Altarea : 2020 HALF-YEAR RESULTS (BUSINESS REVIEW & PRESS RELEASE)

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2020 HALF-YEAR RESULTS (BUSINESS REVIEW & PRESS RELEASE)

6 Aug 2020

Finance

• Revenue: €1.4bn (+8.1%)
• FFO1 Group share: €118.2m (+7.2)
• Decrease in net debt
• A successful post-lockdown recovery

'Altarea has successfully carried out its post-lockdown recovery by capitalizing on its strengths: a diversified model, a solid financial situation, and mostly thanks to an unprecedented mobilization of the women and men who embody Altarea.

The principles that have guided our actions during this unprecedented period are those that have prevailed since the Group's very beginnings: risk management, swift decision-making and quick execution. In this uncertain environment that lies ahead, it is crucial to lower the risk profile, focus on liquidity and remain agile.

In residential development, we have accelerated the cycle of notarised sales to an unseen scale and achieved high results within a very short time frame. We have given priority to the disposal of rapidly deliverable units and thus accelerated our cash collection, increased our revenue and reduced our debt.

As for retail, our tenants have been hit heavily by the lockdown and we had renewed our partnership relation to foster their recovery. Altarea stepped up and assumed its share of the common effort as shown in our financial statements which record concessions made, particularly to small businesses. We also recorded a decline in value of our retail assets, the impact of it on our financial ratios was offset by the debt reduction.

In commercial property development, we are very proud of the delivery of our new head office on rue de Richelieu in Paris. This head office not only illustrates our expertise in business property but also supports the Group's strategy. The success of the post-lockdown recovery led by Altarea is, to some extent, correlated to the Group moving in this building. At the same time, we had to postpone the delivery of several projects from 2020 to 2021, including Orange's headquarters in Issy-les-Moulineaux.

In this first semester, Altarea has achieved an outstanding performance given the context. However, the macroeconomic environment is expected to worsen: the end of 2020 should see a deterioration in employment which could impact our markets. Therefore, we will undertake the same risk management policy as the one implemented during the first semester of the year. Altarea is prepared to go through this period thanks to a strong liquidity position that will enable the Group to cope with any kind of situations and seize opportunities that might arise in this challenging context for all economic players.

FFO expected for the second semester of 2020 should be around the same levels as for the first semester including the postponed deliveries in business property, the consequences arising from delayed municipal elections, and the progressive increase in tax burden. Beyond 2020, we remain confident in Altarea's growth potential, with a resumption of FFO growth expected in 2021, assuming the health situation will stabilise.

We are convinced that our Cities need, more than ever, to be reinvented and that the urban transformation market holds vast opportunities, taking into account the issues of the low-carbon city and of the inclusive city. Altarea's fundamentals are not only steady but also expected to strengthen in the long term.'

Alain Taravella, Chairman and Founder of Altarea

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