Fabege AB (publ)

Good morning and welcome to our presentation of the third quarter.

As usual, it will be afterwards, there will be an opportunity to ask questions. To summarize the third quarter, I would say it was a stable quarter. We had increased rental income, we had increased net operating income, and we had increased profit from the property management. And the net letting was positive with about 9 million. So in a stable quarter. After the summer, we have seen some signs of improvements. Inquires are increasing, and there have been more viewings. So, it's more activity. That's small, but clear signals that we slowly, but surely, hopefully, will be starting to be more active. There will be more activity in the market. And especially, this is true in the Stockholm inner city. So, Åsa, please give us a review of our numbers.

Thanks, Stefan. Please turn to page four. Rental income for the period amounted to 2.5 billion, just above the same period last year. On a like-for-like basis, income decreased by 74 million, equivalent to minus 3.2 percent, which was mainly related to relocations due to the previous year's negative net lettings. The sale of the property Ynglingen meant a decrease of 25 million. Meanwhile, income increased by 103 million related to occupations in completed projects. Net operating income decreased to 1.9 billion. Property costs include a non-recurring item of 7 million. Other deviations mainly relate to slightly high repair and maintenance costs and property tax. The surplus ratio thus amounted to 74%. For the quarter alone, the surplus ratio was 78%. No sales were reported in Bybostad during the third quarter as no projects were completed. The sales were then related to the second quarter when the first phase in the housing project in Haganara with 23 apartments was completed. This means that the residential development in Bybostad reported sales of 128 million and a gross profit of 20 million. Central administration cost amounted to minus 78 million. Net interest items came in at slightly lower level than the previous year. Higher debt was offset by lower average interest rates during the period. And the result in associated companies amounted to minus 49 million, of which minus 50 million related to the period's capital contribution to Arena Bolaget. Share in profits of other associated companies amounted to smaller positive amounts. This meant a profit from property management of 1 billion 50 million compared to 1 billion 12 million in the previous year. Unrealized changes in value amounted to minus 338 million in the quarter and minus 988 million accumulated for the first nine months. I will come back to this very soon. Impairment of the value of development properties of minus 21 million remains from the previous quarter and related to the valuation of future project opportunities in Viljebostad. Realized changes in value minus 37 million related to deductions for deferred tax in connection with the sale of the property Ynglingen, which was vacated in the first quarter. The valuation of derivatives portfolio follows the long-term interest rates, which rose during the quarter. This meant a positive effect during the quarter, but over the entire period, the surplus value decreased by 216 million. The tax expense which related to deferred tax amounted to plus 47 million, of which plus 128 million related to a reversal of deferred tax in connection with the sale of Ynglingen. Next slide, please. During the quarter, we have independently valued approximately 40% of the property portfolio, supplemented with internal valuations of other properties. The average yield requirement increased during the third quarter by a further 0.04 percentage points to 4.6%. compared to 4.54 at the year end. The increase related mainly to Solna, while the yield requirements in the city are unchanged. In the first quarter, we reported negative changes in value of minus 565 million. This mainly related to the fact that values expected longer vacancy periods and slightly lower rent levels, primarily in Solna, where we do have some vacancies and longer implementation periods for future projects, opportunities in Flemingsberg. In the second quarter, the changes in value amounted to minus 85 million, net of minor adjustments, both upward revaluations and write-downs. The change in value in the third quarter amounted to minus 338 million, and as mentioned, were mainly related to higher yield requirements in Solna as a consequence of Vasakrona's acquisition in Arenastaden. Overall changes in value during the period thus amounted to minus $988 million. And the total property value thus amounted to $78.5 billion. In addition, there is the property value of the development property portfolio in Videoborstad of $1 billion. Next slide, please. Reported equity amounted to 120 Swedish crowns per share, and the long-term EFRA NRV amounted to 146 crowns per share. The equity asset ratio and the loan-to-value ratio were unchanged at 45% and 43% respectively. Both of these key performance indicators confirm our continued strong balance sheet. The interest coverage ratio amounted to 2.7 in the quarter and to 2.5 for the entire period, which is in line with last year. Next slide, please. Access to and pricing of financing is still very good. This applies to both the capital market and banks. The capital market is now strong after the summer with high demand and lower margins. Several of the property companies have been active and there is a broad-based demand from investors. In late August, we issued a bond of 1.25 billion. The bond has a term of 3.5 years at a margin of 100 basis points. Remaining bond maturities during the autumn amount to 0.5 billion, and in 2026 we have 4.6 billion maturing, of which 2.3 during the first half of the year. We intend to refinance our bond maturities with new bonds, whereas our bank facilities are continually refinanced through extensions. We have also started the process of refinancing the bank facilities that mature in 2026, which will mostly occur during the fourth quarter. Undrawn facilities amounted to 6 billion, including the backup facility for outstanding commercial paper. In October, the seller's promissory note was repaid from NREP, which meant that we received just over 680 million Swedish crowns. 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. The average interest rate decreased to 2.83% at the end of the quarter. Maturity of derivatives at low levels and entering into new interest rate derivatives was offset by lower margins on refinancing as well as lower cyber rates following the Riksbank interest rate cut in September. During the quarter, we entered into additional 250 million in a fixed five-year swap and 500 million in extendable interest rate swaps that run with fixed interest for two years with the right of the bank to extend for a further three years. 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 and extendable interest rate derivatives totaling 7.5 billion. Straightforward interest rate swaps have a fixed interest rate of between 0.11 and 2.18%. The callable interest rate swaps have an interest rate between 1.82 and 2.5%. And the extendable swaps finally have a fixed interest rate between 1.66 and 1.72% for at least two years then. 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 2.1 years. So, next slide please. News in the third quarter is that we received the result of a travel survey in Arenastaden. 6,500 people responded and we can confirm that public transport has increased and that the climate impact from work-related travel thus has decreased. In addition, separate on one, the Alfa Laval office in Flemingsburg obtained its final certification, BREEAM-SC, excellent standard. And during the quarter, we completed an internal training in Fabergé's code of conduct for all the employees. So all of the employees have now participated in the training and have also signed the code of conduct. This is something that is now a requirement in connection with new hiring. Otherwise, we have continued to work in line with our environmental and sustainability targets relating to, among other things, the property energy consumption and the reduction of CO2 in project development. Last but not least, I tend to say something about this CSRD ESRS. It's now clear that the omnibus proposal will be approved and that Faberge is not covered by the comprehensive sustainability reporting under the CSRD. We will retain the key performance indicators we have reported previously, but we will revise the structure of the sustainability report so that it's more aligned with the ESRS-inspired structure. And so back to you, Stefan.