KLÉPIERRE: 2023 NET CURRENT CASH FLOW AT €2.48 PER SHARE AND 2024 EBITDA TO GROW BY AT LEAST 4%

PRESS RELEASE
2023 NET CURRENT CASH FLOW AT €2.48 PER SHARE AND 2024 EBITDA TO GROW BY AT LEAST 4%

Paris — February 14, 2024

Klépierre, the European leader in shopping malls, delivered another strong performance over 2023⁽¹⁾:

• Net current cash flow up 10.7%⁽²⁾ vs. 2022 to €2.48⁽³⁾ per share, beating the initial guidance by 5.5%
• EBITDA⁽⁴⁾ up 9.6% versus 2022
• Like-for-like⁽⁵⁾ net rental income up 8.8% year on year, outpacing indexation by 300 bps
• Solid operating metrics:

• Strong increase in retailer sales, up 6% like-for-like⁽⁶⁾ compared to 2022
• Financial occupancy rate at 96.0%, up 20 bps year-on-year
• 4.4% positive reversion on renewals and re-lettings
• Stable OCR at 12.8%
  • Higher proposed cash distribution to shareholders of €1.80⁽⁷⁾ per share
  • Like-for-like portfolio valuation stable over six months, paving the way to a bottom out
• €169 million⁽⁸⁾ in disposals closed or secured, 20% above appraised values

• EPRA NTA per share stable over six months at €30.10
  • Sector-leading leverage:

• Net debt down €130 million over one year to €7,349 million
• Net debt to EBITDA at 7.4x, LTV of 38.0% and ICR at 8.4x
  • €1.8 billion in new financing

• Guidance: EBITDA growth of at least 4% expected in 2024, along with net current cash flow per share for full-year 2024 of €2.45–2.50
  • IFRS consolidated net income: €174.3 million

Jean-Marc Jestin, Chairman of the Executive Board, said, “Klépierre embarked on a strong growth journey in 2022 that accelerated in 2023, delivering an outstanding performance with the pace of growth increasing from top to bottom line. Our portfolio valuations have been stabilizing, while our sector-leading balance sheet leaves us room for maneuver. These results are a testimony of our leadership position in the continental European mall industry and we are fully confident in our capacity to pursue our growth next year. In a changing retail landscape, our portfolio of top-quality malls will continue to provide the most desirable stores to leading omnichannel retailers and further gain market shares. Thanks to the same operating levers, we plan to deliver at least 4% EBITDA growth in 2024 and generate a net current cash flow per share of €2.45-€2.50.”

KEY FINANCIALS⁽⁹⁾

	12/31/2022	12/31/2023	Like-for-like change(10)
In millions of euros, total share
Total revenues	1,430.7	1,501.0
Net Rental Income (NRI)	926.6	1,005.0	+8.8%
EBITDA	841.1	921.4
In euros, Group share
Net current cash flow per share	2.24	2.48
	12/31/2022	12/31/2023
In millions of euros, total share
Portfolio valuation (including transfer taxes)	19,832	19,331
Net debt	7,479	7,349
Loan-to-Value (LTV)	37.7%	38.0%
Net debt to EBITDA	7.9x	7.4x
In euros, Group share
EPRA Net Tangible Assets (NTA) per share	30.90	30.10

STRONG GROWTH MOMENTUM

In 2023, Group net rental income reached €1,005 million, up 8.8% on a like-for-like basis⁽¹⁰⁾, outpacing the 5.8% indexation by 300 basis points. This record growth was fueled by the combination of a 110 basis-point increase in the collection rate (to 97.5%), the delivery of a 21% like-for-like increase in additional revenues (turnover rents, car park revenues and mall income) and a disciplined management of property charges which translated into a wider operating margin.

On a like-for-like basis, total retailer sales at Klépierre malls rose 6%⁽¹¹⁾ in 2023 compared to 2022. All countries contributed to the growth and exceeded 2022 levels. Segment wise, this upward trajectory was mainly fueled by food & beverage, while leisure and entertainment also posted double-digit growth. Sports and health & beauty were on the same outperforming trend.

This performance, coupled with the Group’s asset management and development actions to adapt its offering to an evolving retail environment, has been driving solid leasing tension for its assets identified as key destinations for expanding banners. In 2023, this translated into a 22% increase in volume of leases signed to 1,658, including 1,317 renewals and re-lettings, generating a 4.4% positive reversion.

Meanwhile, Klépierre’s operating fundamentals remained very solid with an occupancy rate of 96.0%, up 20 basis points over the year and an occupancy cost ratio of 12.8% as of December 31, 2023. The average remaining duration of leases stood at 5.1 years (versus 5.0 years in 2022), reflecting the Group’s strategy of favoring long-term leases providing high visibility on rents.

        

GROWING EARNINGS AND DISTRIBUTION

In 2023, net current cash flow amounted to €811.6 million (total share), or €2.48⁽¹²⁾ per share (Group share), a record 10.7%⁽¹³⁾ increase over one year. With more than €1.6 billion in disposals since 2021, this strong performance demonstrates Klépierre’s capacity to continue to grow the net current cash flow significantly while selling assets.

The Supervisory Board will recommend that the shareholders, at the Annual General Meeting to be held on May 3, 2024, approve the payment of a cash distribution in respect of fiscal year 2023 of €1.80 per share to be paid in two installments: (i) a cash distribution of €0.90 per share from Klépierre’s tax exempt activities (SIIC) on March 26, 2024; and (ii) the balance of €0.90 per share (comprising a €0.7983 per share “SIIC” dividend; and €0.1017 per share distribution of share premiums qualifying as an equity repayment⁽¹⁴⁾), to be paid on July 11, 2024.

STABILIZING PORTFOLIO VALUE

Including transfer taxes, the like-for-like⁽¹⁵⁾ value of the portfolio remained stable over six months, at €19,331 million on a total share basis (down 0.2%).

As of December 31, 2023, the appraisers’ main assumptions were the following:

• Discount rate at 7.8% and exit rate at 6.1%; and
• Compound annual growth rate of 2.8% for the next 10 years.

This stabilization in valuation of the portfolio should pave the way for values bottoming out.

As of December 31, 2023, the average EPRA NIY⁽¹⁶⁾ for the portfolio stood at 5.9%.
EPRA NTA per share amounted to €30.10 as of December 31, 2023, stable over six months.

INVESTING IN HIGH-RETURN OPPORTUNITIES

With conservative credit metrics and strong cash flow generation, Klépierre is pursuing an accretive capital rotation policy, reinvesting the proceeds from disposals of non-core assets or land banks into retail development projects (extensions and refurbishment) and targeted acquisitions.
As such, in 2023, Klépierre disposed or signed promissory agreements for €169 million (excluding transfer taxes), 20% above appraised values for a blended EPRA Net Initial Yield of 5.5%.
Meanwhile, the Group continued to invest in extensions of its dominant malls crystallizing strong leasing tension. As of today, before launching any new projects, Klépierre ensures that the expected yield on cost is at least 8%. In November 2023, the 16,200 sq.m. extension of Grand Place (Grenoble, France) was delivered, while the Maremagnum rooftop (Barcelona, Spain) will be finalized in the first half of 2024. In early 2024, Klépierre engaged a new development project with the extension of Odysseum (Montpellier, France).
Lastly, Klépierre’s leverage enables it to consider opportunities and complete targeted acquisitions as demonstrated by the acquisition of O’Parinor, a 100,000 sq.m. super-regional shopping mall in the Paris region. Klépierre will own 25% of the property and act as an asset, property and leasing manager. This investment is expected to generate a strong double digit levered annual cash return from year one. The transaction is expected to close in the first half of 2024.

SECTOR-LEADING LEVERAGE AND AMPLE ACCESS TO FINANCING

Klépierre continued to have good access to debt capital markets, raising more than €1.0 billion with an average maturity of 6.7 years. Furthermore, the Group signed or renewed €725 million of revolving credit facilities. At the end of 2023, Klépierre’s liquidity position⁽¹⁷⁾ stood at €3.0 billion.

The Group’s strong cash flow generation led to a €130 million decrease in consolidated net debt to €7,349 million as of December 31, 2023. This translated into sector-leading credit and cost-of-debt metrics including net debt to EBITDA at 7.4x, a Loan-to-Value (LTV) ratio at 38.0% and an interest coverage ratio (ICR) of 8.4x, leaving the Group room for maneuver. Thanks to an active hedging policy, the average cost of debt stood at 1.5% at the end of the year with an average maturity of the Group’s debt of 6.3 years. As of December 31, 2023, the hedging rate⁽¹⁸⁾ stood at 98% for 2024 and 84% for 2025.

Since May 2023, Fitch has assigned an A− rating with a stable outlook to Klépierre’s senior unsecured debt (F1 short-term rating). Standard & Poor’s currently assigns Klépierre a long-term BBB+ rating (A2 short-term rating) with a stable outlook (affirmed on June 9, 2023).

ACT4GOOD^TM: CONSOLIDATING OUR LEADING POSITION IN ESG

In early 2024, Klépierre was once again included in the CDP’s “A List” of the most advanced companies fighting climate change at global level. The list comprises only 346 companies out of a total sample of 21,000.

The Group is rewarded with the highest certifications by several non-financial rating agencies, including GRESB (Europe’s leading listed real estate company) and MSCI (“AA”) while its low-carbon commitments have been approved as the most ambitious 1.5°C-aligned targets by the Science-Based Target initiative (SBTi). The Group is also member of the Euronext CAC 40 ESG stock market index and CAC SBT 1.5.

These accolades are a testament to Klépierre’s both ambitious ESG plan (Act4Good™) and non-financial performance of 2022. In 2023, Klépierre consolidated its position as leader in sustainable development, with solid achievements, including a 48% reduction in the energy consumption of its portfolio since 2013, and a decrease of 22% in the total greenhouse gas emissions (Scopes 1 & 2, market-based approach) of its portfolio on a like-for-like basis, pointing to 3.4 kgCO2e/sq.m.

Mid-term, Klépierre is well on track to achieve a net-zero carbon portfolio by 2030 with an average energy intensity of 70 kWh/sq.m., the most demanding targets in the sector.

OUTLOOK

The guidance is built under the assumption of low GDP growth in continental Europe in 2024, with a labor market remaining supportive and the inflation environment easing.

In 2024, Klépierre expects to generate at least a 4% increase in EBITDA⁽¹⁹⁾ supported by:

• Retailer sales at least stable compared to 2023;
• Positive indexation;
• Higher additional revenues (turnover rents, car park revenues, mall income); and
• Contribution of extensions of existing assets.

Factoring in the new secured cost of debt for 2024 (€0.11 per share increase), Klépierre expects to generate net current cash flow per share of €2.45–€2.50 in 2024.

This guidance does not include the impact of any disposals or acquisitions in 2024.

NET CURRENT CASH FLOW^(a)

		12/31/2022				12/31/2023
In millions of euros, total share
Gross rental income	1,095.3					1,164.8
Rental and building expenses	(168.7)					(159.9)
Net rental income	926.6					1,005.0
Management, administrative, related income and other income				77.6		74.6
Payroll expenses and other general expenses	(163.1)					(158.1)
EBITDA(b)	841.1					921.4
Cost of net debt					(113.4)	(131.9)
Cash flow before share in equity method investees and taxes					727.7	789.5
Share in equity method investees	53.4					56.7
Current tax expenses	(38.7)					(34.7)
NET CURRENT CASH FLOW (total share)	742.4					811.6
Average number of shares(c)
In millions of euros, Group share
NET CURRENT CASH FLOW (group share)	641.9					709.0
In euros, per share
NET CURRENT CASH FLOW	2.24					2.48

(a) The data used to calculate the net current cash flow are obtained by deducting from IFRS aggregates certain non-cash and/or non-recurring effects, mainly related to positive non-recurring income linked to the 2020 and 2021 account receivables, changes in the fair value of buildings (net of deferred taxes) of equity-accounted companies, and certain provisions and depreciations.
(b) EBITDA stands for “earnings before interest, taxes, depreciation and amortization” and is a measure of the Group’s operating performance.

2023 FULL-YEAR EARNINGS WEBCAST — PRESENTATION AND CONFERENCE CALL

Klépierre’s Executive Board will be presenting the 2023 full-year earnings on Thursday February 15, 2024 at 9:00 a.m. CET (8.00 a.m. London time) during a conference call. Please visit Klépierre’s website www.klepierre.com to listen to the webcast, or click here.
A replay will also be available after the event.

AGENDA
May 3, 2024	Annual General Meeting
May 3, 2024	First quarter 2024 trading update (before market opening)
INVESTOR RELATIONS CONTACTS		MEDIA CONTACTS
Paul Logerot, Group Head of IR and Financial Communication +33 (0)7 50 66 05 63 — paul.logerot@klepierre.com Hugo Martins, IR Manager +33 (0)7 72 11 63 24 — hugo.martins@klepierre.com Tanguy Phelippeau, IR Manager +33 (0)7 72 09 29 57 —tanguy.phelippeau@klepierre.com		Hélène Salmon, Group Head of Communication +33 (0)1 40 67 55 16 – helene.salmon@klepierre.com   Wandrille Clermontel, 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 €19.3 billion at December 31, 2023, 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 and EPRA Euro Zone Indexes. It is also included in ethical indexes, such as Euronext CAC 40 ESG, Euronext CAC SBT 1.5, MSCI Europe ESG Leaders, FTSE4Good, Euronext Vigeo Europe 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 and its appendices together with the earnings presentation slideshow
are available in the “Publications section” of Klépierre’s Finance page: www.klepierre.com/en/finance/publications

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(1) The Supervisory Board met on February 13, 2024, to examine the full-year financial statements, as approved by the Executive Board on February 13, 2024. The consolidated financial statements have been subject to audit procedures. The Statutory Auditors’ report is to be issued shortly with the Universal Registration Document.

(2) Excluding the positive non-recurring income statement impact related to the 2020 and 2021 account receivables (€0.30) and the cash flow generated by disposed assets (€0.08), net current cash flow per share reached €2.24 in 2022.
(3) Excluding the positive non-recurring income statement impact related to the 2020 and 2021 account receivables.
(4) EBITDA stands for “earnings before interest, taxes, depreciation and amortization” and is a measure of the Group’s operating performance.
(5) Like-for-like data exclude the contribution of new spaces (acquisitions, greenfield projects and extensions), spaces being restructured, disposals completed since January 2022.
(6) Change is on a same-store basis, excluding the impact of disposals and acquisitions, and excluding Turkey.
(7) Amount to be approved by the shareholders present or represented at the Annual General Meeting to be held on May 3, 2024.
(8) Total share, excluding transfer taxes.

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(9) The data used to calculate the net current cash flow are obtained by deducting from IFRS aggregates certain non-cash and/or non-recurring effects, mainly related to positive non-recurring income linked to the 2020 and 2021 account receivables, changes in the fair value of buildings (net of deferred taxes) of equity-accounted companies, and certain provisions and depreciations.

(10) Like-for-like data exclude the contribution of new spaces (acquisitions, greenfield projects and extensions), spaces being restructured and disposals completed since January 2022.
(11) Change is on a same-store basis, excluding the impact of disposals and acquisitions, and excluding Turkey.

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(12) Excluding the positive non-recurring income statement impact related to the 2020 and 2021 account receivables.

(13) Excluding the positive non-recurring income statement impact related to the 2020 and 2021 account receivables (€0.30) and the cash flow generated by disposed assets (€0.08), net current cash flow per share reached €2.24 in 2022.
(14) Within the meaning of Article 112-1 of the French Tax Code (Code général des impôts).
(15 ) Like-for-like change. For Scandinavia and Turkey, change is indicated on a constant currency basis. Central European assets are valued in euros.
(16) Group share for the total portfolio appraised. EPRA Net Initial Yield is calculated as annualized rental income based on cash passing rents, less non-recoverable property operating expenses, divided by the market value of the property (including transfer taxes).

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(17) The liquidity position represents the total financial resources available to a company. This indicator is therefore equal to the sum of cash at hand at the end of the period (€0.4 billion), committed and unused revolving credit facilities (€2.3 billion, net of commercial paper) and other credit facilities (€0.3 billion).

(18) Calculated as the ratio of fixed-rate debt (after hedging) to net debt expressed as a percentage.

(19) EBITDA stands for “earnings before interest, taxes, depreciation and amortization” and is a measure of the Group’s operating performance.

Attachment

• PR_KLEPIERRE_2023_FY_EARNINGS