Metrovacesa Sa Metro

Hello, good morning. Welcome to the MetroBathesa 1H2026 results webcast. My name is Juan Carlos Calvo, Director of Corporate Development and Investor Relations. And with me today, as usual, we have Jorge Pérez de Leza, Chief Executive Officer of MetroBathesa, and Borja Tejada, Chief Financial Officer. Together, we will present an overview of our operating activity and financial results for the first half of the year. The presentation materials were released this morning and are available on both the CNNB website and the company's website. We have also distributed them by email to our usual list of analysts and investors. At the end of the presentation, we will hold a question and answer session. And if you wish to ask a question by phone, you may register at any time by pressing star five on your telephone keypad. And if you are joining via webcast, you may submit your questions directly through the webcast platform. and we will address them during the Q&A session. Now, Jorge, please go ahead.

Thank you, Juan Carlos, and good morning, everyone, and welcome to our first half of 2026 presentation. I will start with the highlights, and I would title our results as solid in this first half of the year. Our total revenues are close to $316 million, which is 2.4 times what we had last year, mainly driven by 809 units delivered in this period. We are also confirming our gross margin improvement, which stands at 27.2%, boosting our EBITDA to close to 50 million euros and also a positive net profit of close to 18 million euros compared to negative figure last year. We've had a strong cash flow generation of close to 130 million euros and also with a stable debt position despite the significant dividend that we already paid in May of almost one euro per share. In the market context, we will see that the Spanish housing demand remains at healthy levels despite a moderation that we see in some transaction volumes, especially in second-hand and in some limited markets. I think I will skip page number seven as we will touch upon the details later on in the presentation. I hand it back to Juan Carlos to give us a brief overview on the market. Page number eight.

Yes, just briefly comment on the recent figures about demand. The number of transactions seems to be stabilizing above 700,000 units in the year. It's true that in the last few months, at the beginning of the year, we have seen some slowdown in the volume with a decline of around 3% year-on-year. but actually the total figure stays above 700,000, which is, in our view, a very healthy and robust indication of demand. On the other hand, house prices continue to increase. According to the official statistics, they're still growing at double digits year on year, driven by the imbalance between supply and demand. and construction costs are showing some volatility in the recent months but they are growing by lower growth rates than prices and this is supporting development margins. On the other hand, mortgages are growing slightly more than the volume of transactions. That means that the penetration of mortgages is rising slightly to around 72%. But overall, these pictures and overall quite a healthy situation of the housing market in Spain.

Yeah, thank you, Juan Carlos. So moving on to the operational figures in terms of residential deliveries, We delivered a total of 809 units, which is almost double what we delivered last year, and with an average selling price of €343,000 per unit, which is an 11% increase. Basically, with this number of deliveries, we provide a more homogeneous distribution of the deliveries throughout the year, and also gives us more clarity on our target to deliver around the same units as we delivered last year. As I mentioned before, our margin improvement consolidates and we stand at 27.2% gross margin compared to 22% last year and our deliveries have been focused on key markets like Valencia, Sevilla, Barcelona, Malaga and some in the Canary Islands. In terms of pre-sales, we pre-sold in total 607 units which is an evolution consistently consistent with our strong pre-sales coverage for the coming years and for 2026 as well, obviously, and represents a 15% quarter-on-quarter increase as compared to the first quarter. The average selling price of these pre-sales is above the figure we saw before and is close to 380,000 euros. Basically, we've also started commercialization during the quarter, at the end of part of the quarter, in some key areas like Los Terros in Madrid, which, as you know, is one of our strategic developments, where we have close to 2,000 units to be constructed and delivered in the future. Also in Murcia, where we have an area which is functioning really well at the beginning, and we have around 550 units in total. and also in Lleida with a project of 240 units or 250 in total where we started selling phase number one also at the end of the period. In terms of other key operational figures, our sales backlog stands at 2,900 units in total representing 1.1 billion Euro in future revenues with an average with an average price of around €370,000 per unit. Also, our future deliveries are well covered and the ratios keep improving, basically with 94% of the deliveries of 2026 already sold, close to 80% of 2027, and basically 40% of 2028. is also with a high reliability of close to 80% in private contracts with more than 10% down payment. We have around 3,400 units under construction. We've started 255 units in this first half of 26 and we plan to start around 1,800 units in the total of the year. So even if this figure may seem small, we are planning to basically start around the units that we've been delivering in the last couple of years by the end of the year. In commercialization, we have about 5,300 units with a potential revenue of 2 billion and a price per unit of around 380,000 euros. So we still keep seeing that on the backlog figures and future commercialization units the selling price keeps improving. 55% is already pre-sold and plus we have another 2,000 active units in the design phase that will come into commercialization in the coming months. In terms of land activity, we've had a strong land monetization period and the pipeline replenishment. In total, our P&L revenues in the first half of the year stands at 38 million euros. The majority is corresponding to the notarization of a plot in Valdebebas in addition to other minor residential non-strategic plots in non-core markets. Additionally, we've also sold, as you may have seen in our announcement and in the press, the Portos on Port building office building that we delivered that we sorry co-developed with Fishman Aspire which will have 7 million cash flow impact but doesn't show in the P&L in the revenue line because it's actually accounted for in the as in the equity method we also have 134 million euro in binding contracts which will come into the P&L in the coming in the coming in the coming years part of it in 2026 and part of it in 2027. And additionally, the ongoing commercialization, commercial development in the OREA project with the new office that we are doing in a turnkey solution for the fund ADREA and the two projects of VITA that are not included in the above figures. In terms of land investment, on the other hand, we have signed two JVs with Santander Alternative Investments we developed two co-living projects in Valencia and in Seville with Metroacesa holding 10% and the management of the projects and we will continue to explore new co-investment opportunities with other partners in the year additionally we've acquired a project with 367 units in total in Granada for social housing. Diving a bit deeper in our commercial portfolio, we continue reducing our GAF in this segment with 283 million now left, which is around 13% of the total Metro Bacesa gross asset value. In the Oria Innovation Campus project, to give you an update. The PDSA building with 585 rooms will be delivered in this quarter, in the third quarter of 2026. The Flex Building building with 519 rooms is progressing adequately in construction and will be delivered in 2027. And finally, the office building buildings with 48,000 square meters of GLA in which we are doing a turnkey solution initiated already the construction and we are already coming up to the ground zero level in the structure this represents our largest commercial development with over 350 million in total investment and also as I mentioned before we sold the the Portos on Port building to the GMP grid in the Spanish market Moving on to page number 14 in the ESG arena we continue implementing our ESG plan 2025-2027 which focuses on climate change mitigation and basically this area measurement and improvement on the carbon footprint of our developments also on energy efficiency environmental impact very focused on waste management improvement in all our projects and basically you can read our 2025 annual sustainability report that has a lot of detail on what we do on this area now I finished with the operational highlights and I handed to Borja Cajal our CFO for the financial overview

Thank you, Jorge. Turning to our profit and loss account, we delivered a very strong first half of the year with revenues reaching €316 million, up to 138% year-on-year, driven by higher residential deliveries and land sales. Residential revenues grew to €280 million, while land sales contributed €38 million. Importantly, profitability continues to improve. Residential gross margin increased from 22% to above 27%, driving gross profit to 75.5 million euros and EBITDA to 49 million euros, with an EBITDA margin of 15.6%. Despite 80 million of mailing non-cash impairments in certain conventional assets, we reported 80 million euros of net profit and 42 million recurring pre-tax profit, clearly reflecting the strength of the underlying residential business. In terms of operating cash flow, Cash generation was another key highlight. Gross operating cash flow reached around 130 million euros in the first half, demonstrating a strong cash conversion of earnings into cash. Beyond EBITDA, cash generation benefits from land monetization, including approximately 51 million euros from land embedded in deliveries and 45 million of cash proceeds from land sales. while maintaining disciplined investment levels. The strong performance underpins our confidence in reiterating our guidance of more than 200 million of gross operating cash flow for the year end. In the slide 18, despite paying approximately 137 million in dividends during the semester, our balance sheet remains exceptionally strong. net debt stood at 308 million euros, broadly stable versus year end 2025. We ended June with 160 million of cash, while gross debt increased to 393 million euros. Our ATV remained at 14.4%, comfortably below our long-term target range, from 15% to 20%. In addition, we continue to enjoy significant financial flexibility with more than 300 million of undrawn financing capacity and a syndicated facility with maturity at the end of 2029. In the slide 19, finally, our asset base continues to create value. Gross asset value increased by 3.2% like for life up to 2.14 billion euros supported by the performance of the residential portfolio. NAD stood at 11.55 euros per share, importantly after adjusting around 1 euro per share dividend paid during the period. NED increased by 2.6% compared with December 2025, demonstrating continuous value creation despite significant shareholder remuneration. Overall, our portfolio remains highly resilient with a strong residential structure and NED that continues to highlight the underlying value of the company. With that, let me hand over to Jorge for the closing remarks.

Thank you, Borja. So let me finish talking about the market. We see the market stabilizing at high levels with transactions remaining very healthy, over 700,000 total transactions in the last month, despite a slower beginning of the year. Some volatility in construction costs, but still outpaced by a house price increase. which in public figures has been quoted as 13% year-on-year on March 2026. Very solid performance on our side for the first half of the year with a more homogeneous distribution of deliveries. We confirm our gross margin expansion boosting EBITDA and net profit and with a solid pre-sales coverage that provides the visibility not only for the deliveries of 2026 but also for the coming two other years 2027 and 2028. And finally we reiterate our 2026 guidance that if you remember was gross cash per generation of above 200 million euro with housing development deliveries in line with what we deliver in 2025 and with significant growth in land sales. and that would be all for today. Thank you very much.

Thank you, Jorge. We are now ready to begin the Q&A session. We will first take questions from participants joining via conference call. If you would like to ask a question, please press star 5 on your telephone keypad and if you want to withdraw your question, simply press star 5 again. We will now pause for a few moments to allow participants to register for questions. Okay, our first question comes from Ignacio Dominguez, JD Capital. Please, Ignacio.

Yes, good morning. Thank you for the presentation and for taking my questions. Just one from my side on growth development margins. With growth development margin reaching 27% in the first half, could you provide more color on the sustainability of these margin levels? As we move into the second half, should we expect some normalization in margins due to a period mix, or do you believe for year 26 margins can remain close to current levels? Thank you.

Good morning. Ignacio Jorge here. As I said, we stick to our guidance of mid-20s. Now, mid-20s, you know, you can either take it as 25 or a range of between 24 and 26. If we take the range, I think we should be on the higher part of the range.

Thank you. Okay, the next question is coming from the line of Christophe Chaput from Odo, VHF. Please, Christophe.

Yes. Good morning, gentlemen. Hope my line is great. Thank you very much again for the presentation and congratulations for the results. Honestly, I've got the same question on gross margin. The second one was on your pre-sales, could you give us your monthly absorption rate that you experienced, let's say, on Q2? Thank you so much.

Thank you very much for taking the question as well. Okay, so the gross margin has been already answered. In terms of the pre-sales, we've had months between 2% and 2.5% on the way that we measure it. That, as you know, is different from some other developers. Our average in the last 12 months or 24 months, I would say, has been around 2.5%. So we are in between that and 2%. On that line, on the pre-sales figures, you could consider it like a low figure. I would like to elaborate a little bit more. Some questions have come already offline, whether this is due to the market slowing down or not. And I would say that no, the answer is no, actually, even though that the market may have some impact. But the reality in our line is that we are doing, first of all, market margin optimization. As you've seen, our pre-sales coverage is at 94% this year, close to 80% for next year. So, you know, we only have to sell about 90 units this year. and about 200 and something units for next year to deliver around 1,800 units. So basically, I'm not saying we need to slow down on sales, but we basically can maximize or optimize margins in those developments where we have few units left to be delivered. We've also had a couple of delays in commercialization starts of two key projects, one in Los Terros here in Madrid where we've actually started commercialization of our first project and a second one is coming very soon Los Perros is a huge development for us where sales will go really well in Madrid and we started selling in the end of the second quarter due to the after the final approval of the Proyecto de Reparcelación the reallotment project and basically this will drive you know more a significant sales in the second part of the years and finally we had some forced cancellations so if you see the gross to net figure in sales it may seem a little bit high but in three projects we actually did some cost re-engineering in order to maintain the targeted gross margins as we had higher costs than initially planned and that we talked to the clients and we told them that we are making some changes in the project some clients cancelled those cancellations by the way have been already sold again but we did have some forced cancellations and that actually drives that sales figure those three reasons you know to a figure that may seem a little bit low but it shouldn't be that way in the coming months thank you very much for the clarification very clear thank you

We don't have any more questions from the conference call and we will move on now to the questions submitted through the webcast platform. The first question from one investor is saying the CEO has referred to moderation in transaction volumes in some areas. Can you comment which areas are affected and whether moderation is also impacting sales of new housing stock?

Well, I I think in some areas what drives the slower market in some areas is basically at the end the affordability ratio what clients can pay we don't see that in key markets like Madrid, Valencia, Barcelona or even Seville and we do see some slowdown in markets where affordability ratio reaches something like 40%, something like that. Which market is that? It may be, for example, in Terrassa, even though I wouldn't say that, you know, as you know, Terrassa is a suburban area of Barcelona. But the reality is that we don't see that happening in all our projects in Terrassa. It's only in one out of four. So I wouldn't generalize completely that statement. but I think in general the market you know not just new housing stock but also second second second hand homes are seeing that slowdown that you see in the press which by the way is a slowdown of 3% or something like that which is not a significant figures and that will you know that is happening in areas where the affordability ratio is reaching figures that is already you know hard for to actually pay for the units. So in those areas, what we will see, I think, is that the prices will not increase or will increase at a lower pace, but I don't think that volumes should decrease because the actual demand is there.

Okay, we have another question from an investor. This is about a technical accounting thing about any relevant changes in financial reporting as a result of IFRS 18 in the results of next year?

Well, we have to adjust the structure of our profit and loss account for the new regulation and that will adapt Our financial statements according to the law, next year we are analyzing how we are going to change the structure, but with no changes in our internal procedures and our reporting.

Okay, another question for investors. Can you give us more details about the number of construction starts in the year? What is your expectation for the end of the year? I think you have actually made a point earlier, but the question is coming from there.

Okay, yeah, I think I mentioned it. So this figure, basically for the year, we are planning to As I mentioned in the key operational data, we're planning to start around 1,800 units, which is in line with the delivers of last year or this year. And some of the units have slipped. Some of the startups have slipped to the second part of the year. That's why the figure in the first half may seem a little weaker. The reason for this is related to the obtaining of the licenses. The reality is that almost in all the municipalities where we are at, it's taking us a little bit longer, one month or two months longer than last year or previous years in obtaining the license, which is sad, but it's the reality. But they are coming in the second half, and therefore we plan to start, as I said, around 1,800 or a little bit more units this year in line with our run rate. and this is not related at all to pre-sales because in these projects we have pre-sales levels above of what is required to get financing for the projects.

Okay, we do not have any more further questions from either the webcast platform or the conference call, so this concludes Metro Batesa's first semester 2096 results presentation. Should you have any follow-up questions, the investor relations team would be pleased to assist you. We thank you very much for joining us today, and we look forward to speaking with you again in the future. Goodbye.