Waypoint Reit Ltd. · ASX:WPR
Waypoint Reit — H1 2024 Earnings Presentation
36 slides from Waypoint Reit's earnings presentation, Aug 29, 2024
Slide 1: 1H24 Results Presentation
1H24 Results Presentation 29 August 2024 Hadyn Stephens – CEO and Managing Director Aditya Asawa – Chief Financial Officer
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation has been prepared by Waypoint REIT (“WPR” or Industry data and third party m arket data the inherent regulatory risks in the business of WPR such forw ard looking “Waypoint REIT”) w hich is a stapled entity comprising shares in Waypoint This presenta
Slide 3: WPR Investment Proposition
WPR Investment Proposition Secure rental income with embedded growth, underpinned by long-term leases to top-tier tenants ESSENTIAL ECONOMIC INFRASTRUCTURE ASX-LISTED MAJOR TENANT (VIVA ENERGY) • >7,300 F&C outlets in Australia1, providing an ‘essential • Australia’s largest owned and operated F&C n
Slide 4: Portfolio Snapshot
Portfolio Snapshot High quality portfolio with 91% weighting to metropolitan and highway locations Avg. Book Avg. Avg. Popn. Value WACR Value Site (500m/ WALE Category Description # (Jun-24) (Jun-24) (Jun-24) Area 3km) (Jun-24) Key Portfolio Statistics Capital Cities Capitals of the 8 271 $1,951.2m
Slide 5: Agenda
Agenda 1. 1H24 Highlights 6 2. Financial Results and Capital Management 8 3. Market and Portfolio Update 13 4. VEA Update 18 5. Key Priorities and Outlook 21 6. Additional Information 23 7. Glossary 32 5
Slide 6: 1H24 Highlights
g Director 1H24 Highlights Hadyn Stephens Managing Director and CEO 6
Slide 7: 1H24 Highlights
1H24 Highlights 2.1% increase in NTA per security, gearing maintained at lower end of range, strong hedging position Financial Performance Property Portfolio Capital Management Other Distributable EPS: 8.28cps1 WACR: 5.74% Gearing: 32.6% Viva Energy Australia3 In line with 1H23 +6bp since Dec-23 Low
Slide 8: Financial Results and Capital Management
Financial Results and Capital Management Aditya Asawa Chief Financial Officer 8
Slide 9: Financial Performance
Financial Performance 1H24 DEPS in line with 1H23, with rental growth and lower operating expenses offsetting higher interest expense 1H24 1H23 Change Change $m $m $m % Commentary 1 Rental income 80.3 77.9 2.4 3.1 1 Like for like rent growth of 3.1% 2 Operating expenses (4.6) (5.0) 0.4 (8.0) 2 Reduc
Slide 10: Balance Sheet
Balance Sheet 2.1% increase in NTA per security, gearing remains at the lower end of target range Jun-24 Dec-23 Change Change $m $m $m % Commentary Cash and equivalents 15.5 13.3 2.2 16.5 1 Increase primarily due to net revaluation gain ($35.7m), straight lining rent adjustment ($1.7m) and capital e
Slide 11: Capital Management
Capital Management Prudent capital management position with headroom to covenants Jun-24 Dec-23 Change Commentary 1 Facility limit ($m) 1,138.6 1,048.6 90.0 1 Increased facility limit covers all debt expiries in FY25 and FY26 Drawn debt ($m)1 935.6 927.6 8.0 2 Gearing at lower end of target range (3
Slide 12: Debt and Hedging Profile
Debt and Hedging Profile Available liquidity covers FY25 & FY26 debt maturities; high level of hedging to end of FY26 • $600m of refinancing activity in 1H24 has significantly extended WPR’s debt maturity • Progressive increase in hedging levels at prevailing market rates profile – FY25: hedging inc
Slide 13: Market and Portfolio Update
g Director Market and Portfolio Update Hadyn Stephens Hadyn Stephens Managing Director and Chief Executive Officer Managing Director and CEO 13
Slide 14: Transaction Market Update
Transaction Market Update Transaction volumes showing signs of increased momentum National Transaction Volume • Transaction Volumes $700 7.00% – Transaction volumes beginning to lift from historical lows of 2023 $600 6.00% $500 5.00% – 40 transactions ($245m) in 1H24 vs. 33 transactions ($184m) in 1
Slide 15: Valuations
Valuations1 6bp increase in portfolio WACR offset by rent increases; Highway sites have proven most resilient through cycle Gross Value ($m)1 WACR (%) Cap rate expansion since June 2022 # of Properties @ 30-Jun-24 Dec-23 Jun-24 Variance Dec-23 Jun-24 Change Capital Cities 28bp 12bp 26bp 6bp +72bp Ca
Slide 16: Valuations (cont.)
Valuations (cont.) NSW has experienced the greatest cap rate expansion over 24 months (high metro weighting, tightest WACR) NSW VIC QLD WA SA ACT TAS NT Portfolio 5% 2% 2% 1% 30% 10% % of WPR portfolio value: 20% 30% Cap rate change: 2H22 +40 bp +23 bp +20 bp +17 bp (2 bp) +43 bp +24 bp (45 bp) +27
Slide 17: Non-Core Asset Sales / Leasing Update
Non-Core Asset Sales / Leasing Update Limited progress on non-core asset sales in 1H24; both non-fuel leases expiring in FY24 renewed Non-Core Asset Sales: • One asset unconditionally contracted in 1H24 at 3.6% discount to Dec-23 book value; settlement in late 3Q24 • Eight assets (Jun-24 book value
Slide 18: VEA Update
g Director VEA Update Hadyn Stephens Managing Director and CEO 18
Slide 19: VEA Network Plans
VEA Network Plans 30 OTR conversions expected within the next 12 months, majority to be opened in 1H25 Updated Store Conversion and Growth Pipeline Plans1: WPR comments / observations: • VEA expects to convert 30 stores to OTR format within the next 12 months • VEA disclosures relate to the entire C
Slide 20: Conversion Plans for WPR-Owned Sites
Conversion Plans for WPR-Owned Sites Consent to lodgement of DAs provided on seven WPR-owned sites for OTR conversion • WPR has provided landowner’s consent for the lodgement of DAs for OTR conversions on seven metropolitan properties across WPR’s portfolio, as outlined in the table below • No cost
Slide 21: Key Priorities and Outlook
g Director Key Priorities and Outlook Hadyn Stephens Managing Director and CEO 21
Slide 22: Key Priorities and Outlook
Key Priorities and Outlook FY24 DEPS guidance of 16.48 cps – upper end of original guidance range • VEA expects to convert 30 stores across its ~700-store Express network to the OTR format within the next 12 months OTR Conversions • WPR has provided consent to lodgement of DAs on seven WPR-owned sit
Slide 23: Additional Information
Additional Information 23
Slide 24: Reconciliation of Distributable Earnings to Statutory Profit
Reconciliation of Distributable Earnings to Statutory Profit Increase in Statutory Profit driven by revaluation gain in 1H24 1H24 1H23 Change $m $m $m Commentary Distributable earnings 55.6 55.6 - 1 Net revaluation gain of $35.7m this period. Contracted rental growth offset an expansion in the portf
Slide 25: Lease Expiry Profile
Lease Expiry Profile1 Portfolio WALE of 7.6 years with a staggered expiry profile WALE 7.6 years 25.1% 19.2% 13.8% 7.8% 8.6% 6.6% 6.0% 6.5% 2 0.7% 0.9% 0.1% 0.7% 3.8% 0.2% 3 Vacant FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 FY39 1 26 28 35 28 28 39 59 66 69 2 3 1 2 3
Slide 26: Viva Energy Australia – 1H24 Result
Viva Energy Australia – 1H24 Result1 Transitional period for the C&M business amid a soft retail environment • Group Highlights: 1H24 1H23 Change – EBITDA and NPAT up 25% and 10% respectively on 1H23, underpinned by a Key C&M Stats: strong performance from E&I as the Geelong Refinery returned to ope
Slide 27: Retail Fuel Volumes
Retail Fuel Volumes Fuel volumes have grown at a CAGR of 1.0% over 10 years, despite the lingering impact of COVID • Total fuel sales to retailers have increased by ~10% since 2014 (~11% decline in petrol volumes, ~55% increase in diesel volumes) • Diesel now comprises ~46% of total fuel sales to re
Slide 28: Retail Fuel Prices and Margins
Retail Fuel Prices and Margins Record high average retail prices, but indicative industry margins remain elevated • Average fuel price of ~$2 per litre, with a 4.4cpl (~2%) decline in diesel being more than offset by a 13.0cpl (~7%) increase in petrol • Strong margin conditions persisted for retaile
Slide 29: Australian New Vehicle Market
Australian New Vehicle Market Growth in EV market share has slowed, strong growth in traditional hybrids New vehicles by power source (2023)2 BEV/PHEV Sales as % of New Light Vehicle Sales 1 PHEV 1.0% 12% BEV 7.5% Hybrid 10% 9.6% 8.4% 8.5% 8% Petrol 50.5% Diesel 32.6% 6% 3.8% 4% New vehicles by powe
Slide 30: National Convenience Store Sales
National Convenience Store Sales Sales growth has slowed from 3.1% in 2023 to 0.7% in 1H24; ex-tobacco growth was 4.6% (2023: 10.7%) Sales 2023 1H24 2023 Share Growth Margin Growth Category $m % % % % Tobacco 3,106 29.8 (11.2) 17.2 (13.8) Packaged beverages 2,854 27.4 12.1 45.7 5.5 Foodservice 1,342
Slide 31: IPO Portfolio vs. Bonds and Deposit Rates
IPO Portfolio vs. Bonds and Deposit Rates Minor change in spread to benchmark rates since December 2023 6.00% 5.00% 4.00% 6-mth Jun-24 Jun-24 chg. Spread 3.00% WACR (IPO assets) 5.64% +6bp - 10-yr Govt Bond 4.24% +5bp 1.40% Term deposits (all terms) 3.60% - 2.04% 2.00% 1.00% 0.00% Aug-16 Nov-16 Aug-
Slide 32: Glossary
j x SN Glossary % ~~ NSS
Slide 33: Glossary
Glossary AACS Australian Association of Convenience Stores AIP Australian Institute of Petroleum AMTN Australian Medium-Term Notes ASX Australian Securities Exchange BEV Battery electric vehicle. Powered by battery, with no secondary source of power bp Basis points BL Billion litres C&M Convenience
Slide 34: Glossary
Glossary ESG Environmental, Social and Governance EV General term for electric vehicles, typically including Petrol Hybrid Electric Vehicles, Battery Electric Vehicles and (sometimes) Fuel Cell Electric Vehicles F&B Food and Beverage F&C Fuel and Convenience FY Financial year Gearing Net debt (exclu
Slide 35: Glossary
Glossary NPAT Net profit after tax NTA Net tangible assets OTR OTR Group (“On the Run”) PHEV Plug-in hybrid battery electric vehicle; includes both a traditional ICE and a battery, which needs to be charged QSR Quick service restaurant S&P Standard & Poor's Financial Services LLC Terminal Gate Price
Slide 36: Waypoint REIT
aa a Wayezint REIT