Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Investor Presentation (March 2018)
32 slides from Global Net Lease's investor presentation, Mar 8, 2018
Slide 1: March 2018 Investor Presentation
March 2018 Investor Presentation
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains certain statements that are the Company’s and Management’s hopes, intentions, beliefs, expectations, or projections of the future and might be considered to be forward - looking statements under Federal Securities laws . Prospective investors are
Slide 3: Overview
3 OVERVIEW Long Duration Leases to Investment Grade Rated Tenants (1) Proactive Asset Management to Drive Long Term Portfolio Value High - Quality, Mission Critical, Diversified Portfolio Differentiated Strategy with International Exposure Highly Experienced Management Team Ability to Capitalize on
Slide 4: Portfolio Highlights
4 PORTFOLIO HIGHLIGHTS Properties 321 Square Feet (millions) 22.9 Tenants 100 Industries 41 Countries 7 Leased 99.5% Weighted Average Remaining Lease Term (1) 8.8 years % of SLR derived from Investment Grade Tenants (2)(3) 76.1% % of leases with contractual rent increases (3)(4) 92.8% Portfolio Over
Slide 5: Well Balanced Portfolio
5 United Kingdom 22% The Netherlands 7 % Germany 9% Finland 6 % France 5 % Luxembourg 2 % United States 49% WELL BALANCED PORTFOLIO As of December 31, 2017. 1. Me tric based on SLR. Refer to SLR definition included in the footnotes to page 3. 2. Refer to Investment Grade Rating definition included i
Slide 6: Well Diversified Tenant Base
6 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. Distribution 5% Aaa ** U.S. Office 5% Baa3* U.K. Office 5% Baa3* GER Office 5% Baa1 NETH Office 4% Aa1** FIN Industrial 4% Ba1** U.S. Retail 3% Baa3* U.K. Distribution 3% Aa3 U.S. Office 3% Baa2 U.S. Office 2% WELL DIVERSIFIED TENANT BAS
Slide 7: Focus on High-Quality Tenants
7 Financial Service Providers Government Services Multinational Corporations FOCUS ON HIGH - QUALITY TENANTS $2.4t n Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) U.S. Luxembourg Germany The Netherlands Finland U.K. France AA+ AAA AAA AAA AA+ AA AA Best - in - class portfolio lea
Slide 8: GNL vs. Peers
8 GNL VS. PEERS Source: All data comes from respective company filings as of 12/31/2017. 1. Me tric based on SLR for GNL, and ABR for WPC, GPT, SIR and LXP. Refer to SLR definition included in the footnotes to page 3 . 2. For WPC, Other International includes assets located in Canada, Australia, Nor
Slide 9: Differentiated Investment Strategy
9 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing Focused on single - tenant commercial properties to generate superior risk - adjusted returns • Focus on the U.S. and strong sovereign debt rated countries in Continental Europe • Cri
Slide 10: Company Initiatives
10 COMPANY INITIATIVES GNL continues to execute on corporate, financing and investment actions that enhance the Company’s value and capabilities Q3 2017 $725 Million New Credit Facility • Secured $725 million in commitments led by KeyBank as Admin Agent and Lead Arranger refinancing existing facilit
Slide 11: GNL Capital Structure Progress
11 GNL CAPITAL STRUCTURE PROGRESS GNL continued to improve its capital structure throughout 2017 by extending debt maturities, maintaining a low cost of debt and optimizing the debt structure for continued future growth $1,596 $1,496 $1,473 $1,385 $100 $139 $759 $773 $795 $992 $698 $722 $645 $532 $0
Slide 12: Fully Aligned Management Structure
12 Chris Masterson Chief Financial Officer, Treasurer and Secretary FULLY ALIGNED MANAGEMENT STRUCTURE Fully integrated external management team creates highly scalable platform with an acquisition pipeline generated by a proven, country - focused origination network No transactional fees allows for
Slide 13: 2017 Investment Activity
13 2017 INVESTMENT ACTIVITY Tenant Properties Asset Type Acquisition Date Purchase Price (millions) GAAP Cap Rate (1) Acquisitions Cott Beverages 1 Distribution 1Q 2017 $10.5 7.86% FedEx Ground 2 Distribution 1Q 2017 $6.1 7.18% Bridgestone 1 Industrial 3Q 2017 $6.8 7.46% GKN Aerospace 1 Industrial 4
Slide 14: Robust Pipeline
14 ROBUST PIPELINE As of December 31, 2017 After Pipeline % Change No. of Properties 321 334 +4.0% Investment Grade and Implied Investment Grade (3) 76.1% 76.7% +0.6% Square Feet 22.9 million 26.3 million +14.9% Purchase Price $3.2 billion $3.4 billion +6.0% Lease Term Remaining 8.8 years 9.0 years
Slide 15: Geographic Balance (Including Pipeline)
15 GEOGRAPHIC BALANCE (INCLUDING PIPELINE) U.S. Number of Assets: 265 Remaining Lease Term: 8.8 years (1) % of GNL SLR: 53.8% (2) Europe Number of Assets: 69 Remaining Lease Term: 9.3 years (1) % of GNL SLR: 46.2% (2) 1. Refer to basis for metric calculation included in the footnotes to page 3. 2. M
Slide 16: Pro Forma Portfolio Composition with Pipeline
16 Geographic concentration split changes from 48.9% and 51.1% to 53.8% and 46.2%, for the United States and Europe, respectively with the addition of the 2018 pipeline. PRO FORMA PORTFOLIO COMPOSITION WITH PIPELINE Continued Focus on United States Industrial and Distribution Properties Office 53.4%
Slide 17: Pipeline Highlights: Rubbermaid
17 PIPELINE HIGHLIGHTS: RUBBERMAID Transaction Overview Property and Tenant Overview Tenant Rubbermaid Property Type Industrial Credit Rating (1) Baa3 Location Akron, OH Square Feet 668,592 Lease Term (years) 10.0 Purchase Price $21.4 million GAAP Cap Rate (2) 7.43% Tenant/Guarantor • The parent com
Slide 18: Pipeline Highlights: Penske Logistics, LLC
18 PIPELINE HIGHLIGHTS: PENSKE LOGISTICS, LLC Transaction Overview (1) Property and Tenant Overview Tenant Penske Logistics, LLC Property Type Industrial Credit Rating (2) Baa2 Location Romulus, MI Square Feet 606,000 Lease Term (years) 10.0 Purchase Price $124.9 million GAAP Cap Rate (3) 6.71% Tena
Slide 19: Improved Performance
19 $- $5 $10 $15 $20 $25 $30 $35 $40 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 IMPROVED PERFORMANCE FY 2017 FY 2016 % Change Total Revenue $259.3 million $214.2 million +21.0% Operating Income $86.0 million $60.3 million +42.7% AFFO (1) $140.7 million $1
Slide 20: Debt Overview
20 USD 34% EUR 43% GBP 23% Fixed Rate 86.9% Floating rate 13.1% DEBT OVERVIEW Net Debt to Enterprise Value (1) 48.3% Net Debt to Adjusted EBITDA (annualized) (1) (2) 7.0x Interest Coverage Ratio (3) 4.6x Weighted Average Interest Rate (4) 2.9% Weighted Average Debt Maturity 3.7 Years Debt Metrics as
Slide 21: Comprehensive Hedging Program
21 COMPREHENSIVE HEDGING PROGRAM GNL continues to employ a comprehensive hedging program, with a number of components designed to limit the impact of currency and interest rate movements to its European portfolio Hedging Foreign Currency Exchange Risk (“Cash Flow Hedging Instruments”) • Provides pro
Slide 22: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com
Slide 23: Risk Factors
23 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 . See the section entitled “Item 1 A . Risk Factors” in GNL’s Annual Repo
Slide 24: Risk Factors (Continued)
24 RISK FACTORS (CONTINUED) • We may be unable to pay or maintain cash dividends on our 7 . 25 % Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock ”), any other class or series of preferred stock we may issue and our common stock, $ 0 . 01 par value per share ("Common Sto
Slide 25: Risk Factors (Continued)
25 RISK FACTORS (CONTINUED) • We may be exposed to risks due to a lack of tenant diversity, investment types and geographic diversity . • The revenue derived from, and the market value of, properties located in the United Kingdom and continental Europe may decline as a result of the U . K . 's discu
Slide 26: Projections
26 PROJECTIONS • 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 27: Definitions
27 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 28: Definitions (Continued)
28 DEFINITIONS (CONTINUED) • Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed - as - incurred model) that were put into effect in 2009 and other changes to GAAP accounting for real estate subse
Slide 29: Definitions (Continued)
29 DEFINITIONS (CONTINUED) • Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management's analysis of the operating performance of the Company . Additionally, fair value adjustments, which are based on the impact of current market f
Slide 30: Non-GAAP Reconciliations
30 NON – GAAP RECONCILIATIONS Three Months Ended (in thousands) December 31, 2017 December 31, 2016 Adjusted EBITDA Net income $ 8,449 $ 16,071 Depreciation and amortization 28,558 23,405 Interest expense 12,806 9,004 Income tax expense 964 2,994 Equity based compensation (1,177) 1,341 Acquisition a
Slide 31: Non-GAAP Reconciliations
31 NON – GAAP RECONCILIATIONS (in thousands) Three Months Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 Funds From Operations (FFO): Net income attributable to stockholders (in accordance with GAAP) $ 5,998 $ 2,104 $ 5,200 $ 7,429 Depreciation and amortization 28,558 29,879
Slide 32: Non-GAAP Reconciliations
32 NON – GAAP RECONCILIATIONS (in thousands) Three Months Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 Funds From Operations (FFO): Net income attributable to stockholders (in accordance with GAAP) $ 15,946 $ 8,943 $ 15,763 $ 6,488 Depreciation and amortization 23,405 23,4
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