Inclusio : 01-09-2022 - Half-year financial report as at 30 June 2022

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Half-year financial report as at 30 June 2022

Increasing operating result

• Increase in net rental income to EUR 5.1 million compared to EUR 3.0 million at 30 June 2021 (+70%)
• The operating result from buildings totalled EUR 4.4 million.
• Operating income before portfolio result was EUR 3.1 million (margin of 61.3% on net rental income at 30 June 2022 compared to 53.8% in the first half of 2021).
• Distributable profit of EUR 2.7 million (or EUR 0.36 per share)

Real estate portfolio

• Acquisition of Financière de Roosevelt, owner in Aywaille of a centre for asylum seekers rented to the Belgian Red Cross
• Acquisition of Trifax, owner in Mouscron of two buildings totalling 33 affordable housing units, rented to AIS Mouscron Logement
• Following these acquisitions and the revaluation of EUR 6.7 million of the portfolio (+3.1%) for the first half of 2022, the real estate portfolio is approaching EUR 240 million.
• Occupancy rate of 99.8%1 reflecting long-term commitments with Social Rental Agencies (SRA) and other partners (Red Cross, Samusocial)

Balance Sheet

• The debt ratio stood at 28.1% on 30 June 2022 (compared to 24.3% on 31 December 2021) following the acquisitions realized in the first half of 2022 and the payment of the first dividend in May 2022.
• The cost of debt was 1.52% for the first half of 2022 and 81% of debts were covered against higher interest rates up to August 2026.
• IFRS Net Asset Value (NAV) per share at 30 June 2022 reached EUR 23.77 (up 5.2% compared to 31 December 2021).

Outlook for 2022

• Based on the strong results of the first semester of 2022, Inclusio is revising upwards its estimate for the 2022 gross dividend to a minimum of EUR 0.65 per share (+30% above the dividend paid in May 2022)

Marc Brisack, CEO of Inclusio: "Inclusio remains faithful to its strategy of investing only in social real estate assets. However, opportunities for new projects are decreasing due to the recorded increase in construction costs combined with the rise in interest rates. Nonetheless, the strong financial structure and pipeline of projects under development ensure that results will keep progressing in the coming years."

1 Occupancy rate determined by the expert as of 30 June 2022.

Inclusio SA

Avenue Herrmann-Debroux 40, 1160 Brussels, BelgiumPage 1 of 16 www.inclusio.be - BE 0840.020.295 - Tel + 32 2 675 78 82

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The report on activities

1. Highlights for the real estate portfolio in the first half of 2022
2. • 26 April 2022 - Acquisition of Financière de Roosevelt, owner in Aywaille of a centre for asylum seekers rented to the Belgian Red Cross
   • 17 June 2022 - Acquisition of Trifax, owner in Mouscron of two buildings totalling 33 affordable housing units, rented to AIS Mouscron Logement
   • With these two acquisitions, Inclusio will exceed in 2022 the symbolic cap of annual rental income of more than EUR 10,000,000. Inclusio leases affordable rental properties to 20 Social Rental Agencies (SRA) across Belgium (9 in Brussels, 6 in Flanders and 5 in Wallonia).
3. Investment properties available for rent

This category includes all buildings in operation, whether via Inclusio or via its subsidiaries (Société d'Habitations de Tournai SA, Schoolstraat 41 SA, Financière de Roosevelt SA, Trifax SRL).

The portfolio consists of 199 buildings spread over 64 sites, with a total of 113,301 sqm, 1,052 affordable housing units, 145 housing units for people with disabilities, 8 social infrastructure buildings, 13 ancillary commercial units, and 768 parking spaces or garages.

As at 30 June 2022, buildings in this category had a fair value of 229 MEUR and generated gross rental income of 10.2 MEUR/year.

No site or tenant represents more than 9% of the fair value of the properties in operation.

• For affordable housing, the 1,052 units are distributed as follows:

	Type			Units
	Single-family houses	121
	Student rooms	18
	Studios	196
	1-bedroom apartments	234
	2-bedroom apartments	356
	3-room apartments	99
	4-bedroom apartments	21
	5-bedroom apartments	7

• For housing for people with disabilities, the 145 rental units consist of 100 rooms, 39 studios and 6 houses for couples of operators.

Inclusio SA

Avenue Herrmann-Debroux 40, 1160 Brussels, BelgiumPage 2 of 16 www.inclusio.be - BE 0840.020.295 - Tel + 32 2 675 78 82

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• The social infrastructure portfolio includes 3 reception centres for asylum seekers (rented to the Red Cross), 1 reception centre for homeless people (rented to Samusocial), 1 school, 1 nursery, and 2 office buildings (one is rented to various associations active in the social sector and the other houses the offices of a SRA)

The distribution of the buildings and rental units by geography and purpose is as follows:

	Region			Buildings							Units
							Housing			Accessory			Disabled			Social infra
				[#]			[#]			[#]			[#]			[#]
	Brussels	30		521		14		0		5
	Flanders	38		245		1		105		2
	Wallonia	131		286		0		40		1
	TOTAL	199		1,052		15		145		8

As at 30 June 2022, the distribution of contractual rents was as follows:

	Region			Contractual rent
				at 30 June 2022
				[millions EUR/year]
	Brussels	5.1
	Flanders	2.7
	Wallonia	2.4
	TOTAL	10.2

At 30 June 2022, the rental vacancy totalled EUR 12,300 on an annual basis, or 0.2% of the portfolio in operation. Only a few parking spaces in affordable housing buildings and an accessory commercial area are still available.

As of 30 June 2022, the gross rental yield on the operating portfolio was:

• 4.47% on average across the entire operating portfolio;
• 4.41% in the Brussels-Capital Region, 3.97% in the Flemish Region and 5.39% in the Walloon Region;
• 4.33% for affordable housing, 4.63% for disability and 5.24% for social infrastructure.

Inclusio SA

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a. Geographical distribution

As of 30 June 2022, all the buildings in operation were located in Belgium.

The operating portfolio is broken down in the three regions as follows:

	Region			Based on fair value			Based on rents
				at 30 June 2022			at 30 June 2022
				[EUR]	[%]			[EUR/year]	[%]
	Brussels	115,497,757	50.5 %	5,087,926	49.8 %
	Flanders	68,426,029	29.9 %	2,714,989	26.6 %
	Wallonia	44,937,822	19.6 %	2,422,255	23.7 %
	Total	228,861,608	100.0 %	10,225,171	100.0 %

b. Breakdown by market

The portfolio in operation consists primarily of affordable housing units, and is broken down by market as follows:

	Market			Based on fair value			Based on rents
				at 30 June 2022			at 30 June 2022
				[EUR]			[%]			[EUR/year]			[%]
	Affordable housing	176,596,119	77.2 %	7,652,989	74.8 %
	Disability Infrastructure	23,266,646	10.2 %	1,077,576	10.5 %
	Social infrastructure	28,998,843	12.7 %	1,494,605	14.6 %
	Total	228,861,608	100.0 %	10,225,171	100.0 %

c. Breakdown by tenant type

Inclusio's buildings are mainly rented to Social Rental Agencies:

	Market			Based on rents
				at 30 June 2022
				[EUR/year]			[%]
	SRA	5,355,407		52.4 %
	Others	4,869,763		47.6 %
	Total	10,225,171		100.0 %

Inclusio SA

Avenue Herrmann-Debroux 40, 1160 Brussels, BelgiumPage 4 of 16 www.inclusio.be - BE 0840.020.295 - Tel + 32 2 675 78 82

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d. Top 5 buildings

The five largest buildings in operation are as follows (the "Top 5 buildings"):

	Project			Based on fair value
				at 30 June 2022
				[EUR]			[%]
	Domaine des Etangs	20,801,951		9.1 %
	Ekla	18,179,512		7.9 %
	Antares	14,974,634		6.5 %
	Pavillon 7-9	9,658,537		4.2 %
	Auflette	8,631,220		3.8 %
	Total of the Top 5 buildings	72,245,854		31.6 %

"Domaine des Etangs"

The largest asset under operation is the "Domaine des Etangs" building located on Route de Lennik in Anderlecht- (Brussels). In this ensemble, Inclusio owns:

• 106 housing units spread over 10 buildings
• 6 shops and 1 office on the ground floor
• 82 underground parking spaces

Management of the units has been turned over to three Social Rental Agencies (AIS Baita, AIS Logement pour Tous and AIS M.A.I.S) for a period of 27 years.

Inclusio SA

Avenue Herrmann-Debroux 40, 1160 Brussels, BelgiumPage 5 of 16 www.inclusio.be - BE 0840.020.295 - Tel + 32 2 675 78 82