Catella AB (publ)

Good morning, and welcome to our Q2 2026 earnings call. As just announced, I'm Rikke Lykke, Group CEO of Catella, and I'm joined by our CFO, Gustav Jansson. Let me start with a brief introduction to Catella. We're leading European real estate investment and advisory firm. What sets us apart is our combination of local market insight, longstanding strong client relationships, and our cross-border execution power. Today, we manage 161 billion SEC of assets, have just under 500 employees across 12 countries, and we generated 1.7 billion SEC in revenues over the past 12 months. Since we announced our strategic opportunities, a priority, sorry, in May, our focus has been clear. We want to improve quality of earnings, we want to strengthen operational excellence, and we want to invest in capabilities that make Catella more competitive over time. A stronger base of recurring predictable revenue gives us a greater resilience and a better platform for profitable long-term growth. So we're also simplifying the group. We want to reduce complexity, increase our accountability, and improve our execution speed. As you may have noticed, we have in Sweden this quarter discontinued our previous investment management setup and returned the AFM license. With this, we reduce our complexity and we release approximately 20 million SEK in cash. In corporate finance, we have optimized our French operations through a new office and a more integrated structure. These actions alone in Sweden and France are expected to generate annual savings of around 6 million SEK. At the same time, we continue to invest selectively in capabilities that strengthen competitiveness and support long-term growth. The appointment of Neil Somersel as Chief Digital Officer is to reinforce our capabilities and improve how we operate. We're also investing into our European platform to create a more consistent client offering and scale our earnings base over time. In investment management, we have strengthened our capital raising capabilities through a new group capital raising strategy and partnerships role. Recently, we've seen a stronger market momentum during the quarter. particularly in Sweden, Denmark and Spain. Examples in corporate finance is our involvement in a major office transaction in Sweden and one of the largest residential land transactions, one of the largest of the year in Spain. And just this morning in investment management, we announced the joint venture deal that we entered into in Denmark. We continue to align our European investment management platform, and that includes the phased rebranding of our investment management team and business in France. This is to reinforce and emphasize a more consistent market position across Europe. Across both business areas, closer collaboration is strengthening our client offering and our ability to capture opportunities across Europe. Capital allocation remains a key priority. We're progressing existing projects, we're handling legacy investments, and we are selectively deploying capital where we see attractive long-term opportunities. And finally, during the same quarter, we also initiated a 100 million SEC share repurchase program. And with that, I'm going to hand over to you, Gustav, and I know that you will address the share repurchase program.

Thank you, Rikki, and good morning, everyone. Looking at key highlights for the second quarter, for the group in total, the reported revenues fell significantly compared to the previous year, from Swedish krona, 754 million, to 400 million. This is driven primarily by the sales of Cactus and Catwave. In the 2025 numbers, disposals represent revenues of almost 360 million SEK. Adjusted for this, gross profits on an underlying basis is an improvement of 5%, with second quarter 26 net revenue of SEK 310 million compared to an adjusted 25 number of 294 million. In the quarterly results, corporate finance is up 28 million year-over-year, investment management is down 21 million, and the balancing figure is spread across multiple other movements. I will discuss these results in more detail later on in the presentation. Other highlights. Earlier this morning, we announced the sale of the development project Greenpoint in Copenhagen as part of a strategic asset swap with EconoBolig. As part of this transaction, Catella, our partners Nordkronan and an international investor acquires an adjacent development site with the ambition to develop a new residential project. Ricky mentioned as well the share buyback progress. In the second quarter, we launched a share buyback program. To date, more than 250 million shares have been repurchased at an average share price of 20.5 Swedish kronor. In aggregate, circa 52 million Swedish kronas has been used of the 100 million mandate that was approved at the AGM in May. Further highlights, we believe that supporting our view of the market, transaction volumes data show that the activities are starting to pick up. As mentioned, our corporate finance team have been well positioned to benefit from this, and we're carefully optimistic about the near term future. So going a little bit more into the details and turning our attention on the business areas, starting with investment management. In the quarter, asset under management is helped by currency movements, but otherwise the trend of net outflow and downward valuations continue. This is true also for the last 12 months basis, where reported growth is supported only by an accounting change that now includes asset under development in the AUM number. In terms of revenue that translate to our management fees falling, in the quarter, variable fees are also down as limited dispositions in the funds happen in the 26 number where we saw more activity in 25. The low activity in 2026 is partially related to timing and we expect to see some more activity in the funds going forward. The EBIT is down 7% as the revenue shortfalls are offset by lower costs. In particular, personnel costs have been managed effectively. Moving on to corporate finance. Revenues are flat on a reported basis, but up if adjusting the previous year numbers for fees related to the cactus disposal. The strong result on an adjusted basis is a reflection of the increased number of transactions completed in the quarter, and we saw that on the market activity chart earlier. EBIT is largely flat compared to last year. This is a reflection that we invested in the business last year, despite the slower markets, to be positioned to succeed as the markets picked up again. Hence, costs are largely flat. Moving on to the balance sheet investments and our legacy there. Again, the key variance in the numbers is driven by cactus disposal. Adjusting for that, the net revenue number is 12 million better than previous year. This includes a positive impact of the Met's Eurolog project worth 5 million SEK. Moving on to look at the financials on a consolidated basis. I think we have explained the net revenue performance in the business area sections, and I will therefore now focus on a few items further down the income statement. Operating expenses are 20 million SEK lower, a decrease of 6%. This is mainly driven by lower variable salary costs and expenses no longer incurred following the CACTUS and CATELLA valuations disposals. Offsetting those positive movements are negative movements in fair value adjustment, which creates a negative impact of 8 million between 25 and 26. On an underlying basis, the result on EBIT is therefore largely a flat year-over-year performance. Looking below debit line, the largest impact come from FX, which in Q226 had a positive impact of 50 million SEK, while the impact in Q225 was a positive 40 million. There were also some costs incurred related to the bond repurchase made in April this year. At the end, this results in a net loss for the quarter of 12 million SEK, which excluding FX impacts would have been a negative 27 million. Clearly not the results we would have liked, but we also see some positive signs in market recovery and opportunity for further actions. Having said that, I'm handing it back to Rikke, and thank you.

Thank you. Before we open for Q&A, I would like to return to the bigger picture. Our priority is to sharpen Catella's strategic focus and concentrate our resources behind a clear, scalable growth path. The European real estate market is gradually recovering. Whilst uncertainty does remain, the opportunities are emerging. The actions we're taking now are designed to strengthen Catella beyond the current cycle. By improving earnings quality and simplifying the organization, strengthening our European platform and allocating capital with discipline, we're building a more resilient Catella and a stronger foundation for sustainable value creation. We're not waiting for the market to improve before we act. We're making Catella sharper, more scalable, and better positioned to lead as markets recover. Thank you.

We will now open for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Gustaf Jorgensen from ABG Sundal Collier. Please go ahead.

Yes, thank you and good morning. I have a couple of questions, but I can start with this one regarding investment management. We saw lower variable fees in Q2 despite improving transaction activity in the broader market. What needs to happen for that improvement to translate into higher transaction and performance-based fees? and should we expect any meaningful catch-up in H2?

What needs to happen is that some of our funds are ready again to invest or to divest, because our variable fees in investment management are coming from transactions. We manage on behalf of third party. and it is the third party who and us that are discussing whether we are to sell or acquire. So what needs to happen is that there is a confidence in the market that it's the right time to divest or the right time to sell. Will we see a take-up here? I do believe so. But I also will have to say that, as we said here earlier, is that we see a really strong momentum in Sweden, Denmark and Spain, but our main AUM is in Germany. And currently Germany is still, let's put it this way, they're observing the market. So unfortunately, I would love to tell you that we're definitely going to see a lot more transactions, but I can't promise that.

And adding on your question regarding performance fees, Gustav, Given... This is a general answer, so it doesn't apply to every fund, but given high watermark clauses and so on in the bigger funds and where the trend has been, I wouldn't expect any performance fees or major performance fees in the second half of this year.

So variable fees come from transaction and performance fees.

Okay, thank you. Then I have a question regarding so advice transaction volumes increased from 11.4 billion to from 8.7 billion but the corporate finance EBIT remained at 6 million so how should we think about the lag between improving transaction volumes and the earnings conversion and when would you expect to see more meaningful operating leverage

Just to think about the cost of our corporate finance business, we believe that it's important to maintain a team in place, also through the slower market turns, ready to capitalize when the markets become active again. I think that's true. With more transactions, I wouldn't expect the cost base to increase either. If activities continues in the second half, we're confident about our position in the markets. We are optimistic about our pipeline. You should see an improving profitability in the corporate finance segment, yes.

Fair enough. And then I have a last question also. So you mentioned that simplification in Q2, including the around 6 million of annual savings in the French corporate finance and the window of Catala Property Investment Management in Sweden. Should we expect further structural cost measures or is the cost base now broadly where you want it to be?

I've only acted now as a CEO for a year. I spent the first half year, nine months to understand, listen and learn and analyze. First of all, the bonds buyback that we have noticed before that we've said that we might want to do is definitely going to give us further cost savings. But also, I am of the conviction that you should always look at your cost side. And that said, we will continue to optimize the cost side.

Okay, thank you. That was all of my questions. Thanks.

You're welcome. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Rasmus Jacobson from Red Eye. Please go ahead.

Good morning. Good morning. Excluding the development reclassification in the management, the net flows for the AUM has been negative for three quarters or so. Is that due to like a race environment or is there anything specific related to your funds that is resulting in a net outflow? Thank you.

Good morning, Rasmus. Just to make clear, the asset under development is roughly worth 5.3 billion. The reasons for the outflow are largely driven by redemptions rather than valuations, but valuations as well have trended down. Does that answer your question?

Partly. I was curious about, if I just look at the inflows or the inflows and the outflows, the outflows have been slightly larger than the inflows. And I was just curious if you are signing, if there's an issue with signing units to offset the outflows, so to speak.

Well, we are listed, so we can't say too much about that, but I can, I can say that in the market, it has for everybody in the investment management world in Europe been a few tough years in terms of capital raising for new funds. I think that is something that we all know in this market. It has been a challenging situation. And we are seeing that signs of early, early spring. And so currently, I would say that we're working on it, but it's not something that is just tomorrow.

That's coming tomorrow.

We are like everybody else. Yeah.

So here we're not setting ourselves apart from the market.

We are very much in line with our competitors and colleagues.

All right, thank you very much. And then could you just clarify, you mentioned the 6 million cost savings with the French division. Could you clarify if that is both France and the discontinued investment management in Sweden, or is it just for the French division?

No, it was those two actions in itself together that has improved our bottom line as of next year with 6 million, approximately 6 million SEK. So those two initiatives on its own. Yeah.

All right, perfect.

And then my last question. As I mentioned to Gustav, we are continuing to evaluate our cost base.

Right, all right, perfect. And then just a final question on my end. Has there been any accrued releases or so relating to bonuses in the quarter or has that been or no such in the quarter?

No, it's not. No releases that would create a positive impact. We accrue according to our budget for the year. All right, perfect. Thank you.

At least this will be end of the year, if any. Any further questions, Cosmos?

That is all on my end. Thank you very much.

Thank you so much. Appreciate your questions.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Well, thank you so much for listening in. Thank you to Gustav and Rasmus for the interesting questions. We'll take it with us and see if we can address some of this a little bit more in detail next time. I wish you all a great day and thank you here from Catella Group.