Platzer Fastigheter Holding AB (publ)

Welcome to our presentation, our Q3 report. Fredrik and I will take you through this and let me start with taking you through the highlights of the report. It is well known that our sector is weighted by raising interest rates and it is even more important that our day-to-day operations and lettings are delivering. i'm very pleased to announce that we have a note of high record rental volume in our investment properties of 117 million swedish crown so far this year our net letting comes to 8 million swedish crowns and that is of course the balance between newly signed leases and termination of agreements and this is very positive we have been continuously delivering this positive result quarter after quarter for a long period of time now. It helps us growing our values. In renegotiated agreements, we achieve a rental increase of 15% and that is well exceeding the CPI level. And that means also that our investment portfolio, we have managed to double the net letting compared to the same period last year. So I want to put this into the right context, why I'm mentioning the importance of our letting in our investment portfolio. As Platzer, we are focusing only on Gothenburg region, and we know this market very well. As a result of large volumes of new office space coming out the last year onto the market, about 175,000 square meters, this new office space has been almost fully let. But we also experience a clear flight to quality, causing higher vacancy rates in older existing office space. We are now reaching 11% on the market. Hence, it's for us really important to highlight the achievement as our letting in our investment portfolio and existing stock is reaching these really, really good volumes. Our ability to fill the vacancies are crucial for our delivery. So we are really, really pleased. We also do experience a good demand for offices and its industry and logistics in our region, which we understand might stand out in comparison to Sweden as a whole. However, we are humble that this might change going forward, depending on how the global economic situation develops going forward. We are still... Sorry, we are still closing as many lease agreements this period as last year, so we don't really see any change. But of course, should we get a dip in the demand due to, for example, that we have an unemployment rate that goes up, that will of course also affect our operations. So our operating surplus in this period is up 15%. And we are delivering the highest operating surplus so far of 840 million Swedish crown compared to 709 last year. On rolling 12 months, the operating surplus reaches as much as 1 billion and 44 million crowns. The largest effect we get from our newly completed project Kineum and the tenants that have taken occupation there together with the the purchase of third logistic parks so this shows that we are well performing in the core operations and that's also giving us the ability to navigate and grow despite how financial costs In our market valuation process of our portfolio this quarter, we have continued to adjust our portfolio values and we have taken into account an increase of yield of nine basis points on the total. We have now an average valuation yield in our portfolio of 4.94%. If we isolate the office stock, which is approximately 75% of our portfolio, we have an increase of 11 basis point and an average of 4.8 percent yield the adjustments compared to q2 2022 when our properties was valued at the lowest yield is approximately 50 points up compared to now There has really not been any comparable recorded office transaction on the Gothenburg market, especially not the office market. So hence there is a little bit difficulties to find evidence in the market yield at the moment. We are a bank financed, traditional bank financed operations and our long-term owners gives us a solid platform for further growth. in this market environment and we also believe that the the diversification in our main segments of offices and industry and logistics has an equalizing effect on our stock and customer demand so as i mentioned our focus is gothenburg so why gothenburg Well, our region is experiencing a stronger economic resistance than Sweden overall. The regional GDP growth in Gothenburg has in fact been 65% the last 10 years, and that's well exceeded the Eurozone, which has an average of about 13. So there is something special happening here. Well, the region has, of course, the largest export in Sweden of about 350 billion Swedish crowns. and it also holds Scandinavia's largest port, which is still experiencing an increase in volumes and market shares. Gothenburg has also got the lowest unemployment rate in the entire Sweden. It's now 5.5. But why does then Gothenburg come out stronger? Most likely, one reason is that Gothenburg is Sweden's innovation powerhouse, and here a lot happens simultaneously. You find an extensive variety of trade and industry spanning over more than 750 different industries. We have leading competences in life science, automotive, electrification, logistics and city development to mention some. But it's also one of Europe's most innovative regions. We have 34 of Sweden's private investment in R&D is actually placed in this region. Gothenburg is also the heart of the green industry transformation. Two weeks ago, we had the groundbreaking of Novo. That is the battery plant that Northvolt and Volvo is investing in. It's an investment of 30 billion Swedish crowns. Polestar has announced that they will establish their worldwide headquarters and development center here in central Gothenburg. And only these two investments result in 8,000 new jobs. However, having laid out the specifics of this region, we are, of course, humble what the future holds. Gothenburg economics activity has weakened. We are now on the level that is between normal and recession. And the latest statistics from National Institute of Economics shows a weaker economy on on all but how far this economy will dip and how for how long it of course depends on what margins the households have the global demand and how that affects our strong export industry the unemployment rate and exchange rate and also of course the ability to match high knowledge work competencies that is really sought after in this region obviously this global situation will affect our business and the importance of cost control prioritizing the right project investments and customer focus that is really essential for our business going forward if we then look at our client base we have a solid base of clients our top 10 tenants are listed to the left and they are contributing with 36% of our revenues. 22% of our revenues are from public tenants. And speaking of our tenants, I will now hand over to Fredrik that will guide us through our income statement and overall results of this period.

Thank you, Johanna. We'll start with the income statement and begin from the top. so to speak. And if you look at the rental income development for the period, if you look at Q1 until Q3 for this year, compared to last year, we have an increase of 16%. And as Johanna mentioned earlier, the main drivers to that is of course the occupancy in Kineum when we finished up that project. And then as well as the transaction that we made in the mid-year, in June, 30th of June, of Söder Logistics Park. Looking down to the operating surplus, we have an increase of 15%, which is almost in level with the rental income development, if you compare this period compared to last year. But we have some one-off effects that is impacting that. We had a positive effect last... No, that was last quarter. But for this period, we have a one-off effect of about 20 million Swedish crowns. And that's driven from electricity support and transaction costs And then we have as well, for the period, we have some new costs connected to the occupancy in the project and the transaction as well. Of course, it's not only income that will come with it. We have some increasing costs as well. But the main driver that we have at the same development of the operating surplus is some one-off effects that we have to take into account. Going one step below income from property management, we have a decrease if you compare it to last year and the main impacting driver, as we all know, is the rents, the financial costs that are increasing due to market rents. And then we have the factor in our case, the transaction we haven't increased in debt volume if you compare this quarter to the last quarter of about 1.3 million Swedish crowns and that if you look quarter on quarter on the financial net we have an increase of 30 million and Almost 20 million of that is due to new debt, and the rest of that is driven by interest rates. Further down, we have a change in value of properties, unrealized value changes. And as Hanna was mentioning, we have a yield decompression to manage. We have a negative effect of about 1.3 billion Swedish crowns for this period and we have some mitigating effects what we do in our day-to-day basis in our property management that will sum up in some increased cash flows and then we have the project development pipelines that are mitigating that so for the period they are down 1.1 billion Swedish crowns. Looking into the earnings capacity by this end of period, this is signed leases looking ahead and leases that will be within a six-month period that we take into account in the earnings capacity. And it's down somewhat compared to last quarter, And how does that connect to the net letting? That's because all of the net lettings doesn't directly go into the earnings capacity. If you look in our report, we also have a section, a chart, where we show other lease agreements that will come into play after April 1st. the periods that starts with which starts after first of april and if you combine those two we have a zero net negative effect in the earnest capacity if you look at all in all but but the the negative effect in the current earnest capacity that's vacated premises and Some of it is from our own projects in Södra and Gordon, where we are moving tenants, and some of it is due to terminated leases. The net letting chart. In the isolated quarter, we have a positive effect of 8 million. Johanna mentioned that we have a positive effect in our investment properties, our standing assets, so to speak, of 20 million. That's twice the amount of net letting in our investment properties compared to the same period last year, which is, if you look at the strategic essence of this, we have fewer projects to occupy and we are really keen on getting the cash flow as soon as possible so we we will occupy our our standing assets as much as possible and this is a really good receipt of that and the the bulk volume the is the gross volume is 170 million in in in lettings in our investment properties but but we also have some project lettings so so for for the whole period we amount to 38 million in net liftings. I mentioned changing value of 1.1 billion Swedish crowns that we have in our income statement, but that's not all factors that impact our balance sheet. We also have a project pipeline and investments in our ongoing projects and our existing properties that amounts to 1 billion and then we have the the property transaction that we made 30th of june of 1.5 billion so all in all our closing balance in our value of properties is at 28.4 billion swedish crowns This graph shows that we are still growing. We are growing in both our business areas and we still deliver growth in market value. Of course, market value by itself isn't the whole story. We will deliver our net asset value over time. As you can see on the chart shown, the market appreciation through the share price connected to the net asset value doesn't always meet, but over time they seem to correlate. I will not draw any conclusions on that, but sometimes the market is is drawing the wrong conclusions but i i'm not here to judge but you can see we have a discrepancy now and over time they will meet again i would say we have a decrease now since the year end of seven percent in our net asset value key figures what's what's top of mind uh interest coverage ratio is on all all dashboards now i would say and we have a decreasing interest coverage ratio driven by the the the hike in interest rates and of course our debt portfolio so we are now for for the period at a level of 2.2 times and if you look at the rolling four quarters we are at 2.3 uh that's uh that's above our financial target we have a perimeter that is 2.0 and we are aiming to keeping that at bay but it's well above any covenants that we have but of course with the interest rate hikes that we are facing of course this is a challenge we are keeping our financial targets at at bay all in all our loan to value is at 49 and our target is to be below 50 percent over time and then there's the issue of refinancing and we are a traditional company and we have 80 of our financing is dependent on our bank relations and 20 of the capital markets in the graph on your left the you see the gray the gray shaded uh short and part of the short is our capital market financing in the short term it's our commercial paper program that we are keeping up with the market conditions and refinance ourselves as far as possible. And then we have in the column that is 12 to 15 months, that's an MTN. It's a bond in our own name, unsecured bond. The next period is two bonds actually that is secured in the period of 15 to 18 months, secured bonds through SFF. But we have those within good grasp of our refinancing plan going forward. We have credit facilities of 2.1 billion in our books, but we will mitigate this refinancing without any great hassle. We are still trying to develop our sustainability linking in our financing. We are now at 66%. We have had a higher ratio, but due to increasing terms and conditions. We have gone below 70%, but we are working on making progress at that going forward. But sustainability is an important key factor for us. I will now hand over to Johanna to keep you updated on where we stand right now.

Platzer was one of the first companies in Sweden to receive the green label Nasdaq Green Equity Destination two years ago and to qualify, more of 50% of sales and the majority of investments must be made in green activities. And we are, of course, renewing the green label each year and through an audit and the results of this latest audit, we can see that we have a green classification in 90% of the rental income 89% of the operations and 91% of the investment, which we are really glad for. So on this slide, we present three different areas from our sustainability work. We have the energy consumption, which we have been focusing on for many years. And compared with the same period last year, we have decreased our energy consumption with 5.8%. have continued to invest in further solar plants and we have now 17 of them and with an installed effect of 3750 kilowatts um when it comes to co2 emissions we're looking at scope one and two and there we also see a reduction the green leases that we have now signed we have increased further to 63 so we have a positive result and progress in all three areas both in relation to last year and also during the last 10 year period i would like to summarize what we identify as our success factors we are experts of commercial property in gothenburg Our customer focus is actually important and this current result in this report shows that we are on to this task. Our growth rests on three pillars. Our ability to create an increased operating surplus from our investment properties. Of course, the strategic property transactions and project development. We also find that we have a strength in our diversification of offices and industry and logistics. The tenants are different. They have different drive and business logic which has got a balancing effect on our business. Our committed and skilled employees with the ability to create these results we are very proud of and our financial strength as we described before with 80% bank financed and strong support from solid long-term owners. Now that I have joined as the company's CEO, I look forward to develop this business further together with my committed and skilled team. I truly believe in our strategy of district development to reach strong long-term results. And under my leadership, we will continue to be dedicated to our customers and also bringing our sustainability work into our core business this is to further enhance our businesses and our results and i'm convinced that these strategies will lead us to further success and with that we would like to open up for q and a's