Slide 1: 2015 Results
2015 RESULTS L FEBRUARY 11, 2016
Slide 2: Preliminary Remarks
PRELIMINARY REMARKS The 2015 annual consolidated financial statements were approved by the Board of Directors on February 10, 2016 The audit procedures were performed by the statutory auditors. The audit certification report is in progress - 2015 ANNUAL RESULTS – FEBRUARY 2016 2
Slide 3: Contents
CONTENTS 1 STRATEGY & KEY MESSAGES 4 2 ACTIVITY 11 3 COMPLETIONS & PROJECTS 19 4 FINANCIAL STRUCTURE & RESULTS 29 5 CONCLUSION & 2016 OBJECTIVES 37 - 2015 ANNUAL RESULTS – FEBRUARY 2016 3
Slide 4: Strategy & Key Messages
1 STRATEGY & KEY MESSAGES Eric Le Gentil Chairman and CEO - 2015 ANNUAL RESULTS – FEBRUARY 2016 4
Slide 5: 2015: A Year of Projects and Achievements
2015: A YEAR OF PROJECTS AND ACHIEVEMENTS Launch of the cross- First sale of a non- Acquisition of 5 large Successful opening of the category brand controlling interest food stores for Toulouse Fenouillet retail carried out with an OPCI transformation, including park, first phase of this predominant
Slide 6: The Model's Effective Management Is Reflected in Financial Indicators
THE MODEL’S EFFECTIVE MANAGEMENT IS REFLECTED IN FINANCIAL INDICATORS STRONG GROWTH IN RENTS AND ORGANIC GROWTH significantly > the +2% objective Positive effect of acquisitions Favorable impact of projects Continued development of with immediate returns completed in 2014 and 2015 Casual Leasing and
Slide 7: Key Figures
KEY FIGURES In millions of euros 2014 2015 % Change Invoiced rents 148.8 166.0 +11.6% Organic growth in invoiced rents excluding indexation +2.8% +3.5% +70 bp Rental revenues 152.8 169.0 +10,6% FFO 102.6* 108.5 +5.8% EPRA earnings 98.2* 107.4 +9.5% LTV 37.4% 41.0% +360 bp Average cost of drawn debt
Slide 8: Mercialys Strengthens Its Position as Proximity Leader Through High-Street Retail Projects
MERCIALYS STRENGTHENS ITS POSITION AS PROXIMITY LEADER THROUGH HIGH-STREET RETAIL PROJECTS Large urban areas offer advantages: - Customers with above-average purchasing power and/or - Prime locations or sites MERCIALYS: a proximity player leader and innovative Major centers or leading neighborhood c
Slide 9: Acquisitions and Disposals Conducted with a Major Investor
ACQUISITIONS AND DISPOSALS CONDUCTED WITH A MAJOR INVESTOR Limited investment by Mercialys as part of its asset allocation and maintaining its BBB/stable rating Outsourcing of €71m in Implementation of capital gains (in the parent structural projects on company’s account) in sites already owned by 2
Slide 10: A Diversified Pipeline Providing Good Visibility
A DIVERSIFIED PIPELINE PROVIDING GOOD VISIBILITY Large scale projects Redevelopment of large food stores IRR of 8–10% Shopping centers extensions and retail parks Mixed-use high-street retail projects Total: Controlled pipeline: €224m Potential pipeline: €367m €592m - 2015 ANNUAL RESULTS – FEBRUARY
Slide 11: Activity
2 ACTIVITY Vincent Ravat Executive Vice-President - 2015 ANNUAL RESULTS – FEBRUARY 2016 11
Slide 12: Robust Sustainable Organic Growth
ROBUST SUSTAINABLE ORGANIC GROWTH 5,0% 4,3% Renewals & relettings: +19.8% 3,7% 3,5% 4,0% 3,2% 3,1% 3,1% 3,0% 3,4% 2,6% 2,7% 2,8% 2,0% 2,3% Casual Actions on Leasing 1,0% 1,7% the 1.5% portfolio 0,0% 2.0% 2010 2011 2012 2013 2014 2015 Organic growth of invoiced rents, excl. indexation Organic growth
Slide 13: The Expansion of National Casual Leasing, a Medium-Term Growth Driver
THE EXPANSION OF NATIONAL CASUAL LEASING, A MEDIUM-TERM GROWTH DRIVER Sharp increase in rents by 28.2% to €8.0m An approach focusing on upgrading and improving the quality of merchandising o growth in the share of national brands (31% of Casual Leasing rents) o dedicated support for local retailers:
Slide 14: Long-Term Operating Outperformance of the Market
LONG-TERM OPERATING OUTPERFORMANCE OF THE MARKET CUMULATIVE CHANGE IN FOOTFALL IN 2015* 3,0% +2,8% +1,9% 2,0% +1,4% +1,3% 1,0% +0,7% 0,0% -1,0% -0,7% -0,5% -2,0% -1,1% -1,0% -3,0% -1,4% -4,0% -4,7% -4,7% -5,0% Cumul YtD 31.12.2014 December 2014 Cuml YtD 30.06.2015 June 2015 YtD October Cumul 2015 31
Slide 15: A Network of Targeted and Attractive Commercial Sites for Retailers
A NETWORK OF TARGETED AND ATTRACTIVE COMMERCIAL SITES FOR RETAILERS Examples of leases signed in 2015 - 2015 ANNUAL RESULTS – FEBRUARY 2016 15
Slide 16: Continuous Optimization of Our Store-Mix: Redevelopment of Cafeterias
CONTINUOUS OPTIMIZATION OF OUR STORE-MIX: REDEVELOPMENT OF 29 CAFETERIAS Prime locations inside the shopping centers Redevelopment that enhances the appeal of assets through reletting to attractive retailers A renewed concept on cafeterias operated and owned by Casino, which are moved to the car par
Slide 17: A Single Brand, with Strong Synergies, Across the Entire Portfolio
A SINGLE BRAND, WITH STRONG SYNERGIES, IMPLEMENTED ACROSS THE ENTIRE PORTFOLIO CREATING A GROUP-WIDE, SINGLE BRAND, “G LA GALERIE”, LINKED TO A REDESIGN OF THE VISUAL IDENTITY AND INTERIOR/EXTERIOR DESIGN OF THE CENTERS 43 sites with a new exterior design in 2015 18 sites with renovated interiors in
Slide 18: A Brand That Allows Us to Launch a Unified Digital Ecosystem
A BRAND THAT ALLOWS US TO LAUNCH A UNIFIED DIGITAL ECOSYSTEM LEARNING MORE ABOUT MORE OUR CUSTOMERS PROMOTIONAL OFFERS Qualify customer data in the Make our retailers’ commercial database by systematically offers available to the wider ensuring that the personal public (including those on informatio
Slide 19: Completions & Projects
3 COMPLETIONS & PROJECTS Vincent Rebillard Chief Operating Officer - 2015 ANNUAL RESULTS – FEBRUARY 2016 19
Slide 20: Summary of Operations Completed in 2015
SUMMARY OF OPERATIONS COMPLETED IN 2015 2015 OPENINGS 2015 ACQUISITIONS 5 large food stores for transformation: €167m 1st-half 1st-half Toulouse Fenouillet retail park (1st phase of the project) Besançon, Lanester, Poitiers, Dijon, Marseille €2.3m in annualized rents €9.3m in annualized rents 4 larg
Slide 21: New Openings in 2015, Proof of a Nimble Business Model
NEW OPENINGS IN 2015, PROOF OF A NIMBLE BUSINESS MODEL Very positive trends following the opening of the Toulouse Fenouillet retail park in May 2015 Most recent retailer openings in the autumn Annualized rents of €2.3m, representing a 6.9% yield on cost on this project Very satisfactory retailer per
Slide 22: New Openings in 2015, Proof of a Nimble Business Model
NEW OPENINGS IN 2015, PROOF OF A NIMBLE BUSINESS MODEL Opening of the Aurillac shopping center extension in November 2015 Acquisition of a 1,500 sq.m extension (10 stores, all leased) to this gallery, the leader in its region: investment of €8.2m for a net yield on cost of 6.5% Enhanced attractivene
Slide 23: Acquisition of Restructuring Projects in the 2nd Half-Year
ACQUISITION OF 5 RESTRUCTURING PROJECTS IN THE 2ND HALF-YEAR, OF WHICH FOUR WITH AN INVESTOR Acquisition of 5 large food stores immediately producing rent For 4 of these projects (Narbonne, Istres, Le Puy, Clermont- Total amount (100%): €161.2m (incl. transfer taxes) Ferrand), Mercialys holds a 51%
Slide 24: Development of Mixed-Use Projects on High Street Retail Sites
DEVELOPMENT OF MIXED-USE PROJECTS ON HIGH STREET RETAIL SITES Acquisition of 5 sites for transformation for €110.6m incl. transfer tax and an immediate yield of 5.9% €45m of investment as part of mixed-use projects, for an IRR of ~ 9% (*) MARSEILLE LILLE Breathing new life into an iconic Becoming th
Slide 25: Development of Mixed-Use Projects on High Street Retail Sites
DEVELOPMENT OF MIXED-USE PROJECTS ON HIGH STREET RETAIL SITES PUTEAUX ASNIERES Creating a new block inside the city Adapting the city center to the planning challenges of the Grand Paris CHAVILLE Designing the city center of the future - 2015 ANNUAL RESULTS – FEBRUARY 2016 25
Slide 26: Significant Completions in 2016
SIGNIFICANT COMPLETIONS IN 2016 Phase 2 of the major Toulouse Fenouillet project* Scheduled for opening in November 2016 70% already let to date Annualized rent: €7.0m 5 completions of shopping centers’ extensions on large food stores’ area Aix, Angers, Anglet, Nîmes (phase 1), Rennes (phase 1) Deli
Slide 27: A Potential Pipeline Capitalizing on All of Mercialys' Real Estate Resources
A POTENTIAL PIPELINE CAPITALIZING ON ALL OF MERCIALYS’ REAL ESTATE RESOURCES Large project Shopping centers’ Mixed-use high street extensions and retail parks retail projects Marseille Plan de Campagne La Réunion (Saint-Denis, Le Port) Marseille Canebière Marseille Lille-Marcq-en-Baroeul Brest Putea
Slide 28: Summary of the Development Pipeline: €592M Gross Investments
SUMMARY OF THE DEVELOPMENT PIPELINE: €592M GROSS INVESTMENTS Investment still to Forecasted net Forecasted net yield In millions of euros Total investment Date of completion be initiated rental income on cost Transformation of 4 large food stores acquired in H1 2014 34.5 34.5 3.3 9.4% 2015 to 2017 T
Slide 29: Financial Structure & Results
4 FINANCIAL STRUCTURE & RESULTS Elizabeth Blaise CFO - 2015 ANNUAL RESULTS – FEBRUARY 2016 29
Slide 30: A Solid Financial Structure
A SOLID FINANCIAL STRUCTURE Net debt: €1,361m, including The LTV totaled 41% o €1,230m of bond debt The ICR remains at a very high level of 5.1x o €166m of commercial paper €200m bond issue supplementing the 2023 bond launched at a favorable rate o Undrawn financial resources: €350m Standard & Poor’
Slide 31: A Favorable Cost of Financing
A FAVORABLE COST OF FINANCING Increased financial expenses due to investments are limited by optimizing the cost of debt Volume effect: full-year impact of the €550m bond issued in Q4 2014 (1.787%) and the new €200m bond issued in November 2015 based on a cost of 2.203% Favorable impact of the debt
Slide 32: Transactions Concluded with BNP Paribas REIM France
3 TRANSACTIONS CONCLUDED WITH BNP PARIBAS REIM FRANCE 6 reconfigured large food stores (H1 2015): €10.6m in annual rents Hyperthetis Participations (net capital gain of €25.3m) Mercialys: 51%* 3 large food stores for transformation: investment of €69.5m DIH in Nov. 2015 OPCI SPF2**: 49% o €3.5m in r
Slide 33: Increase in Rents and Organic Growth
INCREASE IN RENTS AND ORGANIC GROWTH €152.8m Rental revenues: +10.6% €169.0m Lease rights €3.0m Lease rights +€5.2m €4.0 M +€24.6m -€1.2m -€0.1m Increase in Indexation invoiced rents -€11.3m Acquisitions Strategic like-for-like & completions vacancy* Disposals & non-recurring items Organic growth +3
Slide 34: Strong Growth in FFO: +5.8%
STRONG GROWTH IN FFO: +5.8% In millions of euros Volume effect of the debt 2014 base of comparison including net 130,0 income of €4.3m (sale of Green Yellow stake) Impact of sales of non- +1.0 controlling interests 120,0 +15.7 +0.5 (0.3) (5.2) 108.5 110,0 (2.1) (0.3) 102.6 (3.3) 100,0 Additional 3%
Slide 35: Portfolio Value Up by +22.4%, Including +6.9% Like-for-Like
PORTFOLIO VALUE UP BY +22.4%, INCLUDING +6.9% ON A LIKE-FOR-LIKE BASIS Breakdown of change in the portfolio’s appraisal value, including transfer taxes* 4000 +€125m +€74m €3,542m 3500 +€449m 3000 €2,894m 2500 2000 +22.4% (+6.9% on a like-for-like basis) 1500 Holdings 12.31.2014 12/31/2014 Change in
Slide 36: Change in NNNAV
CHANGE IN NNNAV 20,00 NNNAV (EPRA, in €/share) +0.01 19.48 19,50 +1.39 19,00 18.85 18,50 +0.87 18,00 17,50 17,00 (1.64) 16,50 16,00 ANR EPRA Triple net triple EPRA net NAV2014 at Dividende Dividendpayé paid Résultat net Net income Var. de la in Change JVfair du of patrimoine assets Var.inde Change l
Slide 37: Conclusion & 2016 Objectives
5 CONCLUSION & 2016 OBJECTIVES Eric Le Gentil Chairman and CEO - 2015 ANNUAL RESULTS – FEBRUARY 2016 37
Slide 38: Dividend Payment
DIVIDEND PAYMENT Proposed dividend up +7.3% to €1.33 per share, contributing to a high total return of 10.2% in 2015 Mercialys will propose to the General Meeting the payment of a dividend of €1.33* per share, including the interim dividend of €0.76 per share paid in December 2015 Mercialys distribu
Slide 39: 2016 Objectives
2016 OBJECTIVES Organic growth in invoiced rents > 2% above indexation Growth of FFO +2% vs. 2015 - 2015 ANNUAL RESULTS – FEBRUARY 2016 39
Slide 40: Appendices
6 APPENDICES - 2015 ANNUAL RESULTS – FEBRUARY 2016 40
Slide 41: Financial Calendar
FINANCIAL CALENDAR April 2016 Activity at March 31, 2016 (after market close) April 20, 2016 Annual Shareholders’ Meeting July 27, 2016 Press release on 2016 half-year results (after market close) July 28, 2016 Conference call on half-year financial results October 2016 Activity at September 30, 201
Slide 42: Asset Locations
ASSET LOCATIONS The only listed French real estate company that is a pure player in shopping centers o Mercialys' portfolio is focused on large and neighborhood shopping centers as well as high-street retail assets that are leaders in their areas o The assets are concentrated in the most dynamic Fre
Slide 43: The Mercialys Portfolio
THE MERCIALYS PORTFOLIO Services BREAKDOWN OF RENTAL INCOME BY BUSINESS SECTOR Culture, gifts, 4% leisure • (in % of annualized rental income as at December 31, 2015 – excluding exposure to the 17% Casino Group) Personal items 43% Beauty and health 15% Household Food and items catering 11% 10% LEASE
Slide 44: The Mercialys Portfolio
THE MERCIALYS PORTFOLIO TYPES OF RETAILERS PRESENT ON MERCIALYS ASSETS Local retailers 19% • (in % of annualized rental income as at December 31, 2015 – excluding exposure to the Casino Group) National and international retailers 81% CHANGE IN THE SHARE OF CASINO BRANDS IN MERCIALYS’ ANNUALIZED RENT
Slide 45: Financing Structure and Schedule
FINANCING STRUCTURE AND SCHEDULE 800 750 700 DEBT SCHEDULE AT THE END OF 2015 Bond 600 480 500 RCF 400 €M Bond 300 240 200 C/C Casino 60 100 50 Confirmed bank facility 0 2016 2017 Dec. Mar. Déc. 2021 2022 Mar. 2018 2019 2020 2023 800 DEBT SCHEDULE AT THE END OF 2014 700 Bond 550 600 480 500 RCF 400
Slide 46: Shareholding in Mercialys and Number of Shares
SHAREHOLDING IN MERCIALYS AND NUMBER OF SHARES 2013 2014 2015 Number of shares outstanding at end of period 92,049,169 92,049,169 92,049,169 Average number of shares outstanding 92,038,313 92,049,169 92,049,169 Average number of shares (basic) 91,734,656 91,826,157 91,767,764 Average number of share
Slide 47: FFO, EPRA Earnings & Net Income Group Share
FFO, EPRA EARNINGS & NET INCOME GROUP SHARE In thousands of euros December 31, 2014 (*) December 31, 2015 Invoiced rents 148,755 165,958 Lease rights 4,032 2,998 Rental revenues 152,787 168,956 Non-recovered property taxes -1 367 -1,081 Non-recovered service charges -3,244 -3,048 Property operating
Slide 48: Balance Sheet
BALANCE SHEET ASSETS (in thousands of euros) December 31, 2014 (*) December 31, 2015 Intangible assets 811 974 Property, plant and equipment other than investment property 434 12 Investment property 1,751,782 2,224,080 Investments in associates 20,880 20,069 Other non-current assets 33,579 34,154 De
Slide 49: Breakdown of Assets
BREAKDOWN OF ASSETS Number of Appraisal value (incl. taxes) Gross leasable area at Appraised net rental assets at at December 31, 2015* December 31, 2015 income Type of property December 31, 2015 In €m % Sq.m % In €m % Regional / large shopping centers 25 2,670.4 75% 648,400 71% 136.7 72% Neighborho
Slide 50: Capitalization Rate Grid Applicable Under the Partnership Agreement
CAPITALIZATION RATE GRID APPLICABLE UNDER THE PARTNERSHIP AGREEMENT Applicable capitalization rate grid for reiterations in the first half of 2016 under the Partnership Agreement with Casino Shopping centers Retail parks City center Corsica Corsica and and Mainland Mainland Type of property France o
Slide 51: Disclaimer
DISCLAIMER This communication contains forward-looking information and statements about Mercialys. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objec