Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q1 2022 Earnings Presentation
28 slides from Global Net Lease's earnings presentation, May 5, 2022
Slide 1: Global Net Lease First Quarter 2022 Investor Presentation
Global Net Lease First Quarter 2022 Investor Presentation Pictured – McLaren Campus in Woking , U.K.
Slide 2: Company Highlights
COMPANY HIGHLIGHTS Best - in - Class , Mission Critical, Net Lease Focused Portfolio : Featuring high portfolio occupancy of 98.7% and complete Original Cash Rent collection (1) for the sixth consecutive quarter, highlighting strong overall operating performance 1 Continued Leasing Momentum: In Q1’2
Slide 3: Portfolio Highlights
3 PORTFOLIO HIGHLIGHTS Portfolio Overview Q1’22 Q1’21 Properties 309 306 Square Feet (millions) 39.3 37.2 Tenants 137 130 Industries 50 48 Countries and Territories 11 10 Leased 98.7% 99.7% Weighted Average Remaining Lease Term (1) 8.4 years 8.3 years % of SLR derived from Investment Grade Tenants (
Slide 4: Geographically Well-Balanced & High Investment Grade Tenancy Supports Continued Growth
4 Financial Services 12% Auto Manufacturing 12% Consumer Goods 6% Healthcare 5% Technology 5% Freight 4% Aerospace 4% Logistics 4% Telecommunications 4% Energy 3% Engineering 3% Pharmaceuticals 3% Metal Fabrication 3% All Other 24% Investment Grade 62% Non - Investment Grade Rated 35% Not Rated 3% M
Slide 5: Attractive Portfolio in Line with Investment Grade Rated Peers
5 ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS GNL’s diversified portfolio of assets that are primarily leased to Investment Grade rated tenants and located in select North American and European countries compares favorably to GNL’s investment grade rated peers Weighted Average Rem
Slide 6: Best-in-Class Top Ten Tenant Base
6 Tenant Rating Country Property Type % of SLR (1) Caa1 (Moody’s) / B - (Fitch) U.K. Industrial 6% Baa2** U.S. / Canada Distribution 4% Baa1 U.S. / Italy Industrial / Distribution 4% Aaa ** U.S. Office 3% Baa2 U.K. Office 3% Baa3** U.S. Industrial / Distribution 3% Aa3 NETH Office 3% Baa1 U.S. Indus
Slide 7: Focus on World-Class Tenants and Markets with Quality Sovereign Ratings
7 Office Distribution Industrial Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) U.S. Finland Luxembourg Germany The Netherlands Canada U.K. France Guernsey Spain Italy AA+ AA+ AAA AAA AAA AAA AA AA AA - A BBB Moody’s: A1 Moody’s: Aaa** Moody’s: Aa3 Moody’s: Aa3 Moody’s: Baa2 Moody
Slide 8: Differentiated Investment Strategy
8 DIFFERENTIATED INVESTMENT STRATEGY Geography Asset Type Property Fundamentals Credit Quality Structure and Pricing • Focus on U.S. and strong sovereign debt rated countries in Continental Europe • Strategically located industrial and distribution facilities • Mission critical, single tenant net le
Slide 9: Acquisitions
9 *Represents Moody’s Implied Rating 1. Represents the contract purchase price and excludes acquisitions costs which are capitalized per GAAP. The acquisition costs for acquisitions completed during the 12 months ended December 31, 2021 were $18 .8 million. 2. Weighted Average Cap Rate is a rate of
Slide 10: Q1'22 Leasing Momentum and Lease Expiration Schedule
10 In Q1’22, GNL continued on the renewal leasing momentum it generated in 2021 and proactively executed two lease renewals and three renewal and expansion leases, totaling 1.2 million square feet and $54 million of net new straight - line rent over the new weighted average Remaining Lease Term 2022
Slide 11: Transaction Overview: PFB Corporation Acquisition
11 Transaction Overview Tenant PFB Corporation Property Type Industrial Credit Rating PFB Corporation (Moody’s Implied): Ba2 Location Canada (4); US (4) Purchase Price $45.8 million Square Feet 604,236 Weighted Average Remaining Lease Term (1) (years) 20.0 Tenant • PFB Corporation is a Canadian publ
Slide 12: Global Geographic Balance
12 GLOBAL GEOGRAPHIC BALANCE Note: Metrics as of March 31, 2022 unless otherwise noted. 1. Refer to basis for metric calculation included in the footnotes on slide 3. 2. Metric based on SLR. Refer to SLR definition included in the footnotes on slide 3. U.S. and Canada Number of Assets: 235 Weighted
Slide 13: Continued Focus Towards Industrial and Distribution Properties
13 Office 46% Industrial/Distribution 49% Retail 5% United States & Canada 61% Europe 39% Office 42% Industrial/Distribution 55% Retail 3% Continued Focus Towards Industrial and Distribution Properties and Balanced Geographic Diversification United States & Canada 65% Europe 35% Property Type Concen
Slide 14: First Quarter 2022 Key Highlights
14 $5.5 $41.6 $44.3 Net Income Common Stock Dividends AFFO First Quarter 2022 Key Highlights • Since 2020, over 81% of GNL’s acquisitions have been industrial or distribution, increasing GNL’s exposure to a highly depend abl e asset class • GNL leveraged the leasing momentum it generated in 2021 and
Slide 15: Continued Focus on Driving Earnings Growth
15 $3,173 $3,421 $3,763 $4,319 $4,691 $4,617 $135 $149 $146 $135 $171 $182 2017 2018 2019 2020 2021 CONTINUED FOCUS ON DRIVING EARNINGS GROWTH Historical Revenue Growth Core Funds From Operations (1) Real Estate Assets at Cost Adjusted Funds From Operations (1) $259 $282 $306 $330 $391 $389 2017 201
Slide 16: Key Debt Metrics and Maturity
16 $55 $270 $348 $78 $0 $666 $260 $275 $ 500 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2022 2023 2024 2025 2026 Thereafter Mortgages Credit Facility Unsecured Notes 2% 5% 11% 8% 4% 3% 10% 10% 47% KEY METRICS Metric Q1’2022 Net Debt to Enterprise Value (1) 54.8% Net Debt to Adjusted EBITDA (Q1’22 a
Slide 17: Management Structure Fully Aligned
17 Management structure fully aligned to compensate based on operational outperformance, in turn delivering increased value to shareholders James L. Nelson Chief Executive Officer and President No transactional fees allows for low general and administrative costs, which allows AR Global to provide g
Slide 18: Comprehensive Hedging Program
18 COMPREHENSIVE HEDGING PROGRAM Hedging Foreign Currency Exchange Risk • Provides protection against a weakening in the value of EUR and GBP versus the U.S. Dollar associated with the Company’s foreign property operations Interest Rate Swaps: Fixing Interest on Floating Rate Debt • Cost effective t
Slide 19: Forward-Looking Statements
19 The statements in this presentation that are not historical facts may be forward - looking statements . These forward - looking statements involve risks and uncertainties that could cause actual results or events to be materially different . In addition, words such as “may,” “will,” “seeks,” “ant
Slide 20: Risk Factors
20 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 . • We may be unable to acquire properties on advantageous terms or our p
Slide 21: Risk Factors (Continued)
21 RISK FACTORS (CONTINUED) • In owning properties we may experience, among other things, unforeseen costs associated with complying with laws and regulations and other costs, potential difficulties selling properties and potential damages or losses resulting from climate change . • We depend on our
Slide 22: Disclaimers
22 DISCLAIMERS • 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 23: Definitions
23 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 24: Definitions (Continued)
24 DEFINITIONS (CONTINUED) • In calculating Core FFO, we start with FFO, then we exclude certain non - core items such as acquisition, transaction and other costs, as well as certain other costs that are considered to be non - core, such as debt extinguishment costs, fire loss and other costs relate
Slide 25: Definitions (Continued)
25 DEFINITIONS (CONTINUED) • As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our performance including relative to our peers and a more informed and appropriate basis on which to make decisions in
Slide 26: Non-GAAP Reconciliations
26 NON – GAAP RECONCILIATIONS Three Months Ended March 31, 2022 March 31, 2021 EBITDA: Net income $ 10,541 $ 4,184 Depreciation and amortization 39,889 39,684 Interest expense 24,123 21,368 Income tax expense 3,095 2,080 EBITDA 77,648 67,316 Impairment charges 230 ─ Equity based compensation 2,727 2
Slide 27: FFO and AFFO Reconciliations
27 FFO AND AFFO RECONCILIATIONS 1. FFO, Core FFO and AFFO for the three months ended March 31, 2022 include income from a lease termination fee of $0.3 million, wh ich is recorded in revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently
Slide 28: Annual FFO and AFFO Reconciliations
28 ANNUAL FFO AND AFFO RECONCILIATIONS Twelve Months Ended December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 Funds from operations (FFO): Net income (loss) attributable to common stockholders (in accordance with GAAP) $ 20,731 $ 1,082 $ 34,535 $ (7,775) $ (8,6