Klépierre: FIRST-HALF 2021 EARNINGS
PRESS RELEASE
FIRST-HALF 2021 EARNINGS
Paris — July 27, 2021
Klépierre, the European leader in shopping
malls, today reported earnings for the six-month period ended
June 30, 2021.(1) The main highlights include:
- First-half 2021 net current cash
flow (total share) of €248 million or €0.72 per share
- Collection rate of 70% over the
first-half as of July 21, 2021, reflecting 5 months of severe
restrictions (out of which 2.5 months of full store closures)
- Strong sales recovery since
reopening, with June sales reaching 96%(2) of the 2019 level, and
up 15% compared to June 2020
- Dynamic leasing activity with
almost 800 leases signed, and positive reversion
- Loan-to-Value flat compared to
December 31, 2020 at 41.1% pro forma(3)
- €472 million in disposals closed
since January 1st (including the sale of five assets in Norway on
July 8, for a total consideration of €435 million)
- EPRA Net Tangible Asset Value per
share at €29.70(4)
- Guidance confirmed for 2021 net
current cash flow per share expected at €1.80(5), assuming no more
store closures or severe restrictions
KEY FINANCIALS
|
H1 2021 |
H1 2020 |
In millions of euros, total share |
|
|
Total revenues |
475.4 |
616.0 |
Net Rental Income (NRI), shopping centers |
315.9 |
503.1 |
Property portfolio valuation (incl. transfer taxes) |
21,471 |
22,840 |
Net debt |
9,146 |
9,129 |
Loan-to-Value (LTV) |
42.6% |
40.0% |
Net debt to EBITDA |
12.6x |
8.4x |
In euros, Group share |
|
|
EPRA Net Tangible Assets (NTA) per share(4) |
29.7 |
34.9 |
Net current cash flow per share |
|
0.72 |
1.37 |
OPERATING PERFORMANCE
Operating context
In late 2020 and early 2021, Europe faced a
third wave of the pandemic, leading governments to reimpose
restrictions. As a result, Klépierre experienced the equivalent of
2.5 months of full closure, a longer period than the previous year,
when malls were closed for 1.6 months on average during first-half
2020. Governments opted for various restrictions and degrees of
lockdowns:
- Full lockdowns, in France, Denmark,
the Netherlands, Germany, the Czech Republic and Portugal: all
non-essential stores, restaurants and entertainment venues were
compelled to close from January for some of them to the end of May
in some cases;
- Partial lockdowns/limited
restrictions, in Italy, shopping centers were closed on weekends
and public holidays (including the day before) until mid-May and
the whole country experienced a full lockdown during the Easter
period. In Norway, regional measures included mall closures in the
Oslo area. Lastly, in Spain, malls broadly remained open over the
period (except in Barcelona during the first quarter), while in
Sweden the government recommended avoiding shopping areas without
ordering store closures.
From April until the end of May, restrictions
were gradually lifted and 100% of our stores (in rents) were
authorized to trade. However, restrictions related to certain
activities remained in place in several countries (mainly movie
theaters, fitness centers and restaurants), such as limits on the
number of people allowed in malls as well as curfews in many
cases.With the surge of infections resulting from the Delta
variant, new restrictions started to emerge early in the second
half of the year. This is the case of the law voted in France on
July 25, 2021, that allows the local authorities to impose a
vaccination certificate or a negative Covid test to visitors and
employees of large malls in regions where the epidemic situation
deteriorates, provided that such a measure does not hamper access
to public transportation and stores selling essential products.
Retailer sales
Since reopening, retailer sales(2) have
rebounded much strongly than last year and on a like-for-like basis
were up 15% in June compared to 2020 (96% of the June 2019 level).
The strength of the business resumption has notably been fueled by
high transformation rates and average basket sizes.By geographic
region, France (where retailer sales in June were up 15% vs. June
2020) enjoyed a strong recovery: being today at 99% of the June
2019 level. Similarly, Italian retailers experienced a fairly
robust resumption with sales up 23% in June compared to June 2020
and reaching 94% of pre-Covid levels (June 2019). Business also
rebounded firmly in Scandinavia where June performances were
similar to 2020 and 2019, and fared even better in Norway where
sales were up 9% in June 2021 compared to June 2019.Conversely,
recovery has tended to be slower in malls relying on tourism or
located in transport hubs and/or large business districts.
Rent collection
Over the first half of 2021, €673.1 million
in rents and charges were invoiced at Group level.
As of July 21, 2021, we have collected 70%.
Although the management is of the view that rents corresponding to
the closure periods are contractually due, it has entered into
negotiations with tenants on a case-by-case basis to grant
potential waiver in exchange for compensations (lease extensions or
the opening of new stores). In addition, allowances for credit
losses were also recognized for unpaid rents relating to open
periods but very disturbed, considering restrictive measures in
place. As of June 30, 2021, €176 million have been
recognized as accrued rent abatements (€112 million) or as
credit loss allowances (€64 million), pointing to a targeted
collection rate of at least 74% for the first half of 2021.
In France, the government announced a specific
support program to help retailers pay their rent and charges for
the closure period of the third lockdown (February to May 2021). As
of today, no decree had been passed and discussions with the
European Commission are still ongoing. Should the plan be
implemented, it could improve rent collection and the first
subsidies are expected to be granted to retailers in the fourth
quarter of 2021.
This year, we also continued to collect rents
related to 2020 for an aggregate amount of €72 million.
Consequently, as of June 30, 2021, the 2020 collection rate stood
at 85%, 100 basis points higher than our initial projected rate
(84%). Accordingly, €9 million in provisions was reversed
during the period.
Leasing
Although Klépierre’s malls have been impacted by
various closures and restrictions throughout Europe, letting
operations recorded growing momentum with 776 leases signed over
the first six months of 2021 (with a positive 0.1% reversion),
gathering pace month after month. In volume terms, this was
comparable to the same period in 2019 and is 70% above the one of
2020.With a long-term vision, the Group leveraged its European
platform of shopping centers and close relations with most of the
leading retail chains to further increase its market share in each
catchment area and optimize occupancy (which currently stands at
94.2%).Over the period, Klépierre continued to consolidate its
long-standing partnership with key accounts, notably through a
dynamic leasing flow with, among others, Inditex, Calzedonia Group,
Yves Rocher, Rituals, Sephora and Lego. Simultaneously, growing
retailers chose to carry on expanding in Europe within Klépierre’s
malls, including Samsung, LG and Hubside as well as value retailers
such as Normal and Action.The Group continues to capitalize on the
development of sports banners. In the coming months, ten new stores
including Snipes, Asics, FootKorner, Hummel and Intersport will
join Klépierre’s malls. These openings will further strengthen the
sales dynamic of this segment over recent months (up 9%, on a
like-for-like basis, compared 2019). Lastly, as part of the rollout
of its Destination Food® concept, the Group further broadened the
restaurants offering at its malls, notably signing with
international banners such as Starbucks, KFC, T.G.I Friday’s,
Dunkin’ Donuts and Poke House, as well as dynamic local brands.
NET CURRENT
CASH
FLOW
Over the first half of 2021, net current cash
flow amounted to €248 million (total share), or €0.72 per share.
Compared to the first half of 2019(6), the €0.63 decline, is
attributable to the negative impacts of rent abatements and
allowances (€0.61), the loss in variable revenues due to mall
closures and lower occupancy (€0.15); partly offset by cost
reductions (€0.03; G&A and payroll) and other items(7) (€0.10;
mostly related to tax reduction in Italy and lower cost of
debt).
PORTFOLIO VALUE AND EPRA NET TANGIBLE
ASSETS (NTA)
Including transfer taxes, the value of the
portfolio is at €21,471 million on a total share basis as of
June 30, 2021, down 1.8% on both a reported and
like-for-like basis over six months. This decline was balanced
between a market effect (negative 1.1%) and a cash flow effect
(negative 0.7%).EPRA NTA per share amounts to €29.70 at the end of
June 2021, versus €31.40 six months earlier(4).The decrease
reflects the generation of net current cash flow (€0.72 per share),
which was more than offset by the decrease in the value of the
like-for-like portfolio (€1.11 per share) and by the cash
distribution payment (€1.00 per share). Foreign exchange and
other items had a negative impact of €0.31 per share.
DEBT AND FINANCING
As of June 30, 2021, consolidated net debt
totals €9,146 million, versus €9,054 million six months
ago. It does not incorporate the €435 million disposals in
Norway closed in early July (see the Disposals section below).As of
June 30, 2021, the Loan-to-Value (LTV) ratio is at 42.6% (compared
to 41.4% at December 31, 2020) and 41.1% factoring in the
recent disposals in Norway and assuming the 2020 cash dividend
would have been paid in two equal installments.Klépierre’s
liquidity position(8) is strong at €2.2 billion (including
€1.8 billion of committed credit facilities) and covers all
the Group refinancing needs until May 2024.
DEVELOPMENTS AND DISPOSALS
Investments
Over the first half 2021, Klépierre continued to
contain its cash outflows with total capital expenditure amounting
to €56.9 million.The construction of a 16,700-sq.m. extension in
Gran Reno (Bologna) which started in April 2019 is expected to be
delivered in the second quarter of 2022. Pre-leasing stands at 81%
(signed or under advanced negotiations) with leading brands such as
Zara, Primark, New Balance and Tommy Hilfiger.
Disposals
Since January 1, 2021, the Group has disposed of
assets for a total consideration of €471.6 million(9) at an
average yield of 5.6%(10), mainly including the disposal of five
Norwegian non-core properties on July 8, 2021.
ACT FOR GOOD®
Over the first half of 2021, Klépierre has
received new ESG acknowledgements and has maintained its leading
position within the industry:
- The Building Research Establishment
(BRE) awarded Klépierre with the 2021 BREEAM Award in the
Responsible Investment Large Portfolio category;
- The MSCI upgraded its non-financial
rating from AA to AAA (highest score achievable) and recognized the
Group as a worldwide leader in CSR, demonstrating its ambition to
make shopping centers more efficient and even more environmentally
responsible; and
- Euronext included Klépierre in the
CAC 40 ESG Index since its launch in March 2021.
These recognitions are the fruit of the Act for
Good® policy and the operational excellence of the Group regarding
environmental, societal and social challenges.The Covid-19 pandemic
highlighted opportunities to support the local communities with
which Klépierre is involved. Hence, the Group committed to fight
against Covid-19 and set up testing points and more recently
vaccine hubs working alongside local partners, in France, Italy,
the Czech Republic and Germany. The Group notably leveraged its
long-lasting partnership with the Italian Red Cross in Porta di
Roma to set up a 1,000 sq.m. vaccination center capable of
accommodating 3,500 people per day.In addition, the number of
Klépierre malls (by value) that organized initiatives contributing
to local employment rose to 95%(11).
OUTLOOK
Since the reopening of our malls, footfall and
retailer sales have rebounded firmly. Since then, the coronavirus
Delta variant has spread rapidly across Europe, causing some
European countries to impose new restrictions and possibly
triggering additional ones in other countries. At this stage, it is
not possible to assess the potential impact of these measures on
our malls’ operations during the second half of the year.Assuming
no more store closures or severe restrictions in the second half of
2021, the Group maintains its net current cash flow guidance at
€1.80 per share(5) for 2021 and will update the market as and when
the situation warrants.
CHANGE IN RETAILER
SALES(a)
IN JUNE 2021 COMPARED
TO JUNE 2020 AND JUNE
2019
Geography |
Change in retailer sales |
Share in total reported retailer sales |
June 2021 vs. June 2020 |
June 2021 vs. June 2019 |
France |
+15% |
-1% |
36% |
Italy |
+23% |
-6% |
24% |
Scandinavia |
+1% |
+1% |
19% |
Iberia |
+20% |
-17% |
9% |
CE &
Other |
+21% |
0% |
6% |
Netherlands |
+23% |
-7% |
3% |
Germany |
+2% |
-9% |
3% |
TOTAL |
+15% |
-4% |
100% |
Segments |
Change in retailer sales |
Share in total reported retailer sales |
June 2021 vs. June 2020 |
June 2021 vs. June 2019 |
Fashion |
+26% |
-4% |
41% |
Culture, Gifts
& Leisure |
+7% |
+3% |
18% |
Health &
Beauty |
+8% |
-2% |
14% |
Food &
Beverage |
+16% |
-13% |
9% |
Household
Equipment |
-2% |
+1% |
11% |
Others |
+13% |
-12% |
7% |
TOTAL |
+15% |
-4% |
100% |
(a) Change in retailer sales on a same store
basis, excluding closure days.
COLLECTION
RATES ON RENTS AND SERVICE
CHARGES RELATED TO THE FIRST HALF OF
2021
Geography |
Invoiced(in €m) |
Actual collection rate(a) |
France |
254.1 |
58% |
Italy |
105.9 |
60% |
Scandinavia |
111.1 |
94% |
Iberia |
75.1 |
82% |
CE &
Other |
49.5 |
72% |
Netherlands |
38.6 |
75% |
Germany |
29.6 |
78% |
TOTAL SHOPPING CENTERS |
663.9 |
70% |
TOTAL WITH OTHER RETAIL PROPERTIES |
673.1 |
70% |
(a) As of July 21, 2021, on a total share
basis, excluding equity-accounted companies and VAT.
TOTAL REVENUES
In millions of euros |
Total share |
|
Group share |
H1 2021 |
H1 2020 |
|
H1 2021 |
H1 2020 |
France |
144.1 |
220.9 |
|
117.4 |
181.2 |
Italy |
76.4 |
98.3 |
|
75.6 |
97.2 |
Scandinavia |
85.2 |
83.6 |
|
47.8 |
46.9 |
Iberia |
53.9 |
65.7 |
|
53.9 |
65.7 |
CE & Other |
36.0 |
41.0 |
|
35.6 |
40.2 |
Netherlands |
25.9 |
36.9 |
|
25.9 |
36.9 |
Germany |
17.7 |
24.5 |
|
16.9 |
23.3 |
SHOPPING CENTERSGROSS RENTAL INCOME |
439.3 |
571.0 |
|
373.1 |
491.5 |
Other retail properties |
5.1 |
10.0 |
|
5.1 |
10.0 |
TOTALGROSS RENTAL INCOME |
444.3 |
581.0 |
|
378.2 |
501.5 |
Management, administrative and related income (fees) |
31.1 |
34.9 |
|
29.3 |
32.5 |
TOTAL REVENUES |
475.4 |
616.0 |
|
407.5 |
534.1 |
Equity-accounted investees* |
30.9 |
39.4 |
|
29.1 |
37.9 |
* Contributions from equity-accounted
investees include investments in jointly controlled companies and
investments in companies under significant influence.
QUARTERLY NET RENTAL INCOME ON A TOTAL SHARE
BASIS
|
H1 2021 |
2020 |
In millions of euros |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
France |
43.6 |
45.6 |
14.7 |
95.6 |
101.8 |
96.6 |
Italy |
36.1 |
22.9 |
0.6 |
39.8 |
45.0 |
42.9 |
Scandinavia |
50.5 |
23.4 |
34.7 |
37.7 |
37.0 |
39.1 |
Iberia |
22.9 |
19.8 |
13.1 |
21.7 |
29.4 |
31.3 |
CE & Other |
12.3 |
11.8 |
8.1 |
19.6 |
15.5 |
20.1 |
Netherlands |
12.5 |
2.9 |
14.4 |
16.0 |
14.6 |
14.4 |
Germany |
10.6 |
0.9 |
6.1 |
8.8 |
7.1 |
8.5 |
SHOPPING CENTERSNET RENTAL INCOME |
188.5 |
127.3 |
91.8 |
239.4 |
250.3 |
252.8 |
Other activities |
2.5 |
2.2 |
(1.6) |
5.1 |
4.0 |
4.4 |
TOTAL NET RENTAL INCOME |
191.0 |
129.6 |
90.3 |
244.4 |
254.3 |
257.2 |
NET CURRENT CASH FLOW
|
H1 2021 |
H1 2020 |
Total share, in millions of euros |
|
|
Gross rental income |
444.3 |
581.0 |
Rental and building expenses |
(123.8) |
(69.5) |
Net rental income |
320.6 |
511.5 |
Management and other income |
35.7 |
42.2 |
General and administrative expenses |
(71.4) |
(63.9) |
EBITDA |
284.9 |
489.8 |
Adjustments to calculate operating cash flow: |
|
|
Depreciation charge for right of use assets(a) |
(4.2) |
(4.0) |
Employee benefits, stock option expense and non-recurring operating
expenses |
0.0 |
0.2 |
IFRIC 21 impact |
8.2 |
7.5 |
Operating cash flow |
288.9 |
493.5 |
Cost of net debt |
(58.2) |
(52.9) |
Adjustments to calculate net current cash flow before taxes
exclude: |
|
|
Amortization of Corio’s debt mark-to-market |
(1.9) |
(8.4) |
Financial instrument close-out costs |
1.7 |
4.1 |
Current cash flow before taxes |
230.5 |
436.3 |
Share in equity-accounted investees |
17.6 |
26.4 |
Current tax expenses |
0.1 |
(8.8) |
Net current cash flow |
248.1 |
453.9 |
Group share, in millions of euros |
|
|
NET CURRENT CASH FLOW |
206.9 |
392.1 |
Average number of shares(b) |
285,539,909 |
286,430,401 |
Per share, in euros |
|
|
NET CURRENT CASH FLOW |
0.72 |
1.37 |
IFRS 16 straight-line amortization |
(0.01) |
- |
NET CURRENT CASH FLOW |
0.72 |
1.37 |
(a) Right-of-use assets and lease liabilities
related to head office and vehicle leases as per IFRS 16.(b)
Excluding treasury shares.
The review procedures on the condensed interim
consolidated financial statements have been completed. The
Statutory Auditors’ review report is in the process of being
issued.
2021
HALF-YEAR
EARNINGS WEBCAST
— PRESENTATION AND CONFERENCE
CALLKlépierre Executive Board will present the 2021
half-year earnings on Wednesday,
July 28,
2021 at
9:00am
Paris time
(8:00am
London time). Please visit Klépierre’s website at
www.klepierre.com to listen to the webcast, or
click here.A replay will also be available after
the event.
AGENDA |
|
October 22, 2021 |
Business review for the first nine months of 2021 (before market
opening) |
INVESTOR RELATIONS CONTACTS |
MEDIA
CONTACTS |
Hubert
d’Aillières,
Group Head of IR and financial communication+33 (0)1 40 67 51
37 — hubert.daillieres@klepierre.comPaul
Logerot, IR Manager +33 (1) 40 67 53 02 —
paul.logerot@klepierre.comJulia Croissant, IR
Officer+33 (0)1 40 67 51 68 — julia.croissant@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 €21.5 billion at June 30,
2021 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, EPRA Euro Zone and GPR
250 indexes. It is also included in ethical indexes, such as
Euronext CAC 40 ESG Index, DJSI World and Europe, FTSE4Good, STOXX®
Global ESG Leaders, Euronext Vigeo France 20 and World 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 webpage:
www.klepierre.com/en/finance/publications
(1) The Supervisory Board met at
Klépierre’s headquarters on July 26, 2021, to examine the interim
financial statements, as approved by the Executive Board on July
21, 2021. The consolidated financial statements have been subject
to review procedures by the Company’s Statutory Auditors. The
review report on the interim financial information is to be issued
shortly.(2) Change in retailer sales on a same store
basis, excluding closure days.(3) Net debt post-Norway
disposals and factoring in half of the cash distribution payment
related to 2020 (implying net debt of €8,649
million).(4) EPRA NTA per share figures are rounded to
the nearest 10 cents.(5) Excluding the impact of
amortizing Covid-19 rent concessions.(6) Restated for
disposals and share buyback impact.(7) Including €0.06
of tax savings, €0.03 of lower cost of debt, €0.05 of 2020
provision reversals and -€0.04 of management
fees.(8) Liquidity position is the total financial
resources available to a company. This indicator is therefore equal
to the sum of the cash at hand at the end of the year, confirmed
and unused revolving credit facilities (net of commercial paper)
and uncommitted credit facilities.(9) Excluding transfer
taxes, total share.(10) Computed based on 2021 estimated
net rental income.(11) As of December 31, 2020.
- PR_KLEPIERRE_2021_HY_EARNINGS
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