Nsi Nv · EURONEXT:NSI
Nsi Nv — H1 2023 Earnings Presentation
40 slides from Nsi Nv's earnings presentation, Jul 14, 2023
Slide 1: Half Year Results 2023
HALF YEAR RESULTS 2023 14 July 2023 NSI Half Year Results 2023 1
Slide 2: Disclaimer
Disclaimer This presentation is made for the sole benefit of financial analysts and qualified institutional investors and is not to be considered as an incentive to invest or as an offer to acquire NSI shares. The information provided herein is extracted from NSI financial reports and press releases
Slide 3: We enable our customers to achieve maximum productivity and growth
“We enable our customers to achieve maximum productivity and growth, providing best-in-class flexible space solutions and services in modern, healthy, sustainable buildings in prime locations.”
Slide 4: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 4
Slide 5: Key Performance Indicators: Resilient operational performance
Introduction Key Performance Indicators Resilient operational performance Key metrics Change in net rents Net rents like-for-like (%) Operational performance H1 2023 H1 2022 Change 7.4% EPRA Vacancy 7.3% 6.6% 0.7pp 5.2% 4.7% Operating margin 78.8% 79.7% -0.9pp 3.0% Gross rents like-for-like 7.3% 5.0
Slide 6: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 6
Slide 7: An attractive, highly focused, Dutch office portfolio
Portfolio & market An attractive, highly focused, Dutch office portfolio Strong focus to Amsterdam Total portfolio Portfolio by segment (H1 2023) Book % of total EPRA City # assets GIY Value portfolio Vacancy Amsterdam 23 € 644m 56% 6.3% 9.5% Other G4 14 € 328m 29% 7.8% 6.4% Other NL 10 € 172m 15% 7
Slide 8: Continued capital recycling of mature/non-core assets
Portfolio & market Continued capital recycling of mature/non-core assets Net seller of assets for the past five years H1 Annual transaction volumes (€m) Acquisitions € millions Disposals HNK Den Bosch 600 HNK Ede City: Den Bosch City: Ede 400 m2: 7,517 m2: 9,706 139 161 527 200 61 101 32 34 0 0 0 H2
Slide 9: In control of our vacancy
Portfolio & market In control of our vacancy Highly concentrated: 60% of total vacancy limited to five assets Distribution of EPRA vacancy 9.5% 7.3% 6.4% 1.6% Total Amsterdam Other G4 Other Netherlands Top 5 assets (vacancy) Segment Contribution to total vacancy Asset vacancy Centerpoint I Amsterdam
Slide 10: High level of CPI will drive lease indexation in 2023
Portfolio & market High level of CPI will drive lease indexation in 2023 7.3% gross rental growth versus H1 2022 NSI has rotated from an over-rented to an under-rented portfolio… … allowing us to bring forward reversion in high inflation environment 10,3% Reversionary potential 7,9% L-f-l GRI 6,1% 7
Slide 11: Dutch office market - latest data
Portfolio & market Dutch office market - latest data Investment volumes Offices Netherlands (€ bn) Prime Yields (%) 8 8,0% 6.7 6.8 6.3 5.9 6 5.5 6,0% 4.3 3.8 3.9 4 3.3 2.3 4,0% 1.9 1.9 2 1.5 1.4 1.1 0.2 0 2,0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 2010 2011 20
Slide 12: Market adjustment to higher interest rate environment
Portfolio & market Market adjustment to higher interest rate environment Transaction volumes and capital values under pressure Transaction volumes1 Yield shift: NSI portfolio vs. prime1 24b Other CRE 2022 H1 prime yield Office 2023 H1 prime yield +125 bps +117 bps Amsterdam 2022 H1 GIY NSI 22b 2023
Slide 13: Yield expansion drives negative portfolio revaluations
Portfolio & market Yield expansion drives negative portfolio revaluations Developments impacted by deteriorated market conditions H1 2023 Revaluations - Total portfolio (€m)1 Lower yielding assets more impacted by yield expansion 10 ▪ Largest value declines in Amsterdam due to lower starting yields
Slide 14: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 14
Slide 15: Sustainability: a non-linear cost path to reduce energy intensity
ESG Sustainability: a non-linear cost path to reduce energy intensity NSI well positioned with relatively modest costs to Paris-alignment NSI portfolio split and cost estimate for first 32 assets to CCREM Paris-proof alignment Sustainability: A non-linear cost path to reduction % of book CRREM area
Slide 16: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 16
Slide 17: Developments update: Redefining options in a challenging environment
Developments Developments update Redefining options in a challenging environment Laanderpoort Vitrum ▪ Existing/ongoing development agreement between ING and NSI. ▪ A H1 2023 High Court ruling has materially impacted the timetable for our redevelopment plans for Vitrum. ▪ Rezoning plan approved in M
Slide 18: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 18
Slide 19: EPRA Earnings
Financials EPRA Earnings H1 2023 H1 2022 Change % Gross rental income 35.5 35.6 -0.1% Service costs not recharged -0.9 -0.5 70.1% Operating costs -6.7 -6.7 -0.6% Net rental income 28.0 28.3 -1.3% Administrative costs -4.0 -4.6 -12.6% Net financing result -3.5 -4.3 -17.0% Direct investment result bef
Slide 20: EPRA Earnings (€ per share)
Financials EPRA Earnings (€ per share) 1.10 1.05 0.00 1.00 0,04 0.00 -0.05 0,03 0.95 -0.02 0.01 0,09 0.90 -0.07 1.02 0.85 0.99 0.05 0.00 EPRA EPS GRI - GRI - GRI - Disposals GRI - Like-for-like Service costs Operating costs Administrative Financing costs Other EPRA EPS H1 2022 Acquisitions Developme
Slide 21: EPRA NTA
Financials EPRA NTA (€ per share) 46 45 1,02 -1.12 44 -0.07 43 42 41 -5.81 40 44.17 39 0.00 0.00 38 38.19 0 EPRA NTA EPRA Dividend Effect of Revaluation Result Other EPRA NTA 31 Dec. 2022 Earnings stock on 30 Jun. 2023 dividend sales NSI Half Year Results 2023 21
Slide 22: Main balance sheet KPIs
Financials Main balance sheet KPIs Metrics consistently resilient Cost of debt Loan to value 2.6%3 60% 2,2% 2,1% 2,1% 2,0% 40% 29,2% 30,2% 35% 27,4% 28,2% 28,7% 2019 2020 2021 2022 H1 2023 2019 2020 2021 2022 H1 2023 Covenant Target range LTV Interest coverage ratio Net debt to EBITDA 7,2x 7.1 7.1 6
Slide 23: Extending debt maturity profile
Financials Extending debt maturity profile Aiming for long term stability Loans maturity profile June 2023 (€m) Achievements and strategy Achievements in 2023 US PP Term loan • Extension of BerlinHyp secured debt by four years to 2027. Secured debt (drawn) ‒ Only € 55m of € 65m facility drawn per H1
Slide 24: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 24
Slide 25: Significant changes in operating environment have material cumulative impact
Update strategic review Significant changes in operating environment have material cumulative impact Revisiting the strategy is therefore necessary Challenge Impact Occupational and • Decreasing tenant demand due to WFH investment • Changes in the type of demand (prime, sustainability, amenities) ma
Slide 26: Initial findings external strategic review
Update strategic review Initial findings external strategic review Final outcome to follow in Q4 2023 Timeline Q3 2022 Q2 2023 Q3 2023 Q4 2023 Initiated strategic review First draft of strategic review Budget day Final outcome Status Strategic options Considerations1 • Continuation as a stand-alone
Slide 27: Revising the NSI strategy & Next Steps
Update strategic review Revising the NSI strategy & Next Steps 5 key elements to the strategy Focus on Amsterdam Sustainability • Best space experiences high demand and • Major driver of polarisation rental growth • Key to asset rotation/disposal strategy • A new disposal program to follow Capital a
Slide 28: Table of contents
Table of contents 1. Introduction 2. Portfolio & market 3. ESG 4. Developments 5. Financials 6. Update strategic review Annex NSI Half Year Results 2023 28
Slide 29: Segment information: Key portfolio metrics
Annex Segment information Key portfolio metrics 30 June 2023 Dec. 2022 Change Amsterdam Other G4 Other NL TOTAL Number of properties 23 14 10 47 49 -4.1 % Market value (€)1 644 328 172 1,144 1,275 -10.3% Annual contracted rent2 37 26 12 75 78 -3.9 % Market rent 44 27 13 84 88 -5.0 % Lettable area (s
Slide 30: Segment information: Yields
Annex Segment information Yields EPRA net initial yield Gross initial yield Reversionary yield Jun. 2023 Dec. 2022 Jun. 2023 Dec. 2022 Jun. 2023 Dec. 2022 Amsterdam 4.4% 4.4% 6.3% 5.9% 7.5% 7.0% Other G4 5.2% 4.9% 7.8% 7.2% 8.1% 7.6% Other NL 4.8% 4.6% 7.1% 7.0% 7.5% 7.5% TOTAL 4.7% 4.6% 6.9% 6.4% 7
Slide 31: Segment information: Expiries and reversion
Annex Segment information Expiries and reversion Total portfolio (€m) Amsterdam portfolio (€m) 100 50 80 40 60 30 40 20 20 0 10 -20 0 Total Total 2023 2024 2025 2026 2027 >2027 TOTAL YE 2023 2024 2025 2026 2027 >2027 TOTAL YE 2022 2022 Contract rent 4,1 12,3 15,2 12,7 10,2 20,6 75,1 76,6 Contract re
Slide 32: Consolidated financial statements: Income statement
Annex Consolidated financial statements Income statement (€ m) Amsterdam Other G4 Other Netherlands Corporate¹ TOTAL Gross rental income 17.8 11.9 5.8 35.5 Service costs not recharged -0.6 -0.2 -0.0 -0.9 Operating costs -3.0 -2.4 -1.3 -6.7 Net rental income 14.2 9.3 4.5 28.0 Administrative costs -4.
Slide 33: Consolidated financial statements: Balance sheet
Annex Consolidated financial statements Balance sheet (€ m) 30 June 2023 31 December 2022 Real estate investments 1,129 1,259 Other assets 20 19 Cash and cash equivalents 1 0 Total assets 1,150 1,280 Shareholders' equity 770 887 Interest bearing loans 334 286 Debts to credit institutions 12 14 Other
Slide 34: Consolidated financial statements: EPRA NAV
Annex Consolidated financial statements EPRA NAV / 30 June 2023 31 December 2022 (€ m) EPRA NTA per share EPRA NTA per share IFRS Equity attributable to shareholders 770 38.19 887 44.23 Diluted NTA 770 38.19 887 44.23 Diluted NTA at fair value 770 38.19 887 44.23 Fair value of financial instruments
Slide 35: Property market data: Amsterdam
Annex Property market data Amsterdam Stock (m sqm) Prime yields 6.3 7.0% 6.2 6.2 6,3% 6.2 6,1% 6.0% 5,8% 6.1 6.1 6.1 5,5% 6.1 6.1 6.1 6.0 6.0 6.0 5.0% 6.0 5.0% 5.9 5.9 4,5% 5.9 4.0% 4.0% 4.0% 3,8% 5.8 3,4% 3.3% 5.8 3.3% 3,2% 3.0% 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2
Slide 36: Property market data: Utrecht
Annex Property market data Utrecht Stock (m sqm) Prime yields 6,8% 6,8% 2.9 7.0% 6,6% 6,7% 6.3% 6,0% 2.8 6.0% 5.8% 5,8% 2.8 2.8 2.8 5.5% 5.3% 5,3% 5,0% 5.0% 2.7 2.7 2.7 5.0% 2.7 2.7 2.7 2.7 2.7 2.7 2.6 2.6 4.0% 2.6 3.0% 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2010 2011 2
Slide 37: Property market data: Rotterdam
Annex Property market data Rotterdam Stock (m sqm) Prime yields 3.6 7.0% 6,4% 6,5% 6,3% 6,3% 3.5 3.5 3.5 6,0% 3.5 3.5 6.0% 5,8% 3.4 5,5% 5.5% 3.4 5,3% 3.4 3.4 5.0% 4.8% 4,5% 4,5% 4.5% 3.3 3.3 3.3 3.3 4.0% 3.3 3.3 3.2 3.0% 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2010 2011
Slide 38: Property market data: The Hague
Annex Property market data The Hague Stock (m sqm) Prime yields 4.2 4.1 4.1 7.0% 4.1 6,4% 6,5% 6,3% 4.1 4.1 4.1 6,2% 6,3% 6,3% 4.1 4.0 6,0% 6,0% 6.0% 5.8% 4.0 5,5% 5,3% 5,0% 5.0% 3.9 3.9 5.0% 3.8 3.8 3.7 4.0% 3.7 3.6 3.7 3.7 3.6 3.0% 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 39: Property market data: Eindhoven
Annex Property market data Eindhoven Stock (m sqm) Prime yields 1.8 8.0% 7,6% 7,6% 7,2% 7,0% 7,0% 1.7 6,8% 6,8% 6,8% 7.0% 6,5% 6,3% 6,0% 6,0% 6,0% 1.6 1.6 6.0% 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 5.0% 1.4 1.4 1.4 4.0% 3.0% 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 40: NSI Half Year Results 2023
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