Wallenstam AB (publ)

to the conference call for the fourth quarter and a summary of 2025 for Wallenstam. During December, we vacated the entire Sergelskrapan, which we took over in February this year. The only remaining tenants are now on the ground floor since the middle of December and below street level, where the space arena is located. You can see this on the picture. Various types of events have been held here during the year by, for example, Spotify, Annual General Meetings and the Gates Foundation. And it is operated by the Stureplan Group. This is also where we recorded our year-end film for the fourth quarter this year, Me and Hans. To summarize some of the key activities we have carried out as a company during 2025. We have invested a total of 2.2 billion kronor in new construction and redevelopment. We have started 394 apartments and completed 686 apartments. So now we currently have just over 1000 apartments under construction. The demand for our rental apartments remains strong, which can be seen in the 77,000 new applicants who joined our own housing queue during the year. bringing the total to 330 000 people in our own queue. It has also been an intensive year in terms of transactions, both acquisitions and divestments, with a total volume of 5.4 billion kronor. Part of the money has been used to repurchase our discounted share, In total we have repurchased 17 million shares during the year 2025. So now we have 22 million shares. So what has happened during this fourth and last quarter of the year? We divested our newly produced property Nacka Grace on the 34th October to the Folkestone Group and KPA Pension. And as I mentioned, we continued to repurchase our own shares also during the last quarter. In the fourth quarter, we repurchased 3 million shares, which are trading at a discount of approximately 30%. We repurchased shares at an average price, including broker fees, of 45 kronor 0.67 öre per share. And our net asset value as of last December amounts to 62.1 kronor. Here, as usual, is an overview showing our company in summarized key figures. We have 210 investment properties with a value of 64 billion kronor, and including ongoing and future projects and land, the total property value amounts to 70 billion kronor. As before, half our rental income comes from residential properties and the other half from commercial properties, where offices account for the largest share. We continue to have a strong economic occupancy rate of 97%, with residential units at 100% and 90% for our total commercial space. where Gothenburg is the largest market at 94% occupancy rate. This reflects a stable demand for our properties. In other words, we continue to see solid and consistent demand for our space or premises. In 2025, we developed a climate roadmap that outlines the prioritized actions across all three emission scopes. This is our three climate goals, scope one, two and three. So what have we done with the scopes? The first one We have a minus of 39% for the Scope 1 and our key initiatives focus on replacing refrigerants with lower impact alternatives combined with regular inspections and installation of leak detection systems. During the year, we experienced fewer leakages, which has had a substantial positive effect on our Scope 1 emissions, which you can see. Regarding Scoop 2, we have minus 45% and the goal is 50%. The reduction in Scoop 2 emissions is driven by continuous operational optimization and the results of larger efficiency projects underway. In addition, district heating providers have lowered their emission factors, which further strengthens our Scoop 2 performance. And scope three, where you find our new construction, we have a minus of 36%. And there has been several drivers contributed to the reduction. Our ambition to reduce climate impacts is now firmly embedded from the earlier stages of our development projects. Material selection plays an important role. We have increased evaluating and selecting products, enabling more informed and lower emission choices. Concrete is also a key component. This year we have used only Swedish produced concrete, resulting in shorter transport distances and thereby reduced emissions. We also prioritize concrete produced with a lower carbon footprint. And as I mentioned on the previous slide, we continue to work actively to reduce the energy consumption across our portfolio. Today, 67% of our properties measured by rental value are classified in energy classes A to C, up from 62% last year. And we keep on trying to get even more A to C. We also report our EU taxonomy alignment voluntarily. Looking at the share of our revenue that meets the taxonomy criteria, 100% of our wind power revenue is aligned and 51% of the revenue from our properties is aligned. So in total, this results in 53% taxonomy aligned revenues, an improvement of 5 percentage points year on year. So let's move on to the income statement and start with our net operating income which increased by 5% to 2.3 billion. This is a surplus ratio of 76% which is in line with the previous year. So now let's turn to the next slide to look at more details. As mentioned, our net operating income increased by approximately 5%, totaling 112 million. Looking at the drivers behind this development, the new construction and large projects contributed 51 million SEK. As noted earlier, we completed around 686 apartments during the year. Property transactions also had a positive net impact of 4 million compared with last year. This includes our newly constructed property Naka Grace which was gradually completed towards the end of last year and therefore contributes positively in 2025. In the comparable holdings net operating income increased by approximately 20 million The 2025 rent negotiations resulted in an average increase of around 4% for the residential rents and 1.6 for commercial base rents, adding a net 43 million kroner in higher rental income in the comparable holdings. In total, rental income increased by 5% year on year. Operating expenses in the comparable portfolio increased by 24 million, driven mainly by higher repair and maintenance expenses compared with last year, as well as continued tariff increases in areas such as district heating and water. This is a key reason why our energy efficiency efforts are important, both for the environment and for our financial performance. Our energy saving initiatives, together with lower electricity prices, reduced our electricity costs by approximately 15 million kronor. However, the lower electricity price doesn't impact the group's net result, as it is offset by a corresponding decrease in revenue within other operating income from the wind turbines. As communicated in previous quarters, we also recognized 38 million kronor in net one-time compensations related to early lease terminations. So all in all, we improved our net operating income by 5% compared with the previous year. As mentioned, we completed a total of 686 apartments during the year, all of which contributed positively to our net operating income. In the fourth quarter alone, we completed 64 apartments. So this is in Ädelövet in Farsta in Stockholm where we completed 64 apartments this quarter. It's located by the lake Dreviken. So now we have 42 apartments remaining to be completed in 2026. It's a beautiful place. Looking at the commercial leasing market in Gothenburg, which contributes to our result in a good way, our view is that it remains stable and has strengthened further towards the end of the year. Our commercial occupancy rate in Gothenburg is 94% and we see a high level of tenant loyalty. Around 90% of our tenants choose to stay with us. This means that fewer than 1 in 10 tenants with the option to terminate actually choose to do so. So we have a surrender rate of 90%. This clearly demonstrates strong willingness among tenants to remain with Wallenstam and that they are satisfied with their premises. It also means that we have a good visibility into upcoming leasing needs as we closely monitor tenant intentions well before any potential terminations, which is strategically important moving forward. Turning to the income from property management, we delivered an improvement of approximately 11%, reaching 1.3 billion kronor, an increase of 127 million year on year. Administrative expenses increased by 43 million kronor. This increase is mainly driven, as in the previous quarter, by the implementation of new IT systems, which are now expensed directly, as well as higher personal costs and additional security related expenses. For example, background controls of our entrepreneurs. Net financial items improved by 8%, despite the average debt level being 3 billion higher than in the same period last year. The average interest rate during the period was 2.49%, which is roughly 60 basis points lower year on year. At year end, our average interest rate stood at 2.39%, with continued activity active management our interest hedging strategy throughout the year we have made some adjustments of our interest rate derivatives which now amounts to 22.1 billion kronor and we have also extended the duration slightly Our average interest fixing period now stands at 3.5 years, equivalent to 42 months. And 62% of the loan portfolio is hedged. Our interest coverage ratio for the year amounts to 2.6 times. Moving on to the value changes starting with our properties. We report a positive value change of 1.7 billion kronor. This is primarily driven by higher net operating income, the completion of new constructions and divestments. We haven't made any adjustments of our direct yield requirements. The value chains in our financial instruments amount to a total cost of 148 million kronor, mainly due to time value effects on the interest rate derivatives, rather than an increase in long-term interest rates. In total, we report a profit after tax of 2.6 billion Swedish kronor. compared with 774 million SEK in the previous year. So I think it's a good result for this year 2025. So turning to the balance sheet, our total property value amounts to just over 70 billion kronor. income generating properties account for approximately 64 billion kronor while the value of ongoing construction projects and future construction is recognized at around 7 billion kronor as mentioned earlier we haven't adjusted our direct field requirements The average effective yield amounts to 4.5% for our commercial portfolio and 3.7% for our residential portfolio. 57% of our total market value consists of residential properties, with a remaining share in commercial assets. Property transactions have had a positive net impact on property values of 1 billion kronor. In total, we invested 2.2 billion in our redevelopment and new construction activities during the year, which is slightly higher than in the previous year. This figure also includes investments in our existing portfolio where we have carried out energy efficiency projects as well as other upgrades in our existing properties. We now have a total of 1013 apartments under construction. During the year we have started almost 400 new apartments. On the equity and liability side, our interest-bearing debt has increased by approximately 3 billion compared with the previous year, amounting to a total of 33.3 billion. We continue to maintain a solid financial position, reporting an equity ratio of 44% and a loan-to-value ratio of 47%, despite ongoing investments and share buybacks. Our net asset value at year end amounts to 62.1 kronor per share, an increase of 8% year on year. And the board proposes a higher dividend of 55 ören per share, an increase of 10%. The dividend will be in two payments, one in May and the other in November. But first, the AGM has to decide it. So as developments within our industry are typically gradual from quarter to quarter, we have evaluated our communication format. For that reason, we will test a new approach and not hold a conference call every quarter. There will therefore not be a call for the first quarter 2026, and we will return with more information about our plans going forward. We will, however, continue to produce our quarterly results videos, and I'm, of course, available for any questions you may have regarding the report. We will evaluate this new way of communication during the year. So, like I said, if you have any questions, you are more than welcome to contact me and I will answer them all. Thank you very much for listening and have a very good day.