Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — Merlin Pptys Socimi Ord — FY2022 Earnings Presentation
36 slides from Merlin Properties Socimi's earnings presentation, Feb 28, 2023
Slide 1: FY22 Results Presentation
FY22 RESULTS PRESENTATION 28 FEBRUARY 2023
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared certain assumptions and estimates. These offering, will not be registered under the This presentation may include forward- by MERLIN Properties SOCIMI, S.A. (the internal analyses may have not been verified U.S. Securities Act of 1933, as amended (the l
Slide 3: Contents
CONTENTS • FY22 Financial results • Offices • Logistics • Shopping centers ISMAEL CLEMENTE MIGUEL OLLERO • Valuation and debt position CEO COO • Sustainability • Value creation • Digital Infrastructure Plan • Closing remarks & Outlook
Slide 4: Key highlights | Overview: A year of Alpha
Key highlights | Overview: A year of Alpha Operating performance • O utstanding performance in all three asset categories with outstanding LfL rental growth (+7.3%) and occupancy at 95.1% (+60 bps vs. FY21) • O ffices delivering excellent operating behaviour: +6.0% LfL rental growth, +5.8% release s
Slide 5: FY22 Financial Results
FY22 FINANCIAL RESULTS
Slide 6: FFO of €0.62 per share, exceeding guidance
FY22 Financial results | FFO OF € 0.62 PER SHARE, EXCEEDING GUIDANCE (€ million) FY22 FY21 restated(1) YoY Gross rents 452.8 419.7 +7.9% Gross rents after incentives 428.2 377.1 +13.5% Net rents(2) 378.9 328.4 +15.4% EBITDA(3) 334.7 291.8 +14.7% Margin 73.9% 69.5% FFO(4) 290.5 273.0 +6.4% Margin 64.
Slide 7: GRI bridge: outstanding LfL growth (+7.3%)
FY22 Financial results | GRI bridge OUTSTANDING LFL GROWTH IN THE PERIOD (+7.3%) (€m) +6.0% Offices LfL(1) +7.3% +8.6% Logistics +7.5% Shopping centers +29.2 +3.9 452.8 419.7 FY21 Like-for-Like Balance acquisitions, FY22 growth disposals & other 7 (1) Portfolio in operation for FY21 (€ 397.8m of GRI
Slide 8: Occupancy and WAULT
FY22 Financial results | Occupancy and WAULT OVERALL OCCUPANCY +60 BPS VS FY21 Occupancy and WAULT to first break per asset type(1) +60 bps 97.0% 97.3% 95.1% MERLIN 95.0% Average 92.5% 7.2 3.3 3.7 3.2 2.2 MERLIN Average Offices Logistics Shopping centers Other 8 (1) WAULT by rents means the weighted
Slide 9: Offices
OFFICES
Slide 10: Offices | GRI bridge and breakdown
Offices | GRI bridge and breakdown LFL RENT INCREASE (+6.0%) AND RELEASE SPREAD (+5.8%) LfL(1) (€m) +6.0% 228.6 +12.5 +1.6 242.7 FY21 Like-for-Like growth Balance acquisitions, FY22 disposals & other LfL growth by area Occupancy by area FY21 FY22 Madrid +5.9% Madrid 87.8% 90.6% +288 bps Barcelona +1
Slide 11: Offices | Leasing activity
Offices | Leasing activity Contracted sqm #Renewed contracts Release spread Tenants contracted Madrid 169,300 77 +3.8% Barcelona 43,307 43 +11.5% Lisbon 23,520 9 +19.5% Total 236,127 129 +5.8% 11
Slide 12: Offices | Flex space
Offices | Flex space 5 NEW SPACES OPENED IN THE YEAR INCREASING LOOM’S FOOTPRINT BY 54% KPIs 26,028 sqm 2,639 desks 83% occupancy 12 spaces New openings 2022 Atica exp. 155 desks Torre Glòries exp. 87 desks Castellana 93 exp. 69 desks Ferreteria 22@ 222 desks Plaza Cataluña 9 248 desks 12
Slide 13: Logistics
LOGISTICS
Slide 14: Logistics | GRI bridge and breakdown
Logistics | GRI bridge and breakdown VIRTUAL FULL OCCUPANCY COUPLED WITH RENTAL GROWTH RESULT IN OUTSTANDING LFL GROWTH (+8.6%) LfL(1) (€m) +8.6% 65.9 +5.5 +2.2 73.6 FY21 Like-for-Like growth Balance acquisitions, FY22 disposals & other LfL growth by location Occupancy by area FY21 FY22 Madrid +8.3%
Slide 15: Logistics | Leasing activity
Logistics | Leasing activity Contracted sqm #Renewed contracts Release spread Tenants contracted Madrid 225,828 5 +4.3% Barcelona 17,030 - - Other 52,082 3 +22.8% Total 294,940 8 +7.9% 15
Slide 16: Logistics | ZAL Port
Logistics | ZAL Port EXTRAORDINARY PERFORMANCE: FULL OCCUPANCY AND DOUBLE DIGIT FFO INCREASE (+14.9 YoY) Stock 736,217 sqm Third parties stock (ground leases) 183,252 sqm Stock under management 919,636 sqm Tenants Contracted sqm Release spread # contracts 161,163 (4.3%) 33 Occupancy by area FY21 91.
Slide 17: Shopping Centers
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Slide 18: Shopping centers | GRI bridge and breakdown
Shopping centers | GRI bridge and breakdown TENANT SALES SURPASSING PRE-COVID LEVELS WHILE MAINTAINING HISTORICALLY LOW OCR AT 11.8% LfL(1) (€m) +7.5% 114.9 +8.7 +0.2 123.8 FY21 Like-for-Like growth Balance acquisitions, FY22 disposals & other Footfall evolution(2) Tenant sales evolution(2) OCR evol
Slide 19: Shopping centers | Occupancy at record-high levels
Shopping centers | GRI bridge and breakdown OCCUPANCY AT RECORD-HIGH LEVELS Release spread # contracts Tenants All portfolio +5.2% 197 Contracted sqm Net absorption Total 68,323 3,685 19
Slide 20: Valuation and Debt Position
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Slide 21: Valuation and debt position | GAV summary
Valuation and debt position | GAV summary SLIGHT DECLINE IN VALUATION ACROSS THE BOARD (-1.5% LFL), WITH ONLY LOGISTICS IN POSITIVE GROUND Passing yield 4.4% 5.2% 5.8% - 4.7% 11,317 10,685 6,387 GAV TOTAL with minority stakes (€ million) Shopping centers 2,135 Minority stakes 1,400 Logistics Offices
Slide 22: Valuation and debt position | GAV drivers
Valuation and debt position | GAV drivers FIRST WAVE OF CYCLICAL YIELD EXPANSION (+44 BPS) ABSORBED DURING THE PERIOD WITH MODERATE IMPACT ON VALUATION +0.6% (1.5%) GAV MERLIN LIKE-FOR-LIKE average(2) EVOLUTION(1) (1.9%) (3.5%) Offices Logistics Shopping centers +65 +39 +44 bps MERLIN +29 YIELD aver
Slide 23: Valuation and debt position | Sound financial structure
Valuation and debt position | Sound financial structure STRONG EFFORTS IN TERMS OF LTV REDUCTION (-651 BPS VS FY21) 31/12/2022 31/12/2021 Net debt € 3,792m € 5,247m LTV 32.7% 39.2% Average cost (spot) 1.98% (2.00%) 2.07% (1.76%) Fixed rate debt 99.6% 100% Average maturity (years) 4.9 (5.8 yrs PF)(1)
Slide 24: 2023 maturity refinanced; no maturities until May 2025
Valuation and debt position | Sound financial structure 2023 MATURITY (€ 743M) REFINANCED AT A COMPELLING COST (MS +126 BPS). NO FURTHER MATURITIES UNTIL MAY 2025 Refinanced 872 72 745 2 602 622 2 22 531 502 2 2 29 302 2 600 743 600 800 500 500 300 62 2 2 2 60 2023 2024 2025 2026 2027 2028 2029 2030
Slide 25: Sustainability
SUSTAINABILITY
Slide 26: Sustainability | FY22 Milestones
Sustainability | FY22 MILESTONES INTENSE YEAR IN TERMS OF ESG INITIATIVES 3 main milestones achieved this Launch and implementation year of our Pathway to Net Zero 1. Reducing operational carbon Continued certification (scope 1+2) program in all three 2. Reducing embodied carbon asset classes (offic
Slide 27: Sustainability | FY22 Update
Sustainability | FY22 UPDATE OUTSTANDING YEAR IN TERMS OF SCORINGS AND ACCOLADES Inclusion for MERLIN B- Average score B C 7,2 Top 1% A- 2 nd year in a row Financial Europe Global (negligible risk) services average 79% 70% #1 Average peers: 68% Average sector: 21% IBEX-35 27
Slide 28: Value Creation
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Slide 29: Value creation | Divestments
Value creation | Divestments EXCELLENT TIMING BBVA portfolio disposal Transformational event for the company executed in 1H22 (@17.1% premium to GAV), which has implied Strong LTV Rating perspective Extraordinary reduction upgrade dividend (-651 bps vs FY21) (€ 0.75 p.s.) paid in August From Stable
Slide 30: Value creation | Best II: 2022 deliveries
Value creation | Best II: 2022 deliveries Cabanillas Park I J Cabanillas Park II A • Last available landplot in Cabanillas Park I • First warehouse in our Cabanillas Park II development • 100% let to DSV • 100% let to Logista GLA 44,858 sqm GLA 47,403 sqm ERV € 1.9m ERV € 2.1m Yield on cost 7.0% Yie
Slide 31: Value creation | 2023 deliveries: Plaza Ruiz Picasso
Value creation | 2023 deliveries: Plaza Ruiz Picasso VIRTUALLY FULLY LET TO TIER-1 TENANTS AT TOP RENTS GLA Capex Incremental rents Delivery Yield on cost 36,899 sqm € 70.6m € 7.2m 2023 10.2% After Refurbishment 5,323 sqm created 31
Slide 32: Digital Infrastructure Plan (MEGA)
DIGITAL INFRASTRUCTURE PLAN (MEGA)
Slide 33: Digital Infrastructure Plan | Projects status
Digital Infrastructure Plan | Projects status Bilbao-Arasur Madrid - Getafe Barcelona - PLZF 1st module MW 3 3 3 % Pre-let 66% 53% 20% Status Construction nearing completion Works on track Works on track Delivery 3Q 4Q 4Q 33
Slide 34: Closing Remarks & Outlook
i CLOSING REMARKS & OUTLOOK
Slide 35: Closing remarks & Outlook
Closing remarks & Outlook | Operations • MERLIN has delivered a strong performance in all key financial and operating metrics (LfL rental growth, occupancy, release spread and FFO generation) • Occupancy at an all-times high across the board Value creation • € 2.1bn of BBVA portfolio disposal at a 1
Slide 36: Contact details
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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