Catena AB (publ)

Welcome to the conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead.

Hi, and welcome everyone to Catena's Q3 report 2025. My name is Juergen Eriksson, and I'm the CEO of the company. And here is the agenda for today, a summary, a business overview, an update followed by sustainability, finance, and the short takeaway before ending up with it in Q&A. So let's start with the summary of the Q3 2025 report, where we report 25% increase in rental income ended up at 1,963,000,000 SEK driven mostly by acquisitions, but also, of course, of our TPI-linked contracts. Profit from property management increased by 32% in total, and per share, it was up to 18.7%. Our NRV came in at 438 SEC per share. The balance sheet remains very solid with an LTV at 39.2%. And we expect to generate strong cash flows in the coming quarters. And with that said, in combination with our robust balance sheet, we are in a favorable condition for more growth. The business overview, the market update. We have witnessed much more activity in the transaction market after the summer. And we have also heard that there is more to come. which means that here will arise opportunities for us to continue to grow. And when there are properties that fit into our strategy, we will try to execute. E-commerce continues to develop in the right direction. In the second quarter of the year, it grew by 9% compared to last year. And some of our e-commercers perform very strong, such as Boost, with their brand Boost.com, Apotheia within the pharmacy industry, and Nelly within the fashion. The top three growing segments are furniture and home furnishings up to 20%, pharmacy up 17%, and home electronics up 10%. We can after the summer send some more activity regarding new projects and we are involved in more dialogues as we speak compared to the first half year 2025. It's still a little too low but nevertheless it's a positive sign. The Swedish logistic market has continued to see increased vacancy rates currently at 9% or a bit more even though And in Denmark, the number is around 5%. The rise in the vacancy rates is mainly driven by the extensive development on new logistic assets, of which a high proportion have been built speculative. Regarding our customer portfolio, El Giganten has taken place in the top four after the latest acquisition, which we closed at the 1st of September. DSV is our biggest customer and has moved from 20 to 18% of our contractual value. Logistics and transport is our biggest segment, standing for almost 50% of the contract value. We can also note that durable goods has risen to 18%, partly due to the acquisition we made on the 1st of September. The total value of our portfolio is close to 44 billion SEK. It is worth noting that in the report and in the presentation here, we break down the value and not only by regions, but also now by investment properties, projects, building rights and land values. So the average leftable square meter has a value of 12,761 SEK. Let's go over to a business update. As we said in the Q2 report, we announced the signed agreement to acquire El Giganten's distribution and central warehouse in Jönköping. At the 1st of September, we closed the deal. With that said, we have one month of rental income from this property in this Q3 report. The property is located opposite our newly built facility that El Giganten rents from us. And the investment was 1,275,000,000 before deduction of deferred tax. And we estimate the NOI to approximately 80,000,000 SEK. On our ongoing projects, portfolio totals to around 1.2 billion SEK, where 272 million is remaining investments. When all is completed, we will add another 91,000 square meter to the portfolio. And yield on cost on those projects is around 7%. Regarding the project Ramlösa, we expect to come with an update during Q4. And regarding our land bank, We have one update. The municipality of Ängelholm adopted a new zoning plan, E-City Ängelholm, close to where Boost is located today. And the decision was at the end of September. This decision was unfortunately appealed. So now we have to wait for a verdict from the Land and Environment Court. So the story is to be continued. Then over to leasing update. Looking at the operations, our net leasing in terms of moving in and moving out came in with plus 70 million for the first nine months. And for the third quarter, it was plus 7 million. Our whale is now 6.5 years and the letting ratio is at 96.6%. Over to the sustainability. Now we have 58% environmentally certified area. And scoop-free is decreasing on a 12-month rolling basis due to less projects. We continue to maintain a high level of EU taxonomy alignment. For example, our turnover came in at 76%. A total of four biodiversity projects were carried out in the south and the east regions in the third quarter. The projects including replacing moved lawns with meadows, planted with meadow flowers. Produced energy from solar cells reached around 36,500 megawatt hours on rolling 12-month spaces and total installed output on our roofs is now above 71 megawatt. And now, over to Magnus for some financial update.

Thank you, Jörgen. This slide highlights the continued strength in our underlying earnings with solid year-on-year growth across all key metrics. Rental income is up 25%, mainly driven by acquisitions. Net operating surplus increased by 28% and profit from property management rose by 32%, reflecting both scalability and cost control. During the quarter, retroactive property tax of approximately 20 million SEK was re-invoiced to our tenants as a result of new property tax assessments, which impacted the margin with 2.5 percentage points for the quarter. Further, we had 2 million SEK in OPEX related to insurance matters. However, compensation from the insurance company is recognized as other income in the income statement. Earnings per share from property management grew by 18.7% to 19.91 Swedish kronors, underlining our ability to translate top line growth into shareholder value. While not shown here, our earnings capacity implies Swedish krona 27.3 per share on a full year basis, 12% above the level a year ago. The Catena model continues to deliver predictable, resilient earnings with operational leverage. This slide breaks down the key drivers behind our rental income growth for the last 12 months. As just mentioned, total rental income increased by 25% year over year. The largest contributor to that was acquisitions, accounting for 19.7 percentage points of the growth. Our completed development projects added to 4.4 percentage points, consisting mainly of new facilities in Jönköping and in the Gothenburg region, all these to well-known tenants in retail and food service. Like-for-like rental income rose by 3.4%, where two percentage points reflect CPI-linked indexation, and 1.4 percentage points refers to an increase in property tax assessments, which is re-invoiced to our tenants. All in all, this underlines our ability to grow through multiple channels, strategic acquisitions, value-adding development and strong day-to-day operations. Let's turn to our capital structure. Over the course of the year, we've seen a pickup in real estate transactions and increased activity in the credit markets, a momentum that has continued during Q3. That said, global long-term structural uncertainties remain, and it's important that we keep being prepared in case of renewed volatility. At the end of the third quarter, our equity ratio stood at 51%, a balanced level that supports strategic flexibility. EPRA NOV per share increased to 438 Swedish kronors, excluding dividends, an increase of 5.2% compared to a year ago. This shows our ability to create shareholder value over time, even as shareholder returns are being realized. Let's move to our financial position. We continue to demonstrate strong financial control with all key metrics within policy levels. In October, the credit rating agency Fitch Ratings affirmed Catena's investment grade rating BBB with a stable outlook in its annual credit rating update. Net debt to EBITDA came in at 7.8 times, interest coverage at 3.9 times and loan to value at 39.2%. These figures reflect both a solid capital structure and strong underlying cash flows that contributes to giving us headroom to our financial covenants, as well as the ability to act on new investments without compromising financial resilience. Let's have a look at our debt and liquidity management. We remain focused on maintaining and securing funding on competitive terms. During the quarter, we have refinanced 950 million SEK at margins that are improving our cost of debt. And we continue to see a growing appetite from the banks that we work with in regards to upcoming refinancing and also in exploring new deals. In early July, as we communicated in connection with the Q2 report, we also completed a 1 billion Swedish krona senior unsecured bond transaction split across three and five year maturities. Our average debt maturity remains solid at 4.6 years. Liquidity is strong with 3.4 billion in available liquidity. and a liquidity ratio above one. Let's move on to our interest rate management. We enter Q4 with the view that the Swedish Riksbank has reached the end of its rate cutting cycle, and the market anticipates that the policy rate to remain unchanged for the coming year or so. As of the balance date, 59% of the outstanding debt carries fixed interest and our current average interest costs at 3.2% reflects a stable level with some room for improvement. Back to you, Jörgen.