Swedish Logistic Property AB

Then we welcome you to the presentation for the first nine months of 2024 for Swedish Logistic Property. My name is Tommy Åstrand and I'm the CEO of the company. And by my side, I have Matilda Olsson, who is the CFO of the company. She will present the financial development later in the presentation. So we have an agenda with some highlights from the period. And then before we deep dive into the property portfolio and of course, the financial development. We have had yet another very good quarter behind us. We are very pleased with the development of the company, not least considering the challenging macro environment we're living in with still high interest rates and recession. We continue to deliver in the daily work, both within portfolio management, but also within other parts of the company, such as financing and sustainability. We can see that in property costs that in principle on the same level as of the same period last year, even though we have a substantial bigger portfolio now. Central administration is still on the same level. We have even lower margins on our loans. Our green transition delivers in big increases in certifications of our properties from 25 percent of the portfolio in the beginning of the year to 54 percent at the end of the third quarter and also a big increase in sustainable financing from 53 percent in the beginning of the year to today's 75 percent. We increase our rental income with 20 percent, of course, partly explained by acquisitions, but also CPI of six and a half percent. And of course, the daily work within the property management, we increase our property profit from property management with 26 percent, despite the increasing interest costs for the state's stable part, we have managed to keep big parts of the increase in our result. Our loan to value is 39 percent, way below our long term level of maximum 55 percent, of course, affected of the equity raise that we did during the third quarter. We took in one point one billion with a premium of 30 percent in .A.V. The interest was very high from both current and new investors and also big interest from foreign investors. We have growth in .A.V. with 13 percent, which is even better than our goal of 15 percent per year. We have a strong interest coverage ratio of three point one times, which is an effect of our strong work within property management, good negotiations with our banks and effective processes within the company. We continue to acquire properties with the possibility to create value within. We have taken ownership of nine properties during the period, keeping our pace of one transaction a month in average, and we see continued opportunities to grow with new acquisitions of logistic properties with development potential. We have successively grown the portfolio. We are now at one hundred and seven properties with a property value of approximately two twelve point five billion. We see continued big demands for the logistics area. Our occupancy rate is 96 percent up one percent from Q2. We have a long remaining tenancy period of six years, which of course is good when talking to when talking three years financing with the banks. We deliver on our two overarching goals of growth of .A.V. per share with 15 percent and increased results in property management per share with 15 percent per year, which Matilda will come back to later in the presentation. An important part of the strategy is acquisitions of logistic properties with development potential. We are not focusing on the day one yield instead of what we can do with the properties to create value, fill up existing vacancies, lower energy costs, possibilities for add on projects and so on. We have continued to do acquisitions during 2024 and we have taken possession of nine properties during the period, the same pace since the last five years, one transaction a month on an average. As I said before, acquisitions of logistic properties with development potential is an important part to fulfill our overarching goals. And we are trying to describe the potential we have by dividing our portfolio into two parts, the property management portfolio part, property that that are fully developed. There are cash cows that generate a higher NOI and in general a higher loan to value and in some way finance our development properties. And the other part, the development portfolio, there we see continued potential where we can increase the NOI, we can lower the vacancy, we can lower the energy cost through investments in energy projects, add on projects that could be low existing rents and so on. If you look at the difference between the NOI in the two categories, there's a difference of around 160 Swedish krona per square meters in higher NOI in the management portfolio. And we have approximately 50% left to develop of the portfolio. We have ongoing projects, which I will come back to a little bit later, and then we have a potential as well in our building rights. We can build approximately 200,000 square meters new production with an estimated investment cost of 2.4 billions. And this is not building rights that we have bought standalone. They are an essential part of the old properties that we have bought. So we haven't paid anything to get to acquire them. As of Q3, we have four bigger projects ongoing with a total investments of 1.2 billion, where approximately 200 million remains to invest. All the projects have a 100% letting ratio. The bigger investment projects are, of course, very important for us, but at least as important are all of the minor projects that we're doing on a daily basis. These are an important explanation to how we can deliver positive investments in the value changes in our properties quarter after quarter. We are very active with our teams to identify all of these development projects, such as energy investments, conversions, add-on projects, solar cells, batteries, and so on. We have invested 61 million during the first nine months in energy projects and 200 in other investments as add-on projects and conversions. We have a broad and strong mix of tenants. They represent various categories. Major categories within our portfolios are food, beverage, and transportation. We see a continued strong demand from our tenants. We have two commercial managers that on a daily basis focus on our tenants, meeting with them, discussing regarding investments in energy projects, add-on projects, and so forth. This is a big part of how we can continue to deliver positive value changes quarter after quarter. We have a strong net rental income in the period of 24 million and 2 million in the last quarter. We as our banks love long cash flow. We have six years remaining tenancy period. It's extra safe that our 10 biggest tenants have close to nine years in duration. Ninety-nine percent of the rental contracts are linked to KPI, which means that we have gotten 20 percent rent increases during the last two years. We continue to take big steps in our sustainability work. During the period, we have delivered on yet two of our sustainability goals. We have reached 55 percent, 54 percent certified area, and 75 percent sustainable financing. Earlier during the period, we have already reached our goals of installed effects of solar cells and charging infrastructure. Related to this high goal fulfillment before schedule, we will set new goals coming into 2025, which we will come back with later. As already stated, here we see that we are way before time schedule and have reached goals of at least 70 percent sustainable financing before time schedule. We are on 75 percent at the end of the third quarter. We are of course not satisfied with this level and we will continue to work with this on a daily basis going forward as well. Then I will leave over to you, Natilda.

Thank you. We continue to work towards the same overarching goals, which we can see on the left in the picture. During the period, the net asset value per share has increased by 13 percent, which means that we are very well on our way towards our goal of 15 percent for the whole year. The growth in profit from property management per share amounts to 7 percent compared to the same period last year. Here you have to bear in mind that we increased the number of shares in 2023 with the two share issues that we heard out for a total of 1.1 billion. That the issue proceeds have mostly been used for the acquisition of project properties where the projects are still ongoing. This means that we don't see any profit from this until the turn of the year when the projects are finished. On the right in the picture we have the result of our financial risk limitation, which shows a continued stable financial position. The loan to value ratio decreased during the period as a result of the new share issue in September and amounted to 39 percent at the end of September compared to the risk limitation of a maximum of 55 percent. The equity to asset ratio amounted to 49 percent compared to the risk limitation of minimum 40. And we have a continued strong interest coverage ratio of 3.1 times compared to the 2.5 times that we have as a risk limitation. The earnings ability continues to increase and the current earnings ability is a snapshot of our property portfolio on a 12-month basis as of October 1st. This picture excludes the major ongoing projects that currently have an operating income of close to 80 million and the majority will be completed around the turn of the year. Compared to one year ago the rental income increased by roughly 140 million. Which is an increase of 24 percent. This is mainly due to the acquisition of new properties and completion of new construction and extension projects but also letting off vacant spaces and the CPI indexation of 6.5 percent this year. The property costs are almost at the same level and increased by 4 million compared to one year ago and the cost has increased as a result of the acquisition of new properties but have been countered by our investing in developing the existing properties and especially in energy saving projects. With the new share issue in September the cash is large at the end of the period which brings financial income to our earnings ability. Looking at the income statement and the outcome for the first nine months of the year the rental income increased by 20 percent compared to previous year. This is mainly as a result of having a larger property portfolio but also as a result of move-ins in new construction and extension projects and letting off previous vacant spaces. The net operating income for the period amounted to 445 million which is an increase by 23 percent compared to the previous year. And looking at the comparable holdings the NOI has increased by 8 percent compared to previous year which shows that we successfully develop and optimize the NOI of the properties. It's also very pleasing that the profit from property management is increasing even more than the NOI and we see an increase of 26 percent compared to previous year. The cost for property administration and central administration are at the same level as last year even though we continue to grow the property portfolio which shows our internal efficiency and cost awareness. The higher financial costs are primarily attributable to the new lending because we have a larger property portfolio compared to a year ago but we also have a lower average interest rates than last year. Like previous quarters all of the properties have been valued externally and we report positive value changes in our investment properties of 289 million of which 72 in the latest quarter. We have not yet reported negative value changes in any single quarter. This is even though the yield requirement has increased from 5.2 to 5.9 percent over a two year period. The positive value changes comes from new lettings and renegotiations of contracts but also from new construction projects, energy saving projects and deduction for the first tax on acquisitions. At the end of September the property value amounted to 12.5 billion Swedish kronor. The increase since the turn of the year comes from about 1 billion from acquisitions and investment in existing property holding of approximately 1.1 billion and also the unrealized value changes of about 300 million. If we look at our major ongoing projects there's about 200 million remains to be invested in these which are not reflected in the property value at the end of September. With the new share issue in September we end the period with a cash balance of approximately 1 billion which we will use to finance new investment in property acquisitions and new construction projects so that we can continue to create growth in profits from property management and asset value per share. At the end of the period the net asset value per share amounted to 28.64 kronor which corresponds to an increase of 13 percent in the nine months during this year. We continue to work only with secured bank financing with Nordic banks and during the quarter we have started to work with an additional bank and look very positively at continuing to grow with secured bank financing on attractive terms going forward. During the quarter we have refinanced approximately 25 percent for total loan portfolio in advance. It's loans that would have matured in the second quarter of 2025 that now runs for a further three years. This means that we have extended our capital tie-up which now amounts to two years and that we have lowered our average credit margin which now amounts to 1.47 compared to 1.5 percent quarter ago. Looking at our fixed interest period now amounts to 2.7 years and our average interest rate is at 3.8 percent. This is 30 basis points lower than a quarter ago due to falling market rates and also the lower margins. We continue to increase our share of sustainable financing which now amounts to 75 percent. It shows our pace in the mentally certifying and energy optimizing at our properties and the sustainable loans means that we get a discount on the margin between five and ten points.

At

the end of the period our interest bearing liabilities amounted to about 5.9 billion and in addition to this loan volume we have about 1 billion in cash and 1 billion in granted property and facility credits and this gives us a very good conditions to continue the acquisition and investments going

forward. And here we

see SOP's shareholders as of the end of September. Both the number of shares and the number of owners has increased during the quarter with the new share issue of 1.1 billion. The new share issue was carried out at a premium of approximately 30 percent compared to the net asset value per share at the end of June and there was a great interest from a range of both Swedish and international existing and new institutional investors. And with that I'll hand it over to you again Tommy for a

short summary. Thanks for that Matilda. So to summarize, SOP stands very strong. We have a good result. We see a high demand for logistic areas which proven by high and improving economic letting ratio and high net rental income. We have a strong financial position with 39 percent low to value. Our banks are wide open to continue to grow with us. We are positive to be able to continue our journey with growing SOP with logistic properties with development potential. That was all for us. Please use our info mail for questions.