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    URW   FR0013326246

UNIBAIL-RODAMCO-WESTFIELD SE

(URW)
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Unibail Rodamco Westfield : 2021 Half-Year Results Financial Report

07/28/2021 | 12:14pm EDT

FINANCIAL REPORT - FIRST HALF 2021

Management Discussion & Analysis:

1.

Business review and H1-2021 results

p 4

2.

Investments and divestments

p 33

3.

Development projects as at June 30, 2021

p 36

4.

Property portfolio and Net Asset Value as at June 30, 2021

p 40

5.

Financial resources

p 62

6.

EPRA Performance measures

p 76

7.

EPRA and Adjusted Recurring Earnings per share

p 83

Other information:

1.

Group consolidated data

p 85

2.

List of H1-2021 government restrictions

p 88

3.

Main government support schemes

p 90

4.

Glossary

p 91

Condensed consolidated interim financial statements as at June 30, 2021

p 95

Statutory auditors' review report on the 2021 half-yearly financial information

p 149

Statement of the person responsible for the condensed consolidated interim financial

p 151

statements and the half-year financial report as at June 30, 2021, filed with the

French Financial Authorities (Autorité des Marchés Financiers "AMF")

1

2

MANAGEMENT DISCUSSION & ANALYSIS1:

1.

Business review and H1-2021 results

p 4

2.

Investments and divestments

p 33

3.

Development projects as at June 30, 2021

p 36

4.

Property portfolio and Net Asset Value as at June 30, 2021

p 40

5.

Financial resources

p 62

6.

EPRA Performance measures

p 76

7.

EPRA and Adjusted Recurring Earnings per share

p 83

1 The Management Discussion & Analysis (MD&A) is based on the Financial statements prepared on a proportionate basis.

3

1. BUSINESS REVIEW AND H1-2021 RESULTS

I. ACCOUNTING PRINCIPLES AND SCOPE OF CONSOLIDATION

Accounting principles

Unibail-Rodamco-Westfield's ("URW" or "the Group") consolidated financial statements as at June 30, 2021, were prepared in accordance with International Financial Reporting Standards ("IFRS") as applicable in the European Union as at that date.

Since 2018, the Group also prepares financial statements in a proportionate format, in which the joint-controlled entities are accounted for on a proportionate basis, instead of being accounted for using the equity method under IFRS. The business review and results are presented based on the financial statements on a proportionate basis, with no impact on the net results.

For rent relief granted to tenants in relation to the COVID-19 pandemic and where such relief qualifies as a lease modification because the tenant agrees concessions (e.g. extension of a lease term or higher Sales Based Rent ("SBR")), IFRS 16 applies. Under IFRS 16, the relief is treated as a lease incentive which is straight-lined over the expected term of the lease as a reduction of the Gross Rental Income ("GRI").

Rent relief signed or expected to be signed, granted without any counterpart from the tenants is considered as a reduction of the receivables and is charged to the income statement as a reduction of the GRI.

Certain amounts recorded in the consolidated financial statements reflect estimates and assumptions made by the management in the evolving context of the COVID-19 pandemic and of difficulties in assessing its impact and future prospects. In this context, management has taken into account these uncertainties on the basis of reliable information available at the date of the preparation of the consolidated financial statements, particularly with regards to the fair value of investment properties and financial instruments, the evolution of rent relief and doubtful debtors, as well as the testing of goodwill and intangible assets.

Due to inherent uncertainties associated with estimates, the Group reviews those estimates based on regularly updated information. Actual results might eventually differ from estimates made at the date of the preparation of the consolidated financial statements. In particular, no further lockdowns have been assumed, post H1-2021.

94% of URW's property portfolio and intangible assets related to the Shopping Centres, Offices & Others, Convention & Exhibition and Services segments were valued by independent appraisers as at June 30, 2021.

Scope of consolidation

The principal changes in the scope of consolidation since December 31, 2020, are:

  • The foreclosure of Westfield Citrus Park and Westfield Countryside in January 2021;
  • The disposal of the SHiFT office building located in Issy-les-Moulineaux in January 2021;
  • The foreclosure of Westfield Sarasota in February 2021;
  • The disposal of the Les Villages 3, 4 and 6 office buildings in March 2021;
  • The disposal of a 60% stake in Aupark in May 2021; this asset is now joint-controlled by URW and WOOD & Company, the acquirer, and therefore accounted for using the equity method under IFRS and at 40% in the consolidated financial statements under proportionate (for the investment property and the financial debt);
  • The acquisition of the 47.4% remaining stake in Westfield Trumbull and Westfield Palm Desert in May 2021;
  • The foreclosure of Westfield Broward in June 2021.

Operational reporting

URW operates in nine regions: France, the United States of America ("US"), Central Europe, Spain, the United Kingdom ("UK"), the Nordics, Austria, Germany and The Netherlands.

As France has substantial activities in all three business lines of the Group, this region is itself divided into three segments: Shopping Centres, Offices & Others and Convention & Exhibition ("C&E")2. The other regions operate almost exclusively in the Shopping Centres segment. In the US, the Group also operates an airport terminal commercial management business.

2 C&E includes the Les Boutiques du Palais retail asset.

4

  1. COVID-19 AND THE IMPACT ON URW'S BUSINESS

The COVID-19 pandemic has continued to have a significant impact on URW's business over the course of H1-2021. Consequently, additional performance indicators were added to provide investors with the clearest possible view of conditions during the period.

Closing and reopening of the Group's shopping centres in H1-2021

The operations in URW shopping centres in H1-2021 were again impacted by a series of lockdown and restriction periods that affected the assets and activities of the Group. During the mandatory shutdowns, the Group's priority was to ensure the safety of its employees, customers and suppliers, to ensure security and safety in the assets, and to prepare for reopenings.

The enhanced health and safety measures developed in 2020 remained a key priority in all centres, in particular during reopening periods. These included specific cleaning and social distancing requirements, put in place in 2020 and monitored by fully trained in-centre staff. URW's "Safe & Healthy Places" label, created in 2020 with the support of Bureau Veritas' scientific committee, is used to attest to the excellence of its HSE practices and to ensure compliance with the latest recommendations of local health authorities. 50 of the Group's European centres and all the US centres have now received this label following an independent audit by Bureau Veritas.

During H1-2021, most of the Group's European centres had to close at various points, except for "essential" retailers and excluding the centres in Sweden and parts of Spain which remained open throughout the period, albeit with certain restrictions on F&B, cinemas and fitness. These closures impacted variously between January and May, with restrictions generally easing during April and May. In France, centres over 20,000 sqm were forced to close from January 31 until May 19, while smaller retail formats were only closed in most locations from mid-March, disproportionately affecting URW.

In the US, all of the centres were open throughout the first half, however restrictions on sectors like F&B, entertainment and fitness were only progressively eased during February and March. The Group was impacted by its weighting to California, Maryland area and New York ("NY") where restrictions were generally relaxed later than in many other parts of the country. For example, in Texas and Florida (the two most populous states apart from California and NY) indoor dining was allowed throughout Q4-2020 and H1-2021 and all capacity restraints were removed by March, two-months earlier than in California or NY.

Overall, during the first half of the year, on average, the Group's shopping centres were closed for 683 days (vs. 67 days in H1-2020), including 92 days in Europe (vs. 60 days in H1-2020).

As at June 30, 2021, in all European countries, all sectors were allowed to trade including indoor dining and entertainment, albeit with some remaining capacity limits or other sanitary requirements. A full list of the applicable closures/restrictions is provided in Appendix 2. As at June 30, all the Group's US centres are also able to trade normally and all capacity restraints have been removed.

With no new restrictions being introduced in July, all of the Group's centres are therefore currently able to trade relatively normally, however some restrictions remain in the European centres, with for example requirements for negative COVID tests or completed vaccinations in order to visit bars and restaurants in some markets (e.g. Austria, Czech Republic and Denmark) or capacity limits remaining within stores and venues in some countries. New French regulation could impose requirement for COVID-19 pass to enter shopping centres, subject to local decisions.

The vaccination rate has improved significantly, though with differences across countries where the Group operates, reaching for example 68% of the population having received a first dose in the UK, 58% in France, 60% in Germany and 56% in the US (including 64% in California and 62% in NY)4. Despite progress made on vaccination and in light of the ongoing developments around potential different variants of COVID, it is not possible for the Group to accurately predict the possibility of any restrictions being reintroduced in the second half.

  1. Weighted by shopping centres' NRI in 2019.
  2. As at July 23, 2021.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Unibail-Rodamco-Westfield SE published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 16:13:02 UTC.


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Sales 2021 2 229 M 2 612 M 2 612 M
Net income 2021 -3 709 M -4 346 M -4 346 M
Net Debt 2021 24 661 M 28 893 M 28 893 M
P/E ratio 2021 -2,17x
Yield 2021 -
Capitalization 9 088 M 10 641 M 10 647 M
EV / Sales 2021 15,1x
EV / Sales 2022 12,7x
Nbr of Employees 3 049
Free-Float 79,2%
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Number of Analysts 18
Last Close Price 66,41 €
Average target price 65,63 €
Spread / Average Target -1,18%
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Managers and Directors
Jean-Marie Tritant Group Chief Executive & Operating Officer
Fabrice Mouchel Group Chief Financial Officer
Jean-Luc Neez Director-Finance
LÚon Bressler Chairman-Supervisory Board
Olivier Bossard Chief Investment Officer
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