Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q4 2022 Earnings Presentation
28 slides from Global Net Lease's earnings presentation, Feb 23, 2023
Slide 1: Global Net Lease Fourth Quarter 2022 Investor Presentation
Global Net Lease Fourth Quarter 2022 Investor Presentation Pictured – McLaren Campus in Woking , U.K.
Slide 2: Fourth Quarter 2022 Company Highlights
FOURTH QUARTER 2022 COMPANY HIGHLIGHTS Best - in - Class, Mission Critical, Net Lease Focused Portfolio : Featuring high portfolio occupancy of 98% and complete Original Cash Rent collection (1) for the ninth consecutive quarter, highlighting strong overall operating performance 1 2 Note: Metrics as
Slide 3: Fourth Quarter 2022 Portfolio Highlights
3 FOURTH QUARTER 2022 PORTFOLIO HIGHLIGHTS Portfolio Overview Q4’22 Properties 309 Square Feet (millions) 39.2 Tenants 138 Industries 51 Countries and Territories 11 Leased 98.0% Weighted Average Remaining Lease Term (1) 8.0 years % of SLR derived from Investment Grade Tenants (2)(3) 60.5% % of leas
Slide 4: Geographically Well-Balanced & High Investment Grade Tenancy Supports Continued Portfolio Growth
4 Auto Manufacturing 12% Financial Services 12% Consumer Goods 6% Healthcare 6% Technology 5% Freight 4% Aerospace 4% Logistics 4% Energy 3% Metal Fabrication 3% Pharmaceuticals 3% Engineering 3% Automotive Parts 3% All Other 24% Investment Grade 60% Non - Investment Grade Rated 36% Not Rated 4% Met
Slide 5: Attractive Portfolio in Line with Investment Grade Rated Peers
5 ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS GNL’s portfolio features leases to primarily Investment Grade rated tenants with contractual rental increases and is diversif ied across select North American and European countries, resulting in favorable comparisons to GNL’s investme
Slide 6: Best-in-Class Top Ten Tenant Base
6 Tenant Credit Rating Country Property Type % of SLR (1) Caa1 (Moody’s) / B - (Fitch) U.K. Industrial 5% Baa2** U.S. / Canada Distribution 4% Baa1 U.S. / Italy Industrial / Distribution 4% Aaa** U.S. Office 3% Baa3* U.K. Office 3% Baa2* U.S. Industrial / Distribution 3% Aa3 NETH Office 3% Baa1 U.S.
Slide 7: Markets with Quality Sovereign Debt Ratings
7 Office Distribution Industrial 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 Moody’s: Aa3 Moody’s: Baa2 Moody
Slide 8: Comprehensive Hedging Program
8 COMPREHENSIVE HEDGING PROGRAM Hedging Foreign Currency Exchange Risk • GNL locks in fixed rates through forward contracts and converts foreign currencies into USD quarterly, stabilizing USD cash flows despite currency fluctuations • GNL’s utilization of financial instruments to protect against a w
Slide 9: Differentiated Investment Process
9 DIFFERENTIATED INVESTMENT PROCESS Structuring & Pricing • Long term net leases with contractual rental increases (1) • Disciplined contract and lease negotiations, including tenant security deposits and key lease terms • Leverage extensive international relationships to generate attractive risk -
Slide 10: 2022 Acquisitions
10 Note: Ratings information is as of December 31, 2022. *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating eve n 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 a
Slide 11: Boots UK Portfolio Transaction Overview
11 Transaction Overview Tenant Boots UK Limited (“Boots”) Property Type Retail Credit Rating (1) Walgreens Boots Alliance Inc. (Moody’s Parent): Baa2 Location U.K. (Various) Purchase Price (2) $75.5 million Square Feet 323,730 Weighted Average Remaining Lease Term (3) (years) 11.5 Tenant • Boots is
Slide 12: 2022 Lease Extensions and Expansions
12 In 2022, GNL generated a significant amount of lease renewal and expansion activity, totaling 3.8 million square feet and $154.0 million of net new straight - line rent over the new weighted average Remaining Lease Term. In Q4’22, GNL completed a lease extension for approximately 156,000 SF and a
Slide 13: Global Geographic Balance
13 GLOBAL GEOGRAPHIC BALANCE Note: Metrics as of December 31, 2022, unless otherwise noted. 1. Refer to basis for metric calculation included in the footnotes on slide 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on slide 3. U.S. and Canada Number of Assets: 236 Weigh
Slide 14: Continued Portfolio Focus on Diversified Industrial and Distribution Assets
14 Office 41% Industrial & Distribution 56% Retail 3% Office 42% Industrial & Distribution 54% Retail 4% United States & Canada 65% Europe 35% Continued Focus Towards Industrial and Distribution Properties and Balanced Geographic Diversification United States & Canada 60% Europe 40% December 31, 202
Slide 15: 2022 Key Operating Highlights
15 2022 Key Operating Highlights • Closed on three acquisitions in 2022 for $33.3 million at a weighted Average Cap Rate of 7.7% and a weighted average Remainin g L ease Term of 13.6 years and completed an eight - property portfolio acquisition subsequent to quarter end for $75.5 million • Since 202
Slide 16: Continued Focus on Driving Earnings Growth
16 $3,173 $3,421 $3,763 $4,319 $4,691 $4,491 $135 $149 $146 $135 $171 $169 50 70 90 110 130 150 170 190 2017 2018 2019 2020 2021 2022 CONTINUED FOCUS ON DRIVING EARNINGS GROWTH Historical Revenue Growth Core Funds From Operations (1) Real Estate Assets at Cost Adjusted Funds From Operations (1) $259
Slide 17: Fourth Quarter 2022 Key Metrics
17 $249 $330 $0 $163 $201 $302 $670 $ 500 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2023 2024 2025 2026 2027 Thereafter Mortgages Credit Facility Unsecured Notes 2% 10% 7% 4% 4% 12% 11% 6% 44% FOURTH QUARTER 2022 KEY METRICS Metric Q4’2022 Net Debt to Enterprise Value (1) 60.0% Net Debt to Adj
Slide 18: Management Structure Aligned with Shareholders
18 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 19: Forward-Looking Statements
19 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 20: Risk Factors
20 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 21: Risk Factors (Continued)
21 RISK FACTORS (CONTINUED) • Our tenants may not be diversified including by industry type or geographic location . • In owning properties we may experience, among other things, unforeseen costs associated with complying with laws and regulations and other costs, potential difficulties selling prop
Slide 22: Disclaimers
22 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 23: Definitions
23 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 24: Definitions (Continued)
24 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 25: Definitions (Continued)
25 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 26: Non-GAAP Reconciliations
26 NON – GAAP RECONCILIATIONS (Amounts in thousands) Three Months Ended December 31, 2022 December 31, 2021 EBITDA: Net loss $ (12,640) $ (2,796) Depreciation and amortization 36,987 42,025 Interest expense 25,731 24,101 Income tax expense 2,370 6,212 EBITDA 52,448 69,542 Impairment charges 4,504 9,
Slide 27: Non-GAAP Reconciliations
27 NON – GAAP RECONCILIATIONS (Amounts in thousands) Twelve Months Ended December 31, 2022 December 31, 2021 EBITDA: Net income $ 12,023 $ 11,366 Depreciation and amortization 154,026 163,076 Interest expense 97,510 94,345 Income tax expense 11,032 12,152 EBITDA 274,591 280,939 Impairment charges 21
Slide 28: Annual FFO and AFFO Reconciliations
28 ANNUAL FFO AND AFFO RECONCILIATIONS (Amounts in thousands, except per share numbers) Twelve Months Ended December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with