Merlin Properties Socimi, S.a. · BME:MRL

Merlin Properties Socimi — FY2016 Earnings Presentation

38 slides from Merlin Properties Socimi's earnings presentation, Feb 28, 2017

  1. Slide 1: FY 2016 Results Presentation

    FY 2016 RESULTS PRESENTATION 28 FEBRUARY 2017

  2. Slide 2: Disclaimer

    DISCLAIMER This presentation has been prepared by Certain statements in this document presentation in other jurisdictions may RELIED ON IN CONNECTION WITH ANY MERLÍN Properties, SOCIMI, S.A. (the regarding the market and competitive also be restricted by law and persons CONTRACT OR COMMITMENT TO SEL

  3. Slide 3: Contents

    Contents Introduction ISMAEL CLEMENTE CEO FY 16 Financial Results Portfolio performance Investment & divestment activity MIGUEL OLLERO CFO / COO Outlook 2017 Closing remarks DAVID BRUSH CIO ı3ı

  4. Slide 4: Introduction

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  5. Slide 5: Introduction | Fast facts

    Introduction | Fast facts MERLIN IS THE LARGEST AND MOST DIVERSIFIED SPANISH REIT GLA GLA GRI(1) ATTRIBUTED GRI(2) 3,038,341 sqm 550,329 sqm € 451.3 m € 478.1 m IN STOCK EXPANSION PROJECTS ANNUALIZED ANNUALIZED FY 16 FY 16 FY 16 FY 16 € 351.0 m € 303.6 m € 232.7 m € 179.6 m GROSS RENTS REC. EBITDA(3

  6. Slide 6: Total shareholders return

    FY 16 Financial results Introduction | Total |shareholders Total shareholders return return EXCELLENT RETURN TO SHAREHOLDERS IN 2016 (€ per share) TSR + 17.2% 0.31 11.54 1.38 11.23 9.85 EPRA NAV NAV growth EPRA NAV DPS EPRA NAV+DPS Dec-15 2016 Dec-16 2016 Source: Company ı ı16 6ı

  7. Slide 7: Shareholders remuneration: FY 16 dividend €160 m

    Introduction | Shareholders remuneration +€20 M FY 2016 DIVIDEND TO REACH €160 M, AHEAD OF GUIDANCE OF €140 M INTERIM(1) COMPLEMENTARY(2) TOTAL (PAID) (MAY-17) MERLIN FY 16 DIVIDEND € 0.20 € 0.20€ 0.20 €160 M € 0.40€ 0.40€ 0.40 € 0.20€ 0.20€ 0.20 SeptemberSeptember 2016(1) October 2016(1) 2016(1) AG

  8. Slide 8: FY 16 Financial Results

    FY 16 FINANCIAL RESULTS

  9. Slide 9: Consolidated profit and loss

    FY 16 Financial Results | Consolidated profit and loss +6.6% INCREASE IN FFO PER SHARE AND +9.6% IN EPRA EPS (€ million) 31/12/16 31/12/15 YoY Gross rents 351.0 214.4 +63.7% Net rents after incentives 323.5 201.5 +60.5% EBITDA 260.3 161.2 +61.5% Recurring FFO(1) 232.7 133.1 +74.8% FFO(2) 189.5 107.6

  10. Slide 10: Bridge gross rents to FFO

    FY 16 Financial Results | Bridge gross rents to FFO HIGH OPERATING EFFICIENCY (92% GROSS-TO-NET & 86% RECURRING EBITDA MARGIN) (€ million) 351.0 331.3 323.5 11.8 303.6 (19.7) (7.8) 260.4 (23.1) (8.5) (43.2) 189.4 (70.9) l (1) ) es es ts es e g A A nt s ex O g (1 re os m in D D FF en ne tiv iv tiv op

  11. Slide 11: Bridge annualized gross rents

    FY 16 Financial Results Results | Bridge annualized gross rents € 451 MILLION OF ANNUALIZED GROSS RENTS (€ million) €12.1 m Testa Residencial €4.6 m Tres Aguas SC 49.3 Annualized 152.0 €10.3 m ZAL Port & Other 478.1 attributable Rent 3.8 (38.7) 451.3 (16.7) 301.7 ) (1 nt ns ls s ec ed on ec ed sa re

  12. Slide 12: EPRA Metrics

    FY 16 Financial Results | EPRA Metrics EPRA NAV PER SHARE GROWS € 1.38 IN THE YEAR TO REACH € 11.23 (+14.0%) 31/12/16 31/12/15 YoY €m Per share €m Per share €m Per share EPRA earnings 179.6 € 0.49 99.3 € 0.45 80.8% +9.6% EPRA NAV 5,274.7 € 11.23 3.181.2 € 9.85 65.8% +14.0% EPRA NNNAV 4.819.5 € 10.26

  13. Slide 13: GAV summary

    FY 16 Financial Results Results | GAV summary Gross yield 4.7% 5.7% 4.7% 7.0% 5.0% 9,824 9,489 4,541 GAV TOTAL with minority stakes (€ million) 2,205 1,613 Shopping centers High Street Retail Minority stakes 659 472 334 Logistics Offices TOTAL Other(1) €/sqm AG 3,643 3,543 4,787 625 2,401 Source: Co

  14. Slide 14: GAV bridge

    FY 16 Financial Results | GAV bridge METROVACESA DRIVES GAV GROWTH IN THE YEAR (€ million) Testa Residencial deconsolidation 794.4 480.7 9,823.6 3,169.7 231.9 92.4 (710.0) (288.1) Value created +55.2 6,052.7 GAV 288.1 Net debt (111.4) Premium achieved +51 NAV 176.7 GAV GAV MVC GAV NAV Acquisitions D

  15. Slide 15: GAV drivers

    FY 16 Financial Results | GAV drivers ROBUST GROWTH IN LFL GAV (+6.2%) GAV 9.7% 9.7% like-for-like 8.1% evolution 7.2% 7.2% 6.2% 4.6% MERLIN average(1) Office Offices Shopping centers HighLogistics street retail HighLogistics street retail (45 bps) (45 bps) Yield compression (35 bps) (28 bps) MERLIN

  16. Slide 16: Testa goodwill evolution

    FY 16 Financial Results | Testa goodwill evolution TESTA GOODWILL NOW VIRTUALLY OFFSET (€ million) 270.0 70.0 154.4 7.7 28.1 9.8 Acquisition Revaluation Revaluation Residential Disposals 31/12/2016 2015 2016 deconsolidation 2016 Source: Company ı 16 ı

  17. Slide 17: Debt summary

    FY 16 Financial Results | Debt summary STRONGER CREDIT PROFILE AND GOOD DIVERSIFICATION OF FINANCIAL SOURCES (€ million) 180.0 135.8 5,193.3 2,350.0 4,471.2 (722.1)(1) 1,268.6 1,258.9 Unsecured Secured Unsecured Revolving Leasings Total Cash Total bank loans loans bonds facilities gross debt net deb

  18. Slide 18: Debt schedule and metrics

    850 840 800 700 140 162 158 FY 16 Financial 5 Results 86 | Debt schedule and metrics 28 5 147 (2) 2 23 135 15 84 84 19 158 80 41 10 LTV REDUCED 2017 2018 TO 45.5% 2019 2020 2021 2022 2023 2024 2025 >2026 PLANNED EARLY REPAYMENT OF €200 M 1,361 Secured loans €200 m debt repayment(1) Unsecured loans U

  19. Slide 19: Portfolio Performance

    PORTFOLIO PERFORMANCE

  20. Slide 20: Balanced portfolio in line with company's target

    Portfolio performance | Breakdown BALANCED PORTFOLIO IN LINE WITH COMPANY’S TARGET 31/12/2015 31/12/2016 6% 0.3% 6% 0.3% 4.0% 4.0% GAV 7% 6% 0.3% 7% 4.8% 4.1% 15% 15% 5.9% 4.0% 29% 29% breakdown 7% 4.9% 7.6% 15% 9% 9% 29% per asset 6.6% 36.7% type 9% 41% 41% 15% 16.4% 15% 47.6% 41% 11.1% 15% 23% 23%

  21. Slide 21: Occupancy and WAULT

    Portfolio performance | Occupancy and WAULT OCCUPANCY IMPROVEMENT POTENTIAL AFTER MVC Occupancy and WAULT per asset type(1) 100.0% 95.4% 87.9% 88.6% 20.3 91.3% MERLIN 76.5% average 7.2 MERLIN 4.0 average 3.5 2.9 2.3 Offices Offices Shopping centers Shopping centers Logistics High street retail HighL

  22. Slide 22: MVC occupancy performance since acquisition

    Portfolio performance | MVC occupancy performance since acquisition OFFICES SHOPPING CENTERS 86.2% 84.7% 84.1% 73.1% 75.0% 77.9% At acquisition 31/12/2016 At acquisition(1) 31/12/2016 Incl. Opción Excl. Opción Source: Company (1) Rebased to adjust for reallocated assets into different asset categori

  23. Slide 23: FY Leasing activity

    Portfolio performance | FY 16 Leasing activity +650K SQM CONTRACTED WITH EXCELLENT RETENTION RATE OF 80% Offices Shopping Logistics Logistics Minority centers WIP stakes 182,819 136,922 136,922 99,821 74,253 50,667 35,237 29,606 15,008 20,931 21,190 12,794 - - (946) (551) (21,877) (16,812) (21,741)

  24. Slide 24: FY Leasing clients

    Portfolio performance | FY 16 Leasing clients ATTRACTING LEADING CLIENTS Offices Office Renewal Renewal Renewal Renewal 7,267 sqm 16,000 sqm 10,619 sqm 113,037sqm 10,732 sqm 7,168 sqm Avenida de Bruselas 24 Puerta Sevilla -de las Naciones Borbolla Príncipe Vergara 187 Josefa Valcarcel 48 Shopping ce

  25. Slide 25: LfL Rental growth

    Portfolio performance | LfL Rental growth POSITIVE LFL RENTAL GROWTH ACROSS THE BOARD (DATA FOR MERLIN ONLY) Commercial annualized LfL rent evolution (passing 31/12/16 vs. passing 31/12/15) Like for like Like for like space” “same Absolute (€ thousand) % % Rent Same (€ thousand) Renewed Renewed # le

  26. Slide 26: Shopping centers evolution

    Portfolio performance | Shopping centers evolution RETAIL METRICS SHOW SUSTAINED STRONG PERFORMANCE Sales evolution Footfall evolution +5.5% +3.1% 2013 – 2016 CAGR 2013 – 2016 CAGR 96.5 807.3 818.6 92.5 88.0 88.7 751.9 697.3 million visitors € million 2013 2014 2015 2016 2013 2014 2015 2016 ı 26 ı

  27. Slide 27: Capex

    Portfolio performance | Capex DELIVERED ON-GOING Ulises 16-18 Avda Europa II Puerta de las Naciones #3 Scope: Scope: Scope: Full refurb Full refurb Full refurb Capex (€ 000): Capex (€ 000): Capex (€ 000): 6,950 6,600 5,173 Status: Status: Status: 100% let 100% let 100% let Juan Esplandiu Marineda Th

  28. Slide 28: Investment & Divestment Activity

    INVESTMENT & DIVESTMENT ACTIVITY

  29. Slide 29: Torre Glòries

    Investment & divestment activity | Torre Glòries Description Key Metrics • Torre Glòries is one of the most iconic buildings Torre in Barcelona, located in the prime area of 100% Ownership Avenida Diagonal junction with Plaza de Les Glòries, in the heart of the Barcelona tech- Freehold oriented busi

  30. Slide 30: Asset rotation: excellent achievements in 2016

    Investment & divestment activity | Asset rotation EXCELLENT ACHIEVEMENTS IN 2016 PRICE (€M) HotelHotel Portfolio Portfolio • Urban • hotels Urban mainly hotelslocated mainly en Madrid located in y Barcelona Madrid and Barcelona 535.0 Dec-2016 • • Foncière Buyer: Dec-2016 des Murs Buyer: Foncière des

  31. Slide 31: Outlook 2017

    OUTLOOK 2017

  32. Slide 32: Outlook 2017: Our market

    Outlook 2017 | Our market Positive trend Positive trend Further Further yield Rapid growth Significant No major in in rents compression in of logistics refurbishment change in logistics mainly in due to lack of activity in office supply but logistics 3PL suitable incipient product refurbishment acti

  33. Slide 33: +10% growth potential in annualized rents

    Outlook 2017 | Potential rents +10% GROWTH POTENTIAL IN ANNUALIZED RENTS (€ million) Our market +10% 13.0 496.0 Positive trend 21.3 yield Further 10.3 Rapid growth Significant in rents 451.3 compression in of logistics refurbishment logistics due to lack of activity in office 3PL suitable product ME

  34. Slide 34: Shareholders remuneration guidance

    Outlook 2017 | Shareholders remuneration guidance MERLIN DIVIDEND GUIDANCE CALCULATED MANAGEMENT GUIDANCE ON THE BASIS OF FOR DISTRIBUTION FY 2017: 80% OF FFO 1(1) MINIMUM OF € 207 M ADJUSTED BY SALE (€ 0.44 + PER SHARE) OF HOTELS(2) INTERIM FINAL(3) TOTAL • Payment in two instalments: €€ 0.24 0.26

  35. Slide 35: Dividend distribution evolution

    Outlook 2017 | Dividend distribution evolution DPS GUIDANCE REPRESENTS +10% GROWTH YOY 2017 VS 2016 (€ per share) 0.44 p.s. 0.40 €206.7 m p.s. (Eurmillion) €160.2 m 0.19 p.s. €60.0 m 0,0 2014 2015 2016 2017E Source: Company (1) MERLIN average includes yield compression in ‘Other’ assets. ı 35 ı

  36. Slide 36: Closing Remarks

    CLOSING REMARKS

  37. Slide 37: Closing remarks: value creation to shareholders

    Closing remarks | Our market Value • +6.6% FFO per share creation to • +14.0% EPRA NAV per share shareholders • TSR of 17.2% Positive trend • Credit profile Further improved in all yield metrics Rapid growth Significant in rents compression in of logistics refurbishment logistics due to lack of acti

  38. Slide 38: Paseo de la castellana, 42 28046 MADRID info@merlinprop.com

    Paseo de la castellana, 42 28046 MADRID +34 91 787 55 30 info@merlinprop.com www.merlinproperties.com

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