Tag Immobilien Ag U/Adr

Ladies and gentlemen, welcome to the TAG Immobilien Publication of Interim Statement Q1 2026 conference call. I am Hilly, the conference call operator. I would like to remind you that our participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Martin Thiel, CFO and co-CEO. Please go ahead.

Yeah, many thanks and good morning all. This is Martin. Welcome to our Q1 2026 earnings call. Let's start right away with page number three of the presentation, and I'm coming to the highlights. We think it's fair to say that the first quarter of 2026 was a very good one. Just looking at the FFO1 that came out in Q1 2026 at 49.3 million after 44.9 million in the comparable quarter in the previous year, so that's a 10% increase. So this is definitely a good start into the year, looking at some operational figures like like-for-like range growth. In Germany, we came out at 3.3% per annum, which is quite good. And in Poland, like-for-like range growth also remained quite high at 3.2% per annum. So a strong start into the year from the rental business. And also the sales business developed quite well. Looking at the development of the net income from sales in Poland, we achieved in the first quarter of 2036 a net income of 12.7 million. That compares to 5.0 million in Q1 2025. And also the number of units sold in Poland was in the first quarter of 658 units, stronger than in the same quarter of the previous year, so then in Q1 2025 with 592 units. Talking about the projects that we have ongoing, I think that's of course very much of interest. The antitrust approval for the Resilient Forensic Portfolio Acquisition opponent that we signed last year in August is still outstanding, but we really expect now shortly the decision. So therefore, we still assume that the closing will take place in the second quarter of 2026. So this should now happen really shortly, and what it can tell you is that, firstly, unchanged, we expect a positive decision. So an antitrust approval without any condition. And secondly, this approval is basically the only material outstanding closing condition. So once this approval is there, the closing will take shortly thereafter, so that's two weeks after the approval, we will have the closing. So therefore, as previously communicated, the unchanged expected closing to take place in Q2 2026. Second project refers to the state's business. Well, to make it short, we still look into strategic alternatives for Robit. Honestly, the main strategic alternative is your potential public offering existing of Robit shares on the Warsaw Stock Exchange. This is continuing to be evaluated, so not really a very different use that we can give you, but just to repeat what we have already said. It's the full year 2025, I must call. Firstly, we are fully committed to remain the majority shareholder for WIC, so this is not a strategic change. So this is not a sell-down of the state business. You know that we like this business a lot, that it makes for us a lot of sense to continue with both businesses in Poland, with the state business as well as with the rental business. So therefore, in all the considerations that we have, we are committed to remain the majority shareholder of ORBIC. And a second comment, which is also important for us, it could be an opportunity, but it's not a must. So therefore, if everything remains as it is, if we continue to be the sole shareholder of ORBIC, that's definitely not a great outcome. So let's look where we end up here. These strategic alternatives are still being evaluated. Looking into the balance sheet, for NTA, as not unusual for the first quarter, was more or less flat, but a quite nice increase year-on-year with a 7% growth. LTV is stable at a quite low 41%, but to be fair, that economically real LTV is more the performer LTV after the Polish acquisition. So once we have the closing of the reservoir in transaction, the LTV will be around 45%, which is very good. So even after the closing of this quite material acquisition, we are more or less exactly at our LTV target of 45%. There is an outlook for the next earnings call, which is the earnings call for H1 2026. As always, we will have also a full portfolio valuation with the H1 figures. And what we can give as an outlook is that we expect for the German portfolio a valuation result, which is more or less in line with the two previous semi-annual valuations. Just to remember, we had an H1 to H1 2025, a value increase of roughly 1.3%. In the second half of last year, we had a value increase of 1.8%. So somewhere in that range should be also the valuation results for the general portfolio in H1 2026. With today's results, we fully confirm, again, all of our guidance, so FFO1, and FFO2, this is fully confirmed, and as said, as we expect the closing for the FFOM transaction to happen in Q2, 2026, this is of course then very supportive for the guidance. Dividend pays out is for the 2025 financial year, 40% of FFO1, so therefore, We will have a decision next week in our AGM on a dividend for financial year 2025, which is 40 cents. As in the previous year, a script dividend option will be provided for our shareholders. And just to remind everyone, for this financial year, so for financial year 2026, we'll have an increased dividend payout of 50% of the 401. That's it with the highlights, and then let's move quite quickly to page number seven, a little bit more details on the actual results. Just repeating that FFO1 had a quite strong development, also quarter on quarter. So also comparing Q1, 2026 with the previous quarter, with a quite nice increase of around 4 million from a higher EBITDA of more than 5 million compared to the previous quarter, partially offset by a higher financing cost of roughly 1.3 million euros. And also on a per share basis, there's also an increase quarter on quarter by two cents, so therefore we should be on a good way to achieve our targets in financial year 2026. Page number eight gives some more details on our Polish safe business and the FFO2. And don't be confused that between the quarters, between Q1 2026 and Q4 2025, the result changed. So as always, nearly always, The fourth quarter is the strongest of the year, so therefore, as expected, Q1 2026 compared to the previous quarter was weaker. But as said at the beginning, compared to the start into the year 2025, we're already better this year. And this year, we will have a similar result development as last year. So over the quarters, you should expect growing results. with the strongest results then coming into play in Q4 this year, as most partners are headed over towards the end of the year, as nearly in every year. Let's take a look at page number nine. APRA NTA, as I said, remained more or less unchanged compared between the quarters. As I said, we expect, again, a positive variation result, so they should support the APRA NTA development in H1 2026. And if you compare the NTA development year-on-year, so Q1 2026 with Q1 2035, that's quite a nice increase of 7% per annum. Page number 10 shows the financial structure. As said, LTV currently at 41.0%. Performa after the R4R portfolio acquisition, we're at 45.3%, so right at our LTV targets. That's to assume that S&P confirmed its rating could be minus with a positive outlook. And already in March, 2026, Woolies has its rating BN3 with a positive outlook since June, 2025. We are right now in the discussion every year around this time of the year with the agency. And in general, we should have on the ratings definitely a good development as our financial metrics are quite strong. So not only the LTV has in the meanwhile a quite low level also, and that's also shown on this slide, that has potential depth to ABTR ratio standard 8.6 times. in the ICR level of more than six times. So this should be very good finance metrics also to support further banking developments. Page 11 shows the maturity profile. And just to explain, as I think we already did in the last conference call, We have indeed a quite strong current cash position of nearly 1.3 billion euros at the moment, which is good to have, but a lot of that will be used firstly for the R4R portfolio acquisition payment price, that's around 565 million, and our main maturity this year, the conversion response due in August 2026 of 470 million, will be repaid from this existing cash. So therefore, a lot of the cash that we have in the balance sheet is also designated as for purchase price and payment of , but still we are left with a quite sizable cash position, which is good as we want, as you know, to invest further in our Polish and also the German . Let's take a look at page number 13. Developments operationally of the German portfolio was quite good, especially very strong like-for-like rental growth. It was 3.3% in total. That's for us the highest like-for-like rental growth that we had in the last roughly three or four years. And this was mainly driven by higher rents from rent increases from existing tenants, which are basically Each bigger increases higher tenant turnover. So this basic like-for-like rental growth, which is more or less a rental growth without any big investments, was close to 3%. That should be a very strong number. Plus, with the help of some vacancy reduction, we ended up at 3.3%. Perhaps you've noticed that vacancy in our German portfolio increased by some 30, 40 basis points in Q1, but that's a normal seasonal pattern, so you will see in the following quarters that the vacancy rate in the German portfolio will go down, and we expect on a year-on-year basis a declining trend in vacancy, so as we started the year with 3.2%, you should expect that the vacancy rate at the end is lower than at the beginning, that would be also in line with what we have done. Page number 15 gives an overview of the Polish rental portfolio development. Vacancy here in all the units that we have finished for at least 12 months ago, so they are now stabilized. that are in the market for a longer time, is still at a very low 2%, so that should be a good proof that the demand is really strong. And rent growth is continuously there, so we could be at 3.2% in Q1 2026, at 3.4% and 3.2% in the years 2025 and 2024. On pages number 16 and 17, we see some figures regarding the policy space. I think I already mentioned that the sales results in Q1 were quite good. So 658 units sold compared to 592 units in the comparable quarter of the previous year. And also the number of apartments handed over, that's on page number 17, was with 311 units sold. And finally, again, summarizing our statement on the guidance, which is presented on page number 19, we are confirming again all guidance for 2026. So FFO1, the adjusted net income from State of Poland, and FFO2 should all be as expected and communicated in the part month. That's it from my side, so hopefully comprehensive and quick summary of Q1 2026. Thank you so far for listening, but of course, now very happy to take your questions.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Marius Pastu from Bernstein. Please go ahead.