Parque Arauco S.a. · BCS:PARAUCO
Parque Arauco — Investor Presentation (February 2017)
38 slides from Parque Arauco's investor presentation, February 2017
Slide 1: Investor Presentation
1 Investor Presentation FEBRUARY 2017 CONTACTS SARAH INMON (HEAD OF INVESTOR RELATIONS) | EDUARDO PEREZ MARCHANT (CORPORATE FINANCE MANAGER) - 1| EMAIL: TEL: (562) 22990510 - IR@PARAUCO.COM
Slide 2: Disclaimer
2 disclaimer This document has been prepared by Parque Arauco for the purpose of providing general infor- mation about the Company. The Company assumes no responsibility for, or makes any represen- tation or warranty, express or implied, with respect to, the accuracy, adequacy or completeness of the
Slide 3: Introduction, Our Operations, Investment Highlights, Future Developments
3 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS - 3 -
Slide 4: Parque Arauco at a glance
INTRODUCTION Parque Arauco at a glance parque arauco OPERATIONAL METRICS BY COUNTRY Parque Arauco is the third largest shopping center operator in Chile , the Peru second largest Peru, and the fourth largest in Colombia. 38.9% Peru 30.9% Indicator/ Country CHILE PERU COLOMBIA TOTAL Colombia Total GL
Slide 5: In the last five years Parque Arauco has doubled GLA, revenues and EBITDA
5 INTRODUCTION In the last five years Parque Arauco has doubled GLA, revenues and EBITDA GLA(1) m2 1982 Parque Arauco Kennedy opens as first shopping center in Chile 1993 Arauco Maipu inaugurates in Santiago +2.0 X 1995 Parque Arauco S.A. IPO 1997 Inauguration of Marina Arauco in Viña del Mar, Chile
Slide 6: The spread over the cost of capital of our last projects is approximately 3%
6 INTRODUCTION The spread over the cost of capital of our last projects is approximately 3% 9% 6% 3% Real WACC (2) Spread Over Real WACC Real Cap Rate(1) Source: Parque Arauco (1) Real caprate is the yield on cost rate averaged by amount invested and considers the following properties: Arauco Expres
Slide 7: Total Return
7 INTRODUCTION Total Return Parque Arauco’s value creation is proven by the fact that it has had one of the highest “Total Return” of the real estate sector in the last years Total Return1, last 5 years Total Return1, last 15 years Annualized, local currency Annualized, local currency 17% 16% 16% Fa
Slide 8: Revenue type and contract duration
INTRODUCTION Revenue type and contract duration FIXED VS VARIABLE RENTAL REVENUES CONTRACT LENGTH as of December 30, 2016 (BASED ON º/º OF revenues) Other Revenues 15% 85% Rental Revenues 39% 100% 10% Variable Revenues 10% 15% 41% ‹2 YEARS 2-3 YEARS 3-4 YEARS ›4 YEARS TOTAL 85% Fixed Revenues OUR RE
Slide 9: Our Operations
9 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS - 9 -
Slide 10: Parque Arauco has iconic and dominant shopping centers in Chile, Peru and Colombia
10 OUR OPERATIONS Portfolio Parque Arauco has iconic and dominant shopping centers in Chile, Peru and Colombia PARQUE ARAUCO KENNEDY - CHILE ARAUCO MAIPÚ - CHILE LARCOMAR - PERÚ LA COLINA- COLOMBIA MEGAPLAZA NORTE - PERÚ ARAUCO ESTACIÓN - CHILE - 10 -
Slide 11: Parque Arauco is concentrated in Santiago and Lima
11 OUR OPERATIONS Portfolio Parque arauco is concentrated in Santiago and Lima, which makes the company a “market specialist” in these cities Antofagasta Coquimbo Cajamarca Santiago Lima San Antonio Chillán Cañete Pisco Quilicura Buenaventura Arequipa Concepción Outlet MegaPlaza Norte Kennedy Plaza
Slide 12: Parque Arauco portfolio in Chile
12 OUR OPERATIONS Chile Portfolio Parque Arauco has 6 regional shopping centers, 4 outlets and 14 strip centers in Chile. the average age of the portfolio is 17 years. Owned GLA Year of GLA (m2) % Ownership Occupancy (m2) incorporation Antofagasta Parque Arauco Kennedy 113,500 100% 113,500 98.6% 198
Slide 13: Parque Arauco portfolio in Peru
13 OUR OPERATIONS perú Portfolio In Peru in the company has 6 regional shopping centers and 8 neighborhood shopping centers, 2 outlets and 2 strip centers. The average age of the portfolio is 5 years. Owned GLA Year of GLA (m2) % Ownership1 Occupancy (m2) incorporation MegaPlaza Norte 110,000 50% 55
Slide 14: Parque Arauco portfolio in Colombia
14 OUR OPERATIONS COLOMBIA Portfolio Parque Arauco has 3 regional shopping centers in Colombia and the average age of the portfolio is 3 years Owned GLA Year of Bucamaranga GLA (m2) % Ownership Occupancy (m2) incorporation Pereira Parque Arboleda 40,500 55% 22,275 95.7% 2010 Bogotá Parque Caracoli 3
Slide 15: Investment Highlights
15 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS - 15 -
Slide 16: Investment highlights
16 6. 1. Important growth Strong results in a challenging opportunities. macroeconomic environment. 5. 2. Conservative debt investment Stable and diversified revenues structure and outstanding financial performance. highlights 4. 3. Solid corporate governance Strong commercial relationships with loc
Slide 17: Positive but weaker macroeconomic outlook and attractive industry dynamics
17 STRONG RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT Positive but weaker macroeconomic outlook and attractive industry dynamics Parque Arauco is positioned in countries with strong macroeconomic prospects GDP Growth Retail Sales Growth 8.2% 7.4% 7.6% 7.1% 7.2% 6.0% 5.9% 4.5% 4.9% 4.9% 3.9% 3
Slide 18: Results have been positive in all three countries
18 STRONG RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT Results have been positive in all three countries GLA1 Tenant sales2 Revenues2 NOI2 +3.5% +9.0% +8.7% +10.0% 424,000 1,024,996 409,500 940,488 99,417 88,850 91,479 80,802 Chile 2015 2016 2015 2016 2015 2016 2015 2016 1Q1 +6.7% +12.1% +16.4
Slide 19: Strong Same Store Growth and a Healthy Occupancy Cost
19 STABLE AND DIVERSIFIED REVENUES Strong Same Store Growth and a Healthy Occupancy Cost CHILE SAME STORE SALES / CH % CHILE SAME STORE RENT / CH % CHILE OCCUPANCY COST 7.7 7.2 6.8 10.1% 10.0% 5.8 6.2 54% 5.5 Others 4.3 4.1 2.6 2.7 46% Anchor Stores 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16
Slide 20: Diversification by country, format and socio-economic level
20 STABLE AND DIVERSIFIED REVENUES Parque Arauco diversifies its market risks at a country, format, and socio-economic level Country level diversification (º/º revenues) Format level Diversification (º/º revenues) Neighborhood Outlet 7.0% 5.3% Colombia 5.2% Strip center 30.9% 4.0% Peru 85.5% Regiona
Slide 21: Market leader in the outlet format in the Andean region
21 STABLE AND DIVERSIFIED REVENUES With a 39% market share in Chile, Parque Arauco is the market leader in the outlet format in the Andean region Outlets currently in our portfolio Arauco Premium Outlet Buenaventura, Chile Arauco Premium Outlet Concepción, Chile Keys to the Premium Outlet Format (1)
Slide 22: Consolidated commercial relationships with well-known tenants
22 STRONG COMMERCIAL RELATIONSHIPS WITH LOCAL AND GLOBAL BRANDS Consolidated commercial relationships with well-known tenants Total GLA Years as a Tenant Malls Country (m2) client CHILE 11 PERU 96.554 35 Ancho r COLOMBIA CHILE Stores 10 PERU 74.548 35 CHILE 5 PERU 48.050 12 CHILE 4 PERU 33.011 16 CH
Slide 23: Supporting the globalization of several brands entering the Andean region
23 STRONG COMMERCIAL RELATIONSHIPS WITH LOCAL AND GLOBAL BRANDS Parque Arauco is supporting the globalization of several brands entering the Andean region NEW TENANTS PARQUE ARAUCO KENNEDY IN THE LAST 5 YEARS: NOMBRE GLA NOMBRE GLA 80% of new GLA leased in Parque FOREVER 21 1,639 ETIQUETA NEGRA 209
Slide 24: Recognitions from local and international organizations
24 SOLID CORPORATE GOVERNANCE AND INCREASED CONCERN WITH SUSTAINABILITY Parque Arauco has received important recognitions from local and international organizations workplace Recognition Management recognition Parque Arauco was recognized by Best Capital Markets Strategy: Great Place to Work in Chil
Slide 25: Advancing on our sustainability strategy
25 SOLID CORPORATE GOVERNANCE AND INCREASED CONCERN WITH SUSTAINABILITY In the last year we have continued advancing on our sustainability strategy ESG workstreams • Baseline measurement: Environmental assessment and definition of baseline carbon emissions in Chile, Peru and Colombia • Sustainable C
Slide 26: Policy to finance projects with 50% debt and 50% equity
26 CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE Parque Arauco’s policy is to finance projects with 50% debt and 50% equity, and is comfortably within all its covenants Liabilities / Equity Net Financial Debt / Equity < 1.40x < 1.50x 1.15x 1.18x 0.87x 0.89x 0.76x 0.72x 0.81x 0.78
Slide 27: Improved debt rating, eliminated dollar debt, increased liability duration
27 CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE During the last 24 months, the Company has improved its debt rating, eliminated debt in Dollars, and considerably increased the duration of its liabilities IMPROVEMENT IN LOCAL DEBT RATING Liability amortization profile and duratio
Slide 28: The cost of debt has decreased importantly in the past 5 years
28 ONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE The cost of debt has decreased importantly in the past 5 years Date: 12-12-2014 Date: 04-17-2015 Base: 1.66% Base: 1.62% Spread: 1.74% Spread: 1.68% Duration: 14.3 Date: 10-12-2016 Duration: 14.77 Base: 1.46% Spread: 1.02% Duration:
Slide 29: Market participation in Latin America and the Andean Region
29 IMPORTANT GROWTH OPPORTUNITIES Parque Arauco has 0.9 million m2 and a 2% market participation in Latin American and a 8% market participation in the Andean Region. LATIN AMERICA GLA: 45.5 million m2 BRAZIL MEXICO GLA: 14.7 million de m2 GLA: 17.4 million m2 32% of total 38% of total ANDEAN REGION
Slide 30: Participates in markets with a growing retail market
30 IMPORTANT GROWTH OPPORTUNITIES Parque Arauco participates in markets with a growing retail market GDP Per Person vs. GLA per 1,000 inhabitants1 2,500 USA 2,000 GLA per 1,000 habitants 1,500 Canada AT Kearney GRDI1 window of opportunity 1,000 South Africa 500 Portugal Spain Opening Peaking Maturin
Slide 31: Growth has come from greenfield projects and M&A
31 IMPORTANT GROWTH OPPORTUNITIES Parque Arauco’s growth has come from greenfield projects and M&A 128,500 947,000 90,000 37,400 132,858 69% Greenfields 80,242 650,643 m2 27,676 91,625 24,595 83,708 55,651 194,745 31% M&A 296,357 m2 Total Total Total Total Total Total Total Total Total Total New Tot
Slide 32: Future Developments
32 INTRODUCTION OUR OPERATIONS INVESTMENT HIGHLIGHTS FUTURE DEVELOPMENTS - 32 -
Slide 33: Future Developments 2016 and Onwards
33 Future Developments 2016 and Onwards Parque Arauco has announced projects that will add 228,000 m2 of GLA over the next few years and will require an investment of US$ 819 million. Estimated Total GLA Owned GLA Total Investment Total Investment New Projects Type Country Format Opening Date m2 % O
Slide 34: Parque La Colina inaugurated in December 2016
34 Parque La Colina was inaugurated in December 2016 Committed brands: - 34 -
Slide 35: New expansion of Parque Arauco Kennedy
35 We announced a new expansion of Parque Arauco Kennedy Hotel Operator: Project Details: Investment: 5,355,000 UF 5-star hotel: Hilton by Hilton Rooms: 401 Convention center: 3,000 m2 Parking spots: 700 Additional GLA: 11,000 m2 - The project will have the first five star Hilton hotel in Chile, a c
Slide 36: Landbank
36 Landbank Total Cost Total Cost name M2 % Ownership (Local Currency) 1 (USD MM) Quilicura 25,486 100% 78,000 3 Buenaventura 115,864 100% 455,000 18 Chicureo 47,614 100% 206,000 8 Los Andes 39,254 100% 117,000 5 Others in Chile 55,567 100% 445,000 17 Total Chile 293,785 100% 1,301,000 51 Parque El
Slide 37: Glossary
37 Glossary Adjusted FFO Margin - AFFO / revenues weighted by average occupancy for the period AFFO -Adjusted Funds From Operations: Net Profit - Depreciation Monthly Sales/m2 -Monthly tenant sales divided by GLA weighted & Amortization - Other Income/expenses - Share of Profit (Loss) by average occ
Slide 38: AVAVAN AVAWAWAWAWAWAWANAY:
AVAVAN AVAWAWAWAWAWAWANAY: VAs WAWa Wawa WaWaWaWawan
Parque Arauco — Investor Presentation (February 2017) on 6ix