Leader in shopping centers in Eastern Europe Company presentation November 2010
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Atrium Snapshot Owner and Manager of super market anchored shopping centres Owner and Manager of super market anchored shopping centres • The only listed property player focused 100% on the Central Eastern European and Russian retail markets • 152 income producing properties • Shopping centers, primarily supermarket anchored • Market value of standing investments €1.5bn • GLA of standing investments: 1.1m sqm • 2009 GRI: €149m, NRI: €121m • 9M2010 GRI: €112m, NRI: €100m 9M2010 GRI €112 NRI €100 • Development and land portfolio: €688m • Cash 30.09.10: €383m • Net LTV 30.09.10: 1.9% Net LTV 30.09.10: 1.9% 3
Atrium: milestones • €428m of convertible bond exchanged for • Debt restructuring, equity • Atrium repurchased • Fitch upgraded credit • ‘06 bond buy-back ‘06 b d b b k • CPI/Gazit become CPI/G it b • Tender offer for T d ff f th the remainder of the i d f th rating for Atrium by 2 f started 49.5% shareholders ‘06 bond (€80m) 2006 Notes (€ 153m) notches to BB+ Aug Jan Nov Dec Jan Mar Jun Sep Oct Aug 2008 2009 2009 2009 2009 2010 2010 2010 2010 2010 • Management internalized • Listing on NYSE • Introduction of new dividend • Interim dividend (€0.03 per • New team of international Euronext, policy – first dividend in the share) company’s history ( € 0.03 per real estate experts Amsterdam • To be followed quarterly appointed under CEO appointed under CEO share quarterly) share quarterly) Rachel Lavine • Payment of € 0.5 per share special dividend Development pipeline rationalised to provide increased flexibility Development pipeline rationalised to provide increased flexibility Research coverage initiated by RBS and HSBC 4
Atrium Today: proven stability and steady improvement Stable Occupancy Improved Operating Margin 93.11% 87.86% 87.90% 86.94% 81.43% 80.14% 94.69% 94.68% 77.37% 94.23% 93.96% 93.57% 93.57% 93.40% Q1 2009 H1 2009 9M 2009 2009 Q1 2010 H1 2010 9M 2010 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Net Operating Profit, €’000 Maintained high occupancy across the portfolio despite • difficult market conditions 61,828 Improved operational efficiency of the group and maintained p p y g p 24,860 • 16 389 16,389 a sustainable level of the OPEX margin Restructured the balance sheet and reduced interest • (16,464) expenses by €98m per annum (45,555) (71,371) First Operating Profit in five quarters reported in Q1 2010, p g q p Q , • followed by further increase in the Operating Profit in Q2 and Q3 2010. (279,304) 5 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010
Majority of Portfolio in Investment Grade Rated countries Approx. 90% of Standing portfolio value is located in Investment Grade Rated countries Poland (40.9% of the Group): Russia (18.1% of the Group): Czech Rep. (15.5% of the Group): • GDP growth* 11E: 3 7% GDP growth 11E: 3.7% • GDP growth 11E: 4 3% GDP growth 11E: 4.3% • GDP growth 11E: 2 2% GDP growth 11E: 2.2% • Fitch rating: A-/ Stable • Fitch rating: BBB+/ Positive • Fitch rating: A+/ Positive •17 properties •7 properties •97 properties •281,000sqm •208,200sqm •330,000sqm Slovakia (7.9% of the Group): • GDP growth 11E: 4.3% • Fitch rating: A+/ Stable •3 properties •64 300sqm •64,300sqm Hungary (5.7% of the Group): • GDP growth 11E: 2.0% • Fitch rating: BBB/ Negative g g •25 properties •103,000sqm Remaining 12% of the Group portfolio is located in Latvia (1 property) Romania (1) and located in Latvia (1 property), Romania (1) and Turkey (1). All three countries have a credit rating 1 notch 6 below Investment Grade: BB+. * Source: IMF outlook October 2010
62% of NRI comes from stable countries Net Rental Income 9M 2010 9M 2010 NRI as % 9M 2010 NRI as % NRI 9M 2010 of total NRI per Accumulated Country IDR* €'000 country NRI % Czech Rep. A+/Positive 16,157 16.12 16.12 11.15% Slovakia A+/Stable 7,319 7.30 23.42 26 80% 26.80% Poland P l d A /S A-/Stable bl 38 723 38,723 38 63 38.63 62 05 62.05 Russia BBB/Positive 22,230 22.18 84.23 62.05% Hungary BBB/Neg 4,636 4.63 88.85 Latvia BB+/Stable 330 0.33 89.18 Romania BB+/Stable 5,134 5.12 94.31 Turkey BB+/Stable 5,708 5.69 100.00 Total To 10 100, 0,23 237 7 100 Countries with A ‐ rating and above Other Investment Grade countries * Long Term Issuer Rating (IDR), Fitch Rating as of September 2010 Below Investment Grade contries 100% focused 100% focused on on retail retail pr properties operties in in CEE, CEE, but… but… …62% …62% of …62% of …62% of the of the the total the total total NRI otal NRI NRI comes NRI comes comes from omes from from countri from countries countries countries with es with with A rating with A-rating rating and rating and and above and above above bove …89% of NRI comes …89% of NRI comes from the I from the Inve nvestme stment nt Grade rated countrie Grade rated countries 7
Tenant Mix: Resilience to the crisis Tenant Mix Based on Annualized Income Fashion 33% % 9% Hyper/Supermarket 24% 4%3% 33% Entertainment 3% 2% Smaller Food retailers 1% Health and Beauty 6% Home 15% H 15% 15% Non Retail 2% 6% Restaurants 4% 1% 24% Services 3% 3% Specialty Goods 10% Tenant Mix Based on GLA Hyper/Supermarket 35% 3%2% 6% Fashion 22% 35% of GLA is occupied by food • 3% 35% 35% Entertainment 6% 5% retailers (Hyper-/ Supermarkets) Smaller Food retailers 1% A tenant mix with a large exposure to • Health and Beauty 4% food and everyday necessities has 17% Home 17% proven its economic resilience 4% 4% Non Retail 5% il % 1% 6% Restaurants 3% 21% Services 2% 8 Specialty Goods 6%
Lease Expiry – Well Balanced Lease Expiry Based on Annual Income 44.3% Long duration of lease contracts • 10.6% 13.3% provides protection in difficult 7.5% 8.1% 9.8% rental markets rental markets 6.4% 6.4% 2010 2011 2012 2013 2014 2015 >2015 (H2) Lease Expiry Based on GLA Lease Expiry Based on GLA 55.7% 7.4% 6.8% 8.7% 7.6% 10.4% 5.3% 2010 2011 2012 2013 2014 2015 >2015 (H2) 9
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