Fastighets AB Balder (publ)

Welcome to the Balder Q4 2022 presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star 5 on their telephone keypad. Now I will hand the conference over to the speaker's CEO Eric Sellin and CFO Eva Wasberg. Please go ahead.

Good morning and welcome to Balde's presentation of the year-end report for 2022. Here from us today is me, Eva Wasberg, CFO at Founder, and Erik Selund. After the presentation there will be a Q&A session.

Yes, thanks Eva. So we present the year-end figures, but first we have some short information about Balder as a company. We are a listed real estate company since 2005. We have properties predominantly in the Nordic countries and we have roughly half residential and half commercial properties. At the year end the property value was 217 billion, 96% occupancy rate, On the longer leases, the biggest leases are on average 10 years for our largest single leases. We have a rating at S&P that is a triple B flat. Net debt to total assets, 47.9%. We have cash, 25 billion cash and facilities at year end. And NAV per share stands at 92 compared to 84 last year. And the average NAV growth since inception of O5 has been 29% per year. Looking at the Q4 figures, rental income was up 16%. Profit from property management decreased slightly or 5%. The reason behind that decrease was in the financial cost that we had an extraordinary financial income last year. So the underlying earnings were slightly better. But quarter on quarter, we have a decrease. Looking at the full year, rental income is up 17%. 11% and then looking a bit at the current status and looking forward the earnings capacity stands at 5.39 per share at year end and that is 4% better than one year ago and so this means that we have been able to offset increased interest rate costs with more income from the underlying business Net debt to assets 47.9% and we had a like-for-like rental growth of 3.9%. Looking a bit more at the portfolio, the characteristics is that it's very diversified both in property type and in geography, but there is a concentration to the larger cities and capitals in the Nordic regions. So we have Helsinki and in property categories Resi is by far the biggest and then we have Office, some retail logistics and also other properties that can be mixed properties and hotels for example. We also invest in development of properties in the Nordic countries and we have basically two categories of development. One is where we build and we keep it mostly residential but can also be pre-let commercial properties and we have also then another business line predominantly in Sweden but some cases in Finland and Denmark as well where we build recipe properties and send to consumer and this shows up a bit differently in the P&L the properties we keep will be unrealized value changes as we go along with the projects. The properties that we sell or the apartments that we sell, then the result is booked after completion. So the result from properties that we sell or apartments that we sell will be more irregular if we look at it quarter to quarter. But of course a long-term trend can be interesting to look at, but quarterly figures will be irregular in that segment. But the most important thing has always been to, over time, increase the earning, the cash flow. We are a long-term owner, and so profit from property management is the single most important thing that we focus on. And since inception, we have had an upward trend there over the years. Hasn't been the same increase every year, obviously, so it's been a bit irregular there as well. But the long-term trend has been good over time. But things can happen in different years that sort of affect this trend a lot. So in 2008, we had a small decrease. And then you might think it was the financial crisis, but it actually wasn't, because we sold off the properties in 2007. But then it took off again. And you can also see here on this slide six, slattish between 19 and 20, and that was the pandemic that made things slow down a bit. It was still an increase, but not that fast. And then last year, as I said before, was 11%. And on the next page, you can see from the beginning that portfolio value has been increasing since we started in 2005. And at the same time, we have lower the debt to assets, so the trend is down there also on a longer time horizon. Occupancy has been very stable and of course we have a very spread portfolio of different areas, cities, asset classes, so it makes it very sticky. So my forecast is that there will never be any big changes up or down the occupancy range. this year end as well. And then we have what we call earnings capacity and this is sort of how the situation is every quarter and it's updated every quarter in the quarterly reports. So there is how it looks on that particular quarter end. So here you see then for example the rental income on a yearly basis is 11.6 31st. And then what's new for this year is that we also make a forecast for the profit from property management for the full year 23. We never did that before, but we felt it could have a value this year since there seems to be a lot of uncertainty from an operational standpoint. So our forecast is that profit from property management 2023 will be 6.2 billion. And as you can see, the last figure here, 31st December is 6.220, so it's more or less the same. And what we then see in this year is that we likely more than 2.9, but the rental income will also be slightly more than 11.6. So this is our forecast as of today. And now I hand over to Eva again.