VGP NV (VGPBF) Full Year 2024 Results Earnings Call Transcript

2025-02-20 18:17:57 ET

VGP NV (VGPBF)

Full Year 2024 Results Earnings Conference Call

February 20, 2025 4:30 AM ET

Company Participants

Jan Van Geet – Chief Executive Officer

Martijn Vlutters – Vice President-Business Development and Investor Relations

Piet Van Geet – Chief Financial Officer

Conference Call Participants

Frédéric Renard – Kepler Cheuvreux

Marios Pastou – Bernstein

Wim Lewi – KBCS

Steven Boumans – ABN AMRO-ODDO BHF

Edoardo Gili – Green Street

Francesca Ferragina – ING

Thomas Rothaeusler – Deutsche Bank

Paul May – Barclays

Ventsi Iliev – Kempen

Presentation

Operator

Good day and welcome to today's VGP Full Year 2024 Results Call. Throughout today's recorded presentation, all lines will be in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions]

And now I'd like to hand the call over to your host, Mr. Jan Van Geet, CEO. Please go ahead, sir.

Jan Van Geet

Good morning, everybody on the call and thank you for being here present at our VGP financial results call. I will start immediately with the executive summary. The building, which you're seeing on the picture now is our battery assembly plant in Pamplona. Manufacturing projects have been the main driver of our new rental income in 2024, of which most of them we closed actually in the first quarter. And the one which you're seeing is Mobis Hyundai in Pamplona, which is now virtually finished.

I will immediately go to the highlights in 2024. I'm happy to announce a net profit of €287 million, which is an increase of €200 million versus 2023, or 229%. Many of you look at the EPRA NTA while it's up 7% despite the fact that we have paid dividend last year of more than €100 million. And the net asset value growth is 8.4%, up to €2.4 billion. Our EBITDA, and I'm very happy that all of our recurrent businesses have contributed to it very solidly, so the recurring rental business starts to be really important and has contributed €204.3 million to our EBITDA, or an increase of 19%. The development activities, which is in essence where our heart lies because we like to create new things, they contributed €144.8 million, or plus 178%, and the renewable energy starts with more than €8 million of revenue, starts to be really a nice business of which we have €5.4 million EBITDA, which is 236% increase.

Despite all the negative rumors on the market, we signed an historic record of €91.6 million of new and renewed leases of which a big part came over the last quarter. Also, the first two months in 2025 have started very promising and that brings our annualized committed leases at the end of the year to €412.6 million, or an increase of 17.6%. Currently, we have 780,000 square meters under construction. Our development pipeline, also there we've heard a lot of comments, but I was very confident the whole time. It's now 80% pre-lets, including what we're going to start up in the next two months.

And all of our buildings are now, all of our new deliveries are all certified, and we have chosen to do so from all going forward with at least BREEAM Excellent. We even have a couple of outstanding buildings, which I think we are very alone in the market with that and we have also some DGNB Platinum buildings in Germany. We delivered 584,000 square meters in 2024, which is 94% let. We also have very nice demand for what is vacant at the moment.

And despite all the thoughts over joint ventures, we had a record cash recycling of €809 million through four joint venture closings and the disposal of LPM in last year, an absolute record. We're planning to do quite some new transactions also in 2025 with our current joint venture partners. Our photovoltaic capacity grew 53% year-on-year. We also doubled the effective output, the effective income from it. The operational capacity today stands at 155.7 megawatt peak versus 101.8 in December 2023. And so that's an – effectively what we produce on energy has also doubled in 2024. We have a very solid balance sheet, I think, with a gearing ratio of 33.6% versus 40.3% in December 2023 and we have a proportional LTV, which is not a covenant on any of our instruments, but anyway we reported a 48.3% down 5% since 2023. We will ask to our – on our annual shareholders events to approve an ordinary dividend of €90 million, which is €3.3 per share, which is an increase of 12% versus last year. Last year we also did an extraordinary dividend, but compared to the ordinary dividend to normal dividend, it's an increase of 12%.

If we go to the summary of the financial results, we see that now we have €7.8 billion assets under management in total and so it's growing steadily. It's there is an increase of more than €600 million over the last year. That's also reflected in the asset management fee income, which is growing very quickly. We have a continued strong growth in the committed annualized rental income. We have this Quo Vadis instrument inside of VGP where we are always making for ourselves, it's not published, our growth ambitions, with the senior people of the group. And we are on spots of what we wanted to achieve and also on spot I think for what we want to achieve in 2025. So our annualized rental income grew with 17.6%....

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