Nivika Fastigheter AB (publ)

I welcome to the day of the broadcast. The Norwegian Fastidies. With us today we have the CEO of the Swedish Stock Exchange and the CEO of Kristina Karlsson who will present and answer questions during Q&A. If you have any questions, please use the form to the right of the broadcast. And with that I will leave the floor to you. Please go ahead.

Thank you and again warm welcome to the Norwegian Fastidies quarter presentation of the fourth quarter. My name is Sverke Källgården and I am the CEO of Nevika since June 1st this year. And with me I have Kristina Karlsson who works as the CEO and responsible for the company. We start with some slides about Nevika. What is that in short? Yes, we are a small country fast food company and we have a purpose to long-term own, manage and develop commercial properties and housing and thereby create profitable and sustainable value growth. We believe in local presence and that the closeness to customers of our properties creates the best businesses. Therefore we have small country or coast to coast in the height of small country as our geography and we have four management areas Jönköping, Värnamo, Växjö and the west coast and on the west coast is the office in Varberg to have that closeness to customers and that it should be felt that Nevika is really there and is present if something happens in the property. We have a diversified property portfolio. Currently the property value is about 11 billion, 61% are commercial properties and 39% are housing. Within the commercial property there is mainly light industry, warehouses, offices and some social properties. You can see to the right how we are distributed in the portfolio. We have a growing property portfolio with stable finances and profitability. The diversification is large, we have almost 200, we have 199 properties worth 11.4 billion. As you can see we have after a few years or some year of consolidation we grow in the portfolio again which is very happy. At the same time we have pulled down the loan rate, it is today at .4% and that means that we are well-routed for growth now because our financial policy allows an LTV up to 55%. Through the years we have had a strong growth in our long-term substance value as you can see and a stable financial result with high profitability. The drift network has been stable around 70% despite a strong growth. In August 31, 2024, we have a contract value of 734 million. What happened in the fourth quarter? Well, if we look at the numbers we see an increase in rental income and improved drift network. The economic level is still high at 96% where the commercial properties are at 95% and the housing at 98%. We have a positive net expense of 9 million with three major new contracts. We have written a new 10-year contract with a company called Rudhäl where they rent and we implement a new industrial property in Breda Sten in Värnamo. Also a 10-year contract with Sordin AB which is a company that takes over after another lease. Even if we get a vacation we fill it up very quickly and it is also located in Breda Sten which is an extremely attractive area. We have completed the construction of the safe house in Jönköping with about 80 apartments and acquired a commercial property with triple net number, a smaller portfolio with central properties and a clear building ground for future projects. We also have an extra company where it is decided that Nivika will change the accounting year to calendar year. This means that Nivika will release a Q5 and Q6 report to get into the calendar year phase. We hope to see you again on the 21st of November when we release the Q5 report and through that report we will get into the calendar year phase and it will be the opposite Q3 report in the new format. Kristina, let's move on to the financial and numbers.

Yes, thank you for

that.

Let's go into the details here and see that the income during the period, the last three months in the quarter, has increased to 176 million kronor and it is an increase of 12% compared to the same period last year. As Sverke said, we have a high average on both our local and residential areas. The drift network has increased by 10%, up to 134 million kronor. The financial network during the period is 65 million kronor which is actually an increase compared to last year but we also have a slightly higher debt than we have historically had. We have a pension rate of 1.8 which is a rolling 12. This means that we are increasing from successive to every period we report here. The management result during the period was 55 million kronor which is an increase compared to last year but if you take into account the exclusive cost of income that we have had during the period, the management result was 59 million kronor. We have had high activity, as Sverke said, we are now changing the year of accounting which means that we are counting on a lot of periods. We have a change of management where Sverke came in in June which is a big part and we have also changed the system here both financially and the housing system. So we are well equipped for growth here now. The results for the stock period are similar to last year but a clear improvement compared to the previous year when we were negative. The value change for the property is similar to .1% so it is really no change. We continue to look at the balance calculation we have a property value of 11.5 billion almost. It is an increase by 10% almost from the previous year. Of them, over 95% of what we call property with cash flow and rent income every month. In addition to construction and construction land, it is less than 5% of our portfolio. During the period we have made a commercial acquisition mainly to the city of Vänamo but also a smaller acquisition to the Jönköpings portfolio. So the centre of property and commercial property belong to Vänamo and the construction of land for the future project belongs to Jönköping so it can be exciting in the future. On the debt side we have 5.4 billion which is 26% higher than the previous year. Despite that, we have a very low net and loan rate compared to many bank colleagues 46% and the debt is in the Nordic banks at the moment. We have a rental income of 2.2 billion we have a private loan but in advantage. The financing in the construction credit is 362 million and we have a credit card over that. The long-term value at the end of the period is 64.40 per share. And then we look at the ongoing project we are one of four companies that during periods with high interest rates have continued to build. So during the period we have completed one larger construction of a safe house in Jönköping and a larger renovation to the police here in Vänamo. We have a project that adds a total of 35 million in the coming rental value until 2026. And you can also see clearly on the top right on the current interest rate growth on a one-year basis here in I mean the rental value that was 621 last year, we have 766 here now. And then I thought I would leave it to Sverkes who can talk a little bit now. Absolutely.

What has happened after the period is over and what is the focus forward? Yes, we in September have joined UN Global Compact as a lead in our sustainability work. We have also completed negotiations on the amortization levels with one of our main banks. With the current LTV levels of the portfolio the amortization goes down to zero and the cash flow effect for that is about 20 million crowns per year. And the conversation is also with other banks about the same thing. On the picture to the right you see that we took a first spade which was also a part of our sustainability work, but also our role as a world of property. We took a first spade regarding Sweden's first re-mining power plant that is built on broad stones. In the background you see our new headquarters which is under construction and will be completed around the year where Niwika will take two apartments and the rest will be rented out to other tenants. And in front of that the power station will be located which is a collaboration with Ionity which will drive the power station and Frendow which will drive the service station on the same property. So it will be the first re-mining power station or power charging station which has a service building as well. We have signed a deal with additional re-mining in two separate businesses and they are two commercial properties in Jönköping. Both are located in E4 and have a total rent value of 11 million. We also have questions about a number of interesting re-mining objects, especially in the electricity industry in our geography. And also a number of questions about the rent and the capacity of the guests to adapt and expand the spaces. That was all about the presentation. Now we would like to answer questions.

Thank you for that presentation and we have received a lot of questions so we will start with the first one which is like this. How much of the rent of the power station do you have in the

I can't tell you in detail.

It's a relatively low share. If you look at the amount of the power station we have about 35% of the residents and I would think that it's about the same number of properties, of which maybe three or five have power charging. So it's relatively low but we will read it exactly.

We have discussed these and where we have it we have had a very good selection, especially we have basically five properties here in Burnham and we are working with that property.

We have property with prescriptions that are still going under normal negotiations so

we

have prescriptions yes but not affecting the rent.

Thank you for that answer. Can you quantify the income costs for a change of year of account and the rent in the quarter and will you get more in-games costs for this coming quarter.

Yes, we can do that. About four million crowns that is in-game costs and it is the system change that will continue. It is not really clear, but there will be a little of those costs and also costs for change of board. But but the big costs are taken.

And includes finance. Net some in-game costs or is it representative for the cost of the current debt.

That includes also, we have drawn up and put on loans with one of our big banks and plan to do it also with another where we sit the same amontage discussion here also. So there is also in-game costs there.

And how do you judge that the ongoing increase in rent revenues affects your long-term growth goals, especially with the goal of reaching 15 billion in the value of the property in the year 2028?

But of course, when the rents go up, the value of the property goes up, so we will get help on that. But it is not that which will take us from 11.4 to 15 billion, but it gives growth through projects and procurement. But of course it helps.

Which strengthens the cash flow. Absolutely.

And how do you plan to use cash flow to support future growth, especially with regard to rent changes and your financing opportunities?

An increased cash flow, it makes it easier to grow through mainly procurement. And since we are a company that buys everything from small and single-use properties to large portfolios, so the single-use properties are sometimes a little more complicated to finance via bank, but they want you to pick up a portfolio. And then it is very, very easy to buy them in cash and then pick up the portfolio, which then contacts the banks and finances. So that will make it easier. The strong cash flow will definitely make our procurement strategy easier in the future.

The result per share has increased compared to the period at the beginning of the year, as you mentioned. But how do you see your ability to improve the result per share in

the future? We have about 50 percent of our financing in rent-safety today, so we are at a relatively high rate of running. So of course we will have a positive effect when the rents come down. And we are constantly looking at how we should be rent-safety. But all the signs point in the right direction and indicate that our financing costs will go down in

the future.

And how do you then decide that the ongoing conversion of the property portfolio, including any changes, will affect rent-safety, but also growth strategy?

We have a target number that has mentioned earlier that we will reach 15 billion 2028, where about a third or 30 percent of the property will be rented and 70 percent commercial. If you look at 30 percent of 15 billion, it is in a round round, about how much property we own today. So the growth in the future will mainly be on high-cost commercial properties, which will increase the ability to identify and the result per share. And it will also be a positive key for the rest of the concern. So the growth forward will probably mainly happen via projects and commercial high-cost properties.

With two-thirds of your property portfolio in commercial properties, how do you assess the future after the question about this segment and what risks you

see? We are working in the Gnosjö region, which is an incredibly strong industrial region in Sweden. You have a tradition of entrepreneurship and entrepreneurship. It is also a region that has historically shown economic sustainability, regardless of the situation. We have seen very few businesses or companies that have had problems, even in this high-cost level. So we are looking positively forward and we are working very close to our tenants and want to develop them. We see that there is a need for larger areas and to be able to build more and build more and look at larger locations. So we are very positive about it. So it is not said that everything is green. We have a lot of respect for high-cost levels and that everyone has it a bit harder. But thank you and we promise that the businesses are going well and the demand for their products is also high.

And how do you see the impact of the coming tax cuts on the tax revenue and the results, especially with the fact that the tax cuts are relatively

short? As I said, we are welcome to that of course. We will see positive effects of that in the future.

Let's take a closing question here. Can you explain more about the strategy behind the new emissions in 2023 and how these have contributed to your financial stability and growth opportunities?

Yes, we can do that. We got into this high-cost situation with a number of obligations that would be refinanced or solved. And there was a decision to make a new emission to be able to solve these obligations from the market and reduce the risk. When we entered this situation, the single biggest risk for a real estate company was not to be able to refinance their property. So they made the decision to take in money and solve these obligations, which also made it possible for the company to go down in the rate of interest, so we are now at a 46% rate, which is relatively low in the segment. That is why we are well-equipped for growth today. We have a financial policy that gives a 55% rate of interest and we have 46%. We are talking continuously with our banks and we have very good cooperation with most Nordic banks and they are very supportive of us and definitely willing to support our growth journey forward. So we are very positive for the future.

Good, that was all the questions we had. Then I thank you, Sverker and Kristina, for the presentation and also for the answers to all our viewer questions. We are also very grateful to all who have followed the broadcast with Vika Fastigheter. Swedish people continue to have a good day and see you again. Thank you very much. Thank you.