Good morning, everyone, and welcome to the Covivio Q1 2024 Results Conference Call. As a reminder, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press Star 1 on your telephone. Alternatively, you may submit your question via the webcast. Please be advised that today's conference call is being recorded. Now, I would like to hand over the conference to Christophe Kullmann, CEO of Covivio. Mr. Kullmann, please go ahead. Hello, everybody. I'm happy to gather with Paul to present Covivio H1 2024 results. We titled "Transforming Semesters is Clearly My Feeling: Looking at the Market and Our Achievements." Let's start page three with the key highlights. We set ourselves three main priorities for 2024: financial discipline, earning growth, and portfolio rebalancing. At mid-year, we are well on track. We reinforce the balance sheet with new disposal agreements and reduced LTV while value starts to stabilize in parallel. We extract growth from our portfolio through asset management works. Our results are growing, and we started the rebalancing of the portfolio with two major deals. Let's go more into detail on this transforming semester. First, page 5, we see first sign of recovery on the investment market. Environment is improving, start of ECB rate curve, rebuild risk premium, stabilization of the yields. In parallel, after one of the most quiet first semesters on the investment market, investors start to be back. We have a renewed appetite for prime city center office with the first catch-up in German residential transaction with strong demand for hotels. This improving investment market was reflected into appraisal values over the semester, appraisal values which are at a turning point. Overall, values were down by a moderate -1.3%, -2.6% in offices with good performance in France and Italy, especially in CBDs, +2% in Paris. Germany, which accounts for only 15% of the office portfolio, continued to suffer. Stabilization in German residential with a +2.2% in Berlin, where we are the most exposed. Hotels' appraisals start to increase again at +0.5%, driven by good performances in some Southern Europe and France. Our portfolio is valued at EUR 15.4 billion group share, diversified with 42% in Germany, 34% in France, and with an average yield of 5.3%. Another positive signal for values is also reflected by the good progress we did on disposal program, page seven. As you can see, we signed for EUR 311 million new disposal agreement group share, close to EUR 500 million in total, an average 3% above 2023 appraisal values. This was made of offices for the largest part for EUR 142 million group share, mostly split between French offices to be converted into residential and Italian telecom asset in regions. We also sold German residential assets for EUR 129 million group share with 6% margin of which +40% on privatizations. To a lower extent, non-strategic hotel for EUR 40 million and 11% margin, reflecting the appetite for this asset class. The largest amount of disposal has been made with the GV we created on the EUR 274 million Berlin residential portfolio. As you can see on slide eight, it's a strategic and very interesting deal for us, a deal done in line with book values at an average yield close to 3.7%. Beyond that, it created a new partnership in German residential with the entry into this market of a large French institutional investor. It also shows the quality of the portfolio and local teams who will keep on managing the GV. We continue to stay exposed to the reversionary and privatization potential of this portfolio. Another key milestone of the first half is our increased exposure to hotels, as you can see page nine. As you know, Covivio is exposed to the hotel industry through its subsidiary Covivio Hotels. Over the semester, we took over 8.7% of Covivio Hotels through an exchange in shares. We now own 52.5% of Covivio Hotels. This is an equivalent to a EUR 500 million acquisition of hotels, which we know very well made of prime hotels in city centers of the major European cities. Main consequences are the increase of our hotel exposure to 20% of the portfolio with accretion on earnings per share and positive impacts on leverage metrics. Last but not least, page 10, there was a confirmation of the quality of our office offer. Following the evolution of the end user needs in office, we set a strategy based on three pillars we see on the left part of the slide: centrality with 94% core asset and 69% in city center, sustainability with 94% of assets certified and two-thirds with best certification levels, and with the best level of hospitality with high customer satisfaction. Based on this positioning, we record successes on ratings up 8% year-on-year, and especially translated in the sharp evolution of occupancy rate, now about 95%. I now lend the floor to Paul, who will comment on the operating performance and results. Thank you, Christophe. Good morning, everyone. So what Christophe said started to drive the operating performance in H1 across all asset classes. Let's start with hotels, page 12, with a continued sustained like-for-like growth of +5% over the semester. On fixed leases, which is 57% of the revenue, we recorded a 4.4% increase, benefiting from a strong indexation. In variable revenues as well, after a strong year 2023, growth continues with a +6% like-for-like despite the lackluster performance in Paris waiting for the Olympic Games, but this was largely offset by very strong performance in Germany, and as you can see, strong performance as well in the south part of Europe. Page 13, moving to offices, like-for-like rental growth has been as well one of the best we recorded so far. Like-for-like growth is positive, as you can see on the left part of the slide in each of our subcategories. +10% in city centers, which accounts for 70% of the portfolio, +8% in major business hubs, and +4% on non-core assets. This strong like-for-like growth was driven by our capacity to pass through all indexation to our tenants, then by the increase in occupancy as commented by Christophe, and also thanks to the strong uplift in the renewal. You can see the example on the right part of the slide, +9% on core assets, +15% in city centers. Looking now at German residential, page 14, revenues are up by 3.9% on a like-for-like basis, driven by indexation, by modernization programs, and also by relettings. On the relettings, as you can see on the right part of the slide, the trend is accelerating with +22% uplift on average, of which +35% in Berlin, which is a main part of our German residential portfolio. So overall, looking at page 15, what does that mean for our revenues? First, an increase by 1.8% at current scope, despite the risk positioning of our portfolio. That means that the reinvestment and reinforcement in hotels has largely offset the disposal in offices. Letting activity has also been a big support, as you can see with the blue column, with like-for-like revenue growth by +6.5%, driven by three main drivers: indexation, which accounts for three points, increase in occupancy and uplift on relettings, 2.9 points, and variable revenues in hotels. Overall, occupancy is also up by 40 basis points to 97.1%. So those revenue growths directly drive the earnings growth. And looking now to the financial results, page 17. So we accounted in the first half EUR 231 million of recurring earnings, growing by 3.3% over one year. As you can see in the bridge, office disposals impacted the results by -EUR 14 million. The departure of tenants on assets to be transformed into residential had also an impact of -EUR 5 million. Those two effects were more than offset by the start of the deliveries in the pipeline, by the decrease of the financial cost by EUR 4 million, by the reinforcement in hotel, and by the strong like-for-like rental growth we commented just before. Per share, adjusted earnings reached EUR 2.24 versus EUR 2.36 last year due to the increase of the number of shares following the Scrip dividend taken by a large part of the shareholders. On the balance sheet, then, moving to page 18 for the NTA. So EPRA NTA amounts to EUR 8.7 billion at the end of June. On absolute basis, it is up by close to EUR 200 million, mostly due to the reinforcement in hotels, the decrease in value being offset by the recurring results. On a per share basis, looking at the right part of the slide, NTA accounts at EUR 77.7 per share, down by -7.5% in relation to the fact that 77.5% of the shareholders choose the SCRIP option at a price of EUR 38.6. Moving now to the financing side, a strong H1 as well on page 19. So we continue to reinforce the balance sheet. LTV is down by 50 basis points versus end of 2023, very close to our LTV policy of below 40%, while we will benefit in the second part of the year for the full cash flow. Net debt to EBITDA is also down, moving from 15 times in 2020 to 12 times as of today. As you can see on the right part of the slide, our key debt indicators are LCR, liquidity covers the debt expiry until 2026. Debt maturity is close to five years. Cost of debt is at 1.7% and is expected to stay below 2.5% by the end of 2028. We continue to increase the part of our debt linked to ESG KPI. I now lend the floor to Christophe for the outlook. Thank you, Paul. Let's now talk about the future. Starting page 21 with guidance. Our increased exposure in the hotel sector and the strong performance over the semesters leads us to increase our 2024 guidance with recurring net result now targeted at EUR 460 million. That means EUR 4.30 per share versus initial guidance of EUR 440 million. Then, for the coming semesters, we set two main strategic goals. First, we intend to continue the reinforcement in hotels and second, to extract growth potential on the existing portfolio. Let's start with hotels. We like the asset class for its structural growth potential, as you can see page 22. Over the long term, it has demonstrated its ability to outperform inflation and GDP growth. Looking at the coming years, demand will remain strong with hotels, overnight stays expected up +5% per year by 2030. And in parallel, the stock of hotel under construction is limited at 2% of the existing stock, especially in the country where we operate. The market is structurally growing, and we are among the best players to benefit from it. Moving to page 23, we are one of the leaders in Europe with 311 hotels and EUR 6.4 billion portfolio managed by Covivio Hotels, which means a group share value of EUR 3.1 billion. We have a unique skill being able to manage the whole value chain from lease or to management contracts. We have relationships with the leading operators in Europe, and our portfolio is strategic for them as it has the best location in the major European destinations and ID certified. The strong position will enable us to generate new revenue over the coming years in addition to the positive market trend. See some examples, page 24, with total additional revenue from the existing portfolio expected above EUR 50 million. First, we'll benefit from the full year impact of the increased stake in Covivio Hotels with a further EUR 20 million. Then, the asset swap with AccorInvest will generate EUR 10 million of additional revenue in 2025. On top of this, CAPEX program, mainly on this AccorInvest asset, shall bring EUR 15 million revenues. And finally, we are also studying conversion of offices into hotels in Paris and Boulogne for additional revenue of EUR 7 million. Beyond hotels, our strategy is to continue to reinvent cities, especially in Paris and Milan. In Paris, for instance, page 25, we own 22 assets. Half of this portfolio is made of the orange portfolio we bought in the 2000s, 11 assets with break options by 2030. You already heard about the two committed project Monceau and Grand Boulevard with delivery in 2025 and 2027, but there is also further room for revenue growth. As a whole, with roughly EUR 450 million of remaining CAPEX, we should be able to create EUR 30 million additional revenues over the coming years by transforming these assets into private office or into hotels. Other example with Milan City, where we own 40 assets as a whole and also plots of land in Porta Romana. First, we will continue to deliver new buildings in Symbiosis near Fondazione Prada. We have further potential for 23,000 square meters, a bit more than EUR 100 million budget, and 7.5% yield on cost. Then, we will participate in one of the greatest urban regeneration projects in Milan on Scalo di Porta Romana. Overall, it's made of mixed-use projects for a total budget of EUR 500 million with around 7% yield on cost. In Germany, we own a premium portfolio, page 27. Mostly exposed to ACT, this portfolio is especially exposed to Berlin, 57% of the portfolio, where housing shortage is the highest. One competitive edge of this portfolio is also to be mostly divided into condominium. Page 28, this high-quality portfolio will benefit first from strong market fundamentals. Market trends continue to increase in Germany and especially in Berlin by +7% year-on-year on existing flats. There were a lot of comments on the latest Mietspiegel published in Berlin. In all locations, the rents reference indexed increased by 7.4% over one year, which together with 2-3 increases makes a +13% increase. This will enable to increase rents for existing tenants, but also reinforce the reversionary potential through future relatings. On average, reversionary potential is at 25%-30% in Germany and 30%-35% in Berlin, especially. We will also benefit from a strong asset management potential. As mentioned, we have a strong value extraction potential through privatization with 50% difference between selling price and book value in Berlin. These disposals at very low exit yield will mostly be reinvested into modernization programs with a much higher yield from 5%-10%. To conclude this presentation, it's been a transforming half year with positive signals on the investment market, stabilizing values, progress on disposals. In this context, we deliver solid like-for-like rental growth and growing results, and we are able to increase guidance and are now ready for the year round with a lot of growth drivers among our existing portfolio. We are ready together with Paul, but also with Olivier, our Deputy CEO, and Tugdual, CEO of Hotels, to answer your questions. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star two. If you wish to ask a question via the webcast, please type into the box and click submit. Our first question comes from the line of Florent Laroche-Joubert with ODDO BHF. Please go ahead. Hello. So thank you very much for this presentation. I would have two questions, if I may. So my first question will be on the investment market on offices. So what do you think now of the appetite of the investment market for offices, especially in France, in particular to the last events that we have had in the last months? That would be my first question. And my second question would be on the guidance for 2024. Could you please give maybe some more details on what could explain the rise of the guidance? Thank you very much. Thank you. Of the investment market, first of all, we put in the appendix of the presentation, I think it's page 40, some ongoing negotiations that we see today in the Paris market. And really, when you're looking to these examples, you see that really the market is changing compared to what it was just six months ago. Six months ago, a lot of people were expecting that prime yield will be at 4.5%, something of 4.75% for prime office assets in Paris. Today, we are really back to 4% and sometimes below 4%. So that's what we see today in current discussion negotiations that are public because all this information is public. That's what we just share in this presentation. On top of that, the evolution in the political field in France is not easy to understand. What we can say first is that we have only 34% of exposure in France today. Usually, when you are compared to other countries, we are well impacted in Italy for a long period. Today, we see the figures in Italy are really good. So we hope this situation will not last too long. About the guidance 2024, perhaps Paul, if you can give some updates. Yes. I mean, we have this mechanical impact of the reinforcement in hotels, which is the main effect of the rate of the guidance. And then the good letting activity in office adds a bit of more upside as well. So I mean, the biggest part is reinforcement on hotel. The second one is letting activity in office. Okay. Thank you. The next question comes from the line of Céline Soo-Huynh with Barclays. Please go ahead. Hi, Christophe and Paul. I've got three questions for you guys. The first one is about the Berlin transaction with CDC. Do you have any sign that CDC could take the other half of the transaction? My second question would be, do you have an update on Covivio Hotels' share offer to Covivio Hotels shareholders? And then my third question for you, Paul, on the guidance. Can you provide the EPS per share guidance, please? Thank you. On the Berlin transaction, no, the transaction is really clear that we will stay at 51%. It was also linked to the fact that we want to keep the debt in place. For that, we need to keep the majority of these transactions. So really, there is no willingness or possibility for CDC to take this 51%. After that, perhaps they could do other deals, but it is not today something which will be immediate. On the Covivio Hotel shares, we already published the results of the transaction. At the end, we were able to have 0.35% of the shares of Covivio Hotel linked to this public offer. It's roughly 13% of the free float. That was the only part that could contribute because all the major shareholders have decided to remain invested in Covivio Hotel shares. And Paul, on the guidance? Yes, on the guidance. But as you said, Christophe, during the call, it's EUR 4.30 per share. Okay. Okay. Thank you. Can I go back to the Covivio Hotels share offer? Why do you think it failed? Is it because of pricing? For us, just it's not a failure. Just to be clear, this mandatory offer was mandatory linked to the transaction with Generali. That was for us very good news, very interesting, and so on. After that, because we crossed threshold, we have to launch this mandatory with this offer. But it was as of today, and we are happy with the 0.35%, which is more than that what we had before. At the end, this transaction reinforced our exposure in the hotel sector, which was one of the main targets we have. This is roughly EUR 500 million of investment. After that, what I understand is all the other main shareholders are happy of the exposure into Covivio Hotels and want to contribute to the future development of the company. Yeah, makes sense. Thank you, Christophe. The next question comes from Stéphanie Dossmann with Jefferies. Please go ahead. Hello, everyone. I would have 3 questions, mainly. First one on the strategy on the German offices. What is your strategy on that? I mean, in terms of raising the occupancy, retenting with uplifts, positive uplifts, disposals going forward on that portfolio. The second question, so you're doing very well on the French offices. I would say the remaining challenge would be CB21. Could you update us on that one, please? And the third one relating to disposals. So the EUR 300 million you have currently under discussion, could you give some colors on the type of assets, locations, and so on, and buyers also, please? Thank you. Thank you, Stephanie. So on the German office portfolio, first of all, you see that in the figures, the German office portfolio remains the weakest part of the portfolio in our activity in the first half. It's around 7.5% of our asset today. We want to continue what we said during the last months to improve occupancy. It was done slowly, I have to say, during this semester, but it increased a little bit. I have to say today, this market continues to suffer more than the other office market. Today, what we see is linked to the evolution of the economy in Germany, also the fact that working from home in Germany remains more important than what we see in France or in Italy. So we will continue to push on the strategy to do the CapEx program that we will implement in the different projects we have in ICON, but also in Alexanderplatz. We see some improvements. We have done 14,000 sq m lettings and renewals during the semester, 9% increasing compared to past year once. We have also 3,000 sq m in ICON preletting. So that's some good news, but they are really something to continue to be done. If we can do some disposals, especially on the non-core part of this portfolio, we'll do that. But I have to say today, there is really not a lot of investors in front of us, so we prefer to keep these assets for some more quarters. But in the medium term, we will reduce our exposure in this activity. On CB21, in French office, yes, you're right, it's one of the main challenges we have in front of us for the following quarters. As planned, SUEZ will leave in mid-2025. We don't expect, I have to say, major impact for next year in EPRA, thanks to the termination fees in front of rental loss. So no major impact next year in our cash flow linked to this departure. We are currently defining the CapEx plan for the vacant space. It could be around EUR 50 million-EUR 60 million that we have to spend in the next two years. We are starting, I have to say, discussion with potential tenants. So for small surfaces or large surfaces, that really we have the two types of prospects today. Just to remember, CB21 is one of the best located assets in La Défense. We have today proven a very good track record with the occupancy rate coming from 80% to 100% last year. Today, the tower is fully let, 100% occupancy, about 15 per capita for various sectors. They also seem to enter because of this location, as I said before, accessibility, service offer, quality of space. That means that it's a challenge, but we have a lot of things to put in front of this challenge. And on disposals, perhaps, Paul, you want to answer on this? Just EUR 100 million discussions are mostly offices in France and in Italy for most of the parts, a bit of German residential and hotel as well. Yeah, that's what I can share out of today. It's moving forward. The next question is from Thierry Cherel with Natixis. Please go ahead. Hi all. I hope you are hearing me well. I think just a question about office first regarding the remaining EUR 300 million of disposals to be done. I would like to know what would be the impact on the non-core exposure. You mentioned 6% currently. I would like to see what would be next or after these disposals. And what would be the impact on the occupancy rate? Because it has improved. I would like to know if it's related to this disposal program or just very good asset management. Second question is on the German resi privatization. I would like to know how it goes and with what margin. And the next question is the last one for the hotel. Except the point that just would like to know if you will feel a free hand with the control of the Covivio Hotels now and maybe what would be the next step with this, even if our core deal is not done yet. Thanks for the slide. Very clear. Just would like to know how you expect to reach one-third of your portfolio and what's the timeframe for this. Thank you. Thanks for this different question. So first of all, on the disposals, I have to say, as Paul said, the EUR 300 million disposal has quite a lot of different potential deals that could be done. In terms of non-core office, what we are doing for the non-core office today is first to try to let some of these vacant offices. We have one pending discussion in France that could be closed in the coming months or weeks. We have also a lot of these offices in France that we want to transform into resi. And for that, it will take time to dispose of the asset, but really, that's something which is on track. For example, in Paris, Paris region is ready. We have also good news coming for the Nice asset and so on. But it will take time because transformation into resi will take time. We want also to dispose of assets if we can, but it's not, as I said before, for German offices, not the most easiest part to be disposed. Just on the occupancy rate increasing that we saw during the last months is really linked to asset management that we have been able. The figures that Paul shared before in terms of lettings are really good, mostly in France and in Italy when you're looking at this figure, but also in Germany. We increased it a bit a little bit also there. What we see really is that with the quality of the location of the portfolio we have, the fact that we put more services there, the fact that also we see companies going back into office, we are able to increase the occupancy rate, and we are pretty optimistic that that will continue in the coming months. On privatization, Paul, if you want to take this one. We sold on a consolidated basis, EUR 38 million of assets in the first half with an average 40% margin on the privatization. We continue to increase the pace of the privatization in Berlin at very interesting prices. On hotels? On hotels, so yes, today we have 52% of Covivio Hotels, but just to be clear, it's a limited partnership, Covivio Hotels. So we had already before the full control of the company. So that's really not changed a lot. Situation. What changed with this 52% is that we will not need to make a new mandatory offer if we increase our exposure in the company. And that will be easier compared to what we have to be done before as we were below 50% exposure into hotels. After that, in terms of allocation, what we say during the half-year results is that the long-term target of Covivio is to rebalance the portfolio to roughly equal between resi, hotels, and offices. When I'm looking to what we have done during the last two years, we had 60% offices before, today 50%. We have 15% hotels, today we are 20%. We are on track to do that, but it will take time. We are not in a hurry to that, but it's a long-term trend. What we will do, we will continue to dispose more offices than hotels in the future. We have some hotels that will be transformed into resi. If we can increase our exposure into Covivio Hotels, we'll do that, but that depends also on the willingness of the other shareholders. Thank you very much. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Jonathan Kownator with Goldman Sachs. Please go ahead. Good morning. Thank you for taking my questions. Just to follow up, perhaps on the last point you highlighted in the presentation that you want to continue to increase exposure in hotels. So just to understand, obviously, given none of the current shareholders wanted to sell on Covivio Hotels, are you planning to do acquisitions or what are the other ways you are contemplating to increase exposure to hotels? That's number one. And number two, more generally, I think on like-for-like rent growth, I mean, obviously, you had strong performance this time led by occupancy increase amongst other elements in indexation. Are you able to repeat that performance, or would you expect like-for-like rent growth to normalize? And if so, what should we have in mind for trends going forward? Thank you. Yes, in the hotel, yes, acquisition is something that we can study. We are, I have to say, today studying some acquisition in the hotel sector. So that's something that we have not done during the last semester. That's really a way for us to increase our exposure into hotels in the future. In terms of like-for-like rental growth, Paul, if you want to give some colors. Yes, sure. But we will have, let's say, a progressive decrease of the indexation that will stay high, but will progressively decrease. Nevertheless, we will continue to benefit from the increase in occupancy rate. The full effect of this increase in occupancy rate will be in 2025 and from the reversal potential. So I would say, all in all, we expect to keep a high single-digit growth in like-for-like for offices in 2024. Are you able to continue to push occupancy further? I mean, obviously, you've had great success in increasing that so far this year. Can you continue to do that, or are you reaching a limit at this stage? No, we intend to continue. That's the target. We have a good level of pipeline as of today in the three countries. So the target is to continue to increase occupancy rate. Okay. Thank you, very clear. Thank you, Jonathan. The next question is a follow-up from Thierry Cherel with Natixis. Please go ahead. Yeah. Sorry, just having asked my first question on the website, on the webcast, and then just would like to understand why the financial costs are decreasing. Could you just give us more colors? I just didn't get it. And the next question is just also a follow-up. You're not mentioning any valuation bottom. Is it finished? Thanks. So Thierry, first question on the decrease of the financial cost. The main explanation is the decrease of the average level amount of the debt. You remember that we deleveraged the company. So we decrease the amount of the debt, and it has a direct impact, positive, on the reduction of the interest rate cost. And the second one is the fact that the bond issuance of the end of last year has been invested at 4.5% yield. And so it has also a positive effect on the net financial cost on the P&L for the H1. Then second question on the valuation for H2. On the valuation for the, I use the word turning point. For me, that really is what I consider really that we are at this turning point. That means that we expect value to continue to grow in the half that they change really in the first half. That means German resi hotels and CBD office assets. Perhaps on some peripheral office assets, it will be some decrease that will continue in the second half. But really, our feeling is that we are today at this turning point. Perfect. Thank you very much. Gentlemen, there are no more questions registered at this time. Okay. Thanks, everybody, for listening to this call and for your question. We will meet also some of you in the coming days. Just to remember, we have our Capital Market Day that will take place in Paris on the 28th of November. Bye-bye. Thank you. Have a nice day. Bye.