MRM // 2022 Universal Registration Document

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Risk factors

Main risk factors

2.2.1 Risks related to the economic environment, consumer habits and purchasing behaviour

1 WAR IN UKRAINE

Description of the risk and its impacts

Risk mitigation measures

As M.R.M.’s assets are all located in France, it did not suffer from any direct impact of the war. However, M.R.M. remains exposed to the indirect consequences of the war and to the economic uncertainties generated and therefore remains attentive to the indirect effects of the conflict on its business, such as the impact of the increase in the cost of energy on the operating expenses of its shopping centres.

The armed conflict between Ukraine and Russia, which began in February 2022, triggered very sharp geopolitical tensions in Eastern Europe with the risk of this conflict spreading to other countries. This constitutes a source of risks and uncertainties whose economic (direct and indirect), financial, social and environmental consequences could have significant negative impacts on all economic players. In France, where all of M.R.M.’s assets are located, the indirect economic consequences of this conflict are being strongly felt, in particular with an increase in the cost of raw materials and energy, a certain level of inflation and supply problems.

2.2.2 Financial risks

The procedures in place to monitor risks relating to the preparation and processing of accounting and financial information are detailed in paragraph 1.7 of the management report in Section 3.6 of this Universal Registration Document.

2 UNFAVOURABLE CHANGE IN INTEREST RATES

Description of the risk and its impacts

Risk mitigation measures

As property investment is a highly capital-intensive business, M.R.M. needs to raise long-term financial resources in the form of loans or equity to finance its investments and acquisitions and also to refinance any debts reaching maturity. After a decade of historically low or even negative interest rates, there has been a sharp rise in long-term interest rates on the global financial markets since mid-2022. All of the bank loans taken out by the M.R.M. group are at variable rates. The rise in interest rates therefore automatically results in an increase in the cost of its loans and the Group’s financial expenses, which could have an unfavourable impact on its profitability and results and could slow down the Company’s development projects.

To protect itself against rising interest rates, the Group systematically hedges its variable-rate debt by subscribing to caps. As of 31 December 2022, all of the Group’s debt bore interest at variable rates. It is 77% hedged by caps on 3-month Euribor and strike rates of between 1% and 2.5%. It should be noted that in January 2024, M.R.M. will once again have to hedge between 45% and 65% of its bank debt. An analysis of the sensitivity to the rise in interest rates shows that an increase in the 3-month Euribor of 100, 200, 300 or 400 basis points would have a negative impact of €982 thousand, €1,593 thousand, €1,917 thousand and €2,192 thousand respectively on the Group’s financial expenses. Lastly, the Group’s next significant deadline for repaying its bank debt and therefore refinancing is in December 2028, which leaves time for an improvement in economic and financial conditions.

M.R.M. 2022 UNIVERSAL REGISTRATION DOCUMENT

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