Ascencio : Annual press release

Regulated information

25 November 2021 - Under embargo until 5.40 p.m.

Statement of the Statutory Manager

Consolidated results for financial year 2020 - 2021

N e w g o o d p e r f o r m a n c e o f A s c e n c i o

E P R A E a r n i n g s u p b y 3 . 9 %

P r o p o s e d d i v i d e n d u p b y 1 . 4 %

F a i r v a l u e o f i n v e s t m e n t p r o p e r t i e s u p b y 1 . 4 % .

OPERATING RESULTS

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Rental income: €46.29 million, up by 3.9% (before Covid impact)

EPRA Earnings: €30.56 million, also up by 3.9%

Net result: €45.65 million, a strong increase compared with the previous year (€9.25 million), due to the significant increases in value recorded during the past financial year on the portfolios of investment properties and hedging financial instruments

EARNINGS PER SHARE

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EPRA Earnings: €4.63 per share, compared with €4.46 per share at 30/09/2020

EPRA NTA: €57.37 per share, compared with €54.90 per share at 30/09/2020

PORTFOLIO OF INVESTMENT PROPERTIES

• Expertise value (fair value excluding IFRS 16): up : €709.7 million compared with €690.5 million at
  30/09/2020, resulting on the one hand from investments and divestments recorded in the portfolio during the financial year (€9.4 million) and on the other hand from an increase of €9.8 million (+1.4%) in the fair value attributed to the portfolio by the property experts
• EPRA occupancy rate1: lower, at 96.0%, compared with 97.5% at 30/09/2020

FINANCIAL STRUCTURE

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Debt ratio2 : down to 47.6% as against 48.5% at 30/09/2020.

Average cost of debt (*): unchanged at 1.81% in 2020/2021 compared with 1.84% in 2019/2020

PROPOSED DIVIDEND FOR THE 2020/2021 FINANCIAL YEAR

• Proposed distribution of a gross dividend of €3.70 per share, up by 1.4% on the previous year (€3.65 per share), equivalent to a gross dividend yield of 7.5% based on the share price on 30/09/2021 (€49.10 per share). This dividend increase is the seventh in a row.

1 With effect from 30 September 2021, the reported occupancy rate is calculated in accordance with the 'Best Practices' published by

the EPRA organisation. In this statement, the occupancy rate at 30 September 2020 has therefore been recalculated on this same basis to ensure comparability of the information presented.

2 Debt ratio calculated in accordance with the Royal Decree of 28 April 2018 on Regulated Real Estate Companies.

1. Alternative Performance Measure (APM). See pages 11 to 13. They are identified in this press release by an asterisk (*).

Avenue Jean Mermoz, 1 bte 4 - 6041Gosselies ⏐ BE 0881.334.476 - RPM Charleroi ⏐ www.ascencio.be

Summary of activity in 2020/2021

Ascencio's results for the 2020/2021 financial year demonstrate the quality of the portfolio and the pertinence of the strategy pursued by the Company, with rental income and property portfolio values growing and good control of its costs, both in terms of the aid granted to Ascencio's retailers under the Covid agreements and in terms of its corporate overheads and financial charges. This sound and prudent management of the Company allows it to maintain a solid balance sheet structure, with a debt ratio down to 47.6% at 30 September 2021, generating sufficient margins to propose to the General Meeting of Shareholders scheduled for 31 January 2022 the distribution of a dividend for the financial year of €3.70 per share, up by 1.4% on the previous year.

During the 2020/2021 financial year, the economic context continued to be marked by the Covid-19 crisis but it also served to further highlight the resilience and good performance of retail parks and the food sector, which make up the bulk of Ascencio's portfolio.

In this context of health crisis, governments have imposed new mandatory closing periods for non-essential businesses in Belgium, France and Spain over the past year. However, the impact of these closures was more limited than in the 2019/2020 financial year as more stores were deemed essential and were therefore able to remain open, but also due to the agility of Ascencio's retail customers in developing their omnichannel offer. The food distribution sector was even able to benefit from the absence of compulsory closing periods and notably from the generalization of teleworking, which was first imposed and then implemented structurally in many companies, thus improving profitability.

Retail parks have proven to be the most resilient type of retail asset during this health crisis, compared to high street stores or shopping centers. Their 'open-air shopping' aspect and their accessibility among other things have encouraged customers to favour these shopping venues, which also have a commercial mix composed more of shops offering items meeting consumers' primary needs, making them less sensitive to the impacts of the health crisis. Finally, the more affordable rents and very low maintenance charges in retail parks, as well as the flexibility of the retail units, also make this type of asset attractive to retailers wishing to develop their omnichannel offer.

For each closure period, Ascencio undertook targeted dialogues with its retailers, taking into account the specific situations of each one, leading to the conclusion of partial rent rebate agreements for tenants demonstrating that their activity had been negatively and significantly impacted during the periods concerned, in order to help them get through the health crisis.

At 30 September 2021, Ascencio had reached agreements for almost all discussions with its Belgian and Spanish tenants, while the conclusion of these agreements takes longer with its French tenants as these agreements are also dependent on the position of the French state as to its involvement in these discussions.

In the financial statements at 30 September 2021, based on the finalised negotiations and a conservative estimate of the potential impact of the discussions still in progress, the partial cancellations of rent resulting from the closure of the shops amount to a total of €1.2 million, of which €0.6 million relates to credit notes actually issued (and taking into account tax credit compensations granted by the French state) and €0.6 million of provisions for estimated credit notes to be issued relating to discussions still in progress. This impact is relatively limited as it represents less than 3% of the Company's annual rental income.

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In addition to these elements related to the management of the current health context, the Company has performed well over the past year, both in terms of:

• rental:
  by the conclusion or renewal in Belgium and France of a total of 52 lease contracts, representing approximately 10% of the Company's annual rental income. These contracts were concluded on average at rent levels 2% higher than the market values given by the property experts and on average 3.5% lower than the previous rents obtained for these areas. As several contracts have been concluded with start dates after 30/09/2021, they are not included in the EPRA occupancy rates reported in this press release and will only be included in the calculation of these rates when these leases have actually come into force. Despite the surrounding health context, the past financial year has shown that the rental market has remained dynamic and that take-up has remained strong, especially in sectors that have performed well during the crisis and in the type of commercial space offered by Ascencio.
• investment:
• • by the acquisition of a few additional units in the Couillet Bellefleur retail park (Belgium) for €6.4 million, enabling Ascencio to further strengthen its position in this successful retail complex;
  • by the development of additional rental space in the Les Portes du Sud retail park in Chalon-sur-Saône (France) to accommodate the tenant Maisons du Monde on a surface area of over 1,500 m²;
  • by the renovation of the façades of its Messancy retail park (Belgium), for an amount of approximately €1 million, with delivery expected in the last quarter of 2021;
  • by the signing of a sale agreement for its city centre building in Sint-Niklaas (Belgium), which no longer fits in with the strategy pursued by the Company, for an amount of €1.5 million. This disposal was effectively completed during October 2021 and the result will therefore be recorded in the financial statements for the year 2021/2022.
• financial:
• • by strengthening the Company's financing structure, in particular through the renewal of two credit lines nearing maturity for an amount of €25 million;
  • by a new issue of MTNs (Medium Term Notes) for an amount of €10.5 million;
  • by acquiring derivative hedging instruments with deferred start dates in order to secure a hedging ratio of over 80% for a period of more than 4 years.

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Consolidated results for financial year 2020/2021

CONSOLIDATED RESULTS (€000S)	30/09/2021	30/09/2020
RENTAL INCOME	46,285	44,555
Rental related charges	-1,371	-2,224
Taxes and charges not recovered	-130	-183
PROPERTY RESULT	44,785	42,148
Property charges	-3,479	-2,711
Corporate overheads	-4,057	-3,881
Other income and operating costs	-12	-4
OPERATING RESULT BEFORE RESULT ON PORTFOLIO	37,236	35,551
Operating margin (*)	80.4%	79.8%
Net interest charges	-5,881	-5,308
Other financial charges	-427	-334
Taxes	-372	-489
EPRA EARNINGS	30,555	29,420
Net gains and losses on disposals of investment properties	0	-41
Change in the fair value of investment properties	9,835	-20,520
Portfolio result	9,835	-20,561
Change in fair value of financial assets and liabilities	5,704	316
Deferred tax	-443	71
NET RESULT	45,652	9,246

The results for the financial year 2020/2021 show an increase in rental income from €44.6 million at 30/09/2020 to

€46.3 million at 30/09/2021 (+3.9%), before taking into account the impact of the Covid-19 health crisis.

This increase is mainly due to changes in the scope of consolidation in the previous year, with

• the acquisition of the 5 food assets in France leased to Groupe Casino generating annual rental income of €4.6 million and which contributed for the full year 2020/2021;
• to a lesser extent, during the past financial year, with the acquisition of some retail units in Couillet (Belgium) generating annual rental income of €0.3 million;
• with the delivery of a new retail unit developed in the Les Portes du Sud retail park in Chalon-sur-Saône (France) to accommodate Maisons du Monde and generating additional annual revenues of €0.2 million.

The following table shows rental income by country:

RENTAL INCOME (€000S)		30/09/2021		30/09/2020
Belgium	25,011	54%	25,567	57%
France	19,314	42%	17,033	38%
Spain	1,960	4%	1,955	4%
TOTAL	46,285	100%	44,555	100%

On a like-for-like basis, rental income at the Group level evolved by -1.12% over the past financial year, this evolution being positive for the French (+1.57%) and Spanish (+0.24%) portfolios but negative for the Belgian portfolio (-2.37%), which in net impact terms saw some tenant departures and rent (re)negotiations during the past financial year.

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Rental-relatedcharges decreased significantly from €2.22 million at 30 September 2020 to €1.37 million at 30 September 2021. These charges include

• firstly, write-downs of trade receivables for €0.11 million (compared with €0.58 million the previous year);
• secondly, the cancellation of rents granted to certain non-food tenants for €1.26 million in connection with the closure of non-essential businesses (as against €1.64 million in the previous financial year).

After taking account of these rental-related charges and other charges that cannot be re-invoiced,the property result amounted to €44.79 million (up by 6.3% relative to the year ended at 30 September 2020).

Property charges increased significantly, from €2.71 million at 30 September 2020 to €3.48 million at 30 September 2021. This increase is mainly attributable to (i) an increase in technical costs (+€0.44 million), which were kept to a minimum in the 2019/2020 financial year at the time of the pandemic outbreak and have been cautiously restarted in the 2020/2021 financial year in order to cope with the urgent interventions to be carried out in the portfolio; and (ii) a slight increase in property management costs (+€0.25 million).

Corporate overheads remained relatively stable at €4.06 million at 30 September 2021 (compared with €3.88 million in the previous financial year).

After deduction of property charges and corporate overheads, operating result before result on portfolio came to €37.24 million (€35.55 million at 30 September 2020). The operating margin (*) came to 80.4%.

Net interest charges, including the cash flows generated by interest rate hedging instruments, amounted to €5.88 million (€5.31 million at 30 September 2020). This increase is mainly due to the debt financing of the acquisition of the 5 Casino supermarkets for €85.2 million in March 2020. This acquisition increased the Company's average financial debt from €297.7 million in 2019/2020 to €338.5 million in 2020/2021.

The average cost of debt (*)(including margins and cost of hedging instruments) remained stable at 1.81% during the financial year 2020/2021 (compared with 1.84% in 2019/2020).

Thanks to the interest rate hedging policy put in place, the Group's hedging ratio is currently 82.5%. Based on the level of financial debt at 30 September 2021, it is set to remain above 80% until December 2026.

After deduction of the tax charge on French and Spanish assets, EPRA earnings amounted to €30.56 million at 30 September 2021, an increase of 3.9% compared with the previous financial year.

Regarding the revaluations during the year:

• the investment property portfolio recorded an increase in fair value of €9.84 million (+1.4%), a significant improvement on the €20.52 million in negative revaluations recorded in the previous year;
• the fair value of the hedging instruments portfolio also increased by €5.70 million, compared with an increase of €0.3 million in the previous year;
• the deferred tax liability on the tax latency on the French real estate portfolio increased by €0.44 million, due to the positive revaluation of this portfolio during the past financial year, the effect of which was to increase this tax latency value in the Company's financial statements.

Taking account of these last-named items, net result amounted to €45.65 million as against €9.25 million at 30 September 2020, a strong increase due mainly to the positive revaluations during the year in addition to the good operating performance achieved by the Company.

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