Globe Trade Centre S.A.

Thank you very much, Becky, for the kind and warm introduction. And I would like to welcome everybody for our Q3 results call.

I'm really honored and privileged. For me, this is the first call that we are having as a CEO of the company.

And I'm also very happy that I have Jacek with myself, sitting together. We are a new team.

We are a new team with the two other management Board members. We have a lot of experience, and we also represent a very good, a different country representation where our operations are located.

This new team is international and very much focused and interested in driving the future of the GTC company. This is also a new chapter for us and for the company as well.

And last week, we decided to go for a 3-day strategy discussion to discuss our priorities, discuss what are the immediate critical items that we need to think about and also reflect a little bit where we would like to go in the coming months and years. Now I can confirm the most important message or messages from this meeting.

One, we would like to continue deleveraging our company. We would like to continue with asset sales.

And also, we will be very much focused on cost and efficiency improvements. As far as today's agenda is concerned, I would like to give you a little bit of an overall picture of our financial performance, and I would like the team to maybe turn to the slide where we can show the results.

After that, I will like to ask Jacek to give a little bit more details about our financial performance, and then we are going to go more into details. So can I have the slide, please?

Basically, what I can say is that the last quarter represented mixed results for GTC. On one hand, the revenues were increasing, which is a positive phenomenon.

On the other hand, when you look at the revenue increase, it has two different directions. One, we, in this year, incorporated our German acquisition revenues, which show a 9% overall growth.

But without Germany, unfortunately, we are minus 4%, which is a reflection of us selling some of our income-generating assets. When I look at our profitability, it is not showing such a positive result, and this is mainly due to the German acquisition, where we are experiencing quite significant financing costs, and our overall efficiency and profitability is not that strong.

Where we did very good in the last quarter, we were very successful with our bond refinancing program. And I think that was the most relevant and important action and task for us in the last quarter, which doesn't mean that we are not going to have some further refinancing needs in the coming half year.

But I think this was probably our largest debt. So for us, it was extremely important that we successfully refinance it.

Now with all of the refinancing happening nowadays in our industry and also in other industries, the new cost of finance will be a little bit more expensive. But talking to our lenders, the banks, they feel very comfortable actually supporting us in the future as well.

As I mentioned a little bit before, the end result for us is to continue our deleveraging process, selling some of our assets, but also making quite some steps in improving our operational excellence and cost control. And I think that is, I would say, probably the right time for us to give, so to speak, the mic to Jacek because we have spent a lot of time already on budgets.

Okay. Hello, guys.

So Botond has already reported on the performance of ours for the period ending September. Obviously, I just want to highlight the successful story around the refinancing of the bonds, which is behind us.

I will talk about these next steps with the bonds in a moment. Other parameters, obviously, are more or less flat, but I will talk about them in a minute.

So Michal, if you can turn on another slide. In regard of the bond refinancing, I hope you were following the story.

We managed to refinance or to issue the new bonds for the amount of EUR 455 million, out of which we received EUR 430 million cash, and we utilized that cash partially to buy the outstanding bonds for the amount of EUR 195 million. The balance of cash from the issue of new bonds is deposited on the escrow account pledged to the benefit of new bondholders.

And that balance together with the balance of cash that we keep on the balance sheet of the company will be good enough to buy back the outstanding bonds, which is going to happen by the end of Q1 2026. Michal, if you can flip on the next slide.

On portfolio, so nothing really changed from the last quarters. This is obviously the picture already after the acquisition of the German portfolio.

So again, 88% of the portfolio is the income generating, out of which you can see on the left side on the bottom, we have the majority of our assets are office, retail and residential portfolio purchased in Germany. Michal, if you can flip on another slide, please.

On performance of the office portfolio, nothing really changed comparing to the last 9 months of 2024, you see certain drop of -- on occupancy in Hungary that is offset by increase of occupancy in Poland. The weighted average lease is around the same, 3.6 years, as it was last year.

The good thing is basically the leasing activity, if you look at the overall business for the -- in Q3 this year, the company managed to lease approximately 27,000 square meters. Next slide, please.

Retail portfolio, as in the previous quarters, it's doing well. It's fully occupied.

There is some potential of increased occupancy in Poland, in Galeria Polnocna. But again, the weighted average lease remained the same, around 4 years.

And the company is able to extend and lease the remaining space, which is seen here, the company managed to lease the 15,000 square meters of space in Q3 2025. Next slide, please.

German portfolio, we purchased it, as you all know, at the end of last year. Here, what you can see, obviously, there is a slight increase of the occupancy from 83% to 86%, which is, I would think, a good direction.

Still, there is a lot of to do in regard of the occupancy in this German portfolio. The annualizing rent [ in-place ] is stable, around EUR 24 million.

Next slide, please. On the results, so looking at the rental from -- the revenue from rental activity as Botond was mentioning, we are seeing an increase comparing to first 9 months of 2024.

But excluding the Germany, it's a decrease by 4%, mainly driven by the fact that we sold some office buildings in course of 2025. On the other hand, we recorded increase of the cost of the rental operations, so simply property expenses, by 8%.

This is again without Germany. This is something that we are looking in depth and Botond was mentioning about it already at the beginning that this is one of the issues that we are dealing with among many others to have these costs under control.

Then looking at EBITDA and already on consolidated basis, we see a drop from EUR 84 million to EUR 77 million. It's mainly driven by the -- again, by the fact of the disposal of a part of the assets, the office buildings, but also there is a substantial increase of the property expenses, administrative expenses.

This is again mainly driven by the consolidation of the business with acquisition of portfolio of the German assets. Profit, there is below EBITDA, you see an important increase of the expense related to the revaluation of the assets.

This is mainly driven by the fact that we incurred certain CapEx for the fit-outs and maintenance of the buildings, which did not contribute to the value of that building. So it was expensed.

Also, we expensed some option -- cost of the option related to the acquisition of the shares in German portfolio. So the combination of the two elements resulted of that loss of EUR 45 million from, I would say, investing activity.

Then below, again, something that we anticipated, but it's seen here in line finance cost, which is a substantial increase of the finance cost is mainly driven by the consolidation of the financing that was drawn to finance the acquisition of the German portfolio. So overall, the company incurred a loss of EUR 28 million for the given period comparing to the profit of EUR 41 million last year.

Next slide, please. On cash flow, obviously, on the cash flow from operating activities is flat with last year.

Then below, investment activity, you can see here that the company fortunately reduced its investment activity, which is mainly CapEx related to some developments, but also CapEx spend for fit-outs and maintenance of the CapEx. At the same time, the company sold a number of assets for EUR 100 million.

There is another outflow that you already noticed in the past periods of EUR 45 million, which is related to the settlement of the price for the acquisition of the German portfolio for EUR 45 million, and there is EUR 44 million, I would say, accounting [ entry ], which is nothing else like basically moving cash from the investing activity to the deposit account. Obviously, I already mentioned about it, the interest expense went significantly up from EUR 28 million to EUR 50 million, but it's related to the acquisition of the German portfolio.

Next slide, please. On the balance sheet, nothing unusual except of maybe the line #2.

You see the drop of the asset held for sale. This results from the fact that, as you remember from the previous slide, a substantial amount of assets were sold in course of 2025.

But as Botond was mentioning at the beginning, we are working on the list of the assets that we will dispose in course of 2026 in order to deleverage the company, and you will see most likely at the end of the year, the increase of that number, assets held for sale, since we'll be able to provide the market with, I would say, more indicative number of how many assets and how much we want to generate out of disposal in the course of 2026. Next slide, please.

And our debt position, obviously, here, you still see the picture of the balance sheet before refinancing of the bonds. So there is a substantial increase of the short-term financing from EUR 220 million to EUR 860 million.

That obviously at most was dealt with because of the refinancing of the bonds. But still, there is approximately EUR 400 million of financing to be refinanced.

Next slide, please. This is what you can see on that graph on the right side.

So basically, we refinanced close to EUR 500 million Eurobonds by issuing new bonds and that you saw proceeds from the issue of new bonds in combination of the cash that we keep on balance sheet will allow us to redeem all the outstanding bonds by the end of Q1 2026. In regard of the remaining EUR 350 million of the refinancing.

This is asset-backed financing. As you can see, there's basically three jurisdictions that this financing was drawn and will be maturing in course of 2026 is Germany; EUR 124 million loans, Polish entities and -- Hungarian entities and Polish entities.

So -- but again, what was said at the beginning, we are very well advanced with the discussions with the lenders. Some of them provided us with the term sheets.

Some of them provided us with the credit decision. So we are working towards the extension or finalization of that process of extending the loans by the end of Q1 2026.

Next slide.

Thank you very much, Jacek. I think now probably this is the time for us to ask questions, Michal.

Yes. Thank you, Botond, and good afternoon, everybody.

Michal Kuzawinski, Head of Investor Relations at GTC. I have pleasure to be your host for the Q&A session.

[Operator Instructions] Meanwhile, I received the first question from David Sharma from Trigon. The question is, could you please walk us through GTC short-term FFO assumptions following bonds refinancing?

What is our targeted FFO run rate following recent divestments and refinancing?

So as it was said first, I would say a couple of comments on the FFO going forward. So first, we recognize the need of the reduction of LTV and the interest expense related to that.

Obviously, at the first instance, we will focus on the refinancing, on the repayment of the most expensive loans. And we will be dealing with that in course of 2026.

That would result in the decrease of that interest expense, again, but this will be seen only, I think, in the second part of 2026 or even in 2027. That process of, again, disposal and the repayment, the reduction of the most expensive debt will take us easily a year or more.

Then obviously, this is point number one. Point number two is operating activity.

As Botond was saying, the reduction of operating expenses is of the key importance, but also the fact that our vacancy or vacancy on our portfolio is still substantial, and it applies to really to office portfolio and the German asset portfolio. There is, I would say, a substantial work that we need to do in order to increase it and then increase the rental income from that portfolios of assets.

So it's not, I would say, a simple answer to the question, what would be our running FFO, right? We need to look at that, and we'll be looking at that within the next couple of months.

By the way, we are well advanced in the budgeting process for next year, where we actually engaged the entire company in all the jurisdictions to work on that plan. We already see certain improvement of EBITDA in all jurisdictions comparing to the actual results that we anticipate to record in 2025.

But again, that improvement will take time, and we only will be able to really to discuss the FFO run rate in a more detailed way by the time when we will publish the results for 2025, will be sometime in March 2026.

Thank you, Jacek. Olivier Monnoyeur from BNP Paribas has a follow-up question.

Olivier would like to know some more details about the German debt. So the composition, the maturity, the call date and how advanced the company is in the process of disposing part of the German portfolio?

Okay. So on the debt side, basically, let's say, that part consists of two -- I would say, two segments, the senior loans and the loan provided by the party that actually financed the -- a chunk of the purchase price for -- that allow GTC to buy the portfolio.

So in regard to the senior loans, there are two German lenders that we work with. The discussions are well advanced.

We were greenlighted in regard to the extension of that EUR 140 million loans. We'll be receiving term sheets from this lender -- term sheet from the lender this week.

Again, so the discussions will take some time on conclusion and signing the extension. But as I said, we aim to sign and to extend the loan that is terminating at the end of this year, sometime in Q1.

So what is going to happen, the current lender will give us the extension of the loan for the next 3 to 6 months for us -- to give us enough time to sign the new loan agreement with another lender that will refinance the current lender. So this is, I would say, on the front of the senior loan.

And there is obviously that loan that we drawn in order to finance the acquisition. It's a 5-year loan.

The loan was drawn at the end of 2024. So it's still for 4 years outstanding.

Thank you, Jacek. And we have more questions about Germany.

So I'll try to put all the questions in this context. Now we have from Andrew [ Edmondson ].

Gross margin from Germany was EUR 11 million, but admin expenses increased by EUR 8 million year-on-year, mainly because of Germany. Then there are significant debt interest expenses related to Germany.

Please talk through this in greater detail. What needs to happen to bring this back to profitability?

Three things have to happen. First, on the top line, as I said, you saw on the slide, there is 85%, 86% of occupancy.

There's still room to improve, which will take some time, but that's something that we are working on to increase it substantially. Second thing is the property expenses, which are relatively high comparing to our portfolio.

Again, since the company purchased this portfolio only at the beginning of this year. And still, the management of this portfolio is organized in the way that it's done by the seller, by the previous owner of the property, so we try -- we are in the process of taking over the asset management and property management from the seller, which is going to happen in course of 2026.

And in consequence, we anticipate certain decrease of the property expenses, which will increase the NOI. Again, this is a process that will take us easily 1 year to improve.

Then on the financing side, as you rightly noticed, the substantial increase of the cost. This can only be reduced by the repayment, partial repayment or full repayment of the loan that was provided to finance that acquisition.

Again, there are -- the major source of obviously, of the repayment would be to start selling the German portfolio. But again, we are looking at that right now.

We do not want to commit on the timing of this process. We simply still need more time to understand how quickly we can improve the performance of the portfolio increase -- in order to increase its value before certain decisions on the disposal will be taken.

Thank you, Jacek. We have also a follow-up question from Olivier on Germany.

Olivier is reminding us that we have not answered the question about advancement in the process of selling part of the portfolio. If we can give an update where we are in selling the residential units in Germany.

I already answered to someone else that we are analyzing basically different scenarios and of -- let's say, and different strategies of selling that portfolio or part of the portfolio, we recognize the importance of the reduction of LTV and a decrease of this finance costs related to the loan provided to finance the acquisition. But again, it's too early for us to talk about the details of the phasing or the volumes of the assets that we will sell in course of 2026.

I can only say that we will be able to talk more about it during our presentation of the final results for this year, which will be sometime in March next year.

But I think we can also say that we are working with potential buyers and agents who are interested in the portfolio, but we are not ready yet to commit the deals.

Olivier is also asking about the interest rate of the senior loan. Olivier, we don't disclose the interest rates on particular funding sources, but we did disclose the average weighted interest rate of about 3.8% for the 9 months.

And the next question is from [ Vicki Chen. ] Vicki is wondering if -- when are we going to start paying dividends again.

And also asks for a detailed outlook on the asset sales program in 2026.

Okay. Maybe this question I would answer.

I think both are very good questions. I would say the first question relating to the dividend payments.

I mean, I think it's very clear for us that there are certain priorities that we would like to make sure that they are delivered. And for us, it's really making sure that we are finishing the journey on the refinancing.

And once we are finishing that journey, also, we are deleveraging our assets. Until that is done to the extent, I feel it's very comfortably that we can pay a dividend.

I would not like to commit to any date in terms of dividend payments. But definitely, 2026 is not going to be a year where we are going to pay dividends.

And from when, I think we are actually, as I mentioned, started our strategy directions with the management team. We still need quite some time to finalize it at the moment for us, the real challenge is what I have just basically said.

So that was the dividends. The question on the 2026 portfolio sale.

Now I don't want to be unpolite, but for me, this is probably one of the most confidential information that we can have because believe it or not, there are a lot of companies and people are coming to us asking this question and trying to get some of our assets. Obviously, sometimes it is cheaper than what we think is the right level of compensation.

So for me, this is very confidential what and how we would like to kind of sell because we would like to make sure that we get the maximum return for our investors and lenders, and that actually requires quite some tactical approach on our side. I hope you understand that.

So we have no more questions at this point. [Operator Instructions] Maybe let's -- I propose to allow a minute to check if any more questions appear.

But I think we can also say that in case new questions pop up, please feel free to contact us after the call.

It's also a good idea. So with that, Botond, I pass the voice over to you for concluding remarks.

First of all, thank you very much for joining this call. I hope we managed to shed some light on our current status, our current business and the directions.

I would like to thank Jacek and yourself as well for the information. For me, what is the most important that we are truly committed to the future success of this company.

And we are very conservative in that respect. And for us, the financial goals and also the goals for improving our business is equally critical.

I think that we are very close to finishing our fourth quarter, and I really would like to come and see you again and talk to you again after our fourth quarter is finished and we can actually finish the year. So thank you very much for joining and looking forward to -- I wouldn't say seeing you because you can see us, we cannot see you now, but let's say, talking to each other next time.

Thank you. And we received no questions -- no more questions.

If you still want to ask a question, you can please e-mail or call us. And thank you, gentlemen.

Thank you, everybody, for joining this call. And see you again next year when we report our annual earnings.

Goodbye.

Thank you.

Thank you.