Regulatory News:
In a year characterised by the health crisis and attendant
business restrictions, Carmila’s (Paris:CARM) core business was
resilient and its financial structure solid:
- Encouraging performances on business resumption during the
different reopening phases
- Stable rental base, down just 0.5% versus 2019
- Dynamic leasing activity
- Decline in the valuation of the asset portfolio limited to
4.7% on a like-for-like basis
- EPRA Net Tangible Assets of €24.72 per share
- Loan-to-value ratio (including transfer taxes) at
37.0%
- Recurring earnings of €167.6 million, down 24.7% versus
2019, at €1.20 per share
Marie Cheval, Chairman and Chief Executive Officer of Carmila
commented: “In an unprecedented health context for Carmila and
for the entire industry, this has been a very demanding year. The
multiple challenges brought about by the crisis have served to
underline the particular strengths of Carmila's shopping centres:
rooted in local regions, backed by the partnership with Carrefour,
engaged with their retailers and popular with their visitors.
Thanks to the exceptional commitment of the Carmila teams, leasing
activity has remained dynamic, structural projects continued to
move forward and the development of growth drivers picked up
pace.
Backed by the partnership with Carrefour, and with a solid
financial position, stable rental base and stronger growth drivers,
Carmila has a good platform from which to take advantage of the
business resumption.”
Key financial
information
In Carmila’s three countries (France, Spain and Italy), business
momentum was brisk in the first quarter of 2020, before being
adversely impacted by the health crisis.
Carmila’s shopping centres had to contend with an initial period
of forced store closures from mid-March to end-May 2020, then the
gradual reopening of some or all stores, followed by a host of
travel and trading restrictions in all three countries during the
third and fourth quarters. In total, the closure periods amount to
an average of three months across France, Spain and Italy.
The key financial performance indicators for 2020 were adversely
impacted as follows:
- Retailer sales retreated by 19.1%.
- Net rental income contracted to €270.8 million, a
decrease of 18.7% on a reported basis and of 18.4% like for
like.
- EBITDA1 for the year amounted to €220.2 million, down
22.1% versus 2019.
- Recurring earnings per share2 for 2020 came out at
€1.20 per share, retreating by 26.7%.
- The asset value of the portfolio (including transfer
taxes) at year-end amounted to €6,148 million, down
4.7% on a like-for-like basis. The average exit rate
was 6.20% (up 30 basis points over the year).
- Carmila's net asset value (EPRA Net Tangible Assets) at
31 December 2020 was €24.72 per share versus €27.76 per
share at end-2019, down 10.9%.
- The loan-to-value ratio (consolidated net debt/fair value of
property portfolio, including transfer taxes) stood at
37.0% and at 38.9% when transfer taxes are excluded.
2020 results Gross rental income
for 2020 totalled €349.7 million, down 2.7% year
on year. The decline mainly reflects (i) the IFRS 16 impact of
rent-free periods granted in connection with the health crisis in
exchange for lease extensions and (ii) adjustments made to
provisions for variable rents for the months during which stores
were closed.
Net rental income for 2020 amounted to €270.8
million, down by 18.7%, chiefly due to the direct and
indirect impacts of the health restrictions.
The total year-on-year decrease amounted to €61.3 million like
for like, or 18.4%. Adverse Covid-19 impacts (included in
like-for-like data) over the year reduced net rental income by
€56.7 million, or 17.0%. Organic growth as adjusted for these
specific impacts was a negative 1.4%, and includes a positive 1.5%
indexation effect.
Growth spurred by lease extensions represented €1.0 million, or
0.3%.
No acquisitions were carried out in 2019 or 2020.
Other effects reduced net rental income by €2.1 million (0.6%),
including the impact of strategic vacancies to allow for
restructuring and extension operations.
During the period, Carmila held negotiations with its
lessees with a view to supporting them through the crisis by
granting rent relief.
Overall, the impact of the various forms of relief
granted represented €69.6 million, equivalent to 1.9 months of
rents, of which €51.0 million was written off against 2020
income. The remaining €18.5 million (deferred in accordance with
IFRS 16) will impact income in future reporting periods.
70% of Covid-19-related negotiations have been agreed and
signed.
Certain negotiations were concluded without any concessions, in
direct application of government measures, notably three months of
rent waivers (€9.6 million) for small businesses. The other
negotiations were conducted on a tenant-by-tenant basis, and
concluded with or without concessions (55% included extensions to
non-cancellable lease terms or commitments for new leases, which
have strengthened the rental base).
Out of the total rents invoiced in 2020, 77.3% have been
collected, 18.0% have been waived as Covid-19 rent relief and 4.7%
were pending collection at 31 December 2020. To date, Carmila has
already recovered 3.0% of this amount, lifting the rent
collection rate to 80.3%.
Rent collection rates improved after shops reopened in the third
quarter (84.9%), whereas the second (53.3%) and fourth (74.3%)
quarters were impacted by lockdowns and other government-imposed
restrictions.
The rental base remained broadly stable over the
period (down 0.5%), thanks notably to a dynamic leasing
performance that underlines the resilience of Carmila’s core
business.
Overhead costs declined by 3.6% in 2020 to €50.9
million versus €52.8 million one year earlier, with the
decrease reflecting savings generated in light of the health
crisis.
EBITDA came in at €220.2 million in 2020, a
decline of 22.1%.
Net financial expense for 2020 amounted to €75.6
million versus €58.1 million one year earlier. The cost of net
debt at 31 December 2020 remained stable year on year at €56.7
million. Net Other financial expense for the year increased due to
the bond redeemed in November 2020 and other adjustments in
connection with the application of IFRS 9. The average cost of debt
for the year stood at 1.9%.
EPRA recurring earnings amounted to €167.6 million
for 2020, versus €222.5 million in 2019, representing a decrease of
24.7%.
Recurring earnings per share fell 26.7% year on year to
€1.20.
Footfall and retailer sales
performance
2020 was characterised by five different phases depending on the
health restrictions decided at a national level in France or on a
regional basis in Spain and Italy. The restrictions varied widely
depending on the period and the country (lockdowns, states of
emergency, curfews, opening limited to stores selling "essential"
goods, capacity restrictions and weekend closures of shopping
centres).
In 2020 in the Group’s three countries, Carmila’s shopping
centres recorded declines in footfall of 20.9% on
average, less than the industry average3 thanks to the positioning
of its centres and the strength of the Carrefour hypermarkets,
whose utility came to the fore during the crisis.
During the lockdowns, essential goods stores in centres remained
open – representing 6% of retailers (rental value) in the three
countries during the first lockdown between March and mid-May. In
France, 34% of shops remained open during the second lockdown in
November.
Over 2020 as a whole, footfall in Carmila centres outperformed
its comparable panels in the Group's three countries by 750 basis
points in France, 640 basis points in Spain and 320 basis points in
Italy. On reopening, footfall virtually bounced back to normal (92%
of prior-year levels in France in December).
Retailer sales declined by a cumulative 19.1%4
year on year in the Group’s three countries, with France down
16.0%, Spain down 29.1% and Italy down 25.6%.
The impact of the crisis on the different business segments was
variable: Food & Restaurants was the hardest hit (down 33% in
France, 37% in Spain and 36% in Italy), followed by Health &
Beauty (down 15% in France, 28% in Spain and 31% in Italy) and
Culture, Gifts & Leisure (down 14% in France, 28% in Spain and
29% in Italy).
In the Group’s three countries, retailer sales for Ready-to-Wear
also retreated (down 24% in France, 36% in Spain and 35% in
Italy).
Household Furnishings was the most dynamic segment in 2020 (down
just 3% in France, 18% in Spain and 9% in Italy).
In all three countries, retailer sales were up in the first two
months of the year (by 1.0% in France, 3.8% in Spain and 1.3% in
Italy) as well as in France during the reopening periods (up 2.6%
excluding seated food service, which remained closed).
Leasing activity
Leasing activity was robust during the year, with 684 leases
signed (11% of Carmila’s rental base), representing
minimum guaranteed rent of €36.1 million, and rents in line with
appraisal values. Leasing activity concerned contracts signed for
(i) 370 vacant premises, (ii) 21 premises on extension projects,
and (iii) 293 renewals.
Due to the closure of the centres, revenues derived from
Specialty Leasing and Pop-up Stores in all three countries
retreated by 10.5% year on year, although they continued to gain
ground as a proportion of net rental income (4.7%), attesting to
the efficiency and resilience of this model.
The average reversion rate on renewals over the year was
a positive 2.2% (1.6% in France, 2.8% in Spain and 5.4% in
Italy).
At 31 December 2020, the financial occupancy rate5 was
95.7%, down slightly from 96.3% at end-2019. The increase in
the vacancy rate was limited to 60 basis points.
Administration proceedings concerning a few major Ready-to-Wear
brands did not have a material impact on the vacancy rate. At 31
December 2020, 1.4% of Carmila’s rental base was subject to ongoing
insolvency proceedings, with 83% of insolvencies during the year
resulting in a takeover or re-leasing.
Digital marketing
strategy
Since its creation, Carmila has implemented a distributed
marketing strategy that equips every shopping centre with effective
marketing and digital tools. During the health crisis, these tools
have allowed Carmila to remain responsive and adaptable in pursuit
of two priority objectives:
- Supporting retailers (whether open or closed) with a strong
and permanent omnichannel presence Throughout the year, Carmila
kept up a constant dialogue with all of its retailers (open or
closed), and pressed ahead with the rollout of the Kiosk, a local
marketing solutions initiative aimed at developing the appeal of
its retailers’ stores. In 2020, Carmila ran 8,783 marketing
campaigns for its points of sale. In France, digital drive-to-store
marketing campaigns helped generate 3 million visits to Carmila
shopping centres (up 14.8% versus 2019). In order to help retailers
generate sales despite the crisis, Carmila was especially active in
supporting their omnichannel development. A host of
click-and-collect initiatives were put in place locally to support
retailers using collection points inside the centres or dedicated
drive-in pick-up points. In Spain, Carmila also joined forces with
Shopify to assist retailers in creating their own online sales
presence.
- Strengthening ties with customers In 2020, Carmila
prioritised informing and reassuring customers on the comprehensive
application of strict health protocols, and sharing local
initiatives to support all of its retailers, whether open or
closed. Carmila regularly contacted its 3.5-million strong customer
base, and mobilised its entire digital eco-system (shopping centre
websites, Google My Business, Facebook, etc.). Thanks to these
communication initiatives and the health protocol put in place, 93%
of customers reported feeling secure during their visits to Carmila
shopping centres7. Backed by these actions and the excellent
on-site operational execution, Carmila obtained a visitor
satisfaction rate in France of 87%6 and a Net Promoter Score of +7
– up two points on 20197.
Project pipeline
In view of the health crisis, Carmila decided to streamline the
implementation of its shopping centre extension projects. With the
exception of the main ongoing projects, Carmila's pipeline has been
put on hold, able to be reactivated as soon as conditions are
right. Carmila will focus on the five highest-potential projects
(Terrassa, Montesson, Antibes, Toulouse Labège and Vénissieux).
Two extension-restructuring projects are in the process of being
completed:
- Extension of Nice Lingostière to host 50 new banners, including
Cultura, Kiabi, H&M, Foot Locker and Mavrommatis, over an
additional gross leasable area of 8,000 sq.m. This project
represents an investment of €90 million, is fully pre-leased and
slated to open in the spring of 2021.
- Transformation of Cité Europe (Calais-Coquelles), with the new
and fully modernised Cité Gourmande food and leisure space, and the
new Primark store, which opened on 29 January 2021. This project
represents an investment of €33 million.
Growth drivers
Innovative property projects
Carmila is planning to transform certain of its sites as part of
urban diversity projects (around 20 sites currently being studied)
and is set to play a significant role in three urban development
projects launched by Carrefour in partnership with Altarea on the
Flins/Aubergenville, Nantes Beaujoire and Sartrouville sites, which
are jointly owned by Carmila.
Other projects aimed at consolidating the leadership of
Carmila’s sites are moving forward:
- 10 Food Park projects;
- 5 hypermarket downsizings in partnership with Carrefour.
Carmila Retail Development
In 2020, Carmila accelerated the expansion of Carmila Retail
Development, which is dedicated to investing in promising new
concepts. Carmila gives financial support to dynamic entrepreneurs
who wish to focus their development on its centres, following in
the footsteps of men’s hair salon La Barbe de Papa, shoe store
Indémodable, e-cigarette retailer Cigusto, and the Centros Ideal
beauty clinics in Spain.
The health crisis has showcased the professionalism of Carmila's
partner entrepreneurs who have continued to develop with almost 40
new store openings in 2020.
At 31 December 2020, Carmila Retail Development’s four main
partners operated 76 stores in the Group’s French and Spanish
shopping centres, representing annual rents of €2.8 million and a
total of 111 stores in both countries, including 35 with
third-party lessors.
These banners are planning to open a further 50 stores by the
end of 2021, representing total additional annual rents of €1.2
million.
In 2020, Carmila Retail Development joined forces with new
innovative partners such as digital native vertical brands (DNVB)
concept store Marquette, created with Digital Native Group.
The Group has ambitious aims to develop Carmila Retail
Development going forward.
Healthcare
To respond to clearly-expressed customer expectations,
reinforced by the health crisis and in line with the vital role
played by its centres, Carmila is continuing to roll out its
healthcare offering. It is using the strengths of its shopping
centres in terms of their urban settings, accessibility and parking
facilities as a platform to deploy its healthcare strategy, based
around two priority avenues for development:
- Development of dental care centres based on the best brands in
the profession as part of the Vertuo joint venture in France and
DentalStar in Spain.
- Development of pharmacies in the scope of the Pharmalley joint
venture.
Some 15 projects have been planned for 2021 – including opening
two pharmacies, ten Vertuo and two DentalStar centres – and Carmila
is aiming to develop a total of 60 projects by 2025.
Tower Company (Lou5G)
Through its Lou5G subsidiary, which owns the land, Carmila
leases plots to telecom operators for their mobile mast
installations in France. Created in 2019, the business was
structured in 2020, with 67 masts installed to date and a further
35 planned in 2021.
Corporate social
responsibility
In 2020, Carmila further strengthened its CSR commitments, as
expressed through its CSR initiatives programme “Here we act”,
which is founded on three pillars.
Pillar 1: Here, we act for the planet
Carmila is committed to continually improving its environmental
performance and to contributing to the fight against climate
change. In 2020, Carmila cut its greenhouse gas emissions by 28%
and its energy intensity by 36%. Carmila has set itself a target of
a 50% reduction in greenhouse gas emissions by 2030. The Group’s
environmental performance has been rewarded with an “A-” rating
from the Carbon Disclosure Project.
As of 31 December 2020, BREEAM certification had been awarded to
88% of the portfolio in value terms, exceeding the target for the
year of 75%.
Pillar 2: Here, we act for the local regions
Drawing on its strong local roots, in 2020 Carmila decided to
step up its job support programmes by expanding the range of
solutions available to the centre managers. Carmila has also
launched a partnership with Student Pop and is aiming to introduce
local job support initiatives in each of its centres by 2022.
Carmila prioritises local players when choosing its partners.
72% of its works investments during the year – €50 million – were
allocated to regional businesses.
Lastly, Carmila encourages local community outreach actions. In
response to the health crisis, 17 shopping centres deployed drop-in
centres for victims of domestic violence and 16 shopping centres
hosted Covid-19 testing facilities.
Pillar 3: Here, we act for employees
Carmila is committed to promoting diversity of profiles among
its employees, with particular attention to upholding workplace
equality. The workplace equality index stood at 84/100 in 2020,
with Carmila having targeted 90/100 in 2022. The Group also
promotes youth employment, with apprentices making up 17% of the
total workforce.
Lastly, Carmila deploys numerous actions to boost engagement
among its employees, 84% of whom declare themselves satisfied with
the Company. Carmila was recognised with an EPRA Gold Award for the
quality of its financial and non-financial reporting.
Portfolio valuation
At 31 December 2020, the gross asset value of the portfolio,
including transfer taxes, stood at €6,148 million on a
like-for-like basis, down €298.1 million (-4.7%) compared to
31 December 2019. The year-on-year 4.7% decrease in the
like-for-like portfolio valuation includes an exit rate effect
(4.6%) and a rent effect (0.1%).
This limited decline underlines the resilience of the rental
base, 2020 leasing activity in line with market rental values and a
contained vacancy rate.
The average exit rate for the portfolio was 6.20%
at 31 December 2020, representing a 30-basis-point decompression
over the year.
Debt and balance sheet
structure
Carmila increased its liquidity in 2020, issuing a €300 million
bond in December 2020 with maturity in May 2027 and a 1.625%
coupon. This issue was 5.5 times oversubscribed, proving the
Group’s ability to secure attractive rates on bond markets.
At 31 December 2020, Carmila's gross debt stood at €2,586
million, with no major borrowings falling due before 2023, and its
available cash position amounted to €311 million. Available
liquidity (revolving credit facility and net available cash)
amounted to €1,070 million. At 31 December 2020, the average
maturity of Carmila’s debt was 4.5 years (versus 5.0 years at
end-2019).
Carmila’s financial position is solid, with a consolidated
loan-to-value ratio (net debt/fair value of property portfolio,
including transfer taxes) of 37.0% at 31 December 2020
and a net debt/EBITDA ratio of 10.3x.
The EBITDA/cost of net debt ratio at 31 December 2020
stood at 3.9x, compared with 5.0x one year earlier, well
above the minimum contractually agreed banking covenant threshold
of 2.0x.
On 27 March 2020 as part of an industry-wide review, S&P
confirmed Carmila's "BBB" rating with a "negative” outlook.
Dividend
The Annual General Meeting to be held on 18 May 2021 will be
asked to vote on a dividend of €1 per share in respect of
2020, with a stock dividend option.
Outlook
Given the current lack of visibility over the reopening dates of
the shopping centres and on the lifting of government-imposed
restrictions adversely impacting trading in France, Spain and
Italy, at this stage Carmila is unable to provide guidance for its
2021 results.
However, Carmila remains firmly confident in the vital role
played by its shopping centres, in the effectiveness of its
business model, and in the solidity of its balance sheet.
In addition, the partnership with Carrefour, dynamic leasing
activity, strengthened growth drivers and the operational
excellence of its teams will enable Carmila to emerge from the
crisis on a solid footing.
Main results and financial
indicators:
(in thousands of euros)
31/12/2020
31/12/2019
% change
reported
Gross rental income
349,744
359,457
-2.7%
Charges rebilled to tenants
79,621
79,359
Total Income from rental
activity
429,365
438,816
Real estate expenses
(23,510)
(21,214)
Rental charges
(71,177)
(71,307)
Property expenses (landlord)
(63,841)
(13,111)
Net rental income
270,837
333,184
-18.7%
Overhead expenses
(50,949)
(52,840)
Additions to depreciation and amortisation
of property, plant and equipment and intangible assets, and
provisions
(2,849)
(3,493)
Other operating income and expenses
(2,379)
1,343
Gains and losses on disposals of
investment properties and equity investments
(65)
(610)
Change in fair value adjustments
(334,267)
(90,172)
Share in net income (loss) of
equity-accounted companies
(3,189)
4,376
Operating income
(loss)
(122,861)
191,788
Financial income
917
559
Financial expense
(57,634)
(57,277)
Cost of net debt
(56,717)
(56,718)
Other financial income and expenses
(18,903)
(1,389)
Net financial
expense
(75,620)
(58,107)
Income before
taxes
(198,481)
133,681
Income tax
196
(25,277)
Consolidated net
income (loss)
(198,286)
108,404
Consolidated net
income (loss) attributable to owners
(198,755)
108,213
EBITDA
220,205
282,569
-22.1%
EPRA
earnings
160,986
218,543
-26.3%
Recurring
earnings
167,609
222,545
-24.7%
Portfolio
valuation (in millions of euros)
6,147.9
6,421.5
-4.3%
EPRA NTA NAV (in
millions of euros)
3,529.7
3,799.4
-7.1%
Per-share data
(in euros)
Recurring
earnings per share (average)
1.20
1.63
-26.7%
Diluted EPRA NTA
NAV per share
24.72
27.76
-10.9%
The Board of Directors of Carmila SA met on 16 February 2021
under the chairmanship of Marie Cheval and approved the 2020
consolidated financial statements. The financial statements have
been audited and the audit report is currently being prepared for
issue.
Investor agenda
17 February 2021 (after trading): 2020 Annual Results
18 February 2021 (2:30 p.m. CET): Investor and Analyst
Meeting 22 April 2021 (after trading): First-quarter 2021
Financial Information 18 May 2021 (9:30 a.m. CET):
Shareholders' Annual General Meeting 28 July 2021 (after
trading): Interim 2021 Results 29 July 2021 (2:30 p.m.
CET): Investor and Analyst Meeting
*******
The presentation of Carmila's 2020 annual results will be
broadcast live on 18 February 2021 at 2:30 p.m. (CET) on Carmila's
website (www.carmila.com). The presentation slides will be made
available as soon as the webcast begins. A replay of the webcast
will then be available online later during the day.
*******
Important notice
Some of the statements contained in this document are not
historical facts but rather statements of future expectations,
estimates and other forward-looking statements based on
management's beliefs. These statements reflect such views and
assumptions prevailing as of the date of the statements and involve
known and unknown risks and uncertainties that could cause future
results, performance or events to differ materially from those
expressed or implied in such statements. Please refer to the most
recent Universal Registration Document filed in French by Carmila
with the Autorité des marchés financiers for additional information
in relation to such factors, risks and uncertainties. Carmila has
no intention and is under no obligation to update or review the
forward-looking statements referred to above. Consequently, Carmila
accepts no liability for any consequences arising from the use of
any of the above statements.
*******
About Carmila
Carmila was founded by Carrefour and large institutional
investors in order to develop the value of shopping centres
anchored by Carrefour stores in France, Spain and Italy. As at 31
December 2020, its consists of 215 shopping centres in France,
Spain and Italy, mostly leaders in their catchment areas, and was
valued at €6.1 billion. Inspired by a genuine retail culture,
Carmila's teams include all of the expertise dedicated to retail
attractiveness: leasing, digital marketing, specialty leasing,
shopping centre management and portfolio management. Carmila is
listed on Euronext-Paris Compartment A under the symbol CARM. It
benefits from SIIC (sociétés d'investissements immobiliers cotées)
tax status (French REIT regime). Carmila became part of the FTSE
EPRA/NAREIT Global Real Estate (EMEA Region) indices on 18
September 2017. Carmila became part of the Euronext CAC Small, CAC
Mid & Small and CAC All-tradable indices on 24 September 2018.
On 18 December 2020, Carmila joined the SBF 120 and CAC Mid 60
indices.
*******
1 Including income related to the impact of deferring Covid-19
rent relief in accordance with IFRS 16, in an amount of €18.5
million 2 EPRA earnings restated for non-recurring items described
in the Annual Financial Report published on the Company’s website.
Calculated based on an average number of shares for the period,
fully diluted. 3 Quantaflow for France, Shoppertrak for Spain and
CNCC for Italy. 4 Excluding seated food service. 5 Excluding 2.5%
of strategic vacancies at end-2020, versus 1.8% at end-2019. 6 2020
Carmila France/Spain survey. 7 Customer survey conducted in October
2020; 34,017 respondents in 100 centres in France
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210217005807/en/
Investor and analyst contact Florence Lonis - Secretary
General florence_lonis@carmila.com +33 6 82 80 15 64
Press contacts Morgan Lavielle - Communications Director
morgan_lavielle@carmila.com +33 6 87 77 48 80
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