Fastighets AB Balder (publ)

Good morning, everyone. Welcome to Balder's call for the first quarter of 2025. We'll have some introductory remarks from Erik and Eva, and then open up for questions. And with that, I'll leave the word to Erik Selin, CEO of Balder.

Thank you, Jonas, and good morning, everyone. Balder is a real estate company with the Nordic exposure. We are one of the largest and most diversified real estate companies in the Nordic region. We've been active for 20 years, more or less now, and we have a mixed portfolio with residentials and commercial property, roughly half of each. We manage our assets ourselves. That is one of our fundamentals. Even normally we buy and hold, but we can also develop and build and hold, and obviously also build and sell. And we have had an average NAV growth of 26% per year since inception 20 years ago. We have a S&P rating, BBB flat, and net debt to asset of 49%. So that's a baller at the glance looking at the first quarter rental income increased 9% and the NOI net operating income increased 10%. If we then look at the profit per share, you can see an increase of 7% and the missing piece is that we issued some shares during the year. So that's the difference from 10 to 7. Looking at earnings capacity, which will be next slide, it's now at 538. So that's 8% better than this quarter last year. Net debt to asset, as I said, 49%. And like for like rental growth on average in the whole company, 2.9%. And NAV stands at 89.55 right now. Earnings capacity is a slide that we show every quarter and it's just more or less the figures on that particular date so it's not a forecast but it gives you a big picture of the overall figures in the company. And if you compare now year end to quarter one you can see a small decrease in rental income and further down also in profit from property management. and that is because of the currency movements so on constant currency we would have had a small increase but this is always currencies per quarter end and if you compare quarter year end with quarter end the swedish strengthened quite significantly if you compare with Euro and even the other currencies. So that's why I have a small adjustment in earnings capacity. Apart from that, it's very stable numbers, as you can see. And looking more specific of the portfolio, 80% is in larger cities and capital in the Nordic region. So the biggest cities are then Helsinki, Gothenburg, Stockholm, Copenhagen. And if you look at property categories, we have Resi with 53%, Office 15, Retail 12 and then we have some other properties including hotels. And we have also a small part that is industrial and logistics property, 6%. Looking back on this slide you can see the development of profit from property management going 10 years back in time. You can obviously see a good improvement 16 till 22 and then a flat development. That is the shift from zero interest rate to gradually higher interest rate that makes the profit from property management to be flat. But in order to be flat, we had to have a very good development on the NOI and that has actually compensated for higher interest levels during this turbulent years. And looking at other metrics you can see portfolio value last 10 years from roughly 80-90 billion to 222. The leverage have been around 50% or there about. And occupancy rate also very stable at 96. If you look at even smaller numbers, you can see that it's 95.5, 95.8 sometimes. One quarter, I think we also were below 95.5. So we had 95 in the figures, but a very stable number over the years. And the explanation is we have a very diversified portfolio on asset classes, countries, geographies. So that makes it that is very, very small changes up or down. And that is on purpose. We like this to be very low operational risk. And we think that this will continue to be stable over coming cycles as well.

Great. So a short ESG update. In February, the EU Commission presented simplified rules for sustainability reporting through the so called omnibus package. The proposal involved among other things changes in the CSRD and taxonomy, as well as two year delay in implementation for smaller businesses. These changes do not affect Balder at present, as the size of the group is included in wave one, which means that we shall continue to report in line with CSRD requirements for the fiscal year 2025. And our sustainability report has taken major steps towards the new reporting requirements in order to achieve full compliance in 2025. Alder's sustainability work has developed during the past year, reduced energy use and greenhouse gas emissions, more charging points for electric vehicles, increased energy production from solar panels and larger amounts of environmentally certified square meters. We also have a higher proportion of properties that has undergone climate risk analysis and are aligned with the EU taxonomy. And these are just some results that we have achieved in 2024. And over to some financial information. The equity asset ratio has increased by 0.7% up to 38.7. And net debt to total asset has decreased by 0.4% to 49%. The ICR is at 2.7 and in the quarter it's 2.8. And if you look at netto to EBITDA on a rolling 12-month basis, it's 12.0, down from 13.5 when we introduced ahead of 2023. And also, if you look in the current earnings capacity, we're now at 11.7 times. So we are working our way down to the target of 11 times. And if you look at available liquidity as of Q1, it's a little bit more than 23 million, billion, sorry. And it's well above the criteria from S&P regarding 1.2 times for the coming 12 months, according to S&P's methodology. And that level is unchanged since Q4. To the right you can see the interest refixing structure. Also worth noticing is that the average interest rate for 25 includes the margin for the floating part of the debt portfolio and the average interest rate is 3.1. Here you can see the long-term trend of the portfolio value in relation to net debt to total assets. As I just said, net debt to total assets has continued to decrease a little bit and secure debt to total assets is at 24.3. And that current encumbrance level is reasonable expectations going forward as well. And here is the usual overview of the debt maturity structure, split by bank loans and bonds and commercial papers. And during the quarter, we have been active in both the Swedish capital market as well as the Eurobond market. We issued a seven-year 500 million Eurobond at the same time we repurchased 250 million euros in maturities 26 and 27, as well as the hybrid. And we also did a five-year CEQ bond of one billion. And if you look at the bank side, it's more or less business as usual, rolling maturities. And this has been done with slightly lower credit margins than last quarter. I think that was it from my side.