Samhällsbyggnadsbolaget i Norden AB (publ)

Good morning, everyone, and welcome to today's call. My name is Helena Lindahl, and I'm the Treasury Director at SBB. Today we will walk you through the financial results for the third quarter of 2024. And joining me this morning presenting our results is our CEO, Mr. Leif Synnes, and our Finance Director, Daniel Zellberg. Leif, we'll start with the key financials and the strategic highlights. for the third quarter and an overview of our business units. Daniel will then provide a detailed review of our financial statements, and I'll provide an update on our financing in the end. We will, as always, finish with a summary and Q&A. With that said, I would like to hand over to you, Leif. The floor is yours.

Thank you, Helena. If we start with the most important thing is the development of the core business in SBB. We see that the rental income in the like for like portfolio develops quite well, close to 6% up. We see also that the net operating income develops well with 7.4%. So we are very happy that the properties continue to perform well. And we also work towards better and better financial stability and high equity. And one goal for us is to reduce debt. And we have reduced the debt with 43 billion SEK during the last two years. And we're happy with that. And we'll continue to reduce the debt going forward. We have had some heavy wind when it comes to property valuations. I think the wind is leveling off and then this quarter we had the value decrease of 0.8%. We believe that we will get some tailwind starting from next year. and we get some help with property valuations and help us in our goal to stabilize the SPB group. We have a court case coming up and we're happy to see an end of the discussion about the financial governance. So we will start in January and hopefully we will get a positive result in March and we highly expect that. We strongly believe that the best argument is in our favor. We continue to deliver on the strategy and creating strong subsidiaries and associated companies. And we're very happy with the development in the Corb portfolio. If you look on more details about the achievements on the strategy front, we did some bond exchange which we had a closing in July. And that resulted in 1.6 billion in equity for the shareholders in S&P. And then later we listed SEA Fastheter and we collected 3 billion SEK from the stock market. And that fund will help us to repay the maturing bonds during 2025. They also get long-term financing from Nordic banks and additional credit lines, which will have them to continue performing well from the property side. Nordicus, an associated company of SBB, has been able to borrow 10 to 15 year money in the US bond market with an investment grade rating. They also receive additional trade facilities and also are being able to give dividends to the shareholders in Q4. And they will continue to give dividend in the upcoming years. So we're very positive on the development in Nordicus and also Sveapasteten. And we also have a large ownership in PPI, a Norwegian company. And that company received a triple B minus rating from Fitch with positive outlook. And they have started to acquire properties. And we're very pleased with the performance of that company too. We have a strong project development team in SBB and we are happy to, we have been able to announce a couple of transactions lately and where we have divested properties or will divest properties for around 1 billion SEK and that is elder care and property with the criminal warden as a tenant. We're happy with the strategy execution. We believe that we should, and we want to create a situation with strong companies in the SBB group. We want to create a transparent group structure, and we are gradually achieving that. As I mentioned, we have Nordicus and BPI, two strong companies, and we also have . So we will achieve transparency and also funding options for the group, which is very helpful going forward for SBB. If you look on the community segment, we in total have 45 billion SEK as on property exposure. And some of it is control to 100% via STB and some of it is controlled via strong associated companies. I think the property performance is very good with mostly index-linked revenues and we see a strong development in the like-for-like key figures like rental income and net corporate income. So very stable business. Residential is the part of the company that I think will perform the best in the upcoming year. Due to that, the rent development has been a little bit lower than the inflation in recent years. And over a long period of time, the rents in Sweden for residential grow faster than inflation. So we expect that for the upcoming year, the residential business will beat the revenue growth compared to other segments in the Nordic property market. So we expect a strong development on rental income and strong development of net operating income, and that is very helpful when it comes to property valuations. Education part of the SPB is dominated by the associate company Nordica. And as I said earlier, they have a very strong portfolio from a property point of view. And now they have also a strong position when it comes to funding. with investment-grade funding possibilities and infrastructure rating, and they can borrow for 10 to 15 years. It's quite a strong signal that we combine very strong assets with very long-term funding. It can't be more stable than that, I think. As I mentioned earlier, we had some headwind when it comes to property valuations and things go up and down when it comes to valuations of real estate. If we continue to work hard with improving the rental income and also the net operating income and the EBITDA from the properties, I think at some point of time we will get some tailwind. And I believe that the development in the capital market will help us towards higher property values going forward. We see more or less stable property violations during the last quarter when it comes to yield. The occupancy rate is decreasing slightly, and that is due to projects. We have emptied some properties for us to start new development projects, and we have also just recently finished development of some residential properties, which we are currently leasing out. So most of the drop in occupancy is due to projects, and we will think that the occupancy rate will recover in the upcoming quarters.

Thank you, Leif. Let's go more into detail on the financial statements. On a light for light basis, rental income for the period increased by 5.9%, while net operating income increased by 7.4% compared to the same period last year. In general, both revenues and costs are rising, but revenues are rising more than costs, giving a positive development of net operating income. This is driven by the fact that we have managed to maintain maintenance costs at a low. This achievement is the result of continued dedicated work to deliver on a strategic plan despite the challenging market conditions. which we believe are gradually improving. Together, the income basis provides stability and reduced risk by balancing income streams across the different segments. During the quarter, net operating income continued to grow and improve life for life. At the same time, admin and restructuring expenses are down compared to the same quarter last year. During the period they remained high due to reorganization and legal processes which we did not have in the last year. We have an ambition to reduce those costs by 50% by the end of 2025 and we believe that we're in the right way. There was a decrease in property values, but we are now seeing signs that the decline is leveling off. The decreases of nearly 5.4 billion is due to both realized and unrealized changes. Of these 5.4 billion, 3.2 billion is unrealized, of which only 0.5 billion is in Q3. The value of our property has decreased with 0.8% during the quarter. Rent development and lower capital costs are expected to lead to positive value changes in the long run. Now briefly looking at the balance sheet and the asset side. The large change in property portfolio for the PRD is attributed to transaction with joint ventures and associated company. The acquisitions are entirely attributed to the solution of Coopan and Innovo in the preparation of the IPO of Svea Fattigheter. The changes in other sales is due to structural measures rather than sale of assets. By that, I would now like to hand over to Helena for the financing.