Patrimoine et Commerce — Earnings Release 2022

Feb 22, 2023

PRESS RELEASE

2022 ANNUAL RESULTS

Paris - February 22, 2023

At its meeting on February 21, 2023, the Patrimoine & Commerce Supervisory Board reviewed the Company's operations and approved the 2022 financial statements (1), prepared by Management.

• Group share of net profit increasing by +51.7% at € 47.8m
• Collection rate at 98.1% on rents and service charges
• Portfolio valuation of € 841m
• Dividend payment of € 1.30 per share, +4.0% vs. last year, implying a 7.9% yield on share price, as well as a 4.6% yield on NAV

Key figures

Key financials	31/12/2022 12 months	31/12/2021 12 months	Var. %
Gross Rental Income	€ 47.3m	€ 43.7m	+8.3%
Funds from operations	€ 29.3m	€ 26.7m	+9.6%
Group share of net profit	€ 47.8m	€ 31.5m	+51.7%
Alternative Performance Measures	31/12/2022	31/12/2021	Var. %
Asset appraisal value (excluding transfer taxes) (2)	€ 841.3m	€ 807.0m	+4.3%
Capitalization rate (3)	7.0%	7.2%	n.a.
LTV ratio (4)	44.0%	45.2%	n.a.
NAV (excluding transfer taxes - €/share)	28.5 €	26.7 €	+6.8%

Eric Duval, Managing Director and Founder of Patrimoine & Commerce declared: « The solid results for fiscal year 2022, both in terms of operational and financial performance, confirm the attractiveness of the Group's business model as the leader of low-cost retail park market players in France. With over € 50m in acquisitions and € 40m in disposals during the year, we demonstrated our capacity to carry out targeted acquisitions but also the good liquidity of our assets in line with appraisers values. Supported by a robust financial structure, and our confidence in delivering a sustainable growth, we will propose a distribution of a € 1.30 dividend per share, up by +4.0% compared to last year. »

Operational performance

In an uncertain economic context, characterized by inflation and the rise in interest rates, Patrimoine & Commerce saw its gross rental income increase by +8.3%, and maintained a very

dynamic asset rotation strategy, with the acquisition of seven retail properties, and the disposal of eight assets during 2022.

The retail park model proved its performance and alignment with current trends in consumption. Besides core strengths of the model (human-sized stores, easy car parking, limited service charges, adapted rents), retail parks stand out with an activity not very dependent on tourism, focused on local consumption, open spaces and high attractivity for discount stores.

Patrimoine & Commerce had a sustained leasing activity and signed 55 leases (of which 21 renewals). The financial occupancy rate is increasing and stands at 94.3% (5) on the portfolio. The collection rate on rents and service charges invoiced in 2022 stands at 98.1%.

FFO increasing by +9.6%

In 2022, Patrimoine & Commerce continued to deliver a solid financial performance.

For the fiscal year ended December 31, 2022, Patrimoine & Commerce reported consolidated gross rental income of € 47.3m, against € 43.7m for the fiscal year ended December 31, 2021:

in millions of euros - 12 months	31/12/2022	31/12/2021	Var. %
Like-for-like	41.6	39.9	+4.3%
Acquisitions	3.9	0.4	n.a
Disposals	1.3	3.5	n.a
Properties under restructuring	0.5	-	n.a
Gross rental income	47.3	43.7	+8.3%

The increase of gross rental income is mainly explained by (i) the effect of the acquisitions and disposals made in 2021 and 2022 (ii) the delivery of restructuring operations on a property in Martinique and (iii) the like-for-like increase, driven by contractual indexation (2.5% in average on the period) and the decrease in the amortization of Covid-19 rent free periods.

Net rental income stands at 93% of gross rental income (stable compared to 2021), mainly composed of unrecovered rental expenses and provisions for credit losses:

in millions of euros - 12 months	31/12/2022	31/12/2021	Var. %
Gross rental income *	47.3	43.7	+8.3%
Entry fees	0.0	0.2	n.a.
Gross rental revenue	47.4	43.9	+7.8%
Unrecovered rental expenses	(2.7)	(2.4)	+9.8%
Other building expenses	(0.6)	(0.7)	n.a.
Net rental income	44.2	40.8	+8.3%

* incl. rental guarantees

Operating expenses and other revenues remained under control at € 5.0m (vs. € 4.5m in 2021), the increase derives from property management costs (leasing fees, asset management fees based on the evolution of rents).

Net cost of debt amounted to € 9.5m in 2022, almost stable compared to last year (+0.7%). In a context of a rise in interest rates, the Company continues to benefit from the renegotiations carried out in the past years, as well as from the hedging of its debt portfolio. The average interest rate on debt is 2.07% for the 12 months ending December 31, 2022 (versus 2.04% in 2021), while 79% of the debt is either at fixed rate or at hedged variable rate.

Recurring net result (FFO) amounted to € 29.3m in 2022, compared to € 26.7m in 2021:

in millions of euros - 12 months 31/12/2022 31/12/2021 Var. % Restated current operational result 39.2 36.3 +7.9% Restated net cost of debt (9.5) (9.4) +0.7% Current taxes (0.4) (0.2) n.a. Funds from operations (FFO) (6) 29.3 26.7 +9.6%

The external appraisal valuation campaign resulted in a fair value adjustment of +€ 14.9m in 2022, reflecting the resilience of the portfolio in a context of high inflation and of sharp rise in interest rates.

Diluted FFO per share 1.93 1.78 +8.6%

Including the share of the result of companies accounted for using the equity method (+€ 0.5m), other non-recurring revenues and charges (-€ 1.4m), and the contribution of hedging strategies on debt (+€ 2.8m), net profit amounted to € 46.1m for the fiscal year 2022 and € 47.8m in group share, increasing by +51.7% compared to last year.

Decrease of the LTV ratio and increase of the NAV per share at € 28.5 (+6.8%)

The Group consolidated net debt of € 360.9m as of December 31, 2022, implies a Loan-to-Value ratio of 44.0%, leaving a significant investment capacity compared to the target of 50% set by Patrimoine & Commerce.

in millions of euros - 12 months	31/12/2022	31/12/2021
Net Debt	360.9	359.2
(-) other lease liabilities	(0.6)	(0.6)
(+) deposits on real estate projects	0,0	(0.3)
(-) financial instruments	2.2	(1.3)
Restated Net debt	362.4	357.1
Property valuation (excl. Transfer taxes)	823.9	789.9
Loan To Value ratio	44.0%	45.2%

Net asset value per share amounted to € 28.48 (€ 431.2m) in 2022, an increase of +6.8% versus 2021.

in millions of euros	31/12/2022	31/12/2021
NAV, excl. Transfer taxes	431.2	400.2
NAV per share, excl. Transfer taxes (in euros)	28.48	26.67
Number of shares (excl. Treasury shares)	15 144 241	15 006 681

Development and optimization of the portfolio

As of December 31, 2022, the portfolio valuation (excluding transfer taxes and including properties accounted for using the equity method), reached € 841.3m, increasing by +4.3% compared to 2021. The capitalization rate of the properties in operation stands at 7.0%.

in millions of euros	Variation
Net balance as of January 1, 2022	807.0
Acquisitions	61.8
Disposals	(42.5)
Fair value impact	15.1
Net balance as of December 31, 2022	841.3

Over 2022, Patrimoine & Commerce continued its development through the acquisition of a retail property in Thonon-les-Bains (Auvergne-Rhône-Alpes), of a portfolio comprising five properties in Villefranche-de-Rouergue (Occitanie), Gonesse (Île-de-France), Tavers (Centre-Val de Loire), Avranches (Normandie), and Colomiers (Occitanie) and of a retail park in Saint-Paul-lès-Romans (Auvergne-Rhône-Alpes). Those investments totalled € 53.6m in 2022. Other investments were made on the existing portfolio as well as on restructuring operations in Ville-du-Bois and La Martinique, for a global amount of € 8.2m.

Patrimoine & Commerce also completed the disposal of several assets in Epagny (Auvergne-Rhône-Alpes), Vitrolles (Provence-Alpes-Côte d'Azur), Sarreguemines (Grand Est), Parigné L'Evêque (Pays-de-la-Loire), Bourgoin-Jallieu (Auvergne-Rhône-Alpes), Salon-de-Provence (Provence-Alpes-Côte d'Azur), and an office property in Guadeloupe, for a total consideration of € 42.5m, in line with external appraisers' valuations.

Dividend payment of € 1.30 per share

The distribution of a dividend of € 1.30 per share will be proposed to the Annual General Meeting of Patrimoine & Commerce. The proposed dividend is increasing by +4.0% compared to last year and implies a 4.6% yield on net asset value per share as of December 31, 2022, and of 7.9% on the current stock price as of February 21, 2023.

Agenda

April 12, 2023	First-Quarter 2023 activity
June 8, 2023	Annual General Meeting
July 26, 2023	First-Half 2023 results
October 11, 2023	Third-Quarter 2023 activity

THE LOW-COST RETAIL PARK SPECIALIST

About Patrimoine & Commerce

Patrimoine & Commerce owns and operates a real estate portfolio, largely comprising retail property, covering a total surface area of more than 520,000 sqm. The assets are mainly located in retail parks near mid-sized towns throughout France. Patrimoine & Commerce benefits from a significant identified deal flow that will enable it to feed its growth, in terms of both assets under development and operating assets.

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Notes :¹ The consolidated financial statements have been subject to audit procedures. The Statutory Auditors' report is to be issued shortly

• 2 Incl. Group share of Cherbourg and Studio Prod and assets held for sale.
• ³Based on annualized rents (or market rental value for vacant spaces) and on property valuation excl. transfer taxes
  • 4 Adjusted for hedging instruments
  • ⁵ Excluding strategic vacancy

⁶As of December 31, 2022, the current operational result and the net cost of debt are restated from operating expenses, other income and financial expenses of the real estate development activity (-€ 0.7m)

Patrimoine & Commerce is listed on NYSE Euronext Paris. ISIN code: FR0011027135 – Mnémo code: PAT

For further information, go to : www.patrimoine-commerce.com

For information, please contact : PATRIMOINE & COMMERCE KEIMA COMMUNICATION Eric DUVAL Managing Director +33 (0)1 46 99 47 79

Emmanuel DOVERGNE +33 (0)1 56 43 44 63 emmanuel.dovergne@keima.fr

Appendix 1 : Recurring net result and Net debt

Recurring net result

in millions of euros - 12 months	31/12/2022	31/12/2021	Var. %
Gross rental income	47.3	43.7	+8.3%
Net rental income	44.2	40.8	+8.2%
Operating expenses and other income	(5.0)	(4.5)	+10.8%
Adjusted EBITDA	39.2	36.3	+7.9%
Net cost of debt	(9.5)	(9.4)	+0.7%
Current taxes	(0.4)	(0.2)	n.a.
Funds from operations (FFO)	29.3	26.7	+9.6%
FFO per share	€ 1.93	€ 1.78	n.a.
Change in fair value of properties	14.9	2.5	n.a.
Change in fair value of financial instruments	3.6	1.1	n.a.
Equity method investees	0.5	0.9	n.a.
Other income and expenses	(2.1)	(0.0)	n.a.
Net income	46.1	31.2	+48.0%
Minority interest	1.7	0.4	n.a.
Net profit, group share	47.8	31.5	+51.7%

Consolidated Net debt

in millions of euros	31/12/2022	31/12/2021
Bond loans	30.0	30.0
Borrowings from financial institutions	355.2	340.8
Lease liabilities connected to finance leasing	34.6	41.1
Other lease liabilities	0.6	0.6
Accrued interest	1.8	1.5
Financial liabilities on hedging instruments	0.0	1.4
Bank overdraft	0.0	0.0
Financial liabilities - Partners' current accounts	8.5	4.2
Liabilities related to assets held for sale	3.3	4.1
Total Financial Debt	434.1	423.8
Cash and others	55.2	50.8
Financial assets on hedging instruments	2.2	0.1
Financial assets - Partners' current accounts	15.8	13.7
Consolidated Net Debt	360.9	359.2

Appendix 2 : IFRS Consolidated Financial Statements

Assets
in millions of euros	31/12/2022	31/12/2021
Non current assets
Investment properties	815.4	771.0
Tangible and intangible assets	0.7	0.6
Investment in equity-accounted companies	7.5	7.4
Non-current financial assets	2.9	1.1
Non-current deferred tax assets	0.1	0.1
Total - Non current assets	826.6	780.2
Current assets
Current financial assets	0.2	0.0
Trade and other receivables	22.4	23.0
Other receivables	7.8	9.3
Cash and cash equivalents	55.2	50.8
Total - Current assets	85.5	83.1
Assets held for sale	8.5	18.9
Total assets	920.6	882.1
Equity and Liabilities
in millions of euros	31/12/2022	31/12/2021
Equity attributable to owners of the parent
Share capital	152.8	150.8
Additional paid-in capital	35.7	40.7
Legal reserves	2.8	2.2
Consolidated reserves	192.1	174.9
Consolidated earnings	47.8	31.5
Total - Equity attributable to owners of the parent	431.2	400.2
Equity attributable to non-controlling interests	12.8	14.6
Total equity	444.0	414.7
Non current liabilities
Non current financial liabilities	388.8	370.0
Deposits	7.7	7.5
Deferred tax liabilities	-	-
Other long-term liabilities	2.4	3.8
Total - Non current liabilities	398.9	381.2
Current liabilities
Current financial liabilities	41.9	50.1
Payroll and tax liabilities	6.7	9.8
Trade payables	8.9	7.2
Other liabilities	16.9	14.9
Total - Current liabilities	74.4	82.0
Liabilities related to assets held for sale	3.3	4.1
Total Equity and Liabilities	920.6	882.1

Consolidated statements of comprehensive income

in millions of euros - 12 months	31/12/2022	31/12/2021
Gross rental revenues	47.4	43.9
Service charge income	10.3	10.0
Service charge expenses	(12.9)	(12.4)
Other building expenses	(0.6)	(0.7)
Net rental income	44.2	40.8
External expenses and other taxes	(4.8)	(4.3)
Payroll expenses	(0.8)	(0.9)
Amortization and provisions	(0.1)	(0.1)
Other current operating income and expenses	0.0	0.7
Total - Operating income and expenses	(5.7)	(4.6)
Current operating income	38.5	36.2
Other operating income and expenses	(0.7)	(0.1)
Change in the fair value of investment properties	14.9	2.5
Share in earnings of equity-accounted companies	0.5	0.9
Operating income	53.1	39.4
Financial income	0.4	0.4
Financial expenses	(9.9)	(9.8)
Cost of net debt	(9.5)	(9.4)
Other financial income and expenses	2.8	1.1
Income tax benefit (expense)	(0.3)	0.0
Net income	46.1	31.2
Minority interests	(1.7)	(0.4)
Net profit, group share	47.8	31.5
Net income, per share	3.17	2.13
Diluted net income, per share	3.17	2.13
Net income	46.1	31.2
Items that will be reclassified subsequently to profit or loss	-	-
Items that will not be reclassified subsequently to profit or loss	-	-
Total comprehensive income	46.1	31.2
of which : - Group share	47.8	31.5
- Non controlling interest	(1.7)	(0.4)
Average number of shares outstanding	15 057 573	14 804 270

Consolidated statements of cash flows

in millions of euros	31/12/2022	31/12/2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income from consolidated companies	46.1	31.2
Restatements :
Share in earnings of equity-accounted companies	(0.5)	(0.9)
Dividends received from equity-accounted companies	0.5	0.3
Depreciation, amortization and provisions	0.7	0.1
Change in value of investment properties	(14.9)	(2.5)
Change in value of other assets and liabilities	(3.6)	(1.1)
Capital gains and losses on asset disposals	0.1	(0.1)
Net cost of debt	9.5	9.4
Income tax benefit (including deferred tax)	0.3	(0.0)
Gross cash flow from consolidated companies	38.3	36.4
Income tax paid	(0.0)	(0.1)
Change in operating working capital	3.3	(0.2)
Net cash flow from operating activities	41.6	36.1
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of investment properties and other fixed assets	(61.5)	(16.0)
Proceeds from sales of investment properties	41.4	16.0
Movements in loans and other financial assets	0.3	1.2
Movements in current accounts of equity-accounted companies	(2.5)	2.2
Impact of changes in scope	-	(0.2)
Net cash flow from investing activities	(22.2)	3.2
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to owners of the parent	(15.8)	(12.3)
Dividends paid to non-controlling interests	-	(0.1)
Acquisitions / disposals of treasury shares	(0.9)	(1.2)
New loans, borrowings and hedging instruments	48.7	14.3
Repayment of loans, borrowings, hedging instruments and lease liabilities	(37.2)	(42.8)
Repayment of loans, borrowings and hedging instruments on assets held for sale	(4.4)	(1.0)
Repayment linked to rental liabilities	(0.1)	(0.1)
Interest paid	(9.3)	(9.3)
Transactions with non-controlling interests	-	(1.9)
Changes in partner's current accounts	4.2	(0.3)
Net cash flow from financing activities	(14.9)	(54.6)
Change In Cash and Cash Equivalents	4.5	(15.4)
Cash and cash equivalents at beginning of period	50.7	66.1
Cash and cash equivalents at end of period	55.2	50.7
Change In Cash and Cash Equivalents	4.5	(15.4)