Carmila Sas

Welcome to the Carmilla first half 2026 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, Marie Cheval, Chair and CEO, Sebastien Vanhoove, Deputy CEO, and Pierre-Yves Thirion, CFO. Please go ahead.

Good morning everyone and welcome to our first half results presentation. Operational performance this semester continues to be very strong both in terms of growth and profitability. As a consequence, we are in a position to upgrade the full year guidance and report an increase in the value of our portfolio. Today I will start with the key takeaways. Sebastien will deep dive into our free growth engines and Pierre-Yves will take you through the financials. Let me begin with the key messages. This was a very strong first half. But I want to be clear, it is not a one-off. It is a continuation of a track record we have built year after year. And behind is the same engine, our ability to transform our assets. First, we are upgrading our 26 guidance on the back of operational outperformance and our new acquisition. Second, momentum was strong across our three growth engines. Organic growth with net rental income up 1.4%, boosted by record tenant demand and by strong momentum in Spain. Investment growth with the immediately accretive acquisition of Grand Kittimi and innovation growth contributing 14 million euros with our new retail media offering now being deployed. Third, asset transformation is driving excellent operational performance, record losing activity, strong retailer sales and rising portfolio valuation. Fourth, the strength of our balance sheets provides efficiency and opportunity. with net debt at 7.3 times EBITDA and an APRA ITV of 39.3%. And fifth, we continue to create value for shareholders who discipline capital allocation. We completed 20 million euros of buybacks in the first half and APRA NTA per share rose 3.3%. So in short, a very strong half, but above all, the continuation of a proven model powered by asset transformation. These takeaways are grounded in strong operational and financial performance. We signed 530 leases. This is our highest ever volume of leasing activity with reversion of 2.8% above indexation and occupancy held at a high 96%. that fed directly into financial performance. An EBITDA margin of 80.8% up 80 basis points on last year. And gross asset value up 2.6% like for life. Strong operations translating into strong returns. As you know, our performance is powered by three engines. Organic growth. Net rental income up 1.4%, driven by strong retailer demand, asset transformation, and once again 100 basis points above indexation. Investment growth. His health was marked by the acquisition of Grand Ketimi, adding 1% to recurring earnings on an annualized basis. And innovation growth. 13.7 million euros of recurring earnings up 13% year on year with retail media now live and high demand for specialty leasing. Free engines all firing. Why do retailers choose our centers? Because shopping centers are winning share. They outperform overall consumption. and that is because they convert. In a world where the cost of acquiring a customer online has more than doubled, a store is the most efficient channel. Add to that genuine scarcity. No new greenfield supply is being built. And consumers, we are looking for experience and social interaction. That combination is exactly what our leading shopping centers offer. We operate a European platform of 250 assets across France, Spain and Italy worth nearly 7 billion euros. At its core are 80 leading shopping centers. They make up 80% of that total value and are the primary driver of our performance. Alongside them, A resilient network of 170 convenience centers anchors us in an everyday local life. I want to insist on these leading shopping centers. These 80 leading shopping centers are perfectly positioned to capture retail growth. They sit in the most dynamic region of our three countries in attractive catchment areas with strong economic and demographic growth. They host around 70 top-tier brands. Occupancy is above 97% and they are where we scale our innovations, specialty leasing, retail media, and next-door. In short, we live in the regions with the strongest growth, delivering highly scalable performance right across the portfolio. and this performance is not accidental. It is built through asset transformation. How do we do that? Merchandising mix, 50 restructuring projects a year and reinforcing the customer experience. We consistently grow organic rental income above indexation. As the chart shows, we have done this year after year. and in the first half again 100 basis points ahead of inflation. The same transformation drivers lifted our portfolio value by 2.6%. The operational picture is strong across all three countries. Growth footfall was up nearly 1% and retailer sales up 2.3%. The sound doubt is Spain, where retailer sales rose 6.6% and the occupancy cost ratio remains healthy at around 11%, which means our tenants are profitable and there is room for further rental growth. On investment growth, we acquired Grand Quétini for 45 million euros. It's a deal that ticks every box. First, it's a leading asset with strong fundamentals and a natural fit for our leading shopping centers portfolio. 4.2 million visitors a year, 66 stores and a dominant position in its local market. And second, we have identified exactly where the Carmina platform can add value through higher occupancy, reversion and asset transformation. The result is immediately equity, adding 1% to recurring earnings. On innovation, our third engine. This is where retail media stands out. And it rests on something advertisers truly value, data. We are unlocking Europe's deepest transactional data. We are pairing over 600 million annual visits with Carrefour first-party data and GC Deco expertise. So we give advertisers something they can't find anywhere else, which is the ability to target precisely and to measure real impact all the way through to sales. That's exactly why our first clients, Brands like Ferrero and Heineken are already advertising across our 900 new digital screens. For Carmilla, it's high value, high margin, and we expect retail media to contribute up to 2% of EBITDA. All this leads to our guidance upgrade. Organic Output Performance and Cost Efficiency are expanding our EBITDA margin. Our net buyer strategy is accretive and innovation is accelerating. Together, we take our 26 recurring EPS guidance to €1.87, up 3% on last year, and above our initial guidance of €1.84. I'll hand over to Sebastien to take you through the details.

Thank you, Marie. Let me take you deeper into our three growth engines and the record leasing activity behind it. This was our busiest ever half year for leasing, 530 leases signed. That reflects real record demand from retailers with reversion up 2.8% and occupancy at 96%. And the effort rate of 10.9% tells us tenants remain healthy and profitable. Just as important is the quality of demand. We are welcoming the leaders in the most dynamic categories that are health and beauty, sport, fashion, food, leisure, and the fast-growing Asian waste concepts. When the best brands choose us, is the clearest signal of our center's appeal. This demand is what lets us do what Carmilla does best, transform our assets. Through restructuring projects, we drive incremental rental growth. In the first half, we approved 39 projects at a 9% yield end cost. Let me now show you three examples that capture what we do. In Toulouse-Labeige, Zara Force Place grew to three times its original size, creating a 3,400 square meter flagship. The impact was immediate. Footfall at 7%, that's 130,000 additional visits versus last year. A stronger encore makes the whole center stronger. In Rennes Saison, we did something different. We turn an underused parking area into a 7,000 square meter leisure complex with speed park and four boyars. The result, footfall up 22% with 50,000 new visitors in June alone. This is how we densify our existing footprint and create value from space we already own. And in Talavera in Spain, we opened a new Primark. Since it opened in mid-June, Footfall is up 19% with 77,000 additional visitors. It has repositioned the center as a shopping destination for its region. Three projects, one pattern. This is asset transformation in action. The right brands in the right places leads to the entire asset. Beyond bricks and mortar, the customer experience is central to what we do. Customer experience is critical because it keeps people coming back, driving sustainable, repeat footfall. And across our 620 million visits a year, that translates into stronger sales conversion. We enrich it constantly through events, for example, like Panini Card Trading during the World Cup, specialty leasing concept surfing the Asian waves, and during the heat waves, turning our centers into cool, welcoming places to spend time. Finally, on innovation, we are building recurring income streams beyond traditional leasing. Together, they contributed 30.7 million euros in H1 at 13% year-on-year. Specialty leasing leads at 7.4 million, complemented by marketing services, terminal retail development, and the ramp-up of retail media. I will single out next hour. By monetizing 5G on Wi-Fi connectivity across our sites, we are turning our physical footprint into a new recurring revenue stream, already contributing 1.8 million euros with since then investment plans through 2020. It's a perfect example of how we extract fresh value from assets we already own. Second together, high margin, low capital and the structural driver of our future growth. With that, I'll pass to Pierre-Yves to turn this growth into earnings.

Hello everyone, Marie and Sebastien have shown you the strength of our top line growth. I will now show you how we convert it into earnings through cost discipline, a rising portfolio value and a strong balance sheet. Demonstrated ability to grow revenues with stable operating costs. This is the essence of our model. Net rental income rose to 204 million euros up 1.4% like for like. EBITDA reached 178 million euros up 1.9% like for like. growing faster than rental income. That operating leverage lifted our EBITDA margin by 80 basis points to 80.8% and took recurring EPS to €0.97, up 3.5%. Beyond operating leverage, we have two additional levers to optimize our cost base. AI and ESG. The first is technology. AI has enabled us to build a suite of tools that deliver tangible efficiency gains. AI-driven building management system to optimize energy consumption in real time. A new data lake centralizes our operation to unlock further savings. And by automating high-impact workflows, our AI agents are delivering a return on investment above 20%. The second is ESG. Our decarbonization strategy lowers energy costs structurally through lower consumption of renewable energy usage while keeping us on track for net zero by 2030 with emissions already down 78% versus 2019. Together, these two levels reduced our cost base and directly supports profitability. On slide 26, our portfolio appraisal value continued to rise. They were up 2.6% like for like to 6.8 billion euro. That is 170 million euro increase since December 25. Growth was broad-based. led by friends up 2.9%. This growth is underpinned by rental growth, green certification, scarcity value, and above all, the transformation of our assets, which accounts for more than half of the value increase. This is value we are actively creating, not just market movements. We believe these valuations make a turning point. On the left, you can see that net initial yields have started to compress down 12 basis points since 2024. On the right, we detail the main drivers behind the increase in our portfolio value. Out of the 170 million euro like-for-like increase in gross asset value, 60 million came from rental income growth. Around 100 million came from asset transformation. This is nearly 60% of the increase. And 12 million came from the strong momentum of fields in Spain. In short, our valuation growth is driven by operational performance, not sentiment. On slide 28, our debt structure is a real competitive advantage. We have a well-spread maturity profile with no major refinancing needs before 27. Our cost of debt is fixed and low at 3% and expected at just 3.15% next year. In a higher environment rate, this visibility gives us the firepower to keep investing in growth. On slide 29, rising values and control debt reduced our leverage further. Net debt was broadly stable, while gross asset value continued to grow. As a result, EPRA LTV improved by 40 basis points to 39.3%. Here is the balance sheet at a glance. Leverage at 7.3 times, Maturity at 4.2 years. This is reflected in our earnings. BBB stable from S&P and Fitch and BBB plus from Fitch on senior and secured debt. Efficient and ready for opportunity. On slide 31, our value creation flows through net asset value per share. APRA NTA rose 3.3% year-on-year to 26.75 euros, with NRV and NDV up similarly. Consistent growth value transfer. On slide 32, put together, this is an attractive well-positioned returns profile. Cash flow growth, an NTI re-evaluation of 3.3%, High earnings visibility above 96% occupancy and a strong balance sheet. I would draw particular attention to shares liquidity where we have made a real estate change. Average daily number in our shares doubled in a year at 3 million euros and has now tripled since 2019. This deeper liquidity opens the store to a whole new pool of institutional investors who applied strict liquidity thresholds, broadening our shareholder base. On slide 33, this bridge shows how this strong first-half performance flows through to an upgraded guidance. From 1.81 last year, we initially guided to 1.84. Now, our strong H1 operational performance and the acquisition of Grand Cattini, already a creative, take us to 1.87 euros for a total EPS growth of 3.3%. I will hand back to Marie.

Thank you Pierre-Yves. It has been a great first half of the year and there is more to come. We will host Capital Markets Day on November 19th to announce our new strategic plan to 2030. Five key topics, our leading shopping centers portfolio, our asset transformation engine, growing revenues for innovation, balance sheet strength, and sustainable earnings growth. We look forward to seeing you in person. This concludes the presentation. We will now be happy to take your questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. If you wish to withdraw your question, please dial pound key 6. The next question comes from Akanksha Anand from Citigroup. Please go ahead.

Hi, good morning team. Thank you for the presentation. I have two questions and I'll go through them one by one. The first one is on the like-for-like portfolio value change. So it was 2.6% for the portfolio overall and 2.9% in France, which is actually higher than what, you know, your other European shopping center peers have reported. Is it reasonable for us to expect these trends to be more sticky in the future? As in, is that something that you expect to be outperforming going forward from here? and along with that if you could also provide some color on the investment markets and the opportunities that you see for future accretive acquisitions. That's the first one.

Okay, thank you for your question. As Pierre-Yves explained, the increase in the portfolio creation is driven by two main pillars. First, the robust rent growth and second, the asset transformation. and importantly, Appraiser did not change their methodology. We think that there are more to come on asset transformation. As you know, we have an objective of around 50 projects of transformation per year. We did 39 of them in the first stage, so there are more to come. I think it's really the rollout of a very strong strategy of transforming our assets As I mentioned, three good examples in the first semester, the Zara in La Beige, the Speedpark and Fort Boyard Park in Rennes-Sesson, and the Primark in Talavera, and there is more to come. So we are confident on our ability to continue to grow, to create value on our portfolio. On the acquisition, as you notice, we acquired Ketini. We have reached 50% of our objective of 100 million euros of acquisition this year in the first half meaning that we are on track. We have a pipeline of projects and we are confident in our capacity to reach our targets depending of course this is subject to market conditions so we will keep you posted on this important part of our strategy.

And just to complete, we are... No, you go on, sorry.

No, just on acquisition, our focus is on our free core markets and clearly we are targeting leading shopping centers when we can secure yields of at least 100 to 150 basis points above capitalization rates. That's what we are looking for.

That's very clear. Thank you. The second question is on Spain, actually, because there seems to be a pretty strong momentum in that market. Could you just help us understand what's happening there? The 7% increase in retailer sales obviously is much higher than what France and Italy have performed. And is Spain kind of, because of the attractiveness of the country, is that something that might become a bigger part of your portfolio going from here?

Thank you for your question. As you mentioned, the growth in sales in Spain is quite amazing, 6.6%. I think it reflects first the quality of our portfolio and second the fact that economy in Spain is booming more than in France and even Italy. So we are benefiting from this trend especially tourism is very high in Spain and we are very well located in Spain on the touristic area. and we think that there is more still to come in Spain and we are ready to catch all the good impact on the Spanish economy. As I mentioned previously, we are in an acquisition mode in France, Spain and Italy. We are looking for assets to acquire in Spain. Spain is a very competitive market so we need to find the right opportunity.

It's very clear. Thank you so much for taking my questions.

The next question comes from Florent Laroche-Hubert from Otto BHF. Please go ahead.

Good morning, Marie and team. So thank you for this presentation. I would have maybe one or two questions and I can ask one by one. The first one maybe is on the guidance on your slide 33. So actually we understand that in your guidance you have maybe taken into account the impact of your acquisition in Dijon. But shall we expect maybe also some disposals to be taken into account in 2026 or maybe you are more to look for disposals in 2027?

Thank you Florent for this question. So yes, we have uplifted the guidance from 1.84 to 1.87. Part of it comes from the kidney acquisition around 1 cent and 2 cents come from operational performance which is very strong with the improvement of the ABTA margin. Regarding the impact of potential disposal, we have already done around 15 million euros of disposal this year and the yearly objective is around 50, so we are working on it. We have the capacity to do it as we have done it and we have disposed of more than 6% of the total portfolio in the last three years at really good conditions. That won't impact the guidance for 26 as we are already starting the second semester, so the impact of potential guidance won't impact the guidance for 26.

Okay, thank you. And maybe my second question would be on your acquisition in Dijon. So you expect that it will be equity by plus 1% on net earnings on an annual basis. So shall we consider this as a first conservative estimate or do you already include maybe some some results regarding the transformation of the asset and upgrade of the operational performance.

Thank you for this question. So the 1% is the immediate accretive impact. As we have said, we are well above the target objective of 150 basis points above the cap rate for the net acquisition yield. On top of that, as Marie said, this center is really the kind of center that we are looking for, a leading shopping center. We have capacity to optimize the mixed merchandising. We have the capacity to make restructuring and to optimize the customer journey. So on top of that, there will be additional value creation.

And maybe my last question, so in terms of you have spoken about implementation of cost efficiency notably thanks to artificial intelligence, so shall we expect any further improvement in the future in terms of cost efficiency?

Yes, so artificial intelligence is starting to be really concrete within Carmina. It's not just a concept, but we are starting to develop really interesting solutions. By the way, for example, we are currently developing an agent dedicated, for example, to automated reconciliations for cash receipts with outstanding invoices. This is really important for us as we have more than six a thousand tenants so many invoices and it helps a lot the team to optimize the process and to be more efficient so we we have a good returns on it as you have seen last year we have improved the margin we are continuing this semester with an improvement of 80 basis points and there is more to come with efficiency around artificial intelligence solution deployments Thank you, that's very helpful.

Thank you very much.

The next question comes from Benjamin Legrand from Kepler Shoebrew. Please go ahead.

Yes, good morning and thank you for the presentation. I've got a few questions, I will go through them one by one, but the first one maybe is on the guidance, just quickly. Do we agree that there is no additional acquisitions or disposals in the guidance, meaning that if there is anything happening soon, that could be impacting the guidance again?

Yes, there is no additional impact, As I said we are entering in the second semester so there won't be big changes due to perimeter impact to the guidance so we are comfortable with that guidance and we will deliver that guidance.

Okay, thank you. Maybe regarding the specialty leasing and pop-up stores, they're up more than 8% year-on-year, so it's quite a good performance. I was just wondering how come you drive such a good performance in this area, and should we expect more to come in the second part of 2026 and 2027?

I think on specialty leasing, it's a good example of the power of the Carmilla platform. We have people on the ground, we have a great network and we have very efficient tools. If you remember, we launched ClickStand, an AI power tool in order to be more efficient. We have a very good streamline process because we have many leases on specialty leasing, so we need to be very efficient. and I think we can innovate to propose our tenant with new concept and be able to deploy it very quickly. So clearly it's a very good example of the power of Carmilla platform. We think that there is still to come and probably in the coming years a double digit growth in this pattern, in this specialty leasing.

Okay, clear, thank you. Maybe on Italy, because you didn't really mention anything this time. I know it's not your main geography, but it seems that the figures are a bit softer this time. Obviously, it's related to the change in operator, but I'm just wondering if you could add a bit more colors on the market, and what are you expecting for 2027 with the new operator? Are you looking for growth, or are you trying to reduce the exposure, basically?

Yes, thank you for this question on Italy. As you mentioned, there is a new operator for Italy. We have eight shopping centers. Seven of them are anchored with a new princess, a new operator. It is currently transitioning and running out new concepts. It can explain why footfall is slightly down, but retailer sales actually grew by 1%. So this proves the robust strength of our tenant mix. We are very pleased with our current portfolio. We consider our platform in Italy that the platform is a significant opportunity and we are clearly in a net buyer position in Italy as in Spain and as in France and we would love to expand if we find the right opportunities.

Okay, thank you. If I may, just the last question. You seem to emphasize your 80% of leading shopping centers and then 20% is a bit of the rest. Should we understand that those 20% at your capital market day maybe you're going to try to get rid of those 20% or transform it? What's really the plan for those 20% or should you just wait for the capital market day?

We hope to see you at the Capital Market Day for sure. Clearly, those 20%, first, they are not low quality, they are not bad and we like them. It's a network of convenience centers, checkout gallery, providing daily essentials. and clearly it's a valuable and very resilient segment. So it's not a problem to be solved. That said, clearly our direction of travel is clear. Over the plan we are steering the portfolio toward more leading shopping centers through acquisition and disposal. We want to buy leading centers like Ronchettini, and we are a selective seller of non-core assets like we did with Wider Summers and the idea is to recycle the asset capital and we will give on the exact phase, the term, the buyer universe, we will explain that at our capital market sale on the 19th of November.

Thank you very much, Véryclé, thanks.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Alex Kolsteren from Van Lanchet Kempen. Please go ahead.

Hi, team. Good morning. Thank you for the presentation. Two questions from my end. First one, so there's been a number of wildfires in essentially all of your countries you're present in. Have any of your assets been affected by this and do you see a change in consumer behavior? And second B, so the APRA vacancy rate you report now excludes the strategic vacancies. Why did you decide to change your metric here and what would the number be if you do consider the strategic vacancies?

Yes, on the, On the fire, first of all, we want to demonstrate our support to the people concerned by the fire. No Carmela Shopping Center is exposed to this area. And as you know, our portfolio is very widespread, and I think in terms of risk management, it's a kind of comfort.

On your second question about the EPRAS vacancy rate, we are just aligning with the market. So publishing the EPRAS vacancy rate as the body is calculating it. So the result is 96% of financial occupancy and 4% of of Vacancy. The impact of strategic vacancy is pretty stable. It allows us to develop restructuring projects such as Zara in La Beige, Primark in Talavera, so it creates value, but the idea was to align with the market practices and that was why we decided to publish the EPRAS vacancy as are doing our peers.

Okay, but let's say you would have provided the number as you did previously, what would it have been?

Yes, we can of course, there's no problem with the strategic vacancy, it creates value, so it's around 1.8% and it's pretty stable and it has always been very stable over the semesters.

Okay, so the EPRA occupancy rate is roughly 94% then in H1.

No, no, EPRA vacancy rate is 96%. That's how it's calculated. That's how our peers are calculating it. So that's why we decided to align with the peers and the EPRA occupancy rate is 96%. Okay, thank you. we have a few questions on the chat the first one is about the acquisitions do we target the centers attached to Carrefour or can we look at other hypermarkets operators centers attached to other hypermarket operators yes we can we can buy

the kind of assets we would like. So no problem to buy an asset anchored by another operator. As you know now, Carrefour is anchored mainly with Carrefour Hypermarket and we are very happy with that. But we have in Italy eight shopping centers without the Carrefour Hypermarket and in France now two centers without the Carrefour Hypermarket. So clearly our acquisition policy is clear. We want to acquire a shopping center in which we can create value. And if it's anchored by a car for aftermarket, it's very good. If it's anchored by another aftermarket, it's good also.

And the second question on the chat is about the share buyback program. Do we plan to launch a new share buyback program? So on the share buybacks we have already done 20 million euros during the first semester. Last year the total was 30 million euros. We are currently happy with the 20. We haven't decided to launch a new program for the third quarter, but we will keep you updated for the fourth quarter. And then the question about the heatwave impact on visitors' numbers and retailers' revenues.

So clearly in June, especially in France, it was a positive impact on the footfall. Not major, but a positive impact. I think everybody realized that when it rains, when it's cold and when it's very hot, the shopping center provides a comfort for the visit, which is very appreciated by the clients. and we tried to be very in touch with local authorities during the heat wave. For instance, some schools came into our centre to do the class, especially in Montaisson near Paris. So I think it demonstrates that we are a place that gives comfort and that we are very anchored in the local authority in order to be part of the social link which is very important for us.

And then a last question, where will the capital market day be hosted?

Well, thank you for this question. We will host it in Paris because we think it's more convenient for a lot of people. And we will organize after this CMD visits our shopping center, especially I can announce it in Rennes in order to see the new leisure complex in our Rennes Saison shopping center. I think there is no other question, so I thank you for your attention. Have a nice day and have a nice summer. Thank you very much.