Sonae Sierra

Reasons for SSC

Challenges faced

Services scope

IT systems

Centralization process

Trends

SHARED SERVICE CENTRE

MORE THAN 140 AWARDS

International SC expertise and experience developed over 25 years

SONAE SIERRA

20 ICSC Awards for best centres31 ICSC Marketing Awards3 MIPIM Awards for best centres1 Procos for best developer6 AECC21 Media Awards for best developer2 European Property Awards1 Green Thinker Award3 European Risk Management Award1 Sustainable Energy Europe Award

VisonTo be the leading international shopping centre specialist.

MissionSonae Sierra is the international shopping centre specialist that provides ultimate shopping experiences to customers and creates outstanding value to shareholders, investors, tenants, communities and staff, while contributing to sustainable development.

ValuesTrust and IntegrityFrugality and EfficiencyAmbitionPeople at the centre of our success Cooperation and Independence

WHO WE AREWe develop and invest in sustainable retail assets and provideinvestment, development and property management servicesfor clients in geographies as diverse as Europe, South America,North Africa and Asia, while creating shared value for ourbusiness and society

2

80

SHOPPING CENTRES MANAGED AND/OR LEASED45 OWNED35 FOR THIRD PARTIESGLA MANAGED > 2,2 million m2

11PROJECTS UNDER DEVELOPMENT /ON PIPELINE7 OWNED4 FOR THIRD PARTIES

SONAE SIERRA*

24

34

67

67

92

440

443

Romania

Italy

Germany

Others *

Spain

Portugal

Brazil

* Algeria, China, MoroccoNetherlands, Russia, Turkey, Greece

Employees

1.167

25

328

623

779

1.138

3.066

Romania

Italy

Spain

Germany

Brazil

Portugal

OMV owned assets(millions €)

€5.958m

* December 2015 3

BUSINESSVALUE

Potentialprofitcenter

Salary differencesShare:• “Best practices” • Management and structure costs• Specialized resources

Faster and higher quality response to the change due to cumulative know how

ECONOMIC BENEFITS

Cut Costs

Economies ofscale

Efficiency

REASONS for SSC

Servicequality

PROCESSESINTEGRITY

Flexibility

Company'score

competencies

4

� PROCESSES MIGRATION – WORK SHADOWING (3 months)

� CULTURE

� RESISTANCE TO CHANGE

� TEAM REORGANIZATION SSC (Shared Services Center)/LBO (Local Back Office)

� PROCESS STANDARDISATION, application of best practices limited by technology (several SAP clients)

� HUMAN RESOURCES• Native resources with technical know how• Linguistic competences• Costs and quality

MIGRATION

CHALLENGES

� EFFICIENCY • Cost• Quality

� HUMAN RESOURCE MANAGEMENT• Retention (10% -14% rotation)• Offer from other SSC (1)• Enrichment functions• Participation in projects• Rotation within the company• Company culture• Variable salary

(1) According to AICEP there are about 450 companies in the SSC sector in Portugal, eg THE PHONE HOUSE, ADIDAS, CISCO, 3C, SOLVAY, IBM BTO, NOKIA, SIEMENS, MICROSOFT, SANTANDER, FUJITSU SERVICES, REDITUS, HP, NetJets, SAP , PT PRO, ALTRAN, BNP PARIBAS

OPERATION

5

GERMANSPANISHFRENCHGREEKENGLISHITALIANPORTUGUESEROMANIANRUSSIANTURKISHUKRAINIAN

LANGUAGES

11LANGUAGES SPOKENFLUENTLY

13%EMPLOYEE HAS AFOREIGN MOTHERLANGUAGE

37%EMPLOYEE DOMAIN OF ASECOND LANGUAGE(Other than English / Portuguese)

CHALLENGES

6

� Start in 2008� Finance scope� Focus in Europe� Multifunction� Different geographical

areas, with a common management, reporting to CFO

� Organization by function / country / business

� Limited use of SLA / Prices for Internal benefits

ACCOUNTINGProduce IFRS and LGAAP accountsSupport IFRS accounts audit

CONTRACT MANAG. & INVOICINGManagement contracts and issuance of customers invoices

LISBON

SCOPE

FINANCE & TREASURYManagement of accounts payable and suppliers payment

COLLECTIONS REPORTINGCollections reports

MAIA

7

Spain

1.278 Contracts21 Companies

Portugal

3.721Contracts28 Companies

Germany

1.307 Contracts15 Companies

Romania

85 Contracts7 Companies

Greece

11 Contracts3 Companies

Algeria

84 Contracts

Italy

430 Contracts9 Companies

6.916 Contracts

83 Companies

€4.820m OMV owned

assets (millions €)

SCOPE*

72 Employees

1

2

16

23

30

Direction

Support IT Projects

Cont.Manag.&Invoicing

Finance & Treasury

Accounting

* December 2015 8

LOCAL BACK OFFICE

� Suppliers invoices scan(digitalize and send invoices for central Processing)

� Physical Archive of invoices

� Prepare statutory accounts according to LGAAP and manage external LGAAP accounts auditors works (for Portugal these functions are done by the SSC)

ACCOUNTING

SCOPE

SHARED SERVICE CENTRE

� Book-keeping of suppliers invoices, petty

cash and employees expenses notes,

according to the local fiscal rules

� Manage Suppliers and Chart of Accounts

master data

� Manage the fixed asset master data

(Acquisition, Depreciation, Sales)

� Perform the monthly close of accounts on

IFRS and LGAAP

� Ensure relationship with Auditors for IFRS

accounts

� Report IFRS accounts to the consolidation

� Process Owner for several SAP accounting

modules

9

LOCAL BACK OFFICE

� Interfacing with Shopping Centres partners

� Download, print and send invoices to tenants

SHARED SERVICE CENTRE

� Create contracts and the relevant

amendments in system;

� Update the financial conditions of contracts

• Rents - CPI/increase established by

contract

• Common charges - CPI / Budget

� Invoicing tenants according with the

contracts/amendments (Rents, Common

Charges, ToR, Discounts, Utilities…);

� Update tenants master data

� Create SEPA mandates

� Crossing information – Information send by

the SCs vs. the information in the system

SCOPE

CONTRACT MANAG. & INVOICING

SSC - Information Reported• Accruals Reports - Based in SAP and in the

occupancy report• Invoicing Report - (Legal department and

Shopping Center) • Active contracts• Warranties in system• Tenancy Schedules (Rent Roll)• Files to be upload in Third Parties shopping

centers report systems

10

LOCAL BACK OFFICE

� Suppliers attendance

SHARED SERVICE CENTRE

� Manage payments and supplier accounts

� Bank movements and reconciliations

� Manage bank related matters

� Tenant retentions control

� Gift Card control

� Collection reports and post tenant

receivables

� Manage financial indebteness (including

intercompany)

SCOPE

SSC - Manage 342 Bank Accounts in 11Countries

• Netherlands 44• Luxembourg 23• Portugal 93• Spain 49• Germany 48• Italy 18

FINANCE & TREASURY

• Greece 16• Romania 42• Croatia 1• Hong Kong 4• Morocco 4

11

LOCAL BACK OFFICE

� Collections (contact tenants overdue payments and negotiate payments with tenants, last check point of invoices)

� Report to Partners/ Investors/ Tenants and 3rd parties

� Dunning Letters

SCOPE

COLLECTIONS

SHARED SERVICE CENTRE

� Process and management of receivables

� Reporting concerning receivables

� Process Owner and Key User of C2C

12

SAPFI, CO, AP, AR, RH, MMReal EstateWorkflow

Saphety

Purchase to PayExpenses Notes - EmployeesE-invoicing - costumers and suppliers EDI (Electronic data interchange) – costumers and suppliers

OCR (Optical CharacterRecognition) – suppliersTMS and Signature (Finance&Treasury)

Other

IT Systems

13

COSTUMERS

UINIFICATIONOF THE

MASTER DATA

SUPPLIERSDOCUMENT

TYPESPECIAL GL

CODES

PAYMEMT TERMS

WITHOLDING TAX CODES

VAT CODESCHART OF ACCOUNT(1)

ANALITIC STRUCTURE(2)

ACCESS MANAGEMENT PROJECT (3)

(1) Each country has its own chart of accounts to report

to fiscal (Alternative Chart of Accounts), all SAP

reports can be obtain on both chart of accounts.;

(2) Profit Centre, Cost Centre, Orders, Division;

(3) SAP access profile definition

SAP upgrade to version ECC6(2014-2015)Convert 6 SAP clients to a SINGLE SAP CLIENT

IT Systems

14

Review processes and adopted the "best practices” in all countries;

Easy to maintain and update SAP master data;

Easy to implement IT projects on the several countries ;

Easy to access and compare information cross countries;

Flexibility in HR management and risk reduction.

SAP CLIENT UNIFICATION

IT Systems

15

6th stage

• Creation of SSC

• Team organization

• Companies

Migration

• Treasury full centralization

• Project P2P (PT)

• Project C2C

• Companies migration (cont)

• Companies liquidation &

merger

• Payroll transfer to HR

• Fiscal invoice validation

• External Service Providers

reduction

2007/08/09 2010/11/12 2013/14

• Sierra single chart

of accounts

• SAP Phenix

• Collection

Reporting bookings

• Tax and Corporate

Compliance

Control

• Suppliers

attendance (GER)

1st stage

2nd stage3rd stage

• Expenses Notes

processing (All)

• Project P2P (SP)

• Direct debit

campaign (GER

and IT)

• Credit Card

Reporting (All)

2015

4th stage• Preparation local GAAP

Statutory Accounts

(GER)

• CIT quarterly

calculation (GER & SP)

• Electronic-invoicing

(GER & IT)

• Project P2P (GER & IT)

• Suppliers attendance

(SP)

• VAT statements

preparation (SP & GER)

5th stage

2016

• Preparation local

LGAAP Statutory

Accounts (SP & IT)

• CIT quarterly

calculation (IT)

• Relation with local

External Auditors (SP,

GER & IT)

• Suppliers attendance

(IT)

• VAT statements

preparation (IT)

2017

Centralization

16

Employees SSC & LBO

2010-2015

Employees• Decreases 5%;• Decreases % LBO

Costs• Decreases 9%;• Average savings per

year higher than€500K

Contracts/FTE• Higher than the 2007

"best performance"

Ratio on 2007Portugal 58Spain 42Italy 36Germany 36Grécia 32

Contracts

Costs SSC & LBO (K€)Centralization

Centralization

17

GREATER COMPLEXITY / GREATER RISK

MULTIFUNCION

Higher value added processes, eg:• LGAAP Statutory Accounts

reports;• Tax - VAT, CIT and deferred

taxes calculation

NEW GEOGRAPHIES

• Morocco - reason: quality information for management

• Global Shared Services Survey Results, Deloitte 2013: 36% SSC only provided services to a country / 70% to a continent

OUTSOURCING

Hybrid models, eg: • Morocco with new model,

accounting produced in SSC / Tax Compliance assured by an external entity reporting directly to the SSC.

LOCAL

By 2017, it will only remain on the LBO• Management of local taxes• Operational Collections, Logistic,

Treasury and Payroll tasks• Relationship with local stakeholders

(eg, tax authorities)

THIRD PARTIES

Have additional requirements to service provide: Aachener, UnionInvestment, Commerz Real, DeutschBank, Claren Immobiliare, Immobiliare Italo Romena, CGD

CHALLENGES

• Quality• Efficiency• Human resources management• FLEXIBILITY

TREND

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