Slide 1: FY20 Results Presentation
FY20 Results Presentation 26 February 2021 Hadyn Stephens – CEO Kerri Leech – CFO
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 • F&C operators focused on everyday needs • Viva Energy supplies 24% of Australia’s • F&C tenants continued to operate thr
Slide 4: Contents
Contents: 1. FY20 Highlights 5 2. Financial Results 8 3. Portfolio Update 13 4. Strategy Update 19 5. Key Priorities and Outlook 25 6. Appendices 27 7. Glossary 52 4
Slide 5: FY20 Highlights
FY20 Highlights 5
Slide 6: FY20 Highlights
FY20 Highlights Strong growth in Distributable EPS and NTA per security, gearing below revised target range Financial Performance Property Portfolio Capital Management Business Update Distributable EPS: 15.15cps1 $51.3m invested, $5.5m disposals c.A$250m USPP issuance + $325m bank Strong FY20 for F&
Slide 7: Distributable EPS Growth
Distributable EPS Growth FY20 continues WPR’s strong track record of growth in Distributable EPS1,2 +3.75% +4.25% 15.72 15.15 +3.69% +4.54% 14.54 Assumes: +5.75% 14.02 1. No acquisitions 2. Non-core asset 13.41 disposals of $20-30m 3. No material changes 12.68 in market conditions 4. No other factor
Slide 8: Financial Results
Financial Results 8
Slide 9: Financial Performance
Financial Performance Distributable Earnings of $118.5m represents 6.1% growth on FY19 FY20 FY19 Change Change $m $m $m % $4.2m of like-for-like rental growth at 2.9%, $5.6m of income from acquisitions and completed developments, and $1.9m of development coupon income Rental income 160.2 148.5 11.7
Slide 10: Components of Distributable EPS Growth
Components of Distributable EPS Growth FY20 growth driven by contracted rental growth and debt-funded acquisitions/developments Securities issued in Primarily due to FY19 (Feb-19 2.9% like-for-like higher insurance placement + DRP) rental growth and statutory costs and FY20 (DRP) Debt-funded acquisi
Slide 11: Balance Sheet
Balance Sheet Strong NTA growth driven by 19 bps of cap rate compression across the portfolio Dec-20 Dec-19 Change Change $m $m $m % Cash and cash equivalents 15.5 27.5 (12.0) (43.6) Includes $14.3m carrying value of four properties held for sale Other assets 17.8 6.4 11.4 178.1 Increase due to acqu
Slide 12: Debt / Liquidity
Debt / Liquidity Further debt diversification and 1.4 year tenor extension achieved through inaugural USPP and bank re-financing Dec-20 Dec-19 Change Facility limit ($m) 1,050.3 1,096.7 (46.4) Drawn debt ($m)1 872.3 846.7 25.6 Facility limit adjusted to reflect WPR’s current financing needs with $12
Slide 13: Portfolio Update
Portfolio Update 13
Slide 14: Portfolio Overview
Portfolio Overview1 Geographically diversified portfolio with a strong weighting to metro locations along the eastern seaboard Avg. Site Avg. No. of Value Value Area Value WACR WALE Properties ($m) (%) (m2) ($m) (%) (years) Metro 315 2,081.8 72 3,712 6.6 5.26 11.0 7.1% NT Regional 155 815.2 28 6,736
Slide 15: Valuations
Valuations Cap rate compression of 17bp across the portfolio in 2H20 • Independent valuations carried out on a further 106 properties as at 31 December 2020 (157 as at 30 June 2020) • Gross valuation uplift of $89.6 million recorded in 2H20, with the portfolio WACR compressing 17bp to 5.62% Jun-20 D
Slide 16: Acquisitions and Developments
Acquisitions and Developments $51.3m spent in FY20 on 5 acquisitions and 12 developments (6 complete, 6 in progress) Acquisition State Location Value ($m) WACR WALE1 Greenvale Vic Metro 5.2 5.5% 15.0 Meadow Springs WA Metro 7.3 6.0% 12.2 Colac West Vic Regional 6.8 6.8% 14.4 Redcliffe WA Metro 10.4
Slide 17: Non-Core Disposals
Non-Core Disposals Two assets sold in FY20 at a premium to book value, $20-30m of potential sales identified for FY21 • WPR has commenced the process of identifying and selling non-core Lease Sale Price assets within its portfolio State Location Expiry ($m) Yield • Three assets were taken to public
Slide 18: FY21 F&C Lease Expiries
FY21 F&C Lease Expiries1 Three VEA leases expiring in FY21 (0.7% of income) Passing Property State Location Expiry Rent Status Blaxland NSW Metro May-21 $331,028 • Acquired in March 2017 • VEA has a 5-year option from expiry, subject to market rent determination (0.20% of • Independent expert appoin
Slide 19: Strategy Update
Strategy Update 19
Slide 20: F&C Sector Trends
F&C Sector Trends There are a number of ‘mega trends’ that will impact the F&C sector over the long-term • Transition to EVs is inevitable; however, • Customer visitation remains focused on fuel timing remains highly uncertain offering (80% buy fuel only4); however market • Australia continues to la
Slide 21: Implications for the F&C Sector
Implications for the F&C Sector Long-term trends will impact landlords; however, direct ability to adapt is limited to portfolio management • Primary responsibility for dealing with the trends impacting the F&C sector over the long-term rests with the operator: – F&C properties are typically subject
Slide 22: Implications for WPR's Strategy
Implications for WPR’s Strategy Three-pronged strategy to address long-term trends in the F&C sector Strategy Aim Description/Comments Support our Assist long-term ▪ Optimise current offering (e.g. site operators viability/success of redevelopments) Capitaloffering Adapt partner our operators, ▪ Ada
Slide 23: Summary – Portfolio Strategy
Summary – Portfolio Strategy Maximising long-term portfolio returns through supporting our operators and active portfolio management 1 WPR owns a high quality portfolio of 470 sites occupied on long-term leases by world-class operators focused on everyday needs. 2 WPR’s portfolio diversification pro
Slide 24: ESG Strategy
ESG Strategy In 2020, WPR aligned our key focus areas with the UN Sustainable Development Goals (UNSDGs) Focus Area Key Matters Impact Stakeholders UNSDGs Actions to date Ethical conduct Governance, Direct Employees/ - Strong corporate governance and risk management models. and Transparency Complian
Slide 25: FY21 Priorities and Outlook
FY21 Priorities and Outlook 25
Slide 26: FY21 Priorities and Outlook
FY21 Priorities and Outlook Focus on improving portfolio quality via selective acquisitions, non-core disposals and reinvesting in core ▪ Focused on 2 non-fuel tenant vacancies and FY21 lease expiries (represent 0.9% of income) Core Portfolio ▪ Pursuing strategic capital reinvestment opportunities w
Slide 27: Appendices
Appendices 27
Slide 28: Appendices: Financial
Appendices: Financial 28
Slide 29: Reconciliation to Statutory Profit
Reconciliation to Statutory Profit Statutory profit increased 41.6% largely due to valuation gains recorded during the year $m FY20 FY19 Change Change $m $m $m % Distributable earnings 118.5 111.7 6.8 6.1 19 bps of cap rate compression across the portfolio in FY20 vs flat in FY19 and lower acquisiti
Slide 30: Composition of M&A Expenses
Composition of M&A Expenses M&A expenses increased 12% largely to due to higher insurance and statutory costs Higher volume of Net change, Largely driven by Higher IT and independent inclusive of costs higher insurance accommodation valuations due to associated with premiums post charges post COVID-
Slide 31: Debt/Liquidity
Debt/Liquidity Weighted average debt maturity of 4.3 years and weighted average hedge maturity of 2.4 years Debt maturity profile as at 31 December 2020 Swap maturity profile as at 31 December 2020 400 100% 3.00% 2.72% 90% 350 368 89% 2.50% 80% 300 50 70% 1.88% 1.78% 2.00% 250 128 1.74% 60% 1.50% 1.
Slide 32: Appendices: Property Portfolio
Appendices: Property Portfolio 32
Slide 33: Investment Strategy / Criteria
Investment Strategy / Criteria A range of quantitative and qualitative factors underpin WPR’s value assessment of a site Lease Permitted Use Covenant, term + options, passing rent, Current zoning, possible future rezoning rental growth, Triple Net / Double Net onerous / atypical clauses Location Ada
Slide 34: Lease Expiry Profile
Lease Expiry Profile Portfolio WALE of 10.8 years with a staggered expiry profile • Only five fuel leases expiring in the next five years (1.2% of income) • Two non-fuel tenancies are currently vacant, with a further 12 non-fuel leases expiring in the next five years (0.7% of income) • Staggered lea
Slide 35: FY20 Acquisitions (Detailed)
FY20 Acquisitions (Detailed) 5 assets acquired for $32.5m @ WACR of 6.25% 439 Great Eastern Highway, 416 Princes Highway, 25 Wills Road, 825 Mickleham Road, Lot 50 Mandurah Road, Site Address Redcliffe, WA Colac West, VIC Emerald, QLD Greenvale, VIC Meadow Springs, WA Region Metro Regional Regional
Slide 36: FY23-26 Market Rents
FY23-26 Market Rents Rents on leases expiring in FY23-26 are (on average) ~17% below market • In September 2020, WPR commissioned independent desktop market rental advice on 43 sites leased to VEA with leases expiring between FY23 and FY261 % of combined 17% • Three of the 43 sites have now been sol
Slide 37: Underlying Land Value / Alternate Use
Underlying Land Value / Alternate Use Underlying land value comprises ~50% of current portfolio book value • WPR has completed a high-level and indicative assessment of alternative use potential and residual land value (RLV) analysis for its ~300 metropolitan assets Zoning by Book Value (Metro Sites
Slide 38: Sustainable elements in development design
Sustainable elements in development design Sustainable design elements adopted across WPR’s 15 development sites in 2020 • Established inaugural set of site sustainability criteria, re-affirming elements already assessed in our investment evaluation criteria • Key criteria include: – Environmental P
Slide 39: Appendices: Tenants and Operators
Appendices: Tenants and Operators 39
Slide 40: Viva Energy Australia – Overview
Viva Energy Australia – Overview1 Strategic national retail network and infrastructure Darwin Cocos Islands 24% of the Australian downstream petroleum market2 1,330+ service station sites nationwide in Viva Energy’s network 46 fuel import terminals and depots3 nationally to support operations 19 55
Slide 41: Viva Energy Australia – FY20 Results
Viva Energy Australia – FY20 Results1 Significant impact from COVID-19, but Retail EBITDA increased 18.9% • 16.0% decline in fuel volumes due to COVID-19 $m FY20 FY19 Change • 16.5% improvement in Non-Refining EBITDA driven by strong diesel sales Sales volumes (ML) 12,339 14,695 (16.0%) through both
Slide 42: Coles Express – HY21 Results
Coles Express – HY21 Results1 Strong c-store sales and favourable mix supported an increase in CEXP EBIT • CEXP delivered 10.5% sales growth in HY21 $m 1H21 1H20 Change Key P&L items: – Driven by drinks category, supported by recent investments in fridges and targeted range reviews in healthier drin
Slide 43: Appendices: Industry Information
Appendices: Industry Information 43
Slide 44: Australian F&C Network Update
Australian F&C Network Update Site closures by the three domestic Majors being offset by continued expansion of smaller operators • 197 new sites opened in 2020, with 193 closures for a net increase of 4 sites or 0.1% of total sites as at the start of the year • The three majors (BP, Viva Energy and
Slide 45: Australian Motor Vehicle Statistics - 2020
Australian Motor Vehicle Statistics - 20201 Freight vehicles account for 43% of fuel consumed in Australia and 77% of diesel consumption • There are ~19.8 million vehicles on Australian roads, travelling ~238 million kilometres per annum Proportion of total vehicles and consuming ~33 billion litres
Slide 46: Australian EV Forecasts – CSIRO (June 2020)
Australian EV Forecasts – CSIRO (June 2020) Central Scenario forecasts from CSIRO suggest ~25% market share by 2040 • The CSIRO published a report in June 2020 providing projections of the future capacity Cost of small-scale embedded technologies (rooftop solar, batteries and EVs) as EV Share of Sal
Slide 47: Future Fuels Strategy
Future Fuels Strategy Focus on charging infrastructure and commercial fleets • The Federal Government released its Future Fuels Strategy discussion paper in February 2021 • Key points of interest: – In the short to medium term, conventional vehicles that use petrol and diesel will continue to be the
Slide 48: Domestic Petrol and Diesel Consumption
Domestic Petrol and Diesel Consumption Strong growth in diesel and premium fuels, declining regular and ethanol-based fuels 2011-19 CAGR: 4,500.0 +1.6% 4,000.0 3,500.0 3,000.0 +3.4% 2,500.0 ML 2,000.0 1,500.0 1,000.0 (1.7%) 500.0 +2.2% (3.1%) 0.0 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-
Slide 49: Retail Fuel Prices and Margins
Retail Fuel Prices and Margins Record industry fuel margins in 2020 despite COVID-impact fuel volumes and a 14% decline in retail prices 180.0 20.0 18.2 18.0 160.0 16.0 140.0 National average retail price (cpl) 14.3 13.6 14.1 14.0 120.0 13.3 13.0 12.6 12.0 100.0 11.1 10.3 10.6 10.0 152.8 151.1 80.0
Slide 50: Australian F&C Consumer Behaviour
Australian F&C Consumer Behaviour1 • 56% of consumers cite price as the most important factor in deciding where to buy fuel; however, Most Important Factor in behaviour would appear to suggest that location is the key determinant: 2015 2017 2019 Deciding Where to Buy Fuel: – ~90% of consumers are lo
Slide 51: Australian F&C Consumer Behaviour (cont.)
Australian F&C Consumer Behaviour (cont.)1 • Total sales across Australian convenience stores were $8.8 billion in 2019, up 2.1% on 2018 Total Purchase Behaviour: Inner City Under 30 Sample • Tobacco, packaged beverages and food-on-the-go comprised more than two-thirds of sales and food categories g
Slide 52: Waypoint REIT
Waypr int REIT
Slide 53: Glossary
Glossary ABS Australian Bureau of Statistics ACAPMA Australian Convenience and Petroleum Marketers Association AIP Australian Institute of Petroleum AV Autonomous vehicle bp Basis points Cap Rate Capitalisation rate CEXP Coles Express, a division of Coles Group Limited (ABN 11 004 089 936) COVID-19
Slide 54: Glossary
Glossary 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 FTE Full-Time Equivalent FY Waypoint REIT financial year, being year end 31 December Gearing Net debt (excluding foreign exch
Slide 55: Glossary
Glossary Regional All other properties not located within the Significant Urban Areas The review event triggered under WPR’s debt facilities as a result of Viva Energy’s sell down of its securityholding in WPR in February 2020. As a result, existing lenders at the time Review Event had a period of 6
Slide 56: Focused on delivering long-term sustainable returns for our investors
Focused on delivering long-term sustainable returns for our investors 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