Vgp N.V.

Welcome to the review of VGP's financial results over half-year 2026. 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 or webcast of our performance over the first half year. I'll start with an executive summary of what has happened. So the first quarter of the year actually started very well and the second quarter was a little bit subdued to this Operation Epic Fury which everybody has been following with great interest. It seems now that dust is settling a little bit. The third quarter has been very well so far. And we have very nice prospects for the rest of the year, especially in newly signed lease agreements underway. We report a net profit before tax of €141 million, €140.9 million. That's €120 million net profit after tax, earnings per share of €4.26 million. We also report an EBITDA of 186.4 million and you will be probably pleased to hear that 130.5 million from that is recurring investment segment, so recurrent income. We had 128.2 million of net rental and renewable income at share, which is a growth of 17.9% year-on-year on a proportional basis. and our at the 30th of June our Committed Annualized Renting comes to that nearly half a billion at 489 that has grown to 496 meanwhile and it's 11% year-on-year growth and we will soon break the half a billion barrier which we've been always looking for and I hope it will happen in September or I'm sure it will happen in September. We have 260 million of cash generative leases at the moment at share which means handed over generating lease income already. We initiated 314,000 square meter of new developments and delivered 236,000 square meters in the first half, which were 86% lead. We have our proportional LTV dropped from 50% at the year end to 49.3%. We have a consolidated gearing of 35.5% and we still have a BBB- with a stable outlook, both from Fitch and Standard & Poor's. Our shareholders equity was up 10.5% year to date after 247 million net equity raise and at the moment we have 9.2 billion assets under management. If you look at our investment property at share then that is 6.1 billion and in December we had 8.7 billion assets under management. We have multiple joint venture closings upcoming. As you know, our saga, our latest joint venture is momentarily 60% deployed. We foresee to do a large transaction both in the end of this year, beginning of next year. and then to start a second Saga vehicle and our East Capital Fund is in preparation for 2027 and then I also have some news which I will talk a little bit about but mostly on our Capital Markets Day about our data center deployment we've always been very very careful in communicating about it because we wanted to be sure before we say something that we also can deliver so I think the time has come to reveal a little bit what we plan to do in the next two to three years on the data center side. I'm going to hand over the word to Piet first now for the financial performance.

Thank you, Jan. As always, I've prepared you a set of slides to walk you through the main changes over the period, albeit this time it's in a bit of a new jacket. But as Jan mentioned we are happy to report a profit of 120 million or 140 million before taxes with a strong contribution from all of our business segments resulting also in a 186 million euro of EBITDA. If we compare a bit year over year then you will see that the EBITDA by the segments has grown from 118 to 131 million in the investment segment that is mainly as a result of the recurring earnings and the net rental income that has grown significantly both in our own portfolio as in the joint ventures. I will share a bit more details on that on the next slide. In the development we have a decrease of 118 to 52 million. It's not that there is anything outspokenly negative happening in H1. It's just that H125 benefited from some additional revaluations gains. as well as transactions with joint ventures which resulted in a significant realized gain and we haven't done any joint venture transactions to date. On the other hand the renewable energy EBITDA doubled from 2.1 million to 4.3 million as a result of a higher output of our solar installations and also the battery systems that are coming online. So if we break it down a bit and focus on the different contributing factors, the first and foremost is our recurring earnings which have grown significantly organically also, which is at share up with 18% to 128 million. So that's 51.7 million or 26% up in our own portfolio, 76 million in our share in the joint ventures. Rental income that's up 13%. So I think it's a testament to the quality of our rental. And as Jan mentioned, we have 489 million of contracted annualized rental income in the entire group at 100%. Out of that proportionally, 327 million is the contracted income of which 260 million is already cash generative. The rest is being handed over of which a majority part will be in the next 12 months delivered. Solar, as I mentioned, is up 10%. It's mainly a production increase from 71 to 78 gigawatts and also a capacity increase that is exactly linked to it. Basically, it's 9% and we have now 170 megawatts under construction. We also had a good indexation on the portfolio in the first half of this year and we were also able to re-let vacant space. with an average 6% increase in the rental price that is compared to the latest rental price that was active in that building and that we now replaced. And it's not just one contract, it's quite spread over the group. So all in all, the recurring income, the rental and the renewable energy performed very well. the valuation gains they are 65.9 million on our own P&L and on the joint ventures there is a 25 million revaluation so at share so the total revaluations that share is 91 million as you can see the valuation gains they are primarily driven by the constructions that have been initiated in the first half of 26 And just to give you a bit of color on that, how the development gains are coming to be, I've made the box in the whisker graph on the left which shows with the title development gap, which shows on the left side the yield on cost of the developments and on the right side the weighted average yield by the appraisers of these developments. But you should always know that these developments that have been initiated They are at the beginning of their construction period. There might still be some vacancy in. So up until the moment you stabilize the asset and the asset becomes completed and fully rented, the weighted average yield, provided there are no real fluctuations in other movements, in valuations, assumptions, it will come down. But as you can see, the yield on cost, we are very enthusiastic about it. And the lowest asset that we have is at the 7.2%. The highest we have is at 11.5%. and on the average we are around 8.7% yield on cost fully loaded of course with capitalized interest and development fees etc. Whereas you see the weighted average yield of course should be lower that triggers the margin is between 5.4 and 9.6 where the average is at the moment six and a half. So that looks very promising also for the future because we expect this to ramp up further by continuing to develop these assets that have initiated. You can also see this in the average yield of our portfolio on our own balance sheet that's around 7% and in joint ventures portfolio it's very stable at 522 to 525 also the revaluation in the joint venture we have a 25 million contribution and share but towards the size of the joint ventures which you can see on the right side that is quite a stable revaluation. and as Jan was mentioning, we have 9.2 billion assets under management. The inner circle shows it at 100%, so the 2.8 billion is on our own balance sheet, the rest is in the JVs. The outer circle shows actually in the grey bars, which are in the joint venture, which is our share, so we own 3.3 billion inside of the joint venture's IP and 3.1 is of course economically owned and legally owned by our joint venture partners, so together 6.1 billion. and 74% of the assets of the 9.2 billion they are also located in Western Europe. I think I mentioned already probably most what has happened in our joint venture so strong increase in the net rental income with 13% valuation gains I've just described. but I'm also very happy to show once the APRA metrics of our joint ventures because we always consider our joint ventures sort of a REIT and they are fully stabilized portfolios and we try to run them as efficiently as possible we try to distribute all of the excess cash during the year and different formats but this results that our APRA earnings of the joint ventures have increased to its 16.4 percent cost ratio cost ratios are well in check The valuation yields, they are very stable. The vacancy rate has come down from 2 to 1.2%. Very happy to see that. And then the LTV has also come down from 32 to 31.5%. There was also an excellent performance in our Rheingold joint venture, which has a track record in its 10-year existence now. Rolf Carls, Rolf Carls, Rolf Carls, Rolf Carls, Rolf Carls, Rolf Carls, Rolf Carls, Finally, Rheingold also needed to refinance as the term of the JV came to its maturity, such did his debt. That was 844 million. We have completely been able to refinance that quite easily, even in the volatile market environment. And it's now replaced with a bullet facility with a small top-up of 886 million, which also allowed for the payment of the promote to VGP. On the balance sheet, I think it's a pretty straightforward story. Our total assets and equity and liabilities have increased from 5.2 billion to 5.8 billion. The shareholders' equity is up to 2.9 billion. So the investment property increased from 2.4 to 2.8. It's the equation of 378 million euros of capex and then the revaluation effects our share in the joint ventures as I showed their performance on the previous slide that equates in an equity participation in value of one and a half billion Our consolidated gearing is stable with 35.5% and our proportional LTV edge share came down to 49.4%. We have a very solid cash position with 599 million and untapped RCFs of 500 million, so we have a liquidity position of above 1 billion. Maybe to zoom in once on our debt, because we have been quite active in the last 18 months on the debt markets. Last year we raised a bond of 576 million, beginning of January we raised one of 600 million, which was then used to repay a bond in March of 190 million and also we bought back 100 million on the January 27 bond outstanding as you can see in the graph on the left that bond is now 220 million it was one and a half years ago 500 million but they have been proactively extending the maturity on this bond and being repaying them and very happy that we did so So the refinancing that we are looking at now until 2029 is very limited with only one bond remaining in 27 of 220 million. Of course in the current interest environment I don't think it will come as a surprise that our interest has come up from 2.7 to 3%. But again we are looking quite bright to the future as we don't have to do any major refinance in the next years to come. You know, revenue is vanity, EBITDA is sanity, but the cash is the reality. So it's always good to also look once at the cash flow and see where the money has flown through. You can see that the net cash from the operating activities went from 28 to 4 million. It's not that our operating cash flow went down. On the contrary, it's mainly the movement on the working capital that has played this part. It's a bit of an unfortunate that the promoter was only received on 1st of July, otherwise this picture would have looked already different, but it's mainly build-ups in some short-term receivables, but nothing out of the ordinary, but that is a good contribution. The net cash used in the investing activities is 331 million. It's up versus last year. It's mainly driven by a higher cap expense of 376 million. We also sold one of our parks in Latvia. which was VGP Park Tirana's last year we sold VGP Park Riga in the second half of the year that provided some cash in of 26 million we had distributions of joint ventures in the first half up versus last year it was 19.2 million I think we can expect a minimum 80 million for the year but the JV distributions they usually come in the second half of the year Some of them pay it regularly, others we do it in one go. But we expect about 80 million at least. And then in the finance activities also a big swing versus the previous year. So we raised the bond of 600 million, which raised 593 million net of proceeds. We repaid 190 million bond in January and 100 million proactively, so that's 190 million net. We raised an equity of 250 million, net 247. We paid out the dividend. We paid out the interest on our bonds. The interest that you will see in the P&L is lower than the interest paid. That is because most of our bonds have been raised in the first half of the year. And then it's when we also pay the interest. So that's actually less to be expected in the second half cash flow wise. And I think that will conclude my slides and I'll give it back to Jan. Thank you very much. Yes.