Unibail-Rodamco-Westfield SE (UNBLF) Q4 2024 Earnings Call Transcript

2025-02-13 16:01:03 ET

Unibail-Rodamco-Westfield SE (UNBLF)

Q4 2024 Results Conference Call

February 13, 2025 04:00 AM ET

Company Participants

Jean-Marie Tritant - Chief Executive Officer

Fabrice Mouchel - Chief Financial Officer

Conference Call Participants

Florent Laroche-Joubert - ODDO BHF

Veronique Meertens - Kempen

Valerie Jacob - Bernstein

Frederic Renard - Kepler Cheuvreux

Jonathan Kownator - Goldman Sachs

Pierre-Emmanuel Clouard - Jefferies

Sam King - BNP Paribas

Marc Mozzi - Bank of America

Presentation

Jean-Marie Tritant

Good morning, and welcome to Unibail-Rodamco-Westfield's Full Year Results Presentation. 2024 was a year of strong operating performance across all activities. Our shopping centers delivered increased footfall and higher tenant sales. Group occupancy is now at its highest level since 2017, thanks to strong leasing activity with a focus on high-value long-term deals.

Convention & Exhibition delivered record results as our Viparis venues hosted events and operational hubs for the Paris Olympic and Paralympic Games. Offices' NRI grew by double digits thanks to the full leasing of the Trinity Tower and the successful delivery of Lightwell, both in Paris La Défense.

And at Westfield Rise, our retail media agency, we achieved the 2024 net margin target of €75 million set in 2022. Since the start of 2024, we have successfully completed or secured €1.6 billion of disposals at book value, delivering on the discussions that we referenced at the half year. And we have been active on the investment front, acquiring €0.6 billion of JV partners' stakes at attractive terms.

We also faced the challenges related to our Westfield Hamburg-Überseequartier project and I am pleased to say it will open on April 8. I will provide an update on this later in this presentation.

As a result of this strong performance, we achieved full year earnings above guidance and are proposing a 40% increase in our cash distribution to €3.50 per share. This strong performance is reflected in our financial KPIs. Group like-for-like NRI is up 6.7% year-on-year, demonstrating our excellent operations. Our cost of debt remains low at 2%, thanks to our hedging program and access to financing at attractive conditions. Our loan-to-value ratio benefited from our active deleveraging program and is at its lowest level since 2019, with another 100 basis point reduction in 2024. As a result, our net debt-to-EBITDA ratio stands at 8.7x, down from 9.3x at the end of 2023.

Now let's take a closer look at the excellent operational performance of our shopping centers. Over the past 4 years, we have been proactive in our leasing strategy, upgrading our retail offer and upsizing our key retailers. This curated offer continued to drive footfall in 2024 which was up 2.6% from 2023, well ahead of the market. This has resulted in tenant sales growing by 4.5%, ahead of blended national sales indices and outperforming core inflation.

In 2024, the strong appeal of our assets resulted in a high volume of GLA and MGR signed and also achieved a very healthy MGR uplift of 6.5% on top of indexation. For long-term deals, which represented 80% of our total leasing activity, we achieved an impressive uplift of 11.1%. Going forward, our continued sales performance, the appeal of our assets and the commercial tension we have created will allow us to capture additional reversionary potential.

Moving now to Westfield Rise. Our work to consistently enhance the quality of our assets and create an exceptional customer journey, attracts a massive and highly engaged audience that we are monetizing through our retail media agency. And I'm happy to say that we have achieved the €75 million net margin target set in 2022, delivering a 41% increase in Europe versus last year....

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