2018: a year to remember
A historic year for the Group
Our operational excellence led to 7.2% Adjusted Recurring Earnings Per Share growth to €12.92, which exceeded market guidance. At the same time, the Group continued its long-term policy of divestment of stable non-core assets, and investment in the development of our flagship centres, which have continued significant growth potential.
The Group’s strategic development took a major step forward with the closing in June of the acquisition of Westfield Corporation. The initial half year of integration work has proceeded successfully, and according to the Management’s carefully prepared plan. Integration is always challenging, and the Supervisory Board is impressed with progress on cost and revenue synergies, and organization and process alignment, with much still to do and many benefits to come.
Westfield has expanded the platform and the horizon of Unibail-Rodamco-Westfield, as the world’s premier developer and operator of flagship shopping destinations. It has put us in the unique position to cross-fertilize new ideas and new retail formulas between the US and Europe. This adds to Unibail-Rodamco-Westfield’s competitive edge in an environment where retail markets and our partners are working through steady changes in consumer preferences.
In addition, the combination brings the Group significant future growth prospects from existing flagship assets, and from the development opportunities of our €11.9bn pipeline. These projects are on long timelines, which we can largely control to match our balance sheet strategy, and are spread across the best markets in two continents.
The Supervisory Board would like to pay tribute to the exceptional work of the teams on both sides of the united companies as they work to combine operations.
Meanwhile our long term sustainability agenda continued to advance.
“Better Places 2030” progress has been solid in the former Unibail-Rodamco assets, while the programme is being adapted for experience from the former Westfield assets to produce a unified scheme. We also adopted performance against the ISS-Oekom ESG index as a key measure in senior management long-term incentive compensation.
The Group’s digital agenda has also moved forward successfully, with 7 million consumers now registered into the Unibail-Rodamco-Westfield loyalty programmes, with whom we can now communicate directly.
The long-term effectiveness of our management is being enhanced with our mobility policy, which encourages international transfers to build experience and transfer knowledge. This has already resulted in 54 employees benefiting from a cross-border mobility in 2018.
On behalf of all of their Supervisory Board colleagues, I would like to thank Alec Pelmore and Jean-Louis Laurens for their combined 21 years of service on the Supervisory Board of Unibail-Rodamco. They resigned in June, and we welcome their continued involvement as new members of the Supervisory Board of WFD Unibail-Rodamco N.V., the Dutch entity in the URW stapled share structure.
The Supervisory Board welcomed several new members. Jill Granoff is a US national, with considerable experience of the American brand and retail markets; John McFarlane brings deep global financial market experience, and Peter Lowy has thirty years of shopping centre history in Australia, the US and the UK. John and Peter were former Westfield board members.
Finally, I will thank our staff, customers, partners and shareholders for their continued engagement with Unibail-Rodamco-Westfield. We intend to ensure that the company continues to earn your loyalty in the coming year through its continued commitment to operational excellence, financial performance and successful business integration.