Samhällsbyggnadsbolaget i Norden AB (publ)

Good morning everyone and very welcome to our year-end 2024 conference call for SBB. Thank you very much for taking the time and listening in. With me in the room I have today's presenters, Leif Zinnes, CEO, who will guide you through the last quarter and last year's events and will comment a lot about the strategy going forward. Daniel Telberg, finance director, will guide you through the numbers. And lastly, me, myself, Helena Lindahl, treasury director, will go through the funding with you. The presentation will, as always, be followed by a short Q&A session at the end. So with that said, Leif, please go ahead.

Thank you, Helena. I'm glad to see that the rental growth is there. We increased the rent by 5.5% in the like-for-like portfolio. And when we look on the net operating income, it increased by 7% like-for-like, which is very good. And it illustrates the strong portfolio that SBB has. We still have financial stability and liquidity as our core focus. And we try to reduce the debt as much as possible in order to strengthen the company. And in the last 24 months, we have reduced the debt by 32 billion SEK. We feel that the valuations on the properties are stabilizing and we are hopeful that we will get some tailwind in 2025 with some hopefully write-off on the property side, which will be very helpful. We continue to deliver on the long-term strategy when we see improvements in how we structure the company. In 2024 we listed Sveafallstater, which is now the largest listed pure residential company in Sweden. We are very happy about that and we see a good progress in Sveafallstater and also in all of the residential assets we have in the FPV group. We have delivered some development gains. We have developed properties in Västerås and Flen, and we have sold them or plan to agree to sell them for 1.4 billion, which is very good and illustrates also the good stuff we have here in SBB that deliver projects with good gains. We continue with the focus to make SBB more transparent. And one part of that is to dissolve joint ventures and reduce the number of associated companies. So we have dissolved joint venture for the amount of 20 billion SEK during the year. And if you look on the community properties, first let me tell you about the completed steps that we have done here in SPB. In the educational properties, we feel that Nordicus is now fully structured and it's a very good company with access to cheap and long-term funding. We see that the residential, we have taken care of that with the IPO of Sveafasteter and also the restructuring of the debt in Sveafasteter. And also we have the PPI, the public property investing in Norway, which is the associated company in SBB, which have received a BBB rating and have funded itself with Eurobonds. And the remaining segments is the community properties, which still is on the to-do list for us. And we will put focus on that part of the SBB group from now on with the aim to lower the vacancies, increase the rent level and add lefting areas. I think the properties perform well. But I think that they can perform even better if you put a little bit more effort into the operation. So we will add resources, particularly with the value add properties that we have in SPB. So from an operational standpoint, we will divide the portfolio into two main areas. One is the cash flow or the pure cash flow properties. And then we have a smaller part with properties that need some development. And then we will put in more resources to work with the value add projects that we have. And roughly you can say that the cash flow properties is 90% and the value-add properties is 10% of the holdings. And if we look on the big picture on the group structure, we believe that we are transforming ourselves to a very transparent group with three main areas. the community properties, the residential properties and the educational properties. And the aim is of course to make it easier for you guys to understand SBB and in the end it will lead to more funding options for us. If you dig into the community section, it's a leading and scalable platform. And the largest asset in the community property portfolio is elderly care. Long term rental agreements with publicly financed tenants, making the operations very stable. And the amount of assets is 44 billion SEK. And the residential mainly consists of the holdings we have in Svea Fasteter. But we also have a joint venture together with Morgan Stanley. And then we have a couple of billion that we own 100%. And I think we know when we have put most of the assets into Sveafastheter, we can benefit from economies of scale and also a pure focus for the management in the residential part of the business to increase the rents and reduce the costs. So I think we will see improving net operating income from the residential properties in 2005 and onwards, which will be very helpful. I will touch upon the educational part of the company, which is co-owned with Brookfield, which brings a lot of expertise on how to manage and grow infrastructure properties. and also helps us with getting long-term infrastructure financing. So Nordicus has now one of the safest asset pools combined with very safe long-term funding, making the risk in the Nordicus holdings very low. If you look on the occupancy, it have decreased a little bit during 2024. One part of that is that we have deconsolidated some part of the operations, which is stable in the joint ventures together with Casa Lake. So if we would include the joint ventures with Goselec into the figures, there is no material drop in occupancy rate. So the operations in SPB is stable.

Thank you Leif. So let's go more into detail on the financial statements. On a like-for-like basis, rental income for the full year increased by 5.5% compared to 2023. Having costs under control with low maintenance costs provides a strong net operating income growth of 7.1%. This achievement is the result of our continued dedicated work to deliver on a strategic plan. For the full year, 63% of the consolidated net operating income was generated from community, but also with a strong contribution from residential through Svea Fastigheter. During the quarter, net operating income continued to grow strong and improved like for like with almost 10%. Administration and restructuring expense remains high during the quarter driven by legal process but also additional organizational costs in Svea Fastigheter being the first quarter as a listed company. The ambition for reducing admin costs by 50% by the end of 2025 remains and the work is on track. Changes in property value was almost flat compared to 3 billion down in Q4 prior year, where the slightly negative movement for the quarter is primarily driven by realized changes in value from final settlements of previous transactions. Improvements of results from associated companies and joint ventures are mainly driven by changes of property values leveling off in JVs as well. Net interest improves compared to previous year due to contributions from on lending to joint ventures, while the shift in other financial items were affected by FX differences. During the year, consolidated property portfolio has decreased by 20 billion, primarily driven by properties being deconsolidated into established joint ventures. During the quarter, 1.8 billion of acquisition has been reported due to acquiring stakes from J-Way partners while having a very small cash flow effect. Goodwill was impaired in the third quarter by 1.4 billion but kept intact in Q4 due to stronger market conditions. Reducing depth and improved balance sheet remains our key priority. I will hand over to Helena to elaborate on that further.