Fabege AB (publ)

Welcome to the FOBI GQ2 2025 report presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. CEO Stephan Dalbo and CFO Asa Bergstrom, please go ahead.

Good morning and welcome to our presentation for the first half of 2025, including the second quarter, of course. With me here in the room, I have CFO Åsa Bergström and also Peter Kengert, IR. And as usual, we will end with a Q&A session. Next slide, please. Our strategy will focus on Stockholm. is of course still there. We believe at Stockholm, we believe on offices. I know we come back to that later in the presentation also why. So please also let us talk about the figures first.

Thanks, Stefan. Yes, rental income for the first half year amounted to 1.7 billion, just below the same period last year. On a like-for-like basis, income decreased by 53 million, equivalent to minus 3.3%, which mainly related to relocation due to the previous year's negative net lettings. Occupations in completed projects were offset by reduced income related to divested properties net plus 40 million. Net operating income decreased to 1.233 billion. Property expenses include a non-recurring item of 7 million, other deviations mainly related to high maintenance costs and property tax, and the surplus ratio thus amounted to 72%. During the second quarter, the first phase was completed in the housing project in Haga Norra with the completion of 23 apartments. This meant that Bebostad reported sales of 128 million and the gross profit of 23 million. Central administration costs amounted to minus 59 million. Net interest items came in just below the previous year. Higher debt was offset by lower average interest rates during the period, and the result in associated companies amounted to minus 37 million and related to the period's capital contributions to Arena Bolaget. Share in profit of other associated companies only amounted to minor amounts. This meant a profit from property management of 657 million compared to 659 million in the previous year. Unrealized changes in value amounted to minus 85 million in the quarter and minus 650 million accumulated in the first half of the year. I will come back to this very soon. We have also written down development properties relating to future project opportunities in BEVO, started by minus 21 million. Realized changes in value of minus 37 million related to the sale of Ynglinge, which was vacated in the first quarter. And the valuation of the derivatives portfolio following long-term interest rates which fell during the quarter. During the period, the surplus value decreased by 329 million. The tax expense, which related to deferred tax, amounted to plus 160 million, of which plus 128 million related to a reversal of deferred tax in connection with the sale of the property Ynglingen. Next slide, please. During the second quarter, we have independently valued approximately 40% of the property portfolio, supplemented with internal valuations of other properties. The average yield increased during the second quarter by a further 0.01 percentage points to 4.56%. This was 4.54% at the year end. In the first quarter, we reported negative changes in value of minus 565 million. This was mainly related to the fact that the valuers expected longer vacancy periods and slightly lower rent levels, primarily in Solna, where we do have some vacancies and longer implementation periods for future project opportunities in Flemish Berg. Now, in the second quarter, the changes in value amounted to minus 85 million. net of minor adjustments, both upward revaluations and impairments. Overall changes in value during the period thus amounted to minus 650 million. The total property value thus amounted to 78.3 billion. In addition, there is a property value of development property portfolio in Birjebostad of 0.9 billion. Next slide, please. Reported equity amounted to 119 crowns per share and the long-term EPRA MRV amounted to 147 crowns per share. The equity asset ratio amounted to 45% and the loan-to-value ratio was unchanged at 43%. Both of these key performance indicators confirm our continued strong balance sheet. And the interest coverage ratio amounted to 2.5 moving 12 months, which is in line with the previous year. Next slide, please. Access to and pricing of financing is still very good. This applies both to capital markets and to banks. Since the vacation of the property Ynglingen in March, when we received almost 1 billion crowns, our activity has been at a relatively low level. We have refinanced and extended a bank facility of 1.5 billion. During the second quarter, we issued a total of 700 million in new three-year bonds at the margin of approximately 1%. In connection with this, smaller amounts were repurchased in relation to maturities during the autumn. After that, there are remaining bond maturities of 1.7 billion in the autumn, which we intend to refinance with new bonds. In June, the annual update of the MTN prospectus was carried out. We also launched an updated green framework with a second-party opinion from Standard & Poor's. Undrawn revolving credit facilities totaled 6 billion at the end of the quarter. Overall, we continue to have good preparedness for upcoming financing needs and refinancings. We have facilities in place to cover the upcoming loan maturities. Next slide, please. Of the loan portfolio, 49% is fixed, mainly based on long-term maturities and mostly through straightforward interest rate swaps, supplemented by some fixed rate bonds. In addition, there are callable interest rate derivatives totaling 7 billion, which are still running. Straightforward interest rate swaps run with fixed interest rates between 0.11 and 2.18%, and the callable interest rate derivatives run with an interest rate between 1.82 and 2.5%. The average fixed rate term amounts to 1.5 years adjusted for the estimated maturity of the callable swaps. The fixed rate term increases to 2.4 years. The Riksbank cut of its policy rate in June has not yet had a full impact on our financing. We also see potential for lower margins in connection with upcoming refinancing of both bonds and bank loans. Meanwhile, this is offset by swaps at low interest rates that mature during the year. As I have said earlier, we expect that the average interest rate will remain just below 3%. At the end of June, we reported an average interest rate of 2.89%. For a moving 12-month period ahead, an increase in the market interest rate of 1 percentage point will generate a higher interest expense of approximately 153 million, all ales unchanged. A corresponding reduction in the market interest rate by 1 percentage point will result in a reduced interest expense of 96 million. And over to the next slide, please. Something new in the second quarter, as I just mentioned, is the updated green framework. The framework is based on third-party certified properties and ambitious energy targets. As before, it's mainly based on the green bond principles adapted to the EU taxonomy. The framework is primarily aimed at the capital market, where we have only borrowed using green financing for several years now. S&P has issued a second party opinion with a median green rating for the green terms and conditions. The framework and associated documentation is published on FabiGas website. During the quarter, we have otherwise continued to work in line with our environmental and sustainability targets relating to, among other things, the properties, energy consumption and reduction of CO2 during project development. We have recently started a collaboration with Myrspoven, a Swedish company, to take the next step in further streamlining and managing the energy consumption in our properties. This will be noticeable in both consumption and costs in the longer term. Another initiative is the dismantling of older properties that is now being carried out along Dalvägen in Solna. have set a high target where at least 80 percent of the demolition material must be reused or recycled a lot of material goes back to suppliers for recycling other materials are recycled on site and we have recently sent 1 600 windows to ukraine to help with reconstruction and so back to you stefan thank you also um um