Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Q1 2024 Earnings Presentation
51 slides from Phillips Edison &'s earnings presentation, Apr 26, 2024
Slide 1: Investor Presentation
April 2024 Investor Presentation
Slide 2: Safe Harbor and Non-GAAP Disclosures
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 2 PECO | N A S D A Q L I S T E D Safe Harbor and Non-GAAP Disclosures PECO’s Safe Harbor Statement This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, an
Slide 3: PECO at a Glance
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 PECO | N A S D A Q L I S T E D PECO at a Glance ABR from Founded/IPO Grocery- Total GLA Leased 1991/ Nasdaq Anchored Properties Occupancy PECO Centers 284 32.4M 2021 97% Square Feet 97% We create great omni-channel We are an experienced o
Slide 4: Our Focused and Differentiated Strategy
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 PECO | N A S D A Q L I S T E D Our Focused and Differentiated Strategy Exclusively Focused on Omni-Channel Grocery-Anchored Neighborhood Shopping Centers Key Elements of Our Strategy Cycle-Tested and Resilient Advantage #1 or #2 grocery
Slide 5: Grocery-Anchored Portfolio
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D 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
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 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 Necessity-Based High Foot Traffic Omni-Channel • Consumer staple goods and services • U.S. consumers visit gr
Slide 7: Strategic Presence in Suburban Markets
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 7 PECO | N A S D A Q L I S T E D Strategic Presence in Suburban Markets PECO is well-positioned for future growth with significant presence in Sun Belt states and growing U.S. cities • 284 Properties Across 31 States • 50% of ABR from Sun B
Slide 8: PECO Aligns with Leading Grocer Demographics
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 8 PECO | N A S D A Q L I S T E D PECO Aligns with Leading Grocer Demographics Demand for space reinforces the demographic strength of our trade areas AVERAGE 3-MILE AVERAGE 3-MILE MEDIAN POPULATION HOUSEHOLD INCOME (thousands) (thousands) $
Slide 9: How PECO Defines Quality
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 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 merchandis
Slide 10: Grocery-Anchored Advantage
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 0 PECO | N A S D A Q L I S T E D Grocery-Anchored Advantage 2.4% 85% PECO Grocer Health PECO ABR from #1 Ratio(1) or #2 Grocery Anchor by Sales(2) 97% of our rents come from grocery-anchored centers +35% $705 Grocer Sales PSF Growth PECO
Slide 11: Cycle-Tested Performance
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 1 PECO | N A S D A Q L I S T E D Cycle-Tested LEADING PERFORMANCE Performance LEASED PORTFOLIO OCCUPANCY (1) Performance following the 2008 Global 89.6% Financial Crisis highlights the resiliency 85.4% 82.6% of PECO’s grocery-anchored por
Slide 12: Cycle-Tested Performance
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 2 PECO | N A S D A Q L I S T E D Cycle-Tested LEADING PERFORMANCE Performance LEASED PORTFOLIO OCCUPANCY (1) PECO’s grocery-anchored portfolio 97.4% 97.4% 97.2% demonstrated further resilience during 96.3% 2020 and the pandemic-induced do
Slide 13: Local Neighbors
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 3 PECO | N A S D A Q L I S T E D Local Neighbors LOCAL NEIGHBOR COMPOSITION % of Local ABR as of 03/31/24 TOTAL PORTFOLIO COMPOSITION % of ABR as of 03/31/24 4% 27% of PECO’s ABR is derived from Local 9% Neighbors, comprised primarily of:
Slide 14: Strong Local Neighbors
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 4 PECO | N A S D A Q L I S T E D Strong Local Neighbors THE BACKYARD KITCHEN & NORTHSTAR TAVERN HUNTER SALON COCKTAILS NORMANDALE VILLAGE VINEYARD CENTER MURPHY MARKETPLACE BLOOMINGTON, MN TEMPLETON, CA MURPHY, TX
Slide 15: Math Behind Local Neighbors
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 5 PECO | N A S D A Q L I S T E D Math Behind Local Neighbors PECO’s inline Local Neighbors offer attractive economics, have high retention rates and achieve above average inline renewal spreads • Inline Local Neighbors are resilient and h
Slide 16: Retailers Growing with PECO
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 6 PECO | N A S D A Q L I S T E D Retailers Growing with PECO Dedicated Team Focused on Building Strong Connections with Leading and Expanding Neighbors LOCAL RESTAURANTS HEALTH AND BEAUTY MEDICAL (“MEDTAIL”)
Slide 17: Suburban Market Advantage
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 7 PECO | N A S D A Q L I S T E D Suburban Market Advantage PECO’s suburban markets offer retailers several advantages in today's environment • Comparable, if not superior, visit-per-location trends compared to larger MSAs • Less competiti
Slide 18: Suburban Market Advantage
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 8 PECO | N A S D A Q L I S T E D Suburban Market 112,117 371,950 52% of Advantage 61% of total total 346,261 108,129 locations locations 105,622 322,159 • National retailers are raising Top 25 DMA Chain Avg Non-Top 25 long-term store base
Slide 19: Highly Diversified Neighbor Mix Led by Top Grocers
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 1 9 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 5.9% 5 0.7% 61 5.5% 35 0.7% 32 4.0% 9 0.6% 23 3.7% 2 0.
Slide 20: Investments
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Investments 20
Slide 21: 2024 Acquisition Summary
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 2 1 PECO | N A S D A Q L I S T E D 2024 Acquisition Summary Q1 2024 Contract Price Grocery Location GLA Acquisitions (in thousands) Anchor Shoppes at Lake Mary Lake Mary, FL 74,234 26,100 Publix Goolsby Pointe Riverview, FL N/A 2,027 N/A De
Slide 22: Development and Redevelopment Activity Provides Long-Term Growth Opportunities
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 2 2 PECO | N A S D A Q L I S T E D Development and Redevelopment Activity Provides Long-Term Growth Opportunities Continued Focus on Our Pipeline of Accretive Ground-Up Development and Redevelopment Projects • 9 projects under active constr
Slide 23: Balance Sheet
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Balance Sheet 23
Slide 24: PECO is Among the Lowest Levered Shopping Center REITs
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 2 4 PECO | N A S D A Q L I S T E D PECO is Among the Lowest Levered Shopping Center REITs Net Debt / Adjusted EBITDAre(1) As of December 31, 2023 6.7x • PECO’s net debt / adjusted EBITDAre 5.9x 6.0x 6.1x 6.4x was unchanged at 5.1x as of 5.1
Slide 25: Strong and Flexible Balance Sheet Position
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 2 5 PECO | N A S D A Q L I S T E D Strong and Flexible Balance Sheet Position Investment Grade Balance Sheet Highlights(1)(2) Liquidity Strength(1) • Moody’s: Baa3 (positive); S&P: BBB- (positive) $10M • Significant liquidity position of $5
Slide 26: 2024 Earnings Guidance
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D 2024 Earnings Guidance 26
Slide 27: 2024 Earnings Guidance Summary
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 2 7 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 April 25, 2024 All figures in millions, except per share data Previous Updated Q1 2024 • Nareit FFO / share growth of
Slide 28: Performance and Long-Term Growth
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Performance and Long-Term Growth 28
Slide 29: PECO's Strong Historical Performance
GROC GROCE RY E RYC ECNT E RE E NT D .DC. OCM E RE U NUINT IYT YF OFCOUCSUESDE D | 2 9 OMM PECO | N A S D A Q LISTED PECO | N A S D A Q L I S T E D PECO’s Strong LEADING PERFORMANCE Historical LEASED PORTFOLIO OCCUPANCY Performance 97.4% 97.4% 97.2% 96.3% • High occupancy levels are driving immediat
Slide 30: Strong Operating Environment
GROC GROCE RY E RYC ECNT E RE E NT D .DC. OCM E RE U NUINT IYT YF OFCOUCSUESDE D | 3 0 OMM PECO | N A S D A Q LISTED PECO | N A S D A Q L I S T E D Strong Operating LEADING PERFORMANCE Environment COMPARABLE NEW LEASE SPREADS 32.2% 29.1% 25.2% Leasing spreads demonstrate 15.7% PECO’s pricing power a
Slide 31: Roadmap to Our Long-Term Growth
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 1 PECO | N A S D A Q L I S T E D Roadmap to Our Long-Term Growth PECO Remains Committed to Delivering Sustainable Organic Long-Term Growth and Value Increase in occupancy Redevelopment and expected to development activity contribute 50 to
Slide 32: Growth Beyond Occupancy
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 2 PECO | N A S D A Q L I S T E D Growth Beyond Occupancy When Occupancy is No Longer a Driver of Growth, We Believe our Portfolio Can Still Deliver 3% to 4% Same-Center NOI Growth Long-Term 3% TO 4% SAME-CENTER New and renewal NOI Contrac
Slide 33: Long Term Targets
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 3 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 34: Corporate Responsibility
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Corporate Responsibility 34
Slide 35: Corporate Responsibility and Sustainability
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 5 PECO | N A S D A Q L I S T E D Corporate Responsibility and Sustainability Our Corporate Responsibility and Sustainability Program, which we refer to as the “PECO-ECO Promise ”, is based on the four pillars set forth below, and is overs
Slide 36: Appendix
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Appendix 36
Slide 37: Glossary of Terms
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 7 PECO | N A S D A Q L I S T E D Glossary of Terms Anchor space: A space greater than or equal to 10,000 square feet of gross leasable area (GLA). Annualized base rent (ABR): Refers to the monthly contractual base rent as of the end of th
Slide 38: Appendix: Non-GAAP Reconciliations
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D PECO | N A S D A Q L I S T E D Appendix Non-GAAP Reconciliations 38
Slide 39: Non-GAAP Measures
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 3 9 PECO | N A S D A Q L I S T E D Non-GAAP Three Months Ended March 31 Measures 2024 2023 Net income $ 19,626 $ 18,636 Adjusted to exclude: Reconciliation of Net Income to Fees and management income (2,565) (2,478) NOI for real estate inve
Slide 40: Non-GAAP Measures
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 0 PECO | N A S D A Q L I S T E D Non-GAAP Year Ended December 31 Measures 2023 2022 Net income $ 63,762 $ 54,529 Adjusted to exclude: Reconciliation of Net Income to Fees and management income (9,646) (11,541) NOI for real estate investme
Slide 41: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 1 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, Measures 2022 2021 (Cont’d) Net income $ 54,529 $ 17,233 Adjusted to exclude: Fees and management income (11,541) (10,335) Reconciliation of Net Income to NOI for real estate
Slide 42: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 2 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 $ 5462 Adjusted to exclude: Fees and management income (10,335) (9,820) Reconciliation of Net Income to NOI for real estate in
Slide 43: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 3 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) Reconciliation of Net Income to Straight-lin
Slide 44: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 4 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) Reconciliation of Net Income to Straight-l
Slide 45: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 5 PECO | N A S D A Q L I S T E D Non-GAAP Three Months Ended March 31, Measures 2024 2023 (Cont’d) Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders Net income $ 19,626 $ 18,636 Adjustments: Reconciliation of Nare
Slide 46: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 6 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 (Cont’d) Net income $ 63,762 $ 54,529 Adjustments: Depreciation and amortization
Slide 47: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 7 PECO | N A S D A Q L I S T E D Non-GAAP Year End December 31, Measures 2022 2021 Calculation of Nareit FFO Attributable to Stockholders and OP Unit Holders (Cont’d) Net income $ 54,529 $ 17,233 Adjustments: Reconciliation of Nareit FFO
Slide 48: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 8 PECO | N A S D A Q L I S T E D Non-GAAP Measures 2024 Three Months Ended March 31, 2023 (Cont’d) Calculation of EBITDAre This table presents the Company’s Net income $ 19,626 $ 18,636 calculation of EBITDAre and Adjustments: Adjusted EB
Slide 49: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 4 9 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 This table presents the Company’s Depreciation and amo
Slide 50: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 5 0 PECO | N A S D A Q L I S T E D March 31, 2024 December 31, 2023 Non-GAAP Net debt: Measures Total debt, excluding discounts, market adjustments, and deferred financing expenses $ 2,056,059 $ 2,011,093 (Cont’d) Less: Cash and cash equiva
Slide 51: Non-GAAP Measures (Cont'd)
GROC E RY C E NT E RE D . C O M M U N I T Y F O C U S E D | 5 1 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 equ
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