Investor Presentation · Hanson Logistics #10 1.2% 44 Interstate Warehousing, Inc. #10 0.5% 100...
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Winter 2019 Investor Presentation
Transcript of Investor Presentation · Hanson Logistics #10 1.2% 44 Interstate Warehousing, Inc. #10 0.5% 100...
Winter 2019
Investor Presentation
This presentation contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are basedon our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currentlyavailable to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actualresults to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place unduereliance on such statements. Factors that could contribute to these differences include adverse economic or real estate developments in our geographicmarkets or the temperature-controlled warehouse industry; general economic conditions; risks associated with the ownership of real estate and temperature-controlled warehouses in particular; defaults or non-renewals of contracts with customers; potential bankruptcy or insolvency of our customers; uncertainty ofrevenues, given the nature of our customer contracts; increased interest rates and operating costs; our failure to obtain necessary outside financing; risksrelated to, or restrictions contained in, our debt financing; decreased storage rates or increased vacancy rates; difficulties in identifying properties to beacquired and completing acquisitions; risks related to expansions of existing properties and developments of new properties such as the Woolworthsdevelopment projects in Australia, including failure to meet budgeted or stabilized returns in respect thereof; acquisition risks, including the failure of suchacquisitions to perform in accordance with projections; difficulties in expanding our operations into new markets, including international markets; our failure tomaintain our status as a REIT; uncertainties and risks related to natural disasters and global climate change; possible environmental liabilities, including costs,fines or penalties that may be incurred due to necessary remediation of contamination of properties presently or previously owned by us; financial marketfluctuations; actions by our competitors and their increasing ability to compete with us; labor and power costs; changes in real estate and zoning laws andincreases in real property tax rates; the competitive environment in which we operate; our relationship with our employees, including the occurrence of anywork stoppages or any disputes under our collective bargaining agreements; liabilities as a result of our participation in multi-employer pension plans; the costand time requirements as a result of our operation as a publicly traded REIT; the concentration of ownership by funds affiliated with The Yucaipa Companiesand The Goldman Sachs Group, Inc.; changes in foreign currency exchange rates; the impact of anti-takeover provisions in our constituent documents andunder Maryland law, which could make an acquisition of us more difficult, limit attempts by our shareholders to replace our trustees and affect the price of ourcommon shares; and risks related to our forward sale agreement, including substantial dilution to our earnings per share or substantial cash paymentobligations.
Words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will” andsimilar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements included in this presentation include,among others, statements about our expected expansion and development pipeline and our targeted return on invested capital on expansion and developmentopportunities. We qualify any forward-looking statements entirely by these cautionary factors. Other risks, uncertainties and factors, including those discussedunder “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 and our other reports filed with the Securities and ExchangeCommission, could cause our actual results to differ materially from those projected in any forward-looking statements we make. We assume no obligation toupdate or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated inthese forward-looking statements, even if new information becomes available in the future.
Disclaimer
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Key Investment Highlights
Substantial Internal and External Growth Opportunities Expected to Drive Attractive Risk-Adjusted Returns
Investment Grade, Flexible Balance Sheet Positioned for Growth
Experienced Management Team, Alignment of Interest and Best-In-Class Corporate Governance
Important First Mover Advantage as the Only Publicly Traded REIT Focused on Temperature-Controlled Warehouses
Infrastructure Supported by Best-in-Class IT and Operating Platforms Provides a Significant Competitive Advantage
Global Market Leader with Integrated Network of Strategically-Located, High-Quality, “Mission-Critical” Warehouses
Strong and Stable Food Industry Fundamentals Drive Growing Demand for Our Business
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Note: Figures as of September 30, 2018, unless otherwise indicated. Figures may not sum due to rounding(1) Includes seven ground leased assets(2) Data as of August 2018. As of January 2018, USDA has changed the definition surrounding the capacity of domestic refrigerated warehouses. Warehouses must meet additional criteria to be included in
the publication(3) Figures exclude quarry business segment (4) Segment contribution refers to a segment’s revenues less segment specific operating expenses (excludes any depreciation, depletion and amortization, impairment charges and corporate level SG&A)
Contribution for our warehouse segment equates to net operating income (“NOI”)
Company Snapshot
Warehouses 156
Ownership Type119 Owned (1),25 capital / operating leased, 12 managed
Total Capacity 928mm cubic feet / 40mm square feet
Average Facility Size 6mm cubic feet / 254K square feet
Countries of OperationU.S., Australia, New Zealand, Argentina and Canada
Estimate of U.S. Market Share
23% (2)
Number of Customers ~2,300
Number of Pallet Positions
3.2mm
LTM 9/30/18 Segment Breakdown (3)
($ in millions)2016A 2017A LTM 9/30/18
Revenue $1,490 $1,544 $1,590
Segment Contribution / NOI
$346 $374 $397
Core EBITDA $261 $287 $301
Revenue Contribution / NOI (4)
Financial OverviewPortfolio Overview
Largest global and U.S. REIT focused on the ownership, operation, development and acquisition of temperature-controlled warehouses
93%
4% 4%
Warehouse
Third-Party Managed
Transportation
74% 16%
10%
Warehouse
Third-Party Managed
Transportation
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Temperature-Controlled Warehouses: An Attractive Asset Class
Uniquely designed to maintain the temperature of frozen and refrigerated products in the cold chain and represent a growing, attractive niche of the industrial warehouse real estate sector
Automated Storage & Retrieval System
Pallet Racking System
Rail Dock
Engine Room with Refrigeration Compressors
Specialized Dock Aprons
Battery Charging Rooms
High-Speed Doors
Office Areas
Insulated and Heated Floors
Insulated Walls
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Largest Fully Integrated Network of Temperature-Controlled Warehouses
Farm ProductionAdvantaged Warehouse
Public Warehouse
DistributionCenter
Retail Distribution Center
Supermarket
Fork
Food Producers Americold Realty Trust Food Distribution + Retailers
An indispensable component of food infrastructure from “farm to fork"
e-Commerce Fulfillment
Delhi, LA LaPorte, TX Atlanta, GA Phoenix, AZ
Gouldsboro Distribution Center – Gouldsboro, PA
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Transportation
WarehouseNOI
Third-Party Managed
Transportation
Integrated Operations Overview
Note: Figures may not sum due to rounding(1) LTM figures as of September 30, 2018 and excludes the quarry business segment
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Mission-critical, temperature-controlled real estate infrastructure generates rent and storage income
Comprehensive value-add services
Strategic locations, network breadth, scale, reliable temperature integrity and best-in-class customer IT interface distinguish our warehouses from our competitors
Management of customer-owned warehouses
Warehouse management services provided at customer-owned facilities
Operating costs passed through to customers
Asset-light consolidation, management and brokerage services
Complements warehouse segment
Enhances customer retention and drives warehouse storage and occupancy
Supplementary offering that improves supply chain efficiency and reduces cost by leveraging Americold’s scale
Overview Select Customers % of Contribution (1)
Tran
spo
rtat
ion
4%
Real estate value is driven by the critical nature of our infrastructure, strategic locations and integrated, full-service strategy
4%
93%
Tradewater Distribution Facility – Atlanta, Georgia
Warehouse
Third-Party Managed
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NY008MZK / 957094_1
Strategically Located, “Mission-Critical” Temperature-Controlled Warehouses
962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)
962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)962500_1.WOR (NY008MZK)
# facilities 138
Square feet (000s) 39,660
Cubic feet (mm) 834.0
# facilities 2
Square feet (000s) 232
Cubic feet (mm) 9.7
# facilities 6
Square feet (000s) 1,644
Cubic feet (mm) 47.6
Canada United States ArgentinaAustralia (1) New Zealand
# facilities 3
Square feet (000s) 471
Cubic feet (mm) 14.3
# facilities 7
Square feet (000s) 604
Cubic feet (mm) 22.8
Strategic locations and extensive geographic presence provide an integratedwarehouse network that is fundamental to customers’ ability to optimize their distribution networks
Public
Production Advantaged
Facility Leased
Third-Party Managed
Distribution
Note: Americold portfolio figures as of September 30, 2018(1) Figures include ambient facility, except for cubic feet metric
NY008MZK / 957094_1
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RankMarket Share
Cubic Ft (mm) Rank
Market Share
Cubic Ft (mm)
#1 23.1% 834 #1 4.3% 928
Lineage Logistics #2 18.6% 672 Lineage Logistics #2 3.5% 767
Preferred Freezer Services #3 8.4% 304 Swire Cold Storage #3 1.7% 358
US Cold Storage, Inc. #4 7.8% 280 Preferred Freezer Services #4 1.6% 352
AGRO Merchants Group #5 3.2% 115 AGRO Merchants Group #5 1.2% 263
Interstate Warehousing, Inc. #6 2.8% 100 Nichirei Logistics Group, Inc. #6 0.8% 174
Cloverleaf Cold Storage Co. #7 2.3% 84 Kloosbeheer B.V. #7 0.8% 165
Henningsen Cold Storage Co. #8 1.8% 65NewCold Advanced Cold
Logistics#8 0.7% 140
Burris Logistics #9 1.6% 58 VersaCold Logistics Services #9 0.6% 133
Hanson Logistics #10 1.2% 44 Interstate Warehousing, Inc. #10 0.5% 100
Global Market Leader in Temperature-Controlled Warehousing
Position as the U.S. and global market leader allows us to realize economies of scale, reduce operating costs and lower our
overall cost of capital. Ideally positioned to compete for customers and external growth opportunities
Global Market Leader (2)U.S. Market Leader (1)
Note: Americold portfolio figures provided by the Company as of September 30, 2018. As of January 2018, USDA has changed the definition surrounding the capacity of domestic refrigerated warehouses. Warehouses must meet additional criteria to be included in the publication. Figures may not sum due to rounding(1) IARW Top Companies in USA and North America, August 2018 and USDA National Agricultural Statistics Service, “Refrigerated Space: By Type of Warehouse” chart(2) GCCA and IARW Top Companies in USA and North America, August 2018(3) The remaining 29.1% and 84.5% of the U.S. and global markets consist of ~1.0bn cubic feet and ~18.4bn cubic feet, respectively
TOTAL (3) 70.9% 2,556 15.5% 3,381
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25%
26%
28%
22%
West
East
Central
Southeast
83%14%
3%1%
United States
Australia
New Zealand
Argentina
Highly Diversified Business Model Produces Stable Cash Flows
Note: Figures may not sum due to rounding(1) Diversification based on warehouse segment revenues for the twelve months ended September 30, 2018(2) Retail reflects a broad variety of product types from retail customers(3) Packaged food reflects a broad variety of temperature-controlled meals and foodstuffs(4) Distributors reflects a broad variety of product types from distribution customers
Commodity (1) Global Geographic Diversity (1)
Diversification helps reduce revenue volatility associated with seasonality and changing commodity trends
LTM 9/30/18TOTAL U.S.
WAREHOUSEREVENUE
$967mm
Warehouse Type (1)
Retail ⁽²⁾
Packaged Foods ⁽³⁾
Potatoes
Poultry
Dairy
Fruits & Vegetables
Bakery
Pork
Other
Beef
Distributors ⁽⁴⁾
Seafood
26%
17%
11%
11%9%
7%
4%
4%
3%
3%
3%2%
LTM 9/30/18 WAREHOUSE
REVENUE
$1,169mm
LTM 9/30/18 WAREHOUSE
REVENUE
$1,169mm
U.S. WarehouseGlobal Warehouse
62%
20%
17%
1%
Distribution
Production Attached
Public Warehouse
Facility Leased
LTM 9/30/18 WAREHOUSE
REVENUE
$1,169mm
54% 26%
19% 1%
Distribution
Production Attached
Public Warehouse
Facility Leased
LTM 9/30/18 WAREHOUSE
CONTRIBUTION (NOI)
$368mm
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Long Standing Relationships with Top 25 Customers
(1) Represents long-term issuer ratings as of November 8, 2018(2) Based on LTM warehouse revenues as of September 30, 2018
Scope and scale of network coupled with long-standing relationships position the Company
to grow market share organically and through acquisitions
25 largest customers account for approximately 62% (2) of warehouse revenues, with no one customer generating more than 9% (2) of revenues
Food Producers / CPG Companies
Have been with Americold for an average of
33 years
12 customers are investment grade (1)
100% utilize multiple facilities
100% utilize technology integration
88% utilize value-add services
68% utilize committed contracts or leases
56% are in fully dedicated sites
44% utilize transportation and consolidation
services
Top 25 Customers
Retailers / Distributors
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72%71%
75%
81%
75%75%74%
77%
81%
76%78%76%
77%
82%
78%76%
74%77% 77%
1Q 2Q 3Q 4Q Annual
'15 '16 '17 '18 '15 '16 '17 '18 '15 '16 '17 '18 '15 '16 '17 '15 '16 '17 LTM9/30/18
7,0006,800
7,000 7,1007,350
7,6007,850 8,300
8,5009,000
8,800
8,300
8,500
5,000
6,000
7,000
8,000
9,000
10,000Physical Occupancy Economic Occupancy
Economic Occupancy Driving Improved Returns
Physical Occupancy Average Physical Occupancy
Optimal physical occupancy across our temperature-controlled warehouse portfolio is ~85%, but can vary based on several factors, including
– Intended customer base
– Throughput maximization
– Seasonality
– Leased but unoccupied pallets
Illustrative Economic Occupancy (1)
X X X X
X X
X X
X X X X
Warehouse Pallets
X Currently Occupied
Contractually Reserved Pallets
Implementation of our standard underwriting procedures has contributed to consistent occupancy growth over the last three years
(1) Example assumes 10,000 pallet positions and is for illustrative purposes only; we do not yet calculate economic occupancy
Illustrative Economic Occupancy: 85% vs.
Illustrative Physical Occupancy: 78%
12
Growing Committed Revenue in Warehouse Portfolio
(1) Based on the annualized committed rent and storage revenues attributable to fixed storage commitment contracts and leases as of LTM September 30, 2018(2) Based on total warehouse segment revenue generated by contracts with fixed storage commitments and leases for LTM September 30, 2018(3) Represents weighted average term for contracts featuring fixed storage commitments and leases as of September 30, 2018
Annualized Committed Rent & Storage Revenue ⁽¹⁾
Other Rent & Storage Revenue
42%
58%
$215mm
$298mm
LTM 9/30/18 WAREHOUSE
RENT & STORAGEREVENUE
$513mm
Warehouse Segment Revenue Generated by
Fixed Commitment Contracts or Leases ⁽²⁾
Other Warehouse Segment Revenue
44%
56%
$655mm
$514mmLTM 9/30/18 WAREHOUSE
REVENUE
$1,169mm
Rent & Storage Warehouse Revenue
Total Warehouse Segment Revenue
Significant improvement transitioning from as-utilized, on demand contracts to fixed storage committed contracts and leases
Fixed storage committed contracts and leases currently represent:
– 42% of warehouse rent and storage revenues (1) and
– 44% of total warehouse segment revenues (2)
5-year weighted average stated term (3)
3-year weighted average remaining term (3)
As of September 30, 2018, we had entered into at least one fixed commitment contract or lease with 17 of our top 25 warehouse customers
The scope and breadth of our network positions us to continue to increase our fixed storage commitments
13
$284 $294 $303 $324 $334
$10 $14 $11
$24 $34
$294 $308 $314
$348 $368
2014A 2015A 2016A 2017A LTM 9/30/18
Rent & Storage Warehouse Services
Warehouse Financial Summary
Note: Constant currency (CC) growth rate based on 2014 foreign exchange rates
Warehouse Revenue ($mm) Warehouse NOI ($mm)
Rent and Storage Revenue CAGR: 2.8% Rent and Storage NOI CAGR: 4.4% 4.0% 5.4%
Actual $ CC $ Actual $ CC $
Warehouse Services Revenue CAGR: 3.5% Warehouse Services NOI CAGR: 37.2% 4.8% 35.3%
Total 2014A – LTM 9/30/18 CAGR: 3.2% Total 2014A – LTM 9/30/18 CAGR: 6.1%4.4% 6.9%
$462 $469 $477 $502 $513
$577 $588 $604 $644 $656
$1,039 $1,057 $1,081 $1,146 $1,169
2014A 2015A 2016A 2017A LTM 9/30/18
Rent & Storage Warehouse Services
Contribution (NOI) Margin
28% 29% 29% 30% 31%
2014A – LTM 9/30/18 margin expansion: 316 bps
Margin expansion has been driven by improved commercialization and customer mix, contractual rate increases, occupancy growth and operational improvements
Same Store Rent & Storage Revenue per Occupied Pallet Growth
-- 0.9% 2.5% 4.1% 4.4%
2015A – LTM 9/30/18 Average Growth: 3.0%
14
Labor ($0.44)
OtherFacilityCosts
Substantially All Warehouse NOI Driven by Rental & Storage RevenueEx
pe
nse
sR
eve
nu
es
Rent & Storage Warehouse Services Total Warehouse
=
$0.44 $0.56 $1.00
OtherServices
Costs($0.09)
($0.06)
($0.09)
($0.44)
($0.09)
+
$0.29 $0.03 $0.31
=+
Power and utilities
Real Estate Related Costs: facilitymaintenance, property taxes, insurance,
rent, security, sanitation, etc.
Direct labor, overtime, contract labor, indirect labor, workers’
compensation and benefits
MHE (1), warehouse operations (pallets, shrink wrap, OS&D and D&D (2))
and warehouse administration
REIT: Rent & StorageTRS: Warehouse Services
Commentary
Power ($0.06)
($0.09)
Note: Based on LTM warehouse segment as of September 30, 2018. Future results may vary. Figures may not sum due to rounding(1) Material Handling Equipment(2) OS&D and D&D refer to Over Short & Damaged and Detentioned & Demurrage, respectively
65% 5% 31%NO
I
--
--
--
--
Margin:
% WH Total: 91% 9% 100%
15
Positioned for Multiple Avenues of Growth
Global warehouse network, operating systems, scalable information technology platform and economies of scale provide a significant advantage over competitors with respect to organic and external growth opportunities
External Growth and Expansion Opportunities
Expand Presence in Other
Temperature Sensitive Products in the Cold Chain
Customer-Specific Build-to-Suit
& Market-Driven Development
Redevelopment & Existing Site
Expansion
Industry Consolidation
Global Food Producers
Outsourcing &Sale-Leaseback Opportunities
Underwriting& Contract
StandardizationRate Escalations
/ Occupancy Increases
1
2
4
5
6
7
8
OperationalEfficiencies
& CostContainment
3
Organic Growth Opportunities Development and Redevelopment
16
NOI Margin
30% 30% 31% 32%
NOI Margin
63% 65% 66% 65%
3.2%
2.1%
9.8%
7.2%
2015 2016 2017 YTD 2018
3.4% 3.2%
6.4%
3.7%
2015 2016 2017 YTD 2018
Organic Growth Initiatives Have Driven Same Store Growth
Note: NOI growth represents year-over-year growth to the comparable prior periodNote: Constant currency growth represents year-over-year growth based on the same foreign exchange rates relative to the comparable prior year periodNote: YTD figures as of September 30, 2018
Total Same Store NOI GrowthSame Store Rent & Storage NOI Growth
Same store performance is the culmination of replacing legacy customer agreements with new contracts implementing our Commercial Business Rules, active asset management and leveraging integrated network, scale and market position
2017 same store NOI growth was driven by below market contracts resetting to market rates, representing a new base for strong growth going forward
Constant Currency $ Growth %
6.3%4.7%6.5% 9.5%2.9%6.1%
Constant Currency $ Growth %
4.3% 7.5%
17
Growth Strategy – Expansion, Development and Acquisitions
20.1mm Cu Ft70,100 Pallets
$94mm Cost
5 CompletedCompleted
Since 2014
Expect to initiate on average 2 to 3 expansion / development opportunities annually, with aggregate invested capital of$75 million to $200 million with unlevered stabilized returns expected to range from 10% to 15%
Existing Sites for Future Expansion
Development of New
Sites
600+ acres landadjacent to
60+ warehouses
Customer-Specific
Market-Demand +
Expansion
Target Completion Date: 1Q19
Estimated Costs
~$85mm15.7mm Cu Ft58,000 Pallets
Includes both customer-specificand market-demand
Estimated Investment (6)
~$800mm+
Development
Return on Invested Capital (1) (2)
10% – 15%
Under Construction
FuturePipeline (5) 10% – 13%
1 Expansion
Expansion and Development Opportunities (1)
Targeted Return on Invested Capital (2) (5)
12% – 15%
85+ acres landadjacent to
9 warehouses
(1) As of September 30, 2018; no assurance can be given that the actual cost or completion dates of any expansions or developments will not exceed our estimate, or that targeted returns will be achieved
(2) For projects under construction, represents budgeted stabilized returns on invested capital. For projects in our future pipeline, represents budgeted unlevered stabilized return on invested capital(3) The Letter of Intent is not a binding agreement and the planned transactions are subject to negotiation of definitive documentation, receipt of any necessary approvals by us and Woolworths, and
other conditions. The consummation of these transactions may not be completed at all, or may not be completed in the time frame, on the terms or in the manner currently anticipated. There are a number of risks and uncertainties relating to the transactions
(4) Based on management’s preliminary estimates; there is no assurance that the actual cost or completion dates will not exceed our estimate(5) These future pipeline opportunities are at various stages of discussion and consideration and, based on historical experiences, many of them may not be pursued or completed as contemplated or
at all and there is no assurance that our budgeted unlevered stabilized returns will be achieved(6) Estimated investment of ~$800mm does not include estimated costs related to the Woolworths development projects
Estimated Costs (4)
~$600mmWoolworths
Investment (3)
3 DevelopmentsBrisbane, Queensland
Sydney, New South WalesMelbourne, Victoria
Target Completion Date (4): 2021 to 2023
Customer-Specific
Build-to-Suit for High Quality Tenant
Investment Grade Customer
Within Targeted Return Range
18
Growth Strategy – Recently Completed / Under Construction
Note: Figures as of September 30, 2018. Assumes stabilization occurs in year two(1) No assurance can be given that the actual cost or completion dates of any expansions or developments will not exceed our estimates, or that our budgeted stabilized returns will be achieved(2) Reflects management’s estimate of cost of completion as of September 30, 2018(3) Middleboro facility was delivered in August 2018. Total cost includes $1.6M of residual costs incurred after completing the project
Rochelle, IL Middleboro, MA
($ in millions)
Opportunity Facility Cubic Pallet Cost of Expansion / Development Completion
Facility Type Type Feet (mm) Positions ('000) Date
Phoenix, AZ Development Distribution 3.5 12 Q1 2014
Leesport, PA Expansion Distribution 2.2 2 Q3 2014
East Point, GA Redevelopment Distribution 4.2 9 Q4 2016
Clearfield, UT Expansion Distribution 5.8 21 Q4 2017
Middleboro, MA (3) DevelopmentProduction
Advantaged4.4 27 Q3 2018
Total 20.1 70
($ in millions) Cost of Expansion / Development (1)
Opportunity Facility Cubic Pallet Cost Estimated to Estimated Expected Target
Facility Type Type Feet (mm) Positions ('000) to Date Completion (2) Cost (2) ROIC Completion Date (1)
Rochelle, IL Expansion Distribution 15.7 58 61 24 85 12.0% - 15.0% Q1 2019
Total 15.7 58 $61 $24 $85
18.0%
Un
der
Co
nst
ruct
ion
$94
Co
mp
lete
d S
ince
201
4
Total Cost ROIC
$18
12
11
29
24 8.0% - 12.0% ⁽¹⁾
12.0% - 15.0% ⁽¹⁾
9.0% - 11.0% ⁽¹⁾
20.4%
19
Woolworths Development Opportunity
Note: The Letter of Intent is not a binding agreement and the planned transactions are subject to negotiation of definitive documentation, receipt of any necessary approvals by us and Woolworths, and other conditions. The consummation of these transactions may not be completed at all, or may not be completed in the time frame, on the terms or in the manner currently anticipated. There are a number of risks and uncertainties relating to the transactions. No assurance can be given that the actual cost or completion dates of the developments will not exceed our estimate, or that our underwritten stabilized returns will be achieved(1) Woolworths investment grade ratings from Moody’s and S&P as of November 8, 2018
Woolworths (ASX: WOW), Australia’s largest grocer, has
selected Americold as its sole strategic supply chain partner
– Represents a dedicated build-to-suit opportunity to
design, build and operate highly automated distribution
centers across three primary Australian markets
– Woolworths is a high quality and investment grade (Baa2
(Stable) / BBB (Stable) ratings) (1) tenant
~$600mm total investment staggered over four years
20-year initial term for lease and services agreements
Prospective locations (target completion years):
– Brisbane, Queensland (2021)
– Sydney, New South Wales (2022)
– Melbourne, Victoria (2023)Brisbane, Queensland (Australia)
MapProject Overview
RenderingKey Statistics
COLD’s budgeted unlevered stabilized returns are consistent with previously disclosed targetreturns for future expansion and development opportunities
People per sq km
101 or more
0.1–11.1–10.010.1–100
FacilitiesLess than 0.1
Key logistics corridor
Source: Australian Bureau of Statistics June 2017
Sydney
Brisbane
Melbourne
20
Americold
Lineage Logisitics
Preferred Freezer Services
United States Cold Storage
AGRO Merchants
Group
Next Five Largest
Other Ownership
23.1%
18.6%
8.4% 7.8% 3.2%
9.7%
29.1%
Market Leader with Consolidation Opportunity in a Highly Fragmented Sector
Note: Americold portfolio figures provided by the Company as of September 30, 2018. As of January 2018, USDA has changed the definition surrounding the capacity of domestic refrigerated warehouses. Warehouses must meet additional criteria to be included in the publication
(1) IARW Top Companies in USA and North America, August 2018 and USDA National Agricultural Statistics Service, “Refrigerated Space: By Type of Warehouse” chart; rankings based on cubic feet
First mover advantage with an attractive cost of and access to
capital
Utilize tax-advantaged currency (OP units) to make acquisitions
Highly fragmented market – focused on high-quality real estate
in defensible locations for future acquisitions
Logical consolidator of small operators with limited strategic
options
Top line synergies from leveraging customer relationships and
application of commercial business underwriting standards and
processes
Cost synergies from leveraging scale and efficient operating
model
Assets should be worth more in our portfolio through the
integration of our global network, AOS and best-in-class IT
systems
Total: ~3.6bn cubic feet
Cold storage warehouses with fragmented ownership provide a significant roll-up opportunity
U.S. Cold Chain Market (1) Strategic Acquisitions
FragmentedIndustry
Cost of Capital Advantage
Consolidation Opportunity
AttractiveCurrency
OperationalSynergies
21
Flexible Balance Sheet Positioned for Growth
Pro Forma Capitalization
$475
$292
$800
$200
$400
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Debt Private Placement
Undrawn Revolver
2013 Mortgage Loans
Unsecured Term Loan A
29% % of Debt Maturing
--% --% 56% --% 15% --% --% --% --% --% --%
Pro Forma Debt Maturity (5)
Significant Liquidity: ~$1,097mm (4)
– $800mm Undrawn Senior Secured Revolving Credit Facility
Interest Rate: L + 145 bps
Minimal near term debt maturities
Pro Forma Liquidity
($ in millions) As of Transaction Adj. Pro Forma
9/30/18 Equity ⁽¹⁾ Debt 9/30/18
Equity
Share Price at End of Third Quarter $25.02 $25.02
Diluted Shares Outstanding (mm) ⁽²⁾ 151.557 6.000 157.557
Equity Market Capitalization $3,792 $3,942
Debt
Revolver ($800mm Pro Forma) $-- $--
Unsecured Pro Forma Term Loan A 475 475
2010 Mortgage Loans 448 (448) --
2013 Mortgage Loans 292 292
Australia & New Zealand Term Loans 176 (176) --
New Private Placement Debt -- 600 600
Other Debt Obligations ⁽³⁾ 161 161
Total Debt $1,551 $1,527
Less: Cash and Cash Equivalents (227) (142) 38 (330)
Net Debt $1,325 $1,197
Total Enterprise Value ("TEV") $5,117 $5,139
Leverage Metrics
Net Debt / LTM Core EBITDA 4.4x 4.0x
Net Debt / TEV 25.9% 23.3%
Note: Dollars in millions except per share figures. Figures based on book value as of September 30, 2018. Pro forma capitalization assumes net proceeds from equity and debt offering after accounting for transaction expenses, which include underwriting fees and related legal and accounting cost. Cash used in debt transaction includes ~$21m defeasance and swap breakage costs related to the early termination of the 2010 Mortgage Loans and Australia & New Zealand Term Loans, which is partly covered by $15mm of restricted cash. Figures may not sum due to rounding(1) Assumes our issuance of 6mm common shares upon the full physical settlement of the forward sale agreement(2) Diluted Shares Outstanding based on share price at end of third quarter, which is $25.02(3) Other debt obligations includes capital leases and sale leaseback obligations (4) Figure reflects pro forma cash and the capacity available under the Senior Secured Revolving Credit Facility less ~$33mm in letters of credit(5) Reflects the principal due each period and does not adjust for amortization of principal balances
30%
70%
Cash$330
Revolver Availability
$767
22
Strategic Investment Approach to Maintain a High-Quality Portfolio
Capital expenditures ensure that our temperature-controlled warehousesmeet the “mission-critical” role they serve in the cold chain
Note: Dollars in million. Figures may not sum due to rounding(1) Recurring capital expenditures are incurred to extend the life of, and provide future economic benefit from, our existing temperature-controlled warehouse network and its
existing supporting personal property and information technology systems. Examples include replacing roof and refrigeration equipment, re-racking warehouses and implementing energy efficient projects. Personal property capital expenditures include material handling equipment (e.g. fork lifts and pallet jacks) and related batteries. Information technology expenditures include expenditures on existing servers, networking equipment and current software
(2) Repairs and maintenance expense includes costs of normal maintenance and repairs and minor replacements that do not materially extend the life of the property or provide future economic benefits. Examples include ordinary repair and maintenance on roofs, racking, walls, doors, parking lots and refrigeration equipment. Personal property expense includes ordinary repair and maintenance expenses on material handling equipment (e.g. fork lifts and pallet jacks) and related batteries
2015A 2016A 2017A
9.5%
5.3%
9.9%
5.7%
11.0%
5.4%
1.0% 8.7% 0.9% 8.4%
0.5%
7.8%
1.1% 1.4% 1.0%
11.7%
14.0%
12.2%
14.2%
12.4% 13.1%
Real Estate Personal Property Information Technology
RecurringCapex (1)
R&M
Expense (2)
Recurring
Capex (1)
R&M
Expense (2)
Recurring
Capex (1)
R&M
Expense (2)
As a % of Total Warehouse NOI before R&M Expense
(Capitalized) (Expensed – P/L) (Capitalized) (Expensed – P/L) (Capitalized) (Expensed – P/L)
23
Conclusion
Substantial Internal and External Growth Opportunities Expected to Drive Attractive Risk-Adjusted Returns
Investment Grade, Flexible Balance Sheet Positioned for Growth
Experienced Management Team, Alignment of Interest and Best-In-Class Corporate Governance
Important First Mover Advantage as the Only Publicly Traded REIT Focused on Temperature-Controlled Warehouses
Infrastructure Supported by Best-in-Class IT and Operating Platforms Provides a Significant Competitive Advantage
Global Market Leader with Integrated Network of Strategically-Located, High-Quality, “Mission-Critical” Warehouses
Strong and Stable Food Industry Fundamentals Drive Growing Demand for Our Business
1
2
3
4
5
6
7
– Successfully completed ~$834 million IPO in January 2018
– ~$600 million Woolworths development projects
– Fixed storage committed contracts and leases represent 42% of warehouse rent and storage revenues
– Same store rent & storage NOI growth at 4% year-over-year for YTD 2018
24
