Chairman of the ANF Executive Board A major real estate company in the city centers of Lyons and Marseilles

2008 operations 2008 annual accounts

Sustainable Development

M. Bruno Keller | Chairman of the ANF Executive Board In a particularly tough environment, ANF’s rental income jumped 18% in 2008, at constant scope and by 92% in absolute value. The EBITDA margin stood at 75.1% versus 58.7% in 2007. These figures demonstrate the strength and growth of ANF’s business model. Furthermore, and despite an increase in the capitalization rates used, the appraised value of the asset rose by 11%. Therefore, this increase totally justifies the asset revaluation and development strategy set up since 2005. A major real estate company in the city centers of Lyons and Marseilles

A major real estate company in the city centers of Lyons and Marseilles Valued at €1,544 million at the end of 2008, ANF's assets comprise: 268,500 m2 of built structures in the downtown districts of Lyons and Marseilles (26% shops, 51% housing, 23% offices.) 150,000 m2 of projects and 161 hotels leased to B&B. Thanks to the prime location of its assets and the diversity of its tenants, ANF’s assets are robust and resilient. The portfolio of hotel properties provide secure, recurring cash for nearly half of the group’s rental income. Since 2005, ANF has been implementing an asset revaluation strategy. This strategy is expected to raise rental income to more than €100 million by 2012 - 2014 and thereby sharply improve cash flow.

	2008 operations

Continuation of the rental revaluation strategy led to a sharp increase in ANF’s rental income in 2008. Revenues jumped 18% to €59.1 million at constant scope. Rental income in Marseilles totaled €16.0 million up by 22% at constant scope. In Lyons, rental income dropped by 12% to €14.9 million at constant scope Rental income from B&B 161 hotel properties were boosted by the 5.62% contractual indexing as from November 1, 2008, pushing rental income up by €1.6 million on an annual basis. This significant rental revaluation, at the heart of the ANF strategy, confirms the medium and long term ambitions and guarantees recurring cash flow for the Company. Indeed, while continuing to completely renovate its assets (facelifts, remodeling of lobbies and staircases, early upgrading to meet new elevator standards), ANF is gradually preparing an increase in rents based on two factors: revaluation of built assets and the development of new projects. This strategy is expected to raise ANF’s rental income to more than €100 million by 2012 - 2014 and thereby sharply improve the company’s cash flow. ANF has strong competitive advantages to implement this strategy: ANF assets are located in the two largest cities outside Paris with tremendous growth potential. The downtown locations of ANF’s buildings protect the buildings against any market slumps in city outskirts. ANF is not exposed to mock property development deals. ANF launches the works for its development projects after the tenant is identified and when the financing for the project is fully secured. The low debt ratio is a competitive advantage in the current situation. Lastly, nearly half of ANF’s rents are long term and recurring thanks to the rental of B&Bs hotel properties with a long-term lease. The financing for the development of ANF’s Lyons and Marseille assets is derived from a credit line of €250 million, negotiated in July 2007, at advantageous conditions (Euribor + 50 basis points). This credit is amortized at maturity and there is no reimbursement date before 2014. Thanks to this credit, ANF has the resources required to complete all the projects initiated or for which the company has commitments.

	2008 annual accounts

Key figures (In million euros) 2007 2008 % Rental income 30.8 59.1 92 % Appraised values 1,392 1,544 11 % NAV (€ / share) 43.54 44.32 2 % Condensed income statement (IFRS) (In thousand euros) 2007 2008 Change Rental income Lyons - Marseilles 26,105 30,863 + 18 % Rental income B&B 4,685 28,216 + 502 % Invoiced rents 30,790 59,080 + 92 % Operating income 15,980 43,386 + 172 % Margin 51.9 % 73.4 % + 41 % Changes in fair value 191,922 30,088 - 84 % Operating income after fair value change 207,902 73,474 - 65 % Net income 197,792 69,203 - 65 %

Condensed balance sheet as at December 31, 2008 (IFRS standards) (In thousand euros)   2008 ASSETS   Investment properties   1,504,473 Other assets   3,055 Current assets   54,178 Total assets   1,561,705 LIABILITIES AND SHAREHOLDERS’ EQUITY   Shareholders’ equity   1,099,046 Financial debt   381,800 Other liabilities   80,859 Total liabilities and shareholders’ equity   1,561,705

	Sustainable Development

ANF is a major real estate company in the city-centers of Lyons and Marseilles. It also has significant properties in the hotel industry with the B&B hotel chain in France.

In a sector where the notion of sustainable development is integrated into the townplanning documents and where the regulation is increasingly strict, ANF is faced with a triple challenge: strike a balance between urban development and the preservation of natural areas, promoting a balanced social representation (“mixité sociale”) and protecting the environment. Considering sustainable development as a source of opportunities, it asserts its ethical commitment and its environmental and social responsibility.

Accordingly, since 2005, ANF is focused on integrating environmental concerns into the management of its Hausmann-style real assets. In 2008, the restoration and conservation of the architectural quality of front walls continued as well as renovations (double glazing, water meters, low-energy bulbs) with the purpose of improving the quality of life of users, reducing energy consumption and have better control over charges. In addition, new projects were studied, with the concern of harmonious urban integration, good social balance and minimal impact on the environment. In 2009, ANF intends to continue its dynamic renovation of its properties and incorporate HQE (“Haute Qualité Environnementale”) targets in the definition of development projects.

In social issues, ANF has set a responsible management system around transparency, collegiality and integrity values. It has already adopted the Code of Ethics and drafted a securities trading code. It also ensures the development of skills, compliance with gender equality, and the long-term involvement of its associates thanks to a motivating profitsharing policy.

Lastly, ANF contributes to the balanced urban development of the cities in which it is located, in agreement with local stakeholders particularly through its management of government housing. In 2008, it established a partnership with a social financing entity to build 39 government housing in its buildings. The disposal of two building was also studied with a view to offering affordable homes in the city center. ANF has also decided to support Lyon’s “Entrepreneurs in the city” project launched by the Sport in the “Sport dans la Ville” Association, with the aim of encouraging the social and professional insertion of underprivileged urban youth through various programs.

Creating more long-term value

All the initiatives taken by ANF in the environmental, social and societal areas represent an important source of long-term value creation.

By adapting its assets to the user’s expectations, ANF becomes more competitive and improves its quality on the market.

By relying on a motivating human resource policy, it favors employee sharing in the company’s growth and performance.

Lastly, by participating in the development strategy of the cities where it operates, with a strong bias towards local companies and suppliers, ANF has become a key player in economic development.

In Marseilles:

• 54 buildings renovated between 2005 and 2008 representing more than 40% of Marseille's real assets.
• 191 apartments renovated in 2008.
• Goal to renovate 200 to 250 in 2009-2010, i.e., approximately 50% of the lots currently available.

In Lyons:

• 23 buildings renovated between 2005 and 2008 representing more than 50% of Lyon’s real assets.

Rabatau Project in Marseille

Study of a project to build 3,780 m² of offices and businesses comprised of 2 blocks interconnected buildings with a garden terrace. Mediterranean type plants were selected for their low water requirements and their resilience to drought. The thickness of the soil used for planting fosters thermal inertia, a genuine advantage in terms of energy savings and usage comfort. The soil protects the concrete from overheating in the summer and improves thermal performance in winter. Furthermore, the architectural biais promotes natural light which penetrates inside the block.