Unibail-Rodamco-Westfield SE

Good morning and welcome to Unibody Rodamco Westfield's 2025 Half-Year Results presentation. Our H1 results demonstrate our strong start to the year and are fully aligned with our Platform for Growth business plan to drive organic growth, sustainable value creation, and strong shareholder returns. Football and leasing activity in the first half are all in line with expectations, and we continue to outperform the wider market. In H1, we successfully delivered the retail opening of Westfield-Hamburg-Ibelsee Quartier and handed over the project's first office space. We also further developed our new revenue platforms by expanding our WestfieldWise retail media agency to our U.S. business, and launching a licensing business to generate asset-light, high-margin revenues while driving the international expansion of the Westfield brand. With the stabilization of yields, we are now capturing the positive impact of our rental growth in our valuations, leading to a plus 1.2% portfolio revaluation, including a slight increase in the value of our US portfolio for the first time since the Westfield acquisition. On disposals, We have now completed or secured 1.6 billion of another 0.9 billion under active discussion and are on track to deliver our planned 2.2 billion in disposals by early 2026. We also continue to proactively capture the right windows of opportunity when it comes to refinancing. In H1, this meant the reopening and downsizing of our hybrid and the successful refinancing of two U.S. assets at very attractive terms. As a result of this strong H1 performance and our confidence in that continued performance in H2, we expect full-year ARAPs to be at the upper end of our guidance range. Illustrating this strong performance, group like for like NRI is up 3.6% year on year. Like-for-like EBITDA is up 4.1%, which also reflects a reduction in general expenses. Our net debt-to-EBITDA ratio, including hybrids, stands at 9.2 times down from 9.5 times at the end of 2024. Increasing valuations, driven by the performance of our assets, combined with disposals, have contributed to an 80 basis points reduction in our loan-to-value ratio, including hybrids. With the two deals announced this morning, which I will come back to later, the loan-to value will decrease by an additional 40 basis points. Let's take a closer look at the operating performance of our shopping centers. Woodfall is up across all our regions, leading to tenant sales growth of 3.1% in Europe and 5.7% in the U.S., well ahead of blended national sales indices and outperforming core inflation. Our leading activity led to a 60 basis points reduction in vacancy in H1, further strengthening our commercial tension, visible for a high proportion of long-term deals, and a healthy 7.1% NGR uplift on top of indexation, consistent with the uplift levels we saw last year. Our OCRs remain stable on the back of positive sales evolution, giving us confidence in our ability to continue to capture revolutionary going forward. As well, we have not seen any impact of U.S. tariffs on our leasing negotiations and do not expect this to change in H2 based on how retailers are adjusting to meet these challenges and even capitalizing on opportunities such as currency effects and the suspension of de minimis import tax exemptions. Our platform for growth business plan includes growth at our Westfield-Wise retail media agency and new asset-light high margin revenues through licensing. In H1, we expanded Westfield-Wise to include our US retail media business, which will allow us to capitalize on the transcontinental platform for advertisers in both Europe and the US. We have secured 60% of our 2025 budget through H1 activity, out of which 40 million euros is net income for the period. This is down slightly from H1 2024 when we benefited from the early impact of the surge in demand and increased pricing during the Paris Olympics. On the licensing side, we announced a strategic and franchising agreement with Senomi Centers, the leading owner of shopping malls in the Kingdom of Saudi Arabia. Senomi will run up to eight of its flagship centers as Westfield, with the first three completed by H22026 in the cities of Daman, Jeddah, and Riyadh. There is strong potential in this business, and we will build on our first partnership to reach our target of a 25 to 35 million euro EBITDA contribution by 2028. Moving now to the delivery of our committed pipeline. It has been three months since the successful retail opening of Westfield-Hamburg-Iberzee Quartier, and we are seeing strong commercial momentum. The center has welcomed close to 4 million visits so far, and based on retailer feedback, their stores are exceeding sales targets. The cruise terminal is now fully operational with ships docking weekly, and the first teams from Shell Germany have moved into their new headquarters. We continue to work on the delivery of the additional office and halted spaces, and are actively managing the completion of the projects to remain within the 2.5 billion euro total investment cost. H2 will also see the final delivery of the Coppermaker Square residential project and the opening of the Centrum Chernimost extension, now over 90% pre-lit, which will bring the Westfield brand and an upgraded offer to these assets. Based on our current projects, and the deliveries plan, the development pipeline would be 1.1 billion Euro by year end. We have now successfully completed 1 billion Euro in disposals, including a 15% stake in Westfield Forum DL in Paris, aligned with the latest and effective book value, two regional retail asset disposals in line with the latest blended and effective book value, and an 80% stake in Trinity Tower, setting a positive benchmark for the Paris La Défense office market at a slight discount versus the H1 2024 unaffected book value. In addition, we have announced today two secure transactions subject to customary conditions precedent for these types of deals. First, the sale of the 957-key Pullman Paris Montparnasse Hotel to three institutional investors for above 300 million euros. This is the first large-scale OTET transaction in Paris since 2019. And we have entered into an agreement to sell our URW airports business to ASUR, Mexico's first privatized airport group, for 295 million U.S. dollars. This deal represents ASUR's strategic expansion into the U.S. airport retail concessions market. These two secure transactions account for around €0.6 billion and should complete in H2 2025. With another €0.9 billion of disposals under active discussions, we are well on track to achieve our target of €2.2 billion of disposals by early 2026. With our Better Places plan, we have made great progress in delivering our roadmap, progress which has been recognized within our industry and beyond. I am very happy to share that Time Magazine has again named us one of the 100 most sustainable companies in the world, this year ranking us as the number one real estate company worldwide. Corporate Knives has also increased our ranking, naming URW now the 11th most sustainable company in Europe and number one in the real estate sector. I am also pleased to share that we have made this progress against our targets while trending below the capex needs forecasted as a part of our plan. Our CSRD report was published in March. And obviously, our sustainability and IR teams are always available to share further details and answer your questions. Now, let me hand it over to Fabrice to go into more details on our strong financial performance before coming back for some closing remarks.

Thank you, Jean-Marie, and good morning, everyone. Our H1 results confirmed a positive dynamic seen in 2024, even against the backdrop of an uncertain macroeconomic environment. Tenant sales continued to increase above both core inflation and national sales indices supported by footfall growth. And we even saw an acceleration in Q2 compared to Q1 for both sales and footfalls. Retailer's demand for our flagship destinations remains strong with solid leasing activity in H1 2025. In H1, we also made significant progress in our disposal program with 1.6 billion euros of disposals completed or secured, leading to a further net debt reduction and the ongoing improvement of the group's credit metrics. This disposal progress is in line with our platform for growth plan presented in May with another 0.9 billion euros of disposals under active discussions. Let's look at our key H1 2025 figures. EREP stands at 5.11 euros per share, down just 0.6% on H1 2024, mainly as a result of the disposals completed in 2024 and H1 2025. It was also impacted by the higher number of shares from the CPP-IB deal completed in December 2024 when URW issued 3.25 million shares in exchange for an additional 39% stake in URW Germany. H1 performance is supported by EBITDA growth of plus 4.1% on a like-for-like basis, mainly from shopping centers. H1 2025 earnings. also benefited from the reduction in both financial expenses and the hybrid coupon, which I will comment on later. Here we provide a detailed bridge showing the RRF's evolution year on year. In H1 2025, we have delivered a 5.8% underlying growth on last year's RRFs, rebates for disposals, net of financial expenses, the Olympics, and the impact of the CPTIB deal. This is slightly above the underlying growth that we announced in our guidance for 2025. This mainly derives from retail NRI growth contributing plus 26 cents, primarily from the life-for-life performance. Financial expenses had a positive contribution of 4 cents from successful refinancing and FX hedging. The hybrid had another 5 cents positive impact from the liability management exercise completed in April this year. The minus 7 cents in the order category is mainly due to taxes and depreciation. Let's look now more closely at TRW's retail performance on a life-for-life basis. These figures are now reported based on the new organization for shopping center activity, which is split in four regions. This structure focuses and simplifies management while achieving cost and productivity efficiencies. NRI was up 4.1% on a life-or-life basis, including plus 3.5% for Europe and plus 6.3% for U.S. flagship assets. The U.S. NRI growth was supported by strong contribution from leasing activity, vacancy reduction, and high sales base rents. Indexation at a plus 1.4% contribution at group level, corresponding to a plus 1.8% increase in Europe. Our performance in Europe was supported by leasing activity with a plus 0.8% contribution mainly in Southern and Central Europe. The remaining plus 1.1% contribution is mainly driven by variable income, including commercial partnership and parking, as well as lower doubtful debtors with fewer bankruptcies and strong grant collection. In S1 2025, we saw a further decrease in the number of stores impacted by bankruptcies, amounting to just 86 units compared to 123 last year. This represents 0.9% of the total units compared to 1.2% in H1 2024. 76% of the units impacted by bankruptcy, so the tenants still in place or replaced, limiting their impact on the group's vacancy. This reflects the increased quality of the group's tenant base and the positive sales performance achieved at URW centers. Moving now to vacancy, which stands at 4.9% at group level. This is down from 5.5% last year and 6.3% the year before, showing the positive reduction trend in vacancy since COVID. It is in line with the level achieved at year-end 2024 of 4.8%, which was the lowest level since the WestSeal acquisition. Vacancy in Europe was 3.6%, flat compared to December 2024, and down from 4% last year. U.S. flagship vacancy was 6.3%, in line with December 2024, and down from 7.4% in June last year, reflecting retailers' appetite for URW's high-performing assets. Leasing activity remains strong, with €202 million of MGR signed in H1 2025. This level is lower than last year due to lower vacancy and lower bankruptcies to address. Excluding vacant units and bankruptcies, MGR signed amounted to 180 million euros in line with H1 2024. And we also saw a slight increase in the proportion of long-term leases to 80%, with a stronger increase in the U.S. Rental relief continued to be healthy, standing at 7.1% on top of indexation and 8% before indexation. This is in line with the 7.3% rental uplift achieved in H1 2024. H1 performance continued to be supported by the uplift on long-term deals of plus 13.1% before indexation, including plus 8% in Europe and plus 27.6% in the US. Looking more closely at rent per square meters signed in H1 2025, they showed an increase of 16% in Europe and 10% in the U.S. compared to H1-2024, demonstrating the increasing focus on higher value deals. Moving on now to offices. So NRI for offices amounted to 40 million euros in H1-2025, a 20% reduction compared to last year, mainly due to the disposals of gateway offices in H2-2024 and of an 80% stake in Trinity in H1-2025. 2025 NRI was supported by the full letting of light well delivered last year and therefore not included in the LAC4LAC performance. As a consequence, the LAC4LAC perimeter for offices is limited. Its growth was plus 1.9%, mainly driven by France at plus 6.8%. NOI for the CME activities to that 90 million euros, a 17% decrease compared to last year due to seasonality and the early positive impact of the Paris Olympics seen in H1 2024. On a life-for-life basis, i.e. excluding three annual shows, the Olympics and scope changes, NOI was almost flat compared to 2024 and plus 27% compared to 2023, the last comparable year, thanks to lower energy costs and the full recovery of the activity. Bookings and pre-bookings stand at 95% of the expected rental revenues planned for the year. Our H1 2025 performance was also supported by a 7% decrease in our general expenses as part of wider cost savings initiatives launched in 2024. This is on top of the 10% decrease already achieved in full year 2024. General expenses as a percentage of NRI decreased from 8.6% in H1 2024 to 8% in H1 2025, demonstrating the gains in efficiency achieved. These gains reflect our simplified organization structure, stringent procurement policy, and ongoing process automation. The Group GMV as of June 2025 amounted to 48.8 billion euros, a 1.8% decrease compared to last year. This is mainly due to a minus 1.2 billion euros FX impact, resulting from the weakening of the US dollar versus the euro over the period. GMV was also impacted by disposals achieved in H1 2025 for minus €0.8 billion, partly compensated by CAPEX of €0.6 billion spent over the period. Excluding FX, CAPEX and disposals, valuations were up €0.6 billion, corresponding to a 1.2% increase for the portfolio valuations. This increase supports the 1% annual growth of values we shared at our investor day. And as Jean-Marie mentioned, this is the first positive evaluation of the whole portfolio since 2018. Net range statement values to that 138.80 euros per share at the end of June 2025, a 3.5% decrease compared to year-end. This evolution is mainly due to FX impact of minus 3.77 euros per share and mark-to-market of financial instruments and hybrids with a minus 2.58 euros per share impact. This was partly offset by the IRS contribution of 5.11 euros per share, and NAV saw positive contribution from asset revaluation of 2 euros per share. Net reinstatement value also takes into account the increased distribution of 3.50 euros per share paid in May. Moving now to shopping center portfolio valuations. LAC4LAC retail valuation was up 1.1% in H1 2025, driven by a positive rent impact of plus 0.7% and plus 0.4% from yield impact. This positive rent impact reflects the strong operating performance achieved in H1 2025, both in Europe and in the US. Overall, yield impact, which had been negative in previous years, saw a stabilization in the US and a slight improvement in Europe. Like-for-like valuations were up 1.3% in Europe, slightly above revaluations in H1 and H2 2024 of plus 0.8% and 0.7% respectively. Valuations were up in the U.S. for the first time since the Westfield acquisition at plus 0.3%, reflecting a positive rent impact and stable yields. Regarding U.S. flagship assets, the GMV increase was plus 0.9%, fully coming from a rent impact. The net initial yield for European assets as of June 2025 stands at 5.4% in line with previous years. The net initial yield for U.S. flagship assets as of June 2025 stands at 5.1% in line with 2024 and 30 basis points above 2023. The stabilized yields for U.S. flagship assets based on rents assumed by appraisers in year three stands at 5.8%, a 10 basis points increase compared to last year. These yields reflect the growth potential embedded in our U.S. assets. The NRI growth assumed by appraisers for the U.S. flagship asset stands at 4.1%, and as explained, this is based on cash flow growth, including the contractual rent and cam escalation of 3% on average. This means that three-quarters of the growth assumed by appraisers comes from current leases in place. At group level, the growth of 3.7% assumed by appraisers on our retail portfolio is below the NRI growth potential of these assets as presented within our platform for growth plan. Moving now to development. The key event in H1 2025 was a successful delivery of the retail component of Westfield Hamburg, reaching almost 4 million visits since its opening in April, as well as the first office handover to Shell Germany. Following these deliveries, the total investment cost of URW's development pipeline decreased from 3.5 to 1.9 billion euros, including 1.3 billion of committed projects and 0.6 billion in the control category. The pipeline includes the addition of the CNIT1 office refurbishment at Paris La Défense for plus 0.1 billion euros. As outlined by Jean-Marie, H2 will be active in terms of deliveries with Westfield Hamburg offices and the Ibis Hotel, the last face of Copernicus Square, and the Charny Moss extension. They are pre-letting since at 85% excluding residential. Following these deliveries, URW's pipeline is expected to go down further to circa 1.1 billion euros at year-end 2025. This is consistent with the capex plan presented during the investor day. Net debt has further reduced in H1 2025 from 21.9 to 21.2 billion euros on an IFRS basis including hybrid. The one billion euros disposals completed in H1 had a positive impact of 130 basis points on the LTV. The 0.7 billion euros in recurring cash flow generated in H1 were partly offset by the 0.6 billion in capex and acquisition over the period. Net debt was impacted by the 0.5 billion euros cash distribution paid in H1, which had a negative impact of 105 basis points on the LTV. Net debt decreased by 0.4 billion euros as a result of the weakening of the US dollar, which also impacted the GMV as we saw earlier, leading to an overall negative impact of 20 basis points from FX on the LTV. Last, Portfolio valuation had a positive impact of 60 basis points on the LTV. In total, our IFRS LTV, including hybrid, stood at 44.7%, down 80 basis points compared to December 2024. The group has also secured an additional €0.6 billion of disposals to date, and taking into account these disposals and the pay-up settlement, the IFRS net debt, including hybrid, would stand at €20.7 billion on a pro forma basis, and as a consequence, the LTV would decrease further to 44.3%. The net debt to BDA ratio further improved to 9.2 times in H1 2025 down from 9.5 times in 2024. This is consistent with the trends presented at our investor day at a nine times level anticipated in 2026. These results from the net debt reduction I've just mentioned. and it also includes a slight decrease in EBITDA year-on-year of minus 1.1% due to the mechanical effect of disposals, partly offset by a plus 4.1% increase on a life-for-life basis. This ratio does not take into consideration the additional €0.6 billion of disposals secured, nor the full-year impact on the NRI side from project deliveries in 2025. Cost of debt for H1 2025 amounted to 1.9% in and with H1 2024 and slightly below the 2% in full year 2024. This includes the benefit of part of the refinancing completed to date and the hedges in place in 2025 to cover both rates and currency exposure. Cost of debt is expected to increase for the full year due to the maturity of debt with a low coupon over the period, lower cash amount and decreasing cash remuneration. This will be partly offset by the impact of CMBS refinancing completed in March and July 2025 for $1.2 billion. In total, the cost of debt is in line with the trajectory presented during the investor days of a 20 to 30 basis points increase per year. Let's look at those refinancing in a bit more detail. We refinanced $1.2 billion of CMBS refinancing successfully managing to both extend the maturity and secure improved conditions with an annual saving of around 190 basis points compared to conditions in place before. This included the refinancing of Roseville for $275 million and Century City for $925 million. Century City financing was the tightest spread for AAA tranche since 2019 and the tightest coupon on a CMBS over the last five years for a single asset. In parallel, URW also refinanced part of its hybrid stack, seizing an attractive window ahead of the US tariffs announcement. The group repaid 995 million euros of hybrid with a coupon of 7.25% and issued a new 815 million euros hybrid with a coupon of 4.875%. The remaining 180 million euros was paid using the group's available cash. He supported the group's EREPS with a reduction in the hybrid coupon of €7 million in H1 2025. These transactions illustrate the group's access to funding at attractive conditions and our ability to seize market opportunities. The group's IFRS cash position decreased from €5.3 billion to €3.3 billion during H1 2025. This results from the use of unavailable cash to repay maturing debt and part of our hybrid stack. This is consistent with the group's approach to reduce its cash position as remuneration conditions in Europe deteriorated with a decrease in ECB rates, as placement conditions in the West were impacted by the weakening of the U.S. dollar, and as we have progressed on our deleveraging program. The unrun credit facilities stood at 8.7 billion euros as of June 2025. In total, the group's available liquidity amounts to 12 billion euros and would cover the group's debt maturities for the next three years, even assuming no new debt refinancing and no further disposals completed. This gives us time to access the debt market when we see fit and to continue the leveraging in an efficient and orderly manner consistent with our plan. With that, let me hand back to Jean-Marie for some closing remarks. Thank you, Fabrice.

Before we start the Q&A, a quick comment on our 2025 guidance. We expect full-year airwaves to be at the upper end of the €9.30 to €9.50 range. This is based on our strong H1 performance and our confidence in the continued performance in H2, combined with our successful reopening and downsizing of the hybrid, our refinancing achievements with $1.2 billion of U.S. secured debt, and the progress and timing of disposals. We also confirm that we will propose a €4.50 per share distribution for fiscal year 2025, representing a circa 30% increase on the 2024 distribution, as part of the planned cumulative distribution of at least €3.1 billion for fiscal years 2025 to 2028, announced as part of our Platform for Growth business plan. As usual, this guidance assumes no major deterioration of the macroeconomic and geopolitical environment. With that, let's open the line for questions.