Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — H1 2016 Earnings Presentation
30 slides from Merlin Properties Socimi's earnings presentation, Sep 22, 2016
Slide 1: 1H 2016 Results Presentation
1H 2016 RESULTS PRESENTATION 22 SEPTEMBER 2016
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by MERLIN Company and may have not been audited or reviewed THIS PRESENTATION DOES NOT CONSTITUTE OR FORM Properties SOCIMI, S.A. (the “Company”) for informational by the Company’s auditors. Recipients should not PART OF ANY OFFER FOR SALE OR SOLICITATI
Slide 3: Presenters and Contents
1H 2016 RESULTS PRESENTATION Presenters Contents Introduction ISMAEL CLEMENTE CEO 1H16 Financial results Portfolio performance MIGUEL OLLERO CFO / COO Investment activity DAVID BRUSH CIO Closing remarks
Slide 4: Fast facts
Fast facts GLA GLA GRI(1) ATTRIBUTED GRI(2) 1,895,760 sqm 502,915 sqm € 308.5 m € 322.4 m IN STOCK EXPANSION PROJECTS ANNUALIZED ANNUALIZED 1H16 1H16 1H16 1H16 € 154.6 m € 135.5 m € 98.7 m € 80.6 m GROSS RENTS REC. EBITDA REC. FFO(3) EPRA EARNINGS EPRA EPRA EPRA EPRA 5.0% 4.7% € 3,423 m 10.6 GROSS Y
Slide 5: Financial Results 1H 2016
FINANCIAL RESULTS 1H 2016
Slide 6: Outstanding +32% YoY growth in recurring FFO/share
1H16 Financial results Consolidated profit and loss OUTSTANDING +32% YOY GROWTH IN RECURRING FFO/SHARE (€m) 1H 2016 1H 2015 YoY Gross rents(1 ) 154.6 65.4 +136.4% Net rents(2) 142.3 63.1 +125.5% EBITDA 128.2 57.3 +123.7% FFO 91.4(3) 43.1 +111.8% Recurring EBITDA(4) 135.5 58.9 +130.2% Recurring FFO(5
Slide 7: Excellent operating efficiency (92% gross-to-net & 88% EBITDA margin)
1H16 Financial results Bridge gross rents to FFO EXCELLENT OPERATING EFFICIENCY (92% GROSS-TO-NET & 88% EBITDA MARGIN) (€ million) 154.6 (8.7) 145.9 (3.7) 142.3 3.4 (10.2) (7.3) 128.2 (36.8) 91.4 nt s ex es es es e g g A lt O re os m su in in D FF iv iv tiv op s rr rr IT co r re nt nt G cu cu en Pr
Slide 8: EPRA NAV per share grows €0.75 in the period (+7.6%)
1H16 Financial results EPRA Metrics EPRA NAV PER SHARE GROWS € 0.75 IN THE PERIOD (+7.6%) 1H 2016 Dec 2015 Change €m Per share €m Per share EPRA NAV 3,423.2 € 10.60 3,181.2 € 9.85 7.6% EPRA NNNAV 3,045.7 € 9.45 2,926.4 € 9.06 4.3% Adjusted EPRA NAV 3,344.9 € 10.35 2,981.5 € 9.23 12.1% EPRA net initi
Slide 9: High quality assets driving steady growth in GAV (+5.4% LFL)
1H16 Financial results Portfolio valuation HIGH QUALITY ASSETS DRIVING STEADY GROWTH IN GAV (+5.4% LFL) (€ m) 1H16 FY15 Lfl Change Office 2,337.7 2,189.6 3.1% Shopping centers 709.4 683.7 8.2% Logistics 290.3 276.5 5.0% High street retail 2,040.3 1,934.6 5.5% Hotels 412.9 397.5 3.9% Rented residenti
Slide 10: +70% of Testa goodwill offset in 1 year
1H16 Financial results Valuation drivers +70% OF TESTA GOODWILL OFFSET IN 1 YEAR 325.3 7.4 149.4 (8.2) 6,526.6 6,052.7 GAV bridge GAV MERLIN Capex Acquisitions Disposals GAV Jun-16 Dec-15 revaluation 1H16 1H16 270.0 (70.1) Testa 199.7 (121.4) Goodwill bridge 78.3 At acquisition 2H15 Dec-15 1H16 Jun-
Slide 11: GAV increase mostly driven by prudent yield compression
1H16 Financial results Valuation drivers GAV INCREASE MOSTLY DRIVEN BY PRUDENT YIELD COMPRESSION 68 bps 44 bps 34 bps 26 bps 27 bps 22 bps MERLIN 15 bps Average 7 bps Office Shopping Logistics High street Hotels Rented Other centers retail residential HIGH POTENTIAL FOR FURTHER CAPITAL VALUE GROWTH
Slide 12: Strong credit profile with over 57% of debt unsecured
1H16 Financial highlights Debt summary STRONG CREDIT PROFILE WITH OVER 57% OF DEBT UNSECURED 112.1 3,266.5 (143.0) 169.7 3,123.5 850.0 850.0 1,284.7 Mortgage Unsecured Unsecured Leasings Non-core Gross Cash Net loans loans Bonds debt debt debt % Gross debt 40% 26% 26% 5% 3% 100% Average interest rat
Slide 13: Reducing leverage, extending maturities, lowering floating rate exposure
1H16 Financial highlights Debt schedule and metrics REDUCING LEVERAGE, EXTENDING MATURITIES, LOWERING FLOATING RATE EXPOSURE Debt schedule 1,032 84 81 149 141 850 850 13 25 19 23 2016 2017 2018 2019 2020 2021 2022 2023 +2024 Unsecured bank debt Unsecured bonds Secured loan & other Debt metrics 30/6/
Slide 14: Excellent return to shareholders in the period
1H16 Financial results Total shareholders return EXCELLENT RETURN TO SHAREHOLDERS IN THE PERIOD € per share TSR = +8.7% 0.75 10.60 0.11 10.71 9.85 EPRA NAV EPRA NAV EPRA NAV DPS TSR Dec-15 growth Jun-16 April-16 Jun-16 1H16 ı 14 ı
Slide 15: Portfolio Performance
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Slide 16: Income resilience through high occupancy and long dated WAULT
Portfolio performance 1H 2016 Yields, occupancy and WAULT INCOME RESILIENCE THROUGH HIGH OCCUPANCY AND LONG DATED WAULT EPRA Gross Yield per asset type(1) 6.9% 5.3% 5.6% 5.6% 5.0 % 5.0% MERLIN 4.8% 3.8% Average Office Shopping Logistics High Hotels Residential Other centers(2) street retail Occupanc
Slide 17: Record period in letting activity with 311k sqm contracted
Portfolio performance 1H 2016 Leasing activity RECORD PERIOD IN LETTING ACTIVITY WITH 311K SQM CONTRACTED Offices Shopping Logistics Logistics Minority centers stock pre-let stakes 77,400 49,719 48,468 46,149 22,596 21,579 13,873 17,276 13,851 (506) (4,536) (918) (18,387) (23,102) (18,193) 68% renew
Slide 18: Attracting leading clients
1H 2016 Leasing highlights Clients ATTRACTING LEADING CLIENTS Office Renewal In In In 10,732 sqm 1,718 sqm 3,015 sqm 4,667 sqm Principe de Vergara 187 Padres Dominicos T4 Juan Esplandiú, 11-13 Aquamarina Shopping centers Renewal Renewal In Renewal 5,389 sqm 4,177 sqm 11,984 sqm 2,026 sqm Larios Mari
Slide 19: Real, positive LfL rental growth across the board
Portfolio performance LfL Rental growth REAL, POSITIVE LFL RENTAL GROWTH ACROSS THE BOARD Commercial annualized LfL rent evolution (passing 30/06/16 vs. passing 31/12/15) Absolute % LfL effect % LfL % # Rent In Same Renewed Leases Change Occupancy CPI Rent total space Office 12% 40 (1,162) (811) (17
Slide 20: Retail metrics outperforming the market
Portfolio performance Shopping centers evolution RETAIL METRICS OUTPERFORMING THE MARKET LTM Footfall LTM Footfall LTM Sales LTM Sales (million) evolution (million) evolution Marineda 16.7 6.6% 165.1 4.8% 4.9 8.0% 25.7 5.4% Arturo Soria 6.9 4.1% 45.5 1.9% Centro Oeste 9.2 21.4% 88.0 8.9% Porto Pi 11
Slide 21: New LEED/BREEAM certificates obtained
Other initiatives LEED/BREAAM program 3 NEW CERTIFICATES OBTAINED TO A TOTAL OF 7 OFFICE BUILDINGS + 2 SHOPPING CENTERS EUCALIPTO 25 EUCALIPTO 33 PARTENON 16-18 AV. BRUSELAS 33 PEDRO VALDIVIA 10 PARTENON 12-14 CASTELLANA 83-85 LARIOS PORTO PI NEW NEW NEW ı 21 ı
Slide 22: Investment Activity
INVESTMENT ACTIVITY ı 22 ı
Slide 23: Saba Parques Logisticos
Investment activity Saba Parques Logisticos DESCRIPTION SABA Parques Logísticos S.A. • Saba Parques Logísticos (SPL) is a reference player in logistics in Spain, 75.6% 60% 44.4% 100% 100% Total Parc Logistic Zal Arasur CIM Vallés SPL owning landmark assets such as Parc de la Zona Sevilla Lisboa Logi
Slide 24: Saba Parques Logisticos – PLZF location
Investment activity Saba Parques Logisticos – PLZF EXCELLENT LOCATION IN “MAIN & MAIN” LOGISTICS AREA OF BARCELONA 1ST ISOCHRONE ADJACENT TO ZAL PRAT AND ZAL BARCELONA (OPERATED BY MERLIN PROPERTIES) PLZF ZAL BCN ZAL Prat El Prat Airport Port of Barcelona ı 24 ı
Slide 25: Top-tier tenants at PLZF
Investment activity Saba Parques Logisticos – PLZF TOP-TIER TENANTS: CORREOS, AIR PHARMA, LOGISTA, ASM, CELLNEX, ABERTIS ı 25 ı
Slide 26: Saba Parques Logisticos – ZAL Sevilla
Investment activity Saba Parques Logisticos – ZAL Sevilla EXPANDING FOOTPRINT TO MAIN LOGISTICS HUB IN SOUTHERN SPAIN WITH TOP TENANTS SUCH AS DECATHLON, AIRBUS, NORBERT DENTRESSANGLE ı 26 ı
Slide 27: Asset disposals
Assets disposals 100% OF BBVA BRANCHES SOLD LOCATED IN PERIPHERAL PRIME LOCATIONS Proceeds Gain over Dec-15 GAV SOLD €27.4m +26.9% PIPELINE €15.9m +21.6% ı 27 ı
Slide 28: Closing Remarks
CLOSING REMARKS ı 28 ı
Slide 29: Closing remarks
Closing remarks • +7.6% EPRA NAV per share • +32.4% Rec. FFO per share EXCELLENT SET OF RESULTS • Total shareholders return of 8.7% in the 1H 16 • Robust financial position: maturities extended and floating interest exposure reduced HIGH QUALITY • Great performance across the board ASSETS • Rising r
Slide 30: Contact details
Paseo de la castellana, 42 28046 MADRID +34 91 787 55 30 info@merlinprop.com www.merlinproperties.com
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