Swedish Logistic Property AB

Hi everyone and welcome to the presentation of the first nine months of 2025 for SLP. My name is Philip Persson and I'm the CEO of the company and with me I have our CFO Matilda Olsson who will later go through the financial development. We will start by looking at some highlights from the period, and then we will go deeper into our property portfolio, and Matilda will conclude by presenting the financial development. We have another strong quarter behind us, and we are very pleased with the development of the company, especially considering the tough market environment in which we have operated in the recent years with the pandemic. the troubled world and recession. We continue to deliver results day by day, and this is evident in the fact that we have a high net operating margin. We have a low central administration cost despite the portfolio having grown significantly and that we have low margins on our loans. Our development work, which goes hand-in-hand with our sustainability work,- is yielding results through a large portion of the certified properties- and a full 97% sustainable financing. Our rental income has increased by 44%. This is partly due to the creation of properties- but also the persistent work carried out within the property management. The profit from property management has increased by 50%, which shows that we managed to retain a large part of the increase in net operating income in our result. The loan-to-value ratio at the end of the period was 48.4%, which is far below our long-term risk limitation of maximum 55%. The interest coverage ratio of 3.1 times is also far from our limitation of 2.5 times. and is a result of our property management, where we constantly work to improve our net operating income, and that we have efficient internal processes and routines, and that we have good dialogue with our five banks. The loan-to-value ratio and the interest ratio, in combination with our strong cash flow, give us a good opportunity to continue to acquire properties with the existing capital structure. Growth in profit from property management per share is 33%, which exceeds our target of 15% by a good margin. The net asset value per share has increased by 9%, which means that we're well on our way to reaching our target of 15%. During the period, we have continued to acquire properties with stable cash flows and good development potential, and have acquired 11 properties with a property value of approximately 2.4 billion Swedish kronor. Looking ahead, we have a strong pipeline and see good opportunities to continue growing with acquisitions of logistic properties in good locations with great development potential. If we briefly look at the company, we own 122 properties in the end of the period with a total property value of approximately 16.4 billion switch crowns and a total area of approximately 1.4 million square meters. Our properties are located in good logistic locations along the major highways and railway junctions. The demand for logistic properties remains high and is confirmed by our occupancy rate of 97%, which has been at high levels for a long period of time. We also have a long average remaining lease period in our lease agreements of approximately 6.7 years, which facilitates the dialogue with our banks regarding financing. We are keeping pace in delivering on our two overall goals to increase the net asset value per share by 15% and also to increase the profit from property management per share of 15%. Matilda will return to this later in the presentation. If we look at transactions, the acquisition of logistic properties with development potential in good location is an important part of our strategy so that we can continue to achieve our financial goals in the future. When we evaluate properties, we primarily look at the location and the potential, but also the property's characteristics in form of ceiling height, number of doors, etc. We like stable tenant, but this is what we place the least importance on, as we place greater importance on the property being attractive on the rental market and appealing to many potential tenants. We also do not focus so much on the direct yield on day one, but rather on what we can do with the property and what value we can create over time. The potential that we look at can be found in different ways, but it's often in form of high operating costs, vacant space, the possibility of extensions and redevelopment, and sometimes also too low rent levels that we can renegotiate. As previously mentioned, we have acquired 11 properties in five separate transactions. and have also agreed to acquire another property in Gothenburg with a 12-year lease agreement that we have not yet taken ownership of. Since the company was formed, we have completed approximately 75 transactions, which is approximately one transaction per month. And we see good opportunities to maintain this pace of acquisitions, both in terms of supply on the market, but also in terms of our financial muscles. If we look at the property portfolio, we have tried to describe the potential that we have by dividing the portfolio into two parts. We have properties in property management, which are properties where we have realized the potential that exists through hard work, which are now fully developed. These properties, which we usually call cash cows, they generate a higher NOI and have a lower vacancy rate, which in turn provides the opportunity for a higher LTV ratio. You can therefore say that these help finance the second part of the portfolio, which is the development properties. The development properties are those properties where there is a potential to increase the NOI by implementing measures that we have usually already identified in the acquisition process. Where they usually are in some ways we can lower the energy costs. We can carry out extensions and renovations and rent out vacant spaces, and in some cases renegotiate the rent if it's not market-based. Today, about half the portfolio in terms of area is development properties. And if we look at the difference in NOI between the two categories, it's approximately 164 crowns per square meter, which means that All other things equal, we can drive development of the NOI in the development properties with about 164 pounds per square meter, which is in half our portfolio. In addition to the potential within the premises that already exist, we also have a lot of building rights on our properties where we can drive additional value. And these building rights are not a land bank. They are usually found when we buy an older property that have generous zoning plans, and we usually get these building rights for free. If we look at our projects, we currently have one major new construction project underway. It's a new construction of 38,000 square meters in Falkenberg to speed. That is going according to plan. In addition to that, we also signed a 10-year lease agreement for a new construction in Malmö of 27,000 square meters to a company called Salix, which is an existing tenant. So we're really pleased to be able to grow with them and to continue to be their landlord. And it shows that we have a good dialogue with our tenants. These major new construction projects are, of course, important to us, but just as important are all the smaller projects that we do daily, where we have now approximately 175 projects running. It's these smaller projects that have largely enabled us to report positive value changes Quarter after quarter. We identify these smaller projects already when we evaluate properties for an acquisition. But also in the very active dialogue we have with the tenants. And in many cases we do the projects together to create win-win situations. And that applies to everything in terms of projects such as lighting, better heating system, better ventilation, solar cell renovations, extensions, etc. During the period, we invested 67 million in energy projects and approximately 164 million in other investments, such as smaller extension projects and renovations. If we look at the return on these projects, it's significantly higher than the required return that we have in the portfolio, which is about 5.9%. When it comes to tenants, we have a broad mix of strong tenants. They represent different categories, but the main categories are food, beverage and transportation. We see a strong demand from our tenants. And what's driving this demand is a number of major trends in the society. And it's, of course, the changing trade patterns where e-commerce continues to increase both in number of packages and in volume. We as consumers have increased demands for circularity and sustainable transports, but also the current situation in the world, which is driving companies to secure their goods flow by moving production and warehousing closer to the domestic market. And then, of course, we have Sweden's increased investment in in the defense and also the membership in NATO, which will mean a larger need for a logistics space. We have a very good collaboration with our tenants and currently have three commercial managers who focus daily on meeting with the tenants to see how they are doing and what needs they have and to be a good partner that makes their everyday life easier. This is a very important part of how we can continue to deliver positive value changes over time. And during the year, we have also conducted an NQI, which is a survey where you investigate how the tenants think of you. And we reached a result of 81, which is a large improvement from our first result of 74 in 2023. And it shows that the close dialogue with the tenants is appreciated. We have a positive net rental during the period of 6.2 million, which is really strong considering our high level of letting ratio. And we are also able to maintain a remaining lease period of 6.7 years, which reduces the risk of the portfolio. We always aim to increase the lease periods instead of trying to squeeze out the lost crown in rent. Our 10 largest tenants stand for about 32% of our rental income, but they also have a large remaining lease period of about 9.1 years, which is also very good in terms of risk. We continue to develop our sustainability work, which goes hand in hand and is a natural part of what we do when we refine all logistic properties that we have. We look at our sustainability work from three different perspectives. We have the planet, the people and the business. And in each of those, we have concrete goals that we monitor quarterly. In 2024, a large number of our goals were achieved early, and therefore, we have communicated and updated sustainability goals in the first quarter of 2025, most of which are aimed at 2027. Among other things, we aim to reduce the share of lettable space with energy classes F and G to a maximum of 5%. of the portfolio by the end of 2027, and have a net zero emissions in the value change by 2040. So with that, I will hand over to you, Matilda.

Thank you, Filip. And as Filip mentioned, we have another strong quarter behind us. So let's start to look at the outcome of our overarching goals. where we had a growth in net asset value per share of 9% during the first nine months of the year. This is well on its way towards the goal of 15% for the full year. And if we look at the profit from property management per share, we had a growth of 33% compared to the same period last year. And I will soon return to what has driven the increase during the period. We continue to have a stable financial position with a loan-to-value ratio of 48%, in relation to our risk limitation of maximum of 55%. And we have an interest coverage ratio for the period of 3.1 times compared to the risk limitation of 2.5 times. So as we see it, a financial situation that gives us great flexibility to be able to take advantage of acquisitions opportunities going forward. Our earnings ability, which is a snapshot of October 1, continues to grow. And we are very proud that we have significantly improved our earnings ability during the quarter for the same property portfolio. If we compare it to a quarter ago, the profit from property management has increased by 20 million kronor in one quarter, both driven by a higher NOI and a lower financing cost. As we like to point out, we see a significantly smaller increase in property costs and administrative costs. This shows the good cost control in the company and also the scalability of our processes as we grow the property portfolio. In our earnings ability, we now have over 900 million in NOI and over 600 million in profit from property management, which of course also affect our cash flow significantly.

If we look at the income statement for the first nine months of the year,