Growth in recurring earnings and dividend
- Recurring earnings per share of €1.60, up 8% like for like
compared with 20221 (up 2.3% versus 2022 recurring earnings per
share of €1.56)
- Proposed cash dividend of €1.20 per share (a 2.6% increase
on 2022)
- Acquisition of Galimmo: closing expected in summer
2024
- Recurring earnings per share expected to be at least €1.63
in 2024
Excellent operating performance
- Excellent leasing momentum: 826 leases signed, positive
reversion of 2.4%
- Financial occupancy at a record 96.6%, up 0.1 percentage
points versus end-2022
- Specialty Leasing revenue up 9% versus 2022
- Organic growth of 4.7% in net rental income versus
2022
- Retailer sales up 5% versus 2022
Increase in discount rates used in appraisal values partially
offset by growth in the rental base
- Portfolio valuation on a like-for-like basis: down 2.3%
versus end-2022
- Net Initial Yield of 6.42% (around 350 bps above 10-year
French government bond yield)
- EPRA Net Tangible Assets (NTA) per share of €24.17 at
end-2023 (down 4.3%)
Solid financial structure
- Net-debt-to-EBITDA ratio of 7.3x versus 7.7x at
end-2022
- EPRA LTV ratio including transfer taxes2 of 36.6% at
end-2023
- Financing for the Galimmo acquisition secured
- No maturity to be refinanced before May 20273
Regulatory News:
Marie Cheval, Chair and Chief Executive Officer of Carmila
(Paris:CARM) commented:
"In 2023, Carmila continued to successfully implement its
“Building Sustainable Growth” strategic plan. This innovative and
differentiating growth strategy is based on adapting the
merchandise mix, agile and responsible transformation of our assets
and optimised capital allocation.
The results are there to see: financial performance, record
occupancy, successful asset rotation and the Galimmo
acquisition.
2024 will be another year of growth, with more transformation
projects, a long-term vision around mixed-use with Carrefour, and,
above all, the closing of the Galimmo acquisition, which will allow
us to roll out our strategy on a complementary portfolio.”
Key financial highlights
2023
2022
Change
Like-for- like change
Gross rental income (€m)
368.6
357.0
+3.3%
Net rental income (€m)
342.4
335.2
+2.2%
+4.7%
EBITDA (€m)
292.4
287.2
+1.8%
Recurring earnings (€m)
228.2
224.9
+1.5%
Recurring earnings per share (€)
1.60
1.56
+2.3%
2023
2022
Change
Like-for- like change
Property portfolio valuation including
transfer taxes (€m)
5,884.5
6,165.7
-4.6%
-2.3%
Net Initial Yield
6.42%
6.14%
+28 bps
EPRA LTV ratio (including RETTs4)
36.6%
35.8%
+80 bps
EPRA LTV ratio
38.6%
37.6%
+100 bps
EPRA NTA5 per share (in euros)
24.17
25.26
-4.3%
1. 2023 trading
Excellent leasing momentum: 826 leases signed in 2023
Carmila saw good leasing momentum in 2023, with the Company
signing 826 leases for total minimum guaranteed rent of €44.1
million (up 4.4% year on year), or 12.2% of the rental base.
Reversion was a positive 2.4% on average over the year, on top of
the indexation effect. This indicator includes new leases on vacant
premises and renewals.
Leasing activity reflects Carmila's proactive strategy in terms
of its merchandise mix, in particular:
- More than 80 new retailers opening stores
at Carmila centres for the first time; - Consolidation of the
healthcare offering, with opticians (Alain Afflelou, Soloptical,
Krys and Grand Optical), new pharmacies and pharmacy extensions; -
Development of discount chains (Action, Normal, Tedi); - Renewal of
the food and restaurant offering, with new concepts such as
Crêp'touch in France, Popeyes in Spain, and a mix of international
names (McDonald’s, KFC, Starbucks) alongside independent and
regional concepts; - Expansion of the sports segment, with
Intersport, Basic Fit, JD Sports and Courir in France, along with
Area Fit and Décimas in Spain.
The financial occupancy rate came out at an all-time high of
96.6% at end-2023, thanks to particularly strong leasing activity
in the second half of the year and a record level of temporary
retail activity at the end of the year, particularly in the lead-up
to Christmas. Specialty Leasing revenue was 9% higher year on year.
Temporary retail activity (sales events and pop-up stores) was also
at a record high level.
Retailer sales were up 5% on 2022
Retailer sales in Carmila centres for 2023 were up 5% on 2022.
Footfall in Carmila centres was 2% higher than in 2022, driven by
the attractiveness of Carrefour hypermarkets.
The trend was the same in France, Spain and Italy. Spain
delivered particularly good performances, due mainly to the strong
rebound in tourism.
The average occupancy cost ratio of Carmila's tenants was 10.6%
as of end-2023, stable versus 2022 (10.5%).
2. Financial results
Net rental income up 4.7% year on year on a like-for-like
basis
Net rental income was up 4.7% on a like-for-like basis in 2023,
driven by 4.1% rent indexation as well as organic growth resulting
from the strong leasing performance.
On a reported basis, taking into account the sale of three
assets in France and four assets in Spain, net rental income
climbed 2.2% year on year.
The collection rate for the year came out at 96.5%, in line with
2022.
Recurring earnings per share up 8% vs. 2022 at constant scope
to €1.60
Recurring earnings per share for 2023 were €1.60, an 8% increase
versus 2022, at constant scope and adjusted for exceptional income
resulting from the collection of prior-year rents6. This was 2%
higher than the guidance confirmed in October 2023.
Recurring earnings per share as reported were up 2.3% on the
prior-year figure of €1.56.
Cash dividend of €1.20 per share to be proposed to
shareholders at the Annual General Meeting
The Annual General Meeting to be held on 24 April 2024 will be
asked to approve a per-share dividend of €1.20 in respect of 2023,
to be paid in cash (a 2.6% increase year on year).
This corresponds to a payout of 75% of recurring earnings. As a
reminder, Carmila's dividend policy for the period 2022 to 2026, as
announced to the market in December 2021, is to pay out at least
€1.00 per share in cash, with a target payout ratio of 75% of
recurring earnings.
Portfolio value on a like-for-like basis: down 2.3% versus
end-2022
As of 31 December 2023, the gross asset value of Carmila’s
portfolio, including transfer taxes, stood at €5.9 billion, down
2.3% versus end-2022 on a like-for-like basis.
This like-for-like decrease is attributable to higher discount
rates, the effect of which is partially offset by the growth in the
rental base. The portfolio capitalisation rate (Net Initial Yield)
was up 28 basis points year on year, to 6.42%. Since 2017, this
capitalisation rate has risen by 100 basis points, while the effect
of higher capitalisation and discount rates used to value the
portfolio has been broadly offset by organic growth in the rental
base. Further, the yield on the portfolio represents a substantial
premium of around 350 basis points over the yield on 10-year French
government bonds.
On a reported basis, the value of the portfolio is down 4.6% due
to the sale of three assets in France and four assets in Spain.
EPRA Net Tangible Assets (NTA) per share of €24.17 at
end-December 2023
Carmila’s EPRA Net Tangible Assets (NTA) per share was €24.17,
down 4.3% on the end-2022 figure. The decrease can be explained by
lower like-for-like appraisal values (negative €1.45 per-share
impact), recurring earnings for the period (positive €1.60 impact),
payment of the dividend (negative €1.17 impact), share buybacks
(positive €0.10 impact) and other effects (negative €0.17
impact).
S&P rating maintained at BBB with a stable
outlook
On 16 November 2023, S&P confirmed Carmila's credit rating
of BBB with a stable outlook.
Carmila's financial position is solid, with an EPRA LTV ratio
including transfer taxes of 36.6% at end-December 2023, a net debt
to EBITDA ratio of 7.3x as of 31 December 2023 and an interest
coverage ratio of 4.7x.
3. Acquisition of Galimmo
On 12 July 2023, Carmila signed an agreement (put option) with
the controlling shareholders of Galimmo SCA to acquire 93% of the
company's capital. The acquisition of Galimmo will be completed
simultaneously with the acquisition of Cora France by
Carrefour.
The geographic complementarity of Carmila and Galimmo’s
portfolios provides an opportunity to roll out Carmila's strategy
across a broader scope.
Galimmo's 52 assets, mostly located in North-East France, were
valued at €688 million at end-December 2022. The aim is to roll out
the powerful Carrefour-Carmila ecosystem across this new geographic
area.
The total consideration for the acquisition of 100% of the
shares of Galimmo represents €294 million, to be paid in cash by
Carmila.
The transaction offers a compelling value proposition to
Carmila's shareholders, with an implied acquisition yield of 9.8%
on Galimmo's portfolio and accretion of both net asset value per
share (up 5% pro forma) and recurring EPRA earnings per share (up
3% to 5% pro forma).
The transaction is expected to close in the summer of 2024 once
all related anti-trust and regulatory approvals have been
obtained.
Galimmo SCA currently holds a 15% stake in a Belgian entity
which owns seven shopping centres in Belgium. Prior to completion
of the transaction, Galimmo will sell this stake to the entity's
controlling shareholders, together with a current account granted
to the Belgian entity, for a total cash consideration of €76
million, thereby reducing its pro forma net debt to around €65
million, with an LTV ratio of 9%. The transaction is estimated to
increase Carmila's pro forma Loan-to-Value ratio (including
transfer taxes) by around 160 basis points.
4. Implementation of the 2022-2026 strategic plan, "Building
Sustainable Growth”
Second successful year of the strategic plan
In December 2021, Carmila launched its new strategic and
financial plan for 2022-2026. This plan sets out Carmila's new
ambition to build sustainable growth, invest in new business lines
and transform its assets. The plan is based on three pillars:
- a new role for Carmila as an incubator and
omnichannel platform; - leadership in sustainability, notably
through mixed-use urban development projects and a commitment to
reach “net zero” (Scopes 1 & 2) by 2030; - investment in new
business lines: digital infrastructure and new retail concepts
Since the plan was announced, Carmila has achieved its financial
targets in terms of recurring earnings growth, dividend payouts and
an ongoing robust financial structure, as well as continuing its
strategy of adapting the merchandise mix, acting as an incubator
for new retailers and driving omnichannel innovation. The Company
completed numerous agile asset transformation projects,
demonstrating Carmila's ability to embrace the highest
environmental standards. Lastly, the development of new business
lines continues apace, with the launch of Next Tower's 5G tower
development business in Spain.
Execution of the second phase of the asset rotation
strategy
Since the launch of its new strategic plan, Carmila has sold 13
assets for close to €300 million including transfer taxes,
representing around 5% of the portfolio's value. All disposals were
made at prices in line with appraisal values.
After having exceeded its initial €200 million disposal target
ahead of schedule at the beginning of 2023, following the sale of a
portfolio of four assets in Spain, Carmila announced a new target
of €100 million in disposals by the end of 2024. Of this amount,
around €45 million in disposals were completed in 2023, including
Torcy Bay 1 to Etixia, which was finalised in the fourth
quarter.
Carmila took advantage of the financial flexibility resulting
from its successful asset rotation strategy by acquiring
Galimmo.
A clear vision of long-term value creation through mixed-use
projects
Carmila announced its intention to launch mixed-use projects to
redevelop sites encroached upon by the city since their initial
development. The aim is to reposition the shopping centre and help
sustainably transform local regions. These currently 100% retail
sites will become mixed-use, with homes, offices, local services
and green spaces.
At the end of 2023, against a backdrop of regulations that
favour the redevelopment of already-developed land, 13 Carmila
sites are concerned by the Carrefour-Nexity development project.
Carmila also continued to work with Carrefour and Altarea on its
mixed-use projects in Nantes Beaujoire and Sartrouville.
On track to meet the objectives of Carmila's three growth
initiatives
The three growth initiatives of the “Building Sustainable
Growth” strategic plan – Next Tower, the omnichannel incubator and
Carmila Retail Development – are targeting an additional
contribution of €30 million per year to recurring earnings by
2026.
- Secured annual rental income from leases
signed by Next Tower amounted to around €2.0 million as of
end-2023. Next Tower currently operates 143 antennas in France and
Spain. - In 2023, the incubator and omnichannel services platform
for retailers contributed €4.3 million to recurring earnings.
Carmila is stepping up the development of its service platform for
retailers, which spans development of the franchise, management of
the online presence, pop-up and flash pop-up sales, DNVB
incubators, targeted marketing and in-centre connectivity. -
Carmila's share of the EBITDA of Carmila Retail Development's
equity-accounted partner companies in 2023 is €2.0 million, thanks
to the strong growth momentum of the Cigusto chain. At the end of
2023, Carmila Retail Development has 13 partners for a total of 305
stores, of which 134 are located in Carmila centres.
Ongoing asset transformation strategy
Carmila is pressing ahead with its asset transformation strategy
through restructurings and projects designed to create new
restaurants and food courts. In 2023, 34 projects of this type were
delivered, representing a total investment of €44 million.
A similar number of agile projects and a capital expenditure
budget of around €40 million are planned for 2024.
5. A clear roadmap for sustainable growth
Commitment to reduce carbon emissions (“net zero” Scopes 1
& 2 emissions by 2030)
Carmila is targeting “net zero” Scopes 1 & 2 carbon
emissions by end-2030, by which time it will have cut emissions by
90% versus 2019, notably by reducing energy consumption and
transitioning to renewable energy at its centres. The remaining 10%
of emissions will be offset, in keeping with the recommendations of
the Science Based Targets initiative (SBTi), through carbon credit
financing in France (low-carbon label) acquired on the voluntary
carbon market. This has led to partnerships with Agoterra (around
4,000 tCO2eq. via farming projects) and Carbonapp (around 1,000
tCO2eq. via a reforestation project). Carmila will also continue to
reduce its Scope 3 emissions, with the aim of becoming fully
carbon-neutral on all of its sources of emissions by 2040.
At the end of 2023, Carmila’s Scopes 1 & 2 greenhouse gas
emissions were 46% lower than in 2019, due notably to a 50%
reduction in energy consumption compared to 2019.
An ambitious energy conservation plan
Carmila’s energy conservation plan is based on a combination of
technological innovation (artificial intelligence, building
management systems, etc.), investment (replacing HVAC equipment,
lighting) and careful management of our facilities. In recognition
of these efforts, Carmila has been awarded the Cube Flex Shield, a
prize organised by the French electricity grid operator RTE, Action
for Market Transformation and French building performance institute
IIFPEB, and presented by the French Minister for Energy Transition
on 15 June 2023. In October, Carmila committed to continuing along
this path, renewing its signature of the governmental Energy
Conservation in Commercial Buildings Charter.
Annual €10 million “green capex” investment plan
In addition to efforts to reduce energy consumption, an
ambitious annual €10 million “green capex” investment plan has been
drawn up to retrofit the most energy-intensive assets. At the end
of 2023:
- 100 sites were equipped with LED lighting
and centralised technical building management systems; - 40 HVAC
systems were renovated, giving one-third of the centres in the
portfolio innovative, energy-efficient equipment; - 30 centres were
fitted with innovative smart sensors by our partner The WatchDog,
allowing us to closely monitor sites using artificial intelligence
technology.
To encourage eco-mobility, recharging points for electric
vehicles have been installed at 93% of Carmila sites in France.
Transparency on the non-financial characteristics of the
portfolio
In 2023, Carmila's BREEAM In-Use certification rate stood at
95.8% of the portfolio in terms of value, with 31% of sites rated
Very Good BREEAM. More than 50 centres were recertified or
certified in 2023.
Carmila recognised for the quality of its financial and
sustainability reporting
Carmila received an EPRA sBPR Gold award for the fourth time in
recognition of its alignment with the highest sustainability
reporting standards. Carmila also received an EPRA BPR Gold award
for the quality of its financial disclosures.
Carmila was also recognised for its leadership in terms of
transparency and performance with respect to climate change by
international not-for-profit environmental organisation CDP, which
included the Company in its 2023 A-list (346 companies) of
respondents to its Climate Change questionnaire. Carmila was able
to maintain its position in the Top 5% of the 23,000 companies that
responded to the questionnaire.
Carmila enters the 2023 ranking of women in executive
management at SBF 120 companies in 11th place
This annual ranking, drawn up under the aegis of the French
Ministry for Gender Equality and the Fight against Discrimination,
assesses the commitment of SBF 120 companies to increasing the
number of women in executive management positions and to gender
equality in the workplace more generally. Carmila also scored
95/100 on the Gender Equality Index. These results reward Carmila's
proactive policy in favour of diversity.
6. Outlook
Completion of the Galimmo acquisition
The Galimmo acquisition, expected to close in the summer of
2024, will be accretive to recurring earnings per share from the
closing date. Due to the significant implied purchase price
discount versus the appraisal value of the Galimmo portfolio
expected at the time the transaction is completed, the transaction
will also be immediately accretive to Carmila's net asset value due
to the gain resulting from a bargain purchase (negative goodwill),
as defined by the relevant IFRS standards.
Once the transaction has been completed, Carmila will also be
able to deploy its medium-term value creation strategy on the
Galimmo portfolio.
Recurring earnings per share expected to be at least €1.63 in
2024
Carmila’s recurring earnings per share are expected to be at
least €1.63 in 2024 (2% growth vs. 2023).
This expected recurring earnings growth assumes organic growth
in rents, supported by indexation in line with that of 2023, as
well as the consolidation of a portion of Galimmo's recurring
earnings. These two factors will help offset a moderate rise in
financial expenses following the financing operations carried out
in 2023, in particular to finance the Galimmo acquisition on very
attractive terms for Carmila.
The full annual accretion to recurring earnings per share
(between 3% and 5% pro forma) from the Galimmo acquisition is
expected in 2025. In 2024, Galimmo’s contribution will cover part
of the year only.
Additional information
The presentation of Carmila’s 2023 annual results will be
broadcast live on 14 February 2024 at 09:00 a.m. (CET) on Carmila’s
website (www.carmila.com).
The presentation in English will be made available on Carmila’s
website on the following page:
https://www.carmila.com/en/finance/financial-presentation/
A replay of the webcast will then be available online during the
day on 14 February 2024.
A document entitled "Consolidated financial statements and
commentary on 2023 business activity" will be made available on
Carmila's website at the following page:
https://www.carmila.com/en/finance/financial-press-releases/
The audit procedures on consolidated financial statements have
been carried out. The audit report will be issued following the
final verification of the presentation of information in the format
stipulated by ESEF regulation relating to accounts that will be
included in the annual financial report.
INVESTOR AGENDA
14 February 2024: Annual results presentation 17 April
2024 (after market close): First-quarter 2024 financial
information 24 April 2024: Annual General Meeting 24 July
2024 (after market close): First-half 2024 results 25 July
2024: First-half 2024 results presentation 17 October 2024
(after market close): Third-quarter 2024 financial
information
ABOUT CARMILA
As the third-largest listed owner of commercial property in
Europe, Carmila was founded by Carrefour and large institutional
investors in order to enhance the value of shopping centres
adjoining Carrefour hypermarkets in France, Spain and Italy. At 31
December 2023, its portfolio was valued at €5.9 billion and is made
up of 201 shopping centres, with leading positions in their
catchment areas.
Carmila is listed on Euronext-Paris Compartment A under the
symbol CARM. It benefits from the tax regime for French real estate
investment trusts (“SIIC”). Carmila has been a member of the SBF
120 since 20 June 2022.
Important notice
Some of the statements contained in this document are not
historical facts but rather statements of future expectations,
estimates and other forward-looking statements based on
management’s beliefs. These statements reflect such views and
assumptions prevailing as of the date of the statements and involve
known and unknown risks and uncertainties that could cause future
results, performance or events to differ materially from those
expressed or implied in such statements. Please refer to the most
recent Universal Registration Document filed in French by Carmila
with the Autorité des marchés financiers for additional information
in relation to such factors, risks and uncertainties. Carmila has
no intention and is under no obligation to update or review the
forward-looking statements referred to above. Consequently, Carmila
accepts no liability for any consequences arising from the use of
any of the above statements.
This press release is available in the
“Financial Press Releases” section of Carmila’s Finance webpage:
https://www.carmila.com/en/finance/financial-press-releases
1 At constant scope and adjusted for non-recurring income
resulting from the collection of prior-year rents. 2 EPRA LTV ratio
including real estate transfer taxes (RETTs). 3 Carmila's cash
position at end-2023 is sufficient to cover repayment of the bond
maturing in 2024. 4 Including real estate transfer taxes. 5 Net
Tangible Assets 6 Scope effect of EUR 8 million or €0.05 per share
and net effect of exceptional income of EUR 3 million or €0.02 per
share
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240213946800/en/
INVESTOR AND ANALYST CONTACT Jonathan Kirk – Head of
Investor Relations jonathan_kirk@carmila.com +33 6 31 71 83 98
PRESS CONTACT Elodie Arcayna – Corporate Communications
Director elodie_arcayna@carmila.com +33 7 86 54 40 10
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