Nepi Rockcastle N.v · JSE:NRP
Nepi Rockcastle — H2 2021 Earnings Presentation
36 slides from Nepi Rockcastle's earnings presentation, December 2021
Slide 1: Results Presentation December 2021
RESULTS PRESENTATION December 2021
Slide 2: Agenda
EXCELLENCE. INNOVATION. EXPERIENCE. 1 Overview 2 Operations 3 Finance 4 ESG 5 Relocation 6 Way forward page 3 page 7 page 16 page 23 page 25 page 27 NEPI ROCKCASTLE 2 RESULTS PRESENTATION DECEMBER 2021
Slide 3: Overview
1 Overview NEPI ROCKCASTLE 3 RESULTS PRESENTATION DECEMBER 2021
Slide 4: 2021 at a glance
2021 at a glance Operational results improved vs 2020 as trading restrictions diminished Turnover during period without restrictions bounced back to 2019 level Retailers return to expansion mode Merger of online and offline retail supported by Omnichannel strategy Construction of new retail and mixe
Slide 5: Key business figures: operational performance recovery despite regional lockdowns
Key business figures: operational performance recovery despite regional lockdowns 2020 2021 vs 2020 2021 2021 vs 2019 2019 38.42 € cents -10.4% 34.42 € cents -38.9% 56.33€ cents Distributable earnings per share Distributable earnings per share* Distributable earnings per share 38.42 € cents +5.5% 40
Slide 6: Key business figures: balance sheet and liquidity remain strong
Key business figures: balance sheet and liquidity remain strong Dec 2020 Dec 2021 vs Dec 2020 Dec 2021 Dec 2021 vs Dec 2019 Dec 2019 €5.8bn Investment property value* - €5.8bn Investment property value* -7.9% €6.3bn Investment property value* €6.45 EPRA NRV per share +0.9% €6.51 EPRA NRV per share -
Slide 7: Operations
2 Operations NEPI ROCKCASTLE 7 RESULTS PRESENTATION DECEMBER 2021
Slide 8: Strong bounce back in performance once restrictions have been lifted
Strong bounce back in performance once restrictions have been lifted Turnovers recovered to 2019 levels once restrictions were lifted 2021 vs 2019 turnover* (€m) (€m) 300 100% 100% 100% 100% 100% 99% 99% 92% 85% -14.5% 75% 200 65% 66% +4.6% -3.3% +3.8% -1.2% -7.5% +0.4% -21.0% -15.2% 100 -40,2% -46.
Slide 9: Strong bounce back in performance once restrictions have been lifted » continued
Strong bounce back in performance once restrictions have been lifted» continued Turnover recovered (+25%) at faster pace than footfall (+9.5%), leading to increase in basket size (+15.4%) vs 2020 Basket size variation (€/visit) 15 +15.4% 10 +2.7% 5 0 2019 2020 2021 Footfall and turnover* variation 2
Slide 10: Strong bounce back in performance once restrictions have been lifted » continued
Strong bounce back in performance once restrictions have been lifted» continued Entertainment and Food Services lagged behind 2019 during the months without restrictions. They were subject to trading with limited capacity Turnover full year 2021 variation vs 2019 LfL (%) Turnover variation bounce ba
Slide 11: Leasing activity
Leasing activity Retailers are back to expansion mode 39++61 39 • 1,161 signed leases on 230,000m2 GLA, out of which 39% are new leases • 447 new leases (90,000m2 of GLA) were signed during 2021 Split of signed leases in 2021 39% • 714 leases renewed during 2021 61% New leases • 46.5% of the new lea
Slide 12: Sustainable retail environment
Sustainable retail environment Sustainable anchor tenant base as at 31 December 2021, with limited exposure to concentration risk % Group occupancy cost ratio* evolution (%) by rent * 4.6% 15 2500 3.7% ** 3.4% 2000 3.2% 10 2.1% 1500 1.8% 1.5% 1000 1.4% 5 1.2% 24.1% of total annual rent 500 1.2% * Cr
Slide 13: Sustainable retail environment » continued
Sustainable retail environment » continued General lease terms not changed following Covid-19 pandemic RENT TERM TO FIRST BREAK OPTION A large portion of retail tenants have a contractual obligation to report Typically ten years for hypermarkets, DIYs and cinemas, and three to five turnovers and pay
Slide 14: Active management
Active management Key account management of NEPI Rockcastle is the “One-stop” expansion solution for retailers in CEE Bringing new concepts to our markets & implementing latest store designs in 2021 Poland Romania Bonarka City Center Focus Mall City Park Shopping City Severin Mega Mall new to portf
Slide 15: Omnichannel consumer-centric approach - Digital B2C projects
Omnichannel consumer-centric approach - Digital B2C projects Progress on omnichannel strategy in 2021 by implementation of digital initiatives • SPOT - consumer loyalty app lauched in 2021 in shopping centers in Romania and Bulgaria. The app will be rolled out accross the Group in 2022. • Pilot proj
Slide 16: Finance
3 Finance NEPI ROCKCASTLE 16 RESULTS PRESENTATION DECEMBER 2021
Slide 17: Key drivers of distributable earnings
Key drivers of distributable earnings amounts in euro cents Distributable earnings impacted by high level of liquidity and disposal of Romanian office portfolio and Serbian assets. The positive effect of NOI growth has been fully offset by expenses with litigation claim (+16.3%) +6.29 (+0.3%) +0.12
Slide 18: Liquidity and funding
Liquidity and funding 30.9% Prudent LTV €1.1bnLiquidity BBB Investment grade rating with 35% long term strategic threshold including cash (€499m) and available assigned by Standard & Poor’s (stable revolving facilities (€620m) outlook) and Fitch (positive outlook) Net debt/EBITDA 12 • Weighted avera
Slide 19: Liquidity and funding » continued
Liquidity and funding » continued Debt maturity profile as of February 2022 €m • Maintain the previously existing revolving facilities and 700,000 increased them by €45 million up to €620 million 600,000 • Conclude the first bilateral agreement with IFC for €73.5 500,000 million green funding 400,00
Slide 20: Significant headroom on unsecured debt covenants
Significant headroom on unsecured debt covenants Solvency ratio could be breached only by a 700bps deterioration of valuation yields, which is unlikely % Solvency ratio (%) 60 50 40 40% 39% 30 36% 37% Solvency ratio is computed on a gross basis, not adjusted 31% 20 for cash balances 10 0 2017 2018 2
Slide 21: From distributable earnings to cash flow from operating activities
From distributable earnings to cash flow from operating activities amounts in € thousand Distributable earnings fully supported by cash flow from operating activities +3,869 +1,858 258,031 +37,304 246,917 +6,127 -740 209,613 Distributable Expenses with Recurring Working capital Accrued net Accrued i
Slide 22: Valuation uplift driven by portfolio performance
Valuation uplift driven by portfolio performance €34.7 million fair value gain on property valuation mainly driven from property performance Share of total Countries covered portfolio (%) Colliers International Romania 35% Bulgaria, Croatia, Czech Republic, Jones Lang LaSalle 32% Hungary, Serbia and
Slide 23: ESG
4 ESG NEPI ROCKCASTLE 23 RESULTS PRESENTATION DECEMBER 2021
Slide 24: Continuous commitment to the highest standards of sustainability
Continuous commitment to the highest standards of sustainability NEPI Rockcastle continued to consistently roll out its sustainability strategy in 2021 • 72% of the Group’s assets have “Very good” or “Excellent” BREEAM certifications, confirming they are resource-efficient EPRA sBPR Bronze Award • K
Slide 25: Relocation
5 Relocation NEPI ROCKCASTLE 25 RESULTS PRESENTATION DECEMBER 2021
Slide 26: Relocation from the Isle of Man to the Netherlands
Relocation from the Isle of Man to the Netherlands Relocating the parent Company to an economically and politically stable EU jurisdiction • Enhance the long-term sustainability of the business, as the Netherlands has an EU-compliant legislative and regulatory framework and is economically and polit
Slide 27: Way forward
6 Way forward NEPI ROCKCASTLE 27 RESULTS PRESENTATION DECEMBER 2021
Slide 28: 10-year cumulative forecasted growth
Macroeconomic fundamentals and prospects CEE private consumption growth remains well above WE average 100% 100% Poland Serbia Estonia 80% Latvia 80% Hungary Romania 10-year cumulative forecasted growth Croatia Lithuania 60% Slovakia 60% Czech Slovenia Ireland Republic UK Bulgaria Germany Spain Austr
Slide 29: Average 5-year key macroeconomic indicators in NEPI Rockcastle countries vs EU27
Average 5-year key macroeconomic indicators in NEPI Rockcastle countries vs EU27 % Real GDP growth (%) % General gov. debt (% of GDP) 8 100 80 6 60 4 40 2 20 0 0 NEPI Rockcastle Portfolio EU27 NEPI Rockcastle Portfolio EU27 % Consumer price index % Unemployment 5 12 10 4 8 3 6 2 4 1 2 0 0 NEPI Rockc
Slide 30: Looking ahead: consolidate and grow
Looking ahead: consolidate and grow Leveraging on strong position in the market combined with our in-house excellence of asset management Consolidating the asset base in CEE by additional acquisitions Delivering on the development pipeline including retail and mixed-use projects Potentially entering
Slide 31: Development Projects
Development Projects €610m investments under permitting and construction Target GLA/GSA* of Total Country Type Category opening date development cost m2 €m Developments under construction 133 500 421 Poland Promenada Mall Romania Mall/Office Extension Q4 2025 58 400 218 Promenada Craiova Romania Mal
Slide 32: Actively working on new developments and extensions
Actively working on new developments and extensions Focus Mall Zielona Gora - redevelopment Bonarka City Center - redevelopment • extension of 15,000m2 of GLA • extension by 4,500m2 of GLA and accommodation • new concepts brought in the extended and of a Primark unit refurbished center • the estimat
Slide 33: Actively working on new developments and extensions » continued
Actively working on new developments and extensions» continued Promenada Craiova - greenfield development Promenada Mall - extension • 52,300m2 GLA of retail • approx. 58,400m2 GLA of mixed use retail and office • estimated opening in 2023 extension bringing the total GLA close to 100,000m2 NEPI ROC
Slide 34: Actively working on new developments and extensions » continued
Actively working on new developments and extensions» continued Vulcan Residence - residential for sale Promenada Plovdiv - greenfield development • first residential development started • 57,700m2 of retail GLA • 18,300m2 of residential space for sale (252 apartments) • estimated date of delivery: e
Slide 35: Outlook 2022
Outlook 2022 2022 Focus • Maximise sustainable NOI and reach increase of DEPS by 24% • Execute on development pipeline • Actively looking for investments opportunities • Successful implementation of relocation of the parent Company • Improve ESG performance • Maintain balance sheet safety NEPI ROCKC
Slide 36: NEPI Rockcastle Results Presentation December 2021
NEPI ROCKCASTLE 36 RESULTS PRESENTATION DECEMBER 2021