Eurocommercial Pptys N V

Good morning, my name is Ilaria Vitaloni, Investor Relations Officer, and I'm happy to be on this call with Evertian Van Garderen, our CEO, and Roberto Fraticelli, our CFO, to present Eurocommercial's real results for the year 2025. Evertian will talk about the acquisition of Adion Shopping in Sweden, announced on Wednesday, and about the operational results of the company, followed by Roberto, who will discuss in more detail the financial results. We will then open the call for any questions and comments you may have.

Good morning, everyone. Thank you for joining us today. I will start with the acquisition of Avignon Shopping in Umeå, Sweden, and then move to our operation results for 2025. Let me start with Avignon Shopping, a highly strategic acquisition for Eurocommercial. On Wednesday, we announced the acquisition of Avignon Shopping in Umeå for a total investment of around 110 million. We expected to complete this acquisition on 31st of March, 2026. The map shows where Umeå is, fairly easy to reach from Stockholm by airplane, actually easier to reach than some of our other shopping centers in Sweden. Avion Shopping comprises approximately 45,000 square meters of gross level area around 80 shops and restaurants and 7 newly built large format retail boxes. Most importantly, the center benefits from a direct internal link to IKEA, which significantly enhances Avignon's destination character and regional pool. It has a catchment of around 270,000 inhabitants and the city is around 130,000 inhabitants, but with a growing population. Believe it or not, Avian Shopping even attracts customers from Finland who can reach Umeå by ferry. Umeå is one of the Swedish fastest growing cities. It has a young and highly educated population, driven by Umeå University, which has more than 40,000 students. This creates a structurally stable and recurring footfall base. The city has a dynamic and diversified economy. strong public sector employment and continued population growth. Demographic growth in Sweden has been concentrated in regional hubs like UMEA and Avion is positioned directly at the heart of this growth. Within 30 minutes, the center serves approximately 50% of the catchment population. That is a very strong accessibility profile, particularly for a regional shopping destination. And Avignon is a dominant regional shopping destination. It is anchored by IKEA with direct internal access, which is critical. IKEA is not just a tenant, it's a structural traffic driver from a local retail scheme into a true regional destination. The presence of IKEA drives high stable and recurring footfall, which in turn supports tenant sales productivity and leasing dynamics. By the way, the nearest other IKEA store is almost 400 kilometers away. Beyond IKEA, the tenant mix is attractive and diversified, combining fashion, sports, lifestyle, services and food and beverage. The seven newly built retail boxes provide flexibility and adaptability to evolving retail formats, which we consider strategically important in today's retail landscape. The gallery was built in 2016 and is BREEAM Excellence certified. The retail boxes are brand new. The total asset is modern, well configured and fully aligned with our ESG strategy. In short, this is not a turnaround project. It is a high quality, modern, dominant center with embedded growth potential. Here you will find a map of the shopping center, showing the gallery and the adjoining retail boxes, and the IKEA store, connected to the mall. There are 2600 parking spaces, which we jointly own with Inka Centers, the owner of the IKEA store of 30,000 square meters. You can see where the major brands are located. The pie chart shows a well-balanced tenant mix, with the usual, mostly Nordic brands, and a good restaurants offer. You should not forget that this offer includes the very popular IKEA restaurant with its famous meatballs and fish dishes, which although not part of our property, improves the dwelling time of the visitors of the center. From a capital allocation perspective, this acquisition is highly disciplined. In July 2025, we disposed of the Eco Mega Store, part of our shopping center Samarkand in Sweden. a non-core single-tenant asset. That disposal released capital at an attractive point in the cycle. With Avignon, we redeployed that capital with some additional fresh capital, of course, into a multi-anger dominant regional center with significantly stronger long-term growth characteristics. This is asset rotation in action. We reduce single-tenant exposure and increase exposure to diversified, destination-led retail. We improve portfolio quality, we enhance geographic balance, and we create additional income with growth potential. With the acquisition of Avignon Shopping, the country weightings will change, increasing our exposure to Sweden to 23%, reducing our exposure to France to 20%, and with the weightings to Italy and Belgium relatively stable. This transaction represents a clear step forward in strengthening and upgrading our Swedish portfolio. With this acquisition, Sweden becomes our second largest market, reinforcing our longstanding conviction in the resilience and structural attractiveness of the Nordic retail market. We operate exclusively in established, resilient European economies, Italy, Sweden, France, and Belgium. Across these markets, consumer recovery is underway when we look at the retail sales figures. Importantly, since 2023, online penetration has stabilized at approximately 12%. In addition, Sweden remains one of the most transparent and institutionally stable real estate markets in Europe. There is GDP growth, there is an improving household purchasing power, recently boosted further with the tax incentives provided by the government. and there are also dominant centers which continue to consolidate market share. Our portfolio consists of dominant retail destinations in resilient . We operate two complementary formats, five flagship regional centers, experiential and destination-led, attracting visitors from a wide demographic area, and 20 hypermarket anchor centers, essential, convenience-driven, and deeply embedded in local communities. These 20 centers are the first choice retail destinations in their catchments. They benefit from strong footfall, diversified tenant mixes, and high sales productivity. Avignon shopping fits perfectly in this last category. For us, it is plug and play. Let me now turn to our broader results review. 2025 was operationally strong. Like-for-like rental growth reached 3.4%. Rental uplift on renewals and re-lettings was 4.8% across 297 lease transactions. Retail sales increased by 3.4%. The most spectacular key performance indicators are the reduced OCR for the portfolio, down to 9.4%, and the reduced vacancy, down to 1%, showing a healthy property portfolio. Our collection rate stands at 99%. Footfall increased by 6.2% in flagship centers and 2.8% across the portfolio, despite temporary disruption from ongoing re-merchandising in some of our shopping centers. Huawei Shopping showed an outstanding increase in footfall of 10%. Last year retail sales in our shopping centres increased by 3.4% compared to 2024, with all four markets producing positive growth. Belgium performed particularly well as a result of the re-merchandising at Woloway, a process we internally refer to as the musical chairs. If we look at the various sectors, we see that most sectors performed well last year, with some clear winners, which were health and beauty, and hyper and supermarkets. January 2026 showed that the positive trend continues with a 6.5% retail sales growth for our portfolio. This time Italy produced a remarkable 9.5% growth. Like-for-like rental growth was 3.4%. The growth was driven by a material portion of organic growth and by indexation, although the indexation was lower in 2024 due to much lower inflation. The right-hand table shows the rental growth per country, with Italy's contribution being the highest. The company has always been known for its low occupancy cost ratios, and we are therefore pleased to report a 9.4% occupancy cost ratio for our portfolio as per the end of December 2025. This is lower than the OCRs we reported during 2025 and is clearly the result of growing retail sales. whereas rents increase modestly. This percentage is still one of the lowest in industry and implies that the rents are affordable and sustainable, as is also confirmed by the full rent collection figures that we have again reported. Healthy OCRs will in due course enable us to negotiate higher rents when renewals or re-lettings come up. Low vacancy is usually an indicator of the quality of the properties. Over the last five years, We have reported vacancy rates in our property portfolio ranging between 1.2% to 1.8% and with an average of 1.5%. We are proud to report that at December 2025 we were at 1%, the lowest number reported since December 2020. We are pleased to be able to report that on 297 renewals and re-lettings, An average rental uplift of 4.8% was achieved on top of indexation. These lease transactions represent 40% of the minimum guaranteed rent of the portfolio. And we were able to attract new tenants with our 101 re-lettings, achieving a much higher uplift of 8.8% and confirmed continuous strong demand from retailers to open new stores in our centers. The highest uplifts were achieved in Belgium and Italy. Over the last 12 months, the Italian leasing team signed 92 new deals, resulting in an overall rental uplift of 7.9%. 48 of these transactions were new lettings, producing an overall increased rent of 13.1%, with the highest uplift achieved in Egili, being 16.4%. In Belgium, at Allaway Shopping, the leasing team successfully concluded 15 lease renewals and re-lettings, resulting in an overall rental uplift of 5.8%. And these figures demonstrate that our prime portfolio continues to be well positioned for leasing retail space to expanding tenant base under sustainable conditions and at affordable rent levels. This slide provides an interesting overview of the sectors where we sign deals. The majority of the deals we concluded last year were in the sectors health and beauty, fashion, and food and beverage, i.e. restaurants. Our merchandising mix remains balanced. The main sectors are hypermarkets, which are our anchors, recurring daily traffic. Fashion provides strong destination appeal, whereas services and food and beverage enhance dwell time and customer experience. The diversification over a number of sectors obviously limits concentration risk. This slide provides the increase in gross lettable area of the various brands in our portfolio during 2025. Strong fashion brands like Zara took 51%, whereas in the health and beauty sector, brands like Rituals and Normale and MidiMarket took 32%. We continue to attract powerful brands such as Inditex, Rituals and Primark, reinforcing the dominance of our centers. Three more Primark stores are planned, whereas Rituals is present in all our centers except for one. We welcomed the Inditex group last year again with a number of stores and the group is now represented at 35 stores in our portfolio. Remerchandising has been, and is a very important driver of internal growth. We completed re-merchandising projects in Walloway Shopping and Carosello, but for three centres in Italy and our French centre Valtori, the re-merchandising projects are ongoing. Re-merchandising remains a key value driver. Look at the results. At Walloway and Carosello, the completed project delivered higher footfall, double digit turnover growth, occupancy close to or at 100% and a strong rental uplift. Egili in Florence is a prime example of proactive asset management. We are reducing the hypermarket footprint and introducing new international formats. A new full format Zara store has opened. A new pool and bear store has been added. And the opening of Lefties, the answer of the Inditex group to the Primark formula, is scheduled for the fourth quarter of 2026. The project strengthens EGLE's dominant position in Tuscany, enhances the customer journey it offers, and expands its catchment. You can see the highlights on this slide. ESG is embedded in our strategy. What have we achieved in 2025? Scope 1 and 2 carbon emissions reduced by 40%. Scope 1, 2 and 3 carbon emissions reduced by 23%. Renewable energy reached 93% in landlord-controlled areas, whereas waste to landfill declined by 7%. More importantly, we have nearly removed all gas installations in our portfolio. All assets are BM certified. 83% of our assets have an EPC label A, B or C. Green financing reached almost 1 billion. We continue to future-proof the property portfolio while enhancing sustainable financing. We make a significant effort to engage with our customers in our shopping centers, hence our good score on customer satisfaction. Obviously, we are participating in a number of independent ESG assessments, resulting in scores and awards as posted on this slide. This is not just ESG reporting, it is a competitive edge. More and more retailers and consumers demand sustainable environments, and your commercial is delivering. And now is the moment to hand over to Roberto to discuss our financial results. Thank you.

Thank you very much, Jevetjan. Thank you, everybody. You're quite numerous today. So good. We'll see it. We'll go first to the core messages that we want to give. And that's the financial highlights. So, as you see, the property investments raised with 3.8%, which is, you know, above the 4 million. That's very good because that means that the investment, as we will see shortly, that we have done the merchandising and the improvement of our centers actually deliver the good results. And you see that also in the increase in valuations. We also have a debt net which is very stable, and that led to a net loan-to-value ratio of 39.8%. That's a very good improvement because it's 1.5% less compared to last year. As a consequence, of course, then the APRA MTA also went up to 42.81. You will see a slide on this which will go much more in detail. The same is for the direct investment results. It went up to 131.8 million. We'll have a slide on that with a nice bridge as you all like. That led to an increase in dividend to 1.83, which is great. And I think one of the things we wanted to highlight was that actually in 2025, we basically had no increase in interest expenses. So we thought there was a very nice message for you to see. As I said, if we look at the valuations, you see the increase to over the 4 billion euros. You see the valuation changes compared to last year. What's very important to highlight is that the net initial yield and the total yield are actually the same as last year. So that means the increase in value actually came from the increase in rental income and the ERVs. So that's very, very positive. If we go to the key metrics, you see the net has been stable over 2025 to 1.6 billion. Interest rate hedging level is at 87. You know that we like it when it's around the 80%. And the direct investment result per share went up, as you saw, with 5 cents. Key financial metrics, they improved. Average cost of debt stayed the same. Interest coverage improved. Net debt to EBITDA improved. Average TV improved. The average loan maturity, we'll have a special attention to that, went to almost five years. So that's a big improvement compared to last year. The average interest rate maturity went down, but it's going to go up because, of course, we are very busy with our hedging policy. Let's see what we did this year in 2025. We were quite busy. It was almost a billion of refinancing that we did long term, and what we basically did, transferred all the debt into long-term. So we basically paid out all the short-term debt, which gave us then a lot of space for the acquisition as we see. What we did was we started with Sweden. We did a 555 million loan in Valbo. Then we attacked with Nordia. Another 20 million euros was done in June. And then we went over to Italy. So we started with Fior d'Aliso, 205 million euros. IGLI and Carosello in December, 270 million euros for IGLI and 200 million euros for Carosello. And we finished with Sweden, where we extended the loan for an amount of 600 million euros SEC. So altogether it's the almost one billion euros that you see. The effect on that is on the long-term borrowings, you see The shift has happened in the expiration dates of the loans. Basically, the main refinancing there in 2029, and we have a small refinancing in 2027 that's with ING. We love them a lot, so we think there will be no problem. I think what these two slides actually show, the one before and this one, is the strong relationship that we have with our banks. So I would really love to thank them for that because, you know, they're numerous. They are very, very cooperative, and they enabled us to do all these extensions which were planned. So thank you to all of them. Then if we go and see what we do with the money, that's always a very important question that you have. So as you can see, we had 190 million euros from cash flow operating activities. Then the disposal that Abertian mentioned, 14 million euros. And then we have the net increase in loan of eight. Where did this all go? It went to dividends, 71 million paid. It went to capital expenditures, which as Abertian said, you know, we used to increase the value and the importance of our shopping centers. And it went to other. And then it all went 31 million to cash. part of the reserves that we're using to acquire Avion, as you heard. If we go down to the net loan to value ratio and the hedge ratio, they are where we'd like them to be, so hovering around the 40%. We mentioned that we expect the contribution, the net increase related to Avion to be more or less 1.5%. The hedging ratio, as you can see also for the coming years, is expected to be around the 80%, so very, very stable picture. Let's go to the bridges that you like a lot. There you see the increase in IPRA MTA for the year. We started from 41.79. Then, of course, we add back the direct result and the indirect result. We take away the adjustment for the deferred tax and derivatives. Then we look at the dividend distribution and the euros that you got as dividend. And of course, there is a component for those of you who choose to take shares. We also have a nice foreign exchange movement that's related to the increase in the Swedish krona with the exchange rate with the euro. So that led at the end to the 42.81. If we then go to the direct investment results, Then you see you started from the 127.9 million. We added the rental income. We were a bit cautious, more cautious on the debt. You see then repair, maintenance, property expenses, and service charges. There is an increase there. That's also, of course, the merchandising projects that we are doing. And also for a little bit to a one-off positive variance that we had in France last year. The company expenses went down, 1.3 million, which we thought you might appreciate. The corporate income tax is negative for 1.7, but that's also related to a one-off positive that we had in Sweden in 2024, and that leads to the 131.8 million that we have today. Positive, what's the story? positive increase in earning per share, positive increase in dividend. And I think the core message that we want to give with this slide is that we are extremely, extremely thankful to all our employees because they've done a fantastic job. They really put a lot of effort in this. So thank you for that. Then we go to the guidance. The guidance, We said, you know, it will range between 245 and 250. We know it's cautious, but we also look at the current situation today. We don't sell scenarios. So we do think it's a good guidance for now. And then last but not least, the financial calendar. That's where we hope to see you again. We have the publication of the annual report on the 17th of April. Then first quarter results. annual general meeting, H1, and then the third quarter results. And on that note, let's send that to the operator.