NOI in Q2/2024 UPGRADES ~365,000m2 (1) NIS 249M compared with NIS 244M in Q2/2023 Azrieli App Azrieli Gift Card Average Book occupancy rate value Betterment and 99% (2) ~NIS 15.7B upgrade of malls and retail centers (1) Figures as of 30 June
Slide 9: Store Sales and Occupancy Cost Ratio
Store Sales/ and Occupancy Cost Ratio (1) Total Change in Azrieli Group Mall Store Sales April-June 2024 10.0% April-June 2023 Occupancy cost ratio Occupancy Cost Ratio (1) From March to June, store revenues increased by 8% year-over-year. In July, store revenues increased by 14% Financial Statement
Slide 10: Azrieli Group / Offices
Azrieli Group / Offices INNOVATION & GLA NOI in Q2/2024 UPGRADES ~649,000m2(1) NIS 211M compared with NIS 204 M in Q2/2023 Community Technology Average occupancy rate Book value 98%(2) ~ NIS 16.9B Betterment and upgrade of office towers (1) Figures as of 30 June 2024. GLA figures reflect the Company
Slide 11: Customers / Offices
Customers / Offices Financial Statements June 2024 | 11
Slide 12: Global Data Center Operations – Green Mountain
Azrieli Group / Global Data Center Operations – Green Mountain NOI in Q2/2024 NIS 43M compared with NIS 27 million in Q2/2023 GM - Contracted NOI / MW Hamar NIS 523M / 150MW(1) Telemark Oslo Stavanger Potential growth of Renewable Power London existing sites 100% 600MW Frankfurt Electricity costs PU
Slide 13: Data Center Operations – Timeline
Azrieli Group / Data Center Operations – Timeline 2017 2019 2019 2021 2023 2024 January April October June Decision to Acquisition of Acquisition Acquisition Signing of JV Sale of As of 30 enter the Data 19.5% of of 100% of a Data Center agreement with Compass June 2024, Center space Compass Green i
Slide 14: Global Data Center Operations – Green Mountain
Azrieli Group / Global Data Center Operations – Green Mountain Significant growth since the acquisition of Green Mountain (July 2021) TikTok site, Norway Acquisition – July 2021 June 2024 Change Active countries 1 3 X3 Number of sites 3 6(1) X2 MW 24 150 X6 NOI (NIS in millions)(2) 84 523 x6 (1) Inc
Slide 15: Global Data Center Operations – Green Mountain
Azrieli Group / Global Data Center Operations – Green Mountain SVG1 – Rennesøy RJU1 – Rjukan OSL1 – Enebakk OSL2 – Hamar LON1 – East FRA1 – Mainz A former NATO ammunition Colocation data center Hyperscale and East London location, storage facility located at the nexus of wholesale data center Built-
Slide 16: Green Mountain Capacity and NOI Development
Azrieli Group / Global Data Center Operations – Green Mountain Annual Active Operating Capacity Development based on Bookings (1) in MW in 2024-2026 excluding potential additional contracts 150 150 150 150 150 150 100% CAPACITY 35 (MW) 98 150 150 150 150 115 52 Billed BBNB Q2 '24 Q3 '24 Q4 '24 Q1 '2
Slide 17: Palace Senior Housing Chain
Azrieli Group / Palace Senior Housing Chain Operating Homes Aboveground area NOI in Q2/2024 NIS 22M Palace Tel Aviv ~115,000m2(1) comprising 231 Apts. + 4 ‘Medical’ Units 1,141 Apts. v. NIS 18M in Q2/2023 Palace Modi’in 239 Apts. + 4 ‘Medical’ Units Palace Ra’anana Book value Homes under Constructio
Slide 18: Properties Under Construction
PROPERTIES UNDER CONSTRUCTION Financial Statements June 2024 | 18
Slide 19: Development Pipeline
Azrieli Group / Development Pipeline Tel Aviv Ramat Hasharon Expansion of Azrieli SolarEdge Mall and the Spiral Tower ~43,000 m2 ~150,000 m2 (3) Tel Aviv Petah Tikva Azrieli Town, Building E Land for development ~21,000 m2 (4) ~53,000 m2 (1) Holon Jerusalem Project 3 (formerly Lodzia) Mount Zion Hot
Slide 20: Development Projects / Growth Driver
Development Projects/ Growth Driver Estimated EstimatedConstructionCost, Name of Property Location Use GLA (2) CompletionDate IncludingLand(NIS inmillions)(1) Short-term Check Post Haifa 10,500 2024 140-150 Development Projects Under Construction Total 10,500 140-150 Palace Rishon LeZion Rishon LeZi
Slide 21: Expected Contribution to NOI and FFO
DEVELOPMENT PROJECTS / EXPECTED CONTRIBUTION* TO NOI AND FFO (NIS in millions) NOI (NIS millions) 2,902 Annualized actual NOI in Q2/2024 2,212 2,212 Additional NOI from DC segment based on signed contracts** 351 31% Additional NOI from development projects(1) 108 Addition due to occupancy of vacant
Slide 22: The CBD of Tel Aviv
AZRIELI GROUP / THE CBD OF TEL AVIV EXPANSION OF AZRIELI AZRIELI MALL AND SARONA SPIRAL TOWER AZRIELI TOWN AZRIELI RESIDENCES CENTER & RETAIL AZRIELI AZRIELI TOWN TOWN BUILDING E Under construction Income-producing Financial Statements June 2024 | 22
Slide 23: Expansion of Azrieli Mall & the Spiral Tower
DEVELOPMENT PROJECTS / EXPANSION OF AZRIELI MALL & THE SPIRAL TOWER, TEL AVIV Land area GLA Cost of land 8,400 m2 150,000m2 NIS ~374M including 13,000 m2 of retail space for expansion of the Azrieli Tel Aviv Mall Estimated completion date Uses Estimated construction cost, including land 2027 Hotel R
Slide 24: Expansion of Azrieli Mall & the Spiral Tower
DEVELOPMENT PROJECTS / EXPANSION OF AZRIELI MALL & THE SPIRAL TOWER, TEL AVIV Financial Statements June 2024 | 24
Slide 25: Completed Project / Lot 21 – Modi'in
COMPLETED PROJECT / LOT 21 – Modi'in – Mixed use(1) 11,500m2 80 Offices Rental apartments 4,200m2 85 Retail Hotel rooms (1) The project was completed at the end of Q1/2024, and occupancy has commenced. Financial Statements June 2024 | 25
Slide 26: Development Projects / Lot 10 – Modi'in
DEVELOPMENT PROJECTS / LOT 10 – Modi'in 8,100m2 ±37,000m2 Clalit of offices & retail(1) Medical Center (included in the office and retail areas) A bustling center with Connection to commercial and retail the mall and the buildings and movie existing complex theaters (1) The Company promoted a plan t
Slide 27: SolarEdge Campus in Ramat HaSharon
DEVELOPMENT PROJECTS / SolarEdge Campus in Ramat HaSharon Herzliya The acquired Land area Office campus area site The investment amount(1) 26,000 m2 NIS 1,067M 43,000 m2 of which ⁓16,000 m2 is for use by (including land) in the and underground parking Highway SolarEdge SolarEdge Campus 2 Cinema City
Slide 28: Glil Yam – Rental Housing
DEVELOPMENT PROJECTS / GLIL YAM – RENTAL HOUSING GLA Land area Coastline Estimated construction cost, 630m2 retail 5,200 m2 including land Highway 19,000 m2 rental housing over 2 adjacent lots NIS 380-400M (147 apartments) 2 plots Cost of land per apartment Uses Estimated completion date NIS 710 202
Slide 29: Mount Zion Hotel, Jerusalem
Azrieli Group / MOUNT ZION HOTEL, JERUSALEM Planned built-up area Acquisition cost Land area according to approved zoning plan ⁓NIS 275M 13,000 m2 34,000m2 (1) up to 350 rooms Estimated completion date The Group intends to remodel the hotel Estimated construction cost 2027 to A+ NIS 645-675M Uses Ad
Slide 30: Mount Zion Hotel, Jerusalem
Azrieli Group / MOUNT ZION HOTEL, JERUSALEM ILLUSTRATION OF THE HOTEL AFTER THE PLANNED EXPANSION Financial Investors Statements Presentation, June2024 August 2024 | 30
Slide 31: Existing Properties / Expansion and Betterment
EXISTING PROPERTIES / EXPANSION AND BETTERMENT THE FOLLOWING PROJECTS ARE UNDERGOING BETTERMENT AND VARIOUS STATUTORY PROCEEDINGS: Timeframe for Completion of Name of Property Location Project in property Status Gross Area Added Statutory Proceeding Expansion of retail and office space, and Azrieli
Slide 32: Upgrade of Existing Properties
DEVELOPMENT PROJECTS / UPGRADE OF EXISTING PROPERTIES AZRIELI CENTER TEL AVIV, MALL ROOFTOP HOLON 1 | ILLUSTRATION AZRIELI HOLON MALL | SKYLIGHT AND MAIN AVENUE קניון עזריאלי גבעתיים | הדמיה סקיילייט-קניון עזריאלי חולון | שדרה מרכזית ו PROMENADE | ILLUSTRATION HERZLIYA OUTLET| ILLUSTRATION AZR
Slide 33: ESG / Environment
Azrieli ESG / Environment 7 properties are LEED certified Azrieli Group’s flagship project The world’s tallest tower with a recycled façade 14 properties 350 meters tall, 91 floors are LEED O&M certified The largest project in the world to use recycled aluminum 18 properties Implement a landfill was
Slide 34: ESG / Society
Azrieli ESG / Society Swords of Iron Community engagement Following the Swords of Iron war, and as part of Azrieli • Environmental protection with community engagement, in projects with social organizations, such as: Group’s ESG strategy, it has rallied to support the Environmental cleanups, raising
Slide 35: ESG / Corporate Governance
Azrieli ESG / Corporate Governance Gender diversity on the Board • 4 out of the 9 members of Azrieli’s board are women, constituting around 44% • The board’s chair is a woman • We champion gender equality throughout the Group Code of Ethics Code of Ethics The Code of Ethics: • Is based on our values
Slide 36: Financials
FINANCIALS Financial Statements June 2024 | 36
Slide 37: Continuous NOI Growth
Continuous NOI Growth The NOI compared with previous years and the same quarter last year SP NOI (NIS in millions) NOI (NIS in millions) 5% 553 527 4 4 43 27 18 22 24 30 211 204 249 244 Q2 2023 Q2 2024 ◼ Compass (1) The NOI in 2023 includes approx. NIS 35 million in war-related relief. Financial Sta
Slide 38: Continuous FFO Growth
Continuous FFO Growth The FFO (Management’s method)(2) compared with previous years and the same quarter last year FFO (Management’s method) attributed to the real estate business(1)(2) (NIS in millions) 17% 419 379 40 357 342 15 Q2 2023 Q2 2024 ■ Income-producing properties, excluding senior housin
Slide 39: Consistent and Growing Dividend Distributions
Consistent and Growing Dividend Distributions Dividend distribution of NIS 1,000 million for 2023 (1) ■ Dividend for distribution (NIS in millions) ■ Dividend per share, in NIS (1) This amount includes the distribution of a dividend 39 for the sale of the holdings in Compass. Financial Statements Ju
Slide 40: Leverage Ratio, Duration and Cost of Debt
Leverage Ratio, Duration and Cost of Debt FINANCIAL STRENGTH(1) EXTENSION OF AVERAGE DURATION OF DEBT (2) • Low leverage ratio – net financial debt to assets ratio: ~38% 6.4 6.0 5.3 5.3 5.5 5.4 ~44% • Equity to assets ratio : 4.5 4.4 4.1 • Cash and cash equivalents: ~NIS 1.45B 3.2 3.1 3.3 (approx. N
Slide 41: Payment Schedule (principal only)
Payment Schedule (principal only) On a consolidated basis ,as of 30 June 2024 8,610 8,033 3,312 89 1,920 2,351 1,738 1,775 1,750 1,600 57 724 89 89 26 421 1,453 1,837 1,663 1,416 1,603 1,473 59 44 577 303 15 196 23 26 24 158 2024 2025 2026 2027 2028 2029 2030 ואילך 2031 2031 forth ■ CPs and Short-
Slide 42: Summary of Financial Statement Results
Summary of Financial Statement Results (NIS in millions) Consolidated Consolidated Consolidated Q2/2024 Q2/2023 2023 Revenues from rent, maintenance, management fees and sales 781 735 2,943 NOI 553 559 2,113 Same-property NOI 553 527 -- FFO (Management’s method) attributed to the real estate busines
Slide 43: Summary of Balance Sheet Figures
SUMMARY OF BALANCE SHEET FIGURES (NIS in millions) Consolidated Consolidated 30 June 2024 31 December 2023 Cash, securities and deposits 1,447 4,916 Gross financial debt 21,727 22,749 Net financial debt (1) 20,280 17,833 Net financial debt to assets 38% 33% Financial assets (mainly Bank Leumi shares
Slide 44: Average Cap Rate and FFO / Income-Producing Real Estate Business
AVERAGE CAP RATE AND FFO / INCOME-PRODUCING REAL ESTATE BUSINESS FFO(2) (management's method) for Q2/2024 Weighted average cap rate - 6.96% attributed to the real estate business - NIS 419 million NIS in millions NIS in millions Q2/2024 Q2/2023 NOI 553 559 Total investment property, as of 46,865 G&A
Slide 45: Recap / Leadership, Innovation and Strength
RECAP / LEADERSHIP, INNOVATION AND STRENGTH Continued growth in the key Exceptional financial parameters of the core resilience and strength business (NOI, FFO) The Company’s operations Consistent high occupancy are predominantly in Israel rates over time SIGNIFICANT GROWTH DRIVERS: • Organic growth
Slide 46: Thank You
THANK YOU Financial Statements June 2024 | 46