Azrieli Group Ltd. · TASE:AZRG
Azrieli — Q1 2024 Earnings Presentation
45 slides from Azrieli's earnings presentation, May 2024
Slide 1: Earnings Call Presentation
EARNINGS CALL PRESENTATION 31 March 2024 Financial Statements March 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 Israel’s largest real Traded on the capital ~82% of the value of the investment and under-construction estate company market since 2010 income-producing real estate (on a consolidated basis) is attributed to Free float: 30.1% real estate in Israel The Company’s stock is
Slide 4: Property Portfolio
Azrieli Group / Property Portfolio(1) Malls Offices 22 malls and retail centers 365,000 m2 Senior Homes 16 office and other Rental Housing properties in 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 357 Apts. Gre
Slide 5: Properties Breakdown, NIS in millions
Azrieli Group / Properties Breakdown, NIS in millions(1) Hotels 1% 31% Real estate in Israel, Offices and other 531 16,729 space Rental 4% 29% housing Real estate in in Israel 1,914 Israel Malls 15,606 3% Income- producing 15% properties in the U.S. 1,859 Data centers 7,942 Cash, Holdings, 11% 6% Ot
Slide 6: Q1 2024 Highlights
Azrieli Group / Q1 2024 Highlights FINANCIAL HIGHLIGHTS • NOI totaled NIS 533 million, up ~2% year-over-year. Increase primarily in the rent in the offices and senior housing, offset by the sale of Compass. • Same Property NOI, up 4% year-over-year. • FFO(1) (Management’s method) totaled ~ NIS 393 m
Slide 7: Operating Segments
OPERATING SEGMENTS Financial Statements March 2024 | 7
Slide 8: Malls and Retail Centers
Azrieli Group / Malls and Retail Centers INNOVATION & UPGRADES NOI in Q1/2024 GLA NIS 240M ~365,000m2 (1) compared with NIS 238M Azrieli App in Q1/2023 Azrieli Gift Card Book Average Betterment and value occupancy rate upgrade of malls and ~NIS 15.6B 99%(2) retail centers (1) Figures as of 31 March
Slide 9: Store Sales and Occupancy Cost Ratio
Azrieli Group/ Store Sales and Occupancy Cost Ratio Total Change in Azrieli Group Mall Store Sales January- April 2024 +11% January- April 2023 Occupancy cost ratio Occupancy Cost Ratio Financial Statements March 2024 | 9
Slide 10: Offices
Azrieli Group / Offices INNOVATION & UPGRADES NOI in Q1/2024 GLA NIS 211M ~649,000m2(1) compared with NIS 201 M in Q1/2023 Community Technology Book value Average occupancy rate ~ NIS 16.7B 98% (2) Betterment and upgrade of office towers (1) Figures as of 31 March 2024. GLA figures reflect the Compa
Slide 11: Office Tenants
Azrieli Group / Office Tenants Financial Statements March 2024 | 11
Slide 12: Global Data Center Operations – Green Mountain
Azrieli Group / Global Data Center Operations – Green Mountain NOI in Q1/2024 NIS 32M compared with NIS 20 million in Q1/2023 (1) GM - Contracted NOI */ MW Hamar NIS 513M(2) / 150MW Telemark Oslo Stavanger Potential growth of Renewable Power London existing sites 100% 600MW Frankfurt Electricity cos
Slide 13: Global Data Center Operations – Timeline
Azrieli Group / Global Data Center Operations – Timeline 2017 2019 2019 2021 2023 2024 January April October March Decision to Acquisition of Acquisition Acquisition Signing of JV Sale of As of 31 enter the Data 19.5% of of 100% of a agreement with Compass March 2024, Center space Compass Green Data
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 March 2024 Change Active countries 1 3 X3 Number of sites 3 6(1) X2 MW 24 150 X6 NOI (NIS in millions)(2) 84 513 x6 (1) In
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: Global Data Center Operations – Green Mountain
Azrieli Group / Global Data Center Operations – Green Mountain Annual Operating Capacity Development based on Bookings (1) in MW in 2024-2026 excluding potential additional contracts 100% 150 150 150 150 150 150 5 CAPACITY 37 (MW) 109 145 150 150 150 113 Billed 41 BBNB Q1 '24 Q2 '24 Q3 '24 Q4 '24 Q1
Slide 17: Palace Senior Housing Chain
Azrieli Group / Palace Senior Housing Chain Operating Homes Aboveground area NOI in Q1/2024 NIS 21M Palace Tel Aviv ~115,000m2(1) comprising 231 Apts. + 4 ‘Medical’ Units 1,141 Apts. v. NIS 16M in Q1/2023 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 March 2024 | 18
Slide 19: Development Pipeline
Azrieli Group / Development Pipeline Tel Aviv Petah Tikva Expansion of Azrieli Mall Land for development and the Spiral Tower ~53,000 m2 (1) ~150,000 m2 (3) Tel Aviv Jerusalem Azrieli Town, Building E Mount Zion Hotel ~21,000 m2 (4) ~34,000 m2(2) Holon Modi’in Project 3 (formerly Lodzia) Lot 10 ~250
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: Development Projects / Expected Contribution to NOI and FFO
DEVELOPMENT PROJECTS / EXPECTED CONTRIBUTION* TO NOI AND FFO (NIS in millions) NOI (NIS millions) 2,868 Annualized actual NOI in Q1/2024 2,132 2,132 Additional NOI from DC segment (GM only) based on billings** 385 35% Additional NOI from development projects(1) 131 Addition due to occupancy of vacan
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 March 2024 | 22
Slide 23: Expansion of Azrieli Mall & the Spiral Tower, Tel Aviv
DEVELOPMENT PROJECTS / EXPANSION OF AZRIELI MALL & THE SPIRAL TOWER, TEL AVIV GLA Land area 150,000m2 Cost of land 8,400 m2 including 13,000 m2 of retail space NIS ~374M for expansion of the Azrieli Tel Aviv Mall Estimated completion Uses Estimated construction cost, including land 2027 Hotel Retail
Slide 24: Expansion of the Azrieli Mall & Spiral Tower, Tel Aviv
DEVELOPMENT PROJECTS / EXPANSION OF THE AZRIELI MALL & SPIRAL TOWER, TEL AVIV Financial Statements March 2024 | 24
Slide 25: Completed Projects / Lot 21 – Modi'in – Mixed use
COMPLETED PROJECTS / LOT 21 – Modi'in – Mixed use 11,500m2 80 Offices Rental apartments 4,200m2 85 Retail Hotel rooms Financial Statements March 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 offices, retail, and movie the mall and the theaters existing complex (1) The Company promoted a plan to add ~8,000 sq
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 990M 43,000 m2 Of which ⁓16,000 is land area to be (including the land) in the and underground parking Highway used by SolarEdge SolarEdge Campus 2
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 of rental housing over 2 adjacent plots NIS 380-400M (147 apartments) 2 plots Cost of land per apartment Uses Estimated NIS 710 completion date
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 The Group intends to remodel the hotel Estimated construction cost completion date 2027 to A+ NIS 635-665M Uses Ad
Slide 30: Mount Zion Hotel, Jerusalem
Azrieli Group / MOUNT ZION HOTEL, JERUSALEM ILLUSTRATION OF THE HOTEL AFTER THE PLANNED EXPANSION Financial Statements March 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: Development Projects / 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: Leaders in Green Construction & Sustainable Operation
AZRIELI GROUP / LEADERS IN GREEN CONSTRUCTION & SUSTAINABLE OPERATION BUILDING ISRAEL. PROTECTING THE ENVIRONMENT Azrieli Rishonim Azrieli Sarona Azrieli Town Azrieli Tel Aviv Azrieli Spiral Tower Six pillars of action supporting our ESG program and vision: Human Corporate Sustainable capital govern
Slide 34: Environmental & Community Project, Impact-Focused Donations
Azrieli Group / Environmental & Community Project, Impact-Focused Donations BUILDING ISRAEL. PROTECTING THE ENVIRONMENT Environmental Project • Reduction of the amount of waste sent to landfills by 50% by the end of 2026 • 36 employees with disabilities and special needs integrated for operation of
Slide 35: Financials
FINANCIALS Financial Statements March 2024 | 35
Slide 36: Continuous NOI Growth
Continuous NOI Growth NOI (NIS in millions) compared with previous years and the same quarter last year NOI (NIS in millions) 2% ◼ Compass (1) The NOI in 2023 includes approx. NIS 35 million in war-related relief. Financial Statements March 2024 | 36
Slide 37: Continuous FFO Growth
Continuous FFO Growth FFO (Management’s method) 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) 12% ■ Income-producing properties, excluding senior housing ■ Senior housing (1) For details with respe
Slide 38: 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 for the sale of the holdings in Compass 38 Financial Statements Mar
Slide 39: 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: ~34% ~43% • Equity to assets ratio : • Cash and cash equivalents: ~NIS 3.8B (approx. NIS 4.9 billion including Bank Leumi shares) • Une
Slide 40: Payment Schedule (principal only)
Payment Schedule (principal only) On a consolidated basis, as of 31 March 2024 8,468 7,902 3,164 88 1,889 2,312 1,709 1,747 1,722 1,573 1,222 88 88 57 712 25 61 59 1,430 1,636 1,807 1,394 1,577 1,082 1,354 565 20 192 23 25 155 23 2024 2025 2026 2027 2028 2029 2030 2031 Onward ■ CPs and Short-Term Lo
Slide 41: Summary of Financial Statement Results
Summary of Financial Statement Results (NIS in millions) Consolidated Consolidated Consolidated Q1/2024 Q1/2023 2023 Revenues from rent, maintenance, management fees and sales 749 707 2,943 NOI 533 525 2,113 Same-property NOI 527 506 1,940 FFO (Management’s method) attributed to the real estate busi
Slide 42: Summary of Balance Sheet Figures
SUMMARY OF BALANCE SHEET FIGURES (NIS in millions) Consolidated Consolidated 31 March 2024 31 December 2023 Cash, securities and deposits 3,790 4,916 Gross financial debt 22,084 22,749 Net financial debt (1) 18,294 17,833 Net financial debt to assets 34% 33% Financial assets (mainly Bank Leumi share
Slide 43: 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 Q1/2024 Weighted average cap rate - 6.95% attributed to the real estate business - NIS 393 million NIS in millions NIS in millions Q1/2024 Q1/2023 NOI 533 525 Total investment property, as of 45,628 31
Slide 44: 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 45: Thank You
THANK YOU Financial Statements March 2024 | 45