Cibus Nordic Real Estate AB (publ)

Hello, welcome. My name is Stina Lindhög and I'm a CEO at CBUS and with me I have Pia-Lemma Olofsson, CFO. We live in a very turbulent and unpredictable world right now and with that comes also a volatile stock market. So with that said, I'm glad to present a stable quarter for Sibus and that we can continue to distribute monthly dividend by over 6% yield on actual share price. Sibus mainly focuses on grocery properties and other so listed daily goods real estate company in the Nordic. The aim is to create stable cash flows and the company has been listed since 2018 and has grown from owning food properties only in Finland to now having operation in seven countries. As you see on the picture here, this is a good start to continue growth in existing markets and also investigate new markets in Europe. The blue and red dots you see here, except for the They are the new acquired properties announced this morning. Net operating income increased by 16% to 42.6 million compared with the previous year. And the underlying business here remains stable. Profit from property management increased by 13% to 20.9 million euro and that's excluding non-recurring items and currency effects. Worth mentioning is that profit from property management this quarter is partly charged with interest expenses linked to the financing of transactions completed after the quarter and also some costs related to the refinancing of the bonds. Market value. slightly down during the quarter, depending on that market rents were adjusted downwards in a few properties in Finland, resulting in a marginal decline in property values of 0.50% in the existing portfolio. And this is not a general trend. And in other countries, the values are unchanged or slightly higher. The average yield is still 6.4%. The total portfolio has grown and is increasing and amounted to 13 euros per share. The earning capacity is unchanged at 108 per share. Some key takeaways. As I said, stable underlying business, no surprises in the net operating income and the occupancy rate is slightly up 95.6. We have a continued growth during the quarter. This morning we announced a transaction of 23 properties in Denmark, Finland, Norway and Sweden. at a value of 103 million euro. I will give you some more flavor on that later on. Earnings capacity in line with last quarter, as I said. And also in this quarter, we see a strong capital market. Despite the turbulence in the global economy, the credit market has shown continued appetite And during the quarter, both bond loans and hybrid capital were refinanced at significantly lower levels than before. And in connection with the refinancing and linked to good terms, we took the opportunity to increase the hybrid by an additional 30 million euro and the bond increased by 25 million euro, which has been a part of the financing for the acquisition announced this morning. And also just mention it was decided at the AGM for unchanged monthly dividend of 0.9 per share. During the quarter, we have sold two properties, one in Finland and one in Berlin, and bought one property, and that sums up to 671 properties. The total market value has increased slightly since last quarter, up to 2.7 billion euro. Net operating income from earning capacity totals close to 170 million euro, giving a yield of 6.4% at today's value. Our tenant mix is more or less intact, but worth mentioning is that TocMoney continues to convert the TocMoney store to Eurospar, which means that they even more focus on grocery than before. And now we have eight properties in our portfolio converting to Eurospar. Stable cash flow, our rent that comes from daily good tenants has increased up to 82% from 81%. And still 95% of the properties are owned by grocery tenants. Still 99% of the leases are CPI linked. And the average contract length is now 5.9 years. More than 90% have net or triple net leases and the average property is 2,100, which means that the exposure to each property is relatively small. In addition, we protect the cash flow through a hedging rate of 98%. With our 671 properties, there are always discussions with tenants. This picture shows an example where we practically replaced K-supermarket with Rusta, close to 3,000 square meters in Siljandjärvi in Finland. At the same time, we increased the lease length by 10 years. some more flavor about their transactions. We continue to grow with those five transactions in existing markets and we did those with five separate transactions with a price for 104 million euro. The annual rent income is 7.3 million euro and the properties are located in Finland, Norway, Sweden and Denmark, with an average contract length of 7.8 years. The occupancy rate altogether was 99.5% and the properties have a little bit of area of approximately 60,000 square meter. And the anchor tenants is Tokman i Lidl in Finland, Real Mathusen in Norway and Denmark, and Ilka in Sweden. To give you some more flavor, one of the bigger transactions was a portfolio in Finland with 13 properties. And the biggest tenants are Tokmoney in that portfolio, which Cebus has an established relationship with for many years. Other tenants in that portfolio are Lidl, Justa and also Puilo. Kuvilo, which might be less known, is a listed discount retailer specialized in do-it-yourself tools, pretty much like Bauhaus. More to know is that eight of 13 properties are located in growing cities in this portfolio. In the smaller cities, the micro location is good and the business well suited for chocolate money and low price retail in general. 10 of 13 of those properties are built after 2019 and the vault is over seven years. So that was the biggest of transactions. Another one was one in Denmark, where we bought four properties in growing cities with very functional Rema 2000 stores, which have an average contract length of 8.6 years. In Norway, we also bought four Rema 2000 stores with long leases. over seven years in a bit smaller cities, but with a good micro location and a strong turnover. And except those three, we also made two transactions, one in Sweden and one in Finland. So I see this as a good example how we believe that we can continue with transaction going forward, use our existing platform to find right opportunities. But of course, we also look at the same time in Europe. Over to you, Jelena.

Thank you, Stina. So let's start off with some key events during the quarter. We refinanced the 50 million euro bond by issuing a new 85 million euro bond with a long maturity of four years and a significantly lower margin of 210 basis points down from 400 basis points. Then in February, we refinanced the hybrid bond with a new 60 million euro perpetual hybrid bond at a fixed rate of 6.25%, redeeming early the old hybrid bond in March. Then we announced that I will be leading Sibus in July, and Anne-Sofie Lindloth will take over as CFO. Anne-Sofie is an experienced CFO, so Sibus will be in very good hands. After the period, we held our AGM in April, where we changed the company name by removing Nordic, reflecting our transition to a pan-European company. So the new name was Real Estate AB. We also got appointed two new board members, Louise Wishnow and Stefan Dagbo. Then Sibos has announced acquisitions that Sina already has covered in this presentation. So looking at the P&L, net operating income amounted to 42.6 million euros. Profit from property management was impacted by non-recurring administration costs related to management change. Net financials include a positive exchange rate change of plus 0.3 million euros, but also of minus 0.9 million euros related to early repayment of the old 50 million euro bond. The repayment cost is not considered non-recurring as CBUS is an active and recurring issue on the bond market. Profit from property management excluding non-recurring items and FX was 20.9 million euros. Property values were largely stable and the portfolio yield remained at 6.4%. Interest rate derivatives contributed positively due to market rate movements. Looking at the current earnings capacity, rental income increased due to acquisitions and indexation. Net financial items rose following new acquisition financing, some of which will be included in the earnings capacity from the second quarter. The new hybrid bond is excluded as it will finance acquisition not yet reflected in the earnings capacity. Profit from property management excluding non-cash items plus expenses for the old hybrid bond increased by 4% compared to last year to 1.08 euros per share. Looking at the like for like, net operating income now include four estates since it was acquired in January 2025. The portfolio was negatively affected by higher property costs driven by the increased vacancy. Vacancy had a negative impact of 3 million euros and a large part is the previously in Q4 announced property in Finland. Also three Terminated furniture retail leases increased the vacancy in the quarter. And this was partly offset by a positive net lease contribution in the grocery and daily goods segment. And this is exactly why we focus on the stable grocery and daily goods tenants. Tenant transition reduced income by minus 0.5 million euros. reflecting proactive asset management to support future earnings. The case study, Rusta Silvinjärvi, that Stina presented earlier, being one of these transitions. Indexation contributed with 2 million euros or plus 1.3%, where particularly Finland has low inflation. Overall like-for-like declined by minus 1.2%, World acquisitions drove total net operating income growth by plus 8.2% to 169.2 million euros. Silver segments are defined by country. Finland remains the largest market, accounting for 46% of the net operating income, although its share of the total has declined. Belgium and Denmark are the second largest market, each representing 16% of the NOI. Moving on to the balance sheet, property value amounted to 2.7 billion euros. Secured debts totaled 1.3 billion euros, corresponding to a secured loan-to-value of 49.5%. Silbus has unsecured bonds of 309 million euros. As proceeds from the newly issued bonds have not yet been utilized for acquisitions, the cash position is elevated, resulting in a net loan-to-value ratio of 57.2%. EFRA NRV remains stable at 13 euros per share. Looking at the vault, the average remaining lease term continues also to be very stable and was 5.9 years at the end of the first quarter. Overall, over to funding, the average interest rate decreased to 4% down 0.2 percentage point year on year, driven by lower margins on refinancing bank loans and bonds. The old 50 million euro bond was refinanced at a significantly lower margin and extended to a four-year maturity with the bond volume increased to 85 million euros. In addition, a new 60 million euro hybrid bond was issued at a fixed rate of 6.25% and the previous hybrid bond has been fully repaid of which the last 8.5 million euros was done after the quarter on the 1st of April. Sibus remains 98% hedged against interest rate risk using a combination of caps, swaps and fixed rate loans. We proactively manage interest rate hedging and seek to enter hedging during favorable market windows. During the quarter, we entered into a new four-year interest rate swap at 2.34% and extended an existing swap by four years at a fixed rate of 2.7%. Since a portion of the hedges consists of caps, higher market interest rates have a lower negative impact than lower market interest rates have on earnings, as you can see on the sensitivity analysis to the graphs. Looking at our key credit metrics, all remain well within both internal targets and covenant levels, providing solid headroom. Net LTV was lower than usual as proceeds from recently issued bonds had not yet been deployed for acquisitions. Net debt to EBITDA was slightly lower to 10.4 times this quarter. This metric typically increases during acquisition intensive periods. Debt rises immediately while EBITDA is built over time and declines during periods of low acquisition activity. On a forward-looking basis, net debt to Ebitda was 9.8 times. The interest cover ratio remained stable at 2.4 times. CIBUS continued to deepen dialogue with tenants, particularly around energy efficiency, health and safety, and support for tenant sustainability initiatives. Progress in the energy transition continues with one finished property converting from natural gas to district heating and two additional properties transitioning to renewable heating solutions. Solar installation expanded further with panels now installed at 82 properties. The value of taxonomy-compliant assets increased to 1,134 billion euros. Over to you, Stina.

Thank you. Just a last slide about how to move forward. We will continue to invest in food and grocery properties with stable cash flows. And we will have focus on profitable growth which should, in the longer perspective, increase profit from profit management per share. We will continue to work with the refinancing and hedging to keep the stable cash flow. Overall, I think it's been a stable quarter for Cebus operations. It feels great that we have completed acquisitions after the quarter that both developed the standard of CBUS portfolio and also the earnings per share. We want to continue to develop CBUS in this direction. Thank you.

So we open up for 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 Svante Krokfors from Nordia. Please go ahead.

Good morning, Svante from Nordea. Thank you, Stina and Pia-Lena, for the presentation. First question on the admin expenses up from 3.4 to 4.5, and that includes the €400,000 one-off, so 4.1 is kind of the run rate for 4Q1. Is that correct?

Yes, that is correct.

Thank you. And regarding the property value changes, which were down in Finland, so this is now more tenant specific and not market specific, the development there.

Yes, that's correct. And it's just a few properties.

Okay. And the acquisition that you announced today, you will not obtain any bank loans, so it's funded by the cash from the hybrid and bond issuance, is that correct?

No, we will also finance it with bank loans, as we usually do with acquisitions, yeah.

So is it 50-50 as previously?

Yeah, exactly, that's a good estimate.

Thanks. Do you have any comments on the bank's willingness to lend to the sector? Has it remained good or any changes there?

Yeah, it remains very, very good. They also like the asset class and like the stability of the cash flows. So we have really good dialogue with all our corporation banks. So they continue to support Sibus going forward.

Thank you. And you continue to increase your exposure towards Tokmoney. You are not worried about their financial position?

Well, no. I mean, we have had a relationship with Tokmoney for many, many years and we know the business in there very well. So we also have information about how it works in every store, so to say, and we work close to them, so we feel secure with this transaction that would be made.

Thank you. And then the last one regarding the transaction market, which seems to be quite active. Could you give some color on the... how the potential sellers look at the situation and how is the competition for assets currently in the different countries?

Well, it's hard to give many details there to describe, but overall, I mean, there are both sellers and buyers. I mean, for us, to be able to find good opportunities, the most important thing is to be active in the market and all the time and we have a pipeline which we always investigate and and i mean that's the way how we find opportunities in the end so okay thank you very much that that was all from me thank you thank you

The next question comes from Fredrik Stensvid from ABG Sundahl Collier. Please go ahead.

Thank you very much. Good morning both. I have a couple of questions on the earnings capacity and the sort of link to the announced M&A today, which I'm trying to get my head around. But maybe if we start with the deal, How large? Can you say how large portion of the deal is in each country?

Well, we haven't guided on that exactly, so I don't have the figures exactly in my head now.

Yeah, but I can get back to you because we guided on that in the first release. So as we said, about 20% of the deal size was done in March or early April. And since the earnings capacity is for the first of April, so you can say that the 20% is capacity, 80% is not.

I have some issues hearing you, but just to confirm, 20% of the deal closed in March and April. How much closed in March and how much is part of the earnings capacity?

As I said, the earnings capacity is from the 1st of April, so the 20% is in the earnings capacity and 80% is not.

Okay, so 20% is included. And in relation to that, I guess the net financial expenses line item, how is that taken into consideration the 20% that sort of contributes to NOI and how do you treat the large cash position as of quarter end?

Yeah, as you know we've done the bond, so the bond, the new bond, the 85 million euro bond is in the earnings capacity but then the hybrid bond as we said we have not calculated that in the earnings capacity and sorry what was your other question?

So 20% of the deal contributes to NOI and then I guess also 20% of the is reflected in the net financials line item, is that correct?

The bond, as I said, is completely in the earnings capacity. So the 85 million is in the earnings capacity. So we are having higher net finance costs because we are calculating the whole full 85 million euros bond in the earnings capacity.

okay disclosed the new hybrid is not included in those since none of those right yeah yeah that's that's clear thank you uh one final on this uh follow-up so so the hybrid is not included as you say uh i guess you have a cash position which is larger thanks to the hybrid does that Does that contribute positively to net financials?

I mean, if we have... I mean, we don't calculate interest on that, even if we do get some interest on those funds. But that's only short term, of course. No, we don't have that in our miscalculation.

Okay. Very good. Thank you very much.

Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. 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. The next question comes from Emil Ekholm from Pareto Securities. Please go ahead.

Yeah. Hi, just to follow up on the earnings capacity question there. So you have not included any raised bank debt for acquisition in the net financial... Sorry, I'm hearing you very badly.

Can you try to speak up, please?

Yeah. Just to follow up on the earnings capacity question. You have not included any raised bank debts for the acquisition, just the newly raised bond.

Is that correct? Are you talking about bank loans or what are you? No, I'm not. Yeah. I mean, if we have yes, we do have some some financing also.

with the ones that we have taken possession of then they're included okay um and you also said that you i mean the only thing which is not included it's it's actually the hybrid yeah exactly so it's nothing different it's just because we haven't uh i mean the the acquisitions hasn't been made yet so that's the reason otherwise it's exactly as always

Yeah, but the acquisitions that we have not taken possession of yet, they're not in the bank.

Yeah, yeah, yeah, of course, of course. Okay. And you also said you did 5050 leverage on the acquisition. Is that including the proceeds from the hybrid? Or is that just No, it's just banks.

It's just banks that we have. And then, of course, I mean, we have usually around 50% in LTV. So we usually top up the bank loans with the bonds that we've done prematurely to finance these acquisitions.

Okay, that's clear. Thank you. And also on the hedging portfolio, it doesn't seem to change much quarter over quarter. But can you give an indication on what types of hedging you will do for the new acquisition and maybe an indication on levels given the current interest rate environment?

I mean, you can expect that we will have a high degree of hedging as we have that philosophy that we want to secure our stable cash flows. But we have not guided on what kind of levels that we will do the hedges on.

And it also depends a lot. I mean, the market changes every day and we try to do the best to secure it the best we can.

Yeah, makes sense. Thanks. That was all for me.

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.

Now we just say thank you for us.