Unibail-Rodamco-Westfield SE · EURONEXT:URW
Unibail-Rodamco-Westfield — Unibail-Rodamco — H1 2016 Earnings Presentation
71 slides from Unibail-Rodamco-Westfield's earnings presentation, Jul 20, 2016
Slide 1: 2016 Half-Year Results
HALF-YEAR RESULTS unibail-rodamco
Slide 2: Disclaimer
DISCLAIMER Unibail-Rodamco S.E., a Société Européenne à Directoire et Conseil de Surveillance incorporated under French law, is a listed closed end property investment company. Unibail-Rodamco is registered with the French Authority of Financial Markets (AMF). The value of your investment may fluctu
Slide 3: Financial Results
FINANCIAL RESULTS Täby Centrum, Stockholm
Slide 4: 2016 Half-Year Results
2016 HALF-YEAR RESULTS in € Mn H1-2016 H1-2015 Growth Like-for-like Growth(1) Shopping Centres 643 582 +10.6% +3.8% Offices 84 84 -0.3% +3.1% Convention & Exhibition 53 59 -9.5% -9.5% Net Rental Income 781 725 +7.7% +2.5% Recurring Net Result (Group share) 575 528 +8.9% Implied Growth Recurring EPS(
Slide 5: Recurring EPS and Going Concern NAV commentary
Recurring Earnings Per Share (Recurring EPS) came to €5.81 in H1-2016, representing an implied growth of +13.5% from the recurring EPS for H1-2015 adjusted for the impact of the disposals in 2015. The Going Concern NAV(3), measuring the fair value on a long-term, ongoing basis, came to €191.80 per s
Slide 6: Strong Recurring EPS Performance
STRONG RECURRING EPS PERFORMANCE Evolution of H1-2016 Recurring Earnings Per Share (REPS) +13.5% €5.81 €5.37 €5.12 -4.7% H1-2015 2015 Rebased Implied H1-2016 REPS Disposals H1-2015 REPS Growth REPS 3
Slide 7: Recurring EPS increased by 8.2% in H1-2016
Recurring EPS increased by +8.2% in H1-2016 compared to H1-2015, representing an implied growth of +13.5% from the H1-2015 Recurring EPS adjusted for the impact of the disposals in 2015. This +13.5% implied growth reflects: • Robust like-for-like rental growth of the shopping centres despite the nea
Slide 8: Key Highlights
KEY HIGHLIGHTS Ruhr Park, Bochum
Slide 9: Robust Shopping Centre NRI Growth
ROBUST SHOPPING CENTRE NRI GROWTH Net Rental Income (in € Mn) H1-2016 H1-2015 Growth Like-for-like Growth(1) France 295 273 +8.2% +5.0% Central Europe 80 74 +7.9% +9.2% Spain 71 76 -5.9% -2.8%(2) Nordics 73 53 +38.0% +2.3% Austria 48 46 +4.0% +4.4% Germany 45 26 +70.0% +8.9% The Netherlands 31 34 -8
Slide 10: Total net change in NRI drivers
The total net change in NRI amounted to +€61.5 Mn compared to H1-2015 due to: • +€37.6 Mn from delivery of shopping centres or new units, mainly in Sweden (Mall of Scandinavia), in France (Polygone Riviera and Forum des Halles) and in Germany (Minto); • +€13.9 Mn from changes in consolidation and ac
Slide 11: Persistently Solid Performance Above Indexation
PERSISTENTLY SOLID PERFORMANCE ABOVE INDEXATION LfL NRI(1) growth of Shopping Centres +4.6% +4.7% +4.2% +3.9% +3.8% +3.9% +3.8% 1.1% 2.6% 2.0% 3.6% 3.0% 3.6% 3.5% +1.4% 2.8% 0.8% 2.2% 2.1% 1.0% 0.8% 0.6% 0.3% 0.3% 2009 2010 2011 2012 2013 2014 2015 H1-2016 Indexation LfL growth above indexation 6
Slide 12: Like-for-like NRI growth of 3.8%
The like-for-like NRI(1) growth amounted to +€19.8 Mn (+3.8%), 350 bps above indexation. The +3.8% like-for-like NRI(1) growth for the Group in H1-2016 reflects the impact of low indexation (+0.3% vs. +0.4% in H1-2015), “Other income” (+1.5% vs. +1.0 % in H1-2015) and the solid performance in renewa
Slide 13: Excellent MGR Uplift
EXCELLENT MGR UPLIFT MGR uplift(1) Leases signed(2) 21.4% 19.4% 19.6% 20.6% 795 18.3% 18.2% Average: 19.0% 15.3% Rotation rate(3) 7.2% 000 2010 2011 2012 2013 2014 2015 H1-2016 7
Slide 14: 795 deals signed in H1-2016
As at June 30, 2016, a total of 795 deals had been signed for the Group’s portfolio of standing assets, surpassing the 676 deals signed in H1-2015. The Group’s leasing teams generated a Minimum Guaranteed Rent uplift(1) of +20.6% and a rotation rate(3) of 7.2% in H1-2016, further to its objective to
Slide 15: Signing the Trendiest Brands
SIGNING THE TRENDIEST BRANDS Percentage of IPRs(1) in Unibail-Rodamco tenant rotation(2) 1st in France 1st in Poland 1st two in malls 15.0% 1st in mall in Spain in France 13.8% 12.0% 10.1% 8.4% 1st in mall 1st in mall in Austria 1st in Sweden in Germany 2012 2013 2014 2015 H1-2016 1st in Slovakia 1s
Slide 16: Leases signed with International Premium Retailers
In H1-2016, the Group signed 96 leases with International Premium Retailers(1), compared to 88 in H1-2015, representing an increase of 9% (+43% on standing assets only). Several more IPRs signed with Unibail-Rodamco for their first mono-brand store in a country, such as New Balance in Forum des Hall
Slide 17: IPRs Drive Footfall
IPRs DRIVE FOOTFALL NYX opening at Parquesur 9
Slide 18: Update on Tenant Sales
UPDATE ON TENANT SALES +32.1% +3.1% Group +2.1% +2.0% Nordics (3) Germany +4.2% +2.2% Central Europe France + 3.0% +2.0% +1.4% +1.4% +1.7% +1.2% Spain Austria +2.7% +3.1% Tenants’ sales growth in Unibail-Rodamco’s shopping centres(1) National Sales Indices(2) 10
Slide 19: Tenant sales grew 2.2% through June 30
Tenant sales(1) in the Group’s shopping centres grew by +2.2% through June 30, 2016 compared to H1-2015. Through May 31, 2016, Group’s tenant sales(1) were slightly above the relevant national sales indices(2), with growth of +2.1% compared to the same period last year. Germany, Central Europe and S
Slide 20: Forum des Halles: The New Shopping Heart of Paris
FORUM DES HALLES: THE NEW SHOPPING HEART OF PARIS Tenant sales +21.8% (1) 11
Slide 21: Canopy opened in Forum des Halles
On April 5, 2016, the Canopy opened in Forum des Halles introducing new stores such as LEGO, Rituals, Superdry and Nike. The full renovation of the existing part of the shopping centre is now almost complete with 51% of GLA(2) refurbished or under renovation, as well as a new customer journey. At co
Slide 22: Spectacular Success for Mall of Scandinavia
SPECTACULAR SUCCESS FOR MALL OF SCANDINAVIA Footfall: 8.9 Mn since opening(1) 12
Slide 23: Mall of Scandinavia inauguration and footfall
Mall of Scandinavia was inaugurated on November 12, 2015. Since its opening, more than 8.9 Mn visits were recorded through June 30, 2016. This is well above expectations. Mall of Scandinavia was named “2016 Best International Shopping Centre” by the Retail & Leisure International magazine in May 201
Slide 24: Great New Brands for Polygone Riviera
GREAT NEW BRANDS FOR POLYGONE RIVIERA Footfall: 5.3 Mn since opening(1) since March 2016 since June 2016 to open in Q4 2016 13
Slide 25: Polygone Riviera award and visits
Polygone Riviera, inaugurated on October 21, 2015, was granted the “Prix d’excellence” award from the CNCC (French council of shopping centres). On June 14, 2016, the 5 millionth visit threshold was reached, on track to achieve the Group’s yearly target of 8 million visits for the asset. The first P
Slide 26: Offices: Good H1 Results
OFFICES: GOOD H1 RESULTS Leasing delivers results Net Rental Income in € Mn H1-2016 H1-2015 % Growth % Like-for-like growth(1) France 75 75 +0.2% +3.5% Other 9 9 n.m. n.m. Total 84 84 -0.3% +3.1% 14
Slide 27: Office portfolio NRI
Unibail-Rodamco’s consolidated NRI from its office portfolio amounted to €84.3 Mn in H1-2016, a -0.3% decrease compared to the same period last year. The like-for-like NRI(1) was +€2.1 Mn (+3.1%), mainly due to the AXA IM lease in Majunga and indemnities received in H1-2016 from departing tenants in
Slide 28: Offices: Strong Rebound in Take-up
OFFICES: STRONG REBOUND IN TAKE-UP Office market in the Paris region (in Mn m²) Vacancy rates in the Paris region 12.1% 11.9% 3.9 4.0 3.7 3.7 8.5% 7.6% 7.4% 7.2% 6.7% 6.6% 1.2 1.1 4.8% 4.8% 0.9 0.9 4.6% 3.7% 20% 16% 17% 15% H1-2013 H1-2014 H1-2015 H1-2016 H1-2013 H1-2014 H1-2015 H1-2016 Total Immedi
Slide 29: Paris region office take-up up 20%
With 1.1 million m² of office space let in H1-2016, the take-up in the Paris region was up by +20% over the same period last year, continuing the strong growth trend started in H2-2015(1). The increase in take-up in the office market in the Paris region is mainly due to the level of transactions ove
Slide 30: C&E: Strong Performance vs. Last Comparable Period
C&E: STRONG PERFORMANCE VS. LAST COMPARABLE PERIOD Growth Growth in € Mn H1-2016 H1-2015 2016/2015 H1-2014 2016/2014 Net Rental Income 53 59 -9.5% 46 +16.4% On site property services 26 27 -6.6% 18 +38.1% + share of the profit of associates Recurring Net Operating Income 79 86 -8.6% 64 +22.6% Deprec
Slide 31: Convention & Exhibition recurring NOI
Convention & Exhibition’s Recurring Net Operating Income declined by -8.6% vs. H1-2015, which included the triennial Intermat show, but was up +22.6% compared to H1-2014, the latest comparable period. 31
Slide 32: C&E: Viva Technology at Porte de Versailles
C&E: VIVA TECHNOLOGY AT PORTE DE VERSAILLES 3 days >45,000 visitors >5,000 start-ups >300 conferences 17
Slide 33: First edition of Viva Technology
During the period, Viparis hosted the first edition of the Viva Technology show at Porte de Versailles, which brought together 5,000 start-ups and more than 45,000 visitors. 33
Slide 34: Update on Development Pipeline
UPDATE ON DEVELOPMENT PIPELINE Vélizy 2, Paris region
Slide 35: Development Pipeline: A Unique Opportunity to Create Value
DEVELOPMENT PIPELINE: A UNIQUE OPPORTUNITY TO CREATE VALUE +€0.6 Bn €7.9 Bn Offices Retail €7.4 Bn New Projects and others(4) Secured Secured exclusivity(1) exclusivity(1) 1.2 €1.5 Bn 0.8 -€0.2 Bn Delivered project 19% 32% €2.5 Bn €0.4 Bn 5% Controlled(2) Controlled(2) €7.9 Bn 5.2 5.4 44% €3.4 Bn Co
Slide 36: Consolidated development project pipeline of €7.9 Bn
Unibail-Rodamco’s consolidated development project pipeline amounted to €7.9 Bn (€7.2 Bn in group share) as at June 30, 2016, corresponding to a total of 1.6 Mn m² Gross Lettable Area (GLA), to be re-developed or added to the standing assets portfolio. The Group retains significant flexibility on it
Slide 37: Centrum Chodov: Progress as Planned
CENTRUM CHODOV: PROGRESS AS PLANNED H2-2017 GLA: +41,754 m2 TIC: €166 Mn 71% pre-let 20
Slide 38: GLA and TIC definitions
GLA: Gross Lettable Area TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion date and includes: land costs, construction costs, study costs, technical fees, tenant fit-out costs paid for by the Group, letting fees and related cos
Slide 39: Wroclavia: Right on Schedule
WROCLAVIA: RIGHT ON SCHEDULE H2-2017 GLA: 79,641 m2 TIC: €237 Mn 57% pre-let 21
Slide 40: GLA and TIC definitions
GLA: Gross Lettable Area TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion date and includes: land costs, construction costs, study costs, technical fees, tenant fit-out costs paid for by the Group, letting fees and related cos
Slide 41: Glòries: Phase 1 to Open in H2-2016
GLÒRIES: PHASE 1 TO OPEN IN H2-2016 Phase 1: H2-2016 Full delivery: H2-2017 GLA: +10,690 m2 TIC: €117 Mn Phase 1: 100% pre-let 22
Slide 42: GLA and TIC definitions
GLA: Gross Lettable Area TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion date and includes: land costs, construction costs, study costs, technical fees, tenant fit-out costs paid for by the Group, letting fees and related cos
Slide 43: Mall of the Netherlands: Final Approval of Zoning Plan
MALL OF THE NETHERLANDS: FINAL APPROVAL OF ZONING PLAN H1-2019 GLA: 77,392 m2 TIC: €479 Mn 23
Slide 44: GLA and TIC definitions
GLA: Gross Lettable Area TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion date and includes: land costs, construction costs, study costs, technical fees, tenant fit-out costs paid for by the Group, letting fees and related cos
Slide 45: New Extension Project: La Part Dieu
NEW EXTENSION PROJECT: LA PART DIEU H1-2020 GLA: +28,266 m2 TIC: ~€300 Mn 24
Slide 46: GLA and TIC definitions
GLA: Gross Lettable Area TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion date and includes: land costs, construction costs, study costs, technical fees, tenant fit-out costs paid for by the Group, letting fees and related cos
Slide 47: Sustainability: Preparing for the Future
SUSTAINABILITY: PREPARING FOR THE FUTURE Aéroville, Paris region
Slide 48: Undisputed Industry Leader in Europe
UNDISPUTED INDUSTRY LEADER IN EUROPE… Sector leader 2015 Sector leader ESG leaders 3rd real estate Green Star since 2011 since 2014 since 2011 company worldwide Gold Since 2005 Since 2008 (World) BREEAM In-Use since 2011 Since 2011 (Europe) 96% retail portfolio ranked “Excellent” or above 26
Slide 49: Portfolio certifications at Excellent level
As of June 30, 2016, 96% of the Group’s standing shopping centre portfolio(1) certifications obtained reached an "Excellent" or "Outstanding" level for the "Building Management (part 2)", which is the highest certification profile for a portfolio in the retail real estate market. (1) In terms of m²
Slide 50: Preparing a New Initiative on Sustainability
…PREPARING A NEW INITIATIVE ON SUSTAINABILITY Coming soon: Unibail-Rodamco 2030 CSR agenda September 22, 2016 27
Slide 51: New long-term sustainability agenda
Because of the expected achievement of the sustainability objectives the Group had set for 2020 and the growing environmental and social challenges in the coming years, Unibail-Rodamco is preparing a new long-term sustainability agenda. The new sustainability policy and objectives will be disclosed
Slide 52: Valuation
VALUATION Minto, Mönchengladbach
Slide 53: Value Creation: €15.87 per Share
VALUE CREATION: €15.87 PER SHARE Going Concern Net Asset Value(1) (in € per share) Non LfL revaluation +€0.98 and intangible €191.80 Recurring assets(2) +€5.81 EPS €186.70 +€2.86 Rent effect(3) +€15.87 €175.93 -€4.85 -€5.92 Asset +€9.91 revaluation +€6.07 Yield effect(3) +€0.15 Other(4) GMV €39.3 Bn
Slide 54: EPRA NNNAV and Going Concern NAV
Unibail-Rodamco’s EPRA triple Net Asset Value (NNNAV) amounted to €174.40 per share as of June 30, 2016, an increase of +2.6%, or +€4.50, from €169.90 at December 31, 2015. The Going Concern NAV(1), measuring the fair value on a long-term, ongoing basis, came to €191.80 per share as at June 30, 2016
Slide 55: Active Management Creates Value
ACTIVE MANAGEMENT CREATES VALUE Retail Portfolio – LfL Revaluation (%) Total +9.2% +4.4% +6.0% +2.4% +5.2% +5.9% +3.2% Revaluation Rent effect: 59% Yield effect: 41% 2010 2011 2012 2013 2014 2015 H1-2016 Toison d’Or BEFORE AFTER 30
Slide 56: Increase in value per m²
Since December 31, 2011, the increase in the quality of the Group’s shopping centres has resulted in a +37.6% increase in value(2) per m² to €8,397 as of June 30, 2016, from €6,102 as of December 31, 2011. On a like-for-like basis(3), the net revaluation amounted to +30.4% of which +17.1% is due to
Slide 57: Risk Premiums at Historical Highs
RISK PREMIUMS AT HISTORICAL HIGHS France Spain 8.1% 8.1% 6.8% 5.8% 5.1% 5.1% 4.3% 4.1% 4.3% 340 bps risk premium 330 bps risk premium 1.7% 0.8% Appraisers' Discount Rate (weighted avg.) U-R shopping centre NIY(1) (weighted avg.) 10-yr gov. bond yield(2) (1-yr avg.) 31
Slide 58: Net initial yield and risk premium
The French shopping centre portfolio’s net initial yield(1) as at June 30, 2016 decreased to 4.1% from 4.3% as at December 31, 2015, while the Group’s shopping centre portfolio’s net initial yield(1) as at June 30, 2016 decreased to 4.4% from 4.6% at year-end 2015. A change of +25 basis points in ne
Slide 59: Capitalizing on Strong Investor Demand
CAPITALIZING ON STRONG INVESTOR DEMAND Retail NDP(1) (€ Mn) Europark disposal 30 Other disposals 5 Total Retail 34 Premium over NIY(2) last Offices NDP(1) (€ Mn) unaffected 4.3% appraisal(3) H1-2016 booked disposals 276 25.5% Disposals under contract(4) 334 Total Offices 610 Total 644 32
Slide 60: Assets disposed
Assets disposed include: • The office building located 2-8 rue Ancelle in Neuilly-sur-Seine to a joint-venture between ACM Vie SA and funds managed by Amundi Immobilier (March 24, 2016); • The So Ouest office building located in Levallois-Perret to an institutional investor (July 12, 2016); • A numb
Slide 61: Balance Sheet
BALANCE SHEET Parly 2, Le Chesnay
Slide 62: New Achievements on Bond Markets
NEW ACHIEVEMENTS ON BOND MARKETS… 10-year Euro swap rate PX_LAST Jan-16 Jan-16 Feb-16 Feb-16 Mar-16 Mar-16 Apr-16 Apr-16 May-16 May-16 Jun-16 Jun-16 1,2 1 €500 Mn 20-year 0,8 2.0% 0,6 0,4 Longest maturity 0,2 for a real estate company in the Euro market 0 €500 Mn €500 Mn €500 Mn 10-year 11-year 20-y
Slide 63: Bond issues extending maturity profile
In H1-2016, the Group took advantage of favorable market conditions, in particular following the announcement on the CSPP by the ECB, to extend its maturity profile at attractive conditions, completing the following transactions: • 1st public bond with a 20-year maturity issued by a real-estate comp
Slide 64: … and New Records
… AND NEW RECORDS… Average cost of debt (in %) Average debt maturity (in years) 3.9% 3.6% 7.0 3.4% 6.5 2.9% 5.9 2.6% 5.4 2.2% 4.9 4.5 1.7% 4.3 2010 2011 2012 2013 2014 2015 H1-2016 2010 2011 2012 2013 2014 2015 H1-2016 Fully hedged over next 3 years 35
Slide 65: Average cost of debt and maturity
Unibail-Rodamco’s average cost of debt decreased to 1.7% for H1-2016 compared to 2.2% for 2015. This record low average cost of debt results from low coupon levels the Group achieved during the last years on its fixed rate debt, the tender offer transactions realized in April 2015 and April 2016, th
Slide 66: … Lead to Strong Financial Ratios
… LEAD TO STRONG FINANCIAL RATIOS Contained LTV(1) Strongest ICR(2) (in x) 60%(3) 5.9 4.6 41% 41% 4.0 37% 3.8 35% 3.5 30% 34% 2.5 2.0(3) Stable A rating by S&P and Fitch 36
Slide 67: Financial ratios and credit ratings
The financial ratios stand at healthy levels: • The Interest Coverage Ratio (ICR) improved to 5.9x for H1-2016 (vs. 4.6x in 2015); • The Loan to Value (LTV) ratio decreased to 34% (vs. 35% as at December 31, 2015). Unibail-Rodamco is rated by the rating agencies Standard & Poor’s and Fitch Ratings:
Slide 68: Outlook
OUTLOOK Mall of Scandinavia, Stockholm
Slide 69: Outlook
OUTLOOK From €11.00 - €11.20 Strong H1 results to AROUND €11.20 38
Slide 70: Expected 2016 recurring EPS of around €11.20
Based on the strong H1-2016 results, which include some elements that are not expected to be repeated in the second half (e.g., the recognition of tax losses carried forward in France), the Group expects to generate recurring EPS for 2016 of around €11.20, the top end of the range of €11.00-11.20 fo
Slide 71: www.unibail-rodamco.com
unibail-rodamco www.unibail-rodamco.com