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INCLUDING THE ANNUAL FINANCIAL REPORT Universal Registration Document 2021
1 Group overview 3 Chairman’s Message 4 Klépierre in figures 6 History of the Group 8 Economic environment 10 Vision 12 Strategy 14 Panorama 16 Typical Klépierre mall 20 Retail First® 22 Let’s Play® 24 Clubstore® 26 Act for Good® 28 Leadership widely recognized by external stakeholders 29 CSR 30 Financial discipline 32 Business model 34 Key outcomes 36 2 Business of the year 39 2.1 Business overview 40 2.2 Business activity by region 44 2.3 Net current cash flow 49 2.4 Investments, developments and disposals 51 2.5 Parent company earnings and dividend 54 2.6 Portfolio valuation 55 2.7 Financing policy 59 2.8 EPRA performance indicators 62 2.9 Events subsequent to the accounting cut-off date 67 2.10 Outlook 67 3 Sustainable development 69 3.1 Act for Good® 70 3.2 Act for the Planet 79 3.3 Act for Territories 93 3.4 Act for People 99 3.5 Summary of performance against long-term commitments, methodology and concordance tables 111 4 Financial statements 127 4.1 Consolidated financial statements for the year ended December 31, 2021 128 4.2 Statutory auditors’ report on the consolidated financial statements 191 4.3 Company financial statements for the year ended December 31, 2021 195 4.4 Statutory auditors’ report on the financial statements 218 4.5 Report of the Supervisory Board to the annual combined General Meeting to be held on April 26, 2022 222 4.6 Other information 222 5 Risk and Control 225 5.1 Key risk factors 226 5.2 Risk management and internal control 240 6 Supervisory Board’s report on corporate governance 249 6.1 Oversight and management of the Company 251 6.2 Compensation of corporate officers 275 7 Share capital and shareholding, General Meeting, and share buyback program 307 7.1 Share capital and shareholding 308 7.2 General Meeting of Shareholders 321 7.3 Description of the treasury share buyback program 336 8 Additional information 339 8.1 General information 340 8.2 Documents available 341 8.3 Statement by the person responsible for the Universal Registration Document, which serves as the annual financial report 341 8.4 Persons responsible for the statutory audit and the financial information 342 8.5 Property portfolio as of December 31, 2021 343 8.6 Simplified organization chart as of December 31, 2021 348 8.7 Information about the shares 349 8.8 Cross-reference tables 350 9 Glossary 355 CONTENTS READ THE ON LINE VERSION OF THE UNIVERSAL REGISTRATION DOCUMENT ON KLEPIERRE’S WEBSITE WWW.KLEPIERRE.COM
This Universal Registration Document was filed on March 30, 2022 with the AMF, as competent authority under Regulation (EU) 2017/1129, without prior approval pursuant to Article 9 of said regulation. This is a translation into English of the Universal Registration Document of the Company issued in French. 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 website of the AMF, www. amf-france.org. INCLUDING THE ANNUAL FINANCIAL REPORT Universal Registration Document 2021
2 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT Group overview 1
KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 3 Let’s Play® 24 Clubstore® 26 Act for Good® 28 Leadership widely recognized by external stakeholders 29 CSR 30 Financial discipline 32 Business model 34 Key outcomes 36 Chairman’s Message 4 Klépierre in figures 6 History of the Group 8 Economic environment 10 Vision 12 Strategy 14 Panorama 16 Typical Klépierre mall 20 Retail First® 22 1 Group overview
“Klépierre remains the European leader in shopping malls with a portfolio of more than 100 prime centers.” Jean-Marc JESTIN CHAIRMAN OF THE EXECUTIVE BOARD 4 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT GROUP OVERVIEW Chairman’s Message 1
2021 was a challenging year, marked in particular by the equivalent of 2.5 months of store closures in our shopping centers. Despite these challenges, we demonstrated great resilience and posted solid results in 2021 with 10.6% growth in net current cash flow per share, exceeding the target we announced in October 2021. Since stores reopened in June 2021 and through December 2021, all of our operational indicators have neared or exceeded pre-pandemic levels, as evidenced by the recovery of our leasing activity, the improvement in our occupancy rate and the uptick in our merchants’ revenues. During the year, we also successfully sold nearly €880 million in non-strategic retail properties and significantly reduced our debt by more than €1 billion. I am very grateful to all Klépierre teams for their tremendous commitment at every stage of this crisis. In a fast changing environment, they ensured that we could keep providing retailers with an unrivaled platform of leading malls to support them as they grow their business. We successfully adapted to the restrictions imposed by the health crisis, while continuing to offer a fun, enjoyable shopping experience in a safe, secure environment. Our operational excellence and our development, lease and asset management expertise are increasingly informed by a deep commitment to sustainable development, which ensures that Klépierre makes a positive contribution to the environment, to its host communities and to people. Non-financial rating agencies have praised Klépierre’s international leadership, awarding it excellent ratings for its CSR strategy. Backed by our strategic refocusing on assets located in fast growing metropolitan areas and by our innovative vision for shopping centers, we act to bring physical retail to a whole new level. Klépierre remains the European leader in shopping malls with a portfolio of more than 100 prime centers that attract hundreds of millions of visitors every year. Today, we are facing the war in Ukraine. We immediately responded by allocating our resources to collecting food and basic necessities to help our Ukrainian neighbors. I would like to commend the extraordinary dedication of our teams, and know that I can rely on the strength of our Group to face this new challenge with determination. KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 5 GROUP OVERVIEW Chairman’s Message 1
KLÉPIERRE, THE EUROPEAN LEADER IN SHOPPING MALLS 6 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT GROUP OVERVIEW Klépierre in figures 1
The size of the circle is proportionate to the value of Klépierre’s portfolio in each region. +€3bn >€1bn >€500m >€100m 4.3m sq.m. rentable floor area 3,700 retailers €1.1bn in revenue €21bn total portfolio value 12 COUNTRIES in continental Europe 1,100 employees 10,300 leases 100+ LEADING SHOPPING MALLS IN CONTINENTAL EUROPE KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 7 GROUP OVERVIEW Klépierre in figures 1
Key dates in Klépierre’s history 8 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT GROUP OVERVIEW History of the Group 1
Klépierre is created. 1990 Acquisition of Steen & Strøm, Scandinavia’s leading shopping center owner and manager. 2008 Pan-European agreement with Carrefour to acquire 160 shopping malls. 2000 Disposal of 126 malls adjoining Carrefour hypermarkets. 2014 Opening of the Créteil Soleil extension to the east of Paris, two years after the Val d’Europe extension was completed. 2019 Merger with Compagnie Foncière. Portfolio value triples. 1998 Simon Property Group, global leader in the shopping center industry, acquires a 28.7% stake in Klépierre. 2012 Acquisition of a portfolio of shopping centers in Poland and the Czech Republic. 2005 Merger with Corio in the Netherlands and acquisition of two shopping centers, Oslo City, in Norway and Plenilunio, in Spain. The new Group’s portfolio value increases from €14 billion to more than €21 billion. 2015 Sale of assets in Norway, France and Germany. 2021 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 9 GROUP OVERVIEW History of the Group 1
Retail, a highly fragmented industry largely dominated by brick-and-mortar stores The retail industry is largely dominated by physical stores, which account for 84% of retail sales in continental Europe, compared with 16% for online sales (chart #1). In a constantly shifting environment, online sales have risen sharply in Europe in recent years, by 10% to 18% depending on the country, with a penetration rate varying widely from one country to the next (chart #2). Nevertheless, Klépierre has successfully driven continuous growth in recent years. This performance has been led by the Group’s strategic focus on the shopping center segment, whose strong consumer appeal and highly modular features make it the clear preference of major international retail chains when they decide to open new stores (chart #3). Today, Klépierre is one of the few shopping mall companies with critical mass in continental Europe (chart #4). 16% Online sales 60% City-center stores 19% Shopping centers 5% Other Source: PwC Strategy& study on shopping malls in Continental Europe; Klépierre estimates. SEGMENTATION OF THE RETAIL INDUSTRY IN 2021 chart #1 15.8% 4.8% European average 5.9% 21.9% Germany 5.4% 14.6% France 6.0% 15.2% Sweden 5.7% 23.9% Netherlands Spain 2.0% 10.9% Poland 2.0% 12.4% Italy 1.5% 9.2% 2021 2012 Source: Centre for Retail Research. PENETRATION RATE OF ONLINE SALES BY COUNTRY chart #2 10 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT GROUP OVERVIEW Economic environment 1
THE COMPETITIVE ADVANTAGES OF SHOPPING MALLS chart #3 Source: Company disclosures. URW: non-US portfolio, proportional value of the portfolio. Hammerson: proportional value of the portfolio. Carmila: Group share. Deutsche Euroshop: data as of September 30, 2021. Eurocommercial: proportional value of the portfolio. VALUE OF THE EUROPEAN RETAIL PROPERTY PORTFOLIO OF THE MAIN LISTED RETAIL REITS AT YEAR-END 2021 (in billions of euros, total share, including transfer taxes) chart #4 35.1 6.4 6.2 4.7 4.6 4.3 4.0 3.1 1.9 20.7 URW Klépierre Hammerson Carmila Altarea Cogedim Citycon Deutsche Euroshop Eurocommercial Mercialys Wereldhave H I G H C O N C E N T R A T IO N O F R E T A IL B R A N D S/ V ISI T O R S O P T I M I Z E D R E T A I L M I X C O M P R E H E N S I V E , A D J U S T A B L E T O D E M A N D M O D U L A R S T O R E F O R M A T S E A S Y R E S T O C K IN G A N D L O G IS TI C S C U S T O M E R E X P E R I E N C E A C C E S S I B I L I T Y A N D A M B ITI O U S C O M M IT M E N T T O COMPETITIVE ADVANTAGES OF SHOPPING MALLS S U S T A I N A B ILI T Y KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 11 GROUP OVERVIEW Economic environment 1
In today’s fast transforming retail landscape, our baseline – Shop. Meet. Connect.® – expresses our identity and informs our vision of a shopping center. SHOP. MEET. CONNECT. ® “Shopping malls are open, living environments where all types of communities, both physical and digital, come together to meet and connect.” JEAN-MARC JESTIN CHAIRMAN OF THE EXECUTIVE BOARD 12 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT GROUP OVERVIEW Vision 1
MEET. Because our centers are lifestyle environments where people meet and interact, and not just an e-tailer webpage. Customers come here to enjoy an experience full of excitement and fun. Because Klépierre deeply believes that physical retail will continue to expand, led by an appealing and constantly refreshed offering. SHOP. CONNECT. Because our shopping centers offer a unique service that blends the physical and the digital into a single universe. Connected to the city and its residents, they are seamlessly integrated into the omnichannel retailer platforms and offer visitors an array of digital services. KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 13 GROUP OVERVIEW Vision 1
Over the past ten years the Group has refocused its operations on markets sought-after by retailers and on top-tier assets located in the most vibrant cities in Europe. Our unmatched operational expertise enables us to support customers as they grow their business and to regularly refresh the retail mix in our malls, which is a core driver of the promised visitor experience. This customer-centric approach is designed to make shopping fun and to offer shoppers unrivaled excitement and emotion. Lastly, being the European leader in shopping centers is both a source of pride and a great responsibility, which is why we are engaged in a multitude of daily initiatives that help to positively address today’s environmental and social challenges. A vision and a strategy aligned with the changing world of retail 14 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT GROUP OVERVIEW Strategy 1
OFFERING VISITORS THE FINEST CUSTOMER EXPERIENCE To enhance the shopping experience in its malls, Klépierre is strengthening its marketing initiatives and paying careful attention to each center’s architecture and interior design. This approach is embodied by two concepts: Let’s Play® and Clubstore®. In addition, to respond more effectively to environmental, societal and social challenges, in late 2017, Klépierre deployed the Act for Good® CSR program, aimed at ensuring that its operations make a positive contribution in addressing today’s pressing issues. EMBRACING THE RETAIL TRANSFORMATION 3 REFRESHING THE RETAIL MIX AND SUPPORTING RETAILER GROWTH Leveraging its operational expertise and special relationship with the world’s leading retail chains, the Group is constantly modernizing the retail mix in its centers and agilely responding to retailers’ business development needs by offering them opportunities to expand in their latest formats. CONTINUING TO INVEST IN PRIME CENTERS IN THE HEART OF EUROPE’S LARGEST CITIES Over the years, the Group has developed a unique portfolio of leading shopping centers in the most affluent, densely populated and fastest growing catchment areas in Europe. Its selection of assets is also aligned with the positioning and expansion plans of the leading national and international retailer chains, giving it a decisive competitive advantage in responding to the retail transformation. 1 2 KLÉPIERRE ——— 2021 UNIVERSAL REGISTRATION DOCUMENT 15 GROUP OVERVIEW Strategy 1