Key highlights for the nine months to 31 March 2018:
? Earnings (direct investment result) increased 9.3% compared with the same period last year, due to an increase in rental income and reduced interest expenses. Earnings per depositary receipt increased 7.7% to €1.81.
? Net property income rose 5.5% for which the main drivers were additional income from completed property extensions, projects and acquisitions.
? Rental growth was 2.9% on a like-for-like basis (excluding Valbo and Woluwe which were acquired in January and March 2018 respectively).
? Retail sales grew 1.5% for the nine months to 31 March 2018.
? The sale of four Italian centres was completed after close of the period in April 2018, bringing total sales to €367 million for the financial year.
Jeremy Lewis, Eurocommercial’s CEO, said:
“Over the past nine months we have accomplished a major refocussing of our portfolio with the acquisitions of the prime Woluwe shopping centre in Brussels and Valbo in Sweden, together with the sale of seven smaller properties in France, Italy and Sweden for a total of €367 million. Further sales are planned in all countries with
the aim of ensuring that the acquisitions and extensions of Woluwe, Valbo and other existing centres do not necessitate a significant increase in borrowings. The timing of these transactions is designed to plan for continuing dividend growth over the coming years.
“The problems affecting the retail sector in the United Kingdom and USA are not evident in Eurocommercial’s markets where retail turnover continues to grow and there are no major local corporate failures. Demand from national and international brands is good across our countries and we have, for example, introduced the Italian
fashion brand, Calzedonia, to Woluwe shopping centre. The new H&M brand, Afound, has chosen our C4 centre in Kristianstad which will open in September as their first out of town location.
"Eurocommercial has had another quarter of solid operational and financial results, with earnings increasing substantially year-on-year. Retail sales rallied in the month of March, following a slight decline in January and
February due to poor weather impacting visitor numbers. Across the nine months, retail sales were solid and seven of our centres - I Gigli, Collestrada, Centroluna, Les Atlantes, Val Thoiry, Chasse Sud and Bergvik –
recorded retail sales growth of four percent or more."

Financial & Operational Review
Direct Investment Result
The direct investment result (earnings) for the nine-month period to 31 March 2018 increased by 9.3% to €88.5 million, compared with €80.9 million for the nine months to 31 March 2017, due to higher rental income and
reduced interest expenses. The direct investment result per depositary receipt at 31 March 2018 increased by 7.7% to €1.81 from €1.68 at 31 March 2017.
The direct investment result is defined as net property income less net interest expenses and company expenses after taxation. In the view of the Board, this more accurately represents the underlying profitability of the Company than the IFRS “profit after tax”, which includes unrealised capital gains and losses.

Net Property Income
Net property income, including joint ventures (on the basis of proportional consolidation), for the nine months to
31 March 2018, increased by 5.5% to €128.7 million, compared with €122.0 million for the previous corresponding period, mainly due to additional income from property acquisitions (Woluwe and Valbo) and
extensions/projects (Hallarna, I Gigli, Grand A), plus like-for-like rental growth.

Rental Growth
Like-for-like (same floor area) rental growth in the Company’s properties for the twelve months to 31 March 2018 was 2.9%.
Uplifts on relettings and renewals averaged 18.2% overall and contributed 1.6% of total rental growth. Rental growth was particularly strong in the Italian and Swedish portfolios due to relettings and renewals averaging a 20.9% and 22.6% uplift respectively. The uplift on relettings and renewals in France for the 12-month period
partly reflected tenant choices at MoDo which produced lower rents but improved the merchandising mix and maintained occupancy in the centre at around 98%.
French centres recorded positive rental growth of 1.4%, excluding the short-term vacancies due to the departure of H&M from Passage du Havre and Les Atlantes where we were unable to provide the larger units they require.
These vacancies reduced like-for-like overall rental growth for France to -0.4%. Negotiations to fill the vacated space at Passage du Havre are almost complete, while the long-awaited reconfiguration of Les Atlantes will be
facilitated by the vacation of this strategic unit, together eventually with that of Toys’R’Us, which is still trading although in administration after the failure of its US parent. In the meantime, Les Atlantes has continued to
perform well during the quarter and tenant sales at the centre increased 3.3% during the three months to March 2018.

Like-for-like rental growth, 12 months to 31 March 2018
No. of relettings and renewals
Average rental uplift on relettings and renewals Like-for-like rental growth
Overall* 254 18.2% +2.9%
France 48 3.9% -0.4%
Italy 160 20.9% +4.6%
Sweden 46 22.6% +4.0%
* Eurocommercial acquired Valbo in January 2018 and Woluwe in March 2018. Leasing statistics will be incorporated in this table after 12 months of
ownership.

Retail Sales Growth
Like-for-like retail sales growth in Eurocommercial’s shopping centres for nine and twelve months to 31 March 2018, compared with the previous corresponding periods, is set out below.
Swedish centres saw strong turnover growth particularly at Bergvik, Ingelsta and Valbo, which is included in these numbers. The growth excludes the contribution from Hallarna, which has been trading well since reopening
in October 2017. Italian retailer sales increased 1.4% for the nine months, with particularly strong results at I Gigli, Carosello and Collestrada. In France, turnovers grew 1.4% for the nine months, despite the departure
of H&M from Passage du Havre and Les Atlantes.
In Belgium, the Woluwe acquisition was completed only in March 2018. Footfall for the centre has been impacted to some extent by ongoing works to install new tram stops directly outside, which will significantly improve accessibility. The works are expected to finish in September 2018, at which point Eurocommercial will launch a
major new marketing campaign to celebrate 50 years since the centre first opened.
Retail Sales Growth by Country*
Nine months to 31 March 2018 Twelve months to 31 March 2018
Overall +1.5% +1.3%
France +1.4% +1.1%
Italy +1.4% +1.0%
Sweden +1.8% +2.9%
* Excluding hypermarkets, Systembolagets and extensions/redevelopments and Belgium (Woluwe shopping centre). Includes Valbo.

Retail Sales Growth by Sector*
Nine months to 31 March 2018 Twelve months to 31 March 2018
Fashion -0.6% -0.2%
Shoes +1.3% +2.9%
Gifts and jewellery +6.3% +5.3%
Health and beauty +2.8% +2.4%
Sport +4.4% +4.3%
Restaurants +10.6% +9.6%
Home goods +0.5% +0.6%
Electricals -1.0% -1.8%
Hyper/supermarket -1.5% -0.9%
* Excluding extensions/redevelopments and Belgium (Woluwe shopping centre). Includes Valbo.

Occupancy Cost Ratios
Eurocommercial's strategy is to lease its shops to the best retailers and, in doing so, increase the overall attractiveness of the shopping centre. Keeping rent in proportion to turnover ensures retailers are profitable and
better positioned to survive temporary downturns, thus contributing to the minimal vacancies at our centres.
Total occupancy cost ratios (rent plus marketing contributions, service charges and tenant property taxes as a proportion of retail sales including VAT) for Eurocommercial galleries excluding hypermarkets and Systembolagets (the Swedish government-owned alcohol retailer) at the end of the quarter were 8.5% overall:
8.9% in France; 8.3% in Italy; and 8.3% in Sweden.

Rent Arrears and Vacancy Levels
Rental arrears of more than 90 days represent 0.5% of annual rental income. Out of a total of almost 1,700 shops in our portfolio, 16 units are occupied by eight companies which have entered administration. Regular rent payments continue to be received for 12 of these units.
Vacancies at the end of March 2018 were 1.3% of expected rental value, a slight increase on the previous quarter due to short-term vacancies at Passage du Havre and Les Atlantes.

Adjusted and IFRS Net Asset Values
The adjusted net asset value at 31 March 2018 was €45.05 per depositary receipt compared with €43.60 at 31 March 2017 and €44.87 at 31 December 2017. Adjusted net asset values do not consider contingent capital gains tax liabilities nor do they consider the fair value of financial derivatives (interest rate swaps) which are used
to stabilise interest costs.
The IFRS net asset value at 31 March 2018, after allowing for contingent capital gains tax liabilities if all properties were to be sold simultaneously and the fair value of the interest rate swap contracts, was €39.42 per
depositary receipt compared with €38.30 at 31 March 2017 and €39.20 at 31 December 2017.
No property valuations were undertaken at the end of the period, in accordance with the Company’s policy to only commission independent revaluations at the half year and year ends. The adjusted net asset value per depositary receipt, therefore, has changed minimally since December 2017, reflecting only accrued income and currency movements. All properties will be externally valued at 30 June 2018 and reported in the full year results.
The weakening of the Swedish Krona during the quarter had an unrealised negative impact of €21.5 million on the Euro value of Eurocommercial’s Swedish assets and liabilities at 31 March 2018, as recorded in the
consolidated statement of comprehensive income.

Funding
During the third quarter of the financial year, Eurocommercial negotiated three new loans totalling €537 million, including a €472 million eighteen-month loan facility to fund the purchase of the Woluwe shopping centre, 50% of which will convert to a seven-year mortgage loan within the current financial year.
The acquisition was immediately earnings accretive but has temporarily increased Eurocommercial’s loan to
value ratio to 45%, and the net debt to adjusted net equity ratio* to 81%, both of which are calculated following the sale of four Italian properties for €187 million shortly after the balance date. The ongoing asset rotation
programme will provide further funds to ensure that these ratios will reduce.
The average overall interest rate (including margin) for the total loan portfolio at 31 March 2018 was 2.0% (31 December 2017: 2.6%), due to the favourable rates of short-term finance secured for the Belgian acquisition.
The average length of the loan portfolio is currently three years, reflecting the short-term bridging loan for Woluwe but it is expected that this will revert to around five years for the end of the financial year. At the end of
the reporting period, 65% of interest costs were fixed for an average of six years.

* On the basis of proportional consolidation.

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