Corporacion Inmobiliaria Vesta S.a.b. De C.v. · BMV:VESTA
Corporacion Inmobiliaria Vesta S.a.b. De C.v — Q3 2020 Earnings Presentation
44 slides from Corporacion Inmobiliaria Vesta S.a.b. De C.v's earnings presentation, 2020
Slide 1: Corporate Presentation 3Q20
CORPORATE PRESENTATION 3Q20
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Corporación Inmobiliaria Vesta, S.A.B. de C.V. (“Vesta” or the “Company”) solely for use at this presentation. This presentation was prepared solely for informational purposes and does not constitute, and is not to be construed as, an offer or solici
Slide 3: Vesta's Snapshot
VesTA Vesta’s Snapshot Bw ma
Slide 4: Fully-integrated industrial real estate owner, operator and developer
Fully-integrated industrial real estate owner, operator and developer: Well positioned in Mexico, one of the world´s most attractive manufacturing and distribution hubs. Internally managed company, with strict focus on shareholders' return. Market benchmark offering innovative and customized solutio
Slide 5: Strong corporate governance with best-in-class practices
Strong corporate governance with best-in-class governance practices, since inception Board of Directors Lorenzo Berho Corona Executive Chairman Stephen B Jose Manuel Craig Thomas J. Luis de la Wilfrido Oscar Francisco John Williams Dominguez Wieland McDonald Calle Castillo Cazares Uranga Foster Soci
Slide 6: Highlights
1 Record-high results Resilient balance 2 sheet 3 Growth without dilution Consistent dividend 4 growth Highlights Maximizing our stabilized 5 portfolio Asset recycling as additional 6 value driver 7 Attractive discount Vesta Parks development 8 strategy 9 Focus on ESG www.vesta.com.mx
Slide 7: Record-high Results
VesTA Record-high Results
Slide 8: Strong foundation built across key milestones that accelerated growth
Strong foundation built and proved across key milestones that have consistently accelerated growth Initial Stage Pre IPO Post IPO Vesta 20/20 Vison Level 3 Strategy 40.8 38.3 35.8 33.3 30.8 29.9 29.8 26.7 22.6 20.1 16.8 14.4 12.0 10.8 11.0 11.3 11.4 9.9 6.9 4.8 3.5 2.6 1.1 1.2 1.5 0.6 0.7 1998 1999
Slide 9: Stable and predictable cash flows and profitability
Stable and predictable cash flows and profitability Highly predictable rental income & stable occupancy rates Strong EBITDA growth with low margin volatility¹ (US$ in millions) 97.2% 94.7% 91.9% 96.0% (US$ in millions) 85.0% 87.0% 95.3% 84.0% 83.7% 84.0% 84.1% 83.0% 94.2% 93.8% 148 83.2% 144 147 82.
Slide 10: Resilient Balance Sheet
VesTA Resilient ff Balance Sh at
Slide 11: Long-term debt at fixed rates, with sound liquidity position
Long-term debt at fixed rates, with sound liquidity position… 30/09/2020 Rate Maturity Secured Debt MetLife I $47.5 4.35% Apr-22 5.3 years average maturity & MetLife II $150.0 4.55% Aug-26 4.4% average interest rate MetLife III $118.0 4.75% Nov-27 MetLife Top Off $26.6 4.75% Aug-26 Total Secured Deb
Slide 12: One of the largest and most modern industrial portfolios in Mexico
…one of the largest and most modern industrial portfolios in Mexico… (As of September 30, 2020, % of GLA) Consolidated: GLA = 30.2 mm sf (2.80 mm m2) Buildings = 186 Land reserves = 41.3 mm sq.ft (3.8 mm m2) Stabilized portfolio occupancy 3Q20 =91.9% Clients = 176 86.1% of rental income is denominat
Slide 13: High-quality client base diversified by industry and geography
…high-quality client base increasingly diversified by industry and geography with balanced combination of growth and defensive sectors … Balanced portfolio use Long-term and staggered lease maturity profile¹ (% of Occupied GLA, as of September 30, 2020) 4.5 yrs weighted average (% of Occupied GLA, a
Slide 14: Strong tenant credit profile
…strong tenant credit profile… Automotive Logistics Automotive 26.6% Logistics 31.2% Manufacturing 68.8% Energy 4.5% Recreational Aerospace Vehicles 7.7% 8.1% Medical Aerospace Devices 2.0% Paper 0.1% Plastics 3.2% Other 16.6% * Calculated over total occupied GLA www.vesta.com.mx
Slide 15: Exposure to most stable component of automotive supply chain
…exposure to most stable business component of automotive supply chain… Post-crisis outcome: Tier 1 manufacturers have strengthened with a significant reduction of OEM suppliers driven by market consolidation where only the best and most profitable survived. OEM 1.0% Tier 1 48.4% Tier 2 17.6% Tier 3
Slide 16: Growth without dilution
VesTA Growth without dilution
Slide 17: Strong buy-back program helps drive key financial metrics
Strong buy-back program helps drive key financial metrics Increasing FFO per share Increasing EBITDA per share 0.15 0.21 0.21 0.14 0.13 0.19 0.12 0.15 0.09 0.12 0.11 0.07 0.11 0.07 2014 2015 2016 2017 2018 2019 3Q20 LTM 2014 2015 2016 2017 2018 2019 3Q20 LTM Decreasing shares outstanding US$ 75 M bu
Slide 18: Consistent dividend growth
VesTA Consistent dividend growth
Slide 19: Accretive development and acquisitions drive FFO and dividend yield
Accretive development and acquisitions, plus accelerated leasing activity and divestments drive strong FFO results and pay attractive dividend yield $2.50 0 6.5% 5.9% 0 1.99 $2.00 5.1% 1.80 1.74 4.9% 0 1.68 1.53 1.48 $1.50 3.8% 1.36 0 1.21 1.23 0.096 2.9% 0.088 0 $1.00 0.080 0.063 0 1.6% 1.7% 1.5% $
Slide 20: Maximizing our stabilized portfolio
Maximizing our stabilized portfolio
Slide 21: Development tends to decrease as stabilized GLA increases
The development of our portfolio tends to decrease as our stabilized GLA increases while development costs remain flat GLA under construction Growth derived from various types of buildings 46% 46% 47% 3% 6% 43% 44% 2% 42% 8% 38% 8% 97% 98% 94% 34% 35% 36% 36% 9% 33% 33% 32% 15% 92% 92% 28% 91% 23% 2
Slide 22: Asset recycling as additional value driver
Asset recycling as additional value driver
Slide 23: Asset recycling initiated under new Level 3 Strategy
Asset recycling initiated under new Level 3 Strategy Increases flexibility of Expands and diversifies smart capital allocation: Selectively recycle sources of funding, lower portfolio development, capital through higher- financing costs, optimize property acquisitions, returning portfolio capital st
Slide 24: Attractive discount
Attractive discount
Slide 25: Higher Book Net Asset Value vs Market Price
Higher Book Net Asset Value vs Market Price Figures in US$ M 3Q19 3Q20 % change Average Discount/Premium 20.0% Properties 1,821 1,940 6.5% 12.2% -0.6% Land 144 161 11.8% 0.0% 9.8% 2012 2013 2014 2015 2016 2017 2018 2019 3Q20 Cash 111 137 23.4% -20.0% -12.7% Debt Cash Collateral 4 4 -0.1% -23.1% -40.
Slide 26: Focus on profitability
Focus on profitability… Growth paths for leading industrial real estate public companies Index base year 2015=100 230 2015 ‘16 ‘17 ‘18 ‘19 2Q20 220 3Q20 Vesta 210 FFO ps 2015-19 CAGR: 15.4% 200 FFO ps CAGR 2015-19 FFO1 per share 190 Vesta’s peers 180 ▪ Peer 1: 6.3% ▪ Peer 2: 2.4% 170 ▪ Peer 3: 0.4%
Slide 27: Higher yields, even as price per share rises
Higher yields, even as price per share rises EBITDA yield Adjusted FFO yield (EBITDA per share/share price US$) 14.5% (Adjusted FFO per share/share price US$) 13.8% 9.6% 9.9% 9.5% 12.2% 11.5% 7.8% 9.9% 7.2% 8.2% 7.0% 4.5% 6.1% 5.7% 3.2% 3.2% 3.5% 2012 2013 2014 2015 2016 2017 2018 2019 3Q20 2012 201
Slide 28: Vesta Parks growth strategy
VesTA Vesta Parks growth Strategy
Slide 29: Continued organic growth through Vesta Park development
Continued Organic Growth through development Strategy North • is a sustainable City Park Name GLA (000's sf) Stage gated industrial park with TJ Lagoeste 552 state-of-the-art class A TJ Tijuana III 619 buildings designed for TJ VP Alamar 602 35% Bajio advanced light CDJ VP Juarez Sur 720 66% Cit
Slide 30: Focus on ESG
VesTA Focus on ESG Bw ma
Slide 31: Focus on ESG
Focus on ESG ”We contribute to our clients’ and suppliers’ competitiveness and society’s well-being, while minimizing our environmental impact. All our ESG initiatives are aligned with Vesta’s Level 3 Strategic Plan." We improved again our results vis-á-vis the ESG indexes Vesta is part of and certi
Slide 32: Key Performance Indicators: Environment
LEED CLIENTS KEY CERTIFICATION PARTICIPATION PERFORMANCE %GLA LIKE-FOR-LIKE INDICATORS 2018 7.89% 2017 7 2018 21 2019 10.1% Environment 2019 66 EMISSIONS WASTE Generated by Vesta: Scope 1 derived from diesel fuel use: 50 241 tons hazardous tons of CO2e. 244 tons non-hazardous Scope 2 derived from Ve
Slide 33: Gender Diversity, Employment Metrics, Training & Development
EMPLOYMENT METRICS GENDER DIVERSITY DATA 2020 BOARD OF DIRECTORS EMPLOYEES BY GENDER 2019 91 Total Employees 10 New Hires 3 Women 36 Women 17 Men 55 Men 8.3% Turnover Rate MEN WOMEN Women Men TRAINING & DEVELOPMENT HR CERTIFICATIONS/RANKINGS of employee training 3,814 hours Well Building Standard si
Slide 34: High Governance Standards
HIGH GOVERNANCE STANDARDS • 8 of 10 Board Directors are independent • All 6 Board Committees are chaired by an independent director • Single class of shares (one share, one vote) • Vesta’s Code of Ethics serves as a guide to regulate the conduct of all employees • Stakeholder Engagement Program base
Slide 35: Appendix
VesTA Appendix
Slide 36: Historical Results
Historical Results 38 37 36 36 36 36 37 34 35 31 32 28 29 26 27 25 22 23 20 21 21 19 20 19 17 17 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Revenue 95.6% 95.5% 96.8% 96.9% 96.5% 96.8% 96.7% 96.9% 97.0% 96.2% 95.3%
Slide 37: Historical Results
Historical Results LTV 36% 35% 35% 35% 37% 38% 38% 34% 35% 34% 32% 32% 30% 25% 25% 24% 23% 23% 23% 23% 23% 23% 23% 24% 24% 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Net Debt / EBITDA 5.9x 5.7x 5.6x 5.6x 5.7x 5.7x 5.5x
Slide 38: Historical Results
Historical Results Debt/EBITDA 6.9x 6.5x 6.6x 6.9x 6.8x 6.3x 6.3x 6.2x 6.0x 5.8x 5.9x 5.9x 5.7x 5.4x 5.8x 5.5x 5.3x 5.7x 5.1x 5.0x 4.8x 4.7x 4.5x 4.7x 4.5x 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 EBITDA/Interest Exp
Slide 39: Case Studies: Querétaro Aerospace Park
Case Studies Querétaro Aerospace Park Construction start 2006 GLA 2.18 million sf 13 buildings www.vesta.com.mx
Slide 40: Case Studies: Douki Seisan Park
Case Studies Douki Seisan Park Construction start 2013 GLA 2.13 million sf 8 buildings www.vesta.com.mx
Slide 41: Case Studies: Vesta Park Toluca II
Case Studies Vesta Park Toluca II Construction start 2013 GLA 1.47 million sf 6 buildings www.vesta.com.mx
Slide 42: Positive industry trends driving growth
Positive industry trends driving growth Industrial Real Estate Inventory Industrial market absorption¹ (m2 in millions) (m2 in millions) Bajio Central North 90.0 80.0 CAGR ‘10–2019: 5.6% 74.1 77.1 30% 8.4 68.4 71.5 25% 70.0 1.0 62.7 60.0 52.6 20% 1.0 47.0 48.7 50.2 50.5 50.0 15% 5.5 40.0 10% 1.8 30.
Slide 43: High occupancy and growing new deliveries
High occupancy and growing new deliveries (3Q20) Under Construction 2020 Stock Availability Net Absorption Vacancy Rate Average Rent Growth Speculative (m2) (m2) YTD (m2) % USD/m2/month YTD % YTD (m2) Aguascalientes 3,296,200 42,828 3,809 1.30% 4.19 0.00% 0 Guadalajara 3,557,257 123,561 15,701 3.49%
Slide 44: Thank you!
Thank you! www.vesta.com.mx
Corporación Inmobiliaria Vesta, S.A.B. de C.V. — Q3 2020 Earnings Presentation on 6ix