ANNUAL RESULTS 2020 - Frey

MARCH 2021

ANNUALRESULTS2020

Table of contentsIntro - COVID-19: a trend accelerator1 - FREY: a major player in open-air shopping centres, the winning retail asset class2 - Development: intense activity in 20203 - Sound financial results4 - FREY, the first REIT to become an “entreprise à mission”5 - Strategy and outlook

MARCH 2021 2

Disclaimer

This presentation has been prepared solely for information, to accompany theinformation disclosed to the public elsewhere, to which readers should refer.

It does not constitute and should not be construed as an invitation,recommendation or offer to purchase, sell, exchange or subscribe to FREYsecurities or financial instruments.

Distribution of this document may be restricted by the legislation orregulations applicable in certain countries. Anyone in possession of thispresentation must therefore be aware of and comply with such restrictions.FREY waives all liability and responsibility, within the limits authorised by theapplicable law, should anyone whatsoever breach any one of theserestrictions.

MARCH 2021 3

IntroductionCOVID-19:

a trend accelerator

MARCH 2021 4

COVID-19: a trend accelerator

MARCH 2021 5

RETAIL

• Success of the “open air” format(reassuring, practical, convinient and economical)

• Obsolescence of certain formats confirmed

(secondary shopping centres and malls)

• Pressure on constrained business models (occupancy cost ratio, financial leverage, low capitalisation rate)

E-COMMERCE

• Is there a glass ceiling for pure players?• Stepping up the omni-channel approach among retailers

(click&collect, drive-in, deliveries)

SUSTAINABILITY

•Heightened environmental awareness• Rejection of soil artificialisation•New challenges in terms of building cities

Acceleration of the omni-channel approach

MARCH 2021 6

BRICKS-AND-MORTAR STORES E-COMMERCE

€112 billion+8.5% vs 2019

13.4%of retail trade (+3.6 pts

vs 2019)

1.84 billion

in orders +5.8% vs 2019

• +32% for physical goods and sharp fall for services (tourism, leisure)

SHOCK ABSORBER ROLE OF ONLINE SALES FOR BRICKS-AND-MORTAR STORES

• +53% for online sales of bricks-and-mortar stores

• +100% during the lockdown periods

Fevad – 2020 review of e-commerce in France

RETAILERS’ SALES

Data for France - 12 months to the end of December

-26.0%2020

+0.7%-1.5%2018 2019

IN 2020

-28.0%

FOOTFALL IMPACTED BY CLOSURES

2020

+0.3%-1.7% 2018 2019

IFREY A major player in open-air shopping centres,

the winning retail asset class

MARCH 2021 7

COVID-19: open-air shopping centers less impacted by closures

MARCH 2021 8

2.3 months of closure across the 3 countries

in 2020

Opening of stores (by two-week period in 2020) as a % of annualised rental income, Group share

Essential(12%)

No closures

Food, pet shops, garden centres, bicycles, cars, medical

Non-essential(52%)

74 days of closure

Clothing, furniture, toys/party products,

hairdressers

Semi-essential(18%)

44 days of closure

Electricals, discount stores,sports equipment (essential products

only during the 2nd lockdown)

Other (17%)

138 days of closure

Restaurants, cinema, fitness

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

RETAIL TENANTS’ SALES (1)

+7% excl. lockdown

FREY, the most resilient business model adapted to changes in consumption habits

MARCH 2021 9

-16% -10%

2.4%

FOOTFALL (1)

FINANCIAL VACANCY RATE (2)

(stable)

-28%

Success of services offered by FREY to retailers Click&Collect, Click&Drive, supported by local communication campaigns

10% 47%Proportion of tenants having had an on-line activity before and after the 1st lockdown (1)

3.8% to 4.3% for shopping arcades (Mercialys and Carmila)4.8% to 4.9% for regional shopping centers (Klépierre and URW in Europe)

(1) Scope FREY (France), sites equipped with footfall measures in France, and sales figures reported by retailers.(2) Scope FREY Group (France, Spain and Portugal)

-26%

2.3% 2.2% 2.4%

31 Dec. 2019 30 June 2020 31 Dec. 2020

MARCH 2021 10

A strengthened partnership with tenants during the crisis

FREY ANNOUNCES THE CREATION OF €15 MILLION FUNDTO SUPPORT ITS RETAIL TENANTS

16 April 2020

€2.9 million DEFERRED RENTS

to be deferred over two years (2021 & 2022)

€9.8 million aid granted recognised in 2020

€6.9 millionWAIVER OF RENTS RECEIVABLES

recognised in 2020

+

+ €2.3 m. estimated additional amount of aid to be recognised in 2021 (1)

(1) Additional amount of aid (waiver of rent receivables net of tax credit to be received) estimated likely to be recognized in 2021, taking into account negotiations with tenants in progress since January 1, 2021.

Portfolio: excellent operating performances maintained

94%COLLECTION RATE 2020 (1)

of which 81% before the relief package

MARCH 2021 11

90LEASES SIGNED

on the portfolio in operation

+4% average uplift

Remarketing & renewal

+€9.4min additional rents

€7.0m (Group share) (11% of annualised rental income)

New brandssigned across the portfolio

Q1

Q2

Q3

Q4

(1) Rents collected / rents invoiced, after deduction of tenant incentive.

2.80%3.10%

3.70%4.10% 4.25%

5.10% 5.25%

5.95% 6.08%

MARCH 2021 12

A very attractive risk/return profile compared to benchmark

(1) Source: Cushman & Wakefield . (2) Net potential rents / 2020 values excl. transfer tax & including the remaining CAPEX to be spent.

+ 70 to 81 bp

Prime capitalisation rate (1)

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(2)

IIDevelopment: an intense year in 2020

MARCH 2021 13

A livrer en mars 2021 A lancer en 2021 Nouveau à lancer 2021 Autres projets Projet arrêté Pipeline au 31/12/20

Structure of the pipeline in 2020(in €m, investments and minimum rents guaranteed)

Overview of the development pipeline

€16.7 million111,000 m2

€232 million

€288 million€83 million

€200 million

-€250 million

€802 million

€19.8 million105,000 m2

€5.6 million23,000 m2

€10.2 million110,000 m2

340,000 m²

Total GLA

€52.3 millionpotential annualised

rental income

€14.0 million120,000 m2

MARCH 2021 14

To be deliveredin March 2021

To be launched in 2021 New, to be launched in 2021 Other projects Project discontinued Pipeline as at 31/12/2020

MARCH 2021 15

Development: confirmed leasing dynamics projects

CONTINUED DIVERSIFICATION OF THE BRAND PORTFOLIO

€6.1 millionaverage rentguaranteed

TEAMS MOBILISED TO EMBRACE RETAILERS’ NEEDS

2020 LEASING

79leases signed

59%new brands

MARCH 2021 16

Two new Shopping Promenade centres opening in March 2021 (postponed from 2020)

Opening

10 March 2021 Opening

17 March 2021

46,000 m²

Total GLA

€7.5 millionAnnualised minimum

guaranteed rent

€99 millioninvestment

≈ 94% pre-letting rate

66brands

65,000 m²

Total GLA

€9.2 millionAnnualised minimum

guaranteed rent

€133 millioninvestments

(of which €12m in development)

≈ 97% pre-letting rate

86brands

(including 7 kiosks)

MARCH 2021 17

End of the “Ode à la Mer” project: a political decisionKey milestones of the project

End 2014 Winning the auction launched by Montpellier Métropole in 2012

June 2020/to dateEnd of the project decided by Philippe Saurel, former President of the Montpellier Métropole (between the 2 rounds of municipal elections) FREY has claimed SA3M for compensation for damage caused (for a total amount of €77m)

Ode à la Mer is a perfect example of how a shopping area can be

transformed into a new mixed and functional district (shops, offices,

hotel, leisure and services) with an innovative approach of preserving

nature and reducing the energy impact

111,000 m² of retail/leisure 15,000 m²

of offices 1 hotel

with 102 rooms

€250 million in investment planned

2015/2017Obtaining definitive project approval - favourable opinions (CDAC, CNAC, CAA and CE)2017/2020 Obtaining planning permission - pending recourse

Le Village Halle des Docks • Food hall• Food market• Restaurants• Shared kitchen• Events room• Co-working • Food lab• Shops and services

Le Village des Docks: a project secured in 2020, to be launched in 2021

23,000 m²

Total GLA


rental income


Opening scheduled for 2023/24

MARCH 2021 18

Vibrant heart of the new “LesDocks” eco-district in Saint-Ouen

The “Village des Docks” project is part of the transformation of the town of Saint-Ouen through the reclamation and urban renewal of former industrial wasteland to make it a sustainable district linking the town centre to the river Seine

Planning the new district• Eco-district covering 100 ha

along the Seine (i.e. ¼ of St Ouen)• 6,800 housing units• 300,000 m² of offices• 12 ha of parks along the Seine• Public transport links

The commercial organisation focuses on

environmental responsibility (short

distribution channels, reuse, recycling, etc.) and social commitment (openness,

accessibility, diversity, transmission, etc.)

IIISound financial results2020

09 March 2021 19

Operating indicators rising sharply despite the crisis

MARCH 2021 20

43.6

32.823.7

2017 20192018

29.0

18.312.5

2017 20192018

Good control of overhead costsin a context of active development and the health crisis

Strong growth in rental income, driven by project deliveries and international development in 2019 (full

year effect) and the stake in the FREY Retail Fund in July 2020

59.5

2020

42.4

2020

+37%

+46%

(1) Profit from recurring operations does not take into consideration the impact of the health crisis, of €6.1 million, presented in the “Debt write-offs” line of the consolidated income statement.

GROSS RENTAL INCOME (€m) PROFIT FROM RECURRING OPERATIONS (€m)

Increase in the portfolio and annualised rental income

21

VALUE OF THE ECONOMIC PORTFOLIO(1) (€m)

1,128

902

870

730

687

593

o/w value of the economic portfolio in operation

(1) Shopping centres in operation and building sites.

MARCH 2021

2017 20192018 2020

1,249

948

+10.7%

+5.1%

ANNUALISED GROSS RENTAL INCOME (€m)

54.2

42.633.5

2017 20192018

59.1

2020

+9%o/w

+1.0% like for like

€72.6 million

incl. projects to be delivered in

March 2021

incl. projects to be delivered in

March 2021

A robust financial structure

MARCH 2021 22

(1) Average cost after hedging, including margin, after hedging of rates and with a 3-month Euribor as of 31/12/2020 at (0.545)%.

32.4%LTV

including transfer tax(vs 23.1% as at 31.12.201)

1.48%AVERAGE COST (1)

(-25 bp vs 2020)

4.5 yearsDURATION

€530.6mGROSS BANK DEBT

97.5%HEDGING

RATE

Comfortable financial headroom

in a context of strong development activityCorporate Mortgages and CBI

71%

29%

Liquidity strengthened to finance Frey’s growth strategy

MARCH 2021 23

• Partner: Crédit Agricole Group

• Amount: €70m, five years (+ 2 years’ extension)

• Charity supported (which may change every year): CUISINEMODE D’EMPLOI(S) for the reintegration of people in difficulty,through the catering professions

• €140,000 contributed for the duration of the loan, excludingextensions

€268min liquidity (1)

(1) €212 million in corporate facilities and €56 million in cash available.

ENHANCED ACCESS TO THE FINANCING MARKET

SIGNING OF A €70 MILLION SOLIDARITY-BASED LOAN

• €150m in maturity extensions (+1 yr)

• €16m in debt refinanced at FRF

TRAINING IN THE CATERING PROFESSION

WITH THIERRY MAX

“I am convinced that learning a trade is not only a weapon against

unemployment, but also a means of making people

free.”-Thierry Max

A limited impact of the pandemic on the NAV

MARCH 2021 24

CHANGE IN THE NDV NAV (€m)

777.5

-1.3%€32.7 €31.2

767.4

(25.7)(6.1)

(27.3)

35.713.1 (1)

31.12.19 31.12.20

(1) Impact of the pandemic on fully consolidated assets before tax.(2) Partial payment in treasury shares for the stake in FRF2 for €13.6m

-€1.5/share(i.e. -4.6%)

2019 dividend

(paid in cash)

Impact of COVID-19 (1)

(waiver of rents)

Impact change in fair value

COVID-19 (1)

Net profit group share restated for impacts of

COVID-19

Impact reclassification of

FREY treasury stock (2) and other

2020 Net profit (group share): +€2.4m

IVFREY: the first REIT to become an “entreprise à mission”

9 MARCH 2021 25

MARCH 2021 26

FREY, the first REIT to become an “entreprise à mission”

• State our conviction

A company whose sole objective is profit will not be able toevolve favourably in a society with growing expectations interms of common sens

• Positioning CSR at the heart of ourstrategy is the best investment the Group ismaking today because all its stakeholders (investors,financiers, local authorities, retailers, consumers, etc.)will support FREY in their choices

NEW MAJOR STEP IN A N CSR PATH SINCE 2007

Define a mission statement

Integrate major social and environmental objectives into its

Articles of Association (Loi Pacte)

Set up a Mission Committeein charge of monitoring the

execution of the mission

WHY? HOW?

MARCH 2021 27

Our mission statement

WE ARE NOT GOING TO SAVE THE WORLDBUT… WE HAVE CHOSEN TO RESTORE RETAIL

AS A SERVICE FOR THE COMMON GOOD.

FREY, THE FIRST FRENCH REIT TO BECOME AN “ENTREPRISE À MISSION”

MARCH 2021 28

1 2 3

Our main objectives: to make retail...

A DRIVER OF URBAN DIVERSITY

Example of a quantified commitment:

Favour mixed-ude in 100% of its projects of more than 20,000

m² GLA

by combining retail activities with other uses, such as housing, offices, co-working, health

centres, associative, cultural or sports venues, third places, urban agriculture, etc.

A VECTOR OF SOCIAL LINKS AND LOCAL ECONOMIC RESILIENCE


Dedicate at least 10% of its projects, from now on, to social and solidarity

activities,to local artisans or independent traders

AN ACCELERATOR OF ENVIRONMENTAL TRANSITION


Achieve carbon neutrality by 2030 (scopes 1 - 2 and 3 of the Group's greenhouse

gas emissions)

MARCH 2021 29

• Nathalie Palladitcheff: Mission Committee Chair, President and Chief Executive Officer of Ivanhoë Cambridge• Robert Hermann: former President of Strasbourg Eurométropole• Clémence Bechu: Partner and Director of the urban planning and architects’ firm Bechu & Associés• François Lemarchand: founder of Nature et Découvertes and independent director at FREY• Carine Stoeffler: risk manager at FREY• Christophe Garot: Managing Director France of the sustainable development consulting agency Bopro• Elisabeth Laville: founder of Utopies, consulting agency in the social and environmental transformation of companies

Our Mission Committee

Focus on our carbon objective and the FoREY project

• Creation of the forestry group FoREY• Acquisition of 540 ha: 3 forests located in Côte d’Or, Charente

and Haut-Rhin regions• 650 m3 of wood harvested / 2,000 trees planted • 1st construction of a 100% wooden structure in the portfolio• Massive integration of wood in the OPEN project

(Frey is aiming for BREEAM Excellent and E+/C- certification)

• 2020 carbon-weighted Net profit Group share(1): (€4.0m)Wooden frame of the future Basic Fit at Green 7 (Salaise sur Sanne)

€35 millionto be invested by 2030

2020 HIGHLIGHTS

ACQUIRING AND EXPLOITING SUSTAINABLY-MANAGED

FRENCH FORESTS

MARCH 2021 30

(1) 2020 Net profit Group share of €2.4m reduced by the 2020 carbon burden of (€6.4)m (FREY’s 2020 carbon emissions of 256,409 tonnes x €25/tonne of carbon). Given the difficulty of accurately measuring the impact of the health crisis on visitor numbers in 2020, it was decided to keep the 2019 rate rather than apply a correction that could increase the level of uncertainty.

VStrategy and outlook

9 MARCH 2021 31

The crisis is not over...

MARCH 2021 32

INCREASE IN THE PROPOSED DIVIDEND (€/share)

€1.5 (1)

€1.2

€0.77€0.70

20172016 2018 2019

€1.5

IN AN ONGOING UNCERTAIN CONTEXT, STABILITY OF THE DIVIDEND/SHARE

WITH 2 PAYMENT OPTIONS:

100% in cashor

30% in shares and 70% in cash

2020

(€0.45/a) (€ 1.05/a)

(1) As will be proposed at the Shareholders' Meeting to be held on May 11, 2021.

...but FREY is rolling out its strategy by delivering a pipeline of projects perfectly suited to the context

3 LAUNCHES IN 2021Shopping Promenade Lleida (Spain)

128,000 m²

total GLA


rental income


(incl. development)

Village des Docks – La grande Halle (Saint-Ouen) Open (Saint-Genis)

MARCH 2021 33

The health crisis has accelerated changes in retail by several years

MARCH 2021 34

THE RETAIL TRANSFORMATION IS A HUGE, MATURE SOURCE OF POTENTIAL

• Retail will remain the basis of the creation of the city

• Many retail assets are obsolete and will not survive in their current state

• Peri-urban retail areas represent a stock of already artificialized land on which cities will develop in the future

• To be sustainable, retail property in general must adapt to the needs of its stakeholders:• more efficient for retailers and better adapted to their new omni-channel approach, • more practical and experiential for consumers, • more “mixed-use” for communities,• and more in line with society's aspirations in social and environmental terms.

OUR STRATEGY:unlocking the full potential of an ideal context for FREY

MARCH 2021 35

2

1

3 Develop mixed use projects in dense urban areas

Restructure and transform the out-of-townshopping centres into mixed use projects

Acquire and transform obsolete retail assets to be turned around

4 Acquire retail assets in line with our strategy in France and abroad

AN IDEAL CONTEXT, as:

• 100% of its assets and projects are winning retail assets

• Control of the entire value chain and pioneering approach (reclassification, turnaround)

• A pioneer once again with a CSR strategy in line with stakeholders' expectations

• Financial headroom (liquidity, access to credit markets)

4 OFFENSIVE STRATEGIC PILLARS

MARCH 2021

Thank you

Documents

ANNUAL RESULTS 2020 - Frey