2002 Annual Report

2 0 0 2
A N N U A L
R E P O R T
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LEASE
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SELL
2002 ANNUAL REPORT
C O N T E N T S
Shopping Centres > Carré Sénart >
Carrousel du Louvre > Chelles 2 >
Le Forum des Halles > Galerie GaitéMontparnasse > Printemps de l’Homme >
Les Quatre Temps > Rosny 2 > Ulis 2 > Vélizy
2 > Bab 2 in Biarritz > Bonneveine
in Marseilles > Cité Europe > Euralille >
Labège 2 in Toulouse > Mériadeck in Bordeaux
> Nice Etoile > Place d’Arc in Orléans >
Saint-Martial in Limoges > Strasbourg Etoile
> La Toison d’Or in Dijon…
Convention and Exhibition Centres > Carrousel
du Louvre > Cœur Défense- Centre de
Conférences > Cnit > Espace Champerret >
Foyer de l’Arche > Hôtel MéridienMontparnasse > Palais des Sports > Paris
Expo-Porte de Versailles.
Office
Buildings
> Tour Ariane
>
7 place du Chancelier Adenauer >
39-41 rue Cambon > Cité du Retiro >
Cœur Défense > 23 boulevard de Courcelles
> 70 boulevard de Courcelles > 168 avenue
Charles de Gaulle – Neuilly > Tour Europe >
42 avenue d’Iéna > 44-46 rue de Lisbonne >
52 rue de Lisbonne > 5 boulevard
Malesherbes > 189 boulevard Malesherbes
> Immeuble Michelet-Galilée > 50 avenue
Montaigne > Palais du Hanovre > Quai
Ouest > Projet Messine-Monceau-Murat >
108 rue de Richelieu > 1 rue Saint-Georges >
11-15 rue Saint-Georges > 137 rue du
Faubourg Saint-Honoré > 40ter avenue de
Suffren > Centre d’affaires Tolbiac Masséna
> Les Villages…
2
4
6
10
14
18
20
22
26
42
71
85
Key Figures
Message from the Chairman
Office Buildings
Shopping Centres
Convention - Exhibition Centres
Corporate Governance
Sustainable Development
Property Portfolio
Management's Discussion and Analysis
Consolidated Financial Statements
Legal Information
Stock Exchange and Shareholding Structure
Unibail is the leading French commercial
property investment company
Owner of a property portfolio valued at € 7.6 billion, Unibail is a commercial property investment
company proactive in three major business lines: office buildings, shopping centres and convention
and exhibition centres. Unibail is the leader in France in each of these sectors.
A clear focus
The Group decided to focus on high-quality commercial properties with a leading competitive position
in their respective markets, in terms of size, technological performance, location or reputation.
A value creation approach
For each business line, Unibail aims at maximizing shareholder value and return on investment through
creative acquisitions, proactive management, a selective disposal policy and a high level of expertise in
managing major development or refurbishment projects.
An independent group
Unibail has the largest free float of all the listed property stocks in continental Europe. Part of the
SBF 120 and Euronext 100, Unibail had a € 3.2 billion market capitalisation at year-end 2002.
The company is rated ‘A-‘ by Standard & Poor’s.
P R O F I L E
The French original version of this report has been registered with the COB* on April 3, 2003, pursuant to the rule n° 98-01. It can only be used to support a
financial transaction if it is accompanied by a specific document also registered by the COB.
*The French Securities and Exchange Commission
2002 ANNUAL REPORT
01
2002 : another year of value creation
The growth in NAV per share, plus the annual dividend distributed in June 2002 and the tax credit, reflects
the value created by the Company, i.e in 2002, 7.9% for institutional shareholders and 8.4% for individual
shareholders.
The 'Total Shareholder Return' (TSR) indicates the value creation derived from both the changes in the
share price and the net dividend. In 2002, the TSR of Unibail's shares went up to 21.9% (see the last page
of this report).
Consolidated key figures
(€ million)
1999
2000
2001
2002
Portfolio valuation as at 31 December . . . . . . . . . . . . . .4,640 . . . . . . . . .6,375 . . . . . . . . .7,327. . . . . . . . . 7,550
New investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,872 . . . . . . . . . .901 . . . . . . . . . .602 . . . . . . . . . . 503
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 . . . . . . . . . .238 . . . . . . . . . . .65 . . . . . . . . . . 289
Shareholders' equity (before appropriation) . . . . . . . . . .1,339 . . . . . . . . .1,486 . . . . . . . . .1,411. . . . . . . . . 1,496
Net Asset Value, Group share* . . . . . . . . . . . . . . . . . . . . .2,128 . . . . . . . . .3,219 . . . . . . . . .3,638. . . . . . . . . 3,923
Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2,386 . . . . . . . . .3,634 . . . . . . . . .4,117. . . . . . . . . 4,279
Gross rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203
• Office buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
• Shopping centres . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
• Convention-exhibition centres . . . . . . . . . . . . . . . . . . . . . .15
. . . . . . . . . .357
. . . . . . . . . .159
. . . . . . . . . .122
. . . . . . . . . . .76
. . . . . . . . . .456 . . . . . . . . . . 514
. . . . . . . . . .229 . . . . . . . . . . 263
. . . . . . . . . .140 . . . . . . . . . . 158
. . . . . . . . . . .87 . . . . . . . . . . . 93
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .165
Pre-tax recurring cash flow, Group share . . . . . . . . . . . . . .104
Pre-tax recurring cash flow . . . . . . . . . . . . . . . . . . . . . . . . .119
Net profit, Group share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
. . . . . . . . . .286
. . . . . . . . . .179
. . . . . . . . . .201
. . . . . . . . . . .92
. . . . . . . . . .103
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.371
.220
.243
.108
.121
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413
261
284
146
161
Total distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71 . . . . . . . . . . .89 . . . . . . . . . . .91 . . . . . . . . . . . 54**
Number of shares at year-end*** . . . . . . . . . . . . . . .42,892,176 . . . .46,563,123 . . . .45,193,193 . . . . 46,552,001
Average number of shares outstanding . . . . . . . . .34,854,843 . . . .45,081,345 . . . .45,877,069 . . . . 46,512,882
Key figures per share
(€ - Group share)
1999
2000
Earnings per share -EPS . . . . . . . . . . . . . . . . . . . . . . . . . . .1.41
Pre-tax recurring cash flow per share . . . . . . . . . . . . . . . . .2.99
Fully diluted NAV per share . . . . . . . . . . . . . . . . . . . . . . .47.27
Net dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.67
Tax credit (for institutional/individual shareholders) . . . . . . . . .-/-
. . . . . . . . . .2.05
. . . . . . . . . .3.96
. . . . . . . . .67.30
. . . . . . . . . .1.67
. . . . . .0.29/0.29
*
2001
Revalued NAV based on replacement value
Distribution of dividend subject to Shareholders' Meeting approval in June 2003
***
Excluding treasury shares
**
2002 ANNUAL REPORT
02-03
K E Y
F I G U R E S
2002
. . . . . . . . . .2.35 . . . . . . . . . . 3.13
. . . . . . . . . .4.80 . . . . . . . . . . 5.61
. . . . . . . . .78.00. . . . . . . . . 82.10
. . . . . . . . . .1.70 . . . . . . . . . . 1.14**
. . . . . .0.39/0.73 . . . . . 0.09/0.47**
Office properties
Shopping centres
Convention-exhibition centres
*
Cash flow per share
Net dividend per share*
Fully diluted
Net Asset Value
per share
with a tax credit detailed in the chart page 2 - Distribution subject to Shareholders’ Meeting approval in June 2003
**
replacement value
Aside from these figures, the
previous year was marked by a
number of positive developments. To
mention just one example for each
business line, the Office Division
delivered the Cité du Retiro complex
to Cartier, the Shopping Centre
Division opened the Carré Sénart
shopping and leisure complex, and
the Convention-Exhibition Division
launched the Hall 5 reconstruction
project at Paris Expo-Porte de
Versailles.
Owing to Unibail’s sound strategic
positioning and its ability to adapt
to harsh global economic conditions,
we can look forward to 2003 and
beyond with optimism. To reflect
this positive outlook, we have set a
10% growth target for pre-tax
recurring cash flow per share.
Last year, in my message, I mentioned that 2002 would
be affected by “lower demand for office space, slower
growth in consumer spending and a cautious attitude in
the convention-exhibition business.” Overall, the market
evolved in line with our predictions. However, we still saw
an improvement in all our 2002 performance indicators.
More importantly, based on anticipated market
conditions, we can face 2003 with confidence, despite a
persistently tough environment.
In 2002, pre-tax recurring cash flow per share -our most
meaningful indicator- was up 16.9%, while consolidated
net profit (Group share) reached its all-time high of
€ 145.7m.
2002 ANNUAL REPORT
04
M E S S A G E
F R O M
In addition, the introduction of the
new tax regime for listed property
investment companies (SIIC), for
which Unibail should be in a position
to opt this year, will enable us to
pursue our expansion strategy while
raising our dividends. Ultimately, this
should fuel even stronger growth in
our share price.
To conclude on another positive
note, over the past ten years, from
January 1, 1993 to December 31,
2002, Unibail’s annualised Total
Shareholder Return (TSR) amounted
to 19.8% per year, which enables
Unibail to rank among the top ten
companies in the SBF 120 index of
the Paris Stock Exchange.
T H E
C H A I R M A N
Léon Bressler
An enlarged Executive
Committee
Unibail’s strategy of pursuing controlled
expansion, coupled with the broadening
scope of our activities, has led to changes
in our organisation and management
structure. In 2002, a new Managing
Director and an Executive Vice-President
were appointed. The General Managers of
the Group’s three business divisions have
now joined the Executive Committee.
From left to right:
Jean-Marie Tritant:
General Manager
of the Office Division
Léon Bressler:
Chairman & CEO
Michel Dessolain:
General Manager
of the Shopping Centre Division
Renaud Hamaide:
General Manager
of the Convention-Exhibition Division
Catherine Pourre:
Executive Vice-President
François Thomé:
General Counsel
Guillaume Poitrinal:
Managing Director
2002 ANNUAL REPORT
05
Saint-Ouen
Levallois-Perret
17e
La Défense
Cité du Retiro
Neuilly
9e
Office portfolio
Offices under construction/renovation
e
8
2e
1e
16e
11e
Paris
BoulogneBillancourt
15e
14e
13e
Issy-les-Moulineaux
UNIBAIL’S OFFICE PORTFOLIO BENEFITS
FROM ITS TARGETED POSITIONING
After 2001, the difficult economic climate in 2002 highlighted the
soundness of Unibail’s strategy, which focuses on the most resilient
segments of the Paris office market. This strategy has been pursued by the
Group for several years and is based on the following success factors:
• focusing on modern office properties that attract the most creditworthy
blue-chip tenants through their large size, high-quality specifications and
finely-targeted locations within the Paris Central Business District and its
western outskirts;
• ensuring that all investments, completion dates for development projects
and lease durations are in tune with the cyclical trends in the Paris office
market.
As a result of this strategic positioning, Unibail has managed to sign long
leases with prime tenants and build up a robust source of rental income
for the Office Division.
The leases signed at rental rates far below market value also contribute to
this division’s growth potential.
A MORE CHALLENGING BUT FUNDAMENTALLY
SOUND PROPERTY MARKET
The office property market is inherently cyclical. There is a significant timelag between demand and supply: while demand shifts quickly in response
to economic conditions, supply is determined by a lengthier and more rigid
production cycle.
The economic slowdown that began in 2001 went on to deteriorate in 2002,
triggering a downturn in demand, from 1.7 million m2 to 1.5 million m2 in
the Paris region. Meanwhile, the completion of projects launched between
1999 and 2000, coupled with the space vacated by former tenants, pushed
up the vacancy rate to an average of 5.8% (1) in the Ile-de-France region at
end-2002. This increase in vacancies varies according to each district in Paris
and its surrounding region. Unibail’s properties are mainly located in the
areas less affected by rising vacancy rates, as supply has been restrained in
these districts.As a result, Unibail operates in a fundamentally sound market.
Furthermore, current demand is mainly generated by the need of companies
to rationalise the use of their premises. This has encouraged businesses to
relocate to modern buildings with large floorplates that are flexible and
efficient in terms of the space allocated per workstation (average of 12 m2
per workstation in modern buildings, compared with more than twice this
size for Haussmann-style properties).
O F F I C E
Coeur Défense
B U I L D I N G S
2002 ANNUAL REPORT
06-07
• Tour Europe: this office tower has been partly let
Adverse market conditions in 2002 resulted in a slight downward correction
of around 6%(1) in rental values of new or refurbished properties. However,
rental values of prime properties held steady, according to Insignia Bourdais,
based on recent transactions.
For 2003, although overall demand may remain weak, or even decline, in
this more unpredictable economic environment, the persistently limited
supply of new office properties should minimize any downward adjustment
of rental values in Unibail’s core assets.
The property investment market continues to boom
Like 2001, 2002 was an excellent year in terms of investments. Because
of the volatility of the financial markets, many investors looking for a safe
return on their investments have been attracted to the commercial
property market. The most sought-after investments tend to be new or
redeveloped properties, located in prime areas and recently let to sound
tenants. Their future rental flows are secured by long-term leases and
creditworthy lessees.
Investments by Northern European, UK and US funds also increased,
accounting for as much as 50%(1) of the €8.2 billion(1) invested in the
Ile-de-France region in 2002.
The investment market is set to remain buoyant in 2003 as in the last
few years, thanks to low interest rates and the arrival of new foreign funds
willing to reallocate their assets.
Satisfactory letting performance for Unibail
In 2002, the Office Division delivered seven properties, of which five
buildings were let during the same year or already pre-let.
The following key properties were delivered in 2002:
• Cité du Retiro: a 21,200 m2 office complex located in the heart of the
Paris Central Business District and let to Cartier for twelve years (including
a firm nine-year period). This property was designed by the architect
Ricardo Bofill and accommodates Cartier’s international headquarters. It
is an outstandingly well-located office complex, with leading-edge
technical features offering a comfortable and efficient working
environment;
2002 ANNUAL REPORT
08
to the OECD for nine years (including a firm period
of seven and a half years). The 18 floors leased to
the OECD were fully refurbished in 2002, in line
with state-of-the-art comfort and efficiency
standards. This refurbishment project required a
great deal of technical prowess as the building was
still occupied during the works.
All the properties delivered and let by Unibail
involved prime-quality tenants, including Cartier,
the OECD, EDF and EuropaCorp (Luc Besson’s film
production company).
In addition to the letting of the delivered properties
in 2002, the Office Division pursued its re-letting
and lease renewal activities for properties already
occupied, with the constant aim of creating value.
These marketing efforts helped contain the division’s
financial vacancy rate, which reached 5.1% at yearend 2002 vs. 4.6% at year-end 2001.
The leases signed in 2002 also enabled Unibail to
capture some of the reversionary potential
embedded in its office portfolio. As a result, gross
rental income from the Office Division rose by 7.4%
over the year. Rental growth was also driven by an
estimated 3% increase in the INSEE Construction
Cost Index.
Based on its existing lease structure, Unibail’s office
portfolio still offers substantial reversionary potential
estimated at €41m as at year-end 2002. This
potential stems from the difference between the
original rents on existing leases and current market
rents, which are much higher. For example, the rents
for leases expiring in the period between 2003 and
2008 are, on average, 26% lower than market rents.
This difference between initial passing rents and
current market rents also helps offset the risk of
tenants vacating their properties under early
termination options, as their rents are currently
below market levels.
The leases recently signed with blue-chip tenants
for firm periods of six to nine years provide a source
of long-term income and visibility for the Group.
In this challenging market environment, the strong
performance by the Office portfolio has proved that
Unibail’s strategic focus on centrally-located prime
properties is relevant. These properties are
particularly well-matched to current demand from
companies, whose priority is to cut costs by
optimizing their office space and minimizing
property operating expenses.
Cœur Défense
An active asset divestment policy for value-enhanced properties
In a market where safe property investments are much sought-after, the assets in
Unibail’s office portfolio are an ideal target for institutional investors.
In line with Unibail’s strategy of disposing of its property assets once their valueenhancement process is complete, the Group sold nine properties in 2002 for a total
of €239 million.
These disposals included ‘La Chocolaterie’ in Levallois and 23 avenue de Messine in Paris
8, for which sales-undertakings were signed as at year-end 2001, together with
115-123 avenue Charles de Gaulle in Neuilly, 16 rue de Monceau in Paris 8 and the
Parc Evolic industrial estate in Gennevilliers.
The Group intends to pursue this strategy in 2003, as and when the right opportunities
arise.
The Office Division did not acquire any properties in 2002 as none of the reviewed
projects met its criteria in terms of location and profitability. However, Unibail invested
nearly €88.6m in renovation projects (mainly Quai Ouest,Tour Ariane and Tour Europe)
and redevelopments (3M project), which will enhance the long-term value of its portfolio.
A selective property development project
Over the next three years, the Office Division will concentrate its efforts on one largescale project which is perfectly consistent with its strategy, namely the redevelopment
of the former EDF headquarters, which is due for completion in 2005. This ‘3M’ project
covers a total gross area of 70,900 m2 and is located between avenue de Messine, rue
de Monceau and rue de Murat, right next to the Parc Monceau in Paris 8. The aim is to
develop an unparalleled, fully-functional and environmentally-friendly office complex
in the heart of the Paris Central Business District. Unibail is confident about the future
letting of this project, owing to the quality of the property and its location in a district
where few competing products have been planned for development.
Aside from this project, Unibail does not currently have any exposure to non pre-let
developments. However, the Group may well seize various new opportunities in 2003
as part of its counter-cyclical value-creation strategy.
(1)
Sources: Insignia Bourdais and DTZ. Figures for office market as at December 31, 2002.
The Office Division’s performance and outlook reflect its prime-quality portfolio,
targeted locations and ability to anticipate cyclical trends in the office property
market.
137 rue du Faubourg Saint-Honoré
2002 ANNUAL REPORT
09
Cité Europe
Marques Avenue
Les Quatre Temps
Vélizy 2
Ulis 2
Euralille
Rosny 2
Chelles 2
Le Printemps de l’Homme
Le Forum des Halles
Le Carrousel de Louvre
Gaité Montparnasse
Strasbourg-Etoile
Carré Sénart
La Toison d’Or
Place d’Arc
Saint-Martial
Saint-Genis
Bonnac
Mériadeck
Labège 2
BAB 2
Nice-Etoile
Bonneveine
Carré Sénart
Shopping centres
Shopping centre development projects
UNIBAIL IS FULLY BENEFITING FROM ITS
TOP-RANKING POSITION IN THE FRENCH
SHOPPING CENTRE INDUSTRY
In 2002, Unibail consolidated its leadership
position in the French shopping centre industry by
completing the Carré Sénart shopping and leisure
complex, and acquiring the Chelles 2 regional
centre, both located in the Ile-de-France region.
At end-2002, the Group owned a portfolio of
20 shopping centres, mostly consisting of large
regional and ‘super-regional’ centres. Despite a
more erratic economic climate, Unibail’s shopping
centres achieved a strong performance, with
retailers posting a 3.5% average sales growth at
end-December 2002, once again outperforming
the French consumer index, which stood at 1.8%.
In addition to fundamental factors, such as the
size and location of its shopping centres, this
impressive performance is the result of a
customer-oriented marketing strategy, which aims
at anticipating, understanding and meeting the
needs of some 210 million visitors to Unibail’s
shopping centres each year. In 2002, a proactive
management strategy enabled the Shopping Centre
Division to replace 8% of its tenants with a
selection of successful new national and
international retail chains, which fully satisfies its
customers’ expectations. Driven by these factors,
net rental income from the Shopping Centre
Division rose sharply by 8.9% on a like-for-like basis.
S H O P P I N G
Chelles 2
C E N T R E S
2002 ANNUAL REPORT
10-11
Galerie Gaité Montparnasse
The opening of Carré Sénart:
a major success story
Major shopping centres continue
to increase their appeal
In spite of a less buoyant economic environment, major French shopping
centres have continued to increase their appeal, both among consumers
and major retailers. The annual survey conducted by Cofremca/
Sociovision on behalf of Unibail reveals that shopping centres have
become even more popular with consumers, as reflected by the robust
sales growth recorded by Unibail’s centres. Market-leading national and
international chains have continued to step up their presence in prime
locations within major shopping centres. This has become an integral
part of their expansion strategies. Against this background, the expertise
of Unibail’s teams, underpinned by an advanced marketing approach,
has enabled the Group to select the most successful retail chains and
concepts, which are in tune with the latest consumer trends, and to sign
over 220 leases in its existing centres, surpassing its 2001 figure.
Customer satisfaction and commitment to service have become even
more of a priority for Unibail’s teams. In 2002, the key initiatives in this
area included:
• the launch of family-oriented events and activities, such as the Pony
Club at Carré Sénart, the bandstand at Mériadeck in Bordeaux, and the
‘Petites Têtes de l'Art’ children’s art workshop at the Forum des Halles;
• the efforts to enhance the image and profile of the Group’s shopping
centres, including the ‘Atelier Matisse-Picasso’ art workshop, developed
through an exclusive partnership with the Georges Pompidou Centre in
Paris, and the ‘Red Dog’ campaign organised in conjunction with the
French Red Cross;
• the hosting of events organised by major manufacturers to promote
new product launches targeted at consumers.
2002 ANNUAL REPORT
12
The Carré Sénart centre is located 30 km
South-East of Paris and has been extremely
appreciated by consumers since it was opened on
August 28, 2002, clocking up over 4.3 million
visitors by end-December 2002. This 65,000 m2
shopping and leisure complex was designed by the
French architect Jean-Paul Viguier. It can be
reached directly by the A5 highway and benefits
from excellent transport connexions and
5,700 parking spaces. Carré Sénart is perfectly
integrated with the new town of Sénart and is set
to become the cornerstone for a vast catchment
area of 800,000 inhabitants. It caters for an
essentially young, active and family-oriented
population (average of 2.9 children), which has
chosen to live in an environment close to nature.
Carré Sénart has an innovative approach to
customer care, with specially tailored services for
children (e.g. Pony Club, Espace Kids and Fun Trail),
environmentally-friendly facilities (e.g. green
spaces, windmill, landscaped parking and horse
guards), and a whole host of services designed for
customers’ comfort and well-being. Hailed by the
public, retailers and media alike as a major leap
forward in the development of shopping centres in
France, Carré Sénart also represents a significant
milestone for Unibail and its specialist subsidiary,
Espace Expansion.
Carré Sénart’s launch has also been a financial
success. All of its available retail space was fully let
by the time the centre opened, with most leases
signed for a firm period of six years. Due to the
excellent sales figures already recorded by its
retailers, the centre should start generating
additional performance-related rents during its
first year.
Renovation project of Les Quatre Temps
Major projects offering attractive growth potential
for the coming years
Acquisition and restructuring projects
Chelles 2: Unibail acquired the Chelles 2 shopping centre in June 2002.With a GLA
(Gross Leasable Area) of 24,000 m2, Chelles 2 hosts a range of well-known retail
chains, such as Go Sport, Sephora and Celio. This shopping centre benefits from
excellent fundamentals due to its location within a densely-populated catchment
area.
Unibail plans to further increase the appeal of this centre, notably through more
evenly-balanced visitor flows, architectural restructuring and proactive reletting
strategies. Initially, the project aims at redeveloping the mall, the parking
facilities... These works, together with the site’s reletting phase, are due to be
completed by end-2004. In addition, the centre offers an expansion capacity of
over 10,000 m2, which will mainly accommodate new medium-size units.
Les Quatre Temps: after the letting of over 13,000 m2 of retail space in 2002
(including Marks & Spencer and Bricorama), 2003 will be devoted to the ongoing
restructuring project at the centre. Works on the development of a
3,700-seat UGC multiplex is scheduled to begin in 2003 and expected to be
completed in 2005. At the same time, some 10,000 m2 of space located on the
East side of the centre, and currently occupied by the UGC cinema complex, is due
to be relet in the second half of 2003, for a delivery in early 2006.
Other major projects under development
Marques Avenue at Cité Europe: this designer shopping mall offers 13,000 m2 of
retail space (GLA) and is 70%-owned by Unibail. Construction works began in
early 2003 and the mall is due to be opened in December 2003. It is located close
by Cité Europe, which will benefit from this new retail offering, particularly for
British and Belgian customers.
Strasbourg Etoile: this new shopping centre project, with a gross area of around
34,000 m2, is located in Strasbourg city centre. It obtained approval from the
CDEC(1) in June 2000, followed by a building permit in June 2002. It will include a
Leclerc supermarket, around ten medium-size units, some 50 shops and 1,500
parking spaces. Its opening is scheduled for end-2005.
Ilot Bonnac in Bordeaux : this retail project, with a GLA of around 7,700 m2, will
link the city centre stores with the Mériadeck shopping centre, also owned by
Unibail. The project is scheduled for completion at end-2006 and will enhance the
appeal of Mériadeck shopping centre.
(1)
French Retail Property Development Authorities
The Shopping Centre Division maintains the growth target of 4% above
inflation for its like-for-like net rental income.
Euralille
2002 ANNUAL REPORT
13
A1
Foyer de l’Arche
A1
Cnit
ConférencesCœur Défense
Mondial de l’Automobile
Espace Champerret
La Défense
Carrousel du Louvre
A13
Paris
Hôtel Méridien Montparnasse
Palais des Sports
Paris Expo - Porte de Versailles
A6
A3
A ROBUST PERFORMANCE
BY THE FRENCH LEADER
IN THE CONVENTION-EXHIBITION SEGMENT
In 2002, Unibail bolstered its top-ranking position
in the French convention-exhibition segment by
pursuing a proactive marketing policy under the
single umbrella brand ‘Paris Expo’. The Group also
expanded its portfolio in 2002 by acquiring a 50%
stake in ‘Société d'Exploitation du Palais des
Sports’, which owns one of the largest venues in
Paris, with a capacity of 4,200 seats. The Palais des
Sports is adjacent to the Parc des Expositions at
Porte de Versailles.
With seven Parisian sites offering a combined
gross floor area of around 300,000 m2 for
exhibitions, conventions and corporate events,
Paris Expo managed to maintain robust growth in
its various markets in 2002, consolidating its
leadership position in France (based on ‘square
metre occupancy days’), despite a tough
economic climate.
By winning new market shares in Paris Expo’s two
main business lines (rental of exhibition space, and
services to events organisers and exhibitors),
Unibail achieved a 12.5% revenue growth from all
three segments combined (exhibitions, corporate
events and conventions). This performance is all
the more impressive as it was achieved in a
difficult environment.
Cnit
C O N V E N T I O N E X H I B I T I O N
C E N T R E S
2002 ANNUAL REPORT
14-15
Illustration of the future Hall 5
Salon Nautique
In line with the Group’s strategy of focusing on its core expertise in
managing convention-exhibition spaces, Paris Expo transferred in 2002
its hotel and restaurant activities to the Hilton and Flo groups under
operational lease agreements. Paris Expo will then receive rental
payments from its lessees, without being exposed to the business risks
involved in these activities. This restructuring had an adverse impact
on 2002 income, but should start paying off partially in 2003 and fully
from 2004.
Despite a persistently difficult economic climate in 2003, Paris Expo still
benefits from a positive outlook, especially as the newly refurbished
Hall 5 at Porte de Versailles is reopening by end-2003 and Espace
Grande Arche in La Défense is due to open in June 2003.
Robust and sustainable growth
in all Paris Expo’s markets
In the exhibitions segment, which generates the bulk of Paris Expo’s
rental revenues (80% in 2002), Unibail’s rental income grew by 3%,
compared with 1% for the overall market. This outperformance stems
from a combination of factors:
• Unibail’s focus on central locations, in a market where prime-located
space in Paris and La Défense is in limited supply.
• A successful policy of fostering loyalty among existing exhibitors (over
90% of customers represent recurring business), notably the ‘Salon de la
Mode’, the ‘Mondial de l'Automobile’, the ‘Biennale des Antiquaires’ and
the ‘Foire de Paris’.
• A determined marketing strategy aimed at winning new customers.
The division hosted 26 new trade fairs in 2002, including ‘Interclima’,
‘Hopital Expo’ and the ‘Salon des Artistes Décorateurs’.
In the corporate events segment, Paris Expo recorded a 25% rise in 2002
rental income compared with 2001. This is a particularly impressive
performance considering that, in 2002, the market as a whole suffered
from a sharp drop in the number of corporate events held and the overall
revenues generated by this segment. Unibail’s sharp growth is a direct
result of the new organisation introduced in 2002, including the launch of
a common marketing platform for all sites.
2002 ANNUAL REPORT
16
Unibail will pursue this proactive strategy
in 2003 by:
• developing its key accounts strategy, with the
backing of a dedicated sales team;
• canvassing large companies with 500 to 10,000
employees, using tailored marketing tools;
• forming partnerships with expert channels, such
as events agencies and venue finders.
Lastly, Unibail’s conventions segment was not hit
by the impact of the economic downturn.
Although this segment contributes currently very
little to Paris Expo’s revenues, it provides a
significant source of future growth for the division,
which aims at attracting European conventions to
Paris, which remains a very attractive destination.
Paris Expo’s services division pursued its objective
of increasing the services penetration rate (calculated
as services revenues divided by rental income),
mainly by developing new types of services.
Building up a solid
and well-integrated portfolio
Unibail intends to continue developing its
convention-exhibition portfolio as a unified and
consistent entity that can meet the needs of nonmedia communication of its customers.
A significant example of this strategy is the 50%
stake acquired in Palais des Sports in 2002. This site
is adjacent to Paris Expo at Porte de Versailles, and
enhances Unibail’s existing offering, with a flexible
space that can accommodate between 2,000
and 4,200 people.
Parc des Expositions de la Porte de Versailles
Atrium of Cnit
Meanwhile, taking advantage of the Group’s expertise, Unibail launched the
reconstruction of Hall 5 at Porte de Versailles and the renovation project for Espace
Grande Arche in La Défense.
These two sites have been designed to meet the latest market requirements and
will comprise:
• at Hall 5: 218,000 m2 of flexible space that can be divided into three separate areas
of 6,000 m each;
• at Espace Grande Arche: approximately 10,000 m2 of a multi-purpose space to
accommodate exhibitions, conventions or corporate events.
Introducing a customer-focused organisation
In 2002, the division set up a new, totally customer-oriented organisation, with
dedicated teams providing customer-tailored solutions throughout the service
agreement.
• Each customer deals with a single dedicated sales manager, who covers all venues
and supports and advises the customer throughout the event’s planning phase.
• An operation manager is subsequently responsible for ensuring the smooth
running of the event, from planning to execution.
• Each site has a dedicated technical team that caters for customers’ needs and can
provide the best possible services thanks to its in-depth knowledge of the venue.
• A marketing-advertising-quality team monitors the customers day-to-day
requirements. It also keeps pace with and responds to market trends by offering
innovative services and constantly enhancing business processes and skills.
The full impact of this new organisation will come into effect in 2003, with the
support of a new Operation Management Information System installed in
November 2002.
Unibail’s Convention-Exhibition Division was highly proactive in 2002, as reflected
by its sharp growth in revenues and Net Operating Income, despite harsher
economic conditions. Paris Expo has proved its resilience to a challenging economic
environment and the good visibility of its performance. As a matter of fact, 73% of
2003 anticipated revenues will come from contracts already signed or negotiated
by January 31, 2003.
Paris Expo’s strong performance reflects the growing emphasis that companies
place on non-media communication. It also confirms the sound strategic
positioning of Unibail’s sites, which are centrally-located, up-to-date and
unique.
Hall 5 - Construction site
2002 ANNUAL REPORT
17
Unibail adopted corporate governance principles in 1995, as part of a clear policy
to maximize transparency for its partners and, most of all, for its shareholders.
These principles have continually been extended in line with the recommendations
set out by the Viénot reports (July 1995 and July 1999) and, more recently, by the
Bouton report (September 2002).
Board of Directors
Members
Unibail’s Board of Directors currently comprises ten members. Seven directors
comply with the criteria for independent directors, as defined by the Bouton report.
The Board of Directors convened six times in 2002.
Several days prior to each Board meeting, a comprehensive report covering the
topics on the agenda is sent to all Board members, enabling them to be fully briefed
on the companies’ activities and to make an effective contribution to these Board
meetings.
The Board members’ overall attendance at Board meetings reached 82% in 2002, a
higher rate compared with the previous years. Each director receives a maximum
attendance fee of €15,245. Three quarters of this amount is a fixed fee, while the
remaining quarter is a variable portion that depends on each director’s attendance
at Board meetings.
Atrium of Cœur Défense
2002 ANNUAL REPORT
18
Procedures and responsibilities
The Board of Directors complies with a set of by-laws defining its internal procedures
and, above all, its powers with respect to:
• defining the Group’s strategy;
• approving acquisitions, disposals or investments within the frame of the Group’s
strategy in excess of €300m;
• approving acquisitions or investments outside the frame of the Group’s strategy in
excess of €25m.
The Board of Directors is kept regularly informed of the Group’s financial situation, cash
position, business activities in each division, market conditions and outlook, together
with any disputes that could potentially impact its financial position or business
activities.
In addition, to ensure that all the directors are fully informed, Unibail sends them copies
of press articles, as well as published financial analyses related to the Group.
The Board’s by-laws also provide for:
• a formal appraisal of the Board of Director’s procedures every three years, with
optional assistance from an independent expert. The first appraisal will take place
in 2003;
C O R P O R A T E
G O V E R N A N C E
• an annual discussion on the Board’s procedures. The
previous discussion took place in December 2002;
• a definition of the concept of ‘independent director’.
The Board has adopted the criteria for independent
directors set out in the Bouton report, and confirms on
this basis that over one half of its Board members are
independent.
The Board of Directors has discussed all the major
actions taken in 2002, both externally (e.g.
acquisitions, disposals and letting transactions) and
internally (e.g. organisation, appointments and
procedures). A Unibail Board meeting was held at the
Parc des Expositions at Porte de Versailles, with a
review on site of the investment program, especially of
the Hall 5 project.
In September 1995, Unibail set up two specialist
committees -the Audit Committee and the
Nominations & Remuneration Committee- whose
main role is to assist the Board of Directors.
Specialist Committees
• The Audit Committee consists of three directors,
two of which are independent. It is chaired by Mr Bruno
Boutrouille. The Committee met twice in 2002. Its
agenda is set by the Chairman and a comprehensive
report covering the topics on each meeting’s agenda is
sent to all Committee members in advance. Besides
discussing recurring issues (e.g. interim and full-year
accounts, internal auditing, asset and liability risk
management and NAV), the Committee also reviewed
the amount of fees paid by the Group to the Statutory
Auditors and their affiliated companies.
In addition to its contact with the senior management,
the Audit Committee is free to interview accounting,
finance and audit managers, without the presence of
the top-management, and to meet regularly with the
Statutory Auditors. The Committee also has access to
the work of the independent valuers in charge of
assessing the Group’s NAV figure. The Committee
produces a detailed report on each meeting.
The Audit Committee receives a report on the
Unibail adopted corporate governance guidelines
which comply with, and often exceed, prevailing
standards and recommendations. They rank among
the “best practices” of the Paris marketplace.
presentation of Unibail’s financial statements, which describes the
accounting rules and principles adopted, and analyses the Group’s risks,
including any off-balance sheet liabilities. This report is submitted to
the Statutory Auditors for approval. The Audit Committee also receives
interim activity reports from the Audit and Risk Management Division,
which makes reports on internal audit assignments available to
Committee members.
The Audit Committee may also seek outside assistance from any third
party whenever it considers this necessary.
The Committee adheres to a set of by-laws defining its organisation,
responsibilities and procedures.
• The Nominations and Remuneration Committee consists of three
independent directors and is chaired by Mr Roger Papaz. The
Committee met three times in 2002 and mainly focused on: i)
reviewing the renewal of certain directors’ terms of office for three
years; ii) setting the fixed and variable remuneration paid to the
Chairman and Managing Director; iii) launching a new phase of the
stock-option plan and identifying the beneficiaries of this plan; and iv)
reviewing the general wage policy.
The Committee produces a detailed report on each meeting.
The Nominations and Remuneration Committee may also seek
outside assistance from any third party whenever it considers this
necessary. The Committee used this assistance when deciding on the
remuneration of Unibail’s key managers and the rules for granting
stock-options. It is to be specified that no discount has been offered
on these stock-options for several years and that there is no
automatic granting of options neither in terms of amount nor
frequency. Stock-options are always allocated during the same period,
mainly to people who have performed outstandingly, taken
responsibility or played a key role within the Company.
Like the Audit Committee, the Nominations and Remuneration
Committee adheres to a set of by-laws defining its organisation,
responsibilities and procedures. Accordingly, the Committee is
responsible for monitoring the independence of the directors,
assessing the performance of the Chairman & CEO, and discussing the
future of Unibail’s management.
Each member of these two committees received a €1,525 fee
(€2,287 for the Chairman of each committee), in addition to the fee
for attending Board meetings.
2002 ANNUAL REPORT
19
As a leading owner, manager and builder of commercial properties in France,
Unibail invests in value-creating projects which aim at securing the Group’s
long-term future, while adhering to sustainable development principles.
Design, construction and refurbishment
of property complexes
For many years, Unibail’s property refurbishment and construction projects have been
based on an architectural design policy combining quality of life with aesthetics, and
involving the input of renowned architects, such as Paul Andreu, Ricardo Bofill, Jean
Nouvel, Valode & Pistre, Jean-Paul Viguier and Jean-Michel Willmotte. As well as
blending in with their surroundings, and preserving and expanding green spaces, these
properties also aim at creating a healthy and comfortable interior environment. A
great deal of attention is paid to users’ acoustic and visual comfort, as well as
temperature and humidity, through sophisticated air conditioning systems, acoustic
enhancements (e.g. soundproof façades and sound-insulating suspended ceilings) and
maximum use of natural daylight and outside views, coupled with good-quality
lighting.
As a project owner, Unibail has drawn up an Environmental Quality and Sustainable
Development Plan, which formalises the Group’s principles and chosen options for
minimizing risks in all areas of property construction and refurbishment. Unibail is
keen to ensure that its construction contractors work towards the same objectives,
wherever possible, on each of its projects. During the construction works, Unibail
makes every effort to maintain good relations with local residents by keeping them
constantly informed (e.g. toll-free number for Cœur Défense and e-mail enquiries for
Hall 5 at the Parc des Expositions in Porte de Versailles) and constantly looks for ways
to minimize all types of pollution (e.g. tarpaulin covers to reduce dust, night-time
working schedules for indoor areas open to the public during the daytime, and regular
monitoring of sound and dust levels before and during works).
Furthermore, when choosing interior building materials and processes, Unibail restricts
the use of hazardous products, such as materials containing volatile organic
compounds (VOCs), fiber insulation products and heavy metal-based paints. The
Group also encourages the use of sustainable materials, such as 'FSC'-certified wood.
All refurbishment projects launched in 2002 have involved the complete removal of
asbestos-containing materials. The Group has even exceeded current regulatory
requirements by stabilising these waste materials, rather than simply burying them in
landfill sites, despite the extra cost involved (examples include the former EDF
headquarters, Tour Europe, 137 Faubourg St Honoré, Quai Ouest, 168 avenue Charles
de Gaulle and 108 rue de Richelieu).
2002 ANNUAL REPORT
20
S U S T A I N A B L E
D E V E L O P M E N T
Operational management
of property assets
Unibail aims at optimizing the technical
management of its properties by selecting alls
processes and techniques that minimize operating
costs. It takes advantage of district heating and
cooling networks, recovers energy from air
conditioning systems and uses low-energy lamps.
Facilities are made easily accessible to simplify
maintenance and servicing operations and allow
optimal management of air and water quality. For
example, the façades of the Coeur Défense office
complex have been pressurized to enhance the
Solar Heat Gain Coefficient and minimize energy
costs.
As an operator of office buildings, shopping
centres and convention-exhibition spaces, Unibail
has regular and systematic inspections carried out
by independent specialised companies to check
any technical facilities that could potentially harm
the environment or undermine individual safety
(e.g. fire-fighting equipment, ventilation and air
conditioning systems, power installations and
elevators).
The Group has introduced a Healthy & Safety
Manual in all its main properties. This manual
provides a single and comprehensive source of
information for managing risks (e.g. water, air, lead,
asbestos and Legionnaire’s disease). It contains a
section describing the networks and systems used,
applicable regulations and any specific points,
together with a separate section on risk
monitoring. It also details the monitoring plan for
critical areas and the corrective actions required, as
well as the necessary remedial measures, in the
event of an incident. As part of these safety
concerns, the Group began replacing its water
cooling towers with dry coolers in the course of its
office renovation projects in 2002.
Unibail is committed to providing the best
quality of life for its clients, “la plus grande
qualité de vie au m2” and protecting the
environment for all over the long term.
Economic and social development
The management teams of Unibail’s shopping
centres and convention-exhibition spaces play an
active part in the development of the local
economy while enhancing the general quality of
life, as reflected by the Group’s architectural
designs (user-friendly spaces) and its policy of
catering for all visitors (with rest areas, access for
disabled people, clear indicative signs, etc).
Similarly, by working with government agencies,
Unibail constantly strives to combat antisocial
behavior and ensure the safety of customers and
visitors in order to make these public spaces
more attractive and welcoming.
A prime example is the Carré Sénart shopping
and leisure centre opened in August 2002. The
Group’s priority was to provide a family and
leisure-oriented space that blends in perfectly
with its green surroundings and places emphasis
on personal well-being. 1,200 trees (including
500 over ten years old) and 50,000 plants and
shrubs have been planted around the perimetre
of the centre.
Unibail also encourages social development
through its human resources policy, which aims
at promoting the potential of its staff. This
policy is reflected by an action plan whose
priority is to develop the skills and expertise of
Unibail employees, provide career development
opportunities within the Group and implement
a incentive salary system. The details of this
human resources policy are provided in the
“Management’s Discussion and Analysis”
section (page 40).
2002 ANNUAL REPORT
21
Cité du Retiro
Mondial de l’Automobile
A
PORTFOLIO
OF UNIQUE
PROPERTY
ASSETS
Chelles 2
2002 ANNUAL REPORT
22
P R O P E R T Y
P O R T F O L I O
A property portfolio valued
at € 7.6 billion
Property portfolio breakdown by value and by floor space per sector
€ 4,510m in office buildings
866,618 m2 of office buildings
A total area of
1.8 million m2
(Figures according to the scope of consolidation, at year-end 2002)
Office
Buildings
Shopping
Centres**
Paris and West Paris outskirts . . . . . . . . . . . 4,441
% in value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98%
of which CBD* of Paris . . . . . . . . . . . . . . . . . . . . .1,299
of which Paris-La Défense . . . . . . . . . . . . . . . . . . 2,400
of which Neuilly-Levallois-Boulogne-Issy . . . . . . . 565
. . . . . . . . . . . 1,193
. . . . . . . . . . . . . 47%
. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .-
ConventionExhibition
Centres
Total
Total in
%
100%
In floor space (m2)
Paris and West Paris outskirts . . . . . . . . . 818,679
% in floor space . . . . . . . . . . . . . . . . . . . . . . . . . . 94%
of which CBD* of Paris . . . . . . . . . . . . . . . . . . 207,435
of which Paris-La Défense . . . . . . . . . . . . . . . . 423,667
of which Neuilly-Levallois-Boulogne-Issy . . . 124,198
. . . . . . . . . 227,920
. . . . . . . . . . . . . 43%
. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .-
. . . . . . . . 362,737 . . . . .1,409,336 . . . . . . 80%
. . . . . . . . . . .100%
. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .-
Other assets in the Paris Region . . . . . . . . . 39,603 . . . . . . . . . .118,824 . . . . . . . . . . . . . . .- . . . . . . .158,427 . . . . . . . 9%
% in floor space . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% . . . . . . . . . . . . . 23% . . . . . . . . . . . . . . .French Provinces . . . . . . . . . . . . . . . . . . . . . . . 8,337 . . . . . . . . . .180,585 . . . . . . . . . . . . . . .- . . . . . . .188,922 . . . . . . .11%
% in floor space . . . . . . . . . . . . . . . . . . . . . . . . . . . .1% . . . . . . . . . . . . . 34% . . . . . . . . . . . . . . .TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 866,618 . . . . . . . . . 527,329 . . . . . . . . 362,737 . . . . .1,756,684
% of the property portfolio in m2
49%
30%
21%
*
Central Business District
Except the shopping centre projects under construction: Strasbourg-Etoile, Ilot Bonnac and Marques Avenue
**
100%
€ 2,530m in shopping centres
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,510 . . . . . . . . . . . 2,530 . . . . . . . . . . . . 510 . . . . . . . . 7,550
% of the property portfolio in value
60%
33%
7%
€ 510m in convention and exhibition centres
French Provinces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805 . . . . . . . . . . . . . . . . . . . . . . . . . . 805 . . . . . . .11%
% in value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32% . . . . . . . . . . . . . . .-
The portfolio in value
Other assets in the Paris Region . . . . . . . . . . . . 69 . . . . . . . . . . . . . 531 . . . . . . . . . . . . . . . . . . . . . . . . . . 600 . . . . . . . 8%
% in value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2% . . . . . . . . . . . . . 21% . . . . . . . . . . . . . . .-
The portfolio in floor space
362,737 m2 of convention and exhibition centres
. . . . . . . . . . . . 510 . . . . . . . . 6,145 . . . . . . 81%
. . . . . . . . . . .100%
. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .-
527,329 m2 of shopping centres
In value (€m)
2002 ANNUAL REPORT
23
P RO P E RT Y P O RT F O L I O
Office Portfolio* as at December 31, 2002
Acquisition
date
Paris and Paris western outskirts
Paris 1
39-41, rue Cambon
34-36, rue du Louvre
6, rue Pierre Lescot
Paris 2
Palais du Hanovre, Bd des Italiens
108, rue de Richelieu
12, rue du Mail
Paris 8
23bis-29, avenue de Messine/Monceau/Murat
Cité du Retiro
50, avenue Montaigne
5, boulevard Malesherbes
31, rue du Colisée
44-46, rue de Lisbonne
137, rue du Faubourg Saint-Honoré
27-29, rue de Bassano
52, rue de Lisbonne
Paris 9
11-15, rue Saint-Georges
1, rue Saint-Georges
Paris 16
7, place du Chancelier Adenauer
42, avenue d'Iéna
Paris 17
189, boulevard Malesherbes
70, boulevard de Courcelles
67, avenue de Wagram
Sub-total 'Paris Central Business District'
92 Paris-La Défense
Cœur Défense
Espace 21 (Les Villages)
Tour Ariane
Cnit (offices)
Immeuble Michelet-Galilée
Tour Europe
70-80, avenue Charles de Gaulle
Sub-total 'Paris-La Défense'
92 Neuilly-sur-Seine
2, rue Ancelle
41, rue Ybry
136, avenue Charles de Gaulle
168, avenue Charles de Gaulle
92 Levallois
125, avenue du Président Wilson
35, rue d'Alsace - Courcellor
126, rue Jules Guesde
92 Boulogne
40-42, quai du Point du jour ("Quai Ouest")
92 Issy-les-Moulineaux
34-38, rue Guynemer
Sub-total 'Neuilly-Levallois-Boulogne-Issy'
Refurbishment (R)
Construction (C)
Total space
per asset (m2)
Parking
spaces
% of consolidation
Total floor space according
to consolidation (m2)
Main Tenants
(in terms of rental income)
2001
1976
1981
R 1991
R 1989
R 1981
16,900
3,788
1,940
200
100%
100%
100%
16,900
3,788
1,940
Euronext
BNP-Paribas
Foot Locker
1999(2)
1986
1985
R 1996
R 1987/01
R 1996
18,115
3,504
1,622
174
14
100%
100%
100%
18,115
3,504
1,622
AXA
In the letting phase
Socpresse (Le Figaro)
2001
1999(2)
1995
1999
1999(1)
1999(2)
1978
1978
1999(2)
R 2005
R 2002
R 1993
R 2000
C 1972
R 1994
R 1994/97
R 1981
R 1999
62,100
21,188
13,218
8,444
6,200
3,906
3,905
1,615
1,514
622
260
216
2
149
4
100%
100%
100%
100%
100%
100%
100%
100%
100%
62,100
21,188
13,218
8,444
6,200
3,906
3,905
1,615
1,514
Under refurbishment (3M Project)
Cartier
Disney Consumer Products
Unibail’s headquarters
VUP (Vivendi Universal Publishing)
H4 Valorisation and Sofilo (EDF Group)
EuropaCorp
Chantrier et Associés
Moët Hennessy
1991
1991
R 1993
R 1993
7,655
2,840
153
117
100%
100%
1999(2)
1998
C 1992
R 1991
12,048
1,749
150
3
100%
100%
12,048
1,749
Péchiney
Sun Microsystems
1999(2)
1999(2)
1999(2)
C 1990
R 1988
R 1988/90
6,528
4,839
3,817
105
104
40
100%
100%
100%
6,528
4,839
3,817
207,435
Compass Group
Otor Participations
EDF
1998
1999(1)
1999(1)
1999(2)
1999(1)
2000
1999(2)
C 2001
C 1993
C 1975
C 1989
C 1986
C 1975
C 1988
181,817(3)
57,400
56,500
46,012
33,405
27,528
21,005
2,800
820
218
455
127
100
575
100%
100%
100%
100%
100%
100%
100%
181,817
57,400
56,500
46,012
33,405
27,528
21,005
423,667
Crédit Lyonnais, Société Générale,…
Société Générale, Vivendi Environnement,…
Crédit Lyonnais, Société Générale,…
CFPB, Essec,…
Total Fina Elf
OECD, PMU,…
Wyeth Lederle, CDC Ixis, Clariant
1996
1990
1999(1)
1984
R 1995
R 1996
C 1992
R 1995
15,570
14,847
11,977
7,506
170
290
260
126
100%
100%
100%
100%
15,570
14,847
11,977
7,506
Gras Savoye
Ernst & Young
Ernst & Young
BNP-Paribas
1992
1976
1988
C 1992
C 1973
C 1970
6,881
3,264
2,791
179
85
56
100%
100%
100%
6,881
3,264
2,791
Guerlain
Promodès
Relais H
1996
C 1993
15,883
372
100%
15,883
Canal+,
and partially to be let
1999(2)
C 1988
45,479
900
100%
45,479
124,198
Accor, Sybase, EMAP
Other office buildings in Paris
Paris 11
99, rue du Faubourg Saint-Antoine
1995
Paris 13 - Seine Rive Gauche
Tolbiac-Masséna (4)
1989
Paris 14
Gaité-Montparnasse (offices)
1998
Paris offices (other)
1 asset (for 2.1 million euros)
Total offices in Paris and Paris western outskirts
Other Paris property assets
Paris 8
23, boulevard de Courcelles
1999(2)
Paris 15
40ter, avenue de Suffren
1999(2)
Total assets in Paris and Paris western outskirts
Office buildings in the Paris region
78 St-Quentin-en-Yvelines
Guyancourt, Chemin des Chênes
1986
93 Saint-Ouen
48, rue Albert Dalhenne
2000
Other
5 assets (for 6.5 million euros)
Sub-total of office buildings in the Paris region
19
R 1996
5,000
100%
5,000
Monoprix
C 1989
42,101
579
65%
27,366
BNP-Paribas
C 1974
6,570
2,227(5)
100%
6,570
Le Point
568
794,804
R 1989
12,000
100%
12,000
Renault Showroom
R 1982
11,875
100%
11,875
818,679
Volkswagen Showroom
R 1995
8,250
300
100%
8,250
Nortel Networks
C 1997
16,421
353
100%
16,421
Alstom Transport
14,932
39,603
French Provinces (4 assets for 0.9 million euros)
8,337
866,618 m2
Total
* and related : shop units in an office building, light-industrial spaces, apartments...
(1)
(2)
(3)
Acquisition from the Vivendi Group
Acquisition from Crossroads Property Investors
The surface given includes the conference centre (3,330 m2)
(5)
The Gaité Montparnasse private parking lot is shared between the offices, the Hôtel Méridien and the Shopping Arcade Gaité
24
7,655
Groupama,…
2,840 St Ingenierie, Compu-mark, Pierre Lang France
(4)
Jointly held property
P RO P E RT Y P O RT F O L I O
Shopping Centres Portfolio as at December 31, 2002
GLA of the Whole
Complex (m2)
Parking
spaces
Shopping centres in Paris and its western outskirts
Paris-La Défense (92)
Les Quatre Temps :
108,000
Auchan,11 Mus and 200 shops
Colline de la Défense: Under restructuring with les 4 Temps 15,500
Cnit: Shopping Arcade
FNAC, 28 shops and many restaurants
Paris 1
Le Forum des Halles
60,000
FNAC. 10 Mus et 180 shops and Ciné-cité UGC
Carrousel du Louvre :
4 Mus, 50 shops and a food court
10,200
Paris 9
Printemps de l'Homme : Department store (PPR group) 13,870
Paris 14
Galerie Gaité : 4 Mus and 20 shops
14,000
Other shopping centres in the Paris region
Rosny 2 (93 - Rosny-sous-Bois)
Carrefour, BHV, 9 Mus,
190 shops and a cinema complex
Vélizy 2 (78 - Vélizy)
Auchan, Le Printemps
and 8 Mus, 150 shops and 7 cinemas
Carré Sénart (77 - Sénart)
Carrefour, 15 Mus, 115 shops
Chelles 2 ( 77 - Seine-et-Marne)
Carrefour, 5 Mus, 110 shops
Ulis 2 (91 - les Ulis)
Carrefour, 6 Mus and 110 shops, 4 cinemas
Shopping centres in the French Provinces
Cité Europe (62 - Coquelles)
Carrefour, 10 Mus and 130 shops,
a food court and a cinema complex
Euralille (59 - Lille)
Carrefour, 10 Mus and 110 shops,
a food court and a leisure complex
La Toison d'Or (21 - Dijon)
Carrefour, 7 Mus and 130 shops, an aquatic center
Labège 2 (31 - Toulouse)
Carrefour, 3 Mus and 90 shops
BAB 2 (64 - Bayonne)
Carrefour, 3 Mus and 80 shops
CMK-Mériadeck centre (33 - Bordeaux)
Auchan, 7 Mus and 80 shops
Saint-Genis 2 (69 - Lyons)
Auchan, BHV and 65 shops
Bonneveine (13 - Marseilles)
Carrefour, 2 Mus, 75 shops and 5 cinemas
Place d'Arc (45 - Orléans)
Carrefour, 4 Mus and 60 shops
Nice Etoile (06 - Nice)
FNAC and Habitat, 3 Mus and 88 shops
Saint-Martial (87 - Limoges)
Champion, 7 Mus and 60 shops
Lille Grand Place (59 - Lille)
FNAC, 15 shops
Shopping Complexes
Catchment
Number
Estimated
areas* of visitors overall turnover
(in million (in million of the complex
people)
people) (million euros)
Construction
Acquisition -refurbishment
date
date (R)
GLA of the
shop units
(m2)
Shopping Centres
Total space
according to
%
% of consolidation
Unibail(1) consolidation
(m2)
227,920 m2
6,500
3
35
686
700
1992/95
1981
104,000
(2)
53%
100%
104,000
1999
1992
1999(2)
1989
15,500
53%
100%
15,500
11,500
100%
100%
11,500
1979/86
R 1996
60,000
65%
100%
60,000
2,100
4.2
41
470
1994
700(3)
2
7.0
50
1999(2)
1993
10,200
100%
100%
10,200
1993
1999
13,870
100%
100%
13,870
60
1998
1976
R 2000/01
12,850
100%
100%
12,850
ns
(4)
0.7
106,000
6,200
2
13
582
1994
1973
31,678
26%
26%
118,824 m2
8,236
102,000
7,200
2.5
17.4
860
2001
1994
R 1997
1972
7,180
28,200
100%
54%
100%
54%
7,180
15,228
65,000
5,700
0.8
375
1994/99
2002
55,000
100%
100%
55,000
49,500
3,000
0.5
4.4
180
2002
1996
24,000
100%
100%
24,000
47,000
3,200
0.6
9.2
442
1994
1973
R 1998
20,400
45%
45%
9,180
73,000
4,250
4.6
9
400
1995
1995
50,300
50%
50%
180,585 m2
25,150
67,000
2,900
2.5
14
242
1994
1994
42,800
40%
40%
17,120
56,000
3,500
0.5
7
343
1994
1990
31,450
100%
100%
31,450
44,600
3,010
0.9
6.5
265
1994
1983/92
13,000
100%
100%
13,000
37,000
2,500
0.7
7
240
1994
1982
10,900
90%
100%
10,900
35,000
1,500
0.8
10
170
29,000
1,800
0.3
5
27,000
1,000
0.3
9
27,000
750
0.4
19,000
1,200
18,000
800
8,000
340
-
1994
1980
27,600
61%
100%
27,600
1994/96
1981
5,500
100%
100%
5,500
210
1986
1983
9,800
100%
100%
9,800
11
126
1988
1988
13,665
73%
100%
13,665
1
11
162
2000
1982
14,600
100%
100%
14,600
0.6
3.5
65
1989
1989
11,800
100%
100%
11,800
-
-
1992
1992
8,000
10%
-
-
527,329 m2
Total
Shopping centre development projects
Strasbourg-Etoile (67 - Strasbourg)
26,450
Leclerc, 15 Mus, 50 shops
Îlot Bonnac ( 33 - Bordeaux)
7,700
Marques Avenue (62 - Coquelles on the site of Cité Europe) 13,000
1,300
0.5
-
-
2005
26,450
100%
-
130
850
-
-
-
2006
2003
7,700
13,000
100%
70%
-
-
* at less than 30mn from the centre
MUS: Medium Sized Units
(1)
(2)
(3)
Unibail's interest in floor area and rents
Part of the Vivendi asset acquisitions
The Carrousel du Louvre parking lot does not belong to the Group
(4)
2,227 parking spaces for the whole Gaité Montparnasse complex (Hôtel Méridien, Shopping Arcade Gaité and offices)
Convention and Exhibition Centres Portfolio as at December
31, 2002
Construction or
Acquisition
date
Paris and Paris-La Défense
Paris Expo - Porte de Versailles - Paris 15: 8 exhibition halls (from 5,000 to 70,000 m2),
20 conference rooms of which 3 auditoriums
Cnit - La Défense : Exhibition and convention space (43,259m2) and a hotel
Espace Grande Arche - La Défense
Flexible space covering 10,000 m2
Espace Champerret - Paris 17: Exhibition space (Fairs and Trade shows)
Carrousel du Louvre - Paris 1: Exhibition space (Fairs and Trade shows)
Palais des Sports - Paris 15
Flexible amphitheatre for shows or meetings from 2,000 to 4,200 seats
Sub-total
Hôtel Méridien-Montparnasse - Paris 14 : Hotel, a conference centre and a private parking lot(4)
Cœur Défense Conference Centre: Space included in the Office Portfolio
(1)
(2)
Refurbishment
date (R)
2000
Parking
spaces
%
Unibail(1)
Total space
per asset*
(m2)
% of
consolidation
(in thousand m2
occupancy days)
Occupancy
6,500
100%
226,000
100%
36,613
(2)
1999
2001
1989
R 2003
714
100%
100%
53,540
9,500
100%
100%
3,745
-
1989/1995
1999(2)
2002
1989
1993
1,800(3)
700(3)
100%
100%
50%
9,200
7,125
na
100%
100%
50%
1,473
1,492
na
1998
1974
(4)
100%
2001
2001
305,365 m2
57,372
362,737 m2
3,330
100%
* total space according to consolidation
Unibail's interest in floor area and rents
Part of the Vivendi assets acquisition
(4)
2,227 parking spaces for the whole Gaité Montparnasse complex (Méridien Hotel, Shopping Arcade Gaité and offices)
(3)
100%
100%
95
The parking lot does not belong to the Group
25
MANAGEMENT’S DISCUSSION AND ANALYSIS
Business Review
p.
27
Profit and Recurring Cash Flow
p.
33
Net Asset Value
p.
34
Financial Resources
p.
38
Human Resources
p.
40
Risk factors and insurance
p.
41
Outlook
p.
41
26
BUSINESS REVIEW
1. Office Properties
2002 financial performance
The office property market in 20021
Office Portfolio
Net Operating Income (€m)
In 2002, office space take-up in the Ile-de-France region totalled
1,532,000 m², which was in line with the average rate over the past
ten years. This was a good result against a background of weak GDP
growth.
Over 40% of this office space take-up concerned buildings of over
5,000 m², confirming the marked tendency among tenants to
rationalise the use of their premises to minimize costs.
In this context, 2002 saw a significant increase in the volume of
immediately available office space. The vacancy rate reached 5.8% at
the year-end, fuelled mainly by a significant number of small and
medium-size properties vacated by tenants as well as the offices
vacated as a result of preletting operations in 1999 and 2000 and the
completion of some large new buildings which were not prelet.
However, there is still a limited availability of prime quality office
space.
Future certain supply of office space decreased throughout the year
as many projects were postponed, highlighting the cautious attitude
of property developers. The latest estimates indicate that some
2,280,000 m² of new developments are due for completion between
now and 2006, i.e. an average of 570,000 m² a year. If the economy
picks up, the market could return to a more balanced situation from
2004 onwards.
In the Ile-de-France region, the average rent recorded for new or
refurbished properties fell by some 6% in 2002, to reach around
€ 340 per m² per annum (excluding taxes and service charges).
However, if this fall is sharper for small and medium-size properties,
the rents for prime properties have held relatively steady in most
geographical areas.
The office investment market in the Ile-de-France region recorded
substantial volumes totalling € 8.2bn by the year-end, which is an
excellent performance given that the volume of corporate property
outsourcing transactions has dwindled since 2001 (e.g. France
Telecom and EDF).
Investors looking for secured investments have tended to target new
or refurbished office buildings, which are already let and situated in
prime locations.
Overall, yields remained stable. Any appreciation in response to the
slowdown in the rental market was offset by historically low interest
rates and pressure from increasing demand. In the Paris Central
Business District, yields range between 6% and 7.5%, compared with
6.5% to 7.75% for its western outskirts.
2000
2001
2002
Rental Income
159.5
229.0
262.7
Net operating expenses
-12.4
-12.7
-21.3
-2.4
-2.7
-3.3
Asset management costs
Net Operating Income - Office
Portfolio
Year-on-year evolution
144.7
213.6
238.1
47.6%
11.5%
Gross rental income rose by € 33.8m in 2002. This increase breaks
down as follows:
€ 25.3m from Cœur Défense, which started contributing rental
income in May 2001;
€ 5.4m following the delivery of Cité du Retiro to its tenant,
Cartier, in July 2002;
€ 4.9m from the rental of refurbished floors at Tour Europe
following its renovation;
€ 4m from properties acquired in 2001 (41 rue Cambon and 50%
of 168 avenue Charles de Gaulle in Neuilly);
€ -11.1m in lost rental income as a result of properties sold in
2001 (four floors of Tour Maine Montparnasse and 7 rue St
Georges) and in 2002 (La Chocolaterie in Levallois, 16 rue de
Monceau, and 115 avenue Charles de Gaulle in Neuilly);
€ -3.7m in lost rental income due to properties under renovation
and partially completed in 2002 (67 avenue de Wagram, Tour
Ariane, Quai Ouest and Cnit).
The remaining € 8.8m difference stemmed from a 7.4% increase
in rents on a like-for-like basis.
This like-for-like increase breaks down as follows: 6.4% from new
lettings and lease renewals, 3% from the impact of rent indexation
and -2% due to vacating tenants and other circumstances.
In 2002, 31 new leases were signed as part of Unibail’s letting
activities. They covered a total surface area of around 33,000 m² and
generated € 18.2m in full-year rental income. The main newly-signed
leases were at Cœur Défense, Les Villages, Tour Ariane and Tour
Europe (all in La Défense), as well as 67 avenue de Wagram
(delivered in early 2002 following refurbishments) and 137 rue du
Faubourg St Honoré. All these leases were signed with blue-chip
tenants (e.g. Microsoft, Credit Lyonnais, EDF, Air Liquide…) and
for firm periods of six or nine years.
46 leases, worth € 7.3m in full-year rental income, were terminated
in 2002. These leases covered a total surface area of 28,600 m²,
including 11,000 m² of light-industrial space at Tolbiac Masséna.
Eight of these lease terminations were instigated by Unibail to enable
the Group to proceed with refurbishment works on the premises.
Foreign buyers have remained very active (over 50% of agreements
signed), reflecting the appeal of the French market, which continues
to offer reversionary potential coupled with attractive yields. 42% of
the sellers are investors, while 21% are property developers and 37%
are owner-occupiers that have chosen to outsource their properties.
There were few major lease renewals in 2002, with the exception of
the Jil Sander lease for 50 avenue Montaigne. However, 17 leases
were renegotiated outside their three-year renewal period, increasing
full-year rental income by € 2.6m.
The notion of market share is not relevant in the office rental activity.
No actor has a notable share in this activity which is to be seen, from
the point of view of building promotion, as prototype economy
because each building is a specific asset.
As at year-end 2002, combined full-year rental income from all
leases signed amounted to € 271m. The following table shows a
breakdown of these leases by expiry date and date of next
termination option.
1
Sources: Insignia-Bourdais and DTZ
27
Lease expiry schedule for Office portfolio at year-end 2002
Year
Basic rent at
lease end date
% of total
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014+
Total
22.0
32.0
20.9
27.6
11.6
4.1
13.3
91.2
30.1
3.1
1.5
13.9
271.3
8%
12%
8%
10%
4%
1%
5%
34%
11%
1%
1%
5%
100%
Basic rent at date
of next lease
termination option
63.1
38.7
26.7
6.9
32.8
15.1
6.6
56.5
22.6
0.2
0.0
2.1
271.3
*
% of total
23%
14%
10%
3%
12%
6%
2%
21%
8%
0%
0%
1%
100%
* including € 31m for the leases expiring between January 1, 2003 and June 30, 2003
At end-December 2002, potential rents from vacant space amounted
to € 15.8m, i.e. a 5.1% financial vacancy rate, compared to 4.6% at
end-December 2001.
has required outstanding technical and logistic capacity, particularly
as the building has remained occupied. The year 2003 will witness in
this office building the completion of a state-of-the-art intercompany
restaurant, a revamped entrance lobby and additional refurbished
floors.
In addition, the Cœur Défense complex reached cruising speed in
2002, much to the satisfaction of its tenants.
In the Paris Central Business District, construction works on Cité du
Retiro (a 21,200 m² building overlooking 30 rue du Faubourg SaintHonoré) were completed, enabling Cartier Group to begin settling its
headquarters in the second half of 2002 after completing its own
fittings.
The Office Division is also pursuing the redevelopment of the former
EDF headquarters (an office complex of 70,900 m² in gross area
located between avenue de Messine, rue de Monceau and rue de
Murat, Paris 8), which has officially obtained the "office
authorisation" (agrément bureau). Site clearance and asbestos
removal works are already complete. By end-2005, this project will
give birth to a highly functional, environmentally-friendly and
architecturally outstanding office complex.
During 2002, seven construction and renovation projects were
delivered:
This vacancy rate breaks down as follows:
1.2% due to Cœur Défense (vs 2.4% at year-end 2001);
0.6% from ‘strategic’ vacancies, i.e. space reserved for major
renovations (vs 1.2% at year-end 2001);
3.3% from other available properties.
108, rue de Richelieu, Paris 2 (January), currently in the letting
phase;
67, avenue de Wagram, Paris 17 (January), leased to EDF;
18 floors of Tour Europe, La Défense (April-May 2002), leased
to the OECD;
Cité du Retiro (July), leased to Cartier;
137 rue du Faubourg St Honoré (July), leased to EuropaCorp;
Quai-Ouest (December), currently in the letting phase;
Six floors of Tour Ariane.
This increase in the vacancy rate compared with year-end 2001 is
mainly due to the Quai Ouest building in Boulogne, which was
completed at year-end 2002.
Net operating expenses for the Office portfolio rose from € 12.6m in
2001 to € 21.4m, owing to a significantly expanded portfolio,
following notably the completion of Cœur Défense in 2001 and Cité
du Retiro in 2002. On a like-for-like basis, the ratio Net rental
income/Gross rental income improved from 94.5% in 2001 to 94.9%
in 2002, resulting in a 7.8% rise in net rental income compared with
2001.
Nine assets were sold in 2002, including notably:
Net Operating Income for the Office portfolio rose to € 238.1m in
2002, up 11.5% compared with € 213.6m in 2001.
These disposals totalled € 239.1m and generated a € 102.7m capital
gain. The selling prices of these properties were generally in line
with or even higher than the valuers’ appraisals used to compute
Unibail’s Net Asset Value per share.
During 2002, Unibail invested a total of € 436.8m in its Office
Division vs € 480m in 2001 (as measured by the increase in the
Group share of gross fixed assets). This figure breaks down as
follows:
€ 172.4m for the acquisition of the 22% minority interests in
Cœur Défense (€ 334m on a Group share basis);
€ 88.6m in works expenses, mainly covering Cité du Retiro,
Messine Monceau Murat (3M project), Tour Europe and Tour
Ariane in La Défense, 137 rue du Faubourg St Honoré and Quai
Ouest in Boulogne;
€ 14.2m in financial expenses incurred and capitalised during the
construction period.
In 2002, the Office Division actively pursued the policy of investing
in its property portfolio in order to enhance and capture its value
creation potential.
At Tour Ariane, Unibail has successfully completed the program to
overhaul the building’s general technical facilities and redevelop
various floors. As a result, it has managed to sign new leases with
Credit Lyonnais and Société Générale for these refurbished floors.
This program will continue in 2003, as Unibail has negotiated
agreements to vacate other floors.
At Cnit, the process of recovering space to be refurbished is coming
to an end. This will result in the complete renovation of an integrated
and uniform set of workspaces.
One of the highlights of 2002, for the La Défense portfolio, was the
redevelopment project covering 18 floors of Tour Europe. This task
28
La Chocolaterie, Levallois-Perret;
16 rue de Monceau, Paris 8;
23 avenue de Messine, Paris 8;
115/123 avenue Charles de Gaulle, Neuilly;
Gennevilliers business park.
2. Shopping Centres
The shopping centre market in 2002
Due to the combined impact of a slight decline in household
purchasing power and the deterioration in the general climate (rising
unemployment, uncertain global environment, etc.), growth in
consumer spending slowed down in 2002. After a lackluster start to
the year, followed by a pick-up in the second and third quarter,
consumer spending was up 1.8%2 over the 2002 full-year, compared
with 2.7% in 2001.
A 2002 survey by Sociovision-Cofremca confirms that French
consumers have continued to adopt a “wait-and-see” attitude.
However, the desire to buy is still there and shopping centres
continue to have a strong appeal to consumers.
The most buoyant sector in 2002 was consumer electronics, which
posted 6% growth, driven by sales of DVDs, home cinema systems
and digital still cameras and camcorders. The increase in leisure time
benefited the DIY and books/stationery sectors, while sales of
clothing and shoes remained virtually flat (less than 1% growth)3.
2
3
INSEE economic survey, December 2002
Monthly economic survey by the Banque de France (First 11 months of 2002)
Against this background, the shopping centres in Unibail’s portfolio
have continued to outperform their benchmark indices, Unibail's
tenants posting 3.5% sales growth in 20024. This robust growth
should be sustained by: i) a proactive letting policy, reflected by the
arrival of innovative concepts and original stores (e.g. Andaska, Du
Bruit dans la Cuisine, Lollipops, Bodum, Moa and Julie K); ii)
greater emphasis on buoyant consumer sectors, such as health and
beauty (+5.4%) and education/leisure (+3.8%); and iii) the presence
of major flagship chains, such as Zara, H&M, Fnac, Marionnaud and
Mango.
A highlight of 2002 was the successful launch of Carré Sénart.
Benefiting from the most dynamic retail chains and state-of-the-art
concepts, this centre attracted over 4 million visitors during its first
four months of operation.
Rosny 2 and Les Quatre Temps recorded the best performance in the
Paris region. In the French provinces, the top shopping centres in
terms of performance were Toison d'Or in Dijon, Bonneveine in
Marseilles and Labège 2 in Toulouse (the latter opened a Fnac store
following its extension).
In terms of investment, the shopping centre market only saw two
large-scale transactions in 2002, namely: i) the acquisition of a
significant interest in the Parinor 2 shopping centre (33,800 m²) by a
major investor in March 2002; and ii) the acquisition by Unibail of a
100% stake in the Chelles 2 shopping centre for € 58m in June 2002.
This centre offers 24,000 m² of rental space and an initial yield of
7.7%. These few transactions highlight the scarcity of major French
shopping centres, which are much sought-after by investors due to
their long-term revenue growth potential and defensive profile.
Unibail owns or manages 8 out of the 20 biggest French shopping
centres. This extensive presence enables the company to develop
strong management and analysis tools as well as to create close
relations with principal retail chains present in France. It enhances at
the same time the good performance of each shopping centre under
the control of the Group. However, given the uniqueness of each
centre, the notion of market share is only relevant when it is applied
to a particular shopping centre in a certain catchment area.
On a like-for-like basis, rental income rose by € 9.8m compared with
full-year 2001. This increase breaks down as follows:
€ 5.2m from the impact of rent indexation;
€ 1.2m from lease renewals;
€ 2.4m from lease terminations and relettings;
€ 1.0m due to the pro-rated impact of the lettings signed in 2001
and increased car park revenues.
On a like-for-like basis, rents grew by an average of 7.1% compared
with 2001.
On a full-year basis, € 5.6m in variable rents were invoiced in 2002,
i.e. 3.5% of overall rental income.
The rental business was very buoyant, with 173 new leases5, 54 lease
renewals and 27 terminations. These figures reflect a stronger letting
performance than in 2001 (153 new leases, 50 renewals and 59
terminations). The newly-signed leases concerned a total surface area
of over 35,000 m² and represented a € 4.8m increase in full-year
rental income6. Lease renewals concerned an area of around
16,000 m² and generated an average increase of 36.7% in rents.
For 2002, the average occupancy cost ratio7, including medium-size
stores, stood at 9.0%.
This average occupancy cost ratio is below the standard market ratio,
which is estimated at 12.5% for a major shopping centre whose
tenants have recently signed leases at market rates. As a result,
Unibail’s shopping centres offer substantial reversionary potential,
which should be realised as leases are renewed and renegotiated.
As at year-end 2002, total full-year rental income from all leases
signed in all centres amounted to € 165m. The following table shows
a breakdown of these leases by expiry date and date of tenant’s next
termination option:
Lease expiry schedule for Shopping Centre Division at year-end 2002
Year
Basic rent at lease
end date
% of total
Basic rent at date of
next termination option
% of total
2003*
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014+
Total
16.3
11.8
10.0
12.7
8.3
10.1
14.1
21.3
22.3
32.2
1.9
4.0
165.0
10%
7%
6%
8%
5%
6%
9%
13%
13%
20%
1%
2%
100%
46.4
40.4
45.3
5.5
1.6
12.9
0.0
9.0
1.1
0.5
0.0
2.2
165.0
28%
24%
27%
3%
1%
8%
0%
5%
1%
0%
0%
1%
100%
2002 financial performance
Shopping Centre Portfolio
Net Operating Income (€m)
2000
2001
2002
Rental income
121.7
139.9
158.7
Net operating expenses
-16.5
-19.8
-15.4
Ground rents
-3.7
-3.5
-3.6
Asset management costs
-0.6
-0.3
-0.4
Net Operating Income - Shopping Centre
Portfolio
Year-on-year evolution
100.9
116.3
139.3
15.3%
19.8%
* including the expired leases under renegotiation
In 2002, Unibail’s shopping centre portfolio generated € 158.7m in
rental income, a rise of € 18.8m (or 13.5%) compared with
€ 139.9m in 2001.
€ 9.0m of this increase stemmed from acquisitions or development of
new retail space, notably:
The acquisition of the Chelles 2 regional shopping centre in
June, which added € 2.8m to rental income in 2002;
The opening of the Carré Sénart leisure and shopping centre on
August 28, 2002. This complex is fully let and generated
€ 5.0m in rental income in 2002 (including € 0.7m in pre-rental
income);
The redevelopment of retail space acquired from Bricostore in
the Toison d'Or centre in Dijon, together with the acquisition of
various co-ownership lots (Marks & Spencer at Rosny 2,
Gaumont Cinemas at Carré Sénart, UGC Cinemas at Place d'Arc
in Orléans), which generated € 1.0m in additional rental income
compared with 2001.
The financial vacancy rate for Unibail’s shopping centre portfolio
was 2.7% at year-end 2002 (vs 3.9% at year-end 2001), representing
€ 4.2m in full-year rental income. This includes € 1.1m from
Chelles 2, which is due to undergo an extensive refurbishment
program. 0.9%8 of these vacancies were strategic, i.e. the retail space
was deliberately kept free for refurbishments or changes in the tenant
mix, notably at Les Quatre Temps, Rosny 2, Forum des Halles and
Carrousel du Louvre.
5
Excluding Carré Sénart
Net rental increase following lease terminations
7
Occupancy cost ratio: (rental charges + service charges) / tenant sales
8
Figure included in overall vacancy rate of 2.7%
6
4
On a like-for-like basis, i.e. excluding Chelles 2 and Carré Sénart.
29
Operating expenses (€m)
Recurring operating expenses
2001
2002
Change
In addition, the Strasbourg Etoile shopping centre project obtained a
building permit in June 2002 and is due to be launched in 2003.
-13.6
-14.9
-1.3
Key money/compensation
-0.5
4.8
5.3
3. Convention-Exhibition Centres
Major works expenses charged to
tenants
2.8
3.7
0.9
The market for Convention-Exhibition Centres
Management fees
-8.4
-9.0
-0.6
Doubtful accounts
-0.1
0.0
0.1
-19.8
-15.4
4.4
Net operating expenses
Net operating expenses were driven down by various factors:
Recurring operating expenses, which fell to € 14.9m, i.e. 9.4% of
2002 rental income vs 9.7% in 2001;
Net key money payments, after deducting compensation for
evictions, which showed a strong positive improvement in
comparison with 2001, mainly due to changes in the tenant mix
at Les Quatre Temps;
The impact of major works expenses charged to tenants, chiefly
due to the renovation of Les Quatre Temps and Forum des
Halles;
Management fees invoiced by Espace Expansion, which rose in
line with the growth in rental income;
Provisions for doubtful accounts and related risks, which were
similar to the 2001 figure, but lower on a like-for-like basis.
Ground rents rose to € 3.6m vs € 3.4m in 2001, owing to the impact
of rent indexation on the Forum des Halles leasehold.
Overall net rental income totalled € 139.7m, showing a 19.8%
increase over 2001. On a like-for-like basis, net rental income was up
13.2% compared with 2001, or 8.9% excluding the impact of key
money and eviction compensation.
The ratio Net rental income/Gross rental income improved from
83.9% in 2001 to 88% in 2002. Excluding the impact of key money,
this ratio stood at 85.5%, also higher than the 2001 figure of 83.9%.
After taking into account asset management costs, Net Operating
Income for the Shopping Centre portfolio rose to € 139.3m in
2002, up 19.8% compared with € 116.3m in 2001.
Unibail did not sell any of its shopping centres9 in 2002, as almost all
the assets in this portfolio were perfectly consistent with the Group’s
strategy.
Over full-year 2002, the Group invested € 185.1m in shopping
centres. This figure breaks down as follows:
Acquisition of the Chelles 2 shopping centre;
€ 73.5m for the completion of works and delivery of the Carré
Sénart shopping centre, including co-ownership lots in the
cinema acquired from Gaumont;
€ 19.1m for the lots acquired in the UGC cinemas at the Place
d'Arc shopping centre in Orléans and co-ownership lots
purchased in Rosny 2;
€ 14.0m for extensive refurbishment works at Les Quatre Temps
in La Défense (the renovation and extension work of this
shopping centre began in 2002). This project is due for
completion in 2005 and involves the development of a 16-screen
cinema complex at the Colline de la Défense site, which will be
linked to the current shopping centre by an extension, and the
creation of a new 4,000m² restaurant area. Furthermore, this
project frees up the existing premises occupied by the UGC
cinema chain, where 15,000 m² of additional retail space will be
developed;
€ 20.4m for renovation works, mainly covering: i) the Forum des
Halles; ii) the completion of façade works at Mériadeck
(Bordeaux); iii) the development of additional parking spaces at
Cité Europe; and iv) an extension of the Labège 2 centre in
Toulouse to accommodate a Fnac store.
9
Excluding off-plan sales of the Carré Sénart hypermarket to Carrefour and the
stake taken by Quatre Temps minority shareholders in the Colline Défense
project to ensure an even ownership structure throughout the shopping centre.
30
The overall market for Convention-Exhibition Centres was affected
by a difficult economic climate.
In the exhibition segment, total revenues (generated by the rental of
exhibition space and associated services) were up by around 1%
compared with 2001.
The first half of 2002 saw a drop in the number of exhibitors (mainly
trade fairs), which was not repeated in the second half of the year.
The downturn in the first half was mainly due to the setbacks
experienced by recruitment fairs and NICT (New Information and
Communications Technology) shows. Other industry segments did
not show any decline, and even posted a slight increase in the
number of exhibitors.
Furthermore, according to various event organisers, the volume of
business generated by exhibitors during these exhibitions appears to
have held steady compared with the previous year.
The number of corporate events held in conference and convention
centres fell by around 20%, trimming revenues by just 1.5%. The
percentage of events held in hotels remained stable, accounting for
around 50% of total revenues. Over a longer term, an increase in the
size of these events, coupled with a decrease in their length can be
noted, as reflected by the much higher proportion of one-day events.
The conventions segment was not hit by the economic climate, given
that it has an inherently longer planning cycle (over two years on
average).
The Convention-Exhibition Centre portfolio of Unibail, regrouped
under the umbrella brand 'Paris-Expo', holds a market share of nearly
50% in the Paris region, a close equivalence to that of Paris Chamber
of Commerce and Industry (Chambre de Commerce et d'Industrie de
Paris) who is the owner of Palais des Congès at Porte Maillot in
Paris and Parc des Expositions de Paris Nord Villepinte. However, it
is worth noting that the competition to host large events takes place
among European big cities where, in most cases, only one operator
controls the whole offer of exhibition spaces in the city. The market
share of Paris Expo becomes non-significant if we take into account
all the places capable of hosting the events of different sizes and
natures especially in the domain of hotels and para-hotels.
2002 financial performance
The Convention-Exhibition Division encompasses the following
business activities:
All sites included under the umbrella brand 'Paris Expo' and
constituting the core business:
o Parc des Expositions at Porte de Versailles;
o Cnit in La Défense;
o Carrousel du Louvre;
o Espace Champerret;
o Cœur Défense Conference Centre;
o Palais des Sports at Porte de Versailles.
Espace Grande Arche in La Défense, acquired at end-2001, is
due to re-open in 2003, after being closed for renovation works
since February 2002.
The Méridien Montparnasse and Cnit hotels: the direct
management of the Cnit hotel will be transferred to Hilton under
an operational lease agreement effective from June 2003;
Miscellaneous services activities also totally or partially
connected with this division in 2002: installation and hiring of
audiovisual equipment, catering services and direct management
of the Cnit hotel up to December 31, 2002.
Paris Expo Activities
Overall revenues from the Paris Expo Activities rose from
€ 111m in 2001 to € 125m in 2002, while EBITDA increased 4.7%
over the year.
EBITDA growth in 2002 was hit by various marketing, IT and
personnel costs, mainly due to the newly-introduced organisation.
Revenues from Paris Expo stem from two main sources:
Rental activities, which mainly comprise the rental of exhibition
space to events organisers, the rental of parking spaces, and the
fees paid by various concession-holders;
Services activities, including the sale of power supplies, lifting
equipment and various other services directly connected with the
rental of convention/exhibition space (and typically outsourced).
Paris Expo Activities (€m)
2001
Rental income
77.3
83.3
Revenues from services
33.5
41.4
Total revenues
110.8
124.7
Operating expenses
-68.2
-80.1
42.6
44.6
Total Net Operating Income (rental and services)
Year-on-year evolution
2002
4.7%
Rental revenues from Paris Expo
2002 rental income from Paris Expo amounted to € 83.3m, up 8%
compared to 2001.
Cnit has traditionally focused on the NICT and recruitment sectors
and was therefore more exposed to the difficult economic climate in
2002. After dropping by 6% in the first half, compared with the same
period of 2001, the occupancy rate picked up again, fuelled by a
proactive sales approach. On a full-year basis, this occupancy rate
stood at 40% (against 42% in 2001).
Corporate events held at the Foyer de l’Arche and Cœur Défense
increased revenues generated by the portfolio of La Défense.
Combined 2002 Net Operating Income from rental activities at Cnit,
Foyer de l'Arche and Cœur Défense declined to € 5.1m, down 24% in
comparison with 2001.
Carrousel du Louvre
Rental income from Carrousel du Louvre came to € 6.4m, 55% of
which was generated by corporate events. In terms of exhibitions, the
flagship event was the ‘Biennale des Antiquaires’. Overall, rental
income was up 12% in comparison with 2001, while the occupancy
rate rose sharply from 43% to 64%.
Net Operating Income from rental activities for this site rose by 11%
in 2002, reaching € 3.2m vs € 2.9m in 2001.
Espace Champerret
At € 2.9m, rental income was up very slightly compared with 2001.
The occupancy rate (44%) showed an increase of 4% compared to
2001. Net Operating Income from rental activities decreased by
€ 0.4m, owing to one-off employee-related charges.
Palais des Sports
In February 2002, Unibail acquired a 50% stake in ‘Société
d'Exploitation du Palais des Sports’, with a view to developing its
'corporate events' activities in conjunction with Parc des Expositions.
These activities will be launched in 2003.
Services revenues from Paris Expo
This growth varies according to business segments. The 'exhibitions'
segment, which accounts for just over 80% of Paris Expo’s revenues,
posted a 3% growth, due to: i) biennial shows, such as the ‘Mondial
de l'Automobile’ at Porte de Versailles and the ‘Biennale des
Antiquaires’; and ii) rental increases for exhibition space.
Service revenues are directly correlated with the number of
exhibitors and the occupancy rates for the space rented. Both the
overall occupancy rate and the ratio Service revenues/Rental
revenues rose significantly in 2002.
The 'corporate events' segment benefited fully from the sales
platform launched in early 2002. As a result, revenues in this
segment surged by 25% compared with 2001, despite a particularly
difficult environment (see above).
Revenues from these service activities totalled € 41.4m, up 24% in
comparison with 2001, bearing in mind that even-numbered years are
traditionally more favorable, mainly as a result of hosting the
‘Mondial de l'Automobile’ show.
Parking revenues were up 18% compared to 2001, thanks to the
‘Mondial de l'Automobile’ show held at Porte de Versailles, which
always boosts car park activity.
Net Operating Income generated by services for the core Paris Expo
business rose by € 2m compared to 2001, reaching € 5m in 2002.
Apart from Carrousel du Louvre, all sites posted an increase.
Porte de Versailles
Porte de Versailles is still by far the largest contributor to this
division; it generated € 58.2m in rental income. As in every evennumbered year, the flagship event was the ‘Mondial de l'Automobile’
show, which continued to increase its visitor rates compared with
2000, reaching 1.46 million visitors. The site’s occupancy rate rose
to 47% (vs 41% in 2001), i.e. 36.6 million ‘square-metre occupancy
days’.
In addition to regular well-established trade fairs, such as the ‘Foire
de Paris’, ‘Salon de l'Agriculture’ and ‘Salon du Meuble’, Porte de
Versailles also hosted around ten additional exhibitions, which were
either brand new shows or events relocated from other sites. The
main examples were Interclima (1.1 million square-metre occupancy
days) and Hôpital Expo (0.5 million square-metre occupancy days).
Although 94% of Porte de Versailles’ revenues came from
exhibitions, corporate events tripled in volume, reaching € 2.4m in
revenues as a result of synergies developed within the division by the
unified sales team. Consequently, Porte de Versailles is turning into a
key site for major corporate events.
Operating expenses, including ground rents paid to the City of Paris,
totalled € 28.4m.
Net Operating Income from rental activities for this site came to
€ 29.8m, up 6.5% compared with 2001.
Cnit
Revenues of € 14.6m from this site represented a decrease of 3.4%
compared to 2001, mainly due to the departure of some exhibitions,
which was not fully offset by the volume of corporate events.
Other Convention and Exhibition related activities
Méridien Montparnasse hotel
In 1995, a rent-setting procedure was initiated for the renewal of this
hotel’s lease. In its ruling of May 7, 2002, the French Supreme Court
(la Cour de Cassation) rejected Unibail’s appeal. However, the Court
upheld the ‘Théâtre Saint-Georges’ precedent, whereby a variable
rate lease is exempted from all regulations and the new rent may not
be set by the judge, who can merely acknowledge whether there is
agreement or disagreement regarding this new rent.
Pending the outcome of these ongoing negotiations, Unibail has
adopted a very prudent approach, as in previous years, by recording
the rent estimated by legal experts (€ 7.6m per annum).
Cnit hotel
The Hilton Group took over the management of the Cnit hotel in
June 2002.
Extensive renovation works have been carried out, resulting in the
closure of the hotel between November 1, 2002 and June 2003.
Unibail is still responsible for this hotel’s expenses (notably its
personnel costs) during this period, after which an operational lease
agreement with a firm period of 18 years will come into effect. As a
result, Unibail will totally withdraw from its hotel management
activities (treated as a non-core activity in the income statement
under ‘Property services’) and will only act as a landlord.
31
Services to tenants: management of retailers’ associations and
services to occupiers of office buildings.
Property investments
In 2002, the total cost of works came up to € 40.6m, including
€ 33.6m for Porte de Versailles (mainly the reconstruction of Hall 5)
and € 3.2m for Espace Grande Arche.
The building permit obtained for Hall 5 at Porte de Versailles on
March 28, 2002 did not give rise to any third-party claim, enabling
Unibail to complete the demolition works by the summer. So far, the
total budget for this project (€ 70m) is still on track, as all works
orders have now been placed.
All foundations works have been carried out and 50% of the building
shell has been completed. The various building contractors began
work in December 2002. The main technical risks relating to the
foundations have been removed and Hall 5 is scheduled to be
completed in time for the 2003 Batimat fair in mid-October.
The works permits for Espace Grande Arche were issued in June
2002. The companies responsible for carrying out the works have
been selected in line with the budget. The works effectively began in
early October 2002, suggesting a completion date in May 2003.
4. Property services
Property Services Net Operating
Income (€m)
2000
2001
2002
Property services for convention
and exhibition centres
9.2
6.0
3.5
Services for offices and shopping
centres
0.3
3.9
1.6
-0.2
-1.5
-0.4
9.3
8.4
4.7
Other services
Net Operating Income - Property
Services
Other services related to the Convention-Exhibition Division
In addition to the services for Paris Expo described above, which
generated € 5m in 2002 Net Operating Income, Unibail also provided
various other ‘non core’ services.
Proximages, the company which provides audiovisual services,
generated 2002 revenues of € 5m (up 12% in comparison with 2001),
and a Net Operating Income of € 1m (up 20% compared with 2001).
For the Cnit hotel, Unibail has signed a management agreement from
May 2002 to May 2003 with Hilton and will no longer manage this
hotel directly as from June 2003 (date of effect of the operational
lease agreement).
Similarly, the Cnit’s restaurants, which used to be managed directly
by a Unibail subsidiary, have been transferred to the Flo group under
an operational lease agreement for a firm period of ten years as from
June 1, 2002.
Following the sale of Unibail’s catering business, these two
agreements allowed the Group to withdraw totally from the
management of these activities.
Net Operating Profit from these three activities was negative,
totalling € -1.5m. This figure is not comparable with 2001, as the
revenues generated by the operational lease agreement for Cnit's
restaurant activities between June and December 2002 in particular
have been reclassified as related services for the property portfolio.
Property management and maintenance services
This business line covers the activities of three Unibail subsidiaries:
Espace Expansion, S2B and Arc 108:
Services to owners of office buildings and shopping centres:
management of facilities and co-ownership syndicates, technical
management, operating expenses management, leasing activities
(shopping centres only) and project development.
32
Net Operating Income for these services fell from € 3.9m in 2001 to
€ 1.6m in 2002.
In 2002, the fees invoiced by Espace Expansion amounted to €31m,
including € 4.4m outside the Group. Revenues of the leasing
management activities (€ 13.4m) grew in pace with the number of
properties managed on behalf of the Group. Leasing fees (€ 7.2m)
were € 0.4m above the 2001 figures, owing to the final letting phase
for Carré Sénart. Conversely, project development fees dropped by
€ 2m to € 3.3m as the construction project activity for this centre
came to an end. Espace Expansion also incurred preliminary research
costs on uncompleted projects, which impacted the Net Operating
Income for this subsidiary. The Net Operating Income amounted to
€ 2.6m in 2002 vs € 4.3m in 2001.
S2B’s activities in 2002 chiefly comprised technical building
maintenance assignments for the Group, which generated over
€ 23.2m in revenues.
At the same time, S2B continued to develop its range of services to
tenants. A number of new contracts with individual tenants were
signed, mainly at Cœur Défense, 7 Place du Chancelier Adenauer
and 52 rue de Lisbonne. S2B also carried out one-off services for
various major tenants, based on quotes. Lastly, four tenants at Cœur
Défense took out a separate electrical maintenance and repair
contract. Total revenues from these individual services amounted to
roughly € 2.3m.
Lastly, the Cnit business centre had a difficult year, recording only
€ 1.2m in revenues as its users were hit by the economic downturn.
S2B posted a Net Operating Loss of € 0.8m (vs a loss of € 0.5m in
2001).
5. Finance leasing
At year-end 2002, outstanding finance leasing portfolio had fallen to
€ 72.2m, down 31% from year-end 2001 due to normal contract
expiry.
Lease payments amounted to € 35.2m, generating € 3.6m in net
banking income (against € 4.2m in 2001).
The overall finance leasing contribution in 2002 was € 2.7m (vs
€ 3.4m in 2001).
PROFIT AND RECURRING CASH FLOW
Consolidated income statement (€m)
2000
2001
2002
Total Net Operating Income
304.6
391.3
433.6
Operating expenses
-18.4
-20.7
-18.9
Other
EBITDA (Earnings before Interest, Tax
Depreciation & Amortisation)
Depreciation
Net financial expenses
Recurring profit from non-consolidated
companies
-
-
-1.4
286.2
370.6
413.3
-100.8
-113.4
-129.6
-88.2
-127.5
-129.1
0.1
0.4
0.1
Pre-tax recurring profit
Net capital gains/losses on sales of
properties
97.3
130.1
154.7
58.9
25.6
101.9
Exceptional items
-26.6
-
-
-0.9
-3.9
-4.1
Goodwill amortisation
Provisions
-0.3
0.5
-0.4
Corporate income tax
-25.8
-30.9
-90.8
Net profit
102.6
121.4
161.3
Minority interests
-10.4
-13.4
-15.6
Net profit, Group share
92.2
108.0
145.7
200.7
243.5
284.3
85.9
115.7
138.6
Pre-tax recurring cash flow, Group share
178.6
220.4
260.7
After-tax recurring cash flow, Group share
147.1
180.8
212.0
Per-share data
Average number of shares outstanding
(millions)
2000
2001
2002
45.1
45.9
46.5
Earnings per share, Group share (€)
2.05
2.35
3.13
45.6%
15.0%
33.2%
Pre-tax recurring cash flow
Pre-tax recurring profit, Group share
% change since previous year
Pre-tax recurring profit per share, Group
share (€)
% change since previous year
Pre-tax recurring cash flow per share, Group
share (€)
% change since previous year
After-tax recurring cash flow per share,
Group share (€)
% change since previous year
1.90
2.52
2.98
33.7%
32.4%
18.2%
3.96
4.80
5.61
32.5%
21.2%
16.9%
3.26
3.94
4.56
na
20.8%
15.7%
Total Net Operating Income from Unibail’s overall property portfolio
rose by 10.8% to € 433.6m in 2002, compared to € 391.3m in 2001.
Head office overheads and general expenses shared by all divisions
amounted to € 20.3m, showing a slight decline from 2001 and
corresponding to 4.9% of EBITDA (vs 5.3% in 2001).
2002 EBITDA increased to € 413.3m, up 11.5% compared to 2001.
Depreciation charges reached € 129.6m, evolving in line with
disposals, acquisitions, works projects and new properties put into
operation.
Unibail’s consolidated net financial expenses totalled € 152m.
Net financial expenses incurred by construction works (Cité du
Retiro, 3M project and Carré Sénart) were capitalised and amounted
to € 18.4m over the 2002 full-year. After adjusting for
€ 4.6m allocated to the refinancing of Unibail’s finance leasing
portfolio, € 129.1m in net financial expenses were recorded in the
profit and loss account compared with € 127.5m in 2001.
Overall, the debt interest rate averaged 4.74% in 2002 vs 5.25% in
2001. Unibail’s refinancing policy is described in the 'Financial
Resources' chapter below.
2002 pre-tax recurring profit rose by 19% to € 154.7m,
compared with € 130.1m in 2001.
Net capital gains and exceptional items
As mentioned in the business review, disposals were mainly
concentrated in the Office Division (combined selling price of
€ 239.1m) and, to a lesser extent, in the Shopping Centre Division
(€ 50.2m).
Capital gains from these disposals totalled € 101.9m before capital
gains tax and after deducting € 3.5m of related expenses.
Tax
The method used by Unibail to draw up its consolidated financial
statements aims to reflect its underlying tax situation at the fiscal
year-end. This is meant to keep, in future years, the discrepancy
between the theoretical tax rate and effective tax rate to an absolute
minimum, ensuring a closer correlation between tax expense items
and the corresponding income items. As a result, there is a difference
between taxes actually paid and taxes booked.
Taxes paid
Unibail Holding (the parent company) reported a pre-tax profit of
€ 129.3m, including € 94m in taxable profit. Due to the € 102.9m in
tax loss carry-forwards accrued as at January 1, 2002, no corporate
income tax is payable on this profit.
The tax consolidation group set up under Unibail’s Doria subsidiary
posted a taxable profit of € 137.7m (including € 6.6m in long-term
capital gains and € 99.7m in short-term capital gains on property
sales). This figure was offset by € 90.4m in tax loss carry-forwards
accrued as at January 1, 2002.
After taking into account the tax charges for certain businesses not
included in the tax consolidation group, the tax charge payable
amounted to € 25.2m.
Taxes booked
€ 90.8m in tax charges were booked by Unibail in 2002.
The effective tax rate amounted to 32.8% of recurring profit, which
was slightly below the standard tax rate of 35.43% due to the taxexemption of finance leasing revenues and the share of tax payable
by minority shareholders in fiscally transparent companies.
2002 consolidated net profit rose to € 161.3m, compared to
€ 121.4m in 2001.
Minority interests in this net profit amounted to € 15.6m, mainly
comprising the share of profits from the two shopping centres Les
Quatre Temps and Forum des Halles. As Tanagra (Cœur Défense) is
fully owned by Unibail since February 2002, its 22% minority share
has only been recorded over two months and comes to just € 0.6m.
Pre-tax recurring cash flow
Pre-tax recurring cash flow10 increased by 16.8% to € 284.3m in
2002, against € 243.5m in 2001.
The average number of shares outstanding in 2002 came to
46,512,882. This figure takes into account: i) treasury shares
transferred to minority shareholders of Tanagra in exchange for their
interests in Tanagra (including 2,039,820 shares which were
deducted from the consolidated equity as at December 31, 2001); ii)
stock-options and share warrants exercised (384,111); and iii)
buyback of shares (510,654 treasury shares cancelled on the
consolidated balance sheet as at December 31, 2002).
The Group share of pre-tax recurring profit11 stood at € 138.6m, or
€ 2.98 per share, up 18.2% compared with 2001.
Pre-tax recurring cash flow per share amounted to € 5.61 in
2002, rising by 16.9% compared to 2001.
After deducting € 48.7m in tax on recurring profit, after-tax recurring
cash flow per share was € 4.56, up 15.7% compared with 2001. Note
that the tax charge deducted here did not match the tax charge
actually paid (only € 25.2m) but corresponded to the tax charge
booked, based on the effective tax rate of 32.8% mentioned above.
10
obtained by adding back the following items to pre-tax recurring profit:
depreciation charges, provisions for the convertible bond redemption premium
and goodwill amortisation charges.
11
determined by adding back the two following items to after-tax net profit
(Group share): exceptional items and corporate income tax (both excluding
minority interests).
33
NET ASSET VALUE
At end-December 2002, fully diluted Net Asset Value (NAV) per
share, based on replacement value, amounted to € 82.1m, up 5.3%
from end-December 2001.
At book value. This mainly applies to the Messine-MonceauMurat office property complex currently undergoing major
renovation.
1. Valuation methodology
At anticipated disposal price. This applies to two office buildings
in the process of being sold for a total value of € 69m.
For several years, Unibail has estimated its Net Asset Value, based
on replacement value, at December 31 and June 30 of each year. This
estimate values the Company on a going concern basis. Net Asset
Value, in replacement value terms, comprises consolidated
shareholders’ equity, together with any potential capital gains on
property assets, on finance leasing operations and on investments in
affiliates. For property assets, potential capital gains are measured as
the difference between the estimated market value of the assets and
their net book value as shown in the consolidated accounts. For
property services activities, the purchase price is used. NAV per
share is calculated on a Group share basis.
The figures for Net Asset Value are examined by Unibail’s Statutory
Auditors, Ernst & Young Audit, which validates the application of
the methodology and the consistency of the parameters used.
2. Property portfolio
Property portfolio
valuation (1)
Year-end 2001
Year-end 2002
Like-for-like
change
Offices
€m
4,642
%
63%
€m
4,510
%
60%
€m
105
%
2.3% (2)
Shopping centres
2,199
30%
2,530
33%
181
8.7% (3)
4.1% (4)
Convention-exhibition
centres
Total :
486
7%
510
7%
20
7,327
100%
7,550
100%
306
The same valuers have been retained since end-December 1995 to
ensure the consistency of the methodologies used: Expertim
(Auguste Thouard) for office properties and Healey & Baker
(Cushman & Wakefield) for Shopping Centres, Jones Lang LaSalle
has valued the Convention-Exhibition Centres since end-June 2000.
The valuation takes into consideration the recommendations of the
Barthès de Ruyter report12.
The valuations include costs and transfer taxes. They reflect the price
a buyer would have to pay to acquire the same portfolio. However,
assets currently for sale, or about to be sold in the short term, are
valued exclusive of costs and transfer duties.
At year-end 2002, the external experts had valued 95% of Unibail’s
total portfolio. The remaining assets have been valued in the
following ways:
At purchase price. This method has been used for the Chelles 2
shopping centre, acquired in June 2002, and various additional
co-ownership lots in the shopping centres Carré Sénart, Place
d'Arc (in Orléans) and Rosny 2, acquired in the second half of
2002.
Report on the assets valuation methods applied to quoted property
investment companies drafted at the request of COB and published on
February 03, 2000
34
The total value of Unibail’s property portfolio rose by 4.2% on a
like-for-like basis in 2002.
The Office portfolio
The general valuation principle adopted by Expertim involves
applying a market yield to the rental income generated by each
property. The calculation method used depends on the financial
characteristics of each property asset and is summed up as follows:
Properties whose current rental income is higher than the market
rental value: the valuation is determined by dividing the market
rental value by the market yield estimated by the independent
valuer. This amount is then increased by the difference between
the invoiced rents and the market rental value, discounted over
the residual term of the lease (i.e. up to the date when the tenant
is likely to terminate the contract).
Properties whose current rental income is lower than the market
rental value: the valuation is determined by applying the market
yield to the existing rental income. This value is then:
•
Increased by an amount equal to the difference between
the market rental value and the contractual rent,
capitalised at a yield which is higher than the above
market yield.
•
Decreased by an amount equal to the difference between
the market rental value and the contractual rent,
discounted at a financial rate over the residual term of the
lease.
4.2%
(1) Based on the full scope of consolidation
(2) Main changes in the scope of consolidation: 115-123 avenue Charles de Gaulle, 16 rue de
Monceau, La Chocolaterie, Gennevilliers were sold
(3) Main changes in the scope of consolidation: Carré Sénart, Chelles 2, co-ownership interests
acquired
(4) Main change in the scope of consolidation: Palais des Sports (50%stake) acquired
12
Direct valuation by Unibail’s teams. This applies to around ten
minor assets whose overall value has been estimated at € 10.2m.
If the resulting valuation is considered too high by the valuers (for
example, due to rapid fluctuations in rental values), they will revise it
downwards. In this case, they will take the property’s current rental
income, together with any potential income from vacant space within
the building and apply a yield that reflects the quality of the property,
the duration of any firm commitments by tenants, the quality of these
tenants and the lease renewal dates. In this case, the initial rent will
be the key factor behind the valuation, regardless of any expected
increases in value.
Vacant office space is reflected by calculating uncollected rental
income and charges over a variable period, which is determined on a
property-by-property basis.
Valuation of the Office portfolio
at year-end 2002
Paris Central Business District
Neuilly, Levallois, Boulogne, Issy
La Défense
Valuation
Average per
m² (1)
Average
capitalisation rate
used by valuers
%
6.6%
Passing rent
(2)
Initial yield
(3)
Estimated
rental value
(4)
Excluding Messine Monceau Murat
€m
%
69
6.3%
€m
%
1,299
29%
€ per m²
7,336
565
13%
4,272
7.0%
37
Reversionary yield
(5)
€m
77
%
7.1%
6.5%
47
8.3%
7.7%
2,400
53%
5,481
6.8%
169
7.0%
186
Other
247
5%
2,101
7.5%
19
7.5%
20
8.2%
Total
4,511
100%
5,174
6.8%
294
6.7%
330
7.6%
(1) Excluding car parking - assuming an average value of € 15,000 per car park.
(2) Rent invoiced + potential rent from vacant premises
(3) Passing rent divided by valuation
(4) Annualised market rent estimated by valuers
(5) ERV (Estimated rental value) divided by valuation
On a like-for-like basis, the value of the Office portfolio rose by
2.3% over the 2002 full-year. This increase is mainly due to: i) the
initial valuation of 39-41 rue Cambon, acquired in 2001; ii) the
valuer’s appraisal of the renovation program for Tour Ariane and
Tour Europe; and iii) the additional value resulting from a
renegotiated lease for the Saint Ouen Dhalenne building. The
remaining increase in value principally stems from higher rental
values for Unibail’s properties.
On average, the disposal price on properties sold by Unibail in 2002
or covered by disposal undertakings as at December 31, 2002 were
3.0% higher (including transfer duties) than the valuers’ appraisals.
Cœur Défense
In February 2002, Unibail raised its stake in this 182,000 m² office
complex from 78% to 100% by acquiring the 10% and 12% interests
respectively owned by the companies Bouygues and Gothaer.13
This complex was 96%-occupied at end-December 2002. The space
has been leased to ten blue-chip tenants: Air Liquide, AXA IM, Cap
Gemini-Ernst & Young, CCF-HSBC, Credit Lyonnais, ING,
PeopleSoft, Microsoft, SIIF Energies (EDF Group) and Société
Générale. All the leases have nine-year terms, with a firm tenant
commitment of six or nine years. The average initial firm lease
period is eight years. The total contractual rent amounts to € 83.8m,
while the total potential market rent has been estimated at € 87.7m by
the valuer.
Expertim estimated the value of Coeur Défense at € 1,310m as at
year-end 2002 (compared with € 1,303m at year-end 2001).
Office properties completed in 2002
Cité du Retiro – Paris 8: on July 15, 2002, after several months of
reconstruction works, this 21,000 m² office complex, located
between rue du Faubourg Saint Honoré and La Madeleine, was
handed over to Cartier, which relocated its international headquarters
to this site. The twelve-year lease includes a firm period of nine
years.
13
In exchange for these interests, the Group agreed to transfer 927,191 Unibail
shares to Bouygues and 1,112,629 Unibail shares to Gothaer, including
1,485,341 shares from its treasury stocks at year-end 2001. The remaining
shares were purchased from the market in early 2002. Following the
completion of this transaction, Unibail is potentially required to make a cash
payment in August 2005. This payment (for each share received and still held)
will be equal to the difference, if positive, between: i) € 78.8 less the total net
dividends received during the period; and ii) the average volume-weighted
price of Unibail’s shares during the last 100 trading days.
The cash payment will no longer apply if: i) Gothaer or Bouygues sell these
shares; or ii) Unibail offers to purchase the unsold shares at a price of € 72
adjusted for any dividends paid; or iii) Unibail’s share price exceeds € 73.7 for
more than 60 non-consecutive days.
Office properties under construction at year-end 2002
Messine, Monceau, Murat (3M) - Paris: this property is the former
EDF headquarters. Acquired in October 2001, it has a gross area of
around 70,900 m² 14 and is currently undergoing major renovation
works.
Office properties under renovation at year-end 2002
Tour Ariane – La Défense: the phased renovation program for this
property, which was 95% occupied at year-end 2002, is progressing
in line with schedule. The first phase involved 6 of the 34 floors and
was completed during the fourth quarter of 2002. The second phase
covers the remaining 28 floors and is due to begin in early 2003. This
property’s valuation, as at end-December 2002, takes into account
the first phase of the renovation project and part of the second phase.
Tour Europe – La Défense: as planned, asbestos removal works and
safety standards improvements were completed during the second
quarter of 2002. At the OECD’s request, Unibail refurbished the
17,250 m² of space let to this organisation. These works were
completed in December 2002. This property’s valuation, as at endDecember 2002, takes into account minor renovation works
scheduled for the lobby and the canopy during the first quarter of
2003.
The Shopping Centre portfolio
The value of Unibail’s shopping centre portfolio is derived from the
combination of the value of individual assets. Accordingly, no value
is placed on Unibail’s market share, even though this notion is
certainly significant in this sector.
For each shopping centre, the valuation methodology used by Healey
& Baker involves capitalising rental income net of charges, i.e. after
taking into account a standard vacancy rate, management fees,
administration costs, non-refundable expenses, letting fees, unpaid
rents, litigation costs and provisions for maintenance works. The
valuation is based on the situation at year-end 2002.
The valuation also takes into account: i) any future rental gains
generated by the letting of vacant space (subject to a minimum
standard vacancy rate); ii) any increase in rental income due to step
rents; and iii) the renewal of leases due to expire in the near future.
At year-end 2002, Healey & Baker had valued 95% of Unibail’s
shopping centre portfolio. The remainder mainly comprises the
Chelles 2 shopping centre, acquired in June 2002, together with
various additional co-ownership lots in the shopping centres of Carré
Sénart, Rosny 2 and Place d'Arc (in Orléans), also acquired in 2002.
All these acquisitions are valued at their book value as at year-end
2002.
On a like-for-like basis, at year-end 2002, the value of these assets
(excluding Carré Sénart), had increased by € 181m, i.e. 8.7%,
compared with year-end 2001. Of this, 7.0% stemmed from the
growth in like-for-like annualised rental income, while only 1.7%
was due to the decline in initial yields.
14
Following the sale of the apartment block at 23 avenue de Messine
35
Year-end 2001
Value of Shopping
Centre portfolio
€m
4. Operational subsidiaries and property services
Year-end 2002
Capitalisation
Initial yield (2)
rate (1)
€m
Capitalisation
rate (1)
Initial yield
(2)
Paris and the Paris
region (3)
1,351
6.1%
5.6%
1,724
6.2%
5.6%
French provinces
740
6.7%
6.4%
805
6.6%
6.3%
ns
6.4%
ns
6.0%
1
2,530
n/a
6.3%
n/a
5.8%
Under construction
108
Total
2,199
(1) Rate used by independent valuer
(2) Annualised rent divided by valuation
(3) Including Le Printemps de l'Homme
At year-end 2002, capitalisation rates ranged from 5.75% for
Vélizy 2 to 7.25% for Cité Europe.
Shopping centres under development at year-end 2002
Strasbourg - Etoile: this development obtained a permit from the
CDEC (French Retail Property Development Authorities) in 2000,
followed by its building permit in June 2002. No value has yet been
attributed to the project. However, all the amounts invested in the site
are annually provisioned in the books until the expiry of the claim
period.
Based on the same prudent approach, the extension and restructuring
projects have not been assigned a value, despite the high capital gains
anticipated. These projects include the renovation and extension
works already started at Quatre Temps and works scheduled for
Labège 2 in Toulouse, Ilot Bonnac in Bordeaux, Marques Avenues
facing Cité Europe in Calais, and the Forum des Halles.
Espace Expansion holds a strong position in the specialised shopping
centre market, where there is only one other major player and where
expertise is the key for adding value. Due to the evolution in the
number of contracts and their profit margins, Espace Expansion
valuation has been maintained in line with its original purchase price.
A systematic valuation process will be introduced in 2003. The
€ 28.7m potential capital gains recorded at year-end 2002
corresponded to the excess of the purchase price of the shares over
their book value in Unibail’s accounts, which is depreciated each
year by the amount of goodwill amortisation charges.
The initial cost of the services activities at Paris Expo-Porte de
Versailles (€ 58.2m) has been determined by taking the total
purchase price and applying the percentage of overall net operating
income generated by these activities. Given that revenues from the
site services activities are in their expansion phase, they have been
valued according to their original purchase price. As a result, the
potential capital gains amounted to € 6.5m after goodwill
amortisation costs.
Unibail’s other subsidiaries (U2M, S2B and Arc 108) are valued at
their consolidated book value, i.e. the value of their operating fixed
assets. This conservative approach does not give rise to any potential
capital gains or losses.
5. Treasury shares
At year-end 2002, the value of 510,654 treasury shares was deducted
from consolidated shareholders’ equity. These treasury shares were
not taken into account in the calculation of NAV per share. As a
result, out of 47,062,655 shares outstanding, 46,552,001 shares were
used in Unibail’s undiluted NAV per share calculation.
The Convention-Exhibition Centre portfolio
The value of the Convention-Exhibition portfolio increased by 4.1%
on a like-for-like basis in 2002. The value of the Cnit hotel increased
after Unibail signed an operational lease agreement for a firm period
of 18 years with Hilton, to replace the management contract between
Unibail and the Accor Group, expiring at end-March 2002. The value
of the Méridien Montparnasse hotel has risen as a result of partially
factoring in the Court of Appeal’s ruling in favor of Unibail in its
lawsuit with the hotel’s operator.
Valuation of Convention-Exhibition
portfolio (€m)
Year-end
2001
Year-end
2002
Like-for-like change
€m
%
Paris Expo (1)
328
341
9
2.7%
Cnit & Méridien Montparnasse hotels
158
169
11
7.0%
Total
486
510
20
4.1%
(1) Paris Expo encompasses all of Unibail's convention and exhibition centres
For Paris Expo’s core assets, the average initial yield
(EBITDA/Valuation) amounted to 11.6%, i.e a slight decrease in
comparison with year-end 2001 (12%).
3. Finance leasing
The portfolio is valued on a contract-by-contract basis, discounting
the future cash flows, net of all costs and including the cost of
notified or likely exercise of early payment options. The discount
rate used is based on the yield curve as at year-end 2002 for the
relevant contract maturity, plus a risk premium of 2%.
The cost of hedging interest rate exposure is also included. Using this
method, the financial leasing portfolio was valued at € 2.8m (net of
the corresponding share of debt). This represented a fall of € 2.2m
compared with year-end 2001 due to the natural contract expiry.
36
6. Securities giving access to the share capital
As at end-December 2002, the exercise of outstanding warrants and
stock-options would potentially increase the number of shares by
785,650 and 1,851,857 respectively, and the total share capital by
€ 114m. These factors have been included in the fully diluted NAV
per share calculation.
7. Net Asset Value rose to € 4,279m (based on
replacement value)
Consolidated shareholders’ equity reached € 1,496m, posting an
increase from year-end 2001, based on the following factors:
Decreasing factors: i) dividend paid in June 2002
(€ 91m impact); ii) allocation of 2001 earnings outside the
Group (€ 12m impact); iii) buyback of warrants (€ 3.7m impact);
iv) treasury shares held (€ 29m); and v) miscellaneous factors
(€ 1m impact);
Increasing factors: i) 2002 full-year earnings (€ 161m impact);
ii) buyout of Tanagra and Paris Expo minority interests, net of
the partial sale of Colline Défense and Pégase (€ 51m impact);
and iii) exercised stock-options (€ 10m impact).
Potential capital gains on the property portfolio increased by 3.7% to
€ 2,770m (split between € 1,435m for the office buildings,
€ 1,176m for the shopping centres and € 159m for the convention
and exhibition centres).
Unibail’s overall Net Asset Value rose to € 4,279m (or € 3,923m
Group share). NAV per share came to € 84.3 (on a non-diluted
basis), up 4.7% compared with year-end 2001. After taking into
account the full potential dilution from the exercise of stock-options
and warrants, fully-diluted NAV per share came to € 82.1, up 5.3%.
8. Additional information
Deferred tax liabilities
Unibail has estimated the deferred tax liability that would be
generated by the immediate liquidation of its portfolio.
At year-end 2002, this ‘liquidation’ tax liability amounted to € 12.89
per share, comprising € 3.93 in transfer taxes and € 8.96 in capital
gains tax.
The applied tax rates are 35.43% for short-term capital gains and
20.20% for long-term capital gains.
The Management has stressed that this calculation should not be
included directly when valuing the company. Instead, Unibail should
be valued on a going concern basis, which mainly takes into account
growth in recurring cash flow per share, future increases in asset
values and the significantly deferred nature of certain taxes.
Market value of financial debt
The estimated market value of Unibail’s financial debt and offbalance sheet financial instruments represented a potential capital
loss of € 99.7m, or € 2.03 per share on a fully diluted basis. This
change in value stemmed from the drop in interest rates over the
period.
Revalued NAV (€m)
Year-end 2001
Year-end 2002
Change in
Group share
Revalued NAV based on replacement value (€m)
Balance sheet
Consolidated shareholders' equity
Portfolio: potential capital gains
1,410
Group share
Balance sheet
1,264
1,496
Group share
1,383
9.4%
8.1%
2,671
2,338
2,769
2,527
Valuation
7,327
6,640
7,550
7,092
Book value (Note 1)
4,656
4,302
4,781
4,565
5
5
3
3
31
31
35
35
27
27
28
28
4
4
7
7
- 25
- 25
Finance leasing (valuation of discounted cash flows)
Contribution from operational activities
(based on purchase price)
Espace Expansion
Paris-Expo – Porte de Versailles
Deferred tax assets (Note 2)
Total NAV - based on replacement value
4,117
Number of shares (at year end)
Undiluted NAV per share - based on replacement value
3,923
7.8%
45,193,193
46,552,001
3.0%
€ 80.5
€ 84.3
4.7%
3,638
4,279
Impact of exercisable securities
Potential impact of exercisable securities (stock-options and warrants) on
shareholders' equity
115
Potential number of shares generated by the exercise of these securities
Fully diluted NAV - based on replacement value
Number of shares (at year-end)
Fully diluted NAV per share - based on replacement value
Note 1 :
At year-end 2002, the consolidated net book value of Unibail’s property
portfolio, excluding related receivables, was € 5,165m (vs € 4,982m in 2001).
However, a consolidated net book value of € 4,780m (vs € 4,656m in 2001) has
been used to calculate the potential capital gains on the portfolio. The € 385m
discrepancy (€ 326m in 2001) corresponds to the deferred tax charge incurred
on the goodwill allocated to the properties (an equivalent amount has been
booked as a liability on the balance sheet).
115
114
2,920,610
4,232
114
2,637,507
4,037
7.6%
48,113,803
49,189,508
2.2%
€ 78.0
€ 82.1
5.3%
3,753
4,393
Note 2 :
Following an internal restructuring which entailed the revaluation of the fiscal
value of some assets, a tax loss carry-forwards of € 25m has been used and,
consequently, a corresponding deferred tax asset of the same amount has been
created. In the calculation of the revalued NAV based on replacement value,
this deferred tax asset is considered as of no value.
37
FINANCIAL RESOURCES
1. Reinforced cash position
3. Debt structure at year-end 2002
In 2002, Unibail maintained the volume of its refinancing activities
on the financial markets, raising € 2.9bn in additional funds. This
breaks down as:
Debt breakdown
At end-December 2002, Unibail’s consolidated debt stood at
€ 3,170m (excluding partners’ current accounts).
Two public issues totalling € 800m, as part of Unibail’s EMTN
(Euro Medium Term Notes) program.
Firstly, in June 2002, Unibail carried out a € 500m public issue.
This two-year floating-rate issue matures on June 28, 2004 and
bears interest at 30 basis points above the three-month
EURIBOR rate. Originally set at € 400m, this issue was
subsequently increased to € 500m due to high demand.
Non-recourse debt
Bank loans
(Mainly mortgage loans)
€ 113m
Short-term instruments € 124m
€ 60m
Secondly, in November 2002 Unibail launched a € 300m issue
with a duration of five years and three months. The fixed interest
rate on this issue amounts to 4.75%. Unibail has swapped this
issue to floating rate.
€ 714m from EMTN private placements issued at a floating rate
with an average duration of one year and eight months.
Bonds &
EMTN
€ 2,873m
This debt comprised:
€ 1,165m from short-term instruments with a maturity of up to
one year and a maximum outstanding total of € 525m in 2003.
These issues initially comprised Certificates of Deposit,
subsequently replaced by Billet de trésorerie since November
28, 200215.
€ 124m in mortgage and similar debts, split between four loans.
This mainly included two mortgage loans taken out to finance
the Issy-Guynemer building in Paris 15 and Place du Chancelier
Adenauer in Paris 16. These loans had a combined outstanding
balance of € 95m;
These short-term issues are backed by confirmed credit lines,
protecting Unibail against the risk of a shortage of lenders in the
short or medium-term debt markets. These credit lines totalled
€ 570m on December 31, 2002 and have been provided by
leading French and international banks. Their average duration is
2.9 years. As at year-end 2002, none of these confirmed credit
lines had been used.
€ 2,523m in EMTNs (Euro Medium Term Notes) and € 350m in
bonds;
€ 262m from short and medium-term interbank loans.
Update to the EMTN program
The General Meeting of April 10, 2002 authorised the Board of
Directors to raise the maximum outstanding amount of bonds or
similar issues from € 3bn to € 3.5bn.
€ 60m in short-term instruments (Billets de trésorerie);
€ 113m in bank loans, comprising € 53m in interbank loans and
€ 60m in bank overdrafts.
Debt maturity
The following chart illustrates Unibail’s debt maturity as at year-end
2002, based on the residual life of its borrowings and including its
confirmed credit lines.
€m
31 %
1,000
Unibail carried out an annual update to its EMTN program, in June
2002, by increasing its limit to the same amount of € 3.5bn.
24 %
800
600
17 %
15 %
2. Ratings
In May 2002, the rating agency Standard & Poor’s confirmed the
following ratings for Unibail:
• Long-term: ‘A-’ stable outlook;
• Short-term: ‘A-2’.
400
8%
5%
200
0
Under 1 yr
1-2 yrs
2-3 yrs
3-4 yrs
4-5 yrs
Over 5 yrs
These ratings have not changed since the above date.
Unibail’s debt is diversified in terms of maturity. Over half of this
debt has a maturity of at least three years.
As at year-end 2002, the average life of Unibail’s debt was 2.2 years.
After taking into account unused confirmed credit lines, this average
life rose to 2.7 years, i.e. slightly higher than in 2001.
15
On November 28, 2002, Unibail abandoned its ‘finance company’ status,
gaining it access to the Billets de trésorerie market as a replacement for
Certificates of Deposit, which are reserved for finance companies.
38
Average cost of debt
Property portfolio: revalued balance sheet (€m)
Unibail’s average refinancing rate amounted to 4.74% in 2002
against 5.25% in 2001. This reduction is mainly due to lower interest
rates.
€ 4,266m
Revalued shareholders’ equity
€ 7,550m
€ 69m
Deposits
4. Market risk management
€ 100m
Partners’ current accounts
Market risks can generate losses resulting from changes in interest
rates, exchange rates, raw material prices and share prices. Unibail's
risk is limited to interest rate fluctuations on the loans it has taken out
to finance its investments and maintain the cash position it requires.
Unibail's risk management policy aims to control the impact of
interest rate variations on profit and cash flow, while minimizing the
overall cost of debt. To achieve these objectives, Unibail tends to
take out variable rate loans and rely on derivatives, mainly caps and
swaps, to hedge its interest rate exposure. Unibail's stock market
transactions are confined exclusively to these interest rate hedging
activities, which it manages centrally and independently.
Because it uses derivatives to minimize its interest rate risk, the
Group is exposed to potential counterparty defaults, which could
increase its earnings sensitivity to an upturn in interest rates. To
reduce its counterparty risk, Unibail only relies on major
international banks for its hedging operations.
€ 3,116m
Financial debt and other liabilities
Assets
Liabilities
Key balance sheet ratios
Unibail’s key balance sheet ratios have held steady. These ratios are
based on the revalued balance sheets for its property portfolio.
Debt ratio
Interest rate hedging transactions
Over the past few years, Unibail has set a prudential ceiling of 50%
for its ratio Net debt/Market value of properties, which can only be
exceeded temporarily.
To take advantage of the significant drop in interest rates since June
2002, Unibail adjusted its floating-rate position and carried out
various hedging transactions. During the second half of 2002, the
Group implemented floating-to-fixed interest rate swaps for a net
amount of € 1,450m effective from January 1, 2003 to December
31, 2006.
At year-end 2002, this ratio stood at 41%, quasi-unchanged since its
year-end 2001 level of 42%, while the ratio Net debt/Revalued
shareholders' equity allocated to the property portfolio fell to 73%
against 75% at year-end 2001.
Measuring interest rate exposure
At year-end 2002, Unibail’s net debt amounted to
€ 3,152m (excluding partners’ current accounts) after taking into
account € 18m in surplus cash. Around € 2,283m (72%) of this debt
comprised variable-rate borrowings, or fixed-rate borrowings
immediately converted into variable-rate debt. This outstanding debt
of € 2,283m was fully covered by interest rate swaps and caps with
an average maturity of 2.1 years.
Based on Unibail’s debt position at year-end 2002, if interest rates
were to rise by an average of 1% (100 basis points) above 2.865%16
in 2003, the resulted increase in financial expenses would have an
estimated negative impact of € 4.6m on 2003 pre-tax recurring cash
flow. A further rise of 1% (100 basis points) would have an
additional adverse impact of € 1.5m on 2003 pre-tax recurring cash
flow. Conversely, a 1% (100 basis point) drop in interest rates would
reduce financial expenses by an estimated € 5.8m and would enhance
2003 pre-tax cash flow and profit by an equivalent amount.
5. Financial structure of the property portfolio
Revalued net assets amounted to € 7,550m.
These figures do not include the potential increase in shareholders’
equity due to the exercise of warrants and stock-options. These
instruments are all "in the money" and represent a total of € 114.4m
in additional shareholders’ equity for Unibail, which would further
reduce its debt and gearing ratios.
Interest cover ratio
EBITDA interest cover ratio remained at a comfortable level of 2.8x
vs 2.6x at year-end 2001. As expected, this improvement mainly
stems from the fact that Unibail has closed the gap, generated in
2001 and 2002, between the initial rental stream received from Cœur
Défense and the financial expenses incurred on the whole complex.
Financial ratios
Year-end
2001
Year-end
2002
Debt/Market value of properties
42%
41%
Debt/Revalued shareholders' equity
75%
73%
EBITDA interest cover ratio (1)
2.6
2.8
(1) Calculation based on the ratio EBITDA/Financial expenses . As financial expenses incurred
by finance leasing operations are normally deducted from Unibail's EBITDA, they are not
included in ‘Financial expenses’
Shareholders’ equity, plus any potential capital gains on property
assets, stood at € 4,266m. Other liabilities comprised: i) € 100m in
partners’ current accounts, which are treated as shareholders’ equity
in financial ratio calculations due to their nature; ii) € 69m in
deposits; and iii) € 3,116m in financial debt and operating liabilities.
16
Three-month EURIBOR rate at end-December 2002.
39
HUMAN RESOURCES
Unibail has always attached great importance to its human resources,
whose quality and commitment are a key factor behind the Group’s
success. Unibail’s 780 employees all work towards common goals,
namely to create value, to focus on customer care and to expand the
Group’s business activities.
To achieve these goals, the Human Resources department has drawn
up an action plan with the following priorities:
to implement a training policy that promotes the pooling of
knowledge and expertise and encourages the widespread
adoption of the Group’s core values and policies;
to devise a career mobility and development policy that will
attract and retain the diverse array of talented individuals needed
to manage the Group’s wide-ranging business lines;
to introduce a Group-wide integration program for newly
recruited staff, so that each employee rapidly gains an all-round
vision of the Unibail Group, its organisation and the key skills
needed for success.
At the same time, Unibail’s skills and performance evaluation
process, which combines a management appraisal with a crossdivisional assessment by the employee’s key contacts within the
Group, is a powerful tool for enhancing both individual and
collective productivity.
Key employees data
Staff for companies within the Unibail Group
Unibail Holding
Unibail Management
Espace Expansion
Patrimoine & Gestion
Services to Buildings & Businesses (S2B)
Arc 108
Unibail Marketing & Multimedia (U2M)
Other
Total Unibail 'UES' (Business & Labour
Union)
Paris Expo
Cnit (and subsidiaries)
Carrousel du Louvre
Espace Champerret
2000
115
246
29
14
14
2001
3
157
206
37
10
10
11
2002
2
166
207
54
10
9
7
418
434
455
2000
172
323
18
2001
171
270
13
-
2002
181
135
11
2
513
454
329
Total Convention-Exhibition Centres
Staff breakdown by job category
In addition, Unibail has developed a flexible remuneration policy,
which rewards individual achievements through a performancerelated pay scheme. At the same time, there are various collective
agreements which give all staff a vested interest in the performance
of the whole Group or one of its business divisions. These include:
Apprentices &
trainees
1%
Employees
44%
profit-sharing and incentive agreements based on performance
indicators, such as growth in pre-tax recurring cash flow per
share (excluding the impact of the Construction Cost Index), or a
minimum growth target for operating income (before tax, duties
and rents) relative to budget forecasts;
company savings plans: in 2002, the Group supported the
voluntary savings contributions of its staff by making an
employer contribution of over € 351,000 to these savings
schemes. At year-end 2002, Unibail’s employees had a 0.4%
stake in the Group’s share capital through the Company Savings
Plan;
stock-option plan: for the third block of the stock-option plan
launched in 2000, the Group granted 394,000 options to 42
employees in 2002, at an exercise price of € 59.33 per share and
without any discount to the share price at the time of allocation.
Executives
52%
Supervisors &
employees with
executive status
3%
Staff movements in 2002
New recruits
Departures
Permanent contracts
127
Retirements and deaths
Temporary contracts due to
increased workload
27
Resignations
49
Temporary contracts for
replacements
16
Dismissals for personal reasons
32
12
Dismissals during probationary
periods
14
182
Expiry of temporary contracts
Total
Apprentices and vocational
trainees
Total
Simplified organisation chart
Development
François Thomé
Legal Counsel
Léon Bressler
Chairman & CEO
Internal Audit
Finance Department
Human Resources
Department
Guillaume Poitrinal
Managing Director
40
Jean-Marie Tritant
General Manager
Michel Dessolain
General Manager
Office Buildings
Shopping Centres
Catherine Pourre
Executive Vice-President
Renaud Hamaide
General Manager
Convention-Exhibition Centres
Information Systems
Department
Legal
Department
5
23
123
Between 2000 and 2001, the Group’s divisions signed various
agreements relating to the French law on the reorganisation and
reduction of statutory working time (“L’Aménagement et la
Réduction du Temps de Travail”). To take into account the specific
operating requirements of each site and business line within the
Group, various working arrangements have been adopted:
A fixed annual number of working days, mainly for autonomous
executives;
A shorter working week and extra leave days for most other
employees;
An annual number of working hours for certain employee
categories.
In addition, 27 employees work part-time on a 50% to 90% basis.
For the Group as a whole, Unibail paid for 6,161 extra working hours
in 2002.
Absenteeism amounted to a total of 8,156 working days, including
43% for sickness, 23% for maternity leave, 5% for work-related
accidents and 29% for family leave, paternity leave, unpaid leave and
sabbaticals.
During 2002, 74 "equivalent-full-time" employees from outside
companies worked for Unibail. Over 25% of these employees were
part-time workers in the entertainment industry hired by Unibail’s
Convention-Exhibition Division.
Salaries and male-to-female ratios
Employees and
supervisors
% of total workforce
Average monthly salary
Female
25%
2,003
Male
21%
1,862
Executives
Female
21%
3,643
Male
33%
4,465
On a like-for-like headcount basis, salary increases averaged 2.5% of
overall wage costs.
Social security costs totalled € 23.7m in 2002.
Employment relations
Various agreements on incentive schemes (for Unibail ‘UES’ and
Cnitexpos) and profit sharing (for Unibail ‘UES’) were signed on
June 27, 2002.
In accordance with French legislation, each division within the
Group holds monthly meetings with the workers committees and
employees representatives, as well as quarterly meetings with the
committees for Hygiene, Safety and Working Conditions.
Training
During 2002, Unibail devoted an overall training budget of € 513,800
to provide 1,909 days of training.
RISK FACTORS AND INSURANCE
In the course of its business operations, the Group can be exposed to
various types of risk.
Interest rate and cash flow risks, which are discussed in detail in
the 'Financial Resources' section.
As Unibail operates exclusively in the euro zone, it is not
exposed to any currency risks.
Unibail conducts its activities in strict compliance with French
regulations governing construction and building management.
No legal risks have been identified apart from those mentioned
in the appendices to the financial statements.
The main operating risks that Unibail has to manage lie in the
protection of its property portfolio.
In addition to the comprehensive and constantly enhanced measures
introduced to maximize security for Unibail’s buildings and the
people who use them (see section 'Sustainable Development'), the
Group is covered by an insurance scheme which will reimburse it for
any losses or damages to its property assets, as well as any resulting
operating losses.
The Group has also taken out a ‘civil liability policy’ covering any
financial damages caused to third parties.
Despite the difficulties encountered by Unibail, for the second year
running, in renewing its insurance policies, by year-end 2002, the
Group had managed to cover its risks with the same indemnity
guarantees as in the previous year.
Owing to their poor underwriting and financial results, insurance
companies have significantly increased their premiums. However, in
some cases, Unibail has managed to contain these increases by
highlighting the quality of both the technical management of its
property portfolio and the risk prevention policy it has implemented.
Although Unibail has maintained the same indemnity guarantees
after renewing its insurance policies, some insurance excesses have
been raised, particularly in the property & casualty policies for the
Group’s shopping centres and Porte de Versailles site.
In terms of terrorism risks, Unibail remains fully covered by its
insured amounts or by the maximum statutory indemnities payable.
OUTLOOK
For 2003 and beyond, Unibail should continue to see growth in its
key performance indicators, despite a tough global economic
environment, and barring any exceptional events. Anticipating
harsher market conditions, the Group prepared itself for 2003 by:
- reducing its risk profile by focusing its property portfolio on
prime-quality assets in the most sought-after locations. In addition,
Unibail targets blue-chip tenants from the industrial, commercial
and financial sectors, ensuring good visibility and a secure
outlook, particularly in terms of rental income;
- minimizing its property development commitments, which carry
the most risk. Unibail’s development activities are now essentially
concentrated on the 3M project, whose outstanding quality and
2005 completion date bode well for a very positive outcome;
- enhancing its balance sheet ratios to optimize the cost of and to
secure its financial resources.
As a result of these measures, the Group can confidently implement
its value creation strategy, drawing on the expertise it has built up.
This value creation policy will mainly be reflected by the continued
growth of rental income on a like-for-like basis which is driven by
the reversionary potential inherent sin each business line and the
efforts to improve the quality of Unibail’s products and services.
However, the pace of this growth is likely to slow down due to
adverse economic factors which result in longer periods needed to
lease assets and, consequently, higher vacancy rates.
At the same time, Unibail will pursue its asset rotation policy in
order to allocate the group’s capital towards higher value-added
projects and to seize any attractive opportunities on the market.
Against this overall background, Unibail has set a target of 10%
growth in its pre-tax recurring cash flow per share in 2003.
The 2003 French Finance Act introduced a new tax status applicable
to listed property investment companies. Under this new tax regime,
the companies benefiting from this regime would be exempted from
taxes both on their recurring profits and on their realised capital gains
providing that they pay out 85% of their recurring profits and 50% of
their capital gains as dividends. The decision to adopt this regime
(which is optional) triggers the payment of an exit tax equal to 16.5%
of latent capital gains as at the option date.
If this new taxation rules are finalised to its satisfaction, Unibail
plans to opt for the new French tax regime as from 2003.
Based on Unibail’s current situation, the exit tax payable over the
four years from December 2003 to December 2006 would be
€ 387m, which will largely be funded by the resulting corporate tax
savings.
Assuming that it adopts this new tax status, Unibail plans to limit the
dividend payment for the 2002 financial year to the maximum
amount which can be paid without triggering the payment of the
equalisation tax (précompte mobilier).
After switching to this new tax regime, the Group would aim to pay
out a dividend per share of € 3 in 2004 (in respect of the 2003
financial year) and to increase this amount in subsequent years.
41
CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2002
Consolidated balance sheets
p.
43
Consolidated income statements
p.
45
Consolidated cash flow statements
p.
47
Changes in shareholders’ equity
p.
48
Changes in capital
p.
49
1. Principles and methods of consolidation
p.
50
2. Valuation methods
p.
50
3. Other accounting principles
p.
51
4. Scope of consolidation
p.
52
5. Highlights and comparability
p.
54
Notes to the consolidated financial statements
6. Notes to specific items:
6.1-
Consolidated balance sheet assets
p.
56
6.2-
Consolidated balance sheet liabilities
p.
59
6.3-
Off-balance sheet items
p.
62
6.4-
Consolidated income statements
p.
63
p.
68
p.
70
7. Other information
Statutory Auditors’ report
42
CONSOLIDATED BALANCE SHEETS - ASSETS
As at December 31 (€ million)
2000
2001
2002
FIXED ASSETS
4,817
5,213
5,358
Goodwill (Note 1)
71
70
64
Intangible fixed assets (Notes 2 and 3)
71
78
80
Leaseholds
Other intangible fixed assets
65
6
65
13
64
16
Tangible fixed assets (Notes 2 and 3)
4,491
4,933
5,115
Land
1,527
1,907
1,988
Buildings and fittings
2,960
3,022
3,123
4
4
4
Financial assets (Note 4)
184
132
99
Finance-leased fixed assets
Furniture, fixtures and equipment
156
108
76
Other financial assets
28
24
23
CURRENT ASSETS
384
515
457
Trade receivables (Note 5)
129
167
143
Receivables from property portfolio
104
140
109
25
27
34
236
301
296
Tax receivables
60
60
58
Deferred tax assets
53
49
37
Other receivables
87
139
134
Accrued income and deferred expenses
36
53
67
6
28
2
13
19
16
5,201
5,728
5,815
Other trade receivables
Other receivables, accrued income and deferred expenses (Note 6)
Marketable securities (Note 7)
Cash and equivalents
TOTAL ASSETS
Figures for 2000 and 2001 have been restated. See §1-1: ‘Terms of reference’
43
CONSOLIDATED BALANCE SHEETS - LIABILITIES
As at December 31 (€ million)
2000
2001
2002
SHAREHOLDERS’ EQUITY (Group share)
1,329
1,264
1,383
Capital
245
233
235
Additional paid-in capital
891
788
796
Reserves and consolidated retained earnings (Group share)
267
328
381
Treasury shares
-74
-85
-29
MINORITY INTERESTS
156
147
113
DEFERRED TAX LIABILITIES (Note 8)
346
344
437
58
49
55
2,884
3,426
3,311
Bonds
398
1,728
2,912
Borrowings and amounts owed to credit institutions
750
731
239
1,736
967
160
TRADE PAYABLES
126
125
118
OTHER LIABILITIES, ACCRUED EXPENSES & DEFERRED INCOME (Note 11)
302
373
398
CONTINGENCIES & OTHER LIABILITIES (Note 9)
BORROWINGS & OTHER FINANCIAL LIABILITIES (Note 10)
Other financial liabilities
Tax and social security liabilities
47
50
70
Payables on fixed assets
54
57
84
Guarantee deposits
55
63
69
Sundry creditors
46
89
87
100
114
88
5,201
5,728
5,815
Accrued expenses and deferred income
TOTAL LIABILITIES
Figures for 2000 and 2001 have been restated. See §1-1: ‘Terms of reference’
44
CONSOLIDATED INCOME STATEMENTS
As at December 31 (€ million)
2000
2001
2002
REVENUES (Note 12)
448.9
550.2
620.1
Rental revenues
350.0
446.4
505.3
92.2
98.8
110.8
Finance leasing revenues
6.7
4.0
3.8
Other
0.0
1.0
0.2
Revenues from property services
OTHER OPERATING REVENUES (Note 13)
PERSONNEL COSTS (Note 14)
OTHER OPERATING EXPENSES (Note 15)
TAXES
DEPRECIATION AND PROVISIONS
12.4
19.9
16.4
-49.9
-52.2
-51.9
-130.5
-151.3
-163.8
-2.3
-3.8
-3.0
-93.0
-105.3
-134.6
-103.4
-115.5
-132.0
10.4
10.2
-2.6
OPERATING INCOME (*)
185.6
257.5
283.2
NET FINANCIAL EXPENSES (Note 18)
-88.3
-127.5
-128.5
CONSOLIDATED PRE-TAX RECURRING PROFIT
97.3
130.0
154.7
Net capital gains/losses on sales of properties (Note 19)
58.9
25.6
101.9
Provisions for impairment of value of properties (Note 20)
-0.3
0.5
-0.4
Exceptional charges
-26.6
-
-
Corporate income tax (Note 21)
-25.8
-30.9
-90.8
CONSOLIDATED NET PROFIT BEFORE MINORITY INTERESTS &
GOODWILL AMORTISATION
103.5
125.2
165.4
Depreciation (Note 16)
Net provisions (Note 17)
Goodwill amortisation (Note 22)
-0.9
-3.8
-4.1
CONSOLIDATED NET PROFIT BEFORE MINORITY INTERESTS
102.6
121.4
161.3
Minority interests (Note 23)
NET PROFIT (Group share)
-10.3
92.3
-13.4
108.0
-15.6
145.7
2000
2001
2002
45,081,345
45,877,069
46,512,882
Net profit, Group share (€m)
92.3
108.0
145.7
Net profit per share, Group share (€)
2.05
2.35
3.13
Figures for 2000 and 2001 have been restated. See §1-1: ‘Terms of reference’.
(*) see Note 25 for details on the reconciliation of operating income with the EBITDA figure shown in the income statement by division.
CALCULATION OF PER-SHARE DATA
Average number of shares (undiluted)
Pre-tax recurring profit (€m)
97.3
130.0
154.7
-10.3
-13.4
-15.6
-32.6
-40.5
-49.3
After-tax recurring profit, Group share (€m)
54.4
76.1
89.8
After-tax recurring profit per share, Group share (€)
1.21
1.66
1.93
45,552,153
46,863,212
47,305,036
2.03
2.30
3.08
Minority interests (€m)
Tax on recurring profit (€m)
(1)
Average number of shares (diluted)
(2)
Diluted net profit per share, Group share (€) (Note 24)
(1)
(2)
See Note 21: corporate income tax payable amounts to € 5.9m, € 7m and € 25.2m respectively
Calculated according to the ‘share buyback method’ (in accordance with OEC Notice No.27 and IAS33 standards). See Note 24.
45
CONSOLIDATED INCOME STATEMENTS
(BREAKDOWN BY DIVISION)
As at December 31 (€ million)
2000
2001
2002
Rental income
159.5
229.0
262.7
Net operating expenses
. Expenses related to properties
. Property management expenses
. Net allocation to provisions for doubtful accounts
-12.4
-12.7
Office Property Portfolio (Note 25)
-10.0
-1.9
-0.5
= Net rents
-11.2
-1.6
0.1
-21.3
-18.7
-2.0
-0.6
147.1
216.3
-2.4
-2.7
-3.3
144.7
213.6
238.1
Rental income
121.7
139.9
158.7
Net operating expenses
. Expenses related to properties
. Property management expenses
. Net allocation to provisions for doubtful accounts
-16.5
-19.8
Asset management expenses
Office Portfolio Net Operating Income
241.4
Shopping Centres Portfolio (Note 25)
-8.5
-7.7
-0.3
Ground rents
= Net rents
Asset management expenses
Shopping Centres Portfolio Net Operating Income
-11.1
-8.4
-0.3
-15.4
-5.7
-9.0
-0.7
-3.7
-3.5
-3.6
101.5
116.6
139.7
-0.6
-0.3
-0.4
100.9
116.3
139.3
Convention-Exhibition Centres Portfolio (Note 25)
Rental income
Net operating expenses
. Expenses related to properties
. Property management expenses
. Net allocation to provisions for doubtful accounts
75.8
87.1
93.0
-24.1
-29.1
-35.0
-18.3
-5.8
-
-23.7
-5.4
-
-28.2
-5.9
-0.9
Ground rents
-6.8
-8.4
-9.2
= Net rents
44.9
49.6
48.8
Asset management expenses
-
-
-
44.9
49.6
48.8
Convention-Exhibition Centres management
9.3
6.0
3.5
Property management services
0.3
3.9
1.6
-0.2
-1.5
-0.4
9.4
8.4
4.7
Convention-Exhibition Centres Portfolio Net Operating Income
Property Services (Note 25)
Other management services
Property Services Net Operating Income
Finance leasing & other (Note 25)
Net lease payments and other income
Net operating expenses and capital gains/losses on sales of properties
Finance Leasing & Other Net Income
6.1
4.4
3.8
-1.3
-1.0
-1.1
4.8
3.4
2.7
-18.5
-20.7
-18.9
0.1
-
-1.4
-18.4
-20.7
-20.3
General expenses and other (Note 25)
Corporate and development expenses
Miscellaneous
Total general expenses and other
= Earnings Before Interest, Tax, Depreciation and Amortisation (*)
Depreciation (Note 16)
Net financial expenses (Note 18)
Contribution of non-consolidated companies
= Pre-tax Recurring Profit
Net capital gains/losses on sales of properties (Note 19)
Non-recurring income & expenses
Provisions for impairment of value of properties (Note 20)
286.3
370.6
413.3
-100.8
-113.4
-129.6
-88.3
-127.6
-129.1
0.1
0.4
0.1
97.3
130.0
154.7
101.9
58.9
25.6
-26.6
-
-
-0.3
0.5
-0.4
Goodwill amortisation (Note 22)
-0.9
-3.8
-4.1
Corporate income tax (Note 21)
-25.8
-30.9
-90.8
102.6
121.4
161.3
-10.3
-13.4
-15.6
92.3
108.0
145.7
= Net Profit
Minority interests (Note 23)
= Net Profit (Group share)
(*) see Note 25 for details on the reconciliation of operating income with the EBITDA figure shown in the income statement by division
46
CONSOLIDATED CASH FLOW STATEMENTS
As at December 31 (€ million)
2000
2001
2002
Operating activities
Net profit
Depreciation and provisions
Changes in deferred tax
Net capital gains/losses on sales of properties
Net capital losses on convertible bond redemption
Net cash inflow from operating activities
Changes in working capital
Total cash flow from operating activities
102.6
88.1
20.0
-40.9
26.5
196.3
-5.4
190.9
121.4
107.0
23.9
-21.7
230.6
-5.7
224.9
161.3
140.5
65.4
-108.5
258.7
4.9
263.6
-603.4
-283.4
-559.9
30.0
1.5
208.4
-578.9
-130.9
-519.7
1.7
70.0
-12.7
-20.2
-283.6
0.6
290.5
Lending activities
Repayment of finance leasing
Repayment of loans to property developers
Property loans
47.9
45.3
0.5
2.1
49.0
46.7
0.5
1.8
31.5
31.0
0.5
-
Financial activities
Acquisition of investments and other financial assets
Disposal of investments and other financial assets
3.2
-0.6
3.8
1.0
1.0
0.9
0.9
-552.3
-528.9
19.7
3.2
-71.7
-60.1
61.6
5,645.9
-5,258.9
320.0
3.4
-89.2
-84.9
-3.3
3,495.5
-2,958.2
363.3
9.7
-92.1
-64.6
-2.1
3,092.0
-3,283.9
-341.0
-41.2
4.4
-36.8
59.3
-36.8
22.5
-57.3
22.5
-34.8
Investment activities
Property activities
Acquisition of consolidated subsidiaries
Acquisition of non-consolidated subsidiaries
Acquisition of tangible fixed assets
Disposal of consolidated subsidiaries
Disposal of non-consolidated subsidiaries
Disposal of tangible fixed assets
Total cash flow from investment activities
Financing activities
Capital increase
Distributed dividend
Purchase of treasury shares
Purchase of warrants
Sale of treasury shares
New borrowings and financial liabilities
Repayment of borrowings and financial liabilities
Total cash flow from financing activities
Change in cash and cash equivalents during the year
Cash at beginning of year
Cash at year-end
47
CHANGES IN SHAREHOLDERS’ EQUITY - GROUP SHARE
Capital
2000, 2001 and 2002 financial years (€ million)
Additional
Consolidated
Other
Total
paid-in
retained
reserves
shareholders’
capital
earnings
equity
Balance as at December 31, 1999
225.0
852.0
186.0
-75.0
1,188.0
Dividends paid by parent company
-
-39.6
-32.0
-
-71.6
2.6
13.6
-
-
16.2
Capital increases
Net profit, Group share
-
-
92.3
-
92.3
Purchases/sales of treasury shares
-
-
-
1.4
1.4
Long-term capital gains reserves
-
-20.8
20.8
-
-
16.5
83.5
-
-
100.0
0.8
2.1
-
-
2.9
Balance as at December 31, 2000
244.9
890.8
267.1
-73.6
1,329.2
Dividends paid by parent company
-
-40.1
-49.1
-
-89.2
-3.8
-
3.8
-
-
-
-
108.0
-
108.0
-87.1
Bond conversions
Share options
Capital reduction following conversion into euros
Net profit, Group share
Purchases/sales of treasury shares
Share cancellations (following Board decision of Feb. 13, 2001)
Share options and company savings plan
Balance as at December 31, 2001
-
-
-
-87.1
-8.2
-65.4
-
73.6
-
0.5
2.8
-
-
3.3
233.4
788.1
329.8
-87.1
1,264.2
Dividends paid by parent company
-
-
-91.4
-
-91.4
Net profit, Group share
-
-
145.7
-
145.7
Purchases/sales of treasury shares
-
-
-5.9
-27.1
-33.0
Buyout of Tanagra minority shareholders
-
-
2.5
85.0
87.5
Share options and company savings plan
1.9
7.9
-
-
9.8
235.3
796.0
380.7
-29.2
1,382.8
Balance as at December 31, 2002
CHANGES IN SHAREHOLDERS’ EQUITY - MINORITY INTERESTS
Total shareholders’ equity
As at December 31 (€ million)
(minority interests)
Balance as at December 31, 2000
156.4
Changes in the scope of consolidation
-9.7
2000 earnings appropriation
-13.5
2001 non-group earnings
13.4
Balance as at December 31, 2001
Changes in the scope of consolidation
146.6
(1)
2001 earnings appropriation
2002 non-group earnings
Balance as at December 31, 2002
(1)
48
Mainly covers the purchase of Tanagra minority interests (see §5: ‘Highlights and comparability’).
-37.2
-12.1
15.6
112.9
CHANGES IN CAPITAL
As at December 31, 1999
Capital increase: merger with Cnit SA
Capital increase reserved for employees under company savings scheme
Bond conversions
Total number of
Treasury shares
shares(1)
included in the total
14,760,490
585,597
162,679
-
13,621
-
1,075,847
-
-
-23
Exercises of warrants
Exercises of share options
47,760
-
-
429,789
-
-476,007
16,060,397
539,356
Purchases of treasury shares
Sales of treasury shares
As at December 31, 2000
Capital increase reserved for employees under company savings scheme
33,628
-
-
-78
Exercises of warrants
Exercises of share options
50,835
-
-
896,235
31,073,030
589,184
-539,356
-539,356
46,678,534
1,485,341
51,513
-
-
-60,312
Purchases of treasury shares
Three-for-one stock split and conversion of capital into euros on June 13, 2001 2)
Cancellation of shares following Board decision of February 13, 2001
As at December 31, 2001
Capital increase reserved for employees under company savings scheme
Exercises of warrants
Exercises of share options
332,608
-
Purchases of treasury shares
-
1,125,445
Exchange of treasury shares for 22% equity stake in Tanagra
-
-2,039,820
47,062,655
510,654
As at December 31, 2002
(1)
Shares with a par value of FF 100 until June 13, 2001 and € 5 thereafter
(2)
Decision by the Board of Directors on May 29, 2001, authorised by the Shareholders’ Meeting of April 24, 2001
SHARE OPTIONS
Number
of options
allocated
Executive share option scheme
Executive share option scheme
Executive share option scheme
Executive share option scheme
Executive share option scheme
Executive share option scheme (1)
Executive share option scheme (1)
Executive share option scheme (1)
Warrants (May 1999) (2)
Exercise period
from March 28, 2000 to
March 27, 2003
315,000
from March 27, 2001 to
March 26, 2004
172,500
from March 19, 2002 to
March 18, 2005
306,000
from March 18, 2003 to
March 17, 2006
327,000
from March 9, 2004 to
March 8, 2007
109,500
from November 21, 2002
to Nov. 20, 2008
502,500
from October 9, 2003 to
October 8, 2009
317,000
from October 9, 2004 to
October 8, 2010
394,000
from May 12, 1999 to
May 11, 2004
2,081,500
Total
(1)
(2)
(3)
Adjustments (3)
Number of
options/
warrants
cancelled
Number of
options/
warrants
exercised
Number of
options/
warrants
outstanding
Potential
number of
shares
34,638
-
321,547
28,091
28,091
20,010
-
136,833
55,677
55,677
34,842
10,500
99,291
231,051
231,051
25,764
47,877
-
304,887
304,887
4,392
21,324
-
92,568
92,568
7,239
66,156
-
443,583
443,583
-
15,000
-
302,000
302,000
-
-
-
394,000
394,000
-
738,316
96,120
1,247,064
785,650
2,637,507
30% of these share options can be exercised at the end of the second year following their allocation. A further 30% can be exercised at the end of the third year.
Existing shares or shares to be issued.
Following the dividend payments deducted from retained earnings.
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1-
Principles and methods of consolidation
1-1. Terms of reference
Following the withdrawal of Unibail’s ‘finance company’ status on
November 28, 2002, the Group’s consolidated financial statements
are now prepared in accordance with CRC (Accounting Regulation
Committee) Rule 99-02 relating to commercial companies and issued
on June 22, 1999. The financial statements for the previous years
have been restated accordingly.
The changes to the terms of reference only affect the presentation of
the financial statements.
An income statement by division has been supplied to provide
shareholders with additional information and allow a more direct
interpretation of the Group’s key performance indicators.
CRC Regulation 2000-06, which relates to company liabilities and
came into effect on January 1, 2002, has not had a significant impact
on the financial statements shown in this document.
The value of this consolidation difference is reviewed annually,
based on the relevant indicators for the activities involved.
Minority interests are stated at the minority's proportion of the fair
value.
For minority interests acquired, the consolidation difference is
allocated according to the same rules.
Net profit from finance leasing
The net profit from finance leasing is calculated for each contract,
after principal repayment.
Principal repayment is deducted directly from lease payments so as
to show only the interest income on these activities (see Note 12).
Lease payments are restated as instalments on loans, including a
partial repayment of principal as well as the interest on the
investment and services provided by the lessor.
2-
Valuation methods
1-2. Methods of consolidation
2-1. Intangible fixed assets
The scope of consolidation includes all companies controlled
exclusively by Unibail and all companies in which the Group
exercises significant influence, as reflected in direct or indirect
ownership of at least 20% of the capital.
• Companies in which Unibail directly or indirectly holds an
interest of over 50% are fully consolidated.
• Companies in which Unibail directly or indirectly holds an
interest of over 20% are either consolidated by the equity
method, or proportional method if they are jointly controlled.
• The consolidation structure does not include the companies the
Group does not plan to keep for strategic purposes and the
companies which are not considered significant in the overall
structure.
1-3. Financial year-end
All consolidated companies close their books at December 31.
1-4. Consolidation adjustments
Inter-company transactions
Inter-company balances and transactions between Group member
companies have been eliminated.
However, in the income statement by division, inter-company
transactions between the property investment and property services
activities have not been eliminated.
Investments in affiliated and associated companies
For companies acquired, the difference between the purchase price
and the adjusted net assets on the date of acquisition is allocated to
identifiable assets and liabilities of the consolidated company and
evaluated in accordance with the valuation rules normally applied to
such line items. The part of the excess purchase price allocated to the
real estate properties is allocated to the land and construction,
depending on the nature and location of the property.
As regards shopping centres and convention-exhibition spaces, their
value derives from the location of the land on which they have been
erected and from their allocation for commercial purposes, which is a
result of administrative authorisations. Consequently, the excess
purchase price is, in this case, totally allocated to land assets.
When the building is erected on leasehold land, the excess purchase
price is amortised over the remaining life of the leasehold.
Any residual goodwill is amortised or written off over a period
appropriate to the activity of the company acquired.
50
Intangible fixed assets principally comprise leaseholds (mainly for
shopping centres) and are depreciated over the life of the
corresponding lease. Other intangible fixed assets, such as software,
are depreciated over a period of one to five years.
2-2. Tangible fixed assets
Gross value of properties
This amount represents the historical costs (purchase price, related
costs
and
financial
expenses
incurred
during
the
construction/refurbishment period). In the case of assets acquired
before 1996, acquisition costs and financial expenses are stated as
charges and are therefore not included in the gross value of the
properties.
Depreciation of properties
Buildings are depreciated on a straight-line basis over 25 to 40 years,
depending on their nature; fittings are depreciated over 10 years.
Provision for impairment in value
A line-by-line valuation of all the significant properties in our
portfolio is made by an external expert, at the end of each half year,
to determine their market value. An internal valuation is carried out
for assets with a non-significant value.
- Where the appraised value (including transfer tax) is less than the
book value, in the case of an asset to be held with a medium to long
term valuation perspective, a provision is made when the difference
between the appraised value and the net book value exceeds fiveyear depreciation allowances;
- Where the appraised value (excluding transfer tax) is less than the
book value, in the case of property assets that are held for disposal in
the short-term, the loss is immediately stated line-by-line by way of
provision.
Provisions made in this way may be reversed only when the net book
value becomes inferior to the appraised value.
2-3. Financial assets
Finance-leased fixed assets
Finance leasing operations are recorded on the consolidated balance
sheets at the amount of principal outstanding in the case of ongoing
contracts, and at the net book value of the building in the case of
cancelled contracts.
Financial assets
Financial assets are recorded at purchase price. A provision for
impairment is recorded where the book value is less than the
purchase price. The book value is determined based on the useful
value and, in particular, takes into account the market value of the
asset (stock market value for investments in listed companies).
3-
Investments in non-consolidated companies
Investments in non-consolidated companies are recorded at cost,
excluding transaction expenses. At the end of the financial year,
provisions may be made, depending on the evolution of the
companies concerned and their net assets and future prospects.
Unibail uses various interest rate instruments, such as swaps, caps,
floors and forward rate agreements for hedging purposes, to manage
global interest rate risk on balance sheets and off-balance sheets, and
for a small number of specific hedging transactions.
2-4. Trade receivables
Doubtful accounts
Unpaid amounts are recorded under doubtful accounts whenever they
appear likely or certain to remain unpaid. Provisions are assessed on
a lease-by-lease basis after deducting guarantee deposits, with due
consideration for the length of time the amount has remained unpaid,
progress in proceedings undertaken and the nature of the guarantees
received.
2-5. Accrued income and deferred expenses
Bond issue costs
The costs incurred in issuing bonds after January 1, 1999 are
deferred and amortised over the duration of the loan.
Rent adjustment clauses
When a lease includes rent adjustment clauses, such as rent-free
periods or step-rents, the overall effect of any adjustments granted
over the fixed term of the lease is spread out over this same duration.
However, this spreading is only carried out if there is a significant
impact on one of the financial years included in the fixed term of the
lease. This provision is applied to all leases which came into effect
after January 1, 1999, with no restatement of previous leases.
Leasing fees, key money and eviction costs
Leasing fees are spread over the fixed term of the lease. During the
construction of a shopping mall, the initial leasing fees are
capitalised. Once it is completed, the fees are depreciated over an
average fixed term of the leases.
In the event of a change of tenant, the compensation paid to the
tenant being evicted, net of key money invoiced to the incoming
tenant, is included in the consolidated income statements for the
year. If the costs or income determined in this way have a
counterpart in the discounted value of the increase or decrease in
rental obtained in connection with the new lease, this result is spread
over the fixed term of the new lease.
Compensations paid to tenants evicted as part of a major
restructuring program of a building or shopping centre are an integral
component of the overall cost of such operations and are
consequently recorded under fixed assets.
2-6. Contingencies and other liabilities
CRC Regulation 2000-06, relating to liabilities, is applicable to
financial statements for fiscal years beginning from and after January
1, 2002. As from this date, provisions for contingencies and other
liabilities are defined as liabilities whose due date or amount have
not been precisely identified. A liability is defined as an obligation
towards a third party, which is likely to result in a payment to this
third party, while no compensation of an equivalent or greater value
is expected in return. This new definition has had no impact on the
amount of provisions for contingencies and liabilities recorded on the
consolidated balance sheet at the beginning of the 2002 financial
year.
Other accounting principles
3-1. Financial instruments
The accounting principles applied depend on the purpose for which
the transactions are effected.
Premiums paid upon execution of contracts that cover more than the
current financial year are spread over the duration of the contract on
a yield-to-maturity basis. Costs and income are recorded in the
consolidated income statements in proportion to the length of time of
these items. Unrealised profits and losses resulting from the
difference between the estimated market value of contracts on the
effective date and their nominal value are not shown in the accounts.
When cancelling a swap which is not based on a specific balance
sheet item, the resulting cash payment, corresponding to the
difference between the market value and book value, is recorded
directly in the consolidated income statements.
3-2. Taxation
Due to its former 'Sicomi' status, Unibail (parent company) is still
governed by specific tax provisions which provide that:
• businesses related to finance leasing contracts signed prior to
January 1, 1991 are exempt from tax;
• all other operations are fully taxable.
Unibail has one tax sub-group (Doria) that has opted for the tax
consolidation scheme instigated by Article 68 of the 1988 French
Budget Act.
Deferred tax
Deferred tax provisions, calculated under the liability method, reflect
total timing differences at each financial year end between the value
after consolidation adjustments of assets and liabilities items in the
balance sheet and the tax value of the same items.
• Deferred tax assets or liabilities are calculated based on total
timing differences, and on tax losses brought forward, using the
tax rate that will apply on the likely date of reversal of the
relevant differences, if this rate has been fixed, or, otherwise, as
a function of the tax rate in force on the date on which the
accounts are closed. Within a given fiscal entity, and for a given
tax rate, net asset balances are limited to the amount believed to
be recoverable over a foreseeable period.
• Excess of purchase price over book value of purchased assets
and liabilities leads to the recognition of a deferred tax.
3-3. Ownership of treasury shares
The treasury shares held by the Group are deducted from
consolidated shareholders’ equity at their purchase value.
3-4. Retirement plans
Retirement pensions due under the various compulsory retirement
schemes to which employers and employees contribute are the
responsibility of specialised external institutions. The contributions
due for a given financial year are stated in the consolidated income
statements of the period concerned.
The provision for retirement allowances is based on the present value
of these future allowances.
In accordance with the notice issued by the CNC (French Accounting
Board) on January 15, 2003, the Group maintained its position at
year-end 2002 as it had not previously booked any provisions for
major repairs.
51
4-
Scope of consolidation
List of consolidated companies
Method(1)
% interest
at end-2000
% interest
at end-2001
% interest
at end-2002
% control
at end-2002
SA Unibail Holding
SA Omnifinance
IG
IG
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Offices
SA Capricorne
SARL Zéphyr
SAS Alba
SAS Corto
SAS Immobilière 125 Wilson
SAS Immobilière 137 Fg St Honoré
SAS Immobilière 16 Monceau
SAS Immobilière 27-29 Bassano
SAS Immobilière 41 Ybry
SAS Immobilière Babylone
SAS Immobilière Château Garnier
SAS Immobilière Iseult
SAS Immobilière La Chocolaterie
SAS Immobilière Louvre
SAS Immobilière Montgolfier
SAS Immobilière Noria
SAS Immobilière Tolbiac Masséna
SAS Liberty
SAS Quai Ouest
SAS Saint-Ouen Dalhenne
SAS SFAM
SAS SIG 34
SAS Société Foncière de Bureaux Parisiens
SAS Syra
SAS Tanagra
SAS Unibail Investissement II
SAS Uni-Bureaux
SAS Véga
SCI 189 Malesherbes
SCI 3-5 Malesherbes
SCI 7 Adenauer
SCI Ariane Défense
SCI 39-41 Cambon
SCI Colisée 31
SCI Gaité Bureaux
SCI Gaité Parkings
SCI Galilée Défense
SCI Immobilière Illustration
SCI Poncelet Wagram
SCI Sirmione
SCI Village 1 Défense
SCI Village 2 Défense
SCI Village 3 Défense
SCI Village 4 Défense
SCI Village 5 Défense
SCI Village 6 Défense
SCI Village 7 Défense
SCI Wilson 70
SNC 50 Montaigne
SNC Foncière Richelieu Bureaux
SNC Ida
SNC Sogec
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
78.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
78.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
52
Method(1)
Shopping centres
SA Nice Etoile
SA Société d'Expl. des Park. Forum des Halles
SARL Sage
SAS La Toison d'Or
SAS Uni-Commerces
SCI 42 Lisbonne
SCI Société Civile du C.C Chelles
SCI Colline Défense
SCI du CC de Bordeaux Préfecture
SCI du CC des Pontôts
SCI du Forum des Halles de Paris
SCI Espace Commerce Europe
SCI Pégase
SCI Rosny Beauséjour
SCI SCC de la Défense
SCI Sicor
SCI Triangle des Gares
SEP Rosny 2
SEP Ulis 2
SEP Vélizy
SNC Bures Palaiseau
SNC Centre Commercial Francilia
SNC du CC Labège
SNC Les Passages de l'Etoile
SNC Foncière Richelieu Commerces
SNC Saint Genis Laval
SNC Vélizy Petit Clamart
% interest
at end-2000
% interest
at end-2001
% interest
at end-2002
% control
at end-2002
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IP
IG
IP
IG
IG
IP
IP
IP
IP
IG
IG
IG
IG
IG
IG
IG
100.00
65.00
53.30
100.00
100.00
61.00
90.00
65.00
50.00
100.00
50.00
53.30
63.00
40.00
26.00
45.00
54.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
53.30
100.00
100.00
100.00
61.00
90.00
65.00
50.00
100.00
50.00
53.30
73.00
40.00
26.00
45.00
54.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
53.30
100.00
100.00
100.00
100.00
53.30
61.00
90.00
65.00
50.00
53.30
50.00
53.30
73.00
40.00
26.00
45.00
54.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
53.30
100.00
100.00
100.00
100.00
53.30
61.00
90.00
65.00
50.00
53.30
50.00
53.30
73.00
40.00
26.00
45.00
54.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
IG
IG
IG
IP
IG
100.00
93.43
100.00
-
100.00
95.99
100.00
100.00
100.00
100.00
100.00
50.00
100.00
100.00
100.00
100.00
50.00
100.00
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
IG
99.93
100.00
100.00
50.00
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.93
100.00
100.00
50.00
100.00
99.99
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.93
100.00
100.00
50.00
100.00
100.00
99.99
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.93
100.00
100.00
50.00
100.00
100.00
99.99
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
IG
IG
IG
IG
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Convention-Exhibition Centres
SA Espace Champerret
SA Paris Expo Porte de Versailles
SAS Le Carrousel du Louvre
SAS Société d'Exploitation du Palais des Sports
SCI Pandore
Property services
SA Arc 108
SA Crossroads Property Investors
SA Exploitation Carrousel du Louvre
SARL Sovalec
SARL SPSP
SAS Alain Fraux
SAS Espace Expansion
SAS Forum Restauration
SAS S2B
SAS U2M
SAS Unibail Management
SNC Société Exploitation CNIT
SNC CNIT Restauration
SNC Paris Expo
SNC Société d'Exploitation Hotelière du CNIT
SNC Proximages
Holding and other
SARL Espace Expansion Immobilière
SAS Doria
SAS Léa
SNC Financière 5 Malesherbes
(1)
IG=Fully-consolidated companies, IP=Proportional consolidation method
53
5-
Highlights and comparability
Comparability between the 2000, 2001 and 2002 financial years
is affected by the following events and transactions:
In 2000:
On February 18, 2000, following the all-cash takeover bid for
the outstanding shares in Paris Expo, Unibail owned a 61.6%
interest in this company, which operates the ‘Parc des
Expositions’ exhibition park in Porte de Versailles, Paris.
Unibail increased its stake in Paris Expo to 93.4% after
acquiring shares held by CCIP and SAGI on October 1, 2000.
As part of its EMTN (Euro Medium Term Notes) program,
Unibail launched a € 400m public issue in January 2001
followed by a € 710m private placing during the second quarter
of 2001.
Part of the dividend payment in June 2001 was drawn from
retained earnings. The exercise terms for Unibail’s share
options have been adjusted accordingly.
On May 12, 2000, the General Meetings of Unibail and Cnit
SA (which owns the land and archway of the Cnit in La
Défense) approved the merger of Cnit SA into Unibail (which
owned a 72% stake in the company), with effect from January
1, 2000.
On June 13, 2001, the Group carried out a three-for-one stock
split and converted its share capital into euros, giving a nominal
value of € 5 per share. The exercise terms for Unibail’s
warrants have been adjusted accordingly, giving a new
exchange parity of 5 warrants plus € 130 for 3.15 shares.
In accordance with the issue agreement for the convertible
bonds issued in 19941:
i) Unibail repurchased 1,921,131 convertible bonds at an
average price of € 142. These bonds were immediately
cancelled.
ii) Unibail offered early redemption of the 1,002,678 remaining
bonds at a price of € 117.6. Up to September 13, 2000,
bondholders were entitled to opt either for conversion or
redemption of these bonds. The vast majority of these bonds
were presented for conversion, resulting into the issuance of
1,075,722 shares.
This bond buy-back generated a net exceptional loss of
€ 26.6m before tax. After tax, the effect on consolidated net
profit was neutral.
As part of its share buyback program, Unibail repurchased
1,484,483 of its own shares in 2001.
On September 28, 2000, Unibail acquired a 100% interest in a
limited company, Nice Etoile, which owns a shopping centre
located in Nice’s major shopping street.
Other acquisitions and disposals:
- Acquisition of the Alstom Transport headquarters in SaintOuen by SCI Saint–Ouen Dhalenne.
- Acquisition of 21 floors of the ‘Tour Europe’ building in La
Défense.
- Disposal of 29 office properties for a total amount of
€ 237m.
In 2001:
The Cœur Défense complex was opened in May 2001. As from
this date, Unibail began to record the rental income and
building depreciation charges for this complex, while its
financial charges ceased to be recorded as fixed assets and are
now booked under expenses.
On July 1, 2001, the Unibail subsidiary, Doria, acquired SCI
Cambon, which owns the Euronext headquarters at 39-41 rue
Cambon, Paris 1.
In early October 2001, the Unibail subsidiary, Zéphyr, paid
€ 183m to acquire all the buildings of the former EDF
headquarters, located in Paris 8 (3M project) and due for
complete refurbishment.
On September 18, 2001, the Unibail subsidiary, SCI Pandore,
paid € 0.8m to acquire the Foyer de la Grande Arche in La
Défense (9,500 m2 of Convention-Exhibition space).
The Group also increased its interests in various properties:
10% additional stake in Sicor, the company that owns the Place
1 1994 issue of 2,923,809 convertible bonds (3.75%). Conversion ratio: one
share per bond.
Issue price: FRF 670. Final redemption price: FRF 848. Gross yield to
maturity: 5.85%.
54
d'Arc shopping centre in Orléans; 50% additional stake in the
jointly owned property at 168 avenue Charles de Gaulle, in
Neuilly; and final acquisition of the full ownership of Tour
Europe in La Défense.
In 2002:
On February 19, 2002, Unibail acquired the interests held by
the two minority shareholders in Tanagra, the company that
owns Cœur Défense. In exchange for this 22% stake in
Tanagra, the Group tendered 2,039,820 Unibail shares and
agreed to make potential cash payment in August 2005. This
potential cash payment (for each share received and still held)
will be equal to the difference, if positive, between: i) € 78.8
less the total net dividends received during the period; and ii)
the average volume-weighted price of Unibail’s shares during
the last 100 trading days (see Note 11 for details on the
accounting treatment of this cash payment).
The cash payment will no longer apply if: i) the former
minority shareholders sell these shares; or ii) Unibail offers to
purchase the unsold shares at a price of € 72, plus € 6.80 x
n/1277, less the total net dividends paid since February 19,
2002 (where ‘n’ stands for the number of days since February
19, 2002); or iii) Unibail’s share price exceeds € 73.7 for more
than 60 non-consecutive days.
Through a capital increase, Unibail acquired a 50% stake in
‘Société d'Exploitation du Palais des Sports’, the company that
holds the operating concession for the Palais des Sports in
Porte de Versailles. This deal was approved on February 10,
2002 by the City of Paris, the concession-holder of the Palais
des Sports.
The Cité du Retiro office building was completed in July 2002
and the lease granted to its tenant, Cartier, took effect on July
15. The owning company carried out a self-delivery of the
building.
On June 19, 2002, Unibail acquired the two real estate
investment companies, S4C and S42L, which own the Chelles 2
shopping centre in the East of Paris.
The Carré Sénart shopping centre, built by the wholly-owned
Unibail subsidiary, SCI Francilia, was officially opened on
August 28, 2002.
On September 24, 2002, Unibail launched a Public Buyout
Offer for Paris Expo-Porte de Versailles. As a result of this
transaction, Unibail now owns all the shares in this company.
The minority partners (AXA: 24.7% and CNP: 22%) of Société
Civile du Centre Commercial de la Défense, the owner of the
Les Quatre Temps shopping centre, took a stake in Pégase and
Colline de la Défense companies with a view to maintaining an
equal stake in all entities involved in the shopping centre’s
extension and renovation.
On November 22, 2002, the company Tanagra decided to keep
the Cœur Défense building in its portfolio. As a result, a selfdelivery of the asset was carried out.
assets of the Gaîté Montparnasse complex by transferring them
into these subsidiaries.
In addition, nine assets were sold off for a total of € 239m.
On November 28, 2002, the companies Unibail and
Omnifinance permanently gave up their ‘finance company’
status. As a result, Unibail now has access to the commercial
paper market as a replacement for Certificates of Deposit,
which are reserved for finance companies. Unibail has changed
its name to Unibail Holding.
Comparability
None of the 2002 events described above are likely to have a
significant impact on the comparability of the past two financial
years. The Chelles 2 acquisition generated € 1.9m in Net Operating
Income in the 2002 financial statements. The full-year impact would
have amounted to less than 1% of total Net Operating Income from
the overall property portfolio.
Unibail Holding set up two property investment companies to
facilitate the management of the car parking and office property
Unibail Holding: simplified corporate structure chart
Unibail Holding
Office
Division 8 companies
Office
Division 44 companies
Doria
Property
services 16 companies
Shopping
Centre
Division 5 companies
ConventionExhibition
Division 3 companies
Shopping
Centre
Division 22 companies
ConventionExhibition
Division 2 companies
55
6-
Notes and comments
6-1. Notes to Consolidated Assets
Note 1 - Goodwill
2000
2001
2002
Consolidated gross value
78.4
80.8
79.1
Amortisation
-7.4
-11.3
-15.4
Net balance sheet value
71.0
69.5
63.7
As at December 31, 2002, this item mainly comprised the valuation of the property servicing activities for Paris Expo (€ 58.3m amortised over the life
of the concession, i.e. 26 years) and goodwill on the acquisition of the Arc Union Group in 1995 (€ 18.6m amortised over 20 years, following a
€ 30.8m write-off against consolidated shareholders’ equity). If this € 30.8m amount had been recorded on the assets side of the balance sheet,
€ 12.3m of this amount would have been amortised by year-end 2002.
Note 2 - Intangible and tangible fixed assets
Change in gross value of intangible and tangible fixed assets
Additions to
scope of
consolidation
Reclassified
Disposals
At beginning
of year
Works
Leaseholds
Other intangible fixed assets
69.9
19.5
-
-
0.6
2.9
-
3.5
70.5
25.9
Total
89.4
-
-
3.5
-
3.5
96.4
Acquisitions (2)
(2)
(1)
At year-end
INTANGIBLE FIXED ASSETS
TANGIBLE FIXED ASSETS
Land
1,936.5
-
103.8
7.6
-43.0
19.0
2,023.9
Buildings and fittings
3,235.4
101.9
112.5
19.3
-117.8
67.7
3,419.0
108.7
150.2
-
-
-43.4
-95.4
120.1
6.8
1.0
-
-
-0.2
-0.3
7.3
Total
5,287.4
253.1
216.3
26.9
-204.4
-9.0
5,570.3
Total Gross Intangible Fixed Assets
5,376.8
253.1
216.3
30.4
-204.4
-5.5
5,666.7
Construction work in progress
Furniture, fixtures and equipment
(1)
(2)
The balance mainly comprises adjustments to the book value of various fixed assets.
The main acquisitions and disposals during the financial year are described in the section ‘Highlights and comparability’.
Change in depreciation and provisions for intangible and tangible fixed assets
At beginning of
year
Depreciation and
provisions
Reversals of
depreciation
Leaseholds
4.8
0.8
-
0.7
Other intangible fixed assets
6.4
3.3
-
-
9.7
11.2
4.1
-
0.7
16.0
Reclassified At year-end
INTANGIBLE FIXED ASSETS
Total
6.3
TANGIBLE FIXED ASSETS
Land
Buildings and fittings
Furniture, fixtures and equipment
30.0
6.1
-
-
36.1
322.5
118.5
-24.6
-1.2
415.2
2.5
1.6
-
-0.3
3.8
Total
355.0
126.2
-24.6
-1.5
455.1
Total Depreciation
366.2
130.3
-24.6
-0.8
471.1
56
Change in net value of intangible and tangible fixed assets
At beginning of
year
Changes in the scope of
consolidation
Increase
Decrease and other
movements
At year-end
78.3
-
3.5
-1.3
80.5
Net tangible fixed assets
4,932.4
216.3
280.0
-313.5
5,115.2
Net Fixed Assets
5,010.7
216.3
283.5
-314.8
5,195.7
Net intangible fixed assets
Note 3 - Intangible and tangible fixed assets by division
The following table provides a breakdown of intangible and tangible fixed assets for each of the Group’s divisions:
Intangible fixed
assets
Land
Buildings and
fittings
Office Properties
3.6
1,061.7
2,101.9
Shopping Centres
62.7
835.5
5.9
90.6
72.2
1,987.8
Net fixed assets
Convention-Exhibition Centres
Sub-total - Property Portfolio
Property services and other
8.3
Total
(1)
80.5
1,987.8
Furniture,
Fixed assets in fixtures and
progress (1) equipment
Nonconsolidated
assets
Total
56.8
-
-
3,224.0
651.8
28.6
0.3
0.4
1,579.3
232.9
32.3
-
-
361.7
2,986.6
117.7
0.3
0.4
5,165.0
16.5
2.4
3.5
-
30.7
3,003.1
120.1
3.8
0.4
5,195.7
This figure mainly covers works for: i) the 3M project in the Office Division, ii) Les Quatre Temps and Colline de la Défense in the Shopping Centre Division, and
iii) Paris Expo - Porte de Versailles in the Convention-Exhibition Division.
For each of these divisions, the change in net fixed assets was as follows:
Changes in the
scope of
consolidation (2) Acquisitions (3) Disposals (3)
At beginning
of year
Works(1)
Office Properties
3,165.1
102.9
155.8
-
Shopping Centres
1,476.1
100.0
58.0
341.7
40.2
4,982.9
27.8
5,010.7
Net fixed assets by division
Convention-Exhibition Centres
Sub-total - Property Portfolio
Property services and other
Total
(1)
(2)
(3)
Depreciation and
other
At year-end
-132.8
-67.0
3,224.0
27.6
-44.7
-37.7
1,579.3
2.5
-
-0.9
-21.8
361.7
243.1
216.3
27.6
-178.4
-126.5
5,165.0
10.0
-
2.8
-1.4
-8.5
30.7
253.1
216.3
30.4
-179.8
-135.0
5,195.7
In addition to the buildings classified under ‘Construction work in progress’, works were also carried out on Cité du Retiro and the Melun Sénart shopping centre
(completed during 2002), as well as Tour Europe and Tour Ariane.
The main changes in the scope of consolidation were as follows:
- Office Division: acquisition of the 22% minority stake in Tanagra (Cœur Défense). The entire first consolidation difference has been allocated to the property;
- Shopping Centre Division: acquisition of the property companies S4C and 42L, which own the Chelles 2 shopping centre;
- Convention-Exhibition Division: acquisition of a 50% stake in Société Nouvelle d'Exploitation du Palais des Sports.
The main acquisitions and disposals during the financial year are described in the section ‘Highlights and comparability’.
Note 4 - Financial assets
Finance-leased fixed assets
No new finance leasing contracts have been entered into since 1991. As a result, outstanding financing is decreasing as contracts terminate (at
maturity or due to early exercise of purchase options or cancellations).
Outstanding financing on ongoing contracts
2000
2001
2002
Outstanding financing
151.3
104.5
71.4
Provisions
-
-
-
Net value
151.3
104.5
71.4
326
262
194
Number of contracts
57
Finance leasing receivables
Gross value
Provisions for doubtful accounts
Net
2000
2001
7.0
6.4
2002
6.4
-2.0
-2.0
-1.6
5.0
4.4
4.8
2000
2001
2002
3.6
1.2
1.0
Other financial assets
Investments in affiliated and associated companies
Receivables from investments in affiliated/associated companies
1.7
1.5
0.7
Advances to companies consolidated by the proportional method
18.9
17.1
17.1
Deposits paid
Other financial assets (1)
Total Gross Value
Provisions for impairment
(1)
Net
(1)
2.5
2.4
2.5
19.3
16.3
15.6
46.0
38.5
36.9
-18.2
-14.7
-14.4
27.8
23.8
22.5
‘Other financial assets’ (€ 1.2m net) covers loans to property developers granted by Omnifinance, which fully withdrew from this activity in 1991.
Note 5 - Trade receivables
Related receivables
2000
2001
2002
Receivables
127.6
164.9
142.1
8.4
7.6
8.5
136.0
172.5
150.6
Doubtful accounts
Gross value
Provisions for doubtful accounts
-7.3
-5.6
-7.3
Net
128.7
166.9
143.3
Breakdown of trade receivables by division
2000
2001
2002
Office Properties
5.5
21.8
10.3
Shopping Centres
73.9
78.2
65.1
Convention-Exhibition Centres
24.3
39.6
33.7
Property Services
24.9
26.5
34.1
Other
0.1
0.8
0.1
Total
128.7
166.9
143.3
Doubtful accounts, after deduction of guarantee deposits, are covered by provisions totalling almost 100% of their value before VAT.
Note 6 - Other receivables, accrued income and deferred expenses
Tax receivables
2000
2001
2002
Value-added tax
57.1
57.4
56.7
3.2
2.3
1.9
60.3
59.7
58.6
Other receivables
2000
2001
2002
Receivables from suppliers
11.2
13.4
11.3
Service charges due
59.3
73.6
88.6
-
0.4
19.3
Corporate income tax
Total
Deferred tax assets are detailed alongside deferred tax liabilities (see Note 8).
Receivables on asset disposals
Other debtors
6.1
39.2
Receivables from partners
10.5
13.2
15.2
Gross value
87.1
139.8
134.4
Provisions
-0.4
-0.4
-0.5
Net
86.7
139.4
133.9
58
Accrued income and deferred expenses
2000
2001
2002
Leasing and construction expenses to be amortised
10.6
13.9
13.2 (1)
Other expenses to be amortised
11.9
23.4
43.2 (2)
Conditional instruments purchased
3.9
3.4
2.7
Pre-paid expenses
9.1
12.8
7.7
35.5
53.4
66.8
Total
(1)
(2)
This item mainly includes € 9.9m in amortised leasing fees for Cœur Défense.
Other expenses to be amortised mainly comprise € 29.2m in deferred compensation payments for terminated leases, € 7.6m in rent-free periods and step rents,
and € 6.1m in issue costs and issue premiums for the bond and EMTN.
Note 7 - Marketable securities
The decrease in this item is mainly due to the sale of SICAV (marketable securities) by SAS Tanagra.
6-2. Notes to Consolidated Liabilities
Note 8 - Deferred tax liabilities
2001
Provisions for deferred tax liabilities on first
consolidation differences
Other deferred tax liabilities
- Doria tax consolidation group
- Other
Total deferred tax liabilities
Deferred tax assets on buildings
- Doria tax consolidation group
- Unibail Holding
- Other
Other deferred tax assets
Increase
Changes in
scope of
consolidation
Decrease
Reclassified
2002
-342.9
-
4.4
-62.2
7.3
-393.4
-0.8
-51.4
0.5
12.9
-5.2
-44.0
-
-37.4
-
12.9
-5.2
-29.7
-0.8
-14.0
0.5
-
-
-14.3
-343.7
-51.4
4.9
-49.3
2.1
-437.4
16.2
23.5
-
-
-7.3
32.4
16.2
-
-
-
-16.2
0.0
-
23.5
-
-
-
23.5
-
-
-
-
8.9
8.9
33.3
1.4
-38.6
3.1
5.2
4.4
- Doria tax consolidation group
-5.9
-
-
-
5.9
0.0
- Unibail Holding
38.6
-
-38.6
3.1
-
3.1
0.6
1.4
-
-
-0.7
1.3
49.5
24.9
-38.6
3.1
-2.1
36.8
- Other
Total deferred tax assets
(1)
Deferred tax liabilities mainly comprise:
- Provisions for deferred tax liabilities on first consolidation differences. The main change in the scope of consolidation was the acquisition of the 22% minority
stake in Tanagra.
- Other deferred tax liabilities: the € 51.4m increase breaks down into € 14m in tax loss carry-forwards used by Tanagra and € 37.4m in provisions booked by the
Doria tax consolidation group in 2002 for timing differences. The main change in the scope of consolidation involved a tax saving generated by a capital loss on a
property following a company’s withdrawal from the tax consolidation group. The value of the building has been adjusted accordingly.
(2)
The € 13.7m decrease in deferred tax assets is mainly due to the use of virtually all Unibail’s tax loss carry-forwards (€ 33.5m) following internal restructuring
operations. As a result of these operations, € 23.5m in deferred tax assets was booked against properties.
59
Note 9 - Contingencies and other liabilities
Reversals
2001
Allocations
used
unused
Changes in
scope of
consolidation
Reclassified (4)
2002
Negative goodwill
2.8
-
-
-0.2
-
-
Provisions for liabilities
7.1
1.1
-0.7
-
-
-0.9
6.6 (1)
Provisions for litigations
23.9
10.5
-3.5
-0.6
-
-2.4
27.9 (2)
Other provisions
15.5
2.8
-0.9
-0.3
-
0.6
17.7 (3)
Total
49.3
14.4
-5.1
-1.1
0.0
-2.7
(1)
(2)
(3)
(4)
2.6
54.8
Including a € 4.9m provision for the Cnit hotel.
Including:
- a € 14.8m provision for rent from the Méridien Montparnasse Hotel, corresponding to the difference between the billed rent (€ 9.2m on a yearly basis) and the rent
estimated by experts (€ 7.6m) during the statutory rent-setting procedure initiated when the lease expired in 1995.
- a € 10.5m for provision for the disputed tax adjustments relating to the subsidiaries Cnit, Zephyr and Omnifinance.
Mainly includes (i) the provision for liabilities incurred by the non-consolidated subsidiary, SA Dôme, in La Défense; this provision is equivalent to the subsidiary’s
negative net asset value of € 8.6m and (ii) € 2.1m in provisions for retirement allowances.
Mainly comprises reversals of provisions for litigations, which were originally booked against fixed assets (including a €2.7m reversal of a provision for litigations
resulting from the late delivery of Cœur Défense).
Note 10 - Borrowings and other financial liabilities
Borrowings and other financial liabilities
2000
2001
2002
Bonds and EMTN
397.5
1,727.8
2,912.2
Principal debt
388.1
1,692.2
2,872.8
9.4
35.6
39.4
Borrowings and amounts owed to credit institutions
750.0
731.4
238.9
Principal debt
687.0
697.6
177.0
Accrued interests
4.3
2.4
1.8
Bank overdrafts
58.7
31.4
60.1
Other financial liabilities
1,736.5
966.5
159.7
Interbank market instruments and negotiable instruments
1,611.5
843.3
60.0
Accrued interests
Accrued interests
Partners’ current accounts
Total
16.8
6.5
0.0
108.2
116.7
99.7
2,884.0
3,425.7
3,310.8
In 2002, Unibail launched three issues as part of its EMTN (Euro Medium Term Notes) program: one € 714m private issue and two public issues for
€ 500m and € 300m.
The € 177m in borrowings comprises € 124m in mortgage and similar debt split between four loans, including two floating-rate mortgage loans
covered by caps. These two loans finance the Issy-Guynemer building in Paris 15 and Place du Chancelier Adenauer in Paris 16. They had a
combined outstanding balance of €95m as at year-end 2002.
The € 60m in other financial debts on the balance sheet at year-end 2002 comprises commercial paper (see §5: ‘Highlights and comparability’).
The remaining financial liabilities on the balance sheet comprise short-term advances or loans from external minority partners.
The following table shows a breakdown of the outstanding maturity of these borrowings and financial liabilities:
Less than
3 months
3 to 6
months
6 months
to 1 year
1 year to
5 years
Over
5 years
2002 total
Bonds and EMTNs
354.4
8.0
444.8
1,805.0
300.0
2,912.2
Principal debt
315.0
8.0
444.8
1,805.0
300.0
2,872.8
Outstanding maturity
Accrued interest
39.4
-
-
-
-
39.4
Borrowings and amounts owed to credit institutions
70.4
1.3
6.4
58.7
102.1
238.9
Principal debt
8.5
1.3
6.4
58.7
102.1
177.0
Accrued interest
1.8
-
-
-
-
1.8
Bank overdrafts
60.1
-
-
-
-
60.1
Other financial liabilities
60.0
-
99.7
-
-
159.7
Interbank market instruments and negotiable instruments
60.0
-
-
-
-
60.0
-
-
99.7
-
-
99.7
484.8
9.3
550.9
1,863.7
402.1
3,310.8
Accrued interest
Partners’ current accounts
60
Financial instruments
Unibail is exposed to interest rate fluctuations on its variable loans, which fund its investment policy and secure the cash position required. The
company's primary strategy as regards interest rate risk is to enter into derivative transactions to minimize the variability that changes in rates could
have on earnings and cash flows and minimize the overall cost of financing. In order to implement this strategy, Unibail borrows at variable rate and
uses derivatives (mainly caps and swaps) to hedge its interest rate exposure.
The Group does not enter into any derivative contracts other than those designated as hedges. Transactions are managed centrally by the Group itself.
Market value of financial transactions
The following main methods and assumptions are used to value Unibail’s financial instruments:
•
Variable rate debt is valued as the sum of the nominal amount and coupon payments (book value).
•
Fixed-rate debt is valued based on two alternative methods:
- the market price as at year-end 2002 (in the case of listed instruments),
- discounted future income flows based on a given yield curve at year-end 2002 (swap yield curve, augmented by a margin representing
Unibail’s credit risk).
•
Derivatives are valued by discounted estimated future cash flows based on the interest rate curve at year-end 2002.
The following table shows the discrepancies between the market values and book values of the different financial instruments:
December 31, 2000
Fair value of financial instruments
Long-term debt
- Convertible bonds
- Fixed-rate borrowings, interbank and negotiable
market instruments
Off balance-sheet financial instruments
Swaps
December 31, 2001
December 31, 2002
Carrying value
Fair value
Carrying value
Fair value
Carrying value
Fair value
-
-
-
-
-
-
-688.6
-708.6
-1,085.9
-1,079.2
-1,182.7
-1,214.7
-
-7.0
-
-1.9
-1.1
-64.9
Caps
12.0
15.1
7.4
-2.3
5.2
1.5
Total
-676.6
-700.5
-1,078.5
-1,083.4
-1,178.6
-1,278.0
Interest rate risks
Outstanding total as at
December 31, 2002
Financial liabilities
Financial assets
Net financial liabilities before hedging
Micro-hedging
Net financial liabilities after micro-hedging
Macro-hedging
- Swaps
- Caps/Floors
Hedged variable-rate debt
Fixed rate
1,194.8
17.4
1,177.4
-308
869.4
Variable rate
2,074.9
1,142
1,176
3,187.4
-1,142
-1,176
64.9
2,074.9
308
2,382.9
At year-end 2002, Unibail’s net debt amounted to € 3,152m, after taking into account € 18m in surplus cash (excluding partners’ current accounts).
Around € 2,283m (72%) of this debt comprised variable-rate borrowings, or fixed-rate borrowings immediately converted into variable-rate debt. This
latter amount was fully covered by swaps and caps with an average maturity of 2.1 years.
To take advantage of the significant drop in interest rates since June 2002, Unibail adjusted its floating-rate position and carried out various hedging
transactions. During the second half of 2002, the Group implemented € 1,450m (net) in fixed-to-floating interest rate swaps effective from January 1,
2003 to December 31, 2006.
Counter-party risks
Because it uses derivatives to minimize its interest rate risk, the Group is exposed to potential counter-party defaults, which could increase its
earnings sensitivity to an upturn in interest rates. To reduce its counter-party risk, Unibail only relies on major international banks for its hedging
operations.
Foreign exchange risks: none.
61
Note 11 - Other liabilities, accrued expenses and deferred income
Tax and social security liabilities
2000
2001
2002
Social security liabilities
15.6
15.1
14.8
Value-added tax
29.6
29.4
33.1
1.8
5.6
21.9
47.0
50.1
69.8
Other tax liabilities
Total
Other tax liabilities mainly comprise corporate income tax. This figure has increased compared to last year as the Doria tax consolidation group has
become eligible for corporate income tax payment.
Payables on fixed assets
On February 19, 2002, Unibail acquired the stakes held by the two minority shareholders of Tanagra, the property development company that owns
Cœur Défense. In exchange for this 22% equity interest in Tanagra, the Group tendered 2,039,820 Unibail shares and agreed to make a potential cash
payment in August 2005. The potential cash payment has been estimated at € 18.9m and booked in the purchase cost of the shares, with a
corresponding liability booked as payables on fixed assets (see §5: ‘Highlights and comparability’).
In addition, the further co-ownership interests acquired in the Rosny 2 shopping centre during the fourth quarter of 2002 involved deferred payments.
The acquisition debt for this asset amounted to € 12.7m as at December 31, 2002.
Guarantee deposits
This item shows guarantee deposits paid by tenants and, to a lesser extent, payments from finance leasing activities. The increase in this item in 2002
mainly stems from the guarantee deposits received from tenants of the Carré Sénart and Les Quatre Temps shopping centres.
Sundry creditors:
2000
2001
2002
Due to customers
56.0
31.8
65.0
Due to partners
2.1
6.1
7.4
Other creditors
12.6
17.7
24.0
Total
46.5
88.8
87.4
Accrued expenses and deferred income:
2000
2001
2002
Deferred income
97.8
112.8
82.7
Premium on off-balance sheet items
Total
1.9
99.7
1.4
114.2
5.2
87.9
2001 deferred income mainly included sales off-plan (VEFA) for the Carré Sénart shopping centre, which was under construction. Since the
completion of this shopping centre during the third quarter of 2002, deferred income as at December 31, 2002 now chiefly comprises: rents and
support services invoiced in advance for certain exhibitions due to be held at Porte de Versailles in 2003; and the amortised gain from the Matif
market following the release of the interest rate risk hedge implemented for the June 1999 bond issue (this gain is spread over the term of the loan),
together with expenses payable on swaps.
6-3. Off-balance sheet items
1) Financial instruments - hedging transactions
Commitments with respect to financial interest rate and currency futures are recorded as follows:
- For firm transactions, amounts are stated at the par value of the contracts,
- For option contracts, amounts are stated at the par value of the underlying instrument.
Firm transactions
2000
2001
2002
Interest rate and currency swaps
1,193.5
3,069.3
3,898.3
Total
1,193.5
3,069.3
3,898.3
2000
2001
2002
1,390.2
1,715.6
1,540.2
114.3
464.4
364.3
1,504.5
2,180.0
1,904.5
Option contracts
On private contracts
- Caps and floors purchased
- Caps and floors sold
Total
62
Impact on consolidated statements at year-end 2002
Notional principal
Type of instrument used
Less than 1 year
Realised
Accrued
1 to 10 years
Income
Expenses
Income
Expenses
Interest rate swaps
838.9
3,059.4
14.0
25.3
4.8
8.5
- Caps and floors purchased
356.7
1,183.4
0.8
4.6
0.0
0.1
- Caps and floors sold
-
364.3
-
-
-
-
BOBL
-
-
1.0
-
-
-
2) Other commitments received and given
Commitments received
2000
2001
2002
Refinancing agreements obtained but not used (1)
721.5
712.8
569.5
-
-
45.0
10.8
62.4
65.5
Guarantees received in respect of Hoguet Regulation
Guarantees received from tenants
Other guarantees received
(2)
Total
Commitments given
Mortgages
287.1
332.5
299.6
1,019.4
1,107.7
979.6
2000
2001
2002
24.7
24.7
24.7
Guarantees and other securities given
254.7
310.3
181.6
Total
279.4
335.0
206.3
(1)
(2)
Usually accompanied by a requirement to meet specific target ratios based on revalued shareholders’ equity and debt
Mainly representations and warranties for acquisitions of office buildings and shopping centres.
- As at December 31, 2002, one asset was covered by a € 36.2m ‘sales undertaking’.
- In addition, Unibail has given an earn-out commitment in the event that an extension permit is obtained for the Chelles 2 shopping centre during the
next ten years. The maximum amount of this payment is € 91.47 per square meter of contractual GLA (gross lettable area), tied to the ICC
construction cost index.
- After acquiring a 50% stake in ‘Société d'Exploitation du Palais des Sports’, Unibail Holding obtained a ‘sales undertaking’ from the vendor
covering the remaining 50% interest.
- In exchange for the 22% minority stake in Tanagra (the company that owns Cœur Défense), Unibail Holding tendered 2,039,820 of its own treasury
shares. Unibail Holding has the option to buy back these shares, which would remove its obligation to make a potential cash payment (see §5:
‘Highlights and comparability’).
- 1,711 shares in the parent company, Unibail Holding, have been pledged by third parties.
6-4. Notes to the Consolidated Income Statements (standard presentation and breakdown by division)
Note 12 - Revenues
The Group’s revenues are generated by the following activities:
Rental income from Unibail’s property assets, which are divided into three business segments:
•
Office properties, including various business premises (e.g. warehouses and workshops) as well as retail units established at the foot of an
office building or apartments attached to office blocks.
•
Shopping centres, including the ‘Le Printemps de l’Homme’ building (formerly ‘Brummell’), the Carrousel du Louvre shopping centre
(other than the convention–exhibition spaces), and the Cnit’s retail space.
•
Convention-Exhibition centres, including the Méridien Montparnasse hotel, with its conference centre and parking facilities, as well as the
Cnit hotel.
These revenues consist of the rental and similar income (e.g. occupancy compensation and parking revenues) invoiced for office properties and
shopping centres during the financial year. The effects of rent-free periods and step rents are spread over the fixed term of the lease (see Accounting
Principles §2-5).
Rental income from the Convention-Exhibition Division includes turnover generated by the rental of exhibition space and the provision of
compulsory support services.
Charges invoiced to tenants are not included in rental income but deducted from property-related expenses.
Revenues from property services, which cover:
•
Fees for optional services invoiced by companies in the Convention-Exhibition Division. The Parc des Expositions in Porte de Versailles
and the Cnit make the largest contribution to this activity.
•
Fees for property management and maintenance services provided to offices and shopping centres. These fees are invoiced by: i) Espace
Expansion for its property management activities on behalf of owners; ii) S2B for technical building management services; and iii) Arc
108 for project development and consulting services. The internal margins generated on these construction and renovation operations,
whose costs are capitalised in the Group’s individual company accounts, are eliminated.
•
Revenues from other property services, mainly invoiced by U2M.
63
Finance leasing and other revenues, which consist of:
•
Principally, revenues from finance leasing activities, which comprise lease payments, net of related amortisation and refinancing costs.
•
To a lesser extent, net interest charged to companies consolidated by the proportional method.
Note 13 - Other operating revenues
Other operating revenues chiefly comprise key money and major works expenses capitalised and charged to tenants as part of Unibail’s property
investment activities.
Note 14 - Personnel costs
Personnel costs
2000
2001
Head office personnel costs
11.1
14.9
16.0
Unibail Management (1)
Unibail Holding
Other
11.1
-
12.7
1.9
0.3
13.7
2.3
-
20.1
18.7
20.6
Espace Expansion and Patrimoine & Gestion
Services to Buildings & Businesses (S2B) (1)
Arc 108
Unibail Marketing Multimedia (U2M) (1)
Sovalec
Personnel costs for Convention-Exhibition centres
17.7
0.2
1.8
0.1
0.3
18.7
13.3
2.7
1.4
1.0
0.3
18.6
14.1
4.1
1.6
0.7
0.1
15.3
CNIT (and subsidiaries) (3)
Paris Expo
Carrousel du Louvre
Espace Champerret
Other
Total
13.9
4.2
0.3
0.1
0.2
49.9
13.2
4.6
0.3
0.1
0.4
52.2
7.4
6.8
0.6
0.3
0.2
51.9
Personnel costs for property services activities
(2)
(1)
(2)
(3)
2002
Companies founded at end-2000
Patrimoine & Gestion merged into Espace Expansion at end-2000
Disposal of Honoré James and termination of Dôme Imax activities in 2001
Note 15 - Other operating expenses
Operating expenses include:
•
•
•
Expenses related to properties, shown net of costs charged to tenants, which correspond to expenses incurred by the owner, either because
such expenses cannot be charged to tenants due to the nature of such expenses or because the properties are vacant. In addition to property
operating costs, these items include letting fees, costs of legal proceedings, compensation paid for eviction, and ground rents
corresponding to land lease payments for properties built on leasehold sites or operated under a concession. This item mainly applies to
shopping centres, such as Forum des Halles, Euralille and Cité Europe, as well as Paris Expo-Porte de Versailles, to which the City of
Paris has granted a concession to operate the ‘Parc des Expositions’ exhibition centre at Porte de Versailles.
Expenses and general overheads incurred by service companies.
Corporate expenses.
Note 16 - Depreciation
This heading comprises depreciation of buildings and fittings according to the principles defined by the Group’s accounting rules (see § 2-2), the
effect of amortising deferred costs and the depreciation of first consolidation differences on properties built on leasehold sites or operated under a
concession (see § 1-4).
Depreciation by division
2000
2001
2002
- Office Properties
- Shopping Centres
- Convention-Exhibition Centres
- Property Services
Sub-total (1)
- Operating resources for central support functions
Total
40.2
30.4
27.0
3.2
100.8
2.6
103.4
54.4
32.6
23.1
3.3
113.4
2.1
115.5
63.2
39.4
23.6
3.4
129.6
2.4
132.0
(1)
64
Corresponds to total depreciation charges shown in the income statement by division, while depreciation charges for operating resources used by the central support
functions have been classified under corporate expenses.
Note 17 - Net provisions
The positive figures for 2000 and 2001 are mainly due to reversals of provisions for doubtful accounts booked by Omnifinance in connection with its
residual loans to property developers, with a net outstanding amount of € 1.2m as at December 31, 2002.
Note 18 - Net financial expenses
Net financial expenses breaks down as follows:
Financial income
Securities transactions
Banking fees
Other financial interests
Interest income on caps and swaps
Total financial income
Financial expenses
Interest on Certificates of Deposit and ‘BMTNs’ (medium-term
negotiable debt instruments)
Interest on bonds
Interest and expenses on loans
Interest on partners’ advances
Other financial expenses
Banking fees
Interest expenses on caps and swaps
Total financial expenses
Refinancing cost of finance leasing
Financial expenses capitalised (1)
Net financial expenses(2)
(1)
(2)
2000
2001
2002
1.8
0.9
1.1
20.4
24.2
2.0
1.6
0.4
26.2
30.2
1.7
1.1
0.9
19.5
23.2
-56.9
-24.7
-41.3
-4.4
-1.2
-0.9
-20.6
-150.0
-42.1
-65.4
-43.9
-6.2
-0.8
-0.4
-28.1
-186.9
-12.0
-97.4
-21.6
-4.7
-0.1
-0.4
-38.5
-174.7
9.9
27.5
-88.3
8.5
20.7
-127.5
4.6
18.4
-128.5
The financial expenses capitalised in 2002 mainly stem from the 3M project (€ 9.4m), Cité du Retiro (€ 3.5m) and Carré Sénart (€ 2.7m).
The € 0.6m difference (in 2002) compared with the income statement by division is due to the sale of non-consolidated equity stakes, classified as "Miscellaneous".
Note 19 - Net capital gains/losses on sales of properties
This income consists of the balance of the capital gains or losses on sales of properties in a given financial year, adjusted for reversals of provisions
and amortised expenses.
2000
2001
2002
Total selling
price
Capital gains or
losses
Total selling
price
Capital gains or
losses
Total selling
price
Capital gains or
losses
. Office Properties
237.1
58.4
62.2
23.0
239.1
100.2
. Shopping Centres
0.6
0.5
-
-
50.2
1.7
-
-
3.1
2.6
-
-
237.7
58.9
65.3
25.6
289.3
101.9
Sales
. Convention-Exhibition Centres
Net capital gains/losses
Note 20 - Provisions for impairment of value of properties
The provisioning rule for impairment in asset value is described in §2-2. As these provisions aim to cover a potential loss on the sale of a property,
any net allocation or reversal of these provisions are shown alongside ‘Net capital gains/losses on sales of properties’, below the recurring profit line.
In 2002, adjustments to provisions resulted in a net allocation of € 0.4m.
Note 21 - Corporate income tax
Current income tax
Deferred income tax
Total income tax
2000
2001
2002
-5.9
-19.9
-25.8
-7.0
-23.9
-30.9
-25.2
-65.6
-90.8
65
•
•
Income tax due in 2000 and 2001 related to subsidiaries that were not part of the tax consolidation group (Paris Expo and Nice Etoile) and, to a
lesser extent, fixed annual tax charges. The 2002 figure includes the amount of income tax due from the Doria tax consolidation group, which has
fully utilised its tax loss carry-forwards.
Deferred taxes are determined according to the rules in § 3-2.
Due to the difficulty in establishing a reliable schedule for the use of Unibail’s tax credits and liabilities, they have not been discounted.
The tax charge booked can also be broken down as follows:
Tax charge booked
Taxable basis
Tax
Effective rate
101.9
35.4%
32.8%
36.0%
Net capital gains on sales of properties and exceptional items
Exceptional charges (provisions for tax adjustments)
Recurring profit
150.2
-36.1
-5.4
-49.3
Total
252.1
-90.8
Tax calculation: The following table shows the reconciliation of income tax computed at the domestic statutory rates (36.43% in 2001 and 35.43%
in 2002) to income tax expense (20.3% in 2001 and 36.0% in 2002):
2001
2002
Reported pre-tax profit
152.3
252.1
Income tax computed at the domestic statutory rates (36.43% in 2001 and 35.43% in 2002)
-55.5
-89.3
Use of tax-loss carry forwards not valued on the balance sheet
17
-
Impact of changes in statutory tax rate on the valuation of Unibail’s parent company tax loss carry forwards
Use of Tanagra tax loss carry-forwards following the self delivery of Coeur Défense on November 20, 2002
0.7
-
-2.0
-
-1.9
Difference between effective tax charge and proforma tax charge:
Share of expenses on dividends received by Unibail SA
Tax-exempt finance leasing income
2.4
2.2
-1.4
-1.4
Reversal of negative goodwill
0.1
0.1
Timing differences not covered by a deferred tax charge
2.5
Goodwill amortisation
Effect of tax transparent fully consolidated companies (1)
Provisions for tax adjustments
Other
Effective tax charge
Effective tax rate
(1)
4.2
5.1
-2.6
1.7
-5.4
1.8
30.9
90.8
20.3%
36.0%
The tax expense of tax transparent companies is incurred directly by the partners according to their share in the company.
Note 22 - Goodwill on acquisitions
Gross value
Cumulative amortisation
charges at beginning of year
Amortisation charges
in 2002
Doria (Espace Expansion)
18.6
-6.5
-0.9
11.2
Paris Expo (1)
58.3
-4.2
-2.3
51.8
Goodwill on acquisitions
Net balance sheet value
at year-end 2002
Other
2.2
-0.6
-0.9
0.7
Total
79.1
-11.3
-4.1
63.7
(1)
Following the Public Buyout Offer for the shares in Paris Expo - Porte de Versailles (see §5: ‘Highlights and comparability’), the gross value of goodwill on
acquisitions has been adjusted.
Note 23 - Minority interests
As at December 31, 2002, minority interests mainly comprised the share of profits from the two shopping centres Les Quatre Temps (€ 9.3m) and
Forum des Halles (€ 3.3m).
66
Note 24 - Diluted profit per share (Group share)
Diluted net profit per share (Group share) is calculated according to the ‘share buy-back’ method (in accordance with Notice No.27 of the OEC and
IAS 33 standards). Based on this method, it is assumed that the funds raised from the exercise of warrants or options will initially be used to buy back
the company’s shares at market price. This market price corresponds to Unibail’s average monthly share price, weighted according to its traded
volumes. The theoretical number of shares that the company could purchase at the market price is deducted from the total number of shares resulting
from the exercise of the shares and warrants. This figure is added to the average number of shares outstanding and used as the denominator.
2000
2001
2002
92.3
108.0
145.7
45,081,345
45,877,069
46,512,882
Warrants
153,822
294,647
244,242
Share option
316,986
691,496
547,912
Numerator
Net income, Group share (€ million)
Denominator
Weighted average number of shares before dilution
Impact of dilutive securities
Total potential dilutive impact
470,808
986 143
792,154
Weighted average number of shares after dilution
45,552,153
46,863,212
47,305,036
Net income per share before dilution (Group share, in €)
2.05
2.35
3.13
Fully diluted net profit per share (Group share, in €)
2.03
2.30
3.08
(1)
Dilutive impact of share option schemes, as described in the section ‘Changes in capital – Share options’.
Note 25 - Income statement by division: EBITDA by division
An income statement by division has been provided to allow a more direct interpretation of the Group’s key performance indicators. The following
table shows the reconciliation of operating income with the EBITDA figure in this income statement by division.
To ensure that this income statement is meaningful from a business viewpoint, only inter-company transactions within the same business division
have been eliminated.
Reconciliation between operating income and EBITDA figure shown in
the income statement by division
2000
2001
2002
EBITDA (income statement by division)
286.3
370.6
413.3
-100.8
-113.4
-129.6
0.1
0.3
-0.5
185.6
257.5
283.2
Depreciation (excluding depreciation charges for operating resources used by central support
functions)
Other
Operating income
Property investment
• Rental income (see Note 12).
• In addition to the items described above (see Note 15), operating expenses include key money (which is offset against compensation paid for
eviction in accordance with the rule described in 3-6) and the net allowance to provisions for contingencies and other liabilities.
• Property management expenses correspond to the rental management fees invoiced by Espace Expansion and the technical management fees
invoiced by S2B (excluding fees not payable by the owner).
• Net costs of doubtful accounts consist of the net allowance to provisions and receivables written off as losses.
• Asset management expenses represent the Group’s operating expenses linked to its value enhancement projects. The expenses are allocated to
the Group’s business segments.
Property services (see Note 12)
As mentioned above, the amounts charged by Unibail’s property service companies to its property investment divisions are shown as fees under the
‘Property services’ heading, with the corresponding costs stated under ‘Property investment’.
Finance leasing and other
• Net lease payments and net income from other loans (see Note 12).
•
Net operating expenses cover management fees corresponding to Unibail’s share of operating expenses, allocated to each division, as well as
non-recurring income (compensation) and charges, and net provisions for doubtful accounts. Capital gains or losses on sales of properties
consist of the balance of the capital gains or losses on the early exercise of purchase options, after amortisation of the ‘réserve latente’
(difference between operating lease and financial lease).
General expenses and other
Corporate expenses include Group operating expenses, except for those allocated directly to the management of the assets in the three property
divisions, the costs borne directly by the services companies, and the costs allocated to the management of the finance leasing portfolio.
These expenses mainly include personnel costs and head office overheads.
Comments on the detailed breakdown of the income statement by division are provided in the ‘Business Review’ section.
67
(1)
7-
Other information
Events since the year-end: None
Disputes arising from tax inspections
Unibail has been notified of various tax adjustments, arising from two tax inspections. The Group is disputing these adjustments:
A € 2.6m provision was recorded against a tax adjustment due in respect of the Omnifinance subsidiary. The Group has launched an
appeal against this tax demand as its advisors have confirmed that the tax authorities’ position is highly questionable.
Two notifications have been issued to the companies Zéphyr and Doria, challenging the foundation of a € 183m tax loss. The Group’s
advisors agreed unanimously that this claim is totally unfounded. As a result, this factor has had no impact on these subsidiaries’ accounts.
Other exceptional events or litigation
In 1995, a statutory rent-setting procedure was initiated for the renewal of this hotel’s lease. In its ruling of May 7, 2002, the French Supreme Court
(la Cour de Cassation) rejected Unibail's appeal. However, the Court upheld the ‘Théâtre Saint-Georges’ precedent, whereby a variable rate lease is
exempted from all regulations and the new rent may not be set by the judge, who can merely acknowledge whether there is agreement or
disagreement regarding this new rent. Pending the outcome of ongoing negotiations, Unibail has adopted a very conservative approach, as in previous
years, by recording the rent estimated by legal experts (€ 7.6m per annum).
Following the take-over merger of Cnit SA (Unibail subsidiary), Accor, a former minority shareholder of Cnit SA disputed the terms of the merger.
After having its case dismissed by the judge in emergency interim proceedings, Accor decided to take the case further and demanded € 22.9m in
damages and interest from Unibail. Given the precautions taken by the company to set the merger parities (e.g. valuation by an external company and
fairness opinion by an independent third party) and in view of the precedents in this area, the Group believes that Accor’s demands are likely to be
rejected. As a result, Unibail has not made any provisions for liabilities.
The buyer of a property sold in 2002 has initiated proceedings to cancel the sale, claiming that it was inadequately informed about the defects in the
building’s technical facilities. Considering the exhaustive documentation provided in the data room, this case is unlikely to proceed further.
To the company’s knowledge, there are no other exceptional events, disputes or litigation that have recently had, or could potentially have, a
significant effect on the Group’s financial position, results, business and assets.
Average number of staff in Unibail’s companies (full-time equivalent)
- Unibail
2000
2001
2002
115
3
2
-
157
166
-
10
9
-
37
54
246
206
207
29
-
-
- Arc 108
14
10
10
- Other
14
11
7
Total
418
434
455
- Unibail Management (1)
- Unibail Marketing & Multimedia (U2M) (1)
- Services to Buildings & Businesses (S2B)
(1)
- Espace Expansion
- Patrimoine & Gestion
(1)
(2)
Companies founded at end-2000
Convention-Exhibition Centres (1)
(2)
Merged into Espace Expansion at end-2000
2000
2001
2002
- Paris Expo
172
171
181
- CNIT (and subsidiaries) (2) (3)
323
270
135
18
13
11
-
-
2
513
454
329
- Carrousel du Louvre
- Espace Champerret
Total
(1)
(2)
(3)
Excluding part-time and temporary staff
Honoré James sold and Dôme Imax activities terminated in 2001; catering activities transferred under lease-management agreement.
Including 21 Proximages employees in 2002.
Employee profit sharing
The employees belonging to the 'Business and Labor Union' (UES – Unité Economique et Sociale), which includes Unibail, Unibail Management,
Espace Expansion, Espace Création, Arc 108, S2B and U2M, benefit from an employee profit-sharing plan and a profit-sharing agreement. The profitsharing agreement is mainly based on annual growth in pre-tax recurring cash flow per share.
The employees belonging to the Convention-Exhibition Centres receive one part of a legal employee profit-sharing plan and Cnit employees also
benefit from a profit-sharing agreement based on operating income growth.
68
The following amounts were allocated to these schemes:
(€ million)
Regulated employee profit-sharing plan
Employee profit-sharing agreement
1999
0.9
1.1
2000
0.7
1.1
2001
1.6
1.0
2002
1.4
0.7
Remuneration of the Board of Directors and Management
Attendance fees paid to the members of the Board of Directors in 2002 totalled € 0.19m.
The total amount of remuneration paid in 2002 to the responsible officers of the parent company came up to € 0.98m.
Loans or guarantees granted to directors: none.
Transactions involving directors: none
Stock-options
The General Meeting of January 24, 1995 authorised the Board of Directors to grant, on one or more occasions over a period of 5 years, options to
subscribe for new Unibail shares under the conditions stipulated in Articles 208-1 to 208-8-2 of the July 24, 1966 Company Act within the limit of
4% of the share capital, for the benefit of such persons as it may designate among the senior executives and members of staff of Unibail and affiliated
companies within the meaning of Article 208-4 of the aforementioned law. This scheme was fully subscribed. Subsequently, as part of a new fiveyear scheme, the General Meeting of May 12, 2000 authorised the Board of Director to grant options to subscribe for or purchase Unibail shares
within the limit of 2.5% of the fully diluted share capital. Three rounds of options were granted in 2000, 2001 and 2002.
Board Meeting
March 28, 1995
Number of options
granted(3)
315,000
Subscription price
€ 22.40 (1)
105,000
March 27, 1996
172,500
306,000
€ 25.46 (1)
327,000
€ 26.20 (1)
109,500
€ 32.00 (1)
502,500
€ 36.30 (1)
317,000
€ 52.72 (2)
394,000
136,000
(1)
(2)
(3)
(4)
(5)
€ 22.78
55,677
from March 19, 2002
€ 23.41
231,051
from March 18, 2003
€ 29.46
304,887
from March 9, 2004
€ 34.76
92,568
from November 21, 2002
€ 51.94
443,583
€ 53.44
302,000
€ 59.33
394,000
to November 20, 2008
€ 53.44 (2)
0
October 9, 2002
from March 27, 2001
to March 08, 2007
75,000
October 9, 2001
28,091
to March 17, 2006
0
November 21, 2000
€ 20.05
to March 18, 2005
48,000
March 9, 1999
Potential number of
shares (5)
to March 26, 2004
114,000
March 18, 1998
from March 28, 2000
Adjusted
subscription price(4)
to March 27, 2003
48,000
March 19, 1997
Exercise period
from October 9, 2003
to October 8, 2009
€ 59.33 (2)
from October 9, 2004
to October 8, 2010
95% of the average opening price over the 20 trading days preceding the Board’s decision to grant the options.
Average opening price over the 20 trading days preceding the Board’s decision to grant the options.
Includes options granted to responsible officers (figures in italics)
Adjustment made following dividend payments drawn from the share and merger premium accounts
After adjustments and cancellations following the departure of various employees, and options already exercised
69
STATUTORY AUDITORS’ REPORT
ON THE CONSOLIDATED FINANCIAL STATEMENTS
In our capacity as statutory auditors, appointed by your General Meeting, we present below our report on the accompanying consolidated accounts of
Unibail as of December 31, 2002.
These consolidated accounts have been prepared by the Board of Directors. Our responsibility is to express an opinion on these accounts based on our
audit.
We conducted our audit in accordance with French professional standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated accounts are free from material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in these accounts. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall account presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated accounts present fairly the financial position of the Group as of December 31, 2002 and the results of the Group's
operations included in the consolidation for the year then ended, in accordance with French accounting principles.
Without qualifying our opinion, we draw attention to Note 1.1 to the consolidated accounts which refers to the changes in the terms of reference
following the withdrawal of Unibail 's finance company 's status and to Note 2.6 which refers to the application of CRC Regulation 2000-06 relating
to liabilities.
We have also reviewed the information contained in the Directors' report in accordance with French professional standards.
We have nothing to report with respect to the fairness of this information and its consistency with the consolidated accounts.
March 10, 2003.
The Statutory Auditors
70
EURAAUDIT FIDEURAF
Ernst &Young Audit
Yves Blaise
Christian Mouillon
LEGAL INFORMATION
General information
Company name
UNIBAIL HOLDING 1 - ABBREVIATED TO "UNIBAIL"
Registered office and place of business:
5, boulevard Malesherbes - 75008 Paris
Tel: 33 (0)1.53.43.74.37
Legal form and specific applicable legislation
Unibail is a joint stock company (‘société anonyme’) governed by French legislation applicable to commercial companies, in particular, the French
Commercial Code ("Code de commerce") and Decree no. 67-236 dated March 23, 1967. Until November 28, 2002 the Company was also governed by
the French Monetary and Financial Code ("Code monétaire et financier") as a result of its ‘finance company’ status.
Prior to this date, and up to July 1, 1991, the Company was approved as a Sicomi (commercial and industrial property finance leasing company). The
finance leasing agreements signed by Unibail prior to January 1, 1991 remain governed by the Sicomi regulations.
At the request of the Company, which had not signed any finance leasing contracts since 1991, the CECEI - Comité des Etablissements de Crédit et
des Entreprises d'Investissements (Credit Institutions and Investment Companies Committee), at its meeting dated November 28, 2000, approved the
withdrawal of Unibail's status as a finance company, with effect from November 28, 2002.
Term of the company: 99 years from July 23, 1968.
Corporate object: In accordance with article 2 of the Articles of Association, the corporate object of the Company in France and abroad, is:
the acquisition, management, letting, leasing, sale and exchange of all types of land, buildings, real property and real property rights, the
development of all types of land, the construction of all buildings and the fitting out of all property complexes; whether directly, or through the
acquisition of investments or interests, or by creating any investment or commercial company or economic interest grouping;
and generally, all financial, commercial, industrial, personal or real property transactions related directly or indirectly to the corporate object or
of such a nature as to promote its development;
the acquisition of any interest in all types of legal entities whether French or foreign.
Commercial and Companies Registry
682 024 096 RCS Paris - SIRET 682 024 096 00047
APE: 702 C
Place where documents and information relating to the Company may be consulted
At the registered office: 5, boulevard Malesherbes - 75008 Paris
Tel: 33 (0) 1.53.43.74.37
Financial year
The financial year runs from January 1 to December 31.
Distribution of profits pursuant to the Articles of Association
The distributable profit consists of the profits of the financial year, less the previous losses and the sums retained as reserves in accordance with the
law, and increased by any profits carried forward. In addition to the allocation of the Company's distributable profits, the General Meeting may decide
to distribute the sums deducted from available reserves, by indicating expressly upon which reserves the deduction have been made. The dividends
must however be drawn first upon the distributable profit of the financial year.
The distributable sums consist of the total amount of the distributable profit and of the reserves that the General Meeting decided to allocate.
After approving the financial statements and ascertaining the existence of distributable sums, the General Meeting determines the amount to be
allocated to shareholders in the form of a dividend.
However – under the regulations applicable to Sicomi companies – the net income, calculated in the same manner as corporate income tax, resulting
from finance leasing contracts and standard lease agreements, and benefiting from tax exemption pursuant to article 208-3 quater of the French Tax
Code ("Code général des impôts"), shall be distributed in an amount at least equal to 85% of this amount, provided it does not exceed the net income
of the fiscal year.
1
On November 29, 2002, the Company was required to change its corporate name following the withdrawal of its ‘finance company’ status. However, the Company is still entitled to use its
abbreviated name ‘UNIBAIL’ for listing purposes on the Premier Marché of the Paris Stock Exchange.
71
Administrative and management bodies
In accordance with the provisions of law no. 2001-420 dated May 15, 2001, relating to the New Economic Regulations in France, the General
Meeting of the shareholders held on April 10, 2002 agreed to bring its Articles of Association in line with this legislation, in particular by providing
the powers granted respectively to the Board of Directors and to the Chairman of the Board of Directors, as well as the terms governing the general
management of the Company. Following the decision of the Board of Directors dated April 10, 2002, the Chairman of the Board is responsible for the
general management of the Company.
General Meetings of Shareholders
The General Meetings of the shareholders are called and deliberate in accordance with the conditions provided by law. Any shareholder who has held
Unibail shares for at least five days prior to the meeting can participate, personally or through a proxy. The Board may reduce or abolish this time
limit of five days provided that the same rule is applied to all shareholders.
At the meeting dated February 6, 2002, the Board decided to reduce from five to three days the time limit for the suspension of dealings in securities
for the purpose of taking part in the General Meetings, in accordance with article 18 of the Articles of Association.
A single voting right is attached to each share. There are no shares with double voting rights.
Declaration of ownership thresholds pursuant to the Articles of Association
Every shareholder who becomes the owner of a number of shares equal to or greater than 2% of the total number of shares, or equal to a multiple of
this percentage, is bound within 15 days of the date upon which any of these shareholding thresholds is passed, to inform the Company of the total
number of shares he owns, by registered letter with acknowledgment of receipt requested, addressed to the registered office (refer to article 9 bis of the
Articles of Association).
Should the shareholder fail to notify the Company in accordance with the conditions set out above, all shares in excess of the above thresholds shall
forfeit their voting rights in any Shareholders' Meeting during a period of two years following the date of rectification of the notification, if the failure
has been recorded and if one or more shareholders holding at least 2% of the share capital so request, in accordance with the conditions provided by
law.
General information about the share capital
Conditions imposed by the Articles of Association in respect of alterations to the share capital and to the respective rights attached to the
various categories of shares: None.
Authorised share capital - Form of shares
The share capital as at February 5, 2003, amounted to € 235,408,700 divided into 47,081,740 fully paid-up shares with a nominal value of € 5 each.
At the shareholder's discretion, the shares are either registered or bearer shares.
Authorisations to increase the share capital
The following authorisations were granted to the Board of Directors, by virtue of various resolutions approved by the Extraordinary General Meetings
of Shareholders:
- Authorisation to increase the share capital by issuing any type of security carrying preferential subscription rights and giving immediate or
future access to a portion of the share capital, and/or by incorporating reserves, earnings or premiums
Authorisation
Maximum amount of the capital
increase
Date of authorisation
Duration
Marketable securities with preferential
subscription rights
up to an amount of € 500m
€ 76.22m
Combined General Meeting
dated May 12, 2000(1)
26 months
(1) Under this authorisation, the maximum increase in the nominal authorised share capital is € 76.22m, and the maximum increase in indebtedness is € 500m. This
authorisation is now null and void, without having ever been used.
- Share subscription and/or purchase option plans and Company Savings Plan
The General Meeting held on May 12, 2000 authorised the Board of Directors to:
1. grant options, carrying a right of subscription or a right to purchase, to the managers and employees, on one or more occasions during a five-year
period, up to a limit of 2.5% of the fully diluted share capital;
2. carry out increases in the share capital reserved for employees, on one or more occasions during a five-year period, up to a limit of 1% of the fully
diluted share capital.
72
Other securities giving access to a portion of the share capital
- Options to subscribe for shares
In accordance with the authorisation granted by the Extraordinary General Meeting held on January 24, 1995 (Plan No.1), the Board of Directors
granted the Group’s managers and employees options to subscribe for shares, up to a limit of 4% of the share capital. The options to subscribe for
shares have a duration of 8 years and can be exercised at any time, on one or more occasions, with effect from the 5th anniversary of the date of their
allocation by the Board of Directors. Under this plan and as at December 30, 2000, 410,000 options had been allocated (1,230,000 after the impact of
the three-for-one share split in June 2001), i.e.: 2.53% of the authorised share capital. Following the distribution of reserves, the exercise ratio for
these options has been adjusted as follows: 1.1016 for the 1995, 1996 and 1997 tranches, 1.071 for the 1998 tranche and 1.030 for the 1999 tranche.
As at December 31, 2002, under the above-mentioned plan, 557,671 new shares were issued as a result of the exercise of these options. The number of
new potential shares that may be issued now amounts to 712,274 following the cancellation of options due to the departure of some executives.
In accordance with the authorisation given by the General Meeting held on May 12, 2000 (Plan No.2), the Board of Directors granted the Group’s
managers and employees options to subscribe for new shares and/or to purchase existing shares up to a limit of 2.5% of the fully-diluted share capital.
The share subscription and/or purchase options have a duration of 8 years and may be exercised as follows: 30% at the end of the second year
following the date of allocation, 30% at the end of the third year, and the balance or the entirety of the options at the end of the fourth year, on the
understanding that the shares cannot be transferred by the beneficiaries before the end of the fourth year.
As at December 31, 2002, 1,213,500 options have been allocated under this second plan. In view of the allocation date, no option has been exercised
as yet. The number of new potential shares that may be issued amounts to 1,139,583 following the cancellation of options due to staff departures and
various adjustments.
- Options to purchase existing shares and/or subscribe for new shares
In accordance with the authorisation of the Combined General Meeting held on May 20, 1998, as amended by a resolution of the Combined General
Meeting on April 22, 1999, the Board of Directors, in its meeting of the same date, decided to increase the share capital by a nominal amount of
approximately FRF 181 million, subject to a possible increase of 15%, by issuing around 1,810,000 new shares with a nominal value of FRF 100 per
share, each carrying a warrant entitling the holder, at the Company’s discretion, to purchase existing shares and/or to subscribe for new shares, and
delegated powers to the Chairman to determine the manner in which such issue would finally take place.
Using his delegated powers, the Chairman of the Board of Directors decided to increase the share capital of FRF 208,150,000 by issuing 2,081,500
shares with a nominal value of FRF 100 each, each carrying a warrant entitling the holder to purchase existing shares and/or to subscribe for new
shares.
These warrants may be exercised until May 11, 2004. The exercise ratio, originally set out at one Unibail share, with a nominal value of FRF 100, in
exchange for five warrants to purchase existing shares and/or to subscribe for new shares plus a cash payment of € 130, was subsequently adjusted to
3.15 Unibail shares, with a nominal value of € 5, in exchange for 5 warrants plus € 130. In 2002, 95,735 options were exercised, giving rise to the
allocation of 60,312 Unibail shares. During the 2002 financial year, the Company bought back and subsequently cancelled 378,253 warrants in
accordance with article L.225-159 of the French Commercial Code.
As at December 31, 2002, there were 1,247,064 outstanding warrants.
- Convertible bonds
Currently, Unibail has no outstanding convertible bonds.
Other securities giving entitlement to the share capital: None.
Dividends
The amount of dividends paid over the last financial years is shown on page 76 of the report. During this period no interim dividends were paid.
The dividend is paid out from profits and, if necessary, from available premiums. As yet, Unibail has not used the authorisation provided for in article
21 of the Articles of Association to distribute the dividend in the form of new shares.
Dividends attached to Unibail Holding treasury shares are recorded under retained earnings.
Dividends that remain unclaimed for a period of five years from the date they are made available for payment are paid over to the French Treasury, in
accordance with articles L 27 and R 46 of the French State Property Code ("Code du Domaine de L’État").
73
INCREASES/DECREASES IN THE SHARE CAPITAL OF UNIBAIL HOLDING OVER THE PAST FIVE YEARS
Dates
Dec 17, 1997
Jul 1, 1998
Aug 13, 1998
Aug 13, 1998
Nov 26, 1998
Dec 31, 1998
May 12, 1999
Jul 1, 1999
Jul 22, 1999
Sep 14, 1999
Dec 21, 1999
Dec 31, 1999
May 12, 2000
May 23, 2000
Jun 31, 2000
Jul 3, 2000
Jul 27, 2000
Nov 21, 2000
Nov 21, 2000
Feb 13, 2001
Feb 13, 2001
May 29, 2001
Jun 13, 2001
Jul 13, 2001
Jul 25, 2001
Oct 9, 2001
Feb 6, 2002
Apr 10, 2002
May 15, 2002
Jul 24, 2002
Jul 24, 2002
Oct 9, 2002
Dec 11, 2002
Feb 5, 2003
Nature of
increase
Bond conversion (1)
Company Savings Plan
Bond conversion (1)
Share exchange offer for Frankoparis
Merger/takeover of Frankoparis
Bond conversion (1)
Capital increase in cash
Company Savings Plan
Exercise of warrants (2)
Bond conversion (1)
Contribution of CPI assets
Bond conversion(1)
Merger/takeover of CNIT SA
Bond conversion (1)
Bond conversion (1)
Company Savings Plan
Exercise of options (1995 plan)
Bond conversion (1)
Exercise of options (1995 tranche)
Exercise of options (1995 tranche)
Cancellation of shares
Exercise of options (1995-1996 tranches)
Conversion of share capital into euros (3)
Company Savings Plan
Exercise of options (1995-1996 tranches)
Exercise of options (1995-1996 tranches)
Exercise of options (1995-1996 tranches)
Exercise of options (1995-1996 tranches)
Exercise of options (1995-96-97 tranches)
Company Savings Plan
Exercise of options (1995-96-97 tranches)
Exercise of options (1995-96-97 tranches)
Exercise of options (1995-96-97 tranches)
Exercise of options (1995-96-97 tranches)
Number of
shares issued
14
14,469
86
747,776
5,534
270
2,081,500
20,935
20
6,032
2,447,617
134
162,679
125
435,885
13,621
8,220
639,837
32,024
7,516
(539,356)
8,670
---33,628
23,912
4,749
27,112
219,934
18,867
51,513
28,267
28,329
25,211
31,085
Number
of shares
9,436,117
9,450,586
9,450,672
10,198,448
10,203,982
10,204,252
12,285,752
12,306,687
12,306,707
12,312,739
14,760,356
14,760,490
14,923,169
14,923,294
15,359,179
15,372,800
15,381,020
16,020,857
16,052,881
16,060,397
15,521,041
15,529,711
46,589,133
46,622,761
46,646,673
46,651,422
46,678,534
46,898,468
46,917,335
46,968,848
46,997,115
47,025,444
47,050,655
47,081,740
Amount of
share capital
FRF 943,611,700
FRF 945,058,600
FRF 945,067,200
FRF 1,019,844,800
FRF 1,020,398,200
FRF 1,020,425,200
FRF 1,228,575,200
FRF 1,230,668,700
FRF 1,230,670,700
FRF 1,231,273,900
FRF 1,476,035,600
FRF 1,476,490,000
FRF 1,492,316,900
FRF 1,492,329,400
FRF 1,535,917,900
FRF 1,537,280,000
FRF 1,538,102,000
FRF 1,602,085,700
FRF 1,605,288,100
FRF 1,606,039,700
FRF 1,552,104,100
FRF 1,552,971,100
€ 232,945,665
€ 233,113,805
€ 233,233,365
€ 233,257,110
€ 233,392,670
€ 234,492,340
€ 234,586,675
€ 234,844,240
€ 234,985,575
€ 235,127,220
€ 235,253,275
€ 235,408,700
Premium resulting
from operation
FRF 7,980
FRF 8,609,450
FRF 49,020
FRF 459,373,752
FRF 3,411,935
FRF 153,900
FRF 1,413,232,213
FRF 11,776,431
FRF 15,055
FRF 3,438,240
FRF 1,821,557,680
FRF 76,380
FRF 82,915,365
FRF 71,250
FRF 222,506,690
FRF 8,665,415
FRF 2,468,688
FRF 325,671,550
FRF 9,617,672
FRF 2,257,257
(FRF 428,451,640)
FRF 2,628,781
(€ 3,727,131)
€ 1,488,408
€ 431,911
€ 81,027
€ 460,757.36
€ 3,638,736.71
€ 335,455.26
€ 2,245,492.65
€ 512,247.26
€ 463,425.69
€ 434,349.79
€ 546,811.30
(1) Convertible bond issue (April 1994 - 3.75 %) comprising 2,930,385 bonds of FRF 670 nominal value.
(2) Issue of 2,081,500 warrants allocated to subscribers to the capital increase agreed by the Board of Directors on April 22, 1999 under delegated powers from the General Meeting of the same date.
These warrants may be exercised until May 11, 2004, originally on the basis of one UNIBAIL share in exchange for 5 warrants plus € 130, subsequently adjusted to 3.15 shares with a nominal value of
€ 5 in exchange for 5 warrants plus € 130.
(3) The conversion of the Company’s share capital into euros was accompanied by a three-for-one share split on June 13, 2001. Following this conversion and share split, the nominal value of each
share was set at € 5.
Share capital and voting rights
Breakdown of share capital and voting rights
The share capital as at February 5, 2003 comprises 47,081,740 fully paid-up shares with a nominal value of € 5 each. A voting right is attached to
each share.
To the Company's knowledge, ownership of the shares breaks down as follows:
- French investors: around 40%
- International investors: around 60%
This shareholding structure has remained unchanged over the past three years.
As far as the Company is aware, Northern Trust Company, UBS Global Asset Management (UK) Ltd, Franklin Resources Inc. (the latter acting on its
own account and on behalf of its affiliates) and la Caisse des Dépôts et Consignations, each holds over 2% of the share capital and voting rights.
To the Company's knowledge, as at March 28, 2003, no shareholder holds more than 5% of the authorised share capital and voting rights.
1
As at April 10, 2002, the members of the Board of Directors directly or indirectly held 3.4% of the share capital and voting rights .
As at December 31, 2002, the Company Savings Plan reserved for employees of the Company or its subsidiaries held 200,056 shares, i.e. 0.4% of the
share capital and voting rights.
So far as the Company is aware, there is no shareholders' agreement, nor any person or group of persons exercising or capable of exercising control
over the Company.
The Directors as well as all the staff of the Group are subject to an ethical code with respect to the transactions regarding the shares of the Company
completed in personal capacity. In particular they are prohibited from acquiring or transferring shares within the 30-day period preceding the
publication of the annual or half-yearly results.
In addition, in accordance with COB recommendation no. 2002-01, regarding the disclosure by Company Directors of any transaction affecting their
Company’s shares, the Board Meeting of May 15, 2002 voted in favour of an internal procedure requiring each Director and senior executive to
submit a half-yearly declaration of any transaction involving Unibail shares. This information is sent to the COB on a general and anonymous basis.
1
Percentage of ownership known on the day of the last Annual General Meeting, including shares owned by groups and group subsidiaries to which certain Directors belong
74
Share buyback program
The Combined General Meeting held on April 10, 2002 authorised the Board of Directors, pursuant to article L 225-209 of the New French
Commercial Code, to proceed with the buyback of the Company's treasury shares up to the legal limit of 10% of the total number of outstanding
shares, adjusted for any change in the share capital during the authorisation period, so as to allow the Company, in descending order of priority, to:
(i) hold a proportion of shares that may be used in exchange or payment for acquisitions (including new or increased equity interests), with a view to
minimizing acquisition costs or, more generally, to improving the terms of a transaction or carrying out any transaction in the Company’s interest;
(ii) purchase and sell shares according to market conditions;
(iii) restructure the Company’s financial resources in order to optimize recurring cash flow per share, by cancelling or exchanging shares, wherever
necessary, so as to neutralise the potentially dilutive impact of shares issued by the Company and giving access to the share capital;
(iv) hold a proportion of shares which may be granted to its managers and employees and those of affiliated companies, as part of stock-option
schemes or company savings plans;
(v) reduce its share capital by cancelling all or part of its shares, in order to optimize earnings per share and/or cash flow per share.
The maximum purchase price is set at € 80 and the minimum sale price at € 70 based on a nominal value of € 5. This authorisation is valid for a period
of eighteen months as from the Combined General Meeting of April 10, 2002.
This authorisation was the subject of a notice approved by the COB on March 18, 2002, under registration no. 02 –241.
At the General Meeting to be held on June 10, 2003 (if a quorum is reached) or on June 17, 2003 (following a second notice), the Board of Directors
will propose to the shareholders that this authorisation be renewed. The maximum purchase price would be € 80 and the minimum sale price would be
€ 70. This new program will be the subject of a bulletin submitted for approval by the COB.
The number of the treasury shares held by the Company, as a result of the buyback scheme or asset transfers, amounted to 510,654 shares i.e.: 1.08%
of the share capital as at December 31, 2002.
Pledge of shares of the Company
As at February 28, 2003, the number of the Company's pledged shares was negligible (1,711).
Share capital and stock market performance
Shares
All shares forming the share capital are listed on the Premier Marché of the Paris Stock Exchange and are part of the SBF 120, SBF 80 and Euronext
100 indices.
Market capitalisation (€ million) (a)
Trading volumes
Average daily turnover
(thousand) after share split
1998
1999
2000
2001
2002
2003
1,267.8
1,811.9
2,724.2
2,661.4
3,190.8
2,744.9
(b)
52.41
55.14
81.96
89.01
46.8
30.1
41.4
46.4
36.1
41.8
59.8
41.6
56.6
66.0
48.7
57.1
129.73
99.41
Share price (€) after share split
- High
- Low
- Latest closing price
70.9
54.0
67.8
68.05 (b)
56.9 (b)
58.3 (b)
(a) based on the last quoted price for the year or period (February 28, 2003)
(b) based on prices from January 1, 2003 to February 28, 2003
75
Last 18-month trading volumes (number of shares and total value) - Source EURONEXT, including off-system transactions
Shares
(based on quoted prices during trading day)
Month
Highest price in €
Lowest price in €
Volume traded
Amount traded
(in millions of €)
61.00
60.90
60.75
57.80
48.71
53.50
54.00
55.05
1,874,957
1,874,542
1,961,921
1,616,810
102.78
106.26
114.34
90.87
58.95
61.80
62.90
65.60
70.90
70.80
69.00
66.00
65.30
59.80
66.50
67.85
55.50
54.00
58.60
60.00
64.55
61.00
59.50
61.10
56.70
55.70
55.25
62.65
1,775,187
1,619,059
2,166,302
1,248,482
5,016,327
4,617,216
3,933,827
2,544,278
2,363,020
3,005,866
3,119,732
1,671,509
101.45
94.35
131.22
78.86
344.13
307.77
253.25
162.51
142.36
173.97
188.17
109.79
68.05
64.25
60.05
56.90
2,056,896
2,118,258
132.08
125.86
Highest price in €
Lowest price in €
Volume traded
Amount traded
(in millions of €)
September
October
November
December
2002
12.44
12
12.19
10.2
5.52
8.06
8.6
9.21
268,391
123,343
107,017
277,643
2.41
1.18
1.09
2.65
January
February
March
April
May
June
July
August
September
October
November
December
10.38
11.95
12.35
14.27
17.05
17.5
17.4
15.5
15.1
11.8
15.9
16.5
9.55
9.1
10.8
11.22
13.42
13
12.21
12.81
10.5
10.8
11
13
23,719
154,613
84,322
101,936
158,553
65,459
130,673
38,792
246,305
86,459
38,378
42,777
0.23
1.67
0.98
1.32
2.54
1.02
1.78
0.54
3.12
0.99
0.53
0.66
16.17
13.5
12.45
10.15
28,628
12,223
0.42
0.14
2001
September
October
November
December
2002
January
February
March
April
May
June
July
August
September
October
November
December
2003
January
February
Warrants
Month
2001
2003
January
February
Share capital and dividends
Dividends over the last years
Number of remunerated shares
Net dividends per share*
1998
1999
2000
2001
30,612,756
1.58
44,281,470
1.67
46,563,123
1.67
46,678,534
1.70
* Tax credit not included
Proposed allocation of the 2002 profit and dividend(1)
€
Net profit 2002
Retained earnings
Total distributable profit
Distribution
Retained earnings
i.e. net dividend per share
With a tax credit of
- for institutional shareholders
- for individual shareholders
(1)
To be submitted to the General Meeting of Shareholders in June 2003
76
129,327,372
4,304,250
133,631,622
-53,651,427
79,980,195
1.14
0.09
0.47
Board of Directors
(prior to the General Meeting of June 2003)
Léon Bressler was born in Paris in 1947. He is a Law graduate and holds a diploma from the ‘Institut d’Etudes Politiques’ in Paris. Mr Bressler has
been a Director of Unibail since 1984. He has been Chairman of the Board of Directors since 1992 and has also been appointed CEO of the Company
in compliance with the New French Economic Regulations (loi NRE). His directorship was last renewed at the General Meeting held on April 10,
2002, for a term of three years, i.e.: until the General Meeting called to approve the accounts for the financial year ending December 31, 2004.
In addition, Léon Bressler acts as: Chairman of Paris Expo¤; Chairman of Unibail Management¤; Member of the Supervisory Board of NSMD;
Director of Espace Expansion¤, Arc 108¤, Mk2, Espace Champerret¤ and Omnifinance¤; Member of the Executive Committee of Tanagra¤; and, lastly,
permanent representative of Unibail within SNC 50 Montaigne¤, SCI du C.C. des Pontos¤, SCI Rosny Beauséjour¤, SAS Immobilière Salamine¤ and
SAS Immobilière Lidice¤.
Bruno Boutrouille 2 was born in Cambrai in 1940. He is a graduate of the ‘Institut d’Etudes Politiques’ in Paris and of ENA ("Montesquieu" class of
1966) as well as a Law graduate (Economic Sciences). He represented the Caisse des Dépôts et Consignations on Unibail’s Board from 1990 until the
Board Meeting of February 13, 2001, which proposed his appointment as a Director. His directorship was last renewed at the General Meeting held on
April 10, 2002, for a term of three years, i.e.: until the General Meeting called to approve the accounts for the financial year ending December 31,
2004. Mr Boutrouille is also a permanent representative of CDC on the Board of Directors of SITCE and SETGE.
Nicholas Clive Worms 1 was born in London (England) in 1942. He has attended the 'Institut d’Etudes Politiques' in Paris as well as Harvard
Business School, and has served on Unibail’s Board since 1994. His directorship was last renewed at the General Meeting held on May 12, 2000, for
a term of three years, i.e.: until the General Meeting called to approve the accounts for the financial year ending December 31, 2002. Nicholas Clive
Worms is Chairman of the Supervisory Board of Worms & Cie, as well as Chairman of Worms & Co. Inc, Worms & Co. Ltd and Worms 1848 SAS.
He is also a Director of LVMH Moët Hennessy Louis Vuitton, Haussmann Holdings S.A, Ifabanque and Financière de Services Maritimes.
CRAF - Caisse de Retraite du Personnel au Sol de la Compagnie Air France - represented by Pasquin Ordioni.
Pasquin Ordioni was born in Paris in 1927. He holds an ISFA degree in actuarial studies from the University of Lyons. He is Chairman of CRAF. The
directorship of CRAF was renewed by the General Meeting held on May 12, 2000, for a term of three years, .i.e.: until the General Meeting called to
approve the accounts for the financial year ending December 31, 2002. Pasquin Ordioni is a Director of Equigest and Managing Director of SCI Saint
Georges, Blanqui 74 and Petit Moulin.
CREDIT LYONNAIS represented by Jean-Jacques Dayries 2.
Jean-Jacques Dayries was born in Rabat (Morocco) in 1946. He is an engineering graduate from the BTP school and holds an MBA from INSEAD.
He is in charge of the Real Property and Hotels Department of Credit Lyonnais. He does not serve as Director for any other listed company.
Crédit Lyonnais has been a Director of Unibail since 1988. Its directorship was last renewed at the General Meeting held on May 12, 2000, for a term
of three years, i.e.: until the General Meeting called to approve the accounts for the financial year ending December 31, 2002.
Jean-Jacques Dayries is Chairman of Franclim and Clinfim, and a Director of Lion Immobilier Services, Slibail Immobilier and CLAM Immobilier
(up to August 2002). He is a representative of Franclim, which is the managing company of SCI du Verger and SNC Corneille, and a permanent
representative of Crédit Lyonnais on the Board of Directors of Soflim and Cogefo.
Jacques Dermagne 1 was born in Paris in 1937. He holds a Master degree in Private Law and is Chairman of the Economic and Social Council. He
has been a Director of Unibail since 1993. His directorship was last renewed at the General Meeting held on April 10, 2002, for a term of three years,
i.e.: until the General Meeting called to approve the accounts for the financial year ending December 31, 2004. He is also a member of the
Supervisory Boards of Devanlay, DMC, Cetelem and Rallye.
Jean-Claude Jolain was born in Laxou (54) in 1943. He is a graduate of the ‘Institut d’Etudes Politiques’ in Paris, the holder of a post-graduate
professional Law degree (DES) and graduate of ENA (‘Turgot’ class of 1968). Mr Jolain has served on Unibail’s Board since 1989. His directorship
was last renewed at the General Meeting held on April 24, 2001, for a term of three years until the General Meeting called to approve the accounts for
the financial year ending December 31, 2003. He also acts as Chairman & CEO of Villes Services Plus, Chairman of UESL, Director of CCF and
Perexia, and permanent representative of SAGI on the Board of Directors of SNTE and within SNC Duranti.
Henri Moulard 2 was born in St Genis Terrenoire (42) in 1938. He is a graduate of the ‘Institut d’Etudes Politiques’ in Lyons, a graduate in private
law, and the holder of a post-graduate professional Law degree (DES) in public law. He was appointed as a Director at the General Meeting held on
May 20, 1998. His directorship was last renewed at the General Meeting held on April 24, 2001, for a term of three years, i.e.: until the General
Meeting called to approve the accounts for the financial year ending December 31, 2003. Henri Moulard is also Chairman of Invest In Europe and
HM & Associés; Director of Banque Commerciale du Maroc, Burelle SA, DIL France SA (Deutsch Bank group), ELF Aquitaine and Crédit Agricole
SA; and Member of the Supervisory Board of Financière Centria.
¤
1
2
Companies in the Unibail group
Member of the Nominations and Remuneration Committee
Member of the Audit Committee
77
Roger Papaz 1 was born in Paris in 1925. He is a Sciences graduate and holds a diploma from the Institut des Actuaires Français. Mr Papaz has
served on Unibail’s Board since 1978. His directorship was last renewed at the General Meeting held on April 10, 2002, for a term of three years, i.e.:
until the General Meeting called to approve the accounts for the financial year ending December 31, 2004. He is also Honorary Chairman of the
Supervisory Board of NSMD Bank; Honorary Managing Director of AGF; Vice-President of the Supervisory Board of Euler; representative of
Vendôme Rome Participations on the Supervisory Board of Vendôme Rome; and a Director of Foncière Lyonnaise, EMGP and Batipart.
Jean-Jacques Rosa was born in Marseilles in 1941. He holds a doctorate in Economics and a post-graduate degree in Economic Sciences. He was
appointed as a Director of Unibail at the General Meeting held on May 20, 1998. His directorship was last renewed at the General Meeting held on
April 24, 2001, for a term of three years, i.e.: until the General Meeting called to approve the accounts for the financial year ending December 31,
2003. Mr Rosa is also a University Professor and teaches at the ‘Institut d’Etudes Politiques’ in Paris.
¤
1
2
Companies in the Unibail group
Member of the Nominations and Remuneration Committee
Member of the Audit Committee
78
Executive Management
Chairman & CEO:
Managing Director:
Executive Vice-President:
Léon Bressler*
Guillaume Poitrinal*
Catherine Pourre
* Responsible officers pursuant to article 17 of the “Banking Law” dated January 24, 1984 up to November 28, 2002, the date when Unibail’s
‘finance company’ status was withdrawn.
Remuneration of the Chairman and CEO
The gross remuneration paid to the Chairman in 2002 amounted to € 935,000, consisting of a fixed amount of € 450,000 and a variable amount of
€ 485,000 based on the Company’s 2001 financial year results. The variable amount was calculated according to two criteria:
the rate of growth in pre-tax recurring cash flow per share,
consolidated net profit (Group share).
In his capacity as a Director and member of the Nominations and Remuneration Committee (until his resignation from this committee on October 9,
2002), the Chairman was paid € 18,293.89 in Directors’ fees. The Chairman does not receive any other fees for companies in the Group for which he
serves as Director.
The Chairman has a company car.
As at December 31, 2002, the Chairman held options to subscribe for shares, whose main characteristics are as follows:
Date when options were
granted
Plan no.1 (1)
Board Meeting of
March 28, 1995
Board Meeting of
March 27, 1996
Board Meeting of
March 19, 1997
Board Meeting of
March 18, 1998
Plan no.2 (2)
Board Meeting of
November 21, 2000
Board Meeting of
October 9, 2002
Number of options
granted (3)
75,453
33,534
83,835
32,604
76,104
100,000
(1) EGM decision on Jan 24, 1995
(2) EGM decision on May 12, 2000
Exercise period (4)
Exercise price (€)
Number of options
exercised (3)
Number of
outstanding options
Mar 28, 2000 to
Mar 27, 2003
Mar 27, 2001 to
Mar 26, 2004
Mar 19, 2002 to
Mar 18, 2005
Mar 18, 2003 to
Mar 17, 2006
20.05
75,453
-
22.78
33,534
-
23.41
10,000
73,835
29.46
-
32,604
Nov 21, 2002 to
Nov 20, 2008
Oct 9, 2004 to
Oct 8, 2010
51.94
-
76,104
59.33
-
100,000
(3) After share split and adjustments (see page 54 of this report)
(4) For details of the option exercise conditions for plan no.2, see pages 69 and 73 of this report.
Remuneration of the Managing Director
The gross remuneration paid to the Managing Director for the period from August 1 to December 31, 2002 amounted to € 25,000. His gross annual
remuneration consists of a fixed amount of € 60,000 and a variable amount which is calculated according to two criteria:
the rate of growth in pre-tax recurring cash flow per share,
consolidated net profit (Group share).
The Managing Director does not receive any Director's fees in the Company nor in any company of the Group for which he serves as Director. He has
a company car.
In addition, in 2002, in his capacity as an employee of companies of the Group, Guillaume Poitrinal received a gross annual remuneration consisting
of a fixed amount of € 216,517 and a variable amount of € 152,450 based on the Company’s 2001 financial year results.
As at December 31, 2002, the Managing Director held options to subscribe for shares, whose main characteristics are as follows:
Date when options were
granted
Plan no.1 (1)
Board Meeting of
March 27, 1996
Board Meeting of
March 19, 1997
Board Meeting of
March 18, 1998
Board Meeting of
March 9, 1999
Plan no.2 (2)
Board Meeting of
November 21, 2000
Board Meeting of
October 9, 2001
Board Meeting of
October 9, 2002
(1) EGM decision on Jan 24, 1995.
(2) EGM decision on May 12, 2000.
Number of options
granted (3)
8,307
16,767
32,604
31,362
36,531
18,000
36,000
Exercise period (4)
Exercise price €)
Number of options
exercised (3)
Number of
outstanding options
Mar 27, 2001 to
Mar 26, 2004
Mar 19, 2002 to
Mar 18, 2005
Mar 18, 2003 to
Mar 17, 2006
Mar 9, 2004 to
Mar 8, 2007
22.78
8,307
0
23.41
16,767
0
29.46
--
32,604
34.76
--
31,362
Nov 21, 2002 to
Nov 20, 2008
Oct 9, 2003 to
Oct 8, 2009
Oct 9, 2004 to
Oct 8, 2010
51.94
--
36,531
53.44
--
18,000
59.33
--
36,000
(3) After share split and adjustments (see page 54 of this report).
(4) For details of the option exercise conditions for plan no.2, see pages 69 and 73 of this report.
79
Remuneration of the Company's Board Members1
The Combined General Meeting of May 12, 2000 set the amount of Directors’ fees allocated each year to € 213,428 as from January 1, 2000. The
Board Meeting dated May 23, 2000 laid down the following rules for the allocation of such fees:
each Director receives a maximum fee of € 15,245. Three-quarters of this amount comprises a fixed fee (€ 11,434), while the remaining quarter is
a variable portion that depends on each Director’s attendance rate at meetings. The fixed fee is paid in four equal quarterly installments. The
variable portion is based on a number of points accumulated by each Director according to his effective attendance (one point per meeting). Each
Director automatically receives two points. At the end of the year, the value per point is calculated by dividing the total amount to be allocated by
the total number of points awarded for attendance.
an additional € 3,049 is payable to each member of the Audit and the Nominations and Remuneration Committees (including their Chairmen).
an additional € 1,525 is payable to the Chairmen of the Audit and the Nominations and Remuneration Committees.
Remuneration received by Directors in respect of the 2002 fiscal year
Jean-Philippe Thierry*
Bruno Boutrouille
Nicholas Clive Worms
Credit Lyonnais
Jacques Dermagne
CRAF
Jean-Claude Jolain
Henri Moulard
Roger Papaz
UNIFICA*
Jean-Jacques Rosa
€ 7,146.05
€ 19,818.37
€ 17,341.08
€ 18,293.89
€ 18,293.89
€ 14,768.51
€ 14,768.51
€ 18,293.89
€ 19,818.37
€ 7,622.46
€ 13,339.30
* These Directors resigned at the Board Meeting dated July 24, 2002 in compliance with the terms of the New French Economic Regulations (loi
NRE), which place limitation on terms of office.
Top seven executives in terms of share options exercised and top eleven executives in terms of share options
granted
In terms of share options exercised, the top seven executives2 (not serving on the Board of Directors) exercised a combined total of 66,013 options at
an average price of € 21.37.
In terms of share options granted, the top eleven executives3 (not serving on the Board of Directors) were granted a combined total of 125,000 options
at an exercise price of € 59.33.
Fees paid by the Group to its statutory auditors and members of their affiliated companies
(in thousand euros)
1
2
3
Ernst & Young Audit
Euraaudit Fideuraf
Others
Audit
Statutory auditing
Ancillary missions
754
342
110
-
117
-
Other services
Legal, tax, social and acquisition audits
368
-
-
Excluding the information relating to the Chairman and the Managing Director. Apart from the Chairman and the Managing Director, Directors do not benefit from share options.
Only includes employees that were still part of the Group as at December 31, 2002.
Pursuant to the non-discriminatory principle, the number of executives mentioned can exceed 10 if an identical number of share options is granted.
80
PERSONS RESPONSIBLE FOR THIS DOCUMENT, FOR THE FINANCIAL INFORMATION
AND FOR AUDITING THE ACCOUNTS
Person responsible for the registration document (document de référence)
Léon Bressler, Chairman & CEO
Declaration by the person responsible for the registration document
To the best of our knowledge, the data contained in this document is accurate; it includes all the information required for investors to make a judgment
on the assets, business, financial situation, profits and prospects of the issuer and of its group; it does not contain any omissions likely to affect the
accuracy of the document.
Léon Bressler
Persons responsible for auditing the accounts
Principal Statutory Auditors
ERNST & YOUNG Audit
4, rue Auber
75009 PARIS
Christian Mouillon
EURAAUDIT FIDEURAF
135, boulevard Haussmann
75008 PARIS
Yves Blaise
Commencement date of the first term of office
AGM held on May 13, 1975
AGM held on May 13, 1975
Terms of office expire at the Extraordinary General Meeting held to approve the accounts for the 2004 financial year.
Deputy Auditors
BARBIER, FRINAULT & ASSOCIES
41, rue Ybry
92576 Neuilly-sur-Seine Cedex
MAZARS & GUERARD
125, rue de Montreuil
75011 PARIS
Commencement date of the first term of office
AGM held on April 24, 1985
AGM held on May 26, 1992
Terms of office expire at the General Meeting of Shareholders held to approve the accounts for the 2004 financial year.
81
STATUTORY AUDITORS' REPORT
In our capacity as statutory auditors of Unibail Holding and in compliance with the "Commission des Opérations de Bourse" (the French Stock
Exchange Regulatory Body Regulation) Regulation n° 98-01, we have verified, in accordance with French professional standards, the information in
respect of the financial position and historic financial statements included in the accompanying Registration Document (Document de Référence).
This Registration Document is the responsibility of Léon Bressler, Chairman of the Board of Directors. Our responsibility is to issue an opinion on the
fairness of the information contained therein with respect to the financial position and financial statements.
We conducted our review in accordance with French professional standards. This review consisted in assessing the fairness of the information on the
financial position and financial statements and to verify their consistency with the audited accounts. We also reviewed other financial information
contained in the Registration Document in order to identify any significant inconsistency with information in respect of the financial position and
financial statements and to bring to your attention any obvious misstatements we noted based on our general understanding of the company gained
through our audit. The forecasts provided in the Document are the application of the expectations and intentions of Management's strategy and we did
not perform a review thereon.
We performed an audit of the annual and consolidated accounts for the years ending December 31,2002, December 31,2001, and December 31,2000,
as approved by the Board of Directors, in accordance with French professional standards. Our report on these annual and consolidated accounts was
unqualified but contained the following emphasis of matters :
in 2000, there were changes in accounting methods in accordance with the CRC (the French Accounting Standards Committee) Rule 99-07
relating to the consolidation principles to be adopted by companies subject to the Comité de la Réglementation Bancaire et Financière (the
French Banking and Financial Institutions Regulation Committee);
in 2001, there was a change in the recognition of deferred taxes on consolidated difference allocated to the real estate properties booked before
January 1, 2000;
in 2002, there were changes in the terms of reference following the withdrawal of Unibail's finance company's status and the first application of
CRC Regulation 2000-06 relating to liabilities.
We have nothing to report with respect to the fairness of the information on the financial position and financial statements contained in the
Registration Document (Document de Référence).
April 2, 2003.
The Statutory Auditors
EURAAUDIT FIDEURAF
Yves Blaise
82
ERNST & YOUNG Audit
Christian Mouillon
CONTENTS OF THE REGISTRATION DOCUMENT
For an easy following of the annual report by the readers, this table of contents lists the principle information required by the French
Securities and Exchange Commission within the scope of its regulations and application instructions.
INFORMATION
ANNUAL REPORT
Pages :
DECLARATION BY THE RESPONSIBLE PERSONS
•
•
Declaration of the person responsible for this registration document ------------------------------------------------------------------------81
Declaration of the persons responsible for auditing the accounts ----------------------------------------------------------------------------81
GENERAL INFORMATION
On share capital
•
General points --------------------------------------------------------------------------------------------------------------------------------- 72 to 76
•
Non-issued authorised share capital ----------------------------------------------------------------------------------------------------------72-73
•
Potential share capital -----------------------------------------------------------------------------------------------------------------------69-72-73
•
Increase/Decrease in the share capital of Unibail over the past five years ------------------------------------------------------------------74
On securities --------------------------------------------------------------------------------------------------------------------------------------------------75-76
•
Development of the trading volumes and the price over the past 18 months ------------------------------------------------------------76-85
•
Dividends ------------------------------------------------------------------------------------------------------------------------------ 2-41-71-73-76
SHARE CAPITAL AND VOTING RIGHTS
•
•
•
Current breakdown of the share capital and voting rights -------------------------------------------------------------------------------------74
Changes in shareholding structure ------------------------------------------------------------------------------------------------------------74-85
Shareholders pact --------------------------------------------------------------------------------------------------------------------------------- none
GROUP'S ACTIVITIES
•
•
•
•
•
•
Group's organisation (relation with subsidiaries and information on subsidiaries) ------------------------------------------------52-53-55
Key figures of the group ---------------------------------------------------------------------------------------------------------------------------2-3
Business results of each division ------------------------------------------------------------------------------------------------------------------46
Market and the competitive position of the issuer -------------------------------------------------------------------------6-7-10-14-27-29-30
Investment policy --------------------------------------------------------------------------------------------------------------------- 9-12-13-16-17
Indicators of effectiveness -------------------------------------------------------------------------------------------------------------------------2-3
RISK ANALYSIS
•
•
•
•
Risk factors ---------------------------------------------------------------------------------------------------------------------------------------39-41
Exceptional items, litigation and arbitration -----------------------------------------------------------------------------------------------------68
Dependence factors (patents, licences, contracts, production procedures…) ------------------------------------------------------------ none
Insurance policy and risk management -----------------------------------------------------------------------------------------------------------41
PROPERTY PORTFOLIO AND FINANCIAL STATEMENTS
•
•
•
•
•
Property portfolio ----------------------------------------------------------------------------------------------------------------------------- 23 to 25
Consolidated financial statements and appendices -------------------------------------------------------------------------------------- 42 to 70
Off-balance sheet commitments -------------------------------------------------------------------------------------------------------------------62
Fees paid to the Group's statutory auditors and members of their affiliated companies ---------------------------------------------------80
Financial statements of the parent company -----------------------------------------------------------------------------------------------------76
MANAGEMENT AND SUPERVISION BODIES
•
•
•
•
•
•
Organisation of the management and supervision bodies ----------------------------------------------------------------------- 5-72-77 to 81
Corporate governance ---------------------------------------------------------------------------------------------------------------------------18-19
Remuneration of the Company's responsible officers and the stock-options programmes --------------------------------------------79-80
Stock-options granted to the top ten executives not serving on the Board of Directors ---------------------------------------------------80
Stock-options plans ----------------------------------------------------------------------------------------------------------------------49-69-72-79
Regulated agreements--------------------------------------------------------------------------------------------------------------------------------- -
RECENT DEVELOPMENTS AND OUTLOOK ---------------------------------------------------------------------------------------------------------41
83
Unibail shares are listed on the Paris Stock Exchange.
Sicovam code: 12471, Reuters: UNBP.PA, Bloomberg: UL.FP
Fiscal representation in Germany (Law dated July 28, 1969)
Web site: http://www.unibail.com
Investor relations: Tel. + 33 (0) 1 53 43 73 03
Financial services (shares and dividends): Crédit Agricole Investor Services Corporate Trust SE
Service Assemblées – 128, Boulevard Raspail - 75288 Paris Cedex 06
Tel: +33 (0)1 43 23 81 87 - Fax: +33 (0)1 43 23 89 47
Unibail's press releases are available on the Company's website http://www.unibail.com.
Agenda 2003
•
June 17, 2003 : General Meeting of Shareholders
(on the second notice if the quorum is not reached
following the first notice of June 10, 2003).
•
June 18, 2003 : Payment of the net dividend.
•
July 23, 2003 : Publication of the 2003 half-year results.
Photographers : Christian Chamourat, Bernard Collet, Stéphane Himpens, C. Lane / Atelier Mesh (illustration of Les Quatre Temps),
Paul Maurer, Fabrice Rambert, Valode and Pistre Architectes (illustration of Hall 5) and Unibail's Photographic Library.
Photo on the cover : Carré Sénart Shopping Centre (Paul Maurer).
Concept – design and production : Harrison & Wolf.
This is a free translation of the French original report available upon request at Unibail's headquarters.
Headquarters of UNIBAIL HOLDING
5, boulevard Malesherbes
75802 Paris Cedex 08 – France
Tel: 33 (0)1 53 43 74 37
Fax: 33 (0)1 53 43 74 38
84
Stock market performance
Stock market value creation is measured by the Total
Shareholder Return (TSR). This indicates the change in
the company’s share price over a given period, plus the
dividends it has paid out during the period, assuming
they have been immediately reinvested in its shares.
In 2002, Unibail’s TSR(1) amounted to 21.9%. Between
January 1, 1993 and December 31, 2002, annualised
TSR for Unibail shares amounted to 19.8%, compared
with 11.7% for the EPRA(2) property investment
companies performance index.
Comparative performance of Unibail’s stock,
dividends reinvested (basis 100 as at January 1, 1993)
— Unibail (with dividends reinvested) — EPRA index Euro zone (with dividends reinvested)
(1)
This is the gross TSR figure, i.e. before capital gains tax and
dividends, and excluding tax credits.
(2)
European Public Real Estate Association (http:// www.epra.com)
Further increase in liquidity
Once again, the liquidity of the Unibail stock increased in 2002, reaching an average volume of 130,000 shares per day,
i.e. a daily amount of € 8.2m.
Previous 12-month moving volume (€)
—
Monthly average closing share price (€)
Shareholding structure
S T O C K
E X C H A N G E
S H A R E H O L D I N G
A N D
S T R U C T U R E
30%
North American
& Asian
institutional investors
30%
European
institutional
investors
Based on available information at year-end 2002, French investors account for an estimated 40%
of the Company’s capital. European investors (mainly Dutch and British) own some 30% of the
capital, while other international investors (mainly North American and Asian) hold a combined
stake of around 30%.
40%
French
investors
Unibail has a large free float and a diversified ownership structure, which mainly comprises French
and international institutional investors.
2002 ANNUAL REPORT
85
Unibail Holding
5 Boulevard Malesherbes
75802 Paris cedex 08
Tel. 33 (0)1 53 437 437
www.unibail.com