Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q3 2021 Earnings Presentation
30 slides from Global Net Lease's earnings presentation, Nov 4, 2021
Slide 1: Global Net Lease Third Quarter 2021 Investor Presentation
Global Net Lease Third Quarter 2021 Investor Presentation Pictured – McLaren Campus in Woking , U.K.
Slide 2: Company Highlights
COMPANY HIGHLIGHTS High - Quality, Mission Critical, Net Lease Focused Portfolio : Featuring high portfolio occupancy of 99.1% and near complete Original Cash Rent collection (1) for the fourth consecutive quarter, highlighting strong overall operating performance 1 Fortified Balance Sheet: Includin
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Portfolio Overview Q3’21 Q3’20 Properties 312 299 Square Feet (millions) 38.3 34.7 Tenants 134 127 Industries 48 47 Countries and Territories 12 11 Leased 99.1% 99.6% Weighted Average Remaining Lease Term (1) 8.2 years 8.7 years % of SLR derived from Investment Grade Tenants (
Slide 4: Well Balanced Portfolio Supports Continued Growth
4 Financial Services 13% Auto Manufacturing 12% Technology 6% Healthcare 6% Consumer Goods 5% Freight 4% Aerospace 4% Logistics 4% Telecommunications 4% Energy 4% Engineering 3% Pharmaceuticals 3% Automotive Parts 3% All Other 21% Investment Grade 55% Non - Investment Grade Rated 39% Not Rated 6% Me
Slide 5: Attractive Portfolio in Line with Investment Grade Rated Peers
5 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 6: Reaching and Exceeding Pre-Pandemic Performance Levels
6 Significant Upside Potential $60.1 $75.2 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. 2. For Q3’21 Net Income per Share was $0.02 and for Q1’20, Net Income per Share was $0.05.
Slide 7: Well Diversified Tenant Base: Top Ten Tenants
7 Tenant Rating Countr y Property Type % of SLR (1) Caa1 (Moody’s) / B - (Fitch) U.K. Industrial 6% Baa2** U.S. / Canada Distribution 4% Baa1 U.S. / Italy Industrial / Distribution 4% Aaa** U.S. Office 3% Baa2* U.K. Office 3% Aa3 NETH Office 3% Baa3** U.S. Industrial / Distribution 3% Baa1 U.S. Indu
Slide 8: Focus on High-Quality Tenants
8 Office Distribution Industrial FOCUS ON HIGH - QUALITY TENANTS Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) U.S. Finland Luxembourg Germany The Netherlands Canada U.K. France Guernsey Spain Italy AA+ AA+ AAA AAA AAA AAA AA AA AA - A BBB Moody’s: A1 Moody’s: Aaa** Moody’s: Aa3
Slide 9: Differentiated Investment Strategy
9 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 le
Slide 10: Year-to-Date Acquisitions
10 *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. The acquisition costs for acquisitions completed during the nine mont
Slide 11: Transaction Overview: Channel Islands Acquisition
11 Transaction Overview Tenants Northern Trust (75% of SF) Aztec Group Limited (25% of SF) Property Type Office (Class A) Credit Rating Northern Trust (S&P/Moody’s): A+/A2 Aztec Group Limited: Moody’s Implied Baa1 Locations Guernsey, Channel Islands Purchase Price $76.5 million (1) Square Feet 113,7
Slide 12: Global Geographic Balance
12 GLOBAL GEOGRAPHIC BALANCE Note: Metrics as of September 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 Weighte
Slide 13: Portfolio Enhancement
13 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 & Canada 64% Europe 36
Slide 14: Lease Extensions and Expansions
14 Year - to - date, GNL completed nine lease extensions and one tenant expansion project and executed one LOI, that in total, relate to leases that encompass 1.5 million square feet and $15.7 million of annual base rent (1) , if the LOI leads to a definitive agreement Year - to - Date Lease Extensi
Slide 15: Third Quarter 2021 Key Highlights
15 $40.3 $44.3 Net Loss Common Stock Dividends AFFO $2.4 Net Income Common Stock Dividends AFFO Q3’21 Net Loss, AFFO (5) and Common Stock Dividends ($mm) Third Quarter 2021 Key Highlights • Year - to - date closed and pipeline acquisitions of $451.3 million with a weighted average Going - in Cap Rat
Slide 16: Continued Focus on Driving Earnings Growth
16 $135 $149 $146 $135 $176 2017 2018 2019 2020 Q3'21 Annualized $3,173 $3,421 $3,763 $4,319 $4,584 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 Operatio
Slide 17: Key Debt Metrics and Maturity
17 $5 $58 $306 $361 $81 $690 $119 $286 $ 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% 5% 2% 10% 51% KEY METRICS Metric Q3’2021 Net Debt to Enterprise Value (1) 53.0% Net Debt to Adjusted EBITDA (annualiz
Slide 18: Enhanced Capital Structure
18 5.1 5.4 5.1 4.7 4.5 3.1% 3.3% 3.3% 3.4% 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 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Weighted-Average Maturity Weighted-Average Interest Rate ENHANCED CAPITAL STRUCTURE Fortified balance sheet comprised of $500 million of un
Slide 19: Management Structure Fully Aligned
19 Management structure fully aligned to compensate based on operational outperformance, in turn delivering increased value to shareholders James L. Nelson Chief Executive Officer and President No transactional fees allows for low general and administrative costs, which allows AR Global to provide g
Slide 20: Comprehensive Hedging Program
20 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 21: Forward-Looking Statements
21 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 22: Risk Factors
22 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 23: Risk Factors (Continued)
23 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 24: Disclaimers
24 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 25: Definitions
25 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 26: Definitions (Continued)
26 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 27: Definitions (Continued)
27 DEFINITIONS (CONTINUED) • As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our performance including relative to our peers and a more informed and appropriate basis on which to make decisions in
Slide 28: Non-GAAP Reconciliations
28 NON – GAAP RECONCILIATIONS Three Months Ended September 30, 2021 September 30, 2020 March 31, 2020 EBITDA: Net income $ 7,390 $ 4,142 $ 9,601 Depreciation and amortization 41,665 35,049 33,533 Interest expense 24,858 18,677 16,440 Income tax expense 1,930 862 959 EBITDA 75,843 58,730 60,533 Impai
Slide 29: FFO and AFFO Reconciliations
29 FFO AND AFFO RECONCILIATIONS Three Months Ended September 30, 2021 September 30, 2020 March 31, 2020 December 31, 2019 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 2,374 $ (502) $ 5,038 $ 9,263 Impairment charges 1,199 — — — Deprec
Slide 30: Annual FFO and AFFO Reconciliations
30 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