2019 UNIVERSAL REGISTRATION DOCUMENT CONTENTS GROUP OVERVIEW 3 CORPORATE 1.1 Business environment, economic GOVERNANCE REPORT 215 model and strategy 4 5.1 Management and oversight 1 1.2 Key figures 10 5 of the Company 217 1.3 Share ownership and stock information 14 5.2 Compensation of corporate officers 240 1.4 Background 14 1.5 Property portfolio as of December 31, 2019 16 1.6 Simplified organization chart as of December 31, 2019 21 SHARE CAPITAL, SHARE 1.7 Risk Management 22 OWNERSHIP, GENERAL MEETING AND TREASURY 6 SHARE BUYBACK PROGRAM 267 BUSINESS FOR THE YEAR 35 6.1 Share capital and share ownership 268 2.1 Business Overview 36 6.2 General Meeting of Shareholders 284 2.2 Business Activity by Region 41 6.3 Description of the treasury share 2 2.3 Net Current Cash Flow 46 buyback program 294 2.4 Investments, developments, and disposals 47 2.5 Parent Company Earnings and Dividend 50 2.6 Portfolio Valuation 51 2.7 Financial Policy 56 ADDITIONAL INFORMATION 297 EPRA Performance Indicators 59 2.8 7.1 General information 298 Outlook 63 2.9 7.2 Documents on display 299 7 7.3 Statement by the person responsible for the Universal Registration Document, which serves as the annual FINANCIAL STATEMENTS 65 financial report 299 3.1 Consolidated Financial Statements 7.4 Persons responsible for the statutory for the year ended December 31, 2019 66 auditand the financial information 300 3 3.2 Statutory Auditors’ report on the 7.5 Cross-reference tables 301 consolidated financial statements 126 3.3 Company financial statements for the year ended December 31, 2019 130 3.4 Statutory Auditors’ report GLOSSARY 297 on the financial statements 153 3.5 Report of the Supervisory Board to the Ordinary and Extraordinary General Meeting 156 3.6 Other information 156 SUSTAINABLE DEVELOPMENT 159 4.1 Klépierre’s sustainability strategy READ THE DIGITAL VERSION and main achievements 160 OF THE UNIVERSAL 4 4.2 Act for the Planet 167 REGISTRATION DOCUMENT 4.3 Act for Territories 181 ON KLEPIERRE’S WEBSITE 4.4 Act for People 186 WWW.KLEPIERRE.COM 4.5 Sustainability governance 200 4.6 Summary of performance against long-term commitments, methodology and concordance tables 204 2019 UNIVERSAL REGISTRATION DOCUMENT INCLUDING THE ANNUAL FINANCIAL REPORT This Universal Registration Document was filed on March 13, 2020 with the AMF, as competent authority under Regulation (EU) 2017/1129, without prior approval pursuant to Article 9 of said regulation. The Universal Registration Document may be used for the purposes of an offer to the public of securities or admission of securities to trading on a regulated market if supplemented by a securities note and, if applicable, a summary and any amendments to the Universal Registration Document. The whole document is approved by the AMF in accordance with Regulation (EU) 2017/1129. This Universal Registration Document is available on Klépierre’s website, www.klepierre.com and on the AMF website at www.amf-france.org. 2 KLÉPIERRE 2019 UNIVERSAL REGISTRATION DOCUMENT 1 GROUP OVERVIEW 1.1 1.5 BUSINESS ENVIRONMENT, PROPERTY PORTFOLIO ECONOMIC MODEL AND STRATEGY 4 AS OF DECEMBER 31, 2019 16 1.1.1 Business environment 4 1.5.1 Shopping centers 16 1.1.2 Economic model 6 1.5.2 Convenient shopping centers 1.1.3 Strategy 8 and other retail properties 19 1.5.3 Overview of valuation reports prepared by Klépierre’s independent 1.2 external appraisers 19 KEY FIGURES 10 1.2.1 Business key performance indicators 10 1.6 1.2.2 Non-financial key performance indicators 11 SIMPLIFIED ORGANIZATION CHART 1.2.3 Financial key performance indicators 12 AS OF DECEMBER 31, 2019 21 1.2.4 Sectoral key performance indicators (EPRA format) 13 1.7 1.3 RISK MANAGEMENT 22 SHARE OWNERSHIP 1.7.1 Objectives 22 AND STOCK INFORMATION 14 1.7.2 Principles 22 1.7.3 Organization 23 1.7.4 Main risk factors 23 1.4 1.7.5 Details on certain controls 31 BACKGROUND 14 KLÉPIERRE 2019 UNIVERSAL REGISTRATION DOCUMENT 3 GROUP Overview 1 Business environment, economic model and strategy 1.1 BUSINESS ENVIRONMENT, ECONOMIC MODEL AND STRATEGY Klépierre is the European leader in shopping malls combining property development, property and asset management activities. The Group’s property portfolio of more than 100 leading shopping centers in Continental Europe, hosting 1.1 billion visits per year and valued at €23.7 billion as of December 31, 2019, makes it a unique player in the retail property market. 1.1.1 Business environment A highly fragmented market and a fast changing environment The retail market is largely dominated by store-based retailing, accounting for 90% of retail sales in Europe(1) whereas online sales represent approximately 10% of total retail sales. As a major shopping destinations owner, Klépierre operates in a highly fragmented market in which roughly 74% of the physical retail offer (in GLA; Gross Leasable Area) is located on the high street, 21% in shopping centers and 5% in other property segments (mainly retail parks and outlets). Within the shopping center segment, the Group’s portfolio includes several of the highest-quality malls in Continental Europe, located in the most densely-populated and dynamic catchment areas. 3 RETAIL PROPERTY MARKET BY TYPE OF PROPERTY(2) behavior and aspirations and making consumers, more demanding. The new way of shopping is largely characterized by a combination of emotional desires, digital impulses together with ethical and social 74% considerations. Even if the emergence of different consumer habits 21% High street primarily concerns millennials it must be understood as a cross- Malls generational movement which is encouraging the retail industry to 5% adapt its organization to meet the demands of today and tomorrow Other and offer a seamless experience across all channels. Consequently, and although physical stores remain by far the preferred channel for consumers, e-commerce is another component of Klépierre’s business environment. Indeed, in the countries where Klépierre operates, online sales represent roughly 10% of overall retailer sales(1) and are continuing to grow. The role of the store is undeniably changing therefore, and is now part of an omnichannel approach. To address this challenge, retailers are adapting the format and number of In a constantly changing environment, shoppers’ habits are being their stores and reconfiguring their supply chains, with the aim of influenced by new mobility and demographic dynamics, changes in maximizing synergies between online and physical stores. Brick-and- urban planning and technological and environmental revolutions. In mortar locations support brand awareness, provide opportunity for recent years, the purchasing journey has evolved very rapidly with consumers to access products and foster click-and-collect sales. In consumers becoming the driving force, notably thanks to technology that context, Klépierre is easing the transition to omnichannel for which is enabling them to shift from being mere shoppers to well its retailers and acting to drive in-store revenues from both sides of informed consumers. This transformation is influencing customer shopping (physical and online) while attracting new players to its malls. (1) In 2018, Source: ICSC Industry Insights, March 2019. (2) Source: PwC Strategy& study on shopping malls in Continental Europe, October 2018. 4 KLÉPIERRE 2019 UNIVERSAL REGISTRATION DOCUMENT GROUP Overview Business environment, economic model and strategy 1 A unique relationship with retailers Relying on its unique pan-European presence and strong visitor base, Klépierre is the main landlord of Europe’s largest retailers such as Inditex (206 stores in Klépierre malls), Bestseller (85 stores), H&M (79 stores), Sephora (54 stores), McDonald’s (62 stores), Calzedonia (144 stores) and Primark (10 stores). 3 NUMBER OF STORES FOR A SAMPLE OF EUROPEAN RETAILERS AS OF DECEMBER 31, 2019 206 stores 54 stores 10 stores 104 stores 42 stores 79 stores 85 stores 49 stores 62 stores 144 stores 80 stores 33 stores The Group is convinced that a thorough understanding of retail 3 VALUE OF THE RETAIL PROPERTY PORTFOLIO and strong relationships with banners are essential to the success OF MAIN LISTED RETAIL REITS AT YEAR END 2019 of its malls. Klépierre’s unique exposure to retailers and its unrivaled (in billions of euros, total share, including transfer taxes) pan-European platform are key competitive advantages in competing favorably with the high street segment and other retail real estate companies. Klépierre continues to gain market shares in the catchment URW 41.3 15.2 areas where its malls are present with distinctive retailers choosing Klépierre the Group to expand their store network and implement their latest 23.7 concepts in Europe, making a major contribution to increasing the Hammerson 9.8 outreach and footfall of its shopping centers. The strong links that bind the Group to its key accounts and fast-growing retailers – including Intu 7.8 Digitally Native Vertical Brands (DNVBs) – translate into continuous and intense leasing activity as well as a permanent renewal of the Carmila 6.4 offering to match customer expectations (see section 1.2 “Key figures”). Eurocommercial 4.1 A leading player in the retail real estate sector Citycon 4.1 Illustrating its long-term investment vision, Klépierre is among the leading retail owners in Europe and benefits from the French “SIIC” Mercialys 3.6 status (equivalent to the REIT regime) for listed companies whose primary business activity is to acquire and/or construct buildings for Wereldhave 2.9 the purpose of leasing them and directly or indirectly owning equity Portfolio valuation (Europe) Portfolio valuation (outside Europe) in corporations whose business purpose is identical. Source: Company disclosures. Proportionate portfolio valuation for URW, Hammerson, In the shopping center category, Klépierre’s main listed competitors Intu and Eurocommercial and group share portfolio valuation for Carmila.