Slide 1: Viva Energy REIT HY2019 Results
Viva Energy REIT HY2019 Results 22 August 2019
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation has been prepared by Viva Energy REIT (“VVR” or does it guarantee any particular tax treatment. Investors should have is made as to the fairness, accuracy, completeness or correctness of the “Viva Energy REIT”) which is a stapled entity comprising sh
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER such forward looking statements, and many of these factors are beyond Financial data Effect of rounding VVR’s control. For example, the factors that are likely to affect the results All dollar values are in Australian dollars ($ or AUD) unless stated A number of figur
Slide 4: HY2019 highlights
HY2019 highlights MARGARET KENNEDY Managing Director, VER Manager Pty Limited 4
Slide 5: HY2019 Highlights
HY2019 HIGHLIGHTS VVR HY2019 RESULTS HY2019 performance VVR continues to deliver on strategic objectives HY2019 Statutory net profit of $56.9m HY2019 Distribution of 7.18 CPS, on track to deliver FY2019 Distributable Earnings guidance1 • Distributable Earnings per security growth guidance range
Slide 6: HY2019 key highlights
HY2019 HIGHLIGHTS VVR HY2019 RESULTS HY2019 key highlights Statutory net profit of $56.9m Financial performance Portfolio & acquisitions Capital management Distributable Earnings $2.54bn portfolio 33.4% gearing ratio 3 7.18 CPS 464 high-quality service stations and Operating within low end Up 2.7% f
Slide 7: Acquisitions and portfolio update
Acquisitions and portfolio update MARGARET KENNEDY Managing Director, VER Manager Pty Limited 7
Slide 8: Portfolio overview
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Portfolio overview VVR’s portfolio is geographically diversified across Australia with 83% weighted to the eastern states PORTFOLIO AS AT 30 JUNE 2019 Properties Value ($m) Land area Average2 value Average2 size (m2) WACR (%) WALE (years) (m2) (‘0
Slide 9: Growth platform
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Growth platform VVR has a three-tiered platform to deliver growth 1 Contracted net rental growth 2 Continued acquisition activity 3 Asset improvement initiatives • Embedded growth derived from long- • Highly fragmented ownership market • Assisted
Slide 10: Continued portfolio growth
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Continued portfolio growth VVR continues to execute its acquisition growth strategy HY2019 acquisitions1,2 Pipeline $120m Acquisition of 10 Liberty Oil sites3 • Funds deployed include: Additional ~$40m of • $13.5m1 for the acquisition of 3 operati
Slide 11: Portfolio tenants
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Portfolio tenants VVR continues to add to its brand mix Acquisitions as at 30 June 2019 2016 2017 2018 2019 YTD Future pipeline August 2016 (IPO) February 2017 July 2018 February 2019 ~$80m of acquisitions either in due Initial portfolio contained
Slide 12: Development fund-through projects
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Development fund-through projects Invested $17m in development fund-through projects with $21m committed Funding Additional Funding Expected Sites deployed commitments requirement completion1 during HY2019 Albany3 $4.3m $0.2m $4.5m Q3 2019 Townsvi
Slide 13: Strategic relationship with Liberty Oil
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Strategic relationship with Liberty Oil VVR portfolio now consists of $118m of Liberty properties1 VVR purchases by type: Acquisition Locations of VVR ownership Liberty Oil overview and development funding (A$m) of Liberty Oil branded sites • Is a
Slide 14: Liberty Oil development case study
VVR HY2019 RESULTS ACQUISITIONS AND PORTFOLIO UPDATE Liberty Oil development case study Previous service 120-124 Goldring Street, Richmond, Transaction highlights Queensland station Region Regional Asset Type Truck stop and associated facilities Transaction type Fund-through Land purchase: $1.60m Pu
Slide 15: Financial results and capital management
Financial results and capital management GUY FARRANDS Chief Financial Officer, VER Manager Pty Limited 15
Slide 16: Statutory financial performance
VVR HY2019 RESULTS FINANCIAL RESULTS AND CAPITAL MANAGEMENT Statutory financial performance % Change Half year Half year • Rental income Statutory Profit and Loss HY2019 vs 30 June 2019 $m1 30 June 2018 $m1 • Growth driven by fixed escalators HY2018 (predominantly 3%) and part-period Income contribu
Slide 17: Distributable earnings
VVR HY2019 RESULTS FINANCIAL RESULTS AND CAPITAL MANAGEMENT Distributable earnings Half year Half year % Change • 2.7% increase from HY2018 in Distributable Distributable Earnings HY2019 vs Earnings per security 30 June 2019 $m 30 June 2018 $m HY2018 Statutory net profit 56.9 59.6 • 100% payout rati
Slide 18: Financial position
VVR HY2019 RESULTS FINANCIAL RESULTS AND CAPITAL MANAGEMENT Financial position Half year ended Full year ended • In accordance with the valuation policy, a third of the Balance Sheet portfolio will be independently revalued as at 31 30 June 2019 $m1 31 December 2018 $m1 December 2019 Assets • See sl
Slide 19: Capital management overview and strategy
VVR HY2019 RESULTS FINANCIAL RESULTS AND CAPITAL MANAGEMENT Capital management overview and strategy VVR actively manages its capital Balance sheet capacity Half year Half year • VVR has significant headroom to make further acquisitions, Capital Management 30 June 2019 30 June 2018 $m $m consistent
Slide 20: Industry update
Industry update MARGARET KENNEDY Managing Director, VER Manager Pty Limited 20
Slide 21: Retail fuel and convenience property sales
VVR HY2019 RESULTS INDUSTRY UPDATE Retail fuel and convenience property sales The VVR portfolio cap rate premium to bond yields continues to expand Reported Wtd Ave Transaction Yield 1 VVR Portfolio Cap Rate 10 Year Gov. Bond (RHS) • VVR’s portfolio cap rate continues to 8.0% 8.0% remain broadly in
Slide 22: Australian fuel industry landscape
INDUSTRY UPDATE VVR HY2019 RESULTS Australian fuel industry landscape Vehicle ownership in Australia • Vehicle ownership in Australia grew by 1.7% in 20181 • Diesel vehicle ownership in 2018 now represents 25% of all registered vehicles in Australia, an increase from 19% in 2014 1 Fuel retail trends
Slide 23: Convenience retail market trends
VVR HY2019 RESULTS INDUSTRY UPDATE Convenience retail market trends Food and beverage growth supports a stable, yet growing sector Key findings taken from the Australasian Association of Convenience Stores (AACS) 2018 State of the industry report1 • There are 6,644 convenience stores across Australi
Slide 24: Strategy and outlook
Strategy and outlook MARGARET KENNEDY Managing Director, VER Manager Pty Limited 24
Slide 25: Portfolio highlights
VVR HY2019 RESULTS STRATEGY AND OUTLOOK Portfolio highlights Attractive portfolio that is difficult to replicate Strong real estate fundamentals 1.16sqm 20.3km 188 land in metro metro street frontage corner metro sites Convenient locations National 8.5 hectares 72% distributed network of shop area o
Slide 26: Competitive strengths
STRATEGY AND OUTLOOK VVR HY2019 RESULTS Competitive strengths Market-leading national service station and convenience retail distribution platform • Irreplicable high-quality, strategically located service station and convenience retail distribution platform • Portfolio underpinned by 2.17sqm of qua
Slide 27: Strategy and outlook
STRATEGY AND OUTLOOK VVR HY2019 RESULTS Strategy and outlook On track to deliver on FY2019 earnings growth guidance of 3-3.75% • Continue to pursue further acquisition and growth opportunities consistent with our strategy and investment criteria • Manage our balance sheet to maintain diversified fun
Slide 28: Questions
Questions 28
Slide 29: Appendix
Appendix 29
Slide 30: Glossary
APPENDIX VVR HY2019 RESULTS Glossary Alliance The contractual alliance between Viva Energy Australia and Coles Express (and their Management Expense Ratio or MER Management and corporate expenses as a percentage of associated entities) including the Alliance Agreement and Site Agreements as outlined
Slide 31: Portfolio overview
APPENDIX VVR HY2019 RESULTS Portfolio overview ~3 year performance summary IPO As at 30 June 2019 HY2019 FY2018 FY2017 FY2016 August 2016 Number of properties no. 464 454 438 425 425 Property portfolio value $m 2,537 2,496 2,281 2,105 2,105 Occupancy % 100 100 100 100 100 Total land area sqm 2,175,3
Slide 32: Portfolio lease profile
APPENDIX VVR HY2019 RESULTS Portfolio lease profile VVR has one of the longest WALEs in the sector – 12.1 years • Only 7 leases expire over the next 7 years • Initial IPO portfolio lease expiries commence in FY26 1 • Staggered lease renewal profile mitigates against renewal concentration risk • Refe
Slide 33: Site acquisition details
APPENDIX VVR HY2019 RESULTS Site acquisition details 80 Alfred Street, 7-13 Burnett Highway, 176-190 Ogilvie Avenue, 7-21 Shakespeare Street, 6-8 Mackay Street, Site Address Warragul, Victoria Biloela, Queensland Echuca, Victoria Traralgon, Victoria Griffith, NSW Region Regional Regional Regional Re
Slide 34: Site acquisition details (cont'd)
APPENDIX VVR HY2019 RESULTS Site acquisition details (cont’d) 5 Princes Highway, 120-124 Goldring Street, 47-55 Broad Street, 112 Shute Harbour Road, 10805 Brand Highway, Site Address Moruya, NSW Richmond, Queensland Sarina, Queensland Cannonvale, Queensland Cataby, Western Australia Region Regional
Slide 35: Capital management – HY2019 achievements
APPENDIX VVR HY2019 RESULTS Capital management – HY2019 achievements Refreshed balance sheet supports future acquisition pipeline Debt Facilities Expiry Profile ($m): as at 30 June 2019 Swap Cover and average Swap Rate: as at 30 June 2019 500 120% 3.0% 100 400 100% 2.5% 100 80% 2.0% 300 60% 1.5% 200
Slide 36: Movements in NTA
APPENDIX VVR HY2019 RESULTS Movements in NTA 2.22 Movements in NTA1: +$0.01 -$0.01 2.21 • Payout/cancellation costs in $2.20 -$0.02 February 2019 relating to interest 2.20 rate swaps 2.19 • Change in fair value of interest rate $2.18 2.18 swaps from 31 December 2018 to 30 June 2019 and the write-off
Slide 37: Retail fuel & convenience property sales
APPENDIX VVR HY2019 RESULTS Retail fuel & convenience property sales Despite lower transaction volumes in 2019, yields have remained stable ~$400m ~$100m 7.0% Note: Bubble size scale reflects size of transactions reported by JLL • The most common yield band is yields between 5%-6% (JLL data set) 6.5
Slide 38: Population map study
APPENDIX VVR HY2019 RESULTS Population map study National distribution platform aligned with population density Melbourne Sydney % of metro population1 located within a 5km radius of VVR’s 87% 87% property coverage2 1 Metro population as defined by the Greater Capital City Statistical Area, sourced
Slide 39: Population map study
APPENDIX VVR HY2019 RESULTS Population map study National distribution platform aligned with population density Brisbane Perth % of metro population1 located within a 5km radius of VVR’s 76% 50% property coverage2 1 Metro population as defined by the Greater Capital City Statistical Area, sourced fr
Slide 40: Valuation policy and methodology of current independent valuer
APPENDIX VVR HY2019 RESULTS Valuation policy and methodology of current independent valuer Valuation policy: • Fair value of the individual properties are reviewed by the Board at each reporting date • Rolling one third of the portfolio is independently valued each year with each individual property