2020 PRE-CLOSE Presenters 2020 Tomasz Trzso Micha wierczyski - - PowerPoint PPT Presentation

PRE- CLOSE

2020

Presenters

PRE-CLOSE 2020

Pre-close 2020 | Presenters | (2)

Tomasz Trzósło

Chief Executive Officer

Michał Świerczyński

Member of the Board Asset Management

Jacek Bagiński

Chief Financial Officer

Pre-close 2020 Business and COVID-19 update

Agenda

Financial update Operational update Outlook & guidance

Pre-close 2020 | Agenda | (3)

Acquisitions update

Business and COVID-19 update

TOMASZ TRZÓSŁO CEO

Pre-close 2020 | Business and COVID-19 update | (4)

Pre-close 2020 | Business and COVID-19 update |

Limiting the impact of COVID-19 and taking a proactive approach

Business actions taken

Short term / immediate actions:

• Liquidity focus
• Cost saving programme (completed)
• Heavy tenant renegotiations programme (mostly

completed)

• Use of available governmental support programmes
• Significant involvement in government discussions &

new retail landlord organisations (Group 305 and Polish Council of Shopping Centres)

(5)

192.1 10.5 49.6 17.4 160.7 4.1 25.3 238.7 32.5 39.3 246.7 58.9 305 24.2 60.8 12.6 31.3

Poland one of the lowest number

• f cases in Europe

Europe – COVID-19 map

Pre-close 2020 | Business and COVID-19 update | (6) 1.5

Poland case numbers are falling in line with rest of the Europe

As of 23 June 2020 Reported in thousands

Pre-close 2020 | Business and COVID-19 update |

Malls open 28 May Malls open 15 June

Swift return to normal

Defrosting the Polish economy

Lockdown 14 March Lockdown From 22 March GERMANY Lockdown from 16 March Lockdown from 14 March Stage 1 From 20 April Stage 2 From 4 May Stage 3 From 18 May Stage 4 From 30 May Malls open 20 April

Malls open POLAND

ROMANIA SPAIN

(7)

Food courts Entertainment & fitness

• pened on 6 June

Pre-close 2020 | Business and COVID-19 update |

Quick economic response

COVID-19 UPDATE

Nearly € 70 billion of stimulus Stimulus amounted to approximately 15% of Polish GDP Key objectives of the support programmes

I. Support jobs II. Ensure business liquidity III. Promote economic activity Anti-crises shield – 31 March 2020 Financial support programme amounting to € 47 billion and consisting of 5 pillars I. Employee job protection II. Business support III. Health care

• IV. Financial system support

V. Public investments Financial shield – 8 April 2020 Aimed primarily at companies amounting to € 22 billion I. Micro companies II. SMEs III. Large companies

(8)

• 0.3
• 0.6
• 0.9
• 0.3
• 1.3
• 0.4
• 0.5
• 0,6
• 1.5
• 0.1
• 0.5
• 0.9
• 1.2
• 0.9
• 0.1
• 0.6
• 0.8
• 0.9
• 0,9

GDP growth forecast 2020 – 2021 (%)

European and UK macro outlook

EU15 average

• 0.7%
• 0.3

0.2

• 0.4

Pre-close 2020 | Business and COVID-19 update | (9) Source:

European Commission forecasts & Focus Economics

GDP growth forecast 2020 – 2021 (%)

European and UK macro outlook

Poland expected to be

• ne of the least

impacted economies in the next 18 months

• 0.1%

Pre-close 2020 | Business and COVID-19 update | (10)

• 0.3
• 0.6
• 0.9
• 0.3
• 1.3
• 0.4
• 0.5
• 0,6
• 1.5
• 0.1
• 0.5
• 0.9
• 1.2
• 0.9
• 0.1
• 0.6
• 0.8
• 0.9
• 0.4

Source:

European Commission forecasts & Focus Economics

• 0,9
• 0.3

0.2

Pre-close 2020 | Business and COVID-19 update |

5 10 15 20 25 30 35 100 200 300 400 500 600 700

Purchasing power per capita (EUR/year × 1000) Density (m²/1000 residents)

Density Purchasing power

Source:

JLL, Q4 2018; MBR, 2017

Shopping centre stock per 1,000 inhabitants

Western Europe 279 m²

Average density (GLA per 1000 residents): All countries 221 m² Western Europe 279 m² Eastern Europe 159 m² Poland 265 m²

(11)

Pre-close 2020 | Business and COVID-19 update |

Source:

Google COVID-19 Community Mobility Report

(12)

Google Mobility Trends for Retail and Leisure

• 10
• 20
• 30
• 40
• 50
• 60
• 70
• 80
• 90
• 100

Recovery phase COVID-19

Easing of lockdown measures supports recovery of footfall

Mobility compared to baseline pre-COVID-19 Weekly avarage: 30 March to 05 April Weekly avarage: 01 June to 07 June

Pre-close 2020 | Business and COVID-19 update |

E-commerce in Poland – share of online trade decreased in May

3.5%

• 9.0%

TOTAL retail sales (y-o-y, %) fixed prices

• 22.9%

7.3%

5,6 5,6 8,1 11,9 9,1 2 4 6 8 10 12 14

I 2020 II 2020 III 2020 IV 2020 V 2020 Share of e-commerce in total retail sales (%)

• 7.7%

Source: Statistics Poland, June 2020

(13)

Pre-close 2020 | Business and COVID-19 update |

Poland expected to remain resilient in recovery

Macro and retail environment summary

(14)

• Poland avoided the worst by efficient early stage

restrictions implemented

• Poland now prepared to cope with COVID-19
• Poland expected to continue above average growth in

Europe However:

• Polish shopping centres will go through a period of

materially reduced revenues (lockdown and subsequent concessions)

• EPP strategy accordingly adjusted to support tenants in

2020 and potentially beyond as necessary and build longer term relations with tenants in return

Operational update

MICHAŁ SWIERCZYŃSKI

Member of the Board Asset Management

Pre-close 2020 | Operational update | (15)

WARSAW ZAMOSC PRZEMYSL CZELADZ KIELCE ZABRZE BELCHATOW LODZ POZNAN JELENIA GORA KLODZKO KRAKOW KALISZ

GERMANY CZECH REPUBLIC UKRAINE BELARUS LITHUANIA

Hamburg Berlin Dresden Prague Brno Lviv Munich Gdansk WROCLAW SZCZECIN INOWROCLAW WLOCLAWEK LOMZA

DEVELOPMENT PROJECT

1

RETAIL ASSETS

25

POZNAN RADOM CZESTOCHOWA BYTOM

M2 GLA

900 000

Pre-close 2020 | Operational update | (16)

Largest retail landlord in Poland by GLA

EPP retail portfolio 2020

Pre-close 2020 | Operational update |

• f pre-pandemic levels

at June 2020

70%

Weekly footfall since reopening of shopping centres on 4 May 2020 comparing to 2019

Footfall update

Source: Company data

(17) 46% 53% 53% 60% 64% 70%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Footfall percentage 2020 vs 2019

Pre-close 2020 | Operational update |

Tenant negotiations update

(18)

• Assessed on a case by case basis and

taking the following into consideration

• Financial position
• Government aid received
• Historical performance
• Discounts or deferrals considered with an

aim of extending leases and reduced tenant incentives

• No turnover only rentals and no new lease

contracts will be considered, only annexes to existing agreements

GLA currently operational

93%

Pre-close 2020 | Operational update |

Operations nearing normality: June 2020

Retail portfolio summary

(19)

Occupancy

96% 70%

Of pre-pandemic footfall levels in June 2020 WALE by GLA (years) Expected to grow in the coming months with new leases signed

4.2

GLA currently

• perational

93%

Financial update

JACEK BAGIŃSKI CFO

Pre-close 2020 | Financial update | (20)

Pre-close 2020 | Financial update |

Limiting the impact of COVID-19

Operational costs reduction

(21)

• Operational costs in properties reduced
• Non-essential capital expenditures deferred
• Temporary 20% reduction in payroll costs across the

company since May 2020

• Looking for additional ways to optimise liquidity through

the utilisation of government support programmes

Pre-close 2020 | Financial update | 56.7% 55.0% 47.4% 51.9% 50.0%

IPO 2016 2017 2018 2019

Net LTV

Well capitalised

Liquidity position

(22)

• Cash on hand of € 170 million
• Liquidity secured with retention of € 53 million

dividend (H2 2019) and drawing of € 95 million corporate facilities

• Limited debt maturities over the next 12 months
• Strong support from a diversified group of

lenders comprising of local, European and international financial institutions

• Received waivers regarding the majority of the

principal payments and testing of covenants until December 2020

• Average LTV covenant levels of 67% and

average DSCR was 1.4x

200 400 600 800 1000

2020 2021 2022 2023 2024 2024>

Debt maturity profile € million as of 31 May 2020

Acquisitions update

Pre-close 2020 | Acquisitions update | (23)

Power Parks acquisition

Metro Tranche 3 update

• Metro Tranche 3 will not close by end of June 2020 as
• riginally expected
• EPP signed an extension agreement with Chariot
• EPP negotiating the revised transaction terms with Chariot

and willing to close on the transaction in the next weeks

• We will advise further on the deal once all details agreed

with Chariot and the senior lenders consortium

Pre-close 2020 | Acquisitions update | (24)

Outlook & guidance

Pre-close 2020 | Outlook & guidance | (25)

Pre-close 2020 | Outlook & guidance | (26)

• Successfully concluding remaining tenant agreements
• Lay out the foundations to better position the company in a

post COVID-19 environment

• Conducting analysis and recommendations on asset

purchase and sales

• Further cost optimisation

Longer term strategy under preparation:

• Plan for 3–5 years under preparation
• Focus on capital structure, existing asset base, and growth
• f the company in post-COVID times

Outlook

2020

Pre-close 2020 | Outlook & guidance | (27)

Assumptions

• The Polish economy continues its recovery in the second

half of the year

• No significant tenant failures occur
• Successful conclusion of remaining tenant discussions
• No second wave of COVID-19 occurs that will have a

detrimental impact on shopping centres e.g. closure in the second half of the year

2020 full year EPS guidance

€4 to €5 cents

Guidance

2020

Thank you

This document has been prepared and issued by and is the sole responsibility of the management of EPP N.V. (the “Company” or “EPP”) and its subsidiaries. No information made available in connection with this presentation may be passed on, copied, reproduced, in whole or in part,

• r otherwise disseminated, directly or indirectly, to any other person.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. Investors and prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or

• pinions, including statements with respect to the Company’s business, financial condition and results of operations. These statements, which

contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect”, “forecast” and words of similar meaning, reflect the management beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the

• future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved.

There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date of this presentation and the Company expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in this presentation is intended to be a profit

• forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. The information on which these

statements has been based has not been reviewed or reported by EPP’s auditors. This document speaks as of the date hereof. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness. The Company, its advisers and each of their respective members, directors, officers and employees are under no obligation to update or keep current the information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice. No representation or warranty, express or implied, is given by the Company, or any of its subsidiary undertakings or affiliates or directors, officers, any of its directors or employees or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information.

Disclaimer

(29) Pre-close 2020 | Disclaimer |

EPP IR Contact details

Curwin Rittles Poland - Warsaw e-mail: Curwin.Rittles@epp-poland.com Michèle Mackey South Africa Singular Systems IR e-mail: Michele@singular.co.za

www.epp-poland.com

Pre-close 2020 | Contact | (30)