Icade Sa Ord

So, hello. I'm really happy to welcome you today to ICAD Orly Rangis Business Park, and I'd like to thank all the people who are online. Well, today's agenda is quite busy. We will start with a presentation on 2023 annual results, lasting around 45 minutes, and then at 11 a.m., the Executive Committee and I will be pleased to present ICAD's new strategic plan for 2024-2028. Finally, we'll be offering this afternoon an asset tour of our business park. As an introduction to the day, I'd like firstly to invite you to listen to a few words from the Chairman of the Board, Frédéric Thomas.

Hello, everyone. We are delighted to welcome you to ICAS Paris-Orléans Business Park today, and I'm sorry I can't be with you in person. As you will see, the Paris-Orly-Ragis Business Park is a showcase for ICAD's expertise and an illustration of what a new kind of development can look like. It's more and more a real neighborhood which is being transformed to meet the expectations of our tenants and residents. It features greater accessibility, an environment that's more respectful of nature and biodiversity, and services that make everyday life more enjoyable. After 10 months as CEO, Nicolas Joly will present ICAD's new roadmap today, following the sale of ICAD Sante in a challenging economic and financial climate. It's a roadmap that enables ICAD to set clear goals for the future in a market undergoing profound change. Through this message, I want to assure Nicolas Joly of my full support. I would also like to assure you of the full confidence that of all the members of the Board of Directors in the roadmap and its implementations over the coming years. For the past 70 years, ICAD has been evolving, weathering crises and adapting to new challenges. And this is what we intend to continue doing in the years to come. Thank you for your attention and have a lovely day.

Well, so I therefore propose to continue with the presentation of the 2023 annual results. This presentation will, of course, be followed by a Q&A session. So let's move to slide five to give you an overview of the year 2023. Well, in a nutshell, 2023 was marked by a major shift in ECAT strategy with the disposal of the healthcare business and the group refocusing on its core businesses, commercial investment and property development. On an operational point of view, the key word for 2023 was resiliency, with group cash flows at 4.62 euros per share, And the strategic activities, i.e. commercial investment and property development, represented a net current cash flow of 3.07 euros per share above the guidance. The commercial investment business was, as I said, resilient, with rental income of 364 million euros, supported by a plus 2.2%, like-for-like growth, and a strong rental activity with almost 243,000 square meters signed or renewed. In a very complicated market context for the development business, our property development division sales rose slightly to 1.29 billion euros, and the margin, as expected, decreased to 3.8%. On the balance sheet in an high interest rate environment, we saw an adjustment in the values of our asset at minus 17.5% like for like over the past year. This translated into a decrease in NAV and TA to 67.2 euros per share. Nevertheless, the group benefits from a very strong balance sheet, strengthened by the disposal of DLTR activities. In that respect, The group's LTV stood at a very comfortable 33.5% at the end of the year, and the level of liquidity was very high at 2.9 billion euros, covering our debt maturities until 2028. Financial expenses were under control thanks to a very robust hedging policy, enabling us to post a solid ICR of 5.6 times. In terms of dividend, we will be proposing a dividend of 4.84 euros per share, up 11.8% on 2022, partially supported by the dividend coming from the health care. First of all, I'd like to come back to the cell of our health care activities and make a clear point on where we exactly stand today. On July 5, 2023, ICAD announced the sale of its World Health Care Division, resulting in the deconsolidation of these activities. And as you know, this sale comes into three stages. Stage 1, completed on the 5th July 2023, involved the sale of 63% of ICAD's stake in ICAD Santé to Primonial REM and Sogecap for a total amount of 1.45 billion euros, and the transfer of both the asset management and the former ICATSanté teams to Primonial Rennes. Stage 2 consists of the sale of ICATS 23% stake in Premier Health Care, which is the new name of ICATSanté, for an estimated amount of circa 800 million euros at the 31st December 2023. This sale process... which we still envisage within a 2024-2025 timeframe, could be carried out gradually through the acquisition of additional shares by Primonial REM entities and or through the purchase of residual shares by third-party institutional investors. Regarding the conditions of Stage 2, Primonial REM has made firstly the commitment to allocate funds raised by its Cap Santé Fund, And secondly, it is incentivized to execute this stage. Stage 3 will involve the sale of ICAD's healthcare Europe portfolio, meaning Italy, Portugal, and Germany's assets. At the 31st December 2023, it represents an amount of circa 500 million euros, of which 190 million euros is a shareholder loan between ICAD and IHU. Regarding this loan, should be noted that it was initially carried at 100% by ICAD and was refinanced between December 2023 and January 2024 by all the shareholders in proportion to their ownership in IHR, enabling ICAD to receive €132 million. So let's now look at performance by division, starting with commercial investments. Well, you all know that the commercial investment division evolved in a sluggish leasing and investment environment in 2023. On the leasing side, take-up in Paris region was down 17% on 2022, with a percentage of total demand outside Paris CBD of around 77%, underpinned by attractive incentive and scarcity in the CBD. We are also seeing a shift in tenants' expectations for offices that meet the highest standards in terms of centrality, environmental quality, high services level, and flexibility. Total investment volume in France was down 51% compared to 2022, and overall the investors rather focused on small and prime transactions, waiting for yields to adjust to the new financial environment. Some recent deals were now set in new landmarks, restoring the sector's attractiveness in the medium term. Let's move on to slide 13 to see how ECAD performed in this environment. Against this backdrop, ECAD posted a record rental activity with 243,000 square meters signed or renewed this year, representing an increase of plus 20% compared with 2022. These signatures and renewals represent annual rents of 63 million euros and a world of 5.6 years, confirming the resiliency of this portfolio. Good rental momentum concerns the two main asset classes, namely office and light industrials. Offices accounted for almost 181,000 square meters. These leases were signed on terms in line with market rental values. Light industrial and other assets represented 62,000 square meters. The dynamic of rental activity also illustrates the strong demand for our business parks. The financial occupancy rate stood at 87.9% at the end of December, which is slightly up on 2022. It is supported in particular by EDF Renouvelable, leased on the origin building in Nanterre, and the Insomly, some fresh, bringing the occupancy rates for those two assets to 100%. As a reminder, our tenant base is a key differentiating asset for ICAD with 70% of it made up of public institutions and large corporates diversified in terms of sectors. we are able to offer this customer office or industrial premises that meet their expectations in terms of surface, area, location, quality, and price, as well as a wide range of services and turnkey solutions. In terms of investment policy, we remain cautious and selective as we've been in recent months. In July 2023, we acquired the remaining parts of the Ponombe building, ideally located in the 15th district of Paris, giving us now full ownership of a 33,000 square meter property complex and enabling us to envisage value enhancing transformation in the medium term. Investments in the development pipeline, as you can see, were limited to 125 million euros for 2023. Asset disposals were managed opportunistically for almost 146 million euros in line with the December 2022 NAV. So let's now take a more forward-looking point of view and discuss the current pipeline for our commercial investment activities. For several months now, the pipeline has been rigorously reviewed in order to limit investment to assets that meet changing usage patterns and tenant expectations and to project with a satisfactory financial equilibrium. At 31 December 2023, the investment pipeline amounted to €907 million, representing €334 million of future investment for circa 45 million euros of additional rental income. So, as you can see, our pipeline is diversified with, for example, data center project with Equinix or a hotel conversion project you will see in Régis. In the office segment, we've adopted a very selective approach. The one and only project we've added is the retail and office project at the 2933 Champs-Élysées. We will, of course, come back to this later with Emmanuel while presenting our strategy plan. In addition, our pipeline is well secured, with four out of five projects to be delivered in 2024 and 2025 already fully pre-let. So let's now move on to the operational performance of the development business lines. The year 2023 was marked by a slowdown in the overall property development market as a result from a very high interest rate environment and to a lesser extent the phasing out tax incentives. This translates into a 35 drop in individual orders and commercial launches while the inventory of home for sales increased by plus 2%. So now let's move on to slide 19 to see that Against this backdrop, ECAP has a strong focus on block sales to institutional investors, in particular intermediate housing providers, social landlords, and operators that partially offset the lowering demand from individuals. These block sales accounted for almost 3,600 units in 2023 and growth in value of plus 18%. Institutional investors thus accounted for 67% of the volume orders in 2023. This very strong momentum in block sales explains the resilience of our operating indicators. That's the reason why reservation fell by only minus 7% in value and minus 13% in volume in a global market down by minus 26%. The backlog at 1.84 billion euros also remains solid and stable compared with 2022, supported by a plus 5% increase in the residential backlog linked to orders from institutional investors. So let's move on to slide 20. See that in this new market, the property development division has adapted its strategy to further secure new projects and rebuild the margin of new operations. This means, on the one hand, increasing the minimum order rate and the pre-commercialization rates also reach 75% by 2023. On the second hand, conducting an in-depth review of the land portfolio to assess the economic viability of the project, adjust their financial parameters, such as land prices and payment schedules, and or reduce cancel operations that are no longer suited to the market context. Three times more operations have been abandoned this year than in 2022. So this greater selectivity explains the minus 20% year-on-year drop in inventory of home for sale and the minus 16% year-on-year drop in construction starts. In the medium term, greater selectivity in terms of operations has impacted our land portfolio significantly. down by minus 13% to 2.82 billion euros. And now let's move on to the presentation of our financial results for the full year 2023. In 2023, the group's net current cash flow amounted to 350.6 million euros or 4.62 euros per share. 232.6 million euros of this amounted came from our strategic activities, commercial investment and property development businesses. Cash flow from healthcare activities in 2023 represented €118 million. €95 million is coming from H1 cash flows before the disposal, and €23 million in H2 2023 are mainly coming from an interim dividend for 2024 and the interest rate, interest income on the shareholder loan to IACHO. We reported a current cash flow from our strategic activities of €232.6 million, i.e. €3.07 per share, above the guidance which we had communicated at €2.95, €3.05 per share in July. Main variations stem mostly from the development business which reported a decline in net current cash flow of 24 million euros due to lower sale prices, depreciation on land, and higher net borrowing costs. This decline was more than offset by the plus 27 million euros increase in finance income over the period. So let's focus for now in more details on the commercial investment business. As far as the gross rental income is concerned, it was pretty stable in 2023 versus 2022 at €364 million. On a like-for-like basis, performance was positive, as you know, plus 2.2%, mainly carried by indexation on rents, plus 4.7%, and partially offset by the reversion effect. Concerning the net to gross rental income ratio, we were penalized by the increase in vacancy costs. Financial results improved significantly thanks to tight control of our finance expenses and also to income from cash investments made in 2023. As a result, net cash flow from the commercial investment business rose by around 10% to 228.8 million euros. Moving on now to the property development activity, see that economic sales amounted to 1.3 billion euros in the 31st of December 2023, up plus 3% on 2022. This was the result of a limited decline in sales in the residential business and an increase in the contribution from the commercial segment. Thanks to progress on ongoing projects, as well as the opportunistic sales of the Tedbou building shared in July. As already mentioned, in Q3 2023, margins came under pressure in the second half of the year, and the overall margin was down to 3.8%, due to lower prices linked to block sales and land depreciation. With regard to valuations, we saw in 2023 a large increase in capitalization rates, reflecting the rise in interest rates that began two years ago. For ICAB, this meant a like-for-like decline in portfolio value of minus 17.5% over 12 months and minus 22.9% since June 2022. The average yield on our portfolio is now 7.5%, which represents an increase of plus 150 basis points compared with 31st December 2022. Decreases in value vary greatly depending on the asset considered. For example, you see that offices that we consider as well positioned, i.e. those for which we have a long-term conviction as to their tertiary use, fell by minus 16.8%. On the other hand, offices that need to be repositioned because they won't meet tenant demands in the long term, they were down by minus 33%. And the assets in the light industrial segment were down by only minus 3.1%. Of course, we will come back to this segmentation and its consequences when we will present during the next hour a strategy plan. So the downward trend in the value of our asset resulted in a drop in our APRA NTA per share of around 25%. As of 31st of December 2023, the APRA NTA landed at 67.2 euro per share. So now let's move on to slide 28 for a look at the group liabilities. On the balance sheet, the completion of first stage of the health care disposal enabled us to significantly reduce our net debt to €3 billion versus €6.6 billion at the end of 2022 and to substantially improve our LTV and net debt to EBDA ratios. As of 31st of December, the LTV ratio, including duties, stood at 33.5%, down 6 points on last year, despite pressure on valuations. The net debt to EBITDA ratio came out at 7 times, a strong improvement on the previous 10.1 times in 2022. In terms of liquidity, ECAT has a very solid position at 2.9 billion euros, including cash and Android credit line. This liquidity covers our debt maturities until 2028. As we have already indicated, we will also use part of our cash to proactively manage our upcoming debt maturities, particularly bonds. In 2023, we continue to proactively manage our financing, and in particular, given our excess cash position, we reduce short-term maturities by lowering our new CP outstanding and repaying part of the 2024-2026 maturities. We also consolidated our liquidity profile by refinancing 100% of our unrolled credit lines maturing in 2024-2025, for €755 million. In 2023, ECAD pursued its commitment to sustainable finance by making 100% of bank financing responsible backed by either ESG objectives or green use of proceeds. As already mentioned, we also effectively manage our cash investment with around €870 million invested at three Finally, on page 31, we confirmed our tight control on the financial results. Indeed, thanks to our conservative hedging policy, our average cost of debt rose to 1.56% compared with 1.25% in 2022, while the ICR ratio remained very high at 5.6%. In terms of exposure to interest rate risk, ECAD strengthened its aging position with the entry into force at the end of 2023 of 125 million euros of forward starting swap contracted in 2021. Future estimated debt for the next three years is fully aged. And in line with the policy given at the time of the actual result, The Board of Directors will propose to the Annual General Meeting the payment of a dividend of 4.84 euros per share, which is up plus 11.8% on the 2022 dividend. This includes 2.54 euros per share of dividend following the Stage 1 of health care disposal. The dividend yield is, as you can see, 13.6%. based on the share price on the 29th of December 2023. So the dividend will be paid in two installments. Firstly, an interim dividend of 50%, i.e. 2.42 euros per share, paid in early March. And secondly, the balance paid in early July. So let's turn to our CSR performance. As you know, we have strong ambition on CSR and are fully dedicated to define concrete operational objectives and action plans. In 2023, our two businesses posted very solid performance in terms of carbon intensity, consistent with objectives aligned with a 1.5 Celsius degree trajectory validated by the BTI in October 2022. In particular, we are very proud to announce this year that that ECAT has joined the A-list of the carbon disclosure project, placing it among the sector leaders in terms of transparency and performance on climate change. So on slide 34, you see that carbon intensity in the commercial property division failed by 35% between 2019 and 2023, with a target of 60% by 2030. In particular, this was due to One, improving building efficiency and decarbonization of energy sources. Secondly, the implementation of the energy sobriety program. And thirdly, the rollout of environmental committees and climate commitment leases over 200,000 square meters, enabling tenants to be fully involved in the reduction of carbon emissions. The carbon intensity of the property development business was down minus 12% over the period 2019-2023, with a target of minus 41% by 2030. The reduction in carbon intensity was especially explained by the use of low-carbon energy sources, for 79% of projects launched in 2023, and the development of mixed timber and concrete construction for 17% of the projects. As we remain cautious in our sourcing, 100% of our wood source is sourced from responsibly managed forests. To conclude, I suggest we move on to the 2024 outlook. Well, in a new interest rate environment, the real estate market is undergoing deep changes and remains uncertain in 2024, particularly for the property development activity. As a result, ECAD expects in 2024 a net current cash flow from its strategic activities between 2.75 and 2.90 euros per share in 2024. In addition... The non-consolidated shares in healthcare activities should generate additional net current cash flow of circa 80 cents per share on the basis of the current ownership. So the 2023 results demonstrate the resilience of ECAD's portfolio and reflect the commitment and performance of all our teams, asset management, property development, ESG, or finance. And thanks to a solid balance sheet, I'm convinced that the group will be able to size new growth opportunities in this market-adjusting period. Thank you very much for your attention, and now let's move on to the Q&A session. We will answer every question.

Good morning, Nicolas, so thank you very much for this presentation. Maybe I would ask you three questions. So maybe the first question, so you told us that there would be some uncertainties in 2024, but could you please tell us more about your leasing challenges for offices in 2024? So that would be my first question. Maybe a second question on ECAT Santé. So you have given maybe more details. So shall we understand that maybe you have renegotiated, rediscussed with the primordial on the terms of the agreements? And where are you maybe with discussion with third-party investors? And maybe the last question is, for the valuation of the asset, so we have a significant decrease in the valuation. So shall we expect further declines in H1 2024? Thank you.

Thank you very much, Laurent. Well, as for your first question regarding the guidance and the uncertainty globally, I mean, Maybe just to look once again at the guidance, and then we'll focus and dive in into the expiry schedule in 2024. Well, as for the guidance, the uncertainty is both on the property development market, of course, and on our leasing challenges regarding the investment division. You know, and we've shared that in July, that we had something like Roughly 25% of our rents at stake in 2024 with potential break options or end of leases. This amount is now 78 million euros that are concerned. Our view at this stage is that roughly 40 million euros are certain departures. They are mostly composed of assets that need to be repositioned. And you will see that globally on this segment of our portfolio, there's a global WALB of 2.1 year, but there'll be some departures in 2024. And on the well-positioned asset, the one and main concern for us is the Pulse building. You know, the Pulse building is located in the northern Parisian region in Saint-Denis. It's a 30,000 square meter building. It's currently led to the Olympic Committee. And structurally, of course, the Olympic Committee will vanish next November. So, well, it's a great building. I mean, meet anyone from the Olympic Committee. Those guys are the best ambassador ever of this building. But definitely, the northern Parisian region is going through hard times. So it will take time. What we are doing now is working in order to split it, to search some multi-tenants. For example, we are also working a lot on the common parts with SEGES to develop extra meeting rooms and services and amenities. We are in an area where the global environment is evolving. I mean, we are just at the foot on the line 12. The tramway will be also there in a few years. The global environment, and you will see that during the strategic presentation later, We still have land banks that we're going to develop. There's the high proximity of the Campus Condorcet with 12,000 users on a daily basis. So in the mid-long term, I have no doubt about this building. But definitely the short-term period will be even more defensive for this one. So that's for the leasing challenges. Maybe just one last word, last element on the guidance. That was for the challenges and uncertainty. Have in mind also that the guidance is also impacted by the financial products, of course, and we might maybe be the only actor in the sector that a slight delay in the decreasing of the interest rate could be a good news for that, at least for the cash flow. So this could mitigate a bit the guidance, but for the two first elements, that's the reason why we made a cautious guidance. As for ICAT Santé, well, my first question for you, Florent, is it clear now? Okay, good. Thanks to him. We try our best with the team to give you any proper details. So basically, that's where we stand today. So you see that nothing much happened in the last six months due to the main fact that, of course, Primonial is penalized due to the lack of inflows, but the strategic paths remain the same. I mean, we are still confident in achieving the phase two by the end of 2025. I mean, there are resilient assets. There's the cash flow. The dividend is coming, as you saw, and it will also impact the group cash flow at the group level. So we are confident. There's absolutely no rush for us to sell those assets just for the sake of saying, well, the healthcare business is behind us now. Of course, we would have the opportunity to sell with a large discount to some opportunistic investors. But, I mean, that would not be, in my view, a good decision and a good signal to the market. And as for the international part, so the EHE, you saw that we slightly delayed. We think that, especially on the German portfolio, there are some concerns about operators that might need some extra asset management work. So this could slightly delay, in my view, the execution of stage three, and we put 2026 in the presentation. So we are currently not renegotiating with Primonial because there's no need to. We just need to wait a bit, and in the meantime, I mean, take our dividends. And as for valuation, well, of course, valuation, I mean, for every office actor in the sector today is one of the main questions. Maybe three elements to share on that. The first one is yield. Of course, yield has been pushed up strongly by the high rise in interest rates. I think the valuators, they did a good job for that, helping to restore this risk premium of real estate against sovereign bonds. So that's a good thing. You saw also that the valuation and the decrease in valuation vary greatly from one asset class to another and from one asset profile to another. If you take, for example, light industrial, only minus 3% for us. And if you take offices, I mean, the one assets we think need to be repositioned, there were minus 33% during this year, which means that from the peak in June 2022, it was minus 40%. So this varies greatly, and, of course, we remain cautious due to the global uncertainty of the market. But maybe two things about that. The first one is that we have a strong balance sheet. I mean, you saw that we have a good LTV level due to the healthcare business, and we were definitely able to endure such an adjustment. That's for the first one. And the second one is the level of confidence we have in the valuation level. Due to the fact, and I think it's quite a specificity at ICAD, well, at least was something I discovered when arriving 10 months ago, is that almost two-thirds, I think the exact figure is 64% of the portfolio, is covered by a double expertise process, meaning that for two-thirds of our portfolio, we have two independent valuators that are doing on their own their proper valuation, and that, at the end of the day, We take the average valuation. I mean, in an environment such as the one we are going through now, full of uncertainty with few transactions and no transactions, especially on the large volume, I think it's particularly useful to have this kind of process, and that's the reason why we have some confidence in the figures we just shared with you.

Yeah. Yeah. Good morning. Pierre-Emmanuel Clouart from Jefferies. Just coming back on your rental challenges for this year. Yeah. From what I understand, it's mainly non-co-offices that will be vacated. So meaning that you have… And Pulse.

And Pulse. And Pulse. Pulse account for 10 million, so it's quite significant still.

Okay. Okay. and your vacancy for this segment is already above 30%. So should we consider that the 30% will never be offices anymore and will be transformed 100% of them, or are you confident to at least release part of those offices? And I imagine that out of the 78 million euros that will be renegotiated, part of them will be vacated again, so the vacancy should increase once more. So maybe that is my first question.

Okay. Well, definitely on the occupancy rates, the rental challenging we are facing in 2024, we put pressure on our main KPIs, definitely, or spot at the end of 2024, but also, of course, some pressure on the cash flows in 2024 and probably 2025. And as for the one offices that need to be repositioned, We will share it in detail with Emmanuel during the strategic plan review, but what we have done on those 33 buildings is conduct asset-by-asset analysis clearly to find the best scenario. We think that in the mid-long term, those won't be offices anymore. It's a matter of time, basically. Thank you. And it's also a matter of constraint, technical constraint, financial constraint, legal constraint. And sometimes the issue is not just at the level of the building, but at the level of the global neighborhood. So you have to work hand in hand with the local authorities for five or ten years. So what do we do there? I mean, we'll be as pragmatic as we can. I mean, we'll try to maintain as much cash flow as we can during this intermediate period on which we are working on the repositioning plan. We are maybe changing the PLU, obtaining building permit to try to preserve as much cash flow as we can above this global world of 2.1 year, which is already a good news. I mean, we still have an average two years ahead of us to work on those assets. And after that, well, we think that there won't be offices anymore in the long term. And they can be hotels, such as Helsinki and I will see in the afternoon. They can be school. It can be residential, pure residential. They can be student housing. And we'll be happy to share that with Emmanuel and Charles-Emmanuel during the strategic plan. And just one last word. The output of the analysis and the workshops we've done during the past months is that more than half, of the assets have now a proper action plan, analyzed, defined, designed, and the remaining assets are still under analysis.

And on your guidance, what is your main assumption in terms of out of the 78 million euros that would be... As I told you, we consider that at least 40 million euros will be certain departures.

But they won't impact fully the year 2024. So it will impact spots at the end of the year, our occupancy KPIs, definitely. So this will put pressure on the KPI regarding the one we have just right there. And it will put some slight pressure on the cash flows at the end 2024, but also on a full year basis in 2025.

But on the remaining 60%, then you are not 100% sure, obviously.

I mean, it's not because we think they are well-positioned assets that they will be 100% fully let every time. I mean, on an ordinary basis, even the best assets, I mean, some tenants, I'll take an example. For example, in Nanterre, and you will see that during the next hour, Groupama, went away of our Défense Quai de Saint-Cys building, just located behind the Eden project. I mean, in two months, we've already relet 84% of the building. So, I mean, that's the daily life of offices. One tenant comes in, one tenant comes out, so it's never 100%. So there might be some departure. There might be some small reduction even on the well position, of course. But globally, I think the departures will come for the one asset that needs to be repositioned and pulsed. which also has a strong impact.

Okay, thank you. And just finishing on your guidance, on the property development segment, can you give us more color on the main assumption that you took, especially in terms of delivery, but also in terms of new reservations, and obviously the operating margin that you are targeting for this year?

Well, as for property development, once again, I think 2024 will still be full of uncertainty, definitely. We were able, thanks to Charles Emmanuel's team, to pivot strongly into bulk sales. That helped us. But when you do bulk sales and sell to institutional, of course, there's an impact on the margin and the cash flows because you sell at a lower price. But we are really cautious about our balance sheet as for the property development. So 2024 will still be an issue. I still expect some pressure on the margin. That's the reason why we came with this global guidance that we think is cautious. Hopefully, we'll have more visibility to share in July.

Yeah. Thank you.

Hi, Veronique from Vlanske Kempe. Two questions from my side. I noticed that there wasn't a guidance on your dividend for 2024. Obviously, there is still a part that needs to be paid out from the Sunday, but is it your ambition to keep it stable for this year, or what's your view there?

Well, honestly, it's too early to tell. I really think that give dividend policy in February, especially in this context, is definitely too early to tell. The only habit I took at ICAT is give policy dividend in July. So, no, more seriously, I think there's uncertainty on the one side and also full visibility on the other side because you all know that we've decided to split by half The special dividend, roughly 400 million euros split by half this year and next year. And, I mean, the principle stays the same. On top of that, we want to keep as much cash as we can in the company, given the global uncertainty of the environment, in order to be able to seize any opportunity that might arise and in order to fuel our strategic plan, which you will see, in my view, constitute a sizable ambition for ICAT. So, globally... So you have, I think, some clues about what it could be.

Okay, thank you. And then maybe also coming back to the guidance, you already mentioned that you have quite conservative guidance in terms of financial income. I think in the slide it mentioned 3.4% on average. Can you maybe highlight what your assumption is for the guidance on what you can get on your cash deposits right now?

Yeah, well... We think that there will be a strong impact of the financial products selling this year. We are also cautious and took an average year, taking account the overall projection that has been made on the rates, but there will still be significant input from the financial products this year. I won't share the proper figure, but It might be the one positive leverage we had also to have said that because if the central banks take more time, I mean, to decrease the high interest rates, I think we might be one of the only ones that could benefit from that due to the high level of financial products we have.

Okay. Maybe lastly, one question. In terms of disposals, anything included in the guidance? Or is that still opportunistically seeing what you can sell?

Well, disposal will be opportunistic, definitely. I mean, That's exactly the same for the healthcare business. I mean, we are not for seller with the balance sheet we have. That's a strong advantage in the current market. It's even an opportunity to seize some opportunities from distressed sellers. So I'm not saying that we won't sell some assets. On the contrary, we are opportunistic. So if it makes sense regarding our strategic plan, if it makes sense in terms of financial equation, we'll be happy to do so, such as what we did last year.

Okay, very clear.

Thank you. Hi, good morning. It's Rob Jones from BNP Parabags. Two questions from me. One potentially might just be a yes or no answer. I do obviously understand that Primonia has a financial incentive to execute on the purchase of Stage 2 before the end of 2025, but is there a penalty for them not executing before the end of 2025?

No, there is no penalty. It's an incentivized scheme. I would say that there might be, it's not legal, but a strategic penalty for them. Because for them, repositioning on the healthcare business and fully execute their stage two is quite important in their overall strategy and exposure to real estate. But there are no such things in the agreement as a legal penalty.

Okay, that's very clear. And then the other question was... I'm looking at slide 28, where you've got your LTV at the end of the year, 33.5%. Obviously, that's well within the 30 to 35% guided range, which is great to see. I'm then thinking from a cash flow perspective going forwards. When you include the fact that you've obviously got dividend distributions to pay in 2024 that are relatively material, I think that might take the pro forma LTV back up closer to the level that you've seen in 2021 and 22, if I then add the fact that you've got cash, 1.4 billion, if I ignore the under-organ credit lines for now, because realistically that's a short-term refinancing solution ahead of a longer-term refi of, say, the 25 and 26 debt, how do you go about ensuring that your LTV gets down to or remains at that 30% to 35% level if you're going to refi 2526s rather than redeem 2526s?

Yeah. Well, of course, we still think that in the healthcare business, we don't expect so much from the first semester. But as I said, we expect something to happen at the end of the year at least and in 2025. So definitely the path is still the same, and we are in the same trajectory, as you say. So this, of course, will offset the dividend we will be paying, so we are still in phase with the global trajectory shared. It's just taking more time, definitely.

Is it therefore fair to say that if you don't get further health care disposals within the next 12 months, your LTV will be notably higher than it is today?

Slightly higher, yeah, of course. But once again, in our view, no worry about the execution in the midterm of the healthcare business. I mean, there's no issue about the operators, apart from Germany. It's a strategic move for Primonial and the global institutionals around the table, so we remain confident. It's just a matter of time. Thank you. I think they are waiting for the mic here for quite a time. Thanks. Just over there.

Yeah. Sorry, I'm at the back of the room today. Mark from Bank of America. On this LTV thing, I think it's as clear as mud to me, meaning what is your pro forma LTV right now on the Ebra standouts? Because I think this is what matters. And then, to follow up on Rob's question, how do you think That LTV will evolve, or how do you see this LTV evolving when you're going to sell entirely the healthcare business? So starting point, EPRA, economic, and then how it goes, simply if you remove entirely the healthcare business, and then we're going to discuss about the reinvestment, dividend, whatsoever. But just a starting point, because this number, it's an ECAT number, which is maybe relevant for credit agencies, your bankers, and so on, but it's not an economic LTV or so-called equity multiplier from an equity EPRA perspective. Thank you.

Yeah, Mark. Sorry it's not so easy to answer with the mic and having you in the audience. Well, about the LPRI LTV, it should be noted that the LPRI LTV today is even lower than this LTV in terms of including rights. And, of course, if the healthcare business was not, The LTVA will be higher than that. But in our view, once again, it is still at this stage a theoretical scenario. And that's definitely not the path we are working now. Sorry, Mark, it's not really comfortable, neither for you, neither for me. So we are not doing that. Of course, thanks. I mean, there are some shares available in the front row. Okay. Okay. So that's what I say. Of course, the APRA LTV today is even lower than this one. It should, of course, get higher than that if you take a theoretical exercise of reconsolidating the healthcare business, but that's definitely not, in my view, what we have to do and what we need to do. Because in the long term, the conviction stays the same. It takes time. We have the ability, if we want, to sell at a large discount that does not make sense for the company. I'm sorry. Maybe, André, just one question because those guys are waiting for a long time. And after that, we'll have a short break. We'll get to the strategic plan and all the questions you still have. I'd be happy to share in the next session.

Good morning. Finally, Stéphane Afonso, Invest Securities. Just one question on my side on your healthcare division. Could you give us an update on your main KPIs, in particular in terms of occupancy, reversion, and also in terms of asset valuation on a like-for-like basis?

Yeah. Well, it's not our healthcare division anymore, for the one point. And secondly, just to say globally on the occupancy ratio, the payments of the rents, I mean, Nothing specific. I mean, those are still resilient assets, steady cash flow, so nothing to share on an operational point of view. The EBITDA margin of the operators is still high, near to two times. And apart from Germany, we have no sign of any major issues with the operators. Have in mind that this portfolio is mainly focused on acute care, which is no long-term state. That's for that. And the valuation, as you saw, slightly decreased in H2. It was slightly positive in June, and it was minus 3% globally over the year, so a slight decrease in H2 as for the valuation.

Okay. I understand that your portfolio is mainly about acute care, but we know that acute care operators are also under pressure. So to what extent are preserves taking into account those pressures in their assumptions?

I think they are taking this as they always take the global environment in order to take the evaluation. I mean, so I'm sure they've taken this in account, and that led to this, and I think the interest rate rise led to this minus 3, minus 3.3% decrease in the French portfolio.

Okay, and one last question on Office portfolio. Could you give us the reversion rate that was captured in 2023?

Well, not in 2023 because I think you are more interested in the future, but we are happy to share this revolutionary. Globally, we were in line with what we see and we will be sharing for the future. We go to rental market values every time. And as for the future, you will see that in the strategic plan. The global revolutionary potential on our well-positioned offices is minus 8.7%. So I know it's a question keep coming and coming and coming. So I think it was the time to give a proper and precise answer to that.

Thank you.

Okay. Thank you. So I think it's time for a quick coffee and happy to meet you again for the strategic plan we are all waiting for. Ten minutes. Ten minutes break. Two coffees.

Thank you.

Thank you. Thank you. . .

. . . . Thank you. Thank you.

We'll see you next time. So, joining me for the second part of the day are three members of the Executive Committee, Emmanuel Baboulin, Head of Commercial Investment Division,

Charles-Emmanuel Kuhn, Head of Property Development Division, and Flor Jakimowicz, Head of CSR and Innovation. And we are all pleased to present today ICAD's new strategic plan for 2024-2028, a plan called Reshape. So, together with my colleagues, we will share our convictions, being as concrete as and as precise as we can so that you get a proper view of who we are today, who we intend to be tomorrow, and how we want to get there. This presentation will, of course, be followed by the Q&A session. So let's start our presentation with slide five. So ICAD is celebrating its 70th birthday this year. Over the decades, the group's profiles kept evolving through the cycle, both in its core business and its various asset classes, to successfully adapt to the challenges facing society. Historic player as a housing developer, ICAD has gradually diversified to become an investor and developer in the office market and then in healthcare assets. These complementary expertise and unique know-how as a developer and investor, formed the group DNA, no matter the asset classes. This is who we are. And as you know, I deeply believe in the value of having those two skills under the same roof. This will be a key differentiating asset to properly address the challenges of tomorrow and to capture growth. When I arrived at ECAD, I was also struck to see that our CSR commitments had deep roots. They are 20 years old, a time when these convictions were not so unanimously shared in the sector. This put ECAD in the front line, taking leadership in the areas of low carbon and biodiversity, using innovation as a strong catalyst to adapt and transform. People also kept talking to me about ECAD's portfolio. Well, after a deep review we've performed with the team during the past month, it comes out that this is a resilient portfolio and that we believe that more than 85% of our office assets are in line with the new needs expressed by our tenants, our customers. On top of this, we also have a wealth of expertise in other asset classes and the potential to accelerate at our fingertips through uniquely located land banks. It's on the basis of these key competencies as an experienced, responsible developer, investor with a long-term commitment to its customer that I firmly believe in the group's ability to play a key role in transforming the city towards tomorrow. While the fundamentals for real estate have always been to properly understand the dynamics of the society in order to provide adequate answers to the way people want to live and work. Today's challenges are numerous and need to be addressed simultaneously at different scales, both district and asset level. At both levels, needs, constraints and challenges are evolving. At the city level, the quest for quality of life is central. Presupposes lively districts offering multiple services accessible by smart and sustainable transportations. It requires mixed use, inclusive neighborhoods, integrated grating, housing, offices, retail, industrial, and labor assets. In environmental terms, the stakes are huge for the real estate sector in terms of both climate change and biodiversity protection. In addition to low-carbon construction and the use of renewable energies, the aim is to achieve no net land take objective. This means... urban regeneration, or rebuilding the city on top of the city. And this has major consequences, operational, technical, and financial. At asset level, changes in uses call for new functionalities in terms of flexibility, services, and connectivity. Environmental issues are just as important in terms of reducing greenhouse gas emissions and improving building performance, which is essential for tenants. For those reasons, we are convinced that we have to be an integrated and responsible player capable of positioning ourselves across the entire value chain. So what does it mean? First of all, we need to be able to build expertise in different asset classes. ICAD has this, from residential to commercial, with privileged long-term access to local authorities. ECAD also has a real track record in developing large, complex projects and has the land reserve in its portfolio with value-creating potential. Secondly, you have to be able to manage these assets. ECAD has this know-how and is constantly innovating to provide solutions tailored to the needs of its customers. This is, in my view, how you create value on a daily basis, building long-term partnerships. Thirdly, you have to know how to transform and reconvert the city in line with what I've just said. We've just shared the main challenges we are now facing. Of course, it's not an easy task to reconvert assets to new demand and environmental challenges. But ICAD has the know-how to do it. And last but not least, rebuilding the city on the city will undoubtedly come with the need for a solid balance sheet. Because a mere toolbox, no matter the level of expertise, won't be sufficient anymore, in my view, when money and time now comes at a cost. ICAD has definitely all these skills in its unique way, and we will try with the team to illustrate this throughout the presentation. So, moving on to slide 8, where do we start from? Well, today, ICAD has a portfolio of assets worth 6.5 billion euros at the 31st of December 2023. And when I arrived 10 months ago, I carried out an in-depth analysis of the asset portfolio with the teams and decided to implement a new segmentation based on news. The portfolio, as you can see, is now divided into four categories, offices, industrial assets, land banks, and other assets. just in line with what we've shared with you all in July. 82% of the portfolio is made up of offices, the vast majority of which we believe meet our customers' expectations in the long term. And Ebernel will be happy to come back to this in detail. The rest of the portfolio is already diversified, with 11% in the light industrial segment. Lastly, land reserves, which represent only 100 million euros at historical cost, offer definite value potential, which we will illustrate also later. What's more, ECAD draws on its expertise as a recognized mixed-use developer, ranked fifth in France in terms of sales. ECAD sells more than 5,000 housing units a year. providing a real entry point for action on a neighborhood scale. The gap, you know, between the housing offer and demand in France is widening, and this will stay more than ever the one first issue for any major mixed-use redevelopment in France. ICAD has also experience in developing large-scale mixed-use complex and sustainable projects. Recently, ICAD has been selected to lead emblematic urban projects such as La Jalaire, which Charles-Emmanuel and Flo will be happy to explain to you in detail. So, let's finally dive into our 2024-2028 plan on slide 10. Firstly, on the office side, the aim is to consolidate the portfolio and to ensure that it fits for the future. This means continuing to manage our office portfolio with a customer-centric approach, being very selective about the pipeline and rolling out a proper action plan for the one asset that no longer fits with demand. Secondly, we want to accelerate the diversification of our asset classes. We will leverage on our existing portfolio and know-how to develop and invest in the light industrial, student housing, and data center segments. consistent with who we are and the needs for the city of tomorrow. Thirdly, we will illustrate in concrete terms how we intend to contribute to the construction of the 2050 city. We will be building mixed-use, low-carbon, nature-friendly neighborhoods, capitalizing on our investments in innovation. Our business parks are a real demonstrator of this, and they are paving the way for ICAT's growth in the coming years. Finally, as we always did, our development will have to be achieved while maintaining a solid financial profile. This will require a balanced allocation of our financial resources over the period between debt repayments and investments. And now I'll hand over to Emmanuel for the first part of the presentation on our portfolio. Thank you.

Thank you, Nicolas. You know, for many years we have been striving to meet our clients' expectations. Their demands have evolved over time and we are constantly listening to them to identify their new needs. Five priorities clearly emerge from different surveys of office users. The first priority is centrality. It means good location. In 2022, more than 70% of moving companies opted for very well-connected places close to transport hubs. But it means also being in a lively and welcoming environment. Another key concern for the tenant is the ESG level of the building. Greenlees is the top one feature expected. The flexibility inside the lease contract and flexibility inside the building are also expected by all the tenants. They are 75% to opt for flex office and they look for shorter lease terms to be able to adapt easily the spaces to their needs. In addition, companies are looking for turkey solutions and comprehensive services that leave them with nothing to manage. They have many requirements, for example, for co-working, lounge spaces, soft mobility solutions like charging stations or large bicycle storage. Finally, the price is also very important following two years of high inflation and considering that real estate stands at the second largest operational expense for companies. It's worth noting here that prices in the Paris CBD exhibit a significant gap compared to other central locations. For instance, there is a gap of 400 to 600 euros per square meter in prime rent compared to La Défense. Let me now focus on our office portfolio. 86% of our offices are fit for future, which means they are ready for changing uses and expectations. They represent 4.6 billion euros with a yield of 6.7%. They already meet the new demands with good location, very high quality of facilities and equipment, a wide range of services, and best-in-class ESG criterias. They are service-oriented and on top, they are proposed at an affordable price. I can highlight our building origin in Nanterre Prefecture, headquarter of Technip Energy and EDF Renewable Energy. This building was awarded many times for the high level of its environmental labels. Another example is the building next, undergoing refurbishment, already late to the insurance company April, one year before its delivery. As I said, location is key for companies. The accessibility and environment of their premises are also very important criteria. 88% of our well-positioned office portfolio is located in Paris region. 30% in Paris area and 28% in Nanterre area, just behind La Défense. I remind you that the occupancy rate in Les Terrasses de Nanterre is almost 100%. 9% of this portfolio is located in La Défense. which is currently suffering from oversupply, but which offers real potential for a rebound, thanks to its location and many advantages. 12% is located in central districts of main regional cities, such as Lyon, Marseille, Bordeaux, and Toulouse. Let's move on to slide 15. Considering tenants are not only users of space but first and foremost customers, we have been carrying out a new satisfaction survey to understand their needs and improve our offer and relationship with them. According to the latest survey, 86% of our tenants are willing to benefit from tailor-made real solutions. Exactly what we offer. We work to improve occupancy management for square meter performance. We strive to reduce carbon footprint and contribute to our tenant's sustainable development strategy. We improve the quality of real estate use with hospitality management and co-working offers. The development of this comprehensive offer called ECAD Solutions also explains the improvement of our net promote score to plus 14 points in 2023. Concrete examples are presented on slide 16. These include the use of renewable energies such as solar panels, The bi-engagé climat by ICAD, which is a new lease with criteria defined together with the tenants to improve environmental performance of the building. The 1,000 charging facilities for electric vehicles or the 6,000 sensors to be installed in 2024 to improve use of spaces. This offer, adapted to new uses and challenges on climate change, enhances the customer experience and helps them to reduce costs. The well-positioned office portfolio presents solid operational KPIs and a limited downside on future renewables. They provide 82% of the rent, or €244 million in 2023. Their financial occupancy rate is above 90%, and the revolutionary potential is minus 8.7%, the reason being that the current rent has been strongly indexed for several years, And when we sign a new lease, we return to the ERV. The average lease break is 4.1 years. And an interesting point to note on this type of asset, the duration of ECAD's relationship with the tenants is almost nine years. This is due to the significant investment of our team's to maintain a very high level of communication, trust, and satisfaction. To illustrate my point, I'd like to share an interview of Mr. Julien Renaud-Perret, Real Estate Director of the Pierre-Evacan Center Parts Group, which has been a tenant of ICAD for over 20 years.

Hello, I am Julien Renaud-Péret, I am the real estate director of the group Pierre & Vacances Center Parcs. Pierre & Vacances Center Parcs is the leader of the tourism of proximity. We are present today through three brands, which are Pierre & Vacances for the sea and the mountains, Center Parcs for the countryside and Adagio for the urban tourism. We are present in five countries in Europe, so France, of course, Germany. The Netherlands, Belgium and Spain. And we have a turnover of 1.9 billion euros and 12,000 employees. We are a historic tenant of the Flanders Park. We arrived in March 2001. So it's almost 23 years in the coming March that we will be a tenant. We are here in the Parc des Flandres. It's a third-floor intramural campus. It's the only one in Paris. And that's what really pushed us at that time to settle here. With, of course, excellent access since we have the RER, the tram, the metro and large parking. Which means that today, access to this campus... It's very easy for our collaborators. It's been 23 years since we've been in the Parc des Flandres, so we always choose our first destination with access, the building, the economic conditions. But the reasons for which we stay are the teams. We have recently gone through crises due to Covid, in which the group Pierre Vacances Interpax has been very affected, and we have always found solutions. Why? Because the ICAD teams are listening, they are caring, they are available, while obviously having proven financial objectives, but in this dialogue, that I consider as a partnership more than a buyer-prenuer relationship. Thanks to this partnership, this listening, we have always managed to find balanced solutions between ICAD and the group. What is important in the campus of Flanders is that it is in permanent evolution. Aujourd'hui, on a eu, dans les années passées, les fraises artistiques, les bornes rechargeables, la gestion différente des espaces verts avec la faune et la flore. Pour vous donner une anecdote, on a même une famille de canards qui habitent à l'entrée des bureaux, mais aussi les animations et les services, comme la salle de sport ou le beauty salon. All this means that this park is in permanent evolution, which gives the collaborators an important element to come and work. They feel in an environment that is moving and that is not frozen. The Pierre Vacances Interpax group was the first ICAD tenant to sign a green lease in 2013. And of course, in the context of its more recent renewal, we signed a climate-engaged lease. This is very important for the DNA of the Pierre Vacances Interpax group, since we work... So you see how happy our tenants are. Let's move on to

On to slide 18. The attractivity of these well-positioned assets is confirmed. 132,000 square meters were found on the well-positioned assets, including 47% of new tenants. It represents 32 million euros of analyzed rents. And thanks to these signatures, we reach an occupancy rate of 100% for three assets in 2023. The first one is Origine in Nanterre Prefecture. The second one is M Factory in Marseille, the new headquarters of Bourbon. And the third one being Fresque in Paris. All of assets benefit from best level of environmental labels. Let me give you now an example to demonstrate our ability to swiftly attract new tenants. This building, La Défense 456, is a 16,000 square meter building located in Nanterre, in the same sector as Origen and Eden, the future Schneider's headquarters. After the departure of Groupama in September 2023, we managed to relate more than 80% of the surfaces within two months for 4 million euros of rent with two new first-ranked tenants. Another asset which illustrates how ICA addresses tenants' needs over time is this building, which you will visit later during the asset tour. It has been fully let by Uenseg since 2012. Uenseg looked for new spaces with new fitting-out premises, allowing flex office, new ways of working, and a lot of services. To match these requirements, we have proposed to redesign and to adapt the building and to provide advice for transforming the premises. By doing that, we managed to renew the lease for nine years on the whole building, generating 4.1 million euros annualized rent. Let's move on to slide 21. I would like now to talk about our pipeline. We have reviewed our development pipeline to target the best opportunities for creating value, to match our strategy, and to build new assets totally in line with users' needs. The pipeline is focused on a creative investment on prime assets. The first one is innovation. 29-33 on Champs-Élysées, a project of prime offices and retails. I'll tell you more about it in the next slide. Two projects are under study for future pipeline. Firstly, Seed and Bloom, that are two assets located in Lyon-Pardieu, which is the heart of Lyon CBD. Both will be state-of-the-art office buildings with large and pleasant outside spaces and rooftops. They are part of a larger project that also includes the conversion of an office tower into housing by our developer. Secondly, on Ponant building, we can consider some medium-term value creation project. Following the latest acquisition done in 2023, ICAS is now the sole owner of a property complex located in the 15th district of Paris. This property is very well located between a very large public park and the Seine River. Let me come back to our emblematic project in Paris CBD on Champs-Élysées. The building permit was obtained at the end of 2023. The floors are free. The works are expected to start at the beginning of 2025 after the Olympic Games. In the meantime, we have created value through short-term lease. To be precise, we signed two 18-month leases for 3 million euros. It represents more than 12,100 square meters of offices and retails. The best ESG labels are obviously targeted. This project represents an investment of 95 million euros for the next three years. The delivery is expected at the end of 2027. We are confident we can improve the previous rent by more than 160%. and we already have several prospects interested. Let's move on slide 23. to review the share of assets not considered as well-positioned. These assets represent only 14% of our office portfolio with a value of around 700 million euros. They account for 18% of our rental income and have a world of 2.1 years. These to-be repositioned assets are non-strategic. Over the past few months, our development and investment teams have been reviewing these assets to identify the best solution on a case-by-case basis. Conversion, disposal, or refurbishment have been studied depending on their location, their structure, and market sector. Today, we have already identified projects for around 50% of this to-be repositioned portfolio. In the meantime, keep in mind that these assets still provide rent income, which gives us time to design the projects that could be carried out through partnerships or using in-house development. Whatever the case, we have decided to allocate a limited amount of capex of €150 million by 2028 on these assets. One example of conversion of buildings, which you'll see during the tour, is the transformation of office buildings into hotels and residential hotels. We already carried out such a conversion with the Monaco building, which has become a much appreciated hotel with a restaurant for the Pax Tenant companies. Building on the success of this first hotel operation, we have launched a new project to create more than 10,000 square meters of hotel and residential hotel. The permit is already submitted and the delivery is expected in 2025. This project is already fully let. The 41 million euros invested will benefit the whole park and will for sure reinforce its attractivity. As I explained before, we extensively studied various scenarios for assets to be repositioned and we opted for the one offering the best return. Regarding Étoile Park, the obsolete office building of 5,600 square meters in Nanterre should be transformed into a school. Indeed, this area is very attractive for higher education. We know many schools are looking for premises in this sector, and we already have expressions of interest. The yield on cost of the project is above 6%. The building permit will be submitted before June for delivery in 2027. I now give the floor to Charles Emmanuel, who is going to talk to you about another project to convert an office building of our portfolio.

Thank you, Emmanuel. This asset is a 24,000 square meter office. located in Le Plessis-Rombasson, in the south of the Paris region. Given the departure of the tenant at the end of 2023, the property development is now planning to build a 649-unit residential program with construction scheduled to start in summer 2024. This transaction shows the excellent complementarity of the group's different skills. ECAT Property Investment has benefited from secure and high-yield cash flow from a quality tenant, Renault, and has been able to develop a joint operation with ECAT Property Development, offering it an opportunity to carry out a residential project in a great area of the Île-de-France region. The main strengths of this project are value creation through redevelopment in a long-term in a popular residential location, and a residential project boasting the highest environmental standards. The Plessis-Robinson project is a real demonstration of synergies between investment and development teams.

Thank you, Charles-Emmanuel. Thank you. So let's move on into our plan to accelerate our diversification. As mentioned previously and illustrated on slide 28, the group already has strong expertise in segments other than offices, notably light industrial, student housing, and data centers. On top of this in-house expertise, the reason we want to increase our exposure to these markets is that they all rely on solid fundamentals, supported by strong demand and inadequate offer. Therefore, they represent real growth opportunities for ICAD, with several projects already identified leveraging our unique land reserves. So let's first focus on light industrial segments. This asset class is characterized by solid market momentum. Demand, averaging 1 million square meters per year in the Paris region, is resilient, leading to a decline in available supply between 2019 and 2022. The average rental value for this asset is growing strongly, in particular around the A86 axis, as in Rangis. We are seeing CAGR growth of plus 7% over 2016-2023. The average prime rate for light industrial assets is holding up well, reaching 5.75% by the end of 2023, confirmed by a GLL study published this month. So let's move on to slide 31, and you'll see that ECAD already has a diversified portfolio in this segment, representing an overall €703 million in gross asset value at the end of 2023. This covers several asset types, such as workshops, TV studios, storage warehouses, and data centers, which we will come back to in a separate section. So our light industrial assets are strategically located in our two business parks next to the north of Paris and in Angis. In square meters, they each represent 54% and 38% respectively. both benefit from excellent accessibility with direct access to major motorways. And ECAD has succeeded in enhancing the value of these business parks and making them attractive. To achieve this, ECAD has deployed a wide range of services for park users, including gyms, catering services, hotels, business centers. And ECAD also brings this business park to life by offering a wide range of events on a variety of subjects, such as sports, music, or focused on CSR teams. On the environmental front, the parks are representing the cutting edge of green innovation, with the deployment of numerous initiatives to promote waste management, water and animal preservation, and the use of renewable energies. has resulted in a significant reduction in our carbon footprint over the period 2019-2023 and a positive impact on biodiversity. So our efforts to enhance the value of our business parks combined with our expertise in meeting customer expectations have enabled us to attract well-known international tenants operating, as you can see, in a wide range of industries. In the Rungis area, for example, our customer portfolio includes several renowned gourmet chefs, such as Pierre Hermé, Christophe Michalak, or Alain Dicas. To the north of Paris, our portfolio of tenants ranges from LVMH to the AMP Visual TV studios, not forgetting the Schindler workshops. And to illustrate my point, I'd like to invite you to watch an interview with Mr. Gilles Salet, who is president and founder of AMP Visual TV Studio, which is the leading TV service provider in France and the third in Europe, and which renewed its lease in the Port de Paris business park for over 27,000 square meters in 2023.

Bonjour, je suis Gilles Salé, le président fondateur d'AMP Visual TV. Notre métier est d'être prestataire de tournage technique pour la télévision. Nous sommes le premier prestataire français dans ce domaine, le troisième européen et le cinquième ou sixième au monde. Et notre activité se décompose en deux pôles principaux. Les tournages en extérieur, ceux qu'on voit avec des camions, ce qu'on appelle un carrégie de télévision sur des stades. and then for a large part of our activity, which takes place here, shooting with television studios. More than half of our offer of set, 14 television studios are here, on a global surface of about 27,000 square meters. It has been 20 years that our shooting activity in studio is installed here, thanks to a long-established trust with the teams, the interlocutors from ICAD. It has even become the center of gravity of the entirety of our shooting in studio, which are managed here, since the 107 building where we shoot this sequence. C'est une exception française d'avoir des studios de télévision en aussi grand nombre, aussi proche du cœur de la capitale, connectés par des transports en commun de manière aisée, mais aussi ouverts vers le monde, avec la proximité des aéroports du Bourget ou de Roissy-Charles-le-Gaulle, qui en permettent une desserte très aisée. Cela fait une vingtaine d'années qu'on investit régulièrement et lourdement pour maintenir un haut niveau d'équipement technique sur l'ensemble de nos studios et veiller aussi à ce que l'environnement de nos bâtiments s'intègre harmonieusement avec tous les efforts que ICAD fait par ailleurs pour maintenir le site And we will continue to make these investments since we have just renewed for many years our commitment to the ICAD side so that the heart of our studio activity is always here. Among the benefits of the site, obviously, accessibility, the security of the site are very, very important points for us. Every day, we shoot here many recognized and known television shows that welcome celebrities, that welcome the public. So the dessert and the environmental quality in which these people can circulate on the site is welcomed for us, a very important point. So, as you can see, long-term partnership with AMP

contributing to solid operating indicators for this segment in our portfolio. And there is still room for improvement. Over the last four years, the occupancy rate has been between 91% and 94%. In 2023, almost 90% of the year's break option have not been exercised by tenants. And average rental values for our two parks have risen from €141 per square metre to to 163 euros per square meter. Latest leases have even been signed at circa 170 euros per square meter. That's the reason why reversion potential is positive at plus 4.3%. So our assets also boast a high yield of 7.9% that shall improve within the coming years and represent annual rental income of 49 million euros. Leveraging on our strengths, the group intends to accelerate its development in this segment. In that respect, we are working on five potential projects in our Ranges Business Park that you can see in blue on the map. Some of them will be presented to you during the tour this afternoon. All in all, they represent additional capex of circa 150 million euros for rents of 14 million euros. So our targeted yield is around 7%. One of the main examples of development on light industrial segment is the project Ottawa. This is a three-story industrial building, the first of its kind in the park, representing €50 million capex and additional revenues of €3.4 million. Building permit will be submitted in Q2 2024 and delivery is scheduled for late 2026. Student housing segment. is the second area in which we intend to position ourselves over the next few years. Why, you might ask. Firstly, because if housing is a major issue in France for the coming years, student housing is definitely an issue in itself with a structurally undersupplied market. In 2023, The number of beds offered by private and public student housing will be around 6.4 times lower than the number of students. As a result, this segment boasts a very solid occupancy rate above 95%. At the same time, the quality of the offer is insufficient with very few new generation residences meeting the expectations and uses of students. Secondly, because ECAD has been developing student housing for years, we have the know-how, Charles-Emmanuel and his teams. Indeed, since 2015, we have delivered 16 student housing representing over 4,000 beds. Between now and 2028, ECAD has already identified nine potential projects representing more than 2,300 beds. We carry out these operations in partnership with leading operators such as Uxco Group by Brookfield or the Booth Society by AXA. To illustrate our expertise in this field, I would like to hand over to Charles-Emmanuel to present three projects in particular.

Thank you, Nicolas. First project was carried out in co-development with the investor Uxco Group. We developed in VJV more than 100 beds, spread over five buildings for 23,000 square meter project. It was delivered at the end of 2022. The common areas of this residence are quite exceptional, representing more than 10% of the global area. They are entirely focused on the theme of care, taking care of oneself, with the presence of fitness rooms, silent rooms, and even a sauna and projection rooms. Part of the ground floor is also used to host the Vaincre-le-Cancer Association, as well as other associations. The next project is a student co-living residence developed for the Booth Society Group. It's located in Créteil, on the site of a former La Poste sorting center. It develops nearly 600 beds, totally more than 14,000 square meters in a single circular building. It's also part of a residential real estate complex that includes 140 family units. Works began in September 2023, and the project is currently undergoing structural works with delivery scheduled for the end of 2025. The third operation takes place in Levalois-Péret, a prime municipality on the western edge of Paris. It's a major student housing development and a showcase of ECAD's know-how in complex building transformations, driven by the brand after work by ECAD. It relies on three key items. First, it's a mixed-use program emerging from an obsolete and monolithic tertiary building of about 20,000 square meters that will be split into several buildings conceived around the theme of the student life. Also, it promotes urban integration thanks to several diversified architectural sequences above a new commercial ground floor. It includes a lot of green outdoor spaces, which better connect the project to the public spaces of the city. Finally, by preserving the existing structure, we achieve a remarkably low environmental footprint, resulting in minimal carbon impact and avoiding further land artificialization.

Thank you very much, Charles-Emmanuel. So, on the basis of these elements, Porte de Paris Business Park is the perfect playground for such projects. There is notably one block, ideally located at the foot of Metro Line 12, overlooking the Place du Front Populaire, near the student campus Condorcet, a 64,000 square meter area attracting almost 12,000 users. Initially dedicated to a tertiary program, we've decided a shift in approach, hand-in-hand with the local authorities, to focus on housing and specialized housing. Therefore, this block shall be developed with a mixed program, including a student residence, developing 650 beds, as well as a restaurant and commercial space. These projects represent an investment of 75 million euros and a potential income of 4.3 million euros. Finally, let's move on to the third identified growth segment relevant for ICAD, data centers. Well, I know that you are now all familiar with the potential of this growing market, so I'll be brief on that. The fundamentals are strong and new capacities and infrastructures rapidly absorbed by demand. In 2022, for example, new supply in the Paris region represented 63 power megawatts for a take-up of 46 power megawatts. The development of supply in this market is further constrained by, one, access to energy, for which authorization must be obtained from Enedis or RTE, to the necessary prior agreements with local authorities, harder and harder to get, and, thirdly, the scarcity of land meeting all specifications. In that respect, ICAD has a real competitive advantage in this segment, due to our specificities. Firstly, the group has close and long-term relationships with local authorities. Secondly, we are able to propose data center projects that fit in a broader neighborhood development project. What's more, we already have expertise in data center construction and work alongside major operators such as Digital Reality or Equinix. And finally, We have unique land reserve ID located on the outskirts of Paris. To date, ICAD has positioned itself on a relatively light capex business model, which consists of supplying the building shell and power supply to an operator, then equips and operates it. Pure real estate model. On this operation, we carry around 30% of the overall project cost and aim for a yield between 5% and 7%. As a business model, more CapEx-intensive but generating higher yields involve operating data centers directly, either alone or in partnership. This is not the group's historical business model. But we could consider this type of configuration, particularly in the context of JVs, leveraging on our land banks. But first things first, we want to start with maximizing value creation by securing firstly building permits and power agreements. On page 48, you'll find a focus on our existing portfolio with six data centers mostly located in the Port de Paris business park. Five are already operational, and the additional one with Equinix is in the pipeline for delivery in 2025. Today, these five assets represent an IT capacity of 18 megawatts and an annual rent of 4.5 million euros. It's worth noting that data centers projects are no exception to our CSR policy, and that we intend to ensure sustainability as much as possible. On our operating assets, we are working on solutions for recovering waste to serve neighboring buildings, renovating air conditioning systems for greater energy efficiency, and discussing the implementation of climate leases. On the project currently in the pipeline, see on the slide, we are aiming for HQ excellent certification first in France, and we are working with the top of the range operator, allowing to achieve a PUE below the European average. And our loan reserves offer us new growth opportunities in this segment. In the Port de Paris Business Park, we have two projects, including the one in the pipeline. They represent additional investments of 76 million euros with annual rents of 5.2 million euros. Targeted yield for this project is over 6%. And in the Paris Orly Rangis Business Park, we have a new hyperscale data center project representing 2%. 280 million euros in capex and 20 million in revenues. This hyperscale project represents a 130 megawatt power supply over approximately 65,000 square meters. Of course, this project is part of a long-term schedule because, as you know, access to power takes time. And currently, power supply instruction is ongoing within EDIS and RTE, and we plan a building permit application and instruction from Q2 to 2024. So, to that respect, construction would start in 2028 for delivery in 2029-2030. This project concludes the section on our portfolio diversification target, and now I'm happy to hand over to Charles-Emmanuel Enflore to share our vision of the city of 2050 and illustrate how ECAD will concretely play a role in this transformation.

Thank you, Nicolas. We have observed a dual transformation, a shift in usage patterns and an ecological transformation. Therefore, we decided to act that our actions must have positive, proven, and measured impacts. First of all, a positive impact on the planet by integrating the urgency of the fight against global warming. Secondly, on profit, considering that economic performance and sustainable value creation go with taking into account societal and environmental issues. And finally, on real estate assets that we develop or regenerate, into new locations adapt to future uses and expectations. Build the 2050 city means thinking sustainable mixed-use project. To illustrate my point, I propose to see an interview with Raphael Michaud, deputy mayor of Lyon, who comments on the Odessa project, a perfect example of how ICAD is responsibly transforming the city.

La Ville de Lyon attache un soin très important à la mixité d'usage pour garantir qu'on puisse avoir pour tous les Lyonnais une ville du quart d'heure, avec un quart d'heure de chez soi, les services dont on a besoin au quotidien, services publics, services commerciaux, services de la vie quotidienne, et puis les emplois et derrière l'ensemble des activités qui permettent à des enfants notamment de parcourir la ville à hauteur d'enfants à un quart d'heure de chez soi. Odessa is the opportunity to renew a real estate that was clearly dedicated to the third party with a neighborhood that was dedicated to the white collar. Thanks to systems like Odessa, thanks to operations like Odessa, we find ourselves with an active ground floor that dialogues with the city, with the full earth, with more comfortable and more renewed offices in the floors. And then a second building, a second operation that will bring housing and bring diversity to this neighborhood that is cruelly missing. The DICAD teams have brought a lot of attention to the needs of the city and to the global program that had been brought on this will to reuse the buildings, this will to find the right use and this ability to do with the already there. The DICAD teams have demonstrated a know-how that today finds a concrete translation in the ongoing project. Let's move on slide 55.

The Port de Paris Business Park is a perfect example of the evolution we are aiming to bring from a tertiary district to a more mixed-use area. In this district, which was mainly made up of offices and light industrial premises, we have, alongside the municipalities of Saint-Denis and Aubervilliers, the ambition to introduce a significant proportion of residential, whether in residences, student or managed, or in family housing. Such a project is part of a long-term vision. On this plan, the development of the red and the green blocks will make it possible to develop housing units and student residence for a total surface area of around 100,000 square meters. Just have a look on the project time. This residential project will be developed by the property development teams one of the group's historic land banks. Such a project is the fruit of a long-term relationship with the local authorities, who have historically worked very closely with our commercial real estate division. The first building permit authorization will be deposited before the end of this month to develop more than 9,000 square meters with mainly 104 apartments. Let's move on to slide 57, a few words of the history of the early Rungis Park. With the transfer of the Halle district of Paris to the Rungis Mine, the Rungis Park has been developed in the 70s and became one of the largest sites in Europe offering activity buildings for rent. Since the late 90s, several activity buildings have been converted into office spaces leading to a mixed-use area blending light industry with office spaces. From 2017 onwards, we have been considering residential projects to further strengthen the link with the city of Rennes. This is the start of an 182-unit housing project on the edge of the suburban district that was delivered in the mid of 2021. Discussions are continuing with the authorities to develop a new mixed-use district identified in red and blue on the map, the Esterel Nord district. This project, which you will discover during the asset tour this afternoon, involves transforming and re-qualifying four buildings of 21,000 square meters to introduce residential and create a new mixed-use polarity. The project will develop 38,000 square meters of family units, co-living for young people co-developed with Exco Group, and 11,000 square meters of light industrial premises for ECAD students. It's also a virtuous project from an environmental point of view. Insofar, it's a law to preserve the current business buildings, to renature the area, and to optimize water resources. This project will contribute to open up the Ethereal Nord district to further connect into the city. The beginning of works is scheduled in summer 2025. I will now hand over to Flo, who will elaborate on the challenges of the 2050 sustainable city and explain how ICAD is meeting them.

Thank you, Charles and Manuel. Thank you. At a time when NOAA is ignoring the environmental challenge we face and the necessary ecological transition to achieve French and European ambition, we want to affirm once again our deep conviction on the matter. We want to go beyond and lead the way towards stronger ESG actions. As Emmanuel and Charles-Emmanuel mentioned before, we have already implemented several action levers Improvement of building performance, low-carbon building, renovation and restructuring, and last but not least, we do innovate. For the commercial investment, our investment plan for sustainable works has grown to €145 million for 2024 to 2030, with around €66 million already invested between 2019 and 2023. By 2030, 95% of our well-positioned offices will be aligned with the SBTI 1.5 degrees trajectory and energy efficiency regulation. For the property development, we took two strong commitments which will impact the majority of our carbon construction footprint. In 2030, a third of our building will use wood and biosource materials and a third of our operation will be from refurbishment. This will let us stay in line with our 1.5-degree trajectory on our three scopes. We will be able to produce these results thanks to our after-work and Ville-en-Vue offers, as well as our subsidiary, Urbain des Bois. We are deeply committed to inventing concrete solutions to reduce our carbon emissions. Our work with the ecosystem and our investments in startups are already helping to respond to our carbon challenges in an operational manner and to contribute to business. A few words on slide 61 about Urban OTC, our startup studio specialized in our business perimeter, which allows us to find innovative solutions and scale them. As example, we are talking here about biosource materials, off-site design, wood construction, or managing system of our carbon emissions. The originality of Urban Odyssey lies precisely in this ability to be equally within a corporate logic capable of deploying on a large scale and of being very involved on a daily basis in the creation of the startups that we need. The interest for ICAD, concrete value creative operational solution of the shelf that anticipates our challenges. In order to achieve our ambitious goals, we need to put innovation at the beating heart of our strategy. This is the reason why we are investing in 16 startups nationwide. focused on distributing low-carbon solution, biodiversity and soil protection, new uses, and operational performance. Let's now move on slide 62. Our commitment is not only to reduce carbon emission. It goes beyond that. The challenge is also to protect biodiversity. As you know, Our climate and biodiversity strategy was approved in 2022 and 2023 by more than 98% of our shareholders. The model of urban development and construction has long been based on the principle of urban sprawl, which is artificialization of land. The objectives of non-Atlantec set by the climate and resilience law adopted in July 2013 precisely rectifies the situation. And obviously, this represents a major challenge for the real estate and urban planning sector, which must adapt its own development model. We established in 2023 a new method based on recognized standards in order to produce biodiversity assessment. We also have set ourselves ambitious objectives for commercial investment and property development, And the first results are already encouraging. As an example, we rely on the innovative solution from Urban Odyssey, in particular on the management and revaluation of rainwater, on the revaluation of construction site land, and on an artificial intelligence-based solution now offering to collect all the biodiversity data available on land to then optimize its protection during rainwater. a development project. Finally, I am honored to share with you details about the athlete village that we recently delivered on time and within budget, which is obviously expected in a real estate project in general, but rarely achieved in an Olympic project. We are therefore no longer in the intention or in the ambition. We have already carried out a large-scale operation. over several hectares, meeting the best low-carbon and biodiversity standards and making a lot of constructive innovation. This mixed-use program is the archetype of what will be the 2050 city, all different kinds of housing units, offices, activities, shops, in a full, universal accessibility. We created a 3,000-square-meter urban forest planted with indigenous species And we use bioclimatic design to create 2050 climate-adapted buildings, optimizing home heating and cooling. Designed five years ago, this operation remains ahead of its time since we finally managed to build less than 740 kilos of CO2 per square meter, already reaching the environmental regulation at its 2031 level for the housing buildings. To achieve it, building at almost 40% less carbon than the common way, we monitored the carbon footprints within our daily operation exactly like the financial balance. It is therefore a state of mind to be integrated into the daily life of a project manager, and this is what we focus on at ICAD. We did not realize this project alone, and that also a specificity of our will to connect with the best actors in the ecosystem. We surround ourselves with the right partners as early as possible, and this is essential given the scale of the climate challenge. As an example, we work here very closely with CDC Habitat, Banque des Territoires, and Solideo. Charles Emmanuel will now present you two other projects that are emblematics of ICAD's ability to position itself on major urban regeneration projects.

Thank you, Floor. The first project is the one developed by our dedicated author called Ville en Vue. It's located in Blagnac at the heart of the economic activity of Toulouse. It's a model of tomorrow's city offering nature, urban life, and low-carbon development. The area is just near a shopping center belonging to Clépierre with good access to public transportation as well as urban halls. CDC Habitat and ICAD, representing by Urbain des Bois, Synergie Urbaine, and ICAD Promotion, are planning to build a lively mixed-use neighborhood with 450 housing units and 4,000 square meters of working spaces, along with local services and shops for everyday life. The aim is to design and build a showcase low-carbon piece of the city featuring buildings meeting ERO 2028 standards and placing nature at the core of urban development. Let's go in Bordeaux with the project of La Jalaire. The ambition of this project consists in developing a new urban model by converting a former business district, with in particular La Caisse des Dépôts, into an urban neighborhood in a natural environment. Surrounded by forest and marsh, next to the Great Lake of Bordeaux, these former business units built in the 70s are now empty. The project consists into converting office spaces into housing by upgrading and renovating existing structures and building new programs based on wood. At the same time, the project will preserve nature and enlarge its place by moving down from 70% to 50% the waterproof surfaces. Finally, the project will develop cycling facilities and public transportation. This new program is showing the way to the city of the future. With altogether 2,500 housing units for families, active use as well as student accommodation, but also higher education institutions and co-working, La Jalaire will be an example of a new city life, enjoying high-quality urban facilities in the middle of a natural environment with its full biodiversity. La Jalaire is a showcase low-carbon urban project. And we are very proud to announce that this project has been designated last week as one of the 22 projects in France supported by the Ministry as Territoire Engagé pour le Logement.

Thank you, Florent and Charles-Emmanuel. This project perfectly illustrates, in my view, ECAD's DNA and the role ECAD intends to play in the long term, leveraging on what we have already achieved in mixed-use and low-carbon areas. On slide 67, I'd like to turn now onto the financial section. Well, our balance sheet is one of our key assets, especially in this uncertain environment, and we intend to maintain cautious financial policy over the coming years, as we have always done. Firstly, this means keeping our balance sheet ratios under control. We aim to maintain a global trajectory based on an LTV ratio including duties between 30% and 35%, an ICR ratio above four times, and a net debt to EBITDA ratio below nine times. In addition, we will strive to maintain a significant level of liquidity, largely covering our debt maturity, and to maintain a healthy and diversified funding structure. In terms of interest rates, we will continue to apply a prudent hedging policy, and we are aiming for a minimum hedging rate of 85% given the projected debt over the next three years is fully hedged. So in order to maintain this balance sheet structure and meet the target ratios, we plan to use our resources in a balanced way to finance investments and reduce our growth debt. Many of you asked us about the LCA proceeds reallocation and more globally about capital allocation for the coming years. Here is a summary of proceeds and uses over the period 2024-2028 and focusing on the non-recurring and therefore, of course, excluding the effect of cash flows and recurring dividends. So over the period, we anticipate roughly proceeds of 4.2 billion euros from the disposal of the healthcare business, 2.9 billion euros, and as a disposal, 1.3 billion euros. We plan to use this 4.2 billion euros as follows. 1.8 billion euros for investment capex consistent with the ambition we've just shared throughout the presentation. 1.7 billion euro debt repayment to fit our financial policy and 700 million euro in special dividend following disposal of health care activities. So now let's move on slide 69. And in order to give you more visibility about capital allocation, here is the indicative breakdown of the estimated 1.8 billion euros investment over the 2024-2028 period and targeted yield by category. So we are estimating roughly 900 million euros of development capex covering the current pipeline, the new diversification project, and the asset reconversions. In terms of diversification, the yields of projects, of course, will vary depending on the asset class and the retained business model between owner-only and owner-operator. As you saw, there is a potential for a much larger amount in terms of development, which gives us flexibility. On average, we are aiming for a yield above 6%. For asset conversion capex, yield will, of course, be analyzed, but it won't be the sole criterion. Indeed, some reconversion can generate value beyond the asset itself, such as the hotel project in the Orleans Business Park you will see this afternoon. In addition, some expenditure will be necessary to ensure the liquidity of these assets in the market. But once again, as those assets are fundamentally non-strategic, we've set a cap of €150 million to be dedicated to those redevelopments. We've also retained, as you can see, a cash cushion for potential acquisition in order to be agile in sizing external growth opportunities. This to illustrate that even if there's room for investment on our existing assets, We will still be looking, as we do today, closely at all opportunities that might arise in the current market. So, overall, the €1.8 billion budget will generate revenues estimated at €120 million by the end of the plan, which is a sizable ambition for ICAD, allowing us to reshape its profile With the flexibility to accelerate, depending on market condition and potential partnerships, we could structure along the way to capture the numerous opportunities offered by our portfolio. So in conclusion, well, ECAD today has good operating fundamentals, creative development opportunities, and a stress and balance sheet. Faced with new social, economic and climate challenges, we will roll out its new roadmap over the period 2024-2028, which aims to reshape the way we work, to shift from two business lines to one holistic approach, reshape our portfolio, to further improve our offices and increase diversification. reshape the districts to create mixed-use and sustainable areas for the people that live in. We will leverage on our know-how, expertise, capacity for innovation, and solid balance sheet to respond as an integrated long-term operator to the changing uses and challenges of the 2050 city. To execute this plan, We can fully rely on the dedicated and engaged teams at ICAB. Their deep attachment to the group, their daily commitments, their strong awareness of social and environmental issues are essential pillars for successfully implementing our initiatives. Together, we are ready to tackle the challenges ahead and pave the way towards a sustainable future. So thank you very much for your attention and happy to move on now to the Q&A session with the team.

So thank you very much for this presentation. So Florent Langevin from Adobe HF. So I would have maybe two questions to start. So maybe my first question, so you have presented us a lot of projects with yield targets in terms of yield on cost. But what would be the value creation expected for all these projects? What are your criteria in terms of value creations for the next five years? And maybe my second question would be on the evolution of the net recurring cash flow that we can expect in the five coming years, and maybe if you can give us maybe some words on your dividend policy. Thank you. Okay.

I'll take those. Okay. Yeah, about the project, so you saw the main KPI. Well, it's a targeted, of course, the basis, but most of them are really already underway. As for value creation, as you saw, there's room for value creation because we are investing in projects that are accretive in terms of yield. We invest targeting 6%, 7% yield on cost. for asset classes that are cap rates below that. And if you take our prudent approach, we took around 5% financing cost over the period. That's relative. And all in all, the value creation will depend on many factors, actually. Of course, indexation, but also the decrease in the interest rates. So for that reason, you have to make assumptions. So that's not an easy task, definitely. But what we deeply believe in is that all the work we are doing, such as in Ranges, at the end of the day, will benefit and will reflect in the yield. So there will be a price for our asset management work. Today's Ranges must be, I think, above 8%, maybe 8.5%. So there's definitely room for improvement on a much larger scale, as you can see. And we also think that regarding the office, the deep conviction we have on the customer-centric offer will make a difference tomorrow regarding the basic average ERVs. So it's not easy to come out with the proper figures. It involves some macroeconomics, of course, but there are many things that could leverage that in our view. And as for cash flows, well, it's also quite difficult to come out with some hash ups in there. Of course, we've made some, but We've not shared there due to the large uncertainty, especially on the property development division at this stage. It's quite hard to tell what will be the market in 2028, honestly. What we provide you is that our revenues in the investment division through the investment there will be able to get an additional 120 million revenues, but it's not so easy to have a a clear view on cash flows, definitely. And as for dividend, as already shared in July, in the coming years, the special dividend coming from the healthcare business will help and support, of course, the global dividend. Our philosophy should remain the same. The idea is that it will help for the coming years to deliver satisfactory yield. And after that, once ICAD has finally reshaped its new profile, might be time for a new dividend policy as it was the case in the past.

Hello, Adam Shapton from Green Street. Thank you for the presentation. I had two questions. I'll do the first one and then come back to the second if that's okay. Just looking at slide 69, so the bridge to the 120 revenues that you presented earlier, So the development capex is roughly 6% yield on cost, and that's headline rents, is that correct, the yield on cost that you present based on headline rents? So I guess we get to sort of 55 million, something like that.

It's a bit more like that because the started pipeline is just the remaining capex rents. From the 900 million euros pipeline already in.

Okay.

So basically you get 45 million euros of rent regarding the started pipeline already.

Yeah, okay. So the balance to get to 120 from the acquisitions and the ESG and other capex, are you sort of looking for a similar yield on that?

On the ESG capex?

Yeah. I'm just trying to understand what's in that yellow bar. I know there's a footnote.

No, yeah. Yeah, the footnote says it's DHG capex is 145 million euros, you know, until, well, it's part of that because the 145 is until 2030, but it's also like maintenance capex, you can't charge the tenant. For example, the large ones, like Arctic Senses and so on. So those won't be necessarily cash flow productive.

Okay, so as we look at this, there isn't really a, material uh yield on that that capex okay understood and then just on capex more generally in in the long term um you've talked about the changing nature of commercial real estate uh tenants demand more flexibility and leases and other things more services how how do you underwrite the change in the capex requirement over say 10 to 15 years versus how the world how the world used to be if If you're going to deliver an economic return, what are you underwriting in that respect? And maybe I'll come back to my last question after that.

Well, I think it's rather a matter of expertise, actually, than full capex. Of course, there is a part of capex, but it's including in a more global negotiation with the tenant. I think the main issue for people like us would be bringing some expertise because for decades – We've been letting some square meters to some tenants, and tomorrow the customer will choose one building due to its location and because it's high level and meets all the criteria, but also for what he's going to find in. And for that, we'll need extra expertise, maybe coming more from hospitality, of course, on ESG and so on. Rather, I think a matter of expertise, maybe OPEX more than CAPEX.

Okay, so it's in your overhead in the OPEX, not in CAPEX. Okay, understood. Just the last one on capital structure and the balance sheet. You've been very clear on the targets there. Assuming you can deliver an attractive return on your cost of capital, where does equity fit into it? You're a listed company. You want to maintain an LTV in the low 30s. How do you and the board think about where equity would fit into that?

Well, the board is fully supporting, of course, this strategic plan and this global strategy, including our financial policy. And as for the project developed, we are... usually looking at 8% to 10% higher on the project, as you can see. And the best way to achieve it, in our view, is to combine those two expertises. Because basically tomorrow, money will cost less than today, but much higher than it used to be in the decade. So you need to aggregate the value creation on both businesses. That's exactly what we observe on some other type of verticals. So you need to aggregate those value creation in order to address properly your IRR target. Sure. Okay.

Yeah. Okay. Thanks.

Thank you. Good morning. Thank you for the presentation. I'm at Aboulkweter, the Confiter Cam. I have one question about the disposals, the other disposals to 1.3 billion euros. And just to make sure my understanding of the non-core offices strategy is clear, so you're investing to repurpose these assets in order to sell the entire non-core offices, or could you keep part of them? And then my second question would be then it's only 7 million euros for the non-core offices. What's make up for the rest of the up to 1.3 billion euros of other disposals?

So as a disposal, basically it's composed of a part of the non-core assets. I'd say that as they are non-strategic, the idea is to allocate as less capex as possible. So in order to sell them, except for some of them that could benefit at a much larger scale. For example, the Helsinki Yenna former office building, we're just refurbishing Yenna now. The idea, of course, is not to sell it because the most value of the Rangis Business Park is having it at one single piece. But that's an exception. For example, Etoile Park, Emmanuel showed you, the idea at the end of the day is to transform it into a school and then sell it. So a part of the disposal, let's say maybe roughly 500 million euros, will be composed on those assets that are not cash flow productive in the mid-long term. And that leads us to a remaining €8,800 million. And, I mean, for a REIT like us, an investment division, you need to rotate your portfolio. So, of course, the investment market is frozen there, but we are talking about a five-year trajectory. Yields have adapted. The risk premium, in my view, has now significantly restored. So, hopefully... I mean, we are talking about 2028. At that time, we'd be able to sell some mature assets, and those amounts for a REIT with 6.5 billion euros does not seem so much in our view. But nevertheless, should it take more time, I mean, what you saw is that we have all this development pipeline at our fingertips, meaning that Once again, it's like the healthcare business. If we need some extra time, I mean, there's no rush. It's not like there's an opportunity and we absolutely need to rush to catch it. I mean, it's just right there. So if we need to wait an extra six months and in that time create value by obtaining the billing permit, then so we will do it. The response? Oh, mature assets. I mean, There's no such thing as trophy assets on a REIT. We are a value creation REIT, meaning we invest in assets, we transform the assets, we create value. At the end of the day, we monetize assets. So when there's mature assets, if there's a financial equation that works with the buyer, I mean, there's no point keeping the asset if we are able to sell them in order to invest in relative development.

Okay? Thanks. Maybe Mark was here again from Bank of America. Sorry if you can't see me. Once again, I see you. I see you. Don't move. It's okay. I have a question on your slide 69. You have to follow up with the first one. If I do very basic math, it looks like you're expecting a punchy yield on cost or return from your acquisition. But maybe I'm sure I'm missing something somewhere. because that would mean that you're targeting to do 500 million of acquisition at a 7.8% yield, which maybe is your expectation, but I'm missing something somewhere. So potentially it could be your capex, where you're expecting a return out of it?

No, no. Well, if you want to break down, basically on the started pipeline is 45 million euros, and the diversification is above 30 million euros. It's a but it's slightly like that, 30 to 35. On the reconversion, we expect some cash flow coming from some developments, such as the Helsinki IENA was talking about, something like 5, 5 million plus. And on the potential acquisition, it's around 30, 35 million euros. So it's rather, I don't know, 6.5 years.

Yeah, okay. It's okay? Yeah. Yeah, but we will still be on it.

But if we can have some yield on the SG CapEx and charge the tenants, we'd be happy to.

Of course. On the asset you are planning to reposition from the office, which is 80% of your rental income of the office portfolio, which is about €53 million from what I can see on your slide, which is slide 23. What is the likelihood that you're going to lose those 53 million euros at some point, considering the very short-term lease term?

The probability is quite high. And that's our deep conviction. I mean, in the mid-long term, that won't be offices anymore. The good news is that we have at least more than two years ahead of us. And definitely, I don't think that the market is pricing that we're going to get some rent for those assets, honestly.

Fair enough. But that's part of your guidance for 24.

Yeah, yeah, yeah. That's part of that. I mean... It's factored in, in the guidance, as I said, on the investment division, the main issue in 2024 is the expiry schedule, and we are expecting circa 40 million euros of certain departures, mainly located on those assets, as I said, and the pulse building, of course.

It means we're going to have further more to suffer from in 2025.

Yeah, exactly. I mean, the full impact on the cash flow, definitely on a full year basis, will be in 2025. The impact... will be limited in 2024 due to the fact that most of those are in H2.

Yeah, but what I mean is 40 million in 24, and then pro forma 24, 25, but then we're going to have another bunch of 25, 26. No?

Oh, slightly at the end. Yeah, yeah. That might be the case, but the main part are those experience schedule in 2024. So the main impact will be, I think, for your 2025. Okay. Thank you.

Hi, it's Thomas from Deutsche Bank. Just two questions. The first one is on the office exposure. What should we expect regarding office exposure by 2028 roughly, just to to get a rough idea. And then the second one is on your compensation scheme with regards to the execution of the reshape plan. Just maybe you can also provide us with a rough idea.

Sorry, but the second question?

Compensation scheme, your incentive to reach the targets for the reshape.

Okay. So as for the office exposure, I mean, it's not an end in itself. We don't have in mind we much reach that level. I mean, what you say and what we say is that office is the core in our strategy, as you understand, because we have the know-how, we know how to build a building, and we have in our DNA the ability to build long-term partnership with our customers. And office is going through troubled times now. but has definitely its place in the 2050 city. So we want definitely to work on that. But still, once said that, the idea is to embrace globally the mixed-use evolution of the 2050 CC. So mechanically, this will materialize in the fact that the diversification will increase in our portfolio. So at the end of the day, mechanically, it will dilute globally. the share of the office. But it's not an ad in itself to say we must reach X percent of the portfolio. And as for my compensation, well, I'm fully incentivized to make ECAD achieve the strategic plan. As you saw, it's definitely in my objective. It was already in my press release on my nomination, so that's the reason why I'm here, and that's how I'm incentivized.

Jeffrey, maybe one question on your gearing, and did you talk to S&P following, let's say, the makeup of this plan? I understand that due to the dividend and investment that you are planning to spend this year, you will cross in the 35% threshold in 2024. So do you expect, are you willing to be... a notch lower with following this investment that you are planning to do.

Well, about that, you saw that maintaining a sound financial profile is key for us. We perfectly have in mind the S&P guidelines, of course. The figures shared there, you know, there are a trajectory, of course, an average trajectory on that. We think that with Reshape, this plan enables us to match the S&P guidelines and requirements. Of course, there's a question of timing, depending on the health care and so. But once again, as you saw, our financial policy and our profile is one of the fourth pillar of reshape. So that's key for us, as it always has been.

So there is no way to lose one notch. The goal is to maintain. It should be frustrating.

Well, I mean, this decision is not mine, obviously. Okay. But, you know, we have a plan that enables us to match that in the trajectory, and that's a key point for us also to maintain this financial profile.

Putting it in other words, you will do whatever it takes to keep the BBB plus rating, right?

We gave you the guidelines. We fixed ourselves for the plan, maintaining a sound profile.

All right. Another question on the development segment. You know, it's an ongoing question, but did you consider selling this activity when you arrived at ICAD? And how do you see it evolving in the future?

Well, honestly, not a single moment. not even before my arrival, but you know what, you came with convictions and you need to confront them to what you find. And I think that was one of the first key takeaways I shared with the market in July. There were two things. We are definitely much better than the market thinks. If you take our NAV, the resiliency of our portfolio and the stock level we are trading today. And the second takeaway was that our two Businesses, our double expertise, will definitely set the ground of our strategic plan. I think that was the exact term I used in July, and you saw that throughout the presentation. Definitely, I think it's key. It's key because the global environment, I mean, compels to do so. When you're a developer, now you need to have a sound balance sheet. Because you need to buy the piece of land in the city, have it on your balance sheet for quite a period of time, time needed to transform it. So you can't, I don't think so, be a mere toolbox, especially tomorrow when times and money comes at a cost. And when you're a REIT, I mean, you need more than ever this toolbox to transform, such as we do now, our assets. When I arrived, the property development team did not know the portfolio yet. of the REIT, of the investment division. I can assure you now they know all the 33 assets by heart.

Right. And can you remind me the value in your accounts in 2023 of the property development segment?

I don't think I will remind you because that's information we've never given.

All right, fair enough. And my last one is on the data center business. There was this portfolio that had been put on the market by SFR last year. Did you have a look at it?

Well, it was honestly too early for us because the one and single priority I had when arriving at ICAD was achieving the closing of the LCR business. It was well on track. It was a great deal and it was absolutely key vital for ICAT. So that was my main focus for the first three or four months. That and launching the deep analysis on the portfolio. So first thing first.

And is this something that you could consider if another similar portfolio is coming into the market?

Honestly, I haven't looked at the projects, so I can't give you a proper answer, but definitely we are looking at many things that are on the market. But once again, we'll remain cautious. That's what we showed in the guidance. The environment globally still is uncertain, so we have the luxury of having a strong balance sheet, which is a key asset in the environment. So we are looking closely at everything. but won't be too bold, especially in this year, of course. Thank you.

Hi, Rob Jones, BNP Paribas again. Firstly, I just want to say, I think in general, I and probably a lot of people in this room underappreciate the literally thousands of hours that go into producing this and thinking about this. So firstly, thank you. Secondly, I'm just going to go back to slide 69 again. I'm pretty sure I'm the third person that's looked at this, but maybe that's potentially telling in terms of its numbers. If I exclude the started pipeline, i.e. because your total incremental income associated with that is $45 million, but of course the cost to deliver that $45 million is greater than the $0.3 billion on this slide. Correct. Correct. you end up in a scenario where either I think you could say 1.5 billion redevelopment plan over 24 to 28 generates 75 million of incremental revenues, or perhaps the number shouldn't be 1.8 to generate 120, it should be 2.4 billion. Am I right in thinking about it like that? It's actually 0.9 billion for the started pipeline plus the remainder.

Yeah, exactly. 600 million already spent on the started pipeline, so you need to add this, yeah.

Okay, very clear. And then there was a slide, and I can't remember which one it was, where it talks about the data center's opportunity here, the 280 million capex spend. So you get the building permits potentially in something like 2025, but construction doesn't start until 2028. I'm not a data center's expert yet, but tell me what happens in those three years in between. Why does it take so long? Obviously, it's good from a year-on-cost perspective, but obviously from an unlevered IRR perspective, the longer the project takes, the lower the forward IRR, if that makes sense.

The main thing about data centers in terms of time is access to power. In France, you know, when you ask RTE, they have to give you the access to power, but now they are overwhelmed with demands. And even from people that don't even own the land, don't even have talked to the local authorities such as we did with Regis Meyer. So they are overwhelmed with that and they need to study and study and study. So that is the major part that will take time. Of course, we'd be happy to have it delivered earlier, but it won't be the case. And more globally, you saw that all the development opportunities that we've shown throughout the presentation represent a much larger volume that only the 400 million euros in diversification. For me, two reasons on that, especially on the data center, some of the CapEx are after 2028. That's for the first thing. And the second thing is that we also have the choice. I mean, what we wanted to do is to show you concretely the possibilities of the land banks because there was basically two questions on our portfolio. What about the offices? What about the offices? And what are you going to do with your land bank? So we tried with all the teams to show you quickly what we can achieve with that. And that allows us to have the flexibility to choose the project with the higher yield and or to accelerate also because as you saw, as for data centers or even student housing, I mean, all options are on the table. We can I mean, state where we are with a pure real estate model, we can go on a full-slage basis or we can structure some JV in order to get some additional equity to accelerate the rolling out of the plan. So the main key point, once again, is flexibility.

Very clear. And then a final question for me. One of the downsides of our... price target methodology, and I suspect some of the other analysts in the room as well, is our price target is done on a 12-month look-forward basis. As a result of that, we often get a lot of questions from investors asking what are the catalysts for StockX, clearly in this case at CAD, on a 12-month forward view. I wonder to what extent you can give any granularity on over your four-year detailed plan to what element is back-end loaded, i.e. 27, 28, after proceeds coming in, and then we can then reinvest and manage our balance sheet accordingly versus that investor that's asking the analyst for a near-term catalyst within the last 12 months. I note that since the intraday highs, when you started talking at 9 o'clock, the shares are down almost 5%, and I wonder what we can do to allay some of those near-term concerns around around value creation on a shorter term time frame?

Well, I think we've already shared, honestly, many figures, especially concerning the global uncertainty of the environment today. We'll be happy to share more and more details in July if we can, but once again, honestly, that's already many details, actually, because We wanted to be really transparent with you to give as many elements as we can. We perfectly know that it's not easy for you to fill in the box because we are definitely not in a box now. But maybe before talking about catalyst, maybe have a look at the starting point. I mean, the valuation we have today on the stock level, we tried and I hope we've convinced you about the resiliency of our portfolio in terms of offices. where we have a clear view of what we're going to do with our assets, and also a clear view on the potential of the business market that have always been hidden, I mean, and not understood by the market. So, I mean, of course, you'll be looking for catalysts. We give you as much information as we can, but maybe have a look at the starting point, too. Thank you very much.

Hi, Veronique Meertens from Kempen. Question about the Champs-Élysées asset. Obviously, it's currently practically non-yielding. Have you had offers for it? Because it's also, looking at the rest of the portfolio, not a very common asset for you to have. And is it something that you would be willing to sell in the future?

Well, once again, we sell assets when we have created value. Of course, we had offers for the Champs-Élysées. I mean, especially given the recent benchmark. I mean, everyone is focusing on the core, triple core assets and so on. But once again, as an investment division, our job is to create value and we can monetize the asset when we've created that value. Obtaining a building permit is the first step. Of course, it's the Champs-Élysées, so of course, even with the building permit, you know, timetable still isn't certain, definitely, but We have some interest. We have some interest also from tenants on the office part, but also from luxury brands on the retail part. So our job is to create value. First step, obtaining the building permit. Second step, we'll secure leases at the end of the day. We don't have such things such as trophy assets once the value has been created. So we'll see, but that's definitely too early.

Okay, very clear. Thank you.

Two questions on the phone.

We'll take our first phone question from Jonathan Conward from Goldman Sachs. Please go ahead.

Hello. Good morning. Thank you for taking my question. I was wondering, we've talked a lot about the development and the redevelopment potential. About the existing sort of portfolio, particularly offices, what are your targets there? Are you aiming for increasing occupancy or any views about life-like rent growth? Do you have any concrete objectives for the existing portfolio and well-positioned? Thank you.

Well, as Emmanuel showed on the existing portfolio, now that we have a clear view of what in our view will be fit for future as for offices, what we're going to focus our attention on is the customer more than ever. So Emmanuel detailed the global offers we are structuring there. So that's how I think, in my view, you create a premium because it's not all about the building, but it's also, and I think the interviews showed it really properly, how you live into this building. So we will really be focusing as for the well-positioned assets to enhance the quality of the partnership we have with our tenants so that They stay for a long time, and we are able to capture some premium. Of course, this will take a long time, but that's how we will structure ourselves internally too.

And so, in practice, I mean, obviously, you have ESG CapEx, you have some other CapEx also, which may fall into that portfolio. But are you seeing, you know, are you expecting occupancy improvements? Are you expecting to have to manage, obviously, the reversionary potential you're talking about? And can you give us a few more concrete targets, perhaps?

We have no specific targets in terms of occupancy unless we will focus on increasing this occupancy rate. Of course, it shall be impacted by the pulse departure this year. But it's a long way, but that's where we will be focusing on energy. But we don't have a proper target. Once again, an office portfolio, even well-positioned office portfolio, is a living object. You get one tenant is getting out, one tenant is getting in. So there's no such thing as a fixed objective, but we'll be focusing on enhancing this level.

Okay.

All right. Thank you. The next question is from Celine, so from Barclays. Please go ahead.

Hi, Nicolas. I've got three questions, please. The first one is about the rental reversion rate. If we remove the assets to be repositioned in the office portfolio, what is the reversion rate? of dividends, you haven't stated anything regarding the second installment of the dividend to be paid this year, but your comments on keeping the cash within the company imply a script option is on the table. So can you confirm this? And my third question will be about your strategic plan. You're planning to spend $500 million in your investment plan in acquisition. What are the asset classes you're targeting, and what is the minimum you interesting in your eyes.

Thank you. Yeah. Hello, Céline. Well, for the first question, the one asset that needs to be repositioned are valued at a cap rate now above 10%. So definitely the well-positioned asset are with a 6.5 or 6.7% yield, if that answers your question. As for the dividend asset, Well, script dividend is not on the agenda. And as for the investment, well, we will invest in any asset that might be relevant with Reshape and the strategic plan we've shared with you in terms of asset classes and potential of value creation.

Nicolas, regarding my first question, I'm not talking about the cap rate. I was talking about the reversion rate. So you're saying your portfolio is over-rented by 8.7%. If we remove what you consider to be non-core, how over-rented is the rest of the portfolio?

Well, about reversion, I mean, the way we look at reversion, well, definitely it varies from one asset class to another. If we talk about light industrial, we gave you the figure. The potential reversion is positive. It's plus 4.3%. And if you take the offices, I mean, among the offices, in our view, that does not really make sense to be focusing on reversionary potential as for the one asset that needs to be repositioned. Because at the end of the day, those won't be offices anymore. So the one asset for which it's relevant to think about reversionary potential is the well-positioned asset. And for that, we give you the proper figure being minus 8.7%.

All right, so that 8.7 is only for the core assets in your fiscal year?

Yeah, the well-positioned assets, exactly, exactly.

Okay, okay, cool. Thank you.

Thank you. Is there enough other questions? I would like to hand the call back over to the speakers for closing remarks.

Okay.

Just a few words. Two questions, maybe on thresholds, but before talking about that, I would like to come back on flexibility, on lease. Do you have a downward threshold on the vault, waiting a very jealous term, doing shorter lease, because it could be a good way to optimize occupancy and rise rental values, but what's the threshold in terms of vault first?

It's not – the way we see flexibility is just understanding the major concerns of our customer. When we go to an HR director today, he says, well, there's a lease, and I'm committed for three, six, nine years maybe, but I don't even know my need on a six-month basis or 12-month basis. And the answer to that, in our view, is not necessarily short-term leases, but is also the ability to give them flexibility – through our subsidiary Imagine Office. And I think Next is a good example in Lyon.

Yes, Next is a good example of this flexibility. which we offer to the tenants. For example, the whole building will be occupied by April, the insurance company, but one floor is dedicated for co-workers, and they have the priority to take co-workers, co-working offices there. And it's why we do, we often do in our building, we reserve one or two floors for co-working with our subsidiary machine office.

So mainly in the region, I mean in France region, it's not in Paris. Yes, no, it's in Lyon, in the heart of Lyon. But it's the same, we can do the same in Paris, of course. Yeah, because we see co-working... particularly struggling outside in periphery all across the globe. So it's a matter of question.

But the idea definitely, but that is not to roll out a co-working strategy outside of our portfolio. Of course, we have one or two assets inside Paris, but the idea is really to focus on our portfolio. It's part of a much larger offer to our tenants.

Very clear. About the disposals, 1.3 billion euros, what's the assumed or the implied discount on values?

Well, talking about the asset that needs to be repositioned, the one asset that needs to be repositioned just endured quite a significant adjustment, which is minus 40% from the peak in June 2022. The average price per square meter is €2,300 per square meter for those assets. So we are definitely far from a former office valuation. And as for the wealth position, honestly, we don't expect a discount on that. I mean, if... We are opportunistic maybe, but that's not the idea. Those disposals shall go through a usual way of doing business. We transform the assets. We create value. We monetize. So the target might be the NAV, but it can be opportunistic, but still.

Very good to hear. Last one is on – sorry for this one – is looking at yield. Definitely, I think there's a lot of job, and it's very – exciting moment for ICA to do so, but also the yield looks, comparing to the 7.5 on the portfolio, a bit dilutive. My point is about how do you think about sharing, make share buyback while paying cash dividend? Thanks.

Well, actually, the yield we are aiming at honestly are still lucrative regarding the cost of financing and regarding globally the yield, and share buyback is not fully an option on our side because we've looked at what has been done in the past on other companies and we're not so convinced of the interest of doing that. And we have also, you know, two main shareholders, and there's a technical issue in case of share buyback. There's an increase of more than 1%, but I'm sure we've already talked about that in the past. Thank you.

There's a question by Denise Yaganaga. Hi there. Regarding the financial targets under the new business plan, will these be satisfactory for the new CFO and the rating agencies? Standard & Poor's target leverage is at above 8.5 time net debt to EBITDA for the BBB plus rating, but you stated above 9 time net debt to EBITDA as a target. Wondering if you pre-discussed the targets with Standard & Poor's. Thank you.

Thank you very much. Well, I think we've quite answered to that question through the discussion with Pierre-Emmanuel. Those numbers on the slide, once again, are on average on the length of the plan, and we are more cautious, of course. But once again, what we can reiterate is that, as I said, it's the fourth pillar of our strategy, and we are committed to maintain a strong and solid balance sheet.

Another question by Mark the Clerk. My question is about shareholder value, which should be your first priority, and I'm convinced it is. Two parts to my question. First part, recurring cash flow in the coming years will be substantially down from more than 5 euros until very recently. What is your target for 2028? Of course, we understand and accept there are many uncertainties. Part two in my question. Shareholder value and confidence are also down dramatically, even taking into account the interest rate-induced crisis.

With half measures... Maybe I can answer the first one in the meantime. Well... I think the question is an answer in itself. I mean, definitely many uncertainties today. So providing, I mean, a cash flow assumption for 2028 is not an easy task. It was already not an easy task to provide you those figures. Of course, at this stage, there is full of uncertainty. We talked about the property development issue. And so to have a deep conviction on the level of cash flows contributing from the property development in 2028, that's not easy. And on top of that, I mean, there are lots of uncertainty. What we've shared, what we are really confident on is the additional reviews of 120 million euros.

So part two of the question is as follows. Shareholder value and confidence are also drowned dramatically. even taking into account the interest rate-induced crisis. With half measures, this will not change. I think the best investment and the best way to restore shareholder value would be share buybacks. But the actual juridical structure of Solvency II does not allow that. Do you think this structure still remains appropriate today? I'm not convinced. Thank you.

Well, on share buyback, I think we've already answered this question to you.

Next question by Patrick Bohr. There was a time when ECAD had a building management activity. Today, the market seems to offer very little good and reliable services, and the fees have grown regularly. Would you consider a comeback in the activity?

Well, I think it's a good demonstration of... the capacity of ICAD to significantly evolve, to adapt and go through the cycles over the 70 years we just passed through. But as you saw, I mean, there are quite a lot to do on our roadmap with Reshape. I mean, there's large potential developments at our fingertips on our business park. There will be also some, in my view, creative external opportunities. So I think That's already quite a busy agenda for the next five years. Okay. I think there we are. So thank you very much for your attention. I mean, you well deserved a nice cocktail, taking some strength for the Rungis tour, I think. And we meet back at, guys? At two? Okay, you get 45 minutes, and happy to... She has some time with you.