Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — FY2015 Earnings Presentation
31 slides from Merlin Properties Socimi's earnings presentation, 2016
Slide 1: FY 2015 Results Presentation
FY 2015 RESULTS PRESENTATION
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by internal analyses may have not been verified Company have not been and, should there This presentation may include forward- MERLIN Properties SOCIMI, S.A. (the by any independent sources and there can be an offering, will not be registered under look
Slide 3: Introduction and highlights
Introduction and highlights Ismael Clemente A strong performance CEO Financial results iguel Ollero M Solid numbers in a transformational year CFO / COO Portfolio performance David Brush Diversified asset base with high yield, CIO positive take-up and emerging LFL rental growth Outlook 2016 Ismael C
Slide 4: Change in scale across all metrics
MERLIN Fast facts CHANGE IN SCALE ACROSS ALL METRICS GLA GLA GRI(1) ATTRIBUTED GRI(2) 1,865,487 223,024 € 301.7 m € 316.2 m IN STOCK EXPANSION PROJECTS ANNUALIZED ANNUALIZED FY 15 FY 15 FY 15 FY 15 € 214.5 m € 186.7 m € 133.1 m € 99.3 m GROSS RENTS RECURRING EBITDA RECURRING FFO EPRA EARNINGS EPRA E
Slide 5: Financial Results 2015
FINANCIAL RESULTS 2015 SOLID NUMBERS IN A TRANSFORMATIONAL YEAR
Slide 6: Headline results reflect strong growth in the period
Financial results Consolidated profit and loss (Testa’s results for 2H only) HEADLINE RESULTS REFLECT STRONG GROWTH IN THE PERIOD FY 2015 FY 2014 Passing Gross Consolidated Gross rents € 214.5 m € 56.8 m rents annualized profit and loss Office € 63.3 m € 3.9 m € 301.7 m1 High street retail € 91.1 m
Slide 7: Outstanding gross-to-net ratio of 94%
Source: Company. Financial results 0 50,000 100,000 150,000 200,000 250,000 (€ thousand) Pr G op r N e re os s et r n ts 214.5 re no ty nt t r ex s e p be ch en fo arg ses re (10.2) ed in ce nt iv es 204.2 N In et ce re nt nt iv s es af (2.7) te ri nc en tiv es O 201.5 th er Bridge gross rents to FF
Slide 8: Valuation and balance sheet
Financial results Valuation and balance sheet SIGNIFICANT GROWTH Valuation IN GAV AND NAV Dec-15 Adjusted Dec-14 Dec-14 AFTER INTENSIVE 2015 GAV € 6,053 m € 5,389 m (1) € 2,232 m INVESTMENT ACTIVITY EPRA NAV € 3,181 m € 2,951 m (2) € 1,355 m AND PORTFOLIO EPRA NAV per share € 9.85 € 9.13 € 10.50 REV
Slide 9: Portfolio valuation
Financial results Portfolio valuation LFL GAV INCREASE 5.1% INCLUDING EFFECT OF NON-CORE LAND (7.8% IF EXCLUDED) Asset Category LfL Change 31/12/15 31/12/2015 31/12/2014 (€ million) vs 31/12/2014 Office € 2,189.6 m € 1,932.4 m 10.0% High Street retail € 1,883.9 m € 1,669.5 m 6.8% Shopping centers €
Slide 10: Valuation drivers
Financial results Valuation drivers GAV INCREASE MOSTLY DRIVEN BY PRUDENT YIELD COMPRESSION POTENTIAL FOR FURTHER CAPITAL VALUE GROWTH 197 (127) 16 17 6,053 164 6,000 374 3,180 5,000 31/12/14 GAV bridge to 31/12/15 4,000 3,000 2,232 2,000 1,000 - GAV GAV MERLIN 2015 MERLIN TESTA Capex 2015 GAV MERLI
Slide 11: Debt summary
Financial results Debt summary (€ million) Current 31/12/2015 31/12/2014 € 1.7 BN Unsecured bank € 1,700 m € 350 m €0m SUCCESSFULLY loans Mortgage bank loans € 1,157 m € 2,479 m € 1,010 m REFINANCED Mortgage non-bank € 133 m € 133 m €0m ON AN UNSECURED loans BASIS Leasings € 175 m € 175 m €0m Non-co
Slide 12: 2015 Proposed shareholder distribution
Financial results 2015 Proposed shareholder distribution (€’000s) Per share (€ cents) Interim dividend (Oct-15) 25,035 7.750 Complementary dividend (Apr-16) 1,838 0.569 Share premium distribution (Apr-16) 33,146 10.261 Total 60,019 18.580 ı 12 ı
Slide 13: Rating (preliminary)
Financial results Rating (preliminary) INVESTMENT GRADE BBB RATING FROM S&P INVESTMENT GRADE HIGHEST RATING STABLE BBB EVER FOR A SPANISH OUTLOOK REAL ESTATE COMPANY THE RATING WILL SUPPORT PLANNED BOND ISSUANCE… Planned bond issuance will further Bond issuance extend maturity profile 1,139 936 877
Slide 14: Portfolio Performance
PORTFOLIO PERFORMANCE DIVERSIFIED ASSET BASE WITH HIGH YIELD, POSITIVE TAKE-UP AND EMERGING LFL RENTAL GROWTH
Slide 15: Broader diversification in the portfolio
Portfolio performance Breakdown MERLIN HAS ACHIEVED BROADER DIVERSIFICATION IN THE PORTFOLIO… 31/12/2014 31/12/2015 GLA BREAKDOWN PER ASSET TYPE 0.3% 2.7% 6.3% Other Logistics 6.6% 8.7% 29.7% Rented residential Office 9.2% Hotels Shopping Centers 19.6% High Street Retail High Street Retail 69.0% 23.
Slide 16: Yields, Occupancy and WAULT
Portfolio performance Yields, Occupancy and WAULT ...WHILE MAINTAINING HIGH OCCUPANCY AND WAULT EPRA GROSS YIELD PER ASSET TYPE(1) 7.4% 6.9% 5.9% 5.1% 5.1% 5.6% 4.2% 5.3% MERLIN AVERAGE Office High Shopping Logistics Hotels Rented Other2 street retail centers residential OCCUPANCY AND WAULT PER ASSE
Slide 17: Leasing activity
Portfolio performance Leasing activity Renewals Out In Net 120,000 STRONG LEASING 97,568 ACTIVITY WITH: 100,000 87,169 376K SQM SIGNED: 80,000 70,134 106K SQM OF NEW 60,000 48,375(1) CONTRACTS 40,000 AND 270K SQM 30,210 16,653 15,188 10,772 RENEWALS 20,000 12,528 12,285 1,414 0 (597) (20,000) (9,358
Slide 18: Letting highlights
Portfolio performance Letting highlights MERLIN HAS ATTRACTED TOP TIER TENANTS Office Renewal Renewal In In 29,115 sqm 16,001 sqm 1,837 sqm 603 sqm Princesa 3 Costa Brava 2-4 Atica I Juan Esplandiu Shopping centers Renewal In In In 7,673 sqm 1,877 sqm 1,209 sqm 579 sqm Marineda Porto Pi Marineda Mar
Slide 19: Occupancy LFL evolution
Portfolio performance Occupancy LFL evolution HIGH OCCUPANCY SHOWING STRENGTH DESPITE MINIMUM REDUCTION 100% 100% 100% 100% 100% 100% 98.8% 97.1% 94.8% 95.4% 94.2% 93.2% 92.4% 90.1% 91.4% 89.7% Office Shopping Logistics High Hotels Rented Other2 MERLIN centers street retail residential 31/12/14 31/1
Slide 20: LFL rental growth
Portfolio performance Lfl Rental growth EMERGING LFL (1) RENTAL GROWTH MAINLY CONCENTRATED IN 2H Commercial LfL Rent Evolution (2014-2015) Office Portofolio: Detailed Analysis 400 144 € 000’s LfL Rent Occupancy Total 200 0 Office (373) (971) (1,344) -200 Shopping -400 319 378 697 centers -600 (517)
Slide 21: Lease maturity profile
Portfolio performance Lease maturity profile BALANCED MATURITY PROFILE SUPPORTS CASH FLOW PREDICTABILITY 97% 40% 37% 35% 33% 33% 25% 23 % 23% 19% 19% 13% 13% 13% 12% 11% 11% 9% 8% 8% 7% 4% 4% 2% 1% 2016 2017 2018 2019 2020 > 2020 Office Shopping centers Logistics High Street retail Hotels 50,0% 6% 4
Slide 22: Shopping centers evolution
Portfolio performance Shopping centers evolution INCREASING CONSUMER CONFIDENCE DRIVING GOOD SALES AND FOOTFALL GROWTH (+7% FOOTFALL / +10% SALES) 140 120 100 80 60 40 20 - Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 2015 Footfall 2015 Footfall 2015 Sales 2015 Sales (million) vs 2014 (mill
Slide 23: New acquisitions: Pinto
Portfolio performance New acquisitions: Pinto Logistics asset located in the prime area of Madrid’s southern logistics ring, formerly owned by PSA group. The warehouse has 70,000 sqm, with the potential to be divided into several modules (2x35,000 sqm or CLA 3x20,000 sqm), in a plot of 115,892 sqm.
Slide 24: New acquisitions: Azuqueca
Portfolio performance New acquisitions: Azuqueca Barcelona Logistics 100k sqm turn-key project in Miralcampo (second ring of Madrid, 40kms.), in the so-called “Corredor de Henares”, the largest logistic hub in Spain, comprising more than 15 municipalities and 70 km of logistics activity. The warehou
Slide 25: Outlook 2016
OUTLOOK 2016 ATTRACTIVE DIVIDEND GUIDANCE ı 25 ı
Slide 26: Our market
Outlook 2016 Our market HEADLINE RENTS YIELDS HAVE ALREADY VERY SCARCE INVESTMENT STARTING TO GROW COMPRESSED IN LINE WITH OTHER NEW SUPPLY ACTIVITY AT IN OFFICE, LOGISTICS EUROPEAN MARKETS. SOME LOWER PACE AND SHOPPING CENTERS FURTHER YIELD COMPRESSION AFTER RECORD EXPECTED, MAINLY IN LOGISTICS YEA
Slide 27: Dividend guidance on 2016 results
Outlook 2016 Dividend guidance on 2016 results SHAREHOLDER DISTRIBUTION GUIDANCE: MINIMUM OF € 140 M (€ 0.43 + PER SHARE) AGAINST FY 2016 RESULTS WITH THE FOLLOWING CHARACTERISTICS: ALL CASH PAYMENT IN TWO INSTALMENTS Interim1 Final Total (following approval FY 2016 proposed by AGM of 2016 accounts)
Slide 28: LEED/BREAAM program
Outlook 2016 LEED/BREAAM program AMBITIOUS EFFICIENCY PROGRAM TO ACHIEVE LEED/BREAAM CERTIFICATION OVER 90% OF THE PORTFOLIO BETWEEN 2016-2018 Asset Category (# assets) 2016 2017 2018 Granted TOTAL % GAV Office 9 15 9 2 35 85% Shopping centers 2 2 - - 4 93% Logistics 4 13 - - 17 92% Hotels 2 1 7 - 1
Slide 29: Projects: additional rents from development
Outlook 2016 Projects ADDITIONAL RENTS DERIVING FROM DEVELOPMENT PROJECTS EXISTING AS OF 31/12/15 2016 2017 2018 CABANILLAS I & II GLA: 152,583 sqm GAVILANES GLA: 39,576 sqm ISLA CHAMARTIN GLA: 16,639 sqm Expected Rents: € 5.9m Expected Rents: € 2.3m Expected Rents: € 4.9m Delivery: Dec-16 / Jun-17
Slide 30: Q&A
Q&A ı 30 ı
Slide 31: Paseo de la Castellana, Madrid
PASEO DE LA CASTELLANA, 42 28046 MADRID +34 91 787 55 30 info@merlinprop.com www.merlinproperties.com ı 31 ı
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