Catena AB (publ)

Hi everyone and welcome to this report call. In today's presentation we will start off by giving a short summary of the second quarter followed by a short overview of our business. We will then proceed to the business update where we will touch upon our current growth initiatives. Sophie and David will then guide you through the numbers in the financial update and sustainability and we will then end up with the Q&A. Next slide please. Starting off with the summary of the half-year period, we continue to report rental income growth driven by acquisitions, projects, and the stronger like numbers driven by our CPI-linked contracts. We received a confirmed credit rating of BBB- from Fitch Ratings, first from one of the major rating firms. And the rental income for the period is up 17%. The NOI is up 19%. income from property management per share is up six percent and we have a ltv of 36.7 and we have also a whale of 5.3 years further we announced during the second quarter our biggest project yet logistic position ramlasa with the tenant no waste logistics signing an loi for the entire space all of this is in line with what we stated during last year with the equity race And lastly, after the quarter, we announced this week an acquisition of Bokka for a logistic property development company. And I will go deeper into this later in the presentation. So please proceed to slide six. On a similar theme as we saw in Q1 2023, we are going through a trying macro environment with decreasing consumer confidence impacting the majority of the segments. particularly challenging in the e-commerce sector, where the decrease in sales, both nominal and real, is impacting many players. While we are tracking bankruptcies and they are increasing, no material impact has been registered, which we can see in the segment as large. Having a strong customer base has been central to Catena's business and showcases its benefits for their resilience and growth potential. While the e-commerce as a whole is facing a tough market, there are segments that players are growing. Fashion and pharmacy is registering growth, and many of our customers are pre-leased for new space in order to match existing volumes and future growth. We are seeing continued demand for new developments, and these are strong players who want to optimal long-term logistics set up in order to capture future growth. Here, energy, location, and automation is key for the customers. Therefore, we think that these players will end up in a stronger position when the market swings back. Once again, illustrating the importance of having the right type of customer. As mentioned before, all of this showcases the strategic importance of the logistic facilities. Long-term trends such as omnicommerce, circularity, and reshoring are pushing the demand for more space and particularly modern space in right location. As we progress, we will also see the entire logistics segment move past just leasing the facility itself. Future revenue streams will include, for example, electric charging stations of trucks, leasing of standardized equipment such as shelves and automation. And lastly, we are seeing more logistics space being completed this year and the next. While this volume is unprecedented, it doesn't keep up with the customer demand for the long term. Due to the more challenging regulatory environment with regards to zoning, there will be less land loss, particularly in the prime locations. And this will add the pricing power for existing facilities and lead to higher rents. Next slide, please. During the quarter, we acquired a land lot of 47,000 square meters in Gothenburg, which brings the portfolio to a total of 129 properties with a contracted annual rent of about 1.8 billion SEK. Next slide, please. Having a look at our customer base, the ICA acquisition, which took effect in Q1, makes ICA our second biggest customer with regards to the contract value. And furthermore, the top 10 customers now stands for 45% of the contractual value. Next slide, please. And let's take a look at our initiatives for future growth. Next slide. About our current projects. This quarter, we announced the new development of logistic position Ramlösa with the customer on the waste, which I dwell deeper into later. As mentioned in the previous quarter, we are hovering around 6.5% in yield on cost in the current projects. With newer projects, we will be aiming for 7%. And the total investment of all of our ongoing project is 3.8 billion SEK. And that will add about 325,000 square meters to our portfolio when all is finalized. Next slide, please. And now to the fantastic project at logistic position Ramlösa. We mentioned during our equity race in Q4 that we saw potential for new attractive projects going forward and that there is a demand for modern facilities in great locations. And in line with that statement, I'm very happy to announce our latest biggest project to date made official during the quarter in Helsingborg. We will build three new facilities totaling 75,000 square meters. No Waste Logistics has signed an LOI for all of the space. This process we have done previously with the customer and feel comfortable going forward, starting the construction during the summer. Our partnership with fast-growing 3PL players stretches back many years and it's a clear illustration how we grow together with our customers and assist them in their growth journey. Construction will start now, as I said, in the summer this year, and will be completed the latest in Q1, 2026. I can also say that I assume that some of the buildings will be finalized a lot earlier than 2026. Next slide, please. And with regards to our land bank, we have had some progresses in a couple of our processes. although we had to wait for some decisions to gain legal force. And as mentioned before, we acquired a land lot in Gothenburg, which is sown and ready for a project whenever we have a case. Next slide, please. Then this week, we announced the exciting acquisition of Bokafell AB, a leading logistic property developer They have one of the most extensive track record in Sweden, having developed over a million square meters of logistics space in a variety of locations. This experience also extends to the network, having worked with some of the biggest customer in our segments. We purchase Bokasjö through a right issue amounting of 125 million SEK with deal finalizing in October. This is also the net effect of the transaction and the sum that will end up as a goodwill in our balance sheet. And the rationale for the acquisition is to accelerate our initiatives on our land bank with new development and optimize our setup for growth within the area, both through pace and profitability. And we do see a potential for higher deal on cost in future project as a result of Boca first strategy of running and procuring projects. Next slide. Looking at our leasing operations, our letting ratio continues to be high, standing at 96.7, reflecting a strong demand for our segment. It is a small decline compared to Q1, isolated, and it's due to some puddle players that have been struggling. That has resulted in some small vacancy changes but nothing to worry about. It's on the margin. It has nothing to do with our cure logistic business. And we also do have a confidence to fill up those vacancies quite rapidly. And now I would like to hand over to Sophie for sustainability and financial update. Next slide.

And next slide, please. Good morning, and thank you, Jörgen, and good morning, everyone. We continue to work with certification of our property portfolio. At the end of the half year, we have 33% of our electrical area certified, and in pipeline certification later this year is another 18 properties. Since Q2, we have almost doubled our self-produced solar energy. And now, during the warmer season, and as the rain started to come, we continue to work with our biodiversity goal with several ongoing biodiversity projects in all our regions. And we're going over to slide 17 for some financial updates. And slide 18. Thank you. Rental income for the period amounted to 892 million compared to 760 million due to last year. And this was driven primarily by indexation, acquisitions, and some projects being finalized. The higher rental income increased our net operating surplus with 19% to 723 million. The higher surplus ratio is explained primarily by us divesting two older facilities during 2022 while acquiring and completing more efficient facilities with lower property costs. Profit from property management rose 23% to 583 million compared to 474 due to last year. Impacting to profit from property management is the effect from associated company, Fodil Fastighet AB, with 35 million due to change in value for the completed project for HelloFresh in Byd. And next slide, please. The rental development for the half year has been positively impacted by our CPI-linked contracts that came to effect by the start of the year. Acquisitions contributed with 49 million. Divestments made a negative contribution of 20 million. And within projects, the main contributors were the completion of the Postnord facility at Punkagården and the No Waste facility at Plantahuset, both here in Helsingborg. And now handing over to David for some comments on financing. Next slide.

Thank you, Sophie, and good morning to everyone. On balance day, we report an equity ratio of 52.2%, which is well above our minimum target of 40% and offers a flexible way of progress from here. The underlying macroeconomic prospects still screens some uncertainty, which is no surprise to anyone. specifically with regards to difficulties assessing interest rate peaks to combat inflation versus potential downturn impact on economic activities. In the quarter, Fitch Ratings published a long-term issue rating of BBB- with stable outlook and Nordic Credit Rating confirmed their BBB- with a positive outlook. Both signals are strong financial profile along with benign operating fundamentals and our market leading position. Next slide, please. In line with our strategy, we keep a safe distance to our financial policy targets. With market interest rates higher, average cost of debt increased to 3.5% on balance day compared to 3.4% from last quarter. Net debt to EBITDA was reported at 7.9 times, whereas run rate was reported at 7.6 times. Combined with a low leverage of 36.7% and a secured loan-to-value of 32%, we have ample headroom for targets and covenants and expect to be able to capitalize on further opportunities from here. Next slide, please. In the quarter, we have refinanced about 1.6 billion of bank debt, with debt maturities ranging from three to four years. Credit margins are still attractive and moves out only marginally. Additionally, we have signed and borrowed 130 million through the Danish mortgage system. with a 15-year commitment at very attractive levels. Average debt maturity is 4.2 years. After the quarter, we have also signed a new loan agreement with the Nordic Investment Bank of 430 million with an eight-year duration, which also adds to our sources of funds and further extends maturity. Over the next 12 months, about 1.3 billion of debt is about to mature, and including committed investments, we have good control over liquidity. On balance day, liquid funds amounted to 3.1 billion. We continue to assess different strategies, including the bond market, but for now, it still screens unattractive spreads. Next slide, please. Our interest maturity structure implies we have currently 68% of total debt hedged with an average term of almost three years. Our derivatives portfolio and fixed interest loans combined have an average term of about five years. Market rates could move out another one percentage point from here, and we would still be able to keep interest coverage ratio comfortably over 3.5 times. Thanks, and back to you, Sophie.