Catena AB (publ)

Hi, everyone, and warm welcome to this conference call for the Q2 report 2024. Here is the agenda for today, and it's the same as we used to have, short summary, business overview and update, followed by sustainability, finance, and a short takeaway before ending up with a Q&A. Next slide, please. So let's go into the summary by start saying focus and persistence produce results. We report 14% increase in rental income, ended up in 1 billion, 20 million SEC driven by acquisitions projects and the stronger like-to-like numbers driven mostly by our CPI link contracts. Profit from property management increased by 4% in total, And per share, it was down to 11.46 SEK per share. But we do see this is temporarily since we now have acquired a lot and have a much stronger cash flow in the coming quarters. And that we also show very clearly in our earnings capacity report within the report. The balance sheet is very solid with an LTV at 38.8%. And we report an increase in NRV per share up to 396 SEC. With all this in mind, we are comfortable to generate strong performance going forward. Next slide, please. And next slide again for some business overview. In the market, we see more activity in the transactions, and we have witnessed Some transactions with strong demand and aggressive bidding, but still there are concerns in some markets where the yields will end up or trend. And the latest we heard is that in the core money will come back into the market after the summer. It could be a driver for more transactions and stronger demand. It's also due to the first interest cut, which I think David will give some more flavor about later on in this presentation. The numbers for e-commerce for May 2024 shows a positive trend and is up 29% compared to May 2023, according to Svensk Handel's e-commerce indicators. This confirms our long-term bet that e-commerce will keep on growing. Regarding new developments, it is pretty much the same story as last quarter. We have ongoing discussion. It takes longer time than we are used to. We can only keep up the work and do our best. And hopefully, we will sign some agreements after the summer in the coming quarters. That's our strong belief. Lastly, as far as we know, there is the same situation regarding the vacancies around Stockholm Mälardalen region as in previous quarter, where the aggressive developers have started a lot of projects and also finalized them, but still no lease agreements. Next slide, please. Looking into our customer base, there has been a major change regarding the top 10 customers After the transaction in Landskrona with DSV, it's our second biggest customer standing for 8% of our contractual value. Logistics and transport has at the same time increased as a segment by 10%, now standing for 44% of the contractual value. Next slide, please. Some words about the portfolio then. Since the beginning of this year, we report in four different regions called Sweden South, West East, and Denmark. And there has been a huge change in the region South, thanks of course to the DSV transactions during the spring, not only Landskrona, also Helsingborg. So at the moment, region South is actually as big as region East. The fair value in the lettable area has, of course, also increased due to the acquisitions and the projects and amounts now to 35.9 billion SEK and more than 2.6 million of lettable square meters. Next slide, please. Taking a look at the business updates. Next slide. This acquisition, as we mentioned before, expands the property portfolio by just over 180,000 square meters of logistics space. We are not only adding substantial state-of-the-art, well-conceived logistics space to our property portfolio, we're also forging a deeper relationship with DSV, which is becoming one of the biggest tenants, as I said before. The warehouses are located in Landskrona, right beside DSV's head office for Sweden and also close to their cross-stock terminal and the third warehouse. Next slide, please. At our Jönköping project to Norway, we had a speculative part of almost 20,000 square meters when we started this year. In May, we were successful in signing a 10-year lease agreement with Mestorgruppen for that space. Mästergruppen is a leading builders merchants group in Sweden, comprising the brands Excelbygg, Beolist, Happy Homes and Colorama. And Mästergruppen is based from Norway, the group. At the same time, Norway has signed an agreement with Mästergruppen to handle the logistics within the warehouse. Next slide, please. At the 1st of May, El Giganten moving to our biggest project in our history. In totals, almost 87,000 square meters where they will handle and store the Epoch kitchens, which they moved from Czechia. A unique project in its size and in our initiatives together with El Giganten to drive the sustainability agenda for the facility. We aim for wealth certification, which is an international standard which measures factors affecting human health in the property. These factors can include such as thermal comfort, materials and overall well-being. Catena will with this process break new ground within social sustainability, where the well-being of those working in our facilities will be at the center. Furthermore, we are continuing by building energy efficient and sustainable facilities by certifying them in the building process through the BREAM certification process. And we will aim for an excellent grade for this project. Next slide, please. Our ongoing project portfolio totals to around 2.6 billion, where 1.1 billion is remaining investment. When all is completed, we will add approximately 200,000 square meters to the portfolio. The yield on cost is around 6.7%. And for new projects, we are aiming for around 7%. Next slide, please. We have our land bank of 4.6 million square meters. No other updates. around the processing for getting sowing plants. They are ongoing. Next slide, please. Looking at our leasing operations, they are very successful in this report. Our net leasing was plus 51 million in the quarter. Our whale is now at comfortable 5.8 years, and the leasing ratio is back at above 96%. Next slide, please, and handing over to Sofie.

Thank you, Jörgen, and hi, everyone. I'm going to the next slide. The environmentally certified area went down to 41% from 44% last quarter, and this is due to projects and new acquisitions that are in the process of being certified. When these certifications are done, we will see an increase of certified area again, and during this quarter we certified 53,000 square meters of the existing portfolio. We continue to maintain a high level of EU taxonomy alignment, for example our CAPEX of 93%. The scope 3 is at a high level compared to last year due to finalizing projects during the quarter of 93,000 square meters. We report the scope 3 When the buildings are completed, which means that the scope will increase when projects are finalized. And moving on for some financial advice. Next slide, please. And next slide over to the income. Rental income for the half year came to 1 billion, the growth of 14% since last Q2. The increase was driven primarily by indexation, the acquisitions we made, and projects being finalized. Net operating surplus follows this development and rose 14% to 827 million. Profit from property management grows 4% to 608 million. And over to the next slide, please. Our SeaGuyling contract that came to effect in the beginning of this year gave a like-for-like worth of 6%. Acquisitions contributed with 53 million, with especially the newly acquired properties in Landskrona and Helsingborg, with DSV as tenants, and also the Danish property in Jernholm, Denmark. There were no divestments made, and in project development, the finalized project to Elke Jansen i Jönköping, Leker, Malmö, and to SGD in Norrköping were the main contributors during this quarter. Now handing over to David for some comments on finance.

Thank you, Sophie, and good morning, everyone. During the quarter, we followed up on our targeted share issue from the first quarter with new acquisitions amounting to just over 2.5 billion SEK and project investments of approximately 700 million SEK. Including paid and reserved dividends in Q2, the APRA NRV stands at 396 SEK per share, as Jørgen mentioned earlier. When evaluating our capital structure, it aligns with our strategy to maintain financial capacity to continue growing through strategically important acquisitions and value creating projects going forward. On balance day, the equity ratio adds up to 51%, still leaving room for capitalizing on investment opportunities. Passing on to next slide. We have balanced our investment ambitions with equity injections and thereby managed to maintain critical key figures at comfortable levels, leaving ample room relative to both our own policy requirements and financial covenants. The loan-to-value ratio stood at just under 39% and net debt to EBITDA at 8.2 times. The interest coverage ratio has improved slightly to 3.8 times due to a positive trend of lower capital costs. During the quarter, we received news of an upgraded rating, which has contributed to this positive trend as well. In conjunction with refinancing and taking on new loans, we continue to increase the share of sustainable financing which on the balance sheet date now amounts to 61% of outstanding loan volume. Next slide, please. It has been an eventful quarter. Central banks, including the ECB and the Swedish and Danish counterparts, have initiated interest rate cuts due to declining inflation and to some degree poorer economic outlooks. By the end of the year, an additional two to three cuts are expected from the Swedish Riksbank. This has contributed to a gradual decline in capital costs during the quarter. We issued bonds amounting to approximately 1.2 billion SEK during the quarter. And in the most recent transaction of 350 million SEK with a two-year maturity, we paid 90 basis points over three months. We have consistently experienced strong support from banks and feel that there is ample room for new business opportunities. Our liquidity, including debt commitments, totaled 3.1 billion on balance day. This amount is more than adequate to cover upcoming refinancing needs for the next 12 months. Passing on to next slide. The average cost of loans has been maintained at 3.8%, despite increasing debt by just over 1.2 billion SEK during the quarter. And this is, of course, another indication that conditions are improving. During the first half of the year, we also purchased 1 billion SEK in new swaps at an average fixed rate of 2.5%, with an average maturity of six years. Approximately 65% of the loan portfolio has a fixed rate and the average interest rate maturity was 2.6 years as of the balance sheet date. We will follow the market and central banks actions this fall and evaluate when and if we should purchase more interest rate hedges going forward. Passing on over to Sophie for the next slide. She will lead us through capital deployment and valuations.