Nepi Rockcastle N.v · JSE:NRP
Nepi Rockcastle — H2 2022 Earnings Presentation
38 slides from Nepi Rockcastle's earnings presentation, December 2022
Slide 1: Results Presentation December 2022
RESULTS PRESENTATION December 2022
Slide 2: Excellence. Innovation. Experience.
EXCELLENCE. INNOVATION. EXPERIENCE. 1 Overview 2 Operations 3 Finance 4 ESG 5 Developments 6 Investments 7 Way forward page 3 page 8 page 16 page 24 page 26 page 31 page 35 NEPI ROCKCASTLE 2 RESULTS PRESENTATION DECEMBER 2022
Slide 3: Overview
1 Overview NEPI ROCKCASTLE 3 RESULTS PRESENTATION DECEMBER 2022
Slide 4: Reconfirming the position of leading retail real estate group in CEE
Reconfirming the position of leading retail real estate group in CEE Lithuania 2% Poland Oriented towards financial stability 28% and long term growth Czech Republic 3% Slovakia 8% Hungary 9% Romania Croatia 36% 4% Serbia 2% Bulgaria Strong economics of CEE countries where the Group operates^ 8% Pop
Slide 5: Delivering on strategy
Delivering on strategy GROWTH SUSTAINABILITY HIGH-QUALITY EXPANDING AND DELIVERING ON FINANCIAL ESG PORTFOLIO OF STRENGHTENING DEVELOPMENTS STABILITY FOCUS DOMINANT ASSETS THE PORTFOLIO'S NOI • +51.5% growth in • Close to • €35 million NOI • 35.7% safe level • €37 million DEPS vs 2021 240,000m2 adde
Slide 6: Operational excellence
Operational excellence Best operational performance in the Group's history 2021 2022 vs 2021 2022 2022 vs 2019 2019 34.42 € cents +51.5% 52.15€ cents -7.4% 56.33 € cents Distributable earnings per share Distributable earnings per share* Distributable earnings per share 40.55 € cents +20% 48.64€ cent
Slide 7: Balance sheet enhancement and stability
Balance sheet enhancement and stability Dec 2021 Dec 2022 vs Dec 2021 Dec 2022 Dec 2022 vs Dec 2019 Dec 2019 €5.8bn Investment property value* +13.8% €6.6bn Investment property value* +4.8% €6.3bn Investment property value* €6.51 EPRA NRV per share +5.1% €6.84 EPRA NRV per share -6.6% €7.32 EPRA NRV
Slide 8: Operations
2 Operations NEPI ROCKCASTLE 8 RESULTS PRESENTATION DECEMBER 2022
Slide 9: 2022 Operational performance: Turnover
2022 Operational performance: Turnover* 2022 turnovers 11.7% above 2019 and 31.4% above 2021 Full Year turnover* variation (€m) Quarterly turnover* change (€m) 2,500 800 +11.7% +11.8% 2,000 +31.4% 600 -15.2% +16.9% +16% 1,500 400 -0.7% 1,000 200 500 0 0 2019 2021 2022 Q1 Q2 Q3 Q4 2019 2021 2022 * Li
Slide 10: 2022 Operational performance: Basket size
2022 Operational performance: Basket size Average spending up +27%, while footfall reaching 88% of 2019 and 120% of 2021 Footfall and turnover* variation 2022 vs 2019 (%) 30 20 10 0 -10 -20 -30 January February March April May June July August September October November December Footfall Turnover *
Slide 11: 2022 Operational performance: Retail segments
2022 Operational performance: Retail segments Continuous performance improvements throughout all segments Turnover year to date LfL variation (%) Weight in 2022 turnover (%) by segments by segments +11.7% Total -15% +3.8% Fashion 44% -18% +14.9% Electronics 11% -9% +19.0% Food Service 11% -20% +32.7
Slide 12: 2022 Operational performance: Active asset management
2022 Operational performance: Active asset management Positive retail environment supported reducing vacancy to 2.7% and achieving BRU of 8.7% EPRA Vacancy (%) 6 5 4 4.3% 4.0% 3 2.7% 2 2.1% 1 0 2019 2020 2021 2022 49+51 10+90 Split of signed leases 2022 2022 leasing activity by GLA by GRI 10.2% +24.
Slide 13: 2022 Operational performance: Sustainable retail environment
2022 Operational performance: Sustainable retail environment Excellent tenant performance and tight cost controlling led to 12.1% OCR Sustainable anchor tenant base as at 31 December 2022, with limited exposure to concentration risk Group occupancy cost ratio* evolution (%) by rent * 4.9% 15 3,000 *
Slide 14: Strong lease terms on a sustainable expiry profile
Strong lease terms on a sustainable expiry profile Sustainable long-term lease duration post-Covid-19 Expiry profile as at 31 December 2022 (€m) Year % of expiry by gross rentals by gross rentals 400 2023 9.1% 2024 20.6% 300 2025 19.5% 2026 16.2% 200 2027 13.2% 2028 10.8% 100 >2029 10.6% Total 100%
Slide 15: 2022 Operational performance: Leasing activity
2022 Operational performance: Leasing activity New brands show interest in CEE, while existing brands show a high appetite to further increase their presence in the region Newcomers expanding in CEE Flagship opened in Market entry – Market entry – Market entry – Rightsizing and Bonarka Krakow; Prome
Slide 16: Finance
3 Finance NEPI ROCKCASTLE 16 RESULTS PRESENTATION DECEMBER 2022
Slide 17: Finance agenda
Finance agenda Distributable earnings Funding strategy Valuation NEPI ROCKCASTLE 17 RESULTS PRESENTATION DECEMBER 2022
Slide 18: Key drivers of 2022 distributable earnings vs 2021
Key drivers of 2022 distributable earnings vs 2021 amounts in € cents Distributable earnings growth driven by strong operational performance, lack of concessions and settlement of litigation claim. +10.2% +51.5% +3.51 52.15 +17.8% +41.3% 6.13 48.64 +3.5% +20.5% +1.22 +7.05 -0.42 -1.2% -2.70 +8.5% -7
Slide 19: Cash flow from operating activities vs 2022 distributable earnings
Cash flow from operating activities vs 2022 distributable earnings amounts in € thousand Distributable earnings higher than the cash flow from operating activities due to the positive effect of €21 million from Serenada settlement 37,304 provision for litigation +21,304 317,055 +3,571 298,607 +16,00
Slide 20: H2 2022 dividend settlement
H2 2022 dividend settlement • H2 2022 DEPS: 29.32 eurocents • H2 2022 dividend declaration: 27.85 eurocents, 95% payout ratio, to be settled as repayment of capital (default option) 29.32 eurocents, 100% payout ratio Scrip dividend: +3% discount to the reference price • Election Cash distribution 27
Slide 21: Funding strategy - pillars
Funding strategy - pillars stable upgrade BBB/BBB+ Investment grade rating €671m Liquidity 35.7% LTV Standard & Poor’s (stable outlook) / including cash (€251m) and undrawn safe level, comfortably within Fitch (stable outlook) committed revolving facilities (€420m) debt covenants Net debt/EBITDA 12
Slide 22: Funding strategy - 2022 implementation
Funding strategy - 2022 implementation Actions in 2022: Debt maturity profile as of December 2022 (€m) • €500 million 8-year green bond strategically issued in January 2022 700 • €60 million newly 7-year secured green loan concluded in December 2022 600 • €62 million 7-year term extension of secured
Slide 23: Valuation uplift driven by portfolio performance
Valuation uplift driven by portfolio performance -2.8% +4.6%^ Valuation Property yields performance +1.8%^ investment property valuation increase on a like-for-like basis €142 million fair value gain on property valuation mainly driven by property performance Share of total Valuer Countries covered
Slide 24: ESG
4 ESG NEPI ROCKCASTLE 24 RESULTS PRESENTATION DECEMBER 2022
Slide 25: Continuous commitment to the highest standards of sustainability
Continuous commitment to the highest standards of sustainability Silver Award for compliance Top 15 Sustainalytics rated Real AAA with EPRA Best Practices Estate Management companies ESG rating "leader" Recommendations for (low risk - 10.5/100) among 82 companies in the real estate sustainability re
Slide 26: Developments
5 Developments NEPI ROCKCASTLE 26 RESULTS PRESENTATION DECEMBER 2022
Slide 27: Development Projects
Development Projects €677m 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/GSA* of Total Country Type Category opening date deve
Slide 28: Actively working on new developments and extensions
Actively working on new developments and extensions Promenada Bucharest - extension Promenada Craiova - greenfield development • approx. 58,400m2 GLA of mixed use retail and office • 63,700m2 GLA of retail extension bringing the total GLA close to 100,000m2 • opening in Q3 2023 • signed and terms ag
Slide 29: Actively working on new developments and extensions » continued
Actively working on new developments and extensions» continued Bonarka City Center - redevelopment Vulcan Residence - residential for sale • extension by 4,700m2 of GLA and accommodation of • first residential development started a Primark unit • 18,300m2 of residential space for sale (254 apartment
Slide 30: Actively working on new developments and extensions » continued
Actively working on new developments and extensions» continued Galeria Wolomin - extension • extension by cca 3,000m2 GLA • estimated completion Q1 2024 • signed and terms agreed 100% NEPI ROCKCASTLE 30 RESULTS PRESENTATION DECEMBER 2022
Slide 31: Investments
6 Investments NEPI ROCKCASTLE 31 RESULTS PRESENTATION DECEMBER 2022
Slide 32: Consolidating the dominant position in Poland
Consolidating the dominant position in Poland Acquisitions drivers Rich and prosperous catchments Assets with growth potential City of Gdansk (population 470,000) Largest city in north Poland’s Tricity conurbation (population 1,000,000+), one of Poland’s wealthiest and City of Torun fastest-growing
Slide 33: Forum Gdansk, prime asset with strong growth potential
Forum Gdansk, prime asset with strong growth potential €250m €268m €16.5m transaction fair valuation estimated NOI • Adjacent to the historical center • The area is one of country’s most popular tourist destination, attracting more than two million visitors per year • Modern and innovative architect
Slide 34: Copernicus, Torun, core stable asset
Copernicus, Torun, core stable asset €127m €127m €9.6m transaction* fair valuation* estimated NOI • Dominant retail scheme in the city • Strategic location in the city, with excellent visibility and access from all city districts • Outstanding operational performance, very low vacancy • Adjacent plo
Slide 35: Way forward
7 Way forward NEPI ROCKCASTLE 35 RESULTS PRESENTATION DECEMBER 2022
Slide 36: Macroeconomic prospects continue to be favourable to CEE region
Macroeconomic prospects continue to be favourable to CEE region CEE’s recovery is quicker then anticipated and growth is expected to outpace the Western European countries and US GDP Growth (%) 10 5 0 (5) (10) 2010 2012 2014 2016 2018 2020 2022 2024E 2026E CEE USA UK Germany Source: Citibank, Statis
Slide 37: Looking ahead: consolidate and grow
Looking ahead: consolidate and grow Leveraging on the strong position in the market combined with our in-house excellence of asset management Capitalise on the additional acquisitions to deliver growth Delivering on the development pipeline including retail and mixed-use projects Maintaining the saf
Slide 38: NEPI ROCKCASTLE RESULTS PRESENTATION DECEMBER 2022
NEPI ROCKCASTLE 38 RESULTS PRESENTATION DECEMBER 2022