Download the 2009 annual report in PDF format - ANF

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DESCRIPTION OF THE BUSINESS
Profi le
1. Profile
ANF is a major real estate operator in the Lyons and Marseilles city
centres as well as also holding a large portfolio of hotel properties
in France.
Appraised at €1,504 million as of December 31, 2009, ANF’s real
estate assets are comprised of buildings covering 260,000 square
metres, around 130,000 square metres in new developments and
166 hotel properties leased to France’s third largest hotel chain,
B&B. The properties break down as follows:
• Lyons city centre: 56 mixed-use Haussmann-style properties
(49% retail premises, 22% residential units and 29% offi ce
space)*.
• Marseilles city centre: 179 mixed-use Haussmann-style
properties (37% retail premises, 38% residential units, 16%
offi ce space and 9% other)*. This prime city centre location
with a heavy retail component – in high-growth potential cities
* As a percentage of rental income.
2. Message from the Chairman
of the Supervisory Board
Chairman of the Supervisory Board
Alain Hagelauer
In 2009, ANF showed its resilience, coming through this recession
period in a business sector where the downturn was slower and to
date not as strong as in other areas.
This performance was notably based on the balanced and
diversifi ed nature of its real estate assets, which provide it with a
real level of protection, but also on pushing forward with a strategy
of ongoing economic and fi nancial development that is sustainable,
profi table and prudent.
In addition, although the outlook for a recovery in the real estate
market looks pretty grim for 2010 and not much brighter for 2011,
the Company’s business model should continue to generate
satisfactory levels of operating income.
So, for example, the hotel portfolio leased to the B&B budget hotel
chain, which generates close to half of ANF’s revenue on a recurring
basis and over half its operating margin is a key factor to long-term
profi tability and helped consolidate appraisal values compared to
the prior year.
Similarly, the city centre concentration of the real estate assets in
Lyons and Marseilles in attractive locations and the quality product
offering are further positives enabling the renewal of leases on better
terms compared to prior rent levels.
ANF • 2009 ANNUAL REPORT
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Contents
– and the diverse tenant base means that ANF’s rental income
is particularly protected against any decline in consumption and
able to withstand economic diffi culties.
The portfolio of hotel properties spread across France is leased
(minimum 12-year terms, expiring in 2019) at fi xed, indexed rents,
providing a steady, secure stream of rental income.
By virtue of their diversity, ANF’s real estate assets thus provide
it with a sound and resilient base. Listed on Euronext Paris
(compartment B, ISIN FR0000063091), ANF opted for SIIC status
in 2006 and its majority shareholder Eurazeo complies with the
obligations associated with this regime. Eurazeo, which held
59.24% of the capital at the date of drafting of the Registration
Document, is the principal shareholder and ensures the stability of
the Company’s shareholding structure.
As regards risks of fi nancial deterioration, while they clearly exist
they have been well identifi ed and controlled by the Company’s
teams, who manage them on a rigorous and systematic basis to
correct or attenuate any negative effects. Our challenges include, for
example, the relatively high vacancy rate in the Marseilles residential
real estate assets, which it wasn’t possible to bring down over the
year, but which didn’t rise either despite the worsening situation for
tenants in terms of jobs and salaries. The positive, however, was
that departures were offset by new rentals at higher rents, even if
turnover was a little up on previous years.
It was the same story in the retail sector with few stores beating their
revenue targets, something that would have triggered rent increase
clauses. Thankfully closures were also few and far between and
were quickly offset by the arrival of new tenants.
It should be emphasised that in this sector and with a view to
underpinning store sales levels, ANF moreover regularly contributes
to fi nancing various local promotional drives built around the major
annual events, to reaffi rm its role as an active partner committed to
the same retail development goal.
Managed in that way, ANF’s business model can be termed both
defensive, by safely navigating challenging economic times, but also
a generator of income and cash fl ow, making possible the pursuit of
a selective and prudent growth strategy, the continued payout of a
substantial dividend while keeping debt ratios amongst the lowest
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