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UNIBAIL-RODAMCO SE: HALF-YEAR RESULTS 2017

Paris, Amsterdam, July 24th, 2017

Press release

HALF-YEAR RESULTS 2017

Recurring Earnings per Share (recurring EPS) of €6.16 for H1-2017; full-year guidance of €11.80-€12.00 confirmed

  • Recurring EPS grew +6.0% from the recurring EPS for H1-2016 of €5.81
  • Net Rental Income (NRI) like-for-like growth in Shopping Centres of +3.4% compared to H1-2016
  • Record low average cost of debt of 1.4% while average debt maturity extended to 7.4 years
  • Total portfolio value of 42.5 Bn, up +4.9% (+3.3% like-for-like)
  • Net asset value per share:
    • Going Concern NAV: 213.60, up +6.0% vs. Dec. 31, 2016
    • EPRA NNNAV: 195.30, up +6.3% vs. Dec. 31, 2016
    • EPRA NAV: 206.20, up +5.4% vs. Dec. 31, 2016
  • 8.1 Bn development pipeline, with 5 deliveries scheduled for H2-2017
  H1-2017 H1-2016 Growth Like-for-like growth
Net Rental Income (in € Mn)  794 781 +1.7% +3.7%
  Shopping Centres  670 643 +4.1% +3.4%
  France   303 295 +2.7% +1.8%
  Central Europe 84 80 +4.3% +3.8%
  Spain   80 72 +11.2% +5.3%
  Nordics   75 73 +3.5% +4.2%
  Austria 52 48 +8.6% +8.0%
  Germany 47 45 +4.8% +5.5%
  The Netherlands 29 31 -4.8% -1.8%
  Offices   70 84 -17.5% +7.8%
  Convention & Exhibition   55 53 +2.5% +2.5%
Recurring net result (in € Mn) 614 575 +6.7%  
Recurring EPS
(in € per share)
6.16 5.81 +6.0%  
         
  June 30, 2017 Dec. 31, 2016 Growth Like-for-like growth
Total portfolio valuation
(in € Mn)
42,491 40,495 +4.9% +3.3%
Going Concern Net Asset Value
(in € per share)
213.60 201.50 +6.0%  
EPRA Triple Net Asset Value
(in € per share)
195.30 183.70 +6.3%  
EPRA Net Asset Value
(in € per share)
206.20 195.60 +5.4%  

Figures may not add up due to rounding.


"During the first half of 2017, Unibail-Rodamco's dedicated and hardworking teams delivered a solid performance across all businesses and grew the recurring EPS by +6.0%, to €6.16. Retail NRI increased by +4.1% (+3.4% on a like-for-like basis). The Group's tenant sales were up by +2.7% through May 2017, outperforming the aggregate national sales indices by +148 bps. Like-for-like NRI of the Offices division grew by +7.8%, supported by strong leasing performance in France, notably on Capital 8. The Group achieved an average cost of debt of 1.4%, a new record low. As part of Unibail-Rodamco's "Better Places 2030" CSR programme, the Group raised Europe's first green credit facility (€650 Mn). The Group confirms its outlook of between €11.80 and €12.00 per share for 2017." Christophe Cuvillier, CEO and Chairman of the Management Board.

RECURRING EPS AT €6.16, UP +6.0% COMPARED TO H1-2016

Recurring EPS came to €6.16 in H1-2017, representing an increase of +6.0% from the recurring EPS for H1-2016 of €5.81.

SOLID OPERATING PERFORMANCE

Shopping Centres
Through May 2017, tenant sales grew by +2.7% at Group level compared to the same period last year, +148 bps above the aggregate national sales index. Excluding assets for sale(1), the Group's tenant sales grew by +3.2%. In France, the Group's tenant sales outperformed the IFLS index by +374 bps and the CNCC index by +454 bps, respectively.
The Shopping Centre like-for-like NRI grew by +3.4%, +270 bps above indexation, and by +3.6% excluding assets for sale(1). The Group signed 755 leases on consolidated standing assets with an average Minimum Guaranteed Rent uplift on renewals and re-lettings of +13.5%, exceeding the Group's objectives for the period. The tenant rotation rate was 6.4%.
The EPRA vacancy rate was 2.5%, including 0.3% of strategic vacancy, as at June 30, 2017.

Offices
Take-up in the office market in the Paris region grew by +4% compared to H1-2016, with 1.2 million m2 of office space let in H1-2017.
On a like-for-like basis, Unibail-Rodamco offices NRI increased by +7.8%, and by +9.9% in the Paris region. Following the disposal of four office buildings in 2016, consolidated NRI of the office division came to €69.6Mn (-17.5%).
The Group entered into an agreement to dispose of So Ouest Plaza (Levallois). Further office disposals are expected in 2017.

Convention & Exhibition
Convention & Exhibition's recurring net operating income increased by +2.7% compared to H1-2016. Excluding the triennial Intermat show, the net operating income increased by +3.8% compared to H1-2015, the latest comparable period.
The annual International Agriculture's show ("SIA") attracted 619,000 visitors at Porte de Versailles, +1.3% compared to 2016. The 2nd edition of Vivatech, held at Porte de Versailles, attracted over 60,000 visitors (+33% vs. 2016). The biennial "Le Bourget International Air Show" (SIAE) was a record-breaking event in terms of new orders ($150 Bn) and exhibitors (almost 2,400).
The first phase of renovation works (2015-2017) on the Porte de Versailles site continued. The opening of the new Paris Convention Centre is planned for H2-2017.

VALUE CREATION OF €16.45 PER SHARE

The Gross Market Value (GMV) of the Group's assets amounted to €42.5Bn as at June 30, 2017, up +4.9% (+3.3% on a like-for-like basis) compared to December 31, 2016.
The Shopping Centre GMV grew by +2.6% on a like-for-like basis, driven by a rental effect (+1.4%) and yield compression (+1.1%). The average net initial yield(2) (NIY) of the retail portfolio stood at 4.3% as at June 30, 2017 (vs. 4.4% as at December 31, 2016).
The GMV of the Group's office portfolio increased to €4.4 Bn (+8.8% like-for-like) as a result of yield compression (+7.2%), following reference transactions in Paris CBD and La Défense, and a positive rent effect (+1.7%).
The Going Concern NAV per share was €213.60 as at June 30, 2017, an increase of +€12.10 compared to December 31, 2016. This increase was the sum of (i) the value creation of €16.45 per share, (ii) the impact of the interim dividend paid in March 2017 of -€5.10, and (iii) the positive impact of the mark-to-market of the fixed-rate debt and derivatives of +€0.75.

€8.1 Bn DEVELOPMENT PIPELINE TO DRIVE FUTURE GROWTH

Five deliveries are planned for H2-2017: The new 80,843 m² Wroclavia shopping centre in Wroclaw; the 41,972 m² extension of Centrum Chodov in Prague; the 29,906 m² extension of Carré Sénart and the 7,602 m² extension of Parly 2, both in the Paris region, and the 10,517m² extension and full redevelopment of Glòries in Barcelona. The average pre-letting of these projects stands at 94%.
As at June 30, 2017, the estimated total investment cost (TIC) of the consolidated development pipeline amounted to €8.1 Bn (€8.0 Bn as at December 31, 2016). The changes in the TIC (+€68 Mn) and in the GLA (+1,909 m²) result from modifications in the program of existing projects, currency movements and indexation.

NEW HISTORIC LOW AVERAGE COST OF DEBT AND INCREASED MATURITY

In H1-2017, Unibail-Rodamco raised €2.5 Bn of medium- to long-term funds in the bond and bank markets while maintaining its financial ratios at healthy levels: Loan-to-Value remained stable at 33% compared to December 31, 2016, and the interest coverage ratio increased to 6.9x (5.9x in 2016). The average cost of debt decreased further to reach a new historic low of 1.4% (vs. 1.6% for 2016), while the average maturity was extended to 7.4 years (7.0 years as at December 31, 2016). The Group raised a new 20-year Euro bond (€500 Mn) with the lowest spread achieved by a corporate issuer in H1-2017 for this maturity, and signed the first of its kind €650 Mn 'green' revolving credit facility in Europe.

DISPOSALS

Unibail-Rodamco has entered into agreements to dispose of five assets for an aggregate NDP(3) of €526 Mn, representing an average premium of +17.2% over the last unaffected appraisal values and a NIY of 4.1%. These transactions are expected to close in Q3-2017.
In addition, the Group is engaged in a number of other disposal processes, involving both retail and office assets, for an aggregate of approximately 272,000 m² of consolidated GLA.

OUTLOOK

Based on the H1-2017 results, the Group confirms its guidance of between €11.80 and €12.00 per share for its recurring EPS for 2017.
This outlook takes account of the disposal of assets signed as at June 30, 2017, as well as those currently in a disposal process, and assumes successful deliveries of projects in Q4-2017 as well as no deterioration of the general economic or security conditions in Europe.


FINANCIAL SCHEDULE

The next financial events on the Group's calendar will be:

October 26, 2017: 2017 3rd Quarter Revenues (after market close)
January 31, 2018: 2017 Full-year results (after market close)
April 18, 2018: Combined General Meeting
April 23, 2018: 2018 1st Quarter Revenues (after market close)
May 17 & 18, 2018: Investor Days

For further information, please contact:

Investor Relations
Aurélia Baudey-Vignaud                                                          
+33 1 76 77 58 02                                                       
aurelia.baudey-vignaud@unibail-rodamco.com

Media Relations
Pauline Duclos-Lenoir
+33 1 76 77 57 94
pauline.duclos-lenoir@unibail-rodamco.com

About Unibail-Rodamco
Created in 1968, Unibail-Rodamco SE is Europe's largest listed commercial property company, with a presence in 11 EU countries, and a portfolio of assets valued at €42.5 billion as of June 30, 2017. As an integrated operator, investor and developer, the Group aims to cover the whole of the real estate value creation chain. With the support of its 2,008 professionals, Unibail-Rodamco applies those skills to highly specialised market segments such as large shopping centres in major European cities and large offices and convention & exhibition centres in the Paris region.
The Group distinguishes itself through its focus on the highest architectural, city planning and environmental standards. Its long term approach and sustainable vision focuses on the development or redevelopment of outstanding places to shop, work and relax. Its commitment to environmental, economic and social sustainability has been recognised by inclusion in the FTSE4Good and STOXX Global ESG Leaders indexes.
The Group is a member of the CAC 40, AEX 25 and EuroSTOXX 50 indices. It benefits from an A rating from Standard & Poor's and Fitch Ratings.
For more information, please visit our website: www.unibail-rodamco.com



1 Assets for sale: Assets under contract to be sold or in a disposal process

2 Net Initial Yield (NIY) : annualized contracted rent (including indexation) and other incomes for the next 12 months, net of operating expenses, divided by the asset value net of estimated transfer taxes and transaction costs

3 Net Disposal Price (NDP): Total Acquisition Cost incurred by the acquirer minus all transfer taxes and transaction costs





This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: UNIBAIL-RODAMCO SE via Globenewswire

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