Castellum AB (publ)

Good morning, everyone, and welcome to this presentation of Catalum's Q4 report. From our side, it's myself, Christoffer Svendek, Acting CFO, and Paul Alsian, CEO. There will be a Q&A session in the end of the webcast, and if you'd like to ask a question by phone, please dial pound key five on your telephone keypad and ask your question. So let's start. Please go ahead, Paul.

Thank you, Kristoffer, and thank you to all that are phoning in. I would like to start with saying that I've been here for almost six months, and I've got a very warm welcome from all of our staff. I'm very thankful for that. But also from shareholders that have reached out with questions. challenging questions, but also very good advice. And I hope that will continue going forward because that's something that actually makes Castellum better being challenged by our shareholders. I really appreciate that. And the focus for us the past six months has been back to basics, the sort of the new strategy of Castellum. And the focus is crystal clear, our target is to deliver a 10% return on equity over the business cycle. So that's really been what we've been working on for the past six months. It's all about taking away things that are not relevant, that are unnecessary. It's all about leasing, decreasing our vacancy rate, increasing our occupancy rate. And it's about cost control, reducing our costs both in administration but also in our operations. And we have also gone through our portfolio. to see which properties are winners that we can keep in the long term and properties that are struggling a bit more where we either have to change our business plan or we actually have to leave them to someone else who has other ideas or other visions for the future than we have. But that has been really the focus for the past six months, and we call that back to basics. So one of the things we've done, which I mentioned, was decreasing costs. And unfortunately, we were in a situation where we had a bit of a too big of a costume, which led to staff reduction, unfortunately, during the autumn, where 30 people had to leave Castellum. and that costed us around 40 million Swedish crowns during the fourth quarter. We believe though that the savings will be roughly the same amount going forward due to that action. One of the key things for us is having room to maneuver when it comes to the portfolio, freedom to change the portfolio. Without that freedom or without that room to maneuver, it will practically be impossible for us to reach 10% return on equity. And we had some writings or conditions in our bond agreements, which we addressed in the end of last year. It's called cessation of business, which sort of limited our room to maneuver. So we asked the bondholders if we could change those conditions, terms and conditions. And most of them agreed to that in December. But that also came in with a cost of roughly 30 million Swedish crowns. And that's also something that is in the report we are talking about today. Property values are down 2.5 billion last year and 1 billion in the fourth quarter. And the main reason for the value changes are changes of expectations of future cash flow, which is mainly due to changes in long-term vacancy and rental prices or rental levels. And in the fourth quarter, 1 billion Swedish crown in value changes, negative value changes. It's mainly Kista, half a billion. Kista is a small proportion of our portfolio. It's well known in Sweden, I would say. It's often written about it in the newspaper. And we have roughly 130,000 square meters in Kista. And it's around 2% of our portfolio. But it's struggling a bit with vacancy. And that's one of the challenges we have within our portfolio. And Finland, we have also changed sort of the expected long-term vacancy, which has led to a reduction in property value of roughly 200 million Swedish francs. Net leasing for the year was negative 140 million Swedish crowns. Most of the negative event was actually in the first quarter when net leasing was down 184 million Swedish crowns. And that was mainly two events. It was Boost down in Malmö and the bankruptcy of Northvolt. Since then, the quarters two, three, and four has actually been positive, but not as positive as the negative events of the first quarter. So net leasing, 140 million negative. Many people obviously ask if we can see a turnaround. We obviously hope so, but our focus is leasing, leasing, leasing. Time will tell if there has been a turnaround or not. One of the things we've launched now, actually in January, is what we call Castellum Business School. We believe that we need to raise the awareness within the company on how to understand the strategy, for example, but also to increase efficiency in the property management, in project management, and in leadership and things related to the Castellum business. So we launched the Castellum Business School in January. All staff will get a relevant education given their occupation. But also 150 people have been selected to do the Castellum Business School MBA, including calculation, leadership training, and so on and so forth. And we believe that that will be a positive contribution to our aim to reach 10% return on equity. And my final point here is, in the intro is the fact that the board is proposing share buybacks instead of dividend and that's in line with our new policy for capital distribution and we think that's a that is a wise thing to do today when the share price is where it is in relation to the net asset value we can actually skip the go to the next slide and just give you background on Castell we are listed company obviously we have property value of roughly 137 billion where most of it is in major cities in Sweden, Stockholm, Gothenburg and Malmö and we also have a strong presence in regional cities, growing cities like Örebro, Jönköping and Västerås. And we have a portfolio also in Helsinki, Finland, roughly 6 billion Swedish and 5 billion in Copenhagen. And then we have a pretty significant stake in a Norwegian company, Office Company listed, where we have almost 38% of the shares. 5.3 million square meters and the yearly contracted rent of 9.3 billion and high sustainability focus.

Yes, thank you. So summarizing the full year 2025 and comparing it with the same period last year, it is negatively affected by mainly divestments and higher vacancies. That is shown in sort of all of the results figures on this page. In addition to that and as Paul mentioned negative value changes of the properties 2.5 billion for the full year and 1.1 billion for the fourth quarter, minus 1.8 percent for the full year. This all summarizing gives a return on equity of 1.2 percent which of course is Much lower than our target of 10%. Net leasing, Paul also mentioned, minus 140, very negative one in the first quarter, and then three quarters after that, positive ones in the fourth quarter, plus 26 million. occupancy is fairly stable 89.8 percent roughly the same as the last quarter and we have during the year invested quite a lot 4.4 billion combination of investing in our properties is the make most of it and in addition to that we also made some acquisitions during 2025. Paul mentioned a few one-offs, and we have a couple of one-offs in Q4, isolated, both positive ones and negative ones, and we will try to go through all of them during this fall. Looking at it in more detail, in the like-for-like portfolio, income increased by 26 million, that is 0.3%. index contributed with 140 million but it's done offset by higher vacancies of 190 million then we have one of the first one-offs which is 58 million one-off relating to a reversal of accrued annuity for the north vault So that's a difficult one, we took the full net leasing, negative net leasing in Q1, but then now in Q4, we sort of concluded the final parts of the rental agreement with the bankruptcy estates, and then we had So no cash effect, but an accrued one that we reversed during Q4. So that was a positive 58 million in Q4. Direct property costs, like for like, increased by 58 million, corresponding to 2.7%. We have a mild winter. Now we're talking Q4, not what we have seen after Q4, but in Q4, a mild winter. The cost for heating and snow removal was actually decreased compared to last year. But then we have, that was offset by some higher rental losses. And we're also doing Q4 isolated, took a couple of larger wasted projects or projects that we are not expecting to go through anymore. So one of that one recorded under maintenance in Q4. Central administration and property administration in total increased by 54 million. And here we have another one-off, Paul mentioned it, approximately 40 million of those 54 million is one-off relating to the staff reduction and head office reorganization. and we can go to the next slide please so looking at the leasing renegotiations of 279 million that is 11% of the total leased stock up for renegotiation. Fairly the same rent as before, decrease of 0.1%, so very flat, but quite low volume of the total stock up for renegotiation and the very large bulk of it 62 percent or 1.6 billion is actually just prolonged at the same terms as before. That is something I think is very much worth mentioning. Net leasing we have been talking about already and here we also have the figures in the graph up to the right showing that as mentioned the very big part of it was a negative one in Q1 and the very big part of that was the North World Bankruptcy and then we have three positive quarters not big figures Property values, we have been through most of the figures already actually. So 1.1 billion down in Q4. Stockholm stands for 0.9 of that and Finland 0.2. And as Paul mentioned, of the Stockholm 0.9 billion down, 0.5 billion is related to Shista. valuation yield fairly flat one one pips up from from last quarter but you know what 5.64 fairly stable I think we take the next slide there Looking at the financial highlights and our funding situation, overall the funding markets where we are present, i.e. the banking market, the CIEC bond market, the Euro bond market, as well as the hybrid market are. All very favorable at the moment, I would say. Very good market conditions, credit margins at good levels and very much liquidity in all of the markets. Current spreads in the domestic or the SEC market is some 80-bit for 3-year money, some 110-150 for 5-year money. banks offer us typically five year money 110 to 130 bps also at good levels good volumes I would say that most of them or maybe all of them would like to increase their positions that's very good and during q4 isolated we did not actually do that many Funding actions, we made one bond, one billion SEK, 122 BIPs, 5.25 years. Bought back some bonds at the same time. And then, as Paul mentioned earlier, we made this constant solicitation. Overall, we got the results that we were expecting. So that's good. average interest rates 3.1 stable compared to the last year actually down a little bit since the year before and we see potential for actually reducing this a little bit going forward and also on the financing side we have a couple of one-offs Together, they are approximately 50 million. As Paul mentioned, 30 of them are connected to this consent solicitation. And then we have an additional approximately 20 for refinancing and early redemption, both coupled to loans and to bonds. Quite a large one-off in the financial side. I know that this slide we have our financial key ratios very stable I would say small changes compared to most workers loan to value of 36.5 percent iso 3.2 good headroom to our policy and we have ftb policy of 40 percent icr policy of three times so you would have the room there At the beginning of this year, S&P confirmed our triple B flat with stable outlook. That's about what has happened on the rating side. Net maturity is still stable, 4.3 years. We are quite happy with our funding situation and our QH's ability. And I hand it over to you, Paul.