Annual Results 2023-2024

HIGHLIGHTS OF THE YEAR

MACRO-ECONOMIC CONTEXT

After a year of rising inflation in 2022, forcing the European Central Bank (ECB) to adopt a restrictive monetary policy by significantly raising key interest rates, the past financial year saw confirmation that this policy was bearing fruit. These successive rate hikes slowed economic growth and gradually brought inflation closer to the ECB's 2% target. On the strength of this result, the ECB was able to begin easing monetary policy in mid-2024 by cutting interest rates, while suggesting that this trend would continue as long as economic indicators continued to show positive trends. As a result, after peaking at 4.5% in September 2023, short- term interest rates fell to around 3.5% at the end of September 2024.

The ECB's restrictive policy certainly had the positive impacts mentioned above, but it also had the collateral effect of putting consumer confidence and purchasing power under severe pressure. This confidence was shaken by the uncertainties linked both to geopolitical conflicts and to the unprecedented number of elections around the world in 2024. Elections have a strong tendency to polarisation and could lead to the introduction of protectionist policies that are unfavourable to the smooth running of the European economy.

This widespread loss of confidence was reflected in the property markets by a significant slowdown in transaction volumes, both rental and investment, and by a fall in property valuations for certain sectors, both in terms of company share prices and of underlying assets. In the second half of the year, there were initial signs that valuations were stabilising, and even a slight upturn in transactions, but this trend needs to be confirmed over time.

Against this backdrop, the out-of-town retail property market, which is at the heart of Ascencio's strategy, has once again demonstrated its resilience. This sector, which largely meets consumers' primary needs (food, home maintenance and furnishings, sports and leisure, etc.) and which operates with a relatively low rent/return ratio, has therefore performed better than other property sectors. Nevertheless, as consumer purchasing power reduces overall, some sub-sectors have shown signs of weakness. This confirms the importance for Ascencio of keeping a close eye on the individual performance of its tenants, and of further strengthening its relationship with them in order to anticipate their needs as effectively as possible and support them during this uncertain period.

In terms of sustainability, Ascencio is committed to continuously improving its performance, both regarding the energy management of its portfolio and the development of its teams and governance structure.

OPERATING ACTIVITY

Letting

Within Ascencio's portfolio, in addition to the rental activity described below, the past year was marked by the takeover of 5 Casino supermarkets respectively by the food chains Intermarché (4 stores) and Auchan (1 store). These transactions significantly strengthened the credit quality of the tenant portfolio by removing the uncertainty surrounding the Casino brand. The latter, which has been in financial difficulties for several years, accounted for around 10% of Ascencio's rental income. This takeover, following the acquisition of 23 Carrefour Market by Mestdagh supermarkets in 2023, illustrates Intermarché's position as a fast-growing food operator. Intermarché now accounts for around 18% of Ascencio's rental income.

The Company also continued to manage its portfolio dynamically. A total of 25 transactions were concluded (10 new leases and 15 lease renewals), for a rental area of more than 21,000 m2 and €2.5 million in annual rental income, representing almost 5% of the property portfolio's surface area and rental income. Negotiated rents were on average 8.7% higher than the estimated rental value and on average 1.9% lower than previous rents for the rental units concerned.

This activity was namely achieved by the following operations:

• In Belgium :
• • Genval (Les Papeteries de Genval) : 2 new leases (Bijouterie Adam and the fashion retailer Macha Store) and 3 renewals ;
  • Messancy : 2 new leases (Vendezvotrevoiture.be and l'Attrape-Rêves) ;
  • Hannut (Orchidée Plaza) : 1 new lease (Kiabi) and 1 renewal, taking the retail park's occupancy rate to 100% and finalising Ascencio's full repositioning of the asset undertaken a few years ago;
  • La Louvière : 1 new lease (La Foir'Fouille) and 1 renewal ;
  • Leuze-en-Hainaut :2 renewals.
• In France :
• • Crêches-sur-Saône(Parc des Bouchardes) : 1 new lease (Jour de Fête) and 1 renewal ;
  • Rots (Parc des Drapeaux) : 2 renewals.
• In Spain :

There were no rental transactions during the year, as the portfolio is still 100% let.

In addition, Ascencio concluded or renewed 12 short-term leases, primarily to maintain flexibility of occupancy in buildings affected in the short term by renovation or redevelopment projects. This is particularly the case in Belgium at Uccle, where 8 short-term leases were signed to allow for a forthcoming major renovation of the site.

This rental activity illustrates the interest shown by retailers in strategic locations, taking over vacant retail premises as well as consolidating their position through the acquisition of larger portfolios.

All these transactions enabled the Company to consolidate its real estate portfolio EPRA occupancy rate at a level which remains high: 97.8% at 30/09/2024 (vs 97.9% at 30/09/2023).

At 30/09/2024, the average residual term of the occupancy contracts for Ascencio's properties was 2.8 years to lease breaks ("WALB") and 7.2 years to lease terms ("WALT").

Acquisition and disposal :

Over the past year, Ascencio strove to rotate its portfolio through :

• the acquisition of 3 retail units with a total surface area of almost 3,000 m² in the Bellefleur retail park in Couillet (Belgium), for a property value of €7.0 million, after the takeover of 100% of the shares in Holdtub SRL. These recently developed units are fully occupied by leading brands. This acquisition enabled Ascencio to consolidate its position in a retail area that has enjoyed great success for over 10 years ;
• the sale of its Jemappes (Belgium) retail complex, with a surface area of almost 10,000 m², for a net amount of €8.55 million. This sale is part of the ongoing strategic revaluation of the property portfolio;
• the signing of a preliminary sale agreement for its Ghlin site in Belgium (2,000 m²), which required a complete repositioning and was outside the scope of the Company's investment strategy. This transaction, worth €0.4 million, took place during the first quarter of 2024/2025.

Investments

The Company invested about €3.8 million in works within its real estate portfolio, mainly in :

• the renovation of several roofs (€1.6 million), in Belgium (Bruges, Ottignies, Leuze-en-Hainaut, Châtelineau), France (Marsannay) and Spain (Madrid), as part of its multi-year programme to improve the energy performance of its buildings;
• the complete refurbishment of workspaces at its head office in Gosselies (Belgium), as well as technical improvements to the building;
• various works related to the arrival of new tenants.

Ascencio also carried out the preparatory work of permit applications for two redevelopment projects within its Belgian portfolio, in Uccle (Avenue de Fré) and Couillet (Bellefleur retail park).

Property valuations

At 30/09/2024, the value of Ascencio's consolidated portfolio stood at €748.6 million, up €6.1 million (+0.8%), excluding investments and divestments. This increase is all the more remarkable given that it comes against a backdrop of persistently high interest rates, which are traditionally unfavourable for property valuations. This positive trend once again illustrates the resilience of Ascencio's food retail and out-of-town property portfolio, with its consolidated portfolio at 30/09/2024 benefiting from healthy parameters on average, both in terms of rents (€123/m²) and of gross yields (6.99%).

The valuations of Ascencio's real estate portfolio at the end of the last two financial years were as follows :

ESG policy

In line with its policy, and drawing on the experience of its team, Ascencio continued to deploy its ESG strategy both at Company level and within its property portfolio.

The main initiatives and achievements during the year were as follows:

At the environmental level:

1. Signing partnerships with Allego in Belgium and Powerdot in France to roll out a programme to install charging stations for electric and hybrid vehicles (once completed, 470 charging points, including 210 in Belgium and 260 in France) in its property portfolio. These partnerships do not require any investment on Ascencio's part and will create value, both in terms of asset valuation and of additional revenue generation. In addition, this equipment will further enhance the attractiveness of the sites by creating hubs for electromobility there, offering an additional service to consumers and local communities. After obtaining the necessary permits, the first installation work has already started on several French assets;
2. Completing an energy-saving programme by installing LED lights in its car parks. This project covered 15 sites in the Belgian portfolio, or approximately 70,000 m2 of car park space;

Continuing the process of collecting energy consumption data from its tenants in the French, Belgian, and Spanish portfolios. To date, 92.5%, 51% and 27% respectively of the data has been obtained; Launching a project to install photovoltaic panels on the roof of its Intermarché supermarket in Ottignies (Belgium). Thanks to the green energy produced, the 750 m2 installation will enable to reduce the supermarket's carbon footprint in terms of energy consumption by around 17% per year.

At the social level:

1. Continuing the internal training programme for its team by organising a number of "Academy" sessions;
2. Adapting its company car policy by gradually converting its fleet of vehicles to 100% electric;

1. Completing the refurbishment its headquarters in Gosselies (Belgium), including the complete replacement of its HVAC installations, resulting in estimated energy savings of 25%;
2. Organising initiatives in its retail parks to promote sport and to help the fight against hunger, and participation of its team in events linked to these two themes.

At the corporate governance level :

1. Setting up an ESG committee to regularly monitor the implementation of the strategy defined by Ascencio and the preparation of CSRD reporting in accordance with regulatory requirements;
2. Publishing its EPRA sBPR ("sustainability Best Practice Recommendations") reporting, which was awarded a "Gold" label for the second consecutive year;
3. The implementation of a new management system for rental, administrative and accounting activities, providing greater fluidity and agility in the day-to-day management of operational tasks. Ascencio has also begun research into a complementary tool to enhance the automation of its property analysis and reporting systems.

FINANCIAL ACTIVITY

Ascencio continued to proactively manage its debt structure by refinancing credit lines that are due to expire within 12 months. The success of this strategy has enabled the Company to maintain a strong liquidity position at all times, with secure access to its credit lines, enabling it to finance its day-to-day activities while providing immediate additional investment capacity. Given the still-limited accessibility of the bond markets for players in the property sector, Ascencio has concentrated its efforts on refinancing in the form of bank credit lines, with its existing partners but also developing a new relationship with a leading banking institution.

Essentially, Ascencio has concluded 3 new revolving credit lines with several credit institutions, with fixed terms of between 4 to 7 years, for a total nominal amount of €50 million, on competitive financial terms. To refinance a €20 million Medium Term Notes maturity, the Company also carried out a new issue of the same product for an equivalent amount in two tranches with an average maturity of 3 years. This latest issue illustrates Ascencio's ability to also call on capital from institutional investors, thereby maintaining a healthy diversification of its sources of financing.

All these refinancing credit lines enable the Company to maintain an average residual maturity of its debt of

3.0 years (vs 3.4 years at 30/09/2023) and to benefit from unused credit lines totalling €158 million at 30/09/2024, of which €90 million will remain available after taking into account the 100% back-up of commercial paper issues and the forthcoming financing of the year's dividend.

At the end of the last two financial years, the Company's financial debt broke down as follows :

In order to limit the volatility of its financial charges, Ascencio has a portfolio of hedging instruments in the form of interest rate swaps (IRS), which it manages in accordance with its hedging policy. Taking into account the new environment of high interest rates that has emerged over the past two years, Ascencio has reviewed it and confirmed its relevance, while extending its scope over time and adjusting the hedging percentage in proportion to the projected debt. From now on, the hedging horizon is 7 years and the percentage hedging objectives are defined on the basis of degressive ranges over time. This adaptation of a policy that has already demonstrated its effectiveness, with the average cost of debt remaining under control, enables more fluid long-term management of the hedging volumes to be achieved, while guaranteeing great flexibility in its implementation.

To achieve these medium-term strategic objectives while strengthening its short-term hedging ratio, Ascencio has carried out a number of transactions :

• the acquisition of 6 fixed-rate payer IRSs, for a total notional amount of €140 million, mainly over the 2027 to 2031 hedging period ;
• the acquisition of 2 fixed-rate receiver IRSs, for a total of €20 million, to vary the interest rates set at the time of the new issue of Medium Term Notes, in line with its macro hedging ;
• the liquidation of 2 IRSs in the existing portfolio, with a total notional amount of €20 million and active between 2024 and 2029. The balance received was fully reinvested in the acquisition of 2 new IRSs over the period 2024 to 2031, with variable notional amounts (total initial amount of €20 million) and an optional component over the years 2025 and 2026.

ANNUAL CONSOLIDATED RESULTS OF THE FINANCIAL YEAR 2023/2024

Rental income came to €53.3 million, up by 3.9% on the comparable period of the previous financial year (like-for-like equivalent to 4.7%). The breakdown by country is as follows :

The growth in rental income in Belgium and France was due to the combined effect of annual indexation of rents, higher average occupancy levels in the portfolio and the expiry of rent-free periods during the financial year. In Spain, rental income fell slightly as a result of the replacement of a tenant at the Madrid building, the outgoing tenant having paid an exit indemnity during the previous financial year and the incoming tenant having signed a lease at a lower rent.

Rental related charges remained stable at €0.2 million and concerned reductions in value taken on doubtful trade receivables; these rose slightly in Belgium but fell by the same amount in the French portfolio.

These various elements, together with the recovery of property charges (lower due to a non-recurring claim received during the previous financial year) and rental related charges and taxes not recovered, enable the property result to reach €53.6 million at 30/09/2024, up by 3.6% compared to €51.7 million at 30/09/2023.

Property charges rose by 4.4% (€4.8 million compared to €4.6 million) due to an increase in charges on unlet properties, linked to the inclusion of non-recurring taxes on unoccupied space, partially offset by a fall in site repair costs.

Corporate overheads rose by 11.6% (€5.2 million compared to €4.7 million), largely due to the costs of strengthening the team, setting up the new IT system and studying investment projects that had not been completed by the end of the current financial year.

After deducting property charges and corporate overheads, the operating result before result on portfolio came to €43.5 million, up 2.6% on the previous financial year's figure of €42.4 million, giving an operating margin of 81.5% (vs 82.7%).

The financial result fell by 14.9% due to the increase in net financial charges (-€0.5 million) and a fall in non- recurring positive results linked to the restructuring of hedging instruments (-€0.5 million).

Taking into account these changes and stable tax charges, the EPRA Earnings came to €36.2 million at 30/09/2024, stable (+0.5%) compared to the €36.0 million generated the previous year. Per share, EPRA earnings therefore rose to €5.49 (compared to €5.46).

The valuation of the property portfolio showed a positive change (excluding investments and divestments

• debt IFRS 16 included) of +€6.0 million, after the stability recorded in the 2022/2023 financial year. This persistent stability in property valuations once again illustrates the particularly resilient and defensive nature of Ascencio's property portfolio.

The revaluation of hedging instruments amounted to -€16.4 million at 30/09/2024 (vs -€1.5 million). This negative revaluation is exclusively due to the fall in the interest rate curve over the past financial year, as a result of the rate reduction decisions already taken by the European Central Bank and market expectations that this trend will continue over the coming quarters. In addition to these non-monetary negative revaluations, hedging instruments currently generate significant monetary financial income, which is recorded as a reduction in interest charges paid by the Company.

On this basis, the net result was €25.5 million at 30/09/2024 compared to €33.8 million a year earlier, or €3.87 and €5.13 per share respectively. This significant fall (-24.5%) is exclusively due to the revaluation differences illustrated above.