press release
business review for the first
quarter of 2018
Paris - April 26, 2018
Klépierre, the owner of the
leading shopping center platform in Europe, today released its
business review for the first quarter of 2018,([1])
which is characterized by continued robust growth in net rental
income and retailer sales. The main highlights include:
- Total
revenues of €331.5 million, +3.4% year on year
- Shopping
centers net rental income of €261.0 million, +3.6% and +3.0% on a
like-for-like basis([2])
- Retailer
sales +2.0% vs. the first 3 months of 2017([3])
- Sustained
leasing activity with 473 leases signed in the first quarter,
representing €7.8 million in additional minimum guaranteed
rents
- Net debt
reduced by circa €300 million to €8.7 billion at March 31, 2018 vs.
year-end 2017; net cost of debt below 1.8%
- €301 million
of disposals completed in the first quarter of 2018
- Immediate
success for new Prado mall; development projects on schedule at
Hoog Catharijne and Créteil Soleil
- 2018 outlook
confirmed: net current cash flow per share expected between
€2.57-€2.62
Jean-Marc Jestin,
Chairman of the Klépierre Executive Board, commented, "Following our record results in 2016 and 2017, our strong
activity in the first quarter of 2018 further confirms the
relevance and effectiveness of our strategy, which is to focus on
the leading assets in the most dynamic catchment areas of Europe.
Our diversified pan-European platform continues to deliver positive
retailer sales outpacing national indices, sustained leasing flow
and growing rents. I am convinced that our
portfolio - supported by our ambitious development
pipeline, disciplined financial policy and pursuit of operational
excellence in all aspects of mall management - will
continue to deliver sustained growth and superior returns for our
shareholders."
KEY FINANCIALS
In € millions, Total-Share basis |
Q1 2018 |
Q1 2017 |
Current
change |
Gross rental income -
Shopping centers |
303.7 |
293.2 |
+3.6% |
Gross
rental income - Other retail properties |
6.4 |
7.3 |
- 12.2% |
Total gross
rental income |
310.0 |
300.4 |
+3.2% |
Management,
administrative and other income (fees) |
21.5 |
20.2 |
+6.5% |
Total
revenues |
331.5 |
320.6 |
+3.4% |
Net rental
income - Shopping centers |
261.0 |
251.9 |
+3.6% |
OPERATING PERFORMANCE Revenues Gross rental
income
Shopping center gross rental
income (GRI, Total Share) increased by 3.6% to €303.7 million
in the first quarter compared with the same period last year. The
progression reflects sound like-for-like rental growth (including a
+1.2% impact from indexation) and the contribution from the
development projects at Val d'Europe and Hoog Catharijne, as well
as the contribution from Nueva Condomina in Spain, which was
acquired last May. Disposals completed in 2017 and early 2018
reduced shopping centers GRI by 1.8%.
GRI from other retail properties amounted to €6.4 million in the
first quarter, a 12.2% decrease compared to the same period last
year, reflecting the impact of recent disposals.
Management, administrative and related income (fees) increased by
6.5% to €21.5 million, mainly reflecting higher development
fees.
Total revenues for the first quarter of 2018 increased by 3.4%
year-on-year to €331.5 million.
Net rental income
During the first quarter of 2018,
net rental income generated by shopping centers totaled €261.0
million, up 3.6% year-on-year on a current basis, and 3.0% on
a like-for-like basis,(2) benefiting from strong reversion as well
as indexation (+1.2%).
Retailer sales
On a like-for-like basis,(2) total
retailer sales at Klépierre malls rose by 2.0% in the first quarter
of 2018, outperforming aggregated national retailer sales indices
by 80 basis points.([4])
On a geographic basis, retailer sales in Iberia increased by 6.4%
(+5.3% in Spain; +9.8% in Portugal), as they continued to benefit
from buoyant economic conditions; recent re-tenanting initiatives
also boosted the shopping centers' performance. In Germany,
retailer sales accelerated in the first quarter (+3.3% vs. +1.9% in
2017), supported by the successful repositioning of both Forum
Duisburg (near Dusseldorf; +6.0%) and Centrum Galerie (Dresden;
+4.8%), exemplified by the introduction of a 3,000-sq.m. Zara store
under its latest concept in each mall. In France, retailer sales
rose strongly (+3.4%), thanks to the performance of newly renovated
shopping centers including Val d'Europe (Paris area) and Jaude
(Clermont-Ferrand) and despite the negative impact of harsh weather
conditions in the first quarter of this year. Retailer sales in
Italy (- 2.3%) were particularly impacted by pre-election
uncertainty, poor weather conditions and, to a lesser extent, new
competition (Verona).
On a segment basis, health & beauty (+6.9%) and food &
beverage (+7.5%) continued to grow steadily, reflecting both the
structural outperformance of these segments and Klépierre's moves
to introduce the most successful brands. Similarly, sporting goods
sales grew by 8.0%, sustained by the ongoing expansion of retailers
such as JD Sports, Nike and Decathlon. As previously mentioned,
harsh weather conditions in the quarter had a negative impact on
fashion sales (- 1.3%), notably in France and Italy.
Leasing activity
In the first quarter of 2018,
leasing activity remained dynamic, with 473 deals signed. The €7.8
million in additional minimum guaranteed rents includes €3.8
million from renewed or re-let spaces.
As in 2017, Klépierre's focus on key account management generated
strong deal flow with major international retailers. These
retailers are implementing their latest store formats, which are
expected to translate into further retailer sales
outperformance.
Medical and paramedical services are gaining traction in
Klépierre's shopping centers throughout Europe. For the full-year
2017, Klépierre signed 21 leases for beauty centers, pharmacies,
and medical centers in 6 countries. Since the beginning of 2018, 17
leases (9,200 sq.m.; 6 countries) have already been signed,
including a clinic at Espaço Guimarães (4,000 sq.m. on a former
vacant unit) and the largest pharmacy in France (a 2,400-sq.m.
Espace Coty in Le Havre).
On a geographic basis, leasing activity in France remained strong.
This was particularly the case at Saint-Lazare in Paris, where the
ongoing re-leasing campaign generated strong reversion, thanks to
the introduction of 11 new retailers including Nespresso, Foot
Locker, Rituals, Levi's and Kiehl's (L'Oréal Group). At Nice TNL,
Décathlon recently opened a 5,000-sq.m. store.
In Denmark, following the recent revamping of the food area and the
opening of a 9-screen cinema at the Field's mall in Copenhagen,
Zara recently opened a 2,800-sq.m, and a 3,700-sq.m. Bounce
Trampoline Park will open in June 2018. Elsewhere in Scandinavia,
12,000 sq.m. were signed with H&M (8 stores) while Normal (a
brand offering the best of convenience) will open four stores in
Sweden and Norway.
In Germany, the retail mix continues to improve with the arrival of
trendy international retailers. In the second half of 2018,
Boulevard Berlin will welcome Maisons du Monde (1,500 sq.m. on a
former vacant unit) and Vapiano (925 sq.m.), while H&M will
open an enlarged, 2,900-sq.m. store at Forum Duisburg near
Dusseldorf.
Lastly, deal flow in Italy (70 leases) and Iberia (44 leases)
remained robust with the ongoing renewal and re-leasing campaign at
Campania in Naples (8 deals), La Gavia in Madrid (6 leases) and
Nueva Condomina in Murcia, Spain (5 leases).
DEVELOPMENT PIPELINE AND ASSET ROTATION
Pipeline Prado
On March 29, Klépierre opened
Prado, a spectacular new, 23,000-sq.m. mall in central Marseille,
on time and on budget. This unique shopping venue has proven to be
an immediate success. The mall is nearly fully let, with 96% of the
total surface area leased or under advanced negotiations. Anchored
by a four-story 9,400-sq.m. Galeries Lafayette flagship store,
Prado also features popular brands such as Zara (3,300 sq.m.),
Repetto, Lacoste, Tesla, Pandora, Etam, Courir, Lush and Pellegrin
et Fils. In addition to the diversified retail offering, the mall
will provide customers with unique food and dining options,
including a 2,300-sq.m. Auchan Gourmand concept store, and trendy
restaurants such as Factory & Co, Big Fernand burgers or
Mavrommatis.
Hoog Catharijne
The redevelopment project of Hoog
Catharijne, in the Netherlands at Utrecht, is advancing according
to plan. The new grand entrance linking the mall to Utrecht's
central station (88 million passengers per year) opened in February
2018. The North Mile is now fully let, with new flagship stores
such as Lush, Douglas, G-Star and HKMX, as well as an extensive and
unrivalled food offering, including Five Guys, Wagamama, Vapiano,
Illy Café, Leon, Two Tigers, The Burger Federation and an upscale
seafood bar.
Works at the South Mile are ongoing and should be completed in the
first-half of 2019. Leasing is progressing well, building up on the
success of the North Mile (+11.7% footfall, or 2.5 million
additional visitors).
Créteil Soleil
Renovation and extension works
(€134-million investment) started at Créteil Soleil at the end of
January and are expected to be completed in 2020. This project aims
to completely refurbish the shopping center and connect it to the
subway station, as well as create 11,000 sq.m. in additional retail
space.
Disposals
In the first quarter of 2018,
Klépierre completed €301 million([5]) of
disposals across Europe (mainly Vitrolles in France; Roncali in
Cologne, Germany; Gran Via de Hortaleza in Spain). The disposals
were made at an average EPRA Net Initial Yield of 5.0%, slightly
above their latest appraised values.
DEBT POSITION AND FINANCING
As of March 31, 2018, Klépierre's
consolidated net debt amounted to €8.7 billion, approximately €300
million lower than the level at December 31, 2017. This reduction
reflects the recent disposals and the cash flow generated in the
first quarter, which more than offset capital expenditures for
development and the repurchase of shares. Since the beginning of
2018, Klépierre has repurchased 1,425,440 of its own shares at an
average price of €35.07 per share, for a total of €50 million.
Since the €500-million share buyback program was announced in March
2017,([6]) the Group
repurchased shares for €400 million.([7])
In the first quarter of 2018, Klépierre's average debt duration
remained stable at 6.2 years, while the net cost of debt continued
to decrease below 1.8%. The Group's liquidity position remained
strong at €2.4 billion.
OUTLOOK confirmed
In 2018, Klépierre expects to
generate net current cash flow per share of between €2.57 and
€2.62, assuming stable or lower net debt.
RETAILER SALES First quarter
2018 vs first quarter 2017
Countries |
Like-for-like
change(a) |
Share in total
reported retailer sales |
France |
+3.4% |
30% |
Belgium |
- 3.0% |
2% |
France-Belgium |
+3.1% |
32% |
Italy |
- 2.3% |
26% |
Norway |
- 0.6% |
8% |
Sweden |
+1.4% |
7% |
Denmark |
- 1.8% |
4% |
Scandinavia |
- 0.2% |
19% |
Spain |
+5.3% |
8% |
Portugal |
+9.8% |
3% |
Iberia |
+6.4% |
11% |
Poland |
+0.1% |
3% |
Hungary |
- 0.1% |
1% |
Czech Republic |
+7.7% |
2% |
Turkey |
+11.3% |
2% |
CEE and
Turkey |
+4.6% |
8% |
The
Netherlands(b) |
n.s. |
n.s. |
Germany |
+3.3% |
3% |
TOTAL |
+2.0% |
100% |
Segments |
Like-for-like
change(a) |
Share in total
reported retailer sales |
Fashion |
-
1.3% |
38% |
Culture, gift, and
leisure |
+3.6% |
17% |
Health &
Beauty |
+6.9% |
13% |
Food &
Beverage |
+7.5% |
12% |
Household
equipment |
+1.0% |
12% |
Others |
+0.6% |
9% |
TOTAL |
+2.0% |
100% |
(a) Like-for-like change is on a
same-center basis and excludes the impact of asset sales,
acquisitions and foreign exchange.
(b) Only a few Dutch retailers report their sales to Klépierre.
TOTAL REVENUES
In € millions |
Total share |
|
Group share |
Q1
2018 |
Q1
2017 |
|
Q1
2018 |
Q1
2017 |
France |
105.7 |
100.4 |
|
86.5 |
82.7 |
Belgium |
4.5 |
4.4 |
|
4.5 |
4.4 |
France-Belgium |
110.3 |
104.8 |
|
91.0 |
87.1 |
Italy |
53.0 |
51.8 |
|
52.2 |
51.0 |
Norway |
17.8 |
18.5 |
|
10.0 |
10.4 |
Sweden |
15.0 |
16.0 |
|
8.4 |
9.0 |
Denmark |
14.1 |
14.2 |
|
7.9 |
8.0 |
Scandinavia |
46.8 |
48.8 |
|
26.2 |
27.4 |
Spain |
27.9 |
22.8 |
|
27.9 |
22.0 |
Portugal |
5.9 |
5.5 |
|
5.9 |
5.5 |
Iberia |
33.8 |
28.3 |
|
33.8 |
27.5 |
Poland |
8.7 |
8.8 |
|
8.7 |
8.8 |
Hungary |
6.1 |
5.5 |
|
6.1 |
5.5 |
Czech Republic |
8.4 |
7.5 |
|
8.4 |
7.5 |
Turkey |
6.2 |
8.2 |
|
5.5 |
7.6 |
Others |
0.8 |
0.7 |
|
0.7 |
0.7 |
CEE and
Turkey |
30.2 |
30.8 |
|
29.4 |
30.1 |
The
Netherlands |
16.6 |
15.0 |
|
16.6 |
15.0 |
Germany |
13.1 |
13.6 |
|
12.5 |
13.0 |
GROSS
RENTAL INCOME -SHOPPING CENTERS |
303.7 |
293.2 |
|
261.7 |
251.2 |
Other
retail properties |
6.4 |
7.3 |
|
6.4 |
7.3 |
TOTAL
GROSS RENTAL INCOME |
310.0 |
300.4 |
|
268.1 |
258.4 |
Management,
administrative and related income (fees) |
21.5 |
20.2 |
|
20.5 |
19.2 |
TOTAL
REVENUES |
331.5 |
320.6 |
|
288.5 |
277.7 |
Equity Accounted Investees* |
21.1 |
22.3 |
|
20.2 |
21.2 |
* Contributions from Equity
Accounted Investees include investments in jointly-controlled
companies and investments in companies under significant
influence.
QUARTERLY REVENUES ON A TOTAL-SHARE BASIS
|
2018 |
|
2017 |
In € millions |
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
France |
105.7 |
|
104.9 |
106.6 |
108.1 |
100.4 |
Belgium |
4.5 |
|
4.6 |
4.4 |
4.7 |
4.4 |
France-Belgium |
110.3 |
|
109.5 |
110.9 |
112.8 |
104.8 |
Italy |
53.0 |
|
53.2 |
52.6 |
52.6 |
51.8 |
Norway |
17.8 |
|
17.9 |
18.1 |
17.9 |
18.5 |
Sweden |
15.0 |
|
15.2 |
15.4 |
15.8 |
16.0 |
Denmark |
14.1 |
|
14.7 |
14.5 |
14.3 |
14.2 |
Scandinavia |
46.8 |
|
47.8 |
47.9 |
47.9 |
48.8 |
Spain |
27.9 |
|
27.1 |
27.3 |
24.4 |
22.8 |
Portugal |
5.9 |
|
5.5 |
5.6 |
5.4 |
5.5 |
Iberia |
33.8 |
|
32.6 |
32.9 |
29.8 |
28.3 |
Poland |
8.7 |
|
8.5 |
8.3 |
8.4 |
8.8 |
Hungary |
6.1 |
|
6.1 |
5.7 |
5.3 |
5.5 |
Czech Republic |
8.4 |
|
8.0 |
7.7 |
7.6 |
7.5 |
Turkey |
6.2 |
|
8.3 |
9.0 |
8.4 |
8.2 |
Others |
0.8 |
|
1.1 |
0.5 |
0.7 |
0.7 |
CEE and
Turkey |
30.2 |
|
32.0 |
31.3 |
30.4 |
30.8 |
The
Netherlands |
16.6 |
|
16.4 |
16.8 |
16.5 |
15.0 |
Germany |
13.1 |
|
13.4 |
13.6 |
13.7 |
13.6 |
GROSS
RENTAL INCOME -SHOPPING CENTERS |
303.7 |
|
305.0 |
306.2 |
303.7 |
293.2 |
Other
retail properties |
6.4 |
|
6.6 |
6.6 |
7.6 |
7.3 |
TOTAL
GROSS RENTAL INCOME |
310.0 |
|
311.6 |
312.7 |
311.3 |
300.4 |
Management,
administrative and related income (fees) |
21.5 |
|
24.1 |
18.6 |
22.7 |
20.2 |
TOTAL
REVENUES |
331.5 |
|
335.7 |
331.3 |
333.9 |
320.6 |
AGENDA |
|
July 26,
2018
|
First-half 2018 earnings (press release prior to market
opening)
|
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 / Camille PETIT, Burson-Marsteller i&e
+33 (0)1 56 03 12 12 - klepierre.media@bm.com |
ABOUT KLÉPIERRE
Klépierre, the owner and operator
of the leading shopping center platform in Europe, combines
development, property and asset management skills. The company's
portfolio is valued at €23.8 billion at December 31, 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 available on
the Klépierre website: www.klepierre.com
[1] All the
figures disclosed in this press release have not been audited.
[2]
Like-for-like excludes the contribution of new spaces
(acquisitions, greenfield projects or extensions), spaces being
restructured, disposals completed in 2017, 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.
[4] Klépierre
retailer sales growth at the end of February 2018 vs. national
sales indices for France, Italy, Norway, Sweden, Denmark, Spain,
Poland, Czech Republic, Hungary, Turkey and Germany. Weighted by
Klépierre's retailer sales geographical mix.
[5] Total
Share, excluding transfer taxes.
[6] For more
information, please refer to the press release published on March
13, 2017, available on www.klepierre.com
[7]
Corresponding to 11,186,864 shares at an average price of
€35.76
PR_KLEPIERRE_2018_Q1_REVENUES_UK_FINAL
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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