Results Strategy Operations Sustainability Governance & risk Financial Statements INTEGRATED ANNUAL REPORT 2018 Results Strategy Operations Sustainability Governance & risk Financial Statements RESULTS STRATEGY OPERATIONS Message from the CEO 5 Vision, mission and profile 14 Operations 22 Key performance indicators 7 Market, environmental and societal trends 16 Property portfolio The Netherlands 30 Key figures 2014-2018 8 Integrated strategic business model 18 Property portfolio Belgium 38 The share 10 Fully focused on convenience Property portfolio France 46 Financial Calendar 12 shopping centres 19 Staff & organisation 51 Highlights 2018 13 Strategic management agenda 2017-2019 20 Results 52 Equity and debt 54 EPRA tables 55 Direct & Indirect Result 60 SUSTAINABILITY GOVERNANCE & RISK FINANCIAL STATEMENTS Sustainability 61 Report from the Supervisory Board 81 Financial Statements 116 Stakeholder engagement and materiality 63 Composition of the Supervisory Board 88 Bricks: environmental performance 65 Remuneration report 90 People: our human capital 71 Corporate Governance 97 Partners: teaming up in Alternative Performance Measures 114 supply chain responsibility 75 Society: social performance 77 Achievements & commitments 80 AUDITOR'S REPORT Appendix 201 Material topics 205 Independent Auditor’s Report 185 Annual Report 2018 Wereldhave N.V. 2 Results Strategy Operations Sustainability Governance & risk Financial Statements OUR REPORTING FRAMEWORK This is the integrated annual report 2018 of About Wereldhave Feedback Wereldhave N.V., published in digital form on Wereldhave invests in dominant convenience We welcome any feedback from our stakeholders. the Company’s website www.wereldhave.com shopping centres in larger regional cities in the Netherlands, Belgium and France. Please contact us for feedback or any questions you This report focuses on the operational, financial and might have at: [email protected] sustainability performance for the financial year The area surrounding our centres will include at least and/or [email protected] 2018 of Wereldhave N.V. and its subsidiaries. 100,000 inhabitants within 10 minutes’ travel time from the shopping centre. The report covers our portfolio of shopping centres in the Netherlands, Belgium and France and offices With easy accessibility, products that cover all the in Belgium, owned and managed by the group. The daily shopping needs, a successful mix of Finnish activities were ceased in 2018, with the international and local retail products and strong WERELDHAVE N.V. disposal of the Itis shopping centre in December food anchor stores, our centres provide convenience WTC Schiphol, Tower A, 3rd floor 2018. shopping to accommodate a busy urban lifestyle as Schiphol Boulevard 233, 1118 BH Schiphol well as an ageing population. P.O. Box 75837, 1118 ZZ Schiphol, The Netherlands T: +31 20 702 78 00, F: +31 20 702 78 01 We aim for an experience that goes beyond shopping, with restaurants, kids’ playgrounds and Wereldhave is a member of the following high quality amenities in order to attract families organisations: – and keep them with us for longer visits. For more information: www.wereldhave.com Annual Report 2018 Wereldhave N.V. 3 Results Strategy Operations Sustainability Governance & risk Financial Statements OUR REPORTING FRAMEWORK Five reporting topics BRINGING STRATEGY 1 Owner and operator of shopping centres with long- term societal and financial returns PEOPLE TOGETHER OPERATIONS Wereldhave believes in shopping centres that 2 How our convenience centres performed in 2018 bring people together. Shopping centres that are strongly intertwined with local society. Where people love to come, SUSTAINABILITY not just to shop, but also to meet people and 3 Our sustainability framework is fully integrated in our business strategy and operations visit events. Shopping centres that meet different needs and provide a rich, inspiring experience, this RESULTS way strengthening the economic position of 4 Our financial, environmental and societal results in 2018 the region and enriching the range of enter- tainment and relaxation being offered. Bringing people together leverages shopping GOVERNANCE & RISK as a social activity, a combination of need-to-do 5 Our Governance & Risk framework is designed for our business strategy and operations with recreation and entertainment. This will drive footfall, rental income and ultimately the value of our shopping centres, with long- term societal and financial returns for all stakeholders. Annual Report 2018 Wereldhave N.V. 4 Results Strategy Operations Sustainability Governance & risk Financial Statements MESSAGE FROM THE CEO Focus on operations In the Netherlands, the new organisational structure Dear stakeholder, the year 2018 was again with four business units has proven to be a strong a busy year, with overall robust operational format. Leasing activity was high and we managed to results. The most important event during the slightly increase occupancy, with rent reversions in year was the disposal of the Itis shopping line with the economic upturn. centre. Agreement was reached in October and the deal was completed in December Asset management in the Netherlands performed 2018. Wereldhave is now fully focused on well. We were awarded the NRW marketing prize for convenience centres in the Netherlands, the Black Friday shopping night and the Belgium and France, with a healthy Loan-to- redevelopment of the Koningshoek shopping centre Value at 37.5%. The direct result was at was a runner-up for the shopping centre of the year € 3.33 per share, at mid-point of the latest award. The Dutch development organisation was guidance we provided. Operational focus and made more condensed, with improved financial capital discipline are in our view crucial in project control and a reduced committed a retail environment that is uncertain. Dividend development pipeline. The platform and the over 2019 is our priority. majority of the assets are robust and generate resilient cash flows. Finnish operations went well in 2018. In spite of the opening of an adjacent new shopping centre of In Belgium the new management team performed 40,000m², occupancy and rental income remained very well. The opening of Les Bastions in Tournai was stable. The construction of the Finnkino 9-screen very successful, with occupancy above 98%. We also cinema was completed within time and budget. The saw a strong leasing uplift in Courtrai and a decent completion was instrumental for the disposal of Itis pick-up in Genk and we are making good progress and I would like to thank the Finnish staff for their in reletting the Carrefour units in Liege and Genk. dedication and support during the divestment Various asset management initiatives contributed to process. They remained loyal and committed to the the strong Belgian performance in 2018. In success of Itis, facilitating Wereldhave’s exit from December 2018, Wereldhave Belgium leveraged on Finland. its solid share price performance with the acquisition of two retail parks, one in Bruges and the other in Turnhout. Annual Report 2018 Wereldhave N.V. 5 Results Strategy Operations Sustainability Governance & risk Financial Statements MESSAGE FROM THE CEO The acquisition was partly financed with the issuance The main project to further improve the operational On behalf of the Board of Management I would like of new shares of Wereldhave Belgium, reducing excellence of our focused portfolio of convenience to thank all employees for their valuable contribution Wereldhave’s stake in Wereldhave Belgium to just assets is the Customer Journey project. The design during 2018. All disciplines and functions make us below 66% at year-end 2018. The Belgian platform is concepts were completed in 2018 and an a company to be proud of. We are convinced that strong and well positioned to further enhance our implementation schedule has been set up to although the retail environment may be challenging, retail exposure in the market. improve wayfinding, play&relax, restrooms and our focus on operational performance, a robust parking in 2019 and 2020. Multi country teams will portfolio and a stable dividend will pay off on the In France, the year 2018 saw the successful opening implement action plans to continue to deliver value longer term. This is a natural moment for me to in February of Primark in Docks Vauban, Le Havre, for our customers and deliver on our brand move on with my career. I have given notice and will and the completion of the Verrerie refurbishment promises. leave the Company per March 31, 2019, as I have scheme in Saint Sever, Rouen, in December. There accepted a position elsewhere, outside the real were some changes to the management Sustainability remains an integrated part of our estate sector. I believe that with the successful organisation and the team is now complete. Asset business. We are pleased that Wereldhave is disposal of Itis, the transformation of Wereldhave management performance in 2018 was strong and recognised as a top player and we see more into a fully focused company is complete. I am leasing results were decent despite tough market business partners aligned to strive for long-term leaving Wereldhave behind as a financially stable conditions. With dedicated management and new sustainability objectives. and healthy company, with a focused portfolio of solid tenants we have improved our assets Coté convenience shopping centres and a solid Seine (Action and Zeeman), Docks Vauban (Primark), Our outlook for 2019 is a direct result per share organisational platform. Saint Sever (F&B, including Vapiano) and Mériadeck between € 2.75 and € 2.85 per share, assuming (Mango and Truffaut). a stable portfolio. We have a healthy balance sheet, Let me thank you all, shareholders and stakeholders, with the Loan-to-Value at 37.5% at year-end 2018. In for the long-term support in transforming We will remain cautious in our capital allocation and 2019, we will continue to invest in the customer Wereldhave to the current retail property company. continue to focus on operational excellence in journey and seek to optimise our portfolio by asset I wish you all the best for the future.