Slide 1: Information meeting
Information meeting 31 August 2005 Introduction en Bourse de SOF 0
Slide 2: Disclaimer
Disclaimer This document has been prepared by Mercialys (the "Company") solely for use at the analyst presentation of august 31, 2005, held in connection with the proposed initial public offering in France of the Company (the “Offer”). This document is confidential and is not to be reproduced by any
Slide 3: Speakers
Speakers Jacques Ehrmann, Chairman and Chief Executive Officer Géry Robert-Ambroix, Chief Operating Officer Catherine Oulé, Executive Vice President 2 Introduction en Bourse de SOF
Slide 4: Agenda
Agenda Page Introduction 4 Overview 8 The Shopping Centre Market in France 19 Mercialys Asset Portfolio 32 Mercialys Businesses 42 Investment Programme 56 Portfolio and Financial Highlights 67 Corporate Governance 82 Strategy and Outlook 86 3 Introduction en Bourse de SOF
Slide 5: Introduction
Introduction * mercialys
Slide 6: Retailers' property portfolio comprises various types of assets and requires customised strategies
Retailer' property portfolio comprises various types of assets and requires customised strategies Three very different types of assets 9 Retailers gradually acquire > A strategic portfolio comprising the stores related to their core business > A general portfolio comprising offices and warehouses >
Slide 7: Overview
Overview 6
Slide 8: Mercialys has a unique portfolio
Mercialys has a unique portfolio Key figures 9 A consistent portfolio: > Composed exclusively of retail assets > 89% of rents collected from sites ranging from 5,000 to 40,000 sq. m., the faster growing segment of the shopping centre market > 79% of the portfolio rented to non-Casino banners 9 A sub
Slide 9: Mercialys enjoys unique positioning in the French property market
Mercialys enjoys unique positioning in the French property market 9 A pure play in the solid and dynamic shopping centre segment 9 Proven expertise in creating and acquiring high performance shopping centres and enhancing their value 9 The benefits of the REIT-type tax structure (SIIC), generating h
Slide 10: Mercialys is the outcome of the valuation process of Casino's retail assets
Mercialys is the outcome of the valuation process of Casino’s retail assets A continuous process Tomorrow Stepped-up development of Mercialys Fall 2005 IPO First-half 2005 Announcement of planned IPO and implementation 2003 Definition of Casino’s property strategy 2000 Consolidation of Casino’s prop
Slide 11: Mercialys's two founder shareholders are committed to support its growth strategy
Mercialys’s two founder shareholders are committed to support its growth strategy Mercialys ownership structure Post-IPO 9 The Axa Group is transferred one Casino of its major commercial property assets Free float* > 50% to Mercialys, demonstrating its confidence in the business model 9 The Axa Grou
Slide 12: Innovative, secure IPO structure
Innovative, secure IPO structure 9 Patounor converted into a property company Patounor "Mercialys" 9 Patounor changes name to Mercialys 9 Asset transfer agreements between Wholly-owned Groupe Casino Groupe Casino and AXA subsidiary pre-IPO > Signed 23 August 2005 > Subject to successful IPO 9 Shares
Slide 13: Mercialys is focused on the value-added of the business
Mercialys is focused on the value-added of the business Core businesses Asset management 9 Preparing strategic action plans for each asset 9 Renovating and extending existing centres 9 Buying and selectively selling assets Sales and marketing Shopping centre management 9 Defining marketing action pl
Slide 14: Mercialys is led by a full management team
Mercialys is led by a full management team Jean-Marc GOTHARD Géry ROBERT-AMBROIX Bruno DUGAS Large Shopping Centres Chief Operating Officer Neighbourhood Centres Operations and Finance Jacques EHRMANN Catherine OULÉ Chairman and Chief Executive Officer Executive Vice President Marketing and Value En
Slide 15: Mercialys has strong organic growth potential
Mercialys has strong organic growth potential Sources of value creation in a retail property company 9 Continuous optimisation of existing assets > Reinvigorating sites, boosting footfalls and turnover > Renovation 9 Active management of leases and expiry dates > Lease rights and despecialisation pr
Slide 16: Mercialys plans to invest some €500m over the next five years
Mercialys plans to invest some €500m over the next five years €200m in 2006-2007 In €m 100 9 Renovation and restructuring 38 9 Asset purchases through property 194 development programmes 72 9 Buyout of partners in 92 jointly-owned properties 37 9 Purchases of existing assets 125 50 by 2010 2006 - 20
Slide 17: Mercialys on the stock market
Mercialys on the stock market A yield and growth property stock 9 A pure play in the solid and dynamic Percentage of rental revenue derived from retail property assets in 2004 shopping centre segment 100% 84% 9 Profitable, sustained growth 37% 9 Steady cash flow and strong earnings visibility Mercia
Slide 18: The Shopping Centre Market in France
The Shopping Centre Market in France 17
Slide 19: The French shopping centre market has important strengths
The French shopping centre market has important strengths Main features 9 A vigourous segment of France’s consumer market > 27% of total retail sales were generated by shopping centres in 2004* 9 High predictability of future growth of revenues and cash flows > Annual rent increases linked to constr
Slide 20: Retail property is driven by consumer spending
Retail property is driven by consumer spending France: one of the fastest growth rates of consumption in Europe 150 140 130 Spain France base 100 in 1996 120 Euro zone 110 Germany 100 Italy 90 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source EcoWin 19 Introduction en Bourse de SOF
Slide 21: Shopping centres generated over a quarter of retail sales in France in 2004
Shopping centres generated over a quarter of retail sales in France in 2004 Shopping centres in France 9 613 shopping centres(1) representing GLA(2) of 13.5 million sq m. 9 Total sales of €87 billion Shopping centres breakdown in 2004 3% 9% 373 neighbourhood shopping centres 5,000 to 20,000 sq.m. 16
Slide 22: Shopping centres are more efficient in generating sales growth
Shopping centres are more efficient in generating sales growth Growth in sales (in %) 3.1 1.7 0.2 3.2 Of which shops 2.4 1.7 5.8 1.3 1.4 0.2 4.1 4.1 All retail activity Shopping centres 2002 2003 2004 Of which large specialty stores Source: CNCC 21 Introduction en Bourse de SOF
Slide 23: Intercommunity and downtown shopping centres have posted the highest growth
Intercommunity and downtown shopping centres have posted the highest growth Sales growth by type of centre in 2004 (in %) Mercialys’s portfolio consists mainly 7.2 of intercommunity centres 4.1 3.8 3.7 2.7 2.8 2.4 2.2 2.2 2.1 1.7 1.2 All shopping Regional Intercommunity Downtown centres centres cent
Slide 24: Rent increases are based on the construction cost index, rising faster than CPI
Rent increases are based on the construction cost index, which is rising faster than CPI Increase in the construction cost index French 125 Construction Cost Index (CCI) 120 Base: 100 in 1996 115 French Consumer Price 110 Index (CPI) 105 100 1996 1998 2000 2002 2004 Source: INSEE 23 Introduction en
Slide 25: The shopping centre segment has a lower tenant turnover than other real estate segments
The shopping centre segment has a lower tenant turnover than other real estate segments Termination rate of commercial leases in 2003 60% 50% 40% 30% 20% 10% 0% Retail Warehouses Offices 3 years 6 years 9 years Source: IPD France 24 Introduction en Bourse de SOF
Slide 26: Restrictive regulatory environment favours historic players
Restrictive regulatory environment favours historic players The French regulatory environment 9 Articles L.145-1 et seq of the Commercial Code > Commercial leases of at least nine years > Termination by the tenant possible after three or six years > Rents adjusted annually based on variation in the
Slide 27: Openings and extensions are strictly regulated
Openings and extensions are strictly regulated A market with high entry barriers Impact of legislation and market maturity on shopping centre openings Number GLA in sq.m. 35 1973: Royer Act 875,000 1993: Sapin Act 30 750,000 25 1996: Raffarin Act 625,000 + 6-month freeze 20 500,000 15 375,000 10 250
Slide 28: With the shortage of opportunities to open new centres, the focus is on renovating
With the shortage of opportunities to open new centres, the focus is on renovating and extending existing ones Total new shopping centres in France in 2004 38 sites 200,000 sq m. 63% 126,100 sq m. 32 sites 84% 37% 73,900 sq m. 6 sites 16% Number of units Surface Openings Renovations Source: CNCC 27
Slide 29: Shopping centres offer some of the highest yields in the property industry
Shopping centres offer some of the highest yields in the property industry Yield by type of asset in 2004 (in %) 14.1 11.6 11.8 10.9 9.1 8.0 7.1 7.0 7.1 6.6 6.5 4.3 4.5 1.5 1.7 Offices Manufacturing Residential Multi-use Shopping centres Rent yield(1) Asset yield(2) Total yield (1) Net rent invoiced
Slide 30: Shopping centres are a vigourous segment of the commercial property market
Shopping centres are a vigourous segment of the commercial property market Major strengths 9 Sound fundamentals and sustained growth potential 9 Recurring revenue and cash flow generation, with exceptional visibility 9 A shortage of opportunities, creating a barrier to entry 9 High yields 29 Introdu
Slide 31: Mercialys Asset Portfolio
Mercialys Asset Portfolio 30
Slide 32: Mercialys is firmly established in the fastest-growing demographic regions
Mercialys is firmly established in the fastest-growing demographic regions Portfolio by region Asset locations Expected population flows National average: 4.9% 5,8% 5,8% Brest 3 St Brieuc Chartres Paris Quimper 5,1% Rennes 5,1% Lanester 7,0% 7,0% Angers Besançon 6,3% 6,3% St Nazaire Tours Dijon Chol
Slide 33: Mercialys has a balanced portfolio in terms of size
Mercialys has a balanced portfolio in terms of size Breakdown of rental revenu: 89% from sites > 5,000 sq.m 3% 4% 4% 60 sites 27 sites Brest St Brieuc Chartres 3 Paris Quimper Rennes Lanester Angers St Nazaire Besançon Tours 58% Cholet Dijon 31% Poitiers Niort Clermont Angoulême St Etienne Pessac Va
Slide 34: Mercialys has a balanced portfolio in terms of types of stores
Mercialys has a balanced portfolio in terms of types of stores Mercialys revenue by business segment Breakdown of rents by business segment Change in revenue by business segment Personal wear 1.2% 23% -0.6% Food and 0.6% 22% restaurants 0.6% Homeware 2.6% 18% 0.1% Beauty, health, 5.2% 14% hygiene 3.
Slide 35: Mercialys knows how to attract leading banners
Mercialys knows how to attract leading banners 9 A majority of national banners > Higher turnover per sq.m. > Generate more traffic > Less sensitive to business cycles Breakdown of 2004 rental revenue by type of banner Groupe Casino chains 6% Self-service restaurants 15% Other 56% National banners L
Slide 36: Mercialys has a diversified tenant base
Mercialys has a diversified tenant base The 30 biggest tenants (excluding Groupe Casino) account for less than 27% of total rent roll 0.4% 0.5% 0.7% 1.0% 1.5% 5.0% 35 Introduction en Bourse de SOF
Slide 37: Casino self-service restaurants account for 15% of rents
Casino self-service restaurants account for 15% of rents Relations with Casino as tenant 9 Tenant more present than others 9 103 Casino self-service restaurants: €10.5 million in rent, or 15% at april 30, 2005 rent roll 9 Leases : > A two-tier rent structure: » A guaranteed minimum rent, based on ma
Slide 38: A constantly evolving portfolio of centres opened or renovated in the past five years
A constantly evolving portfolio 64 of the 147 centres opened or renovated in the past five years Breakdown of openings and 2002-2005: changes in the Mercialys renovations property portfolio 9 Development programmes > Nîmes Cap Costières 24% > Tours la Riche Number of sites > Albertville, Brive, etc.
Slide 39: Niort Est: A shopping centre renovated by Mercialys
Niort Est A shopping centre renovated by Mercialys Overall renovation completed in 2004 > 50% increase in selling area > 13 shops opened Catchment area 175,000 people Number of stores 50 Hypermarket surface area 8,800 sq m. Large specialty store Vivre Ecouter Voir Shop surface 7,400 sq m. 38 Introdu
Slide 40: Video
Video …. 39 Introduction en Bourse de SOF
Slide 41: Nîmes - Cap Costières: A shopping centre created by Mercialys
Nîmes - Cap Costières A shopping centre created by Mercialys Opening in 2003 > Leading centre in the catchment area, just two years after it was opened Catchment area 410,000 people Number of stores 64 Hypermarket surface area 11,000 sq m. Shop surface area 16,600 sq m. Two large specialty stores H&
Slide 42: Mercialys Businesses
41 Mercialys Businesses * mercialys
Slide 43: An organisation geared to enhancing the portfolio's value
An organisation geared to enhancing the portfolio’s value Asset Management 9 Manages the Strategic Action Plan Marketing 9 Promotes the centre’s image > Across the catchment area > Through events for retailer associations 9 Defines marketing action > Through targeted advertising campaigns programmes
Slide 44: Property management outsourced to SUDECO
Property management outsourced to SUDECO Sudeco: Groupe Casino property manager 9 Management of tenant relations, shared occupancy expenses and building administration performed by Casino subsidiary Sudeco under management agreements 9 Sudeco, a wholly-owned subsidiary of Immobilière Groupe Casino (
Slide 45: Support functions outsourced to Groupe Casino to optimise overheads
Support functions outsourced to Groupe Casino to optimise overheads Synergies with Groupe Casino’s corporate functions 9 Functions: finance and accounting, legal affairs, tax, cash management, IT, insurance, human resources > Service contracts with various Casino subsidiaries > Services billed by Gr
Slide 46: Focus on high value-added businesses
Focus on high value-added businesses 9 A management team with recognised expertise 9 A very thorough knowledge of assets: most Mercialys staff recruited from IGC, Casino’s property unit Function Employees Planned hires at 30 June 2005 (by 31 December 2005) Senior management 3 1 Management Asset mana
Slide 47: Strategic action plan to enhance the value of the portfolio
Strategic action plan to enhance the value of the portfolio “An attractive centre…" "…adapted to the potential of the area” Architecture Marketing > Accessible > Surveys, geomarketing, > High profile consumer database, etc. > Functional > Choice of positioning > High quality design > Banner mix > Ma
Slide 48: Marketing
Marketing Development – market studies Market studies are used to determine a shopping centre’s potential market in its catchment area Centre Leclerc Genay: 430 MF HM Leclerc – 2 920 m² - 350 MF Gallery 3 shops C.C. Porte de Lyon : 1 410 MF HM Auchan 7 500 m² - 580 MF C.C. Caluire 2: 1 170 MF Galler
Slide 49: Strategic action plan to enhance the value of the portfolio
Strategic action plan to enhance the value of the portfolio “An attractive centre…" "…adapted to the potential of the area” Architecture Marketing > Accessible > Surveys, geomarketing, > High profile consumer database, etc. > Functional > Choice of positioning > High quality design > Banner mix > Ma
Slide 50: Architecture
Architecture Integration into Ambiance and style the urban environment Window shopping Architectural vocabulary Hub of life Store design 49 Introduction en Bourse de SOF
Slide 51: Strategic action plan to enhance the value of the portfolio
Strategic action plan to enhance the value of the portfolio “An attractive centre…" "…adapted to the potential of the area” Architecture Marketing > Accessible > Surveys, geomarketing, > High profile consumer database, etc. > Functional > Choice of positioning > High quality design > Banner mix > Ma
Slide 52: Communication and events to attract visitors to our sites
Communication and events to attract visitors to our sites 51 Introduction en Bourse de SOF
Slide 53: Strategic action plan to enhance the value of the portfolio
Strategic action plan to enhance the value of the portfolio “An attractive centre…" "…adapted to the potential of the area” Architecture Marketing > Accessible > Surveys, geomarketing, > High profile consumer database, etc. > Functional > Choice of positioning > High quality design > Banner mix > Ma
Slide 54: Significant reversion potential
Significant reversion potential Careful management of renewals 9 Average rent in 2004: €124/sq.m. 9 85 leases renewed in 2004 generated 24% growth in rental roll Impact of lease renewals on 2004 rent roll Reversionary potential Expiring leases in % Expiring leases Up 24% 18,0% 16.6% amount 12 16,0%
Slide 55: Continuously managing rent structures
Continuously managing rent structures Key management indicators Rent structure at 31/12/04 Variable rent €3.6m Guaranteed 9 A reasonable 7% occupancy cost Fixed rent minimum rent €39.5m €26.8m ratio at 31 December 2004* 5% 9 More than 99% recovery rate 38% 9 97.9% occupancy rate in 2004 57% 877 leas
Slide 56: Investment Programme
55 Investment Programme * mercialys
Slide 57: The creation of Mercialys is a new milestone in our ambitious development strategy
The creation of Mercialys is a new milestone in our ambitious development strategy €500 million in investments in five years 9 Investment objectives through 2010 represent 55% of the current portfolio* In €m By 2007 By 2010 Purchase of assets through property 72 194 development programmes Renovation
Slide 58: A structured investment decision process
A structured investment decision process Investment decision process 9 The Management Committee meets regularly for the sole purpose of considering investment proposals 9 Comprehensive review of short, medium and long-term investment projects and proposals > Internal presentation of renovation and r
Slide 59: Call option on future shopping centres developed by Casino
Call option on future shopping centres developed by Casino Key terms 9 Five-year contract expiring on 31 December 2010 9 To 31 December 2006: Purchase price based on a capitalization rate: > 8% of forecast annual net rents for shopping centres > 8.5% of net annual rents for medium-sized stores that
Slide 60: An agreement with Casino gives Mercialys priority access to Casino's pipeline
An agreement with Casino gives Mercialys priority access to Casino’s pipeline of development projects Agreement between Casino and Mercialys 9 The assets transferred to Mercialys were acquired through Casino’s long-established strategy of developing shopping 9 Mercialys will continue to have priorit
Slide 61: Clermont-Ferrand
Clermont-Ferrand 9 Shopping centre: Géant + 30 shops + 1 medium-sized store. Built in 1979, restored in 1999 9 Expansion: 6,000 sq m. 9 Creation of 20 shops and 2 medium-sized stores 9 Land under option: building permit filed and CDEC building permit received 9 Delivery in November 2006 9 Revenues o
Slide 62: Poitiers
Poitiers 9 Shopping centre : Géant + 9 shops + 1 medium-sized store 9 Expansion 9 Creation of 20 shops and 2 medium-sized stores 9 Building permit filed and CDEC building permit received 9 Delivery in November 2006 9 Revenues of over €1.5 m Project pictures 61 Introduction en Bourse de SOF
Slide 63: High level upstream involvement in the development process
High level upstream involvement in the development process Involvement Involvement for for Mercialys Mercialys Acceptance/Operation Acceptance/Operation No No development development risks risks by by Mercialys Mercialys Project Project Call Call option option exercised exercised development develop
Slide 64: Mercialys plans to invest €100m in renovation / restructuring programmes
Mercialys plans to invest €100m in renovation / restructuring programmes over the next five years Making centres more attractive 9 Over the next five years > Transactions with the potential to create value > 8 projects already identified 63 Introduction en Bourse de SOF
Slide 65: Jointly owned properties: 82,000 sq m. for potential acquisition
Jointly owned properties: 82,000 sq m. for potential acquisition Growth through the buyout of jointly owned property 9 Buyout of assets on sites where Mercialys is currently joint owner: > Increases growth potential > Reduces potential discount > Eases management of certain co-owned sites 9 Potentia
Slide 66: Mercialys plans to spend around €25m a year to acquire other centres
Mercialys plans to spend around €25m a year to acquire other centres Growth through acquisition of existing assets 9 A transaction market estimated by France’s National Shopping Centre Council at approximately €585m in 2004 9 Acquisition of sites from third parties 9 In line with Casino’s acquisitio
Slide 67: Portfolio and Financial Highlights
Portfolio and Financial Highlights 66
Slide 68: Assets portfolio valued at €957m including transfer taxes
Assets portfolio valued at €957m including transfer taxes Asset valuation methodology 9 Assets valued at 30 June 2005 9 Valuation performed by Atis Real Expertise and Galtier in line with the rules of the Royal Institute of Chartered Surveyors (RICS), the French securities regulator (AMF) and the Fr
Slide 69: Mercialys set up by assets transfer from founder shareholders, Casino and AXA
Mercialys has been set up by assets transfer from the founder shareholders, Casino and AXA Creation of Mercialys Pre-transfer Post-transfer Groupe Groupe AXA AXA CASINO CASINO 93.5% 6.5% Patounor Mercialys 146 sites 1 site "Mercialys" 147 sites* * Assets to be retained for at least 5 years 68 Introd
Slide 70: The valuation reflects implied capitalisation rate of 7.3%
The valuation reflects implied capitalisation rate of 7.3% based on the 2005 rent roll Portfolio value 9 Portfolio value including transfer taxes: €957m 9 Portfolio value excluding transfer taxes: €903m Type of Number of Valuation* GLA 2004 property properties at at 30 June 2005 at 30 June 2005 invo
Slide 71: Mercialys's NAV including transfer costs is €941 million
Mercialys’s NAV including transfer costs is €941 million NAV including transfer taxes In €m Opening balance sheet Consolidated equity (IFRS) 871.2 Unrealized capital gains on assets 54.2 Unrealized capital gains on shares 15.4 NAV including transfer taxes 940.8 €15.67/share* (before rights issue) Tr
Slide 72: AXA, one of Mercialys's two founding shareholders
AXA, one of Mercialys’s two founding shareholders Contribution details 9 Asset transfer: AXA will transfer ownership of its Espace Anjou shopping centre > Interest held by AXA after the transfer: 6.5% 9 AXA acquires a block of shares from Casino (apart from the institutional tranche) in a separate,
Slide 73: Mercialys will become a SIIC by end-2005
Mercialys will become a SIIC by end-2005 Timeline 9 23 August: Signature of assets contribution agreements (subject to listing) 9 26 September: Extraordinary Meeting of Mercialys shareholders to approve the contributions 9 D-day - 3: Mercialys shares listed 9 D-day: Settlement/delivery of the shares
Slide 74: Accounting principles and procedures
Accounting principles and procedures 9 Pro forma historical financial statements 9 French GAAP for financial statements at 31 December 2002, 2003 and 2004 9 IFRS for financial statements at 31 December 2004 9 IFRS for interim financial statements at 30 June 2004 and 2005 9 Asset contribution: proper
Slide 75: Key figures 2002-2004
Key figures 2002-2004 French GAAP IFRS In €m (pro forma) 2002 2003 2004 2004 Rental revenue 56.9 65.7 67.8 68.4 Growth (%) - 15.4 3.2 - Net rental* revenue 51.7 60.3 62.9 63.5 Growth (%) - 16.5 4.3 - EBITDA 47.9 55.8 59.1 59.7 Margin (%) 84.1 84.9 87.2 87.3 Net profit 33.1 38.8 40.1 46.9 Operating c
Slide 76: Sustained strong growth in rental revenue
Sustained strong growth in rental revenue (10.9% a year over 2002-2004) Rental revenue Annual financial statements Interim financial statements (French GAAP) (IFRS) CAGR revenue 02-04: 9.1% + 7.2% 37.2 67.8 34.7 0.5 65.7 1.5 0.7 5.4 56.9 3.0 36.7 66.3 60.3 34.0 53.9 + 8.2% 37% CAGR rental revenue 02
Slide 77: Investment and value enhancement, the two engines of revenue growth
Investment and value enhancement, the two engines of revenue growth Invoiced rents* growth (€m) 1.6 66.3 1.8 2.6 Enhancing the 1.4 60.3 Index- value of existing 1.1 based rent properties 3.9 Development increases Enhancing the and restructuring Index- value of existing 53.9 based rent properties Dev
Slide 78: Operating costs represent less than 16% of revenue
Operating costs represent less than 16% of revenue Personnel costs and other operating costs Annual financial statements Interim financial statements (French GAAP) (IFRS) 87.2% Ebitda margin 87.9% 87.4% Ebitda margin 84.1% 84.9% 5.0 11.0 4.8 10.0 9.9 2.2 1.2 1.2 2.1 2.3 5.5 1.9 2.1 4.5 3.8 0.5 0.1 0
Slide 79: Consolidated balance sheet
Consolidated balance sheet Assets French GAAP IFRS In € millions 31 Dec. 2004 31 Dec. 2004 30 June 2005 Investment properties 515.7 895.2 893.2 Financial assets 9.9 10.1 Total non-current assets 515.7 905.1 903.3 Cash and cash equivalents 10.1 10.1 0 TOTAL ASSETS 525.8 915.2 903.3 Equity and Liabili
Slide 80: Continuous cash flow growth
Continuous cash flow growth Faster cash flow generation CAGR net cash flow 02-04: 10,4% IFRS 8.3% 16.9 18.6 15.1 55.7 58.7 48.2 6.1 5.9 30.1 32.6 38.8 40.1 33.1 24.5 26.8 - 0.3 - 9.6 - 0.3 - 4.0 - 26.1 - 19.8 - 48.2 - 38.8 - 46.9 - 33.1 - 38.8 2002 2003 2004 H1 - 04 H1 - 05 Profit Depreciation Inves
Slide 81: 85% of 2005 pro forma income will be distributed
85% of 2005 pro forma income will be distributed 9 Characteristics of the REIT-type tax regime (SIIC): > At least 85% of tax-exempt profit from rental activities to be distributed to shareholders > At least 50% of tax-exempt profit from the sale of properties or certain interests in property compani
Slide 82: Corporate Governance
81 Corporate Governance f mercialys
Slide 83: Mercialys' corporate governance complies with French recommendations
Mercialys’ corporate governance complies with French recommendations (Bouton Report) Board of Directors 9 Board of Directors > 11 members, of which 4 independent directors (including the AXA representative) 9 Board membership Independent directors Bernard Bouloc Law professor Philippe Moati Research
Slide 84: The Board committees are chaired by independent directors
The Board committees are chaired by independent directors Three committees 9 Audit Committee > Majority of independent members > Chaired by Bernard Bouloc (independent director) 9 Nominations and Remunerations Committee > Re-appoints members of the Board committees > Approves management team appoint
Slide 85: Mercialys has prepared formal procedures for the Investment Committee
Mercialys has prepared formal procedures for the Investment Committee Mercialys Investment Committee 9 2 independent directors, including an AXA representative + 2 Casino representatives + the Chairman of Mercialys 9 Standard role > Review investment strategy > Review and make recommendations on ann
Slide 86: Strategy and Outlook
85 Strategy and Outlook P mercialys
Slide 87: Step up organic growth
Step up organic growth Enhance the value of the existing portfolio 9 Increase the profitability of existing leases > Renew leases about to expire > Increase the variable part of rents 9 Optimise the portfolio by refurbishing and restructuring shopping centres 9 Deploy an agressive marketing strategy
Slide 88: Step up acquisitions
Step up acquisitions An ambitious development strategy 9 Call options on shopping centre development programmes implemented by Casino > Priority access to projects by France’s second-largest food retailer, both in and outside France 9 Acquisition of existing assets with a high reversionary potential
Slide 89: Long-term strategy
Long-term strategy 9 Seek attractive development opportunities resulting from Casino acquisitions that include a retail property portfolio 9 Become a consolidation pole for retail assets > A large number of quality portfolios are held by independent owners > Tax window for transfers to a SIIC that a
Slide 90: Double-digit medium-term growth objective
Double-digit medium-term growth objective Targets 9 2005: > Organic growth: » Rental revenue 6 - 7% » Cash flow 6 - 7% 9 2006: > Organic growth (impact of 2006 investments from 2007): » Rental revenue 5 - 7% » Cash flow 12 - 15% (including income from investing the proceeds of the capital increase)
Slide 91: Mercialys on the stock market
Mercialys on the stock market A yield and growth stock 9 A pure play in the strong and dynamic shopping centre segment 9 Profitable, sustained growth 9 Steady cash flow and good earnings visibility 9 A REIT-type structure (SIIC), guaranteeing a high dividend payout rate 9 Considerable potential for
Slide 92: Questions & Answers
91 Questions & Answers * mercialys
Slide 93: Appendices
92 Appendices * mercialys
Slide 94: Mercialys benefits from synergies and economies of scale with Groupe Casino support functions
Mercialys benefits from synergies and economies of scale with Groupe Casino support functions Services IGC “Group” assets 100% SUDECO Support Mercialys functions, “Non-Group” property assets SSEi expansion 100% CSP Support Functions, Mercialys Groupe Gestion CIT Casino 93 Introduction en Bourse de S
Slide 95: Mercialys performs functions that create value and enjoys economies of scale with Groupe Casino
Mercialys performs functions that create value and enjoys economies of scale with Groupe Casino support functions Associations or Mercialys Groupe Casino consortiums CSP SUDECO SSEi Casino SA CIT 9 Marketing 9 Communication/events 9 Large shopping centres Recommend a communication > Management actio
Slide 96: Corporate governance and relations with Casino
Corporate governance and relations with Casino Cash management and current account agreement with Casino 9 Creation of a shareholder current account in line with Article L.511-7 9 Interest paid on the account at Eonia +10 bps 9 Continuation of the agreement as long as Casino controls Mercialys 9 Agr
Slide 97: Corporate governance and relations with Casino
Corporate governance and relations with Casino Related party agreements 9 The following services/contracts will be covered by related party agreements governed by Articles L.225-40 and L.225-42, 225-86 and 223-19 of the French Commercial Code > Service agreement > Cash management agreement > Develop