KLÉPIERRE: 2023 FULL-YEAR GUIDANCE RAISED TO AT LEAST €2.40 PER
SHARE (+7% Y.O.Y)
PRESS RELEASE
2023 FULL-YEAR GUIDANCE RAISED TO AT LEAST €2.40
PER SHARE (+7% Y.O.Y)
Paris — August 1, 2023
Klépierre, the European leader in shopping
malls, delivered a very solid growth performance over the six-month
period ended June 30, 2023(1):
- Net current cash flow per share at
€1.21(2), up 7.4% vs. first half 2022
- Like-for-like(3) net rental income
up 7.3% year-on-year
- Operating KPIs at high levels:
- Occupancy at 95.7%, up 100 basis
points year-on-year
- Occupancy cost ratio at 12.8%
- Collection rate at 96.5%
- Positive reversion rate of
5.3%
- Retailer sales(4) up 8%
like-for-like compared to the same period last year
- Solid balance sheet and credit
metrics:
- Net debt below December 2022 levels
at €7.4 billion
- Net debt to EBITDA at 7.9x, LTV at
38.1%, ICR at 8.8x and cost of debt at 1.4%
- Interest rate hedging at 100% in
2023 and 98% in 2024
- Double investment grade: new A-
rating assigned by Fitch in May; BBB+ stable outlook confirmed by
S&P in June
- €730 million in long-term financing
closed year-to-date with an average maturity of 6.4 years
- €475 million in committed credit
facilities renewed or signed since January 1, 2023
- Shopping centers portfolio
valuation down 1.4% like-for-like(3) over six months
- 2023 net current cash flow guidance
raised to at least €2.40 per share, 7% higher than 2022(5)
Jean-Marc Jestin, Chairman of the Executive
Board, commented: “We delivered a very solid performance
underpinned by the consolidation of our operating indicators at
high levels and strong net current cash flow generation, up 7.4%
year-on-year. Klépierre’s focus on strict financial discipline and
cautious capital allocation has been rewarded by the credit rating
agencies, while the Group benefited from strong liquidity in the
debt capital markets, closing €1.2 billion in new financing.
Against this backdrop, Klépierre is revising its 2023 full-year
guidance upward and now expects net current cash flow to reach at
least €2.40 per share, pointing to growth of 7% compared to 2022.
The Group is also prioritizing its holistic approach and is
continuing to execute its Act4GoodTM strategy with the aim of
building the most sustainable platform for commerce by 2030.”
KEY FINANCIALS
|
H1 2022 |
H1 2023(2) |
Change |
In millions of
euros, total share |
|
|
|
Net Rental Income (NRI) |
441.7 (6) |
484.1 |
+7.3% (like-for-like change(3)) |
In euros, Group share |
|
|
|
Net current cash flow per share |
1.13 (7) |
1.21 |
+7.4% |
|
12/31/2022 |
06/30/2023 |
Like-for-like change |
In millions of
euros, total share |
|
|
|
Shopping
centers portfolio valuation(8) |
19,595 |
19,200 |
-1.4% |
Net debt |
7,479 |
7,403 |
|
Loan-to-Value
(LTV) |
37.7% |
38.1% |
|
Net debt to
EBITDA |
7.9x |
7.9x |
|
Interest coverage ratio (ICR) |
10.0x |
8.8x |
|
In euros, Group share |
|
|
|
EPRA Net Tangible Assets (NTA) per share |
30.90 |
30.10 |
|
OPERATING PERFORMANCE
Leasing activity
Klépierre registered a dynamic leasing
performance over the first half of the year, highlighted by the
signing of 809 leases (up 16% compared to the first half of 2022).
Dealflow included 634 renewals and re-lettings, with a 5.3%
positive reversion rate. The Group’s shopping destinations are
irreplaceable venues for retailers and clients to Shop. Meet.
Connect.® and dovetail perfectly with the drive-to-store strategy
of the leading omnichannel brands. In this context, the flight to
quality in affluent catchment areas pursued by retailers over
recent years is supporting demand for space in the Group’s assets.
Overall, this translated into a 100-basis-point year-on-year
increase in occupancy to 95.7% as of June 30, 2023 (vs. 95.8% as of
December 31, 2022) while the occupancy cost ratio remained at the
sustainable level of 12.8% (versus 12.9% as of December 31,
2022).
Net Rental Income
Net rental income amounted to €484.1 million(2)
in the first half of 2023, a record 7.3% like-for-like(3)
year-on-year increase.
The rebound in retailer sales as well as the
sustainable occupancy cost ratio for tenants have allowed the Group
to capture reversion through a weighted 6.1% positive indexation
effect, and to deliver a remarkable 28% like-for-like increase in
our ancillary income (turnover rents up 36%, parking lot revenues
up 32% and specialty leasing revenues up 13%). Growth was also
supported by disciplined management of property charges which
translated into an improvement in the ratio of gross to net rental
income.
The Group’s rent collection rate was 96.5% for
the first half of 2023, in line with the December 31, 2022 figure
(96.4%).
NET CURRENT CASH FLOW
Over the first half of 2023, net current cash
flow increased by 7.4% year on year to €1.21(2) per share. While
most of the improvement is attributable to the net rental income
growth performance, the 7% reduction – despite the inflationary
environment – in the Group’s payroll, general and administrative
expenses (net of management and other income) also contributed to
the performance.
RETAILER
SALES(4)
AND FOOTFALL
Like-for-like growth in retailer sales was solid
over the first half of 2023, up 8.0% compared to the same period in
2022.
Footfall also jumped by 10% during the period
compared to first-half 2022.
By geographic area, all countries contributed to
the growth and exceeded first-half 2022 retailer sales levels, by
at least 5%.
Retailer sales growth was strong across most
segments, with increases ranging from 6.4% for fashion to 16.5% for
food & beverage. Health & beauty outperformed the Group
average with growth of 10.8% while household equipment was down
slightly by -1.6%.
Retailer sales by geography compared to
2022(4) |
Country |
Like-for-like change |
Share in total reported retailer sales |
France |
+5.7% |
40% |
Italy |
+8.7% |
25% |
Scandinavia |
+6.4% |
12% |
Iberia |
+11.2% |
10% |
Netherlands &
Germany |
+17.4% |
7% |
Central Europe |
+9.9% |
6% |
TOTAL |
+8.0% |
100% |
Retailer sales by segment compared to
2022(4) |
|
Segment |
Like-for-like change |
Share in total reported retailer sales |
Fashion |
+6.4% |
34% |
Culture, gifts
& leisure |
+7.4% |
21% |
Health &
beauty |
+10.8% |
15% |
Food &
beverage |
+16.5% |
13% |
Household
equipment |
-1.6% |
11% |
Other |
+14.6% |
6% |
TOTAL |
+8.0% |
100% |
PORTFOLIO VALUE AND EPRA NET TANGIBLE
ASSETS (NTA)
Including transfer taxes, Klépierre’s shopping
centers portfolio stood at €19,200(8) million on a total share
basis as of June 30, 2023, down 1.4% like-for-like(3)
over six months. The independent appraisers factored in
revised estimates as follows:
- A 20-basis-point increase in
discount rates to 7.4% and a 10-basis-point increase for exit rates
to 5.7%; and
- New indexation and ERV projections
translating into a compound annual growth rate of 2.4% for the next
10 years, versus 2.8% as of December 31, 2022.
Consequently, the EPRA Net Initial Yield (9)
stood at 5.7%, as of June 30, 2023.EPRA NTA per share amounted to
€30.10 as of June 30, 2023, compared to €30.90 as of December
31, 2022.
DEBT AND FINANCING
As of June 30, 2023, consolidated net debt was
down to €7,403 million versus end-2022, after the payment of the
€248 million cash dividend on March 30, 2023.
Year to date, the Group has raised new financing
totaling €730 million with a 6.4-year weighted average maturity.
This amount includes €412 million in unsecured bank loans and €118
million in secured loans. Klépierre also sold €200 million of new
notes on its existing bonds maturing in May 2029 (2% coupon) and
July 2030 (0.625% coupon). These operations illustrate Klépierre’s
very well-established access to the capital markets. The Group has
no significant maturities before end 2024 with a €557 million bond
maturing in November of that year.
The Group credit metrics remain very robust:
-
Net debt to EBITDA ratio stood at 7.9x;
-
Loan-to-Value ratio stood at 38.1%; and
-
Interest coverage ratio at the high level of 8.8x.
The average maturity of the Group’s debt was 6.5
years and the hedging rate for 2023 is 100%. Consequently, the cost
of debt was contained at the low level of 1.4%. At the date of this
release, the Group hedging rate(10) for 2024 stands at 98%.
Over the period, Klépierre also renewed or
signed €475 million worth of six-year revolving credit facilities,
translating into a liquidity position(11) of €2.5 billion as of
June 30, 2023.
On May 30, 2023, Fitch assigned Klépierre a
first-time rating of ‘A-‘ for its senior unsecured-debt, while
S&P confirmed Klépierre’s BBB+ credit rating with a stable
outlook on June 9, 2023.
DEVELOPMENTS AND DISPOSALS
Developments
Extension of Grand Place (Grenoble, France)The
16,200 sq.m. extension of Grand Place (Grenoble, France) which
started in May 2022 is expected to be delivered by the end of 2023
and will bring the mall’s total leasable area to 75,000 sq.m. All
of the projected net rental income is already let or under advanced
negotiations, with leading brands such as Primark which is set to
open its first store in the region – Snipes, Jott and NYX, and the
food court has been upgraded to the latest standards of Klépierre’s
Destination Food® strategy. Yield on cost for this project is
projected at around 8%. In line with its energy sobriety strategy,
Klépierre is also finalizing the installation of a solar plant on
the roof of the mall, with a targeted annual production capacity of
370 MWh.Maremagnum (Barcelona, Spain)In early 2024, Time Out Market
will inaugurate its first location in Spain and second in Europe,
just in time for the America’s Cup. As a key footfall anchor for
the mall, the exclusive food and cultural concept will turn
Maremagnum’s newly-refurbished 5,200 sq.m. rooftop into Barcelona’s
leisure food and beverage hotspot. Yield on cost for this project
is projected at 13.5%.
Disposals
Since January 1, 2023, the Group has closed or
signed disposals for a total amount of €82 million (total share,
excluding transfer taxes) in France and Sweden. Assets sold or
under promissory agreements were divested in line with the latest
appraised values
(-0.2%). ACT4GOODTM:
KLÉPIERRE REMAINS AT THE
FOREFRONT OF ESG BEST
PRACTICES On
the back of its major achievements in sustainable development,
Klépierre’s leadership is widely acknowledged by the leading
non-financial rating agencies and international organizations. In
2022, the Group was rewarded with the highest levels of recognition
by:
- GRESB: ranked number 1 in the
“Global Retail Listed”, “Europe Retail”, “Europe Retail Listed” and
“Europe Listed” categories with a five-star rating and an overall
score of 98/100;
- CDP: among just 299 groups
worldwide included in the “A” list of the most advanced companies
fighting climate change at a global level;
- Euronext: included in the CAC SBT
1.5° index; and
- MSCI: rated “AAA” (highest score
achievable).
The Science-Based Targets initiative (SBTi)
approved Klépierre’s low-carbon commitments as among the most
ambitious 1.5°C-aligned targets, in accordance with the 2015 Paris
Agreement.
In concrete terms, over the first half of 2023,
Klépierre started to roll-out its new Act4GoodTM CSR strategy.
Featuring an expanded scope with new challenges, this strategy is
designed to enable the Group to build the most sustainable platform
for commerce by 2030. Among other initiatives, the Group is
stepping up the deployment of photovoltaic power plants in its top
40 properties. By 2025, the Group will already have 14
installations in line with this objective.
To date, the Group already has seven power
plants installed in Spain (La Gavia, Plenilunio, Principe Pio),
Italy (Gran Reno, Nave de Vero, Romagna), and Belgium
(Louvain).
OUTLOOK
Based on the solid first-half performance,
Klépierre is revising its full-year guidance upward and now expects
net current cash flow of at least €2.40 per share in 2023,
representing growth of 7% compared to €2.24(5) in 2022.
Assuming no major deterioration in the
geopolitical and macroeconomic environment having a significant
impact on household consumption, the main assumptions underpinning
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 projected inflation in Europe for the last six months of 2023
and the current funding cost levels but does not include the impact
of any further disposals.
TOTAL REVENUES
In millions of euros |
|
Total share |
H1 2022 |
H1 2022(a) |
H1 2023(b) |
France |
237.7 |
213.4 |
213.2 |
Italy |
107.2 |
102.1 |
116.9 |
Scandinavia |
75.9 |
67.1 |
66.4 |
Iberia |
63.0 |
63.0 |
69.9 |
Netherlands
& Germany |
53.8 |
49.6 |
55.4 |
Central
Europe |
32.2 |
32.2 |
36.6 |
Other countries |
7.5 |
7.2 |
8.1 |
TOTAL GROSS RENTAL INCOME |
577.3 |
534.7 |
566.5 |
Service charge
income |
132.4 |
132.4 |
133.5 |
Management and development fees |
36.5 |
36.5 |
34.4 |
TOTAL REVENUES |
746.2 |
703.6 |
734.4 |
(a) Excluding the positive non-recurring income
statement impact related to the 2020 and 2021 account receivables
(€19.7m) and the gross rental income generated by disposed assets
(€22.9m).(b) Excluding the positive non-recurring income statement
impact related to the 2020 and 2021 account receivables.
NET CURRENT CASH
FLOW
|
H1 2022 |
H1 2022(a) |
H1 2023(b) |
Change |
Total share, in €m |
|
|
|
|
Gross rental
income |
577.3 |
534.7 |
566.5 |
|
Rental and
building expenses |
(76.0) |
(93.0) |
(82.4) |
|
Net rental income |
501.3 |
441.7 |
484.1 |
+7.3% (like-for-like) |
Management and
other income |
42.0 |
42.0 |
36.3 |
|
Payroll and
general and administrative expenses |
(76.7) |
(76.7) |
(68.5) |
|
EBITDA |
466.6 |
407.0 |
451.9 |
|
Share in
earnings of equity-accounted companies |
28.5 |
26.0 |
27.5 |
|
Cost of net
debt |
(51.7) |
(51.7) |
(59.4) |
|
Current tax
expense |
(17.6) |
(17.6) |
(23.7) |
|
Adjustments to
calculate net current cash flow |
1.9 |
1.9 |
(2.3) |
|
Net current cash flow |
427.7 |
365.6 |
394.1 |
|
|
|
|
|
|
Group share, in €m |
|
|
|
|
NET CURRENT CASH FLOW |
376.5 |
322.8 |
348.3 |
|
Average number
of shares |
286,037,065 |
286,037,065 |
286,363,431 |
|
Per share, in € |
|
|
|
|
NET CURRENT CASH FLOW |
1.32 |
1.13 |
1.21 |
+7.4% |
(a) Excluding the positive non-recurring income
statement impact related to the 2020 and 2021 account receivables
(€41.1m in Total share or €36.0m in Group share) and the net rental
income generated by disposed assets (€21.0m in Total share or
€17.7m in Group share).(b) Excluding the positive non-recurring
income statement impact related to the 2020 and 2021 account
receivables.(c) Excluding treasury shares.
2023
FIRST-HALF
EARNINGS WEBCAST
— PRESENTATION AND CONFERENCE
CALL
Klépierre’s Executive
Board will present the Company’s first-half 2023 earnings on
Tuesday,
August 1, 2023
at
6:00 p.m.
CET
(5:00
p.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 |
|
October 20,
2023 |
Trading update for the first nine months of 2023 (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.comHugo
Martins, IR Manager +33 (0)7 72 11 63 24 —
hugo.martins@klepierre.comTanguy
Phelippeau, IR Officer+33 (0)7 72 09 29
57 —tanguy.phelippeau@klepierre.com |
Hélène Salmon, Group Head of Communication +33 (0)6 43 41 97 18 –
helene.salmon@klepierre.comWandrille 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 €19.4 billion at June 30,
2023, 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 July 31, 2023, to examine the
interim financial statements, as approved by the Executive Board on
July 31, 2023. Limited review procedures on the interim condensed
consolidated financial statements have been completed. The auditors
are in the process of issuing their report.(2) Excluding the
positive non-recurring income statement impact related to the 2020
and 2021 account receivables.(3) Like-for-like data exclude the
contribution of new spaces (acquisitions, greenfield projects and
extensions), spaces being restructured and disposals completed
since January 2022.(4) Change is on a same-store basis, excluding
the impact of asset sales and acquisitions, and excluding
Turkey.(5) Excluding the positive non-recurring income statement
impact related to the 2020 and 2021 account receivables (€0.30) and
the cash flow generated by disposed assets (€0.08), net current
cash flow per share reached €2.24 in 2022.(6) Excluding the
positive non-recurring income statement impact related to the 2020
and 2021 account receivables (€38.6m) and the net rental income
generated by disposed assets (€21.0m).(7) Excluding the positive
non-recurring income statement impact related to the 2020 and 2021
account receivables (€36.0m) and the net rental income generated by
disposed assets (€17.7m).(8) Only shopping centers, excluding
Turkey. As of June 30, 2023 the value of the overall portfolio,
including transfer taxes, amounts to €19,420 million on a total
share basis.(9) EPRA Net Initial Yield is calculated as annualized
rental income based on passing cash rents, less non-recoverable
property operating expenses, divided by the market value of the
property (including transfer taxes).(10) Calculated as the ratio of
fixed-rate debt (after hedging) to gross borrowings expressed as a
percentage.(11) 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
(€300 million), committed and unused revolving credit facilities
(€1.9 billion, net of commercial paper) and other credit facilities
(€300 million).
- PR_KLEPIERRE_2023_HY_EARNINGS
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