Warehouses De Pauw SA · EURONEXT:WDP
Warehouses De Pauw SA — WDP — H1 2014 Earnings Presentation
56 slides from Warehouses De Pauw SA's earnings presentation, Aug 8, 2014
Slide 1: H1 Results 2014
H1 RESULTS 2014 8 AUGUST 2014 1
Slide 2: Agenda
AGENDA > Introduction > WDP in a nutshell > Roll-out growth plan 2013-16 > Operational review > Highlights H1 2014 > Results analysis > Financing structure > WDP share > Outlook 2014 2
Slide 3: Introduction
INTRODUCTION Existing portfolio New investments Funding > High occupancy rate > Market leadership > Equity reinforced sustained position in the Benelux through optional > Two important sites re- confirmed dividend let upfront and to be > Several new reference > First retail bond issue, redeveloped (
Slide 4: Introduction
INTRODUCTION 2013 2014 2015-16 > Roll out new > A “year of growth plan construction” > 40% or 250m > Multiple new euros of pre-let targeted projects in growth execution identified > Financing secured > Already 2/3 of targeted portfolio growth identified > Ca. 140m euros pre-let development projects
Slide 5: WDP in a nutshell
WDP IN A NUTSHELL PURE PLAYER IN WAREHOUSE SECTOR Acquisitions Developments Sustainability Portfolios New build BREEAM Sale and rent back Refurbishments Renewable energy ACTIVE AND FLEXIBLE INVESTOR BUILT ON SOLID FOUNDATIONS > Creating long-term partnerships > Supported by defensive REIT > Focus on
Slide 6: Prioritize controlled growth
PRIORITIZE CONTROLLED GROWTH Shareholders Clients > Improve earnings visibility > Build long-term partnerships > Access to debt and equity > Offer creative deal structuring markets and improve services > Enhance return and > Diversify risk exposure and create conservative risk profile efficiency gai
Slide 7: Built on strong fundamentals
BUILT ON STRONG FUNDAMENTALS >95% Historical average occupancy rate >8% Consistently high portfolio yield (based on long lease duration) <10% Operating expenses as a % of revenues <4% Controlled cost of debt (based on solid risk profile) 55-60% Constant capital structure synchronizing debt and equit
Slide 8: Operating as a genuine commercial entity
OPERATING AS A GENUINE COMMERCIAL ENTITY OPERATIONAL/COMMERCIAL ENTITY WITH A CLIENT-ORIENTED FOCUS Understanding Corporate Corporate Sustainability clients’ needs website brochure GENUINE CORPORATE IDENTITY 8
Slide 9: CCELERATING
CCELERATING THE R ANSWE A WORLD efficiency score
Slide 10: Geographical footprint
GEOGRAPHICAL FOOTPRINT Portfolio fair value split H1 2014(*) TOTAL > Value: 1,321m euros > Gross yield: 8.2% > Vacancy rate: 3.0% > 2.2m m² buildings > 5.5m m² land The Netherlands > Value: 509m euros > Gross yield: 8.6% > Vacancy rate: 3.4% > 823,000 m² buildings > 1,347,000 m² land Belgium > Value
Slide 11: Healthy sector and strategic logistics location
HEALTHY SECTOR AND STRATEGIC LOGISTICS LOCATION Preparing products for Attractiveness European markets FOCUS OPBRENGST Informatie- Gain stroom UNIQUE sharing 4PL Strategisch VALUE PROPOSITION 3PL Know-how Tactisch Proximity 2PL Goederen- Kost per OF LOGISTICS stroom Operationeel pallet and 1990 1995
Slide 12: Roll-out growth plan 2013-16
ROLL-OUT GROWTH PLAN 2013-16 > Ambition to grow EPS in 4 years by 20-25% to 4.40-4.60 euros by 2016 > … based on: ■ Increasing portfolio with 50% or 600m euros in existing markets, especially the Benelux - Acquisitions (direct, sale and rent back, portfolio) - Developments for own account on existin
Slide 13: Roll-out growth plan 2013-16
ROLL-OUT GROWTH PLAN 2013-16 ca. 220m euros acquisitions (**) ca. 2/3 of 600m euros targeted ca. 400m euros portfolio growth identified identified ca. 140m euros projects in ca. 40m execution (*) euros projects executed (*) Excluding long-term uncommitted development potential on land reserves and c
Slide 14: Purchases 2014
PURCHASES 2014 Transaction Country Surface Type Zaventem BE 19,000 m² Multi-unit Ternat BE 9,000 m² Logistic site Zwolle NL 18,000 m² Logistic site Tilburg NL 20,000 m² Logistic site Echt (Susteren) (*) NL 73,000 m² Logistic site Duiven (**) NL 23,000 m² Logistic site Venray (**) NL 40,000 m² Logist
Slide 15: Belgium - Zaventem
BELGIUM - ZAVENTEM Multi-unit of around 19,000 m² close to Brussels Airport 15
Slide 16: Belgium - Ternat
BELGIUM - TERNAT Warehouse of around 9,000 m², leased to ALD Automotive 16
Slide 17: The Netherlands - Zwolle
THE NETHERLANDS - ZWOLLE Warehouse site of 18,000 m² (holding expansion potential), leased to Altrex 17
Slide 18: The Netherlands - Tilburg
THE NETHERLANDS - TILBURG Warehouse site of more than 20,000 m², leased to Bakker Logistiek 18
Slide 19: The Netherlands - Echt (Susteren)
THE NETHERLANDS - ECHT (SUSTEREN) Sale and rent back of around 73,000 m² after completion, leased to Action 19
Slide 20: The Netherlands - Duiven
THE NETHERLANDS - DUIVEN Logistic complex including offices of around 23,000 m², leased to Nedac Sorbo 20
Slide 21: The Netherlands - Venray
THE NETHERLANDS - VENRAY Warehouse site of more than 40,000 m² (and 35,000 m² expansion potential), leased to CEVA Logistics 21
Slide 22: Disposals 2014
DISPOSALS 2014 Transaction Country Type Divestment Boom BE Office € 1m > Optimizing portfolio ~ 1m euros disposals (at fair value) (*) (*) All disposals are based on a transaction value in line with the latest fair value at the time the disposal was agreed. 22
Slide 23: Projects executed 2014
PROJECTS EXECUTED 2014 Location Country Surface Completion Tenant Londerzeel BE 14,500 m² Q1 2014 Colfridis Zwolle NL 4,000 m² Q1 2014 Kuehne + Nagel Eindhoven NL 8,000 m² Q2 2014 Brocacef Total 26,500 m² > Total capex of ca. 18m euros > Yield on total cost > 8% 23
Slide 24: Belgium - Londerzeel (Colfridis)
BELGIUM – LONDERZEEL (COLFRIDIS) New development of a 14,500 m² tailor-made warehouse along A12 motorway 24
Slide 25: The Netherlands - Eindhoven (Brocacef)
THE NETHERLANDS – EINDHOVEN (BROCACEF) Turnkey development of warehouse of more than 8,000 m² Check out YouTube movie 25
Slide 26: Projects in execution (pre-let)
PROJECTS IN EXECUTION (PRE-LET) Location Country Type Surface Completion Tenant Luik (Flémalle) BE New build 2 000 m² Q3 2014 DPD Vilvoorde BE New build 7 000 m² Q1 2015 Intertrans Willebroek, Kon. Astridl. 14-16 BE New build 10 000 m² Q1 2015 Distri-Log Willebroek, V. Dumonl. 4 BE Renovation 34 000
Slide 27: Belgium - Grimbergen (Caterpillar)
BELGIUM – GRIMBERGEN (CATERPILLAR) Existing site partially redeveloped and expanded into a strategic logistic hub of some 60,000 m² 27
Slide 28: Belgium - Londerzeel (Lantmännen Unibake)
BELGIUM – LONDERZEEL (LANTMÄNNEN UNIBAKE) Development of 9,500 m² deep- freeze warehouse for 20,000 m² pallet places 28
Slide 29: Belgium - Willebroek (Bakker Logistiek Groep)
BELGIUM – WILLEBROEK (BAKKER LOGISTIEK GROEP) Renovation and transformation of the existing site of some 34,000 m² into a fully-conditioned warehouse, fully reflecting the needs of the tenant 29
Slide 30: The Netherlands - Schiphol (Kuehne + Nagel)
THE NETHERLANDS – SCHIPHOL (KUEHNE + NAGEL) Development of a brand new warehouse of 13,000 m² at a high quality logistic site 30
Slide 31: The Netherlands - Bleiswijk (MRC Transmark)
THE NETHERLANDS – BLEISWIJK (MRC TRANSMARK) Development of a warehouse with adjoining offices of more than 10,000 m² 31
Slide 32: The Netherlands - Tiel (Kuehne + Nagel)
THE NETHERLANDS – TIEL (KUEHNE + NAGEL) Development project, totaling 27,000 m² of warehouse space with adjoining offices 32
Slide 33: The Netherlands - Zwolle (wehkamp.nl)
THE NETHERLANDS – ZWOLLE (WEHKAMP.NL) BREEAM-certified e-commerce warehouse, developed for wehkamp.nl of around 35,000 m² 33
Slide 34: The Netherlands - Harderwijk (Alcoa)
THE NETHERLANDS – HARDERWIJK (ALCOA) Development of warehouse of around 17,000 m², tailor-made for Alcoa 34
Slide 35: Development potential (uncommitted)
DEVELOPMENT POTENTIAL (UNCOMMITTED) Location Country Buildable surface (*) Port of Ghent BE 180,000 m² (**) Heppignies BE 80,000 m² Trilogiport BE 50,000 m² (**) Meerhout BE 23,000 m² (**) Sint-Niklaas BE 16,000 m² Courcelles BE 10,000 m² Libercourt FR 24,000 m² Various RO tbd > Land positions with
Slide 36: Highlights H1 2014 - On track
HIGHLIGHTS H1 2014 – ON TRACK OPERATIONAL RESULTS > Strong fundamentals FINANCIAL > Ambition for an expected net current result for 2014 sustained (occupancy at > Active balance sheet increased to 4.05 euros per ca. 97% and lease duration management (synchronized share (upped from 4.00 at 7y) debt a
Slide 37: Highlights H1 2014 - Key figures
HIGHLIGHTS H1 2014 – ON TRACK KEY FIGURES Operational 30.06.2014 31.12.2013 Fair value of real estate portfolio (incl. solar panels) (in million euros) 1 395,4 1 273,1 Gross rental yield (incl. vacancy) (in %) 8,2 8,2 Net initial yield (EPRA) (in %) 7,5 7,5 Average lease duration (till first break)
Slide 38: Strong portfolio quality
STRONG PORTFOLIO QUALITY > Investments reflect long-term consideration and entrepreneurship Locations on strategic logistic corridors Robust building quality, integrating sustainability & flexibility throughout lifecycle Diversified portfolio and integrated facility management to tailor client
Slide 39: Occupancy
OCCUPANCY > Continued high occupancy ■ Occupancy rate 97.0% end H1 2014(vs. 97.4% end 2013) ■ Lease renewal rate of circa 90% over the last 5 years ■ More than 90% of rental breaks in 2014 already secured year-to-date Historical occupancy rate Lease maturity profile (till first break) 100,0% 40% 8,0
Slide 40: Diversified client base...
DIVERSIFIED CLIENT BASE… > Well-spread tenant profile ■ Active in multiple industries and predominantly large (inter)national corporates ■ Healthy mix between end-users and logistic service providers ■ Top tenants spread over multiple buildings / businesses / countries (max. building risk <5%) 13% 3
Slide 41: ... with long-term leases
… WITH LONG-TERM LEASES > Income visibility ■ Circa 35% of contracts have a duration of minimum 10y ■ Focus on long-term quality cash flows ■ Strong historical client retention rate & fidelity WEIGHTED AVERAGE LEASE DURATION (in Y) TILL FIRST BREAK TILL EXPIRATION Rental contracts (excl. solar panel
Slide 42: H1 2014 consolidated results
H1 2014 CONSOLIDATED RESULTS (*) Net current profit (in euros x 1 000) H1 2014 H1 2013 % Growth Rental income, net of rental-related expenses 45 134 40 271 12,1% I ncome from solar energy 3 826 3 196 19,7% Other operating income/charges -337 -101 n.r. Property result 49 297 43 366 13,7% Property cos
Slide 43: H1 2014 consolidated results
H1 2014 CONSOLIDATED RESULTS Per share data H1 2014 H1 2013 % Growth Net current result (EPRA) (*) 2,04 1,93 5,4% Portfolio result 0,10 0,23 n.r. I AS 39 result -0,68 0,98 n.r. Net profit (I FRS) 1,45 3,15 n.r. Weighted av erage number of outstanding shares 16 145 370 15 198 946 6,2% Net current res
Slide 44: H1 2014 consolidated B/S
H1 2014 CONSOLIDATED B/S (*) in euros x 1 000 30.06.2014 31.12.2013 30.06.2013 I ntangible fixed assets 142 114 186 Property inv estments 1 292 825 1 167 733 1 036 803 Other tangible fixed assets (incl. solar panels) 65 349 66 814 67 767 Financial fixed assets 23 337 23 384 20 863 Trade receiv ables
Slide 45: H1 2014 consolidated B/S
H1 2014 CONSOLIDATED B/S in euros x 1 000 30.06.2014 31.12.2013 30.06.2013 Capital 128 574 124 898 121 952 I ssue premiums 196 262 177 057 159 221 Reserv es 170 279 145 451 146 183 Net result of the financial year 23 445 79 674 47 878 Equity capital 518 560 527 080 475 234 Long-term financial debt 5
Slide 46: Financial management
FINANCIAL MANAGEMENT > Management of capital structure ■ Matching property acquisitions with simultaneous debt and equity issuance ■ Equity base strengthened by 23m euros through optional dividend ■ Debt ratio expected to remain stable in 2014 vs. 2013 (at around 56%) > Debt financing ■ Retail bond
Slide 47: Maintaining balanced capital structure
MAINTAINING BALANCED CAPITAL STRUCTURE 600 600 500 500 400 400 300 300 200 200 100 100 0 0 Portfolio growth 2010-14YTD (in million Funding sources 2010-14YTD (in million euros) euros) capex existing portfolio retained earnings solar panels new equity pre-let (re-)developments disposals acquisitions
Slide 48: Financing structure
FINANCING STRUCTURE > Solid debt metrics ■ Debt ratio H1 2014 at 58.2% ■ ICR at 3.6x based on long-term visibility and high hedge ratio (currently at 80%) ■ Cost of debt at 3.6% Evolution hedge ratio 90% 6,0 80% 5,0 Commercial paper 70% 18% 60% 4,0 50% 3,0 Debt Bonds 40% 22% composition 30% 2,0 20%
Slide 49: Financing structure
FINANCING STRUCTURE > Well-spread debt maturities ■ Duration of outstanding debt of 3.8y (incl. commercial paper) (extended by 1y over H1 2014) ■ Duration of long-term credit facilities of min. 4.1 and max. 4.4y (*) ■ Committed undrawn long-term credit lines of 120m euros(**) Debt maturities (min.)
Slide 50: WDP share
WDP SHARE > Share statistics ■ NAV (EPRA) per share of ca. 35 euros at H1 2014 ■ Market cap of ca. 925m euros ■ Free float of 73% - Family Jos De Pauw 27% WDP share price vs. NAV EPS and DPS history 70 4,50 4,00 60 3,50 50 3,00 40 2,50 30 2,00 1,50 20 1,00 10 0,50 0 - WDP share price Net Asset Value
Slide 51: WDP share
WDP SHARE > Return of WDP share 700 600 500 400 300 200 100 0 FTSE EPRA/NAREIT Belgium/Luxembourg Index Total return (in euros) FTSE EPRA/NAREIT Euro Zone Index Total return (in euros) FTSE EPRA/NAREIT Developed Europe Index Total return (in euros) WDP Total return (in euros) 51
Slide 52: Outlook 2014
OUTLOOK “2014 – Year of construction” > Expected net current result per share of 4.05 euros (upgraded from 4.00 euros) (*) > … based on: ■ high occupancy (projected to be minimum 96% on average throughout 2014) ■ high lease renewal rate (13% lease expiries in 2014, of which already > 90% renewed) ■
Slide 53: Consistent performance
CONSISTENT PERFORMANCE Earnings growth based on constant capital structure 4,50 65% 4,00 3,50 60% 3,00 2,50 55% 2,00 1,50 1,00 50% 0,50 - 45% 2009 2010 2011 2012 2013 2014E EPS (EPRA) DPS Debt ratio (rhs) > Creating growth and profitability > Efficient deployment of capital (debt and equity) 53
Slide 54: Contact details
CONTACT DETAILS > Joost Uwents CEO T +32 (0)52 338 400 M +32 (0)476 88 99 26 joost.uwents@wdp.be > Mickael Van den Hauwe CFO T +32 (0)52 338 400 M +32 (0)473 93 74 91 mickael.vandenhauwe@wdp.be 54
Slide 55: Disclaimer
DISCLAIMER Warehouses De Pauw Comm. VA, abbreviated WDP, having its registered office at Blakebergen 15, 1861 Wolvertem (Belgium), is a public closed-end property investment company, incorporated under Belgian law and listed on Euronext Brussels. This presentation contains forward-looking informatio
Slide 56: Warehouses with brains
a wbDpP WAREHOUSES WITH BRAINS