Carmila Sa · EURONEXT:CARM
Carmila Sa — Investor Day (December 2021)
68 slides from Carmila Sa's investor day presentation, Dec 7, 2021
Slide 1: Building Carmila 2022-2026: sustainable growth and strategic and financial plan
1 2 3 4 5 Building Carmila 2022-2026 sustainable strategic and growth financial plan 1
Slide 2: Building sustainable growth
1 2 3 4 5 1 Building sustainable growth MARIE CHEVAL Chairman and Chief Executive Officer SEBASTIEN VANHOOVE An incubator and an omnichannel Deputy Chief Executive Officer 2 platform for retailers SANDRINE MERCIER Head of Network, Marketing, Customer and Digital A leader in the sustainable 3 transfo
Slide 3: Building sustainable growth
1 Building sustainable growth 2 3 4 5 1 Building sustainable growth MARIE CHEVAL Chairman and Chief Executive Officer SEBASTIEN VANHOOVE An incubator and an omnichannel Deputy Chief Executive Officer 2 platform for retailers SANDRINE MERCIER Head of Network, Marketing, Customer and Digital A leader
Slide 4: Change is accelerating: the key findings that inform our strategy
1 Building sustainable growth 2 3 4 5 Change is accelerating: the key findings that inform our strategy 1 2 3 Major Changes in A new demographic customer equilibrium for trends expectations retail Locally-Anchored Two million A culture of leaders, with 214 sites in visitors a day partnership with Fr
Slide 5: COVID is a 'game changer' for medium-sized cities
1 Building sustainable growth: Demographics 2 3 4 5 COVID is a ‘game changer’ for medium-sized cities People want to live differently Of the French population post-COVID believe that it is better to live in a medium-sized 87% city • Eco-conscious Source : Le Baromètre des territoires 2020 • Authenti
Slide 6: With Gen Z consumer trends are even more pronounced
1 Building sustainable growth: Demographics 2 3 4 5 With Gen Z consumer trends are even more pronounced Generation Z will accelerate these trends Personalization & Sustainability recognition More omnichannel Exclusive Convenience Human More responsible products interaction Unique and personalized ex
Slide 7: Sustainability and environmental concerns are influencing the behavior of consumers
1 Building sustainable growth : Customer expectations 2 3 4 5 Sustainability and environmental concerns are influencing the behavior of consumers Carbon Local 82% 60% footprint products Feel concerned Base their purchases by sustainable on the sustainability development characteristics of products S
Slide 8: Hypermarkets will remain relevant because they deliver on price and choice
1 Building sustainable growth : Customer expectations 2 3 4 5 Hypermarkets will remain relevant because they deliver on price and choice Key pre-election issues for French people Satisfaction rating by format 9 Hypermarket Supermarket Local shop Online 8 7.5 7.0 7.0 7.0 7 6.6 6.7 6.3 2017 Election:
Slide 9: Healthcare is one of many services finding a place in shopping centres
1 Building sustainable growth : Customer expectations 2 3 4 5 Healthcare is one of many services finding a place in shopping centres A lot of innovative service concepts Sport & Leisure are setting up in shopping centres 75% of French people think that Personal care their access to healthcare will d
Slide 10: Moving towards a new equilibrium for omnichannel
1 Building sustainable growth : Retail 2 3 4 5 Moving towards a new equilibrium for omnichannel E-commerce penetration and projections per country for Non-Food (2021) 2020 2025 50% 40% 30% 20% 10% 0% UK SP IRE POR GR IT FR NT GER Source : Forrester Carmila centres must be fully omnichannel 10
Slide 11: Outside of large urban areas, in-store is the fastest shopping experience
1 Building sustainable growth : Retail 2 3 4 5 Outside of large urban areas, in-store is the fastest shopping experience New actors proposing 15-minute Outside of large urban areas, shopping delivery in large urban areas centres are the fastest solution % respondents, “What maximum delivery time do
Slide 12: Customers have come back to shopping centres
1 Building sustainable growth : Retail 2 3 4 5 Customers have come back to shopping centres Footfall Retailer sales have is recovering and is returned to the level higher vs. peers seen in 2019 92% 100% September 2021 Carmila footfall as a % of June to October 2021 Carmila retailer sales as Septembe
Slide 13: Carmila 2022-2026 Roadmap: Building sustainable growth
1 Building sustainable growth 2 3 4 5 Carmila 2022-2026 Roadmap: Building sustainable growth An incubator A leader in the Breaking new and an sustainable ground omnichannel transformation Digital infrastructure investment platform for of local regions with Next Tower retailers Minority venture inves
Slide 14: The value-creating partnership with Carrefour makes all this possible
1 Building sustainable growth 2 3 4 5 The value-creating partnership with Carrefour makes all this possible Ability to maximize value of assets: Shared initiatives on and around centres 19.7% 9.3% thanks to 100% control of sites through Carrefour x Carmila partnership September 2021 September 2021 C
Slide 15: An incubator and an omnichannel platform for retailers
1 2 An incubator and an omnichannel platform for retailers 3 4 5 1 Building sustainable growth MARIE CHEVAL Chairman and Chief Executive Officer SEBASTIEN VANHOOVE An incubator and an omnichannel Deputy Chief Executive Officer 2 platform for retailers SANDRINE MERCIER Head of Network, Marketing, Cus
Slide 16: Finding successful concepts and helping them grow
1 2 An incubator and an omnichannel platform for retailers 3 4 5 An incubator and omnichannel services platform Finding …and successful helping concepts… them grow 16
Slide 17: Incubating retailers with the right concepts for each shopping centre
1 2 An incubator and an omnichannel platform for retailers 3 4 5 Incubating retailers with the right concepts for each shopping centre A way to further change the mix of A strong pipeline of new concepts stores vs. peers adapted to local needs % of stores • Real estate agents Arrow = Carmila trend •
Slide 18: An ambition to make healthcare a major part of our centres
1 2 An incubator and an omnichannel platform for retailers 3 4 5 An ambition to make healthcare a major part of our centres Healthcare: 15% of gross rental Pharmacy income by 2026 (+300 stores) Carmila has created a platform to facilitate transactions between independent pharmacists % of GRI Dental
Slide 19: Bringing more new concepts and digital native brands to our centres
1 2 An incubator and an omnichannel platform for retailers 3 4 5 Bringing more new concepts and digital native brands to our centres INCUBATE DNVB AND NEW CONCEPTS Helping them open new stores and compete with major brands Advice on in-store and omnichannel best practice 19
Slide 20: Launch of Carmila Services Hub
1 2 An incubator and an omnichannel platform for retailers 3 4 5 Launch of Carmila Services Hub: Bringing together a complete range of services to help retailers get off the ground FINDING THE RIGHT ADVICE ON BEST FORMAT PRACTICE Pop up stores FINDING Product display Franchise development THE RIGHT
Slide 21: Rolling out a complete omnichannel ecosystem for all of our retailers
1 2 An incubator and an omnichannel platform for retailers 3 4 5 Rolling out a complete omnichannel ecosystem for all of our retailers Existing omnichannel services, with scope to accelerate Home delivery Click & Collect Drive and delivery spaces Scale Access to Carrefour marketplace Social Network
Slide 22: An ecosystem of partnerships to be omnichannel at all stages of the customer journey
1 2 An incubator and an omnichannel platform for retailers 3 4 5 An ecosystem of partnerships to be omnichannel at all stages of the customer journey BEFORE DURING AFTER THE VISIT THE VISIT THE VISIT 1 2 3 4 Animate our Enhance our Make e-reservation Organize regular community online presence and pr
Slide 23: Before the visit: achieve maximum visibility for our retailers
1 2 An incubator and an omnichannel platform for retailers 3 4 5 Before the visit: achieve maximum visibility for our retailers BEFORE DURING AFTER THE VISIT THE VISIT THE VISIT Our partners Target 2026 100% of independent retailer information on major platforms (1200 stores) Complete catalogue refe
Slide 24: A Whatsapp personal shopper for Carmila customers in Spain
1 2 An incubator and an omnichannel platform for retailers 3 4 5 A Whatsapp personal shopper for Carmila customers in Spain A simple process Select a retailer on centre website Consult retailer’s online catalogue Chat with the personal shopper to browse and order the product Delivery details and pay
Slide 25: During the visit: live events and additional services
1 2 An incubator and an omnichannel platform for retailers 3 4 5 During the visit: live events and additional services BEFORE DURING AFTER THE VISIT THE VISIT THE VISIT Our partners Target 2026 Doubling the number of local influencers (from 350 today) Dealt services available in all Carmila centres
Slide 26: After the visit: feedback, data and customer satisfaction
1 2 An incubator and an omnichannel platform for retailers 3 4 5 After the visit: feedback, data and customer satisfaction BEFORE DURING AFTER THE VISIT THE VISIT THE VISIT Our partners Target 2026 Significant improvement in customer satisfaction (NPS +5pts) Systematically collect customer feedback
Slide 27: Digital transformation projects benefit from the expertise of Carrefour
1 2 An incubator and an omnichannel platform for retailers 3 4 5 Carmila digital transformation projects benefit from the expertise of Carrefour Access to data analysis and monetization expertise Shared best practice on omnichannel initiatives Internal development capabilities in synergy with Carref
Slide 28: A leader in the sustainable transformation of local regions
1 2 3 A leader in the sustainable transformation of local regions 4 5 1 Building sustainable growth MARIE CHEVAL Chairman and Chief Executive Officer SEBASTIEN VANHOOVE An incubator and an omnichannel Deputy Chief Executive Officer 2 platform for retailers SANDRINE MERCIER Head of Network, Marketing
Slide 29: A pipeline of retail projects respecting the highest environmental standards
1 2 3 A leader in the sustainable transformation of local regions 4 5 A pipeline of retail projects that respect the highest environmental standards and urban redevelopment priorities Montesson 5 MAJOR EXTENSION PLANS Orléans €550M CAPEX 6.6% Yield CA. 60 TRANSFORMATION Toulouse Labège Antibes PROJE
Slide 30: Montesson
1 2 3 A leader in the sustainable transformation of local regions 4 5 MONTESSON Ca. 30 000m² of Gross Leasable Area More than 60 stores Cost : €150M Yield on cost : 6% Preservation of 4 hectares of agricultural land Housing projects Underground parking Redevelopment of the road, new urban park 30
Slide 31: Montesson
1 2 3 A leader in the sustainable transformation of local regions 4 5 MONTESSON Preserving the environment and local agriculture (‘BREEAM’ and ‘Biodivercity’ Labels) An urban park to re-establish the link between nature and the city 2000m² of solar panels 160 homes (60% social housing) 350+ jobs 900
Slide 32: The relaunched Vitrolles and Laval extension and renovation projects
1 2 3 A leader in the sustainable transformation of local regions 4 5 The relaunched Vitrolles and Laval extension and renovation projects VITROLLES LAVAL 32
Slide 33: A complete redesign of Carmila's presence in the city with mixed-use projects
1 2 3 A leader in the sustainable transformation of local regions 4 5 A complete redesign of Carmila’s presence in the city with mixed- use development projects ENVIRONMENT SOCIAL Re-green urban spaces, low In partnership with local carbon construction and energy communities and new retail use, wate
Slide 34: Mixed-use development: a capital light structure to maximize the value of assets
1 2 3 A leader in the sustainable transformation of local regions 4 5 Mixed-use development: a capital light structure to maximize the value of assets Property developer Mixed-use project Special purpose vehicle Projects with €200-500M of Housing CAPEX Office Site sold to SPV Hypermarket at close to
Slide 35: Nantes Beaujoire: a flagship mixed use project
1 2 3 A leader in the sustainable transformation of local regions 4 5 Nantes Beaujoire: a flagship mixed use project 4,000m² 10,000m² GLA of commercial of Hypermarket real estate 2,000 homes 15,000m² (ca. 120,000 m²) office 35
Slide 36: New commitment on climate: net zero scope 1 and 2 emissions by 2030
1 2 3 A leader in the sustainable transformation of local regions 4 5 Matching development ambition with a new commitment on climate: net zero scope 1 and 2 emissions by 2030 Net zero scope 1 and 2 emissions 100% renewable energy • Electric charging stations in every car park • Solar panels on shelt
Slide 37: The roadmap to net zero scope 1 and 2 emissions by 2030
1 2 3 A leader in the sustainable transformation of local regions 4 5 The roadmap to net zero scope 1 and 2 emissions by 2030, with full neutrality including scope 3 in 2040 -90% Aligned with science-based targets initiative guidelines A total of €25M CAPEX Residual emissions will be offset to net z
Slide 38: A complete CSR strategy: Here we act for our regions and our employees
A complete CSR strategy: Here we act for our regions and our employees OUR REGIONS OUR EMPLOYEES Local jobs, local economy, Diversity, change, community outreach commitment • Second hand stores • Equality and diversity • Local employment schemes • d • Charity events and projects Strong governance 38
Slide 39: Core business wrap-up
1 2 3 A leader in the sustainable transformation of local regions 4 5 Core business wrap-up An incubator and A leader in the sustainable omnichannel platform transformation of local regions • New retail concepts • A redesigned development pipeline • Ecosystem of services • “Big-bang” mixed-use proje
Slide 40: Breaking new ground
1 2 3 4 Breaking new ground 5 1 Building sustainable growth MARIE CHEVAL Chairman and Chief Executive Officer SEBASTIEN VANHOOVE An incubator and an omnichannel Deputy Chief Executive Officer 2 platform for retailers SANDRINE MERCIER Head of Network, Marketing, Customer and Digital A leader in the s
Slide 41: Direct investment in digital infrastructure to meet the need for high-speed mobile internet
1 2 3 4 Breaking new ground 5 Direct investment in digital infrastructure to meet the social need for high-speed mobile internet Infrastructure and Carmila’s capacity to 5G are two powerful develop a regional investment trends network of sites Building a mobile tower company with €180M of assets by
Slide 42: What is a mobile tower?
1 2 3 4 Breaking new ground 5 What is a mobile tower? One tower for 1 to 4 telco operator tenants 10-year leases Fixed rents (indexed +2% per year) Carmila has developed a strong real estate and digital infrastructure expertise • Design and feasibility • Dialogue with local authorities • Constructio
Slide 43: Carmila launches Next Tower: Investing in digital infrastructure at scale
1 2 3 4 Breaking new ground 5 Carmila launches Next Tower: Investing in digital infrastructure at scale SUCCESSFUL CREATION OF A NEW DIGITAL TEST PHASE INFRASTRUCTURE BUSINESS LINE Starting with 470 sites (80 per year) 79 towers since 2019 • In France and Spain Tower construction • In Carmila and No
Slide 44: Investing in fast growing retail concepts
1 2 3 4 Breaking new ground 5 Investing in fast growing retail concepts The Carmila team Carmila knows which new can provide what brands and concepts they need to grow will be successful RETAIL DEVELOPMENT Building a €40M portfolio of opportunistic and temporary high-return investments in innovative
Slide 45: A clear investment methodology
1 2 3 4 Breaking new ground 5 A clear investment methodology A minority stake Identify the best entrepreneurs with a strong cultural match with Carmila 30-40% Identify the fastest growing ideas that Carmila services match customer • Support network development needs • Omnichannel 45
Slide 46: Next generation of partnerships already in place to generate future growth
1 2 3 4 Breaking new ground 5 Next generation of partnerships already in place to generate future growth Accelerate development Successful presence in Signing with Carmila centres E-cigarettes new retailers 30% - 109 stores(1) Barber shop 40% - 90 stores(1) Dentist 40% - 2 stores(1) Hearing services
Slide 47: Cigusto: Electronic cigarettes to help people quit smoking
1 2 3 4 Breaking new ground 5 Cigusto: Electronic cigarettes to help people quit smoking Minority investment in Cigusto (30% stake) 50 stores opened in 2 years (28 in Carmila centres), 250 planned by 2025 Launch of a new website in 2021 with Carmila support Enterprise Resource Planning (ERP) and a l
Slide 48: Meaningful contribution to financial performance by 2026 with a dynamic portfolio
1 2 3 4 Breaking new ground 5 Make a meaningful contribution to Carmila financial performance by 2026 with a dynamic portfolio of leading retailers Adding new Sale of stakes concepts to the to long-term portfolio 20 retailers investors 700+ stores* 5-year investment horizon *including non-Carmila ce
Slide 49: Working on new ideas and investment opportunities
1 2 3 4 Breaking new ground 5 Working on new ideas and investment opportunities 3 Social selling / live shopping 2 Urban logistics 4 Data monetization 1 Dark kitchens 5 Co-working 49
Slide 50: Adding growth to a resilient core business
1 2 3 4 5 Adding growth to a resilient core business 1 Building sustainable growth MARIE CHEVAL Chairman and Chief Executive Officer SEBASTIEN VANHOOVE An incubator and an omnichannel Deputy Chief Executive Officer 2 platform for retailers SANDRINE MERCIER Head of Network, Marketing, Customer and Di
Slide 51: Historical performance and Outlook 2022-2026
1 2 3 4 5 Adding growth to a resilient core business Historical performance Outlook 2022-2026 Carmila delivered a Normalisation of financial performance successful first post-COVID phase of growth (2014-2019) Capacity to maintain dynamic leasing activity thanks to the incubator model Resilient opera
Slide 52: A resilient core business
1 2 3 4 5 Adding growth to a resilient core business A resilient core business Stable rental Record number of Positive base leases signed in reversion 2021 YTD -0.4% +34% +3.1% Above rental End-Sep. 2021 on a like- First 9 months 2021 appraisal value1 for-like basis vs End-Sep. vs. first 9 months 20
Slide 53: Rents in Carmila centres will benefit from a strong commercial platform
1 2 3 4 5 Adding growth to a resilient core business Rents in Carmila centres will benefit from a strong commercial platform and the incubator model Change in EPRA vacancy rate H1 Average rent per square meter 2021 vs. end-2019 Carmila Financial Occupancy 255 €/sq.m. rate end-Sep 2021: +260bps 95.7%
Slide 54: Confident in valuation assumptions and positive view from appraisers
1 2 3 4 5 Adding growth to a resilient core business Confident in valuation assumptions and positive view from appraisers on Carmila assets Like-for-Like change in appraisal Appraisal assumptions values: peak to Jun-21 • Net Rental Income CAGR : 1.4% French Peer • Exit cap rate : 6.1% Average1 • Dis
Slide 55: Progressive normalization of rent collection that began in Q3 2021
1 2 3 4 5 Adding growth to a resilient core business Progressive normalization of rent collection that began in Q3 2021 H1 2021 and Q3 2021 Rent Collection (in % of total billed) Rent collection of H1 2021 rents >96% affected by closure periods and 92% anticipation of French government 76% financial
Slide 56: A €30M incremental annual contribution to recurring earnings by 2026
1 2 3 4 5 Adding growth to a resilient core business A €30M incremental annual contribution to recurring earnings from new growth initiatives by 2026 €30M (18% of 2020 • Linear growth in contribution of growth initiatives 2022-2026 recurring earnings) €10M €10M €10M Omnichannel Total Incubator RETAI
Slide 57: Omnichannel incubator: Accelerate on omnichannel services and new concepts
1 2 3 4 5 Adding growth to a resilient core business Omnichannel incubator: Accelerate on omnichannel services and new concepts €10M ANNUAL CONTRIBUTION TO RECURRING EARNINGS BY 2026 INCUBATOR OMNICHANNEL PLATFORM • Support core business rents • New services for retailers • Accelerate on new concept
Slide 58: Carmila Retail Development: a €10M annual contribution by 2026
1 2 3 4 5 Adding growth to a resilient core business Carmila Retail Development: a €10M annual contribution to recurring earnings by 2026, with conservative assumptions Business Plan Ca. 20 partnerships in 2026 RETAIL DEVELOPMENT > 700 points of sale C.€40m net financial commitment €10M IRR >20% ANN
Slide 59: Next Tower: a €10M annual contribution by 2026
1 2 3 4 5 Adding growth to a resilient core business Next Tower: a €10M annual contribution to recurring earnings by 2026 from investment in digital infrastructure Business Plan Asset value €180M in 2026 Value creation €50M for Carmila €10M IRR ANNUAL CONTRIBUTION TO RECURRING EARNINGS >20% BY 2026
Slide 60: Activity returning to normal and incremental recurring earnings growth
1 2 3 4 5 Adding growth to a resilient core business Activity returning to normal and incremental recurring earnings growth from new business initiatives Recurring Earnings Per Share Including IFRS 16 2022-2023: First growth phase supported by 10% CAGR Steady state normalization of financial perform
Slide 61: Asset rotation and development: more active management of the portfolio
1 2 3 4 5 Adding growth to a resilient core business Asset rotation and development: More active management of the portfolio for greater flexibility USE OF PROCEEDS OF DISPOSALS ASSET ROTATION Targeting 200M€ Development of disposals in 2022-2023 Disposals to continue Shareholder return beyond 2023
Slide 62: Capex and investment to support new growth initiatives
1 2 3 4 5 Adding growth to a resilient core business Capex and investment to support new growth initiatives SUSTAINABLE MAINTENANCE NEXT TOWER AND RESTRUCTURING On average ca. €13M a year €40M/year CARMILA RETAIL SUSTAINABLE PIPELINE DEVELOPMENT €150M total investment, starting €15m in 2021, €10M in
Slide 63: Strong liquidity position and funding structure
1 2 3 4 5 Adding growth to a resilient core business Strong liquidity position and funding structure Carmila debt maturity profile (€M) No major borrowings falling due before 2023 following successful refinancing in 2021 170 Significant liquidity1: €1,024M (including €214M in net cash) 548 542 350 4
Slide 64: Targeting a 40% Loan to Value in 2022-2026
1 2 3 4 5 Adding growth to a resilient core business Targeting a 40% Loan to Value in 2022-2026 Solid balance sheet Committed to BBB S&P rating 40% High level of confidence on portfolio valuation LTV Target1 assumptions Significant headroom vs. bank covenants Additional flexibility from asset rotati
Slide 65: Distribution policy
1 2 3 4 5 Adding growth to a resilient core business Distribution policy Dividend Policy1 Annual dividend of at least €1.00 per share, paid in cash Target payout of 75% of Recurring Earnings Per Share Share Buybacks Part of proceeds of disposals to be used for share buybacks 1. Subject to shareholde
Slide 66: Financial wrap-up
1 2 3 4 5 Adding growth to a resilient core business Financial wrap-up 10% €30M Average annual €200M incremental recurring recurring EPS growth in of disposals earnings growth 2022 and 2023 40% €1 per share 75% LTV target minimum dividend target payout Note: See earlier slides for full description o
Slide 67: Final wrap-up
1 2 3 4 5 Final wrap-up MARIE CHEVAL Chairman and Chief Executive Officer 67
Slide 68: Q&A session
1 2 3 4 5 Q&A session 68