press release
business review for the Third
quarter and first nine months of 2017
Paris - October 26, 2017
- Strong acceleration in retailer sales during the
3rd quarter at +5.6%[1]
- Robust leasing activity, with 1,440
leases signed at September 30, 2017 (vs 1,356 for the same period
last year), with 12.1% reversion rate
- Shopping centers gross rental income
+1.8% for the first 9 months of 2017, mostly thanks to solid
like-for-like rental growth
- Net debt stable at €9,120 million;
net cost of debt further reduced to 1.8%
- €358 million worth of disposals
completed or under promissory agreement year-to-date
- Development projects well on track:
83% pre-let at Prado and 87% at Hoog Catharijne
- Inclusion in CDP's "A list," a
recognition for global leadership in fight against climate
change
- 2017 outlook confirmed: net current
cash flow per share of at least €2.45, implying 6.1% growth
KEY FINANCIALS
In
€ millions, Total-Share basis |
9M
2017 |
9M
2016 |
%
Change |
Gross rental income -
Shopping centers |
903.0 |
884.1 |
+2.1 |
Gross
rental income - Other activities |
21.4 |
23.8 |
-10.1 |
Total gross
rental income |
924.4 |
907.9 |
+1.8 |
Management,
administrative and other income (fees) |
61.5 |
64.4 |
-4.6 |
Total
revenues |
985.9 |
972.3 |
+1.4 |
OPERATING PERFORMANCE Total revenues
For the first nine months of 2017,
gross rental income (total share) rose to €924.4 million from
€907.9 million for the same period last year, as sound
like-for-like rental growth, as well as the contribution from
development projects (Val d'Europe and Hoog Catharijne) and the
acquisition of Nueva Condomina in Spain, more than offset the
impact of disposals.
Shopping center gross rental income (GRI, total share) increased by
2.1%, to €903.0 million in the first nine months of the year.
Disposals completed in 2016 and early 2017 had a negative 2.1%
impact on shopping center GRI while the contribution from
index-linked adjustments was +0.7%.
GRI from other activities amounted to €21.4 million in the first
nine months, a 10.1% decrease from the same period last year,
reflecting the impact of recent disposals.
Management, administrative and related income (fees) amounted to
€61.5 million, down 4.6% due to disposals and the acquisition
of Nueva Condomina which was previously managed by Klépierre for a
third-party owner.
Total revenues for the first nine months of 2017 increased by 1.4%
year-on-year to €985.9 million.
Retailer sales
In the first nine months, retailer
sales increased by 2.5% (+2.0% excluding extensions), outperforming
the aggregated national sales indexes by 50 bps.[2]
During the third quarter, the pace of growth accelerated sharply
(+5.6% year-on-year; +4.8% excluding extensions), driven by
improving economic conditions and household consumption (notably in
France), favorable weather conditions and a positive calendar
effect.
On a geographical basis, retailer sales in France posted an 8.9%
increase in the third quarter (+7.1% excluding extensions).
Although France benefited from some technical effects (an extra
Saturday in September and an extra week-long summer sales period in
July compared to last year), the performance also reflects an
improvement in consumer spending trends. In Italy, retailer sales
were up by 3.2% in the third quarter, a significant acceleration
compared to the first half. In Spain, retailer sales increased by
6.7% in the third quarter. This strong performance reflects the
quality of Klépierre's portfolio of malls as retailer sales at
Nueva Condomina rose by 12.1%, La Gavia by 7.3%, and Maremagnum by
3.0%. Lastly, CEE & Turkey posted another solid performance
(+8.3%), mostly driven by Hungary (+12.3%) and Turkey
(+9.0%).
On a sector basis, Fashion sales in the third quarter recorded
strong growth (+7.6%), partly thanks to the longer sales periods in
France and better weather conditions in Europe compared to last
year. Klépierre's exposure to national and international retailers,
together with the implementation of rightsized stores in the
Group's malls, also supported this trend. Health & Beauty sales
expanded by 5.5%, reflecting the dynamism of this sub-segment and
the development of innovative concepts. Last, the Restaurants &
Food sector grew by 5.5%, driven by the strong leasing activity
generated by the roll-out of Klépierre's Destination Food®
concept.
Leasing activity
After a dynamic first half,
leasing activity continued apace in the third quarter of 2017. In
the first nine months, a total of 1,440 leases were signed
(compared with 1,356 in 2016), translating into €25.8 million
additional annual minimum guaranteed rents (compared to €21.1
million over the first nine months of 2016; excluding contributions
from extension and greenfield projects). Reversion in the third
quarter (for renewals and relettings) remained in line with the
first half 2017 level at 12.1%.
Klépierre's increased focus on key account management resulted in
sustained deal flow with top national and international retailers,
with the latter implementing their latest store concept in the
Group's malls. Since the beginning of the year, 23 leasing
deals have notably been signed with the Calzedonia group, 19 with
Inditex, 17 with Yves Rocher, 13 with Pandora, 11 with Levi's, 10
with JD Sports, 9 with Kiko and 8 with Sephora.
On a geographical basis, Italy was the most dynamic market in the
third quarter with a total of 88 leases, including strong leasing
performances at Porta di Roma (14 deals), Il Leone di Lonato (8
deals) and Globo (7 deals). JD Sports signed three deals in Italy,
at Campania (643 sq.m.), Montebello (233 sq.m.) and Lonato
(287 sq.m.). Victoria's Secret opened in Lonato its first
store at a Klépierre mall in Italy. France signed 69 contracts in
the third quarter of 2017. The ongoing leasing campaign at
Saint-Lazare contributed to this good performance. The mix will be
further enhanced with the arrival of Nespresso and the renewal of
Yves Rocher and L'Occitane leases. In September, Primark
successfully opened its 7,500-sq.m. store at Val d'Europe, driving
a 19% increase in footfall (September 2017 vs September 2016). In
Spain, thanks to proactive asset management, Nueva Condomina has
signed 21 deals since Klépierre acquired it in May 2017, including
with Zara Home (530 sq.m.), Pimkie (390 sq.m.), Orchestra (303
sq.m.), and Italian fashion brand OVS (1,735 sq.m.). Leasing
activity with international retailers was also vigorous across CEE
countries, with 14 deals signed at Lublin Plaza, 13 at Duna Plaza
and 12 at Nový Smíchov. At Nový Smíchov, Sephora leased 1,000 sq.m.
(to expand its store from 320 sq.m.); Massimo Dutti (834 sq.m.) and
Benetton (420 sq.m.) will open new stores.
DEVELOPMENT PIPELINE AND ASSET ROTATION
Pipeline Prado
Works are progressing according to
schedule at the new Prado mall (Marseille, France). Zara has taken
possession of its 3,300 sq.m. unit and initiated the fit out of
what will be its largest store in the catchment area. Leasing is
advancing well with 83% of the leasable space being signed or in
advanced negotiations. In addition to the anchors (Galeries
Lafayette and Zara), new brands have joined the project, including
Repetto, Etam, Courir, Pandora and Sabon. Prado's food and beverage
offering will be further enhanced with the arrival of Factory &
Co, Mavrommatis, Wagamama and Big Fernand.
Prado is scheduled to open in April 2018.
Hoog Catharijne
During the third quarter, leasing
activity at Hoog Catharijne was dynamic with 15 additional leases
signed. Brands such as Lush, Douglas, JD Sports, and Perry Sport
will reinforce the mall's strong leasing mix. In addition, on
October 12, 2017, Klépierre announced the signature of a leasing
agreement with mobile and cable operator VodafoneZiggo for a total
of 17,000 sq.m. at Hoog Catharijne. VodafoneZiggo will use 16,000
sq.m. to accommodate its new central office and open a 1,000-sq.m.
flagship store in the mall.
The redevelopment of the North mile[3] is now 87%
let (signed or in advanced negotiations), as against 65% at June
30, 2017.
Disposals
Since January 1, 2017, Klépierre
has completed disposals worth €243 million[4]
across Europe (in Norway, Sweden, France and Spain). In addition,
assets worth €115.5 million are currently under sale or
purchase promissory agreements.
DEBT POSITION AND FINANCING
As of September 30, 2017,
Klépierre's consolidated net debt was practically flat at €9,120
million. Klépierre's average debt duration remained stable at 6
years, while the net cost of debt continued to decrease to 1.8%.
The Group's liquidity position remains strong at €1.8
billion.
On August 11, 2017, Standard & Poor's assigned an A- credit
rating to Steen & Strøm (with a stable outlook). In the wake of
this announcement, Steen & Strøm issued NOK750 million (€80
million) of 5-year floating rate notes at 70 bps above NIBOR. The
proceeds were used to refinance existing shorter-term and more
expensive debt.
As of October 25, 2017, 9,761,424 Klépierre's shares have been
repurchased at an average €35.86 per share, representing an
investment of €350 million.
Extra-financial ratings
In September 2017, Klépierre
obtained outstanding extra-financial ratings, recognizing the
efficiency of its Good Choices® strategy initiated in 2013 and the
effectiveness of the measures implemented in recent
years.
For the second year in a row, Klépierre figures in the "A List" of
CDP, the non-profit global environmental disclosure platform,
recognizing the Group's global leadership in the fight against
climate change. Klépierre was ranked 3rd among listed
companies in the European retail sector and 11th across
all industries in Europe by the Global Real Estate Sustainability
Benchmark (GRESB), and once again been awarded a "Green Star" with
a score of 89/100. In addition, Klépierre reached the 96th percentile
in the World Dow Jones Sustainability Index (DJSI) based on the
review by RobecoSAM, which deemed the company the most efficient in
the world out of 250 real estate companies for its environmental
initiatives.
Overall, Klépierre is considered best-in-class by RobecoSAM for its
environmental strategy, the monitoring of its performance, and the
disclosure of its results. The quality of the latter was also
recognized by the European Public Real Estate Association (EPRA),
which granted Klépierre a Sustainability "Gold Award" for the sixth
consecutive year.
OUTLOOK confirmed
In 2017, Klépierre expects to
generate net current cash flow per share of at least €2.45,
implying at least 6.1% growth. Looking forward, Klépierre will keep
improving its European shopping center portfolio to further
strengthen its relationships with key international retailers. As
such, the Group remains confident in its ability to deliver solid
like-for-like rental growth.
RETAILER SALES like-for-like change
|
9M 2017 |
|
Q3 2017 |
Countries |
incl.
extensions |
excl.
extensions |
|
incl.
extensions |
excl.
extensions |
France |
2.7% |
1.8% |
|
8.9% |
7.1% |
Belgium |
-0.1% |
-0.1% |
|
1.9% |
1.9% |
France-Belgium |
2.6% |
1.7% |
|
8.5% |
6.8% |
Italy |
0.3% |
0.3% |
|
3.2% |
3.2% |
Norway |
-1.1% |
-1.1% |
|
-0.4% |
-0.4% |
Sweden |
2.0% |
2.0% |
|
2.9% |
2.9% |
Denmark |
-0.7% |
-0.7% |
|
1.2% |
1.2% |
Scandinavia |
0.1% |
0.1% |
|
1.1% |
1.1% |
Spain |
5.5% |
5.5% |
|
6.7% |
6.7% |
Portugal |
4.2% |
4.2% |
|
4.0% |
4.0% |
Iberia |
5.1% |
5.1% |
|
5.9% |
5.9% |
Poland |
4.2% |
4.2% |
|
6.2% |
6.2% |
Hungary |
12.0% |
12.0% |
|
12.3% |
12.3% |
Czech Republic |
6.9% |
6.9% |
|
7.6% |
7.6% |
Turkey |
9.1% |
9.1% |
|
9.0% |
9.0% |
CEE and
Turkey |
7.4% |
7.4% |
|
8.3% |
8.3% |
The
Netherlands* |
n.s. |
n.s. |
|
n.s. |
n.s. |
Germany |
1.9% |
1.9% |
|
4.6% |
4.6% |
TOTAL |
2.5% |
2.0% |
|
5.6% |
4.8% |
* Only a few Dutch retailers
report their sales to Klépierre.
TOTAL REVENUES
In € millions |
Total Share |
|
Group Share |
9M
2017 |
9M
2016 |
|
9M
2017 |
9M
2016 |
France |
315.1 |
304.8 |
|
258.4 |
252.4 |
Belgium |
13.4 |
12.7 |
|
13.4 |
12.7 |
France-Belgium |
328.5 |
317.4 |
|
271.8 |
265.0 |
Italy |
157.0 |
153.3 |
|
154.6 |
150.8 |
Norway |
54.5 |
54.8 |
|
30.6 |
30.8 |
Sweden |
47.2 |
52.3 |
|
26.5 |
29.3 |
Denmark |
43.0 |
41.2 |
|
24.1 |
23.1 |
Scandinavia |
144.7 |
148.3 |
|
81.2 |
83.2 |
Spain |
74.5 |
70.2 |
|
72.3 |
67.9 |
Portugal |
16.5 |
15.6 |
|
16.5 |
15.6 |
Iberia |
91.0 |
85.8 |
|
88.7 |
83.5 |
Poland |
25.5 |
25.5 |
|
25.5 |
25.5 |
Hungary |
16.6 |
15.6 |
|
16.6 |
15.6 |
Czech Republic |
22.8 |
20.1 |
|
22.8 |
20.1 |
Turkey |
25.6 |
26.3 |
|
23.6 |
24.2 |
Others |
1.9 |
2.1 |
|
1.8 |
2.0 |
CEE and
Turkey |
92.5 |
89.7 |
|
90.3 |
87.4 |
The
Netherlands |
48.3 |
45.9 |
|
48.3 |
45.9 |
Germany |
41.0 |
43.6 |
|
39.0 |
41.6 |
SHOPPING
CENTERS
GROSS RENTAL INCOME |
903.0 |
884.1 |
|
773.9 |
757.4 |
Other
activities |
21.4 |
23.8 |
|
21.4 |
23.8 |
TOTAL
GROSS RENTAL INCOME |
924.4 |
907.9 |
|
795.3 |
781.2 |
Management,
administrative and related income (fees) |
61.5 |
64.4 |
|
58.7 |
61.1 |
TOTAL
REVENUES |
985.9 |
972.3 |
|
854.0 |
842.4 |
Equity Accounted Investees* |
65.1 |
73.2 |
|
62.3 |
68.0 |
* Contributions from Equity
Accounted Investees include investments in jointly-controlled
companies and investments in companies under significant influence.
Equity Accounted Investees are accounted for a total value of
€1,399 million as of June 30, 2017.
QUARTERLY REVENUES ON A TOTAL-SHARE BASIS
|
2017 |
|
2016 |
In € millions |
Q3 |
Q2 |
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
France |
106.6 |
108.1 |
100.4 |
|
106.6 |
101.7 |
102.8 |
100.3 |
Belgium |
4.4 |
4.7 |
4.4 |
|
4.4 |
4.4 |
4.2 |
4.1 |
France-Belgium |
110.9 |
112.8 |
104.8 |
|
110.9 |
106.1 |
107.0 |
104.4 |
Italy |
52.6 |
52.6 |
51.8 |
|
51.4 |
50.6 |
51.8 |
50.9 |
Norway |
18.1 |
17.9 |
18.5 |
|
20.2 |
18.8 |
18.4 |
17.7 |
Sweden |
15.4 |
15.8 |
16.0 |
|
15.6 |
17.7 |
17.5 |
17.1 |
Denmark |
14.5 |
14.3 |
14.2 |
|
13.5 |
14.3 |
13.5 |
13.4 |
Scandinavia |
47.9 |
47.9 |
48.8 |
|
49.4 |
50.8 |
49.3 |
48.2 |
Spain |
27.3 |
24.4 |
22.8 |
|
22.2 |
23.0 |
23.8 |
23.4 |
Portugal |
5.6 |
5.4 |
5.5 |
|
5.1 |
5.3 |
5.1 |
5.2 |
Iberia |
32.9 |
29.8 |
28.3 |
|
27.4 |
28.3 |
28.9 |
28.5 |
Poland |
8.3 |
8.4 |
8.8 |
|
8.8 |
8.5 |
8.6 |
8.4 |
Hungary |
5.7 |
5.3 |
5.5 |
|
5.5 |
5.3 |
5.1 |
5.3 |
Czech Republic |
7.7 |
7.6 |
7.5 |
|
7.3 |
6.8 |
6.6 |
6.6 |
Turkey |
9.0 |
8.4 |
8.2 |
|
9.2 |
9.0 |
8.6 |
8.7 |
Others |
0.5 |
0.7 |
0.7 |
|
0.8 |
0.4 |
0.8 |
0.9 |
CEE and
Turkey |
31.3 |
30.4 |
30.8 |
|
31.6 |
30.1 |
29.7 |
30.0 |
The
Netherlands |
16.8 |
16.5 |
15.0 |
|
15.2 |
15.2 |
15.1 |
15.6 |
Germany |
13.6 |
13.7 |
13.6 |
|
13.5 |
15.0 |
14.4 |
14.3 |
SHOPPING
CENTERS
GROSS RENTAL INCOME |
306.2 |
303.7 |
293.2 |
|
299.3 |
296.0 |
296.2 |
291.9 |
Other
activities |
6.6 |
7.6 |
7.3 |
|
6.8 |
8.0 |
7.9 |
7.9 |
TOTAL
GROSS RENTAL INCOME |
312.7 |
311.3 |
300.4 |
|
306.1 |
304.0 |
304.1 |
299.8 |
Management,
administrative and related income (fees) |
18.6 |
22.7 |
20.2 |
|
22.1 |
20.6 |
20.9 |
22.9 |
TOTAL
REVENUES |
331.3 |
333.9 |
320.6 |
|
328.2 |
324.6 |
325.0 |
322.8 |
AGENDA |
|
February
7, 2018
April 24, 2018 |
Full-year 2017 earnings (press release after market
close)
General meeting |
Investor relations contacts |
media contacts |
Hubert d'AILLIÈRES
+33 (0)1 40 67 51 37 -
hubert.daillieres@klepierre.com
Mengxing ZHANG
+33 (0)1 40 67 53 05 - mengxing.zhang@klepierre.com |
Lorie
LICHTLEN / Stephanie LASNEL, Burson-Marsteller i&e
+33 (0)1 56 03 12 12 - klepierre.media@bm.com |
ABOUT KLÉPIERRE
The leading pure play shopping
center property company in Europe, Klépierre combines development,
property and asset management skills. The company's portfolio is
valued at €23.3 billion at June 30, 2017 and comprises large
shopping centers in 16 countries in Continental Europe which
together host 1.1 billion 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 included in the CAC Next
20, EPRA Euro Zone and GPR 250 indexes. It is also included in
ethical indexes, such as DJSI World and Europe, FTSE4Good, STOXX®
Global ESG Leaders, Euronext Vigeo France 20 and World 120,
and figures 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: www.klepierre.com
This press release is on the
Klépierre website: www.klepierre.com
[1]
Like-for-like change is on a same-center basis and excludes the
impact of asset sales and acquisitions.
[2]
Klépierre retailer sales growth at the end of August vs
national sales indexes for France, Italy, Norway, Sweden, Denmark,
Spain, Poland, Czech Republic, Hungary, Turkey and Germany.
Weighted by Klépierre's retailer sales geographical mix.
[3] Including
the retail units opened last April 2017 and the new units to open
between November 2017 and March 2018.
[4] Total
Share, excluding duties.
PR_KLEPIERRE_2017_Q3_REVENUES_UK
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Klépierre via Globenewswire
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