Fastighetsbolaget Emilshus AB (publ)

Hello and welcome to today's webcast with Emil Sus. The VD Jakob Fyberg, Sifo Emil Jansbo will present their report for the third quarter of 2024. After the presentation, a question will be asked. If you ring the bell and want to ask a question, press star 9 to raise your hand and star 6 to activate your sound when you get the word. It is also possible to send questions in the form to the right. With that said, I leave the word to you.

Thank you so much. Now Emil and I will talk about Emil Sus. We will talk about the results in January, September 2024, but also go into the quarter, the last quarter, and talk a little about the company Emil Sus. Before we go into how we have developed results, we still want to remind you what is important in Emil Sus. You know from earlier, it is very much about our management result that it should increase all the time. That we should create shareholder value, value for our shareholders. It is about working hard within the management with our properties, with our driftnet, working with the rent, working on the debt side, but also on the sales side. These components together will together create a good management result. It is also incredibly important to be local today, especially in the current situation we are in, that we are close to the tenants, close to our houses. Our local market is so important that we all the time know our tenants and know what is happening and can also act there. Long-term is super important. In all our decisions, the long-term is the basis. In all our businesses, it should be long-term right for the company, even in our expenses. You know that we do not try to stretch so much on the rent levels. We think it is better that the payment question, the will, is there and that we get long contract times. That is also when we come to the debt side, to handle it in balance. In balance, it is about handling it in time. We should always act long-term. We are not a project company or a project that will be in 1-3 or 5 years, but we will do this for such a long time and therefore we should always act long-term. What have we done in the last quarter? We have strengthened our financial position. We always try to work hard with it. But during this quarter we have been insured. We work all the time to try to borrow our properties by getting better cash flows and be able to use the money to do new business. When it comes to the debt side, we also have obligations that we have handled. We made the solution of one obligation earlier this year. Now we have made another solution, a solution that was on 725% plus 10 years. It is on our management result, but by taking it away, the management result becomes better and the debt side looks better. We do business. We have acquired properties in areas where we intend to grow. We have made two new properties in Östergötland, in Norrköping and one in Kalmar. 156 million, not a big volume, but still good for the company. It is also a good contract length, it is on 10 years, these three together, which again makes us get good cash flows. We work hard with our management. We try to work with the rate of payment, which is now at 95%. The net payment was balanced, plus or minus zero, which means that we have received some sales, but we have also been able to measure it with new payments, which we think is good. As usual, there is high direct cast on our properties. It is also a high degree of payment, which is 95% as we have had before. We also have long rentals, and then we talk about contract length, which is over five years. When it comes to the result for the period of January-September, we are a growth company, and then the income will increase. Then, of course, the management result will also increase. During this period, the management result increases by 20%. The cash flow increases by 31% during the period of January-September. If we look at the management result, it increases by 9%. You know that our goal is 15%, but it is 15% over the past 12 months. If we look at that, it is at a level of 14%. But if we go back to these 9%, it is very much linked to the fact that we made a bigger emission during the summer and spring, at 384 million. It has not really given the effect yet. We have done business and interest, but we also have the capacity to do more business, which we will do during the autumn. So we hope that this will improve further. If we look at the period of July-September, the management result increases by 25%, the stock price by 6% and the cash flow by 34%. The numbers will also be told by Emil later in the presentation. But as I said, we are a growth company, this will of course increase. If we look at our stock, there are no major changes in the supply chain. It is the electricity industry that is the big post, it is 50% that we have there. And then there are stockbrokers, it is food and external trade. What we want to say here is that we should stick to these supply chains, we should not flag out and go into new categories. It is because we have a good demand for these stores, it is the properties on the sites where we know there is a demand as well. To the point that there is a good demand, both when we make our purchases, but also when we make our investments in existing houses and existing stores. Our tenants are ready to pay for when we make our investments, and we think that differs a bit from other supply chains. Looking at the value of the house, it is now at 744 million SEK, an increase of 16%, it is the value of the property. We have a property value of 8.4 billion SEK today. Looking at the geographical aspect, you know that we are a small country company, still a focus on small countries. We are also evaluating business and procurement in southern Sweden, we say that we will be a company in southern Sweden. But it is always the right kind of business that we do, we have been sitting here in Småland, we have also increased. In Östergötland, Norrköping and then also in Kalmar. We are in Halland and there we will grow, and there we look intensively at procurement. The degree of ownership is still good, it is at 95%, of course it can get better. But we will stick to these 95-96%, it also gives balance and stability, creates the flow, and then we talk about cash flow. Of course, our rent is very important to us, it is only over 5 years, 5.2 years, and the property value is 9,426 SEK per square meter. Yes, we have also done business, we do a lot of business, we have done it for 5 years. We are not the kind of company that does some big business per year and then we are not, we are the kind of people who are out all the time to look at smaller business volume-wise, but also the larger packages we are interested in doing. Then you know that in terms of distribution, it gets better when you look at the smaller businesses. During this quarter we have bought for 156 million SEK, which is mainly linked to Norrköping, but also a property in Kalmar, as you can see in the picture behind. The contract length here is 10 years, which is good, it is good rental levels and it is good paying rental guests. To comment a little around the market, the rent reduction has made the sellers suddenly ask for a completely different price range than it was in spring. We bought the property at 7.5%, the same house will cost 6% today, the sellers say, and also the contractors. We think that is wrong, we understand that the rent should go down and that the rents should also go down, but not in that big hit. You do not take into account that we are in a situation that is not the easiest, there is a world order that you have to take into account. What we have to do instead is to look at even more business and evaluate even more so that the right to be thrown out for us ends. We long-term feel that this works for us as a company, it has taken in a lot of capital to the industry and that suddenly tends to be more buyers and that the emissions go down. But we will try to keep that in mind and do the business we really believe in. We just have to continue to work hard on the sales side, but as I said, it is the results of these business. We have more capital in the company through the emissions we made, so there is room to make more sales. We have a large prospect list of what we look at, we just have to see that it is right for us to do these business. When it comes to our hiring guests, pay, it is hired, yes it does, it works well on that side. When it comes to net revenue, it is balanced, it rose to plus or minus zero, four million on the new contract, with four million in the agreed agreement. Management and revenue are not a self-playing piano, you have to work very hard every quarter and I think our organization does that in a very dedicated and good way. We talked about the fact that we do not have any volume goals, but size gives an advantage by reducing the risk associated with individual hiring guests. Then it is said that no hiring guest is greater than 3% of our total hiring target, which is good, we should always be aware of that. If you look at the big publications, we have done that mainly linked to the trade side during the year, but also a little on the office side. We have a small office in Växjö, where we have succeeded with some office publications, but it is a very small part of the company. The project portfolio is there, it is at 44 million right now, we are constantly saying that we intend to grow with our portfolio, it does it a bit. We are a company that likes to hire, we do not buy land to develop ourselves, we do many re-buildings, right now it is at 44 million, but we feel that we have good dialogue with our hiring guests and hope that it will increase with time. We are in a situation where we are drawing on the decision, but we still believe that it will increase in the coming quarter, but we still have to be careful with that part, but it gives a very good cast. All our projects give a very good cast, and when it comes to a good cast, that is what we should focus on our sustainable side. Then we look a lot at energy efficiency, and then it is a lot about the ventilation unit, a bit of that, a bit of LED lamps and the like, and that affects our housing management a lot. There we have a very structured work to go through house by house and be able to screw on this, invest, and that often gives a very, very nice cast for us as a company and also for the hiring guests. Then we should say that 44% of our content is triple net connected, and then we do not control the property completely ourselves, but we are of course helpful to the hiring guests when we make investments of this character. But as I said, that should give a cast, it is very important for our part.

Then I was going to go through the result development in more detail, and during the period from January to September, the rents were raised to 493 million kronor, which should be compared with 446 million during the corresponding period the previous year. If you correct the rents in the form of state electricity during the previous year of 5 million, then the growth in income is 12%. This is driven by a combination of index calculation or the tax rate, completed project and acquisition of new properties. The property cost rose to 96 million, which should be compared with 90 years ago, and then the lower cost increase in relation to the income indicates, like the previous quarter, that we are very effective in terms of costs. Jakob has just been in on the fact that we have focused and continue to focus very much on energy efficiency measures, and we see the result on the cost side. We also see the result, continued results, of our electricity price insurance strategy. This means that the drift network increased by 12% and rose to 397 million during the period. The cost of the central admin increased to 25 million, and as a part of the turnover, this is in line with the previous year. The financial network increased to 159 million, and despite a higher debt rate compared with the previous year, the financial network is approximately in line with the previous year. This is a clear effect of the measures we have worked with on the debt and derivatives side, but also a lower market share. I will come back to this a little later when we comment on the debt portfolio. In summary, the management result during January to September was 212 million, an increase of 20% compared with the previous year. If we look at the management result for the stock market, the increase was 9% -to-date and 14% on a rolling 12-month basis. The value changes on the management rate via the result calculation increased to 52 million, and the value adjustments on financial instruments to minus 35 million. The last mentioned above is explained by value adjustments on the interest rate. I will come back to the value adjustments soon. The cash flow from the running business rose to 188 million, and corresponds to an increase of 31% compared with the previous year. And like the previous quarter, the higher growth in the cash flow against the management result is explained by a large part of lower company taxes. This is a result of being more effective when it comes to using tax-based value reduction measures in a more optimal way. If we look at the results of the quarter isolated, the growth in the interest rate was 16%, and the interest rate rose to 173 million. The management result increased by 25% to 76 million, and the cash flow increased by 32% to 67 million. A few words about the ability to recognize and predict. The ability to recognize is an overview of the EMLSU's ability to generate results, given that the property value that was added per 1 October 2024 indicates a management result of 342 million on the 12-month basis. This is an increase of 108 million compared with 12 months ago. The management result per share is determined by an increase of 2.63 million, which corresponds to an increase of 27% compared to 12 months ago. The direct tax, the implicit direct tax given the ability to recognize, rises to .7% and the tax detection rate to 2.8 times. When it comes to the prognosis for the 2014 year, we estimate that the management result will go up to 290 million, which is unchanged compared to the prognosis we gave in connection with our Q2 report. Regarding the property value, the entire property value is valued every quarter by an external independent evaluator. The property value rose to about 8.5 billion crowns in the last September. This is an increase of 1.1 billion compared with the year's income. This is mainly driven by the year's income. Regarding the financing side, we have in the third quarter that Jakob mentioned earlier, a -time-solution volume of 505 million of our obligations with a fall in April and September next year. These have been partially replaced by a new obligation with a significantly lower margin. The debt portfolio rose to 4.6 billion, of which 4.2 billion was made up of bank loans and 400 million of obligations. The average income at the beginning of the period rose to 4.1%, which is compared to .9% in the previous quarter. This significant improvement is explained mainly by the increase in the number of -time-solution obligations with a significantly higher margin than today's levels, but also by a lower interest rate. The interest rate rose to 84% and the average interest bond period was 3.0 years. We report a debt quota of 8.1 times and a interest rate of 2.3 times. Let's talk about the debt ratio compared to our financial goals. We have a goal to increase the management result per stock share with at least 15% per year. If we look at the period 2020-2024, we have an average of 18% growth. Then we have the goal to discard at least 15% of our own capital. If we look at the period 2020-2024, we have a net net debt of 16%. Finally, we have two main financial risk restrictions. One is that we should not have a net debt debt that rises by 60% and at the beginning of the period we were at 51%. The other financial risk restriction is that we should have a tax rate of at least 2.0 times and the rate of interest was 2.3 times

during the period. If we look at the owner's picture, it is stable and good. No major changes. MP3 has gone down the owner's list. You know that. Landbo has become a major owner in the company. There are institutional placers. The Danish Invest has made it up on the top list. It is stable and good. The liquidity in our shares has increased. MP3 has gone down, and the SOS shares did it in the spring. We thought for a while that we would get more shareholders and that it would be sold off. It would be a bit of a downfall on a number of owners, but on the contrary, it had actually increased. Today we are at about 10,000 owners of investment shares, which is very exciting. Stable and good. Strong owner's picture. What are we going to do in the next year? We will continue to work with our existing stock. Work a lot with the driftnet. Work hard with the publishing side, even though it is good. We will always be on it. We will do good business. We will do the right things. We will be able to do good business with good tenants and good owners. That is where Söder Sverige is our goal. We have capacity. As I said earlier, there is more to be obtained there. We will try to do that now for a period, but never at the expense of our profitability and long-term. It should be a good management result. We will also work hard on the debt side. Emil and his group work with that daily. We will focus on increasing our cash flow and keeping the stability of the company. One of our owners said that we think that we should work hard on the debt side. We will work hard on the management side, on the financing side, on the debt side. It is a job that will continue for a period. With that, I would like to thank you for listening to this.

Thank you for the presentation. We will move on to Q&A. If you call and ask a question, press 9 to raise your hand. Then press 6 to activate your voice. The first questioner is the number that ends on 594. You have the

word. Good morning. This is Erik. I am from Carnegie. I hope you can hear me. Yes, that's good. Thank you. I had a few questions. Jakob, you were in and talked about the opportunities for sales and the market and some price images. What do you think about when you are looking for sales? You have taken in money, obviously you are looking for sales. How far do you want to go down in terms of sales requirements to actually get business in the hamlet compared to what you already have in the books?

That's a good question. We understand that we cannot buy the sales that we did a year ago, given how the market looks and where we are going. We are constantly looking to keep our goals. We are always looking to keep our goals and the key numbers that are important to us. When it comes to sales, you can go down a little and we think it's a good guest and good business with a long contract. In other cases, we will try to keep our eyes on the sales. We have always said that we should be around 7% and there you have to be somewhere plus or minus. We are not going to these low numbers that are indicated around 6%. Not in today's market. The conditions for financing should be radically changed. Somewhere 7 plus or minus I would say.

You see falling demand for sales in the transaction market. It's a little bit of a two-edged sword. Even if it's difficult for you to find all the sales you want, it should give a lot of emphasis on the transactions that are made on lower yields and now external values. This is the new market demand. Can you say something about how that discussion is going when you then evaluate your own portfolio? You have been consistently stable on the demand for sales during this period. But it seems like you say that the demand for the transaction is basically on the way down in the direct markets.

Yes, that's right. When we talk to our household evaluators, they are still out there from earlier in the quarter and do not make any big changes to our stock. We see greater effects for going down yield-wise. We think that can come in Q4, but it will be a little bit more difficult to see the results next year. But you also have to see more business that is made on lower yields. Now it has been shown up a few, but you have to see even more so that the valuation industry can feel quite safe. It will probably take a while before it has an effect, at least in the household portfolio.

One last question on the transactions and maybe the geographical distribution. Is it still Småland, Östergötland and Halland that matters? Or do you also look outside these regions?

We always like Småland. We are a small company. But then it is clear that we will increase in Östergötland and also in Halland. It is for small Halland. But then we say that we are a company that should be active in southern Sweden. So we also look at the stock in other places where we are not. But then we will also look at the first type of acquisition for us when it comes to the type of property or guest. So yes, we look at it, but we have not found the right stores yet. It will take a while before we are there. But as I said, we are not surprised if we are in several places in southern Sweden. But that is more than speculation.

Thank you. Then I had one or two questions about the guest market. Could you describe a little how discussions with, maybe especially some of our larger guest hosts are going now, given the conjecture we are in? Is it so that guest hosts in the first hand are looking for opportunities to reduce their amounts? Or how are these discussions going generally today?

The discussions with the larger guest hosts are in the form of that you want to be left in the properties. But you also see that for long-term, you would like us as a company to invest a little in the house. And we do that against the fact that we get longer agreements and maybe also get a little higher rents. We talk about that our investments should also be given a discount. But it still requires an effort from us as a rental company. So we have ongoing discussions with some of our larger guest hosts. But it is not of the character of leaving the house or that you should reduce the rental levels radically. Rather, you want to have a close relationship with us as property owners and be able to discuss some of the investment issues. And then it often comes to those who are on energy savings. For example, LED-lights, ventilation units, these are the measures that you want to see to get a better economy in the house. Which, on the tripping of the rent agreement, can also give an advantage to our guest hosts. But it is a balanced discussion with our guest hosts. We think that. But then, as an addition, when it comes to additional investments in the house, we expect to be able to start a project. But it has been a little cautious in terms of the conditions that we are in.

If you think about the discussions about the rental, which was really difficult, we saw that there were some concessions in the numbers during the first half of the year. I can not see that something should have happened during Q3. But can you describe the risk for, for example, a competition? Are there guest hosts that you monitor where the payment capacity has decreased, or is it simply more ordinary activity?

It is ordinary. It was very specifically linked to the paddle business. We had two reasons, and it is very short-term. We are not sitting in some difficult discussions about the paddle rentals. But as you know, we are in a situation where you have to be very vigilant. It is even more for our management to be on the ball if there is something with our guest hosts. But we commented in this report that on the payment of rentals we do not see any concessions there, which is the first indication that is good. We are not sitting in some big discussions about companies that have problems. It was cleared out in the beginning of the year and was very linked to the paddle business.

Very good, thank you. Then my last question is on the current tax policy. If I understood correctly, this is the second quarter in a row that you have a current tax policy of 13%. Can you say something about what you expect that you should be able to land on this year and maybe give us a little feeling for next year?

It is difficult to mention specific numbers on the same basis as in the previous quarter. The reason we do not do that is that we are still on tax We have a tax advisor inside who does analyses of our tax-related contracts. This work is ongoing now in phase 2, it will be ongoing during Q4. I do not know the outcome of it, but a guess is that it can come down a few percent or a few percent.

Okay, that's good. Thank you very much. That was the questions I had.

Thank you for the questions. We will now give the phone number that ends at 7.01. You have the

floor. Hi, this is Albin Sandberg from Kappelsebrö. The OGM also had some questions. The first one that I think you meant is that you have continued investment capacity How should we look at it? Should we look at your maximum tax rate which is 60% and compare the average between now and 60% that is perhaps not normal or if you can give me a last that would be a reasonable goal.

We have 60% as a risk restriction. Maybe we should not be exactly on the border. We should be somewhere below. But there is capacity to use more in the company and we have, as I said, capital to do business. I think we are in a good position to be able to do without having to take in capital from the market. Which could also benefit our key numbers. We were in on our management tax on the stock market. It has been a bit low in the last quarter but it is because we are not fully invested yet. But on the other hand on the rolling 12 we are on 14 which is a bit better. There is a bit more to do but we should not stretch too much. We should not be on the exact 60% border.

No, that is important. There is the possibility to pay both with insurance debt and obligation loan. The price is very attractive out there right now. But as Jakob says, you do not want to be too close to your financial risk restriction. But a little more can be done. It depends on how the transaction flow looks like.