CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 - PowerPoint PPT Presentation

CLS Holdings plc Capital Markets Day Hamburg 4 April 2019

Disclaimer This document may contain certain ‘forward -looking statements’ . By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from those expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of CLS speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except as required by its legal or statutory obligations, the Company does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Information contained in this document relating to the Company or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance. All numbers provided are as at 31 December 2018 unless otherwise stated.

Contents Fredrik Widlund – CEO Rolf Mensing – Head of Germany Florian Voigt – Head of German Asset Management 1 Overview 7 Germany 10 Operations 14 Key Data 18 Properties 25 Questions

Overview Fredrik Widlund – CEO CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 01

Leadership Senior Management Fredrik Widlund – Chief Executive Officer John Whiteley – Chief Financial Officer Fredrik joined in 2014. His previous experience includes John joined in 2009. He is a Chartered Accountant and his senior roles in business leadership, property and finance previous experience includes senior finance roles with and prior to joining CLS he worked for GE Capital Real Doughty Hanson Real Estate, Great Portland Estates and Estate and Shell. E&Y. Simon Wigzell – Head of Group Property Rolf Mensing – Head of Germany Simon joined in 2010. He is a Chartered Surveyor and Rolf joined in 2006. He is a Chartered Surveyor and his previous experience includes senior leadership roles in previous experience includes working for the Quandt portfolio management and property development for Family Office and DIC Asset AG, a listed property Warner Estate, BAA and Cushman Wakefield. company in Germany. Florian Voigt – Head of German Asset Management Florian joined in 2017. He has worked for several property companies in Germany in senior asset management roles with Christmann Immobilien and Arminius Kapitalgesellschaft. CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 02

Overview CLS Holdings plc ● CLS Holdings plc is a property investment company PROPERTY VALUE BY GEOGRAPHY which has been listed on the London Stock Exchange since 1994 ● At 31 December 2018 the Company had shareholders’ £1.9bn funds of £1.1bn, and a property portfolio in the UK, Germany and France valued at £1.9bn ● We specialise in owning and managing office buildings, UK (£982.3m) 51% with a range of lease lengths, in order to achieve stable Germany (£629.4m) 33% cash flows France (£308.1m) 16% ● We operate in London and the south east, and in the major cities in Germany and France TOP 10 SHAREHOLDERS ● We aim to hold, develop and refurbish our property Mortstedt Family & Charity Trust 51.4% Fidelity Worldwide Investments 9.6% investments to obtain long-term asset growth Bengt Mortstedt 6.5% ● We have established offices in London, Hamburg, Bank of Montreal 6.1% Luxembourg and Paris Invesco 5.0% Schroders 2.5% AXA 1.7% Janus Henderson Group 1.2% JP Morgan Chase & Co 1.0% NW Brown Group 0.9% CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 03

Key Financials Consistent & Strong Returns TOTAL SHAREHOLDER RETURN PORTFOLIO VALUE (£bn) CLS FTSE 350 FTSE Real Estate Super Sector 900 1.92 800 1.80 CAGR 700 1.57 1.46 600 22% 1.31 1.13 500 0.93 0.90 0.88 400 0.81 300 200 100 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 EPRA NAV (pence) EPRA EPS (pence) DISTRIBUTIONS (£m) 12.3 12.6 13.1 28.1 25.9 286 310 23.5 246 19.1 7.7 8.5 208 11.2 12.3 13.2 15.0 15.9 177 6.5 6.5 6.6 115 127 4.3 98 95 83 2.8 6.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 04

Portfolio Group Data CONTRACTED RENT (£109.6m) AFFORDABLE RENTS (£/sq ft p.a.) 23.14 689 19.41 Tenants 11.41 Government (28% by rent) Major corporates (29%) Other (43%) UK Germany France TOP 10 TENANTS (33% of contracted rent) AVERAGE UNEXPIRED LEASE TERM (years) 1. Secretary of State (UK) 5.4 5.4 2. National Crime Agency (UK) 5.3 4.9 4.8 3. Roehampton University (UK) 4.3 4.2 4. City of Bochum (Germany) 2.6 5. BAE Systems (UK) 6. General Mills (UK) 7. Kaufland (Germany) 8. Honda (UK) UK Germany France Group 9. Bosch (Germany) To first break To end of lease 10. COLT Telecoms (France) CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 05

Portfolio Group Data PROPERTY USE BY REVENUE EXCESS OF NET INITIAL YIELD OVER COST OF DEBT 8% Office (89%) 6% Student (5%) 4% Hotel (4%) 2% Food retail (2%) 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net initial yield Weighted average cost of debt OFFICE SECTORS BY REVENUE VACANCY Government (30%) Business services (23%) 5.8% IT (7%) Group KPI 5.0% Manufacturing (13%) 4.5% 4.4% 4.4% Finance (5%) 3.9% 3.8% Medical services & healthcare (3%) 3.1% 2.9% 2.8% Education & training (1%) 1.6% Media and publishing (2%) Telecomms (1%) Charitable (1%) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Other (14%) CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 06

Germany Rolf Mensing – Head of Germany CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 07

Germany Powerhouse of the Eurozone GDP (€bn) GERMAN 10-YEAR BOND YIELD (%) 4.0 4,000 3,386 3.5 3,500 3,277 3,160 3,049 2,939 2,826 3.0 3,000 2,758 2.5 2,500 2.0 2,000 1.5 1,500 1,000 1.0 500 0.5 - - 2012 2013 2014 2015 2016 2017 2018 -0.5 EMPLOYMENT (m) Population: INFLATION (CPI) 82.8m 46.0 2.5% 45.0 45.0 2.0% 44.6 1.9% 2.0% 1.8% 44.0 44.0 1.5% 43.3 1.5% 42.8 43.0 42.5 42.2 0.9% 1.0% 41.8 42.0 41.3 0.5% 0.5% 0.3% 41.0 40.0 0.0% 2010 2011 2012 2011 2012 2013 2014 2015 2018 2012 2013 2014 2015 2016 2017 2018 Source: www.statista.com Source: www.statista.com * Forecast CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 08

Germany Attractiveness of German Real Estate HAMBURG ● Well-diversified strong economy ● Ten large autonomous office markets ● Low vacancy and limited supply driving rental and high office employment driving capital growth MUNICH ● Record level of investment activity ● Low supply of new build offices; mainly pre-let ● Attractive spread between property yields and funding costs CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 09

Operations Rolf Mensing – Head of Germany CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 10

CLS Germany’s History Timeline 2005 2007 2009 2011 Acquisitions Market Entry Platform Established Development Development CLS Germany is set up 17 properties worth 24,000 sqm in Bochum, 12,000 sqm in Landshut, €250m pre-let to Government pre-let to EON 2016 2014 2017 2017 2019 Asset Management Disposals Corporate Acquisition Portfolio CLS Germany Today Vacancy below 3% Disposal of Landshut 21 properties worth Acquired ZIAG AG with 12 30 properties worth €700m properties for €31m properties, valued at €419m €152m CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 11

Strategy Create Value, Reinvest for the Future We acquire the …we secure the …we deliver value We reward right properties… right finance… through active shareholders, management and customers and cost control employees ● Hands-on in-house ● Distribute half of our ● Invest in offices in non- ● Up to 7 year term from EPRA earnings and asset and property broad range of lending prime locations with management reinvest remaining good transport links in portfolio the larger cities in ● Our tenants are our ● Work with our ● Fixed rate primarily Germany customers customers to ● Loans mainly to SPVs & ● Multi-let to spread risk understand their needs ● Reward employees for non-recourse ● Effective cost control ● Disciplined investment their loyalty and work and higher occupancy approach than local markets CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 12

Our Team German Asset and Property Management Team Rolf Mensing Head of Germany Florian Voigt Tanja Korbmacher Head of Asset Head of Property Management Management (Joins 01/07/19) Asset Asset Asset Asset Manager Manager Manager Manager Property Property Property Property Manager Manager Manager Manager Northern Portfolio Eastern Portfolio Western Portfolio Southern Portfolio CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 13

Key Data CLS Holdings plc Full Year Results 2018 | 17 Rolf Mensing – Head of Germany Questions CLS Holdings plc Capital Markets Day Hamburg 4 April 2019 | 14