Aedifica : Interim financial report Q1 2024 - 02/05/2024

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AEDIFICA

Public limited liability company

Public regulated real estate company under Belgian law

Office: Rue Belliard 40 (box 11), 1040 Brussels Enterprise number: 0877.248.501 (RLE Brussels) (the 'Company')

Interim financial report

1st quarter 2024

Robust operational performance driving strong results ahead of budget

• EPRA Earnings* amounted to €59.8 million (+8% compared to 31 March 2023), or €1.26/share
• Rental income increased to €82.0 million (+8% compared to 31 March 2023)
• 3.3% increase in rental income on a like-for-like basis in the 1st quarter of the year
• Weighted average unexpired lease term of 19 years and occupancy rate of 100%

Real estate portfolio* of nearly €6 billion as at 31 March 2024

• 623 healthcare properties for more than 47,300 end users across 8 countries
• Investment programme of €343 million in pre-let development projects and acquisitions in progress, of which €193 million remains to be invested. Over the 1st quarter, 10 projects from the committed pipeline were delivered for a total investment budget of approx. €74 million

Solid balance sheet and strong liquidity

• 39.6% debt-to-assets ratio as of 31 March 2024, down slightly from 31 December 2023
• €868 million of headroom on committed credit lines to finance CAPEX and liquidity needs
• BBB investment-grade credit rating with a stable outlook (by S&P)
• UK REIT regime will increase the contribution of UK operating cashflows to the Group's results

Outlook for 2024 on track

• • EPRA Earnings* for 2024 are estimated at €223 million, or €4.70/share
  • Proposed dividend for the 2024 financial year: €3.90/share (gross)
• Alternative Performance Measure (APM) in accordance with ESMA (European Securities and Market Authority) guidelines published on 5 October 2015. Aedifica has used Alternative Performance Measures in accordance with ESMA guidelines in its financial communication for many years. Some of these APMs are recommended by the European Public Real Estate Association (EPRA) and others have been defined by the industry or by Aedifica in order to provide readers with a better understanding of the Company's results and performance. The APMs used in this interim financial report are identified with an asterisk (*). Performance measures defined by IFRS standards or by Law are not considered to be APMs, neither are those that are not based on the consolidated income statement or the balance sheet. The APMs are defined, annotated and connected with the most relevant line, total or subtotal of the financial statements, in Appendix 4.

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Consolidated key figures & EPRA performance indicators 1

Property-related key figures	31/03/2024	31/12/2023
Fair value of real estate portfolio* (in € million) 2	5,963	5,849
Number of properties	623	617
Gross yield based on fair value (in %)	5.9%	5.8%
EPRA Net Initial Yield (NIY) (in %)	5.3%	5.3%
EPRA Topped-up NIY (in %)	5.5%	5.4%
Occupancy rate (in %)	100%	100%
EPRA Vacancy Rate (in %)	0.0%	0.1%
WAULT (in years)	19	19
Like-for-like rental growth (group currency, in %)	3.3%	5.2%

Financial key figures	31/03/2024	31/12/2023
Debt-to-assets ratio (in %)	39.6%	39.7%
Average cost of debt (in %)	1.6%	1.7%
Average cost of debt (incl. commitment fees, in %)	1.8%	1.9%
Weighted average maturity of drawn credit lines (in years)	4.2	4.4
Interest Cover Ratio* (ICR) 3	6.2	5.9
Hedge ratio (in %)	95.9%	95.8%
Weighted average maturity of hedging (in years)	4.8	5.1
Net debt/EBITDA* 4	8.4	8.4
	31/03/2024	31/03/2023
Rental income (in € million)	82.0	76.2
EPRA Earnings* (in € million)	59.8	55.3
Net result (owners of the parent) (in € million)	75.6	16.1
EPRA Cost Ratio (including direct vacancy costs)* (in %)	15.3%	16.8%
EPRA Cost Ratio (excluding direct vacancy costs)* (in %)	15.3%	16.8%
Key figures per share	31/03/2024	31/12/2023
EPRA NRV* (in €/share)	85.83	84.17
EPRA NTA* (in €/share)	75.59	74.18
EPRA NDV* (in €/share)	77.21	75.41
	31/03/2024	31/03/2023
EPRA Earnings* (in €/share)	1.26	1.39
Net result (owners of the parent) (in €/share)	1.59	0.40

1. See section 4.3 for more information on key figures stemming from the financial statements.
2. Including marketable investment properties, assets classified as held for sale*, development projects, rights of use related to plots of land held in 'leasehold' in accordance with IFRS 16 and land reserve.
3. Calculated based on the definition set out in the prospectus of Aedifica's Sustainability Bond: the ratio of 'operating result before result on portfolio' (lines I to XV of the consolidated income statement) to 'net interest charges' (line XXI) on a 12-month rolling basis.
4. Not adjusted for projects under construction.

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1. Summary of the activities since 1 January 2024

During the first quarter of 2024, Aedifica focused mainly on executing its investment programme and managing its portfolio. Backed by a healthy balance sheet, improving operator performance and an improving macroeconomic environment in which short-term interest rates seem to have reached their peak and inflation has fallen, Aedifica has cautiously resumed its investment policy. Since the beginning of the year, approx. €46 million in new investments have been announced in the healthcare real estate sector, which will continue to need additional capacity in the years to come due to the ageing European population. Aedifica again posted solid results, which is reflected in EPRA Earnings* that are slightly above budget and increased by 8% compared to Q1 2023.

COMPLETING THE INVESTMENT PROGRAMME

A total of ten projects from the investment programme amounting to approx. €74 million were completed during the first quarter. This reduced the investment programme to approx. €343 million as at 31 March 2024 (see Appendix 3). In the coming weeks and months, several more projects are expected to be delivered, which should lead to a further reduction in the size of the investment programme to approx. €120 million by the end of the year (not considering the addition of new projects).

At the end of March, Aedifica's real estate portfolio included 623 sites with a capacity of more than 35,400 residents and over 11,900 children. The fair value of the real estate portfolio* amounted to approx. €5,963 million (compared to €5,849 million at the beginning of the financial year).

HEALTHY BALANCE SHEET

Aedifica boasts a healthy balance sheet. As of 31 March 2024, the consolidated debt-to-assets ratio amounted to 39.6%, down slightly from 31 December 2023 and well below the 45% threshold the Group imposes on itself in its financial policy. After five consecutive quarters of negative portfolio valuations, the portfolio valuation is slightly positive on a like-for-like basis in the first quarter of 2024, confirming the resilience of healthcare real estate.

During the first quarter of 2024, financial resources were strengthened by contracting approx. €25 million in new long-term bank financing (early refinancing, linked to sustainability KPIs). At the end of March, headroom on committed credit lines stood at €868 million, providing ample resources to finance the execution of the investment programme and liquidity needs.

The average cost of debt* including commitment fees decreased slightly to 1.8% thanks to the Group's interest rate hedges covering nearly 96% of financial debt. The hedging's weighted average maturity is 4.8 years.

In addition, 47% of drawn credit lines are linked to sustainability KPIs, underlining the Group's efforts to integrate ESG criteria into its financial policy.

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SOLID RESULTS

In the first quarter of 2024, Aedifica's portfolio generated a rental income of €82.0 million, an increase of approx. 8% as compared to the same period last year. This increase is mainly explained by the projects delivered from the pipeline and the indexation of rents, amounting to 3.4% on a like-for-like basis. EPRA Earnings* amounted to €59.8 million (€55.3 million as at 31 March 2023, an increase of approx. 8%), i.e. €1.26 per share. EPRA Earnings* (absolute and per share) are slightly above budget. Aedifica's total profit amounts to €75.6 million (€16.1 million as at 31 March 2023). This increase in total profit compared to last year can be primarily attributed to the valuation of the portfolio.

These solid results allow Aedifica's Board of Directors to reaffirm its outlook for the 2024 financial year5.

Fredenbeck - Fredenbeck (DE)

Care home completed in March 2024

5 See annual press release of 21 February 2024 or section 5.1 of this interim financial report.

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2. Important events

2.1. Investments, completions and disposals during the 1st quarter

• €46 million in new investments in the Netherlands and the UK

During the first quarter of 2024, Aedifica has announced new investments in the Netherlands and the UK for a total amount of approx. €46 million.

Name	Type	Location	Date	Investment	Pipeline	Lease	Operator
				(€ million)	(€ million) 1
Netherlands				25	-
Remaining stake of 50% in a	Acquisition	Various locations in	02/02/2024	25	-	WAULT 19 yrs	Korian NL
portfolio of 6 care residences		the Netherlands				- NNN
(AK JV)
United Kingdom 2				18	3
St. Joseph's Convent	Renovation	St. Hellier	22/03/2024	-	3	WAULT 23 yrs	Emera
	& extension					- NNN
Rosewood House	Acquisition	London	27/03/2024	18		30 yrs - NNN	Bondcare
Total				43	3

1. The amounts in this column are the budgets for projects that Aedifica will finance. The development projects are listed in the overview of the investment programme (see Appendix 3).
2. Amounts in GBP were converted into € based on the exchange rate of the transaction date.

Villa Florian in Blaricum (NL)	Rosewood House in London (UK)
Part of the AK JV portfolio of which the remaining stake	Care home acquired in March 2024
was acquired in February 2024

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• 10 projects completed for €74 million

Over the course of the first quarter, ten projects from the investment programme were completed for a total amount of approx. €74 million.

Name	Type	Location	Date	Investment	Lease	Operator
				(€ million) 1
Germany				35
Haus Marxloh	Renovation	Duisburg	31/01/2024	4	WAULT 22 yrs - NN	Procuritas
Seniorenquartier Gera	Development	Gera	29/02/2024	16	30 yrs - NNN	Modern Care
Fredenbeck	Development	Fredenbeck	27/03/2024	15	30 yrs - NNN	Residenz Management
United Kingdom 2				16
Dawlish	Development	Dawlish	15/02/2024	16	30 yrs - NNN	Maria Mallaband
Finland				23
Salo Linnankoskentie	Development	Salo	02/01/2024	3.5	15 yrs - NN	Sospro
Hollola Kulmatie	Development	Hollola	08/01/2024	2.5	15 yrs - NN	HDL
Sotkamo Härkökivenkatu	Development	Sotkamo	23/01/2024	2.5	15 yrs - NN	Esperi
Kuopio Torpankatu	Development	Kuopio	31/01/2024	5.5	15 yrs - NN	Esperi
Rovaniemi Gardininkuja	Development	Rovaniemi	29/02/2024	4	15 yrs - NN	Suomen kristilliset hoivakodit
Helsinki Landbontie	Development	Helsinki	04/03/2024	5	15 yrs - NN	Kehitysvammatuki 57
Total				74

1. The amounts in this column only include the works that were carried out, except for the investment amount for the development project in Dawlish, which also includes the contractual value of the plot of land.
2. Amounts in £ were converted into € based on the exchange rate of the transaction date.

• 3 disposals in the Netherlands, the UK and Sweden

During the first quarter, a care home and two plots of land located in the Netherlands, the United Kingdom and Sweden were divested in order to optimise the real estate portfolio.

Name

Netherlands

Natatorium (plot of land)

United Kingdom

Oak Lodge

Sweden

Marmormjölet 9 (plot of land)

Location	Date	Selling price
		(€ million)

Velp 31/03/2024

Chard 02/02/2024

Huddinge 12/03/2024

Total

5.5

Hollola Kulmatie in Hollola (FI)	Dawlish in Dawlish (UK)
Specialist residential care centre completed in	Care home completed in February 2024
January 2024

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2.2. Important events after 31 March 2024

• 1 project completed

After 31 March 2024, Aedifica completed a development project from its investment programme in the United Kingdom amounting to approx. €15 million.

Name

United Kingdom 2

Biddenham St James

Total

Type

Development

Location

Biddenham

Date	Investment	Lease	Operator
	(€ million) 1
	15
05/04/2024	15	30 yrs - NNN	Maria Mallaband
	15

1 The amounts in this column only include the works that were carried out, except for the investment amount for the development project Biddenham St James, which also includes the contractual value of the plot of land.

2 Amounts in £ were converted into € based on the exchange rate of the transaction date.

Biddenham St James in Biddenham (UK)

Care home completed in April 2024

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2.3. Investment programme as at 31 March 2024

As at 31 March 2024, Aedifica had a total investment programme of approx. €343 million, of which approx. €150 million has already been spent and approx. €193 million remains to be invested (see Appendix 3 for a complete overview). The projects have an average initial yield on cost of approx. 5.6%.

The total investment budget can be broken down as follows:

	6%	4%
			Finland
7%			27%	United Kingdom
11%				Belgium
			Ireland
				Germany
12%			19%	Spain
				Sweden
	14%		Netherlands

	€37m
	11%
	2024
€85m
25%	2025
	€221m
	64%
	>2026

Expected deliveries of projects and closings of acquisitions

400 343

300 200 100

0 Pipeline 31/03/2024

-75
	-100		~120​
		-50
Q2	Q3	Q4	Pipeline
			31/12/2024

Expected evolution of the investment programme (approximate, in € million)

based on anticipated completion dates and not considering the addition of new projects

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3. Management of financial resources

3.1. Financial debts

During the first quarter of 2024, Aedifica strengthened its financial resources through a €25 million six- year bank facility (early refinancing) linked to sustainability KPIs.

In addition, Aedifica managed to increase its issuance of short-term treasury notes by €70 million, optimising its cost of debt.

Taking these elements into account, the maturity dates of Aedifica's financial debts as of 31 March 2024 are as follows:

Financial debt	Committed financing		Short-term
(in € million) 1					treasury notes
	Lines		Utilisation
31/12/2024	145		65		312
31/12/2025	531		146		-
31/12/2026	628		305		-
31/12/2027	647		488		-
31/12/2028	554		394		-
31/12/2029	43		3		-
>31/12/2029	649		614		-
Total debt as at 31 March 2024	3,197		2,017		312

1 Amounts in £ were converted into € based on the exchange rate of 31 March 2024 (0.85509 €/£).

As at 31 March 2024, the weighted average maturity of the drawn financial debt is 4.2 years. Available committed financing amounts to €1,180 million. After deducting the backup for the short-term treasury notes, the available liquidity stands at €868 million.

Loans contracted under Aedifica's Sustainable Finance Framework or linked to sustainability KPIs amount to €1,309 million, of which €956 million is drawn on 31 March 2024 (47% of the drawn credit lines), underlining the Group's wish to further diversify its sources of financing and to integrate ESG criteria into its financial policy.

The average cost of debt* including commitment fees decreased slightly to 1.8% (31 December 2023: 1.9%) thanks to the interest rate hedges Aedifica had in place.

As at 31 March 2024, 95.9% of financial debt is hedged against interest rate risks, i.e., the ratio of the sum of the fixed rate debt and the notional amount of derivatives divided by the total financial debt. The hedging's weighted average maturity is 4.8 years.

As part of its financial policy, Aedifica aims to keep its debt-to-assets ratio below 45%. As at 31 March 2024, Aedifica's consolidated debt-to-assets ratio amounts to 39.6%.

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4. Summary of the consolidated results as at 31 March 2024

4.1. Portfolio as at 31 March 2024

During the first quarter of 2024, Aedifica increased its portfolio of investment properties6 by approx. €115 million, from a fair value of €5,849 million to €5,963 million. This value of €5,963 million includes the marketable investment properties7 (€5,812 million) and the development projects (€151 million). The increase in marketable investment properties comes mainly from completed development projects (see section 2.1 above) and changes in the fair value of marketable investment properties recognised in income (+€1.7 million). The changes in the fair value of marketable investment properties8, as assessed by independent valuation experts, are broken down as follows:

-	Belgium: -€5.9 million (-0.5%)	-	Finland: +€2.4 million (+0.2%)
-	Germany: -€4.3 million (-0.4%)	-	Sweden: +€0.0 million (+0.0%)
-	Netherlands: +€3.3 million (+0.5%)	-	Ireland: +€1.1 million (+0.3%)
-	United Kingdom: +€5.1 million (+0.5%)	-	Spain: -€0.0 million

After five consecutive quarters of negative portfolio valuations, expert valuations in the first quarter were up slightly by 0.02% on a like-for-like basis, excluding any impact from currency translation.

0						+0.02%
-0.5				-0.2%
-1			-0.5%		-0.6%
	-0.8%
-1.5	-1.2%
	Q4 2022	Q1 2023	Q2 2023	Q3 2023	Q4 2023	Q1 2024

Evolution of expert valuations per quarter on a like-for-like basis (in %)

As at 31 March 2024, Aedifica's portfolio comprised 623 marketable investment properties (including assets classified as held for sale*), with a total capacity of more than 35,400 residents and over 11,900 children and a total surface area of approx. 2,216,000 m2. The total portfolio has an overall occupancy rate9 of 100%. The weighted average unexpired lease term (WAULT) for the Company's portfolio is 19 years.

• €1,230 million in Belgium (80 sites)
• €1,189 million in Germany (100 sites)
• €1,097 million in the United Kingdom (115 sites)
• €1,056 million in Finland (206 sites)

	1%	>0%
Belgium		7%
	22%
Germany
Netherlands	18%
United Kingdom
Finland
Sweden		21%
Ireland	19%
Spain		12%

Geographical breakdown

(in terms of fair value)

• €680 million in the Netherlands (72 sites)
• €395 million in Ireland (22 sites)
• €72 million in Sweden (26 sites)
• €3 million in Spain (2 sites)

	7%	Elderly care homes
	6%
		Senior housing
16%
		Mixed-use elderly care
		buildings
4%	67%	Childcare centres

Other care segments

Breakdown by facility type

(in terms of fair value)

1. Including assets classified as held for sale*.
2. Including assets classified as held for sale* amounting to €94 million, rights of use related to plots of land held in 'leasehold' in accordance with IFRS 16 totalling €75 million and a land reserve amounting to €16 million.
3. Including gains and losses on acquisitions.
4. Rate calculated according to the EPRA methodology.

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