Mercialys Sa · EURONEXT:MERY
Mercialys Sa — Debt Investor Presentation (November 2014)
26 slides from Mercialys Sa's debt investor presentation, Nov 17, 2014
Slide 1: Bond Investor Presentation
Bond Investor Presentation November 17, 2014
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward-looking objectives and statements relating to Mercialys’ financial position, operating results, business activities and growth strategy. These objectives and statements are based on assumptions that are dependent upon significant risk and unce
Slide 3: Contents
Contents Fundamentals & equity story Financial structure Development pipeline Shareholding structure & governance Appendix 3
Slide 4: Fundamentals & equity story
8 t{ mercialys é L’Esprit Voisin. y Fundamentals & equity story
Slide 5: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Pure player for shopping centers REIT specialized in retail real estate Mercialy’s portfolio is made up primarily of large and local shopping centers located in France’s most dynamic regions Portfolio focused on assets with potential 61 shopping centers Ren
Slide 6: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Value creation based on a low risk profile Strong market position The only French pure player for shopping centers Solid track record of operating performance Best-in-class corporate governance Business model providing value creation… Still significant reve
Slide 7: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Pure player for shopping centers Strong level of diversification: No tenant (excluding Casino) represents more than 3% of total annualized rents €465m of asset disposals in The 10 main tenants (excluding Casino) represent 15% of total 2012 /2013 have enable
Slide 8: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Strong business model Very high recovery rate* : 97.6% in H1 2014 (stable vs. 2013) Moderate occupancy cost ratio** for our tenants 12,0% 9.9% 10.3% 10.1% 10,0% 8.9% 9.4% 8.1% 8.2% 8.6% 8,0% 7.1% 7.3% 6,0% 4,0% 2,0% 0,0% 2005 2006 2007 2008 2009 2010 2011 2
Slide 9: Well-balanced risk profile
Well-balanced risk profile Solid underlying trends, diversified merchandizing and retail mix More than 600 retailers and 2,170 leases without overexposure to or dependence on large retailers French retail offers strong cash flow visibility through lease structures and barriers to entry Solid revenue
Slide 10: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Low vacancy rate mirroring the portfolio’s efficiency Mercialys’ business model is in line with retailer trends… Retailer development intentions (as identified by Procos): slowdown in exposure to jumbo shopping centers in favor of city-centers, retail parks
Slide 11: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Efficient cost base Lean structure: EPRA cost ratio benchmark To encourage clearer, more comparable disclosures for total costs, the EPRA (European Public Real Estate Association) has developed guidance for reporting two EPRA cost ratios (including and excl
Slide 12: FFO & dividend per share
Key drivers in Mercialys’ investment story FFO profile and outlook 2014 revised upwards for both organic growth and increase in FFO Organic growth in rents invoiced is expected to come in at least +2.5% above indexation (vs. +2% initially) Mercialys is targeting over €100m in FFO1, with growth of ar
Slide 13: Financial structure
8 t{ mercialys é L’Esprit Voisin. Financial structure
Slide 14: Key drivers in Mercialys' investment story
Key drivers in Mercialys’ investment story Firm commitment to maintain a prudent financial structure Debt structure fully in line with sector requirements Willingness to diversify sources and access debt capital markets Mid-to-long term financing structure to be extended going forward to match long-
Slide 15: Current debt profile
Key drivers in Mercialys’ investment story Current debt profile At end-June 2014, drawn debt represented €815.5m, with an LTV of 33.7% • €650m bond issue with a 4.125% coupon, maturing in March 2019 • €100m of bank debt • €65.5m of commercial paper outstanding No secured financing Mercialys has acce
Slide 16: Development pipeline
& t{ mercialys é L’Esprit Voisin. Development pipeline
Slide 17: Dynamic investment approach
Key drivers in Mercialys’ investment story Dynamic investment approach Significant investment capacity Ability to acquire land banks and projects from Casino through the partnership Investment pricing determined through a grid of capitalization rates revised every half-year Mercialys also has the ab
Slide 18: Successful project completions in 2014
Key drivers in Mercialys’ investment story Successful project completions in 2014 10 projects completed in 2014 €8.1m of additional annualized rents Risk profile optimized through a deep transformation of the portfolio Through project completions, the acquisition of 4 large food stores and its asset
Slide 19: Example of a significant project led by Mercialys: Toulouse
Key drivers in Mercialys’ investment story Example of a significant project led by Mercialys: Toulouse Investment of approximately €180m Extension project in 3 phases: Phase 1 - retail park with 9 mid-size outdoor units for 24,400 sq.m Phase 2 - shopping center composed of 13 mid-size stores, 47 sho
Slide 20: Example of a significant project led by Mercialys: Toulouse
Key drivers in Mercialys’ investment story Example of a significant project led by Mercialys: Toulouse Portfolio’s largest shopping center, while remaining < 10% of GAV Final area: 70,000 m² Euro 13.5 million in rent, i.e. about 9% of Mercialys’ rents Investment: Estimated Market Value in the Euro 1
Slide 21: Shareholding structure & governance
Shareholding structure & governance
Slide 22: Governance
Governance Stabilized shareholding and management structure Casino remains a key partner, owning 40.2% of Mercialys’ shares Eric Le Gentil was appointed Chairman & CEO in July 2013 Since 2012, the Board of Directors has had a majority of independent directors Mercialys’ governance is built around ma
Slide 23: Governance: Board structure
Governance: Board structure Eric Le Gentil Chairman & CEO 6 independent Board members : Bernard Bouloc Private law professor Anne-Marie de Chalambert Director of various companies Elisabeth Cunin-Diéterlé Chairman of Camaïeu Group Management Board Marie-Christine Levet Active in private equity Ingri
Slide 24: Appendix
8 t{ mercialys é L’Esprit Voisin. i CG Appendix
Slide 25: Income statement
Income statement In millions of euros % 14/13 06/30/13* 06/30/14 chge. Invoiced rents 73.2 76.0 3.9% Lease rights 3.5 2.1 Rental revenues 76.7 78.1 1.9% Non-recovered property tax (0.1) - Non-recovered service charges (1.8) (2.1) Property operating expenses (3.2) (2.3) Net rental income 71.6 73.8 3.
Slide 26: Condensed balance sheet
Condensed balance sheet In millions of euros Assets 12/31/12* 12/31/13 06/30/14 Investment property 1,414.2 1,423.5 1,524.7 Financial assets 27.4 42.1 54.1 Other assets 1.4 2.1 3.2 Total non-current assets 1,443.0 1,467.7 1,582.0 Cash and Casino current accounts 205.9 15.8 6.6 Trade and other receiv
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