Klepierre Sa · EURONEXT:LI
Klepierre Sa — H1 2024 Earnings Presentation
48 slides from Klepierre Sa's earnings presentation, Jul 31, 2024
Slide 1: Klépierre, a story for cash flow growth – Half-Year 2024 Earnings
KLÉPIERRE, A S TO R Y F O R C A S H F LO W G R O W T H H A L F -Y E A R 2 0 2 4 E A R N I N G S J U LY 3 1 , 2 0 2 4
Slide 2: Disclaimer
2024 FIRST-HALF EARNINGS — JULY 31, 2024 DISCLAIMER This document was prepared by Klépierre S.A. (the “Company”) solely for the purpose of presenting Klépierre’s 2024 half-year earnings released on July 31, 2024. This document is not to be reproduced or distributed, in whole or in part, by any perso
Slide 3: Table of Contents
2024 FIRST-HALF EARNINGS — JULY 31, 2024 TABLE OF CONTENTS 01 02 EMBRACING OPPORTUNITIES H1 2024 TO CREATE VALUE HIGHLIGHTS 03 04 SECTOR-LEADING EARNINGS FINANCING METRICS OUTLOOK 3
Slide 4: Embracing Opportunities to Create Value
01 E M B R AC I N G O P P O R T U N I T I E S TO C R E AT E VA LU E 4
Slide 5: We operate in a supportive consumption environment
2024 FIRST-HALF EARNINGS — JULY 31, 2024 WE OPERATE IN A SUPPORTIVE CONSUMPTION ENVIRONMENT Private consumption in € billion in the Euro area(1) Unemployment rate in the Euro area(2) 8.8% 1,916 1,930 1,906 1,860 1,881 1,832 8.3% 1,803 1,747 7.8% 1,698 7.3% 6.8% 6.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 6.3% 2
Slide 6: A unique positioning suited for retail bifurcation
2024 FIRST-HALF EARNINGS — JULY 31, 2024 A UNIQUE POSITIONING SUITED FOR RETAIL BIFURCATION 70 irreplaceable premium malls Welcoming more than 700 million visitors a year and generating €12 billion annual retailer sales Tailored for outperformance thanks to constant leasing update and asset manageme
Slide 7: Klépierre is geared towards growth
2024 FIRST-HALF EARNINGS — JULY 31, 2024 KLÉPIERRE IS GEARED TOWARDS GROWTH • Leading European portfolio of prime malls A sector leading ORGANIC • Unique know-how in leasing & asset management balance-sheet designed for GROWTH outperformance • High level of embedded value to unlock • Moderate levera
Slide 8: Uninterrupted increase in footfall and retailer sales drove OCRs down to 12.6%
2024 FIRST-HALF EARNINGS — JULY 31, 2024 UNINTERRUPTED INCREASE IN FOOTFALL AND RETAILER SALES DROVE OCRs DOWN TO 12.6% Decreasing OCRs, create further rental uplift potential +2.0% 12.8% -20 bps Footfall increase in H1 2024 vs. H1 2023 and up 11.5% since June 2022 12.6% +3.9% Retailer sales growth
Slide 9: Strong leasing demand continued to feed growth
2024 FIRST-HALF EARNINGS — JULY 31, 2024 STRONG LEASING DEMAND CONTINUED TO FEED GROWTH All our operating KPIs are on the rise Deals signed by segment (in sq.m.)(1) CINEMA, FITNESS & OTHER CULTURE, SPORTS & FASHION 896 LEISURE 41% 17% 14% Deals signed +11% year-on-year 96.2% Occupancy rate HOUSEHOLD
Slide 10: Leading banners open their flagship stores in our malls
2024 FIRST-HALF EARNINGS — JULY 31, 2024 LEADING BANNERS OPEN THEIR FLAGSHIP STORES IN OUR MALLS Transformation of Rightsizing and Enlargement of Zara, former hypermarket Hosting Active transfer to welcome one of the best areas into a Primark newcomers retenanting new tenants performing worldwide me
Slide 11: Klépierre malls are pivotal in an omnichannel world
2024 FIRST-HALF EARNINGS — JULY 31, 2024 KLÉPIERRE MALLS ARE PIVOTAL IN AN OMNICHANNEL WORLD Change in retailers’ total store size since 2019 (% change in total sq.m. leased) +231% +160% +147% +99% +73% +55% +58% +28% +29% +31% +12% We are the preferred platform for expanding retail banners 11
Slide 12: Another remarkable net rental income outperformance above indexation
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Organic growth ANOTHER REMARKABLE NET RENTAL INCOME OUTPERFORMANCE ABOVE INDEXATION Six-month like-for-like change breakdown We delivered 320 bps like-for-like outperformance above indexation through multiple drivers +6.0% Our operational excellence translate
Slide 13: We run a very cost efficient platform enabling better-than-planned EBITDA growth
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Organic growth WE RUN A VERY COST EFFICIENT PLATFORM ENABLING US TO GENERATE BETTER-THAN- PLANNED EBITDA GROWTH INITIAL FULL-YEAR HALF-YEAR 2024 2024 GUIDANCE ACHIEVEMENTS 5.4% increase vs. first half 2023 fueled EBITDA At least by a 60 bps increase 4% increa
Slide 14: Our second engine for growth is capital allocation
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Capital rotation OUR SECOND ENGINE FOR GROWTH IS CAPITAL ALLOCATION DEMONSTRATED TRACK RECORD IN ACQUISITIONS LEADING TO SIGNIFICANT VALUE CREATION Major acquisitions of prime malls and strong value creation +37%(1) Value creation since 2015 +34%(1) Value cre
Slide 15: In H1 we closed two very accretive acquisitions of prime malls
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Capital rotation IN H1 WE CLOSED TWO VERY ACCRETIVE ACQUISITIONS OF PRIME MALLS Acquired in May 2024 25% acquired in February 2024 • 6th most visited mall in Italy • 12th most visited mall in France, with 10 million yearly footfall with 11 million yearly foot
Slide 16: Disciplined approach to development with a proven track record
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Capital rotation WE BELIEVE IN A DISCIPLINED APPROACH TO DEVELOPMENT AND WE HAVE A PROVEN TRACK RECORD €500m of investment over the last 5 years with Targeted investments in high return an average return on investment above 8%, delivered opportunities with a
Slide 17: Maremagnum extension opened in July
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Capital rotation MAREMAGNUM EXTENSION OPENED IN JULY Barcelona, Spain Opening of new stores and first Time Out Market in Spain • Extension: 5,200 sq.m. • Total investment: €15 million • Yield on cost: 13.5% • Catchment area: 2.2 million inhabitants +10% in ye
Slide 18: And works at Odysseum are ongoing
2024 FIRST-HALF EARNINGS — JULY 31, 2024 Capital rotation AND WORKS AT ODYSSEUM ARE ONGOING Montpellier, France (12m annual visitors) Extension to further strengthen its leading position in the catchment area and gain market shares • 18,500 new sq.m. • €56 million investment • 9.0% yield-on-cost • D
Slide 19: Our actions translate into growing cash flow
2024 FIRST-HALF EARNINGS — JULY 31, 2024 OUR ACTIONS TRANSLATE INTO GROWING CASH FLOW 2 years of uninterrupted growth in net current cash flow per share +3.3% €1.25 €1.21 (1) €1.13 H1 2022 H1 2023 H1 2024 +5.2% NCCF CAGR over H1 2022-H1 2024 (1) Excluding the positive non-recurring impact on income
Slide 20: We revise our 2024 guidance upwards
2024 FIRST-HALF EARNINGS — JULY 31, 2024 IN THIS CONTEXT, WE REVISE OUR 2024 GUIDANCE UPWARDS We expect to deliver 5% EBITDA growth in 2024 Net current cash-flow per share guidance range raised to €2.50-€2.55 versus €2.45-€2.50 initially 20
Slide 21: Cash flow growth drove property values up for the first time in 5 years
2024 FIRST-HALF EARNINGS — JULY 31, 2024 CASH FLOW GROWTH DROVE PROPERTY VALUES UP FOR THE FIRST TIME IN 5 YEARS Portfolio value: €19,874m(1), total share Like-for-like change in portfolio values over six months +2.5% +2.0% -0.5% Market Cash-flow Like-for-like effect effect change(2) On average the
Slide 22: Net asset value up 4.3%
2024 FIRST-HALF EARNINGS — JULY 31, 2024 NET ASSET VALUE UP 4.3% €31.4 EPRA NTA per share up 4.3% over 6 months 22
Slide 23: Next incremental tailwind should come from market effects
2024 FIRST-HALF EARNINGS — JULY 31, 2024 NEXT INCREMENTAL TAILWIND SHOULD COME FROM MARKET EFFECTS Average discount rates used by independent appraisers at all-time highs 7.8% 7.9% 7.3% 6.7% 6.7% 6.8% 6.6% 6.5% 6.1% 6.1% 5.5% 5.6% 5.4% 5.2% 5.2% 5.2% Recent and expected new ECB rate cuts should lead
Slide 24: Credit ratings confirmed by S&P, outlook positive
2024 FIRST-HALF EARNINGS — JULY 31, 2024 AS CONFIRMED BY S&P THAT MOVED TO POSITIVE, FOLLOWING ACQUISITIONS BBB+ A- Long term rating Senior unsecured rating A2 F1 Short-term rating Short-term rating Positive outlook Stable outlook (raised from stable (confirmed on May 24, 2024) on May 27, 2024) 24
Slide 25: Further enhanced credit metrics, offering flexibility to invest
2024 FIRST-HALF EARNINGS — JULY 31, 2024 FURTHER ENHANCED CREDIT METRICS, OFFERING US FLEXIBILITY TO INVEST Change in Net debt/EBITDA and LTV Net debt to EBITDA 46. 00% 10.8x 12 at a historic low: 7.3x 44. 00% 8.8x 10 41.4% 42. 00% 8.0x 7.9x 7.4x 7.3x 8 38.7% 40. 00% 37.7% 38.0% 37.6% LTV at 37.6%,
Slide 26: A strategy set for long-term growth and value creation
2024 FIRST-HALF EARNINGS — JULY 31, 2024 A STRATEGY SET FOR LONG-TERM GROWTH AND VALUE CREATION CREATING PREFERRED Asset management and leasing actions to enrich SHOPPING DESTINATIONS tenant mix and unlock embedded value INVESTING IN THE Portfolio premiumization through targeted BEST MALLS IN EUROPE
Slide 27: H1 2024 Highlights
02 H1 2024 HIGHLIGHTS 27
Slide 28: Retailers continue to show healthy sales growth
2024 FIRST-HALF EARNINGS — JULY 31, 2024 RETAILERS CONTINUE TO SHOW HEALTHY SALES GROWTH H1 2024 retailer sales by region compared to H1 2023 +3.9% +5.5% +4.6% +3.4% +3.2% +1.3% Group Netherlands/Germany/ France Iberia Italy Scandinavia (share of total sales) Central Europe (41%) (12%) (23%) (12%) (
Slide 29: Earnings indicators
2024 FIRST-HALF EARNINGS — JULY 31, 2024 EARNINGS INDICATORS TOTAL SHARE H1 2023 H1 2024 CHANGE (in millions of euros) Net Rental Income 495.9 520.1 +6.0% (like-for-like) EBITDA(1) 452.7 477.3 +5.4% NET CURRENT CASH-FLOW 397.3 410.6 Group share 348.3 359.7 NET CURRENT CASH FLOW 1.21 1.25 +3.3% (€/PE
Slide 30: H1 2024 net current cash flow per share, up 3.3%
2024 FIRST-HALF EARNINGS — JULY 31, 2024 H1 2024 NET CURRENT CASH FLOW PER SHARE, UP 3.3% +€0.10 - +€0.01 €1.25 €1.21 -€0.07 Management H1 2023 Current tax H1 2024 Change in NRI & other income and Cost of debt NCCF expenses NCCF Payroll & G&A H1 2024 Net Current Cash Flow per share was up €0.04, mai
Slide 31: Cash-flow growth drove portfolio valuation up 2% over six months
2024 FIRST-HALF EARNINGS — JULY 31, 2024 CASH-FLOW GROWTH DROVE PORTFOLIO VALUATION UP 2% OVER SIX MONTHS CHANGE OVER 6 MONTHS (€m, total share, inc. transfer taxes) 06/30/2024 % of total portfolio 12/31/2023 Reported LfL(a) France 7,718 38.8% 7,631 +1.1% +0.7% Italy 4,584 23.1% 4,241 +8.1% +3.0% Sc
Slide 32: Value growth fueled EPRA net asset value metrics
2024 FIRST-HALF EARNINGS — JULY 31, 2024 VALUE GROWTH FUELED EPRA NET ASSET VALUE METRICS DECEMBER JUNE CHANGE EPRA NET ASSET VALUES 2023 2024 EPRA NRV €33.7 €35.1 +4.2% EPRA NTA €30.1 €31.4 +4.3% EPRA NDV €27.7 €28.9 +4.3% 32
Slide 33: Sector-leading financing metrics
03 S E CTO R- L E A D I N G FINANCING METRICS 33
Slide 34: Sector-leading balance sheet, ample access to financing
2024 FIRST-HALF EARNINGS — JULY 31, 2024 WE OPERATE A SECTOR-LEADING BALANCE SHEET, PROVIDING US WITH AMPLE ACCESS TO FINANCING COST OF DEBT & KEY CREDIT METRICS STRONG DEBT AS OF JUNE 30, 2024 RAISING ACHIEVEMENTS 1.6% Cost of debt for 2024 €775 million in long-term financing 8.2x High level of int
Slide 35: We have large covenant headroom
2024 FIRST-HALF EARNINGS — JULY 31, 2024 WE HAVE LARGE COVENANT HEADROOM Covenants applicable to Klépierre SA financing Bank and bonds covenants(1) June 2024 Loan-to-Value ≤ 60% 37.6% EBITDA/Net interest expense(2) ≥ 2.0x 8.2x Secured debt/Portfolio value(3) ≤ 20% 2.0% Portfolio value(4) ≥ €10bn €17
Slide 36: Sound liquidity position covers 40% of gross debt
2024 FIRST-HALF EARNINGS — JULY 31, 2024 OUR SOUND LIQUIDITY POSITION COVERS 40% OF OUR GROSS DEBT LIQUIDITY POSITION AS OF JUNE 30, 2024: €3.4 BILLION, COVERING KLÉPIERRE’S REFINANCING NEEDS UNTIL 2027. €0.3bn €1.0bn Other credit Cash and equivalents facilities Split of liquidity available €2.1bn U
Slide 37: Well spread debt maturities with 6.2 years average maturity
2024 FIRST-HALF EARNINGS — JULY 31, 2024 WELL SPREAD DEBT MATURITIES WITH A 6.2 YEARS AVERAGE MATURITY LONG-TERM DEBT MATURITY SCHEDULE EXCLUDING COMMERCIAL FINANCING BREAKDOWN BY TYPE OF RESOURCE PAPERS (IN MILLIONS OF EUROS) AS OF JUNE 30, 2024 (OUSTANDING DEBT, TOTAL SHARE) 1,326 12% Commercial p
Slide 38: Earnings outlook
04 EARNINGS O U T LO O K 38
Slide 39: 2024 guidance revised upward
2024 FIRST-HALF EARNINGS — JULY 31, 2024 2024 GUIDANCE REVISED UPWARD Based on the first-half performance and taking into account the positive contribution of acquisitions closed year-to-date, Klépierre is revising its full-year guidance upwards and expects to generate a 5% increase in EBITDA(1) and
Slide 40: Agenda
AGENDA October 23, 2024 Q3 business review(1) (1) Before market opening
Slide 41: Appendices
APPENDICES 41
Slide 42: Net current cash flow
2024 FIRST-HALF EARNINGS — JULY 31, 2024 NET CURRENT CASH FLOW 06/30/2023 06/30/2024 Change Total share (in €m) Gross rental income 569.7 597.4 Rental and building expenses (73.7) (77.3) Net rental income 495.9 520.1 +6.0% (like-for-like) Management, administrative, related income and other income 3
Slide 43: The Group has announced its renewed CSR ambition for 2030
2024 FIRST-HALF EARNINGS — JULY 31, 2024 THE GROUP HAS ANNOUNCED ITS RENEWED CSR AMBITION FOR 2030 43
Slide 44: Achieving net zero by 2030
2024 FIRST-HALF EARNINGS — JULY 31, 2024 BUILDING THE MOST SUSTAINABLE PLATFORM FOR COMMERCE ACHIEVING NET ZERO BY 2030 Pursue our efforts on energy Install renewable energy production units efficiency and reach at our assets to reach up to 70 kWh /sq.m as the average portfolio energy efficiency 30%
Slide 45: Building the most sustainable platform for commerce
2024 FIRST-HALF EARNINGS — JULY 31, 2024 BUILDING THE MOST SUSTAINABLE PLATFORM FOR COMMERCE PROMOTING SERVICING GROWING SUSTAINABLE COMMUNITIES PEOPLE LIFESTYLES ALL our shopping centers will • Develop up a long-term “Giving Back” 50,000 people developed across Europe 50 million shoppers guided tow
Slide 46: Our distinguished achievements testify to our long-standing efforts
2024 FIRST-HALF EARNINGS — JULY 31, 2024 OUR DISTINGUISHED ACHIEVEMENTS TESTIFY TO OUR LONG-STANDING EFFORTS… The Group’s 2023 key ESG performance indicators 48% 84% 100% Reduction in the energy intensity Reduction in greenhouse gases Waste diverted of our portfolio (vs 2013) emissions (GHG) Scopes
Slide 47: New green financing framework for future green bond issuances
2024 FIRST-HALF EARNINGS — JULY 31, 2024 NEW GREEN FINANCING FRAMEWORK AS THE FOUNDATION FOR FUTURE GREEN BOND ISSUANCES OUR ELIGIBLE PORTFOLIO GREEN BOND PRINCIPLES PILLARS • 88% of the portfolio • Eligibility criteria definition • Evaluation and selection of • €17.6 billion of market value eligibl
Slide 48: Contact
C O N TACT investorrelations@klepierre.com +33 (0)7 50 66 05 63 48