Paris, Amsterdam, March 30, 2022
Press release
Unibail-Rodamco-Westfield presents path to
2024 and beyond
- Leading European pure play with an unrivalled portfolio of
assets in best cities
- Stabilised European retail NRI and Group EBITDA to reach
pre-COVID levels on a run rate basis in 2023 with full effect in
2024
- Growing new revenues from media advertising, brand
experience and data
- Maximising asset values by unlocking mixed-use development
opportunities with significant residential potential
- On track to achieve ambitious Better Places 2030 ESG targets
and will announce enhanced commitments in 2023
- AREPS guidance of €8.20 to €8.40 confirmed for 2022
- Sustainable dividend to be reinstated from fiscal year
2023
The Management Board of
Unibail-Rodamco-Westfield (“URW” or “the Group”) will today share
with the market its path to 2024 and beyond, a plan which will
strengthen the Group’s core business, generate new revenues and
unlock asset value.
Following the completion of its comprehensive
deleveraging program, which includes the radical reduction of
financial exposure to the US in 2022 and 2023, URW will emerge as a
European pure play with a portfolio of high-quality,
high-performing assets located in the continent’s wealthiest cities
and catchment areas.
European retail NRI will represent the vast
majority of URW income and is expected to return to pre-COVID
levels on a run rate basis in 2023 with full effect in 2024. This,
together with the recovery of Convention & Exhibition activity
and the delivery of URW’s committed pipeline, will support the
return of Group EBITDA for Europe to 2019 levels in 2024. URW will
reinstate a sustainable dividend from the fiscal year 2023 in line
with the company’s disciplined capital allocation framework.
URW’s unrivalled European portfolio also
provides a unique platform to generate significant new revenues
from advertising, brand experience and data by turning URW’s 2021
footfall of 550 million annual visits into qualified audiences
highly valued by brands. URW’s investments in media assets and data
capabilities will generate €75 Mn in annual net revenues1 by 2024,
a €45 Mn increase compared to 2021, with strong growth potential
beyond the plan horizon.
URW will unlock untapped asset value through
targeted, sustainable mixed-use development, with an emphasis on
residential opportunities. This includes the delivery of €2.0 Bn2
of the committed pipeline by the end of 2024 that will generate a
stabilised NRI of €125 Mn3. URW has also identified up to 2.4
million sqm4 of development opportunities, with the target of
adding €1 Bn5 to the Group’s controlled pipeline by 2024. URW will
retain full flexibility about how and when to launch these new
projects and will deploy limited predevelopment expenses in the
coming three years.
URW confirmed that it is on track to meet the
industry-leading commitments in its Better Places 2030 ESG strategy
and will announce an update in 2023, with the aim of enhancing the
Group’s decarbonisation commitments.
Jean-Marie Tritant, Chief Executive Officer
of URW, said: “By 2024, we will have successfully reshaped the
business to capture future growth, centred on our portfolio of
Flagship destinations in the wealthiest cities and catchment areas
in Europe.
Physical stores are a vital part of leading
brands’ omnichannel and drive-to-store strategy, a role reinforced
and validated by the post-pandemic recovery. Our top 50 retailers
in Europe6 have increased their GLA and MGR with us since 2019,
while in many cases streamlining their store portfolios elsewhere.
This dynamic will support a full recovery of our European
retail NRI and Group EBITDA on a stabilised basis to pre-COVID
levels.
Our platform of shopping and lifestyle
destinations in Europe presents a powerful opportunity to grow
media advertising and brand experience revenues by converting our
European footfall of 550 million visits in 2021 into qualified
audiences. We are building the capabilities to market URW’s
pan-European platform to advertisers by creating a dedicated
business division, powered by new data intelligence. These strong
foundations will generate €75 million in annual net revenues by
2024, with significant upside potential.
We will deliver €2 billion in projects from our
committed pipeline by 2024, generating €125 million of stabilised
NRI, and will add €1 billion in densification development
opportunities to our controlled pipeline.
This is the beginning of an exciting journey for
URW that will reshape the business to focus on our core strengths
in Europe, create a new media platform and unlock value from our
asset portfolio to generate sustainable growth by 2024 and
beyond.”
- The company’s plan will be presented by URW’s Management
Board at an investor event today starting at 10:30 CET. Please
follow the link to watch the webcast.
- A full presentation is also available on the Investor
Relations page of the URW website link
URW’s path to 2024 and beyond
Strengthen our core business
Complete radical reduction of financial exposure to the US and
finalize European deleveraging programme |
~40% LTV ratio7 |
Emerge as a focused European pure play with Retail NRI and Group
EBITDA back to pre-COVID levels8 |
2023-2024 expected timeline to reach stabilised 2019
levels |
Build on strong ESG track-record to drive enhanced environmental,
social and financial value |
2023 unveiling step-change evolution of strategy |
Build new revenue platforms
Increase media advertising and brand experience revenue by turning
footfall into a qualified audience |
€75 Mn 2024 European net revenues |
Build data capabilities to generate new revenues with retailers and
brands |
Maximise the value of our assets
Deliver European committed pipeline with tight CAPEX control |
€2.0 Bn by 2024 |
Unlock development opportunities embedded in our assets to refuel
controlled pipeline |
€1.0 Bn new projects added by 2024 |
KEY HIGHLIGHTS
DELEVERAGING PROGRESS & IMPACT
URW’s comprehensive deleveraging program is on
track. The Group is positioned to execute the radical reduction in
financial exposure to the US over the course of 2022 and 2023,
supported by the quality of its US assets, of which 95% are in the
A-category9, as well as the strength of the recovery which is
driving occupancy and rental growth for long term leases.
In Europe, URW will secure the remaining €1.5 Bn
of its €4 Bn disposal programme by the end of 2022. This process
combines the full sale of non-core assets as well as the disposal
of stakes to institutional investors, where URW will receive asset
and property management fees going forward.
Once completed, URW’s LTV, is expected to be
below or around 40% including the Group’s hybrid
bonds.
RETURN OF RETAIL NRI & GROUP
EBITDA
Following completion of the deleveraging
process, URW will be a European pure play with a €41 Bn portfolio10
of high-quality and well-located assets. 95% of the Group’s
European retail assets are in the A-category9.
These assets generate higher sales intensity for
retailers, as well as increased value given the role of the
physical store as part of their omnichannel and drive-to-store
strategy.
Key retailers are increasing their footprint
with URW. Between 2019 and 2021, the Group’s top 50 retailers in
Europe, who account for 29% of total MGR, increased their GLA by an
average of 7% for an average MGR increase of 6%.
URW expects tenant sales to return to pre-COVID
levels in 2022, occupancy and variable income in the course of
2023, and retail NRI on a run rate basis in 2023, with full effect
in 2024. In 2024, the Group forecasts Retail NRI of €1.56 Bn and
EBITDA of circa €1.9 Bn for its streamlined European portfolio.
The Group’s Convention and Exhibition business
is expected to further recover in 2022 and return to normalised
levels in 2023, ahead of the 2024 Paris Olympics. URW’s Offices
business will benefit from the full letting of recently completed
projects as well as new deliveries.
GROWTH OF NEW REVENUES
URW has created a dedicated division to generate
increased revenues from advertising, brand experience and data
services.
The new division will generate €75 Mn in annual
net revenues by 2024 with €23 Mn in additional CAPEX11 to support
this growth. This investment will be split between upgrading and
increasing the Group’s 1,700 in-mall advertising screens, and the
roll out of fully GDPR-compliant technology to qualify footfall at
URW’s Westfield-branded malls.
UNLOCKING VALUE THROUGH MIXED USE
DEVELOPMENT
URW will continue to maximise the value of its
assets through targeted mixed-use development, capitalising on its
established position in the most valuable European real estate
markets with high barriers to entry.
By 2024, URW will deliver €2 Bn of its committed
pipeline which will generate €125 Mn in stabilized NRI. In
addition, URW will unlock further development opportunities
embedded in its assets during the plan horizon, with a potential €1
Bn in projects to add to its controlled pipeline, with limited
predevelopment expenses.
Underpinned by the Group’s disciplined capital
allocation approach, URW will focus on densifying its flagships
with office, hotels and residential, as well as repurposing retail
space and, where appropriate, extending to add high-growth
alternative uses.
BUILDING ON ESG LEADERSHIP
URW launched its ambitious, industry leading
Better Places 2030 ESG strategy in 2016 and has consistently ranked
in the top-quartile on ESG performance. URW’s comprehensive
approach addresses all stakeholders and the Group’s carbon
reduction targets have been approved by the Science Based Targets
initiative and are consistent with levels required to meet the
Paris agreement goal of limiting global warming to 1.5 °C.
URW is on track to meet all Better Places 2030
commitments, including cutting carbon emissions across its value
chain by 50% between 2015 and 2030. The Group has also made good
progress in energy efficiency and green energy usage. 90% of URW
assets in Europe have received Outstanding or Excellent ratings
from the BREEAM IN-USE certification, the world’s leading
sustainability assessment method, compared to 30% for the European
Retail Real Estate sector as a whole.
URW is committed to contributing to global
carbon neutrality and will present a step-change update to its plan
in 2023 with a view to establishing new commitments.
CAPITAL ALLOCATION & DIVIDEND
URW outlined its disciplined capital allocation
framework that balances continued investment in future growth with
maintaining a strong balance sheet.
URW will continue to sell mature assets that do
not meet its return criteria or that do not fit its destination
strategy. URW will continue to invest in projects and acquisitions
on an opportunistic basis, looking at the expected Internal Rate of
Return, the level of risk and any balance sheet constraints. URW
will resume the payment of sustainable dividend from fiscal year
2023.
For further information, please contact : Investor
RelationsMaarten Otte+33 7 63 86 88 78Maarten.Otte@urw.com
Media Relations Cornelia Schnepf – Finelk+44 7387
108 998Cornelia.Schnepf@finelk.eu
About Unibail-Rodamco-Westfield
Unibail-Rodamco-Westfield is the premier global
developer and operator of Flagship Destinations, with a portfolio
valued at €54.5 Bn as at December 31, 2021, of which 86% in retail,
6% in offices, 5% in convention & exhibition venues and 2% in
services. Currently, the Group owns and operates 85 shopping
centres, including 53 Flagships in the most dynamic cities in
Europe and the United States. Present on two continents and in 12
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 2,800 professionals and
an unparalleled track-record and know-how,
Unibail-Rodamco-Westfield is ideally positioned to generate
superior value and develop world-class projects.
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 a BBB+ rating from Standard
& Poor’s and from a Baa2 rating from Moody’s.
For more information, please visit www.urw.com
Visit our Media Library at https://mediacentre.urw.com Follow the
Group updates on Twitter @urw_group, Linkedin
@Unibail-Rodamco-Westfield and Instagram
1 At 100% share2 URW Total Investment Cost excluding Triangle
(delivery in 2026)3 Excludes Hotel Pullman Montparnasse, delivered
in December 20214 At 100%5 URW Total Investment Cost6 In terms of
MGR7 IFRS LTV including hybrid8 2019 retail NRI and EBITDA on
stabilised European portfolio9 In terms of GMV10 As at December 31,
2021, based on European portfolio only, excluding any remaining US
exposure.11 At 100%
- Unibail-Rodamco-Westfield presents path to 2024 and beyond
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