EPP: powerful vehicle to exploit the Polish retail growth story Investor update NOVEMBER 2018
Disclaimer This document has been prepared and issued by and is the sole responsibility of the management of EPP N.V. (the “Company” or “EPP”) and its subsidiaries. No information made available in connection with this presentation may be passed on, copied, reproduced, in whole or in part, or otherwise disseminated, directly or indirectly, to any other person. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the Company’s business, financial condition and results of operations. These statements, which contain the words “ ant icipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and words of similar meaning, reflect the management beliefs and expectations and involve risk and uncertainty bec ause they relate to events and depend on circumstances that will occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. The information on which these statements has been based has not been reviewed or reported by EPP’s auditors. This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers, any of its directors or employees or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information. 1
Section 1 Introduction to EPP
Introduction to EPP 1 Executive management team Hadley Dean Jacek Baginski Michal Swierczynski Wojciech Knawa Rafal Kwiatkowski CEO CFO Head of Asset Head of Property COO Management Management • • • • • >20 years of real estate 17 years of experience in >20 years of real >20 years of experience across >15 years of real estate estate experience CEE experience across Poland, commercial real estate experience Russia and Germany • • Former CEO of Compass Offices’ • • Member of a number of Former Managing Director at Former Chief Legal Officer at • EMEA operations Management and supervisory Former Venture Partner and the Echo Investment Property Echo Investment Boards Head of Retail at Griffin Real Management • • Former Managing Partner of Former Member of the Estate • • Previously, worked in the hotel Eastern Europe at Colliers Former CFO in companies listed Supervisory Board at Barlinek • International on the Warsaw Stock Exchange Former Associate Director at JLL and office sectors and Opoczno and those controlled by large Russia • In 2017 received the EuroBuild private equity funds in CEE • Real Estate Personality of the Former Head of Leasing and • Year (2017) award Former Member of the Development at ECE Projektmanagement Management Board and CFO of Empik Media & Fashion Source: Company filings 3
Introduction to EPP 1 Investment thesis ✓ ➢ Polish GDP growth CAGR One of the few economies that demonstrated resilience through the global financial crisis ✓ 18-20 of 3.2% vs 1.7% Consistently high GDP growth, well above other Western European economies ✓ in Western Europe 3 Exposure to 38m population Why Poland? ✓ ➢ Recently upgraded by “Safe haven” status due to economic and political stability and convergence towards EU living standards, well educated and large population base FTSE RUSSELL to ✓ Public debt and budget deficit as % of GDP expected to fall to 52% and 1.3% by Q4’18 developed market ✓ Rapid increase in consumer spending, expected to continue ➢ Consumer spending ✓ Lack of high-street proposition growth CAGR 18-20: ✓ Online emergence amplifying brick and mortar retail, while Allegro equivalent “Amazon” 5.7% Why retail? already present • “Click n collect” concept driving further in store purchases, cost of delivery remain high ➢ Offline sales growth of and inconvenience of delivery driving consumers to pick up goods in stores. 4.2% in the next 3 years ✓ Tenants increasingly expanding and new e-retailers launching e-stores Retail occupancy: 99.4% 1 ✓ ➢ Largest Polish retail real estate player ➢ 9% 4 div. yield ✓ High quality dominant shopping centres in strategic locations ✓ LFL NRI growth: 4.1% 1 Predictable cash flows, further supported by consistently high occupancy, long leases and ➢ Why EPP? secured pipeline of assets ➢ EUR333m acquisition ✓ Breadth of expertise within EPP allowing it to win tenants vs. market (EPP university, Dash boards etc.) pipeline & c.EUR1.1bn ✓ Strong growth profile (organic and inorganic) backed by in house platform development pipeline 2 Source: Company filings, Oxford Economics 1 As of 1H 18 report; 2 Represents estimated value at completion; 3 Western Europe (EU15) — Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK; 4 Div. yield calculated as mid-point of management 4 guidance DPS 18E of 11.70 cents / Share price of EUR1.31 as of November 7, 2018
Introduction to EPP 1 EPP at a glance Dominant Polish shopping centre portfolio focus Overview Geographical footprint EUR1.9bn 3 Pure play Poland 1 Standing retail (19 assets) Szeczecin PP Olsztyn Focus on dominant retail assets 1 Lomza Inowroclaw EUR1.1bn 4 Poznan Wloclawek Largest retail landlord in Poland Retail development 1 Warsaw Mlociny – Q2 19 Kalisz Towarowa 22 – 2024/5 Lodz M1 Radom Anchor shareholder: Redefine properties 1 Wroclaw (JSE listed with €3.2bn market cap) Belchatow EUR308m Jelenia Gora M1 Czestochowa Kielce Office Zamosc PP Opole Retail Occupancy: Czeladz (6 assets) GAV: EUR2.1bn 1 M1 Bytom 99.4% Klodzko Zabrze EUR333m Przemysl EPP sites Krakow PP Tychy M1 Tranches 2 & 3 Dividend yield: 9% 2 Employees: >150 (8 assets) Source: Company filings 1 1H18 Total portfolio value, excluding value of developments, EUR2.4bn including them; 2 Div. yield calculated as mid-point of management guidance DPS 18E of 11.70 cents / Share price of EUR1.31 as of November 7, 2018; 3 Marcelin shopping centre acquired post year end, 5 EUR1,763 ex. Marcelin; 4 Total estimated value on completion – Mlociny EUR412 and Towarow 22 EUR680m
Introduction to EPP 1 EPP’s strategy 1 2 Create an income-generating retail champion in Poland Develop even larger scale with prudent leverage • Leading Polish retail landlord focused on income generation • Growth driven by acquisitions of hand-picked retail assets, extensions and two developments in prime locations in Warsaw • Dominant, defensible and sustainable portfolio located in key locations • Steady deleveraging towards the mid-term LTV target of 45% • Consolidation of key retail assets in strategic locations • Cautious liquidity management 3 4 Utilise strategic relationships Maintain efficient operations through expertise • • Leverages relationships with tenants by exploiting economies of Experienced asset and property management teams and scale excellent staff retention • • Strong relationships in the international capital markets. Direct cooperation between asset management team and the client base to optimise tenant mix Source: Company filings 6
Recommend
More recommend
