Klépierre: FIRST-QUARTER 2021 BUSINESS REVIEW
PRESS RELEASE
FIRST-QUARTER 2021 BUSINESS REVIEW
Paris — May 7, 2021
Klépierre, the European leader in shopping
malls, today reported its first-quarter business update(1). The
main highlights include:
- Shopping center reopening underway:
55% of our stores have already reopened and close to 95% are
expected to be open by end-May(2)
- First-quarter shopping center gross
rental income down 10%
- Strong rent collection rate at
65%(3) in a context of store closures, set to improve further when
tenant negotiations are finalized
- When open, retailer sales remained
highly resilient in March (87% of the March 2019 level)
- Net debt down to €9,016 million
compared to December 31, 2020
- Proposed cash distribution of
€1.00(5) per share
- 2021 net current cash flow expected
at €1.80(6) per share due to longer lockdowns than anticipated
(2.6 months versus an anticipated 1.5 months)
- Klépierre recognized by BRE for its
Act for Good® policy and included in the Euronext CAC 40 ESG
Index
Jean-Marc Jestin, Chairman of the Klépierre
Executive Board, commented, “With the expected reopening of our
French shopping centers as from May 19, close to 95% of our
portfolio will soon be open again, albeit with certain restrictions
such as the trading ban at weekends in Italy. We are enthusiastic
and confident in the rapid resumption of our business. We are
already observing encouraging signs of recovery, proving that our
vibrant malls continue to attract both shoppers and expanding
retailers. As we turn the corner, I would like to pay special
tribute to our teams, our retail partners and local stakeholders
who have worked with us to prepare and implement all the reopening
health measures designed to protect customers in our venues.
Over the first quarter of 2021, almost all
European countries in which Klépierre operates ordered the closure
of retail activities for a period averaging 1.5 months, and before
being gradually eased, these measures were extended in April for an
aggregate period longer than anticipated. Based on the official
reopening dates, we have revised our 2021 net current cash flow
guidance at €1.80 per share. Furthermore, we are proposing a
distribution of €1.00 per share in cash, which demonstrates our
confidence in our business recovery.”
KEY FINANCIALS
|
Q1 2021 |
Q1 2020 |
Reported Change |
In millions of euros, total share |
|
|
|
Gross rental income — Shopping centers |
262.5 |
291.9 |
-10.1% |
Gross rental income — Other retail properties |
4.0 |
5.3 |
-24.8% |
Total gross rental income |
266.4 |
297.2 |
-10.3% |
Management and development fees |
14.7 |
19.7 |
-25.1% |
Total revenues |
281.2 |
316.8 |
-11.3% |
OPERATING PERFORMANCE
Operating context
Over the first quarter of 2021, Klépierre’s
activities were impacted by multiple trading restrictions enforced
in almost all European countries in which Klépierre operates,
except in Spain and Sweden. Stores in our malls were closed for an
average of 1.5 months.To date, 55% of our portfolio is open(2)
(Denmark, Portugal, Norway, Netherlands, Poland, Spain, Sweden, and
Italy, where malls are closed at weekends). Strict lockdowns in
France, Germany and the Czech Republic are expected to be lifted in
May or early June. The current retail lockdown in France (35% of
our portfolio) will be lifted on May 19 provided that the number of
weekly contaminations does not exceed 400 cases per 100,000
inhabitants in the departments where the malls are located. As of
today, all our malls are located in departments where the number of
contaminations is below this threshold. Similarly, in the Czech
Republic, malls are expected to reopen on May 10. Lastly, in Italy,
restrictions related to the closure of stores at weekends are
expected to be lifted in June.Overall, close to 95% of stores (in
rents)(2) are expected to be open by the end of May.
Retailer sales
Over the first quarter of 2021, retailer sales
reached 62% of the first-quarter 2020 level, largely reflecting the
closure of stores in most European countries. In Spain and Sweden,
where retail has remained open to public – albeit subject to
significant travel restrictions – retailer sales reached 77% and
85%, respectively, of first-quarter 2020 levels. In France, in
January when malls were open, retailer sales were 88% of the
January 2020 level.Lastly, retailer sales of stores that remained
open in March reached 87% of the pre-Covid level (March 2019),
demonstrating the strong resilience of Klépierre’s malls in a
challenging health environment.
Rent collection(3)
Over the first quarter of 2021, the Group
invoiced rents and service charges for a total of
€334 million. As of April 30, the rent collection rate stood
at 65% and is expected to increase further. In France, the
government announced a specific support program to help retailers
pay their rent and charges for the closure period. This program,
which is currently being reviewed by the EU Commission, should
be implemented during the second half of the year.
Leasing update
Letting operations regained momentum over the
first quarter of 2021, with the volume of signed leases doubling
compared to the second quarter of last year. This underscores the
appeal of Klépierre’s malls for retailers and is expected to renew
the retail mix and consolidate occupancy going forward. Among the
transactions concluded recently in December, Klépierre signed an
important deal with Primark for the opening of six new stores in
France and Italy, underlining the long-standing partnership between
the two companies and Klépierre’s capacity to adapt its malls to
support expanding retailers. The new stores will complement the 11
existing sites in Klépierre’s portfolio.Over the first quarter,
sports retailers continued to expand as materialized by three deals
with Snipes, two with Foot Locker in Italy and eight with Courir in
France (including two new stores). Klépierre also continued to
support the development of banners that resonate with consumer
expectations, illustrated by two deals with FootKorner – the French
street fashion retail chain – at Créteil Soleil and Belle Épine.
Similarly, the new partnership with Base, a local Spanish sports
retailer which opened its first two stores in Klépierre’s
portfolio, will further enrich the retail mix at La Gavia
(Madrid, Spain) and Meridiano (Tenerife, Spain).Beyond the sports
segment, the Group also continued to support the growing momentum
of innovative retailers – as showcased by deals with Samsung,
Danish retailer Normal and high-tech reseller Hubside – while
rolling out Klépierre’s Destination Food® concept, bringing on
board a host of local and international food retailers in all
regions such as Starbucks, KFC, T.G.I Friday’s, La Piadineria and
Pitaya.
Revenues
Klépierre’s total revenues for the three-month
period ended March 31, 2021 amounted to €281.2 million, an
11.3% decrease compared to the same period last year.Gross rental
income generated by shopping centers amounted to €262.5 million
over the first quarter of 2021 on a total share basis, compared to
€291.9 million for the same period last year, mainly
reflecting the adjustment to variable revenues, a lower occupancy
and the straight-line amortization under IFRS 16 of rent
concessions granted in 2020.Only mandatory abatements ordered by
local authorities have been recognized so far. Discussions with
retailers to adapt the financial terms of leases in exchange for
concessions are ongoing. Where rent abatements are granted, they
will be recognized as a deduction from gross rental income.
DEVELOPMENT CAPEX
Since the outbreak of the pandemic, the Group
has limited its capital expenditure to committed projects only.
Accordingly, only €15 million was disbursed during the first
quarter of 2021. In Gran Reno (Bologna, Italy), the 16,500-sq.m.
extension is progressing in line with the budget and is currently
75% pre-leased (estimated rents signed or in advanced
negotiations). The opening is expected in spring 2022.
DEBT AND FINANCING
As of March 31, 2021, the Group’s liquidity
position(4) remains strong at €2.4 billion, after the
redemption of €864 million in bonds at term. All refinancing
needs are covered until April 2024. Klépierre’s consolidated net
debt amounted to €9,016 million on a total share basis, with an
average 1.2% cost of debt.
ACT FOR GOOD®
In early 2021, Klépierre’s ESG leadership was
once again recognized by the Building Research Establishment (BRE),
the world-leading organization for sustainable buildings. Klépierre
received the BREEAM Award 2021 in the Responsible Investment Large
Portfolio category, which recognizes projects and organizations
that are leading the way with significant achievements in
sustainable building design, development and management. This award
is the result of the Act for Good® policy and the outstanding work
of Klépierre’s teams day-in, day-out to make shopping centers more
efficient and ever more environmentally ambitious. In another mark
of its ESG leadership, the Klépierre share was included by Euronext
in the CAC 40 ESG Index launched in March 2021. This new index
consists of the 40 highest-performing companies in environmental,
social and governance matters within the CAC Large 60.
DISTRIBUTION
The Annual General Meeting to be held on June
17, 2021 will be invited to approve a proposed cash distribution of
€1.00 per share in respect of fiscal year 2020(5) to be paid in a
single installment on June 23, 2021.
OUTLOOK
Based on official announcements on store
reopenings, administrative closures would last the equivalent of
2.6 months for the whole portfolio instead of 1.5 months as
initially expected. Consequently, and assuming no more store
closures, the Group is adjusting its net current cash flow guidance
for 2021 accordingly to €1.80 per share.(6)
TOTAL REVENUES
In € millions |
Total share |
|
Group share |
Q1 2021 |
Q1 2020 |
|
Q1 2021 |
Q1 2020 |
France |
93.9 |
103.9 |
|
75.6 |
84.4 |
Belgium |
4.9 |
4.7 |
|
4.9 |
4.7 |
France–Belgium |
98.8 |
108.6 |
|
80.4 |
89.1 |
Italy |
47.9 |
51.0 |
|
47.3 |
50.4 |
Norway |
15.6 |
15.8 |
|
8.7 |
8.9 |
Sweden |
13.7 |
13.9 |
|
7.7 |
7.8 |
Denmark |
12.2 |
13.7 |
|
6.8 |
7.7 |
Scandinavia |
41.5 |
43.3 |
|
23.3 |
24.3 |
Spain |
25.2 |
29.3 |
|
25.2 |
29.3 |
Portugal |
2.8 |
4.6 |
|
2.8 |
4.6 |
Iberia |
28.0 |
33.9 |
|
28.0 |
33.9 |
Czech Republic |
8.2 |
7.9 |
|
8.2 |
7.9 |
Poland |
7.5 |
8.7 |
|
7.5 |
8.7 |
Turkey |
2.9 |
5.0 |
|
2.6 |
4.5 |
Other |
0.4 |
0.9 |
|
0.4 |
0.9 |
CE & Other |
18.9 |
22.5 |
|
18.6 |
22.0 |
Netherlands |
16.4 |
20.1 |
|
16.4 |
20.1 |
Germany |
11.0 |
12.4 |
|
10.5 |
11.9 |
SHOPPING CENTER GROSS RENTAL INCOME |
262.5 |
291.9 |
|
224.6 |
251.7 |
Other retail properties |
4.0 |
5.3 |
|
4.0 |
5.3 |
TOTAL GROSS RENTAL INCOME |
266.4 |
297.2 |
|
228.6 |
257.0 |
Management and development fees |
14.7 |
19.7 |
|
13.9 |
18.7 |
TOTAL REVENUES |
281.2 |
316.8 |
|
242.5 |
275.7 |
Equity-accounted companies* |
18.1 |
21.4 |
|
17.3 |
20.6 |
* Contributions from equity-accounted
companies include investments in jointly-controlled companies and
investments in companies under significant influence.
COLLECTION RATE(A)
|
Q1 2021 |
France-Belgium |
57% |
Italy |
47% |
Scandinavia |
90% |
Iberia |
80% |
CE & Other |
66% |
Netherlands |
66% |
Germany |
69% |
TOTAL SHOPPING CENTERS |
65% |
Other retail properties |
27% |
TOTAL |
64% |
(a) As of April 30, 2021, on a total share
basis, excluding VAT and equity-accounted companies.
AGENDA |
|
June 17,
2021 |
Annual General Meeting |
June 21, 2021 |
Ex-dividend date |
June 23, 2021 |
Distribution payment |
July 27, 2021October 22,
2021 |
First-half 2021 earnings (after market close)Business review for
the first nine months of 2021 (before market opening) |
INVESTOR RELATIONS CONTACTS |
MEDIA
CONTACTS |
Hubert d’Aillières, Group Head of IR and financial
communication+33 (0)1 40 67 51 37 —
hubert.daillieres@klepierre.comPaul Logerot, IR
Manager +33 (1) 40 67 53 02 —
paul.logerot@klepierre.comJulia Croissant, IR
Officer+33 (0)1 40 67 51 68 — julia.croissant@klepierre.com |
Hélène Salmon, Group Head of Corporate and Internal
Communications+33 (0)1 40 67 55 16 –
helene.salmon@klepierre.comDelphine Granier, Taddeo+33 (0)6 33 05
48 50 – teamklepierre@taddeo.fr |
ABOUT KLÉPIERRE
Klépierre is the European leader in shopping
malls, combining property development and asset management skills.
The company’s portfolio is valued at €21.9 billion at December
31, 2020, and comprises large shopping centers in more than 10
countries in Continental Europe which together host hundreds of
millions of visitors per year. Klépierre holds a controlling stake
in Steen & Strøm (56.1%), Scandinavia’s number one shopping
center owner and manager. Klépierre is a French REIT (SIIC) listed
on Euronext Paris and is included in the CAC Next 20, EPRA Euro
Zone and GPR 250 indexes. It is also included in ethical indexes,
such as Euronext CAC 40 ESG Index, DJSI World and Europe,
FTSE4Good, STOXX® Global ESG Leaders, Euronext Vigeo France 20 and
World 120, and features in CDP’s “A-list”. These distinctions
underscore the Group’s commitment to a proactive sustainable
development policy and its global leadership in the fight against
climate change. For more information, please visit the newsroom on
our website: www.klepierre.com
This press release is available on the Klépierre
website:www.klepierre.com
(1) The data
disclosed in this release, including those set out in the
appendices, have not been audited.(2) Italian shopping malls have
been considered as fully open even if they are closed on
weekends.(3) As of April 30, 2021, on a total share basis,
excluding VAT and equity-accounted companies.
(4) The liquidity
position is the total financial resources available to a company.
This indicator is therefore equal to the sum of cash at hand,
confirmed and unused revolving credit facilities (net of commercial
paper) and uncommitted credit
facilities.(5) The
proposed distribution of €1.00 per share would be an equity
repayment within the meaning of paragraph 1 of Article 112 of the
French Tax Code.(6) Excluding the impact of amortizing Covid-19
rent concessions
- PR_KLEPIERRE_2021_Q1_REVENUES
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