Vgp N.V.

Welcome to the review of VGP's financial results over full year 2025. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead.

Good morning everybody and welcome to the presentation of our full year 2025 financial results. My name is Jan van Geet and I'm the CEO of VGP, as most of you know I think. I'll first start with a little executive summary and the highlights of 2025. We recorded a pre-tax profit of $338 million, an increase of $19 million or 6% higher than the full year of 2024. Our net asset value grew 8.3% up to $2.6 billion and that's the EPRA NTA is up 9%. We have an EBITDA growth of 28% to $454.7 million, 13.5% increase. And what makes me happy is the historic record of 106.7 million of new and renewed leases, which I will go to more detail later on. The annualized committed leases at the year end sent now at 468.3 million. We have 1,052,000 square meters under construction and our development pipeline is 75% pre-let. I can add to that that we have signed a lot of LOIs which are in final negotiation. We think that by the end of the first quarter most of them will translate into new lease agreements and if they do, and we expect they do because we are finalizing the lease agreements with them, we will have a new record of more than 80 million of signed lease agreements to be started up in the new year. So we are having a solid pipeline to be started up already, which is fully pre-LED. We delivered almost 500,000 square meters last year, 99% LED, and the last unit has just been agreed upon. It's a small unit in Koblenz with somebody from the defense industry. We have 1.4 million square meters of land acquired, and our total secured land bank stands at 10.3 million square meters, which represents a development potential of at least 4.3 million square meters. We did a net cash recycling of 389 million through a transaction with our joint venture partner in the Saga joint venture, and that led to an additional 60.5 million realized profits in 2025. And we target another material closing with the Saga as we already announced it in August last year. We announced that we were going to do a billion. I think we'll do a bit more in the second half of 2026 for which we have already all of the assets aligned. It will be a material closing. We'll go more in detail also later on that. And then finally VGP and East Capital have agreed to set up at least a one and a half billion of gross asset value of Pan-European fund with an emphasis on Central and Eastern Europe. We know East Capital already for 15 years. They are very reputable boutique fund manager from out of Sweden which have quite some track record in Eastern European assets and the fund management thereof. The board of directors proposes an ordinary dividend of 92.8 million, which is 3% higher than the ordinary dividend of 2024, or 3.4 euro per share. If we look at the summary of the financial results, then you see that the steady growth of the total portfolio value goes up for the full year at 100%, including the joint venture portfolio at 100%, with 900 million almost, from 7.8 billion to 8.7 billion. We have a continued strong growth in Committed Annualized Rental Income. It grew 13.5% year-on-year, so we're getting bigger every year. It's more and more difficult to beat that, but we're going to do our best this year. I think we're going to be able to set another nice year. We have a lot of demand in the pipeline. The full year of 2024, we had 412.6 million at the end of the year Committed Annualized Rental Income. And at the end of 2025, we had 468.3 million. The EBITDA increased 28%. Pete will go more in detail later on, which followed actually a very solid performance in all of our business segments. It went up from 354.4 million in 2021. to €454.7 million in 2025 and then I already told you about a dividend which will grow with 3% to, we propose in any way, to €3.4 per share. I'll first go a little bit on the market and the market update. These are not our slides. These are slides which we got from John Slang-Lassalle, and I will compare our own performance a little bit to that. If you look at demand and occupier segments, then you see the take-up share by sector, and then you see that the third-party logistics are still the biggest one. We have very little third-party logistics inside of our own portfolio. We have most end users and also longer-term lease agreements. And we see a very big comeback from e-commerce. It is bigger than what we have in here. And what we have in the pipeline now, what we are working on, is also very e-commerce determined. So we see them coming back and we see that there is more and more and more demand from out of that sector. It's not only Chinese companies, also they are here, but it's mostly Western European and American people who are coming back to the market. We also see a lot more demand now from the defense sector. We have been able to secure some of them and we are also currently negotiating with some of them for some new manufacturing things in the pipeline. The vacancy rate has gone up a lot over the past quarters. It actually doubled from 3% to 6.2%. But that compares in our own portfolio to we are a little bit more than 98% lead at the moment. and we see healthy demand and we also see that there is a lot less speculative construction in the market so the vacancy levels we expect them to go down in the future if you compare to all the The markets which you see right next to them, there where we are, Budapest, we have zero vacancy. Madrid, we have zero vacancy. If you look at Bratislava, we have zero vacancy at the moment. In Milan, we have zero vacancy. In Prague, we have zero vacancy. Of course, some of these are also speculative buildings which have been started up over the last quarter. On the supply, you can see that the build to suit over the last three years is quite flat. The 2023, 2024 and 2025 levels have remained stable, but you see that the speculative development is coming down quite a lot, which gives us A good view on that there will be soon not so much available anymore in the market because there is quite some take-up over the last year also. We have 16.2 million square meters space under construction, which is the lowest level in the past five years now. Capital markets, I don't know if we can say something intelligent on it. Last year started very well, and we did a very large transaction, 509 million in the second half year, so that also contributes to it. But we saw that overall, over the whole year, the transactions went up, both in volume and in size. mostly in the smaller markets, on the major markets, only UK, the Netherlands and Poland posted the year-on-year growth. The yields have been relatively flat. You can see that very well. We've had a devaluation on some of our German assets because our valuator takes the view that vacancy levels in Germany should go up, not should go up, but the re-letting should take a longer period. He has made that from 12 months to 18 months. Pete will go in detail to it, but we are seeing that in Germany, what has come available over the year, we have been able to re-let on average in two days, not more. And we have a 21% uptake on the rental income of what we have re-let. So we can't really concur to that view, but it is what it is in the market. That's what our evaluators think of it, but it's not visible in our own portfolio. I will go through the operational performance for the full year. Maybe I'll just go back. This is... our park in Arad, which we've just started, and the building which you see on the right side is a building which we constructed for VAT. VAT is a vacuum valve producer for the semiconductor industry, a very specialized product production. It's got 12,000 square meter of clean rooms inside at a very high level. And we have achieved with that building, BREEAM outstanding score of 96.2%, which is the highest of any industrial building in the world last year. No, overall, over all the years in BREEAM outstanding. And this is our park in Valsamoja, which is also fully led and which we've transacted last year to our joint venture with Saga, with our friends from Marine. As I already said, we had a record year in committed rental income, including the JVs at 100%. The group has 465 tenants, but that's divided over more than 650 lease agreements, as you can see. So we have a lot of tenants which come multi-times back into our buildings. The committed annualized leases as of 31st of December stand at 468.3 million. occupancy rate 98% and it's filling up really very well. At the moment we really have quite some demand in our portfolio. And if we make the bridge, then you see that the committed annualized rental income started with 400 and I think it's 13, yeah, 412 and a bit. We signed new leases, almost 57 million. We had six and a half million indexations. We had some amendments in leases, people who wanted some other space or differentiate their space. Then we had 8.9 million of terminations. And we sold one building in Riga to its end, to its user, to Jysk. which declined also 2.4 million of rental income and that brought us to 468 which we had at the year end. But meanwhile we signed quite some leases already and we're looking forward to be able to report you after the first quarter because as I said we have quite some nice LOIs in the pipeline. The majority of the new contracts which we signed were within the logistics segment. I have some examples. Logistics was 67.9%, but as I said, we have very little third-party logistics. You don't see many third-party logistics also in the names here. We signed with Studenats, which is one of the largest retailers in the Balkan, a very nice cult warehouse, which is delivered this week. We signed with Aldi a very nice new warehouse which we're going to start construction in a couple of weeks in Frankenthal. That's a big one, 60,000 square meters. We signed a very nice lease with Movianto. Healthcare, dedicated logistics, that's a third-party logistics. But you see Heineken, Eureka, Duomed, Ursus, Pharma, Studenat, they are all end users and they use their own facilities and sometimes use somebody to operate it. This is something which changes all the time. But e-commerce was last year 16.5% and I expect it to be quite a bit higher this year. Light industrial 14% but that's just a move in time because we also had quite some demand from light industrial over the past year. Our portfolio is leased to a very diversified and blue-chip tenant base. The weighted average lease term is already year-stable. It's 7.8 years as we keep on growing, and most of the leases are relatively long-term signed. The top 10 tenants represent 29.7% of committed leases, but also there, these represent 28 different lease agreements in many different jurisdictions. So it's well spread, the risk of it. And if you look in here, this is a little bit longer term. The logistics represent 47% in our total portfolio. Light industrial, 34%. And e-commerce, 17%. And we have some others. We have some... It's mainly Siemens, yes, where Siemens is in Nuremberg. It's a site where we have offices and which we are going to start rebuilding this year completely. This year we have some quite iconical projects which are upcoming and about which I will tell a little bit more afterwards in the outlook because we are going to really have some land plots coming online which from which we expect really a very nice contribution in the coming 12 to 24 months. If you look at VGP at a glance and you look, we are always looking forward in how can we grow and where can we grow and which segments can we grow and of course the main part, the main raw material to be able to grow is the land bank because we always grow organically, we develop everything ourselves, we don't buy any standing assets. And if you look at the December 24 net cash generative rental income, so things which were delivered and really generated cash, it was $350 million or $240 million at share. During 2025, we activated $39 million of new leases, so it went up with 11% to $389 million or $236 million at share, including 50% of the joint renters, if you look at it. The signed leases which are still under construction and which will be added on in the next 12 to 18 months is another 79 million and so that's another 18% and that takes us to 468 million of income generating activities or 310 million a chair of income generating lease agreements. of which 321.7 million sits in the joint ventures. But if you look at our land bank, which we have today, and the ERV of the vacancy and the development pipeline, which we have, that's another roughly 300 million, which takes us the potential up to 766 million, or at this moment, 602 million a chair. And we are trying to accelerate our development pace as much as we can now. The development activity, talking about acceleration, drives our second strongest EBITDA in our history. And if you look, there is a couple of notes which I need to say to this. You see very well the division between East and West. In 2021 and in 2020, we had big startups in Western Europe. because we had these big leases in Gießen and in Munich which started up at that time. You see also that in 2022 we delivered and then we started up a lot less because of the big inflation. I told you that I was standing very much on the break at that point because I was afraid about having too much vacancy with buildings for which we paid far too much. Now we have our costs very well under control, our margins are going up relatively quickly, we have very sound margins again, which you can also see in the revaluation result, because the revaluation result in this year, I think it's 183 million, is pure and only revaluations from new activities, from things which we have started up, and whereas in 2021 it was a little bit a distorted image because there was also a big uptake in valuations because in the standing portfolios yields were going down with very steep declining interest rates. Out of the 634 million record EBITDA in 2021, only 81 million was really cash income. Out of the 455 million EBITDA in 2025, it's 249 million, which says a little bit also about the resilience of our results going forward. It's more and more regenerative income. The net rental and renewable energy income at Cher has grown a lot, year on year with 18% in 2025. If you look at it, we are now at 223.384 million 2025, which we... We expect a continuous growth in 2026. In the renewable energy, about which Martijn will tell you a lot more later on, we have now a lot diversified also into battery projects, battery projects which have a very high yielding on their investment and of which we have foreseen to construct quite a lot in 2026, as now we have the permits coming into place in order to be able to do that. We also, thanks to the brownfields which we have been buying over the past years, most of them have been big factories with enormous electrical connections. For example, we bought Hagen. Hagen has 90 megawatt connection of energy which not only allows us if we can deliver back very nice battery projects, big in size, but it also opens the potential, and it's very congested today to be able to do a more data center exercise. We are trying to take a look at it, whether we could implement a data center also in Hagen, whether the location is the right one. At the moment, we have two identified together with Sarah, our new employee who came from Microsoft, One is in Rüsselsheim and one is in Paderno and on both we are very well advanced on the permitting side. We are advancing very well. It will take a little bit more time. These are complex exercises also, but we are on a good way to be able to realize them soon. And it's our ambition to have something by the year end to be able to say something more concrete about our data center developments going forward. The portfolio is virtually led on a long-term basis, and you can see there is very little variance. Combined occupancy of the portfolio stood at 98%, vaulted 7.8 years, with the first break at 7.4 years. Top 10 customers, as I said, that's 28 lease agreements, and the biggest one is still CrossMafi. But when we first contracted them, they were 21%, and now, thanks to all this growth, it's only 6% left of the total portfolio, which is now CrossMafi. In Opel it's 5.1%, which is a short-term lease, but it will be replaced and we are going to redevelop, of course, Rüsselsheim and we expect to be able to do quite a significant uptake in the leases going forward. Our own weighted average lease time on our own portfolio is 9.6 years at the moment. On the delivery side, and here you see our park in Vela under construction in Denmark, we delivered 21 buildings, which represented almost 500,000 square meters in gross lettable area. That was 32.9 million rental income, 39 new contracts, and they were 99% let. And as I said, we now have a tentative agreement with somebody from the defense sector to take the last... unit in these buildings and it will be 100% leased. 100% will be rated BREEAM actually excellent, of which 31% is BREEAM outstanding over the last year, which I think in Europe at least we believe we have done the best performance with the rating of BREEAM outstanding. You see two of our buildings, the VGP Park Parma in Italy, which last year we delivered to Mutti, the tomato producer, and our parking Kachkemet, where amongst others we also have Mercedes as a customer. The deliveries in 2025, sending towards logistics, but you see immediately that there is also some quite big productions inside. Hyundai Mobis was a very nice one. We delivered 50,000 square meter facility in Pamplona. And we deliver to VAT, as I already said, this building for this vacuum valve producer. On the two pictures which you see, you see VGP Park Cordoba, which is a production, by the way. And then you see our VGP Park in Montijo, which we delivered last year, and which for the biggest part is a cult and deep cult warehouse for Lodifrio. The portfolio at SHARE has grown organically and completely organically because we only develop everything ourselves and then we place it in our joint ventures, but it has grown at an annual compounded growth rate of 21.9% and it's gone up from 5 billion to 5.6 billion. We offloaded since 2022 3.4 billion of gross asset value into the joint ventures and we aim, this model works very well, we aim to continue to do that. If you look at it, Germany is still the strongest market, although the others are now growing maybe a little bit faster relatively. The Czech Republic is now almost 1 billion in assets. Spain is growing quite well. And in the Netherlands, this year will be a huge uptake because we already leased out 60,000 square meters, which is under construction. But we are working on a very big new lease agreement in the Netherlands, which will take out our entire park in Nijmegen. The investment portfolio on 100% view has grown to 8.7 million, which is up 11% year on year. And Western Europe represents 74% of the total portfolio value as of December 2025. You can see the completed is 7 million. Development land is 770 million, or 9% of our total. investments and under construction we have almost 1 billion 930 million which is also 11%. On the development side, the portfolio under construction represents 85.3 million of new leases and as per today 43 buildings are under construction which represent 1 million, just 1 million of square meters. um it's 75 percent pre-led including pre-lets on development land and when we finalize these LOIs which we have in the pipeline it will be well over 80 percent um so it i think it's on a very healthy basis at the moment we have started last year 761 000 square meter of new buildings in 2025 and we aim we have to already start up 450,000 square meters if this materializes, which is already pre-led, which is the highest which we ever had at the beginning of a year, pre-led, to be started up in a given year. So that's a very nice forward-looking thing to have. You can see again on the right side, you see our park in Rouen, which is now virtually fully red. We only have one last unit left. And then a small one, 4,500 square meters, out of the total more than 100,000 square meters, or in total more than 150,000 square meters, which we are constructing there. And then you see our VGP park in Vela, Denmark, where we also have one last unit left, also 4,500 square meters. um yeah again it's well spread across our geographical footprint you saw in what is the income generating assets or the assets overall which are already that germany in the income is is more than 50 percent in the um in what is under development it's only 36 percent you see that the other countries are relatively growing a little bit faster now they also are becoming more and more mature france is a big market spain is a big market the united kingdom i'm sure will come up to speed soon And so we think that we'll be able to do some very nice developments all over Europe. 2025 was also the first year where we had buildings under construction in literally every country we were active in. That's never happened before. So that is now, we have everywhere now buildings under construction. On the land bank, the picture you see is our beautiful park in Nijmegen where we have Ahold de Leize and Bol.com in one of these buildings which you see and the land bank in front that's only a very small part of it because we still have more than 20 hectares available where we now have started ground works already and we are already under construction for one client which we signed at the end of last year pragmatrading and then we are negotiating we have signed an LOI for the rest of the land bank The land bank, of course, it's something I am very much dedicated to because it is the source of our future growth as we develop everything ourselves. And the land bank, Pete likes to make bridges, so we have also this in a nice bridge. We owned in 2024, when we started, or beginning of 2025, 7.4 million square meters, which is fully permitted, by the way. We acquired 1.37 million of square meters, which we always acquire subject to having the permit in place, so that's also fully permitted. We deployed 1.6 million square meters last year. We sold a little bit, a couple of square meters, but that's nothing. And then so we owned at the end of 2025 7.09 million square meters. But we committed and in December we had 3.15 million square meters of committed. So that's land which we have binding agreements on and which we then buy at the moment. when we have the permit in order to be able to use it for its intended purpose. So that brings the old and committed in December 2025 to 10.25 and we have another under-option and PD contract of 1.51 million square meters and this means that roughly Because the 4.3 million is just the ground floor space, you need to calculate mezzanines and offices to it. But at least 4.5 million can be developed on this total land bank versus the 7 and a bit million of buildings which we currently have either finished or under construction. I also try to take a look, a very pragmatic look at the land bank and everywhere we need to have a nice margin which of course makes it in Germany the yields are a bit lower than the exit yields than they are for example in Romania but we try to target everywhere the same margin so we have been able to target lands in all of our countries and the land bank is geographically well diversified We have some specific countries we really need to take a look at going forward, but we were able to secure quite some really nice land plots and I will talk a little about it also in the outlook later on. This is the first part of our operational results. I'll come later back to the JVs, but I'm now going to first give the word to Martijn to talk a little bit about our renewable energy company and its income.

Thank you, Jan. First giving a short overview of how our renewable energy business has now actually developed two segments. Jan already mentioned it at the beginning. Photovoltaic has continued to grow and we added a good 50% to the revenues for the photovoltaic business. But something that is still a bit nascent but for which we see good prospects is on the battery projects. You see there's in total 258 projects on the photovoltaic side. There's a few less on the battery side, but actually in terms of investments we see a good opportunity both to deploy capital. There's around 4 million euros invested now, but we see that grow substantially over the coming two years. And certainly if you see the megawatt-hour deployment, That becomes, with 173, that's a good 30% of the total in renewable energy. And as Jan mentioned also, the profitability of this business is typically much better than for the photovoltaic. So this will start to add to the EBITDA line for renewable energy in 2026, but even more so in 2027 and onwards. The big constituent of renewable energy remains the photovoltaic business. Certainly in 2025, we've seen a good growth. As I mentioned, the revenue came from 8.3 million And we've added another 4 million to the total revenue, which was driven by additional production that was now over 130 gigawatt hours. Energy price at which we've been able to sell has remained broadly constant. If you look at the outlook, we've added another 13% in operational photovoltaic this year. So you will start to see that also in the production figures for 2026. And then there's another 35 megawatt peak that is under construction, which we expect to become operational in the course of this year. I think the last thing to add is that the overall yield for photovoltaic has now popped over 10%. So the overall investment of the projects that are operational is 110 million and asset growth revenues was 12. So the growth yield has actually for the first time now popped over 10%. Then maybe also briefly on the corporate responsibility. There is one thing here highlighted on the left-hand side, which was something that was recognized at the end of last year by Time magazine in cooperation with Statista. They've done sort of a science-based and quantitative assessment of all the listed companies across the globe. And based both on our financial revenue growth as well as the sustainability metrics that we've been able to accomplish in 2025, they've highlighted us as one of the top 100 companies globally in terms of realizing sustainable growth. I think one of the big contributing factors to that is the EU taxonomy, which you see on the third on the left in the smaller boxes. We've now achieved 68% of the total portfolio, but certainly if you look at the new productions or new construction, we've actually been able to verify EU taxonomy for 95% of the buildings that we are that we are currently constructing, that's all under the eotexonomy new construction regime, so that's quite a strict regime, which we've set ourselves, and with the 95% you hear, that really has become our internal market practice to adhere to across the group. A couple of other metrics that we've highlighted here that I'll leave to you to read at your leisure. I think we can move on to the joint venture update. Jan, back to you.