Wereldhave N.v. · EURONEXT:WHA
Wereldhave — H1 2019 Earnings Presentation
50 slides from Wereldhave's earnings presentation, 2019
Slide 1: H1 2019 Results
H1 2019 RESULTS WERELDHAVE
Slide 2: Company profile: key facts
CONVENIENCE SHOPPING CENTRES IN NORTH-WEST EUROPE COMPANY PROFILE 16 KEY FACTS 9 • Numbers of shopping centres 31 • Average size 27,300m² • Numbers of shopping centre 64m visitors (H1 2019) 1 6 • Loan to value ratio 40.0% • Occupancy shopping centres 95.6% • EPRA NIY shopping centres 5.4% • WALT2 5.
Slide 3: Company profile: portfolio breakdown
CONVENIENCE SHOPPING CENTRES IN NORTH-WEST EUROPE COMPANY PROFILE PORTFOLIO BREAKDOWN 3% 30% 44% € 3.2 bn € 3.2 bn 26% 97% Belgium France Netherlands Shopping centres Offices 3
Slide 4: Highlights H1 2019
HIGHLIGHTS H1 2019 De Koperwiek, Capelle aan den IJssel – Halloween event> 4
Slide 5: Highlights H1 2019
HIGHLIGHTS H1 2019 H1 2018 H1 2019 CHANGE Direct result per share1 1.33 1.44 8.3% Indirect result per share1 (0.75) (3.10) FY 2018 H1 2019 CHANGE EPRA NAV per share 43.82 40.90 (6.7%) Full year DPS 2.52 2.52 0.0% LTV 37.5% 40.0% +250bps • Outlook FY 2019 direct result € 2.75-2.80 per share (previous
Slide 6: Highlights H1 2019: net rental income
HIGHLIGHTS H1 2019 LFL NRI NET RENTAL INCOME (€M) H1 2018 H1 2019 GROWTH GROWTH Belgium 19.8 24.0 21% +1.9% Overall growth includes acquisition effect, opening Tournai and one-off indemnity France 20.4 20.2 (1%) (1.5%) Slight decline due to rental reversions and Toys ‘R’ Us bankruptcy (Docks 76) Net
Slide 7: Operational performance
OPERATIONAL PERFORMANCE 7
Slide 8: Leasing performance: shopping centre LFL rent growth positive
LEASING PERFORMANCE: SHOPPING CENTRE LFL RENT GROWTH POSITIVE # OF LEASING MGR OCCUPANCY LFL NRI COUNTRY REMARKS CONTRACTS VOLUME UPLIFT RATE GROWTH Belgium 32 4.6% +6.6% 96.2% +1.9% Leasing to Decathlon (Nivelles) and Action (Genk) France 30 6.4% (2.7%) 92.0% (1.5%) Slow leasing activity in H1 expe
Slide 9: Positive in the Netherlands & Belgium, negative but improving in France
POSITIVE IN THE NETHERLANDS & BELGIUM, NEGATIVE BUT IMPROVING IN FRANCE LFL NRI GROWTH LFL NRI GROWTH (% YOY) 2.3% 1.9% 2.0% 2.0% 1.7% 1.5% 1.3% 0.8% 1.0% 0.8% 0.3% 0.1% -0.7% -1.1% -1.3% -1.5% -3.4% -3.5% -3.9% -7.0% Belgium France Netherlands Shopping centres FY 2017 H1 2018 FY 2018 H1 2019 Index
Slide 10: Above 95% on group level
ABOVE 95% ON GROUP LEVEL OCCUPANCY EPRA OCCUPANCY RATE SHOPPING CENTRES (%) 97.2% 97.1% 97.2% 96.7% 96.8% 96.5% 96.2% 96.1% 96.3% 95.5% 95.6% 94.9% 94.0% 93.6% 93.2% 92.0% Belgium France Netherlands Shopping centres H2 2017 H1 2018 H2 2018 H1 2019 10
Slide 11: Strong in Belgium and the Netherlands
STRONG IN BELGIUM AND THE NETHERLANDS FOOTFALL CHANGE IN VISITORS (%) 7.6% 6.5% 4.4% 3.4% 2.7% 1.4% 1.1% 1.0% 0.6% 1.4% 1.0% 0.7% 0.4% 0.1% -0.4% -0.2% -0.6% -0.6% -1.7% -1.5% Belgium France Netherlands Shopping centres H2 2017 H1 2018 H2 2018 H1 2019 Market H1 2019 11
Slide 12: Strong in Belgium
STRONG IN BELGIUM TENANT SALES 1 LIKE-FOR-LIKE TENANT SALES (%) 2.7% 1.3% 1.3% 1.5% 0.5% 0.0% -1.6% -1.8% -2.0% -2.1% -3.6% -4.4% Belgium France Shopping centres FY 2017 H1 2018 FY 2018 H1 2019 1 Excluding hypermarkets and supermarkets; H1= year-to-May, FY=December-to-November 12
Slide 13: Financial performance H1 2019
FINANCIAL PERFORMANCE H1 2019 13
Slide 14: Direct result increased
DIRECT RESULT1 INCREASED DIRECT RESULT BRIDGE (IN € M) € -8.7 €74.5 -€14.8 €65.8 €1.1 €0.3 €0.9 €59.7 €1.9 -€0.6 €2.5 1 2 3 4 Total Direct Discontinued Direct result Disposals Acquisitions NRI standing General cost Net interest Tax & other Direct result Result operations continuing portfolio H1 2019
Slide 15: Rent growth largely due to acquisitions
RENT GROWTH LARGELY DUE TO ACQUISITIONS NET RENTAL INCOME BRIDGE CONTINUING OPERATIONS (IN € M) € +3.9 €87.4 €0.6 €0.4 €1.0 €83.5 €2.5 -€0.6 1 NRI H1 2018 Disposals NL Acquisitions retail Key money Like for Like Other NRI H1 2019 and Belgium parks Belgium Indemnities and C&A Tilburg MAIN OTHER MOVEM
Slide 16: Lower indirect result from revaluations
LOWER INDIRECT RESULT FROM REVALUATIONS INDIRECT RESULT BRIDGE (IN € M) €0.3 -€123.0 -€1.3 -€2.1 -€125.1 €1.0 Valuation results Results on disposal Customer Journey Other income & expenses Taxes on indirect result Total Indirect result H1 2019 Customer Journey: Implementation and development of Fami
Slide 17: Investment markets & values
INVESTMENT MARKETS & VALUES France ▪ Hardly any transactional activity ▪ Several centres for sale, some taken off the market ▪ Slight adjustment in EPRA NIY (+0.1%) Belgium ▪ Transactional activity was low, a few assets on the market of various quality ▪ Pricing levels provided sufficient support fo
Slide 18: Revaluations
REVALUATIONS VALUE (€ M)1 REVALUATION H1 2019 EPRA NIY (%)2 2018 H1 20193 €M % 2018 H1 2019 Belgium 862 877 -1 (0.2%) 5.5% 5.5% France 879 851 -36 (4.1%) 4.7% 4.8% Netherlands 1,445 1,393 -84 (5.7%) 5.6% 5.8% Shopping centres 3,186 3,121 -122 (3.8%) 5.3% 5.4% Offices 95 94 -1 (1.1%) 8.1% 8.2% Total
Slide 19: Revaluations: rents & yield shift
REVALUATIONS: RENTS & YIELD SHIFT BREAKDOWN OF VALUATION RESULT Belgium -0.1% -0.1% France -2.0% -2.1% Netherlands -1.9% -3.8% Shopping centres -1.4% -2.4% Belgium offices -0.9% -0.2% Total portfolio -1.4% -2.3% Yield shift Market rent & other 19
Slide 20: Financing
FINANCING 20
Slide 21: Debt profile
DEBT PROFILE 2018 H1 2019 COVENANTS POLICY Interest bearing debt1 € 1,362m € 1,317m Average cost of debt 2.08% 1.90% Undrawn committed € 430m € 244m Cash position € 126m € 26m Fixed vs floating debt 97%/3% 78%/22% 75%/25% LTV 37.5% 40.0% ≤60% ≤ 40% ICR 6.2X 6.5x ≥2.0X ≥2.0X 1 Nominal value of intere
Slide 22: Debt mix
DEBT MIX Q4 2018 Q2 2019 1% 3% 7% 1% 21% 18% € 1,362m 36% € 1,317m 56% • Matured debt (€ 56m USPP and € 250m convertible bond) funded by proceeds from Itis 57% disposal and drawing from RCF EMTN Treasury Notes Convertible bond USPP Bank loans (incl. RCF) • Baa2 with a stable outlook credit rating by
Slide 23: Leading ESG practices
LEADING ESG PRACTICES GOVERNANCE SOCIAL Wereldhave is recognised for its best-in-class ENVIRONMENTAL We create places that cater to the needs of our corporate governance practices: We care about our impact on the planet. local communities. • GRESB Governance score 94/100 • 11 assets in BREEAM (re-)c
Slide 24: Environmental, social & governance case studies
ENVIRONMENTAL, SOCIAL & GOVERNANCE CASE STUDIES 0,84 MW added Green roofs 4 Dutch centres Accessibility (Les Bastions Tournai) Shopping centre Koperwiek ♥ More than 25,000m2 green roofs on our +2,952 solar panels Amersfoort, Arnhem, Nieuwegein, We cooperate with local initiatives to improve shopping
Slide 25: Benchmarking ESG performance
BENCHMARKING ESG PERFORMANCE SHARPENING FOCUS ON GRESB, CDP and BREEAM Focus Out of scope Portfolio Asset-level Rationale • These benchmarks are real estate focused • Aligned with investor and regulator requirements • Give meaningful peer benchmarking • Result in more focused GRESB FIVE STARS Carbon
Slide 26: Country updates
COUNTRY UPDATES De Koperwiek, Capelle aan den Ijssel Play & Relax > 26
Slide 27: Belgium: good growth in footfall & retailer sales
GOOD GROWTH IN FOOTFALL & RETAILER SALES BELGIUM MARKET SITUATION FOOTFALL GROWTH TENANT SALES GROWTH 7.6% • Somewhat lower growth of the economy (+1.2% for 2019 and 20201), but solid private 4.4% 2.7% 2.7% consumption expected. 1.3% 1.5% • Tenant sales +2.7% LFL outperform general retail 2017 2018
Slide 28: Belgium: rising LFL rent growth for shopping centres
RESULTED IN RISING LFL RENT GROWTH FOR SHOPPING CENTRES BELGIUM PERFORMANCE LFL NRI GROWTH1 Indexation CHANGE IN MGR 2.0% ROTATIONS & RENEWALS • LFL NRI growth shopping centres +1.9% (indexation +2.0%) 0.3% 1.9% 6.6% • Healthy growth in MGR uplift continues -1.1% 4.6% 4.9% 2017 2018 H1 2019 • Occupa
Slide 29: Recent shop openings: Belgium
RECENT SHOP OPENINGS BELGIUM STADSPLEIN GENK SHOPPING 1 • Pearle Genk • 168 m2 • Chitir Chicken • February 2019 • Restaurant • 200 m2 • March 2019 RING SHOPPING LES BASTIONS KORTRIJK TOURNAI • Leonidas • 60 m2 • StreetOne • February 2019 • 130 m2 • March 2019 29
Slide 30: France: challenging conditions, recovery seen in Q2
CHALLENGING CONDITIONS, RECOVERY SEEN IN Q2 VERSUS Q1 FRANCE MARKET SITUATION FOOTFALL GROWTH2 TENANTS SALES GROWTH Market +0.1% 1.4% • Slightly lower economic growth1 projected for 2019-20 at +1.3%/1.5% GDP, unemployment set 0.7% Market -1.6% -0.2% to decline to 8.5% in 2020 (2018: 9.0%). Private -
Slide 31: France: upward trend in LFL rent growth
UPWARD TREND IN LFL RENT GROWTH FRANCE PERFORMANCE LFL NRI GROWTH CHANGE IN MGR ROTATIONS & RENEWALS • Improvement of LFL NRI growth to -1.5% Indexation +2.3% (indexation +2.3%) versus -3.5% in 2018, albeit 0.9% still negative. -1.5% -1.7% -3.5% -2.7% • Occupancy dropped due to 92%. Impact 2017 2018
Slide 32: Recent shop openings: France
RECENT SHOP OPENINGS FRANCE MÉRIADECK BORDEAUX DOCKS VAUBAN • Centre Dentaire LE HAVRE Mériadeck • Bershka • Healthcare • 946 m2 • 193 m2 • April 2019 SAINT SEVER DOCKS 76 ROUEN • Carador ROUEN • 140 m2 • Parfois • April 2019 • 93 m2 • February 2019 32
Slide 33: Netherlands: strong footfall and good occupancy
STRONG FOOTFALL AND GOOD OCCUPANCY THE NETHERLANDS MARKET SITUATION FOOTFALL GROWTH • 2019/2020 forecasts1 GDP growth 1.6%; 1.1% unemployment 3.5%/3.6%; Private consumption 0.4% Market 1.4%/1.6%. Inflation expected at 2.5%/1.5% for 0.1% -0.6% 2019/20. Indexation for 2019: 1.6%. 2017 2018 H1 2019 • F
Slide 34: Netherlands: absorbing the Q1 bankruptcy impact on track
ABSORBING THE Q1 BANKRUPTCY IMPACT ON TRACK THE NETHERLANDS PERFORMANCE LFL NRI GROWTH CHANGE IN MGR Indexation ROTATIONS & RENEWALS • LFL NRI growth +1.5% (indexation +1.3%) 2.0% 1.3% 1.5% -0.2% • Bankruptcies spiked in Q1, but modest in Q2; ca. -2.9% 0.8% 70% of impacted locations already leased-u
Slide 35: Recent shop openings: Netherlands
RECENT SHOP OPENINGS THE NETHERLANDS DE ROSELAAR ROOSENDAAL DE KOPERWIEK • Vero Moda CAPELLE A/D IJSSEL • 425 m2 • C&A • March 2019 • 1,073 m2 • January 2019 CITYPLAZA PRESIKHAAF NIEUWEGEIN ARNHEM • Shabu to Go • 203 m2 • Miss Etam • Food & Beverage • ca. 554 m2 • January 2019 • June 2019 35
Slide 36: Asset rotation: acquisition & disposal
ASSET ROTATION: ACQUISITION & DISPOSAL THE NETHERLANDS • Q1 2019: acquisition of the C&A in Tilburg for € 11m • Q2 2019: disposal of the former V&D in Hoofddorp for € 7m at book value 36
Slide 37: Redevelopments
REDEVELOPMENTS NETHERLANDS • Next phase of Inner-city Tilburg project with a net investment of € 16m, scheduled for completion in 2021 • Dordrecht extension & refurb: € 16m, 90% pre-leased, expected completion 2021 • In de Koperwiek (Capelle a/d IJssel) pre-leasing reached 89%, completion expected 2
Slide 38: Four projects – implementation on schedule: customer journey
FOUR PROJECTS – IMPLEMENTATION ON SCHEDULE CUSTOMER JOURNEY PARKING WAYFINDING • Completed: 2 • Completed: 7 • In progress: 3 • In progress: 4 • 2020-25: 8 • 2020: 8 • 2021: 1 PLAY & RELAX RESTROOMS • Completed: 7 • Completed: 3 • In progress: 4 • In progress: 4 • 2020: 8 • 2020: 2 • 2020/21: 2 38
Slide 39: Next steps & outlook
NEXT STEPS & OUTLOOK 39
Slide 40: Direct result 2019: €2.75 to €2.80 per share
DIRECT RESULT 2019: € 2.75 TO € 2.80 PER SHARE OUTLOOK DIRECT RESULT (€ PER SHARE) DIVIDEND (€ PER SHARE) 3.45 3.43 € 3.01 € 3.08 € 3.08 3.23 3.33 € 2.87 2.97 € 2.52 € 2.52 2.75-2.80 € 2.62 Continuing operations 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 • Outlook FY 2019 direct res
Slide 41: Investment case
INVESTMENT CASE • A FOCUSED BUSINESS MODEL ON • DEFENSIVE BUSINESS MODEL WITH LIMITED CONVENIENCE RETAIL DEVELOPMENT EXPOSURE • RELATED TO THE DAILY NEEDS OF THE • LOW SINGLE ASSET EXPOSURE CONSUMER • LOW SINGLE TENANT EXPOSURE • CUSTOMER-CENTRIC • DIVERSIFIED FUNDING SOURCES AND LOW • UPWARD TREND
Slide 42: Wereldhave
Ww WERELDHAVE
Slide 43: Appendices
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Slide 44: Top 10 tenants
TOP 10 TENANTS VALUE PER JUNE 2019, IN % OF RENT ROLL 1 2 3 4 5 Fashion Fashion Health & Beauty Food Food 3.2% 2.7% 2.1% 1.7% 4.2% 6 7 8 9 10 Homeware & household Electronics Fashion Homeware & household Department & Variety 1.5% 1.3% 1.3% 1.3% 1. 2% a 44
Slide 45: Tenant mix
TENANT MIX BREAK-DOWN BY CATEGORY CONTRACT RENT BY CATEGORY 1% 5% 12% Food 10% Services 7% F&B / Leisure 3% Fashion & accessoires 7% Health & Beauty 11% Homeware & household Sport 10% Multimedia & Electronics Department & Variety 34% Shoe & Leatherware 45
Slide 46: Like-for-like tenant sales by branche
LIKE-FOR-LIKE TENANT SALES BY BRANCHE (% YOY) EXCLUDING HYPER/SUPERMARKETS Belgium France Total Fashion & accessoires -1.0% -4.6% -3.3% Food 3.8% -0.4% 2.3% Health & beauty 1.1% -0.6% 0.1% Homeware & household -0.2% 1.7% 0.9% Leisure -5.1% -5.1% Multimedia, electronics & special goods 8.7% -0.7% 4.2
Slide 47: Key projects development pipeline
KEY PROJECTS DEVELOPMENT PIPELINE CAPEX CAPEX YIELD TOTAL PLANNED (IN €M) SPENT SPENT ON PRE-LET INVESTMENT DELIVERY (NET) 2019 COST RATE De Koperwiek 38 30 5 5.0% 89% 2020 Presikhaaf 23 19 1 6.0% 78% 2020 Sterrenburg 14 3 1 5.6% 90% 2021 Tilburg 16 - 3 6.0% 6% 2021 Total 91 52 10 47
Slide 48: NAV declined due to revaluations
NAV DECLINED DUE TO REVALUATIONS EPRA NAV BRIDGE: H2 2018 TO H1 2019 (IN € PER SHARE) € 1.44 € 43.82 -€ 3.09 -€ 1.26 € 40.90 -€ 0.01 YE 2018 Direct result Indirect result Dividend FV adjustment H1 2019 derivatives & def tax 48
Slide 49: Reconciliation of EPRA NAV
RECONCILIATION OF EPRA NAV € 40.90 € 40.44 € 0.46 € -1.44 € 39.46 IFRS NAV EPRA adjustments EPRA NAV Triple adjustments EPRA NNNAV EPRA adjustments add back the liabilities related to: ▪ Fair value of interest rate derivatives ▪ Deferred tax Triple adjustments subtract the liabilities related to: ▪
Slide 50: Wereldhave: Bringing people together
aaa wy WERELDHAVE Bringing people together