Altarea

Earnings Release • Nov 7, 2019

9-month 2019 revenue up 21%

Strong momentum in each of the business lines

Residential: robust performance and increased visibility

• New orders¹ : €2,134 million (+12%) i.e. 7,784 units (+5%)
• Backlog: €3,580 million (+13%)
• Cogedim voted "Customer Service of the Year" for the third consecutive year

Business property: sustained activity in Paris and regional cities

• New orders (Group share): €388 million (+11%)
• Finalisation of agreements with CDC and CNP Assurances for Issy-Cœur de Ville and Paris-Montparnasse

Retail: growth in rental income

• Rental income: €152.1 million (+9% overall and +2.9% on a like-for-like basis in France)
• Opening of the new Cap3000 in Nice

CSR: extra-financial performance once again greeted in 2019

• Confirmation of "Green Star 5*" status for GRESB and "Prime" status for ISS-Oekom
• 3-point improvement in the Gaia Index

Consolidated financial indicators

• 9-month revenue: €1,900 million (+21%)
• Net financial debt² : €2,677 million (+€215 million vs 30/06/2019)
• Successful €500 million BBB bond issue maturing in 2028

Unaudited figures at 30 September 2019

¹ On a like-for-like basis (excluding Severini and Woodeum), new orders up +12% in value to €2,089 million and +2% in volume (7,608 units). ² Net financial bond and bank debt.

I. BUSINESS ACTIVITY AND EXTRA FINANCIAL PERFORMANCE

Residential

New orders³ : €2,134 million (+12%) i.e. 7,784 units (+5%)

Reservations incl. tax	30/09/2019		30/09/2018	Change
Individuals - Residential buyers	€737 million	35%	€677 million	36%	+9%
Individuals - Investment	€811 million	38%	€706 million	37%	+15%
Block sales	€586 million	27%	€518 million	27%	+13%
TOTAL in value	€2,134 million		€1,901 million		+12%
Individuals - Residential buyers	2,124 units	27%	2,131 units	33%	=
Individuals - Investment	3,152 units	41%	2,838 units	29%	+11%
Block sales	2,509 units	32%	2,454 units	38%	+2%
TOTAL in units	7,784 units		7,423 units		+5%
Average price per unit	€274 thousand		€256 thousand		+7%

Revenue and backlog

	30/09/2019	30/09/2018	Change
Revenue	€1,365 million	€1,168 million	+17%
	30/09/2019	31/12/2018	Change
Backlog	€3,580 million	€3,169 million	+13%
			24 months of revenue

Momentum has been sustained with visibility clear in the Residential segment since the beginning of the year. The Group continues to gain market share, with new orders up 12% in value and 5% in volume. All brands are growing, confirming the suitability of the Group's offer for all categories of customers, and the pertinence of its geographical positioning.

The trend in the average price per unit year on year (+7%) is attributable chiefly to very good marketing campaigns for large Grand Paris mixed-use projects, especially Issy-Coeur de Ville.

Cogedim voted "Customer Service of the Year 2020" for the third consecutive year

Cogedim, France's second-largest property developer, has been awarded the "Customer Service of the Year 2020" trophy in the "Property Development" category for the third consecutive year. The award promotes French companies that place the quality of the customer relationship at the heart of their concerns.

Business property

Finalisation of agreements between Altarea Cogedim, CDC and CNP Assurances⁴

In October, Altarea Cogedim Entreprise and CDC Investissement Immobilier (on behalf of CDC) signed the off-plan sale contract with CNP Assurances for the three office buildings of the Issy-Cœur de Ville eco-district and the acquisition of CNP Assurances' current headquarters, located above the Paris-Montparnasse railway station, for redevelopment.

³ On a like-for-like basis (excluding Severini and Woodeum), new orders up +12% in value to €2,089 million and +2% in volume (7,608 units). ⁴ See press releases issued on 28 March 2019 and 8 October 2019, available on the altareacogedim.com website, Press section.

Strong operating activity in Paris and regional cities

	30/09/2019	30/09/2018	Change
New orders (incl. tax)	€388 million	€351 million	+11%
Revenue	€366 million	€248 million	+48%
	30/09/2019	31/12/2018	Change
Backlog	€769 million	€862 million	-11%

Since the beginning of the year, the Group has recorded €388 million incl. VAT in new orders (Group share), an increase of 11% year on year, including:

• the off-plan sale to CNP Assurances of the three office buildings of the Issy-Coeur de Ville project (in partnership with CDC);
• two property development contracts for EM Lyon Business School in Lyon-Gerland (29,000 m²) and a logistics platform for Lidl in Grands-Champs-des-Fontaines in Nantes (47,000 m²);
• the off-plan sale to Newton Offices of one of the four buildings of the Les Carrés du Golf programme in Aix-en-Provence. This 11,000 m² project, due to be delivered in 2020, is now fully leased following the signing of an off-plan lease agreement with EDF in mid-October.

Momentum is powerful in the Business property segment, both in Paris and in regional cities. Since 30 September 2019, the Group has signed several major transactions that will increase the year-end backlog, including a protocol with a leading economic player to create a 700-room hotel complex in the Grand Paris area.

Retail

Growth in rental income: +9.0% (+2.9% like-for-like in France)

Over the first 9 months of the year, rental income was up sharply at €152.1 million (+9.0%). The impact of deliveries and acquisitions (first tranche of retail space at the Paris-Montparnasse railway station, extension of Cap3000 and acquisition of a portfolio of railway stations in Italy) largely offset disposals made in 2018 and since the beginning of 2019⁵ . On a like-for-like basis, rental income was up 2.9% in France.

Portfolio performance indicators⁶ are strong. Tenants' revenue in France was up 3.6% and footfall in shopping centres was up 2.0%, compared with +0.1% and +0.1% respectively for the CNCC benchmark.

Strong commercial performance

Over the first nine months of the year, the Group signed 214 leases for a total of €23.1 million in rents, including €10.0 million for new space (77 leases).

In terms of pipeline, the Group recently obtained the definitive commercial approvals for the Ferney Voltaire shopping and leisure centre project in the French Geneva area (46,000 m²) and for the future retail spaces of the Paris-Austerlitz railway station (25,000 m²).

⁵ The Group sold three assets (Okabe in the Kremlin-Bicêtre, the Galerie de l'Hôtel de Ville in Châlons-en-Champagne and 14th Avenue in Herblay) for a total amount of €122 million (including transfer duties) overall higher than the appraisal values at the end of 2018 (+1.9%).

⁶ Data for the France portfolio on a like-for-like basis – rolling 12-month data as at end-September 2019 for footfall and tenants' revenue (excl. VAT) for the Group's portfolio and CNCC (National Centre of Shopping Centres).

Opening of the new Cap3000: the Europe's most striking waterfront shopping destination

On the occasion of Cap3000's 50th anniversary, Altarea Cogedim unveiled recently its seafront extension, with more than 70 new brands and a unique restaurant offer with panoramic views over the Mediterranean.

Fully rented, these new spaces are home to emblematic Cap3000 names, such as Galeries Lafayette and Apple Store, much awaited brands such as Victoria's Secret, Parfums Christian Dior, Urban Outfitters, Five-Guys, IT Villaggio, and major brands such as Monoprix, Darty and Maisons du Monde. This extension also offers a varied leisure and services offer, including a 360° immersive MK2+ space that currently features the "OCEANS" experience in partnership with the Oceanographic Museum of Monaco, the 1st METROPOLITAN premium Fitness&Spa space in France, as well as the CAPSULE concept store dedicated to e-commerce players.

In the second half of 2020, the last milestone of the metamorphosis will be the delivery of Corso, a premium mall of around thirty shops, mostly leased, including Mauboussin, Mont-Blanc, a 500 m² multi-brand luxury watch area, as well as a gourmet high-end offer. This last step will confirm the international opening of Cap3000, both in terms of brands and customers. As a reminder, Cap3000 is located next to Nice airport (2nd international airport in France) and benefits from the unique tourist appeal of the Côte d'Azur.

Large mixed-use projects: 11 new "city centre" projects

In the very booming market segment of large mixed projects, Altarea Cogedim manages 11 major mixed-use projects representing nearly 920,000 m² and more than 9,000 residential lots.

Issy-Cœur de Ville: an acclaimed urban renewal project

The Group has started work on the largest mixed-use development in the Grand Paris metropolitan area. This 100,000 m² eco-district is already a commercial success: all office, all retail space and nearly 75% of the 600 housing units offered (free, social rental and senior residence) have been sold 30 months before the programme's delivery.

Extra-financial performance: an acknowledged CSR approach

Once again, several extra-financial ratings have applauded the long-term "Tous engagés" (we are all involved) CSR approach driven with conviction by the Group's teams and brands in response to the ongoing energy, ecological and societal transitions:

• confirmation of the "Green Star 5*" status won in 2016 in the GRESB 2019 (Global Real Estate Sustainability Benchmark), which attests to its CSR performance over time. Ranked fourth among listed retail companies in Europe, with a score of 90/100, the Group also obtained an A in Transparency, a recognition of the quality of its institutional publications, and the reliability and comprehensiveness of its CSR reporting;
• confirmation of the "Prime" status in the ISS-Oekom 2019 ranking, which rewards the quality of the CSR performance of the companies surveyed;
• present in the Gaia Index since 2017, the Group this year achieved a score of 77/100 (+3 points compared with 2018), well above the average of the panel of 230 companies surveyed (58/100) and that of companies with over €500 million in revenue (69/100). On environmental aspects, the Group was awarded a rating of 100.

II. FINANCIAL OVERVIEW

€ millions		Q1 2019 Q2 2019 Q3 2019		TOTAL 9-mth 2019	Q1 2018		Q2 2018 Q3 2018	TOTAL 9-mth 2018	9-mth 2019 / 9- mth 2018
Rental income	49.1	52.9	50.2	152.1	46.5	47.1	45.8	139.4	+9%
Services	6.6	4.8	4.7	16.0	4.6	4.1	5.3	13.9	+15%
Property development	-	-	-	-	-	3.1	-	3.1	-
Retail	55.7	57.6	54.8	168.2	51.0	54.3	51.1	156.4	+8%
Revenue (% of completion)	433.0	460.9	463.3	1,357.2	339.5	458.3	368.6	1,166.4	+16%
Services	1.8	3.5	2.4	7.7	0.1	0.7	0.9	1.7	X3.6
Residential	434.8	464.4	465.7	1,365.0	339.6	459.0	369.6	1,168.1	+17%
Revenue (% of completion)	101.0	159.0	98.5	358.5	42.0	127.5	54.2	223.7	+60%
Services	1.0	5.7	1.3	8.0	2.0	20.3	2.2	24.5	-67%
Business property	102.0	164.7	99.8	366.5	44.0	147.8	56.3	248.1	+40%
Revenue	592.5	686.8	620.4	1,899.6	434.6	661.0	476.9	1,572.6	+21%

Contribution of all business lines to 9-month consolidated revenue growth of +21%

Consolidated 9-month revenue amounted to €1,900 million, up 21% year-on-year (+18% excluding scope effects⁷ ), driven by Development (+22%) and a robust performance by the Retail portfolio (+8%).

Financial structure: good management of liabilities in a context of growth

Net financial debt (bank and bonds) amounted to €2,677 million at 30 September 2019, up €215 million compared with 30 June 2019 (€2,479 million).

Successful €500 million rated bond issue maturing in 2028

On 25 September, S&P Global confirmed the "BBB, stable outlook" financial rating for both Altarea and Altareit, the listed subsidiary for the Group's development activities.

Following this confirmation, Altarea successfully placed, in October, a €500 million rated bond with an 8 year maturity, offering a coupon of 1.875%. The proceeds from the issue will be used to refinance secured debt and for general financing needs. The transaction fits in with the Group's broader disintermediation policy; it reinforces the structure of its financing and extends the maturity of its debt.

III. 2019/2020 OUTLOOK

For 2019, Altarea Cogedim is aiming for FFO ranging from €17.50 to €17.70 per share after taking into account the dilutive effect of the payment of the 2018 dividend in shares (issued in May 2019), and will propose a 2019 dividend of €13.00 per share (subject to approval by the General Meeting called to approve the 2019 annual financial statements).

For 2020, the Group confirms its trajectory and maintains its FFO target of €300 million, taking into account the increase in taxes paid on non-SIIC activities and changes in accounting standards (IFRS 15 & 16 and IAS 23).

Financial calendar 2020

2019 annual results: Monday 2 March 2020 after trading Presentation meeting at 8:30 am on 3 March 2020

⁷ Histoire & Patrimoine and Severini have been fully consolidated since July 2018 and January 2019 respectively.

ABOUT ALTAREA COGEDIM - FR0000033219 – ALTA

Altarea Cogedim is the leading property developer in France. As both a developer and an investor, the Group operates in the three main property markets (Retail, Residential and Business property), leading major mixed-use urban renewal projects in France. The Group has the required expertise in each sector to design, develop, market and manage made-to-measure property products. In Retail, Altarea Cogedim manages, at 30 June 2019 a portfolio worth €4.8 billion. Listed in Compartment A of Euronext Paris, Altarea has a market capitalisation of €3.1 billion at 30 September 2019.

CONTACTS ALTAREA COGEDIM CONTACT COMMUNICATION

Agnès Villeret, Press Relations – KOMODO

agnes.villeret@agence-komodo.com, tel : +33 6 83 28 04 15

Eric Dumas, Chief Financial Officer edumas@altareacogedim.com, tel : + 33 1 44 95 51 42

Catherine Leroy, Analyst and Investor Relations cleroy@altareacogedim.com, tel : +33 1 56 26 24 87

DISCLAIMER

This press release does not constitute an offer to sell or solicitation of an offer to purchase Altarea shares. For more detailed information concerning Altarea, please refer to the documents available on our website www.altareacogedim.com.

This press release may contain declarations in the nature of forecasts. While the Company believes such declarations are based on reasonable assumptions at the date of publication of this document, they are by nature subject to risks and uncertainties which may lead to differences between real figures and those indicated or inferred from such declarations.