Aroundtown Sa U/Adr

Good morning, everybody. Thank you for joining us for Around Town's Q1 2024 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. I am Katrin Petersen, Around Town's group head of communication. With me today will be CEO Barak Bar-Hen, CFO Eyal Ben-David, Chief Capital Markets Officer, Oshri Massachi, and Executive Director, Frank Roseen. Investor Relations, Timothy Wright, and representatives from Grand City Properties are also present. In addition, we want to welcome Ms. Limor Bermann, who was recently appointed to the management body of the company as Chief Sustainability Officer. For the duration of the call, all participants will be on a listen-only mode. Following our presentation, you will have the opportunity to ask questions. But feel free to send us your questions via email also during the presentation. The email address is info at aroundtown.de And 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, Catherine. Good morning also from my side and welcome to our results presentation for the first quarter of 2024. Before starting with the presentation, allow me a few words. After a few challenging years, we entered 2024 more helpful based on positive signs ahead. The macroeconomic sentiment seems to be more positive and it looks that we are avoiding a severe recession in Germany and Europe. It seems that the interest rates have peaked and rate cuts are expected in the very near future. Further, capital markets have started to open up again after a long muted period when we believe that when the ECB will start lowering rates, the transaction market will pick up pace again, providing more stability and certainty to valuations. Accordingly, the conditions have enabled us to launch a large exchange on our perpetual notes, which have been accretive on a future earning and supportive to our credit rating metrics and have placed us back in the market with a very successful result. More on that in detail later in the presentation. The hospitality industry is on track to pre-pandemic levels with continued positive momentum and with several large events taking place in Europe this summer, from the Olympics, the UEFA Euro Cup and others, supporting this sector further this year. Nonetheless, we are not fully through these challenging times and we continue to keep focus on strengthening our balance sheet, maintaining high liquidity level, which at the right time and in the supportive market environment will also put us in the right spot to grasp growth opportunities. On slide four, we present the financial highlights for Q1 2024. Net rental income amounted to 293 million euros, slightly lower year over year due to disposals, but partially offset by like for like rental growth of 2.8%. Adjusted EBITDA increased slightly year-over-year and amounted to €247 million as optimization measures and indexation offset the impact of disposals. FFO1 was €76 million down 10% year-over-year as a result of a higher perpetual note attribution and net finance expenses, which partially offset by recovery of the hotel portfolio and thus positioned us on track to achieve our 2024 guidance. As we did not revalue the portfolio in Q1, EPRA NTA remained stable at €7.4 per share. In the first quarter of 2024, we kept a strong liquidity position which amounted to €2.9 billion or 21% of debt. Our liquidity will be additionally strengthened by €240 million of signed secured financing year-to-date. LTV stands at 43%, stable compared to 2023, maintaining our wide headroom to bond covenants. We will elaborate on this and other points further in the presentation. Osri, please continue.

Thank you, Barak. Please turn to the next slide, where we will present some further progress on our disposal activity. We signed circa 200 million euros of disposals year-to-date. These disposals have been signed at book value. In the first quarter of 24, we closed 110 million euros of disposals across all other types and expect to complete the rest in the coming periods. We continue to focus on disposing properties at good prices, which will support our leverage and free up cash proceeds. The transaction markets continue to be mostly muted, but we anticipate that if the ECB were to cut interest rates soon, it has the potential to increase the activity in the transaction markets, resulting in higher transaction volumes. We expect that this will support selling assets in order to further strengthen the balance sheet, delever the company and support the credit rating. Moving to slide 6, where we provide some more details on our perpetual exchanges. Just after the publication of our year-end results, Around Town in Grand City launched a voluntary exchange offer with tender options to all perpetual note series which passed their first call date, as well as those with first call dates within the upcoming 12 months. The high average acceptance ratio of circa 80% is a testament to the success of the transaction. The offer included a tender option which was chosen by only half of those accepting the offer. As a result of the exchange offers, we issued five new perpetual notes with an aggregate nominal amount of 2.5 billion euros, which makes the Arantone Group the largest issuer among European investment grade rated peers year to date. The total balance of outstanding perpetual notes reduced to 4.5 billion euros from 4.8 billion euros prior to the offer, primarily through the buyback of perpetuals at an average discount of over 30% via the tender option. utilizing partially S&P's reduction allowance. Benefits of the exchange are long-term accretive to the group. Firstly, the exchange results in a reduction of the annual coupon of 35 million euros after 24, while the impact in 24 itself is neutral on FFO. Furthermore, the result supports the company's credit metrics under S&P's methodology as the new securities regain equity content. We note that under IFRS and the company's bond covenants, all perpetual notes, regardless of whether called or not, are considered 100% equity. Lastly, the exchanges have created more certainty on perpetual note coupon rates in the mid-term. More details on the exchange can be found in the appendix of this presentation if you follow the link at the bottom of this slide. Let me now hand you over to Limor, our new Chief Sustainability Officer, for the next slide.