VGP NV: Financial Result for FY2022
February 23 2023 - 1:00AM
VGP NV: Financial Result for FY2022
23
February 2023, 7:00am,
Antwerp, Belgium: VGP NV (‘VGP’ or ‘the Group’), today
announces the results for the financial year ended 31 December
2022:
- Solid operating
performance
- Strong rental
activity with € 73.4 million of
signed and renewed leases bringing the annualised committed leases
to € 303.2 million1, a 18.4% YoY increase
- 44 projects
delivered representing a record 1,141,000
m² and € 71.9 million of annualised rental
income.
- 26 projects
under construction at year-end representing 814,000
m² and € 51.3 million of additional annual rent once fully
built and let (>90% pre-let
today2)
- €5.9 million
gross renewable energy income
-
Operating profit of
€ 177.5 million
before unrealized valuation losses of € 293 million3, amongst
others reflecting a like for like negative revaluation change of
7.33% on VGP’s portfolio4 due to further increasing of market
yields
- Cash recycled
for € 347 million through disposals and closings with joint
ventures, which have led to € 87.2 million realized gains on a
record year of transactions with the joint ventures
- Progress on
existing joint ventures:
- successfully
executed the 10th closing as per January 17th with the First Joint
Venture generating € 81 million in cash
- Advanced
discussions on new JVs’ setup and closings in 2023 on various parts
of the portfolio
- Year-end gearing
ratio amounts to 34.4%, supported by € 1.1 billion of available
liquidity
- Intention to
propose to the AGM a distribution of a gross dividend of € 2.75 per
share
Jan Van Geet, CEO of
VGP, said: “I am proud of our performance in 2022, in
terms of leasing activity it is one of our best years ever, and
taking into account the economic and geopolitical challenges it is
perhaps our best year thus far, having signed and renewed leases in
amount of € 73.4 million. Whilst we have booked a devaluation of
our portfolio in response to macroeconomic conditions, VGP realized
€ 87.2 million gains on all disposals to JV’s in ‘22, reflecting
high double digit IRRs, in what was a record year of closings with
our JV partners.”
Jan Van Geet continued: “Over the year we
delivered a record number of >1.1 million square meters of high
quality assets and, as a result, our net rent and renewable energy
income increased with 51% at share to €107 million. With a total of
€ 303 million contracted rental income, our portfolio cash flow
will continue to grow at a similar pace in 2023. Likewise, our
efforts in building a renewable energy platform sees good momentum
with +200 MWp of solar systems either already installed or under
construction.”
Jan Van Geet concluded: “We approach 2023 with
confidence as we see continued healthy occupier demand, start to
see construction costs coming down, and our technical competence
and ESG measures becoming increasingly important factors of
distinction. We benefit from a strong cash position and are on the
look-out for new opportunities which will become available in the
present environment, yet, we remain vigilant due to prevailing
uncertainties and are focused on profitable developments against
attractive conditions. This was showcased during the delivery of
VGP Park München last December, a project fitted to the highest
technical standards and a plurality of sustainability measures,
delivered significantly within budget. We count on the desirability
of our locations and the agility of our teams to further strengthen
our pipeline.”
FINANCIAL AND OPERATING HIGHLIGHTS
Strong new leasing
activity continued
- Signed and
renewed rental income of € 73.4 million driven by 904,812 m² of new
lease agreements signed corresponding to € 53.8 million of new
annualised rental income
- Germany
contributed most new leases (€ 25.4 million; 44%) whilst the
remainder was geographically well spread across the markets VGP
operates in: Romania € 5.2 million (9%), Spain € 4.4 million (8%),
Czech Republic € 4.3 million (8%), Netherlands € 3.9 million (7%),
Serbia € 3.5 million (6%), Hungary € 3.2 million (6%), Slovakia €
3.1 million (5%), Austria € 2.4 million (4%), Latvia € 1.2 million
(2%), Portugal € 0.8 million (3%), and Italy € 0.1 million
(1%).
- Lease
agreements renewed for 308,000 m² (corresponding to € 16.0
million of annualised rental income) and € 3.6 million of
indexation. € 10.3 million rental contracts terminated, replacement
contracts have a 12% average increased pricing.
- The total
signed lease agreements represent € 303.2 million5 annualised
committed rental income (equivalent to 5.2 million m² of lettable
area), a 18.4% increase versus December 2021 reported at € 256.07
million.
- VGP expects a
considerable amount of rental increase in 2023 throughout its
entire portfolio as lease agreements are annually indexed against
inflation.
Record year in project
delivery
- During 2022 we
delivered 44 projects representing a record 1,141,000 m² of
lettable area, which equates to € 71.9 million of annualised rental
income (98.7% let).
- At year-end 26
projects were under construction representing 814,000 m² of future
lettable area, which, once delivered and fully let, will generate €
51.3 million of annualised committed rental income; the portfolio
under construction is currently +90% pre-let6.
Land bank
- Over the last
12 months in total 1,970,000 m2 of land was acquired representing a
development potential of minimum 792,000 m2 and a further 2,405,000
m2 of land plots were committed, pending permits, which have a
development potential of at least 1,076,000 m2 of future lettable
area, bringing the total owned and committed land bank to
10,362,000 m2, supporting a minimum of 4,664,000 m2 of future
lettable area
- In addition to
the owned and committed land bank, VGP has signed non-binding
agreements (“land under option”) and is currently performing due
diligence investigations, on an exclusive basis, on the potential
acquisitions of in total circa 321,000 m² of new land plots
with a development potential of at least 136,000 m2. This
brings the land bank of owned, committed and under option to
10,683,000 m2 supporting circa 5,000,000 m2 of future lettable
area.
- The land bank is
well spread across the countries in which we operate.
- We remain
vigilantly focussed on expanding our landbank, with a priority
focus on Germany and the new countries France and Denmark.
Significant strengthening of the team
- At the end of
2022 the VGP team consisted of 383 FTE equivalent, net +61 FTE
versus 2021 as we have strengthened our teams across the board and
set up a team in France and Denmark. The number of FTE is not
expected to grow further in 2023.
- Start of
operations in Sweden and Greece has been postponed. The Group will
reassess entry into those countries once local logistics markets
have stabilized.
Joint Venture closings
- In March 2022
VGP and Allianz Real Estate announced the successful third closing
in the Second Joint Venture with a total transaction volume of €
364 million. The gross proceeds from this transaction amounted to
circa € 233 million7. The transaction comprised of 13 logistic
buildings, including 9 buildings in 7 new VGP parks and another 4
newly completed logistic buildings which were developed in parks
previously transferred to the Joint Venture.
- Two additional
closings took place on July 1st, one in the First and one in the
Second Joint Venture. The transaction occurred for a total gross
asset value of € 105 million and with gross cash proceeds for VGP
amounting to € 82 million8. The closing in the First Joint Venture,
also called Rheingold, contained 8 logistic buildings of which 3
were located in Germany, 4 in the Czech Republic and one in
Hungary. The closing in the Second Joint Venture, also called
Aurora, consisted of one Portuguese asset.
- In December VGP
and Allianz Real Estate executed the closing of the Third Joint
Venture upon the completion of VGP Park Munich. The transfer
consisted of a total GAV of € 418 million. The remaining payment
received upon the closing amounted to € 70 million cash, a
remaining € 7 million related to the transaction will be received
during H1 ’23.
- An additional
closing was announced in December for the First Joint Venture; the
10th closing comprised of three new logistic buildings located in
Germany (one) and in the Czech Republic (two) representing 113,000
m2. The transaction value exceeded € 110 million and the gross
proceeds amounted to € 81 million. The closing of the transaction
has been effectuated in the course of January. Upon the closing of
this transaction the First Joint Venture has reached completion and
has entered its holding period.
- VGP and Allianz
Real Estate have subsequently agreed to extend the holding term of
the First Joint Venture agreement by 10 years to 2036. When the
First Joint Venture was set up in 2016 it shaped the ambition for a
long term-partnership. The extension announcement has reinforced
the cooperation between the partners.
- In addition VGP
received a total profit distribution of € 60 million9 from the
joint ventures over 2022.
- VGP is currently
in discussions with Allianz Real Estate and various other potential
joint venture partners about the Europa joint venture and other
potential joint ventures. Various alternative structures are being
assessed and the Group expects to be able to update the broader
market once closing term sheets are signed.
- The first upcoming closing will be
the anticipated fourth closing for Aurora, the Second Joint
Venture, which is expected to occur in H1 2023 comprising of 12
assets (260,000 m2) in Austria, Italy, Spain and the
Netherlands.10
Strengthened capital and
financial position
- On the 10th of
January 2022, VGP announced the successful issue of its second
public benchmark green bonds for an aggregate nominal amount of €
1.0 billion, in two tranches, with a € 500 million 5-year bond
paying a coupon of 1.625 per cent p.a. and maturing on 17 January
2027 and a € 500 million 8-year bond paying a coupon of 2.250 per
cent p.a. and maturing on 17 January 2030.
- On 25 November,
VGP successfully completed a € 303 million rights issue by offering
5,458,262 new shares. The transaction had the highest take-up of
issued rights of similar size in Belgium since 2015 and was
completed without a discount.
- The Group
further benefits from its expanded multi-year € 400 million
revolving credit facilities which remain undrawn. The revolving
credit facilities mature as follows: € 100 million matures in July
2027; € 50 million in December 2025; € 200 million matures in
December 2026; and €50 million matures in December 2024.
- Year-end
gearing ratio amounted to 34.4%.
ESG update
- Strong
improvement in ESG ratings: The Sustainalytics score improved by
3.3 points to 12.1 – significant progress was made on the
management score where we moved from Average to Strong. For CDP the
Group achieved a B score (on scale from A to D-, F), part of the
16% highest graded companies globally (48,200 companies
graded).
- CO2 emissions
and 2030 target across Scope 1-3 submitted to Science Based Target
initiative.
- Already over 40%
of portfolio compliant in 2050 on the 1.5°C decarbonization pathway
(CRREM analysis).
- The VGP 2027,
2029 and 2030 bonds have been affirmed as aligned with the Climate
Bonds Taxonomy.
- 131.6MWp in
photovoltaic projects installed or under construction with a
further 75.0MWp in pipeline; once fully built, the PV projects will
generate more renewable energy than all tenants’ energy consumption
combined.
- All VGP offices
switched to renewable energy since 1 January 2022 through a PPA
contract with our own 3.9MWp solar roof at VGP Park Roosendaal
providing the energy.
- We introduced
further steps to reduce embodied emissions within our developments
– first projects completed with wooden load bearing structure and
heat pumps included in the VGP building standard (replacing gas
powered heating), furthermore we have updated our building standard
to implement water saving and retention techniques.
Renewable Energy
- In total, there
are 62 solar panel installations operational across the portfolio.
The total installed renewable energy capacity of the Group’s assets
in 2022 is 56.6 MWp (of which 15.1 MWp is third party operated)
(+66% compared to Dec 2021) with a further 28 projects with a power
of 75.0 MWp under construction, representing an investment of € 78
million once completed. Looking forward, another 60 projects with a
total of 72.7 MWp contracted power are in the pipeline.
- Gross renewable
energy income over 2022 was € 5.9 million (net € 5.6 million);
compared to € 1.3 million in 2021. Gross renewable energy income
over 2022 benefitted from significant increase in production
capacity as well as higher energy prices.
- Operational
solar production capacity should see exponential growth in the
coming year.
- In 2022, new
solar panels were installed across the portfolio. One of largest
multi-site roof-top photovoltaic systems in the Netherlands is
being built in VGP Park Nijmegen (Netherlands): the construction
works started in 2020, with the installation of 4.8 MWp; in 2022 an
additional 3.1 MWp has been installed and the project will be fully
operational in 2023, when the installation will achieve a total
output of around 17.61 MWp. The Group’s largest multi-site in
Germany is at VGP Park München where an 11.55 MWp photovoltaic
plant was installed and finished in December 2022, generating an
estimated saving of energy purchased from the grid of
9,000,000KWh.
- In Germany, VGP
Park München also uses geothermal energy to meet its heating and
cooling needs. A solid pipeline of future projects is maintained
throughout the Group, such as photovoltaic self-consumption plants.
The renewable electricity produced by the Group is either
self-consumed to meet our tenant’s energy needs or sold to the
grid. Once the photovoltaic projects currently under construction
are fully operational the solar power production capacity will
surpass the total energy consumption of all tenants as measured
over FY2021.
Outlook 2023
- Along with our
strong balance sheet, healthy treasury position, well positioned
portfolio and with a primary focus on the development of our
existing and attractive land bank, we remain confident to deliver
solid operational performance and further strengthen our cash
recycling model.
- With the months
of January and February having started well and despite an
uncertain geopolitical and economic environment, VGP pursues
prudently its margin-focused strategy, underpinned by technical
competence and investment as well as a constant quest for high
sustainability and quality in our warehouses and their
locations.
- Given its
annualized contracted rental income of € 303 million and recent
deliveries of 1.1 million square meters to lessees, net rental
income is expected to further record high double digit growth.
Dividend 2022
- The Board of
Directors has decided to propose to the Annual Shareholder’s
Meeting of 12 May 2023 to distribute a gross dividend of € 2.75 per
share, corresponding to a total gross dividend amount of €
75,051,108.
KEY FINANCIAL METRICS
Operations and results |
2022 |
2021 |
Change (%) |
Committed annualised rental income (€mm) |
303.2 |
256.1 |
18.4% |
Gross Renewable Energy income (€mm) |
5.9 |
1.3 |
353.8% |
Operating result before unrealized valuation adjustments (€mm) |
177.5 |
45.4 |
291.0% |
IFRS net profit (€mm) |
(122.5) |
650.1 |
n/a |
IFRS earnings per share (€ per share) |
(5.49) |
31.41 |
n/a |
Dividend per share (€ per share) |
2.7511 |
6.85 |
(59.9)% |
Portfolio and balance sheet |
2022 |
2021 |
Change (%) |
Portfolio value, including Joint Ventures at 100% (€mm) |
6,443 |
5,746 |
12.1% |
Portfolio value, including Joint Ventures at share (€mm) |
4,605 |
4,084 |
12.8% |
Occupancy ratio of standing portfolio (%) |
98.9 |
99.4 |
- |
EPRA NTA12 per share (€ per share) |
103.17 |
106.93 |
(3.52)% |
IFRS NAV per share (€ per share) |
98.70 |
99.65 |
(0.95)% |
Net financial debt (€mm) |
1,669 |
1,159 |
44.0% |
Gearing13 (%) |
34.4 |
29.8 |
- |
AUDIO WEBCAST FOR INVESTORS AND
ANALYSTS
VGP will host an audio webcast at
10:30
(CET) on 23 February 2023The
conference call will be available on:
Webcast link:
-
https://channel.royalcast.com/landingpage/vgp/20230223_1/
- Click on the link above to attend the presentation from your
laptop, tablet or mobile device
- The presentation will stream through your selected device
- Please join the event audio webcast 5-10 minutes prior to the
start time
A presentation will be available on VGP
website:https://www.vgpparks.eu/en/investors/publications/
FINANCIAL CALENDAR
Publication
Annual Report 2022 |
11 April 2022 |
First quarter
2023 trading update |
4 May 2022 |
General meeting
of shareholders |
12 May 2022 |
Dividend
ex-date |
24 May 2022 |
Dividend payment
date |
26 May 2022 |
Half year results
2023 |
24 August 2022 |
Third quarter
2023 trading update |
3 November 2022 |
CONTACT DETAILS FOR INVESTORS AND MEDIA
ENQUIRIES
Investor Relations |
Tel: +32 (0)3 289 1433investor.relations@vgpparks.eu |
Karen Huybrechts (Head of Marketing)| |
Tel: +32 (0)3 289 1432 |
ABOUT VGP
VGP is a pan-European owner, manager and
developer of high-quality logistics and semi-industrial real
estate. VGP operates a fully integrated business model with
capabilities and longstanding expertise across the value chain.
Founded in 1998 as a Belgian family-owned real estate developer in
the Czech Republic, VGP with a staff of circa 383 FTE’s today owns
and is active in 17 European countries directly and through several
50:50 joint ventures. the Gross Asset Value of VGP, including the
joint ventures at 100%, amounted to € 6.44 billion and the company
had a Net Asset Value (EPRA NTA) of € 2.30 billion. VGP is listed
on Euronext Brussels (ISIN: BE0003878957). For more
information, please
visit: http://www.vgpparks.eu
Forward-looking statements:
This press release may contain forward-looking statements. Such
statements reflect the current views of management regarding future
events, and involve known and unknown risks, uncertainties and
other factors that may cause actual results to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. VGP is
providing the information in this press release as of this date and
does not undertake any obligation to update any forward-looking
statements contained in this press release considering new
information, future events or otherwise. The information in this
announcement does not constitute an offer to sell or an invitation
to buy securities in VGP or an invitation or inducement to engage
in any other investment activities. VGP disclaims any liability for
statements made or published by third parties and does not
undertake any obligation to correct inaccurate data, information,
conclusions or opinions published by third parties in relation to
this or any other press release issued by VGP.
1 For Joint Ventures at 100%2 Calculated based on the contracted
rent and estimated market rent for the vacant space3 € 394 million
including JV’s at 100% and excluding realized gains of € 92.3
million4 Including Joint Ventures at 100%5 For Joint Ventures at
100%6 Calculated based on the contracted rent and estimated market
rent for the vacant space7 Including a € 5.5 million equity
distribution8 Including a € 14.75 million equity distribution9
Composed of an equity distribution from the Joint Ventures for an
amount of € 37.4 million and a partial repayment of shareholders’
loan for a total amount of € 22.6 million. Resulting in a total
profit distribution by the Joint Ventures of € 60 million.10
Subject to final agreement between the joint venture partners in
terms of the transferred income generating assets and pricing11
Proposed dividend per share to be approved by the Annual General
Meeting of Shareholders of 12 May 2023.12 EPRA Net Tangible Assets.
Other metrics, EPRA Net Reinstatement Value and Net Disposal Value
can be found in note 12.213 Calculated as Net debt / Total equity
and liabilities
- VGP_Press_Release_FY2022 - EN 23022023
VGP NV (EU:VGP)
Historical Stock Chart
From Jul 2024 to Aug 2024
VGP NV (EU:VGP)
Historical Stock Chart
From Aug 2023 to Aug 2024