Nepi Rockcastle N.v · JSE:NRP
Nepi Rockcastle — H1 2022 Earnings Presentation
37 slides from Nepi Rockcastle's earnings presentation, August 2022
Slide 1: Results Presentation June 2022
RESULTS PRESENTATION June 2022
Slide 2: Excellence. Innovation. Experience.
EXCELLENCE. INNOVATION. EXPERIENCE. 1 Overview 2 Operations 3 Finance 4 ESG 5 Way forward page 3 page 7 page 17 page 25 page 27 NEPI ROCKCASTLE 2 RESULTS PRESENTATION JUNE 2022
Slide 3: Overview
1 Overview NEPI ROCKCASTLE 3 RESULTS PRESENTATION JUNE 2022
Slide 4: H1 2022 highlights
H1 2022 highlights Strong recovery of retailers, with sales 8% higher compared to H1 2019 Excellent operational results, with like-for- like NOI higher by 4.3% vs first half of 2019 EPRA Vacancy decreasing from 4.0% at end of 2021 to 3.4% Property valuation at June 2022 up by €59 million Earnings gu
Slide 5: Key business figures: distributable earnings per share higher by 29.4%
Key business figures: excellent operational results translated into distributable earnings per share higher by 29.4% relative to H1 2021 H1 2021 H1 2022 vs H1 2021 H1 2022 H1 2022 vs H1 2019 H1 2019 €17.64 cents 29.4% €22.83 cents -21.3% €29.02 cents Distributable earnings per share Distributable ea
Slide 6: Key business figures: balance sheet improving, liquidity remains strong
Key business figures: balance sheet improving, liquidity remains strong Dec 2021 Jun 2022 vs Dec 2021 June 2022 Jun 2022 vs Dec 2019 Dec 2019 €5.8bn Investment property value 1.7% €5.9bn Investment property value -6.3% €6.3bn Investment property value €6.51 EPRA NRV per share 2.0% €6.64 EPRA NRV per
Slide 7: Operations
2 Operations NEPI ROCKCASTLE 7 RESULTS PRESENTATION JUNE 2022
Slide 8: H1 2022 Status of the business – Turnover
H1 2022 Status of the business – Turnover* Strong turnover recovery in H1 2022 (8% vs H1 2019), driven by great Q2 performance (16% Q2 2022 vs Q2 2019) Half-year turnover* variation (€m) Quarterly turnover* change (€m) 1000 600 +8% +16% 800 -25% +45% -1% 400 600 400 200 200 0 0 H1 2019 H1 2021 H1 20
Slide 9: H1 2022 Status of the business – Basket size
H1 2022 Status of the business – Basket size* Basket size continues to increase (+27% vs H1 2019) Footfall and turnover* variation H1 2022 vs H1 2019 (%) 30 20 10 0 -10 -20 -30 January February March April May June Footfall Turnover * Like-for-like properties, excluding hypermarkets Basket size vari
Slide 10: H1 2022 Status of the business – Retail segments
H1 2022 Status of the business – Retail segments Fashion and entertainment catching up with 2019 results (-0.3% and -16.7%) Turnover year to date LfL variation (%) Weight in 2022 turnover (%) by segments by segments 8.2% Total -25% -0.3% Fashion 45% -27% 21.9% Electronics 11% -16% 12.5% Food Service
Slide 11: H1 2022 Status of the business – Leasing activity
H1 2022 Status of the business – Leasing activity EPRA vacancy dropped to 3.4% from 4%. Over 80% of the leases expiring in the year have been renewed Retail EPRA Vacancy evolution (%) 6 5 4 4.4% 3.8% 3 3.2% 2 1 0 H1 2021 H2 2021 H1 2022 51+49 Split of signed leases in H1 2022 by GLA 433 signed lease
Slide 12: Sustainable retail environment
Sustainable retail environment Sustainable anchor tenant base as at 30 June 2022, with limited exposure to concentration risk Group occupancy cost ratio* evolution (%) by rent * 4.7% 15 2500 3.5% 14.5% ** 3.4% 12.9% 13.3% 2000 11.9% 3.3% 10 2.0% 1500 ^ 2.0% 1.8% 1000 1.4% 5 1.1% 24.3% of total annua
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: H1 2022 Status of the business – Leasing activity
H1 2022 Status of the business – Leasing activity Anchor tenants signed in H1 2022 One lease One lease Two leases Two leases Two leases 3,560m2 2,054m2 2,942m2 1,241m2 1,835m2 Four leases One lease One lease Three leases One lease 2,153m2 672m2 738m2 1,283m2 540m2 Other main leases Shopping City Sfa
Slide 15: H1 2022 Status of the business – Leasing activity » continued
H1 2022 Status of the business – Leasing activity » continued New openings in H1 2022 City Park, Serdika Center, Alfa Centrum Romania Bulgaria Byalistok, Poland 2,695m2 2,054m2 2,051m2 Alfa Centrum Mega Mall, Focus Mall Zielona Byalistok, Poland Romania Gora, Poland 1.357m2 672m2 811m2 Serdika Cente
Slide 16: Omnichannel consumer interaction
Omnichannel consumer interaction In H1 2022, the Group continued the development of its omnichannel ecosystem • Consumer Loyalty App (SPOT) • Online marketplace • To further strengthen Group » As of H1 2022, SPOT is » Pilot test finished, the Group omnichannel capabilities, a available in 50% of the
Slide 17: Finance
3 Finance NEPI ROCKCASTLE 17 RESULTS PRESENTATION JUNE 2022
Slide 18: Key drivers of distributable earnings relative to H1 2021
Key drivers of distributable earnings relative to H1 2021 amounts in € cents Distributable earnings growth driven by strong operational performance and impact of concessions. +35.6% +2.7% + 6.29 + 0.47 -0.40 +29.4% -2.3% 22.83 -2.08 -11.7% +5.1% + 0.91 17.64 Operational performance H1 2021 Distribut
Slide 19: Key drivers of distributable earnings relative to H1 2019
Key drivers of distributable earnings relative to H1 2019 amounts in € cents Distributable earnings driven by operational performance similar to H1 2019, offset by high level of liquidity during Covid-19 pandemic. +1.2% +0.5% 29.02 +0.36 +0.15 -2.37 -8.2% -0.76 -2.6% -1.12 -21.3% -3.8% 22.83 -2.45 -
Slide 20: Liquidity and funding
Liquidity and funding 31.3% Prudent LTV €1.1bnLiquidity BBB Investment grade rating with 35% long term strategic threshold including cash (€450m) and available assigned by Standard & Poor’s (stable revolving facilities (€620m) outlook) and Fitch (positive outlook) Net debt/EBITDA 12 10 • Weighted av
Slide 21: Liquidity and funding » continued
Liquidity and funding » continued Debt maturity profile as of June 2022 (€m) 700,000 • Secured 2022 and 2023 with no significant debt 600,000 obligations as we strategically issued €500 million 8-year green bond in Jan 2022 500,000 400,000 • Ensured that 91% of our portfolio is unencumbered 300,000
Slide 22: Cash flow from operating activities to distributable earnings
Cash flow from operating activities to distributable earnings amounts in € thousand Distributable earnings fully supported by cash flow from operating activities 150,632 15,521 139,058 -16,017 -8,204 -2,874 Cash flow from operating Net finance result: Tax expense: Accrual less Other Working capital
Slide 23: Significant headroom on unsecured debt covenants
Significant headroom on unsecured debt covenants Solid unsecured debt covenants, safe from being breached Solvency ratio (%) 60 50 40 40% 39% 38% 30 36% 37% Solvency ratio is computed on a gross basis, not adjusted 31% 20 for cash balances 10 0 2017 2018 2019 2020 2021 H1 2022 Consolidated coverage
Slide 24: Valuation uplift driven by portfolio performance
Valuation uplift driven by portfolio performance €59 million fair value gain on property valuation mainly driven from property performance Share of total Valuer Countries covered portfolio (%) Colliers International Romania 36% Bulgaria, Croatia, Czech Republic, Jones Lang LaSalle 32% Hungary, Serbi
Slide 25: ESG
4 ESG NEPI ROCKCASTLE 25 RESULTS PRESENTATION JUNE 2022
Slide 26: Sustainability update
Sustainability update • a €37 million investment in 30 photovoltaic plants for shopping centres by the end of 2023, minimising the carbon footprint and stabilising energy costs • 85% (by GLA) of the Group’s assets have “Very good” or “Excellent” BREEAM certifications, confirming they are resource- e
Slide 27: Way forward
5 Way forward NEPI ROCKCASTLE 27 RESULTS PRESENTATION JUNE 2022
Slide 28: Macroeconomic fundamentals and prospects
Macroeconomic fundamentals and prospects CEE private consumption growth remains well above WE average 120% Poland 120% 100% 100% Hungary Serbia Estonia Latvia Romania 80% Czech 80% Republic 10-year cumulative forecasted growth Lithuania Croatia Slovenia 60% Slovakia 60% Germany Ireland UK Spain Bulg
Slide 29: Inflation reached double digit levels in all CEE countries
Inflation reached double digit levels in all CEE countries, while Western European countries are approaching 10% level as well CPI by components June 2022 YoY (%) 25 24.5 20 21.2 15 16.9 16.6 14.4 13.8 10 13.4 10.4 8.6 8.8 5 7.9 7.7 7.7 6.5 6.2 5.7 4.4 5.4 5.3 3.2 1.1 0.6 0 2.7 1.8 -0.3 -1.0 -5 Over
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 NEPI ROCKCASTLE 30 R
Slide 31: Development Projects €665m
Development Projects €665m investments under permitting and construction Target GLA/GSA* of Total Country Type Category opening date development cost m2 €m Developments under construction 144 900 435 Promenada Bucharest Romania Mall/Office Extension Q4 2025 58 400 220 Poland Promenada Craiova Romani
Slide 32: 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 • estimated opening in 2023 • retail park
Slide 33: 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 4,500m2 of GLA and accommodation of • first residential development started a Primark unit • 18,300m2 of residential space for sale (252 apartment
Slide 34: Actively working on new developments and extensions » continued
Actively working on new developments and extensions» continued Promenada Plovdiv - greenfield development Galati Retail Park - development • 57,700m2 of retail GLA • More then 30,000 GLA of retail • estimated date of delivery: end of 2024 NEPI ROCKCASTLE 34 RESULTS PRESENTATION JUNE 2022
Slide 35: Actively working on new developments and extensions » continued
Actively working on new developments and extensions» continued Galeria Wolomin - extension Photovoltaic projects - green energy development • Retail park to be extended by 2,900m2 of additional retail to be • Projects to be delivered gradually in 2022-2023 delivered in 2023 NEPI ROCKCASTLE 35 RESULT
Slide 36: Outlook 2022
Outlook 2022 2022 Focus • Maximise sustainable NOI and reach increase of DEPS by approximately 33% • Execute on development pipeline • Actively looking for investments opportunities • Consolidate ESG strategy • Maintain balance sheet safety NEPI ROCKCASTLE 36 RESULTS PRESENTATION JUNE 2022
Slide 37: NEPI ROCKCASTLE RESULTS PRESENTATION JUNE 2022
NEPI ROCKCASTLE 37 RESULTS PRESENTATION JUNE 2022