Warehouses De Pauw Sa · EURONEXT:WDP
Warehouses De Pauw Sa — FY2023 Earnings Presentation
49 slides from Warehouses De Pauw Sa's earnings presentation, Jan 26, 2024
Slide 1: 2023 Results
2023 RESULTS 26 January 2024 1 www.wdp.eu
Slide 2: Agenda
AGENDA • 2023 highlights • #BLEND2027: introduction new growth plan • 2023 activity report • Results and balance sheet • Financial management • WDP share • Outlook 2024 Online press conference Friday 26 January 2024 03.00 pm CET 2
Slide 3: 2023 Strong earnings growth & robust fundamentals
2023 Strong earnings growth & robust fundamentals Confident for what lies ahead ROBUST BALANCE SHEET LOAN-TO-VALUE SECURED INVESTMENT PIPELINE 34% 640 DEVELOPMENTS ACQUISITIONS million euros ENERGY PROJECTS 6.4 x NET DEBT / EBITDA (ADJ.) 500m euros cost to come EPRA EPS 2023 OCCUPANCY RATE PORTFOLIO
Slide 4: Continued strong investment rhythm
Continued strong investment rhythm Improving earnings run rate whilst strengthening balance sheet +30% ANNUALIZED INCOME 2022-23 -1.5x NET DEBT/EBITDA (adj.) 4
Slide 5: Growth plan 2022-25 | Status update
2023 Growth plan 2022-25 | Status update Targets within reach amidst a challenging market backdrop GROWTH PLAN TARGET BY 2025 2024 GUIDANCE EPRA EPS 1.50 euros EPRA EPS 1.47 euros +8% CAGR vs. 2021 +10% CAGR vs. 2021 Net debt / EBITDA (adj.) ~8x Net debt / EBITDA (adj.) ~7x 2025 EPRA EPS TARGET WITH
Slide 6: Consistent delivery on ambitious targets
Consistent delivery on ambitious targets Strong track record of execution 2022-25 • External 2019-23 growth+: structural • Volume-based growth, value- 2016-20 • Balanced add from the geography existing • Solidifying • Development- portfolio and 2013-16 Benelux led climate as an position • Benelux pl
Slide 7: #BLEND2027 New growth plan 2024-27
#BLEND2027 New growth plan 2024-27 7
Slide 8: #BLEND2027 Combining multiple drivers in multiple markets
#BLEND2027 Combining multiple drivers in multiple markets BUILD B Robust structural demand drivers L LOAD Developments and acquisitions BOLSTERING OUR EUROPEAN E EXTRACT Capturing internal growth AMBITIONS(1) N NEUTRALIZE Decarbonizing logistics supply chain D DISCIPLINED Strong financial position a
Slide 9: #BLEND2027 Ambition 2027
#BLEND2027 Ambition 2027 CAPEX EPRA EPS 1.5bn euros (2) 500m euros/y with full-year impact in 2027 1.70 euros 1.36 euros DPS COST OF DEBT <2.5% +6% CAGR(1) NET DEBT / EBITDA (ADJ.) ~8x Key assumptions • Sustained structural demand in logistics real estate, with a temporary cyclical slowdown and a ca
Slide 10: #BLEND2027 Robust structural demand drivers
#BLEND2027 Robust structural demand drivers Outbound demand to E-commerce & omni-channel grow at a normalized pace Cold storage space OUTBOUND Reverse logistics Last-mile and urbanization MULTIPLE LONG-TERM Inbound demand in response Stay- and reshoring DEMAND to supply chain resilience Automation D
Slide 11: Expanding our European presence via developments and acquisitions
#BLEND2027 Expanding our European presence via developments and acquisitions DE RO Market share 9% 25% BENELUX FR L LOAD Replicating our compass for profitable growth given a substantial addressable market 11
Slide 12: Strong total return potential through organic growth & developments
#BLEND2027 Strong total return potential through organic growth & developments (1) Long term Reversion and development potential Medium term 2025 Short term 2024 Annualized Indexation Project Annualized Indexation Pre-let Potential Rent Rent potential Potential long- EXTRACT E rent 31.12.2023 2024(2
Slide 13: WDP Energy | Solar roll-out & growing e-mobility opportunities
#BLEND2027 WDP ENERGY | Solar roll-out & growing e-mobility opportunities From solar production… … to integrated energy solutions 350 MWp 182 MWp ~250 MWp 113 MWp Targeted Under development In operation 2022 2023 2025 2027 182 MWp in operation – 82 MWp under development • Green electricity through s
Slide 14: Fully-funded ambitioned growth
#BLEND2027 Fully-funded ambitioned growth 2024-27e CAPEX FULLY BACKED BY BALANCE SHEET CAPACITY & LIQUIDITY 0.5bn euros 34% COST TO COME 700m euros LTV INVESTMENT PIPELINE EXPECTED RETAINED EARNINGS & SCRIP DIVIDEND 1.8bn euros 1bn euros AVAILABLE LIQUIDITY 6.4x INCREMENTAL CAPEX ENVISAGED 800m euro
Slide 15: Activity Report 2023
ACTIVITY REPORT 2023 15
Slide 16: Acquisitions
Acquisitions Return hurdles increased in function of higher cost of capital SALE-AND-LEASE-BACK EXISTING WAREHOUSES 215,000 m² GLA LAND RESERVE 640,000 m² Capex(1) 210m euros (1) Cost to come: 173 million euros. Gross initial yield(2) 9.5% (2) Excluding land reserve. 16
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Slide 18: Projects Executed
PROJECTS EXECUTED 18
Slide 19: Projects executed
Projects executed 13y Lease duration Capex 312m euros (1) Gross yield in the Benelux: 5.9% and in Romania: 8.0%. Gross initial yield(1) 6.3% 19
Slide 20: Ty N\/
Ty N\/
Slide 21: Projects Under Development
PROJECTS UNDER DEVELOPMENT 21
Slide 22: Projects under development
Projects under development(1) High pre-letting rate and long-term lease duration (1) Based on 100% of the investment for the fully consolidated entities (incl. WDP RO) and the proportionate share for the JV’s (i.e. 55% for Luxembourg and 29% for Gosselin-WDP). The lettable area for JV’s is always sh
Slide 23: Projects under development
Projects under development(1) 71% High pre-letting rate and long-term lease duration Pre-let(2) 10y Lease duration 100% Green certified(3) Gross initial yield: 6.4% including 2023 identified projects Cost to come: 287 million euros 150 7.1% Gross yield in the Benelux: 6.1% and in Romania: 7.6% milli
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Slide 25: WDP Energy
WDP ENERGY Decarbonisation of supply chain Targeted capacity 350 MWp Installed capacity 113 MWp 182 MWp Solar capacity 2008 2022 2023 2027 82 MWp under development CAPEX 65m euros(1) 1st Green Mobility Hub Green electricity through PV for warehouse EV charging infrastructure Batteries supporting EV
Slide 26: Portfolio fair value split
Portfolio fair value split (1) Development potential ~1,700,000 m² Buildable surface (1) Excluding solar panels and including projects, land reserve and assets held for sale. Including the proportional share of WDP in the portfolio of the joint ventures (mainly WDP Luxembourg). In the IFRS accounts,
Slide 27: High-quality portfolio
High-quality portfolio WAREHOUSE QUALITY WAREHOUSE TYPE 49% Green certified ▪ Locations on strategic logistic corridors with around 50% suitable for urban logistics ▪ Robust building quality, integrating sustainability & flexibility throughout lifecycle 8y Avg. age ▪ Diversified portfolio and integr
Slide 28: Occupancy
Occupancy High occupancy and strong client retention HISTORICAL OCCUPANCY RATE LEASE MATURITY PROFILE (TILL FIRST BREAK) ▪ Occupancy rate of 98.5% on 31 December 2023 (vs. 99.1% end 2022) ▪ 99% of the 12% of leases maturing in 2023 extended – 55% of the 10% of leases maturing in 2024 extended ▪ Leas
Slide 29: Diversified
Diversified Well-spread tenant profile TOP-10 TENANTS (EXCL. SOLAR ~29%) (1) TENANT INDUSTRY ACTIVITIES BE NL 16% Dedicated e-commerce ▪ Active in multiple industries and predominantly large (inter)national corporates ▪ Healthy mix between end-users and logistic service providers ▪ Top tenants sprea
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Slide 31: Climate Action Plan
Climate Action Plan Document in full Target 2021 2023 WDP electricity 100% 56% 100% procurement green(1) by 2023 Renewable energy 250 MWp WDP Energy capacity by 2025 95 MWp 189 MWp Lead the transition towards renewable Energy monitoring 100% 73% 85% energy generation and system by 2025 optimized con
Slide 32: Financial Results 2023
FINANCIAL RESULTS 2023 wDP ‘iii i 2
Slide 33: Consolidated results
Consolidated results Analytical P&L FY 2023 FY 2022 4 yly (abs.) A yly (%) Rental income, net of rental-related expenses 336,617 292,940 43,677 14.9% Indemnification related to early lease terminations 159 ° 159 ne. Income from solar energy 24,056 22,902 4,154 5.0% Other operating income/costs 430 3
Slide 34: Consolidated results
Consolidated results (1) Including solar panels. 34 (2) Including the proportional share of WDP in the portfolio of the joint ventures.
Slide 35: Consolidated results B/S
Consolidated results B/S ine ) 31.12.2023 31.12.2022 A (abs.) A(%) Intangible fixed assets 1,198 860 337 ne Investment properties 6,430,464 6,351,916 87,548 1.4% Other tangible fixed assets (solar panels inclusive) 166,037 166,351 -315 0.2% Financial fixed assets 86,476 169,308 62,832 -48.0% Trade d
Slide 36: Consolidated results B/S
Consolidated results B/S Metrics 31.12.2023 31.12.2022 A (abs.) A (%) IFRS NAV 20.2 20.9 07 -34% EPRA NTA 20.1 20.7 -0.6 -2.7% EPRANRV 220 226 -06 2.8% EPRANDV 208 218 1.0 47% ‘Share price 28.5 26.7 18 6.7% Premium / (discount) vs. EPRANTA 41.5% 28.9% 12.6% ne Loan-to-value 33.7% 35.4% AT% ne Debt r
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Slide 38: Financial management
Financial management Ensuring consistency of financial strategy Leverage Net debt / EBITDA (adj.)(1) Cost of debt Loan-to-value 6.4 x 1.9 % 33.7 % Coverage Baa1 BBB+ 6.6 Interest Coverage Ratio Hedge ratio 100 of financing % needs covered x 119 % Moody’s Fitch Financing ▪ 100% Refinancing next 24 mo
Slide 39: Debt overview
Debt overview Solid debt metrics and active liquidity management DEBT MATURITIES 83% Green financing 60% Bank financing 40% Bonds CP ▪ Well-spread debt maturities with 6-year debt duration on average ▪ Limited long-term debt maturities till end-2025 (ca. 320m euros) ▪ Continued solid access to unsec
Slide 40: Hedging profile
Hedging profile Stable cost of debt despite rapid rise in interest rates 6y Average EVOLUTION COST OF DEBT EVOLUTION HEDGE RATIO(1) hedge duration ▪ Cost of debt at 1.9% over 2023 and expected at remain <2.5% by 2027(1) ▪ Temporary overhedging after ABB, moving back to 100% by end of 2024 ▪ Prior to
Slide 41: Prudent financial policy throughout the cycle
Prudent financial policy throughout the cycle Strict capital discipline and well-balanced capital structure based on Historic policy of not adding leverage against revaluations 33.7% 5.3% Loan-to-value EPRA NIY ✓ No leverage on historic revaluations ✓ No impact on Net debt / EBITDA ✓ Financial robus
Slide 42: Financial management driven by cash-flow leverage
Financial management driven by cash-flow leverage Strong track record of issuing equity to calibrate leverage 6.4x 8.1x Net debt / 10-year EBITDA (adj.) average ✓ Real measure of leverage on the business ✓ Within control of management ✓ Not impacted by property valuations ▪ Policy: Net debt / EBITDA
Slide 43: Share
SHARE 43
Slide 44: Share statistics
Share statistics WDP Share 45 1.60 40 1.40 35 1.20 30 1.00 25 0.80 20 0.60 15 10 0.40 5 0.20 0 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 EPRA EPS (rhs) DPS (rhs) WDP share price EPRA NTA ▪ Market cap ~6bn euros ▪
Slide 45: Outlook
OUTLOOK 45
Slide 46: Outlook 2024
Outlook 2024 Guidance EPRA EPS DPS +5% +5% y/y y/y 1.47 euros 1.18 euros Underlying assumptions (1) : ▪ Impact from acquisitions and pre-let development completions in 2023-24 ▪ Organic growth of 3% mainly through CPl-linked indexation ▪ A minimum average occupancy rate of 98% and stable client paym
Slide 47: Q&A
Q&A 47
Slide 48: Joost Uwents, Mickael Van den Hauwe
Joost Uwents CEO joost.uwents@wdp.eu Mickael Van den Hauwe CFO Mickael.vandenhauwe@wdp.eu www.wdp.eu 48
Slide 49: Disclaimer
Disclaimer Warehouses De Pauw NV/SA, abbreviated WDP, having its registered office at Blakebergen 15, 1861 Wolvertem (Belgium), is a public regulated real estate company, incorporated under Belgian law and listed on Euronext. This presentation contains forward-looking information, forecasts, beliefs