Wereldhave N.V. · EURONEXT:WHA

Wereldhave — FY2012 Earnings Presentation

71 slides from Wereldhave's earnings presentation, Feb 11, 2013

  1. Slide 1: Strategy update and full year 2012 results

    Strategy update and full year 2012 results Amsterdam 11 February 2013

  2. Slide 2: Main topics 2012

    Main topics 2012 H1 2012  Downward valuation of €173.8m  Dividend cut to €3.20 - €3.40 Q3 2012  Stabilisation and restructuring • Sale US Announced 7 January 2013, closing Q1 2013 • Action plan UK shopping centres Announced today, closing Q1 2013 • Cost reduction plan Plan ready and in executi

  3. Slide 3: Sale US and UK

    Sale US and UK US portfolio: UK portfolio: Full exit was realised within 6 months Full exit before year end  Pricing  $720m at +5% to book value  £243m at -4% to book value  Net exit yield  2.7%  5.75%  Acquirer(s)  Lone Star  Various  Closing transaction  Q1 2013  Q1 2013  Exit  2013

  4. Slide 4: Strategy update

    Strategy update Itis - Finland 4

  5. Slide 5: Trends

    Trends "Convenience will be king as shopping habits evolve into a multichannel approach rather than one-stop shopping.“ “There’s a tremendous opportunity to grow through new formats, such as Walmart Express. Express has been created to offer convenient access for fill-in and stock-up shopping trips,

  6. Slide 6: Our view on the market

    Our view on the market  Changing consumer patterns driven by demographics, (socio)economic cycles and technology  Mature real estate markets with multi dimensional competition  Demanding retailers looking for multi channel approach and best value per sqm  Tight financing markets with lower risk

  7. Slide 7: Our response

    Our response  Focus on core markets: Belgium, Finland, the Netherlands and Paris  Excellence in operations  Solid and sustainable balance sheet  Back to predictable returns Wereldhave aims to be an excellent operator of dominant regional centres in North-Western Europe 7

  8. Slide 8: Our approach

    Our approach Phase I: Derisk (2012 – 2013)  Exit non-core markets  Healthy balance sheet  Cost reduction Phase II: Regroup (2013 – 2015)  Operational excellence  Controlled development pipeline  Maximise value Itis  Reinvest in core markets  Alignment with all stakeholders Phase III: Growth

  9. Slide 9: Phase II: Regroup (2013 – 2015)

    Phase II: Regroup (2013 – 2015) 1. Operational excellence  Achieve like-for-like rental growth above indexation  Become low cost operator with value-add skills  Leverage on expertise of core country organisations 2. Controlled development  Realise projected returns pipeline  Build a sequential

  10. Slide 10: Phase II: Targets (2013 – 2015)

    Phase II: Targets (2013 – 2015) 1. Operational excellence  Average retail LFL growth of 125bps above indexation  ≥98% occupancy  Overhead reduction to ≤€14m  Strengthen talent development  Standardise best practices between core countries 2. Controlled development  Retail €330m and offices €11

  11. Slide 11: Four core markets

    Four core markets Belle-Ile - Belgium 11

  12. Slide 12: Four core markets, predominantly retail

    Four core markets, predominantly retail Solid macro economic fundamentals  High GDP per capita Belgium  High and stable credit rating  Population growth In-depth market knowledge  Expertise in each real estate market Retail Finland  Deep understanding of consumers  Embedded relationships with

  13. Slide 13: Solid macro economic fundamentals

    Solid macro economic fundamentals High GDP per capita 2011A High and stable credit rating Population growth 2012 - 2020 AA Belgium Long term 5.0% (BE) 32,900 A-1+ 31,230 Short term 29,800 28,900 27,000 25,200 AAA Long term 3.3% Finland 2.9% (FI) A-1+ Short term 2.3% 2.1% AAA Netherlands Long term (N

  14. Slide 14: Retail strategy

    Retail strategy De Eggert - The Netherlands 14

  15. Slide 15: Wereldhave offers convenient shopping

    Wereldhave offers convenient shopping Our criteria:  90% of shopping needs  Top-of-mind in their catchment areas  Catchment areas of at least 100,000 inhabitants within 10 minutes drive time  Easy accessibility  Strong national and international brands in combination with local heroes  Fully e

  16. Slide 16: Retail structures in core countries differ

    Retail structures in core countries differ Belgium  Predominantly out-of-town retail, next to highways  Scarcity of modern retail parks and shopping centres  Prohibitive planning for out-of-town retail, rising demand for (inner-)city developments Finland  Diverse retail structure  50% of total

  17. Slide 17: Acquisition criteria

    Acquisition criteria Wereldhave aims to expand in its core retail markets:  Critical mass  Dynamic reletting strategy  Regional dominance Acquisitions need to fit Wereldhave's criteria for convenient shopping For each core retail country Wereldhave has identified acquisition targets:  Belgium To

  18. Slide 18: Strategy per country

    Current portfolio 25% Strategy Finland €495m per country 28% Netherlands €543m 28% Belgium €555m 15% Paris €291m 4% Spain €97m Segmentation based on investment properties in operation and under construction (valuation per 31 Dec 2012) 18

  19. Slide 19: Belgium

    Belgium Nivelles - Belgium 19

  20. Slide 20: Continuation of growth in Belgium

    Continuation of growth in Belgium  Wereldhave’s Belgium portfolio originally comprised three shopping centres: Nivelles, Belle-Ile and Tournai  All three centres are dominant in their catchment area and have high occupancy rates  Over the years Ghent, Genk and Waterloo were added to the portfolio

  21. Slide 21: Winner Sustainability, Winner Shopping centres

    Winner Sustainability Winner Shopping centres

  22. Slide 22: Overview of redevelopment planning

    Overview of redevelopment planning (Re-)development Assets Remarks 2013 2014 2015 Redev. of former student restaurant in retail and student home, total Ghent inv. €15m, €4m capex so far, expected net yield of 6.25-6.75% Refurbishment and extension of Genk Shopping 1, total investments Genk €84m, €34

  23. Slide 23: Belgium artist impressions

    Belgium artist impressions Ghent Forum Overpoort Les Bastions, Tournai Genk Shopping 1 Genk Shopping 1 23

  24. Slide 24: Belgium: Targets 2013 – 2015

    Belgium: Targets 2013 – 2015 Portfolio  Footfall Growing  Tenant rotation ≥ 5%  Like for like growth ≥ 220bps above indexation  Occupancy ≥ 98% Development pipeline  Investments €140m  Yield on cost ≥ 6.5% - 7.0%* * Yield on cost for the period 2013 – 2017 24

  25. Slide 25: Finland

    Itis - Finland wi = WERELDHAVE

  26. Slide 26: Maximise value Itis

    Maximise value Itis  Acquired in 2002, largest centre in Nordics  Performance has always been solid (acquired for €322m, current value in operation €450m)  Renovations and extensions in order to become the leading shopping centre in Finland  Focus on completion mid 2014 at a yield on cost of 7.0

  27. Slide 27: Slide 27

  28. Slide 28: Pasaassi before refurbishment and finalised

    Pasaassi before refurbishment Pasaassi finalised 28

  29. Slide 29: Overview of redevelopment planning

    Overview of redevelopment planning Refresh- & refurbishment Projects Remarks 2011 2012 2013 2014 Car parking Sequential execution Diagonal New Yorker and Bik Bok first store in Finland at Itis Bulevardi Executed in three parts, shops remain open Piazza Relocation of Stockmann in November 2013 Pasaas

  30. Slide 30: Overview of redevelopment planning

    Overview of redevelopment planning Level 1 Pasaasi Bulevard Diagonal Stockmann Tenant relocation programme 30

  31. Slide 31: Finland: Targets 2013 – 2015

    Finland: Targets 2013 – 2015 Portfolio  Footfall Growing  Tenant rotation ≥5%  Like for like growth ≥ 200bps above indexation  Occupancy ≥ 99% Development pipeline  Investments €95m  Yield on cost ≥ 7.0% 31

  32. Slide 32: The Netherlands

    The Netherlands Kronenburg - The Netherlands 32

  33. Slide 33: Transformation of the Dutch centres

    Transformation of the Dutch centres  Wereldhave’s Dutch centres need to be repositioned in the next 2-3 years  Despite difficult economic circumstances, these shopping centres have shown solid performance due to:  Stable footfall  Top-of-mind within their catchment area  High occupancy (97%) 

  34. Slide 34: Overview of the refresh & development planning

    Overview of the refresh & development planning Refresh- & refurbishment Redevelopment plans for 2015 going forward Assets 2013 2014 2015 Timing mostly depending on permit processes Kronenburg Extension of 15,000 sqm in total in several phases Arnhem De Koperwiek 2,000 sqm for extension of existing a

  35. Slide 35: Netherlands: Targets 2013 – 2015

    Netherlands: Targets 2013 – 2015 Portfolio  Footfall Growing  Tenant rotation ≥ 5%  Like for like growth Above indexation  Occupancy ≥ 97% Development pipeline  Investments €60m  Yield on cost 6.0%* * Yield on cost for the period 2013 – 2017 35

  36. Slide 36: Paris

    We WE i % Ww Oe Joinville - Paris WERELDHAVE

  37. Slide 37: Wereldhave will leverage on its track record in Paris

    Wereldhave will leverage on its track record in Paris  In the past 10 years we have successfully (re)developed offices in Paris In €m Acquisition Cost price Yr disposal Price/valuation Profit Return (€m) (€m) (€m) Clichy 2002 64 2006 106 42 66% Sold Joinville* 2010 71 2013 91 21 29% Ilot Kleber 199

  38. Slide 38: Spain

    Spain Plaza de la Lealtad - Spain 38

  39. Slide 39: Spain: on hold

    Spain: on hold  Wereldhave’s current portfolio consists of: In €m Book value Book value 2009 2012 Fernando el Santo and Arroyo de la Vega 66 62 Rivas and Planetocio 84 36 Total 150 98  Plaza de la Lealtad was sold in December 2012 for €15.2m and 5.9% net exit yield (book gain €1m)  Wereldhave Spa

  40. Slide 40: Organisation

    Organisation Itis - Finland 40

  41. Slide 41: Clear management structure and governance

    Clear management structure and governance Management structure  Management Board with a CEO and CFO  Management Team consisting of Dirk Anbeek, CFO, Hans Vermeeren and Richard Beentjes. Supported by country directors Luc Plasman, Michel Janet and Jaakko Ristola Governance  Expand and strengthen S

  42. Slide 42: Culture: towards a result oriented organisation

    Culture: towards a result oriented organisation Corporate culture  Create an entrepreneurial, transparent and result oriented culture  Standardise best practices between core retail countries  Increase commercial focus and value-add skills  Strengthen talent development  New Group & Dutch offic

  43. Slide 43: Organisation: Management Team

    Organisation: Management Team Dirk Anbeek  CEO Responsible for strategy, investor relations, human resources, acquisitions and disposals Management 6 years experience in real estate and 13 years in retail Board  CFO Responsible for finance & control, tax, treasury, ICT Hans Vermeeren  Managing Di

  44. Slide 44: Reduction of overhead expenses

    Reduction of overhead expenses €22.7m Restructuring €1.9m costs €6.7m €2.0m Other overhead €20.8m expenses €16.0m €14.0m 2012A Overhead reduction 2013E Overhead reduction 2014E  Overhead reduction is generated by savings on direct costs (a.o. personnel), indirect costs (external advisory and tempor

  45. Slide 45: Debt profile

    Debt profile 31 Dec 2012 Covenant  LTV 44% ≤ 60% 3%  Solvency ratio 54% ≥ 40% 18%  ICR 4.6x ≥2x 39% Total  Secured 4.6% ≤ 40% €1.3bn 18% 22% Ambitions  Optimise debt profile in H1 2013 Revolving credit facilities USPP  Maintain and further exploit diversified funding base Convertible bond  LT

  46. Slide 46: Our approach

    Our approach Phase I: Derisk (2012 – 2013)  Exit non-core markets  Healthy balance sheet  Cost reduction  Phase II: Regroup (2013 – 2015)  Operational excellence  Controlled development pipeline  Maximise value Itis  Reinvest in core markets  Alignment with all stakeholders Phase III: Growt

  47. Slide 47: Full year results 2012

    Full year results 2012 Itis - Finland 47

  48. Slide 48: Main topics 2012

    Main topics 2012 H1 2012  Downward valuation of €173.8m  Dividend cut to €3.20 - €3.40 Q3 2012  Stabilisation and restructuring • Sale US Announced 7 January 2013, closing Q1 2013 • Action plan UK shopping centres Announced today, closing Q1 2013 • Cost reduction plan Plan ready and in executi

  49. Slide 49: Key results 2012

    Key results 2012 FY 2012 FY 2011 % growth % LFL growth Total NRI core portfolio €89.9m €87.0m 3.3% 3.9% Total NRI non-core portfolio €17.8m €23.7m (24.9)% (0.3)% Total NRI UK and US €43.3m €50.8m (14.8)% (9.7)% Total net rental income €151.0m €161.5m (6.5)% 0.0% Occupancy 89.2 % 91.4 % (2.4)% Direct

  50. Slide 50: Quarterly results

    Quarterly results FY 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 Total net rental income €161.5m €38.4m €38.3m €38.6m €35.7m €151.0m Occupancy 91.4 % 91.1% 88.3% 88.5% 89.2% 89.2 % Direct result per share €4.93 €1.10 €0.97 €0.98 €0.86 €3.91 Indirect result per share €(2.55) €0.01 €(8.01) €(0.45) €0

  51. Slide 51: Country update

    Country update Belgium  Strong LFL growth in retail and office portfolios Finland  Strong LFL growth  Developments at Passaasi have been finalised and Stockmann area under construction Netherlands  Economic headwind impacting retail 2013 LFL Paris  Joinville pre sold at >25% profit margin  Add

  52. Slide 52: Outlook

    Outlook 2013 guidance:  Disposals will lead to a decrease in net rental income  Development projects will start to contribute as of 2014  Decrease in general cost of €6.7m will contribute directly  Optimise debt profile in H1 2013 Direct result 2013 will depend on timing of reinvestment in core

  53. Slide 53: NRI: core portfolio

    NRI: core portfolio In €m FY 2012 FY 2011 % growth % LFL growth Belgium 23.1 16.0 44.4% 4.9% Finland 23.6 28.2 (16.3)% 5.3% Netherlands 29.2 29.1 0.3% 3.7% Paris 9.4 9.1 3.3% 2.3% Spain 4.6 4.6 0.0% (3.8)% Total 89.9 87.0 3.3% 3.9%  Belgian NRI increased due to the acquisition of Genk, the opening

  54. Slide 54: NRI: non-core portfolio

    NRI: non-core portfolio In €m FY 2012 FY 2011 % growth % LFL growth Belgium 8.6 8.6 0.0% 3.8% Netherlands 5.8 9.0 (35.6)% 0.0% France 1.1 3.1 (64.5)% n.a. Spain 2.3 3.0 (23.3)% (12.8)% Total 17.8 23.7 (24.9)% (0.3)% UK 23.1 18.0 28.3% (3.9)% US 20.2 32.8 (38.4)% (11.8)% Total 43.3 50.8 (14.8)% (9.7)

  55. Slide 55: Occupancy

    Occupancy Core portfolios FY 2012 FY 2011 Belgium 98.7% 99.9% Finland 98.5% 96.5% Netherlands 97.1% 96.5% Paris 99.0% 99.1% Spain 87.5% 90.3% Total 97.7% 97.1% Non-core portfolios FY 2012 FY 2011 Belgium 81.3% 83.1% Netherlands 88.0% 89.6% France n.a. 90.8% Spain 67.4% 64.1% Total 79.9% 80.6% UK 96.

  56. Slide 56: Overhead expenses

    Overhead expenses €6.7m €22.7m €15.0m €16.0m €16.0m €14.0m 2010A 2011A Change 2012A 2013E 2014E  Overhead expenses increased by €6.7m in 2012 due to:  Restructuring cost: €1.9m  Increase in (temporary) staff €3.2m  Advisory fees €1.2m  Other €0.4m  Overhead will decrease to €14m due to reducti

  57. Slide 57: Direct result per share

    Direct result per share ( €0.54 ) €0.11 ( €0.73 ) €0.14 €4.93 €3.91 2011A Standing Acquisitions Disposals Currency 2012A portfolio  Decrease result standing portfolio mainly driven by increase in US vacancy and renewals at lower rents, the refurbishment of Itis and increased overhead expenses  Acq

  58. Slide 58: NAV per share

    NAV per share ( €4.70 ) €3.91 ( €8.45 ) €73.44 €0.02 ( €0.13 ) €64.09 2011A Dividend 2011 Direct result Indirect result Currency Other 2012A EPRA NAV EPRA NNNAV  2011: €76.40  2011: €75.25  2012: €68.26  2012: €66.08 58

  59. Slide 59: Appendix

    Appendix De Eggert - The Netherlands 59

  60. Slide 60: Lease expiry profile

    Lease expiry profile Core portfolios 1.8% 16.3% 17.9% 27.5% 7.0% 8.0% 3.1% 10.3% 1.1% 0.5% 6.5% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 > 2021 Non-core portfolios 0.6% 11.5% 14.7% 7.7% 17.4% 13.9% 9.7% 6.9% 7.1% 5.7% 4.8% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 > 2021 Excluding i

  61. Slide 61: Lease expiry profile per sector

    Lease expiry profile per sector 0.39% Other 2.8% Office 0.53% Retail 0.90% 4.7% 4.1% 1.13% 0.11% 0.16% 0.22% 6.0% 4.7% 0.6% 0.08% 2.6% 7.4% 0.00% 0.00% 1.9% 0.06% 2.5% 0.2% 1.2% 9.8% 10.6% 15.8% 4.1% 4.6% 2.9% 0.4% 1.0% 1.8% 6.7% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 > 2021 Excluding ind

  62. Slide 62: Belgium retail portfolio: 2012 performance

    Belgium retail portfolio: 2012 performance Core markets Key parameters FY 2012 FY 2011 Net rental income €23.1m €16.0m Cap rate 6.4% 6.3% Occupancy 98.7% 99.9% Investment properties €377.5m €257.0m in operation Investment properties €55.2m €74.4m under construction Acquisitions €74.0m - Net proceeds

  63. Slide 63: Finland retail portfolio: 2012 performance

    Finland retail portfolio: 2012 performance Core markets Key parameters FY 2012 FY 2011 Net rental income €23.6m €28.2m Cap rate 6.1% 5.8% Occupancy 98.5% 96.5% Investment properties €458.3m €456.5m in operation Investment properties €36.7m €6.5m under construction Acquisitions - - Net proceeds dispo

  64. Slide 64: Netherlands retail portfolio: 2012 performance

    Netherlands retail portfolio: 2012 performance Core markets Key parameters FY 2012 FY 2011 Net rental income €29.2m €29.1m Cap rate 6.3% 5.9% Occupancy 97.1% 96.5% Investment properties €481.8m €491.7m in operation Investment properties €2.7m €1.8m under construction Acquisitions €3.0m €3.9m Net pro

  65. Slide 65: Paris portfolio: 2012 performance

    Paris portfolio: 2012 performance Core markets Key parameters FY 2012 FY 2011 Net rental income €9.4m €9.1m Cap rate 6.1% 5.8% Occupancy 99.0% 99.1% Investment properties €174.7m €163.8m in operation Investment properties €116.4m €3.5m under construction Acquisitions - - Net proceeds disposals - - C

  66. Slide 66: Valuation: Core and non-core portfolios

    Valuation: Core and non-core portfolios Core portfolios – In €m FY 2012 FY 2011 % growth % LFL growth Belgium 377.5 257.0 46.9% 6.5% Finland 458.3 456.5 0.4% 0.4% Netherlands 481.8 491.7 (2.0)% (2.0)% Paris 174.7 163.8 6.6% 6.6% Spain 61.9 77.9 (20.5)% (2.6)% Total 1,554.2 1,446.9 7.4% 1.2% Non-core

  67. Slide 67: Yield movements & cap rates

    Yield movements & cap rates In % Retail Office Other Cap rate Belgium +0.1 (0.3) - 6.4% Finland +0.3 - - 6.1% Netherlands +0.4 +0.3 (1.4) 6.4% Paris - +0.3 - 6.1% Spain +5.2 +0.3 +2.0 8.4% UK +0.6 (1.7) - 7.1% Cap rate 6.5% 6.6% 7.7% 6.5%  Effect US portfolio to discontinued operations -/- 15 bps o

  68. Slide 68: Finance

    Finance Key parameters FY 2012 FY 2011 Covenants Interest bearing debt * €1,282m €1,289m Average cost of debt** 2.7% 3.0% Fixed vs floating debt 49% / 51% 44% / 56% LTV 44% 41% ≤60% ICR 4.6x 5.4x ≥2.0x Diversification debt profile Maturity profile (€m) 464 Debt 3% 18% Undrawn 39% 268 274 18% 22% 99

  69. Slide 69: Currency hedge

    Currency hedge 58% 54% 54% 45% USD USD GBP GBP 31 Dec 12 31 Dec 11 31 Dec 12 31 Dec 11  Coverage of USD and GBP exposure changed due to:  A change of 10% on period-end exchange rates has an impact  Sale of assets of €2.25 (or 3.5%) on the NAV per share  Repayment of interest bearing debt  A cha

  70. Slide 70: P&L 2012

    P&L 2012 (In €' 000) 2012 2011 Δ Theoretical Rent 234,357 231,024 3,333 Vacancy (28,228) (22,787) (5,441) Gross Rent 206,129 208,237 (2,108) Service Costs (net) (3,463) (3,008) (455) Property Expenses * (51,712) (43,743) (7,969) Total Property Expenses (55,175) (46,751) (8,424) Net Rental Income 150

  71. Slide 71: Contact details

    Contact details Press: Analysts:  Richard Beentjes  Jaap-Jan Fit  [email protected][email protected]  T +31 70 346 93 25  T +31 70 307 45 43

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