Corporacion Inmobiliaria Vesta S.a.b. De C.v. · BMV:VESTA
Corporacion Inmobiliaria Vesta S.a.b. De C.v — Q1 2020 Earnings Presentation
44 slides from Corporacion Inmobiliaria Vesta S.a.b. De C.v's earnings presentation, 2020
Slide 1: Corporate Presentation 1Q20
CORPORATE PRESENTATION 1Q20
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Corporación Inmobiliaria Vesta, S.A.B. de C.V. (“Vesta” or the “Company”) solely for use at this presentation. This presentation was prepared solely for informational purposes and does not constitute, and is not to be construed as, an offer or solici
Slide 3: Vesta's Snapshot
VesTA Vesta’s Snapshot Bw ma
Slide 4: Fully integrated industrial real estate owner, operator and developer
Fully integrated industrial real estate owner, operator and developer: Internally managed company. Offers innovative and customized solutions. Development approach to capture specific supply chain sectors and generate higher returns. 184 176 Class A industrial properties located in Mexico’s key trad
Slide 5: Strong corporate governance with best-in-class governance practices
STRONG CORPORATE GOVERNANCE WITH BEST-IN-CLASS GOVERNANCE PRACTICES Board of Directors Lorenzo Berho Corona Executive Chairman Stephen B Jose Manuel Craig Thomas J. Luis de la Wilfrido Oscar Francisco John Williams Dominguez Wieland McDonald Calle Castillo Cazares Uranga Foster Social and Investment
Slide 6: Highlights
1 Record-high results 2 Resilient balance 3 Growth without dilution 4 Highlights Increasing dividends Maximizing our stabilized 5 portfolio 6 Attractive discount 7 Vesta Parks development strategy 8 Focus on ESG www.vesta.com.mx
Slide 7: Record-high Results
VesTA Record-high Results
Slide 8: Strong foundation proven through key milestones that have accelerated growth
Strong foundation proven through key milestones that have accelerated growth Initial Stage Pre IPO Post IPO Vesta 20/20 Vison Level 3 Strategy 1998-2005 2006-2012 Investments from 2012 2013 2015 2019 Investments Second Follow on Portfolio disposition from GE and CALPERS, DEG, IPO First Follow on DEK
Slide 9: Stable and predictable cash flows and profitability
Stable and predictable cash flows and profitability Highly predictable rental income & stable occupancy rates Strong EBITDA growth with low margin volatility¹ (US$ in millions) (US$ in millions) 87. 0% 85.0% 83.0% 84.0% 83.7% 84.0% 84.1% 82.5% 82.8% 83.0% 121 121 125 82. 0% 79.3% 113 92 77. 0% 76 66
Slide 10: Resilient balance
Resilient balance
Slide 11: Long term debt at fixed rates with sound liquidity position
Long term debt at fixed rates with sound liquidity position… 31/03/2020 Rate Maturity Secured Debt 6 years average maturity & MetLife I $47.5 4.35% Apr-22 4.5% average interest rate MetLife II $150.0 4.55% Aug-26 MetLife III $118.0 4.75% Nov-27 MetLife Top Off $26.6 4.75% Aug-26 Total Secured Debt $
Slide 12: One of the largest and most modern industrial portfolios in Mexico
…one of the largest and the most modern industrial portfolios in Mexico… (As of March 31, 2020, % of GLA) Consolidated: GLA = 29.8mm sf (2.77 mm m2) Buildings = 184 Land reserves = 41.8 mm sq.ft (4.0 mm m2) Stabilized portfolio occupancy 1Q20 =93.6% Clients = 176 83.5% of rental income is denominate
Slide 13: Strong client base diversified by industry and geography
…strong client base diversified by industry and geography with balanced combination of growth and defensive sectors … Balanced portfolio use Long-term and staggered lease maturity profile¹ (% of Occupied GLA, as of March 31, 2020) (% of Occupied GLA, as of March 31, 2020) 4.6 yrs weighted average le
Slide 14: Strong tenant credit profile
…strong tenant credit profile… Automotive Logistics Automotive 26.3% Energy 4.4% Other Vehicles Aerospace 7.5% 8.0% Medical Aerospace Devices1.9% Paper 0.1% Plastics3.2% Other 17.9% • Calculated over total occupied GLA • Other Vehicles include motorcycles and recreational vehicles www.vesta.com.mx
Slide 15: Exposure to most stable business component of automotive supply chain
…exposure to most stable business component of automotive supply chain… Post-crisis outcome: Tier 1 manufacturers have strengthened in a significant reduction of OEM suppliers driven by market consolidation where only the best and most profitable survived. OEM 1.1% Tier 1 50.2% Tier 2 17.1% Tier 3 4
Slide 16: Growth without dilution
VesTA Growth without dilution
Slide 17: Strong buy-back program and increasing key financial metrics
Strong buy-back program and increasing key financial metrics Increasing FFO per share Increasing EBITDA per share Lower number of shares US$75 M buy-back fund as of March 2020 US$15 M deployment Attractive discount to NAV www.vesta.com.mx
Slide 18: Increasing dividends
VesTA Increasing dividends
Slide 19: Accretive development and acquisitions result in strong financial metrics to distribute an attractive yield
The accretive development, acquisitions, accelerated leasing activity and devesting, results in strong financial metrics to distribute an attractive yield $2.50 9.0% 8.2% 8.0% 1.99 $2.00 7.0% 1.80 1.74 1.68 5.9% 6.0% 1.53 $1.50 5.1% 1.36 4.9% 5.0% 1.21 1.23 1.17 3.8% 4.0% $1.00 2.9% 3.0% 2.0% 1.6% 1
Slide 20: Maximizing our stabilized portfolio
Maximizing our stabilized portfolio
Slide 21: Development of our portfolio tends to decrease as stabilized GLA increases
The developmnet of our portfolio tends to decrease as our stabilized GLA increases while development costs remain flat GLA under construction Our growth comes from different types of buildings 46% 46% 46% 43% 44% 42% 97%2% 38% 3% 98% 34% 35% 36% 36% 92% 6% 33% 33% 32% 9% 8% 8% 92% 28% 15% 23% 91% 21
Slide 22: Attractive discount
Attractive discount
Slide 23: Higher book Net Asset Value vs Market Price
Higher book Net Asset Value vs Market Price Average Discount/Premium 12.2% 20.0% 9.8% Figures in US$ M 1Q19 1Q20 % change -0.6% 0.0% Properties 1,839 1,901 3.4% Land 125 157 26.4% 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 Cash 60 123 106.4% -20.0% -12.7% -23.1% Debt Cash Collateral 4 4 0.3% -33.6
Slide 24: Stable yields through increasing price per share
Stable yields through increasing price per share EBITDA yield Adjusted FFO yield (EBITDA per share/share price US$) (Adjusted FFO per share/share price US$) 17.9% 12.1% 9.6% 9.5% 13.8% 12.2% 7.8% 11.5% 7.2% 9.9% 8.2% 7.0% 4.5% 6.1% 5.7% 3.5% 3.2% 3.2% 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 201
Slide 25: Vesta Parks Growth Strategy
VesTA Vesta Parks Growth Strategy
Slide 26: Continued Organic Growth through development strategy
Continued Organic Growth through development Strategy North • is a sustainable City Park Name GLA (000's sf) Stage gated industrial park with TJ Lagoeste 552 state-of-the-art class A TJ Tijuana III 619 buildings designed for TJ VP Alamar 602 35% Bajio advanced light CDJ VP Juarez Sur 720 66% Cit
Slide 27: Focus on ESG
VesTA Focus on ESG Bw ma
Slide 28: Focus on ESG
Focus on ESG ”We contribute to our clients’ and suppliers’ competitiveness and society’s well-being, while minimizing our environmental impact. All our ESG initiatives are aligned with Vesta’s Level 3 Strategic Plan." We improved our results in the ESG indexes we participate in and certifications we
Slide 29: Key Performance Indicators
LEED CLIENTS KEY CERTIFICATION PARTICIPATION PERFORMANCE %GLA LIKE-FOR-LIKE INDICATORS 2018 7.89% 2017 7 2018 21 2019 10.1% Environment 2019 66 EMISSIONS WASTES Generated by Vesta: Scope 1 derived from diesel fuel use: 50 241 tons of hazardous tons of CO2e. 244 tons of non-hazardous Scope 2 derived
Slide 30: Gender diversity, employment metrics, training and development
EMPLOYMENT METRICS GENDER DIVERSITY DATA 91 Total Employment 10 New Hires 3 Women 36 Women 17 Men 55 Men 8.3% Turnover Rate TRAINING & DEVELOPMENT HR CERTIFICATIONS/RANKINGS 3,814 hours of training to our employees Well Building Standard since 2017 42 hours an average per Great Place to Work in 2019
Slide 31: High governance standards
HIGH GOVERNANCE STANDARDS • 8 of 10 Board Directors are independent • All 6 Board Committees are chaired by an independent director • Single class of shares (one share, one vote) • Vesta’s Code of Ethics serves as a guide to regulate the conduct of all employees • Stakeholder Engagement Program base
Slide 32: Appendix
VesTA Appendix
Slide 33: Historical Results
Historical Results 35 36 36 36 36 38 32 34 31 28 29 26 27 25 22 23 20 20 21 21 19 19 16 17 17 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Revenue 96.1% 95.6% 95.5% 96.8% 96.9% 96.5% 96.8% 96.7% 96.9% 97.0% 96.2% 95.3% 9
Slide 34: Historical Results
Historical Results LTV 36% 35% 35% 35% 34% 35% 34% 37% 30% 32% 32% 26% 26% 25% 25% 24% 23% 23% 23% 23% 23% 23% 23% 24% 24% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Net Debt / EBITDA 5.9x 5.8x 5.5x 5.9x 5.7x 5.6x 5.5x
Slide 35: Historical Results
Historical Results Debt/EBITDA 6.9x 6.5x 6.2x 6.0x 6.3x 6.3x 6.2x 6.0x 5.8x 5.9x 5.9x 6.6x 5.7x 5.4x 5.8x 5.5x 5.3x 5.7x 5.1x 5.0x 4.8x 4.7x 4.5x 4.7x 4.5x 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 EBITDA/Interest Exp
Slide 36: Case Studies: Querétaro Aerospace Park
Case Studies Querétaro Aerospace Park Construction start 2006 GLA 2.18 million sf 13 buildings www.vesta.com.mx
Slide 37: Case Studies: Douki Seisan Park
Case Studies Douki Seisan Park Construction start 2013 GLA 2.13 million sf 8 buildings www.vesta.com.mx
Slide 38: Case Studies: Vesta Park Toluca II
Case Studies Vesta Park Toluca II Construction start 2013 GLA 1.47 million sf 6 buildings www.vesta.com.mx
Slide 39: Positive industry trends driving growth
Positive industry trends driving growth Industrial Real Estate Inventory Industrial market absorption¹ (m2 in millions) (m2 in millions) CAGR ‘10–2019: 5.6% Average industrial monthly rent Industrial occupancy rate (m2 in millions) 4.7 96.9% 4.4 4.3 94.5% 4.3 94.0% 93.6% Source: Jones Lang LaSalle I
Slide 40: High occupancy and growing new deliveries
High occupancy and growing new deliveries (4Q’19) Stock Availability Net Absorption Vacancy Rate Average Rent 2019 (m2) (m2) YTD (m2) % USD/m2/month Aguascalientes 2,260,000 46,330 54,570 2.1% 4.0 Guadalajara 4,260,000 169,122 148,360 4.0% 4.6 Guanajuato 5,840,000 505,160 79,510 8.7% 4.2 Querétaro 5
Slide 41: Why Mexico?
Why Mexio? 76 open airports (12 national 64 international) 117 maritime ports • In 2016 Mexico was the sixteenth largest recipient of Foreign Direct 27 thousand kilometers of railways Investment globally with more tan US$27,400 million. 370 thousand kilometers of roads • Stable macroeconomic environ
Slide 42: Recognized quality of Mexico's automotive manufacturing
Recognized quality of Mexico´s automotive manufacturing has enabled OEMS to choose Mexico as a unique manufacturing platform www.vesta.com.mx
Slide 43: Industry trends
Industry trends 4.0 Industrial Revolution 4.0 and Mexico • Ability to anticipate client demand • Mexico is a world-class Manufacturing Hub, • New paradigm known as the 4th Industrial exporting more than one billion dollars per Revolution day • Convergence of technologies • 50% of these exports are m
Slide 44: Thank you!
Thank you! www.vesta.com.mx
Corporación Inmobiliaria Vesta, S.A.B. de C.V. — Q1 2020 Earnings Presentation on 6ix