Investor Presentation • Jul 27, 2023
Investor Presentation
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28 JULY 2023
This presentation has been prepared by MERLIN Properties SOCIMI, S.A. (the "Company") for informational use only. The information contained in this presentation does not purport to be comprehensive or to contain all the information that a prospective purchaser of securities of the Company may desire or require in deciding whether or not to purchase such securities. The information contained in this document is subject to change, verification and completion without notice. Neither the Company nor any of affiliates, advisors or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of any information contained or referred to in this document. Each of the Company and its affiliates, advisors or agents expressly disclaims any and all liabilities which may be based on this document, the information contained or referred to therein, any errors therein or omissions therefrom. Neither the Company, nor any of its affiliates, advisors or agents undertakes any obligation to provide the recipients with access to additional information or to update this document or to correct any inaccuracies in the information contained or referred to therein.
Certain statements in this document regarding the market and competitive position data may be based on the internal analyses of the Company, which involve
relied upon in substitution for the recipient's own exercise of independent judgment with regard to the operations, financial condition and prospects of the Company.
certain assumptions and estimates. These internal analyses may have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are accurate. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation. Additionally, certain information contained herein may be based on management accounts and estimates of the Company and may have not been audited or reviewed by the Company's auditors. Recipients should not place undue reliance on this information. The financial information included herein may have not been reviewed for accuracy or completeness and, as such, should not be relied upon. This information is provided to the recipients for informational purposes only and recipients must undertake their own investigation of the Company. The information providing herein is not to be offering, will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"). Such securities may not be offered or sold in the United States except on a limited basis, if at all, to Qualified Institutional Buyers (as defined in Rule 144A under the Securities Act) in reliance on Rule 144A or another exemption from, or transaction not subject to, the registration requirements of the Securities Act. The securities of the Company have not been and, should there be an offering, will not be registered under the applicable securities laws of any state or jurisdiction of Canada or Japan and, subject to certain exceptions, may not be offered or sold within Canada or Japan or to or for the benefit of any national, resident or citizen of Canada or Japan. THIS PRESENTATION DOES NOT
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CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE SHARES. ANY DECISION TO PURCHASE SHARES IN ANY OFFERING SHOULD BE MADE SOLELY ON THE BASIS OF PUBLICLY AVAILABLE INFORMATION ON THE COMPANY.
This presentation may include forwardlooking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the financial position, business strategy, management plans and objectives for future operations of the Company are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause such actual results, performance or achievements, or industry results, to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of the Company and the environment in which they expect to operate in the future.
Forward-looking statements speak only as of the date of this presentation and the Company expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation, any change in their expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.
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(1) Net of incentives
(2) Excludes non-overhead costs items (€ 0.6m) plus LTIP accrual (€ 1.4m)
(3) FFO equals EBITDA less net interest payments, less minorities, less recurring income taxes plus share in earnings of equity method APM: definitions and reconciliation of APMs to the latest audited financial accounts can be found on page 53 of https://ir.merlinproperties.com/wp-content/uploads/2023/07/Results-report-6M23.pdf
| EPRA NTA | 15.36 | 17.10 | (10.2%) | |
|---|---|---|---|---|
| EPS | (0.10) | 1.05 | n.m. | |
| AFFO | 0.30 | 0.33 | (7.8%) | |
| FFO | 0.31 | 0.34 | (6.4%) | |
| (€ per share) | ||||
| EPRA NTA | 7,215.6 | 8,034.5 | (10.2%) | |
| IFRS net profit | (47.5) | 491.6 | n.m. | |
| AFFO | 140.8 | 152.8 | 121.6 PF excl. Tree |
(7.8%) |
| Margin | 62.0% | 70.7% | ||
| FFO(3) | 147.4 | 157.5 | 126.3 PF excl. Tree |
(6.4%) |
| Margin | 76.4% | 74.5% | ||
| EBITDA(2) | 181.7 | 165.8 | +9.6% | |
| Net rents(1) | 201.1 | 186.4 | +7.9% | |
| Gross rents after incentives | 222.4 | 209.3 | +6.3% | |
| Gross rents | 237.8 | 222.6 | +6.9% | |
| (€ million) | 6M23 | 6M22 | YoY |
| 126.3 PF excl. Tree |
+16.7% PF excl. Tree |
||
|---|---|---|---|
| 121.6 PF excl. Tree |
+15.8% PF excl. Tree |
||
| $.5^{\prime}$ | 0.34 . |
$(6.4\%)$ . |
|
|---|---|---|---|
| $\leq$ () | $($ ) $\leq$ $\leq$ | ||
| $\frac{1}{2}$ | n.m. | ||
| 36 | 17.10 | $(10.2\%)$ |
6M23
Balance acquisitions, disposals & other
(1.0)
Occupancy and WAULT to first break per asset type(1)
(1) Portfolio in operation for 6M22 (€ 114.1m of GRI) and for 6M23 (€ 122.6m of GRI)
KPIs
C85. 196 desks Pza. Cataluña. 80 desks (extension)
(1) ADR: Average monthly desk rate
New openings 2023
(1) Portfolio in operation for 6M22 (€ 35.5m of GRI) and for 6M23 (€ 37.0m of GRI)
Third parties stock (ground leases) 183,252 sqm
Stock under management 919,636 sqm
| Contracted sqm | Release spread | # contracts | ||||
|---|---|---|---|---|---|---|
| 100,101 | +0.7% | 29 | ||||
| Occupancy by area | ||||||
| 6M22 100% | (163 bps) | 6M23 98.4% | ||||
| €m | 6M23 | 6M22 | ||||
| Gross rents | 37.9 | 35.9 | ||||
| Net rents | 37.6 | 35.4 | ||||
| EBITDA | 36.4 | 33.0 | ||||
| FFO(1) | 20.0 | 20.3 |
Tenants
(1) After deducting leasehold concession charge
Shopping centers | GRI bridge and breakdown
Change vs 31/06/22 (bps)
+209
(1) GAV of WIP projects included under its respective asset class for LfL purposes (2) Including equity method (3) Based on passing rent
| 30/06/2023 | 31/12/2022 |
|---|---|
| 30/06/2023 | 31/12/2022 | |
|---|---|---|
| Net debt | € 3,935m | € 3,792m |
| LTV | 33.9% | 32.7% |
| Average cost | 2.26% | 1.98% |
| Fixed rate debt | 98.0% | 99.6% |
| Average maturity (years) | 5.3 | 4.9 |
| Liquidity(1) (€ million) | 1,034 | 1,856 |
| Rating | Outlook |
|---|---|
| BBB | Positive |
| Baa2 | Positive |
Unsecured loans Unsecured bonds Secured bank loans
Implementation of the green clause
2 main milestones achieved this semester
Value creation | 2023 deliveries: Plaza Ruiz Picasso
Delivery 2023
Delivered in July
Leasing
I - 100% (4,338 sqm) IV - 100% (6,488 sqm)
36,861 sqm After Refurbishment +756 sqm created
160k sqm with agreed Head of Terms +20k sqm speculative
To start construction 2H23(1)
Total remaining investment € 109m
YoC(2) 7.4%
61k sqm Lisboa park
(1) 47k sqm already under construction corresponding to Cabanillas Park II B (2) Including land cost 31
Licensing: February 2022 Start of development: April 2022 Early access: 15th of September 2023 Final delivery date: 29th of September 2023
Licensing: July 2022 Start of development: July 2022 Early access: Already granted to anchor tenant Final delivery date: 29th of September 2023
Facade construction: 95% completed. Finishing the installation of the PV façade (0.5 MWp) Building construction: 85% completed Interior offices: 80% completed
Equipment delivery: Already completed (3 MW) Fiber connection: On-going
Licensing: July 2022 Start of development: August 2022 Early access: Already granted to anchor tenant Final delivery date: 29th of September 2023
Facade construction: 95% completed. Finishing the installation of the PV façade (0.5 MWp) Building construction: 85% completed Interior offices: 30% completed
Equipment delivery: Already completed (3 MW) Fiber connection: On-going
Expected Dec-23 € 290m
Demonstration phase 2024
Full development phase +2035
MERLIN has delivered strong performance in all key operating metrics (occupancy, LfL rental growth, release spread and FFO generation)
• Occupancy at sound levels in all three asset classes (+12 bps vs. 31/03/2023) with offices resilient and record-levels
• Logistics continues enjoying strong tail winds with +160k sqm to be developed on a pre-let basis and occupancy
• Impressive performance of shopping centers with footfall (+0.9%) and sales (+13.8%) above pre-covid levels and
• Recommendation to the BoD: € 0.44 p.s. ordinary dividend corresponding to 2023 fiscal year
Paseo de la Castellana, 257
28046 Madrid
+34 91 769 19 00
www.merlinproperties.com
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