CREATING GREAT PLACES 2019 FINANCIAL RESULTS AND CORPORATE STRATEGY REVIEW PRESENTATION 26 February 2020
CONTENT 2019 highlights 3 2019 results overview 6 ESG and green fjnancing framework 11 Corporate strategy review 13 Retail portfolio 17 Residential for rent 21 Summary 25 2
2019 HIGHLIGHTS 3
A CE PORTFOLIO FOCUSED ON QUALITY URBAN ASSETS IN WARSAW AND PRAGUE €2.6bn €1.7bn €0.5bn POLAND AND CZECH 85% Poland Czech OF THE PORTFOLIO €1bn €0.4bn standing investment WARSAW AND PRAGUE 54% 5 assets Warsaw 2 assets Prague portfolio THE GROWTH DRIVER 809,000 97% sqm GLA Occupancy 6.4% €0.4bn Net equivalent yield redevelopment pipeline 4 ¹ The portfolio fjgures exclude 6 assets classifjed as held for sale
CONSERVATIVE BALANCE SHEET WITH STRONG BBB (stable) €4.96 €300m LIQUIDITY AND INVESTMENT Fitch Baa3 (positive) GRADE RATING unutilized RCF EPRA NAV Moody's 35.1% 72% Net LTV Unencumbered assets €127m c. 3% cash 31/12/19 €300m Cost of debt Moody’s and S&P unutilized RCF 5
2019 RESULTS OVERVIEW 6
POLAND AND CZECH DRIVE GROWTH: LFL NRI +2.4% 1 IN 2019 Net rental income broadly fmat -phasing of +2.0%¹ +3.0% -0.7% asset rotation Poland Czech Russia (in million €) 178.9 176.4 Excl. Russia +2.4% LFL NRI excluding Russia and assets held for sale, +1.1% Group LFL NRI Russia 139.8 140.8 +€1.1m Asset rotation continues in Poland and completed in the Czech Republic Russia anchor retenanting, 35,000 sqm GLA completed -€3.6m 39.1 35.6 1 Excl. assets held for sale 2018 2019 97% Occupancy Lease expiry: > 60% Renewals 2023 & beyond (31/12/2019) (% of ARI) 32.1% 31/12/2019 97.0% 96.6% 5.3 YR WALT Strong demand drives high occupancy 18.0% 15.7% 12.1% 11.9% 10.2% 31.12.2018 31.12.2019 2020 2021 2022 2023 2024 >2024 7 >1,000 leases signed in 2019 at passing rent and 2.8% above ERV
EARNINGS: PHASING OF ASSET ROTATION EBITDA margin 87% Company Adjusted EPRA Earnings (in million €) (in million €) 160 156 154 1 122 118 114 111 106 87% 87% 84% EBITDA as % of NRI EPRA NAV per share/Share price 60% 5.24/ 5.03/ 4.96/ 5.38/ 4.2 3.2 3.5 3.9 2016 2017 2018 2019 2016 2017 2018 2019 Company adjusted EPRA earning p.s. (€ Cents) 31 . 4 32.4 29.3 28.0 1 Adjusted for €6.2m in 2019 and €2m in 2018 for transaction costs in relation with the recommended cash acquisition by Gazit Globe and EPRA NAV discount (28%) (19%) (36%) (30%) in 2018: €4.5m fee in relation with the takeover of Atrium Dominikanska management contract 2020 dividend The Board of Directors has approved an annual dividend of €cents 27 per share for 2020 (to be paid quarterly as capital repayments) 8
PORTFOLIO OVERVIEW, WARSAW AND PRAGUE CENTRIC ASSET BASE Dec. 2019 Market value Net equivalent yield RUSSIA €m % 11% POLAND Warsaw 1,006 5.2% 65% Other Poland 689 6.5% SLOVAKIA WARSAW 38% OTHER POLAND 27% 4% POLAND 1,695 5.7% € 2.6bn CZECH Prague 418 5.1% 6.4% yield REPUBLIC Other Czech 104 5.8% 20% PRAGUE 16% CZECH REPUBLIC 522 5.3% OTHER CZECH 4% Slovakia 121 6.7% Russia 287 12.8% PROPERTY VALUATION STABLE IN 2019 TOTAL 2,625 6.4% 9
SIGNIFICANT LIQUIDITY TO SUPPORT GROWTH, €127M CASH 31/12/19, €190M CASH AS OF TODAY, €300M RCF UNUTILIZED Debt maturities LTV 4.4 years (in million €) (net) average maturity 460 294 37.9% 35.1% 163 133 30.1% 114 28.7% 2020 2022 2025 2026 2027 31/12/2016 31/12/2017 31/12/2018 31/12/2019 Borrowings Financial Performance Indicators 72% (as at 31/12/2019) unencumbered Bonds €887m standing investments Cost of Debt EPRA NAV per share Loans €300m € 1.2bn €4.96 c. 3% Total Debt €5.03 31/12/2018 10
ESG AND GREEN FINANCING FRAMEWORK 11
ATRIUM'S SUSTAINABILITY MILESTONES OUR FOCUS OUR CUSTOMERS OUR PLACES OUR PEOPLE UNDERSTAND CUSTOMER BEHAVIOUR AND DEVELOP AND ENGAGE EMPLOYEES WHO ARE PROUD PROVIDE SAFE AND HEALTHY SPACES THAT OPERATE MEET EXPECTATIONS TODAY AND IN THE FUTURE TO WORK FOR US AND EMBRACE OUR ATRIUM VALUES EFFICIENTLY BY STIMULATING INNOVATION AND OPTIMAL DESIGN Green fjnancing framework Atrium has focused on sustainability since 2014 Including the integration of ESG into our fjnancing activities from 2020 onwards In February 2020, a green fjnancing framework has been endorsed by Sustainalytics and approved by the Board Green fjnancing instruments to become a regular part of the fjnancing activities Financing proceeds will be allocated to assets certifjed as BREEAM in use "Very Good or Higher" 12
ATRIUM BY 2024 CORPORATE STRATEGY REVIEW 13
Vision The Backdrop A leader in retail and residential for rent in Warsaw Atrium is a CE real estate player offering exposure to the largest, fastest growing, most stable CE Countries of Poland and Czech Provide sustainable income growth to our shareholders Outstanding macro indicators: De-risk cash fmow volatility by diversifjcation Poland >25 years of consecutive growth 4.0% and 2.5% GDP growth in Poland and Czech Creates an opportunity for NAV growth. Poland credit rating A-/stable, Czech AA-/stable Passionate about Our people, Our communities, Our customers 1.3% unemployment rate and 6.3% wage growth in Warsaw in 2019 Lack of good quality in residential for rent units in Warsaw to satisfy the rising levels of demand Attractive going in yields in the residential sector in Warsaw compared with other European major cities Robust value and rental growth create an opportunity Leveraging urbanisation , demographic trends Benefjt from having a skilled team on the ground 14 14
Capital structure Mission 1 Capital recycling of non core retail assets Continue the rotation of the retail portfolio into prime dominant assets in major cities Optimal balance sheet - extending debt maturity / lower costs of fjnancing 2 Reinforcement of dominant retail assets via redevelopments and densifjcation Long term net LTV c. 40% 3 Diversifjcation into modern, purpose built residential for rent assets in our core geographies 2024 Portfolio A unique Warsaw/Prague portfolio of 60% retail / 40% residential for rent Cash generating and resilient retail portfolio with a sustainable LFL growth First class retail/residential destinations for our retailers, customer and residents Being at the heart of our communities 15 15
ATRIUM 2014-2024 - THE JOURNEY CONTINUES ATRIUM 2014 ATRIUM 2019 1 ATRIUM 2024 100% 100% RETAIL RETAIL WARSAW/PRAGUE RESIDENTIAL PRIME SHOPPING TO RENT 40% CENTRES 60% 29% 54% CEE Centralized PORTFOLIO URBAN WARSAW PORTFOLIO WARSAW & PRAGUE & PRAGUE RETAIL STRATEGY 7 DOMINANT ASSETS WITH COUNTRIES CREATING VALUE THROUGH PORTFOLIO A REDEVELOPMENT AND DENSIFICATION POTENTIAL DENSIFICATION PIPELINE RESIDENTIAL STRATEGY €2.6 8.0% €2.6 6.4% bn yield bn yield 5,000 TARGET UNITS NO. OF ASSETS AVG. ASSET VALUE NO. OF ASSETS AVG. ASSET VALUE 153 €17M 26 €101M MAJOR CITIES, WARSAW CENTRIC 16 ¹ Excluding assets classifjed as held for sale
RETAIL PORTFOLIO A. Continued asset rotation B. Redevelopment and densifjcation opportunities 17
A. CONTINUED ASSET ROTATION INTO PRIME DOMINANT ASSETS IN MAJOR CITIES 2014 to date: €0.5bn prime assets purchased, €0.8bn secondary assets sold 2019: €0.4bn secondary assets sold at or above book value, King Cross, our 5th asset in Warsaw purchased for €43m 29% in Warsaw and Prague in 2014 —› 31/12/19: 54% WARSAW THE HEART OF POLAND ¹ WARSAW POLAND PRAGUE THE HEART OF THE CZECH REPUBLIC ¹ PRAGUE CZECH Nr of inhabitants 1.8m 38m Nr of inhabitants 1.3m 10.6m Average monthly salary €1,585 €1,209 Average monthly salary €1,553 €1,342 Unemployment 1.3% 3.8% Unemployment 1.2% 2.2% 31/12/19: 31/12/19: 38% in Warsaw 16% in Prague Atrium Flora Atrium Targowek King Cross Arkady Pankrac Wars Sawa Junior Atrium Promenada Atrium Reduta 18 ¹ Czech and Prague Statistics Offjces ¹ Central Statistical Offjce of Poland, GfK
B. CREATING VALUE THROUGH REDEVELOPMENT AND DENSIFICATION The opportunity Targets Create and utilise building rights on and around our core assets - drive footfall Our footprint offers densifjcation and redevelopment potential and income > 55,000 sqm of additional residential / offjce extensions identifjed in Increase variety of complementary uses within zoning plans by adding mixed Warsaw & Prague use non retail elements Attractive redevelopment yields Transform shopping centres into mixed-use offering work, live, play balance Diversifjcation of rental income streams from offjces and residential for rent Future proof the existing centres to adapt to changing consumers behaviors and retail environment Densification creates additional daily footfall and sales , leading to long term sustainable income and capital value growth Redeveloping prime assets in line with consumer trends (F&B, leisure) 19
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