Slide 1: First-half 2010 results
First-half 2010 results Wednesday July 28, 2010
Slide 2: Preliminary notice
Preliminary notice The Company financial statements for the period ended June 30, 2010 were approved by the Board of Directors at its meeting held on July 27, 2010. A limited review of these financial statements was performed by the Statutory Auditors. 2
Slide 3: Overview of the first half of 2010
Overview of the first half of 2010
Slide 4: Six months of work, major advances
Six months of work Major advances Rental revenues of Euro 72 million up +12% Rental revenues over 6 months in 2010 came to the same amount as over 12 months in 2005 Record indicators 7 projects in progress 7 extensions to be completed in 2010 65 new leases signed in the first half of the year First-
Slide 5: Esprit Voisin program staying on course and stepping up
From one project to the next, the "Esprit Voisin" program is staying on course and stepping up The "Esprit Voisin" program is continuing on track The rate of completions is stepping up sharply 3 completions in the first half of 4 completions in the process of the year being finalized for the second
Slide 6: Promising openings
Promising openings Castres Brest Extension opened on May 5, 2010 Extension opened on May 19, 2010 The development program Extension of 2,300 m² (14 new stores) and Redevelopment of 4,900 m² (former renovation of the hypermarket and existing Castorama premises) to create 16 new stores shopping mall A
Slide 7: Esprit Voisin program gaining momentum
The development of the "Esprit Voisin" program has gained momentum, multiplying the various facets of the concept Building a trademark for Mercialys: new tools for the concept and more services for customers "Label V", an innovative label of sustainable development A straightforward and efficient cu
Slide 8: Timid economic recovery during the first half
Timid economic recovery during the first half of the year Slow upturn in growth in France* Slight increase in consumer spending Near-stagnation in the first in 2010** quarter (+0.1%)* +1.9% to end-May** Forecast for 2010: +1.4%* +1.2% expected in 2010** Unemployment rate stabilized: 9.5% Volatile bu
Slide 9: Resilient rental market and booming real estate transactions
Resilient rental market and booming market for real estate transactions Rental market Positive effect of national retailers' policy of opening new stores to make up for the decline in sales Sales relatively stable Rental values maintained Very strong upturn in retail property investment Euro 1.1 bil
Slide 10: Tangible value creation in the portfolio
Tangible value creation in the portfolio... l ass ti nc Growth in rental income as a s Be +3.8% = result of measures to enhance the portfolio +12.2% = Growth in rental revenues Growth in recurring operating +13.5% = cash flow* First-half 2010 results * Cash flow excluding interest on cash and cash e
Slide 11: Main performance indicators continue steady growth
… and Mercialys's main performance indicators continue their steady growth Rental revenues Cash flow* CAGR +14.2% CAGR +14.6% 72.7 67.7 Euro millions - 2005 pro forma figures H2 H2 72.4 64.4 64.5 50.3 56.8 57.0 39.6 48.4 36.2 43.5 H1 37.2 H1 32.6 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 200
Slide 12: Activity and results
mercialys L'Esprit Voisin. Activity and results
Slide 13: Robust growth in rental revenues
Robust growth Continuing robust growth relating to negotiations on the portfolio of leases Growth in the first half of 2010 boosted by acquisitions carried out in the first half of 2009 Rental revenues: +12.2% RR 72.4 +2.4 +6.4 -0.2 - 0.6 -0.4 RR 64.5 Valuation of Strategic Impact of Indexation vaca
Slide 14: Growth fueled by Esprit Voisin projects
As in 2009, growth fueled by the development of Esprit Voisin projects in 2010 Rental income generated by the development of Esprit Voisin projects Difference (Euro millions) 6.4 10.3 Impact on rental revenues growth +9.9pts +7.7pts 19.5 Additional rental income from Esprit Voisin development projec
Slide 15: Le Phare de l'Europe extended to include new stores
"Le Phare de l'Europe" extended to include 16 new stores Opening of extension constitutes a major event in Brest Redevelopment of 4,900 m² (former Castorama premises) to attract 16 new retailers A leading shopping center in terms of number of stores (70 stores) Investment*: Euro 8.4 million Annual r
Slide 16: Le Phare de l'Europe: before and after
"Le Phare de l'Europe" extended to include 16 new stores Opening of extension constitutes a major event in Brest After Before 16
Slide 17: Le Phare de l'Europe: before and after
"Le Phare de l'Europe" extended to include 16 new stores Opening of extension constitutes a major event in Brest After Before 17
Slide 18: Le Phare de l'Europe
"Le Phare de l'Europe" extended to include 16 new stores Opening of extension constitutes a major event in Brest 18
Slide 19: Castres: new stores at La Pyramide du Siala
Castres: 14 new stores at "La Pyramide du Siala" Extension of 2,300 m² 14 new stores and renovation of the hypermarket and existing shopping mall A modern and updated retail facility with 40 stores Investment*: Euro 12.4 million Annual rental income: Euro 0.8 million Yield from extension: 6.7% / Tot
Slide 20: Castres: before and after
Castres: 14 new stores at "La Pyramide du Siala" After Before 20
Slide 21: Castres: before and after
Castres: 14 new stores at "La Pyramide du Siala" Before After 21
Slide 22: Castres: new stores
Castres: 14 new stores at "La Pyramide du Siala" 22
Slide 23: Fontaine Les Dijon: services mall becomes shopping center
Fontaine Les Dijon: when a services mall becomes a shopping center Creation of a neighborhood shopping center by redeveloping the hypermarket site and mall 12 stores and 2 restaurants Annual rental income created: Euro 0.3 million Cost of works: Euro 1.8 million Retailers including Nocibé, Optic 200
Slide 24: Esprit Voisin concept as Mercialys's trademark
"Esprit Voisin" concept establishing itself as Mercialys's trademark and proving its merits A customer- The development of a centric product, the approach, Shopping Center, understanding designed to meet and their even exceed expectations, customers' knowing who they Shopping Center expectations are
Slide 25: Esprit Voisin drives stronger customer relations
"Esprit Voisin" drives stronger relations with customers thanks to concrete benefits Practical services: "Places for the family, something Enjoyment: Choice: truly practical..." "It's fun and makes it a more "Everything in one place..." welcoming place" Generosity: Sociability: “Even the car parks h
Slide 26: Roll-out of customer loyalty scheme
Roll-out of the customer loyalty scheme: further proof of the "Esprit Voisin" concept Key figures for the S'Miles loyalty scheme … and for Mercialys 8 years in existence 13 shopping centers 16 million cardholders in France 500 participating stores 8 major retailers 158,000 store transactions to date
Slide 27: Corporate Social Responsibility and Esprit Voisin
Corporate Social Responsibility (CSR) - a feature inseparable of the "Esprit Voisin" concept A CSR audit (benchmark, SWOT) was carried out at end-2009* to assess the progress made by the company. This allowed Mercialys to identify its main challenges Our environmental challenges: Our social challeng
Slide 28: Label V sustainable development label
Further proof of the "Esprit Voisin" concept during the first half of the year: an innovative sustainable development label "Label V“ reflects the values of the "Esprit Voisin" concept: "People, the local An involved neighbor: sustainable development is one of the key community and real life are wha
Slide 29: Neighborhood shopping centers outperform the sector
Neighborhood shopping centers continue to outperform the sector as a whole during the first half of the year Retailers' sales growth – On a like-for-like basis Source: CNCC 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% May 2010 Total 2007 Total Total Jan Feb March April May Total 12 First-half 2010 results
Slide 30: Signs of improvement in retailers' sales
Signs of improvement in retailers' sales month after month Sales growth indices for Mercialys's large shopping centers (on a like-for-like basis) Volatile sales from one ... and considerable improvement month to the next... in the trend month after month 5,00% 4,00% 3,00% 2,00% 1,00% 0,00% -1,00% -2
Slide 31: Rental management indicators remain stable
Rental management indicators remain stable Stable recovery rate*: 98.0% (98.3% Recurring vacancy rate at Dec 31, 2009) stable at 2.1% (2.3% at Dec 31, 2009) Reduction in strategic vacancies due to completion of "Esprit Voisin" projects in Stable occupancy cost ratio the first half of the year: 0.6%
Slide 32: Strong growth in cash flow and earnings
In line with rental revenues, strong growth in cash flow and earnings Recurring operating cash flow** Cash flow* Net income, Group share +13.4% +13.5% 63.0 64.4 +11.1% 56.8 55.5 50.9 Euro millions 45.8 H1 2009 H1 2010 H1 2009 H1 2010 H1 2009 H1 2010 * Cash flow = net income before depreciation and o
Slide 33: Reduction in capitalization rate; appraisal value and NAV
10 bp reduction in average capitalization rate based on appraisals Appraisal value of portfolio including transfer taxes* 2,437.2 2,467.8 NAV per share incl. transfer taxes (Euro) 2,061.2 1,913.8 27.10 Euro millions 26.78 1,346.9 1,027.0 +1.3% +1.2% 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 06/30
Slide 34: Developments and acquisitions
Developments and acquisitions
Slide 35: Esprit Voisin projects: new openings in second half 2010
"Esprit Voisin" projects: 4 new openings in the second half of 2010 Timetable Letting rate of projects* Oct. May 115% 100% 91% 91% Brest Annecy Castres Paris St Didier ) r r od Fontaine Les Dijon Ste Marie Duparc on ie ie id yn un ni D éu Se Sa Lons Le Saunier St (R y Le ris ec ie ns Pa nn ar Lo M A
Slide 36: Pace of openings will step up in second half
"Esprit Voisin" projects: the pace of openings will step up in the second half of the year Ope Octob ning on er 20 , 2010 Annecy 4,800 m² shopping mall extension 37 new stores ni ng on 0 Ope 20, 201 ber Octo Ste Marie Duparc First-half 2010 results 8,600 m² shopping mall extension 34 new stores 36
Slide 37: Sainte Marie Du Parc: a site leader in Réunion
Sainte Marie Du Parc (La Réunion): a site leader in Réunion island 2010 - End of dev. project Area: 18,700m² Annual rents: Euro 4.4 million Market value: Euro 72 million* x4 2007 - Contribution Area: 10,100m² First-half 2010 results Annual rents: Euro 1.1 million Market value: Euro 17.4 million* (*)
Slide 38: Annecy site: a complete transformation
Annecy site: a complete transformation over 5 years 2010 - End of dev. project Area: 11,300m² Annual rents: Euro 3.3 million Market value: Euro 55 million* x5 2005 - Contribution Area: 6,400m² First-half 2010 results Annual rents: Euro 0.8 million Market value: Euro 11.3 million* (*) Market value in
Slide 39: Paris Saint Didier and Lons Le Saunier openings
"Esprit Voisin" projects: the pace of openings will step up in the second half of the year Open ing O ct 2010 ober Paris Saint Didier (16th district) Redevelopment of shopping mall Lons Le Saunier Development of 7,500 m² of mid-size stores (8 units) First-half 2010 results 39
Slide 40: Grenoble La Caserne de Bonne: works continuing
Grenoble / La Caserne de Bonne: works continuing for opening in the fourth quarter of 2010 First-half 2010 results 40
Slide 41: La Caserne de Bonne development in Grenoble
Development of the La Caserne de Bonne site in Grenoble*: an urban area under transformation Initiated by Apsys, this development forms part of a huge project to transform an entire district in the center of Grenoble 17,300 m² GLA of retail space: 9 large and mid-size stores, 38 stores and 5 restaur
Slide 42: La Caserne de Bonne in Grenoble: retail facilities
La Caserne de Bonne in Grenoble: retail facilities Building A – 10,887 m² GLA of retail space on lower ground floor, ground floor and 1st floor (5 mid-size stores, 21 stores, 4 restaurants, 2 kiosks), including a 3,150 m² GLA Monoprix 1,643 m² of office space on 1st and 2nd floor Building E – 500 m²
Slide 43: Peak in completions of Esprit Voisin projects
The next two years will see a peak in completions of "Esprit Voisin" development projects 13 completions of "Esprit Voisin" extensions in preparation for 2011 including primarily Geispolsheim Annemasse Ajaccio (phase 1) Marseille La Valentine First-half 2010 results Villefranche Auxerre 43
Slide 44: 2011 timetable of Esprit Voisin completions
The next two years will see a peak in completions of "Esprit Voisin" development projects 13 completions of "Esprit Voisin" extensions in preparation for 2011 2011 timetable Q1 Q2 Q3 Q4 Geispolsheim Angers (HM redev.) Marseille la V. Auxerre (GM) Istres (phase 1) Les Sables d’Olonne Annemasse Troyes
Slide 45: Casino development project pipeline
The Casino pipeline comprises around 100 development projects representing a weighted value* of Euro 555 million Casino development project pipeline (Euro millions) 546 555 530 +6 -6 +86 -70 New development 280 pipeline Euro 280 million + Pipeline of Esprit Voisin extensions 275 Euro 275 million Dec
Slide 46: Conclusion and outlook
mercialys L'Esprit Voisin. Conclusion and outlook
Slide 47: Improved visibility for the second half
Improved visibility for the second half of the year Consumer Market of real estate +/- transactions ++ Rental market + spending and Those contrasting market conditions are rather favorable for our development projects Market conditions favoring the development of our "Esprit Voisin" projects - letti
Slide 48: Interim dividend and growth targets
Allowing us to maintain two major principles Interim dividend up +13.6% Principle of paying out an interim dividend equal to half of the dividend paid in respect of the previous financial year maintained in the first half of the year An interim dividend of Euro 0.5 per share will be paid in cash in
Slide 49: Confirming strategy and stepping up implementation
Having demonstrated its relevance, we confirm our strategy and are stepping up its implementation Stepping up the rate of completions of "Esprit Voisin" projects creating value in the medium/long term 2011 and 2012 will be record years in terms of completions of development projects A targeted inves
Slide 50: Appendices
1 mercialys L'Esprit Voisin. Appendices
Slide 51: Partnership agreement: new figures
Partnership agreement: new figures Capitalization rates applicable to call options exercised in the second half of 2010 under the Partnership Agreement with Casino Shopping malls Retail parks City center Mainland Corsica Mainland Corsica France and France and Type of property overseas overseas depts
Slide 52: Detailed income statement
Detailed income statement % change Euro millions 06/30/09* 06/30/10* 10/09 Invoiced rents 62.9 70.5 +12.2% Lease rights 1.6 1.8 Rental revenues 64.5 72.4 +12.2% Non-recovered property taxes -0.1 -0.1 Non-recovered service charges -1.6 -1.6 Property operating expenses -2.1 -1.9 Net rental income 60.7
Slide 53: Condensed balance sheet
Condensed balance sheet Assets Euro millions 12/31/09 06/30/10 Investment property 1,573.1 1,576.7 Financial assets 13.0 13.4 Other assets 1.0 1.1 Total non-current assets 1,587.2 1,591.2 Cash and Casino current account 69.9 50.7 Trade and other receivables 19.9 26.0 Total assets 1,677.0 1,667.9 Equ
Slide 54: Portfolio valued at Euro 2,468 million incl. transfer taxes
The portfolio is valued at Euro 2,468 million, incl. transfer taxes Increase of +1.3% in 6 months Appraisal value Number Gross leasable Appraisal net inc. transfer taxes of assets area at 06/30/10 rents Type of asset at 30/06/10* at 06/30/10 Euro % m² % Euro % millions millions Large regional shoppi
Slide 55: Valuing the pipeline by stage of completion
Valuing the pipeline taking into account the stage of completion of each project Each stage of completion has its own probability The development pipeline as it currently stands contains projects with widely varying stages of completion and chances of going ahead The valuation method for the pipelin