Klepierre Sa · EURONEXT:LI
Klepierre Sa — Investor Presentation (May 2020)
36 slides from Klepierre Sa's investor presentation, May 4, 2020
Slide 1: Investors Presentation May 2020
INVESTORS P R E S E N TAT I O N MAY 2020
Slide 2: Disclaimer
DISCLAIMER This document was prepared by Klépierre solely for use of presenting which could cause actual results to differ materially from those the Company on May 4, 2020. This document is not to be reproduced anticipated in these forward-looking statements. For a detailed or distributed, in whole
Slide 3: Table of Contents
TABLE OF CONTENTS 01 02 EXECUTING 2019: SOLID OUR STRATEGY OPERATING RESULTS 03 04 05 MAINTAINING SOUND CONCLUSION FIRST-QUARTER 2020 FINANCIAL MANAGEMENT ON THE 2019 RESULTS BUSINESS REVIEW AND IMPACT OF COVID-19 3
Slide 4: Executing Our Strategy
01 EXECUTING OUR STRATEGY KLEPIERRE SHOP. MEET. CONNECT.*
Slide 5: 2019: A Strong Year
2019: A STRONG YEAR 2019 net current cash flow of €2.82, up 6.7%
Slide 6: Embracing the retail transformation
AS WE REMAINED FOCUSED ON EXECUTING OUR STRATEGY… 1 PRE-EMINENT ASSETS IN LARGE CITIES … to embrace the retail 2 CUSTOMER-CENTRIC OPERATIONS transformation 3 FINANCIAL DISCIPLINE 6
Slide 7: Our portfolio is now highly concentrated
OUR PORTFOLIO IS NOW HIGHLY CONCENTRATED Over the past 5 years, we have disposed of 48 assets for a total amount of €2.6bn(1) 100 properties represent 96% of the total value(2) (vs. 94% in 2017) (1) Disposal amounts include properties other than shopping centers, and are on a total share basis, excl
Slide 8: Shop. Meet. Connect. creates retailer and customer preference for our malls
SHOP. MEET. CONNECT.® CREATES RETAILER AND CUSTOMER PREFERENCE FOR OUR MALLS Growing Strong occupier Renewed Increased sales appetite mix NPS 8
Slide 9: Act for Good: we sharply reduced our energy consumption
MAY 4, 2020MAY 4, 2020 ACT FOR GOOD®: WE SHARPLY REDUCED OUR ENERGY CONSUMPTION Energy consumption (kWh/sq.m.) Act for Good® Objective 150 140 143 −29% in 6 years 130 (2013-2019) 123 121 120 122 118 118 110 100 On track to achieve a 101 40% reduction 90 by 2022 80 86 2013 2014 2015 2016 2017 2018 20
Slide 10: 72% decrease in carbon emissions since 2013
LEADING TO A 72% DECREASE IN CARBON EMISSIONS SINCE 2013 Klépierre’s carbon footprint since 2013 Scopes 1 & 2 GHG emissions (in kgCO 2 e/sq.m., market-based approach) Act for Good® objective 93% 35 30 33 Renewable electricity used to power common and serviced areas (vs. 73% in 2018) 28 25 25 21 20 2
Slide 11: Our portfolio is now fully BREEAM In-Use certified
OUR PORTFOLIO IS NOW FULLY BREEAM IN-USE CERTIFIED 79% Largest portfolio fully certified worldwide(1) 95% “Excellent” or “Very Good” 16% 5% One of our key 2022 Act for Good® targets reached 3 years ahead of schedule (1) In asset values. 11
Slide 12: Engaging with our communities
ENGAGING WITH OUR COMMUNITIES 97% Share of our malls(1) making space available for local initiatives (vs. 76% in 2018) Our “Let’s Join” app to service the community of our +8 points retailers’ and suppliers’ staff NPS increase vs. 2018 working in our malls 87% Share of our malls(1) offering dedicate
Slide 13: 2019: Solid Operating Results
02 2019: SOLID O P E R AT I N G R E S U LT S
Slide 14: Our net rental income growth is robust
OUR NET RENTAL INCOME GROWTH IS ROBUST Shopping center like-for-like NRI growth(1) by geography Iberia +7.8% Like-for-like NRI growth is benefiting from our balanced Netherlands +5.5% geographical footprint Italy +3.2% Scandinavia +2.4% France-Belgium +2.2% Central Europe & Other +1.7% Strong revers
Slide 15: Occupier demand translating into dynamic leasing and positive reversion
OCCUPIER DEMAND IS TRANSLATING INTO DYNAMIC LEASING, DELIVERING POSITIVE REVERSION… (1) Reversion rates by geography 1,598 Iberia +18.1% Italy +10.3% Leases signed Netherlands +8.9% France-Belgium +8.2% Central Europe & Other +6.6% Scandinavia +5.7% +8.2% Germany -9.3% Average reversion(1) TOTAL +8.
Slide 16: Keeping operating fundamentals at good levels
…AND KEEPING OUR OPERATING FUNDAMENTALS AT GOOD LEVELS EPRA Vacancy Rate Bad debt rate Occupancy Cost Ratio 0.025 0.04 3.8% 12.4% 12.3% 12.2% 12.1% 12.0% 1.9% 11.9% 3.5% 0.02 1.7% 1.7% 0.035 1.6% 1.6% 3.2% 3.2% 1.5% 0.015 3.0% 3.0% 0.03 0.01 0.025 0.005 0.02 0 2014 2015 2016 2017 2018 2019 2014 2015
Slide 17: Retailer sales growing at 1.8%
WHILE RETAILER SALES GROWING AT 1.8% SCANDINAVIA -1.1% Slight overall improvement in H2 (+1.9% vs. +1.6% in H1) mostly driven by Italy and Scandinavia, while France was impacted by the strikes CENTRAL EUROPE GERMANY & OTHER +2.5% +6.8% FRANCE-BELGIUM +0.3% ITALY Remarkable growth in Iberia (+5.9%) +
Slide 18: Combining cash flow growth with moderate leverage
COMBINING CASH FLOW GROWTH WITH MODERATE LEVERAGE Net current cash flow per share Net debt/EBITDA 9.6 2.9 + 30 % 2.82 - 1,2 x 9.2x 2.7 2.65 9.1 2.5 8.6 2.3 8.3x 2.17 2.1 8.1 8.0x 1.9 7.6 1.7 1.5 7.1 2015 2018 2019 2015 2018 2019 18
Slide 19: Maintaining Sound Financial Management
03 M A I N TA I N I N G S O U N D FINANCIAL MANAGEMENT
Slide 20: Accretive capital rotation policy
WE HAVE PURSUED AN ACCRETIVE CAPITAL ROTATION POLICY €300m €537m in share buybacks 8.9% cash flow yield(1) In disposals of non-core assets 7.0% EPRA Net Initial Yield €188m in pipeline projects 6.6% average yield on cost (1) Based on 2019 net current cash flow per share of €2.79 divided by share pri
Slide 21: Opening of the Créteil Soleil extension
OPENING OF THE CRÉTEIL SOLEIL’S EXTENSION Total investment of €137m (extension and renovation) 100% let at opening(1) 6% yield on cost(2) +19% Footfall increase(3) (1) Let or under advanced negotiations. (2) Blended yield including development and refurbishment capex. (3) December 2019 vs. December
Slide 22: Our leverage remains stable and moderate
OUR LEVERAGE REMAINS STABLE AND MODERATE Net Debt/EBITDA since 2015 €45m 9.5x 0.44 9.2x 9.3x reduction in net debt over 2019 (€8,830m as of December 31, 2019) 9.1x 0.42 8.9 x 8.7x 8.6x 8.0x 8.7x 0.4 8.5x Net debt/EBITDA 0.3x decrease vs. December 31, 2018 8.3x 8.3x 0.38 8.0x 8.1x 6.5 years 7.9x 0.36
Slide 23: Our cost of debt fell once again
OUR COST OF DEBT FELL ONCE AGAIN Cost of debt since 2014 3.5% 1.45% 3.0% Further decline in the cost of debt 3.0% 2.5% 2.5% 2.1% 8.0x 1.8% 1.6% 2.0% translating into a further improvement 1.45% (+1.0x) in the interest coverage ratio 1.5% 1.0% 4.6% & 5.4% 0.5% Coupons to refinance in 2020 0.0% 2014 2
Slide 24: Shopping center portfolio valuation down 2.0% in 2019
THE VALUATION OF OUR SHOPPING CENTER PORTFOLIO WAS DOWN 2.0% IN 2019 Shopping center valuation as of December 31 , 2019 (Total share basis, incl. transfer taxes) Due to a negative market % of the 12-month 2019 portfolio LfL change(1) EPRA NIY(2) effect (-2.3%), offsetting a slightly positive cash-fl
Slide 25: Well-balanced uses and sources
WELL-BALANCED USES AND SOURCES Debt reduction: €45m Other: €32m(3) Acquisition: €87m(2) Disposals €537m Share buybacks: €300m Capex (pipeline and other): €205m Capex (Like-for-like): €98m Net current cash flow Distribution(1) €961m €731m SOURCES USES (1) Including dividend paid to shareholders and t
Slide 26: Conclusion on the Results
04 C O N C L U S I O N O N T H E 2 0 1 9 R E S U LT S
Slide 27: 2019 Overview
2019 OVERVIEW +3.0% High like-for-like net rental income growth +6.7% Robust net current cash flow per share growth €645m Sustained pace of disposals(1), 6% above book value 8.0 x Further reduction in net debt/EBITDA (-0.3x) (1) Total share, including transfer taxes and including sales under promiss
Slide 28: First Quarter 2020 Business Review and Impact of COVID-19
05 FIRST QUARTER 2020 BUSINESS REVIEW A N D I M PAC T O F C OV I D - 1 9
Slide 29: First-quarter total revenues decreased by 4.2%
FIRST-QUARTER TOTAL REVENUES DECREASED BY 4.2%, AS A RESULT OF DISPOSALS IN 2019 € millions Like-for- Reported Total revenues decreased by 4.2% mainly due (total share, excl. equity- Q1-2019 Q1-2020 Change like to disposals in Hungary, Portugal, the accounted investees) change(1) Netherlands and neg
Slide 30: Strong retailer sales in first two months of the year
STRONG RETAILER SALES IN THE FIRST TWO MONTHS OF THE YEAR (+2.5%) SCANDINAVIA +6.5% Retailer sales were dynamic at the in January: +0.9% and February: +4.4% CE & OTHERS GERMANY +7.7% +4.1% The closure of most of the stores in Klépierre shopping centers since mid-March makes it meaningless to compare
Slide 31: Most shops have been closed in March
MOST SHOPS HAVE BEEN CLOSED IN MARCH Opening status in the main countries Closures of shops imposed Administrative % of shops 7 countries Country(1) measures opened 2) in France 5% since early/mid-March(1) Italy 10% Spain 7% Complete closure (Excluding stores selling Portugal 12% bare necessities) D
Slide 32: Action plan based on 4 pillars
SINCE THE BEGINNING OF THE LOCKDOWN, WE HAVE LAUNCHED AN ACTION PLAN BASED ON 4 PILLARS #1 #2 Decrease of service charges Reduction and deferral of for the benefit of tenants capital expenditure #3 #4 Decrease in payroll Monthly invoicing and deferral and G&A of April’s rents to H2(1) (1) Monthly re
Slide 33: Countries preparing the reopening phase at different paces
ALL COUNTRIES ARE PREPARING THE REOPENING PHASE, ALTHOUGH AT DIFFERENT PACES Closure order end dates Country Lockdown Schools Retailers France May 11 May 11 May 11(1) Italy May 3 September May 18(2) Spain May 10 September May 25(2) Portugal May 2 September May 15(2) Gradual recovery of Norway No loc
Slide 34: Preparing our shopping centers for reopening
WE ARE PREPARING OUR SHOPPING CENTERS FOR REOPENING Strict enforcement of social In line with local Enhanced cleaning distancing rules: at both standards, body regime and more the entrance to the mall temperature checks and frequent renewal of air (filtering) and inside controls on the wearing of ma
Slide 35: Outlook: 2020 Guidance
OUTLOOK 2020 Guidance Given the difficulty to assess the impact of COVID-19 on our results, we withdraw our initial guidance. 35
Slide 36: Contact
L Contact investorrelations@klepierre.com +33 (0)1 40 67 51 37