SMALLCAP EVENT 14&15 April 2021 - MRM Invest
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SMALLCAP EVENT 14&15 April 2021
Contents 1 Introduction 2 2020 in brief 3 Activity review 4 2020 consolidated financial statements 5 Outlook
1 Introduction
MRM, a pure-play retail REIT
161 M€
Portfolio
A diversified and resilient portfolio of A solid financial position value
local retail assets (excl. tt)
SIIC status (French REIT)
A performing brand mix adapted to 9
market trends: discount, food and A solid shareholder base and long-term Asset
everyday needs commitment of SCOR, majority lines
shareholder (holding 59.9% of the share
An agile and expert management team capital since 29 May 2013) 9,1 M€
Annualised
Asset value-enhancement plan initiated Regular distribution to shareholders net rents
in 2013 and currently being finalized: (exceptional situation in 2020)
significant increase in net annualized 41,4%
rents Net LTV
ratio
2020 Key figures
SMALLCAP EVENT 14&15 April 2021 4
A portfolio of retail assets
In Ile-de-France and regions
1. Halles du Beffroi
7,400 sqm
Amiens 7. 2 rue de l’Étape
1 2,800 sqm
Reims
2. Mixed 7
development
2
Carré Vélizy 3
8
4
11,600 sqm 8. Passage de
Vélizy-Villacoublay 6
5
la Réunion
9
6,000 sqm
3. Sud Canal
Mulhouse
11,600 sqm
St-Quentin-en-Yvelines
4. Aria Parc 9. Valentin
12,800 sqm shopping centre
Allonnes 6,700 sqm
(including extension)
Besançon
5. Gamm Vert
Portfolio
22,000 sqm
Centre region 6. Passage du Palais Shopping centres
and IDF 6,800 sqm
Tours Stand-alone properties
SMALLCAP EVENT 14&15 April 2021 5
A diversified portfolio
A variety of retail asset types
Breakdown by value
6% Garden centres As at 31.12.2020
6 shopping centres and
3 stand-alone properties 23% Shopping galleries 40% High street store
Mid-sized assets
In city centres or on the outskirts
of medium-sized towns 3% Logistics
Total floor area: 87,700 sqm
6% Retail parks
16% Shopping centres
6% Office
SMALLCAP EVENT 14&15 April 2021 6
Overview of strategy initiated in 2013
Three strategic priorities
Refocusing of the portfolio Value-enhancement Dynamic
on retail properties of retail assets asset management
Gradual withdrawal Value-enhancement plans Letting of available space
from the office property segment developed on and work to reduce costs
completed in early 2019 asset-by-asset basis
Optimised terms for asset sales Adapting to new retail trends In-house asset management: tighter
(capex and letting of space) Extension/refurbishing/updating control of operations and costs
Total amount of asset sales: €132m, programmes Letting of renovated and newly
more than 9.8% above appraisal Programmes rolled out over the created space
values as at 30 June 2013 taking period from 2016-2021 Tenant rotation
account of capex
Adapting the retailer mix
Net cash from asset sales: €77m to consumers’ expectations
1 Amount excluding transfer taxes
SMALLCAP EVENT 14&15 April 2021 7
2016-2021 investment plan nearing completion
Reinforced assets attractivity to meet consumers’ expectations
Concerns 7 of the 9 retail property lines in the portfolio
All projects have been launched on a phased basis since 2016
6 projects completed: Aria Parc, Carré Vélizy,
Halles du Beffroi, Passage du Palais, Sud Canal, Passage de la
Réunion, Sud Canal
Total CAPEX
85% €3,9 M still to be paid
15% out as at 31.12.2020
Upgrading Extension /
Completion of the works
works rénovation
at Valentin shopping
+6,900 sqm
€35.5m center
additional area*
*of which 1,500 sqm acquired in Aria Parc (Allonnes) in 2017
SMALLCAP EVENT 14&15 April 2021 8
Success in the refocusing strategy and the 2016-2021 plan
Properties repositioned and updated with a retailer Annualised net rents (Retail assets)
mix reflecting sector trends and convenience €m
positioning 10.0
9.1
8.2 8.5
Increase in annualised rental income: €10m target with 7.4 +7%
+4%
an occupancy rate of 95% (on the basis of the current +11%
portfolio, i.e. excluding acquisitions or asset sales)
Proof of MRM’s asset management expertise
01.01.2018 01.01.2019 01.01.2020 01.01.2021 Target
Current
portfolio
76% 84% 88% 87% 95%
Physical occupancy rate
SMALLCAP EVENT 14&15 April 2021 9
Healthy financial position
Average 1,92%
1,83%
cost of debt
1,68%
1,58% 1,58%
41.0% 41.4%
Group 38.6%
net LTV ratio 35.9% 36.8%
31.12.2016 31.12.2017 31.12.2018 31.12.2019 31.12.2020
SMALLCAP EVENT 14&15 April 2021 102 2020 in brief
Indicators and operations hold up well in 2020
Despite the public health crisis
A year marked by the public health crisis Resilient assets
Up to 5 months of store shutdowns, depending on the sector Limited fall in portfolio value
Tenant support measures allocated on a case-by-case basis: • Appropriate positioning adjusted: proximity, discount
• €1.4 million in write-offs of rent receivables • Favourable merchant mix: food, household
equipment, services...
• i.e. 1.7 months of rent
Management indicators hold up well
• Occupancy rate increase in the 2nd half of 2020
Healthy financial position
• Annualised net rents up
Net operating cash flow stable despite the effects of the • Recovery rate of 90%1 in 2020
crisis
Initiatives to support MRM’s liquidity
• Withdrawal of payout to shareholders in respect of
the 2019 financial year
Investment plan launched in 2016 now nearing
• Postponement to June 2022 and June 2023 of
contractual repayments initially scheduled for Q2 completion
and Q3 2020, as part of the rescheduling of bank Extension of the Valentin shopping centre: phased
debt delivery through to 30 June 2021, depending on
Debt under control and cash of €10 million at end- developments in public health conditions and on letting
December 2020
1 Taking account of rent write-off agreements signed
SMALLCAP EVENT 14&15 April 2021 12MRM has reaped the benefits of its retailer mix
Limited exposure to the retail sectors under most pressure
Sector breakdown1 at 31/12/2020
10% as % of annualised gross rents
Vulnerable sectors Logistics
3% Household
Activity areas affected by
structural difficulties Offices equipment
Beauty
excluding
exacerbated by the public
3% 8% Discount 63%
health crisis (ready-to-wear,
beauty) Personal goods 17% Resilient activities
7% Essentials (food, pharmacies,
Discount
Recreation opticians), services, phones/IT
Household
and activities that held up well
15% (fitness) equipment in 2020 (discount brands and
6% 13% household equipment, garden
Activities suffering Foodservice centres, pet shops, bookshops)
temporary effects 9% Food
Sectors affected by the crisis
but customer interest intact Health 11%
Culture,
(bars, restaurants, fitness 4% gifts and
Services
centres)
10%
leisure
8%
1 CNCC classification
SMALLCAP EVENT 14&15 April 2021 13Resilience of indicators
Net operating cash flow stable, with limited fall in appraisal values
Annualised Net operating
+6.8% 9.1 2.96 2.95
net rents 8.5 cash flow
€m €m -0.4%
01.01.2020 01.01.2021 2019 2020
Portfolio 168.1 Net LTV ratio 41.4%
161.0 38.6%
value1
% of portfolio value
€m
-4.1% excl. transfer taxes
(l/l2)
31.12.2019 31.12.2020 31.12.2019 31.12.2020
1 Based on valuations, excluding transfer taxes 2 Like-for-like, or -4.2% at current perimeter
SMALLCAP EVENT 14&15 April 2021 143 Activity review
Activity disrupted by closures
and legal restrictions
MRM tenants open
As % of annualised gross rents Restaurants
remain Restaurants and fitness
100% closed 100% centres remain
closed
Opening
93% limited to
86% “essential”
2020 average: 83% stores, where
70%
applicable
53%
Opening limited Closure of centres 58%
to “strictly >20,000 sqm (usable
essential” stores area), with access 51%
Opening limited to to food and
“essential” pharmacy stores
stores until 27
November
27%
Jan. 20 Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Jan. 21 Feb. March April
17 March – 30 Oct. – 8pm 6pm 18 March – Since
11 May 15 Dec. curfew curfew 3 April 3 April
1st lockdown 2nd lockdown Regional National
lockdowns lockdown
SMALLCAP EVENT 14&15 April 2021 16Activity management in 2020
In the context of the public health crisis
Severe restriction of retail activity Tenant support Recovery
Restrictions applied to non-essential Case-by-case analysis of the position of Temporary suspension of rent recovery
shops from 17 March those tenants legally required to close under the 1st lockdown
their stores or whose activity levels fell
Two periods of legal closure in 2020 significantly during lockdown periods Return to process of rent recovery when
due from 3rd quarter of 2020
83% of stores remained €1.4 million in rent Recovery rate
open in 2020 receivables written off of 90%2 of rent
(based on annualised in 2020 due in 2020,
gross rents) i.e. 1.7 months of rents after taking account of
rent write-off agreements
already signed
Retail activity restricted by health
measures (social distancing, maximum
customer numbers, etc.) 1st lockdown €1.0 million agreed
Rental activity was particularly hard hit in 2nd lockdown €0.4 million in provisions
the first half
1 Portfolio average over the year, based on 2 At 31 December 2020
annualised gross rents at 1 January 2020
SMALLCAP EVENT 14&15 April 2021 17Dynamic letting activity
Despite the public health crisis
Occupancy rate
19 or
leases1 signed €1.0 million New signatures included Physical (POR) Financial (FOR)
% of floor space as % of market rental values
in 2020 annual rent discount brands, which drive
footfall or strengthen the mix Incl. Valentin Incl. Valentin
extension extension
88% 87% 87% 87%
82% 84%
Annualised net rent Valentin
€ million shopping centre
9.1
8.2 8.5
7.4
31.12. 30.06. 31.12. 31.12. 30.06. 31.12.
Passage 2019 2020 2020 2019 2020 2020
du Palais Aria Parc
01.01. 01.01. 01.01. 01.01. At 31.12.2020, excluding the Valentin shopping centre extension,
2018 2019 2020 2021 the POR and FOR were 89% and 88% respectively
1 Newor renewed leases, excluding contracts
renegotiated as part of measures to support
tenants
SMALLCAP EVENT 14&15 April 2021 18Portfolio value
Reduction in value limited to 4.1%1 despite the public health crisis and its economic consequences
CAPEX Change in portfolio value
Mainly related to the Valentin €m
shopping centre
CAPEX
168.1 +3.1
Negative change in fair value 161.0
Contrasting performance depending Disposal
on property -0.2
Fair value
Increase in capitalisation rates -10.0
Increase in letting periods for vacant
space and rent-free periods for
tenants
31.12.2019 31.12.2020
1 On a like-for-like basis or -4.2% at current perimeter (including the disposal of a small
vacant retail property for €0.2 million in September 2020)
SMALLCAP EVENT 14&15 April 2021 194 2020 Consolidated financial statements
Net rental income
Up 4.3%
€m 2020 2019 Change
Gross rental income 9.5 9.1 +4.2% — Billed rents
Non-recovered property
expenses (1.8) (1.8)
Net rental income 7.7 7.3 +4.3%
Increase in billed rents
+ Effects of new leases and, to a lesser extent, indexation
Tenant support measures in 2020
- €0.3 million of spread rent incentives: impact of -€49k in 2020
1 See page 15
SMALLCAP EVENT 14&15 April 2021 21Net operating cash flow
Good performance given the public health crisis and its economic consequences
€m 2020 2019 Change
Net rental income 7.7 7.3 +4.9%
— €1.0 million for 1st lockdown
Tenant support measures* (1.4) -
— €0.4 million for 2nd lockdown
Operating expenses (2.3) (2.5) -7.7%
Other net operating income
(0.2) (0.7)
and expenses
EBITDA 3.8 4.2 -9.8%
Net gains/(losses) on disposal of assets 0.4 -
Net cost of debt (1.2) (1.2)
Net operating cash flow 2.95 2.96 -0.4%
*Accounting treatment of rent receivable write-offs detailed in appendixe
SMALLCAP EVENT 14&15 April 2021 22Active debt management in 2020
Next significant repayment date deferred to mid-2022
Financing comprising bank mortgage loans Debt maturity schedule
€m
Total outstandings of €76.8 million at 31 December 2020
91% of debt at fixed rate
31.12.2019 31.12.2020
Average cost of debt stable at 1.58%
68.7
Maturity of 80% of outstanding bank debt 53.5
extended by 6 months
21.2
2.3 5.8
2.4
2020 2021 2022 2023 2020 2021 2022 2023
SMALLCAP EVENT 14&15 April 2021 23Net Asset Value
Impact of fall in asset value
EPRA NDV1 Change in EPRA NDV
€m €m
-7.2%
NOCF
2020
100.3 100.3 +2.9
93.1 93.1
-10.0 -0.1
Δ JV Other
2020
31.12.2019 31.12.2020 31.12.2019 31.12.2020
€2.30/share €2.13/share
1 EPRA Net Disposal Value (EPRA NDV) - Liquidation NAV which reflects the shareholder's share of net assets in the event of disposal. This indicator replaces the previous EPRA NNNAV.
SMALLCAP EVENT 14&15 April 2021 245 Outlook
Valentin shopping centre redevelopment/extension
Total floor area of gallery increased to 6,700 sqm
Excellent connections with the north of Letting1:
Besançon • Existing or signed leases 78%
Catchment area of 250,000 people • Including agreements
Gallery adjacent to Carrefour hypermarket, the finalised but not signed 87%
Redevelopment
leader in the Besançon area
1,000 sqm
Total floor area: 24,000 sqm GLA (gallery + • Delivery to tenants:
hypermarket) Extension
• First deliveries in Q4 2020 (incl.
+2,600 sqm
Young and family-centred clientele, AB+ (27%) Action)
• Delivery of remaining shell units
spread out until June 2021
€3.9m still to be spent as at
Expected visitor 31.12.2020
numbers after Finalisation of work on parking and
opening tree-planting: mid-2021
>3 million
Opening date depending on public
or +20% vs 2019
health conditions
1 As % of total floor area of the gallery including extension
SMALLCAP EVENT 14&15 April 2021 26Acceleration in retail trends
Changes in working Ecological and social
environment awareness
Polarisation of
Savings / Spendings
the society
E-commerce/
Convenience
Omnichannel
SMALLCAP EVENT 14&15 April 2021 27Setting up a formal ESG policy
Integration of Environmental, Social and Governance issues
Ramp-up of measures taken since 2015 Further steps undertaken in 2020
Reduce energy and water consumption as well as the Climate Plan adopted by the Board of Directors
quantity of waste produced Formalised strategy and operational action plan with
Improvement in equipment and automation of heating, targets set by 2025
ventilation and air conditioning systems Development of a structured procedure for monitoring
Updating of equipment and automation of lighting systems energy consumption
Creation of an ESG committee within the Board of Directors
Environmental appendix included in leases
Reciprocal provision of information about equipment as Involvement of all internal and external parties concerned
well as water and energy consumption
Local footprint / territorial development Exhaustive review of initiatives carried out
Free premises provided to local associations, local artist Completed in cooperation with the property managers
exhibitions in cooperation with local art schools, distribution
Basis for the definition of the strategy and implementation
of local newspapers, neighborhood announcements
of an action plan in 2021
Support the H'up Entrepreneurs association (entrepreneurs
with disabilities)
2020: Climate Plan
adopted by the Board of Directors
SMALLCAP EVENT 14&15 April 2021 28Conclusion
Operating priorities Preparing for the future
Situation still uncertain due to the public health crisis Further opportunities of value-enhancement of
the existing portfolio
Since 1 February 2021: new period of legal restrictions
on retail activity for a period of at least 1 month Evaluation of opportunities for asset acquisition
• Announcements relative to government support for and disposal
the retail sector
Taking account of sector trends
Finalisation of outdoor works of Valentin shopping
centre
Continued letting of available space
• MRM maintains its annualised net rent target of
over €10m (assuming a physical occupancy rate of
95% of the current portfolio and excluding Dividend payment to shareholders
acquisitions or disposals) Annual General Meeting to be held on 24 June 2021
Launch of work relating to the refinancing of debt Announcement in May of the decision on a possible
due in mid-2022 dividend payment proposal, depending on the
Deployment of the Climate Plan adopted by MRM evolution of the context
SMALLCAP EVENT 14&15 April 2021 29Appendices
4 city-centre shopping centres
Passage 6 800 sqm, Tours Sud Canal 11,600 sqm, St-Quentin-en-Yvelines
du Palais Street-level shopping centre, located in the
main market square of Montigny-le
Excellent accessibility in the city centre Bretonneux
18 stores including 1 supermarket Partially redeveloped in 2016
Refurbished in 2019 Refurbishment completed in 2017
Letting of available Fully let with
units in progress convenience offering
Halles 7,400 sqm, Amiens Passage 6,000 sqm, Mulhouse
du Beffroi de la Réunion
Historic city centre Located in the historic heart of the city
1 medium-sized unit and 24 stores 2017: redevelopment of 1st floor to include
Refurbished and modernised in 2016-2017 a fitness studio
Letting of available units in progress Letting of available units in progress
SMALLCAP EVENT 14&15 April 2021 312 suburban shopping centres
Valentin 6,700 sqm
Besançon Aria Parc 12,800 sqm, Allonnes
shopping centre
Shopping gallery attached to a Carrefour Retail park near Le Mans
hypermarket, market leader in the Acquisition of a 1,500 sqm lot /
catchment area Fully owned site since 2017
Shopping gallery refurbished in 2017 2017/2018: completion of the partial
Extension and partial redevelopment redevelopment of vacant space and
project launched in 2018 creation of a 3,300 sqm medium-sized
unit, the lease for which was
Number of visitors expected to rise by 20%
terminated in January 2020
to over 3 million per year
Opening in 2020 of a clearance stock
Completion of works in 2021
specialist under a short-term lease
SMALLCAP EVENT 14&15 April 2021 323 stand-alone properties
2 rue de l’Étape 2,800 sqm, Reims Portfolio of 22,000 sqm,
Centre and
Central retail district garden centres Paris regions
Iconic high street store 4 100 sqm*, 9 garden centres 12,800 sqm, Allonnes
Single-tenant medium-sized unit Besançon 1 logistics platform
Re-let in 2018 Garden centres leases renewed in 2019
Carré Vélizy 11 600 sqm,
Vélizy-Villacoublay
Mixed-use property
An outstanding location
Retail space extended in 2017 and fully let
Office space refurbished as it is vacated
Letting of office space in progress
SMALLCAP EVENT 14&15 April 2021 33Impact of tenant support measures taken in 2020
in response to the public health crisis
Accounting treatment of rent receivable write-offs
Tenant support measures Impact on Income Statement
1st lockdown
Impact on gross rental income spread over committed
Write-off in rents with counterparts in duration of leases
modification to lease terms1 €0.3 million 2020 = -€49k
From 2021 to 2028 = around -€30k to -€60k per year
Write-off in rents with no modification to lease
terms1
€0.7 million Recorded as an operating cost in 2020
2nd lockdown
Provision for impairment of rent receivables recognised
Estimated rent receivable write-offs €0.4 million in 2020 operating costs
-€1.1 million recognised
Total €1.4 million in 2020 operating income
1 Counterparts modifying the terms of leases in the sense of IFRS 16 (e.g. extension of lease
duration, or waiver of termination rights at the next three-year break option date)
SMALLCAP EVENT 14&15 April 2021 34Operating income
before disposals and change in fair value
Stable in 2020
Impact of tenant support measures on
€m 2020 2019 Change operating expenses in 2020
Net rental income 7.7 7.3 +4.3%
— Provisions: €0.6 million
• €0.2 million in write-offs of rent
Operating expenses (2.3) (2.5) -7.7%
receivables, relating to the 1st
2 lockdown and not covered by
Reversals of provisions and impairment 1.9 0.3
protocols at 31.12.2020
1
• €0.4 million: estimate for 2
Provisions (1.3) (2.1) nd lockdown
2
Other operating income and expenses (2.2) 0.7 1 — Other operating expenses:
€0.5 million in write-offs of rent
Operating income before disposals
3.8 3.9 -0.9% receivables relating to 1st lockdown
and change in fair value
without changes to lease terms
NB: impact of non-opening of 3,300 sqm medium-sized unit in Allonnes in 2019
1 2019: recognition of income relating to contractual penalties invoiced to the tenant and impairment of the
corresponding receivable.
2 2020: reversal of the provision for impairment booked in 2019 and write-off of contractual penalties, as set out
in the amicable lease termination agreement signed in January 2020 (with payment to MRM of a termination
compensation).
SMALLCAP EVENT 14&15 April 2021 35Net income
Affected by the drop in appraisal value
€m 2020 2019 Change
Operating income before disposals and 3.8 3.9 -0.9%
change in fair value
Net gains/(losses) on disposal of assets 0.4 (0.1) — Balance of the sale price of Urban in H1 2020
Change in fair value of properties (10.0) 0.8 — Reduction in value of properties in 2020 after
taking account of CAPEX
Operating income (5.8) 4.6
Net cost of debt (1.2) (1.2) 0.0% — Stable net cost of debt
Other financial income and expense (0.2) (0.2)
Net income before tax (7.2) 3.2
Income tax - -
Consolidated net income (7.2) 3.2
SMALLCAP EVENT 14&15 April 2021 36Healthy financial position
Simplified balance sheet
31.12. 31.12. 31.12. 31.12.
€m 2020 2019 €m 2020 2019
Investment properties 161.0 167.9 Equity 93.9 101.1
Assets held for sale - 0.2 Bank debt 76.8 77.1
Receivables and other assets 8.2 7.6 Other debt and liabilities 8.7 9.8
Cash and cash equivalents 10.2 12.3
Total assets 179.4 188.0 Total equity and liabilities 179.4 188.0
Change in net debt Net LTV ratio
€m Cash % of portfolio value excl. transfer taxes
Drawdown outflow
Others
64.9 +0.9 +0.1
+2.1 66.6
41.4%
Amortisation
38.6%
-1.4
31.12.2019 31.12.2020 31.12.2019 31.12.2020
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