Slide 1: 2020 half-year results
2020 half-year results July 28, 2020
Slide 2: Preliminary remarks
Preliminary remarks The 2020 first-half consolidated financial statements were approved by the Board of Directors on July 27, 2020 A limited scope review of these financial statements has been performed by the statutory auditors 2
Slide 3: Contents
Contents 01 02 Model that is proving its Financial structure and relevance in the context of results an unprecedented crisis 4 18 3
Slide 4: Model that is proving its relevance in the context of an unprecedented crisis
Model that is proving its relevance in the context of an unprecedented crisis Vincent Ravat Chief Executive Officer
Slide 5: First half of the year marked by restrictive health measures
First half of the year marked by restrictive health measures End of the public lockdown and Announcement of a Closure of all non-essential Official appearance of reopening of stores cluster of “viral stores Reopening of most leisure the first cases of covid-19 (excluding leisure venues, cafes, bars
Slide 6: Operational indicators resilient despite the crisis
Operational indicators resilient despite the crisis EBITDA margin Recovery rate 85.0% 85.3% 85.0% 84.9% 84.6% 84.3% 97.6% 97.6% 97.7% 97.1% 97.0% 96.7% 96.7% 96.5% 83.6% 83.7% (1) 2013 2014 2015 2016 2017 2018 2019 H1 2020 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Current financial vacancy rate (2)
Slide 7: Retail mix deeply anchored in the habits of our retail sites’ communities
Retail mix deeply anchored in the habits of our retail sites’ communities Diverse retail mix Strong focus on serving essential needs Change vs 2,111 leases representing an annualized rental Dec. 31, 2016 base of €182.3m, with: 30.6% 26.2% › 29% for food stores and dining › 4% for healthcare › 3% for
Slide 8: Rapid return to normal footfall levels thanks to the relevance of our retail offering
Rapid return to normal footfall levels thanks to the relevance of our retail offering Extremely robust upturn in footfall following the lockdown, until the deferred summer sales period 40% Start of Mother’s Day operation Start of 20% Father’s Day operation 0% -20% March 17 to May 10, 2020 -40% 2 Mer
Slide 9: Retailers’ activity supported by the economic recovery and potential mobilization of high savings
Retailers’ activity supported by the economic recovery and, with time, the potential mobilization of high savings levels Strong increase in household savings Change in Mercialys’ retailer sales during the lockdown +15.4% +16.1% Monthly change in households’ +7.8% bank deposits +0.6% (in billions of
Slide 10: The health crisis has highlighted a default online shopping reflex among consumers
The health crisis has highlighted a default online shopping reflex among consumers Indicating that the majority of online purchases are very sector-specific Online purchases linked closely to the health context (1) Motivations for the period studied Post-lockdown change 76% Avoid exposure to the hea
Slide 11: The health crisis has revealed the need for unified multichannel logistics
The health crisis has revealed the need for unified multichannel logistics E-commerce models (“just-in-time”, very remote production sites) faced with restrictions on movement and distribution, source of Ship-from-store paradigm customer dissatisfaction Breakdown of the volume of items depending › R
Slide 12: Ocitô: ecosystem centered around the shopping center
Ocitô: ecosystem centered around the shopping center offering a rich range of solutions for customers to buy and collect products Retailer e-commerce sites Ocitô.net proprietary marketplace Retailers’ Mercialys’ “default” enriched e-commerce ecosystem model Multiple product Local collection manageme
Slide 13: Ocitô ecosystem provides retailers with bespoke services to facilitate ship-from-store
Ocitô ecosystem provides retailers with access to a range of bespoke services to facilitate ship-from-store To offer an e-commerce site for points of sale that do not have one or to boost their local presence online Local marketplace Food and non-food Services / Connection to retailer stock products
Slide 14: Pipeline able to adapt to market circumstances
Pipeline able to adapt to market circumstances Projects illustrating the modularity of Mercialys’ sites: different forms of retail (redevelopments, extensions, retail parks), dining and leisure, and tertiary activities (coworking, healthcare, housing) Total Investment still to be Target net Target n
Slide 15: Acceleration of tertiary projects across diverse regions
Acceleration of tertiary projects across diverse regions and one third of Mercialys’ sites Urban projects Coworking Healthcare projects Dining / leisure Other (1) Martinique Reunion island Guadeloupe Guyana (1) Outlet, hotel, etc. 15
Slide 16: Saint-Denis: sale of building rights expected for 2021
Saint-Denis: sale of building rights expected for 2021 › Creation of 271 apartments › Resizing of the store and creation of a second retail unit next to the canal › Replacement of the existing ground-floor car park with underground parking Projected building permit award date: November 2020 (post co
Slide 17: Puteaux: new project approved by public officials
Puteaux: new project approved by public officials Before After › Creation of 90 apartments Building permit submitted: Q4 2020 › Supermarket redevelopment and extension Estimated investment: €19m › Creation of a garden over 600 sq.m Expected IRR: 9% Architects: Dominique Hertenberg and Atelier Sylvai
Slide 18: Financial structure and results
Financial structure and results Élizabeth Blaise Deputy Chief Executive Officer
Slide 19: National mediation process, pivotal to discussions with our tenants
National mediation process, pivotal to discussions underway with our tenants Charter supported by the French Ministry for the Economy Mercialys aligns itself with the › A mediation process was considered necessary by the French government, which core principles from this appointed a mediator in Apri
Slide 20: Estimated impacts for Mercialys: maximum budget of €13.5m
Estimated impacts for Mercialys: maximum budget of €13.5m 96.5% Full recovery rate for 3-months rent-relief for very small businesses: the 12 months to end-March estimated maximum of €4,7m (1) 2020 In accordance with the accounting rules applicable: impact spread over the remaining firm term of leas
Slide 21: Organic growth impacted by the covid-19 crisis
Organic growth (1) impacted by the covid-19 crisis 3.4% 3.7% 3.6% 2.6% 3.1% -0.8% 1.2% 1.9% 1.9% 3.5% 2.6% Impacts linked to the health crisis 2.5% 1.7% 1.6% Provisions for rent relief supporting very 1.2% small businesses, spread over the firm period of their leases in accordance with -0.1% the acc
Slide 22: Sustainably low vacancy rates – ineffective OCR analysis in H1 2020
Sustainably low vacancy rates – ineffective OCR analysis in H1 2020 Change in vacancy rate (1) Occupancy cost ratio 3.4% 3.2% 3.0% As the majority of stores were closed between March 15 and May 11, 2020, the 0.4% 0.7% 0.9% occupancy cost ratio analysis is ineffective, as it is based on retailer sale
Slide 23: Rental revenues down -3.6%
Rental revenues down -3.6% Organic growth -0.8% €95.5m €92.0m Lease rights €1.6m Lease rights -3.6% + €1.5m - €2.2m €1.3m - €0.2m - €0.8m - €1.2m - €0.2m - €0.1m €93,8m -3.3% €90,7m June June 30, 2019 30, 2019 Disposals Strategic vacancy Provisions for rent Indexation Lower contribution Actions carr
Slide 24: FFO stable at €63.0m
FFO stable at €63.0m €63.0m €63.0m + €3.2m + €0.2m + €0.6m €63.0m €63.0m + €0.1m - €0.5m Lower tax - €3.5m burden Covid-19 impact on Full-year impact of equity Cost structure the redemption of associates under tight the €480m bond and 2019 control maturing in March asset disposals 2019 84.9% EBITDA
Slide 25: Sound financial structure
Sound financial structure Change in LTV (excluding transfer taxes) and ICR Debt: fixed vs. floating rate exposure (2) 18% 10.6x H1 2020 7.4x 82% 6.7x Fixed-rate debt Variable-rate debt 40.9% 39.5% 41.1% 40.0% 14% (1) H1 2019 2019 H1 2020 H1 2020 proforma 2019 86% LTV (%) ICR (x) Fixed-rate debt Vari
Slide 26: Strong level of liquidity
Strong level of liquidity Change in the cost of drawn debt (1) Net debt at June 30, 2020: €1,385.2m including 1.4% › €1,200.0m of bond debt 1.3% › €372.0m of commercial paper 1.1% Cash position at June 30, 2020: €180.5m Undrawn committed credit lines at June 30, 2020: €410m Standard & Poor’s rating:
Slide 27: Refinancing operation completed in July 2020 to extend debt maturity
Refinancing operation completed in July 2020 to extend debt maturity Change in Mercialys bond debt Extension of the group’s debt maturity profile through spreads vs. benchmark (1) 500 a €300m new bond issue with 7-year maturity and Mercialys 2023 4.625% coupon 400 Mercialys 300 2026 › The new issue’
Slide 28: Change in portfolio value
Change in portfolio value Portfolio value reflecting an assessment of each site’s letting potential Over 6 months Total change on a like-for-like €3,314.6m excluding basis (1) - 3.1% - €105m transfer taxes of which rent effect + 1.2% + €40m of which yield effect - 4.3% - €147m -3.1% over 6 months of
Slide 29: Change in NNNAV per share
Change in NNNAV per share (1) €19.90/share, -0.5% over 6 months, -2.4% over 12 months EPRA NNNAV at end-June 2020 is higher than EPRA NAV, benefiting + €0.69 from a positive contribution for the €20.01 + €0.82 €19.90 marking to market of Mercialys’ - €0.16 fixed-rate debt, with the 2023, - €0.48 202
Slide 30: 2020 objectives
2020 objectives On March 23, 2020, Mercialys indicated that the objectives published with its 2019 full-year results, in February 2020, were no longer applicable The Company has updated its objectives to reflect the impact of the health crisis linked to covid-19 These objectives exclude the impacts
Slide 31: Appendices
Appendices PIERCIALYS
Slide 32: Financial calendar
Financial calendar 2020 October 19 Activity at September 30, 2020 (after market close) 32
Slide 33: Company profile
Company profile €92.0m Leading listed French real estate company that rental revenues is a pure player for shopping centers › Mercialys' portfolio is focused on large and neighborhood shopping centers, as well as high-street 84.9% retail assets that are leaders in their areas EBITDA margin › Assets
Slide 34: Organizational structure
Organizational structure › All core business functions carried out in-house, 122 employees excluding specific mandates at end-June 2020 › Certain support functions brought back in-house, others still outsourced Support functions currently Support functions brought back in-house being brought back in
Slide 35: Shopping center portfolio structure
Shopping center portfolio structure Number of shopping centers and average value 71,383 61,479 38,868 26,907 93 62 58 47 2 010 2 013 2 016 H1 2020 Number of shopping centers in portfolio Average gross asset value of shopping centers (€ mn) Shopping center breakdown by size (% of portfolio gross asse
Slide 36: Rental income structure
Rental income structure Breakdown of Mercialys’ rental income by type of retailer – Consolidated vision Breakdown of Mercialys’ rental income (% of annualized rental income at June 30, 2020 by type of retailer – Economic exposure and June 30, 2019) (% of annualized rental income at June 30, 2020) De
Slide 37: Rental income structure
Rental income structure Casino group lease schedule H&M group lease schedule (main leases: hypermarkets, supermarkets & Monoprix stores) % held by Lease Lease Site Lease start date Lease end date Lease characteristics Site Type Lease characteristics Mercialys start date end date Saint-Denis 100% Sup
Slide 38: Rental income structure
Rental income structure Breakdown of Mercialys’ rental income by business sector (% of annualized rental income at June 30, 2020 – Lease expiry schedule including exposure to the Casino group) (percentage of leases expiring / minimum guaranteed rent) 26.8% Personal items Food-anchored tenants 6% 0%
Slide 39: Financing structure and debt schedule
Financing structure and debt schedule Debt schedule at end-December 2019 (1) Debt schedule at end-June 2020 (1) in €m in €m Proforma for refinancing operations closed in July 2020 Partial 181.3 redemption of the issue New bond issue 750 568.7 225 300 225 300 300 150 150 60 35 30 30 30 35 30 30 30 30
Slide 40: Shareholding structure
Shareholding structure At June 30, 2020 Treasury shares Generali group 0.53% 8.01% Casino group 25.16% December December June 31, 2018 31, 2019 30, 2020 Number of shares outstanding 92,049,169 92,049,169 92,049,169 at the end of the period Average number of shares outstanding 92,049,169 92,049,169 9
Slide 41: EPRA performance indicators
EPRA performance indicators June 30, 2019 December 31, 2019 June 30, 2020 EPRA earnings - € per share 0.69 1.35 0.69 EPRA NAV - € per share 20.86 20.53 19.72 EPRA NNNAV - € per share 20.40 20.01 19.90 EPRA NRV - € per share 23.29 22.87 22.00 EPRA NTA - € per share 20.86 20.53 19.72 EPRA NDV - € per
Slide 42: FFO & EPRA earnings
FFO & EPRA earnings In thousands of euros June 30, 2019 June 30, 2020 Invoiced rents 93,843 90,732 Lease rights and despecialization indemnities 1,644 1,271 Rental revenues 95,487 92,003 Property taxes -15,031 -14,327 Rebilling to tenants 13,971 13,004 Non-recovered property taxes(1) -1,060 -1,323 S
Slide 43: Net income group share
Net income group share In thousands of euros June 30, 2019 June 30, 2020 FFO 62,975 62,993 Depreciation and amortization -20,201 -20,236 Other operating income and expenses -4,862 -11,112 Impact of hedging ineffectiveness and banking default risk -127 1,394 Non-controlling interests: capital gains,
Slide 44: Balance sheet
Balance sheet In thousands of euros December 31, 2019 June 30, 2020 Intangible assets 3,588 4,297 Property, plant and equipment 857 1,247 Investment property 2,222,452 2,196,285 Rights-of-use assets 9,981 9,411 Investments in associates 36,355 36,650 Other non-current assets 51,867 61,400 Deferred t
Slide 45: Breakdown of assets
Breakdown of assets Average appraisal yield rate: 5.49% at June 30, 2020 Appraisal value Appraisal value Gross leasable Appraised Number (excl. transfer taxes) (incl. transfer taxes) area net rental Type of property of assets at June 30, 2020 at June 30, 2020 at June 30, 2020 income at June 30, 2020
Slide 46: Capitalization rate grid
Capitalization rate grid Applicable under the Partnership Agreement with Casino Shopping centers Retail parks City Type of property Corsica and Corsica and Mainland Mainland center overseas depts. overseas depts. France France & territories & territories Rates > 20,000 sq.m 5.9% 6.5% 6.5% 6.8% 5.7%
Slide 47: Disclaimer
Disclaimer › This communication contains forward-looking information heading in the Universal Registration Document filed by and statements about Mercialys. Forward-looking Mercialys on March 23, 2020. statements are statements that are not historical facts. These statements include financial projec