Phillips Edison & Company, Inc. · NASDAQ:PECO
Phillips Edison & — Q4 2023 Earnings Presentation
35 slides from Phillips Edison &'s earnings presentation, Feb 9, 2024
Slide 1: November 2023 Investor Presentation
November 2023 Investor Presentation Grocery Centered. Community Focused.
Slide 2: Safe Harbor and Non-GAAP Disclosures
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, and Section 21E of the Securities Exchange Act of 1934, as amended. Phillips Edison & Company,
Slide 3: PECO at a Glance
PECO at a Glance Founded/IPO ABR from Leased Nasdaq Properties Total GLA 1991/ Grocery Centers 31.4M Occupancy PECO 97% 275 98% 2021 Square Feet We create great omni-channel We are an experienced owner and grocery-anchored shopping Grocery Centered. operator exclusively focused on experiences and im
Slide 4: Our Focused and Differentiated Strategy
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 anchor by sales 97.8% portfolio leased occupancy with (86% of ABR) continued strong Neighb
Slide 5: Grocery-Anchored Portfolio
Grocery-Anchored Portfolio
Slide 6: Grocery-Anchored Centers Benefit from Trends that Provide Strong Tailwinds
Grocery-Anchored Centers Benefit from Trends that Provide Strong Tailwinds Necessity-Based High Traffic Omni-Channel • Consumer staple goods and services that • U.S. consumers visit grocery stores 1.6 • PECO centers are a critical component of are indispensable for day-to-day living times per week(2
Slide 7: Strategic Presence in Top Markets
Strategic Presence in Top Markets Well-Positioned for Future Growth with Significant Presence in Sun Belt States and Growing U.S. Cities ✓ 275 Properties Across 31 States Top 10 Markets(1) ✓ 50% of ABR from Sun Belt States(1) 1. Atlanta ✓ Strong Presence in Fast-Growing U.S. Cities(2) 2. Dallas 3. C
Slide 8: Targeted Trade Areas Align with Leading Grocer Demographics
Targeted Trade Areas Align with Leading Grocer Demographics Demand for Space Reinforces the Demographic Strength of Our Trade Areas Average 3-Mile Population (000s) 65 62 57 PECO Publix Kroger Average 3-Mile Median Household Income ($000s) $79 $74 $70 PECO Publix Kroger Source: Synergos Technologies
Slide 9: SOAR with PECO
How PECO Defines Quality PECO has 30+ Years of Experience in the Grocery-Anchored Shopping Center Industry and an Informed Perspective on what Drives Quality and Success at the Property Level SOAR with PECO Important and Sustainable Measures of Quality in PECO Grocery-Anchored Centers Spreads Occupa
Slide 10: Our Grocery-Anchored Advantage
Our Grocery-Anchored Advantage 97% of Our Rents Come from Grocery-Anchored Centers 2.3% +8% $670 | 5.0% PECO Grocer Health Ratio(1) U.S. Food At Home Spending PECO Grocer Sales PSF | Q3 2023 YoY Growth(3) YoY Growth(2) 86% +7.4% +8.3% PECO ABR from Grocers that are U.S. Food at Home Spending 2022 U.
Slide 11: Strength and Resiliency of Our Local Neighbors
Strength and Resiliency of Our Local Neighbors Portfolio Occupancy Performance Reinforces the Strength of Our Inline and Local Neighbors ~27% of PECO’s ABR is derived from Local Neighbors, comprised primarily of: • Restaurants including quick-service, fast casual and full-service • Personal services
Slide 12: Math Behind Our Local Neighbors
Math Behind Our Local Neighbors Our Local Neighbors Offer Attractive Economics ✓ Our inline Local Neighbors are resilient and have been in PECO’s centers an average of 9 years This length of tenancy compares favorably to the ✓ capital investment payback period of 10 months for inline Local Neighbors
Slide 13: Retailers Growing with PECO
Retailers Growing with PECO Dedicated Team Focused on Building Strong Connections with Leading and Expanding Neighbors Across a Variety of Industries Local Restaurants Health and Beauty Medtail Grocery Centered. Community Focused. 13
Slide 14: Highly Diversified Neighbor Mix Led by Top Grocers and Necessity-Based Retailers
Highly Diversified Neighbor Mix Led by Top Grocers and Necessity-Based Retailers Neighbor Location Count % ABR(1) Neighbor Location Count % ABR(1) IG 62 6.1% 5 0.7% 61 5.8% IG 33 0.5% 31 4.0% IG 4 0.5% IG 23 3.9% 62 0.5% IG 13 2.0% 29 0.5% 10 1.6% 2 0.5% 14 1.5% 19 0.5% IG 18 1.4% 4 0.5% 5 1.0% IG 6
Slide 15: Investments
es |_| Investments PHILLIPS EDISON & COMPANY
Slide 16: 2023 Acquisition and Disposition Summary
2023 Acquisition and Disposition Summary PECO Executed Accretive Acquisitions at a Weighted Average 6.5% Cap Rate(1) 0 0 0 Providence Commons Village Shoppes at Windermere Lake Pointe Market Mt. Juliet, TN Suwanee, GA Rowlett, TX 2023 Acquisitions YTD Location GLA Contract Price Grocery Anchor (in t
Slide 17: Development and Redevelopment Activity Provide Long-Term Growth Opportunities
Development and Redevelopment Activity Provide Long-Term Growth Opportunities Continued Focus on Our Pipeline of Accretive Ground-Up Development and Redevelopment Projects • 12 projects under active construction which are being developed on land PECO already owned • Our total investment in these pro
Slide 18: Balance Sheet
Balance Sheet PHILLIPS EDISON & COMPANY
Slide 19: Strong and Flexible Balance Sheet Position
Strong and Flexible Balance Sheet Position Investment Grade Balance Sheet Highlights(1)(2) Liquidity Strength(1) • Moody’s: Baa3 (stable); S&P: BBB- (stable) $8M • Significant liquidity position of $714M • Net debt / adjusted EBITDAre of 4.9x $714M • Approximately 84% of our assets are unencumbered
Slide 20: 2023 Earnings Guidance
Aa. 2023 Earnings Sallis sD1Son soe Guidance
Slide 21: 2023 Earnings Guidance Summary
2023 Earnings Guidance Summary PECO’s Full Year 2023 Earnings Guidance – Updated as of October 1, 2023 All figures in millions, except per share data Previous Full Updated Full • Nareit FFO / share growth of 4.7% at the midpoint Full Year Year 2023 Year 2023 Guidance Guidance 2022 Actual • Core FFO
Slide 22: Performance and Long-Term Growth
Performance and Long-Term Growth
Slide 23: PECO’s Strong Historical Performance
PECO’s Strong Historical Performance Record Occupancy Levels are Driving Immediate, Measurable Growth in Our Financial Results Leased Portfolio Occupancy Same-Center NOI Growth(1) 97.4% 97.5% 97.8% 97.8% 8.2% 96.3% 95.4% 94.7% 5.3% 4.9% 4.5% 3.7% 3.2% 2019 2020 2021 2022 Q1 23 Q2 23 Q3 23 2019 2020
Slide 24: PECO’s Strong Historical Performance
PECO’s Strong Historical Performance Leasing Spreads Demonstrate PECO’s Pricing Power and Sustainable Organic Growth Comparable Leasing Spreads New Leases Renewals 32.2% 17.7% 16.9% 27.4% 16.1% 26.3% 25.1% 14.6% 15.7% 8.5% 8.1% 13.3% 6.7% 8.2% 2019 2020 2021 2022 Q1 23 Q2 23 Q3 23 2019 2020 2021 202
Slide 25: Roadmap to Our Long-Term Growth
Roadmap to Our Long-Term Growth PECO Remains Committed to Delivering Sustainable Organic Long-Term Growth and Value Red Increase in occupancy ev Redevelopment and n ei De el cy v op pmen expected to contribute development activity Occ as an re me elo up Inc 50 to 100 bps of expected to contribute nt
Slide 26: Glossary of Terms
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 the applicable reporting period multiplied by twelve months. ABR per square foot (PSF): ABR divid
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations APPENDIX APPENDIX Non-GAAP Reconciliations
Slide 28: Non-GAAP Measures
Non-GAAP Measures Below is a reconciliation of Net Income to NOI for real estate investments and Same-Center NOI (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 13,729 $ 12,173 $ 48,574 $ 38,826 Adjusted to exclude: Fees and managemen
Slide 29: Non-GAAP Measures
Non-GAAP Measures Below is a reconciliation of Net Income to NOI for real estate investments and Same-Center NOI (in thousands): Three Months Ended March 31, Three Months Ended June 30, 2023 2022 2023 2022 Net income $ 18,636 $ 11,398 $ 16,209 $ 15,255 Adjusted to exclude: Fees and management income
Slide 30: Non-GAAP Measures
Non-GAAP Measures Below is a reconciliation of Net Income to NOI for real estate investments and Same-Center NOI (in thousands): Year Ended December 31, 2022 2021 Net income $ 54,529 $ 17,233 Adjusted to exclude: Fees and management income (11,541) (10,335) Straight-line rental income(1) (12,265) (9
Slide 31: Non-GAAP Measures (Cont’d)
Non-GAAP Measures (Cont’d) Below is a reconciliation of Net Income to NOI for real estate investments and Same-Center NOI (in thousands): Year Ended December 31, 2021 2020 Net income $ 17,233 5,462 Adjusted to exclude: Fees and management income (10,335) (9,820) Straight-line rental income (1) (9,40
Slide 32: Non-GAAP Measures (Cont’d)
Non-GAAP Measures (Cont’d) Below is a reconciliation of Net (Loss) Income to NOI for real estate investments and Same-Center NOI (in thousands): Year Ended December 31, 2020 2019 Net income (loss) $5,462 $(72,826) Adjusted to exclude: Fees and management income (9,820) (11,680) Straight-line rental
Slide 33: Non-GAAP Measures (Cont’d)
Non-GAAP Measures (Cont’d) Below is a reconciliation of Net (Loss) Income to NOI for real estate investments and Same-Center NOI (in thousands): Year Ended December 31, 2019 2018 Net (loss) income $(72,826) $46,975 Adjusted to exclude: Fees and management income (11,680) (32,926) Straight-line renta
Slide 34: Non-GAAP Measures (Cont’d)
Non-GAAP Measures (Cont’d) The following table presents the Company’s calculation of EBITDAre and Adjusted EBITDAre and provides additional information related to its operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Year Ended December 31, 2023 2022 2023 20
Slide 35: Non-GAAP Measures (Cont’d)
Non-GAAP Measures (Cont’d) Financial Leverage Ratios The following table presents the Company’s calculation of net debt and total enterprise value, inclusive of the Company’s prorated portion of net debt and cash and cash equivalents owned through its unconsolidated joint ventures, as of September 3
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