Wihlborgs Fastigheter AB (publ)

Welcome to the presentation of Edwards Year End Report 2023. Like an extreme ultra marathon with new challenges and opportunities every day and the same time business as usual, but with changes every day. We have been able to take care of both challenges and opportunities at a high tempo and I'm very proud of the whole well skilled and well trained organization working close together and finding new solutions for our tenants every day. We totally break the scale for the amount of new laces in Q4, a record I like. I know that we train a lot, and that brings more opportunities.

And about training, there's a lot of talk about if it's carbs, that build muscles best. I know that cash flow is what brings real stability and strength so we continue our focus on cash flow. Let's go to our report and the summary of Q4. record net lasting and net lasting positive. Again now 35 quarters in a row. users to increase in line with the index ECR. And we see the bottom market. And our project investment gives us good position for the future. The board proposes a dividend of 3.15 crore per share. Results for the full year 2023.

by 16% to 3,881,000,000.

Operating surplus increased by 19% to 2,763,000,000, meaning that our focus on cash flow continues to work and income from property management amounted to 1,747,000,000, affected by higher financial costs. Together with lower valuations of properties and derivatives, result for the period amounts to minus 27,000,000. EPR NRV is now 89.17 krona per share plus 2% compared with one year ago adjusted for paid dividend.

A comparison of the rental income full year 2022 and full year 2023.

plus 123 million, currency effects, plus 58 million, indexation, Supplementary. Increase. And lower income from outsourcing our canteens in Denmark. First of March gives us minus 30. and other inquiries from completed projects. New leases and re-organized negotiations plus work. We have signed new leases for the last of 146 million, 371 million for the period, and the positive net for the quarter is 18 million. This is an extremely high activity, and I would say that we are in a period of transformation, and when we can help our customers with their changing needs, it's a good thing.

I mentioned in the Q3 report that we expected changes from Danske Bank in Höje-Torstrup, and now in January, we signed our largest lease ever. A new lease with NOVA Nordisk for the full area, 62,000 square meters. This agreement means that NOVA already has success and they have started their refurbishment. A 10 years lease for 62,000 square meters and not a single month with vacancy. That's a good solution.

And as I usually point out, it continues to be the widespread of many tenants in many sectors that contributes to a long history of positive net letting. Here are some of the new tenants that we have signed. segments, defense industry, an animal hospital, university of Lund, technical services, as examples. And here we have the net. Letting in a strong perspective, letting in light. green termination in light blue and dark blue stacks are the net letting now five positive quarters in a row And this last quarter, we must expand the scale to make room for the high volume. Ulysses and 128 million in terminations. Only one quarter with a negative number for over 14 years. We will do everything we can to continue like this. But as always, let's keep in mind that a quarter is quite a short period.

The same quarter as we have done now in January is not to be taken for granted. It's more like magic, actually. But this organization can work wonders, so why not some magic as a part of it? Here's the list of our 10 largest tenants in alphabetic order. All these tenants are strong customers and they contribute with 20% of our rental income. Eight out of 10 are governmental tenants and the rental income from public tenants is in total 23% and they contribute to long-term stability on our cash flow.

of January is 4,408,000,000 per year of rental income. 4,043,000,000 plus 6.1%. A good part is of course indexation. Let's remember that indexation in Denmark and Sweden have been quite different during 2023. Approximately 1% in Denmark and 6.5% in Sweden. In Sweden the indexation is made once a year with the October CPI as base but in Denmark the indexation is made all year around depending on when the lease was signed so low inflation in Denmark affects all the properties we owned a year ago with updated figures. We can see that rental value is up 5.2% and rent and income is up 5.3%. If you just look at offices in Sweden, rental value is up 6.5%. So we keep indexation. Let's look at the changes in market value of properties.

We started the year with 55 billion, 179 million in accordance with our external valuation. We have acquisitions of 134 million. We have invested 1 billion, 862 million. A small divestment, minus 18 million. Changes in valuation amounts to minus 1 billion, 212 million. And together with currency translation minus 73 million, that's some rise to 55 billion, 872 million Swedish kronor. As usual, at year end, we make a total valuation of all our properties all at the same time by external appraisers.

One appraiser in Denmark and one in Sweden. The portfolio has developed, as you can see on this slide, since 2005 without raising any and a new equity. With investments, new leases, and a few transactions we have in 23 years, been able to increase the value somewhat despite higher yield requirements. And we have seen higher yield requirements the last seven quarters, bit by bit. The evaluations are, as you all know, affected by several And we sometimes hear predictions about how much valuation will change or have been changed. But of course, it's hard. to make comparisons that are general. These assumptions, they change all the time. The properties change all the time.

have declined 12.5% if they applied the current yield requirements to net operation figures from end 22. But we have significantly improved income, improved operations and have developed our project since then. So it's a part of the daily operations that we are very proud of, and by that we have been able to meet higher yield expectations quite well. Most of all, it's interesting to measure how we actually perform in relation to these values. And these figures, the running yield, show that, how we actually perform in relation to the valuation.

This is not the valuation yield. For the portfolio, the occupancy rate is 93%. land, and with an operating... ...3 billion... ...running... of 5.8%, fully let would give a running yield of 6.4%. In the office portfolio with the market value now is is 46 billion 85 million and overall the occupancy rate is 93%. It's 93%. Malmö, 92 in Helsingborg, 90% in Lund, and 94% in Copenhagen. And in Malmö, it's very sunny at the moment. Improved numbers compared to a year ago, except on loans, where we have added two new projects, and one.

The operating surplus from offices summarized to 2 billion 599 million Swedish krona and a running yield of 5.6 percent. This brings stability and resilience when interest rates are at higher levels. The demand for logistic and production continues to be good, occupancy 95% in Malmö, 88% in Helsingborg, 98% in Lund, and 97% in Copenhagen. 91% occupancy rate as a whole, with a running yield of 6.9%, and a total value of 6,983,000,000.

Our portfolio is running yield. 5.8% is back. on the same level as 2015. But we have also improved our portfolio since then. So we have a higher quality today. A quick increase in the running yield during the last one and a half years. value and properties in our four cities, 40% of the value in Malmo, 22% in Helsingborg, in a region of continuous change to develop well, even if in unemployment in some Certain segments have increased slightly. The unemployment... ...in Malmö is also a bit higher than in Sweden as a whole. it's low in a historical perspective. And the Danish market has hardly any unemployment at all. The massive ongoing infrastructure investment

will benefit from them in the future, as well as we benefit from a good access to Copenhagen Airport. And time for financials. Over to you, Arvid.

Thank you very much, Ulrika. If we look at the slide with the income statement relating to the fourth quarter isolated, you can see that the rental income amounted to 969 million for the quarter. That is up 9%. You should bear in mind, though, that the 969 are affected by the yearly settlement of additional charges, primarily for electricity.

And that That has affected this number by minus 15 million for the quarter. and this is a yearly settlement which we always do normally it results in us charging our tenants a few million extra, but this year that has been the reverse. plus and 59 million also up nine for the quarter. Income from property management amounted to 366 million. And that has, of course, been... affected by interest costs increasing by 92 percent quarter versus the fourth quarter of 2022. And as you know, the underlying

The stable rate since spring 2022 has increased from zero to just above 4%. And that, of course, affects the financial net. We've had changes in value of properties amounting to 297 million minus for the quarter isolated. And we've had a change of value of derivatives of minus 506 million in the quarter.

And as you also are quite aware of, the expectations of future interest rates in the financial markets have a huge shift. November, beginning of December. expectations, of course, affect the value of the derivative portfolio significantly. Result for the period of minus 350. million swedish corner look at the balance sheet you can see see that the investment properties versus 12 months previously increased by approximately 0.7 billion Swedish kronor. Equity has decreased by a billion. but you should of course be aware or remember that that decrease has been affected by

by the value changes of derivatives and properties amounting to in total 1.8 billion Swedish kronor. Borrowings at the same time has increased by 1.1 billion to 27.9 billion Swedish kronor. Looking at the key figures, our equity assets ratio now stands at 39%. and the LTV at 50%, well in line with our financial targets, although slightly weaker than the previous quarters. Interest cover ratio is 2.8 times

which is still a good level given the sharp increase in the underlying interest rates that I just mentioned. APRA NRV stands at 89.7%. Against the backdrop of with the position, our balance sheet metrics, and our earnings capacity. a dividend, as Rika mentioned initially, of 3.15 kroner per share. making this 18 years of rising dividends. You can see that the 89,

3.17 is a slight decrease versus 12 months previously, although, of course, that number has been affected by the dividend paid spring 2023 of 3.1 kroner. Overall, over this period of time, we still have an average annual increase of EPRA NRV of 16%. The financial metrics in a historical perspective you can see on this slide. The decrease in the interest cover ratio

is, of course, against the background of increasing market interest rates, but still, historically, at quite decent levels. And in relation to the historical development of of the equity assets ratio . Feel that our balance sheet metrics are quite stable. On the next slide. You can see the net debt in relation to EBITDA. Strengthen this ratio from 11 to 30. 10.3 times. Our finest processing sources are based

a bit over 50 percent of the financing comes from swedish bilateral bank agreements some 40 percent from the danish real mortgage system and seven percent from the bond market i will get back to the bond market in a couple of slides. The structure of our interest or our loan portfolio you can see on the following slide. We have now an average interest rate in the portfolio of 3.93%. We have an average fixed interest period of 2.8 years and the average loan maturity of six years flat.

Looking at interest rate sensitivity in the graph. shows how a change in the markets underlying market rates would affect our average interest rate. And you can read the graph in the way that if the underlying rates were immediately by 2.5 percentage points, we would still be able to meet our target of the 2.0 interest rate cover ratio. you can see evolved over time so with according to our financial policy and

interest rate swaps during the quarter, bringing the fixed interest period slightly upwards in the quarter, while the loan maturity has remained stable over several years, as you can see. This is a graph showing the bond maturities, and I think it's worthwhile pointing out that On the left-hand side of the slide, you have bonds amounting to approximately 1.1, 1.2 billion Swedish kronor, which mature now in February and March.

And we, of course, had those in mind during the coming past. or during the past couple of years. As I mentioned, The shift in the sentiment in the bond market has been quite rapid. So since December, we've seen an increased demand for new institutions of corporate bonds also in the Swedish real estate sector. And the three bonds on the right-hand side of this graph which we have is during December, January, and February. That's the past few months. most recently now in February, we issued a two-year bond

at 135 basis points margin. So that illustrates the improvement in the bond market over the past few months. Lastly, from my side, you can see the development of our available funds, that is, unutilized credit facilities plus liquid funds as of year end. which stands at 3.2 billion Swedish kronor. And with that, I hand the word back to you Ulrika.

Thank you. promise you, you will get a lot of Let's give an update. State of sustainability. We continue with our solution. certification program adding on properties to this year's list. and 71% of the Swedish offices were approved in the certification system. And today, over 80% of the offices are submitted for approval. Our goal is that 90% of Swedish offices will be certified until 2025. certification have trained us and

We improve our way of working all the time.

We cannot afford to invest in anything but the best, which means the lowest impact. And that is what creates the highest value tomorrow. We also continue with energy savings, 6% reduction of energy consumption as a total for the full year. Our solar cells produce corresponding 9% of property energy consumption, And we continue with energy saving actions in the existing portfolio. Some examples from 23 on this list. And one example