Klépierre: 2022 FULL-YEAR EARNINGS
PRESS RELEASE
2022 FULL-YEAR EARNINGS
Paris — February 15, 2023
Klépierre, the European leader in shopping
malls, today reported its 2022 full-year earnings(1), which
significantly exceeded guidance:
- Retailer sales(2) up 25%
like-for-like compared to 2021
- Like-for-like(3) net rental income
up 24.8% year on year
- Dynamic leasing activity
illustrated by:
- Occupancy up 110 basis points to
95.8%
- 4.1% positive reversion, on top of
3.7% indexation
- Net current cash flow up 20.1%
versus 2021 to €2.62 per share, beating the mid-range initial
guidance by 13%
- Proposed increased cash
distribution to shareholders at €1.75(4) per share
- Solid balance sheet and improved
credit metrics:
- Total disposals of €602 million, in
line with appraised values(5)
- Net debt down €527 million over one
year and by €1.6 billion compared to December 31, 2020
- Net debt to EBITDA at 7.9x, LTV of
37.7% and ICR at 10.0x
- 2023 net current cash flow per
share expected at €2.35(6) (up 5% compared to 2022 adjusted NCCF of
€2.24(7))
- Confirmed industry leadership in
CSR with a new Act4Good™ strategy aiming at “Building the most
sustainable platform for commerce” by 2030
Jean-Marc Jestin, Chairman of the Executive
Board, said, “Our team has delivered a remarkable operating and
financial performance. Our operating fundamentals are solid. Today
we are posting a 20.1% growth in net current cash flow, 13% higher
than our initial guidance. The upturn in retailer sales, footfall,
leasing activity and revenues is the direct result of Klépierre’s
clear strategic positioning in Europe’s largest cities with a
portfolio of pre-eminent shopping malls in large and wealthy
catchment areas. With net debt down by €1.6 billion over two years,
our Group operates with one of the most solid balance sheets in the
industry. We will be proposing an increase in the cash distribution
to our shareholders, to €1.75(4) per share.Furthermore, we have
delivered powerful and concrete results in the CSR space and have
been ranked number one by several non-financial rating agencies.
Going forward, with our new Act4GoodTM strategy, we are aiming to
act as a game changer as we want to build the most sustainable
platform for commerce by 2030”.
KEY FINANCIALS
|
2022 |
2021 |
Reported change |
Like-for-like change(3) |
In millions of
euros, total share |
|
|
|
|
Total
revenues |
1,231.7 |
1,071.4 |
+15.0% |
|
Net Rental Income (NRI), shopping centers |
1,023.6 |
863.4 |
+18.6% |
+24.8% |
Property
portfolio valuation (incl. transfer taxes) |
19,832 |
20,713 |
−4.3% |
-0.7% |
Net debt |
7,479 |
8,006 |
−6.6% |
|
Loan-to-Value
(LTV) |
37.7% |
38.7% |
|
|
Net debt to
EBITDA |
7.9x |
8.8x |
|
|
In euros, Group share |
|
|
|
|
EPRA Net
Tangible Assets (NTA) per share |
30.90 |
31.20 |
−1.0% |
|
Net current cash flow per share |
2.62 |
2.18 |
+20.1% |
|
OPERATING PERFORMANCE
Trading improved continuously throughout the
year, illustrating the strength of the business rebound, the
attractiveness of Klépierre’s retail venues and the relevance of
the Group’s operational initiatives in providing a constantly
renewed offering adapted to shoppers’ evolving expectations.
Retailer sales(2) and footfall
On a like-for-like basis, retailer sales
rebounded strongly in 2022. After suffering the negative impacts
from the pandemic and the early months of the Ukraine conflict,
retailer sales continued to improve between April and December,
hitting 100% of 2019 levels over the period, and coming out 2%
higher in December.
Retailer sales by geography compared to
2019(2) |
|
|
Country |
Retailer sales change |
Share in total reported retailer sales |
First-quarter 2022 vs. 2019 |
From April to December 2022 vs. 2019 |
France |
89% |
101% |
41% |
Italy |
86% |
98% |
27% |
Scandinavia |
91% |
97% |
12% |
Iberia |
92% |
102% |
10% |
Netherlands
& Germany |
85% |
103% |
5% |
Central Europe |
93% |
108% |
5% |
TOTAL |
89% |
100% |
100% |
Retailer sales by segment compared to
2019(2) |
|
|
Segments |
Retailer sales change |
Share in total reported retailer sales |
First-quarter 2022 vs. 2019 |
From April to December 2022 vs. 2019 |
Fashion |
83% |
100% |
36% |
Culture, gifts
& leisure |
93% |
102% |
21% |
Health &
beauty |
92% |
101% |
14% |
Food &
beverage |
84% |
99% |
11% |
Household
equipment |
102% |
100% |
12% |
Other |
83% |
96% |
6% |
TOTAL |
89% |
100% |
100% |
Footfall also increased sharply from 78% of the
2019 level in January 2022 to 92% in December 2022.
Leasing
Over the course of 2022, leasing demand for our
unique European platform of shopping malls was remarkably strong.
The Group signed 1,360 leases including 974 renewals and
re-lettings, with a 4.1% positive reversion rate, on top of the
3.7% indexation applied in January 2022.
The bounceback in retailer sales and footfall
coupled with the Group’s Retail First® strategy enabled Klépierre
to seize opportunities with best-in-class banners and offer an even
more attractive retail mix to visitors. Overall, this significantly
supported the occupancy rate which increased by 110 basis points
over one year to 95.8% as of December 31, 2022.
The average left duration of leases in Klépierre
malls also increased to 5 years, significantly higher than the
year-earlier figure of 4.7 years and the pre-Covid level of 4.8
years.
Net Rental Income
Net rental income amounted to €1,035.3 million
in 2022, up 17.7% on a reported basis and 24.8%
like-for-like(3).
2021 was severely impacted by Covid-19 as stores
were closed for 2.5 months on average. 2022 is the first
undisturbed year with virtually no business disruption due to
Covid-19, although some light restrictions were still in place
during the first quarter. Consequently, the comparison between 2021
and 2022 is not meaningful.
In 2022, net rental income included two
non-recurring/one-off contributions:
-
reversals of provisions (€88.6 million or €0.30 per share) due to
better-than-expected rent collection for 2020 and 2021; and
-
€25.0 million in net rental income generated by assets disposed
over the course of 2022.
Excluding those two elements, net rental income
for 2022 amounted to €921.7 million, reflecting the basis of the
first undisturbed year since Covid-19 outbreak.
NET CURRENT CASH FLOW
In 2022, net current cash flow amounted to
€851.0 million (total share), or €2.62 per share (Group share), up
20.1% over the year. This amount included €0.30 per share relating
to higher-than-anticipated collection of 2020 and 2021 rents
(one-off item) and €0.08 per share relating to cash flow generated
by asset disposed over the course of 2022.
SHOPPING CENTER PORTFOLIO
VALUE AND EPRA NET TANGIBLE ASSETS
(NTA)
Including transfer taxes, Klépierre’s shopping
center portfolio stood at €19,595(8) million on a total share
basis as of December 31, 2022, down 1.0% like-for-like(3)
over 12 months and down 1.3% over 6 months.The change in
the like-for-like valuation during the second half of 2022 was
attributable to the following changes in appraisers’
assumptions:
- The tightening
credit environment and impacts on risk free rates translated into a
40-basis-point increase in discount rates to 7.2%, and a
20-basis-point increase in exit rates to 5.6%; and
- On the back of
the inflationary environment, the compound annual growth rate for
net rental income increased slightly from 2.5% to 2.8%.
Overall, as of December 31, 2022, the
average EPRA Net Initial Yield of the portfolio stood at 5.4%.EPRA
NTA per share amounted to €30.90 as of December 31, 2022, compared
to €31.20 as of December 2021.
DEBT AND FINANCING
As of December 31, 2022, consolidated
net debt totaled €7,479 million compared to
€8,006 million at the end of 2021. Overall, net debt has
fallen by €1.6 billion over the last two years.As a result,
Klépierre significantly improved its financing metrics, restoring
them to – and even exceeding - pre-Covid levels. As of December 31,
2022, the net debt to EBITDA ratio stood at 7.9x (versus 8.8x one
year earlier), while the Loan-to-Value (LTV) ratio stood at 37.7%,
a 100 basis-point decrease compared to December 31, 2021. The
interest coverage ratio was 10.0x, among the highest in the
industry. The hedging profile remains strong with 100% of net debt
hedged at fixed rates in 2023, and 90% in 2024.Klépierre’s
liquidity position(9) stood at €2.8 billion, mainly comprising
€2.1 billion in unused committed revolving credit facilities, net
of commercial paper, €0.4 billion in other credit facilities and
€0.3 billion in cash and cash equivalents. The average maturity of
the Group’s debt was 6.5 years, while the cost of debt
remained stable at 1.2%.Standard & Poor’s currently assigns
Klépierre a long-term BBB+ rating (A2 short-term rating) with a
stable outlook.
DEVELOPMENTS AND DISPOSALS
Investments
In 2022, Klépierre focused on its main committed
projects: the Gran Reno extension in Bologna (Italy), the
refurbishment and extension of Grand Place in Grenoble (France) and
the development of five Primark megastores in Italy and
France. On a total share basis, total
capital expenditure for 2022 amounted to €184 million, of which
€108 million in development projects, €76 million in
like-for-like capex and capitalized interests.
Pipeline
As part of its development strategy, Klépierre
regularly transforms its existing assets to strengthen their
leadership in their respective catchment areas. The two main
projects under construction are:Extension of Grand Place (Grenoble,
France)The construction of the 16,200 sq.m. extension started in
May 2022 and is scheduled for completion by the end of 2023.
Pre-leasing is at 89% of the projected net rental income. In
addition, this new development will host the first Primark store in
the region. As part of Klépierre’s Destination Food® strategy, 14
new restaurants including KFC, Poke House and Black & White
will open with indoor and outdoor terraces offering customers an
enjoyable gastronomic experience. Yield on cost for this project is
projected at c.8%.Maremagnum (Barcelona, Spain)In early 2024,
Maremagnum, Barcelona’s leading mall, is set to host the second
Time Out Market in Europe. With this food and cultural market
concept, the 5,200 sq.m. rooftop will become Barcelona’s leisure
hotspot for food & beverage with exclusive views over the city,
the port and the sea. In addition, the recently signed deal with
Inditex for the enlargement of Stradivarius, Pull & Bear,
Bershka and Lefties, will provide fresh retail impetus for the
mall.
Disposals
Since January 1, 2022, the Group has completed
disposals or signed promissory agreements for a total consideration
of €602.2 million (total share, excluding transfer taxes). This
amount includes the sale of Norwegian properties, as well as a few
portfolios of retail properties in France and offices located above
the Hoog Catharijne (Utrecht) shopping center. Retail assets sold
and under promissory agreements were disposed in line with December
2021 appraised values (-1.8%).
ACT FOR
GOOD®:
FIVE YEARS
OF ACHIEVEMENTS AND NEW
MILESTONES AHEAD
Klépierre consolidated its position as leader in
sustainable development. Among the first companies to be recognized
for its CSR commitment within the industry, the Group was rewarded
with the highest levels of certification by several non-financial
rating agencies. For the third year in a row, Klépierre has been
ranked number 1 of the “Global Retail Listed”, “Europe Retail”,
“Europe Retail Listed” and “Europe Listed” GRESB categories. In
2022, the Group improved its score to 98/100, substantially
outperforming the average comparable company rating (79/100) and
the combined rating of all GRESB participants (74/100). Klépierre
was once again included in the CDP’s “A List” of the most advanced
companies fighting climate change at global level and was rated
“AAA” (highest score achievable) by MSCI. Likewise, in January
2023, Euronext included Klépierre in the CAC SBT 1.5° index, a
new climate-focused index, made up of companies whose emissions
reduction targets have been approved as in line with the 1.5°C goal
of the Paris Agreement. In 2018, Klépierre launched Act for Good®,
a five-year CSR plan built on 32 concrete objectives. The results
to date have exceeded expectations with the Group having achieved
an average of 99.8% of the objectives. In particular, Klépierre has
reduced the energy intensity of its portfolio by 42% since 2013 and
cut its direct and indirect greenhouse gas (GHG) emissions by 82%.
As unveiled on February 1, 2023, alongside its new Act4GoodTM
strategy, Klépierre now intends to go a step further by building
the most sustainable platform for commerce. Developed with a
committee of independent experts, this new CSR strategy is based on
four pillars:
- Act for the
climate by achieving net zero by 2030;
- Act to service
communities and territories around its shopping centers;
- Act as a skills
developer for its employees, partners and visitors; and
- Act to promote
sustainable lifestyles for its entire ecosystem – customers,
retailers, employees, partners and citizens.
DISTRIBUTION
The Supervisory Board will recommend that the
shareholders, at the Annual General Meeting to be held on
May 11, 2023, approve the payment of a cash distribution
in respect of fiscal year 2022 of €1.75 per share. The
proposed distribution will be paid in two installments:
- A cash
distribution of €0.87 per share from Klépierre’s tax exempt
activities (SIIC). This will be paid as an interim distribution on
March 30, 2023; and
- The balance of
€0.88 per share corresponding to:
- A €0.04 per share “SIIC” dividend;
and
- A €0.84 per share distribution of
share premiums qualifying as an equity repayment within the meaning
of Article 112-1 of the French Tax Code (Code général des impôts),
to be paid on July 11, 2023.
OUTLOOK
Over the course of 2022, Klépierre’s operations
grew thanks to robust fundamentals: rebound in retailer sales and
footfall, high rent collection, strong cash flow generation and
improved credit metrics.
In 2023, the Group expects to generate net
current cash flow per share of €2.35(6), representing a growth of
5% compared to the adjusted figure for 2022 of €2.24 (i.e., €2.62
restated for €0.30 in reversals of provisions and for €0.08 in cash
flow generated by disposed assets).
Assuming no major deterioration in the
geopolitical and macroeconomic environment having a significant
impact on household consumption, the main assumptions underpinning
of the guidance are:
- Retailer sales at least equal to
2022;
- Stable occupancy; and
- Stable collection rate.
The guidance also factors in the impact on costs
of the projected inflation in Europe for 2023 and current funding
cost levels but does not include the impact of any disposals in
2023.
TOTAL REVENUES
In millions of euros |
Total share |
2022 |
2021 |
France |
466.7 |
366.3 |
Italy |
217.7 |
174.1 |
Scandinavia |
141.1 |
158.7 |
Iberia |
130.7 |
117.4 |
Netherlands
& Germany |
110.5 |
102.9 |
Central
Europe |
65.7 |
59.0 |
Other countries |
16.3 |
14.6 |
SHOPPING CENTERS GROSS RENTAL INCOME |
1,148.7 |
993.1 |
Other retail properties |
13.7 |
13.3 |
TOTAL GROSS RENTAL INCOME |
1,162.4 |
1,006.4 |
Management, administrative and related income (fees) |
69.3 |
65.1 |
TOTAL REVENUES |
1,231.7 |
1,071.4 |
NET CURRENT CASH FLOW
|
2022 |
2021 |
Change |
Total share, in €m |
|
|
|
Gross rental
income |
1,162.4 |
1,006.4 |
+15.5% |
Rental and
building expenses |
(127.1) |
(126.9) |
+0.2% |
Net rental income |
1,035.3 |
879.5 |
+17.7% |
Management and
other income |
83.8 |
74.5 |
+12.4% |
General and
administrative expenses |
(164.0) |
(147.2) |
+11.4% |
EBITDA |
955.0 |
806.8 |
+18.4% |
Adjustments to
calculate operating cash flow: |
|
|
|
Depreciation charge for right-of use assets(a) |
(8.7) |
(8.4) |
|
Employee benefits, stock-option expenses and non-current operating
expenses/income |
3.6 |
3.3 |
|
Operating cash flow |
949.9 |
801.7 |
+18.5% |
Cost of net debt |
(119.5) |
(115.3) |
+3.7% |
Adjustments to
calculate net current cash flow before taxes: |
|
|
|
Amortization of
Corio debt mark-to-market |
(1.7) |
(2.8) |
|
Financial
instruments close-out costs |
7.8 |
2.6 |
|
Net current cash flow before taxes |
836.4 |
686.1 |
+21.9% |
Share in
earnings of equity-accounted companies |
53.4 |
49.6 |
+7.7% |
Current tax
expense |
(38.7) |
(16.7) |
+132.0% |
Net current cash flow |
851.0 |
718.9 |
+18.4% |
Group share, in €m |
|
|
|
NET CURRENT CASH FLOW |
740.8 |
622.3 |
+19.1% |
Number of
shares |
286,524,518 |
285,860,024 |
|
Per share, in € |
|
|
|
NET CURRENT CASH FLOW - IFRS |
2.59 |
2.18 |
+18.8% |
IFRS 16
adjustment |
0.03 |
0.0 |
|
NET CURRENT CASH FLOW - ADJUSTED |
2.62 |
2.18 |
+20.1% |
(a) Right of use assets and lease liabilities
related to head office and vehicle leases as per IFRS 16.
2022
FULL-YEAR
EARNINGS WEBCAST
— PRESENTATION AND CONFERENCE
CALL
Klépierre’s Executive
Board will present the full-year 2022 earnings on
Thursday,
February 16, 2023
at
9:00 a.m.
Paris time
(8.00
a.m.
London time). Please visit Klépierre’s website
www.klepierre.com to listen to the webcast, or
click here.A replay will also be available after the event.
AGENDA |
|
May 11,
2023 |
Annual General Meeting |
May 11,
2023 |
First quarter 2023 business review (before market opening) |
INVESTOR RELATIONS CONTACTS |
MEDIA
CONTACTS |
|
Paul Logerot, Group Head of IR and Financial
Communication+33 (0)7 50 66 05 63 —
paul.logerot@klepierre.comTanguy
Phelippeau, IR Officer+33 (0)7 72 09 29
57 —tanguy.phelippeau@klepierre.com |
Hélène Salmon, Group Head of Corporate and Internal Communications
+33 (0)1 40 67 55 16 – helene.salmon@klepierre.com Wandrille
Clermontel, Taddeo +33 (0)6 33 05 48 50 –
teamklepierre@taddeo.fr |
|
ABOUT KLÉPIERRE
Klépierre is the European leader in shopping
malls, combining property development and asset management skills.
The Company’s portfolio is valued at €19.8 billion at December
31, 2022, and comprises large shopping centers in more than 10
countries in Continental Europe which together host hundreds of
millions of visitors per year. Klépierre holds a controlling stake
in Steen & Strøm (56.1%), Scandinavia’s number one shopping
center owner and manager. Klépierre is a French REIT (SIIC) listed
on Euronext Paris and is included in the CAC Next 20 and EPRA Euro
Zone Indexes. It is also included in ethical indexes, such as CAC
SBT 1.5, MSCI Europe ESG Leaders, FTSE4Good, Euronext Vigeo Europe
120, and features in CDP’s “A-list”. These distinctions underscore
the Group’s commitment to a proactive sustainable development
policy and its global leadership in the fight against climate
change. For more information, please visit the newsroom on our
website: www.klepierre.com
This press release and its appendices together
with the earnings presentation slideshoware available in the
“Publications section” of Klépierre’s Finance page:
www.klepierre.com/en/finance/publications
(1) The Supervisory Board met on February 14, 2023, to
examine the full-year financial statements, as approved by the
Executive Board on February 13, 2023. The consolidated
financial statements have been subject to audit procedures. The
Statutory Auditors’ report is to be issued shortly with the
Universal Registration Document.(2) Change is on a same-store
basis, excluding the impact of asset sales and acquisitions, and
excluding Turkey.(3) Like-for-like data exclude the contribution of
new spaces (acquisitions, greenfield projects and extensions),
spaces being restructured, disposals completed since January 2021
and foreign exchange impacts.(4) Amount to be approved by the
shareholders present or represented at the Annual General Meeting
to be held on May 11, 2023. (5) Retail assets were sold in line
with December 2021 appraised values (-1.8%).(6) Excluding the
impact of amortizing Covid-19 rent concessions.(7) €2.62 restated
for €0.30 of reversals of provisions and for €0.08 in cash flow
generated by disposed assets.(8) Only shopping centers, excluding
Turkey. As of December 31, 2022, the value of the overall
portfolio, including transfer taxes, amounts to €19,832 million on
a total share basis.(9) The liquidity position represents the total
financial resources available to a company. This indicator is
therefore equal to the sum of cash at hand at the end of the
period, committed and unused revolving credit facilities (net of
commercial paper) and other credit facilities.
- PR_KLEPIERRE_2022_FY_EARNINGS
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