Slide 1: 2010 full-year results
2010 full-year results Thursday, February 10, 2011
Slide 2: Preliminary notice
Preliminary notice The 2010 full-year consolidated financial statements were approved by the Board of Directors at its meeting of February 9, 2011. Audit procedures have been conducted by the statutory auditors. Finalization of the statutory auditors' report on the consolidated financial statements
Slide 3: Overview of 2010
€j mercialys L'Esprit Voisin. Overview of 2010
Slide 4: Improvement in market fundamentals and changes in regulatory conditions
Improvement in market fundamentals and changes in regulatory conditions Significant improvement in Changes in regulatory fundamentals conditions Stabilization in retailers’ sales Regulations concerning commercial urban development Retailers launching expansion (still) being overhauled plans Solvency
Slide 5: A year of strong growth in rental revenues for Mercialys
A year of strong growth in rental revenues for Mercialys Further double-digit growth in rental revenues Rental revenues of Euro 149.5 million Growth of +11.4% Continuing robust organic growth of +2.6%* despite unfavorable indexation (-0.5 point) 2010 full-year results (*) Organic growth in invoiced
Slide 6: A record year for lease signings
A record year for lease signings 351 leases signed during the year 237 renewals and relets 114 leases signed for Esprit Voisin projects under development Rental income of Euro 3.4 million in Specialty Leasing*, up Euro +0.8 million relative to 2009 2010 full-year results (*) Short-term lets 6
Slide 7: Continuing acceleration in the Esprit Voisin program
Continuing acceleration in the Esprit Voisin program… Rate of completions of Esprit Voisin development projects accelerated significantly in 2010 7 completions during 23,500 m² created / 8,900 m² redeveloped 18,700 m² renovated the year 2010 full-year results 7
Slide 8: Value-creation strategy stepped up
…and value-creation strategy stepped up Adoption of an active portfolio arbitrage policy Continuing solid rate of investment Euro 122 million of 45 properties sold in 5 portfolios Euro 31 million of capital gains realized mature assets sold equal to 5% of the portfolio Investment of Euro 138 million
Slide 9: Further growth in Mercialys's main performance indicators
Further growth in Mercialys’s main performance indicators… Rental revenues Recurring operating cash flow* CAGR +15.5% In millions of euros – 2005 pro forma figures CAGR +13.4% 149.5 125.8 72.7 67.1 H2 H2 H1 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 +11.4% +10.5% 2010 full-year resu
Slide 10: Significant improvement in cash flow per share
… and significant improvement in cash flow per share Cash flow per share* In millions of euros – 2005 pro forma figures 1.45 1.35 Average annual growth over 5 years +9.3% +7.3% 2009 2010 2010 full-year results (*) Cash flow relative to average number of shares fully diluted over the period 10
Slide 11: Sharp increase in the 2010 dividend
These results allow for a sharp increase in the 2010 dividend Dividend of Euro 1.26 per share* proposed for 2010 Sharp increase in the dividend: +26% as a result of Growth in rental revenues A higher recurring payout rate: 100% of rental earnings (commitment made at the time of the contributions in
Slide 12: Results
1 mercialys L'Esprit Voisin. Results
Slide 13: Solid growth in rental revenues
Solid growth in rental revenues Continuing robust growth relating to negotiations concerning assets in the Organic growth +2.6%** portfolio Growth in 2010 boosted by acquisitions RR carried out in 2009 149.5M€ Rental revenues: + 11.4% +4.2M€ +1.6M€ -0.2M€ -0.6M€ +9.3M€ -0.2 M€ -0.3M€ Variable Indexa
Slide 14: Strong growth in cash flow
Strong growth in cash flow Growth in recurring operating cash flow* in line with change in invoiced rents Total cash flow** also benefited from lease rights of Euro 6.9 million relating to openings of Esprit Voisin developments (Euro 1.2 million in 2009) Recurring operating cash Cash flow** flow* 13
Slide 15: Cash flow per share boosted by organic growth and 2009 contribution
Cash flow per share boosted by organic growth and impact of 2009 contribution Cash flow per share* 1.45 1.35 Growth in cash flow excluding effect of +7.3% 2009 contributions: +2.4% Dilutive effect relating to dividends paid in 2009 2010 shares in 2009 (2.6 million shares created) 1.41 Earnings-enhan
Slide 16: Results impacted by capital gains and depreciation
Results also impacted by capital gains on asset sales and depreciation relating to 2009 contributions 2009 2010 % chg. Funds from operations (FFO)* Net rental income 125.8 140.3 +11.6% Operating income -14.2 -15.5 +9.0% 128.0 Misc. other income 114.7 3.3 3.1 NS and expense In millions of euros Opera
Slide 17: Growth achieved without use of debt
Growth achieved without use of debt 2009 2010 Comments Invest. – asset sales – Investment property 1,573.1 1,604.3 depreciation Other non-current assets 14.0 12.5 Invoices to be issued/Q4 Trade receivables 6.0 16.4 openings and Grenoble In millions of euros VAT to be recovered Other current receivab
Slide 18: Average appraisal yield down over 12 months
Average appraisal yield down by 20 bp in the second half of the year and 30 bp over 12 months Growth over 12 Appraisal value of the portfolio, months including transfer taxes* 2,566.6 Euro -26m 2,467.8 Change in scope of 2,437.2 consolidation Acqu./Asset sales 2,061.2 In millions of euros 1,913.8 Eu
Slide 19: NAV per share up 6% in 2010
NAV per share up 6% in 2010 NAV per share incl. transfer taxes (euros) 28.39 26.78 27.10 27.00 25.70 +4.8% +6.0% 12/31/2007 12/31/2008 12/31/2009 06/30/2010 12/31/2010 Liquidation NAV per share (excl. transfer taxes) 2010 full-year results 24.21 25.40 25.32 25.61 26.89 19
Slide 20: 2010 Activity
€j mercialys L'Esprit Voisin. 2010 Activity
Slide 21: Improvement in retailers' sales across all sectors in 2010
Improvement in retailers’ sales across all sectors in 2010 Sales of retailers at shopping centers* Annual growth 2009 and 2010 4% 2009 2010 2.5% 2.8% 2.1% 2% 1.1% 1.0% 0.8% 0.6% -0.5% -1.5% -1.4% -7.0% -2.6% -7.8% 0% A stable year for nt ure ms s ing ta l h ice al t me To i te t er eis -2% rv e reta
Slide 22: A slight increase in retailers' sales over the last months
A slight increase in retailers’ sales over the last 12 months Business activity at shopping centers remained highly volatile from one month to the next. However it increased slightly on a cumulative basis relative to 2009 Retailers’ sales growth – All retails Accumulated sales at end-December 2010 +
Slide 23: A record year in terms of lease signings
Against this backdrop, Mercialys achieved a record year in terms of lease signings 2010 2009 130 leases renewed 106 leases renewed 107 relets 114 relets 114 leases signed for Esprit Voisin 86 leases signed for Esprit Voisin development projects development projects _________________________ ________
Slide 24: Management indicators attest to solidity of retailers
Management indicators attest to the solidity of our retailers and the low level of risk for our portfolio Stable recovery rate*: 98.0% The current vacancy rate also (98.3% as at December 31, 2009) remained stable at 2.1% (2.3% as at December 31, 2009) Occupancy cost ratio** still Reduction in strate
Slide 25: Increase in values per square meter
Increase in values per square meter as a result of asset sales and acquisitions Average gross rental value of Euro 203 per m² IPD benchmark Euro 306 per m²* 203 185 174 In euros per m² 162 147 136 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 Change over 6 months +Euro 18 per m² - Increase i
Slide 26: Second half marked by openings of large Esprit Voisin projects
Second half of the year marked by openings of large scale Esprit Voisin development projects Duparc Ste Marie - Réunion Island Val Semnoz - Annecy Extension opening on October 20, 2010 Extension opening on October 20, 2010 • Hypermarket turnover up +20% since • Hypermarket turnover up +8% since the
Slide 27: Esprit Voisin concept breathing new life into shopping centers
Esprit Voisin concept continuing to breathe new life into our shopping centers New Center Directors have joined the team in order to accompany the growth of our shopping centers and the development of the Esprit Voisin concept Christophe Juillet Véronique Former rugby player in Pecqueux-Rolland Patr
Slide 28: Label V accreditation and roll-out
Esprit Voisin concept continuing to breathe new life into our shopping centers Following Châteaufarine - Besançon, 2 new shopping centers applied for and obtained “Label V” accreditation: Castres and Annecy 24 applications planned for 2011 – 2012 A demanding label Roll-out • 3 main principles: - Int
Slide 29: Esprit Voisin concept once again awarded in 2010
Esprit Voisin concept once again awarded in 2010 Caserne de Bonne wins the 2010 Caserne de Bonne wins the Procos award for “Creation “City and Future” SIIC award of a shopping center” Esprit Voisin wins another award, the TopCom Consumer 2010 award in the Global Design category 29
Slide 30: Strategy stepped up by adding asset sales
Strategy of enhancing the value of the portfolio stepped up in 2010 by adding asset sales Euro 122 million of properties sold / 5% of the total portfolio Capital gains of Euro 31 million 45 properties sold representing net rental income of Euro 7.7 million in 2010 Initial buyer yield* 6.5% 2010 full
Slide 31: Asset sales focusing on portfolios of small mature properties
Program of asset sales focusing primarily on portfolios of small mature properties Annonay, Bourg en Bresse, Castres, Figeac, Portfolio of 14 food stores (Leaderprice, Grenoble, Issoire, Mont de Marsan, SPAR, Supermarchés Casino, Cafétérias) Montbéliard, Montélimar, Montpellier, Plouescat, Quimper,
Slide 32: A momentum modifying the profile of the portfolio
A momentum deeply modifying the profile of Mercialys portfolio 2010 2009 Appraisal value Appraisal value Number incl. Transfer Number incl. Transfer taxes Type of property of assets taxes at 12/31/10* of assets at 31/12/09* 12/31/10 Euro % 12/31/09 Euro % million million Regional and large shopping
Slide 33: Developments: overview and outlook
Developments: overview and outlook
Slide 34: 2010 enriched by the Esprit Voisin program
2010 enriched by the Esprit Voisin program with 4 major openings in the second half of the year 7 completions in 2010 Letting of developments* Aug. Dec. May Oct. 99% 100% 110% 94% 100% 84% 62% Brest Annecy Castres Ste Marie Duparc ) r n st r es od on ie ie jo Fontaine Les Dijon re id tr yn un ni Di
Slide 35: New stores at Val Semnoz
36 new stores at Val Semnoz Enlarged by 4,900 m² 36 new stores opened, renovation of the existing center and 1,600 m² hypermarket extension The center now has 65 stores Investment*: Euro 31.9 million Gross annual rental income: additional Euro 2.1 million Yield from extension: 6.7% Inclusion of La G
Slide 36: Val Semnoz - Annecy
Val Semnoz - Annecy VAL SEMNOZ SEYNOD mercialys L'Esprit Voisin. 36
Slide 37: Val Semnoz - Annecy: transformation over years
Val Semnoz - Annecy: transformation over 5 years 2010 – End of dev. project Area: 24,400 m² Investment over the period: Euro 50.3 million Annual rental income: Euro 4.6m (acquisition of the extension and the Market value: Euro 80m* adjacent retail park and renovation) Size x 7 2005 – Contribution Ar
Slide 38: Duparc - Ste Marie doubled in size
Duparc – Ste Marie doubled in size and includes top retailers in its extension Enlarged by 8,500 m² 34 new stores opened and renovation of the existing center The center now has 58 small stores and 5 mid-size stores Investment*: Euro 33.2 million Gross annual rental income: additional Euro 3.0 milli
Slide 39: Duparc - Sainte Marie (La Reunion)
Duparc – Sainte Marie (La Reunion) 39
Slide 40: Sainte Marie Du Parc: one of the island's top sites
Sainte Marie Du Parc (La Reunion island): one of the island’s top sites 2010 – End of dev. project Area: 11,800m² Investment Annual rental income: Euro 4.1m over the period: Euro 37.0m (acquisition of the extension and renovation) Market value: Euro 70m* Size x 4 2007 - Contribution Area: 3,300m² 20
Slide 41: Les Belles Feuilles - Paris St Didier: a new look
Les Belles Feuilles - Paris St Didier: a new look Complete renovation of communal and external parts 290 m² supermarket extension Major changes to the merchandising plan with the arrival of new retailers Investment*: Euro 25.6 million Annual rental income: additional Euro 1.5 million Yield from rede
Slide 42: Higher rents on renewals and relets since start of works
Higher rents on renewals and relets since start of works Between 2008 and end-2010: period of works - 5 leases renewed December 31, 2010: - 15 premises relet Annual rental value: Euro 1.4 million Change in rental value (on a like-for-like basis) +30% 2008 Total annual rental value: Euro 3.0 million
Slide 43: Les Belles Feuilles: a complex renovation project
Les Belles Feuilles: a complex renovation project 2010 – End of dev. project Investment over the period: Euro 33 million Annual rental income: Euro 3.0m (redevelopment works and Market value: Euro 53m* acquisition of supermarket and co-ownership lots) Size x 5 2005 - Contribution Annual rental incom
Slide 44: Opening of Arc en Sel in Lons le Saunier
Opening of Arc en Sel in Lons le Saunier Development of a complex of 7 mid-size stores close to our shopping center Investment*: Euro 10.9 million Annual rental income: Euro 0.8m Yield: 7.3% Inclusion of Intersport, Chaussland, La Halle aux enfants, La Grande Récré, Kiabi + extensi on de Average ren
Slide 45: Lons le Saunier: an upgraded site
Lons le Saunier: an upgraded site 2010 – End of dev. project Area: 10,000 m² Investment Annual rental income: Euro 1.5m over the period: Euro 10.9 million (acquisition of the adjacent retail park) Market value: Euro 24m* Size x 4 2005 - Contribution Area: 3,000 m² 2010 full-year results Annual renta
Slide 46: Next two years to be peak years in completions
Next two years to be peak years in terms of completions of Esprit Voisin development projects 11 completions of Esprit Voisin extensions in preparation for 2011, including primarily: Geispolsheim Annemasse Ajaccio (phase 1) Marseille La Valentine 2010 full-year results Villefranche Auxerre 46
Slide 47: Next two years to be peak years in completions
Next two years to be peak years in terms of completions of Esprit Voisin development projects 11 completions of Esprit Voisin extensions in preparation for 2011 and more than a dozen for 2012 2011 schedule Q1 Q2 Q3 Q4 Annemasse Geispolsheim Les Sables d’Olonne Marseille la V. Auxerre (GM) Angers (re
Slide 48: 50% of properties to benefit from Esprit Voisin by end-2012
50% of properties will benefit from the Esprit Voisin development program by end-2012 End-2010 End-2012 Euro 100-150 million of investment per year 50% of projects Around Euro 10 completed* million in annualized rents created per year More than 100,000 m² upgraded Annualized rental 25% of projects i
Slide 49: 2013 - 2015: a well-stocked pipeline to fuel completions
2013 – 2015: a well-stocked pipeline to fuel completions 00 m² + 20,0 fo r CDAC d 2013 - 2015 applie n rizatio x a u th o Value creation from 250,000 m² of space to fuel growth Major projects Chartres Toulouse Fenouillet Orléans Phase 2 projects Annecy phase 2 and Arcaloz’ 2 Brest phase 2 Ajaccio ph
Slide 50: Casino pipeline still the main driver for acquisitions
Casino pipeline still the main driver for acquisitions in the years to come Very large pipeline of Esprit Voisin extension projects – Numerous Pipeline* of Casino development projects in millions of euros completions in the next two years Projects at new sites abandoned because of uncertainties 555*
Slide 51: Conclusion and outlook
mercialys L'Esprit Voisin. Conclusion and outlook
Slide 52: Strategy centered on enhancing the value of assets
Strategy centered on enhancing the value of assets for development: increase in the quality of the portfolio Enhancing the value of the portfolio Reversion Development of Redevelopment specialty leasing and projects associated revenues Extensions Acquisitions Asset sales Esprit Voisin programs – Sal
Slide 53: Fast-paced development coupled with a controlled risk profile
Fast-paced development coupled with a controlled risk profile - Pure play operator (retail properties in France) - No exposure to sensitive countries (PIGS, Central Europe) - Financing mainly by equity - A durably strong operating An “industrial” process performance Risk profile below average for re
Slide 54: Dividend payout policy suited to our strategy
Dividend payout policy suited to our strategy Acquisitions Asset sales Enhancing the value of the portfolio 2010 full-year results Dividend Solid cash flow Capital gains payouts growth on asset fuelled by: sales 54
Slide 55: Outlook for 2011
Outlook for 2011 Maintaining a robust rate of organic growth Indexation effect becoming positive again Reversion Uncertainties relating to the impact of business activity on our variable and temporary rents Our objective Strong year in terms of Esprit Voisin Growth in funds from completions operatio
Slide 56: Appendices
1 mercialys L'Esprit Voisin. Appendices
Slide 57: Partnership Agreement: new terms
Partnership Agreement: new terms Grid of capitalization rates applicable to call options exercised in the first half of 2011 within the framework of the Partnership Agreement with Casino Shopping malls Retail parks City center Mainland Corsica Mainland Corsica France and France and Type of property
Slide 58: Detailed income statement
Detailed income statement In millions of euros % chg. 12/31/08 12/31/09 12/31/10 10/09 Invoiced rents 113.6 130.9 144.7 +10.5% Lease rights 2.6 3.3 4.8 +44.7% Rental revenues 116.2 134.2 149.5 +11.4% Non-recovered property taxes -0.1 -0.2 -0.2 Non-recovered service charges -2.5 -3.1 -3.7 Property op
Slide 59: Number of shares
Number of shares 2008 2009 2010 Number of shares outstanding . As at January 1 75,149,959 75,149,959 91,968,488 . As at December 31 75,149,959 91,968,468 92,000,788 Average number of shares 75,149,959 85,483,530 91,968,488 outstanding Average number of shares 75,073,134 85,360,007 91,744,726 (basic)
Slide 60: Condensed balance sheet
Condensed balance sheet Assets In millions of euros 12/31/09 06/30/10 12/31/10 Investment property 1,573.1 1,576.7 1,604.3 Financial assets 13.0 13.4 11.7 Other assets 1.0 1.1 1.0 Total non-current assets 1,587.2 1,591.2 1,617.0 Cash and Casino current account 69.9 50.7 77.4 Trade and other receivab
Slide 61: Portfolio valued at Euro 2,567 million incl. transfer taxes
Portfolio valued at Euro 2,567 million incl. transfer taxes Increase of +5.3% over 12 months Appraisal value Gross leasable Appraisal net Number incl. transfer area at 12/31/10 rental income Type of property of assets taxes at 12/31/10* 12/31/10 Euro % m² % Euro % millions millions Regional and larg
Slide 62: Enhancing the value of the pipeline by stage of completion
Enhancing the value of the pipeline taking into account the stage of completion of each project Each stage of completion has its own probability The development pipeline as it currently stands contains projects with widely varying stages of completion and chances of going ahead The valuation method