Parque Arauco S.a. · BCS:PARAUCO
Parque Arauco — Q1 2018 Earnings Presentation
40 slides from Parque Arauco's earnings presentation, August 2018
Slide 1: Investor Presentation First Quarter 2018
parque arauco Investor Presentation First Quarter 2018 1 INVESTOR PRESENTATION [First Quarter 2018] CONTACTS Sarah Inmon (Head of Investor Relations) Francisco Moyano (Corporate Finance Manager) Claudio Chamorro (CFO) Tel: (562) 22990510 | Email: ir@parauco.com
Slide 2: Disclaimer, Introduction, Investment Highlights, Our Operations, Future Development
parque arauco Investor Presentation First Quarter 2018 « 4 17 2 IMPORTANT INVESTMENT DISCLAMER HIGHLIGHTS 5 INTRODUCTION 35 FUTURE DEVELOPMENT 11 OUR OPERATIONS
Slide 3: Important Disclaimer
« parque arauco Investor Presentation First Quarter 2018 IMPORTANT DISCLAIMER This document has been prepared by The information contained herein has been Parque Arauco for the purpose of providing prepared to assist interested parties in general information about the Company. making their own evalu
Slide 4: 1. Introduction
parque arauco Investor Presentation First Quarter 2018 4 1. INTRODUCTION
Slide 5: Parque Arauco at a Glance
PARQUE ARAUCO parque arauco Investor Presentation First Quarter 2018 AT A GLANCE PARQUE ARAUCO OPERATIONAL METRICS BY COUNTRY Parque Arauco is the third largest shopping center operator in Chile and 15.3% Peru, and the fourth largest in Colombia. 39.8% 27.8% Indicator / country Chile Peru Colombia T
Slide 6: In the Last Six Years Parque Arauco Has Doubled GLA, NOI and AFFO
parque arauco Investor Presentation IN THE LAST SIX YEARS First Quarter 2018 PARQUE ARAUCO HAS DOUBLED GLA, NOI AND AFFO GLA(1) M2 1982 Parque Arauco Kennedy opens as first 2011 Capital increase for US$145 MM +1.8X shopping center in Chile 1,012,000 1,018,000 1995 Parque Arauco S.A. IPO 2014 Capital
Slide 7: The Spread Over the Cost of Capital of Our Last Projects Is Approximately 3%
parque arauco Investor Presentation First Quarter 2018 THE SPREAD OVER THE COST OF CAPITAL OF OUR LAST PROJECTS IS APPROXIMATELY 3% 3% 9% 6% 7 Real WACC (1) Spread Over Real WACC Real Cap Rate (2) Source: Parque Arauco 1. Weighted Average Cost of Capital 2. Real cap rate is the yield on cost rate co
Slide 8: Total Return
« parque arauco Investor Presentation First Quarter 2018 TOTAL RETURN Parque Arauco’s value creation is proven by the fact that it has had one of the highest “Total Return” of the real estate sector in the last years TOTAL RETURN 1, LAST 5 YEARS TOTAL RETURN 1, LAST 10 YEARS ANNUALIZED, LOCAL CURREN
Slide 9: Revenue Type and Contract Duration
« parque arauco Investor Presentation First Quarter 2018 REVENUE TYPE AND CONTRACT DURATION FIXED VS VARIABLE RENTAL REVENUES CONTRACT LENGTH AS OF MARCH 31, 2018 (BASED ON % OF REVENUES) 15% Other Revenues 85% 99 Rental Revenues 40% 100% 12% Variable 12% Revenues 16% 32% 88% Fixed ‹2 YEARS 2-3 YEAR
Slide 10: Purpose, Mission and Corporate Values
PURPOSE, MISSION parque arauco Investor Presentation First Quarter 2018 AND CORPORATE VALUES OUR VALUES CORPORATE PURPOSE « Our purpose is to create spaces that contribute to improving people’s lives. Openness va to change and inno tion « Our mission is to be leaders in 10 10 developing and operatin
Slide 11: 2. Our Operations
parque arauco Investor Presentation First Quarter 2018 11 2. OUR OPERATIONS
Slide 12: Iconic and Dominant Shopping Centers in Chile, Peru and Colombia
PARQUE ARAUCO HAS ICONIC AND DOMINANT parque arauco Investor Presentation First Quarter 2018 SHOPPING CENTERS IN CHILE, PERU AND COLOMBIA PARQUE ARAUCO HAS ICONIC SHOPPING CENTERS IN ALL THREE COUNTRIES PARQUE ARAUCO KENNEDY ARAUCO MAIPÚ ARAUCO ESTACIÓN CHILE CHILE CHILE 12 LARCOMAR MEGAPLAZA NORTE
Slide 13: Chilean Portfolio
« parque arauco Investor Presentation First Quarter 2018 CHILEAN PORTFOLIO % Owned Year of Chile GLA (m2) Ownership GLA (m2) Occupancy incorporation IN CHILE PARQUE ARAUCO HAS: ParqueAraucoKennedy 111,000 100% 111,000 99.1% 1982 Arauco Maipú 74,000 100% 74,000 99.2% 1993 7 Regional shopping centers
Slide 14: Peruvian Portfolio
« parque arauco Investor Presentation First Quarter 2018 PERUVIAN PORTFOLIO % Owned Year of Peru GLA (m2) Ownership GLA (m2) Occupancy incorporation MegaPlaza Norte 111,500 50% 55,750 97.6% 2006 IN PERU IN THE COMPANY HAS: MegaPlaza Express Villa Chorrillos 8,000 50% 4,000 97.4% 2009 Larcomar 27,000
Slide 15: Colombian Portfolio
« parque arauco Investor Presentation First Quarter 2018 COLOMBIAN PORTFOLIO % Owned GLA Year of Colombia GLA (m2) Ownership (m2) Occupancy incorporation Parque Arauco has: Parque Arboleda 41,000 55% 22,550 96.4% 2010 3 Regional shopping centers Parque Caracoli Parque La Colina 38,500 62,500 100% 10
Slide 16: 3. Investment Highlights
parque arauco Investor Presentation First Quarter 2018 16 3. INVESTMENT HIGHLIGHTS
Slide 17: Investment Highlights
« parque arauco Investor Presentation First Quarter 2018 INVESTMENT 6. HIGHLIGHTS Important 1. Consistent results growth opportunities. in a challenging macroeconomic environment. 2. 5. 17 Stable and diversified revenues. Conservative debt structure and outstanding financial performance. Strong comm
Slide 18: Positive but Weaker Macroeconomic Outlook and Attractive Industry Dynamics
CONSISTENT RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT parque arauco Investor Presentation First Quarter 2018 POSITIVE BUT WEAKER MACROECONOMIC OUTLOOK AND ATTRACTIVE INDUSTRY DYNAMICS Parque Arauco is positioned in countries with strong macroeconomic prospects. Chile Peru Colombia GDP GROWTH
Slide 19: Results Have Been Positive in All Three Countries
CONSISTENT RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT parque arauco Investor Presentation First Quarter 2018 RESULTS HAVE BEEN POSITIVE IN ALL THREE COUNTRIES GLA TENANT SALES 1 COUNTRY LEVEL COUNTRY LEVEL (M2) (US$ MM) REVENUES1 (US$ MM) EBITDA1,2 (US$ MM) +0.9% +5.1% +6.6% +6.5% 453,500 45
Slide 20: Consistent Same Store Growth and a Healthy Occupancy Cost
CONSISTENT RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT parque arauco Investor Presentation First Quarter 2018 CONSISTENT SAME STORE GROWTH AND A HEALTHY OCCUPANCY COST CHILE SAME STORE SALES (%) CHILE SAME STORE RENT (%) CHILE OCCUPANCY COST (%) 7.0 10.9% 10.5% 3.7 3.4 1.2 2.6 58 % 42 % 1.7 2
Slide 21: Diversifies Market Risks by Country, Format and Socio-Economic Level
STABLE AND DIVERSIFIED REVENUES parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO DIVERSIFIES ITS MARKET RISKS AT A COUNTRY, FORMAT, AND SOCIO-ECONOMIC LEVEL COUNTRY LEVEL DIVERSIFICATION FORMAT LEVEL DIVERSIFICATION SOCIO-ECONOMIC DIVERSIFICATION (% REVENUES) (% REVENUES) (% REVE
Slide 22: 29% Market Share in Chile: Outlet Market Leader
STABLE AND DIVERSIFIED REVENUES parque arauco Investor Presentation First Quarter 2018 WITH A 29% MARKET SHARE IN CHILE, PARQUE ARAUCO IS THE OUTLET MARKET LEADER IN THE COUNTRIES WHERE WE OPERATE SOME OF THE OUTLETS CURRENTLY IN OUR PORTFOLIO ARAUCO PREMIUM OUTLET ARAUCO PREMIUM OUTLET ARAUCO PREMI
Slide 23: Supporting the Globalization of Brands Entering the Andean Region
STRONG COMMERCIAL RELATIONSHIPS WITH LOCAL AND GLOBAL BRANDS parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO IS SUPPORTING THE GLOBALIZATION OF SEVERAL BRANDS ENTERING THE ANDEAN REGION RETAIL PRESENCE BY COUNTRY1 (% OF GLOBAL BRANDS IN COUNTRY) 53.0% 52.7% 23 44.0% 1st in Colom
Slide 24: Important Recognitions from Local and International Organizations
SOLID CORPORATE GOVERNANCE AND INCREASED CONCERN WITH SUSTAINABILITY parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO HAS RECEIVED IMPORTANT RECOGNITIONS FROM LOCAL AND INTERNATIONAL ORGANIZATIONS WORKPLACE RECOGNITION MANAGEMENT RECOGNITION 24 Parque Arauco was recognized by Gre
Slide 25: Advancing Our Sustainability Strategy
parque arauco Investor Presentation SOLID CORPORATE GOVERNANCE AND INCREASED CONCERN WITH SUSTAINABILITY First Quarter parque 2018 arauco Investor Presentation First Quarter 2018 IN THE LAST YEARS WE HAVE CONTINUED ADVANCING OUR SUSTAINABILITY STRATEGY 2017 SUSTAINABILITY AGENDA GENERATING SOCIAL VA
Slide 26: Policy to Finance Projects with 50% Debt and 50% Equity
CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO’S POLICY IS TO FINANCE PROJECTS WITH 50% DEBT AND 50% EQUITY, AND IS COMFORTABLY WITHIN ALL ITS COVENANTS LIABILITIES / EQUITY NET FINANCIAL DEBT / EQUITY <_1.40x <_
Slide 27: The Company Has a Conservative Debt Structure
CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE parque arauco Investor Presentation First Quarter 2018 THE COMPANY HAS A CONSERVATIVE DEBT STRUCTURE LIABILITY AMORTIZATION PROFILE AND DURATION1 SUMMARY OF DEBT BY CURRENCY March 31, 2018 (US$MM) 389 10% Average Duration: 6.3 Years C
Slide 28: The Cost of Debt Has Decreased in the Past 5 Years
CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE parque arauco Investor Presentation First Quarter 2018 THE COST OF DEBT HAS DECREASED IMPORTANTLY IN THE PAST 5 YEARS DATE: 04 / 17 / 2015 BASE: 1,62 % SPREAD: 1,68 % DURATION: 14,77 GENERIC LONG-TERM BOND DATE: 12 / 12 / 2014 DATE: 1
Slide 29: 1 Million M2 and 2% Market Participation in Latin America
IMPORTANT GROWTH OPPORTUNITIES parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO HAS 1 MILLION M2 AND A 2% MARKET PARTICIPATION IN LATIN AMERICAN AND A 9% MARKET PARTICIPATION IN THE ANDEAN REGION MÉXICO 18,4 GLA: Million m2 39% of total ANDEAN REGION 29 11,1 GLA: Million m2 24% o
Slide 30: The Latin American Real Estate Region Is Quickly Developing
IMPORTANT GROWTH OPPORTUNITIES parque arauco Investor Presentation First Quarter 2018 THE LATIN AMERICAN REAL ESTATE REGION IS QUICKLY DEVELOPING LATIN AMERICAN RETAIL REAL ESTATE HISTORY HIGHLIGHTS Walmart sells 10 assets in Chile for ~US$ 650 million to insurance com- First condominium First condo
Slide 31: Participates in Markets with a Growing Retail Market
IMPORTANT GROWTH OPPORTUNITIES parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO PARTICIPATES IN MARKETS WITH A GROWING RETAIL MARKET GLA PER 1,000 INHABITANTS1 AT KEARNEY GRDI WINDOW OF OPPORTUNITY2 OPENING PEAKING MATURING CLOSING Brazil 2,500 Mexico Colombia Chile 2,000 Peru 31
Slide 32: Omnichannel Shopping Is Increasing in Importance in Latin America
IMPORTANT GROWTH OPPORTUNITIES parque arauco Investor Presentation First Quarter 2018 OMNICHANNEL SHOPPING IS INCREASING IN IMPORTANCE IN LATIN AMERICA PARQUE ARAUCO IS INVESTING ECOMMERCE SALES AS A % OF TOTAL RETAIL SALES1 IN TECHNOLOGY ANDEAN REGION UNITED STATES 2012 2012 7% Digital New US$ 1% 9
Slide 33: Focus on Capital Cities
IMPORTANT GROWTH OPPORTUNITIES parque arauco Investor Presentation FOCUS ON CAPITAL CITIES First Quarter 2018 Parque Arauco is concentrated inthe capital cities of Santiago, Lima and Bogota. PERU CHILE COLOMBIA LIMA SANTIAGO BOGOTA 33 Megaplaza Norte Parque Arauco Kennedy Parque La Colina Larcomar A
Slide 34: Growth from Greenfield Projects, M&A and Minority Interest Purchases
IMPORTANT GROWTH OPPORTUNITIES parque arauco Investor Presentation First Quarter 2018 PARQUE ARAUCO’S GROWTH HAS COME FROM GREENFIELD PROJECTS, M&A AND MINORITY INTEREST PURCHASES TOTAL INVESTMENT (US$ MM) 183 -63 1,390 319 4% Landbank 34 13% M&A 363 14% Minority Interest 34 200 69% Greenfields 244
Slide 35: 4. Future Developments
parque arauco Investor Presentation First Quarter 2018 35 4. FUTURE DEVELOPMENTS
Slide 36: Future Developments 2018 and Onwards
FUTURE DEVELOPMENTS parque arauco Investor Presentation First Quarter 2018 2018 AND ONWARDS TOTAL ESTIMATED TOTAL TOTAL % INVESTMENT TOTAL NEW PROJECTS TYPE COUNTRY FORMAT OPENING GLA GLA OWNERSHIP LOCAL US$ MM2 DATE M² M² CURRENCY¹ Parque Angamos Development Chile Neighborhood 2H18 11,000 55% 6,050
Slide 37: New Expansion at Parque Arauco Kennedy
FUTURE DEVELOPMENTS parque arauco Investor Presentation First Quarter 2018 2018 AND ONWARDS WE ANNOUNCED A NEW EXPANSION AT PARQUE ARAUCO KENNEDY Phase I Details Hotel Operator Construction start: Opening date: 2017 2021 Investment: Additional GLA: UF 5,355,000 11,000 m2 Construction Company: 5 star
Slide 38: Landbank
LANDBANK parque arauco Investor Presentation First Quarter 2018 TOTAL COST TOTAL COST LANDBANK BY TOTAL COST (MARCH 2018) NAME M2 % OWNERSHIP (LOCAL CURRENCY)1 (US$ MM)2 Quilicura 25,486 100% 78,000 3 Buenaventura 115,864 100% 455,000 20 Chicureo 47,614 100% 206,000 9 34% Los Andes 39,254 100% 117,0
Slide 39: Glossary
« parque arauco Investor Presentation First Quarter 2018 GLOSSARY ADJUSTED FFO MARGIN: AFFO / revenues GREENFIELD PROJECTS: Organic development of PIPELINE: Greenfield and expansion projects under new shopping centers development AFFO: Adjusted Funds From Operations: Net Profit Depreciation & Amorti
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