press release
business review for the first nine
months of 2018
Paris - October 22, 2018
Klépierre, the pan-European leader
in shopping malls, today released its business review for the first
nine months of 2018.([1]) The main
highlights include:
- Total
revenues of €1,005.7 million, +2.0% year-on-year
- Shopping
centers net rental income of €823.7 million, +3.1%
like-for-like([2]) and +2.3%
on a current basis
- Retailer
sales +0.7% vs. the first 9 months of 2017([3])
- Sustained
leasing activity (1,381 leases; €28.6 million in additional minimum
guaranteed rents)
- Net debt
reduced by ca. €274 million to €8,879 million at September 30, 2018
vs. June 30, 2018; net cost of debt below 1.6%
- €575 million
in disposals(7) since the
beginning of the year, at appraised values
- Leasing
progressing rapidly for Hoog Catharijne and Créteil Soleil
extensions
- 2018 outlook
confirmed: net current cash flow per share expected at least at
€2.62
Jean-Marc Jestin,
Chairman of the Klépierre Executive Board, commented, "Klépierre's performance in the first nine months of the
year confirms the relevance of our strategy in a changing retail
landscape. Our operational excellence, combined with our portfolio
of leading malls, allowed us to keep outperforming the market. We
continued to bring the best of retail into our malls through
buoyant leasing activity, which ensures dynamic rental growth.
Since the beginning of the year, we have continued to streamline
our portfolio at a steady pace while further lowering the company's
leverage and buying back our shares. Going forward, we plan to
accelerate our investment in our assets to further enhance their
positioning in their catchment areas and deliver sustainable
growth, while maintaining our rock-solid balance sheet."
KEY
FINANCIALS
In € millions, Total-Share basis |
9M 2018 |
9M 2017 |
Current
change |
Gross rental income -
Shopping centers |
924.1 |
903.0 |
+2.3% |
Gross
rental income - Other retail properties |
19.1 |
21.4 |
-10.6% |
Total gross
rental income |
943.2 |
924.4 |
+2.0% |
Management,
administrative and other income (fees) |
62.5 |
61.5 |
+1.7% |
Total
revenues |
1,005.7 |
985.9 |
+2.0% |
Net rental
income - Shopping centers |
823.7 |
805.3 |
+2.3% |
OPERATING PERFORMANCE Revenues Gross rental
income
Shopping center gross rental
income (GRI, Total Share basis) increased by 2.3% to €924.1 million
for the first nine months of 2018 compared with the same period
last year. The progression reflects sound like-for-like rental
growth and the contribution from the development projects of Prado
and Hoog Catharijne. Disposals completed in 2017 and since the
start of 2018 reduced shopping centers GRI by 1.6%.
GRI from other retail properties amounted to €19.1 million for the
first nine months, a 10.6% decrease compared to the same period
last year, reflecting the impact of recent disposals.
Management, administrative and related income (fees) increased by
1.7% to €62.5 million, mainly due to higher development
fees.
As of September 30, 2018, total revenues increased by 2.0%
year-on-year to just over €1.0 billion.
Net rental income
As of September 30, 2018, net
rental income generated by shopping centers totaled €823.7 million,
up 3.1% on a like-for-like basis,(2) and a 2.3% increase
year-on-year on a current basis, benefiting from strong reversion
and indexation (+1.3%).
Retailer sales
On a like-for-like basis,(3) total
retailer sales at Klépierre's malls increased by 0.7% over the
first 9 months of 2018. After a steady positive trend in July and
August - despite one less Saturday in July - September sales were
down (-5%) year on year, reflecting the effect of an adverse
comparison basis (+10% in September 2017 vs. September
2016).
Since the beginning of 2018, weather conditions in Europe have been
unfavorable for the Fashion segment (-1.5%). Other segments are
performing well (+2.1%), mainly driven by Food & Beverage
(+5.0%) and Health & Beauty (+4.4%), while the Culture, Gifts
& Leisure (+1.7%) benefited from the recent leasing initiatives
in the Sports segment (+7.4%).
Leasing activity
In the first nine months,
Klépierre's leasing activity was dynamic across all malls. In the
period, 1,381 leases were signed (versus 1,440 in 2017),
translating into €28.6 million in additional annual minimum
guaranteed rents (compared to €25.8 million in the first nine
months of 2017; excluding contributions from extensions and
greenfield projects).
Klépierre continued to implement its leasing strategy, which aims
to enrich its retail offering across the portfolio, favoring
experiential stores, seizing the growth momentum of trendy
retailers and introducing new segments.
The Group notably continued to right-size fashion anchors, with 19
new stores opened or signed since the beginning of 2018 (including
6 Zara stores measuring approximately 3,000 square meters each; 3
Lindex, 2 Reserved, etc). At the same time, 13,500 sq.m. (net of
openings) of smaller fashion spaces were reallocated to more
dynamic segments, including Beauty (with 10 new Rituals and Sephora
stores), Sports (15 new stores with The North Face, Snipes,
Quiksilver, JD Sports, Foot Locker, and Courir), Health, and Food
& Beverage (12 new stores with KFC, Nespresso, Vapiano, and
Burger King). Since the beginning of the year, these segments
represent an additional 19,700 of new sq.m. (net of
closures).
In addition, Klépierre continued to implement new brands and store
formats in its malls. Porta di Roma will notably host the first
full Victoria's Secret concept store in a shopping center in Italy
on 950 sq.m. Trendy cosmetics brand Normal has opened four stores
in Klépierre malls since the beginning of the year, while Chinese
mobile phone brand Mi Xiaomi will unveil three stores in
Spain.
Other highlights of the first nine months of 2018
include:
- Assago (Milan, Italy):
Following the acquisition of 6,200 sq.m. from the Carrefour
hypermarket, Klépierre secured the implementation of a Zara store
on its latest format to better anchor the mall. Combined with the
Clubstore® refurbishment and Destination Food® implementation, this
has significantly reinforced Assago's positioning in its catchment
area, and generated an 8% increase in footfall and 10% increase in
F&B retailer sales.([4])
- Forum Duisburg (Germany): Of
the 52 leases set to expire in 2018, 90% have already been secured.
In addition, following the opening of a Zara store in 2017, 11 new
brands will enrich the retail mix, including Only, Jack &
Jones, Orsay, and Oil & Vinegar. Footfall at Arneken Galerie
Hildesheim has jumped by 40% since the September 2018 opening of a
2,000-sq.m. TK Maxx store.
- Following the recent Turkish
Presidential Decree requiring, for a period of two years beginning
in Q4 2018, the conversion of Euro and USD lease contracts to
Turkish Lira, Klepierre estimates, based on current circumstances,
the impact to represent less than 1% of the net current cash flow
(group share) on a full-year basis.
DEVELOPMENT PIPELINE AND ASSET ROTATION
Pipeline Hoog Catharijne (€438 million investment,
([5])
yield-on-cost of 6.4%)
([6]) -
Utrecht, the Netherlands
In November 2018, the "South Mile"
redevelopment phase of Hoog Catharijne - consisting of 11,200-sq.m.
in retail space - will open as planned. Of the South Mile's 29
units, 25 are now leased or under advanced negotiations. The units
include Ray-Ban, Guess, Lindt, BALR. and Levi's, as well as a
pop-up store devoted to the world of Harry Potter.
The next phase of the development is expected to be delivered by
the end of 2019 and will further enhance Hoog Catharijne's position
as the leading mall in the Netherlands, thanks to its unique
connection to Utrecht's central train station (88 million
passengers per year), 72,000 sq.m. of retail space, iconic
architecture, and powerful Fashion and Food & Beverage
offering. Ultimately, Hoog Catharijne is expected to host more than
30 million visitors per year.
Créteil Soleil (€134 million investment,
(5)
yield-on-cost of 5.7%)
(6)
- Paris region, France
The extension of Créteil Soleil is
advancing on schedule and expected to be completed by the end of
2019. This project aims to better connect the mall to the subway
station, as well as create 11,000 sq.m. of additional retail space
to enrich the mall's offering. Approximately 60% of the extension
will be dedicated to Leisure and Food & Beverage, with the
implementation of Klépierre's latest Clubstore® and Destination
Food® concepts.
As of September 30, 2018, 70% of the new space is already signed or
in advanced negotiations, including with brands such as Nike, Beef
House, and Factory & Co.
Disposals
In the third quarter of 2018,
Klépierre completed disposals across Europe for
€223 million([7]). This
amount includes the disposal of three malls in Italy: Metropoli and
Settimo in Milan, and Rondinelle in Brescia. In addition, Klépierre
sold two malls and an office building in Hungary: Alba Plaza in
Székesfehérvar, Nyír Plaza in Nyiregyhaza, and Duna Plaza offices
in Budapest. These disposals were made at appraised values (June
30, 2018).
Including sales under promissory agreement for €39.4 million,
Klépierre's disposals since the beginning of 2018 amount to
€574.6 million (excluding transfer taxes), in line with the
Group's asset rotation strategy.
DEBT POSITION AND FINANCING As of September 30, 2018, Klépierre's consolidated net debt
amounted to €8,879 million, a €274 million reduction compared to
June 30, 2018. The reduction primarily reflects the €223 million in
completed disposals. At this level, and based on June 30, 2018
valuations, Klépierre's Loan-to-Value ratio at September 30 amounts
to 36.3%.
Klépierre's average debt duration
and average cost of debt remained stable at 5.9 years and 1.6%,
respectively, compared to June 30, 2018. The Group's liquidity
position remained strong at €2.1 billion.
Between January 1 and October 19, 2018, Klépierre repurchased
4,184,527 of its shares for a total investment of €136
million. Taking into account the shares repurchased in 2017, to
date Klépierre has invested €486 million of its €500-million
program, announced in March 2017.
OUTLOOK confirmed
In 2018, Klépierre expects to
generate net current cash flow per share of at least €2.62.
RETAILER SALES first nine
months of 2018 vs first nine months of 2017
Countries |
Like-for-like
change(a) |
Share in total
reported retailer sales |
France |
+1.1% |
30% |
Belgium |
-3.8% |
2% |
France-Belgium |
+0.9% |
32% |
Italy |
-2.7% |
26% |
Norway |
-0.6% |
8% |
Sweden |
+0.5% |
7% |
Denmark |
-2.9% |
4% |
Scandinavia |
-0.7% |
19% |
Spain |
+3.0% |
8% |
Portugal |
+4.7% |
3% |
Iberia |
+3.5% |
11% |
Poland |
-0.3% |
3% |
Hungary |
+10.5% |
1% |
Czech Republic |
+0.6% |
2% |
Turkey |
+13.4% |
2% |
CEE and
Turkey |
+5.4% |
8% |
The
Netherlands(b) |
n.s. |
n.s. |
Germany |
-0.8% |
3% |
TOTAL |
+0.7% |
100% |
Segments |
Like-for-like
change(a) |
Share in total
reported retailer sales |
Fashion |
-1.5% |
40% |
Culture, Gifts and
Leisure |
+1.7% |
17% |
Health &
Beauty |
+4.4% |
13% |
Food &
Beverage |
+5.0% |
11% |
Household
Equipment |
+0.1% |
11% |
Other |
-1.4% |
8% |
TOTAL |
+0.7% |
100% |
(a) Like-for-like change is on a
same-center basis and excludes the impact of asset sales,
acquisitions and foreign exchange fluctuations.
(b) Only a few Dutch retailers report their sales to Klépierre.
TOTAL revenues
In € millions |
Total Share |
|
Group
Share |
9M
2018 |
9M
2017 |
|
9M
2018 |
9M
2017 |
France |
322.4 |
315.1 |
|
263.3 |
258.4 |
Belgium |
14.2 |
13.4 |
|
14.2 |
13.4 |
France-Belgium |
336.7 |
328.5 |
|
277.5 |
271.8 |
Italy |
160.2 |
157.0 |
|
157.7 |
154.6 |
Norway |
53.5 |
54.5 |
|
30.0 |
30.6 |
Sweden |
44.9 |
47.2 |
|
25.2 |
26.5 |
Denmark |
42.9 |
43.0 |
|
24.0 |
24.1 |
Scandinavia |
141.2 |
144.7 |
|
79.2 |
81.2 |
Spain |
83.8 |
74.5 |
|
83.8 |
72.3 |
Portugal |
17.7 |
16.5 |
|
17.7 |
16.5 |
Iberia |
101.5 |
91.0 |
|
101.5 |
88.7 |
Poland |
26.0 |
25.5 |
|
26.0 |
25.5 |
Hungary |
18.8 |
16.6 |
|
18.8 |
16.6 |
Czech Republic |
25.2 |
22.8 |
|
25.2 |
22.8 |
Turkey |
17.9 |
25.6 |
|
16.1 |
23.6 |
Others |
2.3 |
1.9 |
|
2.3 |
1.8 |
CEE and
Turkey |
90.2 |
92.5 |
|
88.4 |
90.3 |
The
Netherlands |
54.8 |
48.3 |
|
54.8 |
48.3 |
Germany |
39.5 |
41.0 |
|
37.6 |
39.0 |
GROSS
RENTAL INCOME -SHOPPING CENTERS |
924.1 |
903.0 |
|
796.7 |
773.9 |
Other
retail properties |
19.1 |
21.4 |
|
19.1 |
21.4 |
TOTAL
GROSS RENTAL INCOME |
943.2 |
924.4 |
|
815.8 |
795.3 |
Management,
administrative and related income (fees) |
62.5 |
61.5 |
|
59.9 |
58.7 |
TOTAL
REVENUES |
1,005.7 |
985.9 |
|
875.7 |
854.0 |
Equity Accounted Investees* |
62.7 |
65.1 |
|
60.0 |
62.3 |
* 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
|
2018 |
|
2017 |
In € millions |
Q3 |
Q2 |
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
France |
99.0 |
99.1 |
93.4 |
|
93.3 |
97.2 |
98.1 |
89.5 |
Belgium |
4.8 |
4.3 |
4.4 |
|
4.9 |
4.0 |
4.2 |
3.7 |
France-Belgium |
103.9 |
103.4 |
97.8 |
|
98.1 |
101.2 |
102.3 |
93.2 |
Italy |
52.2 |
51.6 |
44.5 |
|
51.0 |
50.6 |
50.8 |
42.7 |
Norway |
15.7 |
16.4 |
16.0 |
|
15.7 |
16.3 |
16.3 |
17.1 |
Sweden |
13.5 |
13.9 |
13.4 |
|
13.9 |
14.0 |
14.0 |
14.2 |
Denmark |
12.8 |
13.2 |
12.4 |
|
13.3 |
12.5 |
12.5 |
12.8 |
Scandinavia |
42.0 |
43.5 |
41.7 |
|
42.9 |
42.8 |
42.8 |
44.1 |
Spain |
25.4 |
24.8 |
24.9 |
|
23.5 |
24.7 |
21.7 |
19.7 |
Portugal |
6.0 |
5.2 |
5.5 |
|
4.9 |
5.5 |
4.9 |
5.1 |
Iberia |
31.4 |
30.0 |
30.4 |
|
28.4 |
30.2 |
26.6 |
24.8 |
Poland |
8.1 |
7.8 |
8.0 |
|
7.8 |
8.0 |
7.7 |
8.0 |
Hungary |
5.9 |
5.8 |
5.8 |
|
5.7 |
5.4 |
4.8 |
5.3 |
Czech Republic |
8.3 |
8.1 |
8.0 |
|
7.7 |
7.7 |
7.4 |
7.5 |
Turkey |
3.8 |
5.7 |
5.2 |
|
7.1 |
7.4 |
7.3 |
6.9 |
Others |
0.6 |
0.8 |
0.7 |
|
0.9 |
0.2 |
0.6 |
0.6 |
CEE and
Turkey |
26.7 |
28.2 |
27.8 |
|
29.1 |
28.7 |
27.7 |
28.3 |
The
Netherlands |
15.0 |
14.6 |
9.5 |
|
13.2 |
13.4 |
13.2 |
9.5 |
Germany |
10.3 |
9.9 |
9.3 |
|
10.5 |
11.3 |
11.8 |
9.3 |
GROSS
RENTAL INCOME
SHOPPING CENTERS |
281.5 |
281.3 |
261.0 |
|
273.3 |
278.2 |
275.2 |
251.9 |
Other
retail properties |
6.2 |
6.1 |
6.1 |
|
6.5 |
6.2 |
7.2 |
7.1 |
TOTAL
GROSS RENTAL INCOME |
287.6 |
287.3 |
267.1 |
|
279.8 |
284.4 |
282.4 |
259.0 |
Management,
administrative and related income (fees) |
20.7 |
20.3 |
21.5 |
|
24.1 |
18.6 |
22.7 |
20.2 |
TOTAL
REVENUES |
308.3 |
307.6 |
288.6 |
|
303.9 |
303.0 |
305.1 |
279.2 |
AGENDA |
|
February 6, 2019 |
2018 full-year earnings |
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
Paul LOGEROT
+33 (0)1 40 67 53 02 - paul.logerot@klepierre.com |
Lorie LICHTLEN / Camille PETIT / Stéphanie LASNEL
Burson Cohen & Wolfe
+33 (0)1 56 03 12 12 - klepierre.media@bm.com |
ABOUT KLÉPIERRE
Klépierre, the pan-European leader
in shopping malls, combines development, property and asset
management skills. The company's portfolio is valued at
€24.6 billion at June 30, 2018 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, please visit the newsroom on our website:
www.klepierre.com
This press release is available on
the Klépierre website: www.klepierre.com
([1]) The figures disclosed in
this press release have not been audited.
([2]) Like-for-like excludes the
contribution of new spaces (acquisitions, greenfield projects and
extensions), spaces being restructured, disposals completed in 2017
& 2018, and foreign exchange impacts.
([3]) Like-for-like change is on a
same-center basis and excludes the impact of asset sales,
acquisitions and foreign exchange fluctuations.
([4]) Footfall increase after completion of the
refurbishment June / August 2018 vs. 2017.
([5]) Estimated cost as of June
30, 2018 including fitting-out (when applicable) and excluding
step-up rents (when applicable), internal development fees, and
financial costs.
([6]) Targeted yield-on-cost as of
June 30, 2018, based on targeted NRI with full occupancy and
excluding all lease incentives (when applicable), divided by the
estimated cost price as defined above.
([7]) Total Share basis, excluding
transfer taxes. Including €535 million of assets sold and €39
million of sales under promissory agreement.
PR_KLEPIERRE_2018_Q3_REVENUES_UK_FINAL
This
announcement is distributed by West Corporation on behalf of West
Corporation 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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