Unibail-Rodamco-Westfield SE

Good morning, this is the conference operator. Welcome and thank you for joining the Unibail-Rodamco-Westfield Healthier Results 2026 Conference Call. As a reminder, all participants are in listen-only mode, and after the presentation, there will be an opportunity to ask questions by pressing star and 1 at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star and 0 At this time, I would like to turn the conference over to Mr. Vincent Roger, Chief Executive Officer. Please go ahead, sir.

Thank you. Good morning and a warm welcome to URW's H1 2026 webcast. Thank you for taking the time to follow our presentation on a busy reporting day. I'm pleased to take you through a short overview of our results and business highlights before Fabrice looks at our financials in more detail. We will then open the line for Q&A. Our H1 performance is once again driven by our powerful platform for growth. At the core of this platform is our ecosystem of performance, built on our unparalleled network of flagship destinations, operating expertise, advanced data and AI capabilities, and the strength of the Westfield brand. All combined under one roof, this creates a clear competitive advantage. Our ecosystem helps retailers and brands grow by driving traffic conversion, visibility and sales. It also provides URW with multiple growth levers through leasing new revenues, data and capital light opportunities, translating into attractive business performance. Her strong H1 2026 results are a testament to the power of this growth platform and her ability to turn scale into performance and performance into sustainable growth. Moving now to the detail of our first half results where we continue to deliver a key A Platform for Growth business plan priorities. Strong retail operating performance was supported by sustained leasing momentum, increasing MGR uplifts, and record occupancy. This is real NRI growth. not just indexation. Very strong footfall and tenant sales translate into leasing tension and occupancy gains, which allows us to be highly proactive when it comes to asset management. Westfield Rise kept on delivering growth at 7% year-on-year in a slightly muted brand activation market. With our 2.2 billion euro disposal plan now complete, we are very happy to transition to value-accretive capital recycling, including in the US already from H1. We are capturing attractive opportunities to improve portfolio quality and drive future growth while staying disciplined. We also saw another positive portfolio revaluation, up just under 1% in the first half, which contributed to a 90 basis point improvement in our LTVV ratio, and we executed well on over 2 billion in financing. All these elements supported Moody's upgrade of her outlook to positive during the period. Fabrice will cover the financials in detail, but this snapshot shows how we are consistently delivering in line with our business plan. Continued top line growth, with like-for-like EBITDA growth above 5%, Increasing profitability with improving EBITDA margin, demonstrating the operating leverage of a platform and our ability to translate growth into earnings. Discipline cost and financial expense management, even in a higher rate environment, reflecting a proactive refinancing work and strong access to debt markets. and control investments, with net capex aligned with the annual envelope in our business plan. This is a business with good operating momentum, careful capital deployment, and a financial profile that supports our growth ambitions. Of course, headline numbers are still impacted by the €2.2 billion of disposals executed since January 2025. I'm happy to say we are getting towards the end of this phase from an accounting point of view with the completion of our disposal plan. Let's take a closer look at shopping center performance. Tenant sales and footfall once again showed healthier annual growth across Europe and the U.S. This is really key for us. Group vacancies down 80 basis points versus H1 2025 to just over 4%, the lowest level since 2017. Leasing activity was strong with 200 million euros of MGR signed in H1 and an accelerating MGR uplift at plus 14% on long-term leases. If you recall, Leasing, leasing, leasing is our number one priority for 2026. So it's very encouraging to see this progress in H1 and the overall leasing trend across our portfolio. This is exactly the dynamic we want to create as part of our business plan. Higher footfall and sales intensity, leasing tension, stronger MGR, market share gains, and occupancy improvements. Let's have a quick look at the two flagship examples in Europe that show how active asset management is driving tangible outperformance. Westfield London and Westfield Centro in Germany. Both have delivered double-digit year-on-year tenant sales growth in H1. At Westfield London, occupancy has improved by more than 800 basis points since 2021. Here, we have meaningfully rebuilt leasing tension, achieving lower vacancy and higher NGR uplifts at one of Europe's leading retail destinations. We have also rapidly scaled our Westfield Rise offer to reach Westfield London's massive 27 million audience, with further upside expected. At Westfield Central, we have invested meaningful leasing capital over the last three years, resulting in increased footfall, sales intensity, and reduced OCRs. We have opened 14 flagship stores in the last 18 months, including the largest in-mall Zara store in Europe, while also upgrading this asset's leisure offer to increase its destination appeal. Tenant sales growth reached double digits which shows our teams have conducted a very successful repositioning in a muted German consumption environment. These are two strong examples of the value creation effect our active flagship asset management can deliver even in markets with a soft macroeconomic context. A key achievement in H1 with also the signing of a conditional purchase agreement to take full ownership of one of her many trophy assets. This is the largest M&A transaction for the group since COVID, with attractive pricing, no LTV impacts, and ARAP secretive towards the end of her plan. Westfield UTC in San Diego is a 116,000 square meter open-air shopping center with annual footfall of 14 million and $765 million in tenant sales. The center has one of the highest sales intensities in the U.S., and San Diego is one of the strongest metropolitan economies in the country, affluent, fast-growing, and innovation-led. The asset has limited capex needs, following a major upgrade over the last 10 years and the recently completed luxury extension, which has attracted brands such as Chanel, Hermès, and Loro Piana. We see a clear and durable upside at this fantastic asset through higher rents, retenanting, parking revenues, Westfield rise, and over the long term, opportunities for additional mixed-use densification. Increasing our ownership will thus contribute to lifting our solid medium-term organic growth profile. In addition to UTC, we've been very active in unlocking opportunities within our US portfolio. Macro fundamentals across our eight markets are very supportive and favor our dominant flagship assets, which benefit from attractive occupancy cost ratios, clear leasing tension, and repeatable rental growth.

Our H1 US portfolio activity combines leveraged neutral acquisitions, smart capital recycling, and capital light development projects.