Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — IPO Roadshow (May 2018)
31 slides from Global Net Lease's IPO roadshow presentation, May 18, 2018
Slide 1: Global Net Lease May 2018 Investor Presentation
GLOBAL NET LEASE May 2018 Investor Presentation
Slide 2: Important Disclosure
2 IMPORTANT DISCLOSURE 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 .
Slide 3: Overview
3 OVERVIEW 1. As used herein, “Investment Grade Rating” includes both actual investment grade ratings of the tenant or Implied Investment G rad e. Implied Investment Grade includes ratings of tenant parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the leas
Slide 4: Portfolio Highlights
4 PORTFOLIO HIGHLIGHTS Properties 332 Square Feet (millions) 25.0 Tenants 104 Industries 41 Countries 7 Leased 99.5% Weighted Average Remaining Lease Term (1) 8.6 years % of SLR derived from Investment Grade Tenants (2)(3) 78.3% % of leases with contractual rent increases (4) 91.5% Portfolio Overvie
Slide 5: Well Balanced Portfolio
5 Non Investment Grade 19.6% Investment Grade 78.3% Not Rated 2.1% United States 49% United Kingdom 22% The Netherlands 7% Germany 9% Finland 6% France 5% Luxembourg 2% WELL BALANCED PORTFOLIO As of March 31, 2018 1. Metric based on SLR. Refer to SLR definition included in the footnotes to page 4. 2
Slide 6: Well Diversified Tenant Base
6 Tenant Rating Country Property Type % of SLR (1) Baa2** U.S. Distribution 5% Aaa** U.S. Office 5% Baa3* U.K. Office 5% Baa3* GER Office 4% Aa3 NETH Office 4% Aa1** FIN Industrial 4% Baa3** U.S. Retail 3% Baa3* U.K. Distribution 3% Aa3 U.S. Office 3% AA - FIN Office 2% WELL DIVERSIFIED TENANT BASE
Slide 7: Focus on High-Quality Tenants
7 Financial Service Providers Government Services Multinational Corporations FOCUS ON HIGH - QUALITY TENANTS $2.4t n 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 lea
Slide 8: Differentiated Investment Strategy
8 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 9: Fully Aligned Management Structure
9 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 10: AR Global Executive Management Team
10 Michael Weil Chief Executive Officer AR GLOBAL EXECUTIVE MANAGEMENT TEAM Katie Kurtz Senior Vice President, Finance Chief Financial Officer, AFIN, HTI & NYCR Louisa Quarto Executive Vice President Anthony Galioto Senior Vice President, Deputy General Counsel – Risk Management and Litigation Micha
Slide 11: AR Global Organization
11 Michael Weil Katie Kurtz Anthony Galioto & Michael Anderson Louisa Quarto Joe Marnikovic Nicholas Schorsch Jr. AR GLOBAL ORGANIZATION Synergistic Value: “AR Global Services Group” (163 Members Strong) Operations Marketing Accounting Legal Human Resources Originations Due Diligence Investment Bank
Slide 12: AR Global Investment Programs
12 AR GLOBAL INVESTMENT PROGRAMS AR Global $10.6 Billion AUM Net Lease Retail Net Lease Office & Industrial Healthcare NYC Commercial Real Estate 1. Assets Under Management (“AUM”) is based on total assets plus accumulated depreciation and amortization as of March 31, 2018. As of March 31, 2018, Ame
Slide 13: GNL Capital Structure Progress
13 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 $1,328 $1,305 $1,284 $1,265 $96 $130 $130 $773 $799 $992 $1,047 $722 $648 $532 $
Slide 14: 2018 Investment Activity
14 2018 INVESTMENT ACTIVITY Tenant Closing Date Properties Asset Type Purchase Price (millions) 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 $17.8 8.2
Slide 15: Robust Pipeline
15 ROBUST PIPELINE As of March 31, 2018 After Pipeline % Change No. of Properties 327 334 +2.1% Investment Grade and Implied Investment Grade (3 ) 78.3% 79.1% +1.0% Square Feet 23.7 million 26.3 million +11.3% Purchase Price $3.2 billion $3.4 billion +7.1% Lease Term Remaining 8.6 years 8.8 years +1
Slide 16: Geographic Balance (Including Pipeline)
16 GEOGRAPHIC BALANCE (INCLUDING PIPELINE) U.S. Number of Assets: 265 Remaining Lease Term: 8.6 years (1) % of GNL SLR: 52.0 % (2) Europe Number of Assets: 69 Remaining Lease Term: 9.0 years (1) % of GNL SLR: 48.0 % (2) 1. Refer to basis for metric calculation included in the footnotes to page 4. 2.
Slide 17: Pro Forma Portfolio Composition with Pipeline
17 PRO FORMA PORTFOLIO COMPOSITION WITH PIPELINE Continued Focus towards United States Industrial and Distribution Properties Geographic concentration split changes from 49% and 51% to 52% and 48%, for the United States and Europe, respectively with the addition of the 2018 pipeline. Office 54% Indu
Slide 18: First Quarter Acquisition: Fiat Chrysler
18 FIRST QUARTER ACQUISITION: FIAT CHRYSLER Transaction Overview Property and Tenant Overview Tenant FCA US, LLC Property Type Industrial Credit Rating (1) Moody’s: Baa2 Location Sterling Heights, MI Square Feet 127,974 Lease Term (years) (1) 9.9 Purchase Price $18.2 million GAAP Cap Rate (2) 8.56%
Slide 19: Pipeline Highlights: Rubbermaid
19 PIPELINE HIGHLIGHTS: RUBBERMAID Transaction Overview Property and Tenant Overview Tenant Rubbermaid Property Type Industrial Credit Rating (1) Moody’s: Baa3 Location Akron, OH Square Feet 668,592 Lease Term (years) (1) 10.0 Purchase Price $21.4 million GAAP Cap Rate (2) 7.43% Tenant/Guarantor • T
Slide 20: Improved Performance
20 $- $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 IMPROVED PERFORMANCE Q1 2017 Q1 2018 % Change Total Revenue $62.8 million $68.1 million +8.4% Operating Income $20.3 million $21.8 million +7.6% AFFO (1) $34.5 million
Slide 21: Debt Overview
21 USD 36% EUR 42% GBP 22% Fixed Rate 82.9% Floating Rate 17.1% 0% 0% 2% 1% 7% 10% 25% 14% 9% 3% 29% DEBT OVERVIEW Net Debt to Net Capitalization (1) 46.2% Net Debt to Adjusted EBITDA (annualized) (1) (2) 7.4x Interest Coverage Ratio (3) 4.4x Weighted Average Interest Rate (4) 2.8% Weighted Average
Slide 22: Comprehensive Hedging Program
22 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 23: Investor Inquiries
INVESTOR INQUIRIES 1 - 866 - 902 - 0063 investorrelations@globalnetlease.com www.GlobalNetLease.com
Slide 24: Risk Factors
24 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 25: Risk Factors (Continued)
25 RISK FACTORS (CONTINUED) • Provisions in our credit facility, may limit our ability to pay dividends to holders of our common stock and preferred stock . • We may be unable to pay or maintain cash dividends or distributions on our common stock and preferred stock, or increase dividends or distrib
Slide 26: Projections
26 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 27: Definitions
27 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 28: Definitions (Continued)
28 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 29: Definitions (Continued)
29 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 30: Non-GAAP Reconciliations
30 NON – GAAP RECONCILIATIONS (in thousands) Three Months Ended March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 EBITDA: Net income $ 4,812 $ 8,449 $ 2,487 $ 5,200 Depreciation and amortization 29,496 28,558 29,879 27,497 Interest expense 12,975 12,806 12,479 11,634 Income tax expen
Slide 31: Non-GAAP Reconciliations
31 NON – GAAP RECONCILIATIONS (in thousands) Three Months Ended March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 Funds from operations (FFO): Net income attributable to common stockholders (in accordance with GAAP) $ 2,361 $ 5,998 $ 2,104 $ 5,200 Depreciation and amortization 29,496