Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Investor Presentation (October 2018)
29 slides from Global Net Lease's investor presentation, Oct 4, 2018
Slide 1: Global Net Lease Investor Presentation October 2018
GLOBAL NET LEASE October 2018 Investor Presentation NETSCOUT – ALLEN, TX
Slide 2: Overview
2 OVERVIEW Long Duration Leases to Investment Grade Rated Tenants (1) Proactive Asset Management to Drive Long Term Portfolio Value High - Quality, Mission Critical, Diversified Portfolio Differentiated Strategy with International Exposure Highly Experienced Management Team Ability to Capitalize on
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Properties 333 Square Feet (millions) 25.0 Tenants 104 Industries 41 Countries 7 Leased 99.5% Weighted Average Remaining Lease Term (1) 8.5 years % of SLR derived from Investment Grade Tenants (2)(3) 79.1% % of leases with contractual rent increases (4) 91% Portfolio Overview
Slide 4: Well Balanced Portfolio
4 Non Investment Grade 17.4% Investment Grade 79.1% Not Rated 3.5% United States 51% United Kingdom 21% The Netherlands 7% Germany 8% Finland 6% France 5% Luxembourg 2% WELL BALANCED PORTFOLIO As of June 30, 2018 1. Me tric based on SLR. Refer to SLR definition included in the footnotes to page 3. 2
Slide 5: Well Diversified Tenant Base
5 WELL DIVERSIFIED TENANT BASE Top Ten Tenants As of June 30, 2018. *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating. 1. Metric based on SLR. Refer to SLR definition included in the footnotes to page 3. Top Ten Tenants Represent Only 38 % of SLR (1) Tenant Rating Country Proper
Slide 6: Focus on High-Quality Tenants
6 Financial Service Providers Government Services Multinational Corporations FOCUS ON HIGH - QUALITY TENANTS Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) U.S. Luxembourg Germany The Netherlands Finland U.K. France AA+ AAA AAA AAA AA+ AA AA Best - in - class portfolio leased to l
Slide 7: Differentiated Investment Strategy
7 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing Focused on single - tenant commercial properties to generate superior risk - adjusted returns • Focus on the U.S. and strong sovereign debt rated countries in Continental Europe • Cri
Slide 8: 2018 Investment Activity
8 2018 INVESTMENT ACTIVITY Tenant Closing Date Properties Asset Type Purchase Price (millions) Average GAAP Cap Rate (1) Acquisitions Chemours Company, FC LLC 2/26/2018 1 Distribution $18.6 6.96% Lee Steel Holdings, LLC 3/21/2018 1 Industrial $8.8 8.31% LSI Steel Processing 3/29/2018 3 Industrial $1
Slide 9: Robust Pipeline
9 ROBUST PIPELINE *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating. 1. The acquisitions of $134 .5 million in contract purchase price of properties are subject to customary closing conditions, and there can be no assurance t he y will be competed on their current terms, or at a
Slide 10: Geographic Balance (Including Pipeline)
10 GEOGRAPHIC BALANCE (INCLUDING PIPELINE) 1. Refer to basis for metric calculation included in the footnotes to page 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes to page 3. U.S. Number of Assets: 270 Remaining Lease Term: 9.0 years (1) % of GNL SLR: 54.4% (2) Europe
Slide 11: Pro Forma Portfolio Composition with Pipeline
11 PRO FORMA PORTFOLIO COMPOSITION WITH PIPELINE Continued Focus towards United States Industrial and Distribution Properties Geographic concentration split changes from 51% and 49% to 54% and 46%, for the United States and Europe, respectively with the addition of the 2018 pipeline. Office 53% Indu
Slide 12: Second Quarter Acquisition: DuPont Pioneer
12 SECOND QUARTER ACQUISITION: DUPONT PIONEER Transaction Overview Property and Tenant Overview Tenant Pioneer Hi - Bred International, Inc. (d/b/a DuPont Pioneer) Property Type Distribution Credit Rating (1) S&P: Parent: BBB/A - ; Moody's: Parent: Baa2/A3 Location Spencer, IA Square Feet 200,000 Le
Slide 13: Third Quarter Acquisition: NetScout
13 Transaction Overview Tenant NetScout Systems Texas, LLC Property Type Office Credit Rating (1)(3) S&P: N/A; Moody's: Implied: Ba3 Location Allen, TX Square Feet 145,000 Lease Term (years) 12.0 Purchase Price $54 million Average GAAP Cap Rate (2) 7.36% Tenant/Guarantor • NetScout Systems Texas, LL
Slide 14: Fully Aligned Management Structure
14 Chris Masterson Chief Financial Officer, Treasurer and Secretary FULLY ALIGNED MANAGEMENT STRUCTURE Fully integrated external management team creates highly scalable platform with an acquisition pipeline generated by a proven, country - focused origination network No transactional fees allows for
Slide 15: Company Initiatives
15 COMPANY INITIATIVES GNL continues to execute on corporate, financing and investment actions that enhance the Company’s value and capabilities Q4 2017 $187 Million CMBS Offering • Closed on $187 million of CMBS debt with Credit Suisse • Interest rate of approximately 4.37% with a 10 - year term; c
Slide 16: GNL Capital Structure Progress
16 GNL CAPITAL STRUCTURE PROGRESS GNL continued to improve its capital structure throughout 2018 by extending debt maturities, maintaining a low cost of debt and optimizing the debt structure for continued future growth $1,473 $1,385 $1,136 $1,375 $100 $139 $135 $139 $799 $992 $1,047 $983 $648 $532
Slide 17: Performance Metrics
17 $- $5 $10 $15 $20 $25 $30 $35 $40 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 PERFORMANCE METRICS Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Total Revenue $65.0 million $64.9 million $66.6 million $68.0 million $71.0 million Operating Incom
Slide 18: Debt Overview
18 Fixed Rate 76.3% Floating Rate 23.7% USD 41% EUR 39% GBP 20% DEBT OVERVIEW Net Debt to Enterprise Value (1) 51.0% Net Debt to Adjusted EBITDA (annualized) (1)(2) 7.4x Interest Coverage Ratio (3) 4.2x Weighted Average Interest Rate (4) 3.1% Weighted Average Debt Maturity 3.3 Years Debt Metrics as
Slide 19: Comprehensive Hedging Program
19 COMPREHENSIVE HEDGING PROGRAM GNL continues to employ a comprehensive hedging program, with a number of components designed to limit the impact of currency and interest rate movements to its European portfolio Hedging Foreign Currency Exchange Risk (“Cash Flow Hedging Instruments”) • Provides pro
Slide 20: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com
Slide 21: Forward Looking Statements
21 FORWARD LOOKING STATEMENTS This presentation contains certain statements that are the Company’s and Management’s hopes, intentions, beliefs, expectations, or projections of the future and might be considered to be forward - looking statements under Federal Securities laws . Prospective investors
Slide 22: Risk Factors
22 RISK FACTORS The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward - looking statements . See the section entitled “Item 1 A . Risk Factors” in GNL’s Annual Repo
Slide 23: Risk Factors (Continued)
23 RISK FACTORS (CONTINUED) • Provisions in in our credit facility, may limit our ability to pay dividends on our common stock, $ 0 . 01 par value per share ("“Common Stock"”), our 7 . 25 % Series A Cumulative Redeemable Preferred Stock, $ 0 . 01 par value per share ("“Series A Preferred Stock"”) or
Slide 24: Projections
24 PROJECTIONS • This presentation includes estimated projections of future operating results . These projections were not prepared in accordance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentat
Slide 25: Definitions
25 DEFINITIONS • Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an ap
Slide 26: Definitions (Continued)
26 DEFINITIONS (CONTINUED) • Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed - as - incurred model) that were put into effect in 2009 and other changes to GAAP accounting for real estate subse
Slide 27: Definitions (Continued)
27 DEFINITIONS (CONTINUED) • Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management's analysis of the operating performance of the Company . Additionally, fair value adjustments, which are based on the impact of current market f
Slide 28: Non-GAAP Reconciliations
28 NON – GAAP RECONCILIATIONS (in thousands) Three Months Ended June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 EBITDA: Net income $ 7,743 4,812 $ 8,449 $ 2,487 Depreciation and amortization 29,813 29,496 28,558 29,879 Interest expense 14,415 12,975 12,806 12,479 Income tax expense
Slide 29: Non-GAAP Reconciliations
29 NON – GAAP RECONCILIATIONS (in thousands) Three Months Ended June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 Funds from operations (FFO): Net income attributable to common stockholders (in accordance with GAAP) $ 5,288 2,361 $ 5,998 $ 2,104 Depreciation and amortization 29,813 2
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