Icade Sa Ord

Hello and welcome to the conference call eCAD results as of March 31st 2025. Please note this conference is being recorded and for the duration of the call your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star 0 and you'll be connected to an operator. I will now hand you over to your hosts, Nicolas Joly, CEO, and Bruno Valentin, CFO, to begin today's conference. Thank you.

Good morning. Nicolas Joly speaking. Well, thanks to everyone for being on the call today. Well, I'm happy to be here today with ICAD's new CFO, Bruno Valentin, who's just joined the group last week. Delighted to welcome him to the team, and I'm sure he will make a great contribution to the financial team and to ECAD. So this morning, we are pleased to present ECAD's results as of March 31st, 2025. This presentation will be, of course, followed by a Q&A session. So let's move to slide five for an overview of the main messages of the first quarter of the year. The Investment Division reported a good rental activity with circa 50,000 square meters signed or renewed during the quarter. This volume was boosted in particular by the signing of Pearl's building with the Cincinnati Departmental Council for 29,000 square meters. The resilience of the financial occupancy rates for well-positioned assets was confirmed at 88.4%, excluding the positive impact of Pearl's. Revenues were pretty stable with like-for-like growth of 0.5%. ECAD's property development business grew in volume and value supported by good momentum in the residential segment. However, we remain cautious about the pace of recovery given the still uncertain environment and French political agenda. On balance sheet aspects, ECAD confirmed its very strong liquidity position at 2.3 billion euros at the end of March. Additionally, in April, the group signed 190 million euros of revolving credit facilities in attractive conditions in line with existing finances. Lastly, we reaffirmed today our 2025 Group Net Current Cash Flow Guidance presented last February. Let's look now at performance by business divisions starting with commercial investments. The leasing market got off to a slow start in Q1 2025, with a take-up of 420,000 square meters, down minus 6% compared to the same period last year. Activity was driven by medium-sized transactions of between 1,000 and 5,000 square meters, and by positive momentum on the outskirts of Paris. During the first quarter, ECAD's team passed a very good performance with circa 50,000 square meters signed or renewed. These signatures and renewals represent a manual rental income of 12 million euros and a world of 9.1 years. In particular, ICAD signed the largest deal of the quarter with the Seine-Saint-Denis Departmental Council for the entire Pulse building in Seine-Saint-Denis for a 12-year term with no break options. The teams also managed to sign a lease on an extra 4,200 square meters in the jump building in Aubervilliers with the same tenant. These leases on these assets are due to start in late 2025, early 2026. ICAD also signed or renewed nine leases covering a total of more than 5,000 square meters in La Défense and Péridefense areas in Q1 2025. The financial occupancy rate stood at 83.1% as of March 31, 2025, minus 1.6 points compared with December 31, 2024. The decline in the occupancy rate mainly concerns offices to be repositioned as expected. In the well-positioned office segment, the financial occupancy rate remained resilient at 88.4% thanks to leases signing the next building in Lyon and the Toureco building in La Défense. Taking into account the lease signed in February 2025 for Perth, the financial occupancy rate of well-positioned offices stood at 91.1%. Let's now move on to the operational performance of the development business line. Continuing the trend observed in H2 2024, we've seen a good sales momentum in the residential sector. At the end of March 2025, the property development division recorded 697 orders, totaling €209 million, up by plus 16% in volume and plus 22% in value, driven by both individual and bulk orders. Individual orders represented 432 units for 148 million euros. The growth in value was due to a different product mix with an acceleration in the scale of upscale development projects such as 58 Victor Hugo in Neuilly and CMR Lafayette in Lyon. Institutional sales were also up, but this is also due to base effect given a low volume in 2021-2024. The institutional investors accounted for 38% of orders in volume terms, which is, as you know, generally less than the final share on a full-year basis. Let's move to slide 10, in which we present the trend in consolidated revenue as of March 31, 2025. ECAD's total IFRS revenue saw an increase of plus 1.2%, coming from a slight growth in revenues in the two business lines. Let's jump directly to the next slide for details on property investment divisions. As of March 31, 2025, gross rental income from property investment remained stable at circa €94 million. On a like-for-like basis, the change was plus 0.5% year-on-year. Gross rental income was adversely affected, as expected, by current departures in 2024 and negative reversion on renewals. Indexation had a positive impact of plus 3.3%, but at a slower pace than last year. It should be noted that rental income was also boosted this quarter by the positive effect of early termination fees received on Office to Seize to be repositioned. Economic revenue from property development amounted to €254 million as of March 31, 2025, down minus 2.2% compared to the same period last year. The changes in revenue reflect differences in performance between market segments. Revenue from the residential segment totaled €205 million, up by plus €16 million compared to the end of March 2024, In Q1, this increase continued to be fueled by the good sales momentum seen in H2 2024 among individual investors and first-time buyers for home sold individually. Revenue from the commercial segment was down by minus 32 million euros compared with the same period in 2024. This due to the completion of major projects as Envergure in Rome at the end of 2024 and the absence of new commercial contracts signed in 2025. To be noted also that the economic revenue includes the proceeds from the sale of the Tobiak building for 19.5 million euros completed in Q1 2025. Let's move on to slide 14 for the 2025 guidance. Based on the group results as of March 31, 2025 and year-end forecasts, the Group Net Current Cash Flow 2025 guidance isn't changed. We expect, indeed, Group Net Current Cash Flow of between 3.40 and 3.60 euros per share in 2025. To be noted that the Group Net Current Cash Flow includes 67 cents per share coming from non-strategic operations. For the sake of clarity, this amount has already has been estimated without the impact of disposal of these activities or the repayment of a CAAS loan granted to the usher. The guidance will be adjusted in due course as and when disposals are made during the year. Well, to wrap up, I would say that the limited growth in sales in the first quarter 2025 reflects in particular some departures in 2024 and the slowdown in commercial property development activity. Nevertheless, ECAD's team achieved a number of very good operational successes at the start of the year, including robust leasing activity with the full relating of the showcase post-building and growth in housing orders in the property development division. The teams are fully mobilized to continue in this direction and in the deployment of reshaped strategy plans. Let's start the question and answer session.

Thank you, sir. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. And if you change your mind and want to withdraw your question, please press star 2. And please ensure your lines are unmuted locally as you'll be prompted when to ask your question. The first question comes from a line of Veronique Mittens from Kampen. Please go ahead.