LEG Immobilien SE

Good morning, everyone, from Dusseldorf. Welcome to our call for our Q1 2026 results, and thank you for your participation. We have in the call, as always, our entire management team with our CEO, Lars von Lackum, our CFO, Katrin Koehling, as well as our COO, Volker Wiegel. You'll find the presentation document as well as the quarterly report and documents within the IR section of our homepage. Please note that there is also a disclaimer, which you'll find on page two of our presentation.

And without further ado, I hand it over to you, Lars. Thank you, Frank. Good morning, everyone, and thank you for joining our analyst and investor call today. Our message today is short and unambiguous. Energy is fully on track to deliver its 2026 targets. Rent growth, EBITDA margin, AFFO, and LTV are all moving within or towards guidance, and they are doing so on the back of the same disciplined operating model you have come to expect from us. Like-for-like rent growth came in at 3.7% on a clear path into our guidance corridor of 3.8% to 4%. The EBDA margin expanded by 180 basis points to 77.4%, underlying the operational leverage of our platform. And AFFO, our whole steering metric, came in at 58.6 million euros, fully confirming our full-year guidance range. As a brief cross-check, operating cash flow developed in line with this picture, rising by 14.5% year-on-year. Let me address the AFFO line directly, because I expect questions on it. AFFO is slightly below last year, and the bridge is purely a timing and phasing effect. Two drivers. First, a deliberately more linear CapEx profile in 2026 versus a Q1 heavy ramp-up in 2025 on the back of the BCP integration. Second, a modest step up in cash interests as new financings are written at current rates. The investment spending is a phasing pattern, not a quality of earnings issue. Underlying cash generation, margin development, and rent growth all confirm the trajectory, and we therefore reiterate the full-year AFFO range without any reservation. On valuation, we remain cautiously constructive for H1, a flat to slightly positive result of up to plus 1%. Momentum may soften somewhat as transaction volume stays subdued and buyers remain on the sidelines. But we do not see a reversal of the trend. ATV improved by 60 basis points to 46.2%, driven by disciplined test generation and lower net debt. Our 45% target remains in reach. It has become more ambitious in the current environment. But the direction of travel is unchanged, and the cash flow engine that gets us there is intact. Let me now turn to slide six. Slide six captures in one picture where LG continues to stand out in a sector where the quality of earnings is increasingly being questioned. Five points. First, the market. We operate against a backdrop of geopolitical tension, capital market volatility, and stagflation risk. Yet the structural driver of our business, the German housing shortage, is not cyclical. Demand exceeds supply by a wide and widening margin. New construction continues to slow. Household numbers continue to rise, even as net immigration flattens. LEG is positioned squarely in affordable housing in North Rhine-Westphalia, Germany's largest state by population and GDP. That is what underpins the durability of our cash flows. Second, the balance sheet. And here I want to be quantitative rather than narrative. Our 2026 maturities are fully covered on a pro forma basis. Liquidity stands at more than 500 million euros. Our hedging ratio is around 98%. Our interest coverage ratio is at 4.2 times, comfortably above covenant requirements and strong in sector context. Average debt cost remains at 1.8%, a level few of you had in your forward models. The next sizable maturity is the 500 million euro bond in November 2027, which gives us the option to refinance gradually rather than under pressure. This is what genuine financing resilience looks like, measured in numbers, not adjectives. Third, cash discipline. AFFO remains our core steering metric, and as long as we steer the company on AFFO, you have the assurance that we will not re-level. The underlying cash dynamics support this approach. Operating cash flow rose by 14.5% in the quarter, but it is AFFO, with its full deduction of investments, that anchors our capital allocations. Every additional euro of spending is benchmarked against a strict hurdle rate driven investment logic. That same discipline is what preserves the firepower for selective opportunities when they arise, as we did with BCP. Fourth, strategic focus. We do what we are good at, managing value creating assets in the affordable segment. We do not tie up capital in riskier, more capital intensive businesses. our disposal policy remains prudent, non-core only, at or above book value. The proposed script dividend supports the same logic for actively strengthening the balance sheet versus a full cash dividend. Fifth growth. As outlined at our full year call, we expect ASFO to grow by around 5% in the medium term. The drivers are tangible. Subsidized units coming off restriction in 2028 will add around one percentage point to rent growth. Green Ventures target approximately 20 million euros contribution by 2028 on an aggregated basis. Digitalization and IR initiatives will deliver some 10 million euros of efficiency gains by 2030. Together, these more than offset the refinancing headwinds we will face as we adjust to current rate levels. So, If you take one message away from this chart, take this one. LEG's business model continues to perform exactly as designed. Predictable, like-for-like rent growth, an expanding EBITDA margin, disciplined AFFO steering, and a quantitatively robust balance sheet. Our cash flow resilience is demonstrated by AFFO-based steering, fully covered financing, and a stable vacancy rate. In our view, That is the right lens through which to assess quality in our sector today. Cash resilience and discipline, not adjustments. It is a combination that remains rare in the current environment, and it positions us exceptionally well for the remainder of 2026 and beyond. Let's move to slide seven. After three months, we are well on track for our 2026 guidance, and operational performance remains rock solid. Net quote rent grew by 3.3%, driven by strong like-for-like growth, partially offset by disposal effects. The EBITDA margin improved by 180 basis points year-on-year to 77.4%. AFFO came in at 58.6 million euros, slightly below last year, but as I just outlined, this reflects a different investment phasing, not a change in earnings quality. we are bang in line with our guidance range. The same applies to FFO1, which we know remains an important reference for many of you. With this short overview, I hand over to Volker for the operational highlights.

Thank you, Lars, and good morning, everyone. Let me start with the rent development on slide 8. On a like-for-like basis, our average rent per square meter rose by 3.7% year-on-year, reaching €7.15. Free finance units continue to benefit from strong market momentum, achieving rental growth of 3.8%. By market segment, the range goes from a solid 3.5% in higher yielding markets to 4% in stable markets. This clearly underlines our operating strength and the resilience of the portfolio. 2026 is a cost-rent adjustment year. As a reminder, we can adjust the cost rent for subsidized units every three years based on CPI development. This adjustment took place in Q1 and translated into a 3.3% like-for-like increase across our subsidized portfolio of around 30,000 units. On the breakdown of rental drivers, rent tables were the strongest contributor, accounting for 1.9 percentage points of the 3.7% like-for-like growth. Modernization and re-letting added 1.3 percentage points, and the cost rent adjustment contributed 0.5 percentage points across the total portfolio. We continue to monitor new rent tables closely, and you will find our outlook on slide 24 in the appendix. To give some color, the new table for Mönchengladbach implies an uplift of around 6% for a typical LEDG apartment, the table for Una in Westfalia an uplift of around 8%. All in all, we are well on track to deliver on our rental guidance for full year 2026. Finally, on a like-for-like vacancy, we kept the rate stable at the previous year's low level of 2.4%. Moving to investments on slide 9. In the first quarter, adjusted investments amounted to 98 million, or 8 euros per 82 cents per square meters, roughly a quarter of the full year volume, which we expect to come in at more than 35 euros per square meter in line with guidance. Beyond the absolute level, we are deliberately steering towards a more evenly quarterly distribution in 2026. Last year, this was only partially possible as BCB had not yet been fully integrated in Q1. As a result, our Q1 2026 investments came in 17% above the prior year quarter. You will find an illustration of past quarterly investments patterns on the following slide. For 2026, please assume a markedly more even distribution across the year. On the composition, in Q1 2026, CapEx accounted for $52.8 million, or €4.75 per square meter, while maintenance came in at €45.2 million, or €4.07 per square meter. Our cap rate rose by one percentage point to 54%. Let's now turn to disposals on slide 11. Year-to-date, we have completed our signed sales for around 1,000 units. with total proceeds of 74 million euros. Of these, around 250 units were transferred in Q1 for around 18 million euros. The remaining around 750 units of gross proceeds of around 56 million euros are due to be transferred from Q2 onwards. Disposals were generally executed at or above book value, and this is a deliberate and important point. We sell only non-core and only at or above book. Disposals serve our LTV management, not our earnings. You will not find recurring sales contributions during the heavy lifting in our P&L or in our cash generation. That is what makes our disposal contribution to LTV reduction credible and repeatable rather than opportunistic. Against the backdrop of a German residential transaction market characterized by fewer large volume deals and limited international investor activity, additional context on slide 33 in the appendix, we remain confident in delivering on our disposal program our flexibility to offer smaller portfolios or even individual multifamily houses tailored to buyer needs is a structural advantage in the current markets. The total disposal program is still comprised of up to 5,000 units, including approximately 1,400 units in eastern Germany. With this, I hand over to Katrin.