Unibail-Rodamco-Westfield SE · EURONEXT:URW
Unibail-Rodamco-Westfield — Unibail-Rodamco — Shareholder Meeting (May 2018)
104 slides from Unibail-Rodamco-Westfield's shareholder meeting presentation, May 17, 2018
Slide 1: 2018 Annual General Meeting
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Slide 2: Limitations and qualifications
By reading the following presentation slides, you further agree to be bound by the following limitations and qualifications: This presentation is for informational purposes only and is not intended to and does not constitute an offer or invitation to sell or solicitation of an offer to subscribe for
Slide 3: A year of exceptional achievements
A YEAR OF EXCEPTIONAL ACHIEVEMENTS
Slide 4: Deliveries, disposals, acquisitions and Westfield announcement
Retail (3) (4) Announcement Disposals Acquisitions of Westfield acquisition Deliveries(1)(2) to create €930 Mn €710 Mn €364 Mn the world’s premier developer 172,400 m² and operator of flagship shopping destinations (1) TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from t
Slide 5: Financial results
FINANCIAL RESULTS
Slide 6: Net rental income and recurring result
Shopping Centres 1,346 1,273 +5.8% +4.3% Offices 141 153 -8.1% +13.5% Convention & Exhibition 95 103 -6.9% -6.9% Net Rental Income 1,583 1,529 +3.5% +4.2% Recurring Net Result (Group share) 1,202 1,114 +7.9% Recurring EPS(2) 12.05 11.24 +7.2% 219.20 201.50 +8.8% 200.50 183.70 +9.1% 211.00 195.60 +7.
Slide 7: Shopping centres net rental income by region
France 610 581 +5.0% +3.7% Central Europe 172 156 +10.4% +4.2% Spain 161 146 +10.3% +4.6% Nordics 146 140 +4.2% +7.6% Austria 103 99 +4.6% +3.9% Germany 93 90 +2.9% +3.2% The Netherlands 62 62 +0.2% +3.8% 1,346 1,273 +5.8% +4.3% (1) Net Rental Income (NRI) like-for-like growth excluding acquisitions
Slide 8: Tenant sales growth
+5.3% +2.3% +3.6% +3.9% +2.3% +5.9% +2.1% +4.3% +4.6% +2.5% +1.7% +0.5% +2.7% +1.8% Tenant sales growth in Unibail-Rodamco’s shopping centres(1) National Sales Indices(2) (1) Tenant sales data include shopping centres accounted for using the equity method (Rosny 2, CentrO and Paunsdorf) but not Jumb
Slide 9: Offices net rental income
France 124 136 -9.0% +15.9% Nordics 12 13 -4.2% +2.7% Other 5 5 +5.1% -6.7% 141 153 -8.1% +13.5% (1) Net Rental Income (NRI) like-for-like growth excluding acquisitions, divestments, transfers to and from pipeline (extensions, brownfields or redevelopment of an asset when operations are stopped to e
Slide 10: Office lettings and vacancy
Renewals Letting to 22,800 m² 13,200 m² CNIT Tour Ariane First lettings 11,600 m² 6,500 m² Les Villages 3,100 m² Capital 8 4,400 m² rooftop terraces and balconies 72,300 m² 44,600 m² Vacancy(1) down to 3.3% (1) EPRA Vacancy rate = Estimated Rental Value (ERV) of vacant spaces divided by ERV of total
Slide 11: Convention & Exhibition results
Net Rental Income(2) 95 103 -6.9% 100 -4.5% Property Services and Other Income(3) 50 62 -19.1% 49 +2.8% 146 165 -11.5% 149 -2.1% Depreciation -12 -11 +7.2% -11 +9.5% 134 154 -12.9% 138 -3.0% (1) Adjusted for the impact of the triennial Intermat exhibition in 2015 (2) Includes €11.6 Mn, €13.0 Mn and
Slide 12: Paris Convention Centre opening
Opened November 22, 2017 Capacity 35,000 participants 15 congresses Signed 2018 2019 European European Society Respiratory Society of Cardiology 22,000 35,000 participants participants 11
Slide 13: CSR pillars
PILLAR 1 PILLAR 2 PILLAR 3 PILLAR 4 LESS LESS LESS LESS CARBON EMISSIONS POLLUTING TRANSPORT LOCAL UNEMPLOYMENT TOP-DOWN BETTER BETTER BETTER BETTER BUILDINGS CONNECTIVITY COMMUNITIES COLLECTIVE POWER 146 partnerships 398 charging spaces 32 shopping centres 1,161 units 20 shopping centres 98% store
Slide 14: Development
DEVELOPMENT
Slide 15: 2017 deliveries
Additional GLA(1) 172,400 m² TIC(2) €930 Mn 99% let at opening(3) Yield on cost(4) 7.7% (1) GLA: Gross Lettable Area (2) TIC: Total Investment Cost equals the sum of: (i) all capital expenditures from the start of the project to the completion date and includes: land costs, construction costs, study
Slide 16: Value creation & excellent financial metrics
VALUE CREATION & EXCELLENT FINANCIAL METRICS
Slide 17: Going Concern NAV
Recurring Going Concern NAV(1) (in € per share) EPS Non LfL +€12.05 revaluation €219.20 & intangible assets(2) +€4.29 €201.50 -€10.20 +€27.14 +€0.76 €192.06 Asset revaluation +€14.16 Rent effect(3) +€9.22 Other(4) +€0.93 Yield effect(3) GMV €43.1 Bn(5) +€0.65 December 2016 Dividend MtM of debt Decem
Slide 18: Cost of debt, maturity and undrawn bank lines
Average cost of debt (%) Average maturity (years) 3.9% 7.2 3.6% 7.0 3.4% 6.5 2.9% 5.9 2.6% 5.4 2.2% 4.9 4.5 4.3 1.6% 1.4% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 €6.2 Bn of undrawn bank lines(1) (1) Does not include the €6.1 Bn Westfield bridge credit facility
Slide 19: Low LTV, strong ICR
Low LTV(1) Strong ICR(2) 60%(3) 6.7 5.9 41% 41% 37% 4.6 35% 4.0 33% 3.8 30% 3.5 2.5 2.0(3) (1) Consolidated Loan-to-Value (LTV) = Net financial debt / Total portfolio valuation including transfer taxes. Total Portfolio valuation includes consolidated portfolio valuation (€43,057 Mn as at December 31
Slide 20: Dividend
DIVIDEND
Slide 21: Cash dividend for fiscal year 2017
For fiscal year 2017 (1) Cash dividend : €10.80 90% pay-out ratio INTERIM €5.40 on March 29, 2018 (2) FINAL €5.40 on May 30, 2018 (prior to implementation date of Westfield transaction(3)) (1) Subject to the approval of the Annual General Meeting (AGM) (2) The dividend will be paid to Unibail-Rodamc
Slide 22: Unibail-Rodamco: an unparalleled platform of iconic shopping destinations
UNIBAIL-RODAMCO: AN UNPARALLELED PLATFORM OF ICONIC SHOPPING DESTINATIONS
Slide 23: Destination, proximity and online
Destination - Experience • Brand interaction • Flagship stores • Customer services • Entertainment and dining • Social experience and events Proximity - Convenience Online - Efficiency • Fulfils a practical need • Personalized • Rapid and efficient • Value for money • Daily consumption • Quick • Unl
Slide 24: Best brands need selected flagships in key locations
Best brands need selected flagships in key locations Amazon books, Westfield Garden State Plaza Warby Parker, Westfield Century City 23
Slide 25: Concentration, differentiation, innovation
Concentration Differentiation Innovation • Focus: • Continuous • Continuously in • • Drive footfall by i • for tenants, and visitors and employees and Generate superior Building Fostering creativity growth and returns the new face of retail 24
Slide 26: Focus on large assets and disposals
97% GMV > 6 Mn visits 75% GMV > 10 Mn visits Focus on large assets €5.0 Bn(1) 85 - 95% Attractive Disposal since 2013, of which pay out ratio distribution policy of non-core assets 27 shopping centres Selective acquisitions Shopping City Süd 2008 mfi 2012 La Maquinista 2008 Centro 2014 Arkadia 2010
Slide 27: Portfolio of shopping centres by visits
Stockholm Helsinki Copenhagen Amsterdam The Hague Oberhausen Berlin Warsaw Lille Wroclaw Bochum Prague Paris Vienna Bratislava Munich Lyon Cagnes-sur-Mer Barcelona Madrid Valencia Number of visits in 2017 Portfolio includes assets consolidated under equity method (1) Asset under heavy refurbishment
Slide 28: Like-for-like NRI growth of shopping centres
Like-for-like NRI growth of Shopping Centres +7.9% +7.7% Average Lfl growth above indexation since 2007 +2.9% 4.2% 4.4% +4.6% +4.7% +4.2% +4.3% +3.9% +3.8% +3.9% +3.4% 1.1% 2.6% 2.0% 3.6% 3.6% 3.0% 3.6% 3.7% 3.1% 3.3% +1.4% 2.8% 0.8% 2.2% 2.1% 1.0% 0.8% 0.7% 0.6% 0.3% 0.3% 2007 2008 2009 2010 2011 2
Slide 29: Recurring EPS growth and guidance
Aggressive non-core asset disposal program improved growth potential 14,00 Medium-term guidance: REPS CAGR 5-7% Medium-term guidance: REPS CAGR 6-8% 12.05 14% 12,00 11.24 10.92 10.22 10.46 12% 10,00 9.60 9.19 9.27 9.03 8.52 7.86 10% 8,00 +8.4% +8.3% +7.9% +7.5% +7.2% 6,00 +6.8% 8% +6.3% +6.5% +5.4%
Slide 30: Acquisition of Westfield Corporation
ACQUISITION OF WESTFIELD CORPORATION: CREATING THE WORLD’S PREMIER DEVELOPER AND OPERATOR OF FLAGSHIP SHOPPING DESTINATIONS
Slide 31: Westfield acquisition rationale
Adds attractive Provides a unique Strong cultural Adds €4.9 Bn(2) new markets: platform and strategic development pipeline London and of iconic shopping similarities of iconic projects the wealthiest destinations markets in the US • Extends footprint with flagship • , of which • • Embedded assets in
Slide 32: Westfield's 35 assets
Seattle Chicago Connecticut Trumbull Meriden San Francisco Area New York Area Oakridge* South Shore Sunrise Los Angeles Area Washington Area Wheaton London Milan Westfield Milan Palm Desert San Diego Area Florida Valencia* Brandon Croydon Horton Plaza Broward Mission Valley* Citrus Park North County
Slide 33: Westfield London
LONDON Opened 2008 Footfall 28 Mn GLA 171,000 m² Extension GLA 82,000 m² Westfield share 50% Total retail sales €1,152 Mn Extension delivered Q1-2018 Note: all data as of December 31, 2017 32
Slide 34: Stratford City
STRATFORD CITY Opened 2011 Footfall 49 Mn GLA 175,000 m² Westfield share 50% Total retail sales €1,358 Mn Note: all data as of December 31, 2017 33
Slide 35: Century City
CENTURY CITY Re-Opened 2017 Footfall(1) 18 Mn GLA 121,000 m² Expected retail sales(1) €1,000 Mn (1) Estimated data for completed centre 34
Slide 36: World Trade Center
WORLD TRADE CENTER Opened 2016 GLA 27,000 m² Extension GLA 7,000 m² Anticipated completion 2019 Note: all data as of December 31, 2017 35
Slide 37: Westfield's A++ assets well above peers
US shopping centres Westfield’s share of GMV at 100% of A++ assets well above peers(1) repartition by grade(2) 3% A++ 14% 6% A+ 9% A 29% 29% 40% 39% 11% A- A++ 55% 14% B+ 73% 15% B 56% 63% 10% B- 52% 59% 9% C+ A+, A, A- 39% 10% C 14% 10% C- 9% 13% Other 6% 2% 7% 4% D US shopping centres Global (US)
Slide 38: One brand, one platform, one strategy
One brand: One platform for brand ventures One strategy €13.0 Bn(2) flexible pipeline flagship shopping destinations 3,700 professionals €62.0 Bn combined GMV(1) REPS accretive(3) 56 flagship assets from first full year 27 capital cities “A” category rating preserved(4) 1.2 Bn+ visits annually Stron
Slide 39: 102 shopping centres, 85% of GMV in flagships
Stockholm New York Washington Silicon DC Area Valley London Los Angeles San Diego Paris Vienna Barcelona Unibail-Rodamco regions Standing flagship assets Madrid Westfield regions Brownfield developments 102 shopping centres - 85% of combined GMV(1) in flagships (1) Proportionate GMV of flagships as
Slide 40: Top city catchment areas
GDP/Capita as % Top 3 GDP/Capita as % Top 3 City(1) of national average shopping centres City(1) of national average shopping centres Warsaw 195% Stockholm 142% Paris 176% New York 141% WORLD TRADE CENTER San Jose 175% VALLEY FAIR OAKRIDGE Los Angeles 133% CENTURY CITY San 154% SAN FRANCISCO Barcelo
Slide 41: Combined portfolio by segment and region
GMV(1) €43.6 Bn €18.4 Bn €62.0 Bn # of countries(3) 11 2 13 # of shopping centres 67 35 102 Average footfall per flagship asset(4) 15.1 Mn 16.6 Mn 15.2 Mn Portfolio by segment(1) Portfolio by region(1) Like-for-like NRI CAGR 2014-2017(2) The Netherlands Austria 4% 3% +3.8% +3.6% Spain 6% 6% 7% Nordi
Slide 42: Drive superior earnings and capital growth
DRIVE SUPERIOR EARNINGS AND CAPITAL GROWTH WITH RECENT DELIVERIES AND LARGEST RETAIL PIPELINE
Slide 43: Combined pipeline paving the way for capital growth
Combined pipeline(1) paving the way for capital growth €13.0 €3.1 €1.3 €0.6 €0.5 €0.4 + Source: Companies’ filings Note: Development pipeline for global retail peers (€ Bn). As at December 31, 2017 (1) Unibail-Rodamco’s view of Westfield’s pipeline. Proportionate total investment costs as per Unibai
Slide 44: Geographically spread pipeline
Geographically spread - 41% in extensions and renovations By segment(1) By region(1) Central Europe €1.1 Bn The Netherlands €0.4 Bn 4% 3% 8% Belgium France Retail 3% 5% 19% €5.4 Bn Spain €1.5 Bn 6% 12% 41% Germany 9% €13.0 Bn €13.0 Bn 14% France Offices Italy 11% €2.9 Bn 36% committed 14% 13% €4.7 B
Slide 45: Yield on cost and additional NRI
7.0 - 8.0% yield on cost(1) can generate ~ €1 Bn of additional NRI Westfield London Westfield Valley Fair Westfield Milan Croydon 2018: €0.4 Bn 2019: €1.3 Bn 2020: €2.1 Bn 2021: €3.7 Bn 2022: €2.2 Bn Mall of the Trinity Vélizy 2 La Part Dieu Netherlands Überseequartier Sisters (1) Unibail-Rodamco’s
Slide 46: Capitalize on best in class management team
CAPITALIZE ON BEST IN CLASS MANAGEMENT TEAM
Slide 47: Integrated development and operating management skills
Operating management skills Integrated development capabilities Digital Specialty leasing Balance sheet management Advertising International Financial disclosure Leasing Brand events / Entertainment Corporate governance / CSR Westfield brand Build a new common culture: + 46
Slide 48: Events and brand activations
Samsung Pop-up, Westfield Stratford City Lady Gaga concert, Westfield London Digital Wall, Westfield World Trade Center Car Boot Fair, Westfield London 47
Slide 49: Total footfall from 0.8 Bn to 1.2 Bn
Total footfall from 0.8 Bn to 1.2 Bn Footfall of top 20 assets(1) (Mn) 49 42 42 33 28 25 22 22 21 20 20 19 19 17 15 15 15 14 14 14 STRATFORD LONDON VALLEY FAIR GARDEN STATE SAN FRANCISCO UTC CITY PLAZA CENTRE Unibail-Rodamco assets Westfield assets (1) Based on Top 20 A++ and A+ rated malls as per G
Slide 50: Unique places and experiences for brands
Creating unique places and experiences… 1.2 Bn visits(1) / year … maximizes in-store brand interaction Flagship Shopfronts Advertising Airport – captive audiences (1) Does not include airports 49
Slide 51: Synergies will deliver additional earnings and cash flows
SYNERGIES WILL DELIVER ADDITIONAL EARNINGS AND CASH FLOWS
Slide 52: Cost and revenue synergies
Significant cost synergies Most of revenue synergies from UR portfolio Closure of Apply Unibail-Rodamco policies Asset Management Spin-off of One Market, an early stage Digital & IT Leasing Synergies from departure of Specialty Leasing Westfield senior management team Advertising Branding €60 Mn €40
Slide 53: Transaction to unlock NAV and REPS accretion
TRANSACTION TO UNLOCK NAV AND REPS ACCRETION AND PRESERVE STRONG BALANCE SHEET
Slide 54: Offer terms and financing
• For each Westfield security: • Lowy family fully supportive, intends to maintain a substantial investment in Unibail-Rodamco FRIENDLY AND • Unanimous recommendation by Unibail-Rodamco’s OFFER TERMS RECOMMENDED Supervisory Board and Westfield’s Board of Directors(4) • Implied mix: 62% scrip, 38% ca
Slide 55: Balance sheet to remain very strong
Unibail-Rodamco’s balance sheet to remain very strong A category rating preserved 4.1x 3.6x 3.5x 4.0x 4.2x 4.6x 5.9x 6.7x 5.6x 38% (1) 37% 37% 37% 37% 37% 35% 33% 33% Clear deleveraging plan supported by proven track record • assets as part of Unibail-Rodamco’s regular asset rotation • More disposal
Slide 56: Efficient structure and governance
EFFICIENT STRUCTURE GOVERNANCE FOR §
Slide 57: Stapled share structure
Structure designed to avoid any disadvantage from holding US assets Unibail-Rodamco / Westfield • Former shareholders of Unibail-Rodamco and Westfield to hold(2) stapled shares securityholders consisting of: one Unibail-Rodamco share + one WFD-UR N.V. share Stapled Existing REIT status preserved 100
Slide 58: Governance principles
• Corporate HQs in Paris and Schiphol • Two-tier board structure: Supervisory • US HQ in Los Angeles Governance and Management Boards HQ & management • UK HQ in London principles • Comply with highest standards • Organisation to match international scope of the Group • Group to continue its best in
Slide 59: Senior management team
Highly experienced senior management team • main Christophe CUVILLIER Jaap TONCKENS coordination body of the New Group Group CEO Group CFO & Chairman Member of the UR MB of the UR MB • Combination of and talent Astrid Michel Jean-Marie Fabrice PANOSYAN DESSOLAIN TRITANT MOUCHEL COO Europe President
Slide 60: Conclusion
CONCLUSION
Slide 61: Transaction timetable
Consultation of Unibail-Rodamco’s works councils FIRB Regulatory Approval AMF and AFM visa Publication of Transaction documentation Tax rulings Ongoing Unibail-Rodamco AGM May 17 Westfield Scheme Meetings May 24 Payment of Unibail-Rodamco 2017 final dividend May 30 Effective Date May 30 Implementati
Slide 62: Key risks
Key risks relating to the New Group and its business Key risks relating to the Transaction and the stapled shares The New Group real estate portfolio and the returns from its The completion of the Transaction is subject to a number investments could be adversely affected by economic conditions, of c
Slide 63: World's premier developer and operator of flagship destinations
The world’s premier developer and operator of flagship Driving significant value creation for shareholders shopping destinations Unique platform Adds Substantial Synergies of flagship assets new markets value creation 102 shopping destinations London c. €100 Mn REPS and NAV accretion(1) 56 flagships
Slide 64: Clarification obtained from the French tax authorities
CLARIFICATION OBTAINED FROM THE FRENCH TAX AUTHORITIES
Slide 65: PEA treatment of stapled shares
Unibail-Rodamco shares held in a PEA on October 21, 2011 could have been maintained in such account After completion of the transaction and due to the stapled share, the stapled shares (UR and WFD-UR N.V.) would not be allowed to be held in a PEA To avoid closure of the PEA, French tax authorities c
Slide 66: French tax basis for stapled shares
The basis for the following French taxes can be limited to the relative value of Unibail-Rodamco within the stapled shares price: ▪ Tax on financial transactions ▪ For individual holding at least 5% : Real property wealth tax ▪ Inheritance and gift taxes payable by non-resident individual shareholde
Slide 67: Governance
GOVERNANCE
Slide 68: Two-tier structure for both entities
Maintaining a two-tier structure for both entities, meeting the highest standards of corporate governance Same structure New structure Unibail-Rodamco to hold 40% of WFD Unibail-Rodamco N.V. Unibail-Rodamco SE WFD Unibail-Rodamco N.V. Supervisory Board Supervisory Board 11 members 5 members Group CE
Slide 69: Cuvillier and Tonckens
CUVILLIER TONCKENS Group CEO Group CFO Chairman of the Management Board of Unibail-Rodamco SE Member of the Management Board of Unibail-Rodamco SE Chairman of the Supervisory Board Vice-Chairman of the Supervisory Board of WFD Unibail-Rodamco N.V. of WFD Unibail-Rodamco N.V. Born on December 5, 1962
Slide 70: Supervisory Board members
GRANOFF HARRIS STABILE TAMMENOMS BAKKER Independent Independent Independent Independent Expertise: Retail, Digital and US Market Expertise: Retail, Consumer Products, Expertise: Finance, Real Estate Expertise: Retail, Consumer Products, Governance and Remuneration and Hospitality Sustainability, Gov
Slide 71: Supervisory Board members
LAURENS PELMORE LOWY MCFARLANE Independent Independent Non independent Independent Expertise: Finance and Asset Management Expertise: Real Estate, Finance Expertise: Real Estate, Retail, Finance Expertise: Finance, Asset Management and Investment Analysis and Asset Management and Real Estate Attenda
Slide 72: Board diversity and expertise
(2) (3) Canadian 64% Female French 1 55% 55% 45% 3 Austrian 1 91% British 27% 27% 27% Australian 3 2 Male Dutch American Retail / Hospitality Finance Real State / Asset ESG / Sustainability Digital / E-Commerce Consumer Products Management 55% 2 3 Some members are represented in more than one area o
Slide 73: 2017 remuneration and 2018 remuneration policy
2017 Remuneration (ex-post): 2018 Remuneration Policy (ex-ante): Chairman of the Management Board (MB) Chairman of the MB Other members of the MB Other members of the MB Chairman of the Supervisory Board (SB) Chairman and other members of the SB 72
Slide 74: Say-on-pay votes at AGMs
AGM April 25, 2017 AGM May 17, 2018 CEO: 84.3% MB Members: 84.1% 73
Slide 75: Cuvillier 2017 remuneration
Remuneration related to Company €4,000,000 4000000 performance: 60.7% €3,000,000 3000000 Fixed Income (FI) 29.1% €1,000 k Total Short-term incentive (STI) 2000000 €2,000,000 remuneration: 43.6% Other benefits €3,438 k €1,500 k 0.7% 1000000 €1,000,000 €24 k Supplementary Contribution Scheme (SCS) 0 €
Slide 76: Bossard 2017 remuneration
Remuneration related to Company performance: 54.7% Chief Development Officer Short-term Fixed Income (FI) Incentive (STI) MB Member since 25.04.2013 34.4% 34.4% BOSSARD Joined the Group in 1998 €480 k Total €480 k remuneration: €1,394 k 1600000 €1,600,000 Other benefits Long-term 1200000 €1,200,000
Slide 77: Mouchel 2017 remuneration
Remuneration related to Company performance: 55.1% Deputy Chief Financial Officer Short-term Fixed Income (FI) Incentive (STI) MB Member since 25.04.2013 33.4% 33.4% MOUCHEL Joined the Group in 2001 €400 k Total €400 k remuneration: €1,196 k 1600000 €1,600,000 Other benefits Long-term 1200000 €1,200
Slide 78: Panosyan 2017 remuneration
Remuneration related to Company performance: 55.1% Chief Resources Officer Short-term Fixed Income (FI) Incentive (STI) MB Member since 01.09.2015 33.5% 33.5% PANOSYAN Joined the Group in 2015 €400 k Total €400 k remuneration: €1,196 k 1600000 €1,600,000 Other benefits Long-term 1200000 €1,200,000 1
Slide 79: Tonckens 2017 remuneration
Remuneration related to Company performance: 54.3% Chief Financial Officer Short-term Fixed Income (FI) Incentive (STI) MB Member since 01.09.2009 35.4% 35.4% TONCKENS Joined the Group in 2009 €650 k Total €650 k remuneration: €1,835 k €2,400,000 2400000 Other benefits €2,000,000 2000000 Long-term 1
Slide 80: Tritant 2017 remuneration
Remuneration related to Company performance: 54.2% Chief Operating Officer Short-term Fixed Income (FI) Incentive (STI) MB Member since 25.04.2013 35.4% 35.4% TRITANT Joined the Group in 1997 €600 k Total €600 k remuneration: €1,694 k 2400000 €2,400,000 Other benefits €2,000,000 2000000 Long-term 1.
Slide 81: Remuneration process and shareholder dialogue
A process based on dialogue and shareholder expectations Supervisory Board GNRC Shareholders External advisors Proxy advisors Transparent and ongoing communication Two options 80
Slide 82: Remuneration policy timeline
January - February February - March March March May Full disclosure GNRC makes Benchmark in the relevant AGM approval of recommendations SB decides Willis Towers Watson documentation and on Remuneration Policy to the SB the website External 100% 100% 100% Shareholder independent independent independ
Slide 83: Competitive remuneration for new Group scale
Set competitive remuneration levels to attract and retain worldwide leadership in view of the new size and geography of the Group, and to successfully drive the integration of Westfield high potentials short and long-term MB members’ the achievement of individual each MB member performance interests
Slide 84: Benchmark and analysis of remuneration
Individual and collective analysis of all the remuneration components Market benchmark by an external independent advisor with 5 benchmark panels (1), consistent with the new Group’s size and geography Individual and Company performance-related remuneration Continuous efforts to improve communicatio
Slide 85: New Group Management Board remuneration
#1 #2 #3 The New Group MB will FI, STI and LTI quantums The performance conditions consist of two members: will be revised for the MB Members of current STI through benchmarks relevant and LTI plans will be adjusted Christophe Cuvillier, to the Group’s new scope for the 2018 transition year Group CE
Slide 86: Remuneration principles
Fundamental principles: a simple and understandable remuneration structure, linked to performance and which never rewards under performance + Reasonable and balanced remuneration based on benchmarks - No Welcome bonus through an independent consultant + Cap on STI - No Exceptional Remuneration + Cap
Slide 87: Fixed income
OBJECTIVE ATTRACT HIGH CALIBER AND EXPERIENCED INDIVIDUALS Reflect the significant change in scope of the Group Established on the basis of a comparative benchmark of 5 panels(1) Set at the start of the 4-year mandate Unchanged during the whole mandate(2) FIXED INCOME AS FROM WESTFIELD TRANSACTION G
Slide 88: Short-term incentive
OBJECTIVE MOTIVATE AND REWARD ACHIEVEMENT OF ANNUAL FINANCIAL AND OPERATIONAL OBJECTIVES STI with 2 components (quantitative & qualitative) STI Maximum potential award: STI Maximum potential award: 200% of FI 150% of FI 87
Slide 89: 2018 STI objectives
2018 STI to be measured against two sets of objectives, each weighted equally: (on a 100% basis) Pro-forma UR standalone budget based on the guidance Completion of the Transaction QUANTITATIVE communicated in early 2018 Cost synergies Individual objectives around three themes (as per 2017 Collective
Slide 90: Long-term incentive
OBJECTIVE RETAIN AND ALIGN WITH THE LONG TERM INTERESTS OF SHAREHOLDERS Combine Performance Stock Options (SO) and Performance Shares (PS) General principles: ▪ Maximum economic value: 150% of FI for 2018 - 180% of FI as of 2019 ▪ No discount ▪ Performance and presence conditions ▪ Same vesting and
Slide 91: LTI structure and KPIs
Key features of the LTI structure - example of potential KPIs 50% 50% Attainment of the compounded annual guidance ranges: Relative to an appropriate peer group: - REPS growth - TSR - NRI Growth - Profit margin - Cash flow FOLLOWING THEIR DETERMINATION IN LATE 2018, THE SB WILL COMMUNICATE DETAILS O
Slide 92: Additional performance share grant 2018
OBJECTIVE RETAIN AND MOTIVATE KEY EMPLOYEES IN VIEW OF SUCCESSFUL INTEGRATION OF WESTFIELD Additional PS Grant in 2018 Principles: ▪ Maximum economic value of 2018 total grants (annual + additional) remains within current cap (150% of FI) ▪ Same terms and conditions (presence condition, vesting and
Slide 93: Integration objectives
#1 Completion of the transaction #2 Attainment of the annual budgets #3 Capture of announced cost and revenue synergies #4 Successful integration: ▪ Build on the respective strengths of Westfield and UR: – Deploy the Westfield brand on UR flagship assets – Deploy key UR operating processes in the Ne
Slide 94: Alignment with shareholders
OBJECTIVE ALIGN THE INTERESTS OF MB MEMBERS WITH SHAREHOLDERS SO Exercise: maintain a personal investment in UR shares, equivalent to 30% of the capital gain (net of tax) Acquisition of PS: must retain 30% Acquisition of PS: must acquire one share for every of the PS vested two PS vested Up to a val
Slide 95: Social security and other benefits
OBJECTIVE PROVIDE ACCESS TO SOCIAL SECURITY / HEALTH AND OTHER BENEFIT SCHEMES annual contribution paid into a blocked savings account ▪ Fixed amount: €90 k CEO ▪ Variable amount: 10% of total cash remuneration earned each year (i.e. FI year N + STI year N-1) ▪ Fixed amount: €45 k MB Member ▪ Variab
Slide 96: Supervisory Board chairman fees
January 1, 2017 April 25, 2017 December 31, 2017 ter HAAR DYER SB Chairman Fees €90,000 SB Chairman Fees €135,000 GNRC Chairman Fees(1) €18,500 GNRC Chairman Fees(1) €51,000 TOTAL €108,500 TOTAL €186,000 (1) Including the out of country indemnities 95
Slide 97: Supervisory Board fee envelope
SB fee envelope (unchanged since 2007) will be increased to €1.18 Mn(1) to allow the recruitment of one new SB Member and additional meetings. Otherwise, same Remuneration Policy. SB Chairman: €180 k Other SB members: €60 k SB FEES €40 k variable part(2) €20 k fixed part Additional fees for Vice-Cha
Slide 98: Report of the Supervisory Board
| REPORT OF THE SUPERVISORY BOARD 97
Slide 99: Statutory auditors' reports
| STATUTORY AUDITORS’ REPORTS Deloitte. EY 98
Slide 100: Duties of the contribution appraisers
DUTIES OF THE CONTRIBUTION APPRAISERS Dominique MAHIAS, Olivier PÉRONNET and Jean-Jacques DEDOUIT appointed by order of the President of the Commercial Court of Paris on February 1, 2018. Our duties are to: ▪ Make sure the value of the contributions is not overestimated, ▪ Verify that the relative v
Slide 101: Due diligence by the contribution appraisers
SUMMARY OF THE DUE DILIGENCE CONDUCTED BY THE CONTRIBUTION APPRAISERS We conducted due diligence according to the professional standards of the French National Institute of Auditors applicable to this assignment. We must express an opinion on whether the overall consideration is equitable for the UR
Slide 102: Valuation methods used by the contribution appraisers
VALUATION METHODS USED BY THE CONTRIBUTION APPRAISERS We analyzed the valuation approaches established by UR with the help of its advising banks and as described in Document E, and assessed the position of the overall consideration being offered. We reviewed the parity resulting from the 4 methods t
Slide 103: Dialogue with shareholders
DIALOGUE WITH SHAREHOLDERS see aida = T \ a” GLORIES
Slide 104: www.unibail-rodamco.com
unibail-rodamco www.unibail-rodamco.com