Earnings Call: Q2 2021

Jul 26, 2021

Hello, everyone. I'm particularly happy to be here with you at Egas' off year results presentation. The results are good and even very good. Given the current environment, it is a very strong performance. Before getting started this morning, I would like to recognize the hard work of our teams over the very busy first half for this year. The Board of Directors and I would like to thank them. Thanks to everyone's involvement, business was especially strong in each one of our 3 divisions in half one twenty twenty one. EICAD's business mix and the adaptable risk profile of our office property investment, healthcare property investment and property development business lines have once again demonstrated their ability to promote resilience, synergies and growth in these challenging times. Olivier and Victor will come back to this in a moment, but I would like to emphasize this. So office property investment division's strong leasing activity and several major disposals. The ESCA Property Investment division's continued expansion with its pre IPO preparation process underway. The Property Development division's residential business, which is trending up. As a result, our business are adapting to new market needs, even though we are still gradually recovering from the crisis. For example, we remain committed to setting higher low carbon goals by implementing the strategy that was presented to you last February. Our medium term outlook remains unchanged, in line with the strategic plan approved at the end of 2020 and wholly consistent with our purpose, which is now included in the preamble of Icard's articles of association. This purpose has been an asset for us. It has helped us stay on course. Our teams have been able to adapt themselves to the unprecedented COVID-nineteen crisis as evidenced by our half year results. As you will see, they are better than in first half 2019. I thank you for your attention, and I will now turn it over to Olivier, who will present our results. Thank you, Frederic. So good morning, everyone. So we are meeting this morning one more time through video. Hopefully, next time, we will be able to welcome you here at Open the Icard headquarters. So I am also with Victor Aubrey, our CFO. And after our presentation, we will have a Q and A session with the entire Executive Committee of Icard. So please don't hesitate to send a question to us by e mail or by phone. So let's start right now with the result figures and KPIs. I'm now on slide 7. While self evaluation is not my favorite exercise, but I think it's fair to say, as Frederic has highlighted, that Icard has been very active, not to say successful during the 1st 6 months of 2021. And our 3 business lines have performed very well this first half of the year, showing, if necessary, the solidity of our business model. Let me remind you that we are still in a sanitary crisis most of this period. We had a 3rd lockdown in France that started in April. And even if it was a smooth lockdown in comparison to the 2021 lockdown when we had to fully stop our construction style, it is still quite difficult to organize visits for office or health care premises, still difficult to welcome our residential clients in marketing suites. As you know, the sanitary situation is not entirely stabilized, but our half year result proved that ICAD is really able to cope with the COVID-nineteen crisis. So let's look at our KPIs. And let's start with the property investment activity, offices and health care. In terms of gross rental income, we have an increase of 3.5 percent, like for like plus 5%. Total rent amount to €348,000,000 And we have a very dynamic prior earnings, €2.43 per share, which is a significant growth of +5.9 percent per share. Regarding the portfolio valuation, it's almost stable and stands at €11,800,000,000 Our financial occupancy rate for the office portfolio stand at 90.2%, a slight decline on a like for like basis. We will come back to that. In our view, these metrics illustrate the more than strong resiliency of our property investment activities. Let's move now to property development with ICAT promotion. The very good news of this 1st part of the year is that we didn't have, as we had last year, shutdown on our construction sites. Therefore, we were able to book our entire revenues. Sales are up at €536,300,000 which is an increase of plus 79% compared to 2020 and maybe more important, plus 38% compared to the first half of twenty nineteen. The cash flow of Icard Promoso is now back in positive territory at €10,900,000 Last KPI that shows the positive trend of the business is the backlog that stand at €1,500,000,000 plus 2.1 percent compared to the end of last year. On the liability side, we have also very good news. The cost of debt keep decreasing at 1.35 percent and it's a record low level ever for OICAD. Now the average debt maturity exceeds 6 years at 6.4 years exactly. And our loan to value ratio has started to decline at 39.8%. So at group level, our EPRA NDV per share stand at €86.7 per share, slightly up by plus 0.8 percent. And our net current cash flow per share is at €2.57 per share. So it represents a double digit growth at almost plus 18% compared to 2020 and also plus 9% compared to 2019. With all those figures, again, we really do think that it is fair to say that 2021 1st 6 months have been more than satisfying for ICAD. I'm now on Slide 8. Here, I would like to highlight some of the key achievements of ICAD for this 1st part of the year, which has been a very dynamic period. Regarding our office property division, I would like to focus on the very dynamic portfolio rotation. We have completed 3 significant disposals for a total of €462,000,000 and it is significantly above NAV at the end of December 2020, plus 9.8 percent and also slightly above valuation at the end of December 2019. In terms of acquisition, we are and will remain opportunistic. We have closed 2 value add acquisition for a total of €243,000,000 1 is announced this morning and I will come back to it in a few minutes. Even more important, we also had a very strong leasing activity during this period. We announced this morning also 2 significant leasing transaction on 2 projects of our pipeline. I will come back to this transaction. Regarding our Healthcare Property division, it is a still growing portfolio, more than €200,000,000 of new investment during the 1st part of the year. And we have also announced the 7th June that subject to market condition, we will go for an IPO of eCasante by the end of this year. Xavier Cheval will give you more details about that in a few minutes. For Icard Promotions, our development subsidiary, thanks to a very strong demand for residential, as already said, a revenue growth of plus 79% compared to 2020 and plus 38% versus the 1st part of 2019. Important for the future, new orders are up by plus 20% at 2,613 units, an increase which is significantly higher than the market level. Finally, on the liability side, let me remind you the successful bond issue in January, a 10 year €600,000,000 bond with an annual coupon of 0.62.5%. So assuming we are close to the end of the COVID-nineteen crisis, we do confirm that TCAD is accelerating to deliver our strategic midterm roadmap. So some more details now on the performance of each of our business lines. So let's start with the Office Investment division and I am now on slide 11. The top three figures are reflecting the solidity of our rental office portfolio. 72 of our tenants are large corporates, listed companies or government agencies. Rent collection rate is still very high, nearly 97 percent and cost of default still very low, below 1.2%. In terms of gross rental income, it's an increase of +1.8 percent with a total amount of rent that represents €190,000,000 and it's a like for like growth of plus 9%. And with a total of 82,000 square meters signed or renewed since January, which represent more than €15,000,000 of net rental income, our asset management team has been again one of the most active on the market. And if our occupancy rate that stand at 90.2% slightly decline, let me highlight that the balance between new tenants and departure is positive. In term of land rent, it's plus €5,300,000 And we will also benefit from longer leases with a weighted average lease break at 4.2 years. Those figures do not take into account the 2 major letting transactions, totaling more than 30,000 square meters that we are announcing this morning. Let's go to slide 12 to say a few more words on these 2 significant relating transactions. First one, it's on the Frist building, our ongoing project in Isidio Molino, not far from open, our headquarter. We have signed 8 year lease on 14,000 square meters with a public tenant Paris Saint Campus. And we have also signed a 9 year lease for 16,000 square meters, again a pre let transaction on our Eden project, a state of the art building located in Nanter close to La Defense. It's a location that we know very well. And we have several office building there, including Origine and West Park 4 that we have completed this year. The tenant for Eden will be Schneider Electric for the French headquarter of the group. To pre let, large office scheme is clearly the DNA of ICAD. And our office building meet perfectly the requirement of large corporates for their premises. I'm now moving to Slide 13. A few words now on our office development pipeline, still a very strong driver for value creation. And look what we have achieved in 2021. We have completed 3 office schemes, representing more than 90,000 square meters and 36,000,000 in annual rental income. This include Technip Energy's new headquarter, Origine, nearly 65,000 square meters of office space in Nanterre, a very attractive and dynamic location. Another example is the new Latteco Air headquarter, a 13,000 square meters office building in Toulouse and fully pre let. And let's finish with West Park 4 also located in Nanterre and also pre let. So those 3 major projects represent a total investment of €565,000,000 for Ical and new value creation at completion of €192,000,000 which means a development margin of nearly 34%. And our current pipeline represents still €1,000,000,000 as of the end of June, and it's already pruned at the level of 46%. I'm now on Slide 14. As I said earlier, asset representation within our portfolio has more than actively resumed. We have announced during our Q1 result 2 transactions in Ville Juif and Millionaire 1 in Paris. And we announced this morning another transaction on the Silky Way building located in Lyon €438,000,000 Total disposal since the beginning of the year represent more than €462,000,000 And we have completed the transaction with a premium of +9.8 percent to 2020 NAV and maybe more interesting, plus 3% compared to valuation at the end of 2019. In terms of acquisition, we have also completed opportunistic investment for a total amount of €243,000,000 to transaction. This includes the acquisition of a building called Preriel in Nanterre for €60,000,000 right next to La Defense in an area again that we know very well. And the other one is the acquisition of Equinorve and I'll give you further detail on the coming slide. And those two projects have in common that they have 1st class tenant and a significant value creation potential through redevelopment in the medium term. Slide 15 now. Here we have some detail about the Equinor project. So those 2 large office building represent a total of 64,000 square meters and they are fully led to Renault. And we have an appealing cash on cash yield of 8% since inception. And the potential of value creation will be unlocked through a future redevelopment into a residential scheme when Renault will leave the buildings. And it's a good example of synergy and stronger complementarity between 2 of our business lines. On slide 16, now you have the main KPIs of our office portfolio. And these key metrics are quite stable compared to the end of last year and they are reflecting our operational solidity. Let's move now to slide 18, the 2nd business unit, which is the Healthcare Division. As we said earlier this year and the year before, the impact of the COVID-nineteen crisis has been very limited on this asset class. The figure confirm the very positive trend and a steadily growing business for Icat Sante. Our gross rental income amounted to €157,600,000 up by plus 5.6% and it's 0.6% like for like growth. We continue to benefit also from a very solid portfolio of tenants that are long term committed. The average lease break is 7.2 years and the occupancy rate is 100%. Slide 19 now. The growing in France and abroad is, as you know, one of our key objectives for Icat Sornet. And our total investment on the first half amount to €217,000,000 including 40% of that abroad. In Europe, E Cat Sante has completed its first acquisition in Spain with a preliminary agreement with the Amavia Group to acquire 2 nursing homes in Spain for €22,000,000 So this is a new milestone in the Icat Sante international expansion strategy. The total amount invested outside of France since the end of 2018 is now close to €740,000,000 But the facts and figures that you have on this slide illustrate the very favorable outlook Icat Sante. Icat Sante delivers in a very disciplined way its very ambition growth roadmap. And Xavier Cheval will come back to that in a few minutes when he will present the project of IPO for Icad Sante. On slide 20, you have on this slide all the metrics for Icad Sante portfolio. And this growing portfolio is by far the largest close to €6,000,000,000 and the most financially appealing with a cash on cash sheet at 5.1% is the most appealing SKA real estate portfolio in Europe. And again, Xavier will come back to that. Now on Slide 22, for our 3rd business line, property development with ICAD Promotions. Some figures that I have already mentioned. So the growth for the revenue for the 1st part of the year, it's an increase by plus 79%, up to €536,000,000 and this is also a growth of +38 percent compared to 2019. It is clearly driven by the residential segment with 2,600 new orders for residential apartments, a figure up plus 20% compared to the same period last year and plus 16.5% compared to 2019. Again, the very good news of the 1st part of the year is the fact that we have no shutdown for our construction site this year. Now looking at Page 23. I would like to emphasize the 2 key messages that illustrate the strong dynamic for our property development business. On one hand, I want to underline Icard's capability to meet the new market need and we are also able to increase and to renew our offer by resending to new urban practices and lifestyle. To illustrate this, let me mention the launch of our subsidiary, Orbanes des Bois. Corpin des Bois will develop real estate schemes that are both participative and very low carbon. Let me highlight also the fact that we put on the market more than 3,000 apartments during the 1st 6 months of the year, which is a +48% compared to last year and plus 36% compared to 2019. On the other hand, on the right part of the slide, you have our main KPIs illustrating the fact that this activity has still a growth potential that remained unchanged. We have a growing housing stock, plus 7.1% at more than 4,400 units, a backlog that stand at €1,500,000,000 and a potential total revenue coming from the residential portfolio of close to €3,000,000,000 And our medium term revenue potential is close to €7,000,000,000 for Ical Probuccio. So all the indicators are well oriented and we are very confident that we will deliver our 2025 ambition, which are €1,500,000,000 in terms of revenue with a margin of 7%. So I'm now handing over to Victor for the detailed financial results. Victor, the floor is yours. Thank you, Olivier, and hello, everyone. By way of introduction and in echo with Olivier's words, I would really like to emphasize the very good financial performances of all our businesses in this 1st part of the year. We may see it by getting into details of the income statement of our different divisions. Let's start on Slide 26 with a focus on our property investment business lines. We are talking here about Office division and Healthcare Swan. The key message to have in mind is that EPRA earnings for those divisions, which is 2.43 per share, it is an increase of 5.9%, are very robust and reflecting the dynamic growth of these activities. Our net rental income goes up by plus 4% on a year on year basis to at €333,800,000 Another important indicator is the improvement of our net gross rental income ratio reaching 95.9%. We clearly improved on that during the first half. I also want to underline our attractive APRA cost ratio. It stood at 14.5%, including vacancy costs, a quite low level ratio that reflects the good management of our operational and structural costs. The ratio only increased by 2 points even though the turnover increases significantly. These figures are clearly reflecting the good performance of our property investment business lines. In addition, also including the improvement of financial costs over the period, our EPRA earnings reached a level at €2.43 per share, as I said before, plus 5.9% compared to June 2020 and already back to the level of 2019, taking into account the increase of shares during the period. While the HOFI division is very resilient and solid, I will come to that in detail shortly. The part of the Healthcare division continued to grow during this period and has provided for 42 up points. Let's jump on Page 27. On this slide, I want to draw your attention on the strong performance of both business lines, Office and Healthcare. First, the financial results of the office property division remain sound and healthy. The main figures illustrate the resilient performance and the very dynamic commitments of our asset management team. Gross rental income grew by 2.4%, supported by significant deliveries during the half year, including Origine, Fontana and Lateco Air, as Olivier said earlier. On a like for like basis, gross rental income is up 0.9% with a +4.6 percent growth for our business parks subdivision. The net rental income grew by 1.5, a more limited growth, mainly due to the sale of fully leased assets. As I explained before, I'm taking into account a good control of operational cost and improvement in financial cost, the adjusted EBITDA earnings increased at €105,500,000 up 2.7% compared to 2020. Now, in terms of Healthcare Investment division, all the indicators are well positioned and reflect the continued momentum. We have a double digit growth in April earnings, plus 12.1 percent to €75,500,000 In term of gross rental income, it grew by 5.6 percent, stimulated by our expansion in France and abroad, with net rental income €156,200,000 reflecting a high net gross rental income ratio at 99.1%. To recap, our investment activities have remained dynamic, thanks to a very resilient activity for our office investment division and growing performance of our Healthcare Investment 1. We can now just switch to the result of our property development activity, the 3rd business line of the group. I'm on Slide 28. As Olivier previously said, the business revenue is here as we expected and in line with our Q1 results. Economic revenues for the first half grew by 78.6 percent year to year to €536,000,000 a 30 percent, 38% growth versus 2019. This variation includes, of course, a catch up effect, but also a strong commercial dynamic over the last few months, which is bearing fruit. Revenue from the residential segment rose by 81%, €458,000,000 that represents 85% of the total activity. This segment is also driven by a strong demand coming from both individuals and institutional investors, clearly back in the residential market since mid-twenty 20. I also want to highlight that we improved our operating margin at 5% on average, even 5.2% in the residential segment. And last but not least, our net loan cash flow is back in positive territory at almost €11,000,000 I remind you, it stood at minus €11.9 in the first half twenty twenty due to the construction shutdown. To conclude on that activity and on the back of a demand that remains structurally high, we are fully ready to address the challenges and are in line with our 2025 ambition roadmap. What are now the key points regarding the group net current cash flow? I'm on Slide 29. We are actually seeing a sharp rebound of the net loan cash flow by share, up 18% year on year at €2.57 per share and up nearly 9% compared to the 1st semester 2019. We can say this is a strong performance on a half year basis. This growth is obviously driven by the performance of our 3 business lines as we saw before. And perhaps even more, the positive effect of the recovery of the promotion, whose result, I repeat, have rebounded sharply after the crisis. The rebound of the net current cash flow clearly reflects our solid business model. This side, I would like a word on the scrip dividend option, a success with 85% subscription rate and therefore a demonstration of Icad's attractivity that had marginal impact on the indicator per share, allowing at the same time to reinforce equity capital. Let's jump on Page 31. On this slide, I would like to share a few comments regarding valuations, a key topic in the current period. We have read a lot of things, but nothing is better than concrete figures. Let me first remind you the valuation process at TCAD, unchanged since 5 years. We conduct double external expertises on main assets around 60% of the portfolio with expert rotation, last one occurred in 2019. And finally, as Olivier said, disposal program is the best illustration of the soundness of the variation of the portfolio. Having seen that, few comments regarding this slide. On the left side, on the office investment activity, it's a minus 2.4% change on a reported basis due to the effect of disposal, minus 0.7 on a like for like basis. This slight decrease mainly reflects cautious expert assumption on existing assets, longer time for commercialization and lower level of indexation. Notice that those figures also include value creation of the asset delivered during the period. Now concerning Healthcare division in the right side. The valuation of the portfolio had a progression of +5.9 percent on a reported basis and up 3.4% on a like for like basis, benefiting from a yield compression at an average of 20 bps. This compression concerned both short and long stay MSO and senior housing. It also highlights, if necessary to recall, the very positive outlook as well as growing appeal of the sector. Let's go right now on Page 32. This slide is a good summary of what I presented to you before, the evolution of NAV. Actually the NAV and DV net disposal value. What should we notice from these figures? First of all, this metrics reflects our strong operational performance. The net disposal value, NAV, is at €86,700, per share after dividend distribution to be compared with €86,100,000 at December 2020. It is a progression of +5.4 percent excluding the dividend. Notice that the property valuation, including development, hold up very well with €1.9 per share contribution. I'm now on Page 33. We have included here a new slide in order to better formalize the whole portfolio managed by UCAD first and to reflect how important the health care part is for ICAD and as a direct consequences, how important our IPO project is for ICAD in term of value creation beyond the significant contribution of the business line in the P and L of the group. On the left side, you have the total valuation of our investment portfolio on a 100% basis at nearly €15,000,000,000 end of June. As of June 2021, Healthcare portfolio was valued at €6,000,000,000 including duties, reflecting a €1,500,000,000 expansion since 2018 and a 40% contribution. In the meantime, our office investment portfolio remains stable, including a net business discipline position over the past 4 years. Teams are focused on asset rotation and slowdown in speculative projects since 2020. This is a good illustration of the adaptability of our business model, taking into account the economic cycles and thus adapting our risk profile. On the right side, you have a concrete consequence on the NAV side. You find the breakdown of the NAV and DV on a group share basis. I was just saying on the previous page that our NAV is at €86,700,000 per share. As of today, end of June, 33% of the NAV is dedicated to the health care activity, up 70 bps compared to December 2020. You have here a visual illustration of our exposure to the health care business. On this occasion, we specify at the bottom of the slide the NAV of the Healthcare division on a 100% basis at €4,100,000,000 at end of June. Turning now to the question of liability. I'm on Page 35. It goes without saying that our financial structure is still very robust. As we have repeated before, we have a very active and dynamic 2021 first half that allowed to keep optimizing the management of our balance sheet. Let me insist on a few points. Icard has successfully issued in January a 10 years €600,000,000 bond with an annual coupon of 0.625 percent, a lower coupon ever for ICAAD. Those funds were mainly used to optimize the funding structure with early redemption of 2 bonds maturating in 2021 2022. Our continued and proactive management allowed us to maintain very attractive cost of debt that continue to decline at 1.35 percent and longer average debt maturity at 6.4 years. We still benefit from a solid liquidity position that merely covers 5 years of principal and interest payments. I will finish on this liability part with 4 metrics that show how sound our financial structure is. I'm on Page 36. As I said, our average debt maturity is above 6 years, and we reached an all time low point in term of cost of debt at 1.35. Our ICR exceed 6 multiples, once again. And our net debt to EBITDA is under 10 multiples at 9.8. And finally, you can notice that our LTV ratio had begun to decline and stand below 40% at 39.8%. Finally, I'm happy to share with you we received last Thursday from S and P the confirmation of our rating BBB plus stable outlook. I have finished with the presentation of the financial results. We had given an appointment at the beginning of June to give you more detail on the IPO of Fikal Sainte. So I will leave the floor to Xavier, who will give you more details. Thank you for your attention. Thank you, Victor, and good morning all. We want to take advantage of the presentation of Icat's semi annual results to give you more color on Icat Sante and the eve of the IPO of the company. So I'm now on slide 38. And first, I would like to underline a key message. Icat Sante contemplated IPO is designed to confirm Icat Sante as the leading pan European platform for healthcare real estate. That's Icat Sante's strategy and that is Icat's ambition for its subsidiary. Therefore, we have revised upwards our growth ambitions with a new €3,000,000,000 investment target by 2025. I will detail that in the next slide. To support our objective and fund these investments in the short and mid term, the terms and conditions of the IPO as of the date of this presentation are based on a primary offering of €800,000,000 There might also be a limited offering with secondary shares to obtain a free float of around 15% to 16% in line with strict regime constraints. These features of the offering will obviously give us a strong investment capacity in the next 5 years. They will enable Icat Santa to reduce leverage and strengthen our balance sheet. They will provide capital for new projects or cash acquisition. In order, the IPO will greatly increase our financial flexibility. On the governance side, it is important to make clear that IKAD intends to remain the controlling shareholder of IKAD Sante post IPO with a long term commitment to its subsidiaries' growth plan. As such, Icat Sante will remain a major contributor to the group's performance, far above 30% of the group net current cash flow and net asset value based on June futures. At the end of the day, I truly believe that the IPO is an opportunity for ICAD Sante and obviously for ICAD as well. To dig further into this topic, I will specify the 2021 guidance and 2025 outlook for Icat Santee. So let's start on slide 39 with strong medium term growth outlook in the perspective of the IPO. We think it is timely to revise upwards our ambition of investments with a new target of €3,000,000,000 by end of 2025. This represents an average annual volume of around €600,000,000 An indicative allocation is shown on the top right hand corner with approximately 60% international and 40% France, but also 70% long term care and 30% acute care. That results from our proactive diversification policy outside of France. And indeed, we are very active, as you can see on this slide. As of today, our pipeline of projects launched or yet to be committed stands at close to €500,000,000 And acquisitions subject to an exclusivity of framework agreement stands at currently around €350,000,000 But on top of that, we have on a rolling basis a further volume of opportunities under review for an amount ranging from €600,000,000 to €1,000,000,000 On slide 14, we provide you with detailed guidance for the 2021 full year period as well as KPI for Icat Sante for the post IPO period. So here, we consider a combined version of Icat Sante. It will be structured by the day of IPO. At that point, Icat Sante will encompass all healthcare property investment activities, so for France, Italy, Spain and Germany. For 2021, the gross rental income will stand at €318,000,000 up 5.5 percent and EPRA earnings is expected up 6% at €251,000,000 For the period post IPO, so by 2025, we are aiming at an average volume of investments reaching €600,000,000 And for the current year, we expect to land between €450,000,000 €500,000,000 but more is better. The CAGR for EPRA earnings is expected at plus 6%. And EPRA cost ratio will be around 9% to 10%. So a level that is very efficient compared to our peers. The target LTV ratio is set at 40 plus percent, so 40% to 42%. And finally, the envisaged dividend policy corresponds to a minimum payout ratio of 85% based on EPRA earnings. So you can see that we count on delivering growing and reliable cash flows with the listed Decade Sante. I am now handing over to Olivier for the conclusion. Thank you. Thanks, Xavier. So let's now go back finally the level of the ICAD Group. We as we usually do give you an update on our priorities for the current year. So I'm now on Slide 42. And those priorities remain the same compared to those announced in February 2021. And we do think they are well underway. I remind you then briefly. With respect to the Office Investment division, the priorities are the asset rotation and the value creation deriving from the office development pipeline. For Icat Centre, the priority is further growth and international expansion and the preparation of the IPO. The priority for Icat Promotion, our property development business, is still to increase revenues and to achieve a higher margin. On CSR, the acceleration of our low carbon strategy, with notably the launch of our subsidiary, Urbain des Bois at the beginning of 2021. And finally, the last priority, the operational implementation of our purpose. In all of our activities, it is a clear priority for 2021. So now I'm on Slide 43 and let's conclude this presentation with the financial outlook for 2021. So given the good and strong performance of the first half of the year and the transaction already announced or secured, we are in a position to rate the 2021 guidance as follow. 2021 net current cash flow per share is now expected up at plus 6%, excluding the impact of 2021 disposal as well as the impact of the dilution deriving from the scrip dividend, which means a plus 3%, including the impact of the significant disposal of the year. So this guidance is still subject to the health and economic situation not worsening significantly, which is not the case for the time being. And the 2021 dividend will follow the same trend. It will be up by plus 3%. So this level of dividend reflects a payout ratio of 83%, which is more or less the same level compared to 2020. So thank you for your attention. And we are now ready with the executive committee to answer your question. Thank you. Laurent Laroche Gouve calling from ODDO BHS. Please go ahead. Hi. So thank you very much for your presentation and congratulations for your strong results. So I would have 3 questions, so if I may. So maybe the first question on the offices and the leasing activity on your offices. So would it be possible to give me more color on the renovation on the rent you have signed and maybe also to have an update on the percentage of break options that should still need to be secured by the end of the year? So and second question, could you please tell us if you could contemplate to do more disposals in offices by the end of the year? And maybe my third question will be linked to the IPO of Icloud Sante. So just to confirm, so what will change for shareholders of ICAD with the IPO in terms of waste profile between your 3 business lines? Thank you very much. Thank you for your we have some more time. Thank you very much for your questions. So Xavier will answer the third one, Emmanuel the first one. And I will answer the second one about more disposal by the end of this year. As we announced at the beginning of the year, we have in mind a volume between €500,000,000 to €600,000,000 As you could have seen, we have already closed €462,000,000 which means that we will do probably a little bit more. We want to remain flexible on disposal. No pressure on the disposal plan, for sure. And but maybe more important with your question, it's the future disposal that we may close by the end of this year are already included in our guidance. Xavier, do you want to answer the question on Nicat Sonthe and after Emmanuel on break option and reversion? Yes. So about the impact for Icat of the IPO of Icat Sante, overall Icat Sante will remain consolidated fully consolidated into the ICAAD's financials. So it should remain a risk profile for the mix of activities for ICAAD. From ICAAD's perspective, very close to what it is today. But you'll get the valuation of the full valuation of Icard Sante within Icard. And maybe an additional comment on the answer given by Zevida. In terms of risk profile, we don't see any major shift or change in the risk profile of ICAD after IPO because, for sure, we will be a little bit diluted, but the company will be larger and bigger. So therefore, we will be able to, let's say, like this, to capture the same amount of cash flow in terms of group share even after the IPO. So and we have a strong, as Xavier described, a strong acquisition plan over the next 5 years. So therefore, we do not see any major change in the risk profile of ICAD even after the IPO. Emmanuel? Hi, good morning. So about the leasing activity and the break, we signed and renewed all the leases at the same level in line in perfect line with ERV, and we didn't see any revision for the moment in any sectors of our portfolio. Okay. Thank you very much. And maybe a comment on the brake option. So we have 25% of break option, and we already discussed with all the tenants to renew the leases in the next month. Okay. Thank you very much. The next question comes from the line of Veronique Mertens calling from Kempen. Please go ahead. Good morning all and thank you for the presentation. A couple of questions from my side. First, you mentioned the dividend guidance, so the 3% growth is expected, but you also mentioned that the payout ratio is in line plus there's distribution of part of the gains on disposal. So I was wondering if you're also guiding for a +3 percent impact on NCCS, isn't the dividend then higher than 3%? That was my first question. And maybe the second question is, do you see or expect any difference in terms of leasing activity and discussions now that the delta variant of COVID is causing new restrictions? And lastly, at the full year results, you stated that the EPRA NTA is your primary indicator for NAV. Well, in this presentation and also the results, there was a large focus on NPV. So I was wondering if there was a specific reason for that. So thank you for your question. The first part, it was really difficult to hear you. So if somebody could repeat, and Victor will answer the second part of the question about LTV. So you mentioned a dividend increase of 2%, and you mentioned a payout increase as well. Will you be able to maintain the level to 3% as you have indicated? The dividend policy, yes. Of course, yes, of course, it's fully relevant to confirm our guidance on the dividend side after the reusment of the guidance on the net cash flow. So it's fully in line. Perhaps few comments regarding the I believe I understand your question regarding the difference between NAV and T and NAV and DV. So we focus end of June on NAV and DV. But also, we always give you all the figures in each of our presentations. So you have in the slide, we can say the NDV, if you want to catch up the level of ADV, it's a slight decrease, 0.8 on the NTE as we disclosed it end of 2020. And on the NDV, as we said on Page, it's always sorry, I will give you the exact 32. 32, on the NDV, it's a slight increase because it includes the valuation of the debt. So that's why we disclose sometimes NDE, sometimes NTE, but you always have all the figures in the presentation. Okay. Thank you. Maybe to repeat my first question because I don't think it was completely clear. So you mentioned a 3% increase in dividend coming from a same payout ratio, but also a distribution of the part of the gains. But since the NCCF already is guided with a 3% increase, if you top that up with the distribution of part of gains on disposals, will the dividend be up more than 3%? No, I think that as of today, that's our dividend policy to have and it's the same dividend policy since now years. We have a dividend which follow more or less the same trend as the net current cash flow per share. Last year was a bit specific as we were requested by the French government, let's say, like this to reduce dividend. It was the case for all the companies and corporates. So over time, we will follow the growth of the net cash flow per share. Our guidance for cash flow per share for this year is now including the impact of major disposal plus tripleton. And this also takes into account the small dilution deriving from the scrip dividend that we have made this year. So I think we're very consistent. And the comment the technical comment or the tax comment that we said is that payout ratio will be more or less 83%, and we will distribute a part of the capital gain deriving from major disposal. It's a request from the with the CIC regime, which is a specific tax regime for REITs in France, we have to distribute 70% of the capital gains within a period of 2 years. So it means that we have really the capacity to distribute such a dividend, and that will be the dividend for 2021. And part of the capital gain, for sure, won't be distributed this year. Well, let's see in 2022, how we will manage the dividend policy, but the policy for 2021 is really clear. Another question by phone, okay? Yes, perhaps. Who's next? I think it's from Barclays. We have a question by email. Three questions from Pierre Emmanuel Bank is down 20% like for like this half year. Okay. First question. Antoine, do you want to answer? Hello. Now this contraction is in fact is a 20% contraction that is a reflection of the caution. To be instructed for some of those who are ready to be launched starting next year or the following year with a proportion of residential operations, which will enable to have a certain diversity and answer to the needs and demands in terms of buildings, housing buildings. So we have a lot of housing in our reserves. €129,000,000 And the total portfolio represents €8,000,000,000 So this evolution is a very small part of the portfolio. 2nd question from Pierre Emmanuel. Do you have an 2nd question, in fact. Home orders for this year. Are you expecting a recovery of building permits before the end of the year? So we started off for the first half of the year, we had more than 40 starts, sites had an increase in 2020 2019. And we expect a second half that should be dynamic for the sales launches even though we expect, like all the industry, a certain degree of caution by the authorities in issuing building permits. Insofar as this happens, we have acted when we look at this market sequence and looking, in fact, at the development aspects, we have more than 5,000 accommodation units equivalents when we look at compared to 2019 in the first half of the year, which means we should have more building permits and offset the delays in deliveries or the reductions by our representatives, for example. So we're expecting a dynamic second half as a result of a strong solvent demand. Emmanuel Croix? No, there is no third question. So we have another one on the line. We have no further questions coming through on the phone lines. No question? We will be more than happy to answer if there are some more. By email or by phone? One question by phone. I was just wondering if you could reconcile the positive 0.9% like for like rental growth in Offices and Business Parks and the declining like for like occupancy rate? Thank you. Emmanuel, could you answer like for like growth, Business Parks and Offices? And occupancy rate. Occupancy rate. No, Antoine de Chabane, responsible for portfolio management will answer the question. Regarding the of growth in rent, it's mainly due to is positive plus 0.5% and on the office investment division, and it's mainly due to the business park division impacted by the Pulse location last year. And regarding the occupancy rate, it's stable if you compare to the last quarter, but slight decrease there is a slight decrease for the beginning of this year due to the departure of yourself at Trond Floor, which will be a new project in our pipeline soon. Thank you, Antoine. For the time being, I think we have no more questions. Final call? No, thank you very much for attending this presentation. And probably, we'll have another meeting in end of September, beginning of October for the IPO of Icat Sante with Xavier. Thank you very much for your attention.