Cibus Nordic Real Estate AB (publ)

Well, good morning all. Welcome to CIBA's second quarter results presentation. We're speaking to you today from our office in Stockholm. Christian Fredriksson, CEO, speaking now.

And Pia-Lena Olofsson, CFO.

And it's in the middle of summer here in Stockholm, and we apologize. There's a strict no drilling policy in the building we are, but apparently someone thought all office buildings were empty. So apologies for any drilling in the background noise here from somewhere in the building. Right, right. Let's jump into things. CBUS, converting food into yield. That's our slogan. It still is. And it tells exactly what we do. It's still a fantastic slogan because it says what we do, i.e. owning grocery, daily goods, real estate. Looking at our portfolio and what we do these days is we're still the only listed pure daily goods real estate vehicle in the Nordics. We've been listed since 2018. We are now a pan-European platform after our acquisition in the Benelux earlier this year. We aim to create stable cash flows, increase earnings capacity per share. We have a market cap of about 1.3 billion euros in a very liquid share, which Pialeno will tell you a bit about later. And also important for many is that we pay the monthly dividends to our shareholders and it's a five year anniversary in October this year. And looking at the map on the right, you will see also that this is the first quarter where the this is what the NOI looks like per country for a full quarter. So you'll see Finland is our largest market with about 15% of NOI and then Belgium and Denmark fighting it out for second place about 15% of our NOI and then Sweden our third largest market, fourth largest market sorry, and then the Netherlands, Norway and Luxembourg. You will see the getting back to that a bit later to sort out the acquisitions we've done and when we announce them etc So looking at our properties at the end of the quarter 2025, 637 properties, a very well diversified portfolio in seven countries, about 2.4 billion euros of property value, NOI 156.3 and 1.3 million square meters. And as you'll see on the pie chart to the right, you will recognize many of these household names. And that's our strategy to have a well diversified tenant mix of the large most dominant grocery chains in each country. Digging further into our portfolio and our business, our aim is to create stable cash flows. And how do we do that? Well, we try and create stability in every part of our business. And how do we do that? We own 81% of rental income is from non-cycle daily goods tenants. 95% of our properties are anchored by daily goods tenants. A well-diversified portfolio is mentioned in the number of assets. And then we continue to grow our cash flows. If we won't be carrying or are not carrying out any acquisitions, then also through indexation growth because 99% of our leases are CPI linked and almost all are fixed rent leases so i.e. not much turnover rent at all in our portfolio. Our average vault is 5.9 years and has been around that number since we were listed in 2018 of above five years. Our average asset size is 2,100 square meters, and that's a very well diversified portfolio as well, because as seen here, our largest property is about 1.3% of our NOI. When creating these stable cash flows, it's very important also, of course, to have costs under control. And one way of doing that, as we do it, is that we have 90% of our leases are net or win-win for our tenants many of our tenants of course are grocers and for grocery business the stores and the accessibility of the stores and the stores networks function is very very important it's operational infrastructure so it's a win-win for many of our tenants they can take care of their stores themselves um through our net and triple that leases and then of course creating stable cash flows also nine being having a large part of our interest rate So looking into financial summary of Q2, just handing over to Pele.

Yeah, thank you. Rental income increased with 35% to 41.3 million euros. Net operating income grew with 28% to 39.1 million euros. The growth in NOI was lower than rental income due to that we have received and insurance compensation, which increased service income in the second quarter, 2024. Profit from property management amounted to 19.5 million euros, but excluding non-recurring items and currency effects, it amounted to 20 million euros. And I will get back later in the presentation with more details. Earnings after tax amounted to 13.7 million euros, or 0.17 euros per share. Unrealized changes of properties was positive or flat in all countries and amounted to plus 2.7 million euros. Derivatives was in the second quarter, however, negative with minus 6.7 million euros. EPRA NRV was 12.8 euros per share, up one euro since second quarter last year.

Thank you. So jumping into a couple of the key takeaways for this quarter, it's been a stable value generating quarter, picking up a couple of the operational metrics that have improved. The NOI margin improved 1.1 percentage points to almost 95% quarter on quarter. Also our profit from property management grew almost by 70% year on year, but also 9% quarter on quarter excluding non-reoccurring items. Betrix per share is very, very important for us and fundamental in what we do. And we're happy to show that our earnings capacity per share has continued to grow now for the eighth consecutive quarter to 1.05 euros per share, which is 9% increase year on year. And that's accounting for the old number of shares prior to the equity haven't used or deployed that capital in yet, and therefore we feel it's fair to use the old number of shares. What's been a big driver in this quarter in the increased earnings capacity has been lower financing costs. We've announced a couple of points about that earlier through press releases, but just summarizing up, we have refinanced about 276 million euros of bank financing with more than 50 basis points lower margins. And that's led to the net financial cost going forward has been decreased by 1.4 million euros per annum in our earnings capacity. And a couple of other metrics there. Our average credit margin is now 1.8%. That's in bond and bank debt. And that's the all-time low. That's the lowest we've ever had. And also our average interest cost has dropped to 4.0%. That was 4.5% one year ago. So things are moving in the right direction for us there. When it comes also to the financing maturities, we've seen that what we've been working on is extending our debt maturity. So that's now two and a half years. For a year ago, it was only 1.7 years. And we've increased our hedge duration to 2.9 years. Important for creating those stable cash flows, of course. And we also have 36% of our hedges are caps. upside being a cap, but also on the downside, if interest rates fall, we get a healthy value increase or cash flow increase from that as well. And the interest rate environment right now is really choppy, of course, as you know, the things and the outlooks change day by day or week by week, depending on what's happening in geopolitics and also in European inflation. So happy to have a large part of our hedge in caps. Moving on from the financing side of things, looking more operations, we've had a very nice leasing activity in our quarter. I'm going to get back to that a bit later and dive into that and tell you a bit more about what we actually do one case study. I will tell you about that later. But looking up down, what we've done is we've extended the wall to 5.9 years. We've increased the occupancy rate and we've also leased out more than 10,000 square meters of previously vacant space so far in 2025. So very happy to see that number and the team working very hard to let that space. And it's worth mentioning there also, which I'll go back to, is that this is predominantly not grocery space. This is the 19% of our rental income, which is not grocery, but rather non grocery retail. That's where we need to do the bulk of our work. That's where tenants move and we need to work with vacancies. importantly number six are on the slide also in june we carried out a proactive share issue for growth uh we raised one billion euro swedish krona one billion swedish for nothing else about 9.91 million euros and why did we raise that capital well we saw that we have a very strong pipeline which we've built up over here and we're happy to try and capitalize on that so we've already announced a couple of transactions and we're looking for more i'm building up the pipeline and and executing on the previous pipeline in our seven home markets. And as mentioned, we've announced this since our Q1 report, we've announced that we've acquired 18 properties in eight transactions in five countries with a total value of 107 million euros. So very happy with the team performance here and that we can execute our pipeline in so many countries and at speed after we raised the capital in mid June. Importantly also is, of course, capital regeneration. So what we've been doing this quarter as well is we've been trimming the portfolio. We've been selling non-strategic assets and we've in this total this year divested eight assets in three countries for about 25 million euros. And that's great for two reasons. One, we recycle capital and can invest more converting food into yield assets, but also, of course, recycling our own capital. Earnings capacity, I mentioned already, so continued steady growth here with an eighth consecutive quarter, now jumping to 1.5 euros per share. And as mentioned, this came this quarter mostly from lower bank and bond margins or lower bank margins and refinancing. Looking at our property values, a big jump, of course, earlier this year with the former state of the day we'll see further jumps going forward when we carry out, when the acquisitions that we've announced already come into our books. So what I thought we'd do, we've been quite busy on the acquisition side and we've been press releasing these at certain different times. I thought we'd sort out what transactions we've done and when they actually hit our accounts. So looking from left to right in our Q1 report, we had the acquisition of Jumbo. So that's in the figures for the Q1 report that was announced on the 17th of April. So that was Jumbo in Belgium. And Jumbo has about 20% market share in the Netherlands and is starting to expand in Belgium. They have about a 1% market share there. But a nice long lease with Jumbo in Belgium. And then we announced in June, on the 5th of June, two acquisitions. We announced the Albert Heijn in Ede in the Netherlands, seen on the picture there, and also a redeveloped Netto in Denmark, in Holsten. and this used to be Rema 1000 but now it's a Netto and they redeveloped it and or the property owner redeveloped it for Netto and then they sold it to us so a great new acquisition for us and a great new store there I kind of it proves also the point that when a certain tenant moves often another grocer comes in and this is an example of that um in April 17th we announced also an acquisition of a grocery store Salonis Back in Finland. We can now happily tell you that it was Lidl who was the tenant there and who carried out the Salonis Back. So this is something that was done earlier this year, but will be first in our Q3 report. And what has happened there? Well, it's a same list bag. It was used to be under construction, but it's soon to open. And the picture there you see, that's a picture taken yesterday by our local team who was there looking at the asset. So a new shiny asset in the East Almi in Finland on a long list. And then we get to our July announcements, which were two. Firstly, on the 8th of July, we announced the Tokmani transaction, which was a sale and lease back of five stores in Finland. Ten-year leases, ten-year waltz, newly signed together with Tokmani. And the reason why there's so many sale and lease backs now, in my perception, is that there's been a period when markets have been quite still. of the grocers who have real estate arms have developed stores and settles, the ones that want to increase their store networks. And this was an example of this. So happy to have been carried out this sale and lease back with our second largest tennis, Tokamani. We also announced in July, not the sale and lease back, performing very well across Finland and not many of these assets are owned by third-party real estate owners. Most of them are owned by S Group themselves, much like ICA does in Sweden, owning very many of the ICA Maxis by themselves. So very happy to have got our hands on this newly built or asset under construction. And that's a forward funding deal where we get an interest during the period company. Great ESG characteristics, of course, on these assets announced in July, 8th of July, the newly built assets. And then moving to the three acquisitions announced here on the right in the Q3 report, we will see Villis times two in Enschede and Ludovica. The Villis in Enschede is a location I know very well. When I was at ICA, we moved the store from This is a great location. It's bang in the center of in shopping. Longleast, semi-longleast, there's some other tenants in there as well. It used to be a residential development project, but as that market has become quite tough, it's now more of a long-term grocery retail location, which works very, very well for us. So we're happy to have got our hands on that as well. And speaking of car dealerships, the next announced transaction here really is in Ludwiga. That is an ex-car dealership in a new transformed light industrial to retail area. You see there's a big tema in the background there. So an ex-car dealership, which has been turned into a Veles store. Lovely, good location. And Veles is, of course, doing formats in sweden um the last transaction on this slide is also something that will come into our q3 figures also announced on 16th of july which is a proxy dress in the mayhout in belgium mayhout is east of amsterdam and it's a nine year old uh there's of course the belgian break options in there but it's a central location uh store is performing well uh and then to our whole delays these And then the last transaction we've announced so far 2025 is this Danish transaction. Seven stores across Denmark, six of them on Zealand and one in Jutland. 9,000 square meters, 9,100 square meters, long waltz, sunny nice day when the pictures were taken as well. So since I paused last quarterly report we have acquired or announced 18 assets acquisition of 18 assets in five countries in eight transactions so very happy with our good execution and deal sourcing capabilities in all of our countries and our ability to execute since the capital raise on the 11th of june As mentioned, we're also trimming the portfolio and reusing our own capital. Just running through this quickly for you as well. Started the year, this hit our Q2 report, we divested three DIY stores in Belgium, led to Gamma, the local DIY player, and that was above book value. In Helsinki, announced 17th of April, we sold one to another grocery chain, which is now turning that into its own grocery store. And then also we did a reverse sale and lease back. And I think this proves a couple of things. One is that if a tenant leaves, then there's most often another grocer who wants to come in. And sometimes if they have their own real estate arms, we can sell it to an attractive price. This was significantly above book value, these transactions. And what's a reverse sale and lease back? And what we want to do is we want to create long term relationships with our tenants. Operational infrastructures and stores are very, very important for them. And therefore, what we like to do is to engage with them in helping them develop their store networks. And in this case, S Group came to us and wanted to buy had some building rights, had some residential on top. The only ones who really can unlock that value is someone who actually can close the store and actually redevelop the whole thing. So as long as the price is right, we're happy to do this sale, this reverse sale in its backs, just both making money and creating a good relationship with our tenants. and also announced so far in 2025 we sold a an exposure store in iceland to the municipality for urban development that's being turned into a or being knocked down to be turned into an elderly care home i understand so happy to help municipalities develop um in belgium we've sold the caa fashion store which is of course non-strategic for us and in um in So right, I hope that sorted out a bit of the many transactions we've done this year so far. I mentioned earlier that let's dig into a bit more about letting activity and what are we doing a bit behind the scenes and let's this call to tell you a bit more about what we're doing. We have a stable underlying business, as you know, and stable occupancy rates, which are around 94% to 95% and have been historically. And what I thought we'd dig into is to show you a bit about how we work behind the scenes, so to speak. So we negotiate, of course, and renew a lot of leases. That's the stickiness in the grocery assets that we own. So far in 2025, we've renewed about 70 leases and over 90,000 square meters across several countries. And those include those larger packages, which I mentioned, where we maybe have 30 or 40 leases at once with one of our larger tenants. That's a good negotiation for both. There's bargaining power from both sides in those kind of negotiations. And those renewals and packages and the things we've done in approximately five years extension. So that's not five years. It wasn't zero years when we started. So the average vault is, of course, longer than five years. But in total for these transactions or these renewals, about five years extension. And this quarter included a five year extension for our largest assets. So that has now a more than nine year wall. So that's also an example how we actually proactively extend our leases long before they actually come to maturity. And then in the middle of the slide here, when we talk about new lettings, I thought I'd characterize these for you in how the four main types of lettings that are in the grocery sector. One is when a grocery player leaves a location for whatever reason that may be. They want a bigger store and that site doesn't work for that. That could be one reason. In some cases, just because the branding of that particular grocer or that price perception doesn't really work in that market is one example. And then what we do is we let it to another grocer. And I'm going to show you the next page a couple of days. The second type of new letting we do is grocery to non-grocery. That's when actually a grocery location doesn't work anymore for anyone or that it's a great grocery location, but perhaps the other chains who are active, because it is a market where there are not many players around, then we can let it to non-grocery. tenant or perhaps for other developers or for other types of tenants. A third type is, of course, when non-grocery is left to grocery. An example of this is not something we've done in this quarter, but, for example, the car dealership in Ludovico, which I told you about. There used to be a non-grocery, and that's now grocery. There's also a trend in Sweden of a couple of paddle courts. Way too many paddle courts in Sweden. They're now being turned into grocery locations instead. So that's another example. And then the fourth type is where the bulk of our work is done, is when a non-grocery tenant moves out and we fill it up with another grocery tenant or non-grocery tenant. These are the types of natural changes to a retail location that happen. But a lot of work is done there. And that's also one of the reasons why we like to buy and own as much grocery and daily goods as we can, just because the stickiness is lower. and the stability in the cash flows is much better. So summarizing what we've done in 2025, 33 leases in four countries with new lettings. Very happy with the walls we received. Very happy with the attractiveness also on the rental levels. And also to point out here, this quarter we've let more than 10,500 square meters of previous vacancy. So that's great work from the teams working on this vacancy. 0.8% of our total lettable area. So good work everyone. And then as mentioned a couple of examples of letting activity. So grocer to grocer, two of those leases in the quarter for example to Tokmani in Finland and to a local grocery chain in the Netherlands. When it comes to grocer to non-grocer we have let three of those areas in this case to three different discounters like Rusta, Action and Viva and of course Benelux brand names. Non-grocer-to-grocer, we haven't done any of that activity this quarter but we've been more active on the non-grocer-to-non-grocer type so here's a couple of examples of those brand names which we've been active with and filling up for vacant space. And then we've also carried out two store extensions, one for K Group, Kesko, and one for TopMine. And I'll tell you about one of those later. So in terms of trying to tell you a bit more about what we've been up to this quarter, so you've left 10,500 square meters of previously vacant space. And then the Last slide for me on the operations here is a case study of what we've done in the K-Marketing Cupio in Finland. We want to work close to our tenants and help them to develop their store networks. And this is an example of this and what we've done this year and decided on this year. So Kesko wanted to extend the store for store network reasons. The asset was built in 1972, so it needed a But in this case, we decided together with Kesko that we would build a whole new store. So together with Kesko, we are opening a new store. We will double the letterball area to 800 square meters. We signed a new lease with them, so the vault is extended from one year to 13 years. We invest about 2 million euros. facilitate the project we have an attractive yield on cost an attractive IRR and it's a turnkey contract with an experienced contractor in order of course to to avoid any or mitigate any construction risks here and this contractor they've been building for Kesco for years and of course we get a very nice uplift in EPC ratings as well and here's the Kesco announcement for what we've done so and from the case study is, yes, we're busy with transactions, but also every quarter we're adding value to our portfolio through these kind of active asset management measures. Over to you.

Thank you. So let's talk a little bit about significant events. So the 10th of April, we had our AGM. and it was resolved that there would be an unchanged dividend of 0.90 euros per share paid in 12 installments. The board also received a mandate to issue up to 20% new shares of which 7.6% of the 20% have been used in the directed share issue that was done the 11th of June. Stefan Gertberg was elected new chairman of the board and Stina Lindhök as new board member. All other board members were re-elected. And then they were adopted to incentive programs. And then we have also employed a head of sustainability and investment manager. We have carried out, as Christian has said, a lot of acquisitions, which he has gone through. And also, as we discussed, the 11th of June, we did the directed share issue, raising more than 1 billion SEK at a subscription price of 172.6%. SEAC, which represents a premium to Gebra NRV of about 25%. And after the period, we have done more acquisition, as also Christian said. So looking into more details, we have non-recurring expenses of 0.5 million euros in the quarter. based on the resolution by the AGM to establish a warrant program, both for the Nordics and the Belgian, and to subsidize the option premium. Net financials include a cost of 0.5 million euros in the quarter for the reversal of arraignment fees. And this cost is not classified as non-recurring. A large part of our interest-bearing debt have been refinanced and corresponding future reversals are not deemed to be relevant in the near future. Profit from property management excluding non-recurring items and exchange effects amounted to 20 million euros. And unrealized changes in value of properties amounted to 2.7 million. And as I said before, all countries had increasing or flat values for the second quarter. Looking at the earnings capacity, rental income this quarter is slightly lower than in Q1 2025 due to the investments that have been made. Property expense is also lower, especially in Belgium. We also see effects of lower costs due to our energy efficient investments that we made. We have higher administration costs due to newer, larger offices in both Stockholm and Helsinki, since we have a large organization. And net financial is significantly lower due to that we have received lower margins in our large refinancing of bank loans. Profit from property management excluding non-cash items plus the expense for the hybrid bond amounted to €1.05 per share, which is an increase with 9% since the 1st of July 2024. The net operating income in a like-for-like portfolio earnings capacity shows how the portfolio owned by CBUS on the 1st of July 2024 has developed up until the 1st of July 2025. The negative effect of the changes in occupancy amounted to minus 1.8 billion euros or minus 1.6%. Of this, only about 25% relates to daily goods properties. And half of this relates to one property in Denmark where we have ongoing negotiations with another daily goods tenants. Another part of the daily goods vacancy relates to the property K-Market in Kopio that Christian mentioned just a while ago here, where the current lease is terminated to develop a new larger store on the same site for the same tenants. The effect of change of occupancy for a sold property relates to the property in Helsinki, Finland, which we sold to another grocery, which we have previously communicated. The effect of index amounted to 1.6 million or plus 1.4%. Finland in particular experienced low inflation during the period. And then of course that affects the CPI increase. The effect of acquired properties increased net operating income by 37.1%. In total, net operating income and earnings capacity increased by 36.3% to 156.3 million. CBUS segments are countries, and as Christian said earlier, Finland is still the largest with 50% of NOI and 48% of property value. Denmark is the next largest with 15% of NOI and 17% of the property value. But close by is Belgium that have 15% of NOI and 16% of the value. Looking at the balance sheet at the end of the second quarter, property value was 2.4 billion euros. Secured debt was 1.2 billion euros, giving a loan to value on secured debt of 50.6%, which was unchanged from the last quarter. We have unsecured bonds of 243 million euros. But also the funds from the share issue in June is in other net assets, giving a net loan to value of 55%. The net loan to value is expected to increase again when the funds have been deployed. If we deduct the funds from the share issue, the net LTV was 58.7%, which also would be unchanged since Q1. Net asset value, the Ebera NRV was 1 billion 54 million euros or 12.8 euros per share, which is an increase from 12.6 euros per share in Q1. The weighted average unexpired lease term, the Volt, is shown in the graph above, both without Belgian termination rights, which was 5.9 years, and with the Belgian termination rights, which is 4.4 years. In Belgium, the tenants of retail properties have a statutory right to terminate the leases every third year. And to minimize the risk that the tenant would leave is usually offset by that the tenants invest significantly in the premises. Looking at the graph below, you see that the vault continues to be stable. During the first half year of 2025, we have prolonged nearly 70 leases with major tenants. Regarding funding, the average interest rate is now 4% down from 4.5% one year ago. Bank financing is still the largest part of CBUS funding with 81% of total funding. This quarter we've been able to lower the bank margin to 1.5%. We have refinanced loans of 276 million euros during the second quarter, lowering the margin of those loans with more than 0.5 percentage points. We have, after the period, refinanced additional 24 million euros of bank loans at a 0.1 percentage point lower margin. When we acquired 4 mistakes, not all of the subordinated loans were converted to CBIS shares. And during the quarter, we have called on the rest of the outstanding subordinate loans, which amounts to 12.2 million euros. And they will be repaid in mid-September with the funds that we received from the share issue in June. For CBUS, stable cash flows are very important. CBUS continue to have a high degree of hedging with 97% hedging on our loans. We have during the quarter prolonged the average fixed interest maturity to 2.9 years. And we continue also after the end of the quarter to do additional forward starting hedging. Based on the earnings capacity and taking all the interest rate hedges in consideration, An increase of the market interest rate with one percentage point would affect profit with minus 1.8 million euros annually. A decrease of one percentage point of the market interest rate would affect profit with plus 4.4 million euros annually. And why an interest rate reduction have a greater impact is due to our interest rate caps, which is 36% of our total hedging. Looking at key metrics, net LTV was 55% end of Q2. The share issue in June have a temporary lower than net LTV and is expected to increase again when the raised funds have been deployed. If deducting the funds from the share issue, the net LTV would be at 58.7%. The interest cover ratio continues to be stable at 2.3 times and is well above the covenant of 1.5 times. The net debt EBITDA is at 11.1 times. The share issue has lowered the debts temporarily. So in the graph to the right, we have deducted the raised funds from the forward-looking net debt to EBITDA and without the reduction the forward-looking would be 9.4 times at the end of the second quarter. CBUS generate stable cash flows, so we can pay out dividends to our shareholders on a monthly basis. The dividend yield on the closing price of 187 SEK was 5.4%. Total return, share price performance and dividend have been 9% for the first half year of 2025. And the average annual total return since CEWIS was listed, 2018, up to end of Q2 2025, including reinvesting dividends, was 15.6%.

That's funny, that's exactly on the digit, the same number that Bill Boys mentioned.

Exactly.

Total return, albeit over 20 years, of course. Happy to see that return on.

Yeah, CBUS is a liquid share. CBUS share was traded at 1.6 times its market cap. which is 60% more than the average for other real estate companies on Nasdaq Stockholm with a market cap above 10 billion SEK. Cebus continue to have strong support from our shareholders, many who have been shareholders for several years. The total number of shareholders continue to grow and we now have 57,000 shareholders. Over to you, Christian.

Thank you, Pia-Lena. I thought we'll discuss this quite quickly so we can leave some time for some Q&A, of course, as well. for everyone and accessible meeting points. Moving forward. So what are we going to focus on going forward? Well, of course, continue to grow earnings capacity for share in all parts of the business. We now have a pan-European platform, the CBIS real estate platform, which is a great platform for further growth. And we are looking for further growth. It's worth mentioning here as well, of course, we are now considered a pan-European as a multi-country player in a very niched focus. point number three here continue to focus on balance sheet optimization refinancing and hedging of course and then as mentioned carry out these cash earnings per share creative transactions execute on the opportunities in our existing markets continue to grow our pipeline but then also as mentioned in press releases as well actively evaluating opportunities in new markets in mainland europe Very happy with the team, of course, competent, experienced employees together are taking pan-European action and very happy about the ongoing integration with our colleagues at former Forum of State. And we are committed every day to deliver shareholder value by converting food into yield. So then just moving to a commercial break, maybe here to give some released this morning. It's a fresh new web page. I think the most interesting point maybe is the clickable map you will find. There's a picture of it here down to your right. So if you go onto our web page, you can find a clickable map of all of our 637 assets where you can click and get a picture and some information. Great if you're out traveling with your family across the Nordics or Benelux this summer and want to pull by any of our assets and do some shopping. Okay, that's another commercial break slide. So let's move on to the Q&A.

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 Oscar Lindquist from ABG Sundahl Collier. Please go ahead.

Hi, sorry, I hope you can hear me. Yes, so on acquisitions, I know you can't comment directly on sort of net initial yield, but could you give an aggregated number for the acquisitions that you have announced during the quarter?

We don't communicate any yields and the reason for that is that we like to be in our space and let's try and carry out as many transactions as we can before the segment gets too hot, so to speak. We do see transaction activity increasing. We've seen a number of Swedish players now come in, both Valdo and Prisma Properties do transactions within our space in Finland, for example. So we're not communicating anything about yields more than the transactions themselves are accretive from day one.

Okay. And could you comment sort of what your, I mean, recent transaction seems to be a bit Nordic tilted. Is that where you see the best potential going forward as well?

No, not really. I think that's just an effect of those that we have. We've been longer in the Nordics, of course. We have strong local relationships. We see interesting opportunities in the Benelux as well with the forum estate. 15 years in the Benelux region. So now we see acquisition opportunities, interesting ones in all of our seven home markets.

Perfect. And then on the Prisma acquisition, just to understand the structure. So you pay the full upfront price and then you receive some sort of interest or what's the structure here?

As and when the construction is carried out, funds are drawn from us. So we finance the ongoing project as and when it's being built and completed. We funded equity first and then the senior debt coming in a bit later. But already now an announcement about 60% of the construction was done, so it was a large a large amount of the actual value was paid out day one and now running at an interesting interest rate for us.

Yeah, perfect.

And then you have streamlined the Benelux portfolio recently. Do you think is there more to come here or are you happy with how it's looking now?

No, I think there's more to come. Just looking at what our portfolio in total has, we have 19% of our gross rental income is from non-retail tenants. And there are certain non-strategic assets still around here and there. And we're actively looking to see what we can do on those. If the price is right, then happy to sell those and regenerate that capital.

If we move over to financing, do you see further downside potential near term from interest maturities?

I mean we have refinanced most of our debt right now so we don't have that much in the short term to refinance but we do see of course interesting opportunities when we finance our acquisitions. The banks are very supportive and very interested in financing our type of asset class. And we also see that the bond market is very strong and also interested in financing CBUS going forward. So coming financing of acquisitions look interesting and positive.

Have you seen any trend on bank margins in recent months?

Yes, as we said in the report and also in the presentation, we have refinanced 276 million euros at 0.5 percentage point lower margin. And also after the period, we have refinanced 24 million euros at 0.1 percentage point lower margin. So we see that the margins have come down.

Yeah, perfect. Thank you. That's all from me. Thank you.

Thank you.

The next question comes from Svante Krokfors from Nordia. Please go ahead.

Thank you. Good morning, Christian and Pia-Lena. Thank you for the presentation. Nice to hear about your letting activity. That's much appreciated to hear details about that. First, I was cut off for a short while, but the 1.8 million that is in the net operating income in a comparable portfolio, the minus due to occupancy, how fast do you expect that to be turned around? I missed some points there in your presentation.

Yeah, we haven't guided on when that will be lowered, but as we said, especially the grocery part of that is under negotiations or have been sold and will be left out. But then, of course, it's a little leeway until that contract is in place. Well, it's in place, but before it starts. But of course, we are working actively at the vacancies, but sometimes it takes a longer time before the new tenant is able to be active in the new premises. And then it takes time before it comes into the earnest capacity.

Yeah, because they just clarify the earnest capacity, of course, a snapshot on the 1st of July. So even if we've signed the lease, on 1st of July, it's not in the earnings capacity. And the bulk of everything that was signed there, of the things I mentioned there, was signed prior to the 1st of July, but that was not active. So moving in a bit later into the actual premises.

Thank you. And then on the S group or Prisma acquisition that you made in Finland, two questions about that. Are you open now for more hypermarket transactions? And the second question is how come S Group didn't buy that property because they don't know what to do with all the money that they have and I guess they prefer to own most of their premises themselves.

hypermarkets if the local market is a hypermarket market, so to speak, where customers prefer hypermarkets. And Finland and Sweden are two markets where hypermarkets are appreciated. In Finland, of course, the K-City markets, which we own a few, and then, of course, the Prismas. And in Sweden, Ica Maxi, Stora Cube are the big rosy names. In Norway and Denmark, for example, not hypermarkets. market. So that's something we need to consider if looking at something at those markets. The same goes for the Benelux and the Netherlands, not really hypermarket market. So what we try and do in our portfolio is to find the right retail format for its specific location. So more than an actual strategy to own certain types of formats. And then on the second question, I think that we managed to get ahead. of them maybe because they I don't know if they were not ready what we've heard rumors of is that they would like to buy this and so we'll see if they pick up the phone to us at some point thank you that's interesting to hear then perhaps last question on you said that competition started to increase not only in Sweden but also in Finland for

assets, but nothing is shown in the yields yet.

Exactly. Our average yield is still 6.5%. Value increases that we saw, very happy to see across all of our markets since mid 2022 has been more on the letting activity side of things rather than yield compression. But looking forward, of course, I think we're back into that where Swedish companies are looking for higher yields who go across the Baltics to Finland. I think the historical evidence is that usually happens when yields become a bit too tight in Sweden, or the yield spread between Sweden and Finland is attractive. And I think that's what we see happen. So going forward with more competition, in theory, that should lead to lower yields.

What's your view of what the yield spread between Finland and Sweden is currently and how it compares to the history?

Jan, I'd say that Looking back, prime yield in Sweden for grocery, I mean, we're talking about a low inflation rate environment, somewhere just below five, around five. But even with sensible interest rates before 2015, prime yield for about 5.25. And I'd say that's likely higher in Finland and especially higher also historically, just because it's a more illiquid market. There's always a liquidity risk for investors who come in and out of markets private equity players etc who want to buy and sell assets for us as a long-term buy and hold player of these assets we're not too concerned about that at all if we see accretive transactions that attractive yields we're happy to do them without having to think about timing of their sale okay thank you that is all from me Yes, we can continue. We were asked by our moderator. We're a bit over time, but happy to continue.

The next question comes from Vency Alia from Kempen. Please go ahead.

Hi, good morning, Christian and Elena. I have to say that the map is a great addition. A quick follow-up on acquisitions. I know you can't reveal yields, but in very broad terms, would you say the acquisition yields are in line with your portfolio or maybe slightly lower, slightly higher? And the second one on H2 activity, would you expect more portfolios to be put on the market and especially big portfolios? Thank you.

If we start with the activity side of things, I think it's fair to say that supermarket assets are becoming even more or becoming an asset class in its own right. And what usually happens in any market, if it's may be is that when sellers potential sellers see that their transactions happening and that it's liquid asset class then that usually brings out more sellers and the brokers sniff that out as well and are looking for for mandates so so let's hope that transaction activity picks up even further and when it comes to yield we can say that when we're looking at at yield we're not talk about accretion and also not buying assets or not buying poor quality assets, even if the yield is very attractive and not buying too low yielding assets either, because we like that kind of cash flow focus and cash flow accretion model that we have. So that said, It's important to the increase in the yield spread, including the monthly dividend yield that we have as a monthly dividend paying company. That's our focus and attractive yield spread and attractive cash on cash more than the actual yields themselves.

All right, all clear. Thank you and have a nice summer. Thank you, likewise.

The next question comes from Stephanie Dossman from Jefferies. Please go ahead.

Hello Christian, hello Pialena. Just a follow-up question on acquisitions on the previous question. Regarding the activity on the transaction market, which is more significant currently, do you expect or could you give us some color about your budget in terms of acquisitions for H1? Would it be higher than for H2, sorry, higher compared to H1 if we exclude foreign estate, of course. Could you please give us some on that and maybe would it be more on an asset per asset basis or portfolios and which kind of country are you targeting right now? And a second question on the cost of debt evolution. Would you be able to give us perhaps a target or where do you see your average cost of debt lending by let's say 2027? And what is the strategy going forward on the hybrid bonds? Would you keep them? What is the rationale there? Thank you.

Okay, great. Hello Stephanie, thank you for your question. Shall I start P.L.N. on the acquisition side of things? We don't have a target to, we don't have a growth number or a target which we want to reach when it comes to growth or acquisitions. We have a very well diversified portfolio. We have great bargaining power towards our tenants, well diversified. So we grow when we see attractive opportunities. and when we grow up there's three main sources of the equity of capital and it's the own resources we have an internal capital it's of course any regenerated capital we may have from selling non-strategic assets and then it's the capital raisings that like the one we did now in June or the one we did in September last year in September we raised about the same slightly lower number um about 80 million euros which was then deployed by mid-december so so when it comes to what you're forecasting i mean it's it's fair to say that we raised 91 million euros in june for to act on a pipeline and identified a concrete pipeline to act on it in a reasonable amount of time and of that 90 million we've now bought assets for about average of 90 million of say it was 50% that we can of course buy assets for 180 just from capital we've already raised now and we haven't announced that many transactions yet but then of course going forward we'll see what acquisitions opportunities are out there to answer your question what types of assets I think our strength is that we look in seven markets we look at both single assets we look at smaller portfolios um and we look at larger portfolios and being now a large pan-european player with two almost two and a half billion euros we can look at large portfolios that's maybe are the four most important rather than size. So happy that we're looking across several countries, several regions, and also be able to look at many different lot sizes. I think sailing specs will continue to be important as the grocers who have tied up capital in building assets and owning assets, perhaps they need to lighten up their balance sheets a bit Yeah.

I mean, we don't have a target for our cost of debt. Of course, we want it to be as low as possible. And of course, we are negotiating with the banks and we also have good indication from the bond market. But of course, as you know, there is an uncertainty in the world and things happen. And that's why we prepare by prolonging the interest rate maturity and working proactively with hedging and everything. But we see that there's a lot of interest from banks and the bond market for our type of asset class to finance that. And when it comes to the hybrid bond, the first call is in September 2026. And of course, we haven't decided yet what will happen at that point. Christian and I prefer to keep things simple and we'll see how we'll act on that when we come closer to that date. But usually we prefer to have a more simple capital structure.

Thank you very much. Thank you.

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

There are no written questions.

No. So thank you for listening. It was a longish call this time, but I'm happy that you listened in and I'm happy we took the time to discuss a bit more about our active asset management in this quarter to give you a bit more flavor of what we're up to there. So that said, please have a look at our new web page and the map. And from PLN and myself, we're looking forward to the rest of the 2025 here and what we can get up to post-summer. So that said, happy summer to everyone when time comes for your holidays.