Fastighets AB Balder (publ)

Good morning everyone and welcome to this conf call for Balder's Q2 2026 results. With me in the room I have Sharam and Eva our CEO and CFO who will take you through some slides initially and then we will open up for questions.

Thanks, Jonas. Yes, most of you have seen this picture before, but I think it's good to show it again. Our portfolio is roughly half residential and half commercial. We have a portfolio value of 241 billion SEK and occupancy rate of 95 and net debt of 50. We have a good liquidity of 23 billion SEK and AB Per Share stands now at 94.3 SEK. And that's a growth comparing rate of 24 since the start of Balder. Our credit rating from S&P remains at BBB with the stable outlook. If you look at the figures for the second quarter, rental income is up 5%. Profit from property management is down 10%. But if you adjust the comparative figures for the effect of distribution of Nurion, we instead have an increase of 3%. Our funding costs increased from last year, but at a lower pace than our portfolio has grown. We have also a bit higher central admin expenses and that is partly because of a slightly higher activity in new development and partly because we are investing a bit in digitalization and making our central functions more streamlined. The effect should be that we can scale the business more efficiently in the coming years. And on the income side, we also need to work even harder with our occupancy. We have an amazing team and they always do well, even in the challenging market conditions. In current earning capacity we see an increase of 10% adjusted for Nurion's contribution in the comparative figures which means that we see an underlying healthy growth. Like for like rental growth 1.2% and NAV per share is 94.3% as I said before. Looking at the earning capacity, you can see that rental income is up and net operation income is up as well. All in all, this summarized down to 6.1 billion SEK and per share 5.21 SEK. You can also see that the per share improvement is a bit better than the profit improvement. And the reason is that we bought back almost 16 million shares in this quarter. Here is an overview of the portfolio, which is very well diversified. Helsinki is the single largest region, followed by Gothenburg, Stockholm and Copenhagen. And the residential side of the portfolio represents a little bit more than 50% of the portfolio. Office stands for 16%, retail 11%, industry logistics 7% and other stands for 13% and hotel are the majority of that. Looking at the whole portfolio you can see that 80% is located in capitals and larger cities. We have always had a long-term view on the business, which of course will continue. If you take a longer time horizon, we have a really good improvement over the years. The latest three, four years has been flattish, obviously because of the interest rates going from zero and upwards. Here you can see the development of property values netted to total assets and occupancy. We have over time increased the portfolio and netted is now at 50% in the longer time period. We would like to come down. occupancy rate is now 95% and as you can see it has been very stable which is an effect of our diversified portfolio. The explanation for a bit weaker occupancy compared to earlier 96 is primarily due to some weakness in the office segment occupancy. And now I will hand over to you Eva to comment a little bit more about the financing.

Thank you, Sharon. Looking at the financing, the funding mix is more or less a 50-50 split between bank and bond financing. We have a slightly more bond financing as of now compared to last quarter. The level of available liquidity is continuously a bit elevated due to the concentration of large maturities in the beginning of 27. The interest rate fixing and hedging ratio is stable and the average interest rate is unchanged compared to last quarter at 2.9. Our funding is now well reflective of the interest rate curve and margins, so I wouldn't expect any significant shifts in our funding costs in relation to the net debt on the cash funding side. During the last couple of years, because of the volatility in the rates market, we have had the opportunity to enter hedges with optionality, like an extendable swap, at very favorable rates. It's hard to judge whether these opportunities will continue. If they don't, this might present a slight headwind in our financing cost compared to our normal hedging activities. Net debt to total asset is up a bit to 50.4%. due to the distribution of Norion and to some extent share buybacks. The ICR is at 2.5 and rolling 12 months net debt to EBITDA is 12.8. Per quarter end net debt to EBITDA was down 0.3 times compared to last quarter. Here you can see the long-term trend of the portfolio value in relation to net debt to total assets. As you can see here, as I mentioned in the previous slide, net debt to total asset increased during the quarter related to the distribution of Norion and share buybacks. Current encumbrance level is at 24.5% and with our current funding mix, we think a level roughly in the 23 to 25% range is where we will be. So over to the maturity structure. On the bank side, it has been business as usual, rolling maturities. In the bond market, we have been taking advantage of the favorable conditions and issued bonds in the SEK market amounting to 1.6 billion SEK. Currently, our bond funding is cheaper than the bank funding, looking at like for like maturities. This slide we have shown before, it's a structural overview of the funding and capital side. As we have said before, we will continue to have a balanced capital allocation until reaching our target of 11 times nettoebita. And that target remains unchanged. We expect nettoebita to gradually come down, but we see no reason to be forceful about it. The direction is more important than the pace of the reduction. Here you can also see an updated calculation on the convertible bond, which when that is converting, assuming that we're above strike price, obviously will have a positive effect on the indebtedness numbers. And in terms of funding strategy, there is no change compared to previous quarters. That was all from us. And on that note, I will leave the floor open for questions.