Parque Arauco S.a. · BCS:PARAUCO
Parque Arauco — Q4 2018 Earnings Presentation
39 slides from Parque Arauco's earnings presentation, April 2019
Slide 1: Investor Presentation Fourth Quarter 2018
INVESTOR PRESENTATION [Fourth Quarter 2018] CONTACTS Tori Creighton (Head of Investor Relations) Francisco Moyano (Corporate Finance Manager) Claudio Chamorro (CFO) Tel: (562) 22990510 | Email: ir@parauco.com
Slide 2: Important Disclaimer
« parque arauco Investor Presentation Fourth 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 eval
Slide 3: Agenda
parque arauco Investor Presentation Fourth Quarter 2018 « 4 INTRODUCTION 13 INVESTMENT HIGHLIGHTS 8 OUR OPERATIONS 34 FUTURE DEVELOPMENT 3
Slide 4: 1. Introduction
parque arauco Investor Presentation Fourth Quarter 2018 1. INTRODUCTION 4
Slide 5: Parque Arauco at a Glance
parque arauco Investor Presentation PARQUE ARAUCO Fourth Quarter 2018 AT A GLANCE FINANCIAL INDICATORS (DECEMBER 2018) POSITIVE LOCAL RISK RATING Parque Arauco is a real estate company Key Figures Total Risk Rating Agency Rating dedicated to the development and GLA (m2) 1,053,000 Fitch AA- operation
Slide 6: In the Last Six Years Parque Arauco Has Doubled GLA, NOI and AFFO
parque arauco Investor Presentation IN THE LAST SIX YEARS Fourth Quarter 2018 PARQUE ARAUCO HAS DOUBLED GLA, NOI AND AFFO GLA M2 1982 Parque Arauco Kennedy opens as first shopping center in Chile 2014 Capital increase for US$182 MM 1995 Parque Arauco S.A. IPO +1.9X 2015 Purchase of minority sharehol
Slide 7: Purpose, Mission and Corporate Values
PURPOSE, MISSION parque arauco Investor Presentation Fourth 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 MISSION « Our mission is to be leaders in developing and opera
Slide 8: 2. Our Operations
parque arauco Investor Presentation Fourth Quarter 2018 2. OUR OPERATIONS 8
Slide 9: Iconic and Dominant Shopping Centers in Chile, Peru and Colombia
PARQUE ARAUCO HAS ICONIC AND DOMINANT parque arauco Investor Presentation Fourth Quarter 2018 SHOPPING CENTERS IN CHILE, PERU AND COLOMBIA PARQUE ARAUCO KENNEDY ARAUCO MAIPÚ ARAUCO ESTACIÓN CHILE CHILE CHILE LARCOMAR MEGAPLAZA NORTE PARQUE LA COLINA PERU PERU COLOMBIA 9
Slide 10: Chilean Portfolio
parque arauco Investor Presentation Fourth Quarter 2018 CHILEAN PORTFOLIO % Owned Year of Chile GLA (m2) Ownership GLA (m2) Occupancy incorporation Parque Arauco Kennedy 112.000 100% 112.000 98,5% 1982 IN CHILE PARQUE ARAUCO HAS: Arauco Maipú 72.500 100% 72.500 98,3% 1993 Arauco Chillán 35.000 100%
Slide 11: Peruvian Portfolio
parque arauco Investor Presentation Fourth Quarter 2018 PERUVIAN PORTFOLIO % Owned Year of Peru GLA (m2) Ownership GLA (m2) Occupancy incorporation IN PERU PARQUE ARAUCO HAS: MegaPlaza Norte 112.000 50% 56.000 98,2% 2006 MegaPlaza Express Villa Chorrillos 8.000 50% 4.000 98,1% 2009 6 Regional shoppi
Slide 12: Colombian Portfolio
parque arauco Investor Presentation Fourth Quarter 2018 COLOMBIAN PORTFOLIO % Owned GLA Year of IN COLOMBIA PARQUE ARAUCO HAS: Colombia GLA (m2) Ownership (m2) Occupancy incorporation Parque Arboleda 41,000 55% 22,550 97,9% 2010 3 Regional shopping centers Parque Caracoli Parque La Colina 38,500 62,
Slide 13: 3. Investment Highlights
parque arauco Investor Presentation Fourth Quarter 2018 3. INVESTMENT HIGHLIGHTS 13
Slide 14: Investment Highlights
parque arauco Investor Presentation Fourth Quarter 2018 INVESTMENT HIGHLIGHTS 5. Financial Strength 1. Stability 4. Sustainability and 2. Diversification Corporate Governance 3. Growth 14
Slide 15: Stability: Revenue Type and Contract Duration
« STABILITY REVENUE TYPE AND CONTRACT DURATION parque arauco Investor Presentation Fourth Quarter 2018 FIXED VS VARIABLE RENTAL REVENUES CONTRACT LENGTH (BASED ON % OF REVENUES) 14 % 39% 100% Other revenues 5.7 86 % 39% of our contracts Rental have a duration of more revenues 10% than 4 years and th
Slide 16: Consistent Same Store Growth and Healthy Occupancy Cost
« STABILITY CONSISTENT SAME STORE GROWTH AND HEALTHY OCCUPANCY COST parque arauco Investor Presentation Fourth Quarter 2018 SAME STORE SALES (SSS) Y SAME STORE RENT (SSR) (%) OCCUPANCY COST (%) 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 11.4 10.7 10.9 1
Slide 17: Results Have Been Positive in All Three Countries
« STABILITY RESULTS HAVE BEEN POSITIVE IN ALL THREE COUNTRIES parque arauco Investor Presentation Fourth Quarter 2018 GLA TENANT SALES 1 COUNTRY LEVEL COUNTRY LEVEL (M2) (US$ MM) REVENUES1 (US$ MM) EBITDA1,2 (US$ MM) +10.1% -1.0% +4.3% +5.8% 500,500 1,731 1,712 454,500 175 129 168 122 CHILE 2017 201
Slide 18: Focus on Capital Cities
« STABILITY FOCUS ON CAPITAL CITIES parque arauco Investor Presentation Fourth Quarter 2018 Parque Arauco is concentrated inthe capital cities of Santiago, Lima and Bogota. PERU CHILE COLOMBIA LIMA SANTIAGO BOGOTA Megaplaza Norte Parque Arauco Kennedy Parque La Colina Larcomar Arauco Maipú Premium O
Slide 19: Diversification by Country, Format and Socio-Economic Level
« DIVERSIFICATION PARQUE ARAUCO DIVERSIFIES ITS MARKET RISKS parque arauco Investor Presentation Fourth Quarter 2018 AT A COUNTRY, FORMAT, AND SOCIO-ECONOMIC LEVEL COUNTRY LEVEL DIVERSIFICATION FORMAT LEVEL DIVERSIFICATION SOCIO-ECONOMIC DIVERSIFICATION (% REVENUES) (% REVENUES) (% REVENUES) 14% 5%
Slide 20: Parque Arauco Operates in Three Attractive Economies
« DIVERSIFICATION PARQUE ARAUCO OPERATES IN THREE ATTRACTIVE ECONOMIES parque arauco Investor Presentation Fourth Quarter 2018 GDP GROWTH POPULATION (MILLIONS) 49.3 49.8 4.0% 48.7 3.7% 3.4% 2.7% 31.5 31.8 32.2 2.5% 1.9% 1.6% 1.8% 18.6 1.5% 18.2 18.4 2016 2017 2018f 2016 2017 2018f 2016 2017 2018f 20
Slide 21: Diversification via Mixed-Use Properties
« DIVERSIFICATION DIVERSIFICATION VIA MIXED-USE PROPERTIES parque arauco Investor Presentation Fourth Quarter 2018 • Generate synergy between formats • Densify strategic locations in urban areas RATIONALE • Respond to each area’s different client needs • Follow new trends toward creating spaces that
Slide 22: 1 Million m2 and Market Participation in Latin America and Andean Region
« GROWTH parque arauco Investor Presentation Fourth 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 11.1 GLA: Million m2 24% of total BRASIL 15.4 GLA:
Slide 23: Growth from Greenfield Projects, M&A and Minority Interest Purchases
« GROWTH parque arauco Investor Presentation Fourth Quarter 2018 PARQUE ARAUCO’S GROWTH HAS COME FROM GREENFIELD PROJECTS, M&A AND MINORITY INTEREST PURCHASES TOTAL INVESTMENT (US$ MM) 77 1,443 172 5% Landbank 299 12% M&A 12% Minority Interest 341 71% 188 Greenfields and expansions 229 136 2012 2013
Slide 24: Value Creation Spread Is Approximately 3%
« GROWTH parque arauco Investor Presentation Fourth Quarter 2018 OUR VALUE CREATION SPREAD IS APPROXIMATELY 3% 3% 8% 5% 24 WACC Spread Over WACC Cap Rate 24
Slide 25: Total Return
« GROWTH parque arauco Investor Presentation Fourth 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, LOC
Slide 26: Supporting Globalization of Brands Entering the Andean Region
« GROWTH parque arauco Investor Presentation Fourth Quarter 2018 PARQUE ARAUCO IS SUPPORTING THE GLOBALIZATION OF SEVERAL BRANDS ENTERING THE ANDEAN REGION RETAIL PRESENCE BY COUNTRY FIRST OPENINGS IN CHILE (% OF GLOBAL BRANDS IN COUNTRY) 1 53.0 52.7 44.0 27.5 23.1 21.3 13.2 9.9 8.7 il at es do m ic
Slide 27: Innovating in a New Business Environment
« GROWTH parque arauco Investor Presentation Fourth Quarter 2018 INNOVATING IN A NEW BUSINESS ENVIRONMENT ECOMMERCE SALES OVER TOTAL RETAIL SALES 1 PARQUE ARAUCO IS INVESTING IN TECHNOLOGY 13.3% 11.6% 10.3% 9.3% 8.5% 3.2% 2.4% 1.9% USA 1.6% 1.3% Chile, Perú, Colombia Digital New New 2013 2014 2015 2
Slide 28: Growing Retail Markets
« GROWTH parque arauco Investor Presentation Fourth Quarter 2018 PARQUE ARAUCO PARTICIPATES IN COUNTRIES WITH GROWING RETAIL MARKETS ROOM FOR GROWTH IN EMERGING ECONOMIES 1 RETAIL MARKETS IN CAPITAL CITIES1 CLOSING 2.500 300 4.000 600 3.500 GLA per 1,000 inhabitants GLA per 1,000 inhabitants 250 500
Slide 29: Important Recognitions from Local and International Organizations
« SUSTAINABILITY & CORPORATE GOVERNANCE parque arauco Investor Presentation Fourth Quarter 2018 PARQUE ARAUCO HAS RECEIVED IMPORTANT RECOGNITIONS FROM LOCAL AND INTERNATIONAL ORGANIZATIONS WORKPLACE RECOGNITION MANAGEMENT RECOGNITION Parque Arauco was recognized by Great Place 1 st place ranking in
Slide 30: Advancing Our Sustainability Strategy
« SUSTAINABILITY & CORPORATE GOVERNANCE parque arauco Investor Presentation Fourth Quarter 2018 IN THE LAST YEARS WE HAVE CONTINUED ADVANCING OUR SUSTAINABILITY STRATEGY SUSTAINABILITY AGENDA GENERATING SOCIAL VALUE COMMITMENT AND LEADERSHIP IN DECISION Develop programs and initiatives MAKING that s
Slide 31: Financial Strength: 50% Debt and 50% Equity Policy
« FINANCIAL STRENGTH parque arauco Investor Presentation Fourth 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 _< 1.50x 1.18x 1.21x 1.21x 1.15x 0.89x 0.81x
Slide 32: Conservative Debt Structure
« FINANCIAL STRENGTH CONSERVATIVE DEBT STRUCTURE parque arauco Investor Presentation Fourth Quarter 2018 LIABILITY AMORTIZACION PROFILE AND DURATION (MM USD) 1 199 DEBT LOCAL 185 DURATION RATING 141 6.3 Fitch: AA- years Feller: AA- ICR: AA- 99 82 RENTAL 62 58 60 55 56 CONTRACT 54 56 57 52 52 45 LENG
Slide 33: Cost of Debt Has Decreased in the Past 5 Years
« FINANCIAL STRENGTH THE COST OF DEBT HAS DECREASED IMPORTANTLY IN THE PAST 5 YEARS parque arauco Investor Presentation Fourth Quarter 2018 DATE: 04 / 17 / 2015 BASE: 1.62 % DATE: 08 / 30 / 2018 SPREAD: 1.68 % BASE: 1.59 % RATE: 3.30 % SPREAD: 0.75% DURATION: 14.77 GENERIC LONG-TERM BOND RATE 2.34%
Slide 34: 4. Future Developments
parque arauco Investor Presentation Fourth Quarter 2018 4. FUTURE DEVELOPMENTS 34
Slide 35: Future Developments
parque arauco FUTURE DEVELOPMENTS Investor Presentation Fourth Quarter 2018 TOTAL ESTIMATED TOTAL GLA TOTAL OWNED GLA TOTAL INVESTMENT NEW PROJECTS TYPE COUNTRY FORMAT % OWNERSHIP INVESTMENT DATE M² M² LOCAL CURRENCY¹ MUSD2 La Molina Development Perú Neighborhood TBD 19,500 100% 19,500 180,000 53 Su
Slide 36: Landbank
LANDBANK parque arauco Investor Presentation Fourth Quarter 2018 TOTAL COST LANDBANK BY TOTAL COST (DECEMBER 2018) % TOTAL COST NAME M 2 (LOCAL OWNERSHIP (MUSD)2 CURRENCY)1 Quilicura 25,486 100% 78,000 3 Buenaventura 115,864 100% 455,000 18 40% Chicureo 47,614 100% 206,000 8 Los Andes 39,254 100% 11
Slide 37: MegaPlaza Business Combination
parque arauco MEGAPLAZA BUSINESS COMBINATION Investor Presentation Fourth Quarter 2018 Total GLA City (m2) Occupancy MegaPlaza Norte Lima 112.000 98,2% MegaPlaza Express Villa Chorrillos Lima 8.000 98,1% MegaPlaza is a Peruvian shopping center company, which began its MegaPlaza Chimbote Chimbote 28.
Slide 38: Glossary
« parque arauco Investor Presentation Fourth 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 & Amort
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