Waypoint Reit Ltd. · ASX:WPR
Waypoint Reit — FY2021 Earnings Presentation
37 slides from Waypoint Reit's earnings presentation, Feb 28, 2022
Slide 1: FY21 Results Presentation
FY21 Results Presentation 28 February 2022 Hadyn Stephens – CEO and Managing Director Kerri Leech – Chief Financial Officer Liberty Greenvale (VIC) Coles Express Coomera (QLD)
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation has been prepared by Waypoint REIT (“WPR” or Industry data and third party market data exchange rates, competition in the markets in which WPR operates “Waypoint REIT”) which is a stapled entity comprising shares in This presentation contains statist
Slide 3: WPR Investment Proposition
WPR Investment Proposition Secure rental income with embedded growth, underpinned by long-term leases to top-tier tenants ESSENTIAL ECONOMIC INFRASTRUCTURE WORLD-CLASS OPERATORS • Roadside retail properties catering for F&C • VEA supplies approximately one-quarter of operators focused on everyday ne
Slide 4: Contents
Contents: 1. FY21 Highlights 5 2. Financial Results 9 3. Portfolio and Strategy Update 14 4. Key Priorities and Outlook 18 5. Additional Information 20 6. Glossary 33 Coles Express Coomera (QLD)
Slide 5: FY21 Highlights
FY21 Highlights Coles Express Derrimut (VIC) 5
Slide 6: FY21 Highlights
FY21 Highlights Strong growth in Distributable EPS and NTA, continued focus on portfolio and capital management Financial Performance Property Portfolio2 Capital Management Other Distributable EPS: 15.80cps1 $3.09bn portfolio Gearing: 30.1% ESG +4.25% on FY20 433 properties Lower end of target range
Slide 7: Historical Returns
Historical Returns WPR continues to deliver strong growth in Distributable EPS and NTA per security Distributable EPS1 NTA per security 5-year CAGR: 4.50% 5-year CAGR: 7.88% +18.53% +4.25% $2.95 +4.25% 15.80c +8.67% +3.69% 15.15c +4.20% +4.54% +3.44% $2.49 14.54c +5.75% +5.22% 14.02c $2.29 $2.20 13.
Slide 8: ESG Update
ESG Update FY21 carbon emissions from operations target achieved and TCFD gap analysis completed WPR Focus Ethical conduct and Our Climate change Safety and Areas transparency people and energy environment UNSDG Alignment 2H21 actions completed: Supporting our tenant operators: - Easement granted on
Slide 9: Financial Results
Financial Results Ampol Meadow Springs (WA) 9
Slide 10: Financial Performance
Financial Performance Strong earnings growth underpinned by higher rental income and lower interest expense FY21 FY20 Change Change $m $m $m % Rental income 163.2 160.2 3.0 1.9 $4.5m of like-for-like rental growth (3.0%), $0.8 of higher income from acquisitions/developments offset by $2.3m lower inc
Slide 11: Distributable EPS Growth Components
Distributable EPS Growth Components Dilution from asset sales offset by reduced securities on issue and net interest savings Lower average debt balance and base 3.0% like-for-like 37 assets sold rate interest savings rental growth and settled during partially offset by full the year year impact of h
Slide 12: Balance Sheet
Balance Sheet Cap rate compression continues to drive strong growth in NTA per security Dec-21 Dec-20 Change Change $m $m $m % Cash and cash equivalents 19.0 15.5 3.5 22.6 Net movement in assets held for sale ($19.6m) plus in-the-money swap position Assets held for sale and other assets 40.2 17.8 22
Slide 13: Debt / Liquidity
Debt / Liquidity Further diversification via AMTN, banking group rationalised and gearing back in target range Dec-21 Dec-20 Change Facility limit ($m) 1,048.6 1,050.3 (1.7) Debt drawn to fund distribution requirements and capital management initiatives, comprising capital return ($132.2m) and buy-b
Slide 14: Portfolio and Strategy Update
Portfolio and Strategy Update Shell & Hungry Jacks Redcliffe (WA) 14
Slide 15: F&C Portfolio Strategy
F&C Portfolio Strategy Review process completed, ongoing portfolio optimisation strategy • WPR’s initial review process (completed 1H21) focused on Avg. pre-2030 expiries: Book Avg. Avg. Popn Value WACR Value Site (500m/ WALE – 40 assets sold or exchanged to date (6.6-year WALE, Category Description
Slide 16: F&C Portfolio
F&C Portfolio High quality portfolio with 87% weighting to metropolitan and highway locations Location by Value Regional 34% 13% Sydney 54% 14% 21% 13% 14% Highway 52% 10% 20% Northern Territory (1%)* Other 5 properties Metro Melbourne $25.6m book value Queensland (20%)* 11% Western Australia (9%)*
Slide 17: Long-Term Diversification Strategy
Long-Term Diversification Strategy Disciplined strategy to broaden avenues for growth, mitigate long-term risks and improve ESG profile Portfolio Strategy Execution Considerations IPO portfolio • Sale & leaseback of 425 F&C sites (100% VEA) • Range of asset classes to be considered Asset selection (
Slide 18: Key Priorities and Outlook
Key Priorities and Outlook Coles Express Surfers Paradise (QLD) 18
Slide 19: FY22 Priorities and Outlook
FY22 Priorities and Outlook Retain focus on portfolio optimisation and capital management, develop diversification strategy Targeting $150m of asset sales Investment Continue to explore opportunities with VEA to reinvest in the core portfolio Portfolio Further develop diversification strategy,
Slide 20: Additional Information
Additional Information Liberty Greenvale (VIC) 20
Slide 21: Reconciliation to Statutory Profit
Reconciliation to Statutory Profit Valuation gains drive significant increase in statutory profit $m FY21 FY20 Change Change $m $m $m % Distributable earnings 122.6 118.5 4.1 3.5 Higher gross valuation gains due to 40 bp of WACR compression (FY20: 19 bp) and $6.3m lower straight-line rent due to ass
Slide 22: Valuations
Valuations1 WACR compression of 21bp for the six months to 31 December 2021 # of Gross Value ($m)2 WACR (%) Properties @ Dec-21 Jun-21 Dec-21 Variance Jun-21 Dec-21 Change Cap Rate Compression Capital Cities 49 344.2 363.6 19.4 5.03 4.76 (0.27) Other Metro 9 71.2 75.6 4.4 5.44 5.35 (0.09) 42bp Capit
Slide 23: Debt / Liquidity
Debt / Liquidity Weighted average debt and hedge maturities increase to 5.0 years and 3.6 years respectively Debt maturity profile as at 31 December 2021 Hedge maturity profile as at 31 December 2021 $300m 100% 1.80% 1.56% 90% 1.51% 1.60% 275 $250m 80% 1.31% 1.40% 1.28% 1.28% 70% 73% $200m 1.20% 200
Slide 24: Lease Expiry Profile
Lease Expiry Profile1 Portfolio WALE of 10.0 years with a staggered expiry profile WALE 10.0 years 23.9% 18.7% 13.7% 10.3% 7.5% 6.7% 6.4% 5.8% 0.9% 2 3 0.6% 0.3% 0.1% 0.4% 0.1% 0.6% 4.0% Vacant FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 FY39 1 1 30 32 37 33
Slide 25: Viva Energy Australia – FY21 Result
Viva Energy Australia – FY21 Result1 Significant growth in underlying earnings, fuel demand recovering with VEA increasing market share • Group Highlights: $m FY21 FY20 Change – 98% increase in Underlying EBITDA (RC) to $484.2m Retail fuel volumes (litres, billions)2 4.0 3.7 8% – 9% decrease in net
Slide 26: Viva Energy Australia – F&C Strategy
Viva Energy Australia – F&C Strategy Network strategy a mix of growth and rationalisation, transitioning to full control of convenience offer Coles Express Liberty Convenience Owner Dealer Sites 716 92 524 Focus • Largest single-branded F&C network in Australia • Regional and highway focused with la
Slide 27: Coles Express – 1H22 Result
Coles Express – 1H22 Result C-store sales and EBIT negatively impacted by reduced mobility (lockdowns) • Sales growth negatively impacted by lower forecourt traffic due to $m 1H22 1H21 Change lockdowns, as well as cycling strong tobacco sales in prior period Key P&L items: • Ex-tobacco, c-store sale
Slide 28: Retail Fuel Prices and Margins
Retail Fuel Prices and Margins Industry margins revert to 10-year average as retail prices increase to pre-COVID levels • Average 2021 retail margin of 13.7cpl was a step down from record highs of 2020 (18.2cpl), however remains in line with the 10 year average (13.5cpl) • Average retail fuel prices
Slide 29: Investment Market Update
Investment Market Update Strong market conditions continued in FY21, skew towards the first half • FY21 transaction volumes increased 49% on FY20 on a 17% increase in the number of transactions (increase in average asset size) • Average capitalisation rates tightened by 51bp, 11bp more than the move
Slide 30: IPO Portfolio vs. Bonds and Deposit Rates
IPO Portfolio vs. Bonds and Deposit Rates Significant yield spread remains to 10-year bond and retail term deposit rates • As of December 2021: – The yield spread between WPR’s IPO assets and the 10-year Australian Government Bond was 344bp (average since IPO: 379bp) – The yield spread between WPR’s
Slide 31: Australian EV Sales
Australian EV Sales EV sales tripled in 2021 but still account for <2% of new vehicle sales • Approximately 1 million new light vehicles are sold each year in Australia • EV market share of 1.95% compares with global average of 4.2% in 2020 • Approximately three-quarters of EVs sold in Australia are
Slide 32: The Norwegian Experience
The Norwegian Experience Exponential sales growth yet to translate to majority fleet share in Norway • Norway is the most advanced market in the world in terms of EV adoption, with pro-emission reduction policies in place since the 1990s • Share of new car sales was ~86% in 2021, but only ~22% of ve
Slide 33: Glossary
Glossary Coles Express Fawkner (VIC) 33
Slide 34: Glossary
Glossary AIP Australian Institute of Petroleum Alliance Arrangement between Coles Express and VEA in respect of the operation of a national network of retail fuel and convenience sites AMTN Australian Medium-Term Notes ASX Australian Securities Exchange BEV Battery electric vehicle bp Basis points C
Slide 35: Glossary
Glossary EPS Earnings per security ESG Environmental, Social and Governance EV Electric vehicle (general term used to cover battery electric vehicles, plug-in hybrid electric vehicles and hydrogen fuel cell vehicles) F&C Fuel and Convenience FY Financial year GHG Greenhouse gases Gearing Net debt (e
Slide 36: Glossary
Glossary PHEV A plug-in hybrid electric vehicle VEA reports its performance on a “replacement cost” (RC) basis. RC is a non-IFRS measure under which the cost of goods sold is calculated on the basis of theoretical new RC purchases of inventory instead of historical cost of inventory. This removes th
Slide 37: Focused on maximising long-term income and capital returns
Focused on maximising long-term income and capital returns Excellence Respect Trust Integrity Doing our best, and For our people, Building and maintaining Operating in an always looking for community, environment, long-term relationships ethical manner that is ways to do better customers and investo