Look at the markets and we''re nearly back to normal; listen to the news and chaos is round the corner. In a world of unease and doubt, at Exane BNP Paribas we are focused on where we can bring clarity: analysing the opportunities tomorrow may bring. Following our major cross-sector reports, Funding Frenzy and One for the Kidz, we introduce a powerful new lens on the future: The Trend Accelerator, a review of how and where COVID has intensified macro pressures. First, our Strategy and Economics teams identify six trends they think should increasingly be influencing your investment decisions. Then our deep bench of top-ranked sector analysts select the stocks they believe can harness the forces at work... and those that could be swept away.
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22 Jun 20
Hybrids will come-back; they will not fully rescue NAVs
The Q1 20 figures from the old world were unsurprisingly good with a stable revenue, lfl. As Hammerson confirmed today that Orion decided not to buy its £400m retail parks in the UK, we can assume that all other players will experience some difficulties in selling assets in the coming quarters. How will Klépierre’s balance sheet react to the crisis?
06 May 20
Contained erosion of Gross Asset Value in H2 19
Erosion of Gross Asset Value was 1.1% in H2 19 (at constant perimeter) and 2% over FY 19. Don’t wait for a strong share price rebound but annual dividend yield looks safe (c.7%) as the retailer’s sales stand in positive territory (+1.8% for FY 19).
06 Feb 20
Resilient, but not enough to avoid some first negative revaluations in H1 19
Klepierre experienced a slight negative revaluation of 0.9% in its full €24bn portfolio in H1 19. The rate does not look harsh, but it could last. For now, more than some peers, the group is protected by its 3% lfl growth in rents. All in all, the NNNAV was down 3.6% in six months despite its resilient rents.
25 Jul 19
Unsurprising lack of dynamism on Q4 French tenants’ sales
FY18 underlying cash flow per share: €2.65. Guidance >€2.62. Dividend up to €2.10 from €1.96 implying a 6.9% yield. Assets revaluation (excluding capital gains): H1 was +1.3%, FY18 +1.5%. This reflects the first 10bp decompression in yields after years of compression, from 4.8% to 4.9% on shopping centres. NNNAV not disclosed. NAV of €40.5 per share vs. €39.50 in H1 18 and €39.6 at the end of 2017. Key points in Q4, tenants’ sales: France -0.3% (35% of revenue, Yellow Vests induced slowdown), +2.3% excluding France; slight improvement in Germany (4% of revenue): +0.1% FY18 vs. -0.8% 9M18.
07 Feb 19
No Brexit/internet fears
Following the latest rumours in the market, Klépierre’s bid offer on Hammerson is no longer a secret. On Monday (19 March), Klépierre confirmed that it had made a proposal to the board of Hammerson a fortnight previously, walking in the footsteps of Unibail and its €24.7m Westfield deal. It has proposed a £5bn takeover offer at a value of 615p per Hammerson share, the Board of which has immediately rejected the offer.
22 Mar 18
Taking advantage of the favourable climate
Klépierre reported its FY17 results, revenues increased by 1.6% yoy (in line with our estimates) to €1,321m. Shopping centre NRI was up by 3.3% on an organic basis. The commercial portfolio value reached €23.4bn (c. 98% of the total portfolio), with 4% lfl compared to FY16. The LTV remained stable at 36.8%, thanks to the rise in property values. We remain optimistic following the good set of numbers.
12 Feb 18
Leasing activity continued apace in Q3 17
Klépierre released its Q3 figures. Gross rental income rose by 1.8% to €924.4m over 9 months. Shopping centres’ gross rental income was up by 2.1% yoy. Leasing activity accounted for 1,440 leases signed at 30 September 2017 (against 1,356 leases yoy). Net debt was quasi stable, at €9.1bn, with cost of debt reduced to 1.8%.
02 Nov 17
Improving trends in retailer sales
Klépierre posted H1 revenues of €654.5m, slightly up by 100bp yoy. Net rental income from shopping centres stood at €527.1m, up by 1.22% (2.7% lfl). EPRA NAV was €37 per share, against €34.80 a year earlier. Net debt stood at €9,134m, up by 6% since FY16. This increase is mainly attributable to the dividend payment, leading Klépierre’s LTV to 38.2% at June 2017. In H1, the cost of financing was 1.9%.
02 Aug 17
Positive results, waiting on disposals
We have updated our model on Klepierre’s FY16 numbers. The published figures are marginally in line with our expectations and we maintain our positive stance on the stock. As a reminder: • Shopping centre NRI stood at €1.05bn gaining 1.7% yoy (+3.5% lfl), and standing +320bp ahead of the index. • EPS at €2.31, +6.8% yoy, exceeded the guided €2.23-2.25, and stood ahead of our expected €2.28. The proposed dividend was €1.82, +7.1% yoy, and net debt lowered by €244m, leading to a 2.1% decrease in cost of debt. • EPRA NAV per share at €36.7, gained +5.9% yoy while the group’s GAV at €22.8bn, gained 4.5% lfl. Management expects a positive FY17, despite a relatively stable macro environment and limited indexation. EPS is seen at €2.35-2.40.
16 Feb 17
New target price following the H1 figures
Klepierre has published solid H1 16 figures with EPS standing at €1.16, up 8.6% yoy, ahead of our FY expectations. Shopping centre net rental income grew by +2.8% lfl , outperforming the index by 250bp, and Retailer sales grew by +2.6% lfl. EPRA NAV stands €34.8 per share, up 8.7% and above our €33 18-month forward NAV, and the group’s GAV is up 4.8% lfl to €22.6bn. The financial position remains strong with cost of debt down 30bp to 2.6%, the LTV at 39.1% remains stable, and net debt now stands at €9.1bn, down from €9.4bn. Management has revised the EPS guidance to the upper end of the expected €2.23 to €2.25 range for FY16.
27 Jul 16
Strong FY figures: now targeting €67m synergies by 2017
Klepierre published strong FY15 figures. The NRI stood at €1,068m, up 3.4% lfl (an acceleration from the 2.8% in H1 15) and 300bp above indexation. EPS stood at €2.16, the upper end of the targeted €2.10-2.15. This is ahead of our expected €2.14/share. And the announced dividend at €1.70/share is in line with our expectations. The NAV per share stood at €34.7, up 8%, beating our expectations and now only 0.5% below our 18-month forward NAV expectations. Management now guides for EPS of €2.23 to €2.25 for FY16.
10 Feb 16
Strong H1: expecting higher cost synergies from Corio, EPS guidance revised towards the upper end
Klepierre published a strong set of figures for H1 15. Pro-forma organic NRI stood at €525.2m, up 2.8% despite close to no indexation (+0.4%), with +3.5% from Old Klepierre assets and +1.4% from ex-Corio. EPS gained 1.4% to €1.07 and total portfolio value was up by 2.3% to €21.9bn, (o/w €18.9bn GS) and EPRA triple net NAV gained 4.2% to €30.9. The integration of Corio is moving fast and delivering the planned synergies. Management currently expects more than the €20m of synergies initially guided for FY15. Occupier conditions remained strong with same-store sales up by 3.2% or 3.8% including extensions and the financial structure was optimized with: cost of debt now at 2.5% (closer to Unibail’s 2.2%), a higher debt maturity at 5.6 years and a stable LTV at 40%. Management has revised its EPS guidance for the FY15 moving to the upper end of the previously guided EPS of €2.10-2.15; we had been expecting €2.14.
30 Jul 15