FIRST HALF 2014 RESULTS September 30, 2014 SFAF Meeting
The low cost retail park specialist
Disclaimer
This document was prepared by Patrimoine & Commerce for the sole purpose of presenting its first half results
on 30 September 2014.
Since 1 January 2014 Patrimoine & Commerce has applied IFRS 10 and 11. Application has been backdated to
2013 and the comparative figures have been restated accordingly.
This document may not be copied or circulated, in whole or in part, without the Company’s prior approval.
Patrimoine & Commerce cannot be held liable if this document is used by any person who does not belong to
the Company.
This document contains no quantified results forecasts.
The Company makes no undertaking and provides no guarantee with regard to the achievement of its targets
or of any goals announced as part of its business plans.
Although the Company believes that its targets are reasonable, investors are reminded that the achievement
of these targets is subject to risks and uncertainties, including those described in the section entitled “Risk
factors” in the annual Registration Document
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CONTENTS
�First half 2014 financial and operating results
�Vision and strategy:
"The leading low cost retail park company"
�Two transactions that boost the institutional standing
of Patrimoine & Commerce
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First half 2014 key figures
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Capitalisation
rate (5)7.5%
318,000 m²surface area (1)
46.2%
Assets68
Total asset
value (2) €520m
LTV (4)
Rental
income (3) €15.8m
(1) Total surface area of owned assets
(2) Excluding transfer taxes (incl. group share of Cherbourg and Studio Prod)
(3) H1 2014 gross rental income
(4) Adjusted for net disposals proceeds of assets held for sale, security deposits and hedges
(5) Annual rental income + vacant properties ERV / total value of assets excl. transfer taxes
FIRST HALF 2014
RESULTS
Results in line with forecasts
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Key deliveries in 2014
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Limoges Le Vigen (87)
Frouard (54)
Istres Hippopotamus (13)
Pontarlier (25)
Surface area 1,064 m²
Delivery date March 2014
Occupancy rate 100%
Rental income €0.1m
Surface area 2,700 m²
Delivery date March 2014
Occupancy rate 100%
Rental income €0.3m
Surface area 316 m²
Delivery date April 2014
Occupancy rate 100%
Rental income €0.1m
Surface area 740 m²
Delivery date January 2014
Occupancy rate 100%
Rental income €0.1m
Status of the asset sale programme
�1 asset sold €2.5m > Metz sold in July 2014
�2 assets under promise of sale €2.9m > Montbelliard
> Chasseneuil-du-Poitou
�Sales prices in line with appraisal values
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Breakdown of retail rental income
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Personal goods
37%
Household
goods
29%
21%
Culture &
entertainment
6%
7%
Health &
cosmetics
Food
Type of retail outlet
TOP 15 retailers(42% of total rental income)
The largest retailer accounts for 9% of retail rental income
Lease expiry schedule(end of lease)
€0
€1m
€2m
€3m
€4m
€5m
Tacit renewal 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 >20272026
Stable and reccuring income
> Occupancy rate 97.5%*
> Default rate c. 1%
> Lease indexation
• ICC 35%
• ILC 63%
• ILAT (offices) 2%
> Average rent
• Retail parks €116 per m²
• Shopping malls and centres €297 per m²
> Tenant turnover rate < 1%
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* Based on rents of retail assets in operation for over 1 year (excluding strategic vacancy)
Increase in gross rental income
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€m
Gross H1 2013
rental income
15.0
Gross H1 2014
rental income
Disposals
(0.1)
Deliveries
(0.5)
Indexation
Renegotiations
1.5
(0.1)
Strategic vacancy
15.8
+5.1%
Income statement (1/2)
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€m6 months
H1 2014
6 months
H1 2013
Change
€m
Change
%
Gross rental income 15.8 15.0 0.8 +5.1%
Net rental income 15.5 14.8 0.7 +4.7%
Operating expenses (1.6) (1.7) 0.1 -4.9%
Normative EBITDA 13.9 13.1 0.8 +5.9%
As % of net rental income 90% 89%
Non-SIIC assets current tax (0.1) (0.2) 0.1 -46.8%
Net cost of debt (4.0) (3.2) (0.8) +26.5%
Funds From Operations ("FFO") 9.7 9.7 0.0 0.0%
FFO per share 1.00 1.00
Income statement (2/2)
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€m6 months
H1 2014
6 months
H1 2013
Change
€m
Recurring funds from operations 9.7 9.7 (0.0)
Change in FV of properties 0.6 1.0 (0.4)
Increase in transfer taxes (2.1) - (2.1)
Change in FV of financial instruments (1.5) 1.7 (3.2)
Other income and expenses (1.5) (2.8) 1.3
Net income 5.2 9.6 (4.4)
Minority interests 0.4 0.6 (0.3)
Net income, Group share 4.8 9.0 (4.2)
€(5.3)m
Sound financial structure
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Other Other58
Financial debt256
Minority interests12
222 Equity Group share
€m 548 548
490
Assets
June 2014
Investment
properties
Liabilities
June 2014
58
Sound financial ratios
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Finance leases
€88.1m
Bonds
€30.0m
Borrowings
€131.5m
Gross debt€m 30/06/2014 31/12/2013
Net debt 1 226.5 217.0
Average maturity (years) 6.8 7.0
% debt hedged 79.4% 80.2%
Debt average interest rate 3.7% 3.9%
LTV 1 46.2% 45.8%
1 Adjusted for net disposals proceeds of assets held for sale, security deposits and hedges
More than 5
years
1 year 2 years 3 years 4 years 5 years
30.0
10.4 10.5 10.7 9.4 9.337.8
78.5
10.610.09.89.38.2
Bonds
Bank loans
Finance lease liabilities
€m
Stable debt repayment
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* Excluding VAT bridging loan, developer loans and accrued interest
Change in NAV
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NAV excl. TT
January 2014
NAV excl.TT
June 2014
Restated NAV
January 2014
Restatements Net income excl.
change in FV
Change in FV
of propertiesOther
224.8
213.4
221.9
8.2
0.6
(0.3)
(7.8)
(2.1)
(1.5)
Dividend
€m
+4%
NAV/share
€22.2
Transfer taxes
NAV/share
€23.1
Change in financial
instrument FV
PATRIMOINE &
COMMERCE
1- Strategy based on long-term
vision of retail property in
medium-sized French cities
From family business to
institutional real estate company
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New expectations from
retailers and local authorities
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Inevitable growth in suburban retail properties based on optimum models
combining footfall and low prices
> Ever increasing consumer demand for
low prices
> Growing competition from online
sales focusing on price
> Retailers seeking
• Lower property costs
• Footfall
• Space
> New business models
Retailers
> Control suburban developments so
as to:
(i) Meet consumer expectations
while protecting town centres
(ii) Generate tax revenue
> Redevelop town suburbs while
optimising traffic flows
> Tight budgetary constraints restricting
capacity for investment
Local authorities
Low cost retail parks, an appropriate solution
�Shopping centres located just outside towns
�Specific profile for low cost retail parks
> Very low charges
> High yield
• Higher than shopping centres and high street shops
> Low capex
• Reduced maintenance costs
• Immaterial “greening” investments
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€15
/m²
Property charges
7.5%
A vast and fragmented market
�A vast market> 914 medium-sized towns totalling over 25 million
inhabitants(1)
> Higher proportion of the population living in the suburbs
> 3.4 million m² of planned retail parks built in France since 2000 (2)
> Patrimoine & Commerce accounts for c. 5% of this new market
�Fragmented portfolio of assets> Low individual values
> Assets owned by promoters, individuals or small local institutions
> An asset category ignored by major listed real estatecompanies
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(2) Source: CNCC / C&W surveys
(1) Source: INSEE 2007 census (metropolitan France towns of 20,000-200,000 inhabitants)
Source: INSEE/ * metropolitan France
1962 2006
37%
33%
30% Rural areas 18%
28%
54%
Town centres
Suburbs
Breakdown of the French population
+46%
Patrimoine & Commerce, an institutional solution for
the retail parks model ramp-up
Located nationwide
Stable revenues
A tailoredmanagement
solution
Driver of consolidation
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Occupancy rate c. 98%
Tenant turnover < 1%
220,000 m² acquired
since 2010
SIIC
Transparency
Rigour
PATRIMOINE &
COMMERCE
2- Two key transactions
that boost the Company’s
institutional standing
- Predica investment in P&C
- Acquisition of retail park
portfolio
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Predica acquires equity stake
in Patrimoine & Commerce
> 20% stake acquired via a share issue
• Transaction value €47.4m
• Low dilution of NAV (3.0 %)
> Reputed institutional shareholder
> Increase in equity
> Changes in corporate governance
• 2 appointments to the Supervisory Board and
1 new member each for investment, audit and
remuneration committees
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Vergely
family
Duval
family
24.3%
Robbe
family
Public float
20.5%
20.0%Predica
Suravenir
Banque Populaire
Val de France
13.4%
8.1%9.3%
4.4%
Acquisition of a €90m portfolio
> Core target assets in Western France
– Annual rental income: €6.3m
– Average capitalisation rate: 7.0%
– Occupancy rate: 100%
> Brand-new properties
– Average delivery: 2008
> 70% settled in cash and 30% in
P&C shares issued at NAV
> Transaction expanded tenant
base
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Trimax portfolio: Le Mans - Val de Sarthe
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32,485 m² retail park
18 tenants
€3.8m rental income
100% occupancy rate
Trimax portfolio: Le Mans - Val de Sarthe
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Trimax portfolio: Alençon Ouest
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11,919 m² retail park
8 tenants
€1.0m rental income
100% occupancy rate
Trimax portfolio: Arçonnay
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20,780 m² retail park
20 tenants
€1.5m rental income
100% occupancy rate
Land
reserve
Literie
de
Fra
nce
Re
stau
ran
t
La F
arfo
uin
e
Fu
rnitu
re&
living
roo
m
Le Mans
Alençon
PATRIMOINE &
COMMERCE
3- A leading listed real estate
company specialising in retail
parks
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A specialist retail property company for institutions
Assets focusing on retail parks
� Pro forma assets: €602m
� Pro forma rental income: c. €37m*
� Pro forma NAV: c. €280m
� Pro forma LTV: c. 45%
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Retail parks
€424m Offices and
business
€27m
Shopping
malls and centres
€151m
70%
25%
5%
Patrimoine & Commerce
following Trimax
transaction
€602m
Appraisal value excluding transfer taxes and assets held for sale
including Group share of Cherbourg and Studio Prod
* H1 gross rental income x 2
+ Trimax portfolio rental income
A specialist retail property company for institutions
A diversified development pipeline
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Surface area 5,784 m² 100% leased
Tenants
La Rochelle (17) - May 2015
Surface area 7,698 m² 100% leased
Tenants
Annecy Epagny (74) - end 2014
�Committed pipeline c. €90m > Including Epagny, La Rochelle, Cergy
�Identified pipeline c. €100m
A specialist retail property company for institutions
Stock market profile appealing to institutions
� Market track record appealing to institutions
> Capitalised at close to NAV
> Improved liquidity
• Market capitalisation: €265m
• Stock market performance: +52% since Jan 2013
• Daily volumes: +182% since Jan 2013
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� Institutional shareholders
� Debt restructuring towards
REIT’s standards> Bonds
> Dynamic management of
debt
Average daily trading
volumes
12
24
800
600
400
200
15
18
21
Market price
(€)
+52%
Development of an institutional property company,
a low cost retail parks pure player
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Total assets €164m
NAV €59m
Market cap €42m
Pro forma total assets €602m
Pro forma NAV €280m
Pro forma market cap €275m
Total assets x4
NAV x5
Market cap x6
Long-term objectives confirmed
�€1bn total assets by end 2016
�Yield of over 7.0%
�Loan To Value ratio around 50%
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Bourg-en-Bresse retail park
APPENDICES
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Structured and independent corporate governance
�Management ensured by Eric Duval
�Supervisory Board, chaired by Dominique Jouaillec
> 15 members (8 independent*)
� Investment Committee, chaired by Jean-Hubert Moitry
> 7 members (5 independent*)
�Audit Committee, chaired by Christian Louis Victor
> 4 members (1 independent*)
�Remuneration Committee, chaired by Humbert Le Fresnoy (Arkea Group)
> 5 members (3 independent*)
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* Pursuant to the Middlenext Code, Predica is not considered as independent
Summary balance sheet
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€m 30/06/2014 31/12/2013 30/06/2013
Investment properties 490.2 473.7 446.8
Assets held for sale 3.4 4.9 35.3
Cash 6.8 18.3 15.6
Other 47.9 51.1 51.4
Total assets 548.4 547.9 549.2
Equity, Group share 221.9 224.8 215.2
Minority interests 12.4 12.3 11.6
Debts 255.8 257.7 261.9
Other 58.3 53.0 60.5
Total liabilities and equity 548.4 547.9 549.2