HALF-YEAR FINANCIAL REPORT 20211

La Hulpe, 6 September 2021

HALF-YEAR RESULT: €29.6M +51 %

Despite the persistence of the health crisis, ATENOR has experienced a remarkable first half-year, leading to strongly increased half-year results.

PROJECT DIVESTMENTS: €313.5M OF FINANCIAL MEANS GENERATED

Giving priority to the turnover of the invested equity, ATENOR has concluded several major transactions since the beginning of the year. This amount corresponds to the sum of the cash received and the reduction of the bank debt dedicated to the projects Vaci Greens F (at 30.06.2021), HBC and Buzz (at 31.07.2021) and Dacia 1 (scheduled for 31.12.2021).

The conclusion in January 2021 of a sale contract for the future European Union conference center is emblematic both for Brussels and for ATENOR!

ACQUISITION OF NEW PROJECTS: €242M ENGAGED FOR NEW PROJECTS

During the first months of 2021, ATENOR continued its international growth plan.

This amount concerns the combined acquisition costs for the 4 new projects: Bakerstreet and Lake 11 in Budapest, rue Victor Hugo in Paris and Cloche d'or in Luxembourg.

SURFACE AREA FOR PERMITS OBTAINED: 300,250M² SCHEDULED FOR 31.12.2021, +281% COMPARED WITH 2020

One consequence of the health crisis has been that permit application procedures have been taking longer. While as of 30 June, permits have been granted for 25,000m², ATENOR is expecting to receive by 31.12.2021 permits for an additional surface of more than 275.000m², thus boosting the results prospects for the two following years. A forerunner and committed player in sustainable urban development, ATENOR applies through the development of each of its projects its "sustainability policy" and the fruits of the reflections reached in its trends laboratory, ArchiLab.

DEVELOPMENT PORTFOLIO: 33 PROJECTS TOTALING SOME 1,300,000M²

ATENOR's active presence (local teams) in 10 countries provides a particular type of diversification, which is a source of resilience and opportunities. Taking the recent acquisitions and divestments into account, the portfolio currently contains 1,300,000m², of which 60% of office space and 40% of residential (the equivalent of about 6,500 units under development).

ATENOR'S CEO STÉPHAN SONNEVILLE SA COMMENTS:

  • Our positioning on sustainability and internationalization has made ATENOR resilient in 2020 and the beginning of 2021. We anticipate increased results for 2021.
    Given the developments in the markets in which we are active and the quality of the projects in our portfolio, we can approach 2022 and 2023 with prospects of growth, embarking on the second phase of the international growth plan. »

**

*

To facilitate understanding of our activities and track their evolution, we provide relevant comments on the first half-year's activities in accordance with the main stages of the value creation cycle in our core business.

1 Atenor has chosen French as its official language. Consequently, ontly the French version text is authentic. The version in English is translation of the French version.

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  1. Activity level overview*

* See the presentation available on www.atenor.eu

Acquisition: As well as the acquisitions in Budapest  during the first half-year - one being office space (24,500 m²)

and the other residential (92,180m², i.e. more than 1,300 units), there were two other major acquisitions: Paris CBD and Luxembourg Cloche d'or. These acquisitions are part of our drive (second phase of the growth plan) to establish our identity as a key player in the 10 markets in which we are active.

Building permit application: As announced, we anticipate that our permit application rate in 2021 will be considerably higher than in 2020, reflecting the high level of activity by the teams despite the unfavorable health situation.

Getting building permit: The slowdown in the processing of planning applications, due to the health crisis, will continue to make itself felt in 2021. Nonetheless, the long procedures undertaken in or before 2020 should normally reach their conclusion during the second half of this year. For instance, the permits for Lakeside in Warsaw and WellBe in Lisbon will be issued shortly, authorising us to start with the construction.

In Brussels, the planning permit for the REALEX project is still pending, even though the application lodged has been revised downwards in terms of height and surface area at the request of the Secretary of State in charge of urban planning. Permit issuance in line with this amended application is vital in order to meet the deadlines and the technical and sustainability specifications for the European Union Conference Centre (replacing the obsolete Borschette) for which a sales contract was concluded on 29 January 2021.

Construction: We maintain our strategy of launching construction work as soon as permission is obtained. This policy is particularly supported by the excellent performance of the residential market and the recovery of office take-up in several countries following the marked slow-down seen in 2020. Thus, 20% of the portfolio is in construction. Of these projects under construction, more than 40% are regarded as low-risk, as they are under pre-lease or pre-sale contracts.

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Letting: Given the marked general slow-down in office space take-up in 2020, we had based our forecasts solely on investment activity. During the second quarter, a revival of take-up was seen in a number of countries. Several of our projects benefited from this, generating an additional margin on pre-sold projects. Despite the anticipated reduction in building stocks, demand is directed towards new office space that is highly sustainable and can accommodate post-Covid/Covid-safe work styles. In most cases, this requirement is difficult to meet in obsolete building stock.

In line with this logic, it may be recalled that we have reached a great agreement with the State of Luxembourg for the lease of almost 10,000 m² in the TWIST building.

Sale: We have experienced a particularly active first half-year. Apart from the pre-sale of the European Union Conference Centre, we have made several major sales in Hungary and Romania. We have also delivered the Buzz building in Luxembourg. Together, these transactions have had a marked combined effect on results, cashflow and debt reduction. We are also achieving historic sales records on the residential side, in both Western Europe and Central Europe.

As a consequence of the activity growth, a certain recurrence has installed itself in the disposal of projects. Thus, several divestment transactions are currently in progress for which the timing cannot be specified.

  1. Prospects for FY 2021

As vaccination rates progress, we are seeing an upturn in the economy and the property market. The health crisis will continue to affect activity levels in the property sector during 2021, but less than in 2020. Processing of permit applications should return to its normal pre-Covid pace.

The health crisis will have accelerated trends that were already ongoing before the pandemic: new ways of working, teleworking, revised work-life balance, talent-hunting, mobility, etc.

But, of course, it is the climate crisis and its urgency that have been brought home to us over these past months. We absolutely must change our behaviour as regards carbon emissions.

ATENOR has indeed positioned itself in line with this deep long-term trend: a consensus on a reduction of office space (an assessment that needs qualifying, depending on the city or country concerned), but certainly also different, more sustainable offices, housing and equipment.

Its positioning on sustainability and internationalization has made ATENOR resilient in 2020 and at the beginning of 2021. Through the recovery - a sustainable recovery - ATENOR will, from 2021 onwards, enjoy the fruits of its positioning.

We expect higher results in 2021. Their extent will be specified in the course of the coming months.

Given the developments in the markets in which we are active and the quality of the projects in our portfolio, we can approach 2022 and 2023 with prospects for growth.

  1. Interim Management Report

The first half of 2021 closed with a consolidated net profit (group share) of 29.60 million Euro, an increase compared to a result of 19.62 million Euro registered for the first half of 2020.

As at 30 June 2021, it is mainly margins generated on sold and pre-sold projects, both office and residential, for the most part in Central Europe that generated this result. The lease revenues of the University Business Center II (Warsaw, Poland), Nysdam (La Hulpe, Belgium) and Vaci Greens F (Budapest, Hungary) buildings have also brought a contribution. Revenues in this semester have once again been diverse with 8 projects contributing to the results.

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Table of key consolidated figures ('000 Euro) - Limited review of the auditor

Results

30.06.2021

30.06.2020

Net consolidated result (group share)

29.604

19.624

Profit per share (in Euro)

4,40

3,69

Number of shares

7.038.845

7.038.845

of which own shares

313.427

313.427

Balance sheet

30.06.2021

31.12.2020

Total assets

1.171.434

1.058.442

Cash position at the end of the period

35.702

67.887

Net indebtedness (-)

-741.459

-589.539

Total of consolidated equity

298.651

261.212

Revenues from ordinary activities and consolidated results

The revenues from ordinary activities as at 30 June 2021 amounted to 132.71 million Euro. They mainly consist of (a) revenues from the sale of the buildings Vaci Greens E and F in Budapest (€93.44M), (b) revenues from the sale of apartments in residential projects (City Dox and La Sucrerie) for a total of 22.42 million Euro, (c) the revenue earned from the sales in future state of completion of the Buzz (Leudelange) and Au Fil des Grands Prés projects (offices; €12.01M), as well as (d) lease revenues on the University Business Center II (Warsaw), Nysdam (La Hulpe) and Vaci Greens F (before sale) buildings totalling 3.04 million Euro.

The other operating revenue (€9.64M) mainly includes the remaining fit out works for the European Commission in the building The One (€4.02M), the usufruct royalty (partly retroceded to Immo Beaulieu SA) of the Beaulieu building for the first semester of 2021 (€3.38M) as well as the reinvoicing of service charges and miscellaneous costs of the leased buildings (€1.54M). The disposal of the NGY participation (Hermes Business Campus building) in Bucharest (€ 0.15M) complements the other operating incomes.

The operating result amounted to 41.87 million Euro. This is mainly influenced by the sale of the Vaci Greens E and F buildings (€38.58M), by the sale of the various apartments in residential projects as mentioned above (total of €3.06M), the results of the progress of the pre-sold Buzz and Au Fil des Grands Prés office buildings (€2.58M), the net result of the usufruct receivables on the Beaulieu building (€1.99M) as well as the rental revenue, net of charges, from the UBC II and Nysdam buildings (total of €1.86M).

The net financial result amounts to -5.34 million Euro compared with -4.53 million Euro for the first half of 2020. The increase of net financial charges over the first half year is mainly due to the increase of the Group's average net debt (€ +249.35M compared to the first half of 2020) attenuated by the rise in activations (IAS 23 ; € +1.36M compared to the first half of 2020) relating to the developments in progress.

Taxes amounted to 5.50 million Euro on 30 June 2021 and are mainly composed of current tax and deferred tax liabilities relating to the Vaci Greens, City Dox, Buzz and Au Fil des Grands Prés projects (total of €5.30M).

The net result (group share) of the first half of the financial year amounts to 29.60 million Euro.

Consolidated balance sheet

The consolidated shareholders' equity amounts to 298.65 million Euro, which represents 25.5% of the balance sheet total, a rise of 37.44 million Euro compared to 31 December 2020.

As at 30 June 2021, the Group has a net consolidated indebtedness of 741.46 million Euro (excluding available cash) compared with a net consolidated indebtedness of 589.54 million Euro as at 31 December 2020, mainly due to the issuance of a bond in two "Green"-type tranches for a total of €100M in March 2021.

The "buildings held for sale" classified under "Inventories (Stock)" represent the real estate projects in portfolio and in the course of development. This item amounts to 846.51 million Euro, a net increase of 70.80 million Euro in comparison with 31 December 2020. This variation results primarily (a) from the acquisition of La Cloche d'Or (Renault, Luxembourg) and Bakerstreet II and Lake City projects (Budapest) for a total of 157.16 million Euro, (b) from the continuation of the works and studies of the Arena Business Campus, Roseville (Budapest), Com'Unity (Bezons), @Expo, Dacia, UP-site (Bucharest), City Dox and Realex (Brussels) projects, for a total of 80.93 million Euro and (c) from the sale of apartments in the City Dox project and the sale of HBC and Vaci Greens F office

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buildings which reduce the stock by 175.37 million Euro. The balance of the net change in this item (€ 8.09M) is distributed over other projects under development.

Financing policy

ATENOR has continued its policy of financial diversification. This involves spreading maturities in order to limit refinancing risks in the event of unfavourable market conditions. It has also ensured flexibility in the financing of its projects, both before obtaining permissions and during the construction and marketing phases.

Following approval from the FSMA, ATENOR updated its multi-currency "notes" long-term issuance programme (EMTN - Euro Medium Term Notes) on 2 February 2021 for a total amount of EUR 150 million. On the one hand by extending it to private investors with denominations of one thousand euros and on the other hand by linking its use and new issues to the Green Finance Reference Framework.

On 19 March 2021, ATENOR successfully issued two "Green Retail Bond" tranches with maturities of 4 and 6 years - primarily aimed at private investors. The proceeds of these 2 tranches of respectively €25M (3% - maturity 2025) and €75M (3.50% - maturity 2027) will be exclusively used to finance sustainable and energy efficient property development projects. They contribute to ATENOR's environmental objectives under its "Green Finance Framework (GFF)" and are in line with the United Nations Sustainable Development Goals (UN SDGs). These bonds are listed on Euronext Brussels.

ATENOR has a short, medium and long-term CP/MTN (commercial paper) line of 200 million Euro, of which some

181.75 million Euro have been drawn (30.06.2021) and intends to actively pursue its use, with a preference for longer maturities (starting from two years).

As mentioned in the previous paragraph, the use of the EMTN line (150 million Euro) amounts to 103.60 million Euro (30.06.2021). ATENOR will continue to use it in its GFF and is prepared to process the proposals (reverse inquiries) of qualified investors for maturities corresponding to the European development of its project portfolio.

ATENOR shares (code ISIN BE0003837540)

ATENOR has concluded with KBC Securities, officially recognised by Euronext, a liquidity contract on ATENOR shares. KBC Securities is performing the mission of providing liquidity for ATENOR shares, in accordance with the conditions set out in this liquidity provider contract.

Each day, KBC Securities places purchase and sale orders on the markets, in complete independence from ATENOR but respecting certain conditions as regards volume and spread.

Through this new collaboration, ATENOR wishes to improve and facilitate investors' access to ATENOR securities.

Principal risks and uncertainties

The real estate sector generally takes a certain amount of time to experience the effect of an economic recovery. Even if significant public funds are being mobilised to revive the economy following the exit from the Coronavirus pandemic, the visibility of this way out of the crisis is still uncertain. The current slowdown in the real estate sector could last for several more months. We remain attentive to the possible consequences of this develop- ment, but are confident in the resilience of the portfolio due to its diversification.

The Board of Directors is attentive to the analysis and management of the various risks and uncertainties which ATENOR and its subsidiaries are confronted with.

On 30 June 2021, ATENOR was not confronted with any litigation.

Impacts of the Covid-19 crisis and prospects for FY 2021 and 2022

The Covid pandemic will continue to weigh heavily on the activity level of the property sector in 2021. We have therefore taken into account, in our forecasts at the beginning of the year, the slowing down in the decision- making and administrative procedures regarding urban planning but also the fact that the office rental market in the private sector will remain at a relatively low level.

At the present stage, we do not anticipate that the Covid-19 crisis will have a major impact on ATENOR's expected level of activity, nor on its results forecasts.

However, we remain attentive to any developments, notably to any consequences of new waves of contamination caused by the variants of Covid-19.

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Atenor SA published this content on 06 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 September 2021 16:21:08 UTC.