KLÉPIERRE: STRONG OPERATING PERFORMANCE DRIVING TO VALUATION
INCREASE AND GUIDANCE UPGRADE
PRESS RELEASE
STRONG OPERATING PERFORMANCE DRIVING TO
VALUATION INCREASE AND GUIDANCE UPGRADE
Paris — July 31, 2024
Klépierre delivered strong operating growth in
the first half of 2024(1), while
property valuations increased by 2%:
- Net current cash flow per share at
€1.25, up 3.3% vs. first-half 2023
-
EBITDA(2) up 5.4% year on
year
- Net rental income up 6.0%
like-for-like(3) (4.9% year on
year)
- Upward trend in operations:
- Collection rate at 97.7%, up 120
basis points year on year
- Occupancy at 96.2%, up 50 basis
points year on year
- Rental uplift +3% and occupancy
cost ratio at 12.6%, down 20 basis points year on year, reflecting
an upward trend in retailer sales with a 3.9%
increase(4)
- Further improvement in credit
metrics:
- Historic low net debt to EBITDA at
7.3x, LTV at 37.6% and ICR at 8.2x
- In May, S&P confirmed the BBB+
credit rating and increased its outlook from stable to
positive
- Fitch confirmed the ‘A-’ rating
with a stable outlook on Klépierre’s senior unsecured debt
- €775 million in long-term financing
closed year-to-date
- €625 million of existing bilateral
credit facilities renewed for five-years
- Property valuation turned positive,
being up 2.0% like-for-like over six months
- EPRA NTA per share at €31.4, up
4.3% over six months
- Active capital rotation with
investment in best-in-class destinations: highly accretive
acquisitions of O’Parinor and RomaEst and €106 million of disposals
closed or secured since January 1st
- IFRS consolidated net income:
€602.4 million (attributable to owners of the parent: €535.7
million)
- Upgraded full-year 2024 guidance:
EBITDA(2) growth of 5% and NCCF of
€2.50-€2.55 per share
HIGHLIGHTS OF THE PERIOD
Klépierre, the premier shopping malls specialist
with exclusive focus on continental Europe delivered a strong set
of results in the first half of 2024.
Operating momentum continues
Klépierre’s proactive asset management and
development initiatives designed to constantly adapt the offering
have been driving significant leasing tension for assets identified
as key destinations for expanding banners. This translated into
growth of 11% in the volume of leases signed (896) and a 3.0%
rental uplift on renewals and relettings, while the occupancy rate
was up 50 basis points compared to June 30, 2023, at 96.2%. The
occupancy cost ratio decreased to 12.6% (down 20 basis points
over 12 months), showcasing the affordable level of rents amid a
3.9%(4) year on year increase in
retailer sales and 2% growth in footfall.
Against this backdrop, net rental income
amounted to €520.1 million, up 4.9% year on year or 6.0% on a
like-for-like basis(3),
representing a spread of 320 basis points over indexation driven by
higher collection and occupancy rates and an 8% like-for-like
increase in additional revenues (turnover rents, car park revenues
and mall income).
Growing earnings and property values
Fueled by strong net rental income growth,
strict control over payroll and G&A expenses and higher
management fees, EBITDA(2) grew by
5.4% year on year. At the same time, net current cash flow
increased by 3.3% year on year to €1.25 per share.
Portfolio valuations upturned, increasing 2% on
a like-for-like basis over six
months(5), to €19,874 million
(total share)(6). The
EPRA NIY(7) for the portfolio
remained stable at 5.9%. EPRA NTA per share amounted to €31.4 as of
June 30, 2024, up 4.3% over six months.
Strong balance sheet capacities enabled to invest into
high-return opportunities
Klépierre continues to operate sector-leading
credit metrics. The net debt to EBITDA reached a historically low
level of 7.3x, the Loan-to-Value ratio was down 40 basis points
over six months at 37.6% and the interest coverage ratio stood at
8.2x. Eventually, the average debt maturity was 6.2 years and
the cost of debt 1.6%. Taken together, this has created significant
balance sheet capacity to act as a net investor in accretive
opportunities.
Since January 1, the Group closed the acquisitions of O’Parinor and
RomaEst, two super-regional shopping malls for a total amount of
€238 million. Pursuing its active capital rotation approach, the
Group disposed non-core assets for a total amount of
€106 million (€65 million closed and €41
million(8) under promissory
agreements), above appraised values (+16.4%) for a blended EPRA Net
Initial Yield of 5.5%. In parallel, Klépierre continued to invest
in its assets and delivered the Maremagnum extension (Barcelona,
Spain) in July, while the extension work of Odysseum (Montpellier,
France) is ongoing. Yield on costs of these projects reach 13.5%
and 9%, respectively.
Capitalizing on its investment grade credit ratings – BBB+ with
positive outlook at S&P (upgraded on May 27, 2024)
and A- with stable outlook at Fitch (confirmed on May 24, 2024) –
the Group raised €775 million in long-term financing (including a
€600-million bond with a maturity of 9.6 years and a coupon of
3.875%, a 130-basis-point spread over the reference rate). Since
January 1, the Group has renewed €625 million of existing
revolving credit facilities on a five-year basis (including €125
million in July 2024).
As of June 30, 2024, consolidated net debt stood at €7,479
million.
Outlook revised upwards
Based on the first-half performance and taking
into account the positive contribution of acquisitions closed
year-to-date, Klépierre is revising its full-year guidance upwards
and now expects to generate a 5% increase in EBITDA and net current
cash flow to reach €2.50-€2.55 per share in 2024.
NET CURRENT CASH FLOW
As common practice in the real estate industry,
Klépierre sees net current cash flow as a relevant alternative
performance measure. It is obtained by deducting from aggregates of
the IFRS income statement certain non-cash and/or non-recurring
effects.
|
06/30/2023
(as published) |
06/30/2023
(H1 2024 format) |
06/30/2024 |
Change |
|
Total share, in €m |
|
|
|
|
| Gross rental
income |
566.5 |
569.7 |
597.4 |
|
| Rental and
building expenses |
(82.4) |
(73.7) |
(77.3) |
|
| Net rental
income |
484.1 |
495.9 |
520.1 |
+6.0% |
| |
|
|
|
(like-for-like) |
|
Management, administrative, related income and other income |
36.3 |
36.3 |
36.8 |
|
| Payroll
expenses and other general expenses |
(68.5) |
(79.5) |
(79.6) |
|
|
EBITDA(a) |
451.9 |
452.7 |
477.3 |
+5.4% |
|
Cost of net debt |
(59.4) |
(59.4) |
(77.8) |
|
|
Cash flow before share in equity investees and taxes |
392.5 |
393.3 |
399.5 |
|
|
Share in equity investees |
27.5 |
27.5 |
30.2 |
|
| Current tax
expenses |
(23.7) |
(23.7) |
(19.0) |
|
| Adjustments to
calculate net current cash flow |
(2.3) |
– |
– |
|
| Adjustment
from the non-cash impact of Covid-19 rent concessions
amortization |
3.2 |
– |
– |
|
|
Net current cash flow |
397.3 |
397.3 |
410.6 |
|
| Group
share, in €m |
|
|
|
|
|
NET CURRENT CASH FLOW |
348.3 |
348.3 |
359.7 |
|
|
Average number of
shares(b) |
286,363,431 |
286,363,431 |
286,757,193 |
|
|
Per share, in € |
|
|
|
|
|
NET CURRENT CASH FLOW |
1.21 |
1.21 |
1.25 |
+3.3% |
(a) EBITDA stands for “earnings before interest,
taxes, depreciation and amortization” and is a measure of the
Group’s operating performance.
(b) Excluding treasury shares.
In the first half of 2023 and 2024, these
adjustments mainly concerned the depreciation charge for
right-of-use assets, share-based compensation payments, an
exceptional profit accounted in general expenses, non-current
operating expenses/income and the annualization of property tax
under IFRIC 21.
In the first half 2023 release, the adjustments were presented
below EBITDA (“Adjustments to calculate net current cash
flow”).
As of June 30, 2024, these adjustments are reallocated to each
relevant line item (H1 2024 format), with no impact on net current
cash flow.
2024 FIRST-HALF EARNINGS WEBCAST — PRESENTATION
AND CONFERENCE CALL
Klépierre’s Executive
Board will present the Company’s first-half 2024 earnings on
Wednesday July 31, 2024 at
10:00 a.m. CET (9:00 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 |
|
|
October 23, 2024 |
Trading update for the first nine months of 2024 (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.com
Hugo Martins, IR Manager
+33 (0)7 72 11 63 24 — hugo.martins@klepierre.com
Tanguy Phelippeau, IR Manager
+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.com
Wandrille Clermontel, Taddeo
+33 (0)6 33 05 48 50 – teamklepierre@taddeo.fr |
|
ABOUT KLÉPIERRE
Klépierre is the premier shopping malls
specialist with an exclusive focus on continental Europe, combining
property development and asset management skills. The Company’s
portfolio is valued at €19.9 billion at June 30, 2024, 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%), one of the leading operators of shopping
centers in Scandinavia. 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 slideshow
are available in the “Publications section” of Klépierre’s Finance
page:
www.klepierre.com/en/finance/publications
(1) The Supervisory Board met on July 29, 2024, to examine the
interim financial statements, as approved by the Executive Board on
July 26, 2024. Limited review procedures on the interim condensed
consolidated financial statements have been completed. The
Statutory Auditors are in the process of issuing their report.
(2) EBITDA stands for “earnings before interest, taxes,
depreciation and amortization” and is a measure of the Group’s
operating
performance.
(3) Like-for-like data exclude the contribution of new spaces
(acquisitions, greenfield projects and extensions), spaces being
restructured, and disposals completed since January 2023.
(4) Excluding the impact of asset sales and acquisitions and
excluding Turkey.
(5) Change is on a constant currency basis.
(6) As of June 30, 2024, the appraisers assumed on average a
discount rate of 7.9% and exit rate of 6.1% while the compound
annual growth rate stood at 2.8% over the next 10 years.
(7) 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).
(8) Total asset value excluding transfer taxes and including the
portion attributable to joint owners.
- PR_KLEPIERRE_2024_HY_EARNINGS
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