Ladies and gentlemen, welcome to the EPIC Suisse AG 2026 half year results conference call. I am Matilde, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Roni Greenbaum, Chairman. Please go ahead.
Thank you, operator, and good morning, everyone. I would like to welcome all of you for joining our EPIC Suisse conference call for the half year result 2026. My name is Roni Greenbaum, and I'm the Chairman of the Board of EPIC Suisse AG. On the call with me this morning, are, as always, our CEO, Arik Parizer, our CFO, Valérie Scholtes, and our Portfolio Director, Philipp Küchler. You should all receive by now our press release this morning, and you can find it on our website, epic.ch, in the English section of the Media and Investors. In addition, you can find the results of half year report 2026, as well as the presentation to this call.
Let me just state that we, again, very proud of our results, having achieved not only strong operative results, but also we have realized a nice one-off disposal gain from the sale of the property in Lausanne. I will let Arik and Valérie to take you through the slides and the presentation for the next 30 minutes or so, and then the four parties will be available for a Q&A session. Arik, go ahead.
Thank you, Roni, and good morning, everyone. I would like to join Roni's comments and to also welcome you all to EPIC Suisse half year 2026 results conference call. As Roni mentioned, Valérie and I will go through the slide deck that was published on the company's website this morning before we open the line for Q&A. It is a great pleasure for me to share with you all today, once again, very strong results and to update you on our ongoing operation and developments. As usual, let me start with a quick overview of the economy. As you can see on slide three of the presentation, the macro picture hasn't really changed much since our last presentation in March 2026. Inflation in Switzerland is now expected to increase a little from the 0.2% level during 2025 to 0.6% during both 2026 and 2027.
On the other hand, GDP growth is expected to come down from the 1.5% level in 2025 to 0.9% in 2026, before increasing again to 1.6% in 2027. While consumer sentiment has improved slightly, it still remains negative and stands at around -34.8%, indicating a continued uncertainty from the consumer side. In this economically and politically challenging environment, our company continued to be very stable, and despite the sale of our Property 23 in May 2026, the market value of our real estate portfolio remained at CHF 1.7 billion. As you can see on slide number five, the real estate portfolio, as at June 30th, 2026, was split according to market values as follows: 53% in the Lake Geneva region, 34% in the Zurich economic area, and 13% in other locations, notably cantons St. Gallen, Bern, and Glarus.
The portfolio remained also well-diversified per sector, with market values per sectors as follows: 41% offices, 35% retail, 23% logistics and light industrial, and 1% developments. We have 24 properties with almost 365,000 sq m of lettable area as at June 30th, 2026. Including our recently completed developments, PULSE and Campus Leman – Building C, the net rental income yield of properties in operation during the year was 4.1%, as PULSE is still in the letting phase. The portfolio continues to benefit from a long WAULT of 7.6 years. On slide number seven, you can see the main highlights of the H1 2026 period. In the six months to June 30th, 2026, we continued to grow our rental income by 4% to CHF 34.7 million, compared to CHF 33.4 million in H1 2025.
Most of that increase was thanks to the start of the rental income from our two completed development projects, which began to contribute meaningfully to the rental income already in the second half of 2025. On a like-for-like basis, the growth was 0.5%, the main contributor being the lower vacancies. Because of the normal absorption time of our recently completed developments, PULSE and Campus Leman – Building C, our reported vacancy for properties in operation increased to 9.4% during the period, compared to 3.8% in H1 2025. If we exclude these recently completed developments, then the adjusted vacancy for the period is only 2.9%. For a reminder, as we did in the past, to be fully transparent with the progress of the letting in our recently completed developments, in addition to the usual reported vacancy, we will report adjusted vacancy in our KPI during the next three years.
Our WAULT remained long and stood at 7.6 years as at June 30th, 2026, compared to 7.9 years as at December 31st, 2025. As you know, we sold at the end of May, the office building Vennes III, with a gain on disposal of CHF 9.4 million, representing a 23% higher price compared to the market value of December 31st, 2025. Our EBITDA, excluding the gain on disposal and excluding the gain on unrealized revaluation of properties, increased during the period to CHF 28.1 million compared to CHF 26.8 million during H1 2025. If you consider the gain on disposal, then the EBITDA for the period comes in at CHF 37.6 million.
We continue to have a very solid equity ratio with 54.4% as at June 30th, 2026. This positive ratio was improved compared to 53.5% as at December 31st, 2025, and compared to 48.4% as at June 2025, thanks to our robust results, the successful capital raise in December 2025, and the attractive selling price of our disposed property. Slide nine summarizes the portfolio key figures. On June 30th, we have 24 properties in operation and two properties under development: Nexus Brunnpark in Roggwil and Campus Leman - Building D in Morges. Our total portfolio value stands at CHF 1.67 billion, which is split between the two segments as follows. Properties in operation stands at CHF 1.66 billion, while properties under development amount to CHF 11 million.
As I mentioned, the vacancy rate for properties in operation during the period was 9.4%, with the adjusted vacancy being only 2.9% for the same period, and compared to 3.8% for H1 2025 and 3.4% for the year ended December 2025. I've already commented on the WAULT, which we consider at 7.6 years to be very attractive. As usual, we do not report the individual market value per property, but on slide number 10, you can see the portion of the top 10 properties and operations out of the total market value of the portfolio, as well as their respective uses. As you can see, the top 10 properties and operations represent 68% of our total portfolio value. We have five properties in operations with a value in excess of CHF 100 million.
The average asset value amounted to approximately CHF 60 million, while the smallest asset that we have in operations carried a value of about CHF 6 million. Overall, we consider our portfolio well-balanced, also from a risk perspective. Slide number 11 shows the change in the market value of our portfolio. Overall, we had a slight decrease in market value compared to December 31st, 2025, but this is due to the disposed asset Vennes III. If we exclude this disposed property, then the market value actually increased by 1.4%, from CHF 1.64 billion to CHF 1.67 billion. This increase was mainly driven by the following two impacts: net unrealized revaluation gain of CHF 13.8 million and CapEx spent during the period amounting to CHF 8.8 million.
On slide number 12, you can see in blue the breakdown of the revaluations per sector as at June 30th, 2026, and the comparable numbers for H1 2025. As in previous years, all our properties were valued by the independent valuer, Wüest Partner, who revalues our properties every six months. As mentioned in the previous slide, the revaluation resulted in a net unrealized revaluation gain of CHF 13.8 million. This was driven by a change in each of the sectors as follows: a gain of CHF 8.7 million in the office sector, a gain of CHF 1.8 million in the retail sector, a gain of CHF 3.6 million in the logistics sector, and finally, a small loss of CHF 0.2 million in properties under development. The average real discount rate decreased from 3.3% in June 2026 compared to 3.32% in December 2025.
On slide number 13, you can see in the graph on the left-hand side of the slide, the reconciliations between reported vacancy and adjusted vacancy for the properties and operations, whereas in the table on the right-hand side, you can see both the reported and adjusted vacancies per sector. Let me begin with the graph on the left-hand side of the slide. As you can see, the total vacancy that we had during the period amounted to CHF 3.7 million, or 9.4%. However, if we take out the vacancy of PULSE amounting to CHF 2.6 million, and the immaterial vacancy in Campus Leman – Building C of CHF 88,000, we arrive at the adjusted vacancy amount of CHF 990,000 or only 2.9%. It is important to reiterate why we report the adjusted vacancy.
Given the developments that we do in order to achieve higher returns, we do not expect our buildings to be fully let upon completion. We have done this time and time again over the years, and to be fully transparent with the letting situation, we report both KPIs for a period of a maximum of three years after the completion of the developments. I would also like to take a moment and share with you the letting situation in our development building PULSE, where the letting have increased from 37% of our communicated target rent to 41% during the period. We can confirm that we are having good discussions with some tenants, but due to the nature of the tenants and the global economic instability, this takes longer than before.
We are very confident with the design of the building and are happy the tenants, such as subsidiaries of the Thermo Fisher Group, PMI Group, or our most recent signature, Eurofins Group, which is a public group on the Euronext exchange, as well as other tenants, have been attracted to building because of its design and flexibility and have decided to move their operations to PULSE. Having said this, we remain laser-focused on further discussions with further future potential tenants. Moving on to the table on the right-hand side, you can see office reported vacancies to the 3.4%, while adjusted vacancy was 3%. Retail reported and adjusted vacancies were the same at 3.8%. Logistics and industrial reported vacancy was 28.6%, while adjusted vacancy was 0.2%. As mentioned, the overall reported vacancy was 9.4% and adjusted vacancy 2.9%.
On the left-hand side of slide number 14, you can see that the increase in rental income of CHF 1.3 million comes from a like-for-like increase of CHF 0.2 million and an increase of CHF 1.1 million from other properties being Vennes III, Campus Leman – Building C, and PULSE. The like-for-like increase was split between the different sectors as follows. Office sector, an increase of 2.1%, mainly due to lower vacancies. Retail, a slight increase of 0.5%. Logistics and industrial, a decrease of 3.4%, mainly due to incentive that we gave in one of our properties. Overall, where the like-for-like increase of 0.5% and a total increase of 4%. On slide 15, you can see the list of our top six tenants.
The top six group of tenants are all very solid tenants and represented 49% of our net rental income during the six months to June 30th, 2026. The contract with those six tenants have a very long WAULT of 9.3 years, and a total net rental income for the period amounted to CHF 17 million for these six tenants alone. The other CHF 17.7 million net rental income are well spread over circa 160 tenants of different sizes. It is important to note that almost 90% of our net rental income on a weighted average basis is linked to the Swiss CPI index. On slide 16, you can see the expiry profile of our leases. As you will notice, more than 53% of our leases will expire post December 2031.
Out of the 5% expiring in 2026, 59% relate to contracts with either no fixed maturity or already renewed or pre-let, or while the remaining expiries relate to surfaces that are on the market. In 2027, we only have 1.7% of expiries. I would now like to pass the word on to Valérie, who will go through the financial numbers in more detail.
Good morning, everyone. It is also a pleasure for me to report on our 2026 half year results, following another productive six months, marked by an increase in profitability compared to the same period last year. As I will explain later in the presentation, the underlying performance of the portfolio improved, which was then complemented by the successful sale of our property, Vennes III. For transparency and comparability purposes, the results, EBITDA, profit, return on equity ratios, and earnings per share, have been reported in three ways. First, including all revaluations, realized and unrealized, which reflects our IFRS financial statements. Secondly, excluding only the unrealized revaluation effects, that means including the realized profit from the sale of Vennes III. Finally, excluding the disposal gain and the unrealized revaluation effects.
In addition, it is important to know that for KPI reporting purposes involving the profit and loss, the properties are considered as per the category they were classified in as at January 1st. As a reminder, PULSE and Campus Leman - Building C were moved from investment properties under construction development to investment properties in operation on the last day of last year, on December 31st, 2025. This means that they were classified in investment properties under development construction during the financial year 2025, while they are classified in investment properties in operation for the financial year 2026 and beyond. As usual, I will cover three main areas. First, the equity and liability side of our balance sheet. Secondly, the performance of our portfolio.
Finally, how this performance translate into net asset value and earnings per share for our investors. For each of the key figure tables, I will highlight the essential points, and I will dive into those on the following slide. Let's start on slide 17 with our balance sheet. Despite the dividend distribution of CHF 35.9 million in April 2026, our equity slightly increased to CHF 924 million end of June 2026, compared to CHF 920 million end of December 2025. This corresponds to comfortable equity ratios of 54.4% and 53.5% respectively. Following the sale of our property Vennes III, the use of the net proceeds to partially and temporarily repay some bank debts, the level of our mortgage secured bank loans decreased below the threshold of CHF 600 million to CHF 596 million, down from CHF 617 million end of last year.
Thus, our net loan-to-value ratio further decreased from 35.5% end of December 2025 to 35.1% end of June 2026, well below our target net loan-to-value ratio medium term of about 45%. The annualized return on equity ratio, excluding the disposal and unrealized revaluation effects, which in fact reflects our underlying performance for H1 2026, came to 4.8% compared to 4.9% for the financial year 2025. The slight drop being explained by the comparatively higher average AFReNA in H1 2026 following the capital increase in December 2025. When we include the net profit of the Vennes III sale, the annualized return on equity ratio reached 6.5%. As illustrated by slide 18, our robust H1 2026 result of CHF 39.8 million allowed our equity to remain above the December 2025 level, considering the dividend distribution of CHF 35.9 million already mentioned earlier on.
In line with our predictable and gradual dividend policy, the dividend per share was further increased from CHF 3.15 last year to CHF 3.20 this year, allowing for a dividend yield of 3.7% based on the 2025 year-end closing share price of CHF 87. The AFReNA per share equaled CHF 82.49 end of June 2026, which is the equivalent of CHF 94.06 when we disregard the different taxed elements. Let's now have a look at the liability side of our balance sheet on slide 19. As at June 30th, 2026, the group keeps benefiting from a low weighted average cost of debt of 1.2%. The bank financing cost decreased by CHF 0.3 million to CHF 3.7 million in H1 2026 compared to CHF 4 million in H1 2025.
This primarily thanks to the lower bank debt levels and also lower amounts of variable financing costs as the Swiss reference rate, which is also the basis for SARON, progressively decreased from 0.5% as at January 1st, 2025 to 0% as at June 30th, 2025, and stayed at this level, 0%, since then. At the balance sheet date, 80% of our mortgage-secured bank loans were hedged, either using fixed interest rate contracts or interest rate swaps. This percentage gets to 72% when we exclude the interest rate swap coming to maturity on September 30th, 2026. As at June 30th, 2026, all cross-currency swaps did unwind without crystallizing any foreign exchange currency differences. As a consequence, there are also no more U.S. dollar loans as at period end.
As a reminder, this cross-currency swap did allow the Group to benefit from lower bank margins, 11 - 14 basis points lower over a period of two years. Moving now to the performance of our portfolio for the first six months of this year, and except for the net rented income yield, the table on page 20 presents a lovely set of nine blue arrows pointing upwards. As already explained by Arik, the rental income from the real estate properties grew by 4% between the two reporting periods, many thanks to PULSE and Campus Leman – Building C being fully operational in the first six months of this year, while still partially under construction in H1 2025.
The H1 2026 net rental income yield for properties in operation decreased to 4.1%, compared to 4.5% in H1 2025, as PULSE moved from a P&L point of view from January 1st, 2026 to properties in operation, but actually is still in its letting phase. Excluding PULSE and Campus Leman – Building C, the net rental income yield for properties in operation corresponded to 4.4%.
The net operating income amounted to CHF 32 million in H1 2026 compared to CHF 30.6 million in H1 2025, showing a 4.3% progression, almost entirely driven by the top-line growth. Arik also commented already on the net unrealized revaluation gain on properties of CHF 13.8 million for the first six months of this year. The sale of our Property Vennes III generated a realized revaluation gain of CHF 9.4 million, or a 23% uplift above the latest independent valuation as at December 31st, 2025.
After tax, this led to a net profit of CHF 8.1 million. Arik will further comment on the sales rationale later in his presentation. The table shows, as already mentioned, the reported EBITDA, reported profit, as well as the EBITDA and profit lines adjusted for the unrealized revaluation effects with or without the disposal. The reported EBITDA amounted to CHF 41.4 million for the first six months of the year versus CHF 40.6 million in the first six months of last year. When we look at the underlying performance of the portfolio, the adjusted EBITDA, excluding the disposal and unrealized revaluation of properties, rose by 4.8% from CHF 26.8 million last year to CHF 28.1 million this year, as the other operating expenses actually remain overall constant over the two reporting periods.
The financial result came to a net expense of CHF 4.3 million in H1 2026 compared to CHF 5.2 million in H1 2025. When we exclude the unrealized revaluation effects of the derivatives and the related underlying U.S. dollar loans over the reporting period, the financial results decreased by CHF 0.3 million from CHF 4.3 million in the first six months of this year to CHF 4 million. Sorry, in the first six months of last year, sorry, to CHF 4 million in the first six months of this year as a result of lower bank financing costs.
As already mentioned, following the unwinding of the cross-currency swap, there will be no more foreign currency FX on the underlying U.S. dollar loans going forward. All of this translated into a profit of CHF 39.8 million for the first half of this year in comparison to CHF 30 million previously.
Again, when we look at the underlying performance of the portfolio, that means excluding the one-off profit on the sale and the unrealized revaluation effects, the adjusted profit amounted to CHF 22 million, showing a CHF 1.5 million increase of 75%, in comparison to the CHF 20.5 million achieved in H1 2025. When we re-include the realized net profit on the disposal, the profit arrived at CHF 30.1 million. As usual, the next two slides summarize visually what I've just said about our H1 2026 performance. Slide 21 shows the main P&L components from rental income to the three EBITDA KPIs. While slide 22 compares graphically the underlying performance of the first six months of 2026 compared to 2025.
On slide 22, again, except for the net rental income yield, which I've already commented on and whose decrease actually is mainly due to the segment reclassification of PULSE and Campus Leman – Building C. The NOI margins and the EBITDA margins, again excluding the disposal and unrealized revaluation of properties, remain attractive and overall stable over the two reporting periods at 89% and 78% respectively. This leads me to the final slide of my presentation, slide 23, and how this performance translates into earnings per share for the investors. On slide 23, please note the change in weighted average number of outstanding shares between H1 2025 and H1 2026 following the December 2025 capital increase, as this impacts the earnings per share calculation.
Despite the number of shares increase, our H1 2026 earnings per share at CHF 1.97, again excluding the disposal and unrealized revaluation effects, almost matched last year's comparable period levels at CHF 1.98. In conclusion, our business continues to grow and to generate solid results, and our focus remains the gradual letting of our property PULSE. Without further delays, Arik will provide you with an update on the disposal rationales and the ongoing developments.
Thank you, Valérie. Let me elaborate a little bit more why we sold Vennes III in Lausanne. As most of you know us well by now, you are aware that selling properties is not part of our long-term strategy, and this is actually the first time we sold a property since becoming a public company four years ago, and only the second time we sold one of our buildings since EPIC inception more than 20 years ago. The building is an office building on the outskirts of Lausanne, and is let to CHUV as a single tenant. We carried out the full cycle with this building. We developed it, we constructed it, we found a tenant for it, and we also managed it until the sale in May this year. We bought the land in 2011 and completed the construction of this building in 2013.
Also, with this building, we started the construction in 2011 without any pre-let. The total construction cost of the building amounted at the time to CHF 34.3 million, including the land. We have collected rent over the years in the amount of CHF 29.3 million. The building was valued by Wüest Partner at December 2025 at CHF 41.6 million, and we sold it for 23% above this value, or almost 50% above our total investment cost for net proceeds of CHF 51.1 million, net of transaction cost. These percentages exclude, of course, the rent of CHF 29.3 million collected in these properties over the years. Even though we liked the building, we felt that it was the right decision to sell the building to better optimize our presence around the Biopôle campus.
We already own four more buildings in the vicinity of Vennes III and felt that we prefer to focus our attention on the attractive Biopôle campus. We also felt that it was the right time to sell. As you know, the market is very strong, so we could generate significant interest, and as you can see by the upside to the market value, we have achieved an attractive selling price, partly also given the single tenant and the relatively long tenant contract.
Moving on to slide number 27, where you can see an update on our upcoming developments. Now that PULSE and Campus Leman – Building C have been reclassified, we have the following current and future developments: Campus Leman - Building D, Nexus Brunnpark, and Tolochenaz, which today is now properties and operations, but is expected to move to developments in phases as we develop the land. Starting with Campus Leman - Building D. This is the third and final phase of the project that included over the past years, Buildings A and B, as well as Building C that was completed just last year.
We expect to submit the building permit for Building D later this year. It is only a small building of about 800 sq m of lettable area, but it is an important phase for us to close the campus and to be able to offer to our current tenants on the campus, the possibility to expand on-site in case they wish to do so. As a reminder, with the final floor on Building C, which is on the Bracco signature. Once this is done, the campus would be 100% let, and that is why Building D is important for us.
Moving on to Brunnpark in Roggwil. We have our technical advisory team working on various scenarios to achieve the most efficient project, which will be attractive to potential tenants and will also make the most efficient use of the land. We expect to submit the building permit for this project during H1 2027. Finally, Tolochenaz. As you know, the authorities have been working on new building rights on this land. While we have significant building rights already in place, we feel that the new master plan will provide more flexible building rights that will allow us to develop different products which could fit different types of demand, such as offices, logistics, medtech, labs, some retail, and maybe even a hotel.
We understand that the plan is with the cantonal authorities at this stage for a final approval, should it be approved, then the revised building rights would come into force, subject to the usual statutory opposition rights. Let me now take you to our outlook on slide 29. EPIC Suisse's prime focus remains the sustainable and mid to long-term growth and profitability of its portfolio and consolidation of the lettings of the recently completed developments.
Assuming no materially adverse changes on our operation during the year, we are increasing the company's guidance for this year's net rental income compared to what we have announced in our ad hoc announcement on May 29th when we sold Vennes III from an increase of approximately 1% to an increase of approximately 1.5% compared to 2025 net rental income. With this, we end the presentation part of the call. I would like to now open the line for Q&A.
We will now begin the question-and-answer session. Anyone who wishes to ask a question, may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from a question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from a line of Philippe Züger from Zürcher Kantonalbank. Please go ahead.
Yes, good morning. I do have a couple of questions. First of all, I lost the connection. Maybe jump back to the sale of the property in Lausanne. Do you have any other sales in the portfolio, or do you plan to sell some other buildings? The second part of the question, how do you see the current market situation to buy any commercial properties?
At the moment, we have no plan of selling any other properties. As Arik mentioned, it was a one-off. The specific reason to sell it, as Arik mentioned in the call, basically, it was to focus on Biopôle and not to compete with ourselves. We already have four buildings there, and we decided to focus on the other side of the road. Regarding the market, as you know, we are not competing for a plain, vanilla building. We cannot buy buildings which are already let and done, fully developed. We are competing on a more niche area where we can buy building and reposition them. We can buy land and start development from scratch, similar to what we are doing in Roggwil at the moment. The market is tough.
It is hard to buy, but we are still optimistic that we will be able to extend the portfolio. By new acquisition, we are currently studying a few opportunities, and hopefully they will mature for us to be able to buy them. As you know, we did a capital raise with the intention to also extend the portfolio, and we are working hard to get it.
Thank you. Second question goes to Tolochenaz . You mentioned before, you are waiting for the final approval. What could be the time horizon to get the permit?
We believe that if everything, that is the feedback that we get from the authorities, that if everything goes according to plan, then it should be later this year or latest, early next year.
Okay, thank you. Last question is to the Campus Leman – Building C. You mentioned in the press release that you are in quite close negotiation with the sixth floor. May you give an update again?
It is even beyond that. We are already in the final contract exchange, and we expect to be signed very shortly. It really is on the brink of signature. All the terms have been negotiated, have been agreed by the parties, and we expect to be signed in the next two to three weeks.
Perfect. Thank you for the presentation and the answers.
Thank you, Philippe.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no more questions at this time. I would now like to turn the conference back over to Roni Greenbaum for any closing remarks.
Yeah, thank you very much. The next time we speak will be full-year results next year, and we hope to continue to present you with growth and good figures. And anyway, if there is any question after this call, feel free. You can contact us at any time. We are available for answering any questions. Thank you very much, and have a nice day.
Have a nice day.
Thank you very much. Have a good day.
Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.