Annehem Fastigheter AB

Fastighetsbolaget Annehem har släppt sin bokslutskommuniqué för 2024. Vi kommer att få en presentation av kvartalet och helåret av vd Monica Falenius och Adela Tjelakovic. Efter det så kommer vi att ha en frågestund där ni som tittar kan ställa frågor via livechatten. Först ut vd Monica Falenius, mycket välkommen.

Tack så mycket.

You will now be able to present and you will also tell us a little bit about what Annehem is. So I say please go ahead and present and see you for a question.

Thank you very much. Hello everyone, all listeners. Today we will present our book release communiqué for 2024. My name is Monica Falenius and I am the CEO, just as Mattia introduced me to. And with me here today I have Adela Sholakovich as well, who is CFO. She will come in a little later and will tell a little bit about our figures. We have the agenda for today. I will briefly tell you about Annehem. We are here for the first time and I think we have a lot of new viewers. Then we will present some figures and I will also tell you about our latest acquisition. And as Mattias said, we will end with a Q&A session. Annehem was listed in December 2020 at Nasdaq Stockholm, so we have just passed four years as a listed company. We own, manage and develop modern properties in the Nordic region. The properties are affordable in growing regions and have a high sustainability profile. Besides our modern properties, we also manage and own two business parks in Skåne, where we have a high sustainability potential and where we contribute to an essential migration in connection with our administration there. And as you can see in the picture, we have an ambitious vision that shows the way for us in decisions, both large and small. And we also have very high sustainability figures, where we have 85% of our property value that is in line with the EU taxonomy, and we also have 82% of our property value that is environmentally certified. Geographically, we are today in Skåne, Stockholm, Gothenburg and Helsingfors. The focus of our stock is offices, where the largest part, approximately 75% of the rent income comes from. Then we have income from social services and also housing, logistics and a little bit more. Vi är ett tillväxtbolag och med en tydlig strategi så fokuserar vi på att skapa en diversifierad portfölj med en god riskjusterad avkastning och en hög finansiell stabilitet. Man kan säga att hållbarhet är den röda tråden i alla våra investeringar. We had a real estate value of 3.3 billion SEK during the last four years. We have built up about 42% in volume. At the start of Q4 2024, we have properties worth 4.7 billion SEK. Our growth journey continues. To sum up, we have achieved a good result, we have high business activity during the year and we have made important transfers for the company. I am proud to present that our rental revenues have increased 11% this year to 275 million SEK and we have an administrative result, exclusive currency effects that have increased by 5% during the year. Per aktie är det dock en minskning och det är relaterat till den offensiva företrädelsemissionen som vi gjorde i början på året kopplat till det förvärvet som vi gjorde för The Corner. Totalt sett så ser vi också en ökning av substansvärdet med 13% och lika så här har vi en minskning per aktie relaterat till nyemissionen. We still feel that the office market is under a bit of pressure in the current low-income situation, partly because of hybrid work. And my conviction has always been that we will see a greater return to the office workplaces in the future. And we have also seen in recent times that some companies leave a clear message to their employees that they want to see a greater return to the office and leave a little more of the homework. We are also convinced that attractive, efficient and even sustainable offices in good communication conditions will be sought after first. And that will support our business. Despite this challenging situation, the net rent for the year is up to SEK 15 million, which is a really good figure. For the quarter, it is also positive and goes up to SEK 2 million. This figure is substantiated, among other things, by the fact that we have extended two rental agreements for ten, respectively four years in our park, Ljungbyhed park. There are two important actors there who have established their establishment and contribute strongly to the cluster we have there for research, education and development. I can also happily note that we have more satisfied tenants, where our satisfied customer index has increased from 5 units to 79 and our satisfied employee index has increased from 4 units to 85. Or was it 84 maybe? I don't look good on the screen, but we are four units anyway. And I usually say that satisfied employees give satisfied tenants. And a good relationship is a relationship with a tenant who often stays a little longer. And it becomes a win-win situation. But we are not satisfied there, but we are actively working to continue to be an attractive rental world. These business activities that we have done during the year, and also the relocations, contribute both to our growth, but also to strengthen our stability even more. In the first quarter, we carried out this successful offensive new mission, linked to the acquisition of the office property Decorner, which is located in Malmö. We also entered a housing estate in Partille outside of Gothenburg in the first quarter. And in the fourth quarter, the board adopted revised financial goals. They are challenging and they clarify our direction and how we will continue to grow forward in the new market conditions that are now in place. We say that with a strong cash flow, we first prioritize growing on our own profits and in this way create shareholder value without adventuring the financial position for the company. Another big and important shift is that we, during the fourth quarter, carried out a successful refinancing. We negotiated 73% of our loan portfolio in advance and we have achieved a much higher flexibility and at the same time we have lowered our credit margins. Adela will tell a little more about the whole thing in the refinancing in a little while. And so now in January we entered into a contract on acquisition and it concerns a social property in Limhamn in Malmö. And the acquisition is completely in line with our strategy to grow and expand the property portfolio within the social property segment. And I want to take the opportunity today to finally tell a little more about the business. So I think it's time for some numbers, so I'll hand it over to Adela. Monica.

Yes, and as Monica has already mentioned, we have a good result development for the year, which I am very pleased with. The rent income fell to 275 million SEK for the whole year, an increase of 11%, where the biggest contributing factor to the increase is the two properties that arrived at the end of 2023, respectively the beginning of 2024, that is, De Corner and Partille Port. And for the fourth quarter, the corresponding income increase increases to 15 percent. During the year, we have also had growth in our existing stock, corresponding to 11 million, thanks to index adjustments and renegotiated and new contracts. But compared to 2023, we have also lost over SEK 12 million in rental income. This is related to the sale of the Norwegian property Carl Bernertorg, which we sold in October 2023. In addition, we have remaining property income of SEK 50 million for the period compared to SEK 45 million last year. and they are related to further debited media costs and property tax, rent guarantees and slush revenues from our business parks. The net profit increased by 10% compared to the same period last year and mainly depends on the previously mentioned increase in revenue and we have a continued high surplus rate for the company at 84%. The administrative result, exclusive currency rate effects, went up to 97.3 million, because the whole year increased by 5% compared to last year. This is a development that we are pleased with, given that the interest rate net had a negative development of 21%, given the interest rate market that has been. In addition, we had a negative effect of 3.2 million SEK for the quarter, related to loan acquisition costs, which was related to the portfolio refinanced in the bank consortium in the past, which I will tell you more about later. The value of property increased by 6% year to year. The increase is mainly related to the acquisition of Partille Port housing, which arrived in March 2024, but also thanks to investments in the existing estate. During the year, we have invested over SEK 71 million, where most of it has gone to our project with Saab in Ljungbyhed Park. but also to green projects and energy saving measures, especially in the parks, which are both good for the environment and give quick payback. During the year, we have also made deductions of over SEK 58 million compared to SEK 278 million last year. During the year, there have been some smaller yield adjustments corresponding to six points compared to the start of 2023. But if we compare Q4 2024 to last quarter, the yield is stable at 5.31%. Yes, but as I said, we have been active with acquisitions the past year, but we have also made big moves in our financing portfolio, which I was going to tell you more about now. As you can see in the diagram on the top left, the net income has increased marginally in the last quarter. This is an increase in loans of approximately SEK 95 million, which is related to refinancing. At the start of Q4, the net reward rate was 41% compared to 43% in the same period last year. Since we are lowly rewarded, one of our goals with refinancing was to increase the reward where there was room and thus create opportunities for us to make more acquisitions and investments in the existing stock. We will use this 95 million SEK to purchase the bridge next week. The development of the current average rate is in the same diagram. It is now at 3.6% compared to the previous quarter of 4.1%. Compared to the start of 2023, the average rate has decreased by 0.74%. The positive development during the quarter is linked to the refinancing, where we reduced the marginal cost by 48 points in the refinanced portfolio, which increased to 1.6 million. In addition to reducing the marginal cost, which will mean a large cost savings for Annehem in the future, we also created flexibility for future financing by leaving the bank consortium for bilateral agreements with several banks. At the top right, we see the capital structure, which shows that there is no decline within a year. The previous portfolio in the bank consortium of 1.5 billion had a decline in November 2025 and was refinanced in advance over three to five years. Per årsskiftet så uppfyller faktiskt 83 procent av vår totala lånevolym på 2,2 miljarder villkoren för grön finansiering. On the bottom right, we see that the interest rate bond is spread over time and we have worked actively this year to secure the interest rate to reduce the interest rate cost but also the interest risk. 68% of the loan portfolio is interest-free and the average interest rate in the derivative portfolio rose to 1.6% at the end of the year. We have a long-term goal of reaching 2.2 in long-term interest rate. If you look at Q4, we were just below 2.1, but we are convinced and sure that we will see it increase again as interest rates and marginal costs go down by 2025. And now Monica will finally be able to tell more about our new acquisition.

Yes, our last acquisition, and not the last one. At the end of January, we signed this agreement on a social property in Limhamn. The seller is ABG Fastena. As you probably noticed, I am very pleased with this acquisition, which fits well into our strategy, both when it comes to geography sustainability and diversification of the property portfolio. Through this acquisition, we also strengthen the segment within social housing in Sweden. A little about the property, it is a modern property. It is located in a newly developed residential area in Limhamn in Malmö. The property was built in 2019 by NCC and it has a high sustainability standard by having energy class B and is also certified according to BREEAM Very Good. The local area is 7,500 square meters and there is a parking lot that covers 350 parking spaces that are mainly used by residents in the area. And in the building there is, among other things, a health center, a preschool that is located at the top of the house and also has a schoolyard on top of the roof. A really wonderful environment. There are other care units, some offices, and we also have daily grocery shopping, as you can see in the picture at the bottom of the screen. There are stable tenants and long rental agreements, where the remaining weighted contract period is six years. And some of the tenants that we have in the house, we don't have because we haven't applied yet, but it feels like we already own one. It is Region Skåne, Malmö city, surgery center in Skåne, Apkoa, which takes care of the operation of the parking lot, Coop, as we see in the picture, and the pharmacy, which is behind the sign there, bridge 2. The underlying property value is up to 440 million SEK and financing is done via bank loan and cash. As Adella mentioned, this purchase made it possible for us to finance this purchase. Our low degree of reward seen to the total in the company has also made it possible for us, in combination with this good property, which also means that we can use and get a really good discount on our own capital. And when we join, we expect to get an increased administrative result of about 14 million kronor per year, which makes an estimate of about 13 percent. And we look very much forward to being able to access this property already next week. In summary, we have delivered a really good result this year. We have one year behind us with a high business activity and we have made important moves. With this acquisition in hand, we are well positioned for continued sustainable and profitable development of the company and I look forward to 2025. Thank you.

Thank you very much for that Monica and Adela. We will start the Q&A session, so it would be great if both of you could be here. If we start with the macro climate and the climate for the property sector, how would you describe the current situation and perhaps a little ahead of 2025-26?

And only until 2026, did you think? No, but now we see a larger activity. Especially if you look back at 2024, the first three quarters were very calm. But we took very good speed in quarter four, both given a slightly better outlook, of course, But also the rate has gone down and the sellers and buyers meet in a larger extent. So I think it is still positive. Then we have a turbulence in the environment, we do not really know how it will play out. So I think a certain caution will still be found.

You touched a little on the development within the office in the presentation. You describe that fewer people will work at home. How fast do you think this return of staff will happen?

It's hard to say, but we already see today that we have a higher return to the offices, and we can also see that in our restaurants, among other things, in the office areas that we have, that the number of visitors has increased there. It's a very important sign that people are coming back. So I think that successively it will come. Then maybe it is not a full recovery that you do, but that you will have a certain form of homework because it works very well in everyday life with flexibility and you can use your working hours in a good way.

If we look at your property, how do you see the diversification there today and will you make any changes and in which direction?

Today we have the largest share in office buildings and we have been very clear about this. It is our strategy to grow within the other segments. Now we are doing this acquisition, we are strengthening it on the social housing side and we also say that we would like to continue with that, logistics, and also housing. We also believe in diversification because there are different appetites for different types of housing in both high and low-income areas. So we feel that it is a good strategy and it will be a good risk-adjusted rejection in that way.

And when we are still talking about changes and you have already been able to make a contract this year, what is the plan for the rest of the year when it comes to growth?

We still see that we want to grow. We will see a little bit more in the future. We are going to build a little more cash and then also see the possibilities.

But I think and hope for an acquisition during this year as well. And if you do an acquisition, what financing options do you consider?

First of all, we have very good relations with our banks and we want to continue to care for them. The capital market looks very good right now, so it can always be interesting to look at that. But in the first hand, it is a bank financing.

Do you look at new places or is your strategy to strengthen in those places you already exist in?

The answer is yes. Our strategy is to strengthen where we are and also to achieve management efficiency. I think that when you get a little bigger, we need to get a little bigger, then you can also look around a little bit. But of course, it is always the right object, so there will be some evaluation.

One figure that you mention, which I may not always see in a report like this, is that 82% of your property value is environmentally certified. Can you put that in relation to what it looks like in the rest of the market?

I don't want to go deep into key numbers, but I know that it's a very good figure. I don't have it so that I can pick up someone else, but I promise you that I will find out about it the next time I come here.

And Adela, this with green financing, how much lower can the cost be for doing it the green way?

It is between 5 and 10 points, so absolutely, many small books, all the money is counted, but above all, as we see it in the signal value, it is only highly qualified, environmentally certified properties that get green financing, so it puts an extra quality mark on our stock.

Can you say something more about what you think the company will be in five years?

Do I dare to say that? I see that we are where we are today, largely. And I also see that we have grown in volume. Then exactly how much it will be, I do not dare to put any money on it.

I understand that. That was all my questions for you today. Thank you so much for coming here and presenting it.

Thank you for having me here.

Thank you for watching. If you have questions, please post them on the company's website to the IR function. And welcome back in three months for the Q1 report. Thank you.