Aroundtown Sa U/Adr

Good morning, everybody. Thank you for joining us for Around Town's full year 2023 results call. You can view this presentation on Around Town's website, either on the home section or under financial reports of the investor relations section. Guiding you through the presentation today will be CEO Barak Bahen, CFO Eyal Ben David, Chief Capital Markets Officer Oshri Massachi, and Executive Director Frank Roussein. Investor relations with Timothy Wright and representatives from Grand City Properties are also present. For the duration of the call, all participants will be on listen-only mode. Following our presentation, you will have the opportunity to ask questions. With that, I would like to pass you over to Barak and the rest of the team who will guide you through the presentation of our results.

Thank you. Good morning also from my side and welcome to our 2023 results presentation. Please allow me a few opening remarks before we dive into today's presentation. The macroeconomy has dictated the direction of the sector in the past two years, which requires us to be ahead of the curve and take cautious decisions when navigating through these volatile times. In recent months, inflation decreased to manageable levels in the EU, and thus the market expects that interest rates have peaked. So currently, the main discussion in the market is not if, but when and how fast rates will decrease, which is causing some volatility in capital market. This is different from the uncertainty we saw last year, which was related to when and where rates would peak. We expect potential interest rates decreases will provide tailwinds for recovery in a transaction in capital markets, particularly towards year-end. That being said, we believe that it is important not to run ahead of markets at this time, as downside risks remain. We therefore continue to focus on a strong balance sheet with ample liquidity, so we are not dependent on timing of this market development. Starting on slide 4, we present the operation highlights recorded in 2023. Net rental income was 1.2 billion for the year, decreasing 2% compared to previous year as a result of disposals. The disposals impact was offset by like-for-like rental growth of 3.2%, driven by positive contributions from all of our main asset types. We will provide more detail on this later in the presentation. Adjusted EBITDA was 1 billion euros flat year over year, despite the impact of disposals. We recorded FFO1 of €332 million, reflecting a decrease of 8% compared to the previous year. With these figures, we reached the upper half of our guidance for this year. The expected decrease was the result of higher interest expenses and reset of some perpetual note coupons. FFO1 per share amounted to 30 cents. We revalued the full portfolio for the 2023 annual report. We recorded like-for-like property devaluation of 11% for this year, reflecting a revaluation loss of 3.2 billion euros and resulted in APRA NTA per share of 7.4 euros, down 20% compared to December 2022. We significantly shrink our liquidity position during 23, resulting in cash and liquid assets balance of 3 billion euros or 21% of total debt supported by circa 1 billion euros of new secured financing signed during this year. We will provide more details on this also later in the presentation. On slide five, we present the result of our proactive balance sheet management activities during the year. We were able to reduce net debt by 900 million euros during 23, and by €1.5 billion since June 2022, which has allowed us to counterbalance the impact of negative valuations. LTV increased by 3% during 2023, despite declining in values of 11%. As a result, we maintain 35% headroom to our bond covenant, which stands at 37% net debt to net asset as December 2023. The reduction in net debt was primarily driven by the combined impact of disposals and bond buyback at discount. During 2023, we completed disposals in the amount of over 1.2 billion euros and repurchased 1.3 billion euros of bond at a discount. We focused on bond buybacks with near-term maturities, thereby reducing 16% of the debt balance maturing between 2024 to 2026, and as a result, reducing a near-term refinancing risk. On slide six, we present you some more details on our disposals. In 2023, we closed 1.2 billion euros of disposals across all asset types and diverse geographical locations. Closed disposals were signed at an average rent multiple of 18 times and 3% below book value. The total signed amount of disposal in 2023 was 900 million euros, 6% below book value. Most of the signed disposals were closed in 2023 with 200 million euros signed but not closed as December 2023. Since the beginning of 2020, we have been able to dispose 9 billion euros of properties via small and large transactions, which is a testament to the company's ability to sell and generate liquidity even during difficult market conditions. On this slide, we also provide some more background on vendor loans which we have granted and which support the transactions. The loans are secured against the property sold at an initial LTV of 40% to 70%, giving us a high security in terms of pricing and execution. As we already know the asset well, we're comfortable providing a vendor loan to buyers to close the deal, and as of December 2023, 650 million euros of vendor loans are outstanding. Moving to slide 7, where we present a summary of our like-to-like rental growth, Total like-for-like rental growth remained robust at 3.2%, with all sectors contributing positively to the result. The like-for-like growth in the office portfolio is mostly a result from indexation, contractual step-ups, and reversion at re-letting and prolongation, while the wide supply-demand gap in the residential portfolio led to record low vacancy, and the hotel portfolio continues to benefit from the steady recovery. Frank, please continue on the next slide.

Thank you, Barak. Please move to slide eight, where we provide the summary of our ESG achievements during 2023. We further increased the share of green certified office properties in our portfolio, reaching 36% compared to 50% in December 2022. In 2023, we achieved to get 100% of our DATS office portfolio green certified. We continue with green installations, reaching 6 million kilowatt hours max capacity of EVs and HSPCs, while reaching 400 EVs charging sockets across the portfolio. On the social front, we are proud of our achievements in 2023. We supported over 90 charitable projects of local partners, making a meaningful impact on our communities. We maintained our high standards in relation to tenant service quality and expanded digital solutions, particularly for our residential tenants. In 2023, we received the Top Company 2024 award by Kinunu, a leading German career and job review platform. At the same time, GCP was awarded the Most Wanted Start 2024 award for its apprenticeship program. We are proud of these achievements, which underline our commitment to be a top employer in the real estate sector and thereby allow us to continue to attract and develop top talents. Looking at our index inclusions, we remain a component of Dow Jones Sustainability Index and Bloomberg General Quality Index, and after a short stay in the SDACs, are once again included in the MDACs and the MDACs ESG Plus indexes. We are also awarded APRA BPR and SBPR gold for the 76th consecutive year respectively for our 2022 annual report and SPPR report. Lastly, we received top ratings from both Sustain Analytics and S&P Global CSA, rated top six for both. Orsi, please continue.