WRDEF - Wereldhave N.V. (WRDEF) Full Year 2023 Earnings Call Transcript

2024-02-13 11:30:10 ET

Wereldhave N.V. (WRDEF)

Full Year 2023 Earnings Conference Call

February 13, 2024 4:00 AM ET

Company Participants

Matthijs Storm – Chief Executive Officer

Dennis de Vreede – Chief Financial Officer

Conference Call Participants

Presentation

Matthijs Storm

Good morning, ladies and gentlemen. Welcome to the Wereldhave Full Year 2023 Results Webcast. I’m here today with our CFO, Dennis de Vreede. Familiar to many of you, I’m Matthijs Storm, the CEO of Wereldhave. We do the usual format. Dennis and myself will guide you with the slides in this presentation deck through the results. And towards the end of the presentation, there will be an opportunity to ask questions. However, whilst we are presenting, you can already type your questions in the text box in the bottom of your screen and we will go through all the questions towards the end of the presentation.

With that, I’d like to kick off and we go to the key messages directly of the 2023 results. As you have probably seen already, our direct result comes out at €1.73, which is about 6.5% of growth versus last year and well within the range that we communicated in October with the Q3 results, proposed dividend per share, another year of growth, plus 3.5% to €1.20 that will be voted at the AGM in April. I think important the third bullet, tenant sales up 7% versus 2022. Of course, we produced 8% like-for-like NRI growth that is a burden for the retailers, but underlying there is also 7% sales growth. And as you will see throughout the deck, our occupancy cost ratio is roughly stable, slightly up. We still think we are at a very affordable level.

The fourth bullet, positive evolution of the Dutch valuations. I think if you compare to the market and also the news you see in the press, I think it’s quite positive that particularly in our Dutch portfolio, we have a positive valuation result, but also for the Wereldhave portfolio as a whole, we have a positive valuation result for 2023, also the first positive indirect result in about 10 years, which I think certainly helps. Four Full Service Centers delivered last year, all on time, within the budget and on average 94% leased. Of course, that also helped contributing to the valuation result amongst others in the Netherlands.

In December, we announced the first significant acquisition since we launched the LifeCentral strategy back in 2020. We acquired in Hoofddorp shopping center Polderplein, which is the 50% of the covered mall in Hoofddorp, a suburb of Amsterdam that we did not own already. So now we’re the 100% owner and in that webcast we already gave you the insights and the KPIs that we expect on that acquisition in the coming year. Also 2023 was a landmark financing year. Dennis will tell more about that later. We had our first access to equity since 2015 and we also issued our first USPP paper since 2017. So it was a while ago and it’s good to be back in the public capital markets.

Finally on this slide, our outlook for 2024 is a direct result per share of €1.75, that’s another year of growth despite the impact of the higher financing cost, but also despite the dilutive impact of the share issuance that was related to the Polderplein acquisition last year. If we then go to the key numbers, I won’t go through all of them, but as mentioned, direct result per share plus 6.1% and the first positive indirect result for the first time in more than 10 years. Our loan-to-value, we’ll also get back later to that in the presentation, slight uptick of 30 basis points versus December 2022. However, versus the 30th of June, there is a significant decline. Dennis will tell more about that later. If we then go to the results themselves, rental growth for our core portfolio, Netherlands and Belgium, 8% rounded like-for-like. I think that’s a very positive figure and I think most of you – many of you will understand that’s mostly driven by indexation because if you look on the next slide, you can see that our MGR spread, our leasing spread is roughly flat, minus 1.5% in the core markets. So it means that the rental growth has been driven by indexation....

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