Regulatory News:
In the first half of 2021, Carmila (Paris:CARM) illustrated
the effectiveness of its platform with very dynamic leasing
activity and stepped-up growth drivers, while taking advantage of
its geographical footprint, omnichannel strategy and solid
financial position, despite the impact of the prolonged health
crisis (cumulative closure of 2.2 months).
- Firm recovery in retailer sales as stores reopened (retailer
sales in France up 5% in June 2021 versus June 2019)
- Dynamic leasing activity (541 leased signed, up 40% on
first-half 2019 and 140% on first-half 2020)
- Positive reversion for new leasings (+3.9% vs rental values)
and for renewals (+3.0%)
- Financial occupancy rate stable at 95.7%
- Stable and solid rental base (-0.6% on a like for like basis
versus end-December 2020)
- Stable portfolio value at €6,135 million including transfer
taxes (-0.2% like for like on end-December 2020)
- EPRA Net Tangible Assets at €23.69 per share, down
4%
- Recurring earnings of €76.2 million (excluding IFRS 16 Covid
impacts), down 18.9% versus first-half 2020, and recurring earnings
per share of €0.53 (excluding IFRS 16 Covid impacts)
- Collection rate at 69.3% for the first half of 2021
- Loan-to-value ratio of 39.4% including transfer taxes at 30
June 2021, temporarily impacted by first-half 2021 rent
collection
- Liquidity in excess of €950 million; no major refinancing
expected before 2023
Marie Cheval, Chair and Chief Executive Officer of Carmila
commented: “The first half of 2021 was once again shaped by the
health crisis, with 2.2 months of closures for Carmila’s centres.
In this intensely demanding environment, Carmila has demonstrated
the effectiveness of its platform, underscored by exceptionally
dynamic leasing activity, with 541 leases signed in the first half
of the year. Carmila is stepping up the rollout of its growth
drivers with the opening of the Nice Lingostière extension on 19
May 2021, the expansion of Carmila Retail Development and the
successful openings of our Healthcare projects. Capitalisation
rates are stable for the first time since 2017, illustrating the
quality of Carmila’s assets. In light of these results, we are
confident in the strength of Carmila’s business model and our
ability to drive our development prospects.”
1. Key financial information
First-half 2021
Change vs. First-half
2020
LfL change vs. First-half
2020
First-half 2020
Gross rental income (€m)
172.9
+5.7%
163.6
Net rental income (€m)
127.9
-13.2%
-1.7%
147.5
Recurring earnings (€m)
74.1
-21.1%
93.9
Recurring earnings (€m, excl. IFRS 16
Covid impact)
76.2
-18.9%
93.9
Recurring earnings per share (€m, excl.
IFRS 16 Covid impact)
0.53
-22.4%
0.69
First-half 2021
Change vs. Full-year
2020
LfL change vs. Full-year
2020
Full-year 2020
Portfolio valuation (€m, including
transfer taxes)
6,135
-0.2%
-0.2%
6,150
Net Potential Yield
6.20%
+0 bps
6.20%
Loan-to-value ratio (including transfer
taxes)
39.4%
+240 bps
37.0%
EPRA NTA (€/share)
23.69
-4.2%
24.72
2. Operating performance
The first half of 2021 was shaped by continued health
restrictions, imposed at a national level in France and at a
regional level in Spain and Italy, which evolved over time
depending on the geography and size of shopping centres. Over the
first half of the year 2021, stores in Carmila shopping centres
were closed for an average of 2.2 months compared to two months of
closure in first-half 2020.
Dynamic reopening periods In the Group’s three countries,
cumulative footfall was down by an average of 22% on first-half
2019 (down 20.4% in France, 23.8% in Spain and 25.7% in Italy).
Reopening periods were characterised by solid rebounds, with
footfall in June 2021 close to June 2019 levels (90% in France, 80%
in Spain and 85% in Italy). During the periods when stores reopened
in France, retailer sales outperformed 2020 and 2019 levels, with
sales up 5% in June 2021 versus June 2019.
Very dynamic leasing activity 541 leases were signed in
the first half of the year (9.0% of the rental base) for a total
minimum guaranteed rent of €27.6 million and rents 3.9% above
appraisal rental values. In terms of number of leases, this
represented a 40% increase on first-half 2019 and 140% on
first-half 2020. The 541 signed leases comprise 266 vacant premises
and 275 renewals. Carmila recorded a positive 3.0% average
reversion on renewals over the first half of the year. Carmila is
continuing to develop the merchandise mix in its centres by signing
up leading and up-and-coming retail brands in a range of segments.
In France, for example, Carmila is preparing to welcome a number of
stores including two New Yorker, two Action, eight Hubside Store,
and two Normal, while three Popeye’s restaurants are scheduled to
open in Spain. Leveraging the strength of its regional presence and
its retail know-how, Carmila is constantly searching for new
concepts, such as Miniso, Happy Cash Eco (specialised in
purchasing, selling and repairing products) and wine specialist Les
Canons, as well as local retailers. In the first half of 2021,
revenues derived from Specialty Leasing and Pop-up Stores were up
3% compared with the same period last year in the three countries.
Specialty Leasing recovered well in June 2021 with revenues up 38%
compared to June 2020. The good leasing performance is continuing
into the second half of 2021, as illustrated by the high number of
pre-contracts signed with retailers.
Solid rental base The rental base was stable at 30 June
2021, down slightly by 0.6% on a like for like basis versus
2020.
The number of administration proceedings and lease terminations
was flat. In first-half 2021, administration proceedings
represented a negative 0.5% impact on Carmila’s rental base and
lease terminations a negative 1.3%.
Successful omnichannel initiatives Carmila is developing
an omnichannel strategy, the priority of which is to support
retailers through the digital transition, in particular the 40% of
independent retailers and local partner franchisees. Carmila is
helping retailers make the most of the store reopening period
through a range of initiatives, including strengthening their
omnichannel presence via the Carrefour marketplace in Spain,
offering online payment solutions with ShoppingPay, and broadening
drive-to-store solutions with live shopping events. Carmila is
continuing to develop interactions with its customer community by
partnering with a network of local influencers whose subscribers
surged by 300% year on year in the first half of 2021. Focused on
drive-to-store initiatives, Carmila also bolstered its online
presence through a geo-localised customer database of 3.6 million
opt-in contacts in France, Spain and Italy, and by pushing its
presence on Google and Facebook. In the first half of 2021, Carmila
centres were searched nearly 41 million times on Google (up 12%
year on year) and generated 130 million views on their Facebook
posts (up 29% year on year).
Successful opening of the restructured Cité Europe and the
Nice Lingostière extension In the first half of 2021, Carmila
delivered two major extension and restructuring projects:
- Cité Europe (Calais-Coquelles) restructuring: since 29 January
2021, the centre has hosted a new Primark store, as well as a fully
refitted Cité Gourmande leisure and restaurant complex. The centre
has recorded 31 new store openings since 2018, including seven in
the first half of 2021. From 19 May to 30 June 2021, the centre
recorded a 65% surge in footfall versus the same year-ago
period.
- On 19 May 2021, Carmila opened the fully-leased Nice
Lingostière extension. As part of the project devised together with
local stakeholders, the centre is welcoming 50 new stores across
12,000 sq.m. of additional gross leasable area, including leading
retail brands such as H&M, Kiabi, Cultura, Mango and new
concepts like Le Repaire des Sorciers, La Barbe de Papa, Even and
Bambino. Investments in the project amounted to €90 million. The
opening was a success and generated a 30% increase in footfall from
19 May to 30 June 2021 versus the same period in 2020.
Carmila also reached a new milestone on the Montesson shopping
centre extension project after receiving the requisite
authorisation from the regional commercial development authority
(CNAC) in May 2021. This extension, which is adjacent to
Carrefour’s leading French hypermarket, aims to host 60 new stores
and restaurants by 2025 as part of an urban development project
designed to boost the local economy.
Stepping up expansion of Carmila Retail Development
Carmila Retail Development, the Company’s subsidiary that aims to
invest alongside innovative retailers, experienced a sharp rise in
performance in first-half 2021. Carmila’s four main partners –
barbers La Barbe de Papa, footwear and accessory specialist
Indémodable, and e-cigarette retailer Cigusto in France, as well as
Centros Ideal beauty clinics in Spain – opened a total of 37
premises in the first half of the year, with a further 44 scheduled
to open in the second half.
Carmila Retail Development has entered into new partnerships
such as with wine specialist Les Canons and restaurant chain
Dicapo. Several partnerships are currently under development.
Carmila Retail Development’s dynamic partnerships are also
exemplified by the development of Digital Native Vertical Brands
(DNVB). Carmila is continuing to grow the Marquette retail brand,
devised together with Digital Native Group, which distributes
online brands through its concept store. In June 2021, Carmila
launched the “Prix DNVB Ready” aiming to identify innovative
concepts with a mostly-online presence, and develop them in its
centres.
Successful first Healthcare openings In the first half of
2021, Carmila opened its first dental practices under the Vertuo
brand in Athis-Mons, Sartrouville, Perpignan Claira and Nantes
Beaujoire. Five more centres are scheduled to open by the end of
the year. Over the same period in Spain, Carmila opened two
DentalStar centres in Montigala (Barcelona) and Cabrera del
Mar.
At the end of 2021, Carmila Retail Development partnerships will
account for around 248 premises in France and Spain, including 118
in Carmila centres representing €5 million in rent.
Stepping up new real estate activities Carmila is
accelerating its urban mixed-use projects launched in partnership
with Carrefour and Altarea. Three projects are under way at
Flins-Aubergenville, Nantes Beaujoire and Sartrouville, and 20 more
are currently under consideration. Carmila is also continuing to
invest in Lou5G, its TowerCo business, for the construction and
installation of new towers. Lou5G is set to raise recurring rental
income to €1.1 million by the end of the year, representing 101
leases.
Optimising capital allocation During the first half of
the year, Carmila initiated an asset rotation programme that began
with the sale of a retail park in Nanteuil-lès-Meaux at its
end-December 2020 appraisal value. The proceeds from the disposal
will be used to launch a share buyback programme for around €8
million.
Continuing an ambitious CSR strategy Carmila is
accelerating its CSR strategy, rooted in the Here we act
initiatives programme. A number of projects have been deployed
focusing on the programme’s three pillars of the Planet, Local
Regions and Employees.
During the first half of 2021, Carmila initiated BREEAM In-Use
certification at 40 new sites, including 21 sites in France, 16 in
Spain and 3 in Italy. The goal is to have all of the Carmila sites
certified by 2025.
Carmila was also recognised by the Science Based Targets
initiative (SBTi) for its commitment to fighting climate change in
line with the 1.5°C objective, pursuant to the Paris Agreement.
3. Financial results
Net rental income Net rental income amounted to €127.9
million in the first half of the year, down 13.2%. The decrease was
mainly attributable to the temporary effects of the health crisis,
with a 12.2% negative impact on net rental income. The organic
decrease was linked to the 1.0% contraction in the rental base,
including positive 0.2% indexation, which underscores the solidity
of Carmila’s assets. The Nice Lingostière extension had a positive
1.2% impact while other impacts reduced net rental income by 1.2%,
including the sale of the Nanteuil-lès-Meaux retail park and
strategic vacancies in view of restructuring operations.
Impact of the health crisis in first-half 2021 Stores
were closed for an average of 2.2 months in first-half 2021 (2.8
months in France). The negative impact of the health crisis in the
first half of 2021 amounted to €33.5 million, representing 0.9
months of invoicing. Carmila prudently allocated a €17.2 million
provision for rent waivers for the period during which businesses
were closed in France in the first half of the year, as well as
€6.5 million for Spain and Italy. This will enable Carmila to
provide targeted rent waivers for the closure period, speed up
collection of 2021 rents and re-establish systematic due-date
rental payments. All the estimated impacts of closures in the first
half of 2021 have been recognised in the financial statements.
Collection rate The collection rate for first-half rents
stood at 69.3% as of 19 July 2021 (5.5 percentage points higher
than at end-June 2021), the delay being due to the impact of
tenants anticipating a financial support package in France. This
support package represents excellent news that are expected to
accelerate collection.
Operating expenses Overhead costs for the period totalled
€24.4 million, down €0.9 million.
Net financial expense Net financial expense amounted to
€29.5 million, up €2.3 million. The increase in interest expense on
bonds (€3.8 million) was partially offset by the decrease in
interest expense on bank borrowings (€1.6 million).
Recurring earnings Recurring earnings (excluding the
impact of IFRS 16 Covid-related rent-free periods) stood at €76.2
million, down €17.8 million or 18.9% compared with the first half
of 2020. Recurring earnings per share for first-half 2021 amounted
to €0.53 (excluding the IFRS 16 Covid impact), a decrease of €0.16
per share or 22.4%.
4. Portfolio valuation
At 30 June 2021, the gross asset value of the portfolio,
including transfer taxes, stood at €6,135.2 million, down €12.7
million or 0.2% compared with the figure reported at 31 December
2020. On a like-for-like basis, the decrease was €9.7 million (down
0.2%). First-half 2021 was the first period during which
capitalisation rates were stable since 2017: the average
capitalisation rate for the portfolio was 6.20% at 30 June 2021,
flat compared with the 31 December 2020 figure. The solid rental
base, dynamic leasing activity and the limited, flat vacancy rate
all demonstrate the stability of Carmila’s assets in the first half
of the year.
5. Debt and financial structure
The financial position was strengthened in first-half 2021.
Carmila issued a €300 million bond on 25 March 2021, maturing in
April 2029 and paying a coupon of 1.625%. With the proceeds,
Carmila partially reimbursed a bank loan falling due in June 2024
in the amount of €300 million, extending the average maturity of
debt (4.6 years at 30 June 2021 versus 4.5 years at end-December
2020) while maintaining a stable average interest rate (2.0% at 30
June 2021 versus 1.9% at 31 December 2020). Net debt was
temporarily impacted by the collection situation in the first half
of the year, and stood at €2,379 million as of 20 July 2021, a
marked improvement compared to the €2,419 million recorded at 30
June 2021. The loan-to-value ratio including transfer taxes stood
at 39.4% at 30 June 2021, up 240 basis points, due to the temporary
change in net debt. At 20 July 2021, the loan-to-value ratio stood
at 38.9%, down by 40 basis points compared to 30 June 2021.
6. Conclusions and outlook: Carmila, the platform helping
transform the retail sector
The health crisis has accelerated the transformation of retail
concerning issues such as purchasing power, omnichannel,
convenience and corporate social responsibility. Carmila’s centres
help preserve purchasing power, combine the benefits of physical
and online retail; they are safe and accessible, fully adapted and
embedded in the local economy and community.
Carmila is rolling out with agility an efficient platform to
help transform the retail sector.
This platform draws on Carmila’s solid fundamentals: a unique
regional footprint − more than one-third of French and Spanish
citizens can reach a Carmila centre within 20 minutes; leading
local shopping centres registering 650 million visits per year; and
assets adjoined to powerful hypermarkets, which proved their worth
during the health crisis.
This platform is built on four key pillars:
- Retail places in motion
- Preferred partner for retailers
- 100%-omnichannel strategy
- Solid growth drivers fuelled by innovation
In these very demanding times, Carmila has been able to adapt to
the consequences of the health crisis, deploying changes to its
platform in record time and keeping pace with retail industry
trends. Carmila aims to improve customer and visitor satisfaction,
innovating to become a privileged partner, particularly by
supporting retailers in their development and omnichannel
transformation.
- Growth drivers will help boost business in the coming months
and years, particularly:
- portfolio enhancement projects: renovations, creation of food
courts and extensions
- Carmila Retail Development: new projects are under way
following the successful development of four partner brands and the
first Healthcare openings
- new real estate activities: around 20 urban mixed-use projects
are under consideration and Carmila is continuing to roll out its
TowerCo, Lou5G
Carmila will be staging an Investor Day in the autumn to present
in detail its growth drivers and strategy. In view of the
uncertainty linked to the health situation, the impact of a fourth
wave of the pandemic, particularly in Spain, the prolonged state of
emergency in France and arrangements for the health pass, Carmila
is proceeding cautiously with its full-year financial projections,
and accordingly, will not be providing guidance for its full-year
2021 earnings. Carmila is highly resilient and the Group has solid
growth prospects. While the current context remains concerning, in
view of Carmila’s capacity to rebound and the sustainability of its
development, management is confident in the Group’s model.
INVESTOR AGENDA 21 October 2021 (after trading): Third
quarter 2021 Financial Information
ABOUT CARMILA As the third largest listed owner of
commercial property in continental Europe, Carmila was founded by
Carrefour and large institutional investors in order to transform
and enhance the value of shopping centres adjoining Carrefour
hypermarkets in France, Spain and Italy. At 31 December 2020, its
portfolio was valued at €6.15 billion, comprising 215 shopping
centres, all leaders in their catchment areas. Driven by an
ambition to simplify and enhance the daily lives of retailers and
customers across the regions, the local touch is at the heart of
everything Carmila does. Carmila’s teams have a deeply-anchored
retail culture, comprising experts in all aspects of retail
attractiveness: operations, shopping centre management, leasing,
local digital marketing, business set-ups and CSR. Carmila is
listed on Euronext-Paris Compartment A under the symbol CARM. It
benefits from the tax regime for French real estate investment
trusts (“SIIC”). 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 November 2020,
Carmila joined the SBF 120 and CAC Mid 60 indices.
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.
This press release and its appendices together
with the 2021 Half-Year Results presentation slideshow are
available in the “Financial Press Release” of Carmila’s Finance
webpage:
https://www.carmila.com/en/finance/financial-press-releases/
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005760/en/
INVESTOR AND ANALYST CONTACT Pierre-Yves Thirion – Chief
Financial Officer pierre_yves_thirion@carmila.com +33 6 47 21 60
49
PRESS CONTACT Morgan Lavielle - Communications Director
morgan_lavielle@carmila.com +33 6 87
77 48 80
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