Carmila Sas

Welcome to the Carmilla H1 2025 results presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. Mary Cheval, Chair and CEO, Sebastian Van Hove, Deputy CEO, and Pierre-Yves Thirion, CFO. Please go ahead.

Good evening, everyone. Welcome to Carmela's H1 2025 results presentation. Together with Sébastien Vanhoef, Deputy CEO, and Pierre-Yves Thirion, CFO, we are thrilled to present strong results for this semester. We are confirming once again our ability to deliver growth and value for shareholders. We have secured 467 new leases. This strong living activity contributes to our sustained growth in net rental income. What's striking is how this translates into even stronger recurring earnings growth. It has increased by 7.1% year-on-year. Indeed, we raise our 25 recurring appraised guidance to 1.79 euros representing a 7% increase compared to 24. We will also launch tomorrow a new share buyback program of 10 million euros. Alongside these strong results, favorable trends are creating a supportive environment. We are observing a normalization of inflation and interest rates. Furthermore, the omnichannel approach remains the optimal model for retailers with integrated online and in-store strategies. We are seeing robust demand in retail, with positive growth across France, Spain and Italy. Finally, on the supply side, limited new greenfield projects mean that scarcity underpins the value and attractiveness of our assets. As a result, retail real estate investment volumes are increasing, demonstrating renewed confidence in the sector. In this context, the strategy of Carmilla remains the same. It is built on three pillars. First, transforming our asset to create value. Second, we maintain a strong capacity to optimize capital. We achieve this through asset rotation and strategic acquisition, such as Gallimaux. Finally, we are committed to a long-term vision through mixed-use developments with Carrefour, carbon neutrality, and other strategic growth initiatives. By focusing on these three pillars, Carmilla is in a position of strength for continued value creation. As shown on slide 7, we are beating our strategic plan targets across the board with a successful beginning of the fourth year of our Building Sustainable Growth Plan. Let's now talk about Spain. Spain is not just a key geography for Camila. It's a significant growth in China. We are leveraging significant positive trends. First, Spain GDP growth is projected at 2.6% in 2025, significantly above the Eurozone average. Second, Spain is a leading tourist destination expected to attract 100 million tourists this year, which directly benefits our centers located in high density areas. Carmilla is well positioned to capitalize on this growth. We are the number one shopping center operator in Spain with 75 assets representing 21% of our gross asset value. And we have a very strong track record. Our gross asset value has grown four times in Spain over the past 10 years and we see potential growth for the future. The slide 9 provides colors on how we are actively unlocking value within our Spanish portfolio. As you can see, we have achieved net rental income growth above indexation. Furthermore, we maintain a healthy financial occupancy of 95.2% and a net initial yield of 7.3%. There is room for further value creation. On slide 10, you can see some of our flagship assets in Spain. In the Balearics, in Andalusia, or near Madrid, we are positioned in top tourism regions benefiting from strong footfall and consumer spending. Now, let's focus on the GALIMO integration. This seamless integration demonstrates the scalability of our platform. This has led to immediate synergies, 5 million euros in cost synergies, and the integration of IT systems and employees within just six months. With 51 new centers now under operation, Carmela expands its platform and accelerates value creation. we confirm the quality of the GALIMO portfolio. Now on slide 12, the integration of GALIMO is delivering significant value to our shareholders. This transaction is generating an internal rate of return exceeding 40% on our €300 million of equity investments. And there is room for creating additional value. For example, We have already increased the financial occupancy and collection rate on these assets. Let's talk about Carmina's approach to capital optimization. We have a very strong track record. We are now positioned as a net buyer targeting 100 million euros in acquisitions with a spread of 100 basis points above cap rate. At the same time, we plan to disvest 50 million euros per year in line with book value. Recent transactions this year include the sale of Ketini for 17 million euros and Villers-Sommers for 12 million euros. This approach between disposals and acquisitions allow us to target an accretive spread. On slide 14, we are generating growth on a diversified portfolio. We do not subscribe to the view that bigger is always better in retail real estate. Performance is not a matter of size, as I will demonstrate. First, we benefit from strong local leadership on prime locations. 85% of our sites are leading retail destinations, notably thanks to the footfall generated by Carrefour and court centers. Second, The scale of our operations drives operational excellence. Our intelligent IT and AI systems allow us to streamline processes and reduce costs. Third, our extensive network makes Carmilla the go-to partner for expanding retail brands. In fact, half of our top performing assets are small, proving that it's more profitable to have the right location than a bigger footprint in the wrong one. Beyond our core business, we are actively executing on high potential growth initiatives that are already delivering incremental recurring earnings. As you know, our three key initiatives are gaining traction, generating 8 million euros in recurring contributions this semester. We are also working on our retail media platform and we look forward to sharing further updates on this contribution in the coming months. The next slide, 16, is a reminder of our commitment to environmental sustainability. As part of our long-term vision, we are firmly on track to achieve net zero emissions by 2030. Since 2019, we have already reduced our greenhouse gas emissions by 54%. Six photovoltaic projects have been brought into operation in Spain since the beginning of the year, and additional projects are currently under review. As a conclusion to my part, Carmilla is delivering best-in-class performance. We are demonstrating strong net rental income creation, growing 22% since 2019, and the 2025 EPS we will be well above the 2019 level. We have generated a strong shareholder return and are determined to continue to do so. I will now hand over to Sébastien, our Deputy CEO. We will provide details on our activity.

Thank you, Marie. Hello, everyone. Let's now take a closer look at our operational performance, which has been particularly dynamic this semester. I would like to begin with three key achievements that demonstrate our strategic execution, building on what Marie shared. First, Spain proves to be a standout growth engine. Second, we are adapting to evolving consumer expectations to ensure our centers remain attractive. Third, our incremental initiatives and agile restructuring projects are complementing the strong core performance which sustains organic growth. This solid activity is directly benefiting our retailers, as shown by the indicators on slide 19. In the second quarter, retailer sales rose by 2.1% and foothold by 2.3%, showing better momentum than in Q1, which was impacted by the leap year in 2024. Spain posted the most dynamic performance with sales up 4.4% and footfall up 1.5%. This was supported by a favorable economic environment and strong tourism activity. At the end of June 25, the tenants average occupancy cost ratio stood at 10.8%, confirming the strength and balance of Carmela's leasing model. These strong fundamentals are attracting retailers' interest, as illustrated on slide 20. In the first half, we signed 467 new leases, confirming the continued appeal of our centers. This momentum is reinforced by the arrival of 55 new brands, such as Aromazon in Biarritz, an iconic experience-led retailer. As Marie mentioned, This trend extends beyond our largest assets. Retailers are also expanded into convenience centers where Carmilla's proximity and market leadership offer strong growth opportunities. This is reflected in ADOPT's expansion strategy and in McDonald's, now operating nearly 50 restaurants across our portfolio. This illustrates Carmilla's unique network effect. Our ability to support multi-site deployment is a decisive advantage. As we have consistently said, we are well positioned to capture retail trends and deliver organic growth. Let's now look at how this translates into our merchandising mix on the next slide. As part of our strategy to create value, Carmilla is continually pivoting its merchandising mix to stay aligned with evolving consumer trends. We are actively embracing new concepts with a deliberate repositioning that brings us closer to our vision for a typical Carmilla center. Notably, we are seeing solid growth in health and beauty, as well as in restaurants and sports categories, where we are increasingly concentrating our efforts. We are now on slide 22. Our shopping centers are evolving. And as true pioneers of retail trends, we excel in pop-up and temporary concepts, bringing innovation and experience, attracting footfall while testing new concepts. Beyond traditional leasing, we create animation that builds customer loyalty. Specialty leasing is turning our centers into social hubs while delivering strong revenue growth, 9.1 million euros in H1, up 15.1%. An example, our partnership with Julie creates memorable family experiences. We also leverage digital campaigns with brands like M&M's to boost visibility and engagement. And we capture emerging trends like key beauty corners set to expand in the second half. Now let's examine our capacity for asset transformation, directly responding to the consumer trends I mentioned. We continue to reshape our assets through agile and strategic restructuring. Our scale enables us to execute and seize opportunities more efficiently. The numbers speak for themselves. 50 projects per year, 50 million euros in capex, and a targeted yield on cost of 10%. On food parks, we have already secured 11 new concepts since 2021, from street food formats to more premium dining. We are also capitalizing on wellness and entertainment trends by introducing fitness centers and leisure parks, boosting dual time and creating new revenue streams. We are further expanding our health care offer with new pharmacies, downtown clinics, and medical practices, answering clear local needs while improving daily food forms. To illustrate Carmilla's unique expertise on the strong performance in Spain highlighted by Marie, let's take a closer look at Los Alfares, 80 kilometers from Madrid. The site had potential, but faced challenges. from competition from radrid and high vacancy rates we saw an opportunity our approach three precise phases phase one took place between 2015 and 2018. we signed 17 new leases adding fashion healthcare and expanded food and leisure options phase two between 2019 and 2024 was the consolidation phase. We optimized the tenant mix, welcoming brands like Sprinter and Pemko, and grew footfall by 12% versus 2014. Phase 3 is launching now. Primark becomes our new flagship tenant, and the Mongo team concept arrives. Along with new revenue streams from all media and digital advertising, we are transforming this asset in a true destination. The figures are striking, 100% occupancy achieved, plus 23% footfall growth, and strong value creation for shareholders. Now on the next slide, major projects. Limited supply further reinforces the strategic positioning of our centers. In France, for instance, the low on net zero artificialization creates scarcity value for existing retail locations. Continued urbanization transforms our catchment areas into increasingly dense urban zones. We are currently wrapping up the project phase for Tarassa, near Barcelona. Our goal is to create a flagship retail destination, just as we did with FAN Mallorca or Los Alfares. We look forward to updating you on this exciting project in the months ahead. I will now hand over to Pierre-Yves, our CFO, who will provide a detailed review of our financial performance.