Slide 1: 2022 Full-Year Results
2022 FULL-YEAR RESULTS February 15, 2023
Slide 2: Preliminary remarks
Preliminary remarks THE 2022 FULL-YEAR consolidated financial statements were approved by the Board of Directors on February 14, 2023 THE AUDIT PROCEDURES have been completed by the statutory auditors. The audit certification report is underway 2022 FULL-YEAR RESULTS 2
Slide 3: Contents
Contents 01 02 03 04 Mercialys’ operating, Robust organic growth Growth strategy Conclusions & financial and CSR model in 2022, enabled by 2023 targets achievements particularly suited to investment capacity the inflationary context Page 4 Page 6 Page 25 Page 36 2022 FULL YEAR RESULTS 3
Slide 4: Mercialys shows strong operating and financial achievements and a clear strategy for growth
Mercialys shows strong operating and financial achievements and a clear strategy for growth STRONG RESULTS ROBUST MODEL GROWTH STRATEGY Mercialys has achieved strong results, with Strong competitive positions in buoyant Mercialys’ strategy is structured around: the combination of 3 factors: regional
Slide 5: Further steps in 2022 to implement the 2020-2030 CSR strategy
Further steps in 2022 to implement the 2020-2030 CSR strategy FOR OUR ENVIRONMENT FOR OUR STORES › Carbon neutrality: -71% vs. 2021, with › Asset certification: 100% of strategic assets 4.7 kgCO2eq.sq.m certified (in line with target) › Waste recovery: 65% (target 100%) › Responsible retail offering
Slide 6: Robust organic growth model in 2022, particularly suited to the inflationary context
Robust organic growth model in 2022, particularly suited to the inflationary context
Slide 7: Navigating through a new stress test in 2022, with France showing resilient indicators
Navigating through a new “stress test” in 2022, with France showing resilient indicators FRENCH 10-YEAR RISK-FREE RATE CONSUMER PRICE UNEMPLOYMENT RATE (OAT – year-on-year change) (France - growth %) (France) 3,5% 7,0% 9,5% 3,0% 6,0% 9,0% 2,5% 5,0% 8,5% 2,0% 4,0% 8,0% 1,5% 3,0% 1,0% 7,5% 2,0% 0,5% 7
Slide 8: Sound consumption over the year, with supportive measures
Sound consumption over the year, with supportive measures PURCHASING POWER HOUSEHOLD CONSUMPTION PACKAGE OF POLICIES TO (France - growth %) (France - growth %) SUPPORT PURCHASING POWER 3,0% 6,0 IN FRANCE IN 2022 2,5% 4,0 Examples of measures rolled out 2,0% 2,0 1,5% › Fuel discount and tariff shield
Slide 9: Solid set of FY 2022 results, with FFO growth exceeding target
Solid set of FY 2022 results, with FFO growth exceeding target… 2021 2022 CHANGE (%) Organic growth in invoiced rents +3.0% +4.1% - EBITDA 144.7 144.2 -0.3% EBITDA margin 84.0% 83.2% - Recurring earnings (FFO) 101.8 105.5 +3.7% Recurring earnings (FFO) / share 1.10 1.13 +3.1% Loan-to-value (excl. tr
Slide 10: In line with previous years' operating excellence and strong shareholder returns
…in line with previous years’ operating excellence and strong shareholder returns ORGANIC GROWTH EBITDA MARGIN (incl. indexation) +3.4% +3.4% +3.7% +4.1% 85.3% 84.6% 84.3% 85.0 +3.6% +3.0% 83.7% 84.0% 83.2% +2.6% Average: 83.0% 74.8% -7.0% 2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018
Slide 11: Organic growth driven by indexation, reversion and Casual Leasing
Organic growth driven by indexation, reversion and Casual Leasing Organic growth €172.2m +4.1% +0.6% €173.3m + €0.9m - €4.3m + €1.3m + €1.7m Lease rights Lease rights + €3.3m - €0.3m €1.9m €0.7m - €0.4m €170.4m €172.6m +1.3% Rental revenues Acquisitions Strategic Indexation Contribution Contribution
Slide 12: FFO of €105.5m (+3.7%), above the +2.0% target
FFO of €105.5m (+3.7%), with +3.1% per share, above the +2.0% target €1,10 €1,13 +3,1% /SHARE /SHARE EBITDA margin 83.2% €105.5m +3.7% €101.8m - €6.3m + €3.1m + €1.0m + €4.8m + €0.5m + €0.4m + €0.2m FFO Change in Change in Change in Change in Change in Change Change in FFO 31/12/2021 rental revenues
Slide 13: Sustainable dividend yield profile: proposed dividend of €0.96 / share
Sustainable dividend yield profile: proposed dividend of €0.96 / share Proposed dividend up +4.3%, corresponding to 85% of 2022 FFO / share DIVIDEND AS % OF RECURRENT EARNINGS (FFO) DIVIDEND AND DIVIDEND YIELD (1) 85% 88% 90% 85% 85% 1.06 1.09 1.12 1,2 0.92 0.96 12,0% 70% 1 0.95 11,0% 10,0% 10.7% 9.
Slide 14: Steady consumption rate reflected in 2022 retailer sales levels
Steady consumption rate reflected in 2022 retailer sales levels +1% above 2019 THE FOUNDATIONS BEHIND THIS CUMULATIVE CHANGE IN FOOTFALL AT END-DECEMBER 2022 OUTPERFORMANCE ARE LINKED (base 100 in 2015) TO MERCIALYS’ DNA 110,0 107,9 Strong underlying trend for 100,0 99,0 95,7 Mercialys’ sites: catch
Slide 15: Balanced relationship with tenants illustrated by sustainable OCR and controlled vacancy
Balanced relationship with tenants illustrated by sustainable OCR and controlled vacancy levels OCCUPANCY COST RATIO (1) “COVERED RETAIL PARKS”: 10.3% 10.3% 10.3% 10.5% 10.4% 11.1% Mercialys’ shopping centers develop strong positions in their catchment area, while maintaining a streamlined n/a due t
Slide 16: Mercialys portfolio focused on dynamic geographies
Mercialys portfolio focused on dynamic geographies 4 14 SHARE OF TAXED HOUSEHOLDS IN 2019 (1) AND FRANCE’S 15th MOST ATTRACTIVE Saint-Denis Paris 7 13 RETAIL ZONES (2) 5 2 Brest Chartres 1 Mercialys is positioned on 5(3) of France’s 10 Morlaix Rennes Quimper Montargis (excluding Paris Region) most a
Slide 17: Well-balanced portfolio mix to mitigate individual tenant risks
Well-balanced portfolio mix to mitigate individual tenant risks MERCIALYS’ TOP 10 TENANTS: 13.3% of total RECENT DEALS IN rental base MERCIALYS’ PORTFOLIO (excl. brands linked to Casino Group) TENANT SITE FORMER TENANT NEW TENANT H&M Clermont-Ferrand Feu Vert Aix-en-Provence Armand Thiery Annecy Noc
Slide 18: Retail mix focused on price accessibility to protect customer purchasing power
Retail mix focused on price accessibility to protect customer purchasing power BREAKDOWN OF MERCIALYS’ RENTAL SHARE BY SECTOR OF OPENINGS IN FRANCE INCOME BY BUSINESS SECTOR (Since 2014 and 2020) (1) (% of annualized rental income at December 31, 2022 – Mercialys’ restructuring of its retail mix suc
Slide 19: Hypermarket anchor remains relevant and at the heart of consumers' habits
2016-01 2016-01 2016-03 (1) INSEE 2016-03 2016-05 2016-05 2016-07 2016-07 2016-09 2016-09 2016-11 2016-11 2017-01 2017-01 2017-03 (2) Source: Knight Frank 2017-03 2017-05 2017-05 2017-07 2017-07 2017-09 2017-09 2017-11 2017-11 2018-01 2018-01 2018-03 Hypermarkets 2018-03 2018-05 2018-05 2018-07 2018
Slide 20: Enhanced features deployed in 2022 on customer knowledge for each asset
Enhanced features deployed in 2022 on customer knowledge for each asset, benefiting retailers Receipt scan All initiatives developed on the marketing side Events, competitions, games by Mercialys as a landlord, through the loyalty program and wifi, aimed at increasing retailers’ outreach towards end
Slide 21: Develop innovative services: additional deployment of Le Shop / Ocitô
Develop innovative services: as omnichannel is the new normal, additional deployment of Le Shop / Ocitô service completed in 2022 › In 2022, the online sales platform was merged with the “showcase” G La Galerie websites for each center › Le Shop now meets the needs of our shoppers with one single to
Slide 22: Maximize all available space
Maximize all available space CAP COWORK: 4 SHOPPING CENTERS EQUIPPED CASUAL LEASING REMAINS A STEADY CASH FLOW SOURCE, WHILE WITH 1 NEW EXTENSION PLANNED FOR 2023 ALSO PROVIDING ENTERTAINMENT ON SITE › Coworking spaces already at cruising speed or with new extension › €9.9m contribution to consolida
Slide 23: Moving towards a balance between online and physical retail
Moving towards a balance between online and physical retail ONLINE RETAIL REMAINS STRONG IN TRAVEL AND LEISURE, BUT A BALANCE SEEMS TO BE EMERGING WITH A STRONG PHYSICAL RETAIL SECTOR WHICH REMAINS ATTRACTIVE FOR SHOPPERS ONLINE OR IN-STORE: PREFERRED METHOD MARKET SHARE OF ONLINE RETAIL OF PURCHASE
Slide 24: Lease expiry schedule effectively staggered over time
Lease expiry schedule effectively staggered over time and benefiting from new and ongoing deals LEASE EXPIRY SCHEDULE (percentage of leases expiring / guaranteed minimum rent at Dec. 31, 2022) Expired at Dec. 31, 12.0% 2022 150 renewals and relettings completed in 2022 for 2023 4.6% €10.5m, i.e., 6.
Slide 25: Growth strategy enabled by investment capacity
Growth strategy enabled by investment capacity
Slide 26: Successful asset rotation with clear arbitrage criteria
Successful asset rotation with clear arbitrage criteria that have led to a relevant refocusing of the portfolio ASSET SALES (In €m) 2 hypermarkets 2 shopping centers Sales prices crystallizing the work Isolated units carried out on transformed assets and the projects’ potential 1 retail park 1 Monop
Slide 27: Strong liquidity, with no bond maturing until February 2026
Strong liquidity, with no bond maturing until February 2026 INCREASE IN DEBT MATURITY (in years) 5.4 4.7 4.9 4.5 3.6 3.2 2021 H1 2022 2022 Q1 2022 REFINANCING OPERATION Drawn debt maturity (1) Bond debt maturity › €500m bond issue with a 7-year maturity and 2.5% coupon DEBT SCHEDULE AT END-DECEMBER
Slide 28: Level of debt enabling new investments
Level of debt enabling new investments COLLECTION OF RENTS AND CHARGES LARGELY NORMALIZED €M FY 2020 FY 2021 FY 2022 (AT FEB. 6, 2023) Gross recovery rate 91.3% 96.5% 95.5% CHANGE IN LTV AND ICR 5.9x 5.0x 5.1x 38.1% 35.8% 36.7% 34.4% 35.3% 33.0% STANDARD & POOR’S RATING: BBB / Stable Renewed on June
Slide 29: Defensively managed hedging strategy in 2022
Defensively managed hedging strategy in 2022 and limited potential impact of higher interest rates for 2023 CHANGE IN MERCIALYS’ COST OF DRAWN DEBT AND HEDGING VS. RATE ENVIRONMENT 3,0% 120% 2.7% 2.7% 2.6% 2.6% 2.5% 2.5% 2.5% 2.4% 2,5% › Mercialys benefited from fixed to variable Cost of drawn debt,
Slide 30: Appraiser assumptions behind portfolio values at end-December 2022
Appraiser assumptions behind portfolio values at end-December 2022 Change in portfolio value excluding transfer taxes CHANGE ON A LIKE-FOR-LIKE BASIS (1) H1 2022 H2 2022 FY 2022 Of which rent effect +1.6% +0% +1.5% Of which yield effect +0.1% -0.9% -0.8% Total change in portfolio value +1.7% -0.9% +
Slide 31: Appraiser assumptions behind portfolio values at end-December 2022
Appraiser assumptions behind portfolio values at end-December 2022 SPREAD BETWEEN RISK-FREE RATE AND MERCIALYS MERCIALYS’ AVERAGE APPRAISAL YIELD RATE Average annual rent (€/sq.m) 228 6% Net rental income CAGR (10-year) 3.2% (1) 5% Average valuation 3,727 (€/sq.m. excl. transfer taxes) 4% Net Initia
Slide 32: Change in EPRA NDV per share
Change in EPRA NDV per share (1) + €3.02 €20.94 - €0.07 › €20.94/share › Up +6.6% over 6 months › Up +19.0% over 12 months + €0.18 €17.60 + €1.13 EPRA NRV › €20.54/share Rent effect › Up +0.9% over 6 months + €0.49 › Up +0.1% over 12 months Yield effect - €0.92 - €0.25 Other effects - €0.06 EPRA NTA
Slide 33: Mercialys is poised to restart investments, based on strict return rules
Mercialys is poised to restart investments, based on strict return rules… LTV of 35.3% at end-2022 Headroom to finance new investments In a context of inflation with limited visibility over changes in construction costs and interest rates, Mercialys will launch new investments based on an average mi
Slide 34: With good cash flow visibility and a real estate profile
Proximity & recurrence of everyday shopping ASSETS DEVELOPED OR Leading catchment areas …with good cash ACQUIRED IN LINE WITH MERCIALYS’ STRATEGIC flow visibility and a POSITIONING DRIVERS Visibility over the real estate profile rental profile aligned with Mercialys’ current Sites or portfolios prov
Slide 35: Pipeline with a strong multi-usage focus
Pipeline with a strong multi-usage focus TOTAL INVESTMENT STILL COMPLETION (€m) INVESTMENT TO BE COMMITTED DATE COMMITTED PROJECTS 20.0 18.7 2023 / 2026 Tertiary activities 20.0 18.7 2023 / 2026 CONTROLLED PROJECTS 133.1 128.6 2024 / 2025 Retail 115.7 111.4 2024 / 2025 Dining and leisure 3.5 3.4 202
Slide 36: Conclusions and 2023 targets
Conclusions and 2023 targets
Slide 37: Sound fundamentals for the French retail market
Sound fundamentals for the French retail market REAL GDP GROWTH SAVINGS RATE INDEXATION (%) (%) (ILC - %) 8% 25% 6% 6.8% 6% 21.0% 5% 4% 20% 4% 16.5% 2% 3% 2.6% 15% 0% 2% -2% 10% 1% -4% 0% -6% 5% -1% -8% -7.9% -2% -10% 0% 2006-Q3 2007-Q3 2008-Q3 2009-Q3 2010-Q3 2011-Q3 2012-Q3 2013-Q3 2014-Q3 2015-Q3
Slide 38: 2023 targets
2023 targets CHANGE IN RECURRENT EARNINGS (FFO) PER SHARE Increase of at least +2% vs. 2022 DIVIDEND POLICY Dividend ranging from 85% to 95% of 2023 recurrent earnings (FFO) 2022 FULL YEAR RESULTS 38
Slide 39: Appendices
Appendices PIERCIALYS
Slide 40: Financial calendar
Financial calendar 2023 APRIL 20 APRIL 27 JULY 26 JULY 27 OCTOBER 17 Activity 2023 Press release on 2023 Activity Conference call on at March 31, 2023 Annual Shareholders’ half-year results at September 30, 2023 2023 half-year results (after market close) Meeting (after market close) (after market c
Slide 41: Rental income structure
Rental income structure OVER 900 RETAILERS AND 2,087 LEASES BREAKDOWN OF MERCIALYS’ RENTAL INCOME BREAKDOWN OF MERCIALYS’ RENTAL INCOME BY TYPE OF RETAILER BY TYPE OF RETAILER CONSOLIDATED VISION ECONOMIC EXPOSURE (% of annualized rental income at Dec. 31, 2022 and Dec. 31, 2021) (% of annualized re
Slide 42: Mercialys shopping centers: diversified food store ownership
Mercialys shopping centers: diversified food store ownership AT END-DECEMBER 2022, MERCIALYS OWNS 5 FOOD STORES ON A 100% BASIS AND 20 FOOD STORES THROUGH PARTNERSHIPS. MERCIALYS’ ECONOMIC EXPOSURE(1) TO RENT FROM RETAILERS OPERATED BY THE CASINO GROUP IS 18.0% (VS 19.6% AT END-2021). OWNERSHIP BREA
Slide 43: Shopping center portfolio structure
NUMBER OF SHOPPING CENTERS AND AVERAGE VALUE 73.5 65.9 64.1 61.5 48.7 34.3 69 59 58 48 49 48 2012 2014 2016 2018 2020 2022 Number of shopping centers in portfolio Average gross asset value of shopping centers (€m) Shopping center portfolio structure SHOPPING CENTER BREAKDOWN BY SIZE (% of portfolio
Slide 44: Rental income structure
Rental income structure CASINO GROUP LEASE SCHEDULE H&M GROUP LEASE SCHEDULE (main leases: hypermarkets, supermarkets & Monoprix stores) LEASE % HELD BY LEASE LEASE LEASE LEASE LEASE SITE TYPE START SITE MERCIALYS END DATE CHARACTERISTICS START DATE END DATE CHARACTERISTICS DATE Grenoble 100% Monopr
Slide 45: Shareholding structure
SHAREHOLDING STRUCTURE (at December 31, 2022) Treasury shares 0.6% Shareholding structure No shareholder has declared to the AMF a stake exceeding 5% in terms of capital or voting rights. Public However, Cohen & Steers group with parent Cohen & 99.4% Steers, Inc. held 5,715,094 shares (including a s
Slide 46: Mercialys ranked as one of Europe's top performers for its CSR strategy
Mercialys ranked as one of Europe’s top performers for its CSR strategy and results Score: 8,5 BPR Rating: A Industry and Rating: B- Best Score: 91,7/100 Score: 91/100 Gold Award 2022 Green Star status A List status Score : 90/100 Regional Rating: A Prime status general meeting sBPR #2 on maintained
Slide 47: EPRA performance indicators
EPRA performance indicators DECEMBER 31, 2021 JUNE 30, 2022 DECEMBER 31, 2022 EPRA earnings - € per share 1.10 0.61 1.13 EPRA NRV - € per share 20.51 20.35 20.54 EPRA NTA - € per share 18.39 18.24 18.42 EPRA NDV - € per share 17.60 19.65 20.94 EPRA net initial yield - % 5.24% 5.26% 5.29% EPRA “toppe
Slide 48: FFO & EPRA earnings
FFO & EPRA earnings IN THOUSANDS OF EUROS DECEMBER 31, 2021 DECEMBER 31, 2022 Invoiced rents 170,352 172,602 Lease rights 1,879 674 Rental revenues 172,232 173,277 Property taxes -13,570 -13,948 Rebilling to tenants 11,606 11,701 Non-recovered property taxes -1,964 -2,247 Service charges -31,690 -31
Slide 49: Net income attributable to owners of the parent
Net income attributable to owners of the parent IN THOUSANDS OF EUROS DECEMBER 31, 2021 DECEMBER 31, 2022 FFO 101,754 105,524 Depreciation and amortization -39,157 -37,729 Other operating income and expenses 369 1,630 Impact of hedging ineffectiveness, banking default risk and net impact -1,080 -26,
Slide 50: Balance sheet
Balance sheet IN THOUSANDS OF EUROS DECEMBER 31, 2021 DECEMBER 31, 2022 Intangible assets 5,028 3,381 Property, plant and equipment other than investment property 6,922 4,743 Investment property 1,935,117 1,907,148 Right-of-use assets 8,590 10,184 Investments in associates 37,907 35,203 Other non-cu
Slide 51: Breakdown of assets
Breakdown of assets Average appraisal yield rate: 5.75% at December 31, 2022 APPRAISAL VALUE APPRAISAL VALUE GROSS LEASABLE (EXCL. TRANSFER (INCL. TRANSFER APPRAISED NET NUMBER OF AREA AT TAXES) TAXES) RENTAL INCOME ASSETS AT DECEMBER 31, 2022 TYPE OF PROPERTY AT DECEMBER 31, 2022 AT DECEMBER 31, 20
Slide 52: Disclaimer
Disclaimer › This communication contains forward-looking information and statements about Mercialys. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, obj