Welcome to the half year results 2023 on the Investis Group conference call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants are 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 one on your telephone. Webcast viewers may submit their questions or comments in writing via the relevant field. 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 Mr. Stéphane Bonvin, CEO of Investis Group. Please go ahead, sir. Ladies and gentlemen, good morning, and welcome to this half-year result 2023 presentation, and thank you for your interest in Investis. I have today with me René Häsler, our CFO, and Laurence Bienz, our investor relations. The agenda will be as follows. I will start with the highlights, then I will continue with the market trends, and René Häsler will present to you the financial overview, and I will conclude with the outlook before the Q&A session. As introduction, I want to come back to 2022. In 2021, we saw inflation coming, and we decided to disinvest a part of our portfolio with the goal to take advantage first of the excellent market condition, to reduce our debt and our LTV, and also to be able to invest again in our portfolio at a higher yield. This decision was the good one, as we saw during these first six months. First, a contraction in the volume of transaction, but also a decrease of the price for residential properties in Romandie. Our view now is that the increase of interest rate had an impact of the global economy, which is slowing down. We no longer expect rate to rise sharply, and if the Swiss National Bank decide to rise them in September, we believe it will be the last rate hike. We then believe that now is the right time to reinvest in our portfolio on better terms, and we are actively looking for opportunities. During these first six months, we were also very active in the service segment. We were focusing primarily on operational performance, and now we are very well positioned to continue growing this segment profitably. So for the highlights, we had an excellent operating performance and a continued cash flow generation. But due to the market condition, we had also a lower valuation of the portfolio, which leads to a reported loss. On a group level, the EBITDA before revaluation and disposal reached CHF 24.6 million. The net profit, CHF 17.4 million. But our balance sheet is very solid, with a gross LTV little under 25%, with a strong equity ratio of almost 65%. On property segment, we had an excellent like-for-like rental growth of 3.1% for residential properties. Our vacancy rate went down to a very low 1%, and as mentioned, we had this negative revaluation of CHF 48.8 million. Regarding the real estate service, the top line grows 8.6%, and we could again improve our EBIT margin to an excellent 9.9%. Now, I will continue with the market outlook. To fine-tune our investment strategy, we monitor the following metrics. The first one is the migration and the demography. The net immigration in Switzerland for 2022 was +81,000 people. Canton of Geneva, almost +6,000 people, and Canton of Vaud, +7,000 people. And for 2023, the immigration should be again very high. We already saw in the Canton of Geneva for Q1, +2,004 new inhabitants. Regarding the construction activity, the demand for small apartment increase, the construction activity remain low, and we see also a declining, continuing declining numbers of construction permit. In Geneva, for Q1, the delivery of new apartment was plus 373 apartments compared to Q1 plus 1,017 apartments. So a strong decline, and of course, this means that the rental price continued to increase in Geneva. Regulation, the tax regime for corporation among one of the most attractive in Switzerland, continued to attract many companies in the Lake Geneva region. Capital market. Financial market, they are strongly impacted by the interest rate. 2022 and 2023 central banks raised interest rates sharply to reduce this inflation. This had an impact on the Swiss real estate market. The first one was a contraction in investment volume. Many funds, foundation, investor, had no longer the capacity to make new capital increase. The sales volume fell sharply. The property prices contracted, and the investors still active now expect higher return. Also, during the last earnings season in Switzerland, we also noted that construction equipment manufacturer experienced a sharp drop in volume, like Geberit, for example. The watch exports fell by 17% in July, and some industry are starting to see a drop in the order books. This weakening of the economy will have an impact on rates, and we believe that rates have peaked, and that due to the strong resilience of Swiss economy, our currency will become stronger and will be the first to lower rates again. So we therefore believe that the bulk of the rate hike has passed, and that the decline in the value of our properties should no longer be significant over the next few months. The attractiveness of investing in real estate in Switzerland should rapidly return as a result of these forthcoming rate cuts. Now, I will show you some graphs. The first one is the vacancy rate. As I mentioned, we could reduce our vacancy rate to a record low of 1%. We were never, since the last years, so low. If we look into the graph, we can see that the vacancy rate has fallen below 1% in June 2020 for Canton of Vaud. In Canton of Geneva, it stay around zero point four, very low. And overall, we saw that the vacancy rate is coming down for Switzerland to 1.3%, and this means that the price of the rents continue to increase. On the next slide, parallelly, we see that for the residential rental offers in Geneva, Lausanne, there is less advertisement on the market for a shorter period of availability. 2021-2022 compared to 2022-2023, we see that the number of adverts went down from 25,000 to 20,000, and the numbers of days online, went down from 25 to 20. On the right, you can see that the availability numbers of, of days dropped almost in all Switzerland. So you have 15% fewer online residential adverts in, Switzerland over one year. And this stronger demand is reflected by the shorter period of marketing. For Lausanne and Geneva, for example, is -6 days. On the next slide, for the annual rental growth for rented apartment in Geneva, we can see that for the first time, since 2010, the rents with tenant in place are growing, again. And parallelly, we see also with the green line that, when you have a change of tenant, the lease continue to grow around 7% for the six first months of this year. As I mentioned it on the next slide, in introduction, we had a significant slowdown in residential properties sales during this first half year. It went down for almost CHF 1.4 billion to CHF 0.5 billion. The next slide. We show you these slides, since years now. As you know, the margin between the residential prime yields in Geneva and the 10-year Swiss bonds was almost always around 2-2.5%. At the end of last year, we saw that this margin was very low, around 1%, and now we see that the direction is changing. We saw first that residential prime yields in Geneva, they are going slowly up, a little bit up of 2.5%. But in the meantime, we see that the Swiss 10-year bonds have been trending down significantly over the past two quarters. So we expect a normalization of this, but we see more that the interest rates, the 10-year Swiss bond would come down. So next slide. On this slide, we see that Wüest Partner is expecting that in 2026, there will be a shortage of 50,000 apartments in Switzerland. This should continue, first, due to the long approval procedure for new projects and also, actually, to the lack of interest from investors to invest in new projects. And we see that Geneva and Lausanne are in these red cities where the shortage is the higher, highest. So market outlook, if we do, we can see that globally, the—we have strong market fundamentals with a strong demand and a low supply. The demand for rental apartments in Lake Geneva region is fueled by ongoing strong migration. The vacancy rates are further decreasing in 2023, and there are no signs of reversing this trend. The rents are expected to grow substantially going forward. Parallelly, the combination of inflation and rising reference rates also push rents upward for in-place tenant, at least +3% for 2023. Yields and markets liquidity have moved more significantly in Romandie than in German-speaking Switzerland. The SNB interest rate hike is expected to end soon. Property yields might reach a peak soon. Also, residential portfolio have proven more resilient than commercial. Investis is now very, very well, well-positioned to take advantage of this actual market condition. On the next slide, this is the property we show you also since years now. The main change compared to last year is this drop of valuation, 4% from CHF 25.1 million to CHF 24 million. As mentioned earlier, of course, this is due to the market condition. We had, for the six first months, only +0.7% of rental increase, but should improve during the rest of the year. So the position of Investis in the real estate market in Switzerland is unique, as we are active in market where there is a constant situation of under supply. We have low vacancy rate. We focus on middle segment. The number of residential properties in city center does not grow. We have the higher rental growth, and as I mentioned before, the fundamentals remain strong. So now I hand over to René. He will present you the financial overview. Thank you, Stéphane. Good morning, ladies and gentlemen, also from my side. Yes, another set of excellent results and figures for Investis. On page 17, on the lower part, you see the highlights for the properties. This like-for-like rental growth in residential of above 3% is really an excellent achievement. And the further decrease of that vacancy rate to 1%, I think this is the bottom that one can get in our business. And as usual, I remind you that in this 1%, everything is included. All the renovations that are ongoing are counted as vacancy in that statistic. Real estate service is continuing its improved EBIT margin. We can post now a 9.9% EBIT margin for the first six months, 2023. Overall, group revenue rose to CHF 115 million, and I don't dig into the numbers because it's more important to see the segments than on a group level. But important, no change on the fundamentals. Continuous, very strong cash flows from the investments into the portfolio, with some 60% of the cash flows coming from that segment. Real estate service, a very high return on low invested capital, as usual, but the service is the main revenue contributor with almost 80% of the turnover. If we go to the first segment, properties, you'll see revenue small decline compared to last year. That is not a surprise, since we have 11 properties less than a year ago. We sold 10 in the first half and another 1 in the second half last year. I'll go into more details of the effect of these sales in the next page. CHF 26 million rent revenue on track, and as I said, a very strong like-for-like growth, 2.5% overall, and 3.1% for residential only. EBIT is this after the revaluation losses of CHF 49 million negative, but if you exclude that, we are still on track in improving the quality of the P&L of our property portfolio. Page 20, you'll see effectively these impacts of the sold properties. It's very important to understand the mechanics. So, with these 11 properties, we sold a turnover of or rent income of CHF 10.4 million on a yearly basis. In the half year 2022, we still had CHF 4.8 million rental income, as part of the buildings were sold in May, others end of September, and then the last one end of November. Also in the second half, we still had CHF 1.2 million rental income from these properties. These are all gone now. That's why we have CHF 26.2 million rental income this year. As a reminding information, we sold these properties CHF 63 million above the previous valuation by CBRE, which is roughly 20% above the book value. Cash flow from these properties in the last half year were CHF 3.5 million. That is an important information if you compare then the EBIT numbers in that segment. Now, on the next page, let's talk about these revaluation losses. Yes, CHF 49 million, it's a considerable amount, in line with our expectation, because I always told you that 10 basis points will amount to about around CHF 50 million. Now, CHF 49 million, and we had actually three effects in that number. One is discount rate, the other one is the rent increases that we posted above the expectation in the valuation 10-year business plan. And the third one is a slightly stronger CapEx for energetic renovations. At the end, the number came to CHF 49 million. If you compare that to the last couple of years, then the CHF 49 million is in line with the hike in the last years that was also driven by lower discount rates. The characteristic of the portfolio is still the same. We are residential, we are Geneva and Lausanne. Vaud is predominantly is Lausanne, and we are in the small apartments, one to three room. Our apartments is 86% of the portfolio. Still the same as before. Not a surprise, since we did not have any change in the portfolio in the first six months, 2023. Let's talk about our vacancy rate, which still goes south. 1%, as I said, record low. It's 0.9% in Geneva. It's 0.6, even low... No, it's a little higher than end of December, 0.6 for residential in the Canton of Vaud. And also commercial, we could rent some of the vacancies, and are down to 1.4% for our commercials, which is not large in quantity, but still it contributes. On the right, you see we still have rents 10% below markets as CBRE is guiding in our valuation exercise. As a reminder, 72% of our contracts are CPI-linked. That's why we could already increase the rents the last quarter, 2022, but also in the six months of this year. Unlike if the rents would have been to the official reference rate, then rent increases start only as of September this year. We still have a decent turnover in our tenants, 10%, and even so, we had 3.1% vacant like-for-like rent increase this year. We stick to the long-time target of 1%-2% on a yearly basis, like-for-like rent increase. A lot of information for the portfolio. Now, it's our service business. I would say, continuing our path of the last years. We could again increase the margin to 9.9%. As I told you in March, we are more in the camp of consolidating this margin. But for the first six months, we could increase it again by 20 basis points. Last year, in the second half, we had a margin of 11.4%. I would not expect that all these positive impacts that we had last year would repeat. It depends also a little bit on the weather, that we can, of course, not influence, but I would say we have decent progress in our strategy, and service business is performing very well. Two-thirds of our revenues are coming from facility services as we invested in acquisitions these couple of years. That's why property management is down to 34% within that segment. On the next page, you'll see the strong margin improvement over the last years. As I said, it goes along with the increase in turnover, partly by acquisitions, but also organically. And the margin, as you see, decent 9.9%, which is in line with our expectation. If you look below the operating profit, the EBIT, then we have the financials. We could probably for the last time decrease the financial expenses just below last year. This is on the one hand, we had also to pay, like everybody, higher interest rates on our debts, but the debts were considerably lower as we used the proceeds from the property sales last year to reduce our debt, which is now at just below 25% of the portfolio. So average interest in the six months was 0.5%, 0.55%. At the 30th of June, our cost on the outstanding debt was 0.77%. This will increase once we have repaid our bond. As you know, it's 0.05% interest cost, and maturity is the 9th of October. We cannot refinance these CHF 140 million with the same interest rates, of course. Tax is positive due to the loss that pre-tax loss, which is a result of the revaluation losses. So all non-cash, not a problem, but it gives a little tax credit of CHF 2.2 million. Net profit before excluding revaluation effects, CHF 17 million. So we are on track to earn and over-earn our dividend with operating profits. Yeah, balance sheet, page 27. No big changes to December or the previous year. We have the portfolio in the invested part in assets. We have financial liabilities at CHF 364 million. As you know, besides the dividend that we paid, CHF 32 million, we also had to pay federal income taxes on the property sales last year. This is only due in March after the year. That's why the CHF 22 million were paid only in spring 2023. Deferred taxes, as expected, down as a result of the revaluations and the strong equity at CHF 1 billion or 65% is one of the best in the market, I would say. Maybe an information on the right credit lines. As you know, we have to repay the bond, CHF 140 million. Our unused credit lines as we speak are above CHF 300 million, so I don't expect any difficulties in financing that bond. I close with the graph on our debt. You see the development and the hit in between end of 2021 and full year 2022. This is the, as I said, I mentioned, a decrease as a result of the sales, and this year, that small increase resulted of the dividend and, as I said, the federal tax that we paid. Operating cash flow, CHF 9 million in the first half year, reduced just that's accordingly. I will close on the ESG topic. Sustainability is also one of our priorities in the management discussions. We have a clear focus on improving the E and the S. And the E, we have now a dedicated 10-year plan in place to improve our footprint with energy efficient renovation or energetic renovation. Be more precise, to improve our numbers, which are, and this is not a secret, that will not be best in class for a property company. We will publish all the figures in the annual report that we will print in March, and we are full speed in preparing all this information for you. ESG is also important, not only for our employee staff, but also for our tenants. And we do everything that our tenants receive best quality apartments. And that's why, in our renovation program, we have every year still also a focus on improving the quality in there. Yeah. With that, I hand over to Stéphane for the outlook. Thank you very much. Thank you, René. So regarding the outlook, so mainly the residential properties market in Switzerland has solid fundamentals, as I mentioned earlier, despite the rising interest rates. So the demand for residential properties in prime city location remain healthy and strong. The net migration into Switzerland, and especially into the Lake Geneva region, remains an important driver and is expected to further grow. As I mentioned before, the residential market is expected to be short 50,000 apartment, especially in central location. The construction activity continued to decline due to rising interest and also, long approval procedure. So for our property segment, we want to continue to grow our portfolio, through targeted acquisition. As I mentioned at... After the results of the full year 2022, our goal is to buy the same EBIT that we sold for the half of what we sold. Regarding the real estate services, we want to continue to develop it profitably with the margin that as most, as René mentioned, is already high, but now we will focus on growth. And regarding our balance sheet, we want to continue our policy with low debt and strong balance sheet. Well, thank you for your attention, and now we are ready for the Q&A session. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets alone, and eventually turn off the volume of the webcast. Webcast viewers may submit their questions or comments in writing via the relative field. Anyone with a question may press star and one at this time. Our first question comes from Holger Frisch from Zürcher Kantonalbank. Please go ahead. Yes, good morning, and thanks for the presentation. I have a couple of questions. Maybe I'll take them one by one. First one would be, can you share your thoughts on the refinancing of the bond maturing this October? What are your plans or preferred options here? Yes. I mean, at the moment, we are less interested in the bond market itself, as the spreads, especially for investors are, I would say, not representing the quality of our rating on the one hand, on the strong balance sheet and cash flow generation on the other side. That's why we would probably wait for the markets to normalize and use our bank facilities to refinance the CHF 140 million. Thank you. And, maybe can you give more details on the negative valuations? Where did you see the largest individual devaluations in your portfolio, or was it more or less broad-based? As you could see, all the residential properties had a decrease, sorry, an increase in the discount rate by 10 basis points, and that contributed to the revaluation loss, and it's all over. Really, every property was hit by this discount rate increase. Okay, great. And then you said that there were higher estimates for future investments in energetic renovations. They were partially a reason for the devaluations. How will this affect your investment plans in the portfolio going forward? And maybe you can explain why you had much lower investments in your properties in H1 this year compared to last year? Can you repeat the last part of the questions? Because I'm not sure that I correctly understood. Can you maybe explain why you had much lower investments in your properties in H1 this year compared to last year? I don't know where you get this information from. Our investments were higher than in the last year. In the last year, we also had a purchase of a property. That's why you saw in a respective table in the external report, a decrease to roughly CHF 4 million or CHF 5 million. But in fact- Okay We invested more in the renovation in the first 6 months. On the one hand, the normal quality improvements in the apartments, which is kitchen, bathroom, and the water pipes, but also energetic improvements that we started and or concluded this year. When we talk about the valuation exercise by CBRE, then I can confirm that they increased their expectation of our future renovations in the planning. I mean, we stick to our previous information. We will slightly come to an end with the kitchen, bathroom renovations and use that freed up renovation potential to do energetic improvements. But we will also do the next 10 years slightly more to improve our footprint from the portfolio. These energy renovations, you know, you need to do them even normally you would not do that just because it is expected or is expected by law. I mean, we have a roof in all our buildings, and but these roofs are maybe not best practice anymore, and that's why we will do the refurbishing earlier than we would have planned before. That's why the impact. Okay, great. And then maybe, last one, a clarification question. The rental growth like for like for H1 was 2.5%, right? For the year overall portfolio. Yes. The 2.5- Okay, great. all in, and 3.1 is residential, and commercial was slightly negative. Okay, great. That's all from my side. Thank you very much. Welcome. The next question comes from Philipp Zucker from ZKB. Please go ahead. Yes, good morning. I do have a couple of questions. First one is, how do you see do you see already, opportunities on the current yields in Geneva to enlarge the portfolio? Yes, we are. So, the market is much, much, much more liquid than the first half year of 2022. I think we send minimum 2-5 offers per week. You have a lot of foundation institutional owners. They are selling residential properties around the Lake Geneva region. I think there are two motivations. First, ESG, they are not able to refurbish in Romandie. A little bit complicated for them. And the second motivation is maybe some of them, they have to reduce the leverage, so they have to sell properties. We are actually in discussion, and I think we should before the end of the year minimum 2 transactions at a very good price, at a good yield. Are you in competition with private or with institutional investors? I had a discussion yesterday morning, a long discussion with the head of transaction of UBS in Romandie. They said that mainly, you have a private investor now in the market. Institutional, they are out of now. They are now on the opposite side. They want either more to sell than to buy. I would say what, what we noted and also the decline of volume, CHF 1.4 billion-CHF 0.5 billion. If you take away the transaction of Givaudan, then, you imagine that the transaction is, is very low. The transaction level is very low. So what we are seeing now is more that there are a lot of process going on, but you have no closing because the seller, they have to accept the new market condition. That's the reality today. Okay. The second one is, do you think you can enforce, reference rate adjustments on all tenants? So also a second one next year, without any political issues? The reference rate is not really a benchmark for our portfolio and our tenants, as our contracts are CPI-linked. And yes, should the CPI increase, then we can adjust our rents. All our rent increases- I know there are- -by the tenants. I know there are like 26%, I guess, but do you think there is no political headwind, headwind against the second one? So far, we had no headwind in that respect, no. You know, you cannot say that during 10 years we have to decrease the rent due to the interest rate decreasing, and then when one shot, you two times, we maybe have to increase it, but maybe you read it this morning. They said that we will have to wait December for the next adaptation of the rate. So, at the end, you know, sometimes you cannot always decrease, and when you have to, for the investor, they cannot increase. So, at the end, mainly is the population money invested in real estate. Okay. And you might- And maybe additional thoughts on that. You know, we are in a market where there is high demand for our apartments and no real vacancies available. So, as a tenant, you maybe think twice before you challenge a market-related increase, and as I said, we are still 10% below market in average with our rent prices. Good. And, may you give us a guidance for the EBIT margin for the second half year or the full year? What do you expect in the service segment? In the service segment, of course, double digit, very low, very, very low double digit. To stay, I would say, flat on the development for the full year. Thank you. As a reminder, if you wish to register for a question, please press Star followed by one. Gentlemen, so far, there are no more questions from the phone. I have additional questions from the webcast. The first one was from J. Safra Sarasin: Which properties have experienced the highest evaluation, only due to discount rates, or were there other reasons? I believe that this question has already been answered. I flip to the second question from Maerki Baumann: Can we expect a similar like-for-like growth in H2, 2023? What kind of properties, transactions should we expect regarding size, yield, new or existing packages, or one by one, where do you stand in this process? So two folds, that question, can we expect the same like-for-like growth, and where do we stand in terms of transactions? I think that has already been answered, but the first part of the question, maybe, René? Like for like, I mean, we had the highest hike in the CPI in second part last year and the beginning of this year, and this is mostly priced in, in our rent increase. So I would not expect a similar like-for-like growth in the second half. But I don't know. I mean, I don't know where the CPI will be at the end of the year, but if there is, then we can adjust, but I don't think at the moment that we can repeat this 3% in the residential. Yeah. And regarding maybe the second part of the question, maybe an additional information, the where do we stand in process and regarding the size, etc. So our goal is really... So we sold almost CHF 7 million EBIT, and the goal is really to buy back this CHF 7 million EBIT as soon as possible at much better condition, as I mentioned. And where do we stand? So we are in two transactions very advanced, and we hope to close it very soon. But also, as I mentioned, we are sending a lot of offers, actually. That's it from my side. No more questions from the webcast. For any further question, please press Star followed by one. Gentlemen, so far, there are no more questions from the phone. Okay. Thank you again for your interest in Investis. We remain at your disposal for any bilateral question you may have, and we wish you an excellent day. Thank you very much also on my side. Bye-bye. Bye. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.