Nepi Rockcastle N.v · JSE:NRP
Nepi Rockcastle — H1 2023 Earnings Presentation
34 slides from Nepi Rockcastle's earnings presentation, August 2023
Slide 1: Results Presentation
RESULTS PRESENTATION June 2023
Slide 2: Agenda
Overview page 3 Operations page 8 Finance page 18 ESG page 24 Developments page 26 Way forward EXCELLENCE. INNOVATION. EXPERIENCE. page 31 2
Slide 3: Overview
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Slide 4: Retail real estate market leader in the high growth CEE region
Retail real estate market leader in the high growth CEE region Lithuania 2% Poland Oriented towards financial stability 27% and long term growth Czech Republic 3% Slovakia 8% Hungary 9% Romania Croatia 36% 5% Resilient growth of CEE countries where the Group operates, outpacing Western European coun
Slide 5: Delivering on strategy with strong H1 2023 results
Delivering on strategy with strong H1 2023 results GROWTH SUSTAINABILITY HIGH-QUALITY EXPANDING AND DELIVERING ON FINANCIAL ESG PORTFOLIO OF STRENGHTENING DEVELOPMENTS STABILITY FOCUS DOMINANT ASSETS THE PORTFOLIO'S NOI +24.9% growth in Opening of Strong performance Fair valuation uplift €37 million
Slide 6: Excellent operational results translated into higher DEPS by 24.9%
Excellent operational results translated into higher DEPS by 24.9% relative to H1 2022 28.52 € cents 9.9% Dividend yield* €241m NOI Distributable earnings per share +24.9% +2.1pp +23.0% H1 2022 - 22.83 € cents H1 2022 - 7.8% H1 2022 - €196m 97.2% EPRA Occupancy 97% Collection rate** €2,647 Turnover/
Slide 7: Strong balance sheet, with prudent LTV
Strong balance sheet, with prudent LTV €6.8bn Investment property value* €6.92 EPRA NRV per share 84% Unencumbered assets^ +3.0% +1.2% -7pp Dec 2022 - €6.6bn Dec 2022 - €6.84 Dec 2022 - 91% 3.9 years Average debt maturity 33.4% Loan-to-value -0.7 years -2.3pp Dec 2022 - 4.6 years^^ Dec 2022 - 35.7%
Slide 8: Operations
Operations 8
Slide 9: H1 2023 Status of the business – Turnover
H1 2023 Status of the business – Turnover* Solid growth of tenants' sales maintained in Q2 2023. Like-for-like H1 2023 sales are +16.3% higher than H1 2022 Monthly turnover* change (€m) 500 400 300 +10.7% +6.7% +11.6% +32.5% +19.2% +25.1% 200 100 0 Ian Feb Mar Apr May Jun 2022 2023 YTD turnover* var
Slide 10: H1 2023 Status of the business – Footfall
H1 2023 Status of the business – Footfall* Footfall for H1 2023 +9.8% vs H1 2022, on a like-for-like basis. Basket size continues to increase, with +8% in H1 2023 vs H1 2022 Monthly footfall* change (million visits) 50 40 30 +23.8% +7.5% +5.5% +3.3% +5.5% +17.2% 20 10 0 Ian Feb Mar Apr May Jun 2022
Slide 11: Strong operational performance of assets acquired in 2022
Strong operational performance of assets acquired in 2022 H1 2023 vs H1 2022 FORUM GDANSK SHOPPING CENTER, POLAND +27% Turnover +11% COPERNICUS SHOPPING CENTRE, POLAND Footfall PLOIESTI SHOPPING CITY (50% STAKE), ROMANIA +21% Turnover +2% Footfall +18% Turnover +10% Footfall 11
Slide 12: H1 2023 Status of the business – Retail segments
H1 2023 Status of the business – Retail segments All retail segments continue to grow vs 2022. Entertainment continues to provide a solid growth, alongside Food Service and Health & Beauty. Turnover year to date LFL variation (%) Weight in 2023 turnover (%) by segments by segments Total 16% Fashion
Slide 13: H1 2023 Status of the business – Leasing activity
H1 2023 Status of the business – Leasing activity Solid commercial results. 534 new lease agreements and 7.5% growth of Base rents, on top of indexation Retail EPRA vacancy evolution (%) 6 5 4 3.2% 3 2.5% 2.5% 2 1 0 H1 2022 Q4 2022 H1 2023 Actual 56+44 7+93 Split of signed leases H1 2023 H1 2023 lea
Slide 14: Operational performance: Sustainable retail environment
H1 2023 Operational performance: Sustainable retail environment Strong performance of the assets led to a lower, sustainable OCR, despite increased operating costs Group occupancy cost ratio* evolution (%) by rent * 5.1% 20 3,000 ** 3.8% 3.6% 15 2,000 2.7% 14.7% 13.2% 12.9% 2.3% 2.0% 10 1,000 1.8% 1
Slide 15: Strong lease terms on a sustainable expiry profile
Strong lease terms on a sustainable expiry profile Sustainable general lease terms and long-term lease duration Year % of expiry Expiry profile as at 30 June 2023 (€m) by gross rentals by gross rentals 2023 3.0% 500 2024 19.0% 2025 17.9% 400 2026 15.6% 2027 12.5% 300 2028 11.2% 200 2029 4.5% 2030 2.
Slide 16: H1 2023 Status of the business – Leasing activity
H1 2023 Status of the business – Leasing activity New tenants signed in Sibiu Shopping in Aura Centrum, in Sibiu Shopping in Galeria Wołomin, in Aura Centrum, City, Romania Poland City, Romania Poland Poland in Promenada in Promenada in Mammut in Promenada in Aura Centrum, Craiova, Romania Craiova,
Slide 17: H1 2023 Status of the business – Leasing activity (continued)
H1 2023 Status of the business – Leasing activity » continued New stores opened in Forum Liberec in Paradise Center, in Forum Gdańsk, in Forum Liberec in Karolinka in Paradise Center, Shopping Centre, Bulgaria Poland Shopping Centre, Shopping Centre, Bulgaria Czech Republic Czech Republic Poland in
Slide 18: Finance
Finance 18
Slide 19: Finance
Finance Distributable earnings Funding Valuation 19
Slide 20: H1 2023 distributable earnings
H1 2023 distributable earnings +€18m €223m €181m -€60m 28.52 € cents Distributable earnings per share +24.9% H1 2022 - 22.83 € cents LFL NOI NOI Acquisitions Taxes, admin H1 2023 Distributable and finance earnings costs 20
Slide 21: H1 2023 dividend
H1 2023 dividend Dividend payout 95% scrip: 27.10 eurocents + 3% discount NEPI Rockcastle 90% cash: 25.67 eurocents 70% Average European peers Dividend settlement options Tax treatment in the Tax treatment in South Distribution Netherlands Africa Return of capital (reducing the share Repayment of ca
Slide 22: Funding strategy
Funding strategy 2024 refinancing - options Debt maturity profile as of June 2023 (€m) 700 600 Scrip dividend April 2023 - €150 million 500 400 Cost of debt: 2.5% Scrip dividend October 2023 300 Interest rate risk 200 100% hedged Unsecured/Secured funding 100 0 2023 2024 2025 2026 2027 2028 2029 203
Slide 23: Portfolio valuation overview
Portfolio valuation overview Valuation key figures €6.8bn -1.2% +2.8%^ Valuation Property Investment property value yields performance €103.7m +1.6%^ investment property valuation increase Fair value gain on a like-for-like basis €103.7 million fair value gain on property valuation mainly 7% driven
Slide 24: ESG
ESG 24
Slide 25: ESG commitments
ESG commitments Externally recognised In progress EPRA awards for best practices in financial The €37 million investment in and sustainability installation of solar panels on track reporting Commitment to implement Sustainalytics Negligible ESG Science Based Targets risk - 8/163 subindustry rank MSC
Slide 26: Developments
Developments 26
Slide 27: Development Projects
Development Projects €722m investments under permitting and construction • Developing in phased manner, with high pre-leasing targets • Main anchors secured early in the process • Construction costs committed on a gradual manner Poland Target GLA Total Total Spent to Country Type Category opening da
Slide 28: Promenada Craiova
Promenada Craiova NEPI Rockcastle to open at the beginning of October 2023, the 63,700m2 GLA green-field development • Leases agreed and signed for 99% of the shopping center's 53,700m2 GLA • Leases agreed and signed for 85% of the retail park's 10,000m2 GLA • Opening date set for beginning of Octob
Slide 29: Actively working on new developments and extensions
Actively working on new developments and extensions Promenada Bucharest - extension Bonarka City Center - redevelopment • approx. 58,400m2 GLA of mixed use retail and office • extension by 4,700m2 of GLA and accommodation extension bringing the total GLA close to 100,000m2 of a Primark unit • signed
Slide 30: Actively working on new developments and extensions (continued)
Actively working on new developments and extensions » continued Vulcan Residence - residential for sale Galeria Wolomin - extension • first residential development completed • extension by cca 3,000m2 GLA • 18,300m2 of residential space for sale (254 • estimated completion Q1 2024 apartments) constr
Slide 31: Way forward
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Slide 32: Looking ahead: consolidate and grow
Looking ahead: consolidate and grow Leveraging on the resilient growth of the CEE countries Leveraging on the leading market position combined with our in-house excellence of asset management Growing NOI through retail and mixed-use development projects and selected acquisitions Prudent management o
Slide 33: NEPI Rockcastle
NEPI © ROCKCASTLE
Slide 34: Q&A
Q&A 34