Unibail-Rodamco-Westfield SE (URW) Earnings Call Transcript & Summary

Dear shareholders, as Chairman of the Supervisory Board, it is my great pleasure to welcome you to our 2022 AGM for [ URW ], and we are delighted to be able to see you again in person. Now if you don't speak French, we have simultaneous interpretation into English, which you can listen to using the headsets.

For a headset for an English translation, please ask our ground staff now.

I have, by my side, Mr. Jean-Marie Tritant, who's Chairman of the Board. I have Mr. David Zeitoun, who's the Chief Legal Officer, and I would like to greet the members of the -- other members of the Board of Supervisory Board and other members of the Board and the Executive Committee for the group, who are all with us this morning, and they will be happy to answer any questions you might have after our meeting. Now as you will have realized 2021 was a very unusual group and our group was no exception. It was split evenly into 2 parts. H1 was marked by the COVID-19 crisis, which reached a peak in those countries of Europe where we do business. There were strict restrictions. There were lockdowns in European countries where we do business. In the Second half of the year, we noted an accelerated improvement of our operating performance in spite of many external challenges, but thanks to our practical pragmatic strategy and proactive strategy. We weathered that successfully. 2021 was also the year in which we appointed a new Board of Directors, and we put forward a new deleveraging plan, which requires a radical decrease in our financial exposure to the United States. Now you will hear more about this as we speak, and you will hear from Jean-Marie Tritant this and about the progress that we've made on many fronts. As we indicated to the investors back in March in the Netherlands. The Board has given an opportunity to describe its vision for URW and our road map through 2024 and beyond. We can clearly discern that by 2024, URW will have become a major player on the European market with unequaled portfolio. Now the conditions of the stabilization of our net rental income, the deleveraging. All of this will have been restored to pre-COVID levels as well as our gross operating income and the group will develop new sources of income by transforming our massive foot traffic into qualified customers and will maximize the value of our assets by mobilizing opportunities for growth, the combined usage market. The Supervisory Board is convinced that this strategy will allow the group to recover its growth momentum by 2024, and this will carry us forward beyond that date. Our unique positioning in Europe on high-quality assets of high-performing characteristics in an environment where this quality will really set us apart from the competition. Thanks to the trust that the major retail distributors have placed in us. We would like to thank -- I would like to thank on behalf of the Supervisory Board, Jean-Marie Tritant, the members of the Board, the Executive Committee and indeed, all of the employees of the group for their contribution to the success of our company and the quality of their work in troubled and challenging environment, which is entirely unpredictable. So I would also like to thank you for the trust that you have displayed in our group. And have been now by our side as we experienced difficult times indeed. Now pursuant to the law, I'm going to call this AGM to order as it's been convened by the Board. And we will now appoint the members of the bureau. Now the tellers will be Mr. [ Anthony Marek ] for Rock investment, and Ms. Frédérique Debril, who represents Amundi Asset Management. Mr. David Zeitoun will be our Secretary this morning. We have with us the statutory auditors in the presence of Emmanuel Gadret and Antoine Flora, who will give you their conclusions this year's report, we will be voting electronically, and this will be explained to you in details later. I'm now going to hand over to David Zeitoun who will remind you of the manner in which this assembly has been convened. David, you have the floor.

[Interpreted] The convening notice was sent out pursuant to the legal provisions. Your Board received no valid requests for new draft resolutions. All of the information and documents required by law have been made available to the shareholders on our Internet site pursuant to legal and regulatory provisions. Regarding today's agenda, please turn to the brochure, which was provided in the form of a QR code at the entrance, and you can also visit our website. We have also made our annual report available in the same manner. And the entire proceedings will be videoed and will be made available on our website. We have received approval for the manner in which this assembly was convened, and the shareholders were given the opportunity to use webmail boxes to send in their questions. We were sent 10 written questions. from the forum for responsible investment. Given the general nature, but sometimes very technical nature of the questions, you, as shareholders, are invited to consult these questions on our website once again. As to the quorum now, the calculation is based on an assumption that we have [ 138,765,659 ] shares. This is an Ordinary Meeting that we have shares with voting rights, that's [ 27,751,932 ] shares. That's quorum -- the required quorum for resolutions to be approved at this meeting. That is 1/4 of the shares having voting rights for [ 34,689,915 ] shares, and these are all registered by the legal deadline. BNP Paribas Security Services has calculated we have a quorum of 62.2% of shares with voting rights. Thank you for kindly for that, David.

[Interpreted] I will now, after all of those announcement, I give the floor to Mr. Jean-Marie Tritant, Chairman of the Board. Now it will no longer be present past this time to attend the meeting to vote. You have the floor.

[Interpreted] Thank you. Ladies and Gentlemen, dear shareholders, before I come to the details of my presentation, I'd like to thank totality of our teams everywhere in the world who throughout this year continue to demonstrate commitment and tremendous tenacity. We have improved our performance in spite of difficult business climate. Tenant sales approached pre-COVID levels with positive foot traffic trajectory in spite of the COVID situation. Our proactive leasing strategy has been successful. We've protected our long-term value as conditions improved. And if you look at our C&E business improved, combined with the performance of our consumer destinations, it is clear that people are eager to do their shopping physically, and this set to continue this year. The -- our IP is 6.91% as against 7.28% in 2020. This is better than what we expected, which was 6.75%. And this is in spite of our -- thanks to an increase in our sales base trend. We decreased our provisions for doubtful debt, collection rates improved and our operating performance outstripped last year. Thanks to turnaround in our business, a [ 5.2% ] decrease in our recurring -- allowed us to successfully shed debt. We have decreased in like-for-like basis of [ 1.6% ] for our net rents, which is an improvement relative to the negative variation of 22.4% for H1 2021 -- 2020 says the speaker. The recovery became clear in the second quarter after we reached the low end in H1. Our performance in the C&E business was better. The net earnings was a negative territory in the first semester reached EUR 57 million in H2. The tenant sales are 93%, which is better or almost as good as 2019, which is a significant improvement of [ 93% ] as against 62% in H1 relative again to 2019's performance shows an improvement in rental collection, 92% as against 73% in [ S1 ] and an increase in our sales base rent. You can see difference there, thanks to retail sales and airport sales. The trust, the display of our tenants has been accompanied by an improvement in our rental earnings after a deterioration of 60 basis points in H1. If you look at the average rental improvement. It's up by 2.2%, and against 1.3% in H1. These trends continued in the Q1 of this year. The turnover of our tenants have reached 93% of the 2019 levels, and in March, 95%. In Europe, sales are still affected by restrictions. They stand at 89% for the full quarter with an improvement of to 91% in March. In the U.S., sales are consistently better than 2019, 102% in Q1 of '22 and 104% in March. This supported our continued improvement of rental collections, 93% for the group. We continue to collect on rents in 2021. And we reached level of 93%. So up from -- and now up to 94%. We did very well in rental sales in the sense that we got more leases signed up 4%, and our MGR uplift is 6%. Our commercial partnerships stood at EUR 25.5 million, and sales based rent stood at EUR 32.5 million, both up relative to last year, showing that the recovery is genuine in the wake of COVID. Gross rental income is up 36% relative to Q1 2021, particularly due to the fact that there have been no rental discounts, and this has allowed us to pull ahead. Our financial performance is reflection of difficult circumstances, but there is good news. The 2021 AREPS, which is our main measure of our performance, is up 4.7% relative to 2020. After restatement, there has been an improvement in tenant sales, our consumer destinations in the Netherlands did very well, and the C&E business picked up significantly, and we've done a very good job deleveraging. We've decreased our debt by EUR 1.6 billion. We stand at EUR 2.2 billion on a pro forma basis, thanks to recent disposals. Consequently, we've improved by 140 basis points our IFRS LTV, and we're pursuing this effort throughout -- we intend to pursue it throughout this year. We have maintained our commitment when it comes to CSR. We've been focusing on high-impact actions, and have been very successful at this. We've been careful to get into a close contact with stakeholders where we do business, and we support the net-zero initiative whose goal is to design a common framework for carbon neutrality. We played our role in the fight against COVID-19. We allowed or arranged for vaccination centers to be set up our shopping centers. As we indicated on March 30, we are fully committed to anticipating on the required initiatives to meet the climate challenge head on. Our strategy has given us access to new sources of financing. We have the biggest credit line based on sustainability criteria in the amount of EUR 3.1 billion. That's a revolving credit facility. It's the largest by RV IT in Europe. So we continue to measure our performance regularly, and we published our performance figures. We provide specific information every year in our universal registration document. We've made significant progress. By the end of [ 2021 ], we achieved a decrease of 46-plus percent of our carbon emissions across the value chain. Our emissions in 2020 and 2021 were decreased in the wake of closures of a number of centers as a result of COVID restrictions. Our ratios have been reduced by 25%, which is very positive because we aim to reach 50% by 2030. Emissions linked to operations have also been reduced by 55.5%, thanks to significant progress as regards energy efficacy and the use of green energy. I'm pleased to announce that 100% of our collective areas in the assets are now fueled by green electricity. We are also leaders in terms of green advocacy. In terms of construction, we have a frugal building approach, which begins with design, and needs to reduce our carbon footprint. This means using new solutions for building, materials that are low in carbon and also anticipating changes in the use of our assets, thanks to optimized design, our Trinity Tower in La Défense has the best possible rating on the 14th sustainability criteria for the HQE certification. This is the first building to do so in Europe. Our Triangle development, which you can see on the slide, is another example of our approach in this area. If we look at the location, the design and the effective construction and high standard use of Triangle. Triangle actually produces 26% less carbon emissions than any of our building close to Paris. This means a global reduction in carbon emissions of 1,000 tonnes per year, which is the equivalent to a carbon sequestration in a year of 80 hectares of forest Deleveraging is our priority. We've made significant progress in 2021 on each of the pillars that we presented to you last year, with the disposal signed in 2021, our European disposal program based on EUR 4 billion has now been completed by 62%. This does not include the disposal of Jera Arcaden, which was signed in April 2020. That's a 100% amount of EUR 116 million. Progress made in 2021 as regards streamlining of our American regional assets portfolio continued at the beginning of 2022 with the sale of the old Promenade Mal Center, which is to the north of Los Angeles. In terms of CapEx, CapEx was at EUR 1 billion in 2021. in line with the group's commitment to reduce its CapEx to a maximum of EUR 2 billion for 2021 and 2022. As I've already mentioned, we've also made some significant progress as regards our European disposal program, which was in 2021 and in the first quarter of 2022. These disposals reached EUR 2.5 billion including disposal signed at the beginning of 2022, as mentioned in our financial statements for 2021. This has resulted in a cumulative premium of 6.2% as compared to previous appraisals at an initial return of 4.4%. As you will notice, the share of disposals between our malls and our offices has been fairly balanced, EUR 1.2 billion of disposals for our malls, and EUR 1.4 billion for offices. As regards malls, we have 2 main types of transactions. The first is full disposal of assets that are not essential for our destination flagship strategy because the location of their size. A recent example is the sale on the first of February of Solna Centrum in Stockholm, which was a branch of leading Swedish pension fund, Elekta. The second type of transaction concerns certain flagship assets. We aim to sell shares of assets to institutional partners, but we're continuing to monitor and manage these assets, and therefore, we receive fees for real estate management services. For example, on the seventh of February last, the group agreed to the sale of participation to the value of 45% in Westfield Carré Sénart to insurance companies Sogecap and Cardif Insurance, and this price corresponded to the latest expertise. As regards to offices, the focus has been on full disposal of mature offices as in the past. On the basis of our achievements in 2021, we hope to secure EUR 1.5 billion of disposals for the end of 2022. So we'll reach our goal of EUR 4 billion soon. In the United States, we've kept our commitments as regards our internal strategy process, which is now complete. Our operations have picked up very fast. We've also seen some signs of commercial real estate financing market recovery. And therefore, we are confident in the strength of our American portfolio, which presents strong opportunities for investors. 95% of our assets are classed in category A, and 76% are classified in Category A Plus. In 2022, operations conditions continue to improve and the market will therefore have greater visibility as regards growth potential for our malls in A-rated malls. And also, we expect to see increased differentiation for our malls -- B- and C-rated malls. We've decided on a number of options so that we can continue to act in this positive way. Our debt ratio has improved, thanks to our ongoing deleveraging actions. Our EFRS, net financial debt, was at EUR 22.6 billion at the end of 2021, whereas it was EUR 24.2 billion at the end of 2020. This drop by EUR 1.6 billion, is mostly the result of EUR 2.3 billion of disposals and EUR 1 million of recurring non-distributed income. This also includes a negative exchange rate of EUR [ 0.4 ] billion. This debt was EUR 22.1 billion for a pro rata basis for disposal signed for the Solna Centrum, and 45% for the Westfield Carré Sénart. In spite of the drop in the value of assets in 2021. The debt ratio has gone from 44.7% at the end of 2020 to 43.3% at the end of 2021. On a proportional basis, the ratio debt is, therefore, 44.9% and 44.2% pro forma for the same disposals as compared to 46.3% last year. Throughout the crisis, we took a proactive decision to try to protect the value of our assets by choosing right time to negotiate certain long-term leases in conditions that should improve in 2022 and 2023. Consequently, we have more short-term leases due to the crisis, but we have maintained the potential for income by increasing sales-based leases. Our performance in 2021, thanks to the strategy, has led to EUR 80.2 million of sales-based rent. That's a 93% increase as compared to 2020. And if this performance continues, we hope that we will be able to have a larger number of our leases converted from short term to long term, thanks to more favorable conditions. This is what we began to notice indeed in the second half of the year. We had a large number of long-term leases signed. In the first quarter of 2022, the long-term leases represented 60% of transactions. And we have seen an increase in rental earnings, thanks to our minimum guaranteed rent for long- and short-term leases. This was 6%. In H2, vacancy rates dropped in all regions, 70% for the group at the end of the year. This is following an increase in the H1 from 8.3% at the end of December 2020 to 8.9% at the end of June 2020. The vacancy rate in Continental Europe went from 5% in the first half of the year to 4% at the end of the year. But there were improvements in all countries, in particular, in Austria, we have less than 1%; and in Central Europe, 3%; in France and Spain, it was 3.6%. The vacancy rate in the United Kingdom has dropped from 12.2% to 10.6%, but remains higher than in 2019, largely because of Westfield London due to bankruptcies amongst tenants. The United States have also demonstrated an increase. The vacancy rate increased from 2020 -- December 2020 and June 2021, but it did drop in the H2 to 11%. The vacancy rate for flagships in America, apart from WTC in San Francisco, was at 9.3%. This is an improvement as compared to the 12% rate at the end of 2020 and 12.4% in the H1 of 2021. Throughout the first quarter of 2022, the vacancy rate increased by 50 bps for the group. This is in line with seasonal observations in previous years. Certain stores have indeed noticed that recovery has been better than expected because customers have been keen to purchase in store. If we compare with stores online, for example, spectacles, sellers, we've noticed that more and more online stores are trying to open physical stores because this is what consumers want. So this improvement in physical sales has already occurred in a context where tenants consider that sales online is no longer competition for their activities, but is rather complementary. H&M, for example, which recently recognized that it had been slowly developing its online activity, has noticed that in combining with 2 distribution channels, it has made greater successes. The Institute, CACI, which is specialist in consumer behavior, claims that 90% of purchases are influenced by the presence of a physical store. Today, physical stores are once again, therefore, key to the success of tenant because they generate additional revenue and savings and, therefore, increase margins. So for these various brands and classical physical stores are, therefore, essential to sales strategies. We know that tenants are very pleased by this trend, and we've noticed in our annual results that 8 of our main tenants have increased their sales service by 12% from 2019 to 2021. We've also carried out an analysis of our leading tenants in terms of the minimal guaranteed rent in Europe, and they have 33% of the GLA dedicated to sales. So these tenants have really increased their gross leasable area, the surface of the shops. And they are willing to pay more rent in order to keep these stores going because they're making better -- generating greater income. The Trinity Tower is an excellent example of our strategy. 70% of this building is now being rented using referenced rents. And we're also pursuing our destination strategy for malls. And we're seeing that this is continuing in spite of a shift to remote working, we are working with our Axa Investment Managers partner in order to continue this strategy. The recovery of C&E activities in H2 was also a positive aspect of our work. In H1, which was less successful, we've noticed a significant improvement since in terms of activity volume. At the end of January 2022, we saw 401 pre bookings for the year, and 254 of these were not cancelable. The total of pre bookings were 22% represented 81% of pre bookings in the same period in 2018. Pre bookings are now at 528 for 2022. 467 of these cannot be canceled, thus a volume of 93% of pre bookings as compared to the same period in 2018. Activity should return to normal in 2023 when we will also be preparing for the Paris Olympic Games, which will be beginning in H2 of 2023. URW will always be a real estate advocate. Our strategy for 2024, and our prospects for the future, cover both current developments and future long-term opportunities. This will begin with our project portfolio at EUR 2 billion, which will be completed by 2024, and we'll generate EUR 125 million stabilized net rent. We are also investing with a strict profitability criteria into various mixed-use projects. These are high-quality projects and include Gaîté Montparnasse in Paris and Westfield Hamburg-Überseequartier. These 2 projects represent EUR 110 million of stabilized net rent. Over last year, we also revised our development potential linked to density of our existing portfolio, and we identified 2.4 million square meters of projects that includes 50% projects in residential assets. In presenting our 2021 financial statements, we announced that our adjusted recurring earnings per share for 2022 would be within a range of to EUR 8.2 to EUR 8.4. This is on the base of trends observed at the end of the year. That is a reduction that is thanks to promising commercial performance, and positive rental activity as well as a reduction in vacancies in our assets. These results are very positive, and are aligned with the current geopolitical context. In conclusion, our strategy for 2024 includes the following strategies. First of all, we wish to return to our [ 29 ] level as regards stabilized net rents in our malls. And we hope that our GOS for the group for 2023 will return to its previous level. This program will be completed in 2024. We also want our deleveraging program to continue that URW will be a European pure player with performing a highly positive portfolio of assets. We also want to make sure that we have quality visitors in our assets. And finally, we're looking at various opportunities for mixed opportunity developed, so as to maximize the value of our assets. So in conclusion, through our program, we hope we will create a solid that will allow us to accelerate growth beyond 2024, and this will generate new income and also create new real estate opportunities. Thank you very much.

Thank you very much for this very long presentation. which I hope answered your various questions. And it really confirms what I said in my introduction, that is -- there's a huge number of actions taken in 2021, and we can see the importance of the results and progress that we have already achieved. This is a very important time there for our company, and we have a very clear strategy. I'm going to give the floor now to David. He will talk to us about governance.

[Interpreted] The Board now has 5 members, Mr. Jean-Marie Tritant; Chairman of the Board, Mr. [ Fabrice Mouchel ], DG Finance, Mr. Mr. Olivier Bossard; DG Investment, Ms. Caroline Puechoultres; DG Client Strategy, and Mr. Sylvain Montcouquiol; DG for Central Functions and Sustainable Development. The Supervisory Board now providing you approval of the renewal of the appointment of Madam Dagmar Kollmann, [indiscernible] and the appointment of Mr. Mr. Michel Dessolain, the Supervisory Board will be chaired by Mr. Leon Bressler and will have 10 members. Supervisory Board is perfectly gender equal. We have 7 nationalities represented with an independence rate of 80%, with an extremely broad array of skills, particularly finance, real estate, digital e-commerce, commerce and sustainable development.

Thank you very kindly for that presentation. David, let us now hear about the compensation policy for the group, which will go into effect this year, and you will report on the compensation paid in 2021.

[Interpreted] As part of the corrective measures that we undertook in 2021, we reviewed our compensation policy, and this was finalized this year. This is marked by a rebalancing between the short term compensation and its long-term component. We also decreased by 16.5%, the target compensation of the members of the board compared to the previous compensation policy. Variable compensation, both long term and short term, cover the financial criteria, but also strategic and environmental targets to align them in an optimal fashion with the interest of the group. The compensation for 2021 and the 2022 compensation policy is provided in details in our reference document, which is available to you for consultation.

[Interpreted] Thank you very kindly. We're now going to hear from Mr Jean-Yves Jégourel, who represents the statutory auditors. And he will give us a summary presentation of the statutory auditor's report. Good morning, sir. Thank you for joining us.

[Interpreted] Thank you, Chairman. Ladies and gentlemen, shareholders, greetings. It is my honor to describe you the summary version of our reports for the ordinary and extraordinary sessions of this combined AGM. All of the reports have been made available by our company, and are available for you to read on the website. Pursuant to custom, I will just sum up the main features of our reports. Regarding the accounts. We remind you that the fundamental purpose of our job is to obtain reasonable terms regarding the truthfulness of the accounts, and we discovered no anomalies this year. We see that the portfolio is adapted to the footprint of the group, and we verified the amounts reported in the annual accounts and in the consolidated accounts and review the internal controlling environment. The main features that were underscored, and the overall presentation of the accounts. Our report on the accounts contains a specific section, which describes the specific analysis of risks. And according to our professional judgment, this was very satisfactorily handled by the company, and we were given full satisfaction when we obtained answers to our questions. URW SE resolution #1, you may refer to our report universal registration document, we give a full discharge to the company as per our mission. In part 3 of our report, we recall the key features of the audit. We assess the shares, and we looked at how the financial debt was accounted for, and we looked at the derivatives instruments. We made specific inspections, and the Supervisory Board's report was scrutinized as were the -- all the aspects of the Directors' fees. Regarding the consolidated financial statements, which you can refer to pursuant to resolution #2, this is on pages 400 to 406 of the universal registration document. Here, again, we give full discharge to the companies managers and confirm that we conducted an audit according to professional standards in effect in France, and we can attest to the truthfulness and accuracy of the accounts pursuant to IFRS standards. In the third part of the report, we specify the key aspects of the audit, which allowed us to form this opinion. We identified the key aspects which are as followed: valuation of investment real estate, which are held directly or through -- in conjunction with partners. We looked at indeterminate length investments and goodwill pursuant to the acquisition of Westfield, and the reduction in rental fees, as per the COVID-19 context and the accounting of the financial debt. The details of all of these features appear on pages 401 to 404 of the universal registration document. Our special report on related party agreements can be found in full on pages 412 and 413 of the universal registration report. In the first part of the special report, we have reported that no new related party agreement had been entered into during the financial year. And in the second part of this report, we informed the shareholders that the related party agreement that was entered into last year was throughout 2021. It was a transactional agreement, a team, your company; and Ms. [indiscernible], former Chairman of the Board through December 31 last, and the specifics of this agreement can be found on Page 413 of the reference document. As to capital transactions, which are put up for your approval on the basis of extraordinary operations to be approved. They have not been the subject of any particular alerts on our part. We have bound to produce additional reports, and this is not necessary this time around. Thank you very kindly for your attention. You have the floor.

[Interpreted] Thank you very kindly, sir, for your presentation. I'm now going to give David Zeitoun the floor once again. He's going to tell us how many shareholders are going to be voting.

[Interpreted] We've closed the attendance. We have 3,837 shareholders present represented by proxy or voting by correspondence. 87 million-plus shares are represented here at 62.89% of the existing voting rights. And so we have a quorum.

[Interpreted] Ladies and gentlemen of the bureau, you are kindly requested to verify the accuracy of this attendance sheet. Thank you kindly. The time has come for questions. Before we put our resolutions up for a vote, we are going to give the floor to our shareholders for questions, observations. They will be asked to be as brief as possible so that everyone has an opportunity to take the floor, if they so desire. And we have rolling microphones that you are kindly requested to speak into so that your question can be heard. And -- so that can be broadcast -- or webcast rather.

Gentlemen. I have 2 questions. The first has to do with the share price since you acquired Westfield, the share price has plummeted. I remember the days when the share price is EUR 250, but this has plummeted. It has plummeted. I know that you've disposed of a few of Westfields assets, have you completed your disposal program? Are you convinced that the share price will recover? Second question regarding the quorum. You say that you're 38% of the shareholders not voting. So are those investment funds? Because we -- small shareholders are a few in numbers. So how can you explain that so many investments ones are not voting?

Thank you for your attention. I can reply regarding the quorum. The quorum is as it stands, but this is a historic level, in fact, when it comes to the participation in this meeting, and this is not an unusually low level. And we're also in a situation where we are quite sanguine about the future of the company. And so there is no cause for alarm. And that's why there may be slightly lower turnout than you might have expected. As to their share price, I'm going to hand over to Jean-Marie, who is going to tell you that we don't have any comments to make.

[Interpreted] Yes. Indeed, we have no comments to make. But we believe that the intrinsic value of our business is going to be recognized by the markets. We have debt to shed. Clearly, we need to deleverage, and this is scheduled. We've already undertaken a significant amount of deleveraging. And we have 3 pillars, a deleveraging program through disposals of a portion of our assets, particularly the disposal of assets in Europe. We've completed that in the amount of over 62% if you include the sale of that small asset in Germany recently, and we've told the markets that we're quite confident that we'll be able to complete this deleveraging program. In Europe, we have EUR 1.5 billion to secure between now and the end of this year, but we are confident that we will succeed at that. We've also got a plan to undertake to decrease our financial exposure to the U.S. As we told you in 2021, we worked hard to restore the value of our assets, put the business back on track and take advantage of the significant pickup in consumption in the U.S. And to address the high vacancy rate, this is all very well. It's coming along very nicely. We could not find funding for commercial assets, and this is now changing. Since the Ukraine crisis, we've been a bit concerned. But finally, we undertook a transaction in Hawaii in significant amounts, which corresponds exactly to our positioning in the USA. So in a word, we're quite confident that, yes, indeed, our massive arbitrage operation will be successful in the U.S., and that we can successfully refocus on Europe. Pillar #1. Pillar #2, capping our costs, ensuring that we didn't increase our investments. We would undertake no more than EUR 2 billion in investments in 2021, 2022, and we will be as good as our word. Because it was EUR 1.2 billion in 2021, and it will not exceed EUR 1 billion this year so that we can deliver 2 major transactions, the end of the restructuring of [indiscernible] at the Gaîté Montparnasse in Paris, Gaîté Montparnasse and an office building are almost fully let. So that is almost completed. And we're also working to restructure neighborhood in Hamburg on the harbor, EUR 110 million in net stabilized income once that has been fully delivered, which should significantly buoy up our earnings. And the last pillar was the decision not to pay out a dividend in 2021, 2022 financial years. This is also now completed, we have seen a return on our operating performance. That was quite handsome. This is underscored by Standard & Poor's. We were given a BBB+ rating with negative prospects, which were altered to a neutral outlook in March. The valuation of our assets in Europe, which had decreased significantly, is flattening, leveling off. We will conduct another round of assessments after the June closing, but we are convinced that the value of our assets is on the right track and that the deleveraging will help us along that the market will then recognize our financial soundness. I know I went on at length, but that is my answer. Thank you for your question.

[Interpreted] Another question, I'm Patrick from the city of Lille.

[Interpreted] I don't want to ask Mr. Tritant to repeat himself, but let me just recall that money always comes with a backbone. So if your shareholders are not the front-line shareholders, their second-line shareholders through investment funds. And there is always a physical person holding the bag, holding the cash in the end. So this remains a fact whether or not you pay out dividends. I believe that psychologically, you have perhaps made some missteps. I had done abrupt discussion with Mr. [ Kuvare ] back in the day who convinced that shareholders we were sort of a negligible quantity that we were sort of virtual as opposed to a tangible reality. Now your business is a real-estate company in positioning. But in fact, the way you operate is with a spirit of entrepreneurship, and it seems to me that the spirit of the way you operate is closer to the Galeries Lafayette, I would say, when it comes to the risk coefficient. You're closer to the Galeries Lafayette than you are to a [ funeral parlor ] so to speak. And the payout rate relative to the share value reflects a certain risk official. This is my question now. If you pursue this line of thinking -- on content. But in strategic terms, what can you do so as to decrease that entrepreneurial coefficient to bring it more in line with low-risk investment company that is more stable over time. Thank you for your attention.

[Interpreted] Well, in fact, today, there are some significant characteristics that have to be taken into consideration. Commerce was seen for real estate -- retail sales were seen as pretty immune to shocks, but this was disproved by the crisis of -- in commerce that occurred in 2019 in the wake of the 2018 financial crisis. And then there was a huge wide-ranging debate regarding the future of physical retail sales, and they seemed in parallel with the COVID crisis. And with them, our IT -- well, in fact, what we have learned in the wake of the COVID crisis is that we have weathered the stress test, as the Americans call it. We shut down operations in full for -- and worldwide for the period. And we were convinced that, that was the end of physical sales, and that every sale would hence forth be conducted over the Internet and that we would be witnessing an apocalypse. Well, what happened, in fact? Businesses have reopened, shops have reopened, retail distribution outlets have reopened. And our living shareholders with backbones have to recognize that our clients also have a backbone, they are also living people, and they have requirements it is necessary to them to shop in person as we've discovered. And the performance of the major banners are reverting to 2019 levels. And in fact, in some cases, they are exceeding '2019 levels. One example, one of the major partners in the text, which between 2019 and 2021 shut down -- sorry, 2021, 11% of its assets shut down fully. And in Q3 of 2021 was doing more by way of physical sales than they had previously with those 11% more shops. So we're looking at a trend towards bigger shops, more powerful banners, and we are positioned on this flagship destination market. What we see is that the floor space is growing. Our major partners of 50 biggest retail distributors when it comes to rents and surface area have increased their surface area between 2019 and 2020, whereas in the past, they were shrinking. And they've increased their rents, their rent payments. So we are completely immune to this apocalyptic scenario and we are now fully confident that the major banners will continue to come to us. And we will see a revaluing of our assets, and there will be a restoration of serenity in our industry. The value that is locked inside our assets is going to be released. This is something that the Board has carefully planned to carry out. We have a whole program on how to unlock that value. We don't intend to acquire more. We intend to do a better job, making use of what we have, and generate more earnings of the media type based on our assets. So we've recruited Caroline Puechoultres who is our client strategy manager who will help us grow earnings. We've announced to the markets. This is back on March 30 that we would add EUR 45 million in net earnings -- or media to the existing portfolio, going from EUR 30 million to EUR 75 million in 2020. That's our media spend plan. On the basis of the same portfolio in 2030, if we play our cards right, we will hit EUR 20 [ billion ] in revenue, that is stabilized. We're going to increase the earnings of an existing portfolio, number one. Number two, when it comes to driving value from your portfolio is that we're going to densify the value of our existing assets. We've completely reviewed our portfolio in detail. We used to have a development opportunity portfolio before the crisis, which was 95% of our commerce. We carefully reviewed our capabilities and determined that we could create up to EUR 2.4 million in additional floor space, and the 50% of that EUR 2.4 million could indeed be residential. As a result of which, and we announced this to the market, we intend to implement all of the necessary efforts to be able to add development opportunities on our assets. So as to maximize by 2024 and beyond, the value of our existing assets. We will recover a portion of that real estate value that we had thought lost, but then, in fact, we did not lose, and that we will now grow, and grow significantly. Thank you.

[Interpreted] Yes. Sir, in the third row please.

[Interpreted] Thank you very much. I have 3 quick questions. They concern deleveraging and debt. First of all, approximately EUR 21 million at the beginning of 2021. You said, there's approximately EUR 1.6 million to generate in Europe. Now what are your predictions? And what still needs to be achieved in the USA in this respect? Next, following the various crisis we faced, including Ukraine, inflation in the United States and the new rate at the Fed and so on. Does this change your future plans? And finally, given this restructuration, what will be the fate of URW?

[Interpreted] Well, I'm going to give the floor to our Financial Officer, Fabrice Mouchel, who will answer those questions for you. Thank you very much.

[Interpreted] Thanks for this question. As regards to deleveraging, as we've said, this is the priority of our group. And earlier, we talked about exchange rates. And indeed, this has been affected by -- and share prices, and this has been affected by the current situation. We note that our rate is currently overreacting so to speak, because of our high debt rate. Therefore, we've reduced debt from EUR 24 billion to EUR 22 billion. We've still got work to do because we have our financial ratios to look out, so the debt ratio, which has gone from 47% to 42%. If we look at the various disposals, we have achieved. And that includes, for example, [ Solna ]. So our debt ratio is now at approximately 40%, and this demonstrates that we do still have work to do. And in this debt ratio, we, of course, have a numerator and a denominator. And the value of our assets is, of course, changing. That's included in this ratio. So consequently, our ratio has not dropped to the same level as debt itself has dropped and that's because we've seen a change in the value of our assets. That's my first point. Now next, another important ratio is what we call net debt for a gross operating surplus or the -- relating to EBIT. And here, this has been very affected by the crisis. In 2020 and 2021, we had to ground EUR 600 million in rent discounts. That's because our malls were closed for a large part of the year. And consequently, we were required to grant some discounts. So as to share the burden, so to speak, of our tenants. And that's why we've seen such a big impact here on the ratio. We've seen an increase from -- a significant increase of -- from 11x increasing to 16x -- at the end of 2021. So we do need to continue deleveraging. Again, this is a priority for URW, and it's very important for the value of our group. The other question you raised, the impact of the events at the beginning of the year as regards increases in rates. And indeed, this has been significant, approximately 150 bps of increase as compared to our debt duration, the group is well covered here because our net debt anticipated for the 5 years to come is completely covered by fixed rate debt and free financial instruments, and swaps and caps. And this limits, therefore, our exposure to debt costs due to increasing rates. Another important point here is if we look at 2022, we had an analysis of our sensitivity to these rate changes. And we noticed that even with a significant increase in 2022, we would see an impact of approximately EUR 30 million for a 100-point increase. So this seems fairly manageable. Next, as regard to your third question, the Westfield operation, we have the English -- British side to look at because we've bought 2 assets in London, which are very strong assets. Let me give you an idea of what I mean. The turnover per meter square for these 2 malls in London is 40% higher than the turnover per square meter for other malls in the U.K., and that demonstrates the strength of these assets. Now of course, they have been hit hard by the crisis, particularly the COVID crisis, but also the Brexit prices, which reduced the number of stores likely to open in the U.K., but these are really key assets, and we're looking forward to see how they develop in years to come. And then as regards brands, we have a physical platform but also a digital platform, and this is very important for generating an income, particularly that mentioned by Jean-Marie just before.

[Interpreted] Thank you very much, Fabrice. There's another question at the back of the room.

[Interpreted] Yes. [indiscernible] from [indiscernible]. You spoke about your disposal program, and you said it concerned flagships in Europe. You plan to continue to manage these assets and therefore, generating come through fees. Is this the same in the USA? Could you say a little bit more about various scenarios possible in the USA? So for example, a partial disposal, full disposal, disposal in different phases. Could you tell us a little more about that?

[Interpreted] So concerning Europe first, let me just specify that when we look at the various figures. We remain a majority shareholder for these assets. And these are assets for which we've already carried out a great deal of real estate work. For example, we have renovated and remarketed these various assets. I've been fortunate enough to visit certain of these assets, which are wonderful, and we've really created some value there. And this was really a way for us to continue to have some value, thanks to the higher occupation rates, and also the attractiveness of these assets. We've got a good retail mix in our malls in Europe. Now as regards to the USA, I've already really said what I can when presenting our financial statements. We've done some internal work. I'm not going to go into detail of all the processes and all the future scenarios. What we do plan to do is reduce debt through massive arbitrage operations. We had EUR 2.5 billion in Europe, carried out in this framework. And in 2023, we will continue to deleverage, thanks to our work in the USA. We've got 2 options, and we're going to pursue these 2 options at the same time. First of all, wish to optimize operation security and -- then we also want to ensure value through these arbitrations. We wish to keep our main priority as deleveraging of the URW. So we'll be testing these various scenarios, and we'll keep you informed as it progresses.

[Interpreted] There's another question, perhaps. No? Yes, there is.

[Interpreted] Yes. Hello. I wanted to be sure that I'd understood as payments to shareholders. There are 2 fiscal years for which there were no dividends, 2021 and 2023. Is that correct? Could we expect a partial dividend, therefore, in 2022? Or will we have to wait for 2023 to receive any dividend?

[Interpreted] Thank you for this question, which is relevant. Our deleveraging plan has 4 parts, and these various parts are connected. First, we have communicated our various plans to the rating agencies and also to our shareholders, but we plan to pursue our goal of having finally a permanent dividend paid, and that will begin in 2023.

[Interpreted] Thank you very much, Fabrice. And one more question, perhaps. Yes, sir, please. You have the floor.

[Interpreted] Thank you very much for your presentation, and thanks for your optimism. Could you perhaps tell us about some possible scenarios for a debt for recovery? Or are there any obstacles to the plans that you've described?

[Interpreted] We've been carefully following the geopolitical and economic situation, which, of course, has an impact on us directly or indirectly. Let me give you an example. The COVID-19 pandemic. We're now in a post-COVID period, so to speak, but you can see that some part of the world is still hard hit by the pandemic. And this really has an impact on our deliverables, and on the products that are being sold in our stores. When we look at return at its pre-COVID level for our tenants, we can see that this reduced profit can -- and the ongoing pandemic can have an impact on the products that these tenants are able to supply to their customers. There are some supply issues. If you look at IKEA, for example. IKEA is not able to continue to provide all the products that it could provide to customers pre-COVID. So this can slow down recovery. But nonetheless, our strategic position for our consumer destination centers and the location of our assets are really a strong point. We're seeing that customers want to return to physical stores. They want to have social opportunities. And consequently, we are optimistic that we will return to pre-COVID levels in the months to come. There may be a bit of a slowdown because of the obstacles I've described, but I still think we can remain optimistic.

[Interpreted] Thank you very much for this answer. Any more questions? It seems there are none. So therefore, I'd like to thank the shareholders for their questions, and thank you also to those who have provided answers. This has been a very useful discussion. I suggest we now turn to their votes for the resolutions. You'll have the title of the resolutions on your screen in French, but also in English. So David, could you please just explain how the vote boxes will work?

[Interpreted] So before we begin the vote, I would like, first of all, to ask you to check that your voting box is working, and that you have the right number of votes displayed on the screen. Before we open the vote for each resolution, please click on the button. Green is for, Orange is for abstention, and red is for against. You can change your choice during the voting process. You'll have a time bar displayed. And so you have 10 seconds to vote and change your vote if necessary. And please do return your voting box when you leave the room at the end of the meeting.

[Interpreted] So we will, therefore, begin these -- the votes on the resolutions. We'll begin with resolution #1 as per tradition. Resolution #1, approval of the statutory financial statements for the year ended December 31, 2021. Vote is now open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #2, approval of the consolidated financial statements for the year ended December 31, 2021. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #3, allocation of net income for the year ended December 31, 2021. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. The resolution #4. Approval of the statutory auditor special report on related party agreements given by Articles L. 225-86 et seq of the French Commercial Code. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #5, approval of the total remuneration and benefits of any kind paid during the financial year ended December 31, 2021, or granted in respect of the same financial year to Mr. Jean-Marie Tritant as Chief Executive Officer. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #6, approval of the total remuneration and benefits of any kind paid during the financial year ended December 31, 2021, or granted in respect of the same financial year to Mr. Mr. Olivier Bossard as member of the Management Board. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #7, approval of the total remuneration and benefits of any kind paid during the financial year ended December 31, 2021, or granted in respect of the same financial year, Mr. Fabrice Mouchel as member of the Management Board. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #8, approval of the total remuneration and benefits of any kind paid during the financial year ended December 31, 2021, or granted in respect of the same financial year to Ms. Astrid Panosyan as a member of the Management Board. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #9, approval of the total remuneration and benefits of any kind paid during the financial year ended December 31, 2021, or granted in respect of the same financial year to Ms. Caroline Puechoultres as member of the Management Board since July 15, 2021. Voting is open. [Voting]

[Interpreted] Voting is closed. The resolution is approved. Resolution #10. Approval of the total remuneration and benefits of any kind paid during the financial year ended December 31, 2021, or granted in respect to the same financial year to Mr. Mr. Léon Bressler as Chairman of the Supervisory Board. You may vote. [Voting]

[Interpreted] And that resolution is carried. Resolution #11, approval of the remuneration report of the corporate officers in accordance with Article L. 22-10-34 I of the French commercial code. You may vote. [Voting]

[Interpreted] Voting is closed. And that resolution is carried. Resolution #12, approval of the remuneration policy of the Chairman of the Management Board. You can vote. [Voting]

[Interpreted] Vote is closed. And this resolution is carried. Resolution #13 approval of the remuneration policy of the members of the Management Board other than the Chairman. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution #14, approval of the remuneration policy of the members of the Supervisory Board. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 15, renewal of the term of office of Ms. Julie Avrane as member of the Supervisory Board. She is with us here this morning. She is going to be viewed as a member of the Supervisory Board. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 16, renewal of the term of office of Ms. Cécile Cabanis, who is also with us here this morning as a member of the Supervisory Board. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 17, renewal of the term of office of Ms. Dagmar Kollmann as member of the Supervisory Board. She's also with us here this morning. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution has been carried. Resolution 18, appointment of Mr. Michel Dessolain as member of the Supervisory Board, who's also with us here this morning. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 19, authorization granted to the Management Board to enable the company to purchase it shares in accordance with Article L. 22-10-62 of the French Commercial Code. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 20, authorization granted to the Management Board to reduce the share capital by the cancellation of shares bought back by the company in accordance with Article L. 22-10-62 of the French Commercial Code. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 21, delegation of authority granted to the Management Board to increase the share capital by issuing ordinary shares and/or securities giving access to the share capital of the company reserved for participants in company savings plan without preemptive subscription rights in accordance with Articles L. 3332-18 and following in the French Labor Code. Voting is open. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 22, authorization to be granted to the Management Board to grant options to purchase and/or subscribe for shares in the company and/or stapled shares without preemptive subscription rights to the benefit of employees and the executive officers of the company and/or its subsidiaries. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Resolution 23, authorization in regard to the management board to grant free shares in the company and/or stapled shares to the benefit of employees and executive officers of the company and/or its subsidiaries. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. And our last resolution, #24, powers for formalities. You may vote. [Voting]

[Interpreted] Voting is closed. That resolution is carried. Thank you all, very kindly.

[Interpreted] Thank you, David. That was an extended exercise. Thank you all, dear shareholders for having attended the meeting for having voted for having cast your votes, and we would like on behalf of the Supervisory Board, on behalf of the Management Board. Thank you very kindly for your loyalty, for the trust that you have placed in us. And I can now bring this session to a close. Thank you all very kindly.