FIRST-QUARTER 2023 TRADING UPDATE
PRESS RELEASE
FIRST-QUARTER 2023TRADING UPDATE
Paris — May 11, 2023
Klépierre, the European leader in shopping
malls, today reported its first-quarter trading update(1),
confirming the positive momentum observed in 2022:
- First-quarter retailer sales up
13.2%(2) and footfall up 14.1% compared to 2022;
- Strong growth in net rental income,
up 6.2% adjusted for disposals and developments
- Steady leasing activity with 304
leases signed, and significant year-on-year growth in occupancy to
95.7%
- Robust credit metrics:
- Net debt to EBITDA ratio of
8.1x
- Cost of debt at 1.3%
- Interest rate hedging at 100% in
2023 and 93% in 2024
- €530 million in long-term financing
closed and drawn year-to-date with an average maturity of 6.4
years
- Guidance confirmed for 2023 with
net current cash flow per share of €2.35(3) (up 5% compared to 2022
adjusted NCCF per share of €2.24(4))
- Cash distribution of €1.75(5) per
share: interim distribution of €0.87 per share paid on March 30,
2023 with the balance of €0.88 per share to be paid on July 11,
2023
- Ambitious and quantitative
objectives disclosed for the new Act4GoodTM strategy to build the
most sustainable platform for commerce
KEY
FINANCIALS
In millions of euros, total share |
Q1 2023 |
Q1 2022 |
|
|
Total gross rental income |
287.1 |
276.7 |
|
|
Service charge income(a) |
68.3 |
64.5 |
|
|
Management and development fees |
16.1 |
18.3 |
|
|
Total revenue |
371.5 |
359.5 |
|
|
|
|
|
|
|
Total net rental income |
228.5 |
221.5 |
+6.2% |
Change on same scope(b) |
(a) Service charges invoiced to
tenants covering the general maintenance and repairs, security,
heating, cooling, lighting and cleaning of common areas. Service
charge income is included in total revenue (IFRS 15).
(b) Change on same scope
excludes the contribution of new and restructured spaces and
excludes disposals completed in 2022.
OPERATING PERFORMANCE
In a similar vein to the steady performance
observed in 2022, trading continued to improve in the first quarter
of the year.
Retailer sales and footfall
Retailer sales continued to rebound strongly
over the first quarter of 2023, up 13.2% compared to 2022. The
sequence was positive throughout the period with performance
peaking in January (up 19%). This trend underscores the relevance
of Klépierre’s strategy and its robust operating
fundamentals.Footfall also jumped by 14.1% during the period
compared to 2022.By geographic area, all countries enjoyed growth
and significantly exceeded 2022 levels. The Netherlands and Germany
(up 26.8%) led the way, with health restrictions still in place in
the first quarter of 2022, followed by Central Europe (up 20.0%),
Italy (up 16.3%) and Iberia (up 15.1%).
Retailer sales by geography:
Q1 2023 vs. Q1
2022(2) |
Country |
Like-for-like change |
Share in total reported retailer sales |
France |
+8.6% |
40% |
Italy |
+16.3% |
25% |
Scandinavia |
+11.6% |
12% |
Iberia |
+15.1% |
10% |
Netherlands
& Germany |
+26.8% |
7% |
Central Europe |
+20.0% |
6% |
TOTAL |
+13.2% |
100% |
Growth was also strong in all segments, with
increases from 11.5% for Culture, gifts & leisure to 23.5% for
Food & beverage. Fashion outperformed the Group average with
growth of 13.4% while Household equipment (up 2%) was softer due to
solid 2022 figures as this segment was the best performer during
the pandemic.
Retailer sales by segment: Q1 2023 vs. Q1
2022(2) |
Segments |
Like-for-like change |
Share in total reported retailer sales |
Fashion |
+13.4% |
32% |
Culture, gifts
& leisure |
+11.5% |
21% |
Health &
beauty |
+12.6% |
15% |
Food &
beverage |
+23.5% |
13% |
Household
equipment |
+2.0% |
12% |
Other |
+22.3% |
7% |
TOTAL |
+13.2% |
100% |
Leasing activity
Over the first quarter, the Group signed 304
leases, including 230 renewals and re-lettings, with a 5.2%
positive reversion rate. Occupancy rate remained high at 95.7%, up
100 basis points year-on-year.On the leasing front, highlights of
the period included the 7th Retailer Day event held by Klépierre in
Paris on March 22, bringing together more than 200 banners, and
underscoring their ambition to open stores and enlarge their
presence in the Group’s malls.This event provided a forum for
productive discussions with retailers and gave the Group the
opportunity to promote its recently completed projects, such as the
full renovation and 11,600 sq.m. extension of Créteil Soleil
(France) - that brought the mall to a total leasable area of
135,000 sq.m. - and the 16,700 sq.m. canopied extension at Gran
Reno in Bologna (Italy), which now boasts a retail offering
covering a total of 53,000 sq.m.Current and future projects were
also presented, including the extension of Grand Place (France)
with 30 new stores, the renovations of Alexandrium in Rotterdam
(Netherlands) and Le Gru in Turin (Italy), and the Maremagnum
rooftop terrace development in Barcelona (Spain) with Time Out
Market.
Revenue
Klépierre’s total revenue for the three-month
period ended March 31, 2023 amounted to
€371.5 million, up 3.3% compared to first-quarter 2022.Over
the first three months of 2023, gross rental income amounted to
€287.1 million, reflecting the bounce-back in retailer sales and
footfall, dynamic leasing activity and the rebound in variable
revenues and other income.Net rental income amounted to
€228.5 million, up 6.2% compared to first-quarter 2022
adjusted for developments and disposals completed in 2022. This
growth was notably driven by a 5.75% positive indexation
effect.Service charge income and management and development fees
were in line with 2022 at €84.4 million.
INVESTMENTS
Overall, total capital expenditure invested over
the period amounted to €38 million.Regarding development, Klépierre
focused on its main committed projects to strengthen the leadership
of its shopping malls in their catchment areas, notably: the
Grand Place extension in Grenoble (France) and the rooftop
restructuring at Maremagnum in Barcelona (Spain).
Grand Place extension
(Grenoble, France)
The construction of the 16,200 sq.m.
extension of Grand Place (Grenoble, France) which started in May
2022 is expected to be delivered by the end of 2023 and will bring
the total leasable area of the mall to 75,000 sq.m. Pre-leasing
currently stands at 93% of the projected net rental income, with
leading brands such as Primark - that will open its first store in
the region – Snipes, JOTT and NYX, and a food area upgraded to the
latest standards of Klépierre’s Destination Food® strategy. Yield
on cost for this project is projected at c.8%.
Maremagnum (Barcelona, Spain)
The Maremagnum rooftop will host the first Time
Out Market in Spain and the second in Europe, making it the new
must-visit shopping and dining destination in Barcelona. The
opening is planned for 2024, in time for the America's Cup. In
addition, the recent enlargement of Inditex brands Stradivarius,
Pull & Bear, Bershka and Lefties, has provided fresh retail
impetus for the mall. Yield on cost for this project is projected
at 13.5%.
Other recent developments
In 2022 and 2023, Klépierre redeveloped several
assets to strengthen their leadership in their respective catchment
areas. These included the extension of Gran Reno opened in July
2022, translated into strong footfall (up 42% since opening
compared to 2019) and retailer sales increases (€74 million of
additional retailer sales since opening). Works at Campania
(Naples, Italy) has attracted new brands and enabled the Group to
broaden the retail mix, notably characterized by the opening of a
Primark megastore. Operational indicators were on the rise in
first-quarter 2023, with retailer sales up 10% and footfall up 21%
compared to first-quarter 2019.Similarly, at Nave de Vero (Venice,
Italy) the opening of Primark boosted footfall that increased by
24% compared to 2019, while at Centre Deux (France) the revamping
of the mall and the welcoming of Primark translated into a 45%
growth in footfall in March 2023 compared to March 2022 or 16%
compared to 2019.These solid performances illustrate the relevance
of Klépierre’s extensions and development projects and its know-how
in terms of leasing management.
DEBT AND FINANCING
As of March 31, 2023, consolidated net
debt stood at €7,585 million compared to €7,479 million at the
end of 2022, almost stable despite the payment of the interim cash
dividend on March 30, 2023. The average maturity of the
Group’s debt was 6.4 years. Year to date, the Group has signed bank
loans totaling €530 million with a 6.4-year weighted average
maturity. This amount includes €412 million in unsecured loans and
€118 million in mortgage loans primarily used to refinance a €524
million bond, maturing on April 17, 2024.Klépierre continues to
operate one of the most solid balance sheets in the industry with a
net debt to EBITDA ratio of 8.1x. Despite the current interest rate
environment, the average cost of debt remained low at 1.3%. The
hedging profile(6) remained strong with 100% of net debt hedged at
fixed rates in 2023 and 93% in 2024.Klépierre also renewed €300
million of five-year revolving credit facility, with a liquidity
position(7) standing at €2.6 billion as of March 31, 2023
(€1.9 billion in unused committed revolving credit facilities, net
of commercial paper, €300 million in other credit facilities
and €400 million in cash and cash equivalents). Standard &
Poor’s currently assigns Klépierre a long-term BBB+ rating (A2
short-term rating) with a stable outlook.
ACT4GOODtm:
A STRONG COMMITMENT
In early 2023, Klépierre launched its new CSR
policy: Act4GoodTM, featuring an expanded scope with new
challenges. Its four commitments are designed to enable Klépierre
to achieve its ambition of building the most sustainable platform
for commerce by 2030.
“Achieving net
zero”
Klépierre aims to operate shopping centers that
are low energy - targeting an average portfolio energy efficiency
of 70kWh/sq.m., and that locally rely on renewable energy
production to reach up to 30% of self-consumption for its top 40
assets. The Group is also committing to increase waste enhancement
quality, with a strong focus on material recovery (50%).Regarding
retailers, Klépierre will support them in achieving a 20% reduction
in their energy consumption and in creating low-carbon stores. A
40% decrease in carbon emissions related to visitor mobility is
also being targeted.
“Servicing communities”
Implementing a “Giving Back” project with high
impact for local communities, proposing green services and
complying with a set of internal inclusion standards are the main
commitments to ensure that all assets are servicing communities.
Moreover, one shopping center in each territory will be equipped
with a disaster relief plan.
“Growing people”
Klépierre is committed to develop the skills of
its employees, daily operating partners and local communities
around its assets: Klépierre Academies will be set up to upskill
stakeholders and improve their employability in Klépierre Top-50
Malls. To ensure gender balance, the Group is committed to achieve
40% women representation in Top Management and the Top 100
managers, aiming for equal pay. Moreover, Klépierre is encouraging
all employees in sponsorship programs to support local
communities.
“Promoting sustainable lifestyles”
To leverage Klépierre’s impact, each mall will
showcase the responsible products and services of its retailers and
assess the CSR engagement of tenants before entering into leases.
One specific unit to new local, responsible concepts in the Top-50
shopping centers will be dedicated. Lastly, events to promote
sustainable lifestyles and players committed to the low-carbon
transition will be organized to raise visitor’ awareness.
DISTRIBUTION
The proposed €1.75 distribution(5)
for fiscal year 2022 is split into two installments:
- An interim cash
dividend of €0.87 paid on March 30, 2023; and,
- The balance of
€0.88 per share to be paid on July 11, 2023, comprising:
- A €0.04 per share
“SIIC” dividend; and
- A €0.84 per share
distribution of share premiums qualifying as an equity repayment
within the meaning of Article 112-1 of the French Tax Code (Code
général des impôts).
OUTLOOK
Considering the performance of the first
quarter, Klépierre is confirming its 2023 guidance and expects to
generate net current cash flow per share of €2.35(3), representing
a growth of 5% compared to the adjusted figure for 2022 of €2.24
(i.e., €2.62 restated for €0.30 in reversals of provisions and for
€0.08 in cash flow generated by divested assets).This guidance
assumes (i) retailer sales maintain their momentum, (ii) stable
occupancy and (iii) a stable collection rate compared to 2022. It
also factors in the impact on costs of the projected inflation in
Europe for 2023 and current funding cost levels.
AGENDA |
|
July 7, 2023 |
Ex-distribution date for the final dividend |
July 11, 2023 |
Final dividend payment |
August 1, 2023 |
First-half 2023 earnings (after market close) |
INVESTOR RELATIONS CONTACTS |
MEDIA CONTACTS |
Paul Logerot, Group Head of IR and Financial Communications+33 (0)7
50 66 05 63 — paul.logerot@klepierre.comTanguy Phelippeau, IR
Officer+33 (0)7 72 09 29 57 —tanguy.phelippeau@klepierre.com |
Hélène Salmon, Group Head of Corporate and Internal
Communications+33 (0)1 40 67 55 16 –
helene.salmon@klepierre.comDelphine Granier, 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 €19.8 billion at December
31, 2022, 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 and EPRA Euro
Zone Indexes. It is also included in ethical indexes, such as CAC
SBT 1.5, MSCI Europe ESG Leaders, FTSE4Good, Euronext Vigeo Europe
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 is available on the Klépierre
website:www.klepierre.com
(1) The data disclosed in this
release have not been audited.(2) Change is on a same-store basis,
excluding the impact of asset sales and acquisitions, and excluding
Turkey.(3) Excluding the impact of amortizing Covid-19
rent concessions.(4) €2.62 restated for €0.30 of
reversals of provisions and for €0.08 in cash flow generated by
disposed assets.(5) Amount to be approved by the
shareholders present or represented at the Annual General Meeting
to be held on May 11, 2023.
(6) Calculated as the ratio of
fixed-rate debt (after hedging) to gross borrowings expressed as a
percentage.(7) The liquidity position represents the
total financial resources available to a company. This indicator is
therefore equal to the sum of cash at hand at the end of the period
(€400 million), committed and unused revolving credit facilities
(€1.9 billion, net of commercial paper) and other credit facilities
(€300 million).
- PR-KLEPIERRE-2023-Q1-REVENUES
Klepierre (EU:LI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Klepierre (EU:LI)
Historical Stock Chart
From Sep 2023 to Sep 2024