Hello, and welcome to the Klépierre 2020 full year earnings call. My name is Josh, and I will be your coordinator for today's event. Please note that this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Jean-Marc Jestin, CEO of Klépierre, to begin today's conference. Thank you.
Good morning, everyone, and thank you for joining us this morning. I am happy to be here with Jean-Michel Gault, our CFO, and Beñat Ortega, our Chief Operating Officer, to present Klépierre 2020 full year earnings. 2020 has been a challenging year for the company, our colleagues and communities where we serve. Our company hasn't been immune to the exceptional health situation we have known. Due to lockdown orders placed on them, our malls have been closed several times in almost all geographies for an aggregate amount of more than two months. This is the equivalent of 660,000 trading days for our retailers. This has obviously disrupted their operations and caused embarrassment to our shoppers. We dealt with this situation in the best interest of all our stakeholders. We have been solid, pragmatic and resistant throughout the year.
We have been able to swiftly adapt to closures and re-openings to ensure the highest level of safety to our shoppers and to support our retailers. We owe this to all our teams at Klépierre, which have demonstrated incredible adaptation capabilities and resilience. I am truly thankful for their hard work and their unwavering commitment. This past year, we have been able to generate EUR 690 million in cash flow, to return EUR 628 million of cash to our shareholders, to raise EUR 1.5 billion of new financing at exceptionally good conditions, to cut OpEx and CapEx by roughly EUR 200 million and to keep our debt broadly stable, and finally, last but not least, to gain worldwide recognition for our extra financial performance.
I think these are remarkable achievements given the circumstances. Let me now walk through our earnings. In 2020, our net current cash flow reached EUR 1.97 per share.
This excludes the impact of the IFRS 16 straight-line amortization of the rent abatements, which represents EUR 0.08. In other words, this EUR 1.97 net current cash flow per share reflects the full impact of the COVID crisis and stands EUR 0.85 down compared to 2019. To make it simple, the reduction in our cash flow per share reflects a combination of three elements. Rent abatements for EUR 0.44, provision for credit losses for EUR 0.38, and lower variable income for EUR 0.09. The various lockdowns have impacted our collection capability. Nevertheless, for the full year, our collection rate is expected to stand at 92% after the abatements that we have granted, i.e., 84% of the rents contractually due. This reflects administrative closures we have faced in Q2 and Q4, with pre-abatement collection rates reaching 63% and 74% respectively.
For these quarters only, when stores were closed, we waived part of the rents to our tenants with a view to maximizing rent collection, extending targeted leases, and settling disputes on lockdown rents. By contrast, collections were remarkably higher when stores were reopened, as in Q3, where it reached 92%. During open periods of Q4, the collection rate was quite similar, which shows a rapid recovery of our business when malls reopened. Variable revenues including sale-based rent, car park income, specialty leasing, mechanically declined by 26% as a consequence of our malls being closed. Overall, we have been able to contain the drop in our net rental income to 22.5% after excluding the impact of last year disposals and Forex. To mitigate the drop in revenues, we curbed cash outflows. Altogether, OpEx, G&A and CapEx have been cut by roughly EUR 200 million.
On OpEx first, service charges have been reduced by EUR 42 million, as we have been very careful on limiting them in consideration of the financial situation of our retailers. G&A have been reduced by approximately 20% over the full year. This represents savings of EUR 32 million coming from lower payroll and other administrative expenses. The lower staff expenditures reflects reduced variable compensation as well as a conservative approach towards the replacement of departed staff. Besides, we have also taken strong actions to reduce CapEx. We only spent EUR 178 million on like for like and development CapEx in 2020. This is EUR 129 million less than last year, and I think it is a quite contained amount for a company of our size. We will remain extremely vigilant. In 2021, we expect to spend EUR 94 million.
This includes mostly the redevelopment of Gran Reno in Italy, the end of the Ucata redevelopment, and new Primark stores that we plan to open in France and Italy. Our conservative take on CapEx explains why, despite the decline in cash flow, our net debt has been virtually stable, which I think is a strong achievement in this environment. Our debt ratios have increased, but they remain well under control, with an LTV of 41.4%, a net debt to EBITDA of 10.8x , and an interest coverage ratio of 7.3x . On the refinancing side, we have been also very active to reinforce our liquidity position and secure future refinancing, and we did it at outstanding conditions. In 2020, we have raised EUR 1.5 billion in bonds at an average yield of 1.5% for close to 10 years maturity.
Combined with new lines of revolving credit facilities of EUR 1.4 billion, we now have EUR 3.2 billion of liquidity with an average maturity of five years. This means that our refinancing needs are fully covered until early May 2024. The financial discipline we have exercised for years put us in a comfortable position to face current challenges. We have adapted the company to the crisis and demonstrated our robustness, and I think that these are reasons to be optimistic. First, our business is extremely resilient and shows a very rapid pace of recovery. Each time our malls reopen, retailer sales pick up very quickly. They reached 90% of last year level in June and July after the first lockdown, and the same performance was once more achieved in December. In France, for instance, retailer sales of open stores grew by 1% in December after the November lockdown.
Despite the persistence of some health measures, the closure of restaurants, cinemas, and fitness, which are important for footfall and dwell time. This is what resilience is. Once allowed, people are eager to go out and to come to our malls to shop, meet, and connect. There are, of course, some discrepancies between shopping centers as some malls rely more on transportation hubs, office workers, students, or tourists. These malls have registered a softer recovery. Though, with different shades, all countries have bounced back at a satisfactory pace. On the leasing side, the group engaged in negotiation with retailers to offer rent concessions when needed in order to optimize rent collection and/or to extend leases on targeted stores. Circa 5,000 deals have been agreed with retailers, and the group obtained an average 1.6-year extension for 1,900 leases.
Although leasing activity was focused mainly on agreeing deals with retailers, we continue to sign structurally important leases. The pace of signature has slowed down compared to last year for obvious reasons, but we have anyway signed 900 leases with a 4.5% reversion. To name but a few, we have signed this year six new stores with Primark. As we have done in the past, through the rightsizing of hypermarkets that are refocusing their activity on grocery, we are able to find the needed space for the highly differentiating fashion retailer. Together with the 11 stores we already have with Primark, we almost have 20 of their stores demonstrating the relevance of our platform, the quality of our asset base, which will become even more relevant in the current retail landscape. Besides, we still benefit from some retailers that continue to expand their store network.
Hence, we have opened roughly 40 stores with retailers such as Inside, Huawei, Snipes, Courir, or Normal, among others. In 2020, Klépierre malls continued to serve their communities actively and bring value to the territories in which they are anchored. With COVID-related charities to welcome abused women, to collect food, blood, or clothing, towards testing campaigns, et cetera. The group went on contributing to local employment, with dedicated fairs, welcoming local initiatives, and organizing drives for the benefits of local charities. Among its operation, the group accelerated the delivery of its ambitious non-financial roadmap. Over the year, we reduced the energy intensity of our shopping centers by 16% and greenhouse gas by 30%. Thanks to these outstanding achievements, Klépierre has been recognized as a worldwide leader in CSR by several non-financial rating agencies.
First, GRESB, the ESG benchmark for real estate and infrastructure investment, named Klépierre of the 2020 category Global Retail Listed Leader on its performance and strategy worldwide number one. The Science Based Targets initiative also approved Klépierre environmental approach and low carbon commitment with the highest possible level. Lastly, the group made it again to the CDP A List, which gather the most advanced company in the fight against climate change. We are not only proud to be awarded, we are deeply engaged and convinced our business is sustainable, and we now prove it every year. That was for 2020, I cannot wait to turn the page and move towards 2021. We are still impacted by health measures as roughly 60% of our stores are currently closed. Besides, the pace and efficiency of the vaccination rollout makes the end date of those restrictive measures uncertain.
We take the assumption they will not extend beyond March 2021, which would represent an aggregate closure period of 1.5 months for our portfolio and cost us EUR 0.25 in cash flow. Based on this assumption, we expect Net Current Cash Flow to reach EUR 1.9 per share in 2021, excluding the impact of IFRS 16. As I said earlier, our financial position is very strong. The tight management of our balance sheet and our development pipeline has always provided us with the flexibility to pay a dividend to our shareholders. This year again, we have this flexibility. But to benefit from higher visibility on the resumption of our activities, we have decided to call the annual general meeting on June 17 and defer our decision on the distribution proposal to early May.
To conclude, once this crisis is over, we know physical retail will regain traction and trigger a recovery of our earnings. Each time our malls reopen, we have experienced a swift pickup in terms of sales, footfall, and rent collection. I am confident this will be the case in the future. Retailers will continue to refocus their operation on the best stores and the most attractive retail destination. We are those places. We know that we own the proper assets and have the perfect team to support the retail transformation. Now I will end my remarks on this note and open the floor to questions.
Thank you very much. If you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypads now, please. Please ensure your line is unmuted locally, and then I will introduce you into the call. That is star one on your telephone keypad now, please. Our first question comes from the line of Bart Gysens from Morgan Stanley. Bart, please go ahead. Your line is now unmuted.
Hi. Good morning. Thank you, Jean. Jean, I think we understand the difficulty when you provide guidance that it's very hard to have strong visibility for 2021. I have two questions. Firstly, regarding the dividend. I think understandable how you delay the decision, but for us to understand a little bit where the range could be. We've seen some of your peers cutting the dividend entirely. Do you think under current REIT regulations or restrictions, without giving clarity on what you're currently thinking, but do you think this could potentially also be a zero dividend? Would that be possible under the REIT regime or to protect your REIT regime, you think? Is there a minimum level that you think you will have to pay?
Thank you, Bart, for your question. You turn around the corner of the dividend. I think what we wanted to say to the market is, even though the current environment is uncertain, we think it's wise to try to give a guidance based on certain clear assumptions. We gave a guidance of EUR 1.9, which is slightly below, quite equivalent to what we have in 2020 with EUR 1.97. This is subject to changes if the situation evolve differently, I think it is interesting to have the perspective. When it comes to the dividend, the decision will be taken in May. By definition, there is no decision today we can share with you. On the technical question for the SIIC regime obligation, as it has been explained many times, the obligation to pay a dividend is capped at the net income of the holding company.
The net income of the holding company, Klépierre SA, will be negative this year, which means technically that we are not obliged to pay any dividend under the SIIC regime and the amount that we have accumulated will be pushed to the next year. Technically, we have no obligation to pay a dividend under the SIIC regime. When we look at our peers, there are different situations. Some have purely eliminated their dividend forever. Some are forced to pay a dividend because of the SIIC regime. Here we have the full flexibility. We provide a guidance under certain assumptions, I think we give you a view of what is the flexibility we have.
Yeah that's clear. Thank you. My other question is around your guidance that you talk about, the EUR 1.90. Look, you say that this is based on assumption that there will be no more restrictions after the first quarter. But could you provide us more building blocks on what else you have assumed on recovery rates? How quickly you think sales will come back and kind of variable income? Because I think guiding to a lower earnings number for 2021 than for 2020, I appreciate in 2020 you had two good quarters and two challenged quarters effectively like if you're assuming that you're going to have one challenged quarter in 2021 and then three better quarters. Just trying to understand why your guidance for 2021 is lower than on an EPS base than for 2020. Thank you.
Okay. Thank you, Bart, again. I think the most important element to take into consideration to assess the point is the following. We have known in 2020 different closure period all over Europe. What we are telling you is that when we accumulate all the closing period in 2020, in all the countries, this is the equivalent of 2.1 months of closing of the whole portfolio. And in 2021, in the Q1, we have assumed that we have 1.5 months of closing for the whole portfolio. So, as you can imagine, the gap between the closing period in 2020 and 2021 is not that big. It looks a little bit counterintuitive, but in reality, the closing period in Q1 2021, because it concerns more countries at the same period of time, is pretty equivalent to what we have on an aggregate basis suffered in 2020.
When it comes to the rest, I don't want to be too detailed, we have taken assumptions regarding the recovery of footfall and sales and rent collection. We have basically taken the identical or similar pattern to what we have experienced in 2020 when the malls were reopened. We have made that exercise. This is not rocket science, but this is probably the best estimate we can provide for the market based on our, I would say, the benchmark in 2020.
Great. That's very clear. Thank you.
Thank you very much. Our next question comes from the line of Florent Laroche-Joubert from ODDO. Florent, please go ahead.
Yes. Thank you everyone and thank you very much for this presentation. So, I would have two questions. My first question would be on the dividend. Are you attached this year to pay a cash dividend or would you be open to contemplate a scrip dividend?
Thank you, Florent, for your question. I want to restate my statement. The board has not made the decision, all options are on the table, and you will know in due course what has been decided. This will be provided early May, 45 days before the AGM, and we are looking forward to provide that information in due course.
Okay. That means that you can contemplate all options and we can imagine everything on what you can pay and how you can pay this dividend. Okay. Maybe another question on your guidance for 2021. Have you taken into account the fact that the French state can help retailers to pay their rents? If so, does that mean that you could be able to increase your guidance for 2021 in the coming months if we have positive discussions with French state?
Once more, I think what we wanted to do is provide the guidance and reserve our decision on the dividend. I think this is the proper way to do for the market to understand the perspective when the decision will be taken. When it comes to the guidance, we have seen the prime minister in France making statement that retailers will be supported during that period of time when the malls of more than 20,000 sq m are closed. They promised to cover 70% of their fixed costs, which will be a great help to pay their rent. As always, it remain to be seen, okay? We have taken our own assumptions on rent collection for the closing period based on our experience of 2020 and the relation we have with our retailers.
We have already closed thousands of deals for 2020 for the same type of event. We have taken our own assumptions and, once more, if we have a support from the government in France to the retailers, this probably will help in the rent collection. We have not taken a specific view on that because we don't know yet.
Okay. Thank you very much. That's all we aim for.
Thank you. Our next question comes from the line of Pierre Clouard from Klépierre . Please go ahead. Your line is now unmuted.
Thank you. Not Klépierre, but Kepler Cheuvreux, but I think you understood that. Yeah, just to come back on the guidance and on the points made by Florent, just to make sure that you did not take any assumptions on potential tax credit for 2021, but also for 2020, I imagine. That's the first one, and maybe on the point on the guidance is probably, it would be nice to have the split between the rents abatements and the provisions for credit losses that you took in your guidance, just to see if we can expect the same amount of provisions for 2021. Then, the second question is on disposals. Did you set a target for your disposals in 2021 or not? Are you under negotiation with potential buyers or whatever? It would be nice to have more color on disposals.
Well, once more, I think on the guidance, we appreciate everybody want to understand how we did it, probably because nobody did in the industry. Basically what we have done, and I repeat myself, sorry for that, we have taken the benchmark of 2020, what type of deal we have been able to reach with our retailers on closing period, and this you can read in our financial statement of 2020. We have basically in 2020 provided EUR 126 million rent abatements, and we have invoiced rent and service charge for the whole year of EUR 1.3 billion. You can do the math based on two months of closing. In 2021, I said we had 1.5 months. I'm not going to itemize all the ingredients of our guidance. But basically what we have done is taken the benchmark of 2020 and projected.
When it comes to the disposal, we have been successful in 2020. We disposed for EUR 156 million of small assets. It was quite a challenge because they have been sold, and the money has been transferred to our bank account when the malls were physically closed. It shows the appetite of the investors for those type of assets. As you know, we never give any guidance on disposal for next year. We have not factored anything specific in the guidance regarding disposal. We are committed to continue streamlining our portfolio, and to sell non-core assets. 2020 has been a little bit lower than 2019 in terms of disposal volume, but we are confident that this will resume when the market reopen.
Just a quick follow-up on this one. What countries are probably more open than the others today?
Oh, I think it's a little bit everywhere. In fact, we have been, in 2020, it was mainly the French market. We have sold roughly only in France, I think, the 156. The year before it was Hungary and Spain. Next year is difficult to say. I think for the non-core assets we are selling, they are good assets, very stabilized assets. They have very sticky cash flows. They are small size. So, there are different investors a little bit everywhere in Europe to buy those assets. If you remember, I think 12 months ago, we sold an asset in Almere in the Netherlands to a private owner investor. I think the type of assets we are selling a little bit everywhere in Europe, there is a market for that.
It may change from a year to another, but there is no specific geography which is more dynamic today than the others.
Okay. Thank you, Jean-Marc. Thank you.
Welcome.
Our next question comes from the line of Rob Virdee from Green Street. Rob, please go ahead. Your line is now unmuted.
Morning, gentlemen. A couple of questions, please. A little bit more broadly on your capital allocation priorities. So what are they now? How high up or otherwise is deleveraging and your balance sheet? Do you have a target for net debt EBITDA? Obviously, I can see what you've done with the development pipeline, what else are you thinking? It's the first question.
Okay. Thank you, Rob, for your question. I think when we look at the leverage, we are taking into account different elements. First of all, Klépierre has been committed and is committed for a given portfolio to keep the net debt flat. This year it has slightly increased due to the loss of cash flow. You will notice that it increased less than the loss of cash flow. We have been very good at limiting the outflows. This is where we are strong compared to other peers. But we have a full control of our outflows, and I think this give some comfort. The net debt to EBITDA jumped from 8x to 10.8x, based on the 2020 EBITDA.
If we do the exercise, which is purely theoretical, of taking out from the EBITDA loss the abatements and the rent provision in excess of a normal year, the net debt to EBITDA will be 8.4 times. Would be quite equivalent, but this is probably a little bit theoretical as we speak. The most important element that differentiates us from others is that the interest coverage ratio is 7.5 times. I think this is one of the strongest parameters today in the industry in continental Europe. Basically, of course, we are looking at each and every parameter, but the most important for us is to keep our net debt stable or declining, and to continue allocating our CapEx very carefully, and to commit only when we are sure that the projects are profitable, and then we have a clear visibility on the cash flows.
That's very clear, actually. Secondly, if you can just talk a little bit about the investment markets across Europe. So, to follow on from the last question. I know there's some rays of sunshine in the Nordics, but what are you seeing elsewhere? Obviously, some of your peers, quite a few of them, are trying to find an exit in some of the markets. Where are you seeing buyers returning?
When it comes to the investment market, there are people who are more relevant, probably, to discuss it. We are not forced to sell. I think the big difference in the investment market is the timing. Okay? Timing is, of the essence. Okay? If you are not at the right timing, probably this is more difficult to dispose. We have a disposal program of non-core assets, and we have always been able to manage the timing. Today, we have seen transactions of, I would say, non-core assets in some of our peers, which are good assets. The transaction levels have been, I would say, quite in line with their present value. In value. When we look at Klépierre, we sold EUR 156 million, 3% above book value. I think all is about timing, and timing today is not probably the best.
The investment market, direct investment market is quiet. You are better not being in a rush to sell. If you have to sell, this will be probably more complicated. This is not where we are, and we are once more very proud not to have this pressure on our shoulder and to be able to continue generating cash flow and keeping our net debt stable. That's the big message I want to pass.
Thank you.
Thank you. Welcome.
Thank you very much. Our next question comes from the line of Jaap Kuin from Kempen. Please go ahead your line is now unmuted.
Yeah. Hi there. Thanks. I think two small questions. We've talked a lot about guidance and rent collection, but maybe one more on that. On rent collection for 2021, I think that might be part of the kind of miss versus analyst estimates, is that probably people have priced in a better recovery for 2021. Could you share your ideas on rent collection for this year, for 2021, and how you feel that is shaping up? Also how that ties into your NRI margin, and if you feel that should come out perhaps close to where it was in 2020? My second question would be, again, on leverage. Maybe just for record to reconfirm that your covenants are based on your LTV, including transfer tax.
Let's say, assuming that the negative trend in asset values is not broken yet, how much time you basically have to find ways to manage your leverage before you get into uncomfortable territory?
Okay. This, I will leave Jean-Michel to make you more comfortable about our LTV. When it comes to rent collection, I'm sorry, I would love to give you more clarity on 2021. I take the risk to repeat myself. In 2020, when malls are reopened, the rent collection reached 93%. When the malls are closed, we have to make deals, and the rent collection is lower. All in, for two months of closure, we have collected 84% of the rent for the whole year. Okay? We have, as I said, taken the view for 2021 of similar pattern, because we believe that when the shops are reopened, the malls are reopened, the rent collection is more or less slightly below a normal year, but reach comfortable levels. The question mark is more on the level of rents you collect during the lockdown, Jaap.
Once more, I'm not going to break it down and itemize too much. I think you have, from 2020, enough elements to make your calculation for 2021.
Okay. So, I take the next one on the covenant. As you know, the covenant on our banking facilities, which represent a limited part of our EUR 9 billion of debt, because most of our financing are bonds, and they don't have a covenant. It's fixed at 60%. As of today, we still have a very substantial rule of maneuver, and for us, the issue is not there. It was more a consideration of rating, but I just remember that when it comes to a Standard & Poor's , we have a limit for being A- at 43%. It's an equivalent LTV. I'm speaking Klépierre, I'm not speaking S&P now.
In clear wording, it corresponds to a 40% LTV, and for BBB+, which is a possibility, because you know that at BBB+, you still have a very good rating and a very deep and good access to the financing market. I add to what Jean-Marc already mentioned before. We have managed to cover all our refinancing needs until May 2024. That is to say that for the time being, whatever the rating, we don't need to access to the market. No, we consider that we are not under pressure at all on this front.
Okay, thanks. That's fine for me, I guess. Maybe just coming back to the previous question. Obviously, the uptick in vacancy has not been that bad considering what a terrible year 2020 was. Obviously, I think across Europe, bankruptcies have been at a low due to all the government support. I mean, can you maybe share your expectations on what could happen when maybe that support comes to an end, and what your leasing discussions have been in the early months of this year, so January, February? Do you see a change in tone or in the way tenants approach renewals?
Thank you. I think it's a very good and a fair question. The occupancy has decreased, not significantly in 2020, but to reach 5%, if I remember well. We expect this to deteriorate a little bit more in 2021, because there is always a lagging effect of the crisis from 2020 to 2021. We have taken assumptions, which are included in the guidance, and I don't want to detail more about that. When it comes to the retailer environment, unfortunately, we all get used to closing and reopening and negotiating and striking a deal. This is painful, but this is something we are now used to do. It takes a lot of time for the tenants and for us to go through the documentation and agree. I would say this is not the first time, this is not the second time, this is the third time.
So, I think everybody gets used. If we want to look at it positively, and if we look at the French market, only shopping malls above 20,000 sq m are closed. The high street is open, which is unfair to our opinion, and we don't understand it. If we look from a tenant perspective, there are 50%-60% of their shops open. They are trading in much better conditions than in 2020 when everything was closed and 100% of their shops were closed. Depending how you look at life positively or negatively, I think there is no sign today that the environment has worsened. I think we have to be careful. We have to see when the lockdowns are lifted, how the business will resume. But once more, based on 2020, the people come back to the malls.
That's where they can shop, meet, and connect, footfall were on 85%, sales were on 91% compared to last year. I think the tenants have also understood, the retailers have also understood that there is a curve of recovery quite fast after reopening. The atmosphere is not fantastically positive, but not extremely negative, I would say.
Right. Great. Thanks.
Welcome. We have a question from the webcast. In regard to asset holdings in Turkey, given political and social turmoil, which may undermine economic growth in the country, is the company considering any measures to mitigate the potential impact of this?
That's a good question. Turkey is not core to us. This is something we have inherited from the merger with Corio. This is a tough country. I think the most important element to take into consideration is the currency volatility. In fact, from a retail perspective, this is a very strong country. The population is growing fast, is young, and the middle class average revenue per capita is increasing on the medium and long term, quite significantly. The fundamental is good. But the main issue we have here is the currency. The currency is so volatile in EUR and USD terms that when we look at it in EUR terms, that's a little bit disappointing. I would say, this is not core to us. I'm not going to say more on that. This represent 1% or 1.5% of our portfolio, 1%.
It's still 1%, but it's not that big.
Okay. We do have another question on the line. It comes from Kai Klose from Berenberg. Kai, please go ahead. Your line is now unmuted.
Yes. Very good morning. I've got a quick question on page 18 of the presentation regarding the retailer sales of open shops. Could you maybe give a bit more details why the range was so wide between countries by countries? There might be some obvious reasons because of low tourism, but if you're now expecting 2021, the restrictions to be lifted a bit more parallel, could we expect a bit more similar development in retailer sales in 2021? Or are there any material differences you would expect to remain?
Okay. Thank you for the question. Once more, when we look at page 18, I don't really look at the way you look at it. I think the average is 90%. This is high. This is a high level. This is positive. Okay. 87%, that's high. Now to answer to your question and give a little bit more color, okay. The countries where it's a little bit lagging behind, this is Iberia. This is mainly due to the government decision. There are no lockdown in Spain, but there is a lot of restrictions when it comes to travel between cities and even between district in cities. So, the malls are open. They are trading at 78% compared to last year, but we have less footfall in Iberia due to this travel restriction.
We think that this travel restriction will be lifted and this will be more in line with the others, but this is my gut feeling. There is one specific shopping center in Spain where we are suffering a little bit more, that is what we said, it is in Barcelona. As you know, Barcelona is very dependent on tourists and clearly the recovery of Barcelona shopping malls will be probably a little bit later in 2021 than the others. Once more, I think the numbers speak by themselves. The recovery is high everywhere. There are some discrepancies, but they are, I would say, not marginal, but everything is quite consistent.
Also, thank you very much. A quick second question on page 13 of the presentation where you show the reduction of CapEx. Can you expect the postponed, or let's say, the reduced CapEx in 2020 to be spent then in 2022 or later, or would you expect as an overall level of CapEx to be kept low for a little bit longer?
I think the answer is on the development pipeline. We have roughly a EUR 2 billion development pipeline. There are different projects in it. There are many extensions to our shopping malls. The size of each development pipeline project is rather limited, so we can phase it quite well and contain the outflows. So, the question will be how many years we will develop this development pipeline. In the current circumstances, we have slowed down and halted many project, but they can be restarted when we have more visibility and probably a better understanding of the cash flow. There is no normative level of CapEx every year. I think the main takeaway that the level of like-for-like CapEx and the development CapEx for a company of our size is pretty limited.
But the year before was EUR 300 million, which was the average historically of what we are spending every year in the development and the like-for-like CapEx.
That's all. Thank you. Thanks indeed.
Our next question comes from the line of Marcus Phayre-Mudge from BMO Global Asset Management. Marcus, please go ahead.
Thank you. Good morning, gentlemen, and thank you for the presentation. As a shareholder, clearly the dividend news is crucial to us. I just want to be very clear on one point. If you are correct in your expectations for 2021, i.e., the lockdown is lifted and you see the same response as you saw at the end of the previous lockdowns, i.e., something that you're quite positive about, is that the key determinant factor in terms of the dividend payment? Or is it actually regardless of how successfully the malls reopen because it's quite a small window, you'll just have Easter and maybe a bit of May before the board make the decision? Or is it the fact that, as you've alluded to, you all want to keep your balance sheet management extremely tight, even though you have no refinancing issues, as you've made very clear?
It's crucial for shareholders, I think, to have as much clarity as possible as to what will drive the board's decision. I can't quite work out, given that you've given us the guidance for your EPS for 2021 under a set of circumstances, if those circumstances come to fruition quite quickly, April and May, are you then saying, "Yes, we'll feel comfortable about a decent dividend payment"? I'm sorry to try and push you on this, but I know it feels prudent to leave investors in the dark, but it's something which we need more clarification, please.
Thank you, Marcus, for your question. I don't want to be offending. I think the decision has not been taken. We have the flexibility to pay a dividend. The board has decided to wait for the resumption of operations to make a proposal to the AGM. That's what it is. I think providing a guidance based on certain assumptions that give more comfort to see what could be the outcome. Once more, the decision has not been taken, and it's not my role to tell you about a decision that has not been taken. But we have always had the flexibility to pay a dividend. In 2020, we have been the only company in the universe of REIT in continental Europe to pay a full dividend. That's what we have done.
Most of them, they have eliminated or divided completely there by three times or four times their dividend. In 2020, we had the flexibility to pay full dividend. That's the message. We have the flexibility, and that makes a big difference between, I would say, Klépierre and some other peers. I'm sorry not to provide you more clarity, but that's where we are. You just have to wait until May. I'm sorry for that, if you can't wait, but that's probably the wiser decision in the current environment.
Okay, thank you. I understand that. What I was getting at was trying to understand the drivers behind it, but I think the fact of the matter is you're not able at this point to give me more color. That's accepted, but I think for us, it's understanding what is the motivation, and what will drive a partial or full payout. Anyway, we'll leave it there. Thank you for the additional color. Thank you.
Okay. Thank you, Marcus. I think, in fact, in your questions, you have all the answers, all the ingredients to make a decision, and that in your question, you have all the elements that the board will take into consideration to make the wiser decision on the distribution.
Indeed. We trust you implicitly. Thank you.
Okay. Thank you.
We have another question from the webcast. Could you please provide some color on the impairment for credit loss? How much is due to bankrupt tenants, which could impact vacancy versus tenants where you have not been able to agree on relief?
Well, that's a fair question, and I don't want to itemize too much on that. I think the main takeaway is that both abatements and credit losses, they concern lockdown period when shops were closed. There is a little bit more on the credit loss for period when the stores were reopened, just because we said that when stores were reopened, the rent collection was 93%. So, we are missing a little bit compared to the standard of Klépierre, which if you remember, the rent collection at Klépierre historically stands at 98.5% or even 99%, if I remember well in 2021. There is a little bit of leakage in the opening period, okay? The most of the hit is regarding the closing period. Both are concentrated in Q2 and Q4, based on our negotiation with the tenants and our assessment of the credit of our retailers.
It's mainly concerning restaurants, fitness, cinemas, a little bit of bankrupt tenants and difficult tenants. Restaurants, probably I missed this one. It's also very concentrated on certain categories of retailers that are not reopening or which are closed for a much longer period of time.
Our next question comes from the line of Markus Kulessa from Bank of America. Marcus, please go ahead. Your line is now unmuted.
Hi, good morning. Sorry to come back very quickly on the dividend, maybe a last time, and it's more theoretical question, and I understand you haven't decided anything. Just to know if under your SIIC regime and any other regulations can you in theory pay 100% dividend in shares?
I don't know if you were there at the beginning. We have no obligation to pay a dividend as a SIIC company for 2020, number one.
Yes.
We have the flexibility to pay a dividend, and if we decide so, we have the technical instrument to do it. I don't want to be too specific on that, but there is no issue there. Everything has been checked. We have no constraints either way, so to pay or not to pay. It can be any form of dividend. But once more, as this decision has not been taken, and this will be done in due course, including the form of it.
Okay. Yes, understood.
Sorry, [inaudible]. There is so many questions about the dividends, so my answer are roughly the same, and I apologize for repeating myself.
Yeah. Well, just on the technicalities, so I understood. Well, yes. Another question. On the new leases you signed in 2020, I understand you have a 4%+ rent uplift. Does it include the Primark signings you did during the year?
No. The Primark deals are mainly on former hypermarkets we bought specifically in Italy, so there was no base of comparison. They are not included in the reversion calculation.
Thank you. A bit of forward-looking question. If we assume in 2022 everything is reopened, we have all the bad debt provision behind us, where do you feel your rents could stabilize on a like-for-like basis versus 2019?
The perspective we are working with is, I would say the following. We expect the vaccination rollout to be effective by summer. We believe that the lockdowns will be lifted at the end of Q1. This is our estimate today. It may be different. But that's our estimate. We think that the pace of recovery will be steady in 2021. The real year where we will see the growth of the cash flows based on where we stand 2020 will be, I would say, the second half of 2021 and the first half of 2022. This year of 12 months will be between two years. I think what we were not expecting is to have new lockdowns in Q1 2021. We thought initially that the recovery would be faster. Probably the starting point of the recovery will be after the Q1 2021.
What will not be repeated in the future will be the abatements. The abatements are the deals we make with retailers on closing periods. We can reasonably expect that those abatements will gradually but very quickly not repeat. For the rent collection, probably moving from 19% to the standard will take some time. Here you can probably see what is in front of us. The main takeaway is that the rent abatements will not be repeated when the stores are reopened.
If you start from 100 basis in 2019, it means in 2022, a full year where everything is normal, you come back to 100 basis, or is there a rent reduction embedded already in all the agreements you have signed with your tenants?
Today, in reality, the deals we have signed in 2020, which is a specific year where we have to deal with lease renewals in 2020 and lease renewal in advance of 2021, the reversion is 4.5% average. Okay. There are plus and minus, but the outcome is 4.5%. What I think we have been very focused on is to make sure that we do the re-leasing and the renewals in 2020 and 2021 in the best conditions. We have been, I would say, pretty successful so far. What we'll probably not repeat in the next years is the rent abatements, which is a significant portion of the decrease of the cash flow in 2020, and also first half of 2021.
Okay. Thank you.
Yep.
Our next question comes from the line of Sander Bunck from Barclays. Sander, please go ahead.
Hi, team. Good morning, and thanks very much for having me. Two questions from me as well, please. The first one is on cost savings and CapEx. I see that you actually made really decent progress in terms of cost savings on the payroll and G&A line. I was just wondering how much of that is recurring and how much do you expect is kind of one-off related to 2020. Aligned with that, another question was asked earlier on CapEx, but I was mainly interested in like-for-like CapEx, which is about EUR 40 million lower. Is that basically a cancellation of some of it or is it postponement? I appreciate that individually those items are not massive, but combined it's like EUR 80 million-EUR 100 million of cash going out, actually maybe quite material. A bit more color on that would be helpful.
I'll ask my other question after.
On G&A, we went through that year with the view to limit G&A and the number of employees. This has been a great challenge for the team. That has been one of the worst years in terms of hard work to go through that crisis. They have been exceptional. They have been solid, resilient, and we have asked them to do a lot of savings. This will probably not repeat forever. But as long as the crisis stays, we will be very conservative and very, I would say, we'll contain any outflows, including G&A and general expenses, and FTE, and try to limit the impact of the crisis on our financial statements. When it comes to the CapEx, I have not much to say compared to what I already said. I think what we have just demonstrated is that we have the flexibility on our development pipeline.
It's not launching some projects. Part of the reduction is that we have not launched some projects that will be restarted in due course if we made the decision to do so. We have not stopped projects which were under construction. We have slowed down some of them which were under construction, the most important effect is that we have always been able to only commit when we have a clear view on the cash flows. We don't do the opposite. We don't commit first and look for the cash flow after. We look at the cash flow, we spend when we know.
No. Okay. That's okay.
Okay.
Yeah. Okay, the cost saving on the G&A is pretty much then through a lot of furlough schemes. Over time, will probably increase again back to historical levels. You're saying, I was not on the development CapEx, but on the like-for-like CapEx specifically. Is there a catch-up mechanism there or not really?
On the like-for-like CapEx, it's mainly split between maintenance CapEx and leasing CapEx, as you know. Obviously, as our leasing activity has been slower than last year, obviously, we have spent less in CapEx. We'd be dependent on the recovery of our leasing activity and releasing activity. On maintenance, it has been broadly flat because it's a lot of regulatory maintenance. We have a limited buffer to decrease those regulatory amounts.
Okay. That's very helpful. That's great. The other question I had is actually still on the FY 2020 Expo event. Just one thing I struggle to understand. Basically, if I look at the numbers, then your rent collection in H2 was better than it was in H1. Yet your net cash flow contribution was significantly lower. How do we square that? How does that work? How are we looking at that going forward?
For this question, what I may recommend is that we can do that offline. I think if you remember when we closed the financial statements for the end of June, most of the receivables were standing in the balance sheet of Klépierre and our peers waiting for IFRS 16, I would say, decision. Okay? As long as these were not struck, they have to be on our balance sheet. I think there is no deterioration between H1 and H2 in terms of collection. The rent collection per quarter is the final outcome. I think comparing H1 to H2, it needs a little bit more exercise, and I recommend you to call us separately. We see that it is crystal clear.
I think the main difference or gap comes from the way receivables were treated under IFRS 16 when we closed semi-annual financial statements, and I think all the whole industry were at the same position at that time.
Okay.
At the end of the day, we have collected 84% of the rents contractually due, and we have abated EUR 126 million, and we have provisioned for EUR 109 million, if my recollection is correct, and the percentages are very clear. This is the outcome of the negotiation, and I think which started anyway second half of the year.
Yeah. That's helpful color. The technicalities we can maybe take offline, just to kind of clarify it a bit further. If I look at the H2, I think the cash flow contribution was around EUR 0.70. Do you feel that is a pretty accurate reflection of the underlying cash generation of the business? Is that the best way to look at it?
No. Sander, I think once more, there is an optical difficulty in comparing H1 and H2. So what I really propose you is to do that offline. I think the way the provisions and the abatement have been distributed between H1 and H2 have been artificially, I would say, misleading, okay. Because of IFRS 16 treatment. If you want to do that exercise, I would take the full year, I would divide it by two, and then you will have probably the answer. There is no acceleration or deterioration or whatever in H2. This is the outcome of the negotiation. Okay. Let's do that offline.
Yeah, that's right. The cash flow generation for the entire year, you feel is a good proxy for the overall cash generation. That's effectively the conclusion.
I don't know if it is a proxy. The cash flow for the year are the cash flow for the year. That's what I can say. When the question was, how does it split between H1 and H2, I wanted to highlight that there is an optical difficulty to compare H1 to H2. That's what I just said. I'm just saying that if you want to have a semester of 2020, it's better to take the number and divide it by two to get a number for six months. I'm not saying it's a proxy of whatever in the future.
That's 2.1 months.
Okay. That's the way I will do it if you want, about six months.
Yeah. Okay. No, I think I'm just trying to understand what the actual cash generation was for FY 2020, and I'll take that number recorded. Thank you very much.
Yes. I think, just to finish on that, we have communicated a EUR 1.97 per share. The whole hit, okay, is taken, in 2020, no IFRS 16 number. That we also reported differently to EUR 1.97, it's when everything which is abatement and provision is taken as a hit, as a loss in the P&L.
Thanks very much.
Good. Okay. Thank you very much for attending, for your questions. We will end this call. We are at your disposal to answer further questions, and thank you very much and have a good day.
Thank you very much for joining today's call.