Wereldhave N.V. · EURONEXT:WHA
Wereldhave — ODDO BHF Forum 2024
50 slides from Wereldhave's conference presentation, Jan 16, 2024
Slide 1: Full Service Centers - ODDO BHF Forum 2024
Full Service Centers better everyday life, better business ODDO BHF Forum 2024 16 January [DD 2024 Month YYYY]
Slide 2: Table of contents
Table of contents 1. Key Messages & Highlights 9M 2023 2. Results H1 2023 3. LifeCentral, ESG 4. Financing & Valuations 5. Management Agenda 6. Appendices 2
Slide 3: Key Messages 9M 2023
Key Messages 9M 2023 • Direct result per share (DRPS) outlook raised to € 1.70- 1.75 from € 1.65-1.75 • Indexation driving 10% like-for-like growth in rental income • Footfall thriving: 9% footfall growth in our core portfolio vs. 2022 • Sixth Full Service Center completed: Vier Meren in Hoofddorp,
Slide 4: Highlights 9M 2023
Highlights 9M 2023 Solid results despite higher interest rates 9M 2022 9M 2023 Change Direct result per share (€) 1.24 1.30 0.06 Indirect result per share (€) 0.02 0.33 0.31 Total result per share (€) 1.26 1.63 0.37 31 Dec 2022 30 Sep 2023 Change EPRA NTA per share (€) 21.73 22.28 0.55 Net LTV 42.4%
Slide 5: Table of contents
Table of contents 1. Key Messages & Highlights 9M 2023 2. Results H1 2023 3. LifeCentral, ESG 4. Financing & Valuations 5. Management Agenda 6. Appendices 5
Slide 6: Highlights H1 2023
Highlights H1 2023 Total result up more than 50% compared to H1 2022 H1 2022 H1 2023 Change Direct result per share (€) 0.81 0.89 0.08 Indirect result per share (€) 0.03 0.40 0.37 Total result per share (€) 0.84 1.29 0.45 FY 2022 H1 2023 Change EPRA NTA per share (€) 21.73 21.85 0.12 Net LTV 42.4% 4
Slide 7: LFL NRI growth driven by indexation, lower energy costs and sales-based rents
Highlights H1 2023 LFL NRI growth driven by indexation, lower energy costs and sales-based rents Like-for-Like Net Rental Income Growth H1 2023 vs. H1 2022; % 27.1% 12.5% 10.2% 10.5% 7.9% (11.3%) Belgium Netherlands Core Portfolio France Office Belgium Total 7
Slide 8: Operations H1 2023
Operations H1 2023 ERVs remain conservative; leasing +9% # of Leasing Occupancy Country MGR Uplift3) vs ERV Contracts1) Volume2) Rate Belgium 34 4.9% 1.4% 9.1% 96.4% Netherlands 46 5.9% (4.9%) 9.0% 95.6% Core Portfolio 80 5.4% (2.4%) 9.0% 96.0% France 4 1.5% 13.1% 11.0% 94.6% Total 84 5.1% (2.3%) 9.
Slide 9: Continued strong FSC performance
Continued strong FSC performance Four assets will be completed as FSC in H2 KPI Full Service Center In Transformation Shopping Center # Assets 5 6 6 Mixed Use Percentage 16% 16% 9% MGR Uplift1) (0.4%) (6.2%) (0.7%) MGR vs. ERV +10.4% +8.4% +7.3% Tenant Sales vs. 2022 +12.4% +10.2% +12.1% Footfall vs
Slide 10: Footfall continuous to improve
Footfall continuous to improve Footfall growth vs. same period 2019: Belgium Footfall growth vs. same period 2019: Netherlands H1 2023; % H1 2023; % 20 20 0 0 -20 -20 June June February March February March January January May May April April Wereldhave Belgium Wereldhave NL Belgium SC Market NL Ret
Slide 11: Tenant Sales
Tenant Sales 11.5% increase in tenant sales versus 20221) Tenant sales 2023 vs. 2022: Belgium2) Tenant sales 2023 vs. 2022: Netherlands3) H1 2022 & H1 2023; % H1 2022 & H1 2023; % Impacted by 26% Delhaize strikes in Nivelles and Tournai 21% 19% 15% 14% 13% 10% 10% 10% 9% 5% 6% 4% 5% (1%) (4%) Wereld
Slide 12: LifeCentral Strategy makes WH more resilient
LifeCentral Strategy makes WH more resilient in an uncertain macro environment 2019 2020 2021 2022 H1 2023 % of rent % of rent % of rent % of rent % of rent 4% 4% 4% 3% 4% 5% 13% 5% 14% 4% 15% 7% 15% 6% 15% 1% 0% 6% 6% 6% 11% 11% 12% 13% Total Daily Total Daily Total Daily 12% Total Daily 25% Total
Slide 13: Benelux update
Benelux update Belgium • 34 Retail deals signed, 9.1% above ERV and 1.4% above previous rent on average, for example: • Tournai - Shopping Bastions: Basic-Fit • Ring Kortrijk: Casa, Rituals, Press Shop, Bubble Bar, Claire’s • Genk - Shopping 1: Sports Direct, Dunkin Donuts, Calzedonia/Intimissimi •
Slide 14: OCRs NL stable, OCRs BE slight increase
OCRs NL stable due to rising sales and rent levels, both driven by inflation, OCRs BE slight increase OCR Wereldhave Belgium1) OCR Wereldhave NL2) H1 2023, LTM; % H1 2023, LTM; % 15% 14% 14% 14% 13% 13% 12% 11% 10% 9% 9% 8% 7% 3% 3% 2% Wereldhave Fashion Food & Groceries Health & Homeware Multimedia
Slide 15: 10% increase in Direct Result
Direct result 10% increase in Direct Result +9.6% € 1.2m (€ 0.3m) (€ 2.8m) € 1.8m € 3.9m € 43.2m € 39.4m Actuals NRI Netherlands NRI NRI General Interest Actuals H1 2022 Belgium France Cost H1 2023 15
Slide 16: Majority of planned cost savings realized
Majority of planned cost savings realized and efficiency of organization further improved Cost savings program Direct GENEX €m • Wereldhave staff aligned with smaller asset base • Wereldhave head office moved to a cheaper location 1.1 0.9 11.8 11.3 10.9 (0.4) More efficient organization (2.0) • Were
Slide 17: Outlook 2023 DRPS at € 1.65 – 1.75 re-confirmed
Outlook 2023 DRPS at € 1.65 – 1.75 re-confirmed Direct Result per Share Dividend per Share € € 2.01 1.16 1.88 1.10 1.65-1.75 1.63 0.50 2020 2021 2022 2023FC 2020 2021 2022 17
Slide 18: DRPS Growth 2023 – 2027
DRPS Growth 2023 – 2027: Higher indexation, but also higher financing costs Expected average annual DRPS Growth 2023 – 2027 % • The 2023 – 2027 growth comes from multiple drivers 0.4% (0.8%) • Leasing contracts indexed annually with inflation, we use 4.5% in our 0.6% 4.5% forecasts • Additional rent
Slide 19: Table of contents
Table of contents 1. Key Messages & Highlights 9M 2023 2. Results H1 2023 3. LifeCentral, ESG 4. Financing & Valuations 5. Management Agenda 6. Appendices 19
Slide 20: LifeCentral Strategy launched in 2020
LifeCentral Strategy launched in 2020: Transform assets, Strengthen balance sheet and Expand 20
Slide 21: Significant outperformance of Full Service Centers
LifeCentral strategy Significant outperformance of Full Service Centers Footfall Total Property Return1) Retail Sales % delta 2023 YTD vs. 2019 YTD FY 2022 + H1 2023 % delta 2023 YTD vs. 2022 YTD 21% 10% 13% IRR Hurdle 6% 9% -5% Full Service Other Assets Full Service Other Assets Full Service Other
Slide 22: LifeCentral progress H1 2023
LifeCentral progress H1 2023 • Four ongoing transformations reaching completion, still within timelines and budget • Organization further streamlined to execute LifeCentral more effectively across both countries • Customer Experience restructured after completion of elements like Every.deli, The Poi
Slide 23: FSC Sterrenburg already delivering
FSC Sterrenburg already delivering, further increase on key KPIs expected Total Return Yield NPS Mixed Use % %, Net % of floor space 10.6% 5.8% 5.6% 17 19% 6.0% 10% 8 Target H1 20231) Pre Jun-23 Pre Jun-23 Pre Jun-23 transformation transformation transformation GRI Annualized Footfall Occupancy €m m
Slide 24: FSC Presikhaaf delivers according to expected FSC business model
FSC Presikhaaf delivers according to our expected FSC business model from the LifeCentral strategy More rental uplift, but less yield compression than predicted FSC Business Model from the FSC Presikhaaf Business Model LifeCentral Strategy Pre-Transformation situation FSC Presikhaaf GRI (€ m) 3.6 GR
Slide 25: FSC Transformation Vier Meren, Hoofddorp
FSC Transformation Vier Meren, Hoofddorp A Full Service Center with the right retail balance and extensive mixed use offerring, focused on F&B and Leisure • Main construction works finalized 1 May 2023 • New entrance opened • Majority of units delivered and some tenants already opened • Full opening
Slide 26: FSC Transformation De Koperwiek, Capelle a/d IJssel
FSC Transformation De Koperwiek, Capelle a/d IJssel A Full Service Center with a broad convenience offering, combined with extensive F&B offering and a gym Work-in-progress: • Extension to implement our F&B cluster concept Eat&meet – delivery planned for second half of September 2023 and opening pla
Slide 27: FSC Transformation Eggert Center, Purmerend
FSC Transformation Eggert Center, Purmerend A Full Service Center in the inner city with a good retail mix combined with a fresh cluster, F&B and a gym Key items transformation • Full renovation of the first floor: • F&B cluster according to our Eat&meet concept • New Play & Relax and Public Seating
Slide 28: FSC Transformation Genk Shopping 1, Genk
FSC Transformation Genk Shopping 1, Genk A Full Service Center with a strong retail mix, combined with extensive F&B offering and a gym Key items already realized: • F&B cluster according to our Eat&meet concept with seven F&B tenants opened in H1 2023 • Large The Point service hub opened end of 202
Slide 29: LifeCentral CAPEX program on track
LifeCentral CAPEX program on track Investments only done in NL & BE assets with IRRs Total LifeCentral investments1) in NL and BE, excl. FR above threshold of 7.0% € m, 2020-2025+ 291 Other CAPEX (France and smaller 178 projects): € 8m 25 9 40 16 19 113 21 20 29 LifeCentral CAPEX Spent 2020-2023 H1
Slide 30: Continued evidence for FSC yield compression
Change pictures Continued evidence for FSC yield compression Yield com p ression sin ce st art of FSC Tran sform at ion bps Vier Meren (88) Cityplaza (39) Eggert (30) Kronenburg (27) Presikhaaf (24) Sterrenburg (20) NL Market Yield1) 70 Shopping Belle-Île (15) Ring Kortrijk (11) BE Market Yield2) 70
Slide 31: Delay and expected decrease in residential profits
Delay and expected decrease in residential profits due to current macro environment Development of residential units Residential profit reduced to € 0.50-0.80/share # Units The macro environment has, for now, delayed the expected Brugge In Progress residential profits and decreased the overall resid
Slide 32: Relative performance since LifeCentral launch
Relative performance since LifeCentral launch Total Return Cumulative total shareholder return index; 7 February 2020 – 10 July 2023 150 Peer 1 Wereldhave Peer 2 100 Peer 3 Peer 4 Peer 5 50 Peer 6 0 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 Peers: Carm
Slide 33: A Better Tomorrow 2030
A Better Tomorrow 2030 Progress recognized by external benchmarks Bet t er Foot prin t - reducing our impact on the environment and bringing our business in line with the 2015 Paris Climate Agreement • Energy & Carbon • Materials • Value Chain impact Bet t er Nat u re - making sure we adapt our cent
Slide 34: Our climate journey
Our climate journey Compared to 2018, we managed to save 27% on CO2 emissions (scope 1&2) 2018 is the base Where are we at this year for our 30% moment? reduction target Complete Data value chain Yielding ESG & Paris-proof CAPEX complete net zero In € m Base year -30% CO2 Paris-proof ‘18 ‘22 ‘23 ‘30
Slide 35: Table of contents
Table of contents 1. Key Messages & Highlights 9M 2023 2. Results H1 2023 3. LifeCentral, ESG 4. Financing & Valuations 5. Management Agenda 6. Appendices 35
Slide 36: Positive re-valuations for the first time since 2015
Positive re-valuations for the first time since 2015 Value (€ m) Revaluation H1 2023 EPRA NIY (%) Country FY 2022 H1 2023 €m % FY 2022 H1 2023 Belgium 849 850 (3.8) (0.4%) 6.2% 6.4% Netherlands 876 929 24.8 2.7% 6.9% 6.3% Core Portfolio 1,725 1,779 21.0 1.2% 6.6%1) 6.3%1) France 175 179 (2.7) (1.5%)
Slide 37: We have an Investment Grade credit profile again
Finance We have an “Investment Grade credit profile” again Despite a reset of values LTV still down by 3% Solid debt coverage ratio Cumulative Capital Growth NL Net Loan to Value (LTV)1) Debt vs. peers2) 2019 - 2022 Debt, % of value Debt/EBITDA -3.1% 13.1X 12.2X 46.7% 44.8% 43.6% 11.1X 41.0% 42.4% 7
Slide 38: Financing Structure
Financing Structure Key parameters Q4-22 Q3-23 Covenants Policy • Debt, and consequently LTV, increased following FSC capital expenditure and dividend Interest bearing debt * € 859m € 922m payments Average cost of debt 2.5% 3.4% • Average cost of debt increased by 90 basis points during 2023 as resu
Slide 39: Table of contents
Table of contents 1. Key Messages & Highlights 9M 2023 2. Results H1 2023 3. LifeCentral, ESG 4. Financing & Valuations 5. Management Agenda 6. Appendices 39
Slide 40: Management Agenda
Management Agenda Focus on Target 2022-2024 Current Status Focus on earnings & dividend growth 4-6% CAGR as of 2023 4-6% average growth as of 2023 Focus on Total Return Exceed 8% annualized Total Return (Levered) H1 2023: 9.9% Transformed 9 assets to FSC and started 4 additional Five transformations
Slide 41: Table of contents
Table of contents 1. Key Messages & Highlights 9M 2023 2. Results H1 2023 3. LifeCentral, ESG 4. Financing & Valuations 5. Management Agenda 6. Appendices 41
Slide 42: Company Profile June 2023
Company Profile June 2023 Key Facts Number of retail assets 22 Average size 28,200 m² Number of shopping center 43.8 m visitors (H1 2023) Net loan-to-value ratio 43.9 % Occupancy shopping 95.8 % centers 9 EPRA NIY shopping centers 6.2 % WALT1) 5.1 years Development pipeline2) € 37 m 6 1) Lease end d
Slide 43: Company Profile June 2023
Company Profile June 2023 Portfolio Breakdown by value Portfolio Breakdown by value Offices 5% Netherlands Belgium 45% 46% € 2.1bn € 2.1bn Retail Assets 95% France 9% 43
Slide 44: Tenant mix core portfolio
Tenant mix core portfolio Annualized contract rent by category Top 10 Tenants % of annualized rent Homeware & Services Other Ahold Delhaize 6.1 % Household 1.0% 0.2% 9.7% Jumbo Group 4.2 % Sports 2.7% Fashion & C&A 3.4 % Accessoires Health & Beauty 31.4% A.S. Watson Group 3.0 % 11.4% Carrefour 2.3 %
Slide 45: Like-for-like NRI growth
Like-for-like NRI growth LFL NRI growth (% yoy) 36.1% 34.3% 27.1% 23.2% 17.7% 17.0% 15.1% 14.4% 13.7% 12.5% 12.5% 11.4% 7.9% 9.1% 5.6% 6.0% 4.3% -0.7% (3.5%) -9.4% Belgium France Netherlands Shopping centres H1 2021 FY 2021 H1 2022 FY 2022 H1 2023 45
Slide 46: Occupancy rates
Occupancy rates EPRA Occupancy rate Shopping Centers (1.3%) 97.7% (2.6%) 97.2% (1.0%) 97.0% 97.1% 96.8% 96.6% (0.5%) 96.4% 96.1% 96.2% 95.9% 95.8% 95.7% 95.6% 95.0% 94.7% 94.6% Belgium France The Netherlands Shopping centers FY 2021 H1 2022 FY 2022 H1 2023 46
Slide 47: Footfall
Footfall Change in visitors versus the same period previous year (%) 34% 23% 20% 20% 19% 11% 12% 8% 0% (8%) (14%) (20%) (29%) (31%) H1 2020 H1 2021 H1 2022 H1 2023 Belgium France Netherlands Full Service Centers Note: 2020, 2021 and 2022 influenced by Covid Measures 47
Slide 48: EPRA NTA
EPRA NTA EPRA NTA Bridge: YE 2022 to H1 2023 (€ per share) 0.40 (1.16) 0.89 (0.01) 21.85 21.73 EPRA NTA Direct result Indirect result Dividend Other EPRA NTA YE 2022 H1 2023 48
Slide 49: Reconciliation of EPRA value metrics H1 2023
Reconciliation of EPRA value metrics H1 2023 (€ per share) 3.15 25.01 (3.15) 1.08 23.17 22.09 (0.23) 0.24 (0.01) 21.85 IFRS NAV Fair value RETT EPRA NRV Exclude RETT Exclude EPRA NTA Reverse NTA Fair value of EPRA NDV H1 2023 financial H1 2023 Intangible H1 2023 adjustments fixed interest H1 2023 in
Slide 50: better everyday life, better business
better everyday life, better business