Stenhus Fastigheter i Norden AB (publ)

Welcome to today's broadcast with Scenius Fastigheter. We will start with a presentation followed by a Q&A. Call in and ask a question. Press star 9 and then star 6 to activate a sound. Or write a script and ask the question via the form. And with that I send the words to you. Here you go with your presentation. Thank you.

My name is Tomas Georgiadis, and today we are pleased to present the details in today's report that we presented a few hours ago. And I also have with me Micke.

Micke Nikander, and it's an extra joy to be able to stand and present. It's almost exactly five years since we noted on First Note, and today we will go through our report, which is actually the best we have ever done.

Let's start with some highlights. This quarter is the quarter with the absolute best administrative state that we have performed so far in these five years in a noted environment, at 114 million kronor, and also during the period of January and September. We have also bought eight properties that will improve our results. We have also sold three properties that are in principle vacant. We have financed our obligation to essentially better conditions. We have also made a public offer and got through it to acquire remaining shares in Bakkeheden, a noted company on Spotlight that we have been a major owner of. Last on the list is our certificate program, which we started in September and are very successful, where we have managed to create a more flexible liquidity in our cash register. And last but not least, the ICR, the interest rate level, which is up in the quarter at 2.4.

If we go into more detail, we can see that the rental income has increased compared to Q3 last year. We ended up at 258 million. The result, as Thomas said, 114 million, is 33% better than last year. And that, as I said, was our best result ever. We have a small positive value change in the property estate at 21 million. The cash flow from the business during the quarter is plus 127, and we have a result after the tax of 108 million. If you look at the graph on the far right, you can see how the administrative result has improved, and we also see the result per outstanding share, where we now end up with a little over 30 euros per quarter. The properties that we acquired during the quarter, eight to a few, were divided into two different portfolios. We bought a large industrial property in Svenjunga, where Star Trading is a tenant with a 20-year lease agreement. We also bought a portfolio from Bilia, where the main car facilities are for the brands Porsche and BMW. We have sold all the properties during the quarter and after the quarter. These are either development properties or project properties. But when we show our sales rate, including all the built square metres, if we clean up for what we have done, and also what we removed in October, the sales rate increases to 94.7%. In the quarter, we also have an ICR of 2.4, and on the rolling 12, it is at 2.15. If we look ahead, our assessment is that we will have rental revenues of just under 1.1 billion. We will have a net profit of about 820 million. We estimate the administrative result to be 465 million, and so on. Epranavet ends at 17.40 per share. We have a net LTV in the quarter at 53.3%. I mentioned the interest rate. Right now we have 140 properties minus the two that we sold after the end of the quarter, so 138. We have an average duration in the portfolio of 6.3 years and a market value of 13.9 billion. If we look at the map, we see that we still have our largest majority in Stockholm, Mälardalen. If we talk a little bit about our business model, it's quite simple. Cash flow, cash flow, cash flow. That's the most important thing we have. We have five parts that will support our cash flow. We have our four business areas. The largest is warehouse, light industry and logistics, which is about 50% of the portfolio. We have public facilities. We have public facilities, healthcare, school, care, around 20. We have trade. We have trade, daily goods trade and low-price trade only. Where we have around 15-20% and the smallest area we have is offices. Our offices are mainly rented out to various public authorities or municipalities, but we call it office because it is a generic office. We will come in a little bit on types of properties later in each segment. The add-on we have is that we work with to develop the properties we have and try to add more building rights to the existing properties. We never build on speculation and we never build if we have shorter than ten years of rent. We continuously work with ESG. It is important for us to do this together with our customers, since our customers are the biggest consumers. We continuously work with Bream to certify our properties. The goal is to have as many as possible, of course, but we take them piece by piece, five to ten pieces at a time. We also work with the tenants to try to reduce the energy consumption in Kåkanen with different measures. It can be anything from heat-saving facilities or recovery of various types. We have certified Typkåkar, we have certified Svanholmen, a large healthcare facility in Stockholm. We have certified Librobäck in Uppsala. Here we have the police as the host. Unfortunately, we can't show a picture of the house, but it is also certified. All of our facilities are certified according to Breeming News Very Good. And on the far right is our major trading place in Norrtälje. If we dive a little deeper into our property value, 56% is a low-cost industry, 15% is trade, as I said earlier. Public properties, or public properties, are 20%, and offices are just under 10%. If we take a look at the level of emissions, we see that the highest level of emissions is 96% of low-cost industrial logistics. The office, like many of our colleagues in the industry, is a bit worse. The level of emissions is 86%. In Publika we have 91%, Handel 88% and in total 93%. This is before the sales we have made, which means that the degree of employment both in the dairy industry and in the office will increase, where we land on an average of 94.7%. If we look at our VOLT 6.3 years, we find just under 44% of our 15 largest tenants, divided by 58 rents. Here we find tenants such as Bilia, Ahlstrom, Santa Maria, Municipality, Police, and more. The net payment in the quarter was unfortunately negative, but we have a positive net payment over the period. Net payment with us is that we always compare the existing stock during the period, that is, we do not add or subtract from the cash that we buy or sell. Here we have a selection of our properties in a respective segment. To the left we see Tyresö Municipality House, located in the centre of Tyresö. A typical office property for our part, where the municipality rents 100%. In the middle, at the top, we see a car facility. In this case, it is Bilia's Mercedes facility in Akalla Kista, also in Stockholm. The largest part of the facility is the so-called aftermarket. They also have a showroom, but the aftermarket is the largest part where you both change tires, service the cars, you have damage and paint workshops with more. On the far right we have a typical example of a public facility, in this case it is in Tumba. Old Tumba Hospital, the largest tenant here is Bordkyrka Municipality, which runs elderly housing. But we also have the Stockholm County Council, which runs both a health center, dental care and a number of other health operators. In the middle to the left, we see a trading place. In this case, it is in Nåttälje. We are in Östra Knupetorg. The tenants here are Villus, Rusta, Normal, Blomsterlandet and Jysk. A typical trading box for our part. The absolute largest administration unit we own is in Finnsletten in Västerås. Here we have tenants such as Ahlström, ABB, Quintus. Längst till höger, Skiftinge, ytterligare en handelsplats. Den här ligger i Eskilstuna. Vi äger tyvärr inte Biltema och inte heller ICA Maxi, men de ligger på samma handelsområde. På den här platsen har vi också ett antal byggrätter som vi kontinuerligt jobbar med att förädla. Vi kommer komma in på ett exempel på vad vi har gjort där. Till vänster, en typisk logistikfastighet. Det här är Sveriges största möbellogistikföretag, bortsett från IKEA. and is located in Tibro. In the middle, down below, we have the passenger car in Skövde. Here we have made a change. Previously, Rockwool rented it, now Humble Group rents it and they mainly manufacture confections in this facility. And to the right we also have one that is aimed at food. Here we have Santa Maria's large property in Kungsbacka. If we look at the project to the left, we see a newly built JEMOFIX box. If you look a little further to the left, you can see that it is in Blomsterlandet. This is in Skiftinge. JEMOFIX has moved in during Q2, and we are now working on starting up the next stage of our development in Skiftinge, where we have about 6,000-7,000 square meters of buildings that are still to be renovated. We are also working on a refurbishment project. To the right we see a finished project that was finished here in October, where we have remodeled Hella Shopping to a big box retail. It is located next door to Ica Maxi in Hella in Västerås. Everyone has an entrance from outside and here we have tenants such as Dressman, Lindex, Dollar Store and Motornet. So, Thomas. Thank you very much.

Yes, and over to some figures and financing. The result that we talked about, 213 million, is Driftnetot. And this comes from the rental revenues that came from the rental guests that Micke presented. Strong rental guests, long contracts. We have a high rate of surplus, which means that Driftnetot is very stable. Together with that, we also have that basically all of our contracts are copy-adjusted. which means an annual increase in rental revenues. If you look down here, you can see the number of shares. We have bought a lot of shares back during the year and also after the end of the quarter, which means that the number of keys per share is also improved. If you look at the income capacity, we see that we are at about 465 million in earnings capacity. If you look at the chart on the bottom left, we see the sentiment analysis, which describes how it can be changed with the changed interest rates and the changed operating net. If you look at the vacancies, as Micke said, they consist of 59 million. And there we have all our vacancies. No other in the balance sheet that is not included as vacancies here. If we look at the financial figures, we have an LTV at 57.8, which is a bit below 60%, so that's where we want it to be, in order to get sufficient return. The net LTV is at 53.3%. Solidity at over 40%. The ICR level is at 2.15, at a rolling 12. A high capital bond at 2.5. What you can also say is that we have a simple capital structure here. We only have bank loan, obligation and Z-program and then ECO in the company. On the balance sheet, the most important post is at the top right. Market value of our properties. We evaluate our properties externally every quarter. We have basically no building rights value in the figures. The building rights are almost written down to zero, but we see them as potential development when we do something with them, like the ones in Skiftinge. If you look at figures that are interesting in the balance sheet, there are also long-term... long-term... Help me. Long-term... To help NRV. 17.4. This is not in the report, but in the report it is clearer. We have the interest rate bond at 1.3 years, which insures part of the financial net. We have come down to a paid interest rate of 3.9% after all the refinances we have made. Capital bond on insured 2.5 years and an ICR on the quarter at 2.4%.

We can also add that the obligation that we refinanced means that our interest rate for the obligation will be halved, and we will see that in Q4.

The stacks to the left show historical reward and market value. And after the years that have passed, it looks very stable and now on the way up. 90% of our financing is at the bank, the four big Swedish banks and some savings banks. 6% is the obligation, 4% is the SET program. What is interesting here on the right is our capital structure, where we have 700 million that will fall in the next 12 months, and the same for the year 1-2. Of these, basically everything is arranged. In the short part, there is a large part of the financing in Bakkeheden, which we have now acquired, will handle the refinancing in December. So there are probably only 150 million left there, which remains as short. And next year, of the 754, there will be 600 million in the obligation that we have refinanced. So in the next two years, we may have around 250-300 million that will be refinanced. Everything else is handled in the long term. Many of our agreements are also with extension options, where we can extend them one year at a time so that they don't get shorter. Down to the left, historical ICR levels, which are now starting to point upwards. And our stock book with us, because I'm one of the big owners, together with my brother, who is also the CEO. And the other companies. Stable owners who support the company. And we have also bought, in the quarter, we had bought about 10 million shares. Now up to 15. So the company owns about 4% of its own shares now. So, that was what we were going to talk about ourselves, and I hope you have some fun questions for us.

Thank you so much for that presentation, and just as we open up for questions, you can call in and ask a question. Press star 9 to raise your hand, and then star 6 to turn on the sound. But I've got a lot of written questions, I'm going to start with them first. Backa Heden has a loan of 459 million SEK with a 2.12% interest rate, which is currently in December. To what interest rate do you expect to be able to refinance this loan?

To significantly better conditions when it comes to the margin. Then there is Stibor and interest bonds there and there today, as you know. But the margin will be significantly better.

And the margin is 190 points. And it's the insurance that makes it as low as 2.12.

And who is the bigger tenant who says up their contract? And how would you see the prospects for renting out the same property again?

The largest tenant who has chosen to sign the contract and move is Willys in Bro. This is due to the fact that a new trading area is being built in Bro and Willys got more well-adjusted space for its store than we could offer them. This is basically positive for us. The trading area will grow by more than 100%. And we are developing the remaining areas in our existing Kåk to trade that adds to the trade area that already exists. Many of our tenants will be left in the house, but we will move around them when the main entrance will be our future front.

And then we have one who is calling in here in the call, who is going to ask a question. So then we have a phone number that ends with 8628. Please, you have the word.

Hi, I'm on ABG, can you hear me? Yes, I had a question about, partly the reward rate is at 53.3, percent, and you have a budget of about 630 million. How do you think about where you realistically want to be at the reward level, given that the goal is under 60%?

Can I take it? Yes, go ahead. We see that to get a discount on your own capital, which is where you want it, you should be between 55 and 60 percent. You shouldn't be above 60 percent, so hopefully you don't want to be there. Now we have a large cash register, which also depends on the fact that we opened our CERT program. And to do that, it requires a certain volume. Therefore, we now have a fairly large spread between our LTV and NetLTV. But the point is that we will be able to use the Z-program to handle the stock market in a better way and be at about 1% of the market value in the stock market. At least.

Yes, at the lowest. Okay, thank you very much. And then on the capital allocation side, can you go into a little more detail on What do you see on the acquisition market and how do you continue to buy back the stock and the project? Do you want to talk about the acquisition?

On the acquisition side, we are constantly looking to do acquisitions. We have ended up in the lucky position that we both have the opportunity to buy back our own shares. We leave out shares and we also have the opportunity to expand our portfolio. We have acquired for... Almost one billion in the last 12 months, but we have also sold a lot. But we sell things that we consider to be too bad, or where we don't think it fits into our portfolio. For example, this office building that was completely empty in Karlstad. It's nothing that really suits us particularly well, and there we managed to find a good solution together with Karlstad kommun, who acquired it.

Regarding the resale program, we have worked with it during the year and will probably continue with it as long as we see that there is a meaning to it in order to create shareholder value.

Let's talk a bit more about the market. We assess that the market for industrial logistics is stable. There is a good demand among our competitors. A lot of transactions have been made. We see the same thing in the trade segment. We are a bit more aggressive on the office side. Thank you very much. That was all from me.

Let's move on with the questions. Congratulations on a good report. The sales amounted to 19.5 million kronor per quarter from a bigger tenant. Which one?

Thank you for your answer. I think I answered it right away. The big tenant who left us was Willys i Bro. Next question. Which region are you going to grow in next? We're actually talking about our banana. And it's in that banana that we want to grow. If you can take a little picture of Svedala, we'll see. Okay. You can't see Sweden all of a sudden. That's interesting. If we look at this, we see the circles. 33%, 22% and 35%. It's like a banana. North, south of Mälaren. North, south of Vättern. North, south of Vänern. And down a little bit with the west coast. That's where we want to grow. And that's also where we have our administrative offices. We have administrative offices in Stockholm. In Västerås, Karlstad and Borås. And it is most natural for us to grow there. If we want to grow outside of this geography, it is above all if we have clean triple net rental guests, which does not require daily supervision in the same way as it can be with more administrative-intensive kooks.

Thank you for that. Let's take a final question here. Are you looking at expansion in the Baltic countries or Poland? Since it has become one of Europe's growth engines, it can be seen as an interesting market.

If we start with Balticum, Balticum is difficult, we think. It is a very loose transaction market. Sweden is one of the largest transaction markets in Europe. To enter a market where there is a loose transaction market, where you do not know if you can step out, if you want to step out, that is probably not for us. When it comes to Poland, it is located outside the Nordic countries, and we do not see that we are going to enter it directly in the current situation.

Thank you for that. And with that, we end today's broadcast and also Question Time. Thank you both for taking the time to come to us today, and good luck in the future. Thank you to everyone who listened.

And as I said, we came with snow this year, so you have to remember.

Thank you all. Thank you for listening.