Aroundtown Sa U/Adr

everybody. Thank you for joining us for Around Town's Q1 2025 Resorts 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 Varchen, CFO Eyal Ben-David, Executive Director Frank Rosin, Investor Relations Timothy Wright, Chief Sustainability Officer Limor Berman, Deputy CFO Jonas Tintelnoth, CFO of Hotels Kamal Deepmanektala, and representatives from Grand City Properties are also present. For the duration of the call, all participants will be on listen-only mode. During our presentation, you will have the opportunity to ask questions. With that, I would like to hand over to Barak and the rest of the team who will guide you through the presentation of our results.

Good morning, everyone, and thank you for joining our first quarter 2025 results presentation. We're happy to present a good start of 2025 with solid operational achievements, which has more than offset the impact of the disposal completed over the past period, positioning us well on track for our 2025 guidance. Although markets experience short-term volatility driven by macroeconomic and geopolitical uncertainty, our business has continued to perform resiliently with no material impact from these external factors. Importantly, the downward trend in interest rates has persisted into 2025. We saw further rate cuts both during and after the reporting period, which have created a more favorable landscape for financing and refinancing. This was clearly reflected in the strong investor demand of our latest bond issuance two weeks ago, where we achieved a 1.3 percentage point lower coupon compared to our last issuance in July of last year, reflecting the significant progress we made as a company, as well as the improved market sentiment. We're also encouraged by the continued recovery in the asset values. The positive valuation momentum that began in the second half of 2024 has carried into this year, supporting a further uplift in the property valuation. Our proactive financial strategy and successful disposals have positioned us well to pursue new opportunities and create value going forward. We'll take you through this development and more in the following slides. On slide four, we present the financial highlights for Q2025. Net rental income amounted to 295 million euros reflecting an increase of 1% compared to Q1 2024, driven by solid life-for-life rental growth of 3% and only partially offset by the impact of disposals between the periods. Adjusted EBITDA increased as well and amounted to 251 million euros as rental growth was further supported by cost efficiency. FFO1 amounted to 76 million euros stable year-over-year as a result of higher adjusted EBITDA, which offset the higher perpetual notes attribution. As in previous years, we are revaluing part of the portfolio each quarter and each asset at least once a year. In the first quarter, 15% of the portfolio was revalued, resulting in a positive like-for-like value change of 0.8% compared to December 2024, supported by operational growth. EFRA MTA per share came in came in at 7.6 euro, higher by 3% compared to December 2024. We also made further progress on obtaining a green certificate and are happy to report a key milestone. And now over half of our commercial portfolio is green certified with 65% of offices and 50% of our hotel assets have green certificates. LTV stands at 41%, 1% lower compared to year end 2024, maintaining our wide headroom to bond covenant. While we made significant improvements in strengthening our balance sheet in recent periods, we decided not to distribute the dividend for the year 2024 as we believe we should still remain conservative regarding capital allocation and maintain financial flexibility. Last month, S&P lowered our credit rating by one notch to BBB flat with a stable outlook. The recent microeconomic and geopolitical volatility has extended the market recovery period and has slowed down the pace of our disposal progress, thus extending the time to meet S&P's expectations. The updated rating level providing us much more flexibility going forward. Following the adjustment in the rating, we issued a 750 million euro bond for a period of five years with 3.5% coupon, showing the continuous investor trust in the company. On slide five, we present a summary of our operational growth reflected in continued like-for-like rental growth. Total like-for-like rental growth was 3%, with all segments contributing positively to the result. The like-for-like rental growth in the residential portfolio was 4.5%, benefiting from the persistent supply-demand imbalance, resulting in low vacancy and steady rent increases. The like-for-like in their hotel portfolio was 3.7%, reflecting positive fundamentals, as well as a successful repositioning of several assets. The like-for-like in the office portfolio was 1.6%. The segment benefits from high revisionary potential, allowing us to offer competitive rents and capturing upside. These positions are office assets well for growth when broader economic activity rebounds. Eyal, please continue on the next slide.

Thanks, Barak. On slide six, we provide an update of our disposal progress. In the first quarter of 2025, we completed 149 million euros of disposals around book values at an average rental multiple of 18. These transactions cover a range of asset types, with majority being residential properties, as well as offices, building rights, and retail. The disposals were primarily located in Bremen, Frankfurt, as well as non-core locations in Berlin. The relatively high share of residential disposals during the first quarter are mainly the results of timing effects of the closing of the disposals. We signed here today disposals in the amount of 140 million euros, and together with disposals signed but not closed from previous periods, a total amount of 330 million euros disposals are expected to be completed in the coming periods. Moving to slide seven, where we provide an update on our recent bond issuance and liability management. Earlier this month, we successfully completed the 750 million euros senior unsecured bond issuance with a five-year maturity and a 3.5%. This marks a significant improvement compared to the 4.8% coupon on our previous issuance in July 2024. The transaction was very well received by the markets with the order book more than three times oversubscribed on the day of issuance. The proceeds are being used to support 1.3 billion euro of debt repayments in 2025, year to date. This includes approximately 600 million euro used for the repurchase of bonds, including some bonds with relatively higher coupons, and around 660 million euros relates to scheduled repayments. As a result of this proactive liability management measures, we further extended our debt maturity profile. These actions underscore our continued focus on disciplined financial management and optimizing our capital structure. Frank, please continue on the next slide.