Olav Thon Eiendomsselskap ASA

to this webcast in connection with the presentation of the results for the first quarter 2025. It's already been a couple of days since we published it. In connection with the first quarter, we usually have the webcast the day after the presentation, for practical reasons, and this year it was at the UN in Curie, first possible two days afterwards. Vi håper at dere har ventet i spenning og har gledet dere hevningsløst i flere dager allerede. Velkommen til alle, nære og kjære fjor og fjell i hele dette landet vi er så glad i, i tillegg til våre kjære svenske venner. Agendaen er av en ganske tradisjonell form med de hovedpunkter infor finansiell utvikling, finansiering, eiendomsportefølgen, bærekraft og samfunnsansvar har jeg nå tatt inn fordi vi har lagt frem bærekraftsrapporten for 2024. Makerekonom er jo alt. The first quarter of the year was a quarter in which we achieved some round-the-clock results. Welcome to this webcast in connection with the presentation of the results for the first quarter of 2025. It's already been a couple of days since we published it. In connection with the first quarter, we usually have the webcast the day after the presentation, for practical reasons, and this year it was at the UN in Curie, the first possible two days afterwards. Vi håper at dere da har ventet i spenning og har gledet dere hevningsløst i flere dager allerede. Velkommen til alle, nære og kjære fjor og fjell i hele dette landet vi er så glad i, i tillegg til våre kjære svenske venner. Agendaen er av en ganske tradisjonell form med de hovedpunkter infor finansiell utvikling, finansiering, eiendomsportefølgen, bærekraft og samfunnsansvar har jeg nå tatt inn fordi vi har lagt frem bærekraftsrapporten for 2024. Makerekonom er jo alt The first quarter of the year was a quarter where we We had a result before the tax on over 1 billion, we had rental income over 1 billion for the first time, and we had liquidity reserves over 10 billion for the first time. If we look at the results before the tax, valuations and currency, it was 598, a small increase from last year. We have strengthened the balance by increasing the one-capital ratio to 52%. The loan rate has been reduced. We have had a fairly high interest rate on the shares, also in the first quarter. It continues in 2025 with an increase in the share exchange rate of 14%. If we look at the last 12 months, we have had a 25% discount, including exchange rates. This is not something we are particularly dissatisfied with. On the contrary, we are quite pleased with the discount on the share last year. The retail turnover and the number of visitors continued to increase. In the first quarter, the retail turnover only increased with 0.5% compared to the same quarter last year. The retail turnover in the first quarter is often affected, or every year in fact, by the placement of Easter. This year, the turnover has dropped slightly. What we see is that at the beginning of April, the retail turnover on accumulated basis was higher. If we then go over to the drier numbers, we see that there is an increase in gross income from 958 to 1,009. The result for the tax, for the first time, is close to 600 billion. The interest rate is at 3.0 on 12-month bills. If we look at the quarter in isolation, it is higher than that as well. The share price at the end of the period increased to 259 kroner, and the value of the substance increased from 9 kroner to 376 kroner per share. The rental revenues show a growth of 5.3% in the first quarter, with different developments in the segments. I told you last quarter that we have several larger businesses that are upgraded in Oslo, which are taken out of the portfolio. In spite of that, we have a growth of 5.3%. This has caused the shopping centers to increase by almost 9%. Organically, we took over two new shopping centers from Amco. by the end of the year, and they of course contribute to the gross rental, but the organic growth, the rental growth was 3.3%, which we are also quite pleased with. It can be a bit dangerous to be a bit blind to the segments next to our shopping center, because there is a certain glide between the segments, to the type of property locations that you may be able to classify a little differently. over time. So it is important to look at the sum and also look at the trends. The share price development is not directly flabbergasted, to put it that way. And in all periods over the last five years, we have had a positive and fine drop, and also higher than the main index on the Oslo Stock Exchange. The exchange policy is fixed, it was defined a few years ago. A yearly exchange rate of 30-40% of the result, x value changes. Two days ago, it was decided at the General Assembly to share the exchange rate of 7.25 kroner, and it was noted x exchange rate yesterday. That makes up 39% of the result, and is pressed to the top of what the exchange policy was. The exchange rate is paid from the 28th of May, and the direct return is 3.2%. We believe that the exchange rate of 30-40% balances the different views of the credit markets and the stock markets. And we are one of the few Børs-sourced real estate companies in Scandinavia that has maintained a good and increasing exchange rate for 2024. And I think it's nice to be able to give our shareholders that. Financing and interest rate development is also a very exciting topic. We saw last year that we The credit margins in the capital market were significantly reduced, perhaps as much as 0.7-0.8. So if the Norwegian Bank and macroeconomists still believe that the folio interest rate will be stable and unchanged, we will still get a rent reduction through lower credit margins. Short to our key figures, which we think are quite strong, and they defend a solid rating. The rating has been unchanged for four years, and we were boosted to positive outlooks in November. The interest rate development is also an interesting curve, I think. If you look at our interest rate, it has now gone down by 0.5% from 1.3324. At the same time, the market interest rates have been quite stable during the period. This has meant that our quarterly interest rates have gone down, but are now stabilized at the level they were in the first quarter. We see that the access to financing is very good, also in the first quarter. It is possible to say that Serdeles is good, but we could still think of some lower credit margins, so I think Sværtko is the right adjective to use. We see in the first quarter that we have increased the share of short-term financing, and that the share of bank loans is downregulated. This may indicate that these certificate loans are used to pay off interest on bank loans. We are now 3 quarters, 76% of the capital market. But if you include unused credit frames of 9.9 billion, it is 50-50. So there has been a question of what we should use these violent credit frames for. And that is of course a good question. We do not have any concrete plans to use billions, many billions on new purchases. We want to have a solid liquidity, which we have always wanted. And then it is a bit random now, because there have been opportunities to receive very good certificate loans, i.e. at very low interest rates in the first quarter. So even with down payment on credit frames, where we unfortunately still have to pay credit margin on unused frames, it is a very good piece of work for us. If we look at the liquidity reserves and the financial needs, they are, as I mentioned earlier, over 10 billion. This is enough to cover the yield decline for a long time to come. We have entered quite a few financial agreements in the first quarter. The good access continues in the second quarter, and we have in the last two days emitted 1.1 billion in the bond market with a seven-year loan, a little under seven years. to 3.9 meters plus 1.2 meters. And there are still large investor interests to be seen. So we see the financial opportunities in the capital market very clearly, and also in the future. And it is very nice that the obligation investors want to place their money in unsecured loans to Ola Thun A&O. It's up to us. If we then go over to the property portfolio and investments, it is relatively unchanged from last quarter, with 75% of the values in the purchase center property and 25% in the neighborhood property. The total value on the property portfolio was 62.2%. Billions included in the shareholding and is now spread to about 120 different entities. Our shopping center entities are now 56 in number. We have a focus on the largest shopping centers. I will come back to the overview that we love and our competitors hate. The market value of the centers was 46.8 billion. If we compare it with the number per 36, 2022, that was when they were at the highest, then we see that there has been a little marginal increase, but that includes centers that were bought in January 23 and December 24 for over 2 billion. So the market value has gone down, while the income level has gone up. This is also shown in the yield, which has increased from 5.3 to 6.5%. The top 10 centers in the portfolio are out to 40% of the total purchase center values. Briefly about what was also talked about last quarter, namely that we The restructured shareholder company, Amco Eindholm, will be completed in December, but in the direction of January. So the numbers must be seen in that context, that we have got two new centres in with 100%, Amphi Sogningen and Amphi Eidsvoll, and then there is Coop, and we have taken over the shareholders in four smaller centres. That fits very well into our strategy. This is the list that we will never be tired of showing. This is an overview of the 20 largest companies that have a better turnover development than our total portfolio. We see that there are not many holes in the list of centers among the top 20 we do not own, so our market position must still be able to be the leading one in Norway. We are a significant shareholder in the Oslo area with 65 properties within different segments. 15.5 billion, and we see that the market value is lower than it was three years ago, while the income level is increasing. It is the income that creates results for us, not the market value as in the short term. So the fact that the market value goes down is not a big problem for us. And the fact that the yield is higher now than it was in 2022 is something we observe, but it does not take away from us. Our investment strategy is to buy and develop property, and in the last seven years we have invested 10 billion, invested almost 2 in the spring, and in Q1 it is We hope to be able to increase it over the year, and we said that last year as well. But then we at least reached a level that was a little higher than what we had in the first quarter. So who knows what the future brings? Stay tuned. We have larger upgrade projects in the Oslo Center. Kopkegården, which is a wider property with a facade facing Karl Johansgat, Stortorget and Kirkegaten. It is one of the most beautiful monuments in the centre of Oslo. Kopgården, built in the Renaissance style in 1880. It is an elegant monument of timeless elegance. We are now carrying out a total upgrade of the property. We have completed 2,200 sq. m. offices and 1,300 sq. m. commercial areas. It will be completed in the course of the year. For those of you who are looking for new, nice control rooms, just contact us and we can give you a nice demonstration. In addition, we have Vika Atrum, which is this landmark in CBD Vest, which I mentioned at the previous Korsvei as well. It is one of the very few neighbourhoods that has its own bus stop called after it. I think we have done that very nicely. It is then, it is upgraded and can be renewed by contractors, and it is a work that will be completed gradually through 2025 and 2026. There are also some private areas here that are ready for new, active tenants, which we enjoy in this building. We have larger business projects under construction. That is what we have talked about. Previously, Gardermo Park is nearing completion. It will be completed in the summer. Lagunen Storsenter will be completed in the course of the year. In addition, there are slightly smaller projects with Fornyelse av kjøpsenteret i Mås. Vi har boligprosjekt i Asker. Liten utvidelse av Jesheim Storsenter. Og vi har nybygg og rehabilitering i Sadens Kristiansand. Vi har flere prosjekter under planlegging. Jeg henviser til vår utmerkende nettside, olt.no. Bærekraft og samfunnsansvar. We have just published our sustainability report for 2024, where our sustainability-related goals are reflected. They are focused around three pillars, climate and nature, circular solutions and social justice. I will not go into all the details, but I will say that we are on the right path. and have a good faith that we will be able to achieve our ambitions and our goals by 2030. This is the climate gas emissions, the climate strategy, and we see that that the collected emissions, Scope 1 and 2 as they are called, are on the way to the target in 2027 and 2030, with a decline of, if you look at 1 and 2 combined, it is a decline compared to 2019, which is the base year, of 43%. The target for 2027 is 45% and 60% in 2030, so we are optimistic in reaching our own targets for emissions reductions. Here you can also find the backup report at olt.no. For those of you who want to go deeper into this, I can promise you an unusually exciting and interesting report, and I recommend it at its warmest. Macro. These are the latest prognoses from the Norwegian Bank. They are constantly impacting the interest rates. Recently, there was a reference to the consumer price index. I'm not going to say anything about that. What I'm saying is that private consumption looks like... the growth will be doubled from 2024 up to 2.2%, further increase to 2.5% in 2026. This is of course very positive news for our shopping centers, and the reason for the increase in private consumption is that the wage growth Both in 2024, 2025 and 2026, it looks like the consumer price index will rise. The increase in real estate is something that most people get, and that contributes to increased consumption, in addition to increased savings. Another thing to note is the housing investments, which continue to fall by 11% from a fairly low level in 2025. This is relatively dramatic, and the housing prices for existing homes are rising considerably. There is a fairly good correlation between low housing investments, low new building activity and the existing housing prices. If the economy were to be stimulated a little, a cut in the interest rate would not be so bad. There is a relatively weak growth in rural Norway. It seems that much of the growth in the Norwegian economy is linked to oil and gas. So the situation is much weaker within buildings, facilities and some property segments. This was what Norges Bank stated in March, that the time is soon to start putting the interest rate down. But they say that there is still a need for a higher interest rate, and they dare to say that the prognosis shows that it is most likely that the interest rate will be put down during the year. But there is also greater uncertainty about the economic outlook than normally. Most macroeconomists include this uncertainty in their prognoses, and are also a bit uncertain about the number of interest cuts in 2025 and 2026. The last prognosis of the Norwegian Bank shows that the government interest rate is cut to 3% before the end of 2028. That's quite a long time. So we have to prepare ourselves in all possible ways for a relatively high interest rate level, also in the coming years. Now we have come to the summary. In summary, the growth in the Norwegian economy is quite low, even though it increased over the past few years. But the unemployment rate is still low, and the wage growth is high, as I said. The price growth is a big joker. After it fell through 2024, it has increased a little, at least a couple of times this year. It was perhaps when it was lower. than what the Norwegian Bank had seen in May. But it is still higher than the Norwegian Bank's inflation target. There it is perhaps right to emphasize that in relation to the mandate from the Norwegian Bank, the interest rate will be set against the inflation target two years in advance. So that does not mean that inflation today must be 2.0% for them to cut the interest rate, but it must be that it is likely that it will come down to that target within two years. That is an important difference. When it comes to the interest rate, it will most likely be lowered. Regardless of whether the interest rate is lowered or not, Ola Tov and her team hope to present solid results in the future. New, good investments may increase the volume of investment. This is possible through a solid financial position that gives us very good access to the credit markets. We still see the future in a dark and ambivalent world. Then we have come to the Q&A, questions and answers. Have there been any questions? It doesn't look like there have been any questions. No, but then I think it only remains to thank me. Ønsker dere en riktig god 17. mai i hele dette landet som vi er så veldig glad i, som Vedum pleier å si. Mindre om neste webkast som kommer 14. august. Ønsker alle en god 17. mai og en riktig god sommer. Takk for meg.