Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — FY2023 Earnings Presentation
44 slides from Phillips Edison &'s earnings presentation, Feb 9, 2024
Slide 1: Investor Presentation
February 2024 Investor Presentation
Slide 2: Safe Harbor and Non-GAAP Disclosures
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 2 PECO | N A S D A Q L I S T E D Safe Harbor and Non-GAAP Disclosures
Slide 3: PECO at a Glance
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 PECO | N A S D A Q L I S T E D PECO at a Glance Source: Company data as of December 31, 2023; Dividend yield as of December 31, 2023 and is based on an annualized rate of $1.17 per share
Slide 4: Our Focused and Differentiated Strategy
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 4 PECO | N A S D A Q L I S T E D Our Focused and Differentiated Strategy ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Source: Company data as of December 31, 2023
Slide 5: Grocery-Anchored Portfolio
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Grocery-Anchored Portfolio 5
Slide 6: Grocery-Anchored Centers Benefit from Macroeconomic Trends that Provide Strong Tailwinds for PECO
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 6 PECO | N A S D A Q L I S T E D Grocery-Anchored Centers Benefit from Macroeconomic Trends that Provide Strong Tailwinds for PECO • • • ‒ • ‒ • • ‒ • • • • Source: 1. % of ABR as of December 31, 2023 4. Estimate as of December 31, 2023 2.
Slide 7: Strategic Presence in Suburban Markets
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 7 PECO | N A S D A Q L I S T E D Strategic Presence in Suburban Markets • • • • Sources: 1. Based on total ABR in market for wholly-owned portfolio as of December 31, 2023 2. October 2022 report from the Frank Hawkins Kenan Institute of Pr
Slide 8: PECO Aligns with Leading Grocer Demographics
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 8 PECO | N A S D A Q L I S T E D PECO Aligns with Leading Grocer Demographics AVERAGE 3-MILE AVERAGE 3-MILE MEDIAN POPULATION HOUSEHOLD INCOME (thousands) (thousands) 66 $80 $74 $70 62 57 Source: Synergos Technologies, Inc. and Company fil
Slide 9: How PECO Defines Quality
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 9 PECO | N A S D A Q L I S T E D How PECO Defines Quality PECO’s focus on the #1 or #2 PECO retains a healthy and grocer is well-positioned in the diverse mix of National, market with a Locally Smart® Regional and Local Neighbors merchandi
Slide 10: Grocery-Anchored Advantage
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 0 PECO | N A S D A Q L I S T E D Grocery-Anchored Advantage PECO GROCER SALES PSF GROWTH (4) 2019 2020 2021 2022 2023 Sources: 1. Based on the most recently reported sales data available 2. Company data as of December 31, 2023 3. USDA 4.
Slide 11: Local Neighbors
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 1 PECO | N A S D A Q L I S T E D Local Neighbors 7% 9% 27% 31% • 13% • • 13% • 73% 27% Source: Company data; ABR as of December 31, 2023
Slide 12: Strong Local Neighbors
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 2 PECO | N A S D A Q L I S T E D Strong Local Neighbors
Slide 13: Math Behind Local Neighbors
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 3 PECO | N A S D A Q L I S T E D Math Behind Local Neighbors • • • • Source: Company data as of December 31, 2023
Slide 14: Retailers Growing with PECO
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 4 PECO | N A S D A Q L I S T E D Retailers Growing with PECO
Slide 15: Suburban Market Advantage
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 5 PECO | N A S D A Q L I S T E D Suburban Market Advantage • • • • • Source: Placer.ai
Slide 16: Suburban Market Advantage
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 6 PECO | N A S D A Q L I S T E D Suburban Market Advantage Notes: Trailing twelve months visits per month by market size (December 2022 – November 2023) Source: Placer.ai
Slide 17: Highly Diversified Neighbor Mix Led by Top Grocers and Necessity-Based Retailers
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 7 PECO | N A S D A Q L I S T E D Highly Diversified Neighbor Mix Led by Top Grocers and Necessity-Based Retailers Neighbor Location Count % ABR(1) Neighbor Location Count % ABR(1) 63 6.0% 5 0.7% 61 5.6% 35 0.5% 32 4.1% 9 0.5% 23 3.8% 2 0
Slide 18: Investments
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Investments 18
Slide 19: 2023 Acquisition and Disposition Summary
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 1 9 PECO | N A S D A Q L I S T E D 2023 Acquisition and Disposition Summary Source: 1. As of December 31, 2023
Slide 20: Development and Redevelopment Activity Provide Long-Term Growth Opportunities
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 2 0 PECO | N A S D A Q L I S T E D Development and Redevelopment Activity Provide Long-Term Growth Opportunities • • • Source: 1. As of December 31, 2023
Slide 21: Balance Sheet
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Balance Sheet 21
Slide 22: PECO is Among the Lowest Levered Shopping Center REITs
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 2 2 PECO | N A S D A Q L I S T E D PECO is Among the Lowest Levered Shopping Center REITs 6.7x • 5.9x 6.0x 6.1x 6.4x 5.0x 5.1x 5.1x • • • S&P(2) BBB+ BBB- BBB- BBB+ BBB+ BBB BBB- NA Moody’s(2) Baa1 Baa3 Baa3 Baa1 Baa1 Baa3 Baa2 NA Sources:
Slide 23: Strong and Flexible Balance Sheet Position
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 2 3 PECO | N A S D A Q L I S T E D Strong and Flexible Balance Sheet Position • $9M • • • • $606M • $1,500 $1,250 $1,000 $606 $750 $13 $181 $500 $323 $250 $240 $350 $28 $240 $201 $162 $201 $0 $0 $38 $2 $17 $1 $3 2024 2025 2026 2027 2028 20
Slide 24: 2024 Earnings Guidance
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D 2024 Earnings Guidance 24
Slide 25: 2024 Earnings Guidance Summary
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 2 5 PECO | N A S D A Q L I S T E D 2024 Earnings Guidance Summary PECO’s Full Year 2024 Earnings Guidance – Updated as of February 8, 2024 All figures in millions, except per share data Previous Updated Full Year 2023 • Nareit FFO / share
Slide 26: Performance and Long-Term Growth
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Performance and Long-Term Growth 26
Slide 27: PECO's Strong Historical Performance
G RGORCOECRY E RYC ECNETNERED . C. OCM T ERED UN OMM UINT IYT YF OFCOUCSUED S ED | 2 7 PECO | N A S D A Q PECO | N A S D A Q L I S T E D PECO’s Strong LEADING PERFORMANCE Historical Performance 97.4% 97.4% 96.3% 95.4% 94.7% 2019 2020 2021 2022 2023 8.2% 4.5% 4.2% 3.7% 2019 2020 2021 2022 2023 -4.1%
Slide 28: Strong Operating Environment
G RGORCOECRY E RYC ECNETNERED . C. OCM T ERED UN OMM UINT IYT YF OFCOUCSUED S ED | 2 8 PECO | N A S D A Q PECO | N A S D A Q L I S T E D Strong Operating LEADING PERFORMANCE Environment 32.2% 25.2% 15.7% 13.3% 8.2% 2019 2020 2021 2022 2023 16.2% 14.6% 8.5% 8.1% 6.7% 2019 2020 2021 2022 2023 Source:
Slide 29: Roadmap to Our Long-Term Growth
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 2 9 PECO | N A S D A Q L I S T E D Roadmap to Our Long-Term Growth
Slide 30: Long Term Targets
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 0 PECO | N A S D A Q L I S T E D Long Term Targets Same-Center NOI Mid-5x Net-Debt-to- Growth of 3% - 4% Adjusted-EBITDAre Mid-to-High-Single-Digit $200M to $300M Core FFO Growth per Net Acquisitions per Share Year
Slide 31: Corporate Responsibility
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Corporate Responsibility 31
Slide 32: Corporate Responsibility and Sustainability
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 2 PECO | N A S D A Q L I S T E D Corporate Responsibility and Sustainability ENVIRONMENTAL OVERSIGHT & PEOPLE COMMUNITY STEWARDSHIP ETHICS • • • • • • • • • • • • • • • • • • •
Slide 33: Appendix
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Appendix 33
Slide 34: Glossary of Terms
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 4 PECO | N A S D A Q L I S T E D Glossary of Terms
Slide 35: Appendix: Non-GAAP Reconciliations
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED PECO | N A S D A Q L I S T E D Appendix Non-GAAP Reconciliations 35
Slide 36: Non-GAAP Measures
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 6 PECO | N A S D A Q L I S T E D Non-GAAP Year Ended December 31 2023 2022 Measures Net income $ 63,762 $ 54,529 Adjusted to exclude: Fees and management income (9,646) (11,541) Straight-line rental income(1) (10,185) (12,265) Net amorti
Slide 37: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 7 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, Measures 2022 2021 Net income $ 54,529 $ 17,233 (Cont’d) Adjusted to exclude: Fees and management income (11,541) (10,335) Straight-line rental income(1) (12,265) (9,404) Ne
Slide 38: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 8 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, Measures 2021 2020 $ $ (Cont’d) Net income 17,233 5,462 Adjusted to exclude: Fees and management income (10,335) (9,820) Straight-line rental income(1) (9,404) (3,356) Net a
Slide 39: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 3 9 PECO | N A S D A Q L I S T E D Year End December 31, Non-GAAP 2020 2019 Measures Net income (loss) $ 5,462 $ (72,826) (Cont’d) Adjusted to exclude: Fees and management income (9,820) (11,680) Straight-line rental income(1) (3,356) (9,0
Slide 40: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 4 0 PECO | N A S D A Q L I S T E D Year End December 31, Non-GAAP 2019 2018 Measures Net (loss) income $ (72,826) $ 46,975 (Cont’d) Adjusted to exclude: Fees and management income (11,680) (32,926) Straight-line rental income (9,079) (5,17
Slide 41: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 4 1 PECO | N A S D A Q L I S T E D Year End December 31, Non-GAAP 2023 2022 Measures Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders Net income $ 63,762 $ 54,529 (Cont’d) Adjustments: Depreciation and amortizatio
Slide 42: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 4 2 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, 2022 2021 Measures Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders (Cont’d) Net income $ 54,529 $ 17,233 Adjustments: Depreciation and amortizatio
Slide 43: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 4 3 PECO | N A S D A Q L I S T E D Non-GAAP Year Ended December 31, 2023 Year Ended December 31, 2022 Measures Calculation of EBITDAre (Cont’d) Net income Adjustments: $ 63,762 $ 54,529 Depreciation and amortization 236,443 236,224 Interes
Slide 44: Non-GAAP Measures (Cont'd)
G R O C E RY C E N T ERED . C O M M U N I T Y F O C U S ED | 4 4 PECO | N A S D A Q L I S T E D December 31, 2023 December 31, 2022 Non-GAAP Net debt: Measures Total debt, excluding discounts, market adjustments, and deferred financing expenses $ 2,011,093 $ 1,937,142 (Cont’d) Less: Cash and cash eq
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