Stendörren Fastigheter AB (publ)

Hello and welcome to today's broadcast with Stendröre, the CEO Erik Ranje and Sifo Per Henrik Karlsson will present the report for the first quarter of 2024. After the presentation, there will be a Q&A, so if you want to ask a question, press star 9 to raise your hand and then star 6 to unmute your microphone when you get the word. With that said, I leave the word to you Erik.

Thank you very much and welcome everyone to this quarter's broadcast. Before we start, I would like to mention a few things about our company, because we may not all know each other without a reason. We are a listed company operating within the logistics and light industry. In some cases, some of our properties have a temporary housing situation, so in some cases we look at driving a half-plan for our properties against the housing end goal, but it is a few cases. We are a company that has a very clustered stock in the growth region of Mälardalen. Even so, a third of our stock is in Stockholm, a third in the upper part of Stockholm and a third in the upper part of Mälardalen. So we are listed in a growing region and above all urban properties in many cases. Our stock is almost finished, the logistics and light industry, about two-thirds, the property value is 12.5 billion, about high-cost properties, direct-cost, about .5% with long deals. We recently signed a deal with the fortification company, a large deal and a relatively long deal, our average return on our lease agreement is 4.2 years. Low rental value in our world is about 50%, total amount 810,000 square meters of rentable surface. We have a building portfolio of 640,000 square meters, and that is part of the growth potential in the stone door, we can grow within a substantial amount. We have been around for about 10 years, we started with a small portfolio that was carved out of another company and was put on the stock market under separate management. have grown στηνally through these companies, almost at the end, during the first years with a warning machine. growth, then me and many other management groups in the company in around 2020. And since then we have accelerated growth by adding some new markets of the same character. We want to be in a business-based state in urban areas, so we have added, driven our development activities much more forward-looking and to take into account the growth potential in our building portfolio. What makes Stendörn interesting from an investor perspective? I have already mentioned some aspects, but we have stability in our cash flow. We are in a high-price segment with long rents with a very diversified guest list. Our largest guest list came from the Swedish Heritage Association on just under 10% and that is obviously a state risk. Then we are down by a few percent like the next largest and third largest guest. So a very diversified guest list and a very diversified and strong cash flow. We are at the same time a company with a strong growth potential. The property is located in the Mälardalen growth region. We develop logistic properties, partly a derivative of e-commerce. So the potential growth in e-commerce drives the demand for our properties and rents. There is a special dynamic in this approach. I mentioned that there is a potential to convert properties from business-based properties to housing. Once, we converted the Lundnäs industrial area to Hammarby Sjöstad. This makes it disappear square meters of business premises in the most urban areas. A reduced supply and an increased demand creates an increase in the price of the underlying supply, in this case rents. So we have a very nice rent and growth potential in the company in the long run. Then within our project portfolio, we can grow within a presently established with about 80 percent by taking back our buildings which are located in a detailed area in good condition. We have a nice project pipeline where many projects are already -the-art. In time with both the production and production, our ongoing project will have about 75 million in driftnet, which is a relevant increase. A little more about the quarter. We have had a good development, I think. We have increased driftnet by 7 percent. Of course, we have had help from the inflation adjustments, where the contractual rights changes we had, in our contractual agreements, we have had a full through. We have not had any rental assets that we want to renegotiate, the indexing clause or the rents for that reason. So we have had a good driftnet development. The rental side, we have had a positive net exchange, which is only about a million, but not less. In this financial situation, it feels good to say that we have a positive net exchange during the quarter. We have renegotiated some agreements. We usually have a larger rental acquisition in conjunction with renegotiations of 20-25 percent, the numbers that many of you have realized since earlier who listen to us. It is lower this quarter, which we also experience, than the financial situation. I can say in general that we feel the financial situation in a slightly different way than before, with the rental losses being low, they are 2.9 million kronor, while the same quarter last year was 2.3 million. So it is not a dramatic effect, but there are a few more withdrawals, a few more contests and a slightly lower rent increase in the same renegotiations, but really no drama. The surplus is still strong at 78 percent, even if it is below a percentage, but we have a slightly increased vacancy and we have a rather expensive quarter behind us. Even if this is measured in the rolling fourth quarter, this is relatively a cost-influenced quarter compared to the Q1 last year, it has been very cold and snowy, which meets our result count. Within our development activity, we have both completed a project of 2,000 square meters, which is a full-scale. We have started a project of just 1,000 square meters. We have a 54,000 square meter ongoing project. We have a little before we knew that we would hire out the fortification office last half a year, eased a little on the gas, since there was an uncertainty, no potential upcoming vacation when COOP leaves us this year. It has made it easier for us to get the time a little on the gas. But now that we have hired out the fortification office and feel safe, we will accelerate our development activity a little. As I said, 54,000 square meters ongoing project, which corresponds to about 75 million crowns in taxes and expenses.

Some financial highlights. Despite the strong water result, our financial goals, the reduction in the capital and the growth of the oil industry are negatively affected by the value of our properties. In the last 12 months, the value of the oil industry has risen to minus 4.8 million. We have a strong resistance to the increase in the value of our properties. About 80% of our rental debt is secured by a growth rate of about .4% per Q1. And our average annual income for our derivatives is 3.4 years. We continue to take care of our balance, as I mentioned earlier in the quarter, so by 2023 we will reduce our capital and market-based financing by about 2.5 billion. We have increased our secure banking financing during the quarter, which is less dependent on more expensive capital and market-based financing. And we have also continued to have strong liquidity, about 650 million per last quarter. We have green and sustainable lending loans. Per Q1 we have 13% green loans and 30% sustainable lending loans.

I would like to mention a little about sustainability as a reference to the fact that we presented the annual report and updated or adjusted our sustainability strategy. But we have had a very strong progress in some of our most important sustainability goals, which are energy consumption, carbon dioxide emissions and the use of renewable energy sources. And that has meant that we have in advance delivered our goals, or at least come so far that we would deliver them in the short term, far before the date is set. So therefore we are looking at our potential for sustainability. We have put our sustainability strategy, but we have reduced carbon dioxide emissions by 30% per square meter and energy consumption by almost 70%. And that has meant that we have in advance put our sustainability strategy. I will not go through all this, but basically it is about increasing the level of ambition, add some sustainability goals, but also increase the measureability. But above all it is about being a long-term goal, that by 2040 carbon dioxide should be neutral in our entire business. And a little bit about what we practically do to achieve our sustainability goals. In our new construction projects we have solar cells. It is about using building materials with significantly lower carbon dioxide emissions, both concrete and asphalt. We certify our properties, we have charging stations, we have worked with biodiversity. Mountain heat in many cases, or spring heat. We have some of our latest completed projects worked with logs instead, which has reduced carbon dioxide emissions significantly. We are working with recycling and have made a number of investments recently through recycling that we are willing to return to. And on the energy side, we are far below the construction rules of the housing industry, often 80% below the requirements of the construction rules of the housing industry. So this is a concrete example of what we are working with in sustainability. Looking a little forward, we feel that we are in a fundamentally different situation now compared to half a year ago. We no longer have a hanging vacant that 9% of NACOP leaves us, but we have rented out to the fortification company on a long, nice agreement, which is a state guest. We have a good project pipeline of over 50,000 square meters, which we would like to accelerate the development of. And we have also secured a good capital cost and a good equity. So we will work a little more forward. It is of course about that our administration takes into account the underlying growth potential that exists in the company's rental growth. We have low vacancies, but we have good rental growth and we have a good surplus degree, but we also feel that we are on a journey there and can work on that. In the development of property, it is about taking care of the 50,000 square meters that can add a drift network of 75 million in the course of color-curing. We have been relatively careful, or we have not really bought a single property during 2023. For the simple reason that it feels like it will be cheaper than we expect tomorrow, but we feel that we are starting to see a bottom-up in the market. There is a lot of capital. Our banks are very willing to finance, so we see that there are good deals to do, both liquidity in the company, but also bank capital to run the business. And there we will focus on building a critical mass on our new markets, i.e. Oslo, Helsingfors, Copenhagen, West Sweden, but also in Stockholm, where for reasons of competition it has been very difficult to buy anything in recent years. And in terms of financing, we will increase our secure banking financing, because it is the cheapest capital source, and we will be able to build a new market. And that was what we had to say. Thank you very

much. Thank you for the presentation. Now we will move on to Q&A. If you call and ask a question, you press up, star 9 to raise your hand, and then star 6 to enjoy the microphone when you call.

Hello, this is from ABJ Sundal Kåljär.

We hear you.

Yes, a first question. You mentioned that there was a small competition in the quarter. Can you tell us something about where it was? And then we noticed that there has been a competition, the small quarters, in the last seven quarters or something. And when you look out over your guests, when do you think the competition will end? Is there anyone who is on board?

I hear a lot of echo here. Can you hear me now? Yes. Great. We have had a number of competitions, but very small. So it is not a single big competition. But generally, it is very difficult to look forward. I don't feel the need for improvement. We know that some of the guests have problems. So if the question is about the light in the tunnel, the light of the tax cuts and so on, the answer is no. We had 2.9 million rent losses compared to 2.3 million last year in the same quarter. And that is low numbers. But we don't feel that it has doubled.

We don't. When you rented out Green Hub to the FFW, you indicated an interest of over 500,000 kronor per meter. How much of that interest do you think you will be able to convert into other properties?

It is not much. The smallest units we had on the market, let me take a step back. The total access was 129,000 square meters. We rented out the whole thing to one. We could also divide it into 8 units, where the smallest was -30,000 square meters. But they are so big, it is difficult to convert into something that is already available. Since the situation is in the north-west of Stockholm, the only place we could convert into is in Almnes, in Södertälje. So very little will be able to convert.

In the quarter, the current tax was on minus 16. It is higher than usual in a one-off. What is the explanation?

The current tax on minus 16? We have to check it out, if it is ok.

Nothing special has happened? It is a one-off,

and that may have to do with the fact that we sold a property out of a property deal. It gives a tax effect. So nothing has been recovered.

You have developed your credit frames with the banks. How do you see the margins?

Can you repeat the question?

You have developed your credit frames with the banks. How do you see the margins?

It is stable. We have been at a 200-point margin in recent years. When it was a bit harder with bank financing, until three months ago, and now we are at the same margin. We have shortened the running times and worked with extension options to mitigate the consequences of shorter running times. I will not be too technical here. The margins are at the same level as they have been for many years. We have allowed the running times to be the draw instead. So it is a bit under 200 points.

Thank you. That was the general question. Thank you.

We will continue with some questions that have been sent in. The first question is, you increase the liquidity in the quarter. Where did the money come from?

It is from the refinancing of properties. During the last few years, we have increased our driftnet. When we have refinanced loans, we have increased the payment of bank debt. That is an important part of our business model. We want to reinvest both our cash flow, which we do not share, to increase the potential of our building portfolio. We create more cash flow as we build, but we also trade higher-level rents, which generates cash flow. We reward that cash flow as it comes in. So it is guaranteed bank debt that the money comes from.

Thank you. You have completed a project during the quarter, which was what?

It is a project in Almä, which we go to the right corner of the picture. When we show the arrow, we have two houses. This is an illustrative picture, but the two houses are completed. One of them was built at about 2000 square meters. When we stopped at this picture, we can also mention that we have completed a house that is a little higher up, which we rented out to ISAB at 11000 square meters. This is a good example of how we work with the development of a total area. When we bought this a few years ago, it was exploited, or there were rentable areas at 27500 square meters, with a fairly high vacancy rate of 35%, with a low rent. When we develop this area, the exploitation increases to 80000 square meters, with hopefully full rent, but at least twice as high rent, we will be able to increase the rent of this area, this property, seven times. So this is a very good example of how we develop the total area. This is located in the vicinity of Södertälje in Almäs.

Thank you very much. And then we have the last question here. What is the average age of your properties, that is, how many years on average have the properties been built or renovated?

I don't have that number. We have both new and old properties. They usually talk about the property sector worth a year, so I get adjusted to understand the renovations. I don't have that number updated, unfortunately.

I understand. But that was the last question here. So I thank you for the presentation and for your time. Thank you for answering the questions. Thank you to everyone who has called in and watched. I wish you a nice weekend when it comes.

Thank you very much.