Platzer Fastigheter Holding AB (publ)

Welcome everybody to Platzer's Q2 presentation for 2023. My name is Fredrik Odin, the CFO, and I will now hand over to our CEO, PG Persson.

Yes, hello and welcome everybody. I'm PG Persson, the CEO. This is my last report, but I will come into that later in the presentation. I will go through with Fredrik our key numbers for the second quarter in 2023. I will start with some of the events in Q2. We had acquisition of three properties in Söre Logistikpark, which is our own JV. We also got a firm, BBB, minus investment credit rating with stable outlook. We made a sustainable linked bank loan. Fred will come into that a little bit later in the presentation. And we also see a really good net lending, especially in the office segment in Plattsburgh, which was one of the major ones, was one in 3,800 square meters in Lilla Bomman. And if we look at the numbers, summary in January, June, the first half, we have increased rental income, we have increased operating surplus, but decreased income from property management, of course, due to the interest levels. Unrealized change in values of property was negative, minus 620, which is of course because of the yield decompression. So the result for the period was negative instead of positive last year. We have a value change of increasing because of the investments and also the acquisitions. We will come into that also a bit later in the presentation. If we look at the economic activity in Gothenburg, it was slightly better than we expected. We still see low unemployment figures. The inflation is somewhat a little bit decreasing and also we see the GMP growth is slightly better than we reported in the Q1. So this was a little bit unexpected for us. We have also talked to some of our major tenants about it and the picture is that The market situation is slightly better than many people think it is. This is also shown in those figures. We don't know, we haven't got the Q2 figures yet. We will see after the summer, where the economic activity in Gothenburg is headed. What we should say is that although it's positive, it's still not a normal economic situation. For the normal economic situation, it's around 100. So it's still somewhat tough out there. If we look at our market situation for our property, if we start with the property markets, we can see in the office sector that the prime yields are still slowly increasing and it's driven by the sentiment and increasing policy rates rather than implemented transactions. We have no major transactions in Gothenburg in Q2 and not in Q1 as well. And of course, there is an uncertainty going forward on the magnitude of the yield compression. There's a situation on the property market where most market operators are waiting for a less uncertain environment in general, and especially where the policy rate is heading. But if we look at the rental market, even though the vacancies are on a high level, it's stable. The rents went up with the CPI. We don't see any decrease in rents, but we don't expect so many further increases in 2023. If this CPI is flat from now until October, we will have an increase of 4.5% but in the valuation we have calculated on 6%. And we also see from the record year 2022 when we had a lot of projects, 270,000 square meters, We now see a more normal or low volume of office projects in the coming three years from now and 2025, around 30,000 to 40,000 square meters, which is more normal in Gothenburg. high office projects due in 2022. So we still see a good demand, which we also can see in the net letting for office, that we still have a good demand on the rental market in Gothenburg. If we look at the industrial and logistic market, and I start with the property market, we can still see that the prime is slowly increasing. I think I said last quarter that there was an increasing prime yield, but we now see that it's slowing down. There are more transactions on the logistic market in Sweden, still few in the Gothenburg region. So there's still some uncertainty going forward on the magnitude of the yield compression in the industrial and logistics markets as well. But more implemented transactions makes the market situation more confident. So we have seen a slightly slow slowing down the yield. The yield decompression is slightly slowing down. And if we look at the renter market, we still have very low vacancies. Prime rents are stable, not increasing as much. And for us, being in Gothenburg we still have a good demand from e-commerce from tenants looking for the product development close to the Volvo plants and also close to the to the harbor but we can also see there is a little bit more hesitance in and longer process processes from tenants renting so the net The net letting in the industrial logistics is slightly weaker for us right now in the first half of 2023 than in the office segment. These are our locations and this is not new for the people that follow us. We have 75 properties in selected focus locations in Gothenburg where you can see of course that the red dots are the offices in central Gothenburg and the gray and black dots are in outside to the west. And that's our industrial and logistics. And we also have some residential building rights still that we have parts. Most of them we have sold, but they're not being converted into the... We still have them. We have signed the contracts, but we still have them in our books. So that's the green dot. If we look at our earnest capacity, we had a record high earnest capacity. it's up the operating surplus is now up to 1 billion 280 million and that's a record high earnings capacity and that's of course due to the the transaction the acquisition we made but also that we are now seeing the our projects being finished and the the result and the letting out is coming into the books And of course, if I look since 2013 and map the quarter that we did the earnest capacity chart and look 12 months later, you can see that it's almost, it's very correlate between what we say we are going to be and what we in fact are coming also in 12 months later. Hopefully this operating surplus will show up in the books in Q2 2024, hopefully in rolling 12. The investment properties is now a more major part of Platzer than we've had before. Usually the project property stands for around one to ten percent of the portfolio and now it's four percent and that's also because of the situation on the market. I think we will keep it around that for the moment. I think it's a good ratio around five four or five percent of the of the fair value is is the project and we have we also have the same ratio in in the associates now since we have finished our logistic logistic park projects two of them there are uh two uh three of them and there are two more to go so i think that's a good ratio ratio right now be looking at the situation on the market for for platzer Our value creation, we haven't changed anything in how we work. We are working with the Lettingen property management, we are working with our property transactions and we're also working with the project and development project and everything is dependent on our capital and employees of course and we are working on all the time to create sustainable value for all our interests. the shareholders, the customers, the employees and the municipality and everybody that is around us. And if we look at the numbers on the value creation, you can see there's a difference between 2023 and 2022, where we sold a lot in 2022. That's also the reason why we can do the acquisitions this year. We have very strong numbers on key figures on finance. But you can also see that there's a major change in changes in value where we have positive changes in value 2022 at the same time. And now we have negative. changes in value. But still, if you look in the long term, this is how I think all property companies with a long-term strategy should look, where you can see that the market value is continuing to grow. I mean, we can't decide how the market situation will be, but we can work in all types of market situation. I think this chart shows that Platzer is a company which can work in all types of market situation. So that's one of the things that I'm very proud of being the CEO since 2013 when we got listed. I will hand over to you Fredrik to talk them through some more numbers.

Thank you very much, EG. I will just comment on the previous slide as well. As you see, the office segment in value, that's where we have the large decrease in value in Q2. And you see the share of industrial and logistics are increasing, and that's due to the acquisition being made with Soved Logistics Park in 30th of June. Rental income, we have a steady pace of increase if you look at the whole period 2023 up until now. We are up at 679 million in comparable properties and the main increase if we compare the periods it's due to Kineum project in Gorda. That's the main contributor. and we are really happy with the occupancy rates that's that's kind of a receipt that we are making good progress in in hesitant markets income statement if you look at the Isolated quarter for rental income, if you look at Q1 compared to Q2, you see a decrease and that's mainly due to the energy support for electricity. So we have a decrease of 10 million in the isolated quarter, but we have an increase in the contribution in costs with 50 million. So the net there is plus five, but that's the deviation if you compare isolated quarter to the previous quarter this year. We have a growing operating surplus, so that means we are making good progress in our operations, I would say. Changing value, as PG commented, $0.6 billion, and that's in Q2. We had no net zero changes in Q1, but we had The effect is in the second quarter for 2023. Positive net lettings, we were into that as well. We made some progress in industrial and logistics, but if you look at that isolated, it's negative, and we have good progress in our office lettings. And the previous quarter, we were at 20. Six million, I think, and now we are at 30 for the accumulated period of this year. We have not made so much left in project properties, but if you look at the decrease in possibilities there as well, if we have only 4% in projects, that will naturally go down. Key figures. One of the main focuses now for every property company or every debt dependent company is the interest coverage ratio. And if you look at the rolling 12 months, we are at 2.7. If you look at the isolated quarter, it's 2.4. But you always measure this by four quarters. So that's important to it. take note of but due to the increasing rates interest rates this will go down as long as we can't keep up the good work in operating income to give more support but we hope we have a If you look at the Swedish Riksbank, we are closing the top levels. We are up to the peak levels, I would say. With our strong ratios, our strong balance sheet, and our strong earnings capacity, we will meet this and have a good pace going forward, I would say. We have a good running yield. It's about 3.9% now. Decrease in EPRA NRV is mainly due to the property values decrease and we also had a reporting error due to our IFRS reporting. We have reported two high numbers in profit from associates, and we have updated this retroactively in the report to give the best view, to give a good view of what it should have looked like. And if you look at the isolated effect per share in the quarter is about 1.4 Swedish crowns per share negatively. Net asset value compared to share price over time, they seem to correlate that we have a large deviation now. It's not unique for Platzer. It happens to all of us right now, but over time we will see this tool will have a tightening spread, I would say. So it's a big discount. In our sustainability work, we are keeping up the progress in that sector. We are committing more of our financing to our sustainability work and linking that to our operations and we have made a sustainability linked loan agreement with Handelsbanken in this quarter and that is directly connected to both energy efficiency but also the social responsibility to to contribute to the employment market and contributing to getting people into work. If you follow PLATSERI you saw a higher number in our certified properties in our certified buildings last quarter but that's due to we are awaiting certification on the portfolio that we acquired from our joint venture. So this will go up as soon that is in place. So we are still working on our 100% target there. This is a pie chart course over how our sustainability financing are looking right now. And we have a new slice from this period going forward, and that's the sustainability-linked bank loans. It's at 850 million at the moment, and this will have some changes. Its revolving credit facility is one of the loans there, so this will tend to vary over time. Our loan maturities, it's in the scope of interest. If you look at the gray areas in this chart, it's in the short term, that's our commercial papers. So they will always be short, but we are refinancing our commercial paper program at the levels that we are at, and that's 325 Swedish crowns in millions and we will of course look forward to increase that but we are making good progress in the refinancing and are happy with that for now if you look at the 15-20 months that's our first bond maturity in our own name and it's a bit ahead but We have good possibilities to refinance this in bank funding as well as the upcoming bonds in 18 months time. There are two split into bonds. One is with SFF and the other one is in our own name as well. So we have a good plan to refinance this, and if the capital market isn't where we want it to be, we will finance ourselves with the bank market. With that, I turn over to you, GenPG, and we'll look at the projects.