Diös Fastigheter AB (publ)

Good morning and warm welcome to this presentation of the EOS year-end report for 2024. Today we have our new CEO, David Karlsson, who will present the results together with our CFO, Rolf Larsson. My name is Johan Dörnmar and I'm the Chief Investor Relations Officer. After the presentation, there's an opportunity to ask questions. Please listen for instructions how to register your question and we'll do our best to answer. Thank you for your engagement. I leave the word now to David.

Thank you, Johan. This is my first interim report as CEO of the Earth. And I have really been looking forward to this moment since it was confirmed that I would take over as CEO last summer. I started on January the 1st and have since gotten to know the company and my new colleagues. I have traveled to our cities and reviewed our property portfolio. With my experience from previous workplaces, 20 years experience, I'm well acquainted with regional cities in northern Sweden and their dynamics. Leading a market, leading a real estate company, growing cities is something I truly look forward to. And I'm determined to create growth for the future. Looking back at the results for the fourth quarter, I can state that it was a good result considering transaction and one-off effects. The rental market in northern Sweden shows resilience and the marginal increase in vacancies is a result of completed new production, both in our own portfolio and in the market generally. which has raised market vacancies temporarily. And this is not surprising to us as it has been known for a longer period. Access to financing remains good and we see lower interest rates and lower margins during the quarter with continued rate cuts from the Swedish central bank in the first quarter. We see that the marginal cost of debt is lower than the average cost of debt in the portfolio. Property values are somewhat positive and we see a marginal adjustment in the yield. The transaction market has picked up and we see several deals being completed, which is positive and proves the value we have in our books. I will return to the outlook at the end of this presentation, but what I can state is that there is a significant difference between different markets. We see that our series in northern Sweden have a good development with continued stable or rising rental levels and underlying growth. To highlight some specific event during the quarter, I would like to mention transactions, completed new production and the board's proposal on dividend and the nomination committee's proposal for the upcoming AGM regarding Sherman and the new board member. During the year, we have divested 45 properties for almost 1.9 billion while acquiring nine properties for approximately 1.1 billion. This combination makes the result for the fourth quarter difficult to compare to the same quarter last year. The transactions in isolation affect rental income by minus 24 million. Regarding the rental market, we experience stable development despite our vacancies increasing slightly. This is entirely according to plan and something we have known about for a longer period. For example, We have completed a new office for the social insurance agency in the property B at 4 in Luleå. There, the social insurance agency is leaving our premises in another of our properties, which results in an increase in vacancies. We see this development in our portfolio as relatively short-term and expect a turnaround in vacancy development already in the second half of 2025. Recently, the nomination committee's proposal for the board and chairman for the 2025 Annual General Meeting was presented. It is clear that the current chairman, Bob Persson, declines re-election both as chairman and as member. Bob has been on the board since 2007 and has been chairman since 2011. The nomination committee proposes Per Gunnar, also called PG Persson, as the new chairman. And as representative from the largest owner AB Persson Invest, their current CEO Björn Rensåg is proposed as vice chairman and board member of the ÖS. It is also worth highlighting that the board proposes a dividend of 220 Swedish crowns per share to be paid out on four occasions while updating the current dividend policy. A new policy aims to increase predictability and enable further investments for growth. I now hand over to Rolf who will go through the results in more detail. I will return with the market overview at the end of the presentation. Thank you.

Thank you, David. Let's get deeper into the result outcome for the fourth quarter. Like-for-like rental growth is 1.6% supported by indexation and rent reversion. The economic occupancy rate is 91% compared to 92% last year. which is good, taking into consideration we have sold fully occupied residentials. The operating surplus ratio for the quarter is down 6% to 414 million due to one-offs regarding financial compensation for high electricity costs in 2023 and higher maintenance in 2024. We are pleased to observe that our daily efforts to optimize property management are resulting in increased energy efficiency, minus 3.2% for the full year. As we continue to invest in our properties to be more proactive and future-proof, we gather more evidence that properties with higher sustainability scores, such as lower EPDs and environmental certifications, are experiencing greater demand higher rents and increased value. Financial costs are slightly higher, primarily due to derivatives that have matured and restructuring of existing derivatives, which has led to higher short-term financial costs. We have had slightly positive value changes with valuation yield one basis point lower than last quarter. see that our transactions are made at book value which supports our review that our property values are at fair value. Current tax is positively affected in the quarter use in accrual funds and negatively for the full year by withdrawal taxation in connection with property sales and non-deductible interest rate costs. Our Well diversified portfolio has strengthened the resilience of our top line. With 31% of our rental income derived from public sector tenants, we have a solid foundation for passing on CPI adjustments. We see that we can defend and increase our rental levels in connection with renegotiations and new lettings. Notably, 97% of all commercial lease agreements include indexation clauses, with 94% specifically tied to CPI. In line with our long-term strategy, we have increased the proportion of offices in our portfolio by primarily divesting residentials and acquiring centrally located offices. Like-for-like rental growth was 1.6%. And as David said earlier, we have slightly higher vacancies during the quarter and in the first half of 2025. However, we continue to experience strong demand for premises in central locations and expect the positive development of vacancies in the second half of 2025. Despite the slower overall economic sentiment in Sweden, we see great potential in our rental growth. Both when it comes to the rental version, the continued increased occupancy rate and modern new builds. We're seeing an increase in peak rent levels in our new leases, which in some cases approach 3,500 per square meter. These rent levels are being reached in our strongest cities, which have been impacted by investments in the green transition. And as a market leader with local management and being in a company with strong cash flow, we have a competitive advantage over many other real estate companies in our cities. Net letting has been positive in 22 of the last 24 quarters, including 10 million in the last quarter, where full year net letting amounts to 32 million. We see increased activity after summer with Umeå and Luleå leading the way. With the economic outlook improving and interest rates decreasing at the beginning of this year, I anticipate increased activity. The underlying market remains incredibly strong and there is a significant demand for the right premises in prime locations across northern Sweden. The market value of our properties amounted to 31.4 billion. During the quarter, we have invested 232 million in projects. and we have acquired seven properties for 965 million and divested five properties for 281 million, which was announced in June 2024. 91% of the property portfolio has been externally valued in Q4, which has resulted in slightly positive unrealized value changes of 19 million. During the last quarter, we have seen an increase in investment activity We also see that property yield and market values have stabilized and our assessment is that yield adjustments have reached the peak. And the average yield was 6.14%, which is one basis point lower since last quarter. With an interest rate of 4.3%, we have a yield gap of 1.7% and thus a continued strong cash flow. As I said earlier, we have invested 232 million in tenant improvements, property improvements and new builds. The long cost on completed projects during the period excluding project properties amounted to 9%. There is low risk in our major projects where pre-let is a requirement and most of the rental income comes from tax finance operations. All new commercial projects are built, according to BREEAM, at least level very good. We currently have around 16,000 square meters under construction with a total investment volume of 610 million, where remaining investments amount to 260 million. All our ongoing projects are proceeding according to plan, both in terms of cost and time. And in addition, we have around 200,000 square meters of existing or possible building rights, where we see great potential for further value creation. These will be used for both our own development and disposal. And 50% of the building's right refers to commercial premises and the remaining 50 to residentials. As I said before, we have slightly higher financial cost in the quarter. The reason is that the derivative with zero interest has expired and the increase in debt resulting from the acquisition of properties in Gävle and Luleå. This has affected this quarter's financial costs with a total of 9 million. As we have mentioned before, we have had a strong focus on reducing our interest hedging ratio. We have therefore terminated derivatives with higher STIBO fixing in advance and lower our hedging ratio to 71% compared to 85% in Q3. Determination has led to a negative impact in Q4, but will have a positive impact on our future interest costs. During the quarter, we have refinanced bank loan of 566 million, and we have issued bonds corresponding to 200 million, and at the same time redeemed bond maturities corresponding to 70 million. This means that in the next 12 months, we have additional loan maturities excluding commercial paper of 2.9 billion, which corresponds to 17% of interest bearing liabilities. And we're actively working for more prudent maturity profile with longer death maturities. Bank financing is and will be our most important source of financing. And we currently have 69% of our outstanding loans with banks. The proportion of bank financing has decreased since the turn of the year in favor of commercial papers and bonds. During the last quarters, we have seen a highly active Swedish bond market with high volume and lower margins as a result. And as I said earlier, in recent months, we have made issues of unsecured bonds where we see a significant change in pricing. Today, a three-year bond has a margin of 160 basis points, which is 25 basis points lower than three months ago. And this also puts pressure on banks' lending margins, where the margin for a three-year bank loan is around 125 basis points, which is at the same level as in 2021. Our average interest rate at the end of the period was 4.3%. which is 10 basis points lower compared to last quarter. And the manual cost of debt is now longer than our average cost of debt, meaning we have absorbed the increased interest rate. This will have a positive impact on our income from property management when refinancing and taking out new loans. We have divested low yielding assets and used liquidity to amortize debt and thereby lowering our financial cost and improving our ICR and LTD. We have 69% of our financing in banks, 2 billion in unused credit facilities and a secured loan to value ratio of 40%. We will also add additional borrowing capacity through completed projects. And this together with good relationships with our banks makes us feel comfortable about future refinancing. We still have a conservative balance sheet approach, which reflects our commitment to financial prudence and risk mitigation. We have reduced our financial risk over time, lowered our LTV, improved net debt to EBITDA and extended our interest rate fixing and debt maturity. During the past year, we have improved our financial key figures through divestments and a more cautious strategy regarding new major projects. This together with a strong cash flow and available liquidity means that we now see opportunities for growth, which primarily means acquisitions and an increased volume of tenant adaptions. And as we mentioned earlier, during the last quarter, We have acquired centrally located office properties in Luleå and Gävle, cities where we expect good future growth. And yet again, I feel comfortable with our current financial position and action taken. Our strong cash flow with our operating expenses, committed capex and further growth. And I will now leave the word back to David.