Hello and welcome to the Klépierre 2024 full-year results presentation, hosted by Jean-Marc Jestin, Chairman of the Executive Board, and Stéphane Tortajada, CFO. My name is Ben, and I will be your coordinator for today's event. Please note that this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing Star 1 on your telephone keypad to register your question. If you require assistance at any point, please press Star 0, and you will be connected to an operator. I will now hand you over to your host, Jean-Marc Jestin, to begin today's conference. Please go ahead, sir. Good evening, everyone, and thank you for joining us. I'm delighted to present Klépierre 2024 full-year earnings. Once again, 2024 has been an exceptional year for our company. We delivered expansion from top line to bottom line and generated EUR 2.60 in net current cash flow per share, a remarkable 5.3% year-on-year increase. Crucially, it is also 5% above our initial guidance of EUR 2.45-EUR 2.50 per share. We served our shareholders with a total accounting return of 15%, with an 8.9% year-on-year growth on top of one of the most attractive cash dividend yields in the EPRA space. We have delivered a 6.9% EBITDA increase, a jump of 2 percentage points compared to last July guidance. This performance was underpinned by a 70 basis points improvement in the EBITDA margin and a like-for-like net rental income growth of 6.3%, representing an outperformance of 350 basis points compared to indexation. This achievement is a testimony to our ability to unlock embedded value through multiple performance drivers. On the back of high pent-up leasing tension across the entire portfolio, we have further improved occupancy, rent collection, and we are also benefiting from the tailwind of positive rental uplift on renewals and re-lettings. We are also capitalizing on our more than 700 million annual visitors to generate sizable extra revenues. These additional revenues grew by 8.4% on a like-for-like basis over one year, driven by more income, media revenues, turnover rents, and car park revenues. Our key demand drivers are solid, and we are operating in a supportive private consumption environment. Unemployment is standing at historic lows, enabling real wage growth and, in turn, feeding private consumption, and this proves that our business footings are robust. Moreover, we are benefiting from highly favorable long-term supply and demand trends. Structural forces shaping our industry include urban population growth and increasing purchasing power. As accessing downtown areas becomes more complicated, the one-stop-shop destination mall is the most accessible, comfortable, and comprehensive way of shopping, dining, and entertaining. In addition, while e-commerce growth is less prominent in continental Europe and more and more online return fees are being passed through, prime malls are profitable places targeted by omnichannel retailers as part of their highly selective expansion plans. Our conviction is that retail bifurcation is clearly ongoing, with banners focusing on fewer, larger, and better stores, and that is precisely what we offer them. Lastly, the absence of new supply in prime retail in Europe is another strong positive differentiator. We are benefiting from the scarcity of physical retail, with close to zero greenfield projects, very high barriers to entry, and increasingly stringent ESG constraints. In this landscape, Klépierre is set to play a crucial role and thereby secure long-term income growth. We currently operate 70 top-quality malls located in the largest European cities, with the best forecasts in terms of consumption. They attract more than 700 million visitors annually and generate more than EUR 12 billion in retailer sales in our stores every year. Our unique asset management know-how meets retailers' needs, and our platform brings them profitability. This long-standing, clear, and consistent strategy, coupled with favorable long-term trends, is translating into market share gains, as reflected by the sharp increase in visitor numbers during 2024. Footfall was up 2.5% year-on-year and by 7.5% since January 2023. Similarly, retailer sales also increased markedly by 4%, more than doubling domestic growth rates. As a result, leasing momentum has been strong, with tenants demanding more space in the best shopping centers, which is driving solid occupancy performance. We signed 4% more leasing deals than in 2023 and generated 4% rental uplift on renewals and re-lettings, while occupancy grew 50 basis points at 96.5%. We are continuously improving the retail mix of our venues to offer the best shopping experience and support the expansion of the best-performing segments and brands. We are re-tenanting towards health and beauty, sportswear, restaurants, and leisure, while promoting leading fashion retailers. As such, JD Sports and New Yorker have respectively expanded the total area they occupy in our malls by 62% and 102% since 2019. The same goes for Rituals, up 188%, Normal up 274%, Primark up 111%, while Inditex grew its footprint by 14%. Occupancy cost ratios have been sequentially improving over the past several years and now stand at the low level of 12.6%, thanks to the strong increase in retailer sales. Our laser-focused leasing initiatives have clearly translated into growing revenues over the last two years: 15% rental income growth, 17% EBITDA growth, 16% net current cash flow growth. Based on these strong operating and financial results, the Supervisory Board will recommend that the shareholders, at the forthcoming annual general meeting to be held on April 24, 2025, approve a cash distribution of EUR 1.85 per share, up 3% compared to last year. Looking at the current trading, this very solid trend is still undergoing, with operations well oriented in the fourth quarter, characterized by retailer sales up 3.3%, while footfall grew by 2.7%. Early 2025, we also continued to gain market shares, with retailer sales and footfall together up 2% in January, and leasing demand still very high, translating into a 4% positive rental uplift in renewals and re-lettings. In this context, we are confident of continuing to deliver net rental income and EBITDA growth in 2025. Especially, our sensitivity to financing costs is limited, with the 2024 average cost of debt remaining low at 1.7%. We have a well-spread debt schedule, with an average maturity of 5.9 years and only EUR 255 million to refinance in 2025. We enter this year fully hedged at a time of consensus on a declining rate cycle in continental Europe. Consequently, we expect to generate a 3% EBITDA increase in 2025 and a net current cash flow per share of EUR 2.60, between EUR 2.60 and EUR 2.65 per share. Last year, I announced to you that value stabilization should pave the way to a bottom-out. And here we are. For the first time in more than five years, EPRA NTA grew by 8.9% to EUR 32.8 per share in 2024, marking the beginning of a new expansionary cycle. This performance was fueled by a strong cash flow effect that drove valuations up 4.1% on a like-for-like basis. In the meantime, the average EPRA net initial yield of the portfolio has remained stable at 5.9%. Over the period, the investment market has turned more positive thanks to the recognition of strong performance of retail assets. Investment volumes in retail were up 21% compared to 2023. We also managed to close EUR 144 million in disposals, 38% above book values, with institutional investors back and participating in some major shopping center transactions at mid-single-digit net initial yield in continental Europe. Contrary to common predictions, retail real estate in continental Europe has coped with all crises and structural transformation: e-commerce, COVID-19, inflation, high interest rates, and a muted investment market. Cumulative risk premiums are at all-time highs and way ahead of any other asset classes. Positive market effects should be the next tailwind for capital appreciation. This is our conviction. Now, turning to capital allocation and the balance sheet. In 2024, we invested in two very attractive acquisitions for a total amount of EUR 237 million. O'Parinor and RomaEst, two super regional shopping malls, are the perfect illustration of our investment strategy. We focus on high-quality and dominant properties in large cities where we can implement our best practices and create value. These two acquisitions are attractive to NAV and attractive to earnings. Similarly, we believe in a disciplined approach to development and exclusively focus on extensions of existing assets. We only commit limited amounts, ensuring a controlled level of risk. We target a threshold of at least 8% yield on cost, guaranteeing high returns given current funding cost. We have a proven track record with all our projects delivered on time, with no cost overruns. In 2024, the highlight was the opening in July of the Maremagnum extension in Barcelona, with a yield on cost of 13.5%. We also launched an extension in Odysseum in Montpellier that will host a Primark megastore and a fully regenerated food offering. Yield on cost of this project is 9%, and delivery is planned for the fourth quarter of 2025. Our capital allocation strategy is underpinned by sector-leading credit metrics that position us optimally in the current cycle. Our financial risk profile is the best among the European real estate industry, with a net Debt-to-EBITDA ratio reaching a historic low of 7.1 and an interest coverage ratio at 7.4. Meanwhile, the upward revaluation of our asset portfolio contributed to the improvement in the loan-to-value ratio, standing at 36.5%, down 150 basis points over one year. The robustness of our balance sheet has also been acknowledged by the rating agencies. Standard & Poor's reaffirmed our BBB plus rating and upgraded Klépierre's outlook from stable to positive. Fitch also confirmed its A-minus senior unsecured rating with a stable outlook. Before concluding, let me add a few words about corporate social responsibility. In 2024, Klépierre was ranked first worldwide in the listed retail category by GRESB. Besides its remarkable achievement, Klépierre is also number one in the European listed real estate category. The group obtained a total score of 95 out of 100, up two points compared to 2023, and maintained its five-star rating, which is awarded only to the top 20 best-performing companies across all categories. I'm also proud to announce that Klépierre has once again been recognized for its leadership in transparency and performance in the fight against climate change by CDP. The environmental NGO has included the group for the first time in a row on its annual A List. This reflects the consistency of our efforts and our commitments to build the most sustainable platform for commerce by 2030. Let me conclude. Klépierre has a highly distinctive positioning. We offer high-quality earnings to shareholders, characterized by an uninterrupted growth from net rental income to net current cash flow, high revenue predictability, and a very cautious risk management approach coupled with solid returns. This is putting an end to my remarks, and now I open the floor to questions. Ladies and gentlemen, as a reminder, if you would like to ask a question or make a contribution on today's call, please press star one now on your telephone keypad, and to withdraw your question, please press star two. Also, ensure your line remains unmuted locally. You will be advised when to ask your question, but first off, we are going to take some questions from the webcast, so I'm going to hand you back to your host to take questions from the webcast. Thank you. Yeah, the first question from the webcast is from Philippe at the French asset manager. What is the outlook for indexation and like-for-like rental growth in 2025? So we see indexation at around 1.5% across our portfolio for 2025. Rental growth in our guidance is 3%, which is exactly the same level of EBITDA growth we gave, 3%. If we don't have questions on the phone, I will take another one from the webcast. Another one is from Danielle on the credit side. Could you give us the average cost of debt for 2025? So basically, we have very limited refinancing needs in 2025, with only one bond coming to maturity in October for EUR 255 million. And we are fully hedged for interest rates in 2025. So basically, we see the average cost of debt below 2%, between 1.9%, as we say, and 2% in 2025. Okay. So another one from the phone? Yeah, we have one from the phone. Please. All right. The first question comes from the telephone line from Pierre-Emmanuel Clouard from Jefferies. Please go ahead. Yes. Good evening. Thank you for taking my question. So the first one is on your capital allocation. So I know that you are never giving any guidance on acquisition or disposals, but maybe it would be useful for us to give us more colors on your view on the investment market currently. Do you see similarities happening like RomaEst likely to happen in 2025? And maybe can you give us our firepower today, keeping, let's say, a BBB plus rating or A-rating? And again, on ratings, can you remind us what are the main criteria to be upgraded by S&P in 2025? And are you meeting those criteria today? So thank you, Pierre-Emmanuel. Jean-Marc, just to start, you're right. We never and we'll never give any guidance on acquisition and disposals. But we have been quite active, and we continue to monitor the market. Sorry, I was interrupted. So Pierre-Emmanuel, thank you for your question. So as I just said, maybe I repeat, but the micro was off. We never give any guidance on acquisition or disposals, and we will never do. But the investment market has significantly improved compared to the last two years. We have seen a significant transaction in Spain, in Portugal, in Central Europe, and a bit in France. There are quite interesting transactions when we compare it to valuation. We continue to monitor carefully special situations and looking at different opportunities. But for the timing, there is nothing we can comment on. When it comes to our firepower to keep our rating, I think we have been quite vocal about it. So it's around EUR 700 million. And that's it. So maybe on the rating criteria. So basically, we are currently A- at Fitch and BBB plus positive outlook at S&P. The rating criteria to be A- is a debt-to-equity well below 45% and debt-to-EBITDA max 7.5. Today, we are within the two criteria. Okay. Thank you. And maybe a quick follow-up question. Would you be open or open-minded on contribution in acquisitions? And do you have a view on equity rates today, looking at your current valuation? Jean-Marc, Pierre-Emmanuel, that's a very generic question. So what we are looking at, and we have always been looking at, it's high-quality properties, big assets, dominant in the catchment area, in big cities. And the way to finance it, I would say everything is on paper, is open. But depending where we trade, I think we have enough capacity to use our balance sheet to finance any acquisition. So your question is quite theoretical today. And when it comes, the board will see what to do. Our share price has been doing quite well over the last 18 months. So this is a positive. Thank you. That's clear. Thank you very much. The next question comes from the line of Florent Laroche-Joubert, calling from ODDO BHF. Please go ahead. Yes. Good evening. Thanks for the presentation and congrats for these results. Actually, I would have a first question about the guidance. So for 2024, we have seen that you have been able to outperform significantly your initial guidance. So for 2025, you have a first guidance that is quite close from your recovering EPS in 2024. So how conservative is this guidance? And And in the same way, so how have you been able maybe to beat so much your guidance in 2024, notably from Q3 to Q4? Thank you, Florent. Jean-Marc, taking that question. I think I have the reputation, and probably Klépierre also has the reputation to be prudent when we are providing the market with the guidance. We prefer to provide good surprises to our shareholders. I think we enter into 2025 with a very optimistic view. The trading in 2023 and 2024, including Q4 and January, it's very encouraging. We have provided this guidance, which takes into account a 3% EBITDA growth with only 1.5% indexation. We think we can generate outperformance on top of indexation, as we have always done. We feel very comfortable with this guidance. I would say we see 2025 as a good year for Klépierre. We are confident to meet the guidance and probably at the top of the range of the guidance. Yeah, maybe to answer your question, how did you beat 2024? Thanks for that and maybe some. Sorry, Florent, just to follow up because you also asked, how did you beat for 2024? Basically, you can see that we have increased occupancy because we are 96.5, up 50 basis points over one year. We have also increased on collection rate. We had a very strong growth in additional revenue. So basically, when you add all these items, you understand we were able to beat the initial guidance in 2024 and even to finish a bit better in Q4 because Q4 was quite strong also. But Florent, maybe just to add, I think when we look at 2023 and 2024, retailer sales have increased by 10% over the last two years. And I have to say also that the leasing demand from retailers is quite amazing. And to a certain extent, we have been more than positively surprised by the quality of the demand. This is why, in fact, we have constantly improved our guidance. That's why I was just saying 2025, we see it also as a very strong year. We are currently in discussion with a lot of our clients to open new stores, to enlarge new stores. Most of the seeds that we have put in the ground in 2024 will have an impact on 2025. There is quite a high assurance of doing it. I have to say that the leasing market has been extremely good and even better than expected during the whole last two years. Okay. Thank you. So that means that's a follow-up question. I understand that maybe you could be positive also in 2025 for the valuation of your assets if we have a positive rental growth. I think what we have tried to figure out is when the valuers will, one, recognize that inflation, retailer sales increase year after year will help to increase ERVs and will have a cash flow effect, and I think this has been done, and if we continue in that direction, this should continue. I think the next step is that the risk premium that has been accumulated through retail bashing, e-commerce, COVID, inflation, interest rate, at some point of time, the retail asset should be treated a bit more like the other asset classes, so I think we can be positive on seeing those risk premium in the discount rate going down, and this will be a catalyst for further NTA growth in the years to come. Okay. Thank you very much. That's very useful. Thank you, Florent. The next question comes from the line of Jonathan Kownator, calling from Goldman Sachs. Please go ahead. Good evening. Thank you for taking my questions. The first one, where do you see the reversion? I mean, obviously, reversion has been improving gradually to 4% at 2024. I mean, if I listen to you, I mean, you're describing a really bullish picture, a really exciting picture. And when I look at your guidance, I'm coming back a bit to the previous question, but even at the top end of the guidance, we're looking at 2% EPS growth for 2025. I mean, obviously, you had a very good 2024, so maybe you've taken it early. But help us understand perhaps what are the things that can change and reversion is one where effectively that strong momentum that you're talking about would materialize really. I think we will. It's a bit too early in the year, but when we look at January numbers, we always do the guidance assuming that retailer sales are flat. January sales are going up by 2% all over the portfolio, which is a good signal. In a moment where, as we are quite exposed to France for a bit more than a third, we could have imagined that it would be lower, but this has been quite strong in January in all the segments all over the countries with some differences, but this makes us very confident. I think we will see how things evolve during the year, and probably in Q1, we'll have a bit more of colors. We always start the year with quite a conservative view on what we are sure to deliver, and our job is to outperform that. That's the way we do, and we think it's the right way to do. And just to add, Jonathan. Sorry, just to add something on your question. Footfall in January 2025 is also up 2%. So it's also a very good signal. And reversion is fully in line in January 2025 with the number we have seen in 2024. So just to give a bit more color on this front. Okay. So I mean, I'm sorry, it was a bit generic, but if we drill down into some of the metrics, right? You're saying, okay, so reversion is 4% right now, sort of retailer sales 2%, footfall 2%. If we think about occupancy, do you think you're stabilized at this stage? Do you have improvement opportunities? Do you have any risks outstanding? What about other revenues as well? I think you're highlighting that there's a sort of stream of improvements. You have 8% growth in 2024, which is good. I think you're guiding to more than that already. So help us understand a bit on all these operating metrics, how you think they trend all of them, please. Okay, Jonathan, I appreciate your question, but I think it's itemizing the business is probably a bit difficult. Okay. But let's try to, we have quite a numerous number of levers to continue to grow. I think reversion will be positive. I think occupancy, we can still increase it. I think we can also slightly improve rent collection. We can continue delivering more additional revenues. We can improve the ratio between net rental income and gross rental income by cutting cost. We can also be more efficient on our cost structure at the corporate level. We have multiple levels of growth, and each of them is participating to delivering growth. I think none of them will explain by itself the growth, but it's a combination of all this. And reversion, it's also part of it. Maybe one final question. I don't want to take the whole time, but is there something holding back the guidance? It's a different way of asking, maybe something non-operational. There is something that is holding back the guidance that is out there as well. We need to know. No, but Jonathan, as I've mentioned earlier, we have an increase in the interest cost in 2025 compared to 2024 because I say the cost of debt should increase. So in terms of million, it would be up, obviously. And also because approximately half of our business units are taxable, everything except France and Spain is taxable. So basically, you should also have a bit tax up. So if you have the positive 3% up, a bit more tax, a bit more interest cost, you end up to the guidance we have just delivered to you. Okay. Klépierre, perhaps one final one. Any chance of share buyback rather than acquisitions, or you're rather focused on acquisitions right now from a sort of capital allocation perspective? For acquisition, we'll tell you when it comes. Okay, Jonathan, it's difficult to predict. Okay. So we will only focus on what we think is right for the company, where we can add value, and we will see what happens in 2025. For the share buyback, it has always been an option to the board to decide. We did in the past. For the timing, it's not really on the table. We have strong organic growth. We deliver remarkable earnings. So for the timing, it's not on the table. Okay. Very clear. Thanks. Thanks for your help. The next question comes from the line of Celine Soo-Huynh calling from Barclays. Please go ahead. Hi, Jean-Marc, hi, Stéphane. Just one question for me, please. How likely is it for you to replicate the acquisition you have done last year? I mean, yields above the 9% mark, or do you see the investment markets coming towards your valuation yields closer to 6%? Thank you. That's a good question. And obviously, I'm not going to comment on what is our target, but I think what I can say is that the two acquisitions we have done, thanks to our strong balance sheet and to the fact that we are probably the only company which is buying and growing a bottom line. Okay. So we have seized those opportunities at the very right timing. Since then, the investment market has improved, and probably those very fantastic opportunities are no longer available in those terms. But I would say that there are many other situations where we could do acquisitions, which can be accretive to NAV and accretive for earnings for sure. Thank you. The next question comes from the line of Samuel King, calling from BNP Paribas. Please go ahead. Yeah. Hi, good evening, guys. Thanks for taking my question. Another one on external growth levers, please. And picking up on your comments on institutional investors returning to the investment market, which potentially suggests the window for opportunity for high-yield acquisitions is now closing. Kind of any more comments just on what the potential pipeline looks like, or even just the characteristics of assets in terms of size or yield would be helpful. And also thinking if the market is becoming more competitive, what the opportunities are internally, and any comments on perhaps the depth of opportunity in terms of the existing portfolio or extension projects where the yields on costs meet your return criteria. Thanks. So thank you for the question. And I apologize if I'm too generic on external growth, but I think what we are going to look at is where we are strong. Okay. So large properties, big cities, high sales per square meter, and where we can deliver growth. And the countries where we are probably very strong, it's France, it's Italy, it's Iberia. And that's probably the regions where we see more liquidity potentially. We are not excited about Germany at all. We are not very excited about Central Europe. Okay, so I would say that the strategy is always to try to reinforce our footprint where we are already strong. Scandinavia, it's a small country. The number of opportunities is limited, so let's focus on where 80% of our portfolio is: France, Italy, and Iberia. That's a big piece of it, and the big shopping malls. And the yields: any acquisition has to be accretive to our earnings and also to NAV. And maybe just to follow up in terms of kind of the depth of opportunity or asset management projects that are in your incumbent portfolio. Yeah. Basically, we spend around EUR 100 million a year on average in development CapEx, and we tend to launch one project a year. So basically, we have a pipeline of around EUR 700 million of retail projects, which are purely extension. It's not greenfield. It's not mixed-use. It's really extension of our current assets where we see some leasing tension, and we have a demand from large international retailers to come in or to expand. And we have a threshold of 8% yield on cost before committing a new project. And basically, we see a good opportunity to just invest in this pipeline going forward in the coming three, four years. So in terms of development, we have this pipeline, and we are very committed to make it happen. So do you have optionality to accelerate any of those projects if, for example, you wanted to launch two or three in a year as opposed to one to support some of the near-term earnings growth? So, Jean-Marc, I think we should just step back a bit. I think the strengths of Klépierre, okay, whatever we think, is that we have never and we will never commit more than what we have as a cash flow post-dividend. Okay. And that's the rule. Okay. And everyone who has tried to go over the rule, okay, they know what happens. Okay. So it looks limited, but that's accretive to our earnings. And when it comes to accelerating, we would love to do that. But going through the permitting issue, it's long, it's complicated, but we always do it. Okay. So next to come will be in Italy, where in some of our, I would say, two, three properties in the next, I would say, 18 months, we will start doing something. And very soon, one in France. So I think we have a reasonable timeline to start doing something in the magnitude of Stéphane. And as I said, we will never commit more CapEx, okay, than what we earn after dividend. Very good. Thanks very much. There are no further questions. So I will hand you back to your host to take some questions from the webcast. Please go ahead. Yeah. We have another question. Are you planning further disposal going forward? So basically, we have disposed close to EUR 2 billion of non-core assets in the last four years. So basically, we have already made the cleaning, I would say, of the balance sheet. And today, we have maybe the best credit metrics in the industry. So we will continue to gradually divest of very small non-core assets with a very opportunistic approach. In 2024, we're able to dispose of 144. Going forward, we think it could go from EUR 50 million to EUR 150 million, let's say, an average of EUR 100 million a year we can dispose of. It's a collection of very small assets. But the good thing is that we are able, and we were able in 2024 to dispose of them 38% above book value, which demonstrates also that we are a good seller and try to be a good seller. No, that is a good point, Stéphane. I think we are committing to two things. Okay. The first one, which is the most important, is to grow cash flow for our shareholders. Okay. And the second is to constantly improve the quality of our portfolio, which is made of two sub-items. First one, continue to invest in our malls to make them even bigger and better in their catchment area. And second, to streamline the portfolio. We try to do it at the pace which is consistent with the first, I would say, criteria, which is to continue growing the cash flow for our shareholders. We don't see any need to sell urgently or to sell because the assets are not good. We are just streamlining year after year the portfolio. Okay. The next one on the chat is, do you provide a guidance in terms of dividend payout ratio and what is your policy going forward? On this one, I would say that, as you know, Klépierre is really a cash dividend story, and we have never stopped paying dividend in the past. We prefer to look at dividend not through payout ratio, but more like cash dividend yield. When you look at the cash dividend yield, we are among the top three in the largest EPRA companies. So basically, we think we are in a good position. But without giving you a guidance, if you look at the sequence of the last four years, in Europe per share, it was 1.7, then 1.75, then 1.8, then 1.85. So I will not give you a guidance, but let you guess what could be the next point. And by the way, because we have also delivered on capital appreciation, when you add the dividend and the capital appreciation, you have a 15% total accounting return for 2024, which also demonstrates we are in a good position on this front. Okay. I think we have covered the point, and it's time for us. Thank you very much for your question, for your time today, and happy to follow up offline. Thank you very much. Thank you very much, and have a good evening. Good evening.