Atrium Ljungberg AB (publ)

Hello and welcome to Atrium Ljungberg's presentation of Q1 2026. The headline for this report is Strong Finances and Strong Locations in a Changing World. Let me begin by summarizing the key developments this quarter. Overall, I can note that the global geopolitical conditions remain uncertain, where we have had the military operation in Venezuela, the hostile voice around Greenland and the military aggression in Iran, all in the first quarter. It seems like most business still think the war will end in a short time and the office rental market has not changed since last quarter. Our net letting amounted to minus 8 million SEK in the first quarter. I had of course hoped for a positive number but must state that a larger lease was unfortunately not completed in the beginning of the year as management did not receive board approval for the relocation and consequently remained in their current premises. The fact is that net letting is always weaker in the first quarter. We had growth in our rental income of 3%, but profit from property management decreased by 0.9% due to a cold start of the year with increased heating costs and clearance of snow in the quarter and customer losses. Profits from property management decreased by 3.5% due to the same things I just mentioned, but also due to higher interest costs. We report negative value development in the portfolio. This is mostly driven by changes in yield requirements in Kista, partly by the lower inflation assumptions for 2026, and partly by slightly weaker cash flow due to evacuated tenants preparing for upcoming projects. We invested 0.6 billion SEK in the first quarter and the property value amounted to 61 billion SEK. We currently have ongoing projects representing 8.4 billion SEK in ongoing investments, of which 4.4 billion SEK remains. Two projects were completed during the quarter. House 49, located in Slaktusområdet, and Quartier 7, our first tenant-owned housing project within Stockholm Wood City in Nacka. Our primary focus is Stockholm, which accounts for 80% of our total property value. The portfolio consists of 65% offices and 19% retail, with an economic letting rate of 88% and a loan to value ratio of 43.7%, which mainly has increased due to paying out dividend in the first quarter. The leasing market is broadly unchanged compared with the previous quarter. Employment continues to recover and corporate hiring intentions remain positive. At the same time, increased global uncertainty is once again creating uncertainty around company space requirements, while the focus on office presence and on offering attractive workplaces for employees remains strong. Our retail destinations continue to show a positive trend. The ongoing recovery is clearly reflected in data from our retail portfolio, with a marked increase in both visitor numbers and turnover during January and February. Improved household finances are expected to act as an important driver of the Swedish economy in 2026. At the same time, the reduction in food VAT from the 1st of April provides some support, although renewed concerns remain regarding energy prices, inflation and interest rates. The residential market continues to develop positively. Housing prices increased during the quarter and households expect prices to continue rising. Activity levels and decision-making among potential buyers have increased significantly. Sales performance was strong, with the sales rate improving from 45% to 71% during the quarter. Easier mortgage regulations from 1 April provide support, although renewed concerns remain regarding energy prices, inflation and interest rates. Here are some examples of the lettings we completed during the quarter. In Mobilia, we signed a 15-year lease with a fitness operator of almost 1,600 square meters. We also signed a lease with Svanen in Söderhallarna. At Mälarterrassen, we finalized an agreement with the well-known restaurateur Desiree Jacks, who will open a pub concept. In addition, we can now disclose the tenant behind the previously announced leasing at Mälare Terrassen, Tommy Millimäki, who will also be opening a restaurant at the destination. Finally, an important lease was signed in Sickla Central, where Handelsbanken has decided to relocate, moving from Nacka Forum to our premises. Looking at our tenant mix, 53% of contracted rental value is derived from office tenants, 20% from consumer durables, and 10% from culture and education. Our 10 largest customers account for 20% of the total contract value. Of that, 11 percentage points represent government and municipal tenants. The average lease term is five years. We only have five leases over 10,000 square meters, of which two are offices. Our retail portfolio is broad and well-balanced. Fashion accounts for 12% of retail sales, while groceries, alcohol and pharmacies represent 41% of the turnover in our shopping centers. We continue to see a positive trend in January and February in both footfall and turnover in our retail centers. With that, I will hand over to our CFO, Anna.

Thank you, Annika. Let's take a closer look at the numbers, starting with the income statement. Rental income amounted to 759 million in Q1, an increase of 3.3% compared to Q1 2025. This is mainly driven by new rental income from the three projects completed over the past three quarters. Campus Sickla and PV Palatset in Hagastaden last year, as well as Hus 49, Stora Marknadskallen in Slakthusområdet, where Universal moved in at the beginning of the year. We also see a contribution to income from our now fully owned co-working company, A House. A House has been consolidated from February, meaning that its results are now reported line by line rather than as a single JV result line. I will return to A House in a separate slide. The occupancy rate declined from 89% to 88.1% during the quarter. We define occupancy based on whether a property has a tenant on a given date, in this case April 1st. As a result, occupancy lags net leading and reflects lease terminations and new leases signed last year. The decline in occupancy this quarter is primarily attributable to the renegotiation of the Ericsson lease in Gothenburg in Q2 2025, where Ericsson reduced its space by approximately 5,500 square metres. We currently have other tenants occupying about 1,400 square meters of that area. Turning to costs, we had an exceptionally cold start to 2026, with two winter months of snow and prolonged sub-zero temperatures. While this is positive in many ways, for property owners it unfortunately translates into higher heating and snow removal costs, which increased by 7.5 million in the like-for-like portfolio. We also saw an increase of 7 million in customer losses, mainly related to a few restaurant operators in Uppsala. In Q1 2025, customer losses were virtually zero. In addition, we have costs related to A-House, which I will return to, and of course additional costs from completed projects. Overall, this resulted in a 0.9% decline in operating surplus. Net financial items were 5.4% higher than last year. This is explained by three factors. First, we are still seeing the effect of lower interest rates in the comparison quarter. Even though the average interest rate at the end of the quarter has actually declined, the average interest rate in the quarter was approximately 20 basis points higher than in Q1 2025. Second, interest-bearing debt has increased due to the expansion of the investment portfolio following the completion of three projects where we have stopped capitalizing interest. Offsetting this, Our updated principle for capitalized interest, which I mentioned last quarter, now means that we capitalize interest even in early project stages. This change resulted in additional capitalized interest of 8 million in the quarter. Altogether, profit from property management amounted to 316 million in Q1, down 3.5% year-on-year. Property values were adjusted down by 0.4%, corresponding to 215 million. The adjustment relates to five properties. Yields were increased in the valuations of our two properties in Kista and one office property in Malmö. Despite this, the average yield remains unchanged at 4.7%, rounded to one decimal. In addition, two properties in Slaktusområdet were written down due to lower cash flows, as we are preparing these properties for future development, which temporarily reduces value. Finally, during the quarter we lowered our inflation assumption for 2026 from 1.5% to 1%, which also had a negative impact on valuations. This may seem somewhat counterintuitive given renewed inflation concerns, but it reflects a decision taken by the valuation community in February, which we have followed. We will have to see how this develops over the course of the year. On the positive side, we recorded project gains of 50 million from commercial projects during the quarter. In addition, we recognized 26 million from residential projects related to our BRF Kultur Arvet project at Nobelberget in Sickla, where customers have started moving in and profit recognition has commenced. To date, 37 out of 80 apartments have been completed, occupied and profit recognized. Total project gains in the quarter amounted to 76 million. Let's take a closer look at the development in the like-for-like portfolio. Rental income declined by 1.5% while operating surplus fell by 3.4%. Starting with rental income, this development is logical. Indexation amounted to just under 1%, more precisely 0.9%. We entered the year with a vacancy rate approximately 2.5 percentage points higher than last year. The net effect between these two factors largely explains the 1.5% decline. On the cost side, the main drivers have already been mentioned, a 7.5 million increase related to heating and snow removal, and customer losses up by 7 million. Other costs, on the other hand, declined, reflecting continued strong cost control. Looking at the segments, the decline in rental income is mainly attributable to the office segment where vacancies have increased. The increase in costs is largely found in the retail segment where customer losses occurred and where we also have a relatively high share of heating and snow removal costs. Turning to the acquisition of A-House. During the quarter we acquired the remaining 50% of the shares and the company has been consolidated from February. Results are now reported line by line rather than netted on a JV line. A-House is included in operating surplus from the investment portfolio. It is not presented separately in the income statement but included within rental income and property management costs under management costs. In the segment note of the interim report, co-working operations are presented on a gross basis, allowing for a clear view of revenues and costs. Co-working revenues for February and March amounted to 19 million, while costs totaled 25 million. Intercompany rents of 10 million are eliminated, resulting in a net effect of plus 9 million in rental income and minus 15 million in costs, corresponding to a minus 6 million impact on operating surplus. We have received questions regarding the effect on occupancy and net letting. There is no change compared to previous reporting. A premise lease to a house is considered occupied just like our own offices that we rent from ourselves. Any new lease to a house would also be included in net letting. Occupancy in the co-working business is followed and analyzed separately as it represents a different business model. During the quarter we invested just under 600 million. We also completed apartment handovers to residential buyers, resulting in net investments of just over 200 million, which is a slightly lower pace than in previous quarters. We are now entering a more intensive phase in several of our major projects in SLAC2's området. Thus, we still expect gross investments to amount to just under 3 billion for the year. Interest-bearing debt increased by 700 million in Q1, driven by dividend payments during the quarter as well as ongoing project investments. The increase in debt explains why both the net debt ratio and loan-to-value ratio increased during the quarter. The rolling 12-month interest coverage ratio remained unchanged at three times. Overall, we maintain a strong financial position well within our financial targets. The financial markets were highly volatile during the quarter, following the three major geopolitical events that Annika mentioned earlier. However, underlying fundamentals remained strong, and as the Greenland situation eased early in the year, credit margins declined. During this window, we issued bonds totaling approximately 1.5 billion at the tightest level since 2021, three-year bonds at around 80 basis points or slightly below, and five-year bonds at approximately 110 basis points. Long term interest rates also declined during February and in connection with this we entered into a few interest rate hedges at attractive levels. Overall these transactions reduced the average interest rate during the quarter by 0.1 percentage points to 3.1% including commitment fees. Given market developments since then, with rising interest rates and spreads, this reduction should be viewed as temporary rather than a level we expect to maintain for the remainder of the year. Despite ongoing global uncertainty, we continue to have good access to financing, although on somewhat weaker terms, particularly in the bond market. In the commercial paper market, we have managed to maintain our curve even after the outbreak of the Iran conflict, and are currently at 33 basis points for a three-month tenor. As you know, we have a robust financing portfolio, with an average capital maturity of 3.4 years and ample available liquidity totaling 9.4 billion, primarily in the form of undrawn credit facilities. In addition, we have an interest rate duration of 2.6 years and a high share of fixed interest exposure, which limits the short-term impact of the significant interest rate volatility we have seen. And with that, Annika, perhaps you can take over and say a few words about our projects.

In total, we have eight ongoing projects, corresponding to 8.4 billion SEK in investment, of which 4.4 billion SEK remains. We have four projects scheduled for completion in 2026. The letting rate in these commercial projects is too low, a level we are not satisfied with, but we also see that market interest is strongest for our newly produced premises. Sickla Central, with its 23 floors and 17,100 lettable area, has currently, after the lease to Handelsbanken, an occupancy rate of 24%. The building has just opened with a house on the ground floor. It is a remarkable property with panoramic views over Stockholm. However, despite the building being open on some floors, substantial tenant-specific work remains on many floors before we can receive future tenants. Söderhallarna comprises a total lettable area of just over 26,000 square meters with an annual rental value of approximately SEK 155 million, excluding supplements. Following the completed leasing activities with Svanen as the latest tenant, the property's economic occupancy rate amounts to 40%. The building is expected to be fully completed in Q2 2027. As mentioned earlier, two projects were completed during the quarter. The first is Building 49, the Grand Market Hall in Slaktusområdet, which has undergone a comprehensive refurbishment. The investment amounted to SEK 320 million and is fully let. Universal Studios has moved into the property and I had the opportunity to visit them in connection with their move-in. The result is an outstanding office environment and the tenant is very satisfied. We also completed our first housing cooperative project within Stockholm Wood City during the quarter. The project features both a timber structure and a timber facade and comprises 80 apartments with a total investment of SEK 490 million. The sales rate currently stands at 70%. In early 2023, we acquired 50% of the event and coworking operator A-House, and during the first quarter of this year, we acquired the remaining 50%. The rationale behind the acquisition was, and remains, to broaden our customer offering as we believe coworking will continue to be an important part of future workplace solutions. A House has pursued an ambitious expansion strategy over recent years, and today operates five destinations. Ark on Östermalm, Sickla Central, Börshuset in Slakthusområdet, Katarinahuset at Slussen, and a new destination in Life City in Hagastaden, which is scheduled to open this summer. Such rapid expansion naturally puts pressure on earnings, as new destinations are not fully leased at opening. That said, leasing activity for the studio offering has been strong. Ark is fully let, Börshuset is leased to 81%, Katarinahuset to 99%, Sickla Central to 73% and Hagastaden, despite not yet having opened, is already leased to 18%. The more challenging part of the business has been the event operations, which have been adversely affected by the prolonged economic downturn, as this segment is particularly sensitive in weaker market conditions. We expect A House to continue reporting losses throughout 2026 with the ambition of returning to profitability during 2027. A final reminder of our broader development portfolio. We are developing four major areas in Stockholm where natural population growth is strong. The potential investment volume for projects starting before 2032 is SEK 40 billion. All locations are chosen where there is an existing or planned underground station by 2030. That concludes what we intend to present for this report. Thank you for listening and if you have any questions for me or Anna, feel free to send us an email.