Parque Arauco S.a. · BCS:PARAUCO
Parque Arauco — Q2 2017 Earnings Presentation
38 slides from Parque Arauco's earnings presentation, September 2017
Slide 1: Investor Presentation Second Quarter 2017
/ / 1 1 Investor Presentation Investor Presentation Second Quarter 2017 Parque Arauco Second Quarter 2017 CONTACTS SARAH INMON (HEAD OF INVESTOR RELATIONS) | EDUARDO PEREZ MARCHANT (CORPORATE FINANCE MANAGER) | CLAUDIO CHAMORRO (CFO) |TEL: (562) 22990510 | EMAIL: IR@PARAUCO.COM
Slide 2: Important Disclaimer
/ 2 Important Disclaimer This document has been prepared by Parque Arauco for the purpose of providing general information about the Company. The Company assumes no responsibility for, or makes any representation or warranty, express or implied, with respect to, the accuracy, adequacy or completenes
Slide 3: Introduction, Our Operations, Investment Highlights, Future Developments
/ 3 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS Investor Presentation Second Quarter 2017 Parque Arauco
Slide 4: Parque Arauco at a glance
Parque Arauco at a glance / 4 Parque Arauco OPERATIONAL METRICS BY COUNTRY Chile Peru Colombia Parque Arauco is the third largest shopping center operator in Chile and Peru, and the fourth largest in Colombia. 39.6% 29.1% Indicator/ Country Total GLA (m2)1 CHILE 455,500 PERU 391,500 COLOMBIA 142,500
Slide 5: In the last five years Parque Arauco has doubled GLA, revenues and EBITDA
In the last five years Parque Arauco has doubled GLA, / 5 revenues and EBITDA 1982 Parque Arauco Kennedy opens as first shopping center in Chile 1993 Arauco Maipu inaugurates in Santiago GLA(1) M2 1995 Parque Arauco S.A. IPO 1997 Inauguration of Marina Arauco in Viña del Mar, Chile +1.8 x 2006 Parqu
Slide 6: The spread over the cost of capital of our last projects is approximately 3%
The spread over the cost of capital of our last projects is / 6 approximately 3% 6% 9% 3% Investor Presentation Second Quarter 2017 REAL CAP RATE(1) REAL WACC (2) SPREAD OVER REAL WACC Parque Arauco Source: Parque Arauco (1) Real cap rate is the yield on cost rate averaged by amount invested and con
Slide 7: Total Return
Total Return / 7 Parque Arauco’s value creation is proven by the fact that it has had one of the highest “Total Return” of the real estate sector in the last years TOTAL RETURN1, LAST 5 YEARS TOTAL RETURN1, LAST 15 YEARS ANNUALIZED, LOCAL CURRENCY ANNUALIZED, LOCAL CURRENCY 14% 12% 12% Parque Arauco
Slide 8: Revenue type and contract duration
Revenue type and contract duration / 8 FIXED VS VARIABLE RENTAL REVENUES CONTRACT LENGTH AS OF JUNE 30, 2017 (BASED ON % OF REVENUES) 15% Other Revenues 40% 100% 85% Rental Revenues 14% 14% 32% 14% Variable Revenues Investor Presentation Second Quarter 2017 ‹2 YEARS 2-3 YEARS 3-4 YEARS ›4 YEARS TOTA
Slide 9: Our Operations
/ 9 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS Investor Presentation Second Quarter 2017 Parque Arauco
Slide 10: Iconic and dominant shopping centers in Chile, Peru and Colombia
/ 10 Parque Arauco has iconic and dominant shopping centers in Chile, Peru and Colombia Parque Arauco has iconic shopping centers in all three countries PARQUE ARAUCO KENNEDY - CHILE ARAUCO MAIPÚ - CHILE LARCOMAR - PERÚ Investor Presentation Second Quarter 2017 Parque Arauco PARQUE LA COLINA- COLOMB
Slide 11: "Market Specialist"
/ 11 "Market Specialist" Parque Arauco is concentrated in Santiago and Lima, which makes the company a “market specialist” in these cities Lima Santiago ARAUCO PREMIUM ARAUCO OUTLET BUENAVENTURA MEGAPLAZA NORTE QUILICURA JESUS MARIA PARQUE ARAUCO ARAUCO MAIPÚ KENNEDY INOUTLET FAUCETT Lima LARCOMAR A
Slide 12: Chilean Portfolio
Chilean Portfolio / Colombia 12 In Chile Parque Arauco has 7 regional shopping centers, 4 outlets and 14 strip centers. The average age of the portfolio is 16 years. Perú Owned GLA Year of Chile GLA (m2) % Ownership Occupancy (m2) incorporation Parque Arauco Kennedy 112,500 100% 112,500 96.8% 1982 A
Slide 13: Peruvian Portfolio
Peruvian Portfolio / / Colombia 13 13 In Peru in the company has 6 regional shopping centers and 9 neighborhood shopping centers, 2 outlets and 2 strip centers. The Perú average age of the portfolio is 6 years. Owned GLA Year of Peru GLA (m2) % Ownership Occupancy (m2) incorporation MegaPlaza Norte
Slide 14: Colombian Portfolio
Colombian Portfolio / / Colombia 14 14 Parque Arauco has 3 regional shopping centers in Colombia and the average age of the portfolio is 3 years Perú Owned GLA Year of Colombia GLA (m2) % Ownership Occupancy (m2) incorporation Parque Arboleda 41,000 55% 22,550 95.3% 2010 Parque Caracoli 38,500 100%
Slide 15: Investment Highlights
/ 15 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS Investor Presentation Second Quarter 2017 Parque Arauco
Slide 16: Investment Highlights
/ 16 Portfolio 6 1. Consistent results in a . challenging macroeconomic Our operations Important growth environment opportunities Parque Arauco has 3 regional shopping centers in Colombia and the average age of the portfolio is 3 years 5. Conservative debt Investment Highlights 2. Stable and structu
Slide 17: Positive but weaker macroeconomic outlook and attractive industry dynamics
/ Consistent results in a challenging macroeconomic environment 17 Positive but weaker macroeconomic outlook and attractive industry dynamics Parque Arauco is positioned in countries with strong macroeconomic prospects GDP GROWTH RETAIL SALES GROWTH Chile Peru Colombia Chile Peru Colombia 8.2% 7.4%
Slide 18: Results have been positive in all three countries
/ Consistent results in a challenging macroeconomic environment 18 Results have been positive in all three countries GLA1 Tenant sales1 Revenues1 NOI1,2 +8.3% +9.5% +8.5% +9.9% 420,500 455,500 1,077,188 103,848 93,660 983,814 95,716 85,191 Chile LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17
Slide 19: Consistent Same Store Growth and a Healthy Occupancy Cost
/ Consistent results in a challenging macroeconomic environment 19 Consistent Same Store Growth and a Healthy Occupancy Cost CHILE SAME STORE SALES / CHG. % CHILE SAME STORE RENT / CHG. % CHILE OCCUPANCY COST 7.2 7.0 10.2% 10.2% 6.2 4.1 2.6 3.7 4.3 2.7 2.6 58% Others 42% 1.7 Anchor Stores 2Q16 3Q16
Slide 20: Diversification of market risks by country, format and socio-economic level
/ Stable and diversified revenues 20 Parque Arauco diversifies its market risks at a country, format, and socio-economic level COUNTRY LEVEL DIVERSIFICATION (%REVENUES) FORMAT LEVEL DIVERSIFICATION (% REVENUES) Chile Peru Colombia Regional Neighborhood Outlet Strip center 10.3% 5.0% 6.7% 2.7% 29.1%
Slide 21: 39% market share in Chile, outlet market leader
/ Stable and diversified revenues 21 With a 39% market share in Chile, Parque Arauco is the outlet market leader in the countries where we operate Outlets currently in our portfolio ARAUCO PREMIUM OUTLET BUENAVENTURA, CHILE ARAUCO PREMIUM OUTLET CONCEPCIÓN, CHILE ARAUCO PREMIUM OUTLET CURAUMA, CHILE
Slide 22: Consolidated commercial relationships with well-known tenants
/ Strong commercial relationships with local and global brands 22 Consolidated commercial relationships with well-known tenants Malls Country Total GLA (m2) Years as a client 11 CHILE PERU 96.554 35 Anchor Stores >> COLOMBIA 10 CHILE PERU 74.548 35 5 CHILE PERU 48.050 12 4 CHILE PERU 33.011 16 Inves
Slide 23: Supporting the globalization of brands entering the Andean region
/ Strong commercial relationships with local and global brands 23 Parque Arauco is supporting the globalization of several brands entering the Andean region NEW TENANTS PARQUE ARAUCO KENNEDY IN THE LAST 5 YEARS: NOMBRE GLA NOMBRE GLA FOREVER 21 1,639 ETIQUETA NEGRA 209 TOP SHOP 464 MICHAEL KORS 208
Slide 24: Recognitions from local and international organizations
/ Solid corporate governance and increased concern with sustainability 24 Parque Arauco has received important recognitions from local and international organizations Workplace Recognition Management Recognition Parque Arauco was recognized by Best Capital Markets Strategy: Great Place to Work in Ch
Slide 25: Advancing our sustainability strategy
/ 25 Solid corporate governance and increased concern with sustainability In the last years we have continued advancing our sustainability strategy 2016 Highlights Environmental Management 1.We established the baseline for energy, water, greenhouse gases (GHG) and residual consumption in Chile, Peru
Slide 26: Policy to finance projects with 50% debt and 50% equity
/ Conservative debt structure and outstanding financial performance 26 Parque Arauco's policy is to finance projects with 50% debt and 50% equity, and is comfortably within all its covenants LIABILITIES / EQUITY |NET FINANCIAL DEBT / EQUITY < 1.40x < 1.50x 1.14x 1.18x 1.16x 0.79x 0.76x 0.89x 0.72x 0
Slide 27: The Company has a conservative debt structure
/ Conservative debt structure and outstanding financial performance 27 The Company has a conservative debt structure LIABILITY AMORTIZATION PROFILE AND DURATION1 IMPROVEMENT IN LOCAL DEBT RATING June 2014 (US$MM) Fitch: AA- Feller: AA- ICR:AA- Average Duration: 4.1 Years 188 175 98 77 BBB- BBB BBB+
Slide 28: The cost of debt has decreased importantly in the past 5 years
/ Conservative debt structure and outstanding financial performance 28 The cost of debt has decreased importantly in the past 5 years Date: 12-12-2014 Base: 1.66% Spread: 1.74% Date: 04-17-2015 Date: 10-12-2016 Duration: 14.3 Base: 1.62% Base: 1.46% Spread: 1.68% Spread: 1.02% Duration: 14.77 Durati
Slide 29: Market participation in Latin America and the Andean Region
/ 29 Important growth opportunities Parque Arauco has 0.9 million m and a 2% 2 market participation in Latin American and a Mexico GLA: 17.4 million m 2 8% market participation 38% of total in the Andean Region. Brazil GLA: 14.7 million de m2 32% of total Latin America Andean Region GLA: 46.1 millio
Slide 30: Participates in markets with a growing retail market
/ Important growth opportunities 30 Parque Arauco participates in markets with a growing retail market RETAIL SALES PER CAPITA AND GLA PER 1,000 INHABITANTS1 16,000 2,500 GLA per 1,000 habitants 2,000 12,000 Retail Sales Per Capita AT KEARNEY GRDI WINDOW OF OPPORTUNITY2 1,500 8,000 OPENING PEAKING M
Slide 31: Growth has come from greenfield projects and M&A
/ Important growth opportunities 31 Parque Arauco's growth has come from greenfield projects and M&A 44,500 989,500 126,500 90,000 37,400 132,858 67% Greenfields 80,242 663,143 m2 27,676 91,625 83,708 24,595 Investor Presentation Second Quarter 2017 55,651 194,745 M&A 33% 326,357 m2 Parque Arauco To
Slide 32: Future Developments
/ 32 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS Investor Presentation Second Quarter 2017 Parque Arauco
Slide 33: Future Developments
Future Developments / 33 2017 and onwards Estimated Total Total Total Owned New Projects Type Country Format Opening % ownership Investment Investment GLA m2 GLA m2 Date Local Currency USDMM Parque Angamos Development Chile Neighborhood 2H18 11,000 55% 6,050 886,000 36 MegaPlaza Villa El Salvador II
Slide 34: Parque La Colina was inaugurated in December 2016
/ 34 Parque La Colina was inaugurated in December 2016 OPENING DATE: The shopping center opened on December 6, 2016. COMMERCIALIZATION STATE: 88.1% of the GLA is open. H&M opened on May 6, 2017. BRANDS: Investor Presentation Second Quarter 2017 Parque Arauco
Slide 35: New expansion of Parque Arauco Kennedy
/ 35 We announced a new expansion of Parque Arauco Kennedy HOTEL OPERATOR: PROJECT DETAILS: Investment: 5,355,000 UF - The five star Hilton hotel will 5-star hotel: Hilton by Hilton have 401 rooms, two restaurants, Rooms: 401 three bars, two pools, a gym Convention center: 3,000 m2 and an executive
Slide 36: Landbank
/ 36 Landbank Name m2 % Ownership Total Cost (local currency) Total Cost (USD MM) Quilicura 25,486 100% 78,000 3 Buenaventura 115,864 100% 455,000 18 Chicureo 47,614 100% 206,000 8 Los Andes 39,254 100% 117,000 5 Others in Chile 67,550 92% 522,000 21 Total Chile 295,768 98% 1,378,000 55 Parque El Go
Slide 37: Glossary
/ 37 Glossary »Adjusted FFO Margin - AFFO / revenues the areas available for lease tenants pay Parque Arauco divided by the sales of the tenant. »AFFO -Adjusted Funds From Operations: Net Profit - »Greenfield Projects - Organic development of new Depreciation & Amortization - Other Income/expenses s
Slide 38: ® ParqueArauco
® ParqueArauco