Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q2 2023 Earnings Presentation
26 slides from Global Net Lease's earnings presentation, Aug 3, 2023
Slide 1: Global Net Lease Second Quarter 2023 Investor Presentation
Global Net Lease Pictured – McLaren Campus in Woking, U.K. Second Quarter 2023 Investor Presentation
Slide 2: REIT Merger and Internalization Update
REIT MERGER AND INTERNALIZATION UPDATE REIT Merger and Internalization Update(1) Global Net Lease signed definitive agreement to merge with The Necessity Retail REIT (Nasdaq: RTL) Transaction is expected to close in September 2023 Accretive transaction creates the third largest listed net leas
Slide 3: Second Quarter 2023 Company Highlights
SECOND QUARTER 2023 COMPANY HIGHLIGHTS Best-in-Class, Mission Critical, Net Lease Focused Portfolio: Featuring high portfolio occupancy of 98% and complete Original Cash 1 Rent collection(1) for the eleventh consecutive quarter, highlighting strong overall operating performance Highly Differentiated
Slide 4: Well Positioned Portfolio
WELL POSITIONED PORTFOLIO Portfolio Overview Q2’23 Properties 317 Square Feet (millions) 39.6 Tenants 139 Industries 51 Countries and Territories 11 Leased 98% Weighted Average Remaining Lease Term(1) 7.6 years % of SLR derived from Investment Grade Tenants(2)(3) 60.0% % of leases with contractual r
Slide 5: Geographically Balanced & High Investment Grade Tenancy Supports Continued Growth
GEOGRAPHICALLY BALANCED & HIGH INVESTMENT GRADE TENANCY SUPPORTS CONTINUED GROWTH Credit Rating(1)(2) Geography(1) Not Rated 4% United Kingdom 22% Investment Grade Non-Investment 60% Grade Rated 36% Netherlands 4% United States & Canada 60% Finland 4% Germany 3% France 2% Luxembourg 2% Channel Islan
Slide 6: Attractive Portfolio in Line with Investment Grade Rated Peers
ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS Globally diversified portfolio leased primarily to Investment Grade rated tenants with contractual rental increases Occupancy Rate Percentage Investment Grade Tenants(1) 99.5% 99.4% 99.2% 60.0% 98.0% 51.3% 49.1% 31.6% 90.5% 15.6% LXP BNL
Slide 7: Best-in-Class Top Ten Tenant Base
BEST-IN-CLASS TOP TEN TENANT BASE Top Ten Tenants % of Tenant Credit Rating Country Property Type SLR(1) Caa1/ B- U.K. Industrial 5% U.S. / Baa2** Distribution 4% Canada U.S. / Industrial / Baa1 4% Italy Distribution B1* U.K. Office 3% Aaa** U.S. Office 3% Industrial / Baa2* U.S. 3% Distribution Aa3
Slide 8: Focus on World-Class Tenants in Quality Sovereign Debt Rated Countries
FOCUS ON WORLD-CLASS TENANTS IN QUALITY SOVEREIGN DEBT RATED COUNTRIES Best-in-class portfolio leased to primarily Investment Grade(1) rated tenants across North America and Europe Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) The U.S. Finland Luxembourg Germany Canada U.K. Franc
Slide 9: Comprehensive Hedging Program
COMPREHENSIVE HEDGING PROGRAM Comprehensive hedging program reduces adverse impacts from a volatile currency and interest rate environment Hedging Foreign Currency Exchange Risk • GNL locks in fixed rates through forward contracts and converts foreign currencies into USD quarterly, stabilizing USD c
Slide 10: Differentiated Investment Process
DIFFERENTIATED INVESTMENT PROCESS Diligent underwriting process and on-going tenant monitoring results in a portfolio of creditworthy tenants who perform under their long-term lease commitments Structuring & Pricing • Long-term net leases with contractual rental increases(1) • Disciplined contract a
Slide 11: Diligent Acquisition Program
DILIGENT ACQUISITION PROGRAM Management continues to diligently evaluate domestic and international sale-leaseback transactions to generate attractive risk-adjusted returns Acquisition Credit Property Purchase Price Wtg. Avg. Wtg. Avg. Lease Acquisition Name Status Rating Type (in mm)(1) Cap Rate(2)
Slide 12: Continued Proactive Leasing Renewal and Expansion Activity
CONTINUED PROACTIVE LEASING RENEWAL AND EXPANSION ACTIVITY GNL continued the renewal leasing momentum it generated in Q1’23 and completed an additional eleven lease renewals and one tenant expansion project in Q2’23. Year-to-date(1), GNL’s leasing activity totaled 1.7 million square feet and nearly
Slide 13: Global Geographic Balance
GLOBAL GEOGRAPHIC BALANCE U.S. and Canada Europe Number of Assets: 236 Number of Assets: 81 Weighted Average Remaining Lease Term: 7.9 years(1) Weighted Average Remaining Lease Term: 6.9 years(1) % of GNL SLR: 60.4%(2) % of GNL SLR: 39.6%(2) Note: Metrics as of June 30, 2023, unless otherwise noted.
Slide 14: Second Quarter Performance Highlights
SECOND QUARTER PERFORMANCE HIGHLIGHTS Q2’23 Key Operating Highlights • In Q2’23(1), GNL completed eleven lease renewals totaling approximately 803,500 square feet and one tenant expansion project totaling 104,000 square feet • The renewed leases are expected to generate $20.2 million of net new stra
Slide 15: Second Quarter Key Metrics
SECOND QUARTER KEY METRICS GNL Debt Metrics Debt by Currency CAD 1% Metric Q2’23 GBP 18% Net Debt to Enterprise Value(1) 65.2% Net Debt to Adjusted EBITDA (Q2’23 annualized)(2) 8.3x Interest Coverage Ratio(3) 2.9x USD Weighted Average Interest Rate(4) 4.8% EUR 59% 22% Weighted Average Debt Maturity(
Slide 16: Leadership Overview
LEADERSHIP OVERVIEW Management James L. Nelson Chris Masterson Chief Executive Officer and President Chief Financial Officer, Treasurer and Secretary • Joined GNL as an Independent Board Member in March 2017 • Currently serves as Chief Financial Officer of American • Currently serves Chairman of the
Slide 17: Forward Looking Statements
FORWARD LOOKING STATEMENTS The statements in this communication that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. In addition, words such as “may,” “w
Slide 18: Forward Looking Statements (Continued)
FORWARD LOOKING STATEMENTS (CONTINUED) This presentation contains certain statements that are the Company’s and Management’s hopes, intentions, beliefs, expectations, or projections of the future and might be considered to be forward-looking statements under federal securities laws. Prospective inve
Slide 19: Risk Factors
RISK FACTORS The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements. • We may be unable to acquire properties on advantageous terms or our propert
Slide 20: Risk Factors (Continued)
RISK FACTORS (CONTINUED) • Failure to complete the Proposed Transactions could negatively impact our stock price and our future business and financial results. • There can be no assurance that we could become “internalized” or “self-managed” without the Internalization Merger. • The opinions of the
Slide 21: Disclaimers
DISCLAIMERS • This presentation includes estimated projections of future operating results. These projections were not prepared in accordance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation
Slide 22: Definitions
DEFINITIONS • Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appro
Slide 23: Definitions (Continued)
DEFINITIONS (CONTINUED) • In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as acquisition, transaction and other costs, as well as certain other costs that are considered to be non-core, such as debt extinguishment costs, fire loss and other costs related to da
Slide 24: Definitions (Continued)
DEFINITIONS (CONTINUED) • As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decis
Slide 25: Non-GAAP Reconciliations
NON – GAAP RECONCILIATIONS Three Months Ended (Amounts in thousands) June 30, 2023 June 30, 2022 EBITDA: Net loss $ (26,258) $ (716) Depreciation and amortization 37,297 39,359 Interest expense 27,710 23,449 Income tax expense 3,508 2,515 EBITDA 42,257 64,607 Impairment charges – 16,031 Equity based
Slide 26: Non-GAAP Reconciliations
NON – GAAP RECONCILIATIONS (Amounts in thousands) Revenue from tenants – Quarter Ended June 30, 2023 $ 95,839_ Foreign currency translation impact (using average foreign currency exchange rates for the second quarter of 2022) 168_ Revenue from Tenants (year over year constant currency adjusted): $ 9