Covivio Hotels : 2025 Half-year financial report

About this update from Covivio Hotels Sca

FINANCIAL INFORMATION HALF-YEAR 2025 CONTENT ACTIVITY REPORT AS OF 30 JUNE 2025 3 Financial results 8 Assets as of 30 June 2025 11 EPRA indicators 15 Related companies 15 Risks and uncertainties 15 Outlook for 2025 18 Transition tables 19 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS AT 30 JUNE 2025 22 STATUTORY AUDITORS' REPORT 75 CERTIFICATION BY THE PERSON RESPONSIBLE 78 ‌1. ACTIVITY REPORT AS OF 30 JUNE 2025 Hotel market: performance still improving in Europe After very good momentum in 2024, the European hotel industry continued its growth in 2025 with results up +2.5% at the end of May 2025. These results were driven by the increase in prices and a slight increase in occupancy rates. The best results were recorded in Southern Europe, notably Spain and Italy, with increases in RevPAR (Revenue Per Available Room) of +5.0% and +3.6% respectively. Germany continued to catch up, posting a +4.1% increase in RevPAR. In France, RevPAR growth was +2.1%. Hotel investment in Europe totalled €4.95 billion in the first quarter of 2025 (stable year-on-year), with the hotel sector now accounting for 10.7% of total real estate investments. €60 million in disposals, in line with 2024 appraisal values Covivio Hotels signed new disposal agreements totalling €60 million in Group share (€65 million at 100%) during the first half of 2025: 8 assets in France for €23 million, including 2 Accor brand hotels, and 1 hotel in Erfurt, in Germany (€37 million). Increase in appraisal values of +2.3% on a like-for-like basis, due to the increase in revenues and the consolidation of hotels as operating properties performed at the end of 2024 Covivio Hotels held a Hotel real estate portfolio valued at €5,878 million (€6,501 million at 100%) at the end of June 2025, characterized by: high-quality locations: the average grade given for "geographic location" by customers on Booking.com is 8.9/10; a diversified portfolio, in terms of countries (11 countries), segments (27% of economy hotels, 40% of mid-range hotels and 33% of upscale hotels) and partner operators (17 brands including Accor, Marriott, IHG, Radisson, Minor and B&B); long-term leases of 10.7 years on average. Group Share (€ millions, excluding duties) Value 2024 Value H1 2025 H1 LfL change 1 Yield 2024 2 Yield H1 2025 2 Hotel lease properties 3 593 3 561 +1.4% 6.0% 6.2% Hotel Operating properties 2 226 2 317 +3.7% 7.0% 6.5% Total Hotels 5 818 5 878 +2.3% 6.4% 6.4% Non-Strategic (Retail) 43 36 -3.3% N/A N/A Total Covivio Hotels 5 861 5 914 +2.2% 6.4% 6.4% 1 LfL : Like-for-like 2 Yield excluding transfer taxes On a like-for-like basis, the Hotel real estate portfolio was up by +2.3% over six months, driven mainly by assets located in France (+4.7%) and southern Europe (+3.3% in Spain, +2.6% in Italy). This growth is mainly due to the consolidation of hotel properties located in France and Belgium at the end of 2024, which resulted in a revaluation of these assets of +10.4%. The hotel portfolio has an average yield excluding transfer taxes of 6.4% (stable over 6 months), of which 6.2% on the lease portfolio and 6.5% on the operating properties portfolio. Breakdown of the hotel real estate portfolio at 30/06/2025 (in Group share) €183 million increase in equity Covivio Hotels' equity increased by €183 million in the first half of 2025, following the payment of the dividend in shares, which was subscribed by 82.3% of shareholders, at an issue price of €18.57/share. 9,848,860 new shares were issued, increasing the total number of shares comprising the share capital to 157,990,312. This transaction, which reflects the renewed confidence of shareholders in Covivio Hotels' strategy, strengthens the Company's resources to continue its development. Decrease in debt and improvement in the debt ratio The net debt of Covivio Hotels fell to €1,966 million in Group share compared to €2,119 million at 31 December 2024, with a stable rate, of 2.3% at the end of June. The average debt maturity is 4.4 years. On June 30 th , 2025, the Loan To Value (LTV) ratio stood at 29.8%, down -2.7 points compared to the end of 2024, benefiting from increases in value and the payment of the dividend in shares. The interest coverage ratio (ICR) was 8.1x, and the net debt/EBITDA ratio was 6.4x. Covivio Hotels net liquidity (including undrawn credit lines) was €958 million at the end of June 2025. Revenue growth: +5.3% on a like-for-like basis € million Revenues H1 2024 Revenues H1 2024 Revenues H1 2025 Revenues Change Chang H1 2025 Group Group 100% Group Share 100% Share Share L Group Share (%) (%) (*) The good results in the hotel market and for our hotels over the year resulted in revenue growth of +6.0% on a current scope and +5.3% on a like-for-like basis to €162.9 million compared to €153.7 million on 30 June 2024. Fixed Revenues 96.2 89.5 98.4 91.5 +2.3% +3.6% Variable Revenues 65.2 64.2 72.3 71.4 +11.1% +8.7% Total Hotel Revenues 161.4 153.7 170.7 162.9 +6.0% +5.3% Non-strategic (Retail) 1.7 1.7 0.5 0.5 -68.7% +1.8% Total revenues Covivio Hotels 163.1 155.4 171.2 163.4 +5.2% +5.3% e FL (*) On a like for like basis Fixed revenues (56% of hotel real estate revenues; Group share) Rents totalled €91.5 million on 30 June 2025, i.e. a +3.6% increase on a like-for-like scope due to rent indexation. Variable revenues (44% of hotel real estate revenues, Group share) Hotel real estate with variable rent (10% of hotel revenues, Group Share) : the portfolio is mainly let to Essendi (formerly AccorInvest), in France and Belgium. It also includes the variable portion of revenue from assets located in Spain, Italy and the UK, held under leases with a guaranteed minimum rent. Hotel operating properties (34% of hotel real estate revenues, Group share) : the majority of these hotels are located in France, Germany and Belgium. Overall, variable revenues increased by +8.7% on a like-for-like scope year-on-year, thanks in particular to the excellent performance of hotel lease properties in southern Europe and hotel operating properties located in Nice and Lille. Dividends in shares and strengthened balance sheet Covivio Hotels paid its dividend in shares this year, with 82.3% of shareholders subscribing to the offer. Only £39 million in cash was used to pay the balance. Covivio Hotels' net debt amounted to €1,965.5 million for the group's share, compared with €2,119 million at 31 December 2024. its average rate improved by 5 basis points, from 2.33% at the end of December 2024 to 2.28% at the end of June 2025, and its average debt maturity decreased to 4.4 years (compared with 4.8 years at the end of 2024). Covivio Hotels has a stronger debt coverage ratio of 101.6% at end-June 2025 (vs. 94.8% at end-2024), with a coverage maturity of 5.2 years. As at 30 June 2025, the loan-to-value (LTV) ratio stood at 29.8%. The interest coverage ratio (ICR) was 8.09x, up from 6.09x at the end of 2024. At the end of June 2025, Covivio Hotels had liquidity (including undrawn credit lines) of €958 million attributable to the group. In its annual review, S&P Global Ratings confirmed Covivio Hotels' financial rating at BBB+, with a stable outlook, in line with Covivio's rating. This confirmation recognises the strength of the company's operational and financial profile Signing of a new lease with Radisson Hotel Group Covivio Hotels signed a new lease with Radisson Hotel Group for an asset located at Roissy Charles de Gaulle airport, previously operated by Accor under a management contract. This 12-year lease is based on variable rent with a guaranteed minimum. The 4-star hotel with 305 rooms will be operated under the Radisson Blu brand. The transition from operating property to hotel lease property should lead to a significant improvement in revenues, which are expected to grow by more than 50% compared to 2024. This transaction marks a new stage in the strategic partnership between Covivio Hotels and Radisson Hotel Group and illustrates Covivio Hotels' ability to continuously optimize its revenues, by leveraging the flexibility of the different types of contracts (lease, franchise, management) and its in-depth knowledge of operators. Recurring net result growth of +10.7% in H1 2025 Recurring net result (EPRA Earnings) of €132.3 million at the end of June 2025 (compared to €119.5 million at the end of June 2024), increased by +10.7% over a year, boosted by revenue growth. EPRA Earnings per share amounted to €0.88 (compared to €0.81 last year) an increase of +8.8%, taking the payment of the dividend in shares into account. The EPRA NTA (net tangible assets) NAV was €4,006 million, compared with €3,815 million at the end of 2024, up +5.0% over the semester. It totals €25.4 per share, a decrease of -1.5% compared to the end of 2024, due to the payment of the dividend in shares in 2025. The EPRA NDV net asset value, which takes the fair value adjustment of interest rate hedges and fixed-rate debt into account, rose to €3,843 million, from €3,690 million at the end of December 2024, an increase of +4.2%. It totals €24.3/share. ‌Financial results General principles The condensed consolidated half-year financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 "Interim Financial Reporting", as adopted by the European Union. The rules and methods applied are identical to those used on 31 December 2024. Half-year net income statement Revenue Group share Covivio Hotels' revenue attributable to the Group amounted to €163.4 million for the first half of 2025, up 5.3% compared to June 2024. On a like-for-like basis, fixed hotel rents rose by 6.2%, variable hotel rents by 41.0% and EBITDA from hotels owned by 3.5% compared with June 2024. Overall, variable revenues rose by +8.7% on a like-for-like basis year-on-year, thanks to the very good performance of leased hotels in Southern Europe and freehold hotels in Nice and Lille. (In € million) Revenues Revenus H1 H1 2024 2024 100% Group Share Revenues H1 2025 100% Revenues Revenues Revenues H1 2025 Q1 2025 Q2 2025 Group Share Group Share Group Share Lease properties - Variable Lease properties - Fixed Operating properties - EBITDA Total revenues Hotels Non-strategic (Retail) Total 35,6 96,2 29,6 161,4 1,7 163,1 35,6 89,5 28,7 153,7 1,7 155,4 16,6 98,4 55,6 170,7 0,5 171,2 16,6 91,5 54,8 162,9 0,5 163,4 6,9 44,9 14,0 65,7 0,3 66,0 9,7 46,6 40,8 97,1 0,3 97,4 Change (%) Group share -53,3% 2,3% 91,1% 6,0% -68,7% 5,2% Change Group share (%) LfL 1 % of revenues 41,0% 3,6% -3,5% 5,3% 1,8% 5,3% 10,2% 56,2% 33,6% 100,0% n.a. n.a. 1 LfL: Like-for-Like Operating profit attributable to the Group Operating profit amounted to €157.1 million for the Group's share on 30 June 2025, compared with €153.1 million at 30 June 2024. This slight change is mainly due to the change in the fair value of investment properties (+ €49.7 million), offset by the decrease in rental income (-€18 million) and EBITDA from hotels under management (+€26 million) offset by depreciation and amortisation for the period (-€31 million). Financial result, Group share Financial income mainly consists of: The cost of net financial debt of €-22.7 million, down €5 million compared with June 2024, in line with the decrease in average debt and its cost; The financial expense on lease liabilities (-€7.8 million), generated by the application of IFRS 16, which requires lease contracts to be restated in the same way as finance leases; The negative change in the fair value of financial assets and liabilities of -€6 million, considering changes in interest rates; Foreign exchange gains of €0.5 million, compared with €0.4 million at 30 June 2024, related to our UK, Polish, Hungarian and Czech portfolios. EPRA Earnings EPRA Earnings amounted to €132.3 million as of 30 June 2025. This represents an increase of 10.8% compared with 2024. EPRA Earnings per share amounted to €0.88 as of 30 June 2025, compared with €0.81 as at the same date in 2024, representing an increase of 8.8%. Consolidated half-year financial position as of 30 June 2025 The simplified consolidated balance sheet attributable to the group as of 30 June 2025 is as follows : Operating properties decreased (-€70.1 million), mainly due to depreciation for the period (-€49.6 million) and the reclassification of a hotel in Germany to assets held for sale for -€32.1 million. Investment properties increased slightly (+€12.4 million) over the period, mainly because of: The change in fair value of real estate assets, amounting to €+ 49.7 million, The decline in the value of the pound sterling (-€24.5 million) The reclassification of new commitments on retail properties (-€4 million) Assets held for sale also varied due to the disposal of the 2024 commitments and the signing of new 2025 commitments on retail assets and the disposal of a hotel in Germany. Cash and cash equivalents consist of cash and marketable securities totalling €597 million, in anticipation of the repayment of a bond issue (€350 million) in the second half of the year. On the liabilities side, shareholders' equity rose from €3,434 million on 31 December 2024 to €3,499 million at 30 June 2025. This change is mainly due to the impact of: the positive result for the period of €114.5 million the payment of the 2024 dividend of -€222 million, offset by the dedicated capital increase of +183 million, so a net amount of -€39 million the change in the translation reserve of -€11 million A detailed explanation of the various items is provided in the notes to the consolidated half-year financial statements. Debt structure As of 30 June 2025, net financial debt amounted to €1,966 million for the group. Net financial debt attributable to the Group represents 29.8% of total revalued assets including rights attributable to the Group and 32.1% of total assets excluding rights attributable to the Group, excluding restatement of commitments. Debt characteristics The average debt rate was 2.28% (compared with 2.33% on 31 December 2024). Debt by maturity The average maturity of debt was 4.4 years on 30 June 2025, compared with 4.8 years on 31 December 2024. Coverage As of 30 June 2025, the Group's active hedge coverage ratio was 101.6%. The net value of hedging instruments amounted to €90 million for the Group's share as of 30 June 2025. The change in value of hedging instruments over the period had a negative impact of €6.1 million on the Group's share of the income statement due to changes in interest rates. ‌Assets as of 30 June 2025 Covivio Hotels' assets are valued at €6,501 million, excluding transfer taxes, representing €5,878 million attributable to the group, excluding transfer taxes. Covivio Hotels' assets are broken down as follows: Values ED 30/06/2025 Assets, Group Share (In € million) Values ED 31/12/2024 ∆ H1 2025 Yield ED 2024 (2) Yield ED H1 2025 (2) 6,0% 7,0% 6,2% 6,5% 6,4% 6,4% N/A N/A 6,4% 6,4% LfL (1) Hotel lease properties 3 593 3 561 1,4% Hotel Operating properties 2 226 2 317 3,7% Total Hotels 5 818 5 878 2,3% Non-Strategic (Retail) 43 36 -3,3% Total Covivio Hotels 5 861 5 914 2,2% (1) LfL: Like-for-Like scope. (2) Yield HD: Yield excluding duties . On a like-for-like basis, hotel assets rose by 2.3% over the six-month period, driven mainly by assets located in France (+4.7%) and southern Europe (+3.3% in Spain, +2.6% in Italy). This growth is largely attributable to the consolidation of freehold and leasehold assets in France and Belgium, completed at the end of 2024, which resulted in a 10% revaluation of these assets. The hotel portfolio has an average yield excluding rights of 6.4% (stable over six months), of which 6.2% is on leased assets and 6.5% on freehold assets. Since 2005, Covivio Hotels' portfolio has evolved as follows (in € million): Breakdown of rental income Covivio Hotels has high visibility of its future cash flows thanks to long-term fixed leases with tenants who are leaders in their respective sectors and have high credit ratings. Annualised rents Annualised rental income and revenue from hotels (excluding retail outlets) amounted to €371.9 million as of 30 June 2025, broken down as follows: % of rental income Number of Number of Annualised revenues Annualised revenues Annualised revenues Change rooms assets H1 2024 H1 2025 H1 2025 (%) Geographical breakdown (€ million) Group share 100% Group share Paris 3 046 11 35,8 22,1 15,3 -57,3% 4% Inner suburbs 1 366 5 5,8 8,0 2,8 -51,9% 1% Outer suburbs 3 210 31 11,4 15,6 11,0 -3,1% 3% Total Paris Region 7 622 47 53,0 45,7 29,1 -45,1% 8% Major regional cities 3 560 34 26,9 19,0 13,8 -48,7% 4% Other French Regions 3 680 54 8,8 12,4 7,2 -18,1% 2% Total France 14 862 135 88,8 77,1 50,1 -43,5% 13% Germany 5 760 51 34,6 34,3 33,4 -3,5% 9% United Kingdom 1 826 9 35,7 38,7 38,7 8,3% 10% Spain 3 114 16 42,1 43,2 43,2 2,7% 12% Belgium 1 265 5 17,0 10,8 10,8 -36,7% 3% Other 2 285 13 44,5 46,3 46,3 4,1% 12% Total Hotel - Lease properties 29 112 229 262,7 250,5 222,6 -15,3% 60% France 5 107 33 19,6 84,5 76,4 289,4% 20% Germany 3 184 7 40,3 45,8 43,4 7,7% 12% Other 2 091 14 17,7 30,7 29,5 66,2% 8% Total Hotels - Operating properties 10 382 54 77,7 161,0 149,3 92,3% 40% Total Hotels 39 494 283 340,4 411,5 371,9 9,3% 100% Non-strategic (retail) 0 36 1,6 1,3 1,3 -21,5% 0% Total 39 494 319 342,0 412,7 373,1 9,1% 100% % of rental income Annualised Annualised revenues revenues H1 2025 H1 2025 100% Group share Breakdown by tenant/brand Number of rooms Number of assets Annualised revenues H1 2024 Group share Change (%) Accor 11 815 63 77,8 117,1 93,9 21% 25% IHG 2 329 12 43,2 45,6 45,6 6% 12% B&B 13 509 153 43,6 60,7 46,5 7% 12% RHG 1 919 5 5,6 28,8 27,7 399% 7% Marriott 1 326 5 24,4 26,8 26,1 7% 7% NH 3 022 19 55,6 60,8 60,8 9% 16% Hotusa 553 2 8,9 9,9 9,9 11% 3% Barcelo 497 2 8,1 8,7 8,7 8% 2% Club Med 389 1 5,3 5,4 5,4 2% 1% AC Hotels 5,8 0,0 0,0 -100% 0% Melia 534 3 6,7 7,1 7,1 6% 2% Motel One 712 3 4,8 5,3 5,1 6% 1% Hilton 0,0 0,0 0,0 Meininger 591 3 7,2 7,5 7,5 4% 2% Sunparks 877 2 8,2 8,8 8,8 6% 2% Autres 1 421 10 35,1 19,1 18,8 -46% 5% Total Hotels 39 494 283 340,4 411,5 371,9 9% 100% Non-strategic (retail) 0 36 1,6 1,3 1,3 -22% 0% Total 39 494 319 342,0 412,7 373,1 9% 100% Lease maturity schedule The firm residual term of leases decreased by 0.3 years compared to 31 December 2024, representing a firm residual term of 10.7 years at the end of June 2025. Rents, by lease expiry date, are broken down as follows: (In € million, Group share) By lease end date (1st break) % of total By lease end date % of total 2025 0,0 0% 0,0 0% 2026 14,9 7% 0,0 0% 2027 3,2 1% 0,0 0% 2028 5,1 2% 7,7 3% 2029 2,7 1% 8,5 4% 2030 2,1 1% 20,1 9% 2031 31,0 14% 11,8 5% 2032 9,7 4% 11,2 5% 2033 10,5 5% 6,8 3% 2034 6,8 3% 33,5 15% Beyond 136,5 61% 122,9 55% Total Hotels in lease 222,6 100% 222,6 100% Non-strategic (Retail) 1,3 1,3 Summary of the experts' work As of 30 June 2025, the breakdown of the portfolio value (group share) between the real estate experts is as follows: Assets 30 June 2025 PdG Occupancy rate The financial occupancy rate measures the ratio between the annualised rent for occupied premises and the annualised rent if the premises were fully let. The physical occupancy rate indicates the number of square metres occupied in relation to the number of square metres available for letting. Both rates are stable at 100% for hotels as of 30 June 2025. ‌EPRA indicators As of 30 June 2025, EPRA NTA stood at €4,006 million (€25.4 per share), down 1.5% compared with 31 December 2024. EPRA NDV stood at €3,843 million (€24.3 per share), down 2.3% over six months. ‌Related companies The main transactions between related parties during the first half of 2025 are detailed in section 2.2.7.3 of the notes to the consolidated half-year financial statements. ‌Risks and uncertainties Covivio Hotels invites readers to refer to Chapter 2 of its 2024 Universal Registration Document (URD), which identifies the main risks and control measures implemented by the company. Risks are rated based on a combined analysis of their potential negative impact (on the company's valuation, results, image and/or business continuity) and their probability of occurrence. Once quantified, the gross impact and probability are adjusted for the control measures in place to determine the net risk. Following the risk review, those risks whose level could change in the second half of 2025, through an increase in their net impact and/or net probability, are presented below. The measures to control these risks (unchanged) are described in the 2024 URD available on the Covivio Hotels website. The other risks are unchanged at present. Risks related to the environment in which Covivio Hotels operates Unfavourable developments in the real estate market: decline or stagnation in values and revenues Values Covivio Hotels' total assets at the end of June 2025 (€7.2 billion on a consolidated basis) mainly consist of the appraised value of its properties, which amounts to €6.5 billion (more than 91%). As such, any change in the value of the properties has a direct impact on the balance sheet total. The value of Covivio Hotels' assets depends on changes in the property markets in which the company operates. Both rent levels and market prices (and therefore the capitalisation rates used as comparable by experts) may be subject to fluctuations linked to the economic and financial environment. Covivio Hotels recognises its investment properties at fair value in accordance with the option offered by IAS 40. As such, a decrease in appraisal values is likely to affect the value of Covivio Hotels' Net Asset Value and, potentially, its share price. In the first half of 2025, the value of the hotel portfolio changed on a like-for-like basis by+ 2.3% (compared with +1.5% in 2024). Higher borrowing rates may increase financing costs for investors and potential buyers, which may discourage some of them from entering into real estate transactions or making acquisitions. This could reduce market demand and put downward pressure on the valuation of Covivio Hotels' assets. The real estate market is dynamic and reacts to various economic and financial factors. An increase in interest rates may lead to adjustments in capitalisation rates based on risk perceptions and expected returns. Investors may demand higher returns to offset increased borrowing costs, which may result in higher capitalisation rates. However, it should be noted that the impact of the increase in revenue expected by Covivio Hotels should limit the negative effect of a rise in rates. For information purposes, the table below shows the sensitivity of the valuation of leasehold assets as of 30 June 2025 to yield rates (corresponding to the annualised normative rent/appraisal value of assets excluding duties): Decrease in capitalisation rate Data as of Increase in capitalisation rate 1 point 0.75 point 0.5 point 0.25 point 30/06/2025 0.25 point 0.5 point 0.75 point 1 point Capitalisation rate 5,2% 5,5% 5,7% 6,0% 6,2% 6,5% 6,7% 7,0% 7,2% Portfolio value (in €M ) * 4 452 4 250 4 064 3 895 3 739 3 595 3 461 3 338 3 222 Variation in value (in €M ) 714 511 326 156 -144 -277 -401 -516 Variation (in %) 19,1% 13,7% 8,7% 4,2% -3,9% -7,4% -10,7% -13,8% * Total investment properties, excluding development portfolio and rights of use. The sensitivity of covenants to changes in appraised values is presented in section 1.5.2 "Financial risks". Income European tourism was very buoyant in the first half of the year, with average prices and occupancy rates continuing to rise in line with (or even exceeding) 2024 levels. Revenues for the first half of the year amounted to €163.4 million for the group's share (+5.3% on a like-for-like basis vs H1 2024). Nevertheless, the company remains sensitive to its share of variable revenues (assets whose rents are likely to vary according to hotel turnover, as well as rents for hotels owned under leasehold agreements), which represented 50% of its revenues on 30 June 2025. Therefore, in the event of a deterioration in the economic environment, Covivio Hotels could, in addition to a decline in revenue, suffer value adjustments that could be amplified by interest rate increases. The Company also benefits from long-term fixed-term leases, which means it has little exposure to vacancy risk over the next few years. The table below shows the sensitivity of the fair value of investment properties to changes in rents. The capitalisation rate is constant at 6.2% (share of group data). Decrease in annualised rents Data as of Increase in annualised rents 10,0% 7,5% 5,0% 2,5% 30/06/2025 2,5% 5,0% 7,5% 10,0% Annualised rents 210 216 222 227 233 239 245 251 257 Portfolio value (in €M ) * 3 365 3 458 3 552 3 645 3 739 3 832 3 926 4 019 4 113 Variation in value (in €M ) -374 -280 -187 -93 93 187 280 374 Variation (in %) -10,0% -7,5% -5,0% -2,5% 2,5% 5,0% 7,5% 10,0% * Total investment properties, excluding development portfolio and rights of use. Increase in capitalisation rates 0,50% 1,0% Portfolio Portfolio Decrease in rents Variation* Variation* (in €M ) (in €M ) -5% 3 274 -12% 3 035 -19% -10% 3 088 -17% 2 848 -24% * Variation compared to the portfolio at 30 June 2025. The impact of changes in value on the Company's covenants is presented in section 1.5.2 "Financial risks". Financial risks Unfavourable changes in interest rates (borrowing and exchange rates) Loans Covivio Hotels could experience an increase in its financial expenses on its share of unhedged debt and, more generally, see its ability to implement its short/medium-term investment strategy limited. With an average rate of 2.28%, Covivio Hotels' debt amounted to €2.1 billion at the end of June 2025. Its average active coverage ratio stood at 101.6%. The following table shows the sensitivity of Covivio Hotels' EPRA Earnings to interest rate increases. A 25 bps increase in the three-month Euribor rate would have an impact of -€0.3 million on EPRA Earnings. A 50 bps increase in the three-month Euribor rate would have an impact of -€0.5 million on EPRA Earnings. A 100 bps increase in the three-month Euribor rate would have an impact of -€1.0 million on EPRA Earnings. Change A change in the exchange rate between the pound sterling and the euro could have a negative impact on Covivio Hotels' results and more specifically on the amount of rent received, as 13% of its assets are located in the United Kingdom. Breach of bank covenants (LTV, ICR) linked to declines in value and/or income The risks related to changes in values and revenues are detailed in the sections on the risk "Unfavourable developments in the real estate market: decline or stagnation in values and rents" (see above). In the event of a breach of a covenant, Covivio Hotels would theoretically have to repay its entire debt. In practice, however, this risk appears unlikely, as banks generally prefer to renegotiate the existing financial terms with the borrowers concerned, as was seen during the 2008 financial crisis. Covivio Hotels' most restrictive LTV (Loan to Value) covenant is 60% for an effective ratio of 32.1% as of 30 June 2025 (bank LTV). This means that the company could suffer a 46% decline in the value of its assets before reaching its LTV covenant. Covivio Hotels' most restrictive ICR (Interest Coverage Ratio) covenant is 200%, with an effective ratio of 809% as of 30 June 2025. ‌Outlook for 2025 A leading player in European hotel real estate, Covivio Hotels is pursuing its strategy of growth and portfolio optimisation by actively enhancing the value of its existing assets through dynamic and targeted management. ‌Transition tables Transition tables Portfolio transition table Portfolio (as of 30/06/2025) 5 914 M€ Use rights on investment properties + 239 M€ Use rights on operating properties + 45 M€ Equity affiliates > 30% - 156 M€ Non-accrued goodwill of operating property assets - 383 M€ Real Estate Assets Group Share 5 659 M€ The companies's fully consolidated non-controlling interest + 270 M€ 100% Real estate assets - IFRS accounts 5 929 M€ EPRA indicator transition table Shareholders' equity Group - IFRS Accounts 3 499 M€ Fair value of operating property assets net of deferred taxes + 296 M€ Non optimised transfer rights 331 M€ Fair value of financial instruments - 90 M€ Defered tax (including IFRS adjustments) + 290 M€ EPRA NRV 4 326 M€ Non-optimised transfer rights -283 M€ Goodwill and intangibles assets* - 1 M€ Deferred tax on non-core assets - 36 M€ EPRA NTA 4 006 M€ Optimisation of the transfer rights - 48 M€ Intangibles assets + 1 M€ Fair value of fixed-rate debt net (excluding credit spread) of deferred taxes + 49 M€ Fair value of financial instruments + 90 M€ Deferred taxes - 254 M€ EPRA NDV 3 843 M€ The fair value of fixed-rate debt is measured at the risk-free rate and excluding credit spreads. Rents transition table € million Rental income HY 2025 IFRS Accounts Non-controlling interest Rental income HY 2025 Group Share Covivio Hotels Hotels 171 M€ -8 M€ 163 M€ Retail premises 1 M€ 0 M€ 1 M€ Total Rental Income 171 M€ -8 M€ 163 M€ Managed hotel EBITDA 56 M€ -1 M€ 55 M€ 1.7.1.4. EPRA Earnings transition table € million Net income 100% IFRS Accounts Non-controlling interest Net Income, Group Share Restatements EPRA Earnings Net Rental Income 113,5 -7,0 106,5 0,7 107,2 Managed hotel income 55,6 -0,9 54,7 1,7 56,4 Operating costs -9,4 0,5 -8,8 0,0 -8,8 Depreciation of operating assets -51,9 0,5 -51,4 49,6 -1,8 Net allowances to provisions and other 7,9 0,0 7,9 -3,5 4,4 OPERATING PROFIT 115,7 -6,8 108,9 48,5 157,4 Income from disposals of assets -1,2 0,0 -1,2 1,2 0,0 Net valuation gains and losses 51,1 -1,4 49,7 -49,7 0,0 Income from disposal of securities 0,0 0,0 0,0 -0,0 0,0 Income from changes in scope -0,2 0,0 -0,2 0,2 0,0 OPERATING PROFIT (LOSS) 165,4 -8,3 157,1 0,3 157,4 Costs of net financial debt -24,8 2,1 -22,7 0,0 -22,7 Interest charges on rental liabilities -7,8 0,0 -7,8 5,6 -2,2 Fair value adjustment on derivatives -5,9 -0,2 -6,1 6,1 0,0 Discounting and exchange result -0,0 0,5 0,5 0,0 0,5 Net change in financial and other provisions 0,0 0,0 0,0 0,0 0,0 Share in income of equity affiliates 1,0 -0,0 1,0 4,8 5,8 PRE-TAX NET INCOME (LOSS) 128,4 -6,4 122,0 16,8 138,8 Deferred tax liabilities -0,8 0,2 -0,6 0,6 0,0 Recurrent Tax -7,0 0,1 -6,9 0,4 -6,5 NET INCOME FOR THE PERIOD 120,6 -6,1 114,5 17,8 132,3 Attention : This is an excerpt of the original content. 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