Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — H1 2018 Earnings Presentation
32 slides from Merlin Properties Socimi's earnings presentation, Jul 31, 2018
Slide 1: 6M2018 Results Presentation
6M2018 RESULTS PRESENTATION 31 July 2018
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Certain statements in this document presentation in other jurisdictions may RELIED ON IN CONNECTION WITH ANY MERLÍN Properties, SOCIMI, S.A. (the regarding the market and competitive also be restricted by law and persons CONTRACT OR COMMITMENT TO SEL
Slide 3: Contents
CONTENTS 6M18 Financial results ISMAEL CLEMENTE CEO Portfolio performance Offices Shopping centers Logistics MIGUEL OLLERO Valuation and debt position GM / COO Value creation Closing remarks DAVID BRUSH CIO
Slide 4: Key highlights
Key highlights | Financial performance • +3.5% Rents YoY • EPS up 8.6% YoY • EPRA NAV per share up 18.2% YoY to € 14.06 • DPS guidance of € 0.50 per share reconfirmed • TSR of 8.1% in the period (22.1% LTM) • Leverage further reduced to 43.3% Operating performance • Strong letting activity in the pe
Slide 5: 6M18 Financial Results
6M18 FINANCIAL RESULTS
Slide 6: +18.2% increase in EPRA NAV per share and +8.6% in IFRS EPS YoY
6M18 Financial Results | +18.2% increase in EPRA NAV per share and +8.6% in IFRS EPS YoY (€ million) 6M18 6M17 YoY Gross Rents 243.2 235.1 +3.5% Net rents 209.5 208.0 +0.7% Testa and Aedas EBITDA(1) service fee 194.8 198.6 (1.9%) FFO(2) 140.9 148.6 (5.2%) AFFO 136.1 142.6 (4.6%) IFRS net profit 457.
Slide 7: Bridge gross rents
6M18 Financial Results | Bridge gross rents Robust LfL growth in all asset categories except offices, still penalised by the exits of Renault and Huawei. If excluded +4.4% LfL in offices and +4.3% overall (€m) (0.6%) Office Shopping centers +3.2% LfL(1) Logistics +7.8% +2.0% H. Street retail +3.8% O
Slide 8: Offices
OFFICES
Slide 9: Offices | Rent bridge and breakdown
Offices | Rent bridge and breakdown Offices LfL affected by Renault-Adequa and Huawei-Las Tablas. If excluded +4.4% LfL (€m) LfL(1) (0.6%) 108.4 (0.6) +2.4 110.2 6M 2017 Like-for-Like Balance acquisitions, 6M 2018 growth disposals and other Lfl growth by area Occupancy by area 1Q18 2Q18 +3.4% if Ren
Slide 10: Offices | Leasing activity
Offices | Leasing activity Rental growth accelerating (+4.7% release spread vs +3.4% FY17) Contracted Release # sqm spread contracts Tenants Madrid 121,644 +3.8% 165 Castellana 280 Atica Avda. Burgos 210 PE Sanchinarro +35% +26% 6,176 +15% Release spread Release spread sqm Release spread Barcelona 4
Slide 11: Offices | Coworking: Roll out of Loom and launch of Twisttt
Offices | Coworking Roll out of Loom and launch of Twisttt • Coworking spaces fostering the most • Coworking spaces in MERLIN buildings innovative ecosystem to enhance our offer and serve as expansion • Mono-tenant, third party buildings space for existing occupiers • Appealing to entrepreneurs and
Slide 12: Shopping Centers
SHOPPING CENTERS
Slide 13: Shopping Centers | Rent bridge and breakdown
Shopping Centers | Rent bridge and breakdown Steady LfL GRI growth in the porfolio. Footfall and sales affected by Flagship capex and Catalonia (€m) LfL(1) +3.2% 47.3 +1.4 (1.5) 47.2 6M 2017 Like-for-Like Balance acquisitions, 6M 2018 growth disposals and other Visitors (million) Tenant sales (milli
Slide 14: Shopping Centers | Leasing activity and occupancy
Shopping Centers | Leasing activity and occupancy Upwards trend in performance with a release spread of +3.4% Release spread # contracts Tenants All portfolio +3.4% 201 Contracted Net Occupancy Change vs sqm Absorption 30/06/18 31/03/18 (bps) • 4,328 sqm of units(1) affected All portfolio 49,469 (5,
Slide 15: Logistics
LOGISTICS
Slide 16: Logistics | Rents bridge and breakdown
Logistics | Rents bridge and breakdown Significant LfL growth driven by meaningful increase in rents. Temporary drop in occupancy due to the insolvency of one tenant in Madrid (€m) LfL(1) +7.8% +3.4 24.3 19.5 +1.3 6M 2017 Like-for-Like growth Balance acquisitions, 6M 2018 disposals and other LfL gro
Slide 17: Logistics | Leasing activity
Logistics | Leasing activity Outstanding release spread in all markets (+13.4% all portfolio) Contracted Release # sqm spread contracts Tenants Madrid 161,595 +9.2% 7 Barcelona 43,378 +13.4% 8 Other 36,410 +15.9% 5 TOTAL 241,383 +13.4% 20 76,024 +11.9% 29 ı 17 ı
Slide 18: Valuation and Debt Position
VALUATION AND DEBT POSITION
Slide 19: Valuation and debt position | GAV summary
Valuation and debt position | GAV summary Gross asset value approaching € 12bn Passing 4.1% 5.2% 4.5% 6.2% - 4.5% Gross yield 11,755 11,252 5,400 GAV TOTAL with minority stakes (€ million) 2,413 Shopping centers High Street Retail Minority stakes 1,797 Logistics 871 Offices TOTAL Other(1) 771 503 €/
Slide 20: Valuation and debt position | GAV bridge
Valuation and debt position | GAV bridge +4.5% GAV growth in the semester (3.7% LfL) (€m) +4.5% 53.0 11,755.0 321.8 91.8 (0.0) 34.5 11,254.0 (€ million) GAV Acquisitions Disposals Capex & WIP Revaluation(1) Testa Residencial(2) GAV Dec 2017 6M18 6M18 6M18 6M18 cancellation Jun 2018 Source: Company (
Slide 21: Valuation and debt position | GAV drivers
Valuation and debt position | GAV drivers Appraisals reflecting market yields, rent evolution and progressive adaptation of the portfolio to market 9.7% +4.4% +3.4% 8.1% 7.2% 3.7% GAV +2.5% +2.8% 6.2% MERLIN average (1) like-for-like 4.6% MERLIN average(1) evolution(1) Office Offices Shopping center
Slide 22: Valuation and debt position | Debt position
Valuation and debt position | Debt position Further leverage reduction. S&P has upgraded outlook to positive (€ million) 30/06/2018 31/12/2017 Gross financial debt 5,282 5,413 Cash 190(1) 509(1) Net financial debt 5,092 4,904 (Metrics) LTV 43.3% 43.6% Average cost 2.21% 2.23% Fixed interest rate 99.
Slide 23: Value Creation
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Slide 24: Value creation | Acquisitions - Almada
Value creation | Acquisitions - Almada Almada is one of Portugal’s premier retail and leisure destinations • Undisputed dominant shopping and leisure destination in the south bank of river Tagus in Lisbon. • Almada is one of the most popular beach destinations in Lisbon for both tourists and residen
Slide 25: Almada: key growth drivers
Value creation | Acquisitions - Almada Almada is one of the Portugal’s premier retail and leisure destination • Reversionary potential Key growth drivers -7 3% of GRI generated by tenants with leases signed in the economic downturn (2011) •V ariable rent increase - Sales up +3.8% LTM - Variable rent
Slide 26: Value creation | Acquisitions - other
Value creation | Acquisitions - other Zen Tower Cabanillas X Toledo-Seseña • Located in Dom Joao II, the main avenue in • Located in the third logistics ring of Madrid • Development of a facility in the A-4 Parque das Nações in Lisbon (50 kms. from city center), which covers corridor, in an area wit
Slide 27: Value creation | Acquisitions - other
Value creation | Acquisitions - other Gran Europa Portfolio Valencia - Ribarroja • Portfolio of 2 logistics assets: • Most prime logistics axis in Valencia, · (i) 26,775 sqm in Vitoria-Jundiz fully where logistics are surging let to DHL (under a Mercedes-Benz • Privileged location in the junction be
Slide 28: Value creation | Landmark I progress
Value creation | Landmark I progress Torre Glòries Torre Chamartin Adequa #1 • Phase I (floors 2-24) reaching completion • Opening license obtained in June • Refurbishment of former Renault • Phase II includes floors 25-30, vertical • Executed on time and on budget and integration in the complex com
Slide 29: Value creation | Flagship progress
Value creation | Flagship progress X-Madrid Arturo Soria Larios • Groundbreaking shopping center focused on • Deep renovation of façade, common • Acquisition of 3rd party owned units experiences and cutting edge retailers areas, terraces and parking (+16,500 sqm GLA) and subsequent full • Works adva
Slide 30: Closing Remarks
CLOSING REMARKS
Slide 31: Closing remarks
Closing remarks | • Solid set of results delivering excellent return to shareholders (TSR +8.1%YTD) Financial • Steady growth in EPRA NAV per share (€ 14.06, +6% vs 31/12/17) performance • DPS guidance of € 0.5 per share (+9% YoY) reconfirmed • LTV reduced to 43.3% • Offices. Rental growth accelerat
Slide 32: Paseo de la Castellana, 257 28046 Madrid info@merlinprop.com
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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