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| Recurring Earnings per Share (recurring EPS) of EUR6.61 and Adjusted Recurring Earnings per Share of EUR6.58 |
Paris, Amsterdam, Aug 30, 2018 - (ACN Newswire) - Unibail-Rodamco-Westfield Half-Year Results 2018: Solid Performance for the New Group
- Recurring EPS grew by +7.3% to EUR6.61 from EUR6.16 in H1-2017
- Net Rental Income (NRI) like-for-like growth in Shopping Centres in Continental Europe: +4.3%, +300 bps above indexation
- Cost of debt remains low at 1.5%, with an average debt maturity of 6.9 years
- Total proportional portfolio value, including Westfield, of EUR63.7 Bn, up +0.6% on a like-for-like basis
- Net asset values per share:
-- Going Concern NAV: EUR227.10, up +3.6%
-- EPRA NNNAV: EUR204.20, up +1.8%
-- EPRA NAV: EUR216.10, up +2.4%
- Development pipeline: EUR12.5 Bn following the Westfield acquisition
- Westfield integration on track
"We are proud to present today the first results of the new Group. June 7, 2018, marked the creation of Unibail-Rodamco-Westfield, the premier global developer and operator of Flagship shopping destinations. Now, the hard work is underway to successfully integrate the new Group. In addition to the momentous amount of work done to close the acquisition of Westfield in record time, we delivered excellent recurring earnings per share growth of +7.3% in H1-2018. I would like to warmly thank the Unibail-Rodamco-Westfield teams for this extraordinary achievement. Growth was driven by a strong like-for-like retail NRI(1) increase of +4.3%, an outstanding performance by our offices division, the deliveries in 2017, as well as the contribution from our US and UK assets during June. Since June 30, the Group has agreed to sell or executed the disposal of a total of EUR1.3 Bn of mostly Continental European assets and is working on further disposals. Our credit metrics remain healthy, with a cost of debt of 1.5%, an ICR of 7.1x, and an LTV post disposals of less than 37%. Our focus remains on continuous improvement in our portfolio through disciplined asset management, our rotation strategy, and the build-out of the development pipeline. The skills of the Unibail-Rodamco-Westfield team and our best in breed assets are well positioned to deliver value for our shareholders."
Christophe Cuvillier, Group Chief Executive Officer
H1-2018 RECURRING EPS OF EUR6.61, UP +7.3%
Recurring EPS grew by +7.3% to EUR6.61 from H1-2017. The Recurring EPS adjusted for the coupons on the Hybrid Securities was EUR6.58 (+6.8% from H1-2017).
STRONG OPERATING PERFORMANCE IN A CHALLENGING MARKET
Shopping Centres Continental Europe
Tenants sales increased(2) by +2.6% for the Group and by +3.2% for Flagship centres(3), outperforming national sales indices(4) by +131 and +196 bps, respectively. France (+3.3%, outperforming the IFLS index by +337 bps and the CNCC index by +477 bps) and Central Europe (+8.7%, outperforming the weighted average regional sales indices by +515 bps) did especially well.
The like-for-like NRI grew by +4.3%, +300bps above indexation, while that of the Flagship centres increased by +5.7%.The Group signed 641 leases with a Minimum Guaranteed Rent uplift of +10.6%, of which +14.4% for Flagship assets. The rotation rate amounted to 5.9%, in line with Unibail-Rodamco's (UR's) objective of at least 10% in each shopping centre every year, and EPRA vacancy decreased by -10 bps to 2.3%.
Shopping Centres United States and United Kingdom
In the US, the speciality sales productivity per square foot (psf)(5) through June 30, 2018, increased by +4.9% on a trailing 12-month basis. The average letting spreads were +6.9% (+7.6% in Flagship assets) and the average rent for shops under 20k sq. ft was $85 psf, up by +4.2%. As at June 30, 2018, occupancy in the US portfolio stood at 94.3% (95.5% in Flagship assets), a decrease of -140 bps compared to December, 2017, impacted by bankruptcies and certain big box store closures, leading to a negative Comparable NOI(6) growth of -3.0% (-2.6% for Flagship centres). Total NOI increased by +6.1%, primarily as a result of the strong contribution from the deliveries of Westfield Century City and Westfield UTC.
Footfall in the UK was up +3.7% in H1-2018, driven by the opening of the extension of Westfield London. The sales productivity of speciality stores amounted to GBP969 psf, up +0.2% on a trailing 12-month basis. The average MGR uplift was +17%. Occupancy remained strong at 97.7%. Comparable NOI(6) in the UK for H1-2018 grew by +6.7% compared to H1-2017.
Offices
With 1.3 million m2 of office space take-up, demand in the Paris region remained at the highest level since 2007, while the available supply declined by -9% from December 31, 2017. The Group let more than 61,800 m2 in France, including Shift (43,300 m2), fully let to Nestle more than one year before its delivery. Like-for-like NRI increased by +14.4% due to very good leasing performance.
Convention & Exhibition
Recurring NOI increased by +1.2% compared to H1-2017 and by +3.9% compared to H1-2016, the last comparable period. The Recurring NOI in 2018 benefitted from the tri-annual Intermat show, partly offset by the closure for refurbishment of the Pullman Montparnasse hotel in Paris.
VALUE CREATION OF EUR16.74 PER SHARE
The Gross Market Value (GMV) of the Group's assets as at June 30, 2018, amounted to EUR63.7 Bn on a proportional basis, up +46.5% from December 31, 2017, mainly due to acquisition of Westfield. The Continental European portfolio grew by +2.0% to EUR44.4 Bn, or +0.6% on a like-for-like basis.
The Continental European Shopping Centre division GMV grew by +1.4% in total and by +0.7% on a like-for-like basis, driven by a positive rent effect, partly offset by a negative yield effect. The GMV of the Continental European Office division came to EUR4.5 Bn, up +7.0%, including a +2.2% increase on a like-for-like basis, mainly driven by a positive yield effect. The GMV of the Convention & Exhibition division decreased -1.7% on a like-for-like basis.
The average net initial yield of the overall retail portfolio stood at 4.2% (4.3% as at year-end 2017), driven by the inclusion of the US and UK portfolio.
The inclusion of the Westfield portfolio resulted in an increase of EUR19.4 Bn in the Group's proportional GMV, representing 30% of the total.
Going Concern NAV per share stood at EUR227.10 as at June 30, 2018, an increase of +EUR7.90 (+3.6%) compared to December 31, 2017. This increase was the sum of (i) the value creation of EUR16.74 per share, (ii) the impact of the -EUR10.80 dividend paid during H1-2018, and (iii) the +EUR1.96 mark-to-market of the fixed-rate debt and derivatives.
EUR12.5 BN PIPELINE
As at June 30, 2018, the Unibail-Rodamco-Westfield (URW) Expected Cost(7) of the development pipeline amounted to EUR12.5 Bn. The Group retains flexibility, with committed projects of only EUR2.8 Bn. The retail pipeline is split between greenfield/brownfield projects (52%), which are all in Europe, and extensions and renovations (48%) in both continents. Significant progress has been made on the two major Westfield projects in Europe, with the Compulsory Purchase Order obtained for the Croydon development and the building permit granted for Westfield Milan.
In March 2018, the extension of Westfield London opened six months ahead of schedule, taking the centre to over 240,000 m2 of GLA, making it the largest shopping centre in Europe. The extension was 92% let as at June 30, 2018.
INTEGRATION OF WESTFIELD
On June 7, 2018, UR completed the acquisition of Westfield Corporation to create Unibail-Rodamco-Westfield. The new Senior Management Team has been appointed, the new corporate identity implemented and the organization and target model defined. In H2-2018, the Group will continue the detailed work on the combined operations, organisation, and capital structure of the Group. As at June 30, 2018, URW had already achieved run-rate cost synergies of almost EUR74 Mn compared to the EUR60Mn originally budgeted. The revenue synergies are expected to be realized in the next 3 to 5 years as planned.
ASSET ROTATION DISCIPLINE
Including transactions entered into after June 30, 2018, the Group has disposed or agreed to dispose of EUR1.2 Bn of Continental European assets at an aggregate NIY of 4.4%, representing a +6.2% premium to the last unaffected appraisal values. With these transactions, the Group is well underway to reach its previously announced target of EUR3.0 Bn of disposals in Continental Europe in the next several years, with a number of other disposal processes on-going. In addition, URW has disposed of Horton Plaza, one of its US Regional malls, at a price broadly in line with its underwriting.
AVERAGE COST OF DEBT AT 1.5% AND A 6.9 YEAR AVERAGE MATURITY
The financial structure of the Group is healthy with a Loan-to-Value (LTV) ratio of 38.0% and an interest coverage ratio of 7.1x (6.7x in 2017 for UR on a stand-alone basis). The LTV, after taking into account the disposals completed since June 30, 2018, or for which binding agreements have been signed, would be 36.7%(8). The average cost of debt of the Group remained low at 1.5%, with an average debt maturity as at June 30, 2018, of 6.9 years, as a result of the inclusion of Westfield's debt.
EUR8.5 BN OF CAPITAL RAISED
To finance the cash component of the Westfield Transaction, the Group issued EUR2.0 Bn of Hybrid securities with a weighted average coupon of 2.4%, and EUR3.0 Bn of senior bonds with a weighted average maturity and coupon of 10 years and 1.3%, respectively.
Additional capital has been raised under URW's EMTN programme for a total amount of EUR540 Mn, as well as a EUR400 Mn "green" revolving credit facility and a USD 3.0 Bn revolving credit facility.
OUTLOOK
URW's Continental European business is trading in line with UR's assumptions for 2018, and the US and UK operations are trading in line with UR's underwriting of the Westfield transaction. Consequently, there currently is no change to the guidance for 2018 provided on January 31, 2018. Following the Group's annual 5-year business plan process, a medium term outlook will be provided at the time of the release of URW's 2018 Full-Year results.
FINANCIAL SCHEDULE
The next financial events on the Group's calendar will be:
October 25, 2018: 2018 3rd Quarter Results
February 13, 2019: 2018 Full-Year results, 2019 guidance and medium-term outlook (after market close)
March 29, 2019: Interim dividend
May 17, 2019: AGM
July 2019: Final dividend
For further information, please contact:
Investor Relations
Samuel Warwood
Maarten Otte
+33 1 76 77 58 02
Maarten.otte@urw.com
Media Relations
Nathalie Feld
+33 1 76 77 57 94
Nathalie.feld@ext.urw.com
About Unibail-Rodamco-Westfield
Unibail-Rodamco-Westfield is the premier global developer and operator of flagship shopping destinations. With a portfolio valued at EUR63.7 Bn as at June 30, 2018, of which 86% in retail, 8% in offices, 5% in convention & exhibition venues and 1% in services. The Group owns and operates 102 shopping centres, of which 56 are flagships in the most dynamic cities in Europe and the United States. Its centres welcome 1.2 billion visits per year. Present on 2 continents and in 13 countries, Unibail-Rodamco-Westfield provides a unique platform for retailers and brand events, and offers an exceptional and constantly renewed experience for customers.
With the support of its 3,700 professionals and an unparalleled track-record and know-how, Unibail-Rodamco-Westfield is ideally positioned to generate superior value and develop world-class projects. The Group has the largest development pipeline in the industry, worth EUR12.5 Bn.
Unibail-Rodamco-Westfield distinguishes itself by its Better Places 2030 agenda, that sets its ambition to create better places that respect the highest environmental standards and contribute to better cities.
Unibail-Rodamco-Westfield stapled shares are listed on Euronext Amsterdam and Euronext Paris (Euronext ticker: URW), with a secondary listing in Australia through Chess Depositary Interests. The Group benefits from an A rating from Standard & Poor's and from an A2 rating from Moody's.
For more information, please visit www.urw.com
Visit our Media Library at www.mediacentre.urw.com
2018 Half-Year Results URW: http://hugin.info/136618/R/2213164/863141.pdf
Topic: Earnings
Source: UNIBAIL-RODAMCO SE
http://www.acnnewswire.com
From the Asia Corporate News Network
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