Slide 1: 2012 full-year results
2012 full-year results Thursday, February 14, 2013
Slide 2: Preliminary notice
Preliminary notice The 2012 full-year consolidated financial statements were approved by the Board of Directors at its meeting of February 13, 2013. Audit procedures have been conducted by the statutory auditors. Finalization of the statutory auditors’ report on the consolidated financial statements
Slide 3: Introduction
1 mercialys L'Esprit Voisin. Introduction
Slide 4: A year demonstrating resilience and growth potential of Mercialys' business model
In terms of operating performance, a year demonstrating once again the resilience and growth potential of Mercialys’ business model Organic growth Growth in Stable recurring in invoiced rents adjusted FFO* per vacancy rate share** +4.3% 2.4% +9.9% Compared with the target (revised in July 2012) of g
Slide 5: Launch of Foncière Commerçante
A major year in terms of strategy: launch of "Foncière Commerçante"*… Enhancing our The "Foncière Commerçante": unique approach Is to be closely involved alongside national thanks to the banners and independant retailers in their Esprit Voisin local integration in order to enhance their Enlarging co
Slide 6: Refocusing of the portfolio on assets in line with strategy
… and refocusing of the portfolio on assets in line with Mercialys’ strategy 2011 Pro forma asset portfolio*** Euro 472m* of asset sales signed or subject to firm offer Other Other Neighborhood Neighborhood 5%** 2%** shopping shopping centers centers 26%** 25%** 47 assets sold or due to be sold in H
Slide 7: A year of profound changes in financial structure
A year of profound changes in financial structure Euro 1.25bn Euro 1.0bn Solid financial structure of financing of which of exceptional Euro 1bn has distribution LTV 33.3%* been drawn 2012 full-year results (*) Before second exceptional distribution 7
Slide 8: A new Management
A new Management On February 13, 2013 the Board of Directors appointed: Mr. Eric Le Gentil, independant Board Director, as Chairman of Mercialys’ Board of Directors Mr. Lahlou Khelifi as Chief Executive Officer of Mercialys Lahlou Khelifi benefits from a 25-years’ experience in investment, asset man
Slide 9: New corporate governance, Casino remaining a key partner
Adoption of a new corporate governance: enhanced independance, Casino remaining a key partner Casino now has a minority Casino still holds 40.17% of position at the Board of Mercialys’ shares and remains Directors: Mercialys’ strategic partner 6 independant Directors / The new Partnership Agreement
Slide 10: Overview of 2012
mercialys L'Esprit Voisin. Overview of 2012
Slide 11: Retailers' sales turnover growth over 12 months
Another year of highly volatile sales turnovers, still up overall over 12 months Retailers’ sales growth Like-for-like scope / All retailers – Cumulative on 12 months Positive year-on-year sales growth for neighborhood 4% shopping centers despite a generally difficult 3% economic climate 2% 1.5% 1.4
Slide 12: Portfolio holds up well, buoyed by Esprit Voisin concept
Mercialys’ portfolio continues to hold up well, still buoyed by the “Esprit Voisin” concept Retailers’ sales growth Like-for-like scope / All retailers - Cumulative to end-December 2012 +1.5% Very volatile performance from +1.2% one month to the next in 2012, as in 2010 and 2011 • March, June, Septe
Slide 13: Organic growth: main growth driver
Organic growth: still one of the main growth drivers over the full year Organic growth in invoiced rents +4.3% Organic growth Acquisitions / Change in completions of Refocusing of the in invoiced rents rental income “Esprit Voisin” portfolio and +4.3 points development non-recurring -0.6% projects*
Slide 14: Esprit Voisin concept fuelling growth in the portfolio
“Esprit Voisin” concept fuelling growth in the portfolio... 8 extensions completed during the year: annual rental income of Euro +8.2m* 117 new stores - 68,000 m² completed under the conce pt* Fontaine-les-Dijon site reinforced by the development of an adjacent retail park 2012 full-year results 7 a
Slide 15: Istres doubles in size
Istres doubles in size and takes on the “Esprit Voisin” concept Opening date: December 5, 2012 Enlarged by 2,060 m² as an external alleyway, 18 new shops and renovation of the existing shopping mall The center now has 39 shops Total investment*: Euro 11.1m Gross annual rental income: Additional Euro
Slide 16: Istres, a shopping center surrounded by nature
Istres, a shopping center surrounded by nature 2012 full-year results 16
Slide 17: Istres has doubled in value since 2008
Istres has doubled in value since 2008 December 31, 2012 Investment Area: 20,860 m² over the period: Euro 11.1m Annual rental income: Euro 1.9m (extension and renovation works) Market value: Euro 33.7m* Value x2 2008 - Acquisition Area: 18,800 m² Annual rental income: Euro 0.8m 2012 full-year result
Slide 18: Montauban increased in size by over 40%
Montauban has increased in size by over 40% and enhanced its range of new national retailers Opening date: September 11, 2012 Enlarged by 2,075 m² 15 new shops and renovation of the existing shopping mall The center now has 42 shops (including a cafeteria) Total investment*: Euro 9.7m Gross annual r
Slide 19: Montauban: renovation centered around terracotta
Montauban: renovation centered around the theme of terracotta 2012 full-year results 19
Slide 20: Three-fold increase in value for Montauban since IPO
Three-fold increase in value for Montauban since IPO December 31, 2012 Investment Area: 6,336 m² over the period: Euro 12.6m Annual rental income: Euro 1.7m (acquisition of extensions and renovation) Market value: Euro 26.3m* Value x3 2005 - Acquisition Area: 3,611 m² Annual rental income: Euro 0.7m
Slide 21: Pessac: development project for Union Investment partnership
Pessac: an exceptional development project on behalf of our partnership with Union Investment Opening date: November 28, 2012 Enlarged by 6,500 m² 28 new shops + 1 mid-size store, renovation of the existing shopping mall The center now has 56 shops and 6 mid-size stores Mercialys margin: Euro 16.6m
Slide 22: Pessac: extension enhances commercial strength
Pessac: extension significantly enhances the site’s commercial strength 18 months after its acquisition 2012 full-year results 22
Slide 23: H&M inclusion enhances the Narbonne site
The inclusion of H&M has enhanced the Narbonne site, which now reflects the “Esprit Voisin” concept Opening date: October 3, 2012 1 new mid-size store (H&M) and renovation of the existing shopping mall The center now has 28 shops (including a cafeteria) and 1 mid-size store Total investment*: Euro 2
Slide 24: The refocusing of the portfolio continues
The refocusing of the portfolio continues Sale price Sale price Estimated Average including transfer outfperfor- capital gain capitalization taxes mance over Euro 132m rate appraisal Euro 472m* values incl. Euro 62m in 2012 6.2% 18 shopping centers: Toulouse Basso Combo Villenave d’Ornon Geispolshei
Slide 25: New partnership with Amundi Immobilier
A new partnership with Amundi Immobilier centered around a medium-sized retail properties fund Target structure of partnership Mercialys is both joint minority investor and service provider Investors SGP Mercialys Amundi • Advisory in asset Immobilier management, development or structuring, etc. app
Slide 26: Pro forma portfolio of 60 shopping centers worth Euro 2,321m
Pro forma for these asset sales, Mercialys owns 90 properties including 60 shopping centers with a value of Euro 2,321m*… Portfolio structure At December 31, 2012, pro forma for asset sales carried out or subject to firm offer as at February 13, 2013 Market value incl. Number of transfer taxes (in %
Slide 27: Progress in refocusing the portfolio
… and progresses significantly in its strategy of refocusing the portfolio 2011 Pro forma asset portfolio*** Other* Other* 5%** 2%** Neighborhood Neighborhood shopping centers shopping centers 26%** 25%** Large and regional Large and regional shopping centers shopping centers 2012 full-year results
Slide 28: Activity and Results
mercialys L'Esprit Voisin. Activity and Results
Slide 29: Organic growth remains a powerful driver
Organic growth remains a powerful driver for Mercialys’ growth Further strong growth in invoiced rents on a Organic growth like-for-like basis before indexation: +2.3% in rental income +4.3%** RR RR Rental revenues: -0.4% Euro 161.0m Euro 160.4m Euro +5.9m Euro -11.6m Lease Euro +3.6m Lease rights r
Slide 30: Management indicators remain at good levels
Management indicators remain at good levels Recovery rate* still at a high 97.8% stable 97.7% level 06/30/12 12/31/12 Recurring vacancy rate stable 2.4% stable 2.4% at a low level 06/30/12 12/31/12 Moderate occupancy cost 9.7% 9.9% ratio** for our tenants 2012 full-year results 06/30/12 12/31/12 (*)
Slide 31: Results impacted by asset sales and new financial structure
Results impacted by asset sales carried out in 2011 and the new financial structure adopted in the first half of 2012 The increase in operating 12/11 12/12 % chg. expenses is mainly due to: - The increase in CVAE tax* Net rental income 151.7 151.7 -0.1% relating to graduated yearly increase (Euro -0
Slide 32: Unusual items relating to restructuring of financial structure
Unusual items on the income statement relating to restructuring of Mercialys’ financial and shareholding structure Non-recurring costs of Euro 5.4m Non-recurring charges relating to the taking out of debt Euro 3.8m Advisory and other charges relating to the adoption of the new Euro 1.3m financial st
Slide 33: A debt structure preserving balance sheet solidity
A debt structure preserving the solidity of Mercialys’ balance sheet A cautious debt structure Target structure Structure as of 12/31/12 pro forma Bank loans after reimbursement of Euro 200m (February 2015) bank loan following the achievement Euro 350m of the program of asset sales Average maturity
Slide 34: Growth in adjusted FFO well above target
Adjusted for effect of asset sales and based on a like-for-like financial structure, growth in FFO* is well above management’s target for 2012 Funds from operations* (FFO) Adjusted funds from operations** (FFO) 140.8 In millions of euros +10.0% 108.7 Target set in February 92.0 2012 -22.8% 83.7 +6%
Slide 35: Adjusted FFO figures out intrinsic performance
Adjusted FFO figures out Mercialys’ intrinsic performance in its configuration as at December 31, 2012 Reported Adjustment Adjustment Adjustment Adjustment Adjusted FFO* for net rental for net rental for for FFO** income from income from comparable exceptional assets sold assets sold in financial co
Slide 36: Value of assets down as a result of disposals
Value of assets down as a result of asset disposals but continuing to benefit from organic growth Slightly higher average appraisal yields Average gross rental value still well below the benchmark Appraisal value of portfolio, including transfer taxes* Growth over 12 months IPD benchmark Euro 310 pe
Slide 37: 3% increase in NAV
3% increase in NAV over 12 months NAV per share incl. transfer taxes Liquidation NAV per share excl. transfer (euros) taxes (euros) 29.25 27.72 +3.0% +3.6% 18.40 18.94 16.87 17.47 12/31/11 12/31/11 12/31/12 12/31/11 12/31/11 12/31/12 Pro forma* Pro forma* 2012 full-year results (*) Adjusted for exce
Slide 38: Exceptional distribution proposed on top of recurring dividend
Business performance allows for an exceptional distribution to be proposed at the AGM on top of the 2012 recurring dividend Mercialys will propose to the General Meeting: The payment of a recurring dividend amounting Euro 0.91 per share, including the interim dividend of Euro 0.25 per share paid in
Slide 39: Outlook
1 mercialys L'Esprit Voisin. Outlook
Slide 40: Refocusing the portfolio on solid and reinforced assets
Refocusing the portfolio on solid and reinforced assets in order to create value La “Foncière Partnerships Commerçante” Arbitrage of mature assets Creating value through (3-5% of the portfolio Esprit Voisin per year) development projects (Euro 100 to 180m a year) Extraction of organic growth 2012 fu
Slide 41: Asset management for third parties as additional revenue
Development of asset management for third parties, a source of additional revenues Minority stakes in funds of mature assets La “Foncière Partnerships Mercialys fund operator: provider of services Commerçante” (asset management, letting, advisory) Improved return on equity External fees Yields optim
Slide 42: Selective retail activities to enlarge the offering
Introduction of selective retail activities enables to enlarge the offering in our shopping centers Capitalize on Mercialys’ hyperlocal position in order to accompany tenants and develop their business La “Foncière Partnerships Develop new business activities, on a proprietary basis Commerçante” or
Slide 43: La Foncière Commerçante: adapting to clients' needs
La “Foncière Commerçante”: a real estate company that adapts to the new needs of its clients and works with them pro-active approach La “Foncière Commerçante” Target: • Working alongside brands and independent retailers in Footfall integrating them into a local approach in order to boost their and s
Slide 44: Agence d'ici: a new entity serving retail and retailers
Agence d’ici: a new entity serving retail and retailers… Retailers continuing to face the same challenges... ... but in a fast-changing environment Winning new customers An increasingly difficult and competitive market Limited resources Fostering customer loyalty Poor understanding of new forms of I
Slide 45: Benefits from wide knowledge of the local scheme
… that benefits from the wide knowledge of the local scheme Effective tools… … supporting a wide range of services … … offered locally on a day-to-day basis by a business manager working closely with retailers A few examples Mercialys Diagnosis Advertising customer - Customer - Media buying database
Slide 46: 2013 targets: roll-out of the strategy
2013 will see the continuation and roll-out of the strategy initiated in 2012... Focus on growth and profitability 2013 targets Continuing robust 1.5 point of growth in invoiced organic growth rents on top of indexation Continuing high operational EBITDA / Rental revenues performance > 84% Around 10
Slide 47: Earnings impacted by refocusing of assets
… with earnings impacted by the refocusing of assets carried out in 2012 and early 2013 Net rental income impacted by asset disposals 13.3 -15% to -20% 11.3 effect on total FFO* In millions of euros 7.3 Continuing increasing adjusted FFO** 2012 asset sales 2012 asset sales 2013 asset sales Annualize
Slide 48: Objective: restore the 2011 annualized rental base by 2015
The objective: restore the 2011 annualized rental base by 2015 Annualized net rental income Portfolio value** Targets approx. approx. Portfolio value 2.7 restored by 2015 160 2.6 vs. 2011 150 2.3 135 NAV of Euro 1.7bn In millions of euros In billions of euros in 2015 following two exceptional distri
Slide 49: Appendices
€; mercialys L'Esprit Voisin. Appendices
Slide 50: Income statement
Income statement In millions of euros 12/31/11 12/31/12 % chg. 12/11 Invoiced rents 153.4 152.5 -0.6% Lease rights 7.6 7.9 Rental revenues 161.0 160.4 -0.4% Non-recovered property taxes -0.0 0.0 Non-recovered service charges -3.6 -3.9 Property operating expenses -5.7 -4.9 Net rental income 151.7 151
Slide 51: Number of shares
Number of shares 2010 2011 2012 Number of shares outstanding . As at January 1 91,968,488 92,000,788 92,022,826 . As at June 30 91,968,488 92,010,013 92,022,826 . As at December 31 92,000,788 92,022,826 92,022,826 Average number of shares 91,968,488 92,011,241 92,022,826 outstanding Average number o
Slide 52: Condensed balance sheet
Condensed balance sheet In millions of euros Assets 12/31/10 12/31/11 12/31/12 Investment property 1,604.3 1,624.8 1,414.0 Financial assets 11.7 13.6 27.0 Other assets 1.0 0.8 1.4 Total non-current assets 1,617.0 1,639.2 1,442.4 Cash and cash equivalents 77.4 47.5 206.7 Trade and other receivables 4
Slide 53: Portfolio valued at Euro 2,561 million
Portfolio valued at Euro 2,561 million, including transfer taxes Number Appraisal value incl. Gross leasable Appraised net of TT at 12/31/12* area at 12/31/12 rental income Type of property properties 12/31/12 (in millions (in millions % m² % % of euros) of euros) Large and regional shopping centers
Slide 54: Partnership Agreement: capitalization rate grid for H1 2013
Partnership Agreement: grid for the first half of 2013 remains unchanged relative to the second half of 2012 Grid of capitalization rates applicable to reiterations in the first half of 2013 within the framework of the current Partnership Agreement with Casino Shopping malls Retail parks City center