FOCUS ON IMPROVING OPERATIONS
2014 Investor Days
DISCLAIMER
This document has been prepared by Klépierre (the “Company”) solely for use at the presentation of June 13, 2014. This document is not
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undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness
of the information or opinions contained herein. None of the Company, its shareholders, its advisors or representatives nor any other
person shall have any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in
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This document does not constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase any securities, and
this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in any jurisdiction.
Participants are invited to read the registration document (“document de référence”) of the Company filed with the AMF on March 10, 2014
and the risk factors described in the Risk Factors section from page 109 to 116 of the registration document. The registration document is
made available free of charge at the headquarters of the Company (Klépierre), on the Internet site of the AMF (http://www.amf-france.org)
and on the website of the Company (http://www.Klépierre.com).
Certain statements included in the registration document contain forward-looking statements with respect to future events, trends, plans or
objectives. The information, assumptions and estimates that were used to determine these objectives are subject to change or
modification due to economic, financial and competitive uncertainties. Furthermore, it is possible that some of the risks described in the
aforementioned section of the registration document could have an impact on the Company’s ability to achieve these objectives.
Accordingly, the Company cannot give any assurance as to whether it will achieve the objectives described, and makes no commitment or
undertaking to update or otherwise revise this information.
No assurance is given as to the fairness, accuracy, completeness or correctness of the information or opinions contained in this document.
In case of any discrepancies between the information contained in this document and the registration document, the latter will prevail.
2014 INVESTOR DAYS
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2
FROM VISION TO
OPERATIONAL
EXCELLENCE
2014 Investor Days
1
OUR VISION
• To develop and operate quality and superior
retail destinations in major cities
Highly productive and sales intensive
With strong franchise value
Able to attract leading retail brands
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OUR CUSTOMER-CENTRIC KNOWHOW
• By understanding our customers we create
and transform their experience at our centers
in order to:
Attract more customers
Encourage them to come more often and stay
longer
Develop a deeper relationship with the
community
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OUR FOCUS
• From “shoppers” to “style-conscious guests”: provide a
distinctive and image-enhancing combination of
Modern and fashion shopping
The best in casual and fine dining (with gourmet grocery and artisan
shops)
Entertainment and unforgettable performances and activities
• From “retailers” to “partners”: offer an unparalleled
opportunity to thrive in the best real estate with new
locations, an adapted format and a more consistent
merchandizing mix
• From “market places” to “connected places”: use technology
to better connect retailers with consumers
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OUR RESOURCES
•
Uncompromising asset selection with good fundamentals
•
Consistent and comprehensive deployment of the vision
with each and every property
•
Talented, motivated, passionate, and empowered teams
focused on creating mutually-beneficial opportunities and
relationships with partners
“Be creative, collaborative and connected”
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1. ANTICIPATE
TRENDS TO ACCELERATE RE
TENANTING
2. IMPROVE SHOPPERS’ EXPERIENCE
Club Store®
3. ENHANCE MARKETING POSITIONNING
Let’s play®
4. OPTIMIZE OPERATING
COSTS AND
SUSTAINABLE FOOTPRINT
Good Choices®
KLEPIERRE’S OPERATIONAL FOCUS
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MODERNIZING OUR MERCHANDIZING MIX
1
2
Shopping center analysis
-
Footfall analysis
Retailer sales
OCR by tenant
KPI by tenant and benchmark
Merchandising mix
Competition
Catchment area
Customer profile
2014 INVESTOR DAYS
SWOT
and
Challenges
3
4
Leasing strategy
Action plan
- Positioning (offer, price,
differentiating from competition),
- Customer target
- Prioritize retail offers to develop
- Brands targeted
- By segment of activity,
MSU and shops
- Short / medium / long
term,
- Resulting
merchandising mix
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THE LEASING AND MERCHANDIZING MIX
ACTION PLAN TOOL
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ANTICIPATE
TRENDS
TO ACCELERATE
RE-TENANTING
2014 Investor Days
2
ILLUSTRATIVE EXAMPLES
L’Esplanade (Belgium)
Créteil Soleil
Leveraging a large renewal campaign as an opportunity to
optimize the center’s retail mix and consolidate its leadership
Rejuvenating and upgrading the offer of a wellestablished and high performing historical regional mall
Belle Epine
Les Passages - Boulogne
Upgrading the customer path through retenanting and mall design via the ClubStore®
A city-center mall recently repositioned through a renovation
scheme combined with a renewal/re-tenanting campaign
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2005: shopping center
opens
2014: renewal campaign
involving around 80 leases
Key figures (2013):
56,000 sq.m. GLA
Footfall : 8M
MGR : 14.4M€
Av. OCR (shops): 12.2%
L’ESPLANADE – LEADERSHIP CONSOLIDATION
A large re-tenanting and renewal campaing to be followed in the
medium term by an extension scheme
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1. LEADERSHIP CONSOLIDATION THROUGH
RE-TENANTING
•
Objectives
Maintain well-performing retailers with a
significant increase in rents
Negotiate out underperforming tenants
and replace them with attractive
international prospects
•
“Move” Belgium market practices
Differentiate from competition  new
retailers for the region
Adapted to catchment area: families with
high income and students
•
Outcome
Re-tenanting: rental uplift of +49% vs
former MGR
Renewals: +22% vs former MGR
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2. L’ESPLANADE EXTENSION PROJECT – 2018
Transforming the shopping center into a large regional shopping mall
A mall that is continuous with the existing
mall,
Connected to its vicinity and the
Park&Ride at the upper level
Expand the retail offer in line with the
growth outlook for the catchment area:
Pipeline status: controlled
Floor area: +18,000 sq.m.
• Brabant Wallon population expected to
grow by 7%, i.e., 30 000 inhabitants by
2015 (vs population growth of 3.6% in five
years for Belgium)
• Strong development of the Louvain area,
partly due to the arrival of the regional rail
system in 2016
Strengthen the retail mix with additional
high performing brands, new to the region
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1974 :center opens
2000 : Extension (Level 3
: food court)
2014 : Renovation of the
parking area and main
entrance (Porte 23)
Key figures (end Q1 2014):
119,000 sq,m, GLA
220 shops
Footfall : 18M
MGR : 37.4M€
Av. OCR (shops) : 16.5%
#1 asset in Klépierre’s
portfolio in value terms
CRETEIL SOLEIL - REJUVENATE A WELLESTABLISHED, WELL-PERFORMING REGIONAL MALL
Fashion mall upgraded by resizing concepts, renewing retail mix and
improving customer path
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1. CRETEIL-SOLEIL : REJUVENATING THE RETAIL
MIX
•
Today: a mass-market retail offer
=> Primark opened on June 6, 2014 on
5.406 sqm
Lacks innovative and dynamic retailers
•
 Zara on its best format (3.200m²) in
replacement of Boulanger
=> Targeted brands
2014 INVESTOR DAYS
Staged re-tenanting plan is ongoing
Development of a complete fashion mall
following the arrival of Primark arrival
and extension of Zara stores
Resizing a few existing concepts
Attracting new ones
•
Similar plans to extend Zaraland in
Annecy, Boulogne, Jaude, Emporia
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KLEPIERRE IS PRIMARK’S LARGEST LESSOR IN
CONTINENTAL EUROPE
Primark opened a 5,400 sq.m. store in Créteil Soleil on June 6, 2014
Shopping center footfall up 30 % for the first 2 days
of opening*
The 3rd Primark store opening in the Paris region
(5th in France)
As of today 4 Primark stores in Klépierre portfolio
and one scheduled to open in Val d’Europe
extension
*Footfall as compared to same days last year
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2. CRETEIL-SOLEIL : MORE TO COME
• Optimize the customer path
Renovate main entrance from
metro line – “Porte (Gate) 23”
Porte « 23 » renovation
Project perspective
Improve visibility of stores
Digital screens
Accessibility
First phase of a large extensionrefurbishment program designed to
leverage a powerful retail hub
Floor area: + 7,500 sq.m. of
stores
•
Extension project
Main entrance
Partial renovation of existing mall
Restructured food court: link mall
to subway line and location near
the movie theaters
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1971 : Shopping center
opens
1993 : Extension
2014 : Ongoing
renovation
Key figures:
134.000 sq.m. GLA
220 shops
Footfall : 17M
BELLE EPINE – UPGRADING SHOPPING EXPERIENCE
Renovation for deployment of Club Store® concept and the arrival of
anchors’ latest concepts
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1. BELLE EPINE: REAFFIRM RETAIL LEADERSHIP
Tati comeback with its new concept on
a 4,000 sq.m. store
Intense, ongoing re-tenanting campaign
to modernize a mall with a long history,
including aging retailers
•
Uniqlo (1,200 sq.m.) opening in sept 2014
Re-tenanting opportunities exploited to
attract international premium anchor stores
Virgin departure  Flagship 4,000
sq.m. H&M store combining 2 existing
floor spaces, with H&M Home added
Latest arrivals and new concepts
2014 INVESTOR DAYS
Uniqlo to replace OVS
•
Expand the offer to encompass underrepresented segments for the catchment
area
•
Install latest brand concepts, with attention
to design and shop windows
•
Around 20% of leases up for renewal by
end 2016
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BELLE EPINE - RETAILERS
BELLE EPINE, 2014
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2. BELLE EPINE: ENHANCE ATTRACTIVITY
• Complete refurbishment of the center launched
• Customers will discover the Cosmopolis
Club Store® by Fall 2014
Mall design
Services
Image and Brand revisited
• Buzz to boost traffic and visibility
Brand roadshows, e.g., Nespresso
Virtual fitting rooms: an innovative
interactive digital experience via the digital
display panels of Clear Channel.
•Food offer reinforced
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2001 : center opens
2013: Launch of the
“Original Club Store”
2014 : Renewal campaign
completed
Key figures (end Q1 2014):
23,000 sq.m. GLA
58 shops
Footfall : 6M
MGR : 11.7M€
Av. OCR (shops) : 12.7%
LES PASSAGES (BOULOGNE) - CITY CENTER
RENEWAL
An illustration of Klépierre’s knowhow in brownfield development
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2014
2012
A COZY MALL – NEW IDENTITY AND WELCOME DESK
LES PASSAGES
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1. REPOSITIONING OF LES PASSAGES : AN
UPSCALE RETAIL OFFER
•
Zara upgrade and opening of Zara
Men in 908 sq.m. space displaying
the full concept
A unique shopping experience in the
West of Paris
Boulogne is the gateway to Paris for its
western suburbs, a very convenient stop
and shop center
•
Extensive re-tenanting campaign
started in 2012, still underway
44 leases out of 62 expired in 2013
Ongoing re-tenanting with best
performers and exclusive brands
Enrich the retail offer with specific focus
on differentiating brands
•
Outcome
2013 reversion: +36%
Re-tenanting: rental uplift of +45% vs
former MGR
Renewals: +35% vs former MGR
OCR for small shops above 14.5% at
year-end 2013
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2. REPOSITIONING OF LES PASSAGES : A NEW
AND VIBRANT COZY MALL
•
Club Store® creates a unique feeling of cozy
and chic shopping in all areas of the mall
•
Passages brand and identity reinvented to
align with redefined positioning
•
Natural attractivity of the
center reinforced
 Total investment for the 2013
refurbishment less than 1% of
the asset’s value
2014 INVESTOR DAYS
 May 2014: +7.5%
rise in footfall vs
May 2013
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IMPROVE
SHOPPERS’
EXPERIENCE CLUB STORE®
2014 Investor Days
3
THE CLUB STORE® MODEL
KLEPIERRE REDEFINES
SHOPPING CENTERS
AS
FASHION PLACES
BRANDS COLLECTION
SHOP-IN-SHOP
FOOD MEETING POINTS
MASS PREMIUM
CLUB STORE® CHALLENGES
1.
Upgrade the customer path
2.
Improve sense of well-being
3.
Provide a unique recreational atmosphere
4.
Extend customer visits
2014 INVESTOR DAYS
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1. UPGRADED CUSTOMER PATH
WOW
EFFECT
ACCESS
EACH POINT OF CONTACT
IS PEOPLE ORIENTED
WINK
PARKING
LIGHTING
SIGNAGE
ECO
GREENERY
CURIOSITY
ROOM
KIDS
LABEL
SHOWCASE
REFRESH
HOST
FOCUSED
(langage)
EVENT
PLACE
MAIN
ANCHOR
HOST
FOCUSED
(approach)
2014 INVESTOR DAYS
SOCIAL
LINK
WIFI
CLUB
LOUNGE
BREAK
SPOT
30
2. IMPROVED SENSE OF WELL-BEING
ClubStore
Les Passages
Insight*
THE CLUB LOUNGE
DIRECT RELATIONSHIPS
WITH CUSTOMERS
The place is welcoming for 76%
58% see it as a meeting point
57% say their questions are answered
Book sharing is an enriching service for 64%
BREAK AND MINI-BREAK
HOME FEELING
72% use the areas for a break during shopping
time
The design is detail-oriented for 90%
The furniture is high-quality for 86%
The areas are soothing for 79%
*Club Store Les Passages insight – 14/04/2014. 150 interviews on line
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3. UNIQUE RECREATIONAL ATMOSPHERE
ClubStore
Les Passages
Insight*
THE CURIOSITY ROOM
EXCLUSIVE CONCEPT
The restrooms at Les Passages are
clean for 92%, comfortable for 82%,
surprising for 77%
INTERACTIVE FLOOR
CHILDREN ARE BUSY
Entertaining for 71%
WINK
The MUSICAL STAIRS
Never seen before for 71%
*Club Store Les Passages insight – 14/04/2014. 150 interviews on line
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4. EXTENDED CUSTOMER VISITS
ClubStore
Les Passages
Insight*
43% OF RESPONDENTS
DECLARE THAT THEY ARE
SPENDING MORE TIME AT LES
43%
PASSAGES AFTER
REFURBISHMENT
27%
25%
18%
18%
12%
Fully agree
Strongly
disagree
*Club Store Les Passages insight – 14/04/2014. 150 interviews on line
2014 INVESTOR DAYS
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OPERATING COSTS
AND SUSTAINABLE
FOOTPRINT GOOD CHOICES ®
2014 Investor Days
4
ROADMAP
•
Optimize costs - Good Choices®, a
comprehensive approach
Generalized approach to CAM* expenses:
a centralized procurement function
Improved environmental performance,
particularly in terms of energy use and
waste recycling
•
Reduce vacancy costs and net service
charges
Shopping
centers - 2013
yoy growth*
Gross
rents
Net
rents
FranceBelgium
+5.0%
+5.0%
Scandinavia
+3.5%
+7.1%
Italy
+1.3%
+1.6%
Central Europe
+2.0%
+5.3%
Iberia
-3.7%
-4.5%
* Proforma the disposal of the €2.0Bn portfolio
of retail galleries completed in April 2014
Short-term leases
•
Capex : recurring maintenance and upgrade or refurbishment of malls
Help attract must-have, exclusive or differentiating retailers
Control costs through the centralized procurement function
•
Optimize services and marketing actions throughout the portfolio
* CAM: Common Area Maintenance
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PROCUREMENT
FUNCTION
Operating costs and sustainable
footprint
PROCUREMENT FUNCTION OBJECTIVES
Guarantee management of operational risks and
optimize group results by:
Optimizing the procurement process
Contributing to group’s net income
Steering procurement performance
Securing and monitoring supplier market
Paying particular attention to responsible and sustainable
procurement
2 principles:
Neutrality: a process that guarantees objectivity, equity, ethics
and transparency
TCO (Total Cost of Ownership) Vision
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SCOPE – EXPENSE ANALYSIS
23%
27%
Development
On-site current expenses*
(cleaning, security, energy, etc.)
8%
17%
Management structure
Marketing
(Advertising, agencies,
decorations, events, etc.)
(general services, IT, consulting, etc.)
25%
Exceptional charges
(ad-hoc maintenance,
mechanical links, signage)
* Fire alarm control and supervision, cleaning, energy, maintenance contracts and staff
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APPROACH
•
Identify addressable
procurement scope
•
Capture rate as a key
measure for identifying
potential for optimization
•
Illustrative example of
current expenses
Scope – Supplier selection
80% of expenses
incurred with 3% of
active suppliers
identified
Asset-by-asset analysis
Compliance rate
100%
TOTAL scope of
expenses incurred with
goods/services suppliers
[x]%
50%
5 of which account for
82% of current
expenses
Capture rate
Cover rate
2014 INVESTOR DAYS
60%
Segment purchasing: 15
categories
100%
 Define potential target for
reducing/optimizing expenses
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IMPLEMENTATION AND MONITORING
Monitoring performance and management of supplier risks
An executive management dashboard for tracking performance,
with measurable, factual financial objectives
Supplier risk mapping to help manage financial health,
dependency rate, undeclared workers
Professionalizing the procurement function
A procurement tool (native SAP) to manage, optimize and
secure contractual data
Mission statements clearly established with measurable
qualitative and financial objectives
Dedicated resources
Reporting directly to Operations Department, France, and close
to the field
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AN EVOLVING STRATEGY
2014 - 2017
Improve existing
conditions
Extent of cover
rate
Extend standard
contracts
Sourcing
New centers
opening
New supply
sources
Benchmarks per
category
FRANCE
Mgr category
ITALY
SCANDINAVIA
X M€
2014 INVESTOR DAYS
2017
2014
Cover rate
X M€
X M€
X M€
X M€
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ENERGY AND
WASTE
Operating costs and sustainable
footprint
42 CENTERS CERTIFIED
>55%
PERCENTAGE OF ASSETS WITH AN
ENVIRONMENTAL CERTIFICATION
(% IN VALUE)
50.7%
27.4%
16.7%
19.4%
2009
2010
2014 INVESTOR DAYS
21.7%
2011
2012
2013
December 31st
June 13th
38.3%
2014
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A STRONG INVESTMENT IN OUR INDUSTRY
Main missions for
2013/2014
• Environmental
dialogue between
lessors and lessees
• Certifications
Gold Award
For the quality of its
sustainability
reporting
2014 INVESTOR DAYS
Member of the
GRESB User Group,
whose mission is to
devise tools for sectorial
benchmarking
1st
Publication of the
guide to sustainability
reporting principles
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RESULTS AND AMIBITIONS HIGHLIGHTED BY
MAIN ESG RATINGS AND AGENCIES
Main ratings
Score 2013
/ 100
Improvement
vs. last rating
RobecoSAM
74/100
+ 17 %
DJSI World & Europe
Vigeo
57/100
+ 30 %
Euronext Vigeo
France 20
Eurozone 120
Europe 120
World 120
GRESB
67/100
+ 16 %
Green Star
72/100 - B
+ 26 %
-
Carbon Disclosure Project
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Distinction
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Thank you
investorrelations@klepierre.com
www.klepierre.com
2014 INVESTOR DAYS