Slide 1: 2019 full-year results
2019 full-year results February 13, 2020
Slide 2: Preliminary remarks
Preliminary remarks The 2019 annual consolidated financial statements were approved by the Board of Directors on February 12, 2020. The audit procedures have been completed by the statutory auditors. The audit certification report is underway. 2
Slide 3: Contents
Contents 01 02 03 Optimizing Financial structure Conclusions and operations in a and results 2020 objectives shifting paradigm for the retail market 4 28 38 3
Slide 4: Optimizing operations in a shifting paradigm for the retail market
Optimizing operations in a shifting paradigm for the retail market Vincent Ravat Chief Executive Officer Elizabeth Blaise Deputy Chief Executive Officer
Slide 5: Strong set of results
Strong set of results Organic growth (%) FFO (€mn) 3.7% 3.6% 3.4% 3.4% 124.2 3.1% 2.6% 114.4 114.0 115.1 0.3% 1.2% 1.9% 108.5 3.5% 3.5% 102.6 2.8% 2.6% 2.5% 1.7% -0.1% -0.1% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Indexation effect Organic growth in invoiced rents excluding index
Slide 6: Mercialys' portfolio amplifies positive national dynamics
Mercialys’ portfolio amplifies positive national dynamics Client approach boosting local customer Favorable basis for comparison Supportive geographic positioning engagement › As medium-sized cities were impacted by social › Strong underlying trend for Mercialys sites, which › Improved knowledge of
Slide 7: Healthy economic trends with a positive outlook for 2020 onwards
Healthy economic trends with a positive outlook for 2020 onwards Consumer confidence survey in positive territory in spite of current strikes (1) Steadily decreasing unemployment rate (1) 120 11% 110 10% 100 9% 90 8% 80 7% 70 6% Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-14 Dec-15 Dec-16 Dec-17 D
Slide 8: Selective asset base in an increasingly polarized retail market
Selective asset base in an increasingly polarized retail market Concentration on a limited number of sites in Restructuring and expansion of assets with winning dynamic medium-sized cities positions within local “master zones” Optimized letting and asset management Strategic geographical positioning
Slide 9: Example of polarization of retail in suburban areas: Besançon
Example of polarization of retail in suburban areas: Besançon ÉCOLE VALENTIN (Carrefour) CHALEZEULE (Carrefour) Key Turnover for specialized large and mid-size stores Turnover for the shopping center Turnover for the large food store BESANÇON (city center) The size of the circles is proportional to
Slide 10: Example of polarization of local retail in dominant master-zones: Angers
Example of polarization of local retail in dominant master-zones: Angers AVRILLÉ SAINT-SERGE Key L’ATOLL Turnover for specialized large and mid-size stores ANGERS Turnover for the shopping center (urban area) GRAND MAINE BEAUCOUZÉ ESPACE ANJOU (Mercialys) The size of the circles is proportional to t
Slide 11: Hypermarkets still driving consumption in the regions
Hypermarkets still driving consumption in the regions, within a model that is however specializing in food › Massive decline in non-food turnover for hypermarkets over the past 8 › 94% of French people visited a hypermarket at least once during the years, across all product categories year (2) › Non
Slide 12: Hypermarkets' rightsizing to support their realignment around food
Hypermarkets’ rightsizing to support their realignment around food › 58 assets held by Mercialys at year-end 2019: › In the 23 shopping centers where Mercialys does not own the ▼ 47 shopping centers ▼ 6 city-center sites ▼ 5 isolated units anchoring food store, they are operated today by: ▼ Casino a
Slide 13: Major steps forward with innovative projects in 2019
Major steps forward with innovative projects in 2019 at the heart of the expansion of retail asset use 5 strategic drivers to further enhance Mercialys sites’ local leadership and feed their future performance Regular personalized Merchandising mixes Multi-functionality Integration within the Local
Slide 14: Driving footfall and winning client insights through powerful digital tools
Driving footfall and winning client insights through powerful digital tools … Database of 1 million clients enabling interaction with visitors, efficient marketing action metrics and selection of appropriate retailers He shows his phone to 41 years old – 3 children Marketing support Profiles Lives i
Slide 15: …to be strengthened in line with retailers' needs
…to be strengthened in line with retailers’ needs Proprietary services and digital ecosystem supporting our retailers and our assets’ last mile role Increasing interactions between Strengthening our digital and service retailers and consumers ecosystem 2019-2020 2019 › Targeted product communication
Slide 16: Retail mix focused on clients' greatest needs
Retail mix focused on clients’ greatest needs: price accessibility and everyday needs › Successful tailored letting strategy continued in 2019, › Mercialys managing its fashion sector exposure mostly contributing to the strong organic growth and low through retailers responding to consumers’ deep fo
Slide 17: Disruptive fit-outs for an improved customer journey
Disruptive fit-outs for an improved customer journey and shopping center differentiation New low-cost approach to changing site interiors Already live at Toulouse shopping center 17
Slide 18: Projects adding distinctive convenience services to our sites
Projects adding distinctive convenience services to our sites Furiani healthcare center 1st healthcare center in a shopping center in Corsica, let to 12 practitioners under usual commercial leases Project structured to integrate an extension of the existing pharmacy, making it possible to offer sust
Slide 19: Cap Cowork structuring the local shared office market
Cap Cowork structuring the local shared office market with a profitable margin Completion and ongoing letting of co-working space in Angers Letting managed in-house by Mercialys’ local teams in order to internalize the profit margin Next openings at Brest, Grenoble, Quimper and Marseille Sainte-Anne
Slide 20: Ocitô making shopping centers part of last-mile delivery
Ocitô making shopping centers a central part of the last-mile delivery chain Tests being conducted on the last-mile Proprietary platform Retailer knowledge emerging for this new Next center to be food delivery platform for restaurants at the developed for limited service to gradually be extended to
Slide 21: Integrating social responsibility and protecting asset value
Integrating social responsibility and protecting asset value over the long term New significant steps in 2019 Mercialys’ 2° carbon strategy has been put in place and scientifically certified Change in energy intensity per sq.m Scopes Target 1&2 -47% per sq.m by 2030 compared with 2017 -6% between 20
Slide 22: €468.6mn pipeline of meaningful projects on current scope
€468.6mn pipeline of meaningful projects on current scope Investment still Total Target net Target net yield Completion (in millions of euros) to be investment rental income on cost date committed COMMITTED COMMITTED PROJECTS 11.3 5.7 0.8 7.1% 2020 Projects fully secured in terms of land management,
Slide 23: Sainte-Marie
Sainte-Marie Selective investment in an area with development potential €25.0m investment Target net yield on cost: >7.0% Completion: 2023 23
Slide 24: Gassin Saint-Tropez
Gassin Saint-Tropez Consolidating local leadership with a modernized architecture aligned with new practices €25.7m investment Target net yield on cost: >7.0% Completion: 2023 24
Slide 25: Nîmes
Nîmes Diversifying the retail mix by developing a comprehensive dining and leisure offering €27.5m investment Target net yield on cost: >7.0% Completion: 2022 25
Slide 26: High-street retail
High-street retail Saint-Denis project › Building permit submitted › Dedicated company created with the developer Panhard, with a 30% stake held by Mercialys › Project metrics ▼ Circa €17.0m investment & ▼ Target IRR: >8% ▼ Program scheduled for delivery: 2024 Architect: Ateliers 2/3/4/ 26
Slide 27: High-street retail
High-street retail Three additional building permit applications expected for 2020 and 2021 PUTEAUX Mercialys aims to continue building its expertise in › Building permit to be mixed-use urban developments, capitalizing on the submitted: Q4 2020 development projects that are underway & › Program sch
Slide 28: Financial structure and results
Financial structure and results Elizabeth Blaise Deputy Chief Executive Officer
Slide 29: Another year of sustained organic growth
Another year of sustained organic growth FY 2019 renewals & relettings: +9.2% 3.7% 3.6% 3.4% 3.4% 3.1% 2.6% 1.2% 0.3% 1.9% 3.5% 3.5% 2.8% 2.6% 2.5% 1.7% -0.1% -0.1% 2014 2015 2016 2017 2018 2019 (1) Organic growth in invoiced rents, incl. indexation Organic growth in invoiced rents, excl. indexation
Slide 30: Durably sound vacancy rates and occupancy cost ratio
Durably sound vacancy rates and occupancy cost ratio on the back of Mercialys’ sensible lettings strategy Change in recurring financial vacancy rate (1) Change in occupancy cost ratio 2.6% 2.5% 2.5% 10.5% 10.6% 10.4% 2018 H1 2019 2019 2018 H1 2019 2019 (rents + charges including marketing costs + wo
Slide 31: Rental revenues up +2.4%
Rental revenues up +2.4% €191.9m Lease rights €3.0m +2.4% €187.3m + €3.2m Lease rights €2.1m + €3.4m + €1.0m €188.8m +2.0% - €0.6m - €3.4m €185.2m Like-for-like Strategic Disposals Acquisitions and Indexation growth in vacancy(1) and completions invoiced rents non-recurring items Organic growth +3.6
Slide 32: FFO up +7.9%
FFO up +7.9% + €9.3m 20 bp €124.2m - €3.8m Sustained improvement in - €0.9m rental margin at - €0.7m organic growth 94.9% €2.1m of provisions + €1.4m for a dispute + €4.6m relating to a site in Reimbursement Réunion Impact of the sale of of the bond + the Rennes and - €0.7m maturing in Recognition o
Slide 33: €122.4m of asset sales above appraisal values
€122.4m of asset sales including transfer taxes, significantly above appraisal values Breakdown of Mercialys’ asset sales in 2019 Gap shopping Isolated units center €1.1m €7.1m Rennes and Anglet hypermarket premises and La Garenne- Investors interested in all three types of adjacent units €17.4m Col
Slide 34: Sound financial structure
Sound financial structure Change in LTV (excluding transfer taxes) and ICR Debt: fixed vs. floating rate exposure (1) 6.7x 7.4x 60,0% 14% 50,0% 5.0x 40,0% 30,0% 2019 20,0% 40.8% 40.9% 39.5% 86% 10,0% 0,0% 2018 H1 2019 2019 Fixed-rate debt Variable-rate debt Change in net debt to EBITDA ratio 1000,0%
Slide 35: Optimized financing costs following the reimbursement of the March 2019 bond
Optimized financing costs following the reimbursement of the March 2019 bond Change in the cost of drawn debt (1) 2% 1.8% 2% 2% 1.4% Net debt: €1,373.2m including 1.3% 1% › €1,200.0m of bond debt 1% › €250.0m of commercial paper 1% 1% 1% Undrawn committed credit lines: €410m 2018 H1 2019 2019 Standa
Slide 36: Change in portfolio value
Change in portfolio value Over 12 months Total change on a like-for-like €3,420m excluding basis (1) - 1.4% - €48m transfer taxes of which rent effect + 1.4% + €51m of which yield effect - 3.0% - €108m -3.1% over 6 months of which other effects + 0.2% + €9m -3.9% over 12 months Average 12/2018 06/20
Slide 37: Change in NNNAV per share
Change in NNNAV per share (1) €20.01/share, -1.9% over 6 months, -5.4% over 12 months €21.14 + €1.35 - €0.58 €20.01 - €0.55 - €1.09 - €0.26 EPRA NAV at Rent effect: end-December 2019 + €0.56 › €20.53/share Yield effect: › Down -1.6% over 6 months - €1.18 › Down -1.6% over 12 months Other effects(2):
Slide 38: Conclusions and 2020 objectives
Conclusions and 2020 objectives Vincent Ravat Chief Executive Officer
Slide 39: Dividend payment
Dividend payment Proposed dividend up +2.7%, corresponding to 85% of 2019 FFO › Mercialys will propose a dividend of €1.15 › Ex-dividend date: April 27, 2020 per share at the 2020 General Meeting, › Payment date: April 29, 2020 including the interim dividend of €0.47 per share paid in October 2019 C
Slide 40: 2020 objectives
2020 objectives Organic growth in Change in FFO invoiced rents per share Dividend policy At least stable At least stable vs. 2019, Around +2% vs. 2019, vs. 2019, including within a range of including indexation the impact of 2019 & 85% to 95% of 2020 FFO 2020 asset sales 40
Slide 41: Appendices
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Slide 42: Financial calendar
Financial calendar 2020 April 20 April 23 July 27 July 28 October 19 Activity at 2020 Annual Press release Conference Activity at March 31, Shareholders’ on 2020 call on 2020 September 30, 2020 Meeting half-year results half-year results 2020 (after market close) (after market close) (after market c
Slide 43: Company profile
Company profile €191.9m Leading listed French real estate company that in rental revenues is a pure player for shopping centers › Mercialys' portfolio is focused on large and neighborhood shopping centers, as well as high-street 85% retail assets that are leaders in their areas EBITDA margin › Asset
Slide 44: Organizational structure
Organizational structure › All core business functions carried out in-house, 111 employees excluding specific mandates at end-December 2019 › Certain support functions brought back in-house, others still outsourced Support functions brought back in-house Support functions currently being brought bac
Slide 45: Shopping center portfolio structure
Shopping center portfolio structure Number of shopping centers and average value 73,874 61,479 38,868 26,907 93 62 58 47 2010 2013 2016 2019 Number of shopping centers in portfolio Average gross asset value of shopping centers (€ mn) Shopping center breakdown by size (% of portfolio gross asset valu
Slide 46: 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 December 31, 2019 by type of retailer – Economic exposure and December 31, 2018) (% of annualized rental income at December
Slide 47: 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 48: Rental income structure
Rental income structure Breakdown of Mercialys’ rental income by business sector (% of annualized rental income at December 31, 2019 – Lease expiry schedule including exposure to the Casino group) (percentage of leases expiring / guaranteed minimum rent) 26.8% Personal items Food-anchored tenants 6%
Slide 49: Financing structure and debt schedule
Financing structure and debt schedule Debt schedule at end-2019(1) Debt schedule at end-2018(1) in €m in €m 750 750 480 240 225 300 300 150 150 60 35 50 60 30 30 30 30 30 Confirmed bank facilities Casino cash advance Bonds Revolving credit facility Confirmed bank facilities Casino cash advance Bonds
Slide 50: Shareholding structure
Shareholding structure Mercialys’ shareholding structure based on latest public declarations with the French regulator (AMF) Crédit Agricole’s position Treasury shares includes the Casino group's Crédit Agricole 0.38% definitive sale of 15% of 4.47% Mercialys' capital through a Casino group total re
Slide 51: EPRA performance indicators
EPRA performance indicators December 31, 2018 June 30, 2019 December 31, 2019 EPRA earnings - € per share 1.25 0.69 1.35 EPRA NAV - € per share 20.86 20.86 20.53 EPRA NNNAV - € per share 21.14 20.40 20.01 EPRA net initial yield 4.81% 4.89% 4.94% EPRA “topped-up” net initial yield 4.88% 4.95% 5.00% E
Slide 52: FFO & EPRA earnings
FFO & EPRA earnings In thousands of euros December 31, 2018 December 31, 2019 Invoiced rents 185,213 188,849 Lease rights 2,074 3,003 Rental revenues 187,287 191,853 Property taxes -14,339 -14,608 Rebilling to tenants 13,480 13,325 Non-recovered property taxes -860 -1,283 Service charges -31,329 -33
Slide 53: Net income group share
Net income group share In thousands of euros December 31, 2018 December 31, 2019 FFO 115,060 124,168 Depreciation and amortization -37,016 -40,440 Other operating income and expenses 4,780 7,682 Impact of hedging ineffectiveness and banking default risk -387 -1,334 Non-controlling interests: capital
Slide 54: Balance sheet
Balance sheet In thousands of euros December 31, 2018 December 31, 2019 Intangible assets 2,710 3,588 Property, plant and equipment 8 857 Investment property 2,322,755 2,222,452 Rights-of-use assets 0 9,981 Investments in associates 35,160 36,355 Other non-current assets 46,773 51,867 Deferred tax a
Slide 55: Breakdown of assets
Breakdown of assets Average appraisal yield rate: 5.26% at December 31, 2019 Appraisal value Appraisal value Gross leasable Appraised Number net rental of assets (excl. transfer taxes) (incl. transfer taxes) area Type of property at December 31, at December 31, 2019 at December 31, 2019 at December
Slide 56: 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 > 20,000 sq.m 5.6% 6.2% 6.2% 6.6% 5.4% Rates
Slide 57: Disclaimer
Disclaimer › This communication contains forward-looking information factors” in the Registration Document filed by Mercialys on and statements about Mercialys. Forward-looking March 18, 2019. statements are statements that are not historical facts. These statements include financial projections and