Unibail-Rodamco-Westfield SE · EURONEXT:URW
Unibail-Rodamco-Westfield — Unibail-Rodamco — Merger or Acquisition (April 2018)
50 slides from Unibail-Rodamco-Westfield's merger presentation, Apr 12, 2018
Slide 1: Creating the world's premier developer and operator of flagship shopping destinations
CREATING THE WORLD’S PREMIER DEVELOPER AND OPERATOR OF FLAGSHIP SHOPPING DESTINATIONS
Slide 2: Top reasons to support the transaction
TOP REASONS TO SUPPORT THE TRANSACTION 1 Design the future of retail 2 Build the strongest portfolio to deliver consistent growth 3 Drive superior earnings and capital growth with recent deliveries and largest retail pipeline 4 Capitalize on best in class management teams 5 Synergies will deliver ad
Slide 3: Design the future of retail
D E S I G N T H E F U T U R E O F R E TA I L 3
Slide 4: Three winners in retail
1 THREE WINNERS IN RETAIL Destination - Experience • Brand interaction • Flagship stores • Customer services • Entertainment and dining • Social experience and events Proximity - Convenience Online - efficiency • Fulfils a practical need • Personalized • Rapid and efficient • Value for money • Daily
Slide 5: The future of retail is connected retail
1 THE FUTURE OF RETAIL IS CONNECTED RETAIL Best brands need selected flagships in key locations Amazon books, Westfield Garden State Plaza Warby Parker, Century City 5
Slide 6: Build the strongest portfolio to deliver consistent growth
BUILD THE STRONGEST PORTFOLIO TO DELIVER CONSISTENT GROWTH 6
Slide 7: Creating the world's premier developer of flagship shopping destinations
CREATING THE WORLD’S PREMIER DEVELOPER 2 OF FLAGSHIP SHOPPING DESTINATIONS AND OPERATOR United States Continental Europe and London Stockholm New York Washington Silicon DC Area Valley London Los Angeles San Diego Paris Vienna Barcelona Unibail-Rodamco regions Standing flagship assets Madrid Westfie
Slide 8: In the best catchment areas
2 … IN THE BEST CATCHMENT AREAS … Best footprint in western world for catchment area spending power(1) Spending power ($Bn, PPP) 65 55 45 35 25 15 Industry Average + PARIS - LONDON - MADRID - NEW YORK - LOS ANGELES - SAN FRANCISCO Source: UBS Evidence Lab. (1) Spending power within a 30-minute drive
Slide 9: With the best assets
2 …WITH THE BEST ASSETS GDP/Capita as % Top 3 GDP/Capita as % of Top 3 City(1) of national average shopping centres City(1) national average shopping centres Warsaw 195% Stockholm 142% Paris 176% New York 141% WORLD TRADE CENTER San Jose 175% VALLEY FAIR OAKRIDGE Los Angeles 133% CENTURY CITY San 15
Slide 10: Leadership in asset quality, the must-have partner for global retailers
2 LEADERSHIP IN ASSET QUALITY, THE MUST-HAVE PARTNER FOR GLOBAL RETAILERS Creating a one-stop solution for global retailers looking for top quality locations Number of A++ assets(1) Average GMV at 100% per asset(2) 15 €647 Mn(3) 13 €509 Mn €405 Mn 4 3 €150 Mn + + (1) Source: Green Street Advisors. I
Slide 11: Global leader with premium quality portfolio
2 GLOBAL LEADER WITH PREMIUM QUALITY PORTFOLIO As at December 31, 2017 Unibail-Rodamco Westfield Pro forma GMV(1) €43.6 Bn €18.4 Bn €62.0 Bn # of countries(3) 11 2 13 # of shopping centres 67 35 102 Average footfall per flagship asset (Mn)(4) 15.1 16.6 15.2 Portfolio by segment(1) Portfolio by regio
Slide 12: Westfield is not a proxy for the US
2 WESTFIELD IS NOT A PROXY FOR THE US ... US shopping centres Westfield’s share of GMV at 100% of A++ assets well above peers(1) repartition by grade(2) 3% A++ 14% 6% A+ 9% A 29% 29% 40% 39% 11% A- A++ 55% 14% B+ 73% 15% B 56% 63% 10% B- 52% 59% 9% C+ A+, A, A- 39% 10% C 14% 10% C- 9% 13% Other 6% 2
Slide 13: With assets in a league of their own
2 … WITH ASSETS IN A LEAGUE OF THEIR OWN… Flagship Shopping Destinations Westfield UTC Westfield Garden State Plaza Typical US Malls 13
Slide 14: And highest sales productivity
2 … AND HIGHEST SALES PRODUCTIVITY Top US REITs A Malls US Average $833 $782 $740 $735 $719 $712 Average US: $436 $389 $260 Taubman GGP Simon Macerich A Malls B Malls C Malls Sales (US$/sqft)(1) in US (1) Source: Green Street Advisors, A malls and higher rated only for Westfield, Taubman, GGP, Macer
Slide 15: Westfield is not a proxy for the US
2 WESTFIELD IS NOT A PROXY FOR THE US Flagships: the vast majority of portfolio(1) Regional assets well above average US B / C malls(2) Sales / Sqft (US$) 14% 700 650 600 577 550 500 €18.4 Bn 450 425 400 389 260 350 300 86% 250 Average Oakridge Other Average US Average US and Valencia Westfield B Ma
Slide 16: Drive superior earnings and capital growth with recent deliveries and largest retail pipeline
D R I V E S U P E R I O R E A R N I N G S A N D C A P I TA L GROWTH WITH RECENT DELIVERIES A N D L A R G E S T R E TA I L P I P E L I N E 16
Slide 17: NRI growth from 2017 deliveries
3 NRI GROWTH FROM 2017 DELIVERIES TIC: €0.9 Bn TIC: €1.1 Bn Wroclavia Centrum Chodov Century City Westfield UTC Carré Sénart Glories 2017 Deliveries - TIC: €2.0 Bn – Yield on Cost(1): 7.0 - 8.0% EUR/USD FX rate of 1.23 as at 29-Mar-18 (1) Unibail-Rodamco and Westfield disclosures, Total Investment C
Slide 18: Creating the largest pipeline to generate capital growth
3 CREATING THE LARGEST PIPELINE TO GENERATE CAPITAL GROWTH Combined pipeline(1) paving the way for capital growth €13.0 €3.1 €1.3 €0.6 €0.5 €0.4 (2) + Source: Companies’ filings Note: Development pipeline for global retail peers (€ Bn). As at December 31, 2017 (1) Unibail-Rodamco’s view of Westfield
Slide 19: Balanced risk profile for the combined pipeline
3 BALANCED RISK PROFILE FOR THE COMBINED PIPELINE Geographically spread - 41% in extensions and renovations By segment(1) By region(1) Central Europe €1.1 Bn The Netherlands €0.4 Bn 4% 3% 8% Belgium France Retail 3% 5% 19% €5.4 Bn Spain €1.5 Bn 6% 12% 41% Germany 9% €13.0 Bn €13.0 Bn 14% France Offi
Slide 20: Phased deliveries to create value
3 PHASED DELIVERIES TO CREATE VALUE 7.0 - 8.0% yield on cost(1) can generate ~ €1 Bn of additional NRI Westfield London Valley Fair Westfield Milan Croydon Total TIC: 2018: €0.4 Bn 2019: €1.3 Bn 2020: €2.1 Bn 2021: €3.7 Bn 2022: €2.2 Bn €13.0 Bn Mall of the Trinity Velizy 2 La Part Dieu Netherlands
Slide 21: Capitalize on best in class management team
C A P I TA L I Z E O N B E S T I N C L A S S MANAGEMENT TEAM 21
Slide 22: Capitalizing on best in class management teams
4 CAPITALIZING ON BEST IN CLASS MANAGEMENT TEAMS Operating management skills Integrated development capabilities Digital Specialty leasing Balance sheet management Advertising International Financial disclosure Leasing Brand events / Entertainment Corporate governance / CSR Westfield brand Build a n
Slide 23: Implementing Unibail-Rodamco's skills at Westfield
4 IMPLEMENTING UNIBAIL-RODAMCO’S SKILLS AT WESTFIELD... Marketing Action Plan Leasing Action Plan Operating Management Estimated Rental Value review 5 Year Business Plan GRI Year + 2 Active interest rate management Active balance sheet Disposal discipline management 1.4% cost of debt(1) and 7.2 year
Slide 24: And Westfield's skills at Unibail-Rodamco
4 … AND WESTFIELD'S SKILLS AT UNIBAIL-RODAMCO Long-term vision Development Integrated in-house capabilities Ambition level Speciality leasing Generate new revenue Advertising streams Events & Entertainment International Direct access to US / UK retailers Leasing Accelerate roll-out in continental Eu
Slide 25: Westfield well positioned for e-commerce
4 WESTFIELD WELL POSITIONED FOR E-COMMERCE AND … New sources of growth Ama zonbooks 19% (1) Fa bletic s 12.5% (1) Microsoft 10% (1) Bonobos, Westfield UTC Bonobos 6.1% (1) Athleta 4.3% (1) Warby Parker 3%(1) UNTUCKit, Westfield UTC Sources: Westfield and other companies public information (1) % of s
Slide 26: Skilled in sourcing new revenue streams
4 … SKILLED IN SOURCING NEW REVENUE STREAMS Samsung Pop-up, Westfield Stratford Lady Gaga concert, Westfield London Digital Wall, Westfield World Trade Center Car Boot Fair, Westfield London 26
Slide 27: 1.2 Bn visits provide insight/data
4 1.2 BN VISITS PROVIDE INSIGHT/DATA AND… Total footfall from 0.8 Bn to 1.2 Bn Footfall of top 20 assets(1) (Mn) 49 42 42 33 28 25 22 22 21 20 20 19 19 17 15 15 15 14 14 14 STRATFORD LONDON VALLEY FAIR GARDEN STATE SAN FRANCISCO UTC CITY PLAZA CENTRE (1) Based on Top 20 A++ and A+ rated malls as per
Slide 28: Offer retailers the best platform to connect with customers
4 … OFFER RETAILERS THE BEST PLATFORM TO CONNECT WITH CUSTOMERS Creating unique places and experiences… 1.2 Bn visits(1) / year … maximizes in-store brand interaction Flagship Shopfronts Advertising Airport – captive audiences (1) Does not include airports 28
Slide 29: Synergies will deliver additional earnings and cash flows
SYNERGIES WILL DELIVER ADDITIONAL EARNINGS AND CASH FLOWS 29
Slide 30: €100 million of synergies
(1) 5 €100 MILLION OF SYNERGIES Significant costs synergies Most of revenue synergies from UR portfolio Closure of Sydney HQ Apply Unibail-Rodamco travel policies Asset Management Spin-off of One Market, an early stage cash-flow negative subsidiary Digital & IT Leasing Synergies Annual savings from
Slide 31: Strengthen retailer relationships and accelerate global roll-out
5 STRENGTHEN RETAILER RELATIONSHIPS AND ACCELERATE GLOBAL ROLL-OUT Transatlantic cross-fertilisation potential Number of shops 186 21 88 83 165 29 27 4 76 59 14 10 6 23 7 Unibail-Rodamco Westfield Source: Company’s filings, brokers’ reports 31
Slide 32: Transaction to unlock NAV and REPS accretion and preserve strong balance sheet
TRANSACTION TO UNLOCK NAV AND REPS ACCRETION AND PRESERVE STRONG BALANCE SHEET 32
Slide 33: A fair offer based on Unibail-Rodamco and Westfield NAV
6 A FAIR OFFER BASED ON UNIBAIL-RODAMCO AND WESTFIELD NAV… Westfield’s NAV(1) (US$ Bn) – as at June 30, 2017 A Fair Offer Value Per Security (US$) 4.81 6.99(1) Unibail-Rodamco EPRA NAV per share (€)(5) 206.2 x Exchange ratio 0.01844 x USD / EUR FX rate(6) 1.18 14,534 Implied value per Westfield secu
Slide 34: Provides NAV and EPS accretion
6 … PROVIDES NAV AND EPS ACCRETION Accretive deal for shareholders of the New Group, benefitting from low cost of debt Additional value from €100 Mn run-rate synergies Westfield Unibail-Rodamco Value of synergies / Stapled Share(1) Illustrative valuation range 5.7% 5.8% €18 €15 €12 4.8% 5.6% 1.4% 20
Slide 35: Continued focus: maintain strong balance sheet
6 CONTINUED FOCUS: MAINTAIN STRONG BALANCE SHEET Unibail-Rodamco’s balance sheet to remain very strong A category rating preserved ‘A’ Rating Affirmed - Outlook stable 4.1x 3.6x 3.5x 4.0x 4.2x 4.6x 5.9x 6.7x 5.6x 38% (1) ‘A2' Rating - Outlook stable 37% 37% 37% 37% 37% 35% ‘A’ rating - Rating watch
Slide 36: Continued focus: disposals to maintain strong balance sheet
6 CONTINUED FOCUS: DISPOSALS TO MAINTAIN STRONG BALANCE SHEET Impact of hybrid and disposals on LTV 3.2% ~3.0% 40.3% 37.0% 37.1% 39.0% 36.0% < 36% < 34% Proforma Pro forma consolidated consolidated €2 €2Bn Bnrefinancing refinancing Consolidated LTV Consolidated LTV Proportionate LTV Proportionate €3
Slide 37: Efficient structure for shareholders
EFFICIENT STRUCTURE FOR SHAREHOLDERS 37
Slide 38: Efficient structure for the New Group shareholders
7 EFFICIENT STRUCTURE FOR THE NEW GROUP SHAREHOLDERS Structure designed to avoid any disadvantage from holding US assets • Former shareholders of Unibail-Rodamco and Westfield to hold(2) stapled Unibail-Rodamco / Westfield securities consisting of one Unibail-Rodamco share + one Newco share security
Slide 39: Common strategy - clear action plan
C O M M O N S T R AT E G Y - C L E A R A C T I O N P L A N 39
Slide 40: Common strategy - clear action plan
8 COMMON STRATEGY - CLEAR ACTION PLAN Integration committee at work • Day 1 readiness • Talent retention • “Merger” of financial systems upon closing Organization to match international structure of the enlarged group • Keep UK HQ in London and US HQ in Los Angeles July 2018: roll-out of Unibail-Rod
Slide 41: Conclusion
CONCLUSION 41
Slide 42: Next steps and summary timetable
NEXT STEPS AND SUMMARY TIMETABLE Key milestones Consultation of Unibail-Rodamco’s works councils FIRB Regulatory Approval AMF and AFM visa Publication of Transaction documentation Unibail-Rodamco AGM May 17 Westfield Scheme Meetings May 24 Payment of Unibail-Rodamco 2017 final dividend May 30 Effect
Slide 43: Appendices
APPENDICES 43
Slide 44: Strong sell side feedback
STRONG SELL SIDE FEEDBACK “There seems to be some discussion given the recent performance of Unibail’s share price as to whether the bid for Westfield is still attractive to shareholders. We would suggest that the offer is still attractive to Westfield shareholders. Sure the implied price is lower,
Slide 45: Unibail delivered on Rodamco deal despite concerns
UNIBAIL DELIVERED ON RODAMCO DEAL DESPITE CONCERNS Key concerns on the 2007 UNIBAIL/RODAMCO merger Share price out-performance following a 5-Y implementation plan 140 “Management identified EUR40-65Mn of leasing UR Delivered and refurbishment synergies at the time of the merger to be realised by 201
Slide 46: Unibail-Rodamco CDI and the Westfield acquisition
UNIBAIL-RODAMCO CDI AND THE WESTFIELD ACQUISITION Unibail-Rodamco CDIs allow Westfield investors to maintain exposure to the New Group on the ASX The CDIs will remain index relevant at varying levels of take up CDIs are an attractive consideration alternative Offer construct Investment highlights Of
Slide 47: Precedent CDI metrics
PRECEDENT CDI METRICS CDIs have similar levels of liquidity as headstock and constituents High trading correlation between CDIs and headstock of the index they sit within Trading in first twelve months of listing Relative Relative Relative Relevant liquidity liquidity liquidity index of CDI of heads
Slide 48: Summary of key risk factors
SUMMARY OF KEY RISK FACTORS Key risks relating to the New Group and its business Key risks relating to the Transaction and the Stapled Shares The New Group real estate portfolio and the returns from its investments The completion of the Transaction is subject to a number of could be adversely affect
Slide 49: Disclaimer
DISCLAIMER By reading the following presentation slides, you further agree to be bound by the following limitations and qualifications: This presentation is for informational purposes only and is not intended to and doss not constitute an offer or invitation to sell or solicitation of an offer to su
Slide 50: Disclaimer
DISCLAIMER This document does not constitute a prospectus. Any investor should make his investment decision, solely on the basis of information that is contained in the Prospectus approved by the French Autorité des marches financiers (AMF) and the Dutch Autoriteit Financiële Markten, (AFM) and made