Wereldhave N.v. · EURONEXT:WHA
Wereldhave — H1 2021 Earnings Presentation
56 slides from Wereldhave's earnings presentation, Jul 27, 2021
Slide 1: Results H1 2021
Results H1 2021 27 July 2021
Slide 2: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 6. Management Agenda Appendices 2
Slide 3: Company Profile post French Transaction
Introduction Company Profile post French Transaction Key Facts1) Number of shopping centers 22 Average size 26,700 m² Number of shopping center 31.8 m visitors (H1 2021) Pro-forma net loan to value 42 % ratio Occupancy shopping centers 95.5 % 9 EPRA NIY shopping centers 6.0 % WALT2) 6.1 years Develo
Slide 4: Portfolio breakdown by value
Introduction Company Profile H1 2021 post French Transaction Portfolio Breakdown by value Portfolio Breakdown by value Offices 5% Netherlands 44% Belgium € 1.9bn 47% € 1.9bn Shopping centers 95% France 9% 4
Slide 5: Key Messages
Key Messages • Major step in phasing out France: sold four out of six French assets for € 305m • Koningshoek sold above book value, Benelux disposal program finalized • LTV down to 46% - pro-forma for four asset French disposal 42% • Dutch valuations stabilizing for the first time in nine valuation
Slide 6: Highlights H1 2021
Highlights H1 2021 H1 2020 H1 2021 Change Direct result per share (€) 0.97 0.93 (0.04) Indirect result per share (€) (3.73) (1.79) 1.94 Total result per share (€) (2.76) (0.86) 1.90 FY 2020 H1 2021 Change EPRA NTA per share (€) 27.74 26.33 (1.41) Net LTV 46.7% 46.1% -0.6pp NPS (Benelux) +4 +16 +12 P
Slide 7: Highlights H1 2021
Highlights H1 2021 Like-for-like NRI growth positive despite Covid-19 related store closures, lower sales-based rents and variable parking income in the Shopping Centers, and departures in our Belgium Offices Net Rental Income H1 2020 H1 2021 Growth LFL Growth (€ m) Belgium 17.7 19.8 12.2% 12.5% Fra
Slide 8: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 6. Management Agenda Appendices 8
Slide 9: Key terms French transaction
Key terms French transaction • Assets sold: Docks 76 (Rouen) Docks Vauban (Le Havre) Rivetoile (Strasbourg) Saint Sever (Rouen) • Gross Proceeds: € 305m, including estimated CAPEX of € 5m (implied net yield1) of 7.5%) • Buyer: Lighthouse Capital Limited • SPA Signing: 26 July 2021 • Closing Date: 30
Slide 10: Financial Impact French transaction
Financial Impact French transaction LTV DRPS Full Year Outlook % € 1.80 – 2.00 1.75 – 1.85 -4% -0.13 47% 46% 42% 2021 (Q1 FC) Lighthouse Deal 2021 Post Lighthouse Deal EPRA NTA per Share € 30-40% 26.33 -5.06 21.27 FY 2020 Pre Lighthouse Pro-forma Target Q2 21 Lighthouse Deal Q2 2021 Post Deal 30/06/
Slide 11: Two Remaining French Assets
Two Remaining French Assets Côté Seine (Argenteuil, Paris) Mériadeck (Bordeaux) Successfully transformed from a fashion focused center to a Historically challenging asset successfully improved with big box convenient shopping destination with healthy occupancy levels offering and recently secured an
Slide 12: Disposal Program Benelux finalized
Disposal Program Benelux finalized WoensXL Covid-19 Emiclaer Etten-Leur Koningshoek Announcement of Investment Sold Sold disposal Sold market standstill 2020 2020 2020 2020 2020 2021 2021 Feb Feb-Mar Q2-Q3 H2 Year-end Q1 Q2 4 assets on the Marketing market In de Bogaard 4 assets Initially good inves
Slide 13: Executed deals
Executed deals Shopping center Koningshoek in Maassluis • 20,300 m² • Gross proceeds € 47m • Sold slightly above book value • Transaction date 30 April 2021 • Buyer: Novapierre Allemagne 2 13
Slide 14: Disposals accelerate several of our key strategic objectives
Disposals accelerate several of our key strategic objectives Focus on Target 2020-2022 Phase out France1 4 out of 6 assets sold Divestment program NL / BE Completed Restructuring balance sheet LTV decreased by 4%-points after French transaction FSC concepts, for e.g. entertainment, F&B and fashion,
Slide 15: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 7. Management Agenda Appendices 15
Slide 16: Operations H1 2021
Operations H1 2021 High contract volume in H1, positive MGR uplift in Belgium & France and three large package deals in The Netherlands with anchor tenants Leasing MGR Country # of Contracts¹) vs ERV Occupancy Rate Volume²) Uplift Belgium 39 6.0% 1.8% 5.2% 96.2% France 32 9.2% 5.2% 0.6% 93.5% Nether
Slide 17: Strong rent collection in Belgium and NL; France awaiting approval
Strong rent collection in Belgium and NL; France awaiting approval of government support scheme Footfall shows sharp rebound in Belgium and France after store reopenings in Q2 Footfall growth versus same period last year, last 52 weeks Rent collection rates H1 20211) 200% 94% 91% 84% 100% 61% 0% 28
Slide 18: Rent collection for H1 2021 rents
Rent collection for H1 2021 rents Invoiced rent for H1 2021 Breakdown open payments Provisioned 33% Received 80% 20% Open Collectable 48% 19% Discount 18
Slide 19: Rent collection & assessment of Covid-19
Rent collection & assessment of Covid-19 € 114.3m -€ 91.3m -€ 12.1m -€ 4.4m € 18.7m -€ 7.7m € 11.0m Invoiced H1 2021 Cash Discounts Under Expected credit loss To be collected (incl. VAT) collected agreed negotiation H1 2021 19
Slide 20: Belgium
Belgium Footfall (yoy) Change in MGR Rotations & Renewals 200% 1.8% • 39 shopping center deals signed 5.2% above ERV on average and 4 office 100% deals • Leasing examples: 0.5% 0% • Belle-Île: Only, Jack & Jones, 28 32 36 40 44 48 52 4 8 12 16 20 24 Maisons du Monde 2020 2021 • Les Bastions: Jysk 20
Slide 21: France
France Footfall (yoy) Change in MGR Rotations & Renewals 200% • 32 leasing deals signed 0.6% above ERV on average 100% 5.2% • Saint-Sever renovation completed • Successful reopening in May with +32 % 0% 28 32 36 40 44 48 52 4 8 12 16 20 24 footfall in Q2 2021 vs Q2 2020 2020 2021 -6.5% • Leasing exa
Slide 22: Netherlands
Netherlands Footfall (yoy) Change in MGR Rotations & Renewals 50% • 42 leasing deals signed 8.9% above 25% ERV on average 0% • Mixed use 28 32 36 40 44 48 52 4 8 12 16 20 24 -25% 2020 2021 • Basic-fit opened a new gym in Eggert -4.7% Purmerend -50% • Laser clinic ELIS and Bailine dietician opened in
Slide 23: Direct result: impacted by disposals
Direct result: impacted by disposals Lower sales based rents and variable parking income due to Covid-19 in France and Netherlands, offset in France by lower doubtful debt provisions compared to H1 2020 -€ 1.1m € 44.8m -€ 4.3m € 1.2m -€ 0.4m € 43.7m € 0.2m € 3.4m -€ 2.5m € 1.3m Actuals Disposals1) N
Slide 24: Cost efficiency
Cost efficiency Cost Reduction Opportunities Status Phase-out France Four assets sold, annual general cost savings to be implemented in Q1 2022 Changing Headquarters (€ 400k) Starting 2022 / 2023 LifeCentral phase 2 (growth phase) should result in lower cost ratio by realising Exploring phase 2 of L
Slide 25: Outlook 2021
Outlook 2021 Outlook for 2021 direct result per share will come out at € 1.75 – 1.85, lower than previous guidance due to -€ 0.13 disposals impact Direct Result per Share Dividend per Share • Without the disposal impact, our guidance would have increased to € € higher end of previous bandwidth 3.45
Slide 26: EPRA NTA
EPRA NTA EPRA NTA declined mainly due to Dutch transfer tax increase (one-off) and realized loss on two Dutch disposals EPRA NTA Bridge: YE 2020 to H1 2021 (€ per share) 0.93 -1.79 27.74 -0.50 -0.12 0.07 26.33 EPRA NTA Direct result Indirect result Dividend Change in NCI Adjustments fair value EPRA
Slide 27: Revaluations
Revaluations Negative revaluations mainly due to the increase in real estate transfer tax in The Netherlands; EPRA NIY declines as a result of yield compression at five assets Value (€ m) Revaluation 2021 H1 EPRA NIY (%) 2020 H2 2021 H1 €m % 2020 H2 2021 H1 Belgium 830 826 (6.1) (0.7%) 5.6% 5.6% Fra
Slide 28: Valuations are stabilizing
Valuations are stabilizing EPRA NIY Wereldhave Shopping Centers % 7.0% • Finally overall portfolio yield stability due to stronger investment market • In Belgium the yield remains stable and has been so since H1 2019 6.0% • In The Netherlands • The yield is decreasing for the first time since H1 201
Slide 29: Yield Compression after LifeCentral Transformations
Yield Compression after LifeCentral Transformations As presented in our 2020 Strategic Review… … we expect yield compression in our portfolio1) -60bps 6.1% 5.5% Current NIY Expected Post-Transformation NIY • Our belief is that transforming our assets to Full Service Centers will lead to yield compre
Slide 30: First pieces of evidence for FSC yield compression
First pieces of evidence for FSC yield compression • Ongoing transformations are providing the first results: ➢ NIY Ring Shopping Kortrijk down by 27bps after start of FSC Transformation Phase 1 ➢ NIY Shopping Belle-Île down by 10bps after finalization FSC Transformation Phase 1 ➢ Remainder of expec
Slide 31: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 6. Management Agenda Appendices 31
Slide 32: Capital allocation
Capital allocation • Building a rock-solid, efficient balance sheet • Target 30-40% LTV per year end 2022 • Disposing assets • LifeCentral: Investing in a future-proof portfolio • Long-term value creation for shareholders • Transformation towards Full Service Centers • >6% unlevered IRR • Dividend •
Slide 33: LTV Development
LTV Development Next step should come from e.g. last two French disposals, retained earnings, residential gains, equity backed acquisitions Net LTV Development Why we target an LTV of 30-40% -4% • Improves our credit profile and provides sustainable access to 47% 46% credit • Reduces our vulnerabili
Slide 34: Debt Profile
Debt Profile Q4 2020 Q2 2021 Covenants Policy Interest bearing debt1) (€) 1,254m 1,122m Average cost of debt 1.9% 1.9% Undrawn committed (€) 306m 271m Cash position (€) 67m 14m Fixed vs floating debt 69% / 31% 66% / 34% min. 50% fixed Gross LTV2) 50.9% 50.0% ≤ 60% Net LTV 46.7% 46.1% 30% - 40% ICR 5
Slide 35: Debt Mix
Debt Mix € 202m in new financing and refinancing Q4 2020 Q2 2021 arranged in H1 2021 • The Green Revolving Credit Facility with ABN 7% 9% AMRO was amended and extended. The 3% amount was reinstated at € 120m and the term was extended to 1 July 2024 • Wereldhave Belgium 36% € 1,254m € 1,122m 57% 32%
Slide 36: Debt Expiry Profile
Debt Expiry Profile Post French transaction, our available liquidity covers debt maturities until Q1 2024 400 350 300 250 200 €m 150 100 50 0 Drawn Undrawn Drawn Undrawn Drawn Undrawn Drawn Undrawn Drawn Undrawn Drawn Undrawn 2021 2022 2023 2024 2025 > 2025 Commercial Paper Bank loans Private Placem
Slide 37: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 6. Management Agenda Appendices 37
Slide 38: LifeCentral progress H1 2021
LifeCentral progress H1 2021 • Started transformation of Kortrijk • Finalized Fresh Street, according to our Fresh Food Zone concept, in De Koperwiek • Finalized design of day and evening F&B concepts • Signed multiple Mixed Use leases (e.g. laser clinic and dietician in Presikhaaf, Arnhem) Mixed Us
Slide 39: Sterrenburg FSC Transformation
Sterrenburg FSC Transformation Becoming a convenience focused FSC that perfectly fits the characteristics of the catchment area • Construction works started Q3 2020 and expected to finish Q4 2022 • Main items: • Extension for Jumbo Foodmarket (opening Feb 2022) • New units for Lidl and Kruidvat (ope
Slide 40: Covid-19 confirms the need for transformation
Covid-19 confirms the need for transformation Rationale LifeCentral Strategy Impact Covid-19 LifeCentral Actions • Decrease in retail floor space • Trend accelerated, not magnified • Increase mixed use share • Transformation to residential • Convenience retail resilient • Convenience performing stro
Slide 41: Top 10 Tenants Categories assessment - BE
Top 10 Tenants Categories assessment - BE E-commerce Category % of rent Everyday Life % Red flags1) Conclusion Resilient Fashion – Brand stores 34% X - 35% Low risk Health & Beauty - Mainstream 10% + + 6% Low risk Food & Beverage 8% + + 28% Low risk Food - Mainstream 6% + + 8% Low risk Fashion – Dis
Slide 42: At risk categories deepdive - BE
At risk categories deepdive - BE E-commerce WAULT to WAULT to Category % of Rent Everyday Life % Red flags1) Conclusion Mitigation Resilient First Break Contract End All major tenants recently Fashion – Brand stores 34% X - 2.2 5.5 35% Low Risk extended rental contracts for entire portfolio All majo
Slide 43: Top 10 Tenants Categories assessment - NL
Top 10 Tenants Categories assessment - NL E-commerce Category % of rent Everyday Life % Red flags1) Conclusion Resilient Food - Mainstream 17% + + 8% Low risk Health & Beauty - Mainstream 9% + + 6% Low risk Homeware & Household – Mainstream 9% + + 29% Low risk Food & Beverage 6% + + 28% Low risk Fas
Slide 44: At risk categories deepdive - NL
At risk categories deepdive - NL E-commerce WAULT to WAULT to Category % of Rent Everyday Life % Red flags1) Conclusion Mitigation Resilient First Break Contract End Transformation to Mixed Use of expected vacant Fashion – Multi-brand 5% X X 2.3 4.5 67% High risk space included in our Blueprints All
Slide 45: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 6. Management Agenda Appendices 45
Slide 46: We will deliver on our ambitions
We will deliver on our ambitions Focus on Target 2020-2022 Progress 02/21 07/21 Phase out France1) Phase out France Divestment program NL / BE Dispose assets with book value of € 225m - € 275m Restructuring balance sheet Lower LTV to 30-40% FSC concepts, for e.g. entertainment, F&B and fashion, comp
Slide 47: Table of contents
Table of contents 1. Introduction & Highlights 2. Disposal Program 3. Results 4. Capital Allocation & Financing 5. LifeCentral 6. Management Agenda Appendices 47
Slide 48: LifeCentral CAPEX
LifeCentral CAPEX Investments only done in Total LifeCentral investments1) in NL and BE, excl. FR NL & BE assets with IRRs above threshold of 6.0% € m, 2020-2025 67 64 60 61 56 42 19 41 64 60 61 22 23 15 3 2020 2021 2022 2023 2024 2025 Spent Committed Uncommitted 48 1) Including Maintenance, Custome
Slide 49: LifeCentral Transformation projects
LifeCentral Transformation projects Actual Estimated > 2021 Total Unlevered Planned (In € m) Costs to capex Estimate to Pre-let Rate Investment IRR Delivery date 2021 Complete Tilburg 15 3 8 4 7% 23% 2022 Sterrenburg 24 8 4 12 6% 97% 2022 Ring Shopping Kortrijk 12 1 6 4 7% n.a. 2022 Other1) 16 6 4 5
Slide 50: Tenant mix retail
Tenant mix retail Top-10 tenants Contract rent by category Other 1.0% Tenant % of annualized rent Mixed-Use 13.5% Travel & Finance Ahold Delhaize 4.6 % Services 1.5% Fashion & C&A 2.8 % Sport Accessoires 3.2% 33.9% H&M Group 2.6 % Special Goods & Others 3.4% A.S. Watson Group 2.4 % Shoe & Leatherwar
Slide 51: Like-for-like NRI growth
Like-for-like NRI growth H1 Like-for-like NRI growth improved in Belgium and France, but continued to be impacted by Covid-19 related lower sales-based rents and variable parking income in The Netherlands LFL NRI growth (% yoy) 23.2% 12.5% 4.3% 0.8% 0.7% 0.3% 1.3% 0.8% (1.0%) (1.0%) (0.6%) (9.4%) (1
Slide 52: Occupancy rates
Occupancy rates Overall stable occupancy; increase in Belgium and France as a result of leasing activity, Netherlands declines as a result of several bankruptcies and departing tenants EPRA Occupancy rate Shopping Centers 96.3% 96.2% 96.4% 96.6% 96.0% 95.1% 94.9% 94.8% 94.8% 95.0% 94.9% 94.4% 93.5%
Slide 53: Footfall
Footfall Strong rebound in Belgium; impact of 2021 lockdowns still significant in France and The Netherlands Change in visitors versus the same period previous year (%) 11.3%10.1% 4.9% 0.4% 0.2% 1.1% -7.2% -13.6% -14.2% -13.2% -14.7% -17.7% -17.4% -16.5% -22.7% -22.8% -28.0% -30.1% -33.5% Belgium Fr
Slide 54: Breakdown of Valuation Results
Breakdown of Valuation Results Rent vs Yield Belgium -0.7% -1.1% 0.4% France -2.5% -0.2% -2.3% Netherlands -3.7% -0.3% -3.4% Shopping centres -2.3% 0.0% -2.3% Belgium offices -1.4% -1.4% Total portfolio -2.3% 0.0% -2.3% Yield shift Market rent & other 54
Slide 55: Reconciliation of EPRA Value metrics H1 2021
Reconciliation of EPRA Value metrics H1 2021 (€ per share) 2.68 29.03 -2.68 26.41 0.02 -0.08 0.08 -1.02 -0.01 -0.01 26.33 25.39 IFRS NAV Deferred tax Fair value RETT EPRA NRV Exclude Exclude Exclude EPRA NTA Exclude NTA Fair value of EPRA NDV H1 2021 financial H1 2021 RETT 50% of Intangible H1 2021
Slide 56: Residential opportunity in our Benelux portfolio
Residential opportunity in our Benelux portfolio Nivelles Residential profit € 1.60-1.85/sh Our portfolio in the Benelux contains the Kronenburg opportunity to develop between 1,600 and 2,100 Waterloo units on 10 locations. We expect +0.3% to +1.0% unlevered IRR impact on project level. We are activ