Corporacion Inmobiliaria Vesta S.a.b. De C.v. · BMV:VESTA
Corporacion Inmobiliaria Vesta S.a.b. De C.v — Q2 2023 Earnings Presentation
43 slides from Corporacion Inmobiliaria Vesta S.a.b. De C.v's earnings presentation, 2023
Slide 1: Corporate Presentation Q2 2023
CORPORATE PRESENTATION Q2 2023
Slide 2: Safe Harbor
Safe Harbor This presentation has been prepared by Corporación Inmobiliaria Vesta, S.A.B. de C.V. (“Vesta” or the “Company”) solely for use at this presentation. This presentation was prepared solely for informational purposes and does not constitute, and is not to be construed as, an offer or solic
Slide 3: Table of Contents
Table of Contents 1 Company overview 2 Market Fundamentals Differentiated Portfolio & Strong 3 Track Record 4 ESG at the core of our business 5 Appendix
Slide 4: Company Overview
Company Overview
Slide 5: Fully-integrated industrial real estate owner, operator and developer
Fully-integrated industrial real estate owner, operator and developer Optimally positioned to leverage opportunities in 204 Class A industrial properties located in Mexico, one of the world´s most attractive Mexico’s key trade corridors and manufacturing centers manufacturing and distribution hubs.
Slide 6: Best-in-Class assets
Best-in-Class assets Inventory buildings Buildings conform to standard industry specifications designed to be adapted for two or more tenants. Built-to-Suit (“BTS”) Buildings designed and built to meet the specific needs of clients. Vesta Parks A sustainable gated industrial park with state-of-the-a
Slide 7: Extensive Track Record of Consistent Growth
Extensive Track Record of Consistent Growth 25 Year History Building a Foundation, Substantiated by Relevant Milestones Initial Strategy Pre IPO Post IPO 20/20 Vision(2) Level 3 Strategy (3) (1998 - 2006) (2006 - 2012) 2023 GLA (mm sf)(1) Anchor Investments IPO ADS $446 mm 2012 2021 IPO Follow-on II
Slide 8: Level 3 Strategy: 5-year strategic plan drives shareholder returns
Level 3 Strategy: 5-year strategic plan drives shareholder returns Strategy based on five key pillars, supported by a strengthened organizational structure Becoming a World-Class Fully Integrated Industrial Real Estate Company I II III Manage, maintain and Invest and/or divest for Strengthen balance
Slide 9: Vesta's Accelerated Growth Plan: ~48.5 mm sf by 2025
Vesta’s Accelerated Growth Plan: ~48.5 mm sf by 2025 Vesta Accelerated Growth Plan (2023-2025) (2023- 2025 mm sf of GLA) Current (+) Under (+) Growth Portfolio Construction Plan(1) 2025 10.9 Vesta’s Growth Share by Region 48.5 33.7 Northwest 7.4% Northeast 32.1% Current (+) Under (+) Growth +0.8 mm
Slide 10: Solid pipeline of well-defined projects to invest ~US$829 mm
Solid pipeline of well-defined projects to invest ~US$829 mm Pipeline Estimated Value Creation Number of GLA Capex Yield on (US$ mm) Region Vesta Park buildings mm SF US$ mm Cost Northwest Mega Region (Tijuana) 2 0.5 23 12.3% Value Creation Apodaca (Monterrey) 9 2.6 100 10.5% 445 Ratio Northeast Jua
Slide 11: Strong Market Fundamentals
Strong Market Fundamentals
Slide 12: Well Positioned to Capitalize on Favorable Market Fundamentals and Industry Tailwinds
Well Positioned to Capitalize on Favorable Market Fundamentals and Industry Tailwinds • Nearshoring is a significant driver of import/export trade with Mexico • Increasing market share versus competing trading partners Drivers of US – Mexico Nearshoring US – Mexico Trade Consistently and Significant
Slide 13: E-Commerce Expected to Drive Metropolitan Areas' Increased Logistics Demand
E-Commerce Expected to Drive Metropolitan Areas’ Increased Logistics Demand • Strong local e-commerce sales growth forecast through 2025 • Increased online sales relative to total retail sales resulting in increased industrial real estate demand E-Commerce Projected Sales in Mexico(1) Estimated E-Co
Slide 14: High occupancy, supported by a strong demand
High occupancy, supported by a strong demand (Q2 2023) MIN. MAX. UNDER ASKING ASKING UNDER GROSS NET NEGATIVE *SF *INDUSTRIAL MARKET MARKET SIZE AVAILABLE VACANCY CONSTRUCTION PRICE PRICE CONSTRUCTION BTS ABSORPTION ABSORPTION ABS DELIVERED GROWTH (US/SF) (US/SF) 26,410,000 SF 169,570 SF 0.64% $ 0.4
Slide 15: Differentiated Portfolio and Strong Financial Track Record
Differentiated Portfolio and Strong Financial Track Record
Slide 16: One of the largest and most modern industrial portfolios in Mexico
One of the largest and most modern industrial portfolios in Mexico… North East Sq. ft 4,244,638 North West Buildings 21 Sq. ft 6,413,325 Clients 19 Buildings 58 Land bank acres 141.24 Clients 60 12% Land bank acres 0 19% Bajio North Sq. ft 7,280,886 Buildings 30 Clients 25 Land bank acres 374.51 21%
Slide 17: High-quality client base, increasingly diversified by industry and geography
High-quality client base, increasingly diversified by industry and geography with balanced exposure to growth and defensive sectors… Balanced portfolio use Long-term CPI linked and staggered lease maturity profile¹ (% of Occupied GLA, as of June 30, 2023) (% of Occupied GLA, as of June 30, 2023) 4.9
Slide 18: Diversified industry profile and strong tenant credit
Diversified industry profile and strong tenant credit Automotive Logistics 7.3% E-commerce Automotive 25.5% Logistics Manufacturing 40.2% 59.8% Aerospace 7.0% Food and Beverage 0.5% Energy 3.7% Aerospace Paper 1.3% Electronics 2.0% Other Vehicles 3.3% Other 12.4% Medical Devices 1.5% Plastics 2.5% *
Slide 19: Exposure to most stable business component of the automotive supply chain
Exposure to most stable business component of the automotive supply chain… Post-crisis outcome: Tier 1 manufacturers have strengthened with a significant reduction of OEM suppliers driven by market consolidation where only the best and most profitable survived. OEM 0.9% Tier 1 54.1% Tier 2 15.9% Tie
Slide 20: Portfolio development declines as stabilized GLA increases
Portfolio development declines as stabilized GLA increases GLA under construction Growth derived from various types of buildings 50% 10% 9% 46% 46% 46% 47% 43% 44% 45% 3% 5% 42% 3% 2% 38% 8% 90% 91% 36% 36% 97% 95% 34% 35% 34% 98% 33% 33% 32% 8% 97% 31% 31% 15% 9% 92% 28% 92% 23% 25% 91% 21% 20% 21%
Slide 21: Stable and predictable cash flows with profitability
Stable and predictable cash flows with profitability Highly predictable rental income & stable occupancy rates Strong Adj EBITDA growth with low margin volatility¹ (US$ in millions) (US$ in millions) 94.7% 94.3% 96.0% 97.2% 97.3% 82.0% 87. 0% 96.9% 85.0% 95.3% 84.0% 83.7% 84.0% 84.1% 84.2% 84.5% 84.
Slide 22: Long-term debt at fixed rates, with solid liquidity position
Long-term debt at fixed rates, with solid liquidity position… 30/06/2023 Rate Maturity 15 350 Secured Debt MetLife II $150.0 4.55% Aug-26 5.3 years average maturity & MetLife III $118.0 4.75% Nov-27 4.5% average interest rate MetLife Top Off $26.6 4.75% Aug-26 Total Secured Debt $294.6 Unsecured Deb
Slide 23: Accretive development, leasing and divestments drive FFO and attractive dividend
Accretive development, plus accelerated leasing activity and divestments, drive strong FFO results and pay attractive dividend $3.50 yield 7.0% 3.25 $3.00 5.9% 6.0% 5.1% 4.9% 4.9% $2.50 2.40 5.0% 4.1% 1.99 1.94 $2.00 3.8% 4.0% 1.80 2.00 3.5% 1.68 1.74 1.53 $1.50 3.0% 1.36 2.7% 2.9% 1.21 1.23 0.096 0
Slide 24: ESG at the core of our business
ESG at the core of our business
Slide 25: Leader in ESG Best Practices: Clearly Defined Long-term Commitments
Leader in Environmental, Social and Governance Best Practices: Clearly Defined Long-term Commitments Historical Milestones • Climate Change and • Creation of ESG Policies Resilience Strategy • Department and Stakeholder Reinforcement • Target Gender Equality Engagement Program • 1st Materiality Init
Slide 26: Strong corporate governance; best-in-class governance practices
Strong corporate governance; best-in-class governance practices since Vesta’s inception Board of Directors Shareholders structure1 10 Members, 8 Independent Stephen 2.1% 4.9% Craig Williams 0.7% Wieland Daniela Berho Carranza 92.3% Public Jose Manuel Float Dominguez Loreanne Garcia Ottati Luis Sollo
Slide 27: Vesta's Committees are 100% Chaired by independent directors
Vesta´s Committees are 100% Chaired by independent directors Board Committees • Review and analysis of quarterly and annual financial statements Audit Committee • Review of compliance with tax obligations 4 Members • Analysis, approval and follow-up of Company’s operating budget Corporate Practices
Slide 28: Environmental Impact Mitigation
Efficient energy Solar panels LED public lighting Interior LED lighting Used for common areas Lighting motion and natural light sensors Windows Environmental With thermal insulation Impact Mitigation Recreational area Bike storage and locker rooms Endemic landscape Carpool parking Facilities Smoke f
Slide 29: Appendix
Appendix Y LL
Slide 30: Quarterly Results
Quarterly Results Quarterly Revenue Quarterly Adjusted EBITDA and EBITDA margin 50 52 47 84.4% 83.9% 83.7% 46 82.5% 43 80.0% 43 42 40 36 36 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Revenue Adj EBITDA Adj EBITDA margin Quarterly Vesta FFO Quarterly Adjusted NOI and NOI margin³ 94.3% 94.9% 94
Slide 31: Case Studies - Toluca
Case Studies - Toluca Vesta Park Toluca II 2014 GLA 1.47 6 Million sf Operations Start Year Buildings Source: Vesta company filings as of March 31, 2023.
Slide 32: Case Studies - Guadalajara
Case Studies - Guadalajara Vesta Park Guadalajara, phase I 2020 GLA 1.8 4 Operations Start Year Million sf Buildings
Slide 33: Case Studies – Guadalupe, Monterrey
Case Studies – Guadalupe, Monterrey Vesta Park Guadalupe 2021 GLA 498 2 Operations Start Year K sf Buildings Source: Vesta 39
Slide 34: Case Studies - Tijuana
Case Studies - Tijuana Mega Region Park 2022 GLA 0.7 4 Operations Start Year Million sf Buildings Source: Vesta
Slide 35: Mexico is Crucial to North America's Trade and Manufacturing Platform
Mexico is Crucial to North America’s Trade and Manufacturing Platform Strategically located, competitive cost of labor Privileged Location Enables for Shorter Supply Chains(1) Competitive Manufacturing Labor Costs(2) Global-Mexico – Maritime Travel Times (Days) (Monthly salary in US$) $1,156 Destina
Slide 36: Mexico Proximity: Reduces supply times, improves delivery times
Mexico Proximity: Reduces supply times, improves delivery times…and particularly benefits the auto industry Impact of Tariffs on US Imports (%)(1) Share in US Imports of Auto Parts by Country(2) (Change in pp from 2011 to 2021) 2.3% 6.4 1.6% 1.3% 0.5% 0.6% 0.4% 0.5% 0.1% 0.3% 0.2% 0.3% (0.3%) (0.9%)
Slide 37: Mexico's industrial markets are capturing nearshoring growth
Mexico’s industrial markets are capturing nearshoring growth Gross Absorption within Key Markets Steady Levels of Foreign Direct Investment into Mexico (FDI)(1) Nearshoring Driving Strong Gross Absorption in (US$ bn) Mexico’s Main Industrial Markets(2) (mm sf) 60 30% 50 25% 40 20% 30 15% 20 10% 10 5
Slide 38: US/China Geopolitical turbulence is changing global supply chains
US/China Geopolitical turbulence is changing global supply chains Highly attractive Mexico manufacturing efficiency, capacity, and skillset Global Manufacturing Cost Competitiveness Index(1) Gross Absorption from Chinese Companies 2014 – 2021(3) (US = 100) (mm sq. ft.) Mexico China 4.3 92 87 91 96 8
Slide 39: Vesta Benefits from increased Mexico logistics and e-commerce
Vesta Benefits from increased Mexico logistics and e- commerce US and Mexico E-Commerce Comparison(1) Top Motivator for Online Shopping in Mexico(3) (Market Share of online retailers, %) (%) Competition 13% US Mexico Click and Collect 15% Exclusive Content 16% Market Size: US$905 bn Market Size: US$
Slide 40: Glossary of Terms
Glossary of Terms ‘‘Adjusted EBITDA’’ means the sum of profit for the period adjusted by (a) total income tax expense, (b) interest income, (c) other income-net, (d) finance costs, (e) exchange gain (loss) - net, (f) gain on sale of investment property, (g) gain on revaluation of investment property
Slide 41: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconciliations Adj EBITDA and Adj NOI For the Three-Month 6 months Period Ended June 30, Cumulative 2023 2022 2022 2021 (millions of US$) Profit for the period 95.7 53.6 151.0 103.0 (+) Total income tax expense 12.0 13.7 (0.2) 25.3 (-) Interest income (0.5) (0.1) (1.
Slide 42: Non-IFRS Financial Measures and Reconciliations (Cont'd)
Non-IFRS Financial Measures and Reconciliations (Cont’d) Net Debt and Ratio Data As of June 30, As of December 31, 2023 2022 Total Assets 3,051.0 2,953.2 Total Debt 928.9 930.5 Current Portion of Long Term Debt 4.7 4.6 Long term Debt 924.2 925.9 Direct Issuance cost 9.4 10.1 (-) Cash and cash Equiva
Slide 43: Thank you
Thank you
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