Slide 1: 2015 Half-year results
2015 Half-year results July 28, 2015
Slide 2: Preliminary remarks
Preliminary remarks The consolidated financial statements of the 1st half of 2015 were approved by the Board of Directors on July 27, 2015. A limited review of these financial statements was performed by the Statutory Auditors 2015 Half-year results 2
Slide 3: Summary
Summary I. Relevance of the model: accelerated growth and innovation II. Boost the portfolio’s power: strengthening of the development pipeline III. Solid financial structure and half-year results showing significant growth IV. Conclusion and 2015 objectives 2015 Half-year results 3
Slide 4: Relevance of the model: accelerated growth and innovation
Relevance of the model: accelerated growth and innovation Eric Le Gentil, Chairman and CEO 4
Slide 5: Key figures
Key figures H1 2014 In million euros H1 2015 Change (%) Proforma (*) Invoiced rents 76.0 80.6 + 6.0% Organic growth in invoiced rents excluding indexation +2.6% +3.3% +70 bp Rental revenues 78.1 82.3 +5.3% FFO 57.0 56.8 -0.4% EPRA earnings 52.7** 56.8 +7.8% Investments (gross) 219.2 193.4 -11.8% Dis
Slide 6: Mercialys strengthens the commercial appeal of its shopping centers
Mercialys strengthens the commercial appeal of its shopping centers • A strong impact on a national level: implementation of the Creating a strong brand across all the sites as well as the communication Commercial brand networks, BtoB and BtoC spaces • A groupwide identity for the service to retaile
Slide 7: Rollout of a single brand for the Mercialys portfolio
Rollout of a single brand for the Mercialys portfolio One brand for the whole portfolio A strong and unique identity strengthening center visibility Enhancement of the brands and easier customer progress Commercial A project led within the context of the annual maintenance budgets spaces Concept An
Slide 8: Implementation inside and outside the malls
Implementation inside and outside the malls, supporting the strength of the brand BEFORE AFTER 2015 Half-year results Niort 8
Slide 9: The attractiveness of Mercialys' positioning attracts new and innovative brands
The attractiveness of Mercialys’ positioning attracts new and innovative brands… Catering Pessac, Valence, Chartres, Le Puy, Malemort, Brest, June 2015* Grenoble, February 2016* Chalons, December 2015 to March 2016* Concepts originating from e-commerce Angoulême, April 2015* Angers, August 2015* Alb
Slide 10: Accelerated organic growth
… and supplies accelerated organic growth 5,0% 4.3% 3.7% 4,0% 3.2% 3.3% 3.1% Casual 3,0% Leasing 3.3% 1.1% 2.7% 2.8% Actions on 2,0% 2.3% the portfolio 1.7% 2.2% 1,0% 0,0% 2011 2012 2013 2014 H12015 S1 2015 Organic growth of invoiced rents, excl. indexation Organic growth of invoiced rents, incl. in
Slide 11: Organic growth sustained through development of new anchor tenants
Organic growth will be sustained in the future through the development of new anchor tenants… Personal items Angoulême, Lanester, Brest, Niort, Besançon, Morlaix, Mandelieu: Clermont-Ferrand, Marseille: December 2015 to November 2017*, 16,000 sq.m August and December 2015*, 2,400 sq.m Culture and le
Slide 12: Relevant positioning in promising demographic and economic zones
… and through the relevant positioning A portfolio located in promising demographic and economic zones Mercialys portfolio Presence of Mercialys portfolio Average annual change in population Change in net jobs in relation to the active (in %) – 1999 to 2009 (*) population in 2014 (**) Outperformance
Slide 13: The Mercialys model creates lasting outperformance compared to the market
The Mercialys model creates lasting outperformance compared to the market… Cumulative change in footfall in the 1st half of 2015 2,0% (Mercialys: major shopping centers and main neighborhood centers) +1.4% (CNCC: all shopping centers, excluding Primark impact) 1,5% +1.3% 1,0% 0,5% 0,0% -0,5% -1,0% -
Slide 14: Resistant operating profile
…and maintains a resistant operating profile Management indicators remain at excellent levels The recurring financial vacancy rate improved from 20 bp over 12 months to 2.3% The recovery rate remained high at 97.4% Change in recurring financial Recovery rate vacancy rate (Last 12 months invoicing) 2
Slide 15: Development pipeline at the center of value-creating growth
The development pipeline at the center of the acceleration of value- creating growth Mercialys has built a value creation model based on the constant strengthening of its sites’ power via the continuous supply of a development pipeline. Regular asset rotation finances the investments while maintaini
Slide 16: Boost the portfolio's power: strengthening of the development pipeline
Boost the portfolio’s power: strengthening of the development pipeline Vincent Rebillard, Chief Operating Officer 16
Slide 17: Mercialys is gathering momentum on its investments
Mercialys is gathering momentum on its short and mid-term investments Acquisition of 5 new Investment financing Identification of a Rapid progress of large food stores through the sale of potential pipeline up projects acquired in restructuring projects, 49% of a company to 2019 contributing 2014 wh
Slide 18: Toulouse Fenouillet: retail park opening and phase 2 letting
Toulouse Fenouillet: successful opening of the retail park and excellent evolution of the phase 2 letting May 2015 delivery of the 24,000 sq.m retail park, in line with the schedule and the target budget Brands: Intersport, Gautier, Besson, Gemo, Chaussea, Maison de la Literie, Orchestra, Bricoman (
Slide 19: Progress of the restructuring projects acquired in 2014
Progress of the restructuring projects acquired in 2014, improved in relation to projections 4 secured projects Overall view of the 12 projects 2 openings in 2015: Brest and Niort acquired in 2014 2 openings in 2016: Rennes and Aix-en-Provence (acquisition of large food stores + 16,000 sq.m secured
Slide 20: 2015 opening, Brest
2015 opening, Brest: consolidate the leadership of the center over the urban area, 7,000 sq.m developed in 1 year A site that will make up the Top 100 of French shopping centers upon completion of the project Creation of Village.Services Catering space Opening December opened in June 2014 2015 over
Slide 21: 2015 opening, Niort
2015 opening, Niort: lasting positioning of the site as leader, 3,500 sq.m developed in 1 year New visual Catering space identity Opened in December 2014 (pilot site) June 2015 Opening of Village.Services in November 2014 over 300 sq.m H&M extension Opening in December 2015 over 2,700 sq.m Restructu
Slide 22: 2016 opening, Rennes
2016 opening, Rennes: modernization and restructuring of the 1st shopping center to the north of the urban area, 11,700 sq.m developed in 1 year • Optimize the space dedicated to the average DIY store and develop an extension allowing the implementation of three new non-food anchor tenants Objective
Slide 23: 2016 opening, Aix
2016 opening, Aix: massive expansion of the commercial offer completing the renovation of the center, 2,200 sq.m developed in 1 year • Establish a non-food anchor tenant in a centre that was refurbished and expanded in 2014 but without mid-size stores Objective • Reduction of the hypermarket surface
Slide 24: Acquisitions of restructuring projects
Acquisitions of 5 restructuring projects, including 4 projects within the framework of centers already owned by Mercialys… Acquisition of 5 large food stores immediately producing rent Mercialys benefits from an upstream overall control of Total amount: €167m (incl. transfer tax) the commercial stre
Slide 25: Marseille Plan de Campagne large future project
… and a 1st step within the framework of a large future project: Marseille Plan de Campagne Mercialys takes a position in the 1st and oldest commercial zone in France (230,000 sq.m of retail) A regional shopping center of 30,100 sq.m GLA (excluding food store) Installation of 2 non food anchor tenan
Slide 26: Potential pipeline: in-depth transformation of sites
Potential pipeline: projects allowing for the in-depth transformation of the sites and to reinforce their power 14% high potential sites located 70% leader sites within small to 16% challenger sites within small to within large urban units medium size urban units medium size urban units • To transfo
Slide 27: Summary of the development pipeline: €520m gross investments
Summary of the development pipeline: €520m gross investments Investment still to be Forecasted net Forecasted net yield on In millions euros Total investment Date of completion initiated rental income cost Transformation 4 large food stores acquired H1 2014 34.3 34.3 3.2 9.2% 2015 to 2017 Transforma
Slide 28: Disposal of 49% of shares of a company carrying large food stores
Disposal of 49% of the shares of a company that carries 6 reconfigured large food stores A transaction demonstrating Mercialys’ ability to form accretive agreements with major investors MERCIALYS OPCI Shopping Property Fund 2 51% 49% Disposal performed on a 4.8% yield (Mercialys acquired these asset
Slide 29: Solid financial structure and half-year results showing significant growth
Solid financial structure and half-year results showing significant growth Elizabeth Blaise, CFO 29
Slide 30: A solid financial structure
A solid financial structure The LTV totaled 39.2% Net debt: €1,142m, including o €1,030m of bond debts The ICR is still progressing due to good operational and financial performance o €145m in commercial paper Undrawn financial resources: €350m The maturity of the debt was significantly extended in
Slide 31: Significant drop in the cost of debt
The significant drop in the cost of debt reflects the refinancing carried out in the 4th quarter of 2014 Limited increase in the net financial expenses due to the refinancing operations Net decrease in the cost of drawn debt down to 2.1% at H1 2015, i.e. -140 bp over 12 months and -100 bp over 6 mon
Slide 32: Acceleration of robust organic growth
Acceleration of robust organic growth €78.1m Rental revenues: +5.3% €82.3m Lease rights Lease rights + €2.5m €1.7m €2.1m + €11.2m - €1.1m - €0.0m Increase in invoiced rents Indexation - €8.1m Acquisitions Strategic like-for-like & completions vacancy* Disposals & non-recurring items Organic growth +
Slide 33: Change in FFO
Change in FFO: favorable impacts of rental income and financial costs (excluding gain on the disposal of Green Yellow in H1 2014) In million euros 59,0 57,7 +1.7 57,0 57,0 +4.1 56.8 (0.7) (1.0) (0.8) 55,0 53,0 52.7 (4.3) 51,0 +7.8% on the basis of H1 2014 restated from proceeds from the disposal of
Slide 34: Portfolio value increased by +7.1%
Portfolio value increased by +7.1% Including +1.3% on a like-for-like basis Breakdown of change in the portfolio’s appraisal value, including transfer taxes* 3200 +€13m** €3,098m 3100 +€167m +€24m 3000 €2,894m 2900 2800 2700 +7.1% (+1.3% on a like-for-like basis) 2600 2500 31.12.2014 12/31/2014 Var.
Slide 35: Change in NNNAV
Change in NNNAV NNNAV (EPRA, in € / share) 19,50 19,00 18.85 +0.11 18.58 +0.46 +0.06 18,50 18,00 (0.88) 17,50 17,00 16,50 16,00 15,50 2015 Half-year results 15,00 ANR EPRA Triple net triple EPRA net NAV2014 at Dividende Dividend payé paid Résultat Net incomenet Var. Chg. de of in FV la assets, JV du
Slide 36: Conclusion and 2015 objectives
Conclusion and 2015 objectives Eric Le Gentil, Chairman and CEO 36
Slide 37: 2015 objectives: upward revision of the FFO objective
2015 objectives: upward revision of the FFO objective Based on the excellent performance of the 1st half-year, Mercialys is confident in its ability to achieve its target for organic growth in rents and is raising its FFO growth target Organic growth in > +2% above indexation invoiced rents Objectiv
Slide 38: Appendices
Appendices 38
Slide 39: Financial calendar
Financial calendar October 2015 Activity at September 30, 2015 (after market close) 2015 Half-year results 39
Slide 40: Profile of assets
Profile of assets The only listed French real estate company that is a pure 59 French shopping centers player in shopping centers o The Mercialys portfolio is focused on large and neighborhood shopping centers that are leaders in their areas o The assets are concentrated in the most dynamic French r
Slide 41: Toulouse Fenouillet: developments in line with expectations
Toulouse Fenouillet: developments in line with expectations 1 OPEN 4 2 3 5 2015 Half-year results 1 EXISTING MALL 2 INDOOR MALLOPENED CENTER 3 ENTERTAINMENT 3 AREA 4 RETAIL PARK USEFUL AND ESSENTIAL FASHION, BEAUTY & HOME LEISURE, RESTAURANTS & MOVIE THEATER FURNISHINGS AND FAMILY WORK IN PROGRESS W
Slide 42: The Mercialys portfolio
The Mercialys portfolio Type of retailers present on Mercialys assets Breakdown of rental income by business sector (in % of annualized rental income as of June 30, 2015 – excluding exposure to the Casino Group) (in % of annualized rental income as of June 30, 2015, excluding exposure to the Casino
Slide 43: Stability of the economic exposure of rents to the Casino Group
Stability of the economic exposure of Mercialys rents to the Casino Group The acquisitions of large food stores carried out in 2014 and 2015 were conducted in parallel to the disposals or re-assignment of cafeterias Mercialys is now marginally exposed to Casino Restauration and in a more appreciable
Slide 44: Shareholding in Mercialys and number of shares
Shareholding in Mercialys and number of shares on June 30, 2015 Jun. 30, 2014 2014 Jun. 30, 2015 Number of shares outstanding at end of period 92,049,169 92,049,169 92,049,169 Average number of shares outstanding 92,049,169 92,049,169 92,049,169 Average number of shares (basic) 91,806,777 91,826,157
Slide 45: FFO, EPRA earnings & net income group share
FFO, EPRA earnings & net income group share Thousands of euros June 30, 2014* June 30, 2015 % Change Invoiced rents 76,005 80,558 6.0% Lease rights 2,125 1,698 -20.1% Rental revenues 78,131 82,256 5.3% Non-recovered service charges -2,788 -2,382 -14.6% Property operating expenses -2,271 -2,669 17.5%
Slide 46: Balance sheet
Balance sheet ASSETS (in thousands of euros) December 31, 2014* June 30, 2015 Intangible assets 811 756 Property, plant and equipment other than investment property 434 356 Investment property 1,751,782 1,938,039 Investments in associates 20,880 19,964 Other non-current assets 33,579 33,437 Deferred
Slide 47: Breakdown of assets
Breakdown of assets Number of Appraisal value (inc. taxes) Gross leasable area at Appraised net rental Type of property assets at at 06/30/2015* 06/30/2015 income 06/30/2015 In €M % m² % In €M % Regional / large shopping centers 25 2,432.8 79% 614,832 75% 128.9 75% Neighborhood shopping centers 34 6
Slide 48: Grid of capitalization rate under the Partnership Agreement
Grid of capitalization rate applicable under the Partnership Agreement Applicable capitalization rate for reiterations in the 2nd half-year 2015 under the Partnership Agreement with Casino Shopping centers Retail parks City center Corsica Corsica Mainland Mainland Type of property France and France
Slide 49: Disclaimer
Disclaimer This presentation contains forward-looking statements concerning Mercialys. Forward-looking statements do not represent historical facts. These statements include financial projections and estimates, as well as the underlying assumptions, statements regarding plans, objectives and expecta