Slide 1: First-half 2009 results
« L’Esprit Voisin » First-half 2009 results July 23, 2009
Slide 2: Speakers
Speakers Jacques Ehrmann, Chairman and Chief Executive Officer Géry Robert-Ambroix, Chief Operating Officer First-half 2009 results 2
Slide 3: Contents
Contents Page Overview of the first half 4 First-half 2009 activity and results 12 Developments 22 Conclusions and outlook 32 First-half 2009 results 3
Slide 4: Overview of the first half of 2009
Overview of the first half of 2009
Slide 5: Strong first half of 2009 for Mercialys
Strong first half of 2009 for Mercialys... Rental revenues Recurring operating Cash flow* cash flow** +13.2% 64.5 +12.9% +12.5% 57.0 55.5 56.8 49.3 50.3 million euros 55.9 62.9 1H08 1H09 1H08 1H09 1H08 1H09 * Cash flow = net income before depreciation and other non-cash items Lease rights (IFRS) **
Slide 6: ... with continuing organic growth
... with continuing organic growth... Rental revenues million euros Impact of acquisitions in 2008 +13.2% and 2009 64.5 +7.0 points Strategic vacancy 57.0 (relating to Alcudia program) Invoiced rents +12.5% -0.8 points Organic growth* (like-for-like) +6.3 points Lease rights (IFRS) 1H07 1H08 Invoice
Slide 7: ... and a major acquisition
... and a major acquisition Acquisition of 25 Alcudia/”Esprit Voisin” development projects from Casino Euro 334 million Paid for with 14.2 million newly issued shares Casino has redistributed these shares to its shareholders Enhanced Control of Growth Yield stock market risks profile Value of assets
Slide 8: The shopping center sector has managed to hold up despite worsening economic conditions
The shopping center sector has managed to hold up despite worsening and irregular economic conditions The activity is driven by retail laws Spain UK Switzerl. Italy Netherland Germany Belgium France 0,0% 9 French consumer spending -0,5% 0,0% leading the way in Europe -1,0% -0,5% -0,3% -0,7% Estimate
Slide 9: A sector also protected by structural factors
A sector also protected by structural factors Sector fundamentals remain robust 9 Recurring and protected cash flow Very strong cash flow > Guaranteed minimum rents visibility > Indexation of guaranteed minimum rents > Cash flow protected by French lease right system Vacancy rates still low and with
Slide 10: Neighborhood shopping centers show above-average resilience
Neighborhood shopping centers show above-average resilience Shopping centers located close to customers and meeting their needs Retailer sales trends Source: CNCC – comparable perimeter Downtown All shopping Regional Neighborhood shopping centers shopping centers shopping centers centers +3.4% +3.6%
Slide 11: A portfolio presenting a number of strengths, L'Esprit Voisin
Mercialys: A portfolio presenting a number of strengths, underpinned by a powerful positioning “L’Esprit Voisin” 9 A portfolio presenting significant strengths > Shopping centers located in fast-growing regions of France > Strategic locations in built-up areas, on everyday routes, 10 minutes from th
Slide 12: First-half activity and results
First-half activity and results
Slide 13: Robust organic growth
Robust organic growth Growth in invoiced rents +2.0 62.9 +2.2 +3.9 -0.5 -0.7 Organic 55.9 Non-recurring Valuation of growth Impact of Indexation existing items** million euros variable assets Acquisitions in rents +6.3%* 2008 and 2009 +7.0pts -0.8pts -1.2pts +4.0pts +3.5pts = +12.5% 1H08 1H09 * Grow
Slide 14: Resilient shopping centers: in terms of organic growth
Resilient shopping centers: in terms of organic growth 9 Performances in line with past years > Renewals: +27%* > Relets: +103%* 9 Market rents still similar to the levels seen 18 months ago but longer negotiating periods 9 Rents still well below market levels and competitors Rental value per m2 for
Slide 15: Resilient shopping centers: in terms of retailers
Resilient shopping centers: in terms of retailers Retailers' sales growth Cumulative % % change* over 12 months change* to end-May rolling to end-May 2009 2009 1.0% 0.8% 0.5% 0.0% -0.5% CNCC panel – Neighborhood centers -1.0% -1.5% -1.0% Mercialys large shopping centers -2.0% -1.6% -2.5% -3.0% -2.6%
Slide 16: Resilient shopping centers: in terms of new developments
Resilient shopping centers: in terms of new developments The Alcudia/”Esprit Voisin” program: a growth driver 9 The Alcudia/”Esprit Voisn” program provides a catalyst for the reversionary potential of our sites Case study: Besançon Existing section Pre- Alcudia 9 Average store rental value Euro 440
Slide 17: Further improvement in Mercialys's main performance indicators
Further improvement in Mercialys's main performance indicators Rental revenues Cash flow* Euro millions - 2005 pro forma figures 2H 2H 64,5 56,8 57.0 50.3 48,4 43,5 1H 37,2 39,6 1H 32,6 36,2 +13.2% +12.9% 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Net income, Group share Recurring operating c
Slide 18: And further acquisitions by Mercialys
And further acquisitions by Mercialys Rental revenues Lot 1 (Euro 47m) (Euro millions) +21.0% Alcudia extensions Euro 3.2m in full-year 140.6 New properties in 132.4 completed in 1H09: rental income operation Arles and Besançon 126.2 Effective yield 6.8% 116.2 Lot 2 (Euro 113m) +10.0 Alcudia extensi
Slide 19: Portfolio value up 15.5%
Portfolio value up 15.5% over 6 months Organic growth makes up for rise in capitalization rates +15.5% Appraisal value of portfolio including transfer taxes* 2 381.0 Euro +378m 1 913.8 2 061.2 2009 acquisitions** million euros Euro -157m 1 346.9 Increase in average capitalization rate 1 027.0 -2.8%
Slide 20: Appraisal valuations supported by the market
Appraisal valuations supported by the market… And including one of the highest growth potential of the sector 9 Yields in line with acquisitions made in 9 Yields do not take account of the portfolio's the first half of the year full intrinsic reversionary potential > Low values per m2 Angers 7.0% >
Slide 21: Organic growth continuing to support NAV
Organic growth continuing to support NAV* Components of change in NAV between end- Replacement NAV per share 2008 and June 30, 2009 by value Euro +351m 27.00 26.28 25.70 Euros per share 1H09 cash flow: Euro +57m 20.08 17.07 15.62 Acquisitions: Euro +378m IPO 12/31/05 12/31/06 12/31/07 12/31/08 06/30
Slide 22: Developments
Developments
Slide 23: Partnership Agreement: a flexible way of working
Partnership Agreement: a flexible way of working... ... allowing for a highly selective approach in choosing our acquisitions 9 Casino pipeline: 3 options not exercised by Mercialys > St Laurent des Arbres: small > Small property without significant services center with supermarket development poten
Slide 24: Partnership Agreement: rapid adaptation to economic conditions
Partnership Agreement: a flexible way of working... ... allowing for rapid adaptation to economic conditions 9 Yields can be adapted to changes in market conditions: on the basis of the change in the average yield based on appraisal valuations of Mercialys's portfolio (increase by +8.3%), the yield
Slide 25: Continuing works to enhance the value of the portfolio
Continuing works to enhance the value of the portfolio... Projects undergoing works in 2009 Paris Saint Didier (16th arrondissement) Redevelopment and renovation of existing mall Start of works: June 2009 Completion: July 2010 Annecy (*) Extension 4,800 m² and renovation Start of works: September 20
Slide 26: Continuing works to enhance the value of the portfolio
Continuing works to enhance the value of the portfolio... Projects undergoing works in 2009 Sainte Marie de la Réunion (*) Extension 8,600 m² and renovation Start of works: August 2009 Completion: December 2010 Lons le Saunier (*) Construction of a retail park of 7,000m² Start of works: September 20
Slide 27: Continuing works to enhance the value of the portfolio
Continuing works to enhance the value of the portfolio... Projects undergoing works in 2009 Castres (*) Extension 2,260 m² and renovation Start of works: September 2009 Completion: September 2010 Brest Redevelopment and renovation Start of works: November 2009 Completion: October 2010 (*) Projects a
Slide 28: ... and further works in the years ahead
... and further works in the years ahead Narbonne Transformation of hypermarket surfaces into an Marseille la Valentine extension of 1,300m² of Transformation of hypermarket shopping mall surfaces into an extension of 7,000m² of shopping mall Sables d’Olonne Extension of the shopping mall 1,600m² 28
Slide 29: Major changes to the development pipeline during the first half
Major changes to the development pipeline during the first half of the year Casino development project pipeline (Euro millions) -89 +214 -168 -169 +54 New developments pipeline 717 Euro 215 million 538 548 + Alcudia extensions pipeline 706 538 548 505 Euro 290 million 2008 Value of Value of Authoriz
Slide 30: 18 priority projects in the Alcudia pipeline
18 priority projects in the Alcudia pipeline representing a valuation of Euro 170 million Dijon Chenove 4,000 m² shopping mall extension Toulouse Extension of shopping mall and creation of an adjacent retail park To be - 90,000 m² updated Istres 2,000 m² shopping mall extension First-half 2009 resul
Slide 31: 18 priority projects in the Alcudia pipeline
18 priority projects in the Alcudia pipeline representing a valuation of Euro 170 million Auxerre Extension of shopping mall and creation of an adjacent retail park - 18,000 m² Cholet 5,300 m² shopping mall extension Annemasse 4,000 m² shopping mall extension First-half 2009 results 31
Slide 32: Conclusions and outlook
Conclusions and outlook
Slide 33: Enhancement of Mercialys's stock market profile
Enhancement of Mercialys's stock market profile in the first half of the year... 9 Free float increased to Euro 1 billion 9 A stock attracting a growing amount of coverage Shareholding structure at July 14, 2009 > 17 analysts now cover the stock > 5 initiations of coverage in the first half of the y
Slide 34: ... and absorption of Casino distribution of Mercialys shares
... and absorption of Casino distribution of Mercialys shares Over 9 million shares traded since June 2, 2009 Euros 24 821 23 Mercialys: 627 +11.4% 569 Klepierre: 22 502 +3.1% 474 461 Unibail- Rodamco: +1.3% 21 319 310 297 315 302 278 274 286 266 EPRA: 248 242 232 217 209210 +0.5% 202 185 187 179 16
Slide 35: Mercialys confirms its position as a leading real estate investment company
Mercialys confirms its position as one of the market's leading real estate investment companies.... Performance in line with the sector in terms of relevant indicators 9 EV/2009e EBITDA 19x 22x 20x 19x 18x 18x 18x 18x 17x 16x 16x 16x 16x 16x 16x 16x 15x 15x 14x ce rio ys nd li c o n tl. n s ah co a
Slide 36: ... while maintaining robust growth potential
... while maintaining robust growth potential 9 Potential for solid organic growth: priority given to extracting reversionary potential, which remains significant 9 Development pipeline presenting strong growth potential and limited risk > Mainly Alcudia extensions, which present lower risk for reta
Slide 37: Favorable outlook for 2009
Favorable outlook for 2009 9 Strong first-half performance confirms the resilience of our business model > Performance maintained in terms of organic growth over the period > Resilient market trends in rents and highly pro-active approach by retailers 9 No major bad news in the first half of the yea
Slide 38: Appendices
Appendices
Slide 39: Alcudia acquisitions Lot 1: new properties in operation
Alcudia development project acquisitions Lot 1: new properties in operation 9 Extension of retail space at 2 sites: Arles (already started) and Besançon (start date of March 10, 2009) 9 Letting complete (one restaurant still to be let at the Arles site) Description 9 Once this project is complete, t
Slide 40: Alcudia acquisitions Lot 2: properties at an advanced stage of development
Alcudia development project acquisitions Lot 2: properties at an advanced stage of development 9 Extension of shopping centers at 7 sites: Annecy, Castres, Le Puy (Retail Park), Les Sables d’Olonne, Lons le Saunier (Retail Park), Sainte Marie du Parc (Reunion) and Valence Sud (phase 2) 9 Contributio
Slide 41: Alcudia acquisitions Lot 3: reduction in hypermarket area
Alcudia development project acquisitions Lot 3: reduction in hypermarket area (storage and sales area) 9 Extension and redevelopment of shopping malls in space currently occupied by hypermarkets at 10 sites: Agen Boé, Angoulême, Besançon, Béziers, Fontaine-Les-Dijon, La Ricamarie, Marseille La Valen
Slide 42: Alcudia acquisitions Lot 4: properties to be consolidated
Alcudia development project acquisitions Lot 4: properties to be consolidated before extensive restructuring 9 Food stores at 5 inner-city sites: • Marseille Delprat • Marseille La Valentine • Marseille Michelet Description • Paris Massena (13th arrondissement) • Paris St Didier (16th arrondissement
Slide 43: Detailed income statement
Detailed income statement million euros 06/30/08 06/30/09 Change 09 vs. 08 Invoiced rents 55.9 62.9 +12.5% Lease rights 1.1 1.6 Rental revenues 57.0 64.5 +13.2% Non-recovered property taxes -0.1 -0.1 Non-recovered service charges -1.1 -1.6 Property operating expenses -1.9 -2.1 Net rental income 53.9
Slide 44: Condensed balance sheet
Condensed balance sheet Assets million euros 31/12/08 30/06/09 Investment property 1,231.3 1,568.6 Financial assets 11.7 12.2 Other assets 0.9 0.9 Total non-current assets 1,244.0 1,581.7 Cash and Casino current account 10.6 37.3* Trade and other receivables 13.3 20.9 Total assets 1,267.9 1,639.8 Eq
Slide 45: Portfolio valued at Euro 2,381 million including lease rights
Portfolio valued at Euro 2,381 million including lease rights Portfolio value up +15.5% over 6 months Number Appraisal value Gross leasable area at Appraisal net rents Type of asset of assets at 06/30/09* 06/30/09 06/30/08 mn euros % m² % mn euros % Regional and large centers 29 1,387 58 372,600 50
Slide 46: Valuing the pipeline on the basis of the stage of completion
Valuing the pipeline on the basis of the stage of completion of each project Different rates of probability at each stage of completion 9 The development pipeline, as it currently stands, contains projects presenting major differences in terms of stage of completion and chances of going ahead 9 Unti