Wereldhave N.v. · EURONEXT:WHA
Wereldhave — H1 2022 Earnings Presentation
52 slides from Wereldhave's earnings presentation, Jul 22, 2022
Slide 1: Results H1 2022
Results H1 2022 22 July 2022
Slide 2: Table of contents
Table of contents 1. Key Messages & Highlights 2. Results 3. LifeCentral 4. Financing & Valuations 5. Management Agenda Appendices 2
Slide 3: Key Messages
Key Messages • DRPS H1 2022 at € 0.81 per share. FY 2022 guidance € 1.55 – 1.65 confirmed • Strong leasing performance, Dutch leasing spreads positive for the first time since 2016 • 16% like-for-like rental growth core portfolio • Footfall outperforming in our core markets • Positive valuations in
Slide 4: Highlights H1 2022
Highlights H1 2022 H1 2021 H1 2022 Change Direct result per share (€) 0.93 0.81 (0.12) Indirect result per share (€) (1.79) 0.03 1.82 Total result per share (€) (0.86) 0.84 1.70 FY 2021 H1 2022 Change EPRA NTA per share (€) 21.54 21.16 (0.38) Net LTV 41.0% 42.7% +1.7pp NPS (Benelux) +25 +24 -1 Propo
Slide 5: Highlights H1 2022
Highlights H1 2022 Large NRI growth driven by strong leasing market and no Covid-19 impact Net Rental Income H1 2021 H1 2022 Growth LFL Growth (€ m) Belgium 19.8 23.3 17.6% 17.7% Netherlands 26.1 27.1 3.7% 13.7% Core Portfolio 45.9 50.4 9.7% 15.7% France 13.2 3.7 (72.2%) 36.1% Offices Belgium 2.4 1.
Slide 6: Table of contents
Table of contents 1. Key Messages & Highlights 2. Results 3. LifeCentral 4. Financing & Valuations 5. Management Agenda Appendices 6
Slide 7: Operations H1 2022
Operations H1 2022 Dutch leasing spreads positive for the first time since 2016 Leasing MGR Country # of Contracts¹) vs ERV Occupancy Rate Volume²) Uplift Belgium 46 8.2% 5.2% 13.8% 97.0% Netherlands 81 10.0% 0.1% 3.5% 95.0% Core Portfolio 127 9.2% 2.4% 7.2% 95.9% France 11 8.5% 0.0% (1.7%) 96.6% To
Slide 8: Continued strong FSC performance
Continued strong FSC performance KPI Full Service Center In Transformation Shopping Center # Assets 2 6 9 Mixed Use Percentage 19% 11% 11% MGR Uplift +7.0% (4.7%) +4.9% MGR vs. ERV +20.3% +3.1% +7.0% NPS +23 +23 +20 Direct Result 5.9% 5.9% 6.2% Valuation Result 1.3% 0.1% (0.1%) Total Property Return
Slide 9: Footfall outperforming in our core markets
Footfall outperforming in our core markets Footfall growth vs. same period 2019: Belgium Footfall growth vs. same period 2019: Netherlands H1 2022; % H1 2022; % 0 0 -10 -20 -20 -40 January February March April May June January February March April May June Wereldhave Belgium Belgium SC Market Wereld
Slide 10: Dutch investment market conditions are attractive
Dutch investment market conditions are attractive Dutch GDP forecast above EU average… … and 10yr Dutch government bonds second lowest in EU 2022 GDP Growth Forecast, as of April 2022 10-yr Gov. Bond Yields & Long-term Inflation estimate Spain 4.5% Italy 3.3% 1.9% The above average growth United Kin
Slide 11: Dutch Consumer well protected against increasing rent levels
Dutch Consumer well protected against increasing rent levels • Small part of households has floating mortgage debt Limited risks on • Over 50% of households has more than 10 years interest maturity on its mortgage debt side • Very limited consumer debt, only 2% of the Dutch households has difficulti
Slide 12: The Netherlands have already absorbed a lot of online impact
The Netherlands have already absorbed a lot of online impact Dutch broadband penetration already highest in Europe… … and this high penetration level has been reflected in the rent levels Share of households with broadband internet access, 2020 Wereldhave leasing spreads vs. old rent +0.1% Netherlan
Slide 13: LifeCentral Strategy makes WH more resilient in an uncertain macro environment
LifeCentral Strategy makes WH more resilient in an uncertain macro environment 2019 2020 2021 2022 H1 % of rent % of rent % of rent % of rent 4% 4% 4% 4% 5% 13% 5% 14% 4% 6% 15% 1% 16% 6% 6% 6% 11% 11% 12% Total Daily Total Daily Total Daily 12% Total Daily 27% Life: 51% 7% Life: 53% Life: 60% Life:
Slide 14: Belgium: Strong leasing results
Belgium: Strong leasing results • 46 retail deals signed 13.8% above ERV on average and 11 office deals, examples: • Belle-Île: Belchicken & Cup Pasta • Les Bastions: Intersport, Project X Paris, Calzedonia, Kiabi, Claire’s • Nivelles: V.I.P Coiffure • Genk Shopping 1: Chick & Cheez, O’Tacos, Hairdi
Slide 15: France: Sales above 2019
France: Sales above 2019 Coté Seine: • May 2022: Footfall -11% vs. 2019, but Sales +6% vs. 2019 • Occupancy Q2 2022 95.3% vs. 93.4% in Q1 2022 • Store openings: Audio pour tous, Foot Korner, Optikal Distrikt (refurb) and Pitaya (F&B) • Unit for Basic Fit under construction (> 1,500m2) • New leases:
Slide 16: Direct result: impacted by disposals
Direct result: impacted by disposals Direct result (excl. disposals) improves following solid leasing results, inflation and less Covid-19 impact -€ 12.9m € 43.7m -€ 12.9m +€ 8.6m € 2.0m € 39.4m € 1.0m -€ 0.7m € 3.0m € 3.3m € 30.8m Actuals Disposals1) Actuals H1 2021 NRI Netherlands NRI NRI General
Slide 17: Cost efficiency
Cost efficiency Cost Reduction Efforts Status Phase-out France Closed French Head-office per January 2022, last two assets managed externally Changing Headquarters Starting 2023 Aligning staff with smaller asset base Continuing to strive for optimal efficiency LifeCentral phase 2 (growth phase) shou
Slide 18: Outlook 2022
Outlook 2022 Outlook 2022 DRPS at € 1.55 – 1.65 Direct Result per Share Dividend per Share € € 2.01 1.16 – 1.24 1.88 1.10 1.55 – 1.65 0.50 2020 2021 2022 2020 2021 2022 18
Slide 19: DRPS Growth 2023 – 2026 Explained
DRPS Growth 2023 – 2026 Explained Expected annual DRPS Growth 2023 – 2026 % 5.9% • The growth 2023 – 2026 comes from multiple drivers • Leasing contracts indexed annually with inflation, we use 3.0% in our forecasts • Majority of package deals with negative MGR impact done in 2020 and 2021 3.7% 0.2%
Slide 20: Table of contents
Table of contents 1. Key Messages & Highlights 2. Results 3. LifeCentral 4. Financing & Valuations 5. Management Agenda Appendices 20
Slide 21: LifeCentral progress 2022 H1
LifeCentral progress 2022 H1 • All transformations going according to plan and within budgets • Construction works in Vier Meren started and first new unit delivered • Pre-let City-Center Tilburg increased to 62% (vs. 36%) and Vier Meren to 73% (vs. 56%) • The Point open in Presikhaaf and De Koperwi
Slide 22: Presikhaaf: The first finalized Full Service Center
Presikhaaf: The first finalized Full Service Center The new beating heart of the neighbourhood, attracting more visitors and a younger audience FSC Highlights • Four supermarkets and Fresh street with butcher, fish, fruit & vegatebales, nuts & cheese • Healthcare cluster with dentist, dietician, las
Slide 23: FSC Presikhaaf is delivering on all key KPIs
FSC Presikhaaf is delivering on all key KPIs Total Return Yield NPS Mixed Use % %, Net % of floor space 9.6% 5.93% 5.72% 9 21% 6.0% 4% Target H1 2022 Pre Current -33 Pre Current transformation Pre Current transformation transformation GRI Footfall Occupancy € Mn Mn % 4.8 4.6 97% 79% 3.6 3.2 Pre FC 2
Slide 24: FSC Transformation Ring Kortrijk
FSC Transformation Ring Kortrijk Full refurbishment of exterior, creation of an exterior F&B area and opening of the center towards the outside • Development works started Q2 2021 and expected to finish before the end of 2022 • Main items: • Full refurbishment of exterior facades • Creation of exter
Slide 25: FSC Transformation Sterrenburg, Dordrecht
FSC Transformation Sterrenburg, Dordrecht Becoming a convenience-focused Full Service Center that perfectly fits the characteristics of the catchment area • Construction works expected to finish Q4 2022 • Main items: • Extension traditional Jumbo supermarket (2,200 m2) to a Jumbo Foodmarket (4,500 m
Slide 26: FSC Transformation City-Center Tilburg
FSC Transformation City- Center Tilburg Becoming ‘The shopping destination’ of the complete area with an optimal combination of retail, a broad variety of F&B, leisure and multiple services • Construction works expected to finish before the end of 2022 • Main items: • Full re-build of the Emma Passa
Slide 27: Hardly impact Economic Situation on LifeCentral CAPEX
Hardly impact Economic Situation on LifeCentral CAPEX LifeCentral CAPEX Raw Materials Deepdive EUR Mn EUR Mn 350 121 26 97 253 51 202 121 89 51 7 30 7 Total Spent To Spent Non- Construction Raw Labor Other Raw Materials Committed Development At risk LifeCentral Construction CAPEX Materials without p
Slide 28: Continued evidence for FSC yield compression
Continued evidence for FSC yield compression Yield compression since start of FSC Transformation bps Vier Meren -66 Sterrenburg -42 Ring Kortrijk -27 Eggert -24 Presikhaaf -21 Kronenburg -17 Shopping Belle-Île -15 28
Slide 29: Residential opportunity in our Benelux portfolio
Residential opportunity in our Benelux portfolio Nivelles Residential profit € 1.60-1.85/sh Our portfolio in the Benelux contains the opportunity to develop between 1,600 and 2,100 units on 10 locations. We expect Kronenburg +0.3% to +1.0% unlevered IRR impact on project level. We are Waterloo activ
Slide 30: Strong relative performance since LifeCentral launch
Strong relative performance since LifeCentral launch Total Return Cumulative total shareholder return index 150 7 February 2020: Launch LifeCentral 125 Strategy Peer 3 Wereldhave Peer 1 100 Peer 2 Peer 5 75 Peer 4 50 Peer 6 25 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q
Slide 31: Table of contents
Table of contents 1. Key Messages & Highlights 2. Results 3. LifeCentral 4. Financing & Valuations 5. Management Agenda Appendices 31
Slide 32: Revaluations
Revaluations Valuations are stabilizing for our core portfolio Value (€ m) Revaluation H1 2022 EPRA NIY (%) FY 2021 H1 2022 €m % FY 2021 H1 2022 Belgium 832 843 2.2 0.3% 5.7% 6.0% Netherlands 843 849 2.0 0.2% 6.5% 6.7% Core Portfolio 1,675 1,692 4.2 0.3% 6.1% 6.4% France 170 170 (0.7) (0.4%) 4.6% 4.
Slide 33: LTV Development
LTV Development Net LTV Development Next step should come from e.g. Why we target an LTV of 35-40% last two French disposals, retained earnings, residential • Improves our credit profile and provides sustainable access to 42.7% gains, equity backed acquisitions credit • Reduces our vulnerability to
Slide 34: Debt Profile
Debt Profile Q4 2021 Q2 2022 Covenants Comments Debt increased following FSC capital Interest bearing debt1) (€) 817m 869m expenditure and dividend payments Average cost of debt 2.3% 2.2% Undrawn committed (€) 525m 476m Remaining LifeCentral spend: € 253Mn Cash position (€) 27m 28m Fixed vs floating
Slide 35: Debt Mix & Expiry Profile
Debt Mix & Expiry Profile Q4 2021 Q2 2022 • In July 2022, refinancing of € 80Mn bank loans from a Belgian bank, originally maturing in 8% 11% 2023, was agreed, with an average term of four 4% 4% years 14% USPP Bank loans (inl. RCF) 14% € 817m € 869m Bonds Treasury notes 74% 71% 500 250 0 Drawn Undra
Slide 36: Table of contents
Table of contents 1. Key Messages & Highlights 2. Results 3. LifeCentral 4. Financing & Valuations 5. Management Agenda Appendices 36
Slide 37: Management Agenda
Management Agenda Focus on Target 2022-2024 Current Status Focus on earnings & dividend growth 4-6% CAGR as of 2023 Earnings growth as of 2023 Focus on Total Return Exceed 8% annualized Total Return (Levered) H1 2022 >8% levered total return Successful FSC transformation Transformed 9 assets to FSC
Slide 38: Table of contents
Table of contents 1. Key Messages & Highlights 2. Results 3. LifeCentral 4. Financing & Valuations 5. Management Agenda Appendices 38
Slide 39: Introduction
Introduction Company Profile June 2022 Key Facts Number of retail assets 22 Average size 27,300 m² Number of shopping center 40.6 m visitors (H1 2022) Net loan-to-value ratio 42.7 % Occupancy shopping centers 95.9 % 9 EPRA NIY shopping centers 6.2 % WALT1) 5.2 years Development pipeline2) € 82 m 6 1
Slide 40: Portfolio Breakdown by value
Introduction Company Profile June 2022 Portfolio Breakdown by value Portfolio Breakdown by value Offices 5% Netherlands 43% Belgium € 2.0bn 48% € 2.0bn Retail Assets 95% France 9% 40
Slide 41: LifeCentral CAPEX
LifeCentral CAPEX Investments only done in Total LifeCentral investments1) in NL and BE, excl. FR NL & BE assets with IRRs above threshold of 6.0% € m, 2022-2025 97 74 65 60 54 19 18 74 60 46 36 Already 2022 H2 2023 2024 2025 Invested Spent Committed Uncommitted 41 1) Including Maintenance, Customer
Slide 42: Current LifeCentral Transformation projects
Current LifeCentral Transformation projects Actual Estimated > 2022 Total Unlevered Planned (In € m) Costs to capex Estimate to Pre-let Rate Investment IRR Delivery date 2022 Complete City-Center Tilburg 18 8 10 - 7% 62% 2022 Sterrenburg 24 11 10 3 6% 97% 2022 Ring Kortrijk 12 8 4 - 7% n.a. 2022 Vie
Slide 43: Tenant mix
Tenant mix Contract rent by category Homeware & Services Other Household 1.0% 1.0% Top 10 Tenants % of annualized rent 10.0% Sport Ahold Delhaize 5.6 % 2.9% Fashion & Accessoires C&A 2.8 % 31.0% A.S. Watson Group 2.7 % Health & Beauty 11.4% Carrefour 2.1 % HEMA 2.0 % Special Goods & Others Mirage Re
Slide 44: Like-for-like NRI growth
Like-for-like NRI growth LFL NRI growth (% yoy) 34.3%36.1% 23.2% 17.7% 17.0% 15.1% 13.7% 12.5% 7.8% 7.4% 7.4% 4.9% 4.3% 6.0% -3.5% -9.4% -12.0% -19.1% -21.0% -39.7% Belgium France Netherlands Shopping centres FY 2020 H1 2021 FY 2021 H1 2022 Index forecast EC 2022 44
Slide 45: Occupancy rates
Occupancy rates EPRA Occupancy rate Shopping Centers 97.2% 97.0% 96.6% 96.6% 96.2% 96.2% 95.9% 95.7% 94.9% 95.0% 95.0% 94.9% 94.7% 94.4% 93.5% 92.8% Belgium France Netherlands Shopping centers FY 2020 H1 2021 FY 2021 H1 2022 45
Slide 46: Footfall
Footfall Change in visitors versus the same period previous year (%) 43.2% 38.6% 33.0% 28.7% 29.3% 24.6% 19.8% 17.4% 11.3% -3.1% -6.7% -12.2% -13.2% -14.7% 0.4% -17.4% -22.8% -28.0% -33.5% Belgium France Netherlands Shopping centres FY 2020 H1 2021 FY 2021 H1 2022 Market 2022 * For 2020: June data f
Slide 47: Strong rent collection in Belgium and NL
Strong rent collection in Belgium and NL Rent collection rates H1 20221) 97% 100% 100% 99% Belgium France Netherlands Group 1) As of 15 July 2022 and relating to assets held in portfolio at 30 June 2022. Collection rate of invoiced rents adjusted for tenant arrangements 47
Slide 48: ESG initiatives first half 2022
ESG initiatives first half 2022 ECOdays Belgium: Cityplaza, Kronenburg: Sterrenburg: After the success in 2021, a Spring Our tenants increasingly 10 tenants participated in the edition was organized in all Belgian need new employees to staff “Prokkelstage”. The goal of centers in the first half of 2
Slide 49: ESG initiatives first half 2022
ESG initiatives first half 2022 Belle Ile: Nivelles: Our center in Belle-Ile installed a hop A 150 m2 outdoor vegetable garden was installation above the skylights. The created during the ECO days in May idea is that when fully grown it 2022. The idea is to educate people on provides shading in the
Slide 50: Breakdown of Valuation Results H1 2022
Breakdown of Valuation Results H1 2022 Rent vs Yield Belgium 0.3% 0.3% 0.0% Netherlands -0.3% 0.5% 0.2% Core portfolio 0.2% 0.3% 0.1% France -0.4% -1.8% 1.4% Offices Belgium 0.0% 1.1% Total 0.1% 0.2% 0.1% Yield shift Market rent & other 50
Slide 51: EPRA NTA
EPRA NTA EPRA NTA Bridge: YE 2021 to H1 2022 (€ per share) 0.81 0.03 -1.10 21.54 -0.12 21.16 EPRA NTA Direct result Indirect result Dividend Other EPRA NTA YE 2021 H1 2022 51
Slide 52: Reconciliation of EPRA Value metrics H1 2022
Reconciliation of EPRA Value metrics H1 2022 (€ per share) 2.40 23.58 -2.40 0.36 21.81 21.45 -0.27 0.28 -0.01 21.16 IFRS NAV Fair value RETT EPRA NRV Exclude RETT Exclude EPRA NTA Reverse NTA Fair value of EPRA NDV H1 2022 financial H1 2022 Intangible H1 2022 adjustments fixed interest H1 2022 instr