Wereldhave N.v. · EURONEXT:WHA
Wereldhave — H1 2020 Earnings Presentation
68 slides from Wereldhave's earnings presentation, Jul 21, 2020
Slide 1: Results H1 2020
Results H1 2020 July 21, 2020
Slide 2: Table of contents
Table of contents 1. Introduction & highlights 2. Results 3. Update on disposals 4. Financing 5. LifeCentral 6. Management agenda Appendices 2
Slide 3: Introduction: Company Profile Key Facts
Introduction Company Profile Key Facts Number of shopping centres 30 Average size 27,500 M2 Number of shopping centre 49.5 M visitors (H1 2020) Net loan to value ratio 46.7 % Occupancy shopping centres 94.8 % 9 EPRA NIY shopping centres 5.9 % WALT1 4.2 years Development pipeline2 € 24 M 1 Lease end
Slide 4: Portfolio Breakdown
Introduction Company Profile Portfolio Breakdown Portfolio Breakdown Offices 3% Belgium Netherlands 34% 38% € 2.7 bn € 2.7 bn Shopping centres France 97% 27% 4
Slide 5: Highlights H1 2020
Highlights H1 2020 H1 2019 H1 2020 Change Direct result per share 1.44 0.97 (0.47) Indirect result per share (3.10) (3.73) (0.63) EPRA NRV per share 36.071) 32.49 (3.58) Dividend per share, full year 1.89 tbd n/a Total result per share (1.66) (2.76) (1.10) Net LTV 44.8%1) 46.7% +1.9pp NPS n/a -17 n/
Slide 6: Highlights H1 2020: Net Rental Income
Highlights H1 2020 Net Rental Income H1 2019 H1 2020 Growth LFL Growth (€ m) Belgium 24.0 17.7 (26%) (23.8%) France 20.2 10.1 (50%) (50.7%) Netherlands 39.9 32.5 (19%) (19.4%) Shopping centres 84.1 60.3 (28%) (28.7%) Offices Belgium 3.2 3.2 (0.6%) (0.2%) Total 87.4 63.6 (27%) (27.5%) 6
Slide 7: Table of contents
Table of contents 1. Introduction & highlights 2. Results 3. Update on disposals 4. Financing 5. LifeCentral 6. Management agenda Appendices 7
Slide 8: Operations H1 2020
Operations H1 2020 Leasing performance summary # of Leasing MGR Occupany LFL Rent Country vs ERV Contracts Volume Uplift Rate Growth Belgium 40 5.7% 8.6% 15.8% 96.0% (23.8%) France 16 3.6% (13.8%) 12.2% 90.6% (50.7%) Netherlands 70 4.9% (9.0%) 5.6% 96.4% (19.4%) Shopping 126 4.8% (3.6%) 10.3% 94.8%
Slide 9: Covid-19
Covid-19 March 31st 1) June 30 Tenant bankruptcies1) 92% 100% 2.4% Camaieu (3 locations), André (2), France 8% Naf Naf, Moa, La Halle, Plein Ciel (1) Open Closed 79% 99% 0.0% Belgium 21% Open Closed 43% 30% Didi (5 locations), Sandwich (3), 19% 8% 99% 0.9% Tumble ‘n Dry, Smit Mode, Sams, Netherlands
Slide 10: Covid-19: Footfall and rent collection
Covid-19 Footfall development Q2 rent collection rates1) 40% 80% 72% 20% 70% week 60% 59% 0% 60% 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -20% 50% -40% 40% 34% -60% 30% -80% 20% -100% 10% 0% Netherlands Belgium France Belgium France Netherlands Group 1) Per July 17, 2020, adjuste
Slide 11: Rent collection for Q2 rents
Rent collection for Q2 rents Invoiced rent for 2020 Q2 Breakdown open payments Collectable Open 27% 41% Uncollectable Received 48% 59% Deferred 13% Discount 12% 11
Slide 12: Rent collection & assessment of Covid-19
Rent collection & assessment of Covid-19 € 66.0m -€ 39.0m -€ 3.4m -16.3m -€ 3.3m € 20.3m -€ 13.0m € 7.3m Invoiced Q2 Cash collected Deferred to Discounts Under negotiation Expected credit loss To be collected (incl. VAT) H2 2020 H1 2020 H2 2020 12
Slide 13: Belgium
Belgium Footfall (yoy) Change in MGR Rotations & Renewals 40% 8.6% 20% week 0% • 40 leasing deals signed +15.8% 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -20% above ERV on average for H1 -40% 7.2% • Leasing examples: -60% -80% • Belle-Île: Courir, Transit, Cassis -100% • Nivelles:
Slide 14: France
France Footfall (yoy) Change in MGR Rotations & Renewals 0% 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10% week -20% • 16 leasing deals signed 12.2% above -30% ERV on average for H1 -40% -5.6% -50% -60% Leasing examples: -70% • Primark at Saint Sever -80% -90% -13.8% • Chaussea in
Slide 15: Netherlands
Netherlands Footfall (yoy) Change in MGR Rotations & Renewals 10% week 0% 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10% • 70 leasing deals signed 5.6% above -20% ERV during H1 -30% • Temporary contract for former -40% Hudson’s Bay, leased to De -50% -6.7% KOOPman -60% -9.0% 2019
Slide 16: EPRA Earnings (direct result)
EPRA Earnings (direct result) Net Rental Income decline due to the impact of Covid-19 and the departure of several tenants at YE 2019 in France and The Netherlands, the effect of which is partly mitigated by lower general cost -€21.0m €65.8m -€16.3m -€2.0m -€0.7m -€1.2m -€3.5m €0.6m €44.8m €1.8m €0.
Slide 17: Outlook
Outlook EPRA EPS 2020: € 1.70-1.90 per share EPRA EPS per share Dividend per share €3.45 €3.08 €3.08 €3.08 €3.43 €3.33 €3.23 No quarterly dividend in 2020 €2.81 €2.52 • Dividend per share will be €2.62 €1.89 determined with the 2020 € 1.70-1.90 earnings release 2015 2016 2017 2018 2019 2020 2015 201
Slide 18: EPRA NRV
EPRA NRV NRV declined mainly due to negative revaluations EPRA NRV Bridge: H2 2019 to H1 2020 (€ per Share) 0.97 -3.73 €36.07 €3.08 -0.63 €32.99 -0.19 32.49 EPRA NAV Add RETT EPRA NRV Direct result Indirect result Dividend Change in RETT EPRA NRV H2 2019 H2 2019 H1 2020 18
Slide 19: Revaluations
Revaluations Negative revaluations in all countries, largely because of yield shifts Value (€ m) Revaluation 2020 H1 EPRA NIY (%) 2019 2020 H1 €m % 2019 2020 H1 Belgium 869 845 (34) (3.9%) 5.6% 5.7% France 806 753 (64) (7.8%) 4.6% 4.7% Netherlands 1,139 1,053 (63) (5.6%) 6.8% 6.8% Shopping centres 2
Slide 20: Table of contents
Table of contents 1. Introduction & highlights 2. Results 3. Update on disposals 4. Financing 5. LifeCentral 6. Management agenda Appendices 20
Slide 21: Timeline | Phase-out France
Timeline | Phase-out France Strategy update First round Teaser sent Center visits Exclusive due Phase-out France diligence announced 16 NDAs signed Investment memorandum sent 2020 2020 2020 2020 2020 2020 2020 7 H2 Mar- 11 Feb Feb March June Jul/Aug May First round offers / Start process Lockdown Fr
Slide 22: Timeline | Netherlands
Timeline | Netherlands WoensXL Covid-19 Announcement of disposal Investment market standstill 2020 2020 2020 2020 2021 Feb Feb-Mar Mar-May H2 H1 4 assets on the Marketing market 4 assets Received good interest 22
Slide 23: Table of contents
Table of contents 1. Introduction & highlights 2. Results 3. Update on disposals 4. Financing 5. LifeCentral 6. Management agenda Appendices 23
Slide 24: Financing
Financing • Liquidity preservation • Final dividend 2019 cancelled • No interim dividend in 2020 • Reduced 2020-2021 committed capex • Green Financing Framework • € 100m Green Finance Facility • Cost saving measures • Direct genex H1 2020 lowered by 27% (€ 1.8m) to € 5.1m • Several cost savings in p
Slide 25: Key development projects
Key development projects Total Capex spent Capex Spent Planned (In € m) Yield on Cost Pre-let Rate Investment total 2020 Delivery Koperwiek 37 31 2 4.75 % - 5.25 % 92 % 2020 Presikhaaf 23 21 2 5.5 % - 6.0 % 95 % 2020 Tilburg 10 3 1 5.0 % - 5.5 % 19 % 2022 Defensive capex 30 21 9 Committed 100 76 14
Slide 26: Debt Profile
Debt Profile 2019 2020 H1 Covenants Policy Interest bearing debt 1) (€) 1,337m 1,312m Average cost of debt 1.9% 1.9% Undrawn committed (€) 220m 295m Cash position (€) 21m 29m Fixed vs floating debt 77% / 23% 78% / 22% min. 50% fixed Gross LTV 2) 45.5% 48.9% ≤ 60% Net LTV 44.8% 46.7% 30% - 40% ICR 6.
Slide 27: Debt Mix
Debt Mix • Debt maturities covered until March Q4 2019 Q2 2020 2021 Bank loans EMTN EMTN (incl. RCF) 1% Bank loans 1% Treasury 36% Treasury (incl. RCF) notes 41% notes • Constructive discussions with our 7% 2% banks in order to secure coverage for the period 2021-2023 € 1,337m € 1,312m • Credit rati
Slide 28: Debt expiry profile
Debt expiry profile €m 400 350 300 250 200 150 100 50 0 Drawn Undrawn Drawn Undrawn Drawn Undrawn Drawn Undrawn Drawn Undrawn Drawn Undrawn 2020 2021 2022 2023 2024 > 2024 Commercial Paper Uncommiited bank loan Bank loan USPP EMTN RCF 28
Slide 29: Table of contents
Table of contents Direct vicinity of FSC 1. Introduction & highlights 2. Results 3. Update on disposals Full Service Centers 4. Financing for better everyday life 5. LifeCentral 6. Management agenda Broader area surrounding FSC Appendices 29
Slide 30: Current value allows for transformation of fashion space
Breakdown of annualised rent Netherlands Current value allows for Restaurants Leisure transformation of fashion 2% Other retail 5% space 5% Essential Shoes retail Value in € per m2 5% 13% Everyday retail 3,000 2,850 1) 24% 2,450 Wereldhave NL Fashion 2,500 30% Shopping center average H1 2020 2,000 1
Slide 31: Selection of convenience center transactions past 1.5 years
Selection of convenience center transactions past 1.5 years Transaction price in € per m2 4.500 4.000 3.500 3.000 Average: € 2,850 2.500 2.000 1.500 1.000 500 - Rokkeveen Lage Land Westerkoog Raaks Kerkelanden Hof ter Hage Binnenhof Maxis De Laverije Oosterpoort part of Reigersbos Portfolio Eskerple
Slide 32: Examples alternative use pricing & valuations
Retail park transactions NL 2018-2020 (€/m2) 1.800 Examples alternative use 1.600 1.400 Average: € 1,445 pricing & valuations 1.200 1.000 800 Alternative 1: Big-box retail tenants 600 • Transactions range € 1,100-1,700/m2 400 200 0 De Bossche 56 retail De Mortiere Zwolle Spijkenisse Cruquius Portfol
Slide 33: Our values allow for transformation
Our values allow for transformation Implied portfolio values per sqm (€) – Pan-European mall REITs 12.000 10.000 8.000 6.000 4.000 2.000 0 Hammerson Intu ECP Klepierre URW Wereldhave FY 2019 Wereldhave H1 2020 NL UBS-deduced from FY19 reported values At current share price Segro current implied Sour
Slide 34: Residential
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Slide 35: Transformation from retail to residential
Transformation from retail to residential Densifying Redeveloping the into land plot residential Book value Book value Capex Development cost + = € ~1,600 € ~550 € ~1,500 € ~2,050 per m2 per m2 per m2 per m2
Slide 36: Residential strategy
Residential strategy Unlocking residential potential by capturing the opportunity of the Dutch housing market Average residential asking price per m2 (€) 3,531 3,383 3,276 3,008 2,976 2,951 2,913 2,849 2,781 2,761 2,707 2,666 2,611 2,449 2,050 4.7% 5.6% 5.4% 6.1% 6.7% 6.9% 5.1% 3.7% 4.8% 5.6% 6.1% 4
Slide 37: Residential strategy
Residential strategy Improve location Restore the balance Unlock residential quality in retail profits 37
Slide 38: Residential opportunity in our Dutch portfolio
Residential opportunity in our Dutch portfolio Residential profit € 1.5-1.75/sh Our portfolio in the Netherlands contains the opportunity to develop between 1,500 and 2,000 units on 8 locations. We expect +0.3% to +3.0% unlevered IRR impact on project level. We are active on this on several stages o
Slide 39: Kronenburg, Arnhem
Kronenburg, Arnhem First conceptual urban development plan Deal structure • Feasibility study successfully completed on adding approximately 500-700 residential units • LOI between Amvest and Wereldhave for the sale of the development rights to Amvest Financials • Impact on unlevered IRR +1.0% to +6
Slide 40: Winkelhof, Leiderdorp
Winkelhof, Leiderdorp Residential development Deal structure • LOI signed for the sale of a 3,358 m2 plot of land and development rights for Shopping 5,000+ m2 (70-110 units) to a private investor center • Additional earn-out possible Financials • Impact on unlevered IRR +0.5% to 6% • Investment cas
Slide 41: Transforming the inner-city of Tilburg
Transforming the inner-city 3 of Tilburg 4 Shopping Tilburg is a major redevelopment in the heart of the city, linking key retail areas Pieter Vreedeplein and Emmapassage, while creating the new Frederikstraat. Shopping Tilburg is a joint effort between Wereldhave and the Municipality of Tilburg to
Slide 42: Transforming the inner-city of Tilburg
Transforming the inner-city of Tilburg +6.8% retail space transformed into mixed-use1) 25.0% Target 20.0% 15.0% 10.0% 6.8% 7.1% 5.0% 0.3% 0.0% 2019 New mixed-use Now 1) At Pieter Vreedeplein, Tilburg 42
Slide 43: Retail transformations
Retail transformations Mixed-use space as part of total space • The 70bps increase in H1 in mixed-use comes fully BE+NL from signing mixed-use tenants for former 10.2% traditional retail space 10.0% • Kronenburg: transforming part of traditional retail into mixed-use and adding residential 9.8% • No
Slide 44: The Point
The Point Increasing service level, footfall and revenues
Slide 45: The Point: a physical service area
The Point: a physical service area Next level at Belle-Île, first pilot in the Netherlands at Cityplaza during H2 2020 Centralized physical point for all our services Develop our Attracting services to professional make our customers via Our services as visitors life gift card source of easier servi
Slide 46: UpNext
UpNext Full service PopUp retail
Slide 47: UpNext: Test case results
UpNext Test case results Desired services 82% Fit-out Possibly interested in adding a temporary 44% store 36% Changing rooms Possibly interested in temporary stores in other 36% Wereldhave centers 36% Staff Willingness to share a 55% store with other retailers (shop-in-shop) 27% Marketing 47
Slide 48: UpNext Shop and UpNext Premium
UpNext UpNext is a full service PopUp concept that enables retailers and brands to open up a temporary store in one of our centers, available in two service levels. UpNext works with partners to provide services that includes everything necessary to run a temporary store easily: • Store design • Pay
Slide 49: Connect
We provide a platform where local retailers can join forces for efficient and Connect A digital village square and delivery sustainable last-mile delivery and online pick-up points. service for a local fresh products Customers are offered convenience for their everyday life by enabling them to organ
Slide 50: Connect: Test case results
Connect: Test case results Survey amongst all retailers Wereldhave Netherlands Dorpsplein Of the consumers 50% Of local entrepreneurs looking for such a service chose for products to 80% be delivered at home 60% Are fresh food retailers Ordered products per 15 day Sells other products or 30% service
Slide 51: Two pilots to start in H2 2020
Two pilots to start in H2 2020 51
Slide 52: A better tomorrow
A better tomorrow Corporate Social Responsibility programme 52
Slide 53: LifeCentral & Corporate Social Responsibility
LifeCentral & Corporate Social Responsibility Meeting the CSR needs of customers and investors The rise of ethical consumers who shift Retailers adopting more sustainable Investors accelerate the inclusion of ESG towards sustainable products and services business practices – cutting waste, phasing f
Slide 54: Three focus areas
Three focus areas BETTER FOOTPRINT BETTER NATURE BETTER LIVING 54
Slide 55: Better footprint
Better footprint We want our centers to produce less waste and pollution – this forms the basis of healthy communities. Ambition: All surface within direct control of our organization to operate at net zero carbon by 2030, and a net zero value- chain by 2050 Example: • 5,000+ new solar panels planne
Slide 56: Better nature
Better nature We can adapt to the climate crisis with solutions that also protect the local environment and biodiversity. Ambition: Increase the surface of green spaces to • improve customer experience • amplify ecological value and • enhance climate resilience to extreme heat and flash flooding. Ex
Slide 57: Better living
Better living We want our centers to be clean, safe and pleasant places to work and spend time in Ambition: Contribute at least 1% of net rental income to socio- economic and social inclusion initiatives Examples: • Create a safe & healthy environment through the visitor Safety Covid-19 Plan: Spread
Slide 58: Table of contents
Table of contents 1. Introduction & highlights 2. Results 3. Update on disposals 4. Financing 5. LifeCentral 6. Management agenda Appendices 58
Slide 59: Delivering on our ambitions
Delivering on our ambitions Focus on Target 2020-2022 Progress Actions year-to-date Phase out France1 Phase out France Process initiated Divestment program NL / BE Dispose assets with book value of € 225 - € 275 Mn WoensXL disposal finalized in March Liquidity preservation programme Restructuring ba
Slide 60: Final remarks
Final remarks • Outlook 2020 EPRA EPS re-set at €1.70 to € 1.90 • Liquidity preservation: Secured until April 2021; 2021-2023 is progressing well • Targeted divestments: Phasing-out France and disposals in the Netherlands (1 out of 5 assets sold) • Reflecting resilience in Covid-19 environment • Tra
Slide 61: Appendices
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Slide 62: Table of contents
Table of contents 1. Introduction & highlights 2. Results 3. Update on disposals 4. Financing 5. LifeCentral 6. Management agenda Appendices 62
Slide 63: Tenant mix retail
Tenant mix retail Top-10 tenants Contract rent by category Other Mixed-Use 0.8% Tenant % of annualised rent 13.7% Travel & Finance Ahold Delhaize 4.4 % Services 1.3% Fashion & C&A 2.7 % Sport Accessoires 3.2% Special Goods & 35.6% H&M Group 2.5 % Others 3.5% A.S. Watson Group 2.3 % Shoe & Leatherwar
Slide 64: LFL NRI Growth
LFL NRI Growth LFL NRI Growth (% YOY) 1.9% 0.8% 1.1% 2.2% 2.0% 1.5% 2.0% 1.7% 0.3% 0.1% 0.8% (1.5%)(1.0%) (1.0%) (0.6%) (3.5%) (19.4%) (23.8%) (28.7%) (50.7%) Belgium France Netherlands Shopping centres FY 2018 H1 2019 FY 2019 H1 2020 Indexation H1 2020 64
Slide 65: Stable across the board: Occupancy
Stable across the board Occupancy EPRA Occupancy Rate Shopping Centres 97.2% 97.1% 97.2% 96.2% 96.3% 96.0% 96.4% 96.3% 95.6% 95.1% 94.8% 94.8% 94.0% 92.8% 92.0% 90.6% Belgium France Netherlands Shopping centres FY 2018 H1 2019 FY 2019 H1 2020 65
Slide 66: Footfall
Footfall Despite the negative impact of COVID-19, the Belgian and Dutch centres still outperformed their benchmark 12M Change in Visitors (%) 1) 7.6% 4.4% 4.9% 1.4% 1.1% 1.1% 0.2% 1.4% 1.0% 1.1% 0.1% (0.4%) -13.6% -16.5% -20.9% -22.7% -24.0% -25.2% -30.1% Belgium France Netherlands Shopping centres
Slide 67: Revaluation
Revaluation Rents & Yield Shift Breakdown of Valuation Result Belgium -3.9% -3.7% France -7.8% -6.3% -1.5% Netherlands -5.6% -2.6% -3.1% Shopping centres -5.7% -4.0% -1.7% Belgium offices -1.5% -1.4% Total portfolio -5.6% -3.9% -1.7% Yield shift Market rent & other 67
Slide 68: Reconciliation of EPRA NRV H1 2020
Reconciliaton of EPRA NRV H1 2020 (€ per Share) €32.49 -2.59 €2.89 €29.90 0.02 -0.32 -1.50 28.40 IFRS NAV Deferred tax Fair value RETT EPRA NRV Exclude NRV Fair value of fixed EPRA NDV H1 2020 financial instruments H1 2020 adjustments interest rate debt H1 2020 68