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7/7/2025
Welcome to the presentation of Vibros Q2 2025. This report, we have some records, some repetition, and of course, some news. But as a part of that, we start with a celebration. Last year, we celebrated 100 years as the company Vibros. And this quarter, we have celebrated 20 years as a listed company. And that might be worth some reflections. We often talk about focusing on growth and earnings capacity. what have we actually achieved? We started the 23rd of May, 2005 with a property value of 7 billion Swedish krona and 20 years later, we have grown to 63 billion without raising any new equity from our shareholders. During these 20 years, we have invested 20 billion in our project portfolio and gained an extra 5 billion in profit from these investments. We have also made acquisitions at a value of 14 billion We have 19 years in a row with increased dividend, a compound annual growth rate at 10.4%, and in total 9 billion have been paid as dividend to our shareholders. Irrespectively, if you measure rental income, operating surplus or income from property management, we have achieved a compound annual growth rate of almost 10% over these 20 years. And the total return on the share with reinvested dividends has been 1,735%, or annually 15.6%, well above the total Stockholm stock market has generated. Now, time for a summary of Q2. We have record in rental income, record in operating surplus, record in income from property management, record in acquisition, record in dividend, record in property value, completely as we expect from ourselves. Net letting positive at 24 million and the demand for good quality and good location remains, and so does our potential for growth. From our own actions, of course, but based on the fundaments in our geography. Results from the first period, first half 25, rental income up to 2 billion 142 million, operating surplus increased to 1 billion 544 million, and income from property management increased by 12% to 987 million. The result for the period amounts to 883 million, corresponding to 2.87 krona per share, and EPRA NRV has increased by 10% to 94.35 krona per share, adjusted for paid dividend. A comparison of the rental income first half 24 and first half 25, indexation plus 21 million, acquisition plus 47, currency to effect minus 14, additional charges plus 11, and completed project new leases and renegotiation plus 5 million. Higher vacancy today than a year ago, but during the fall and beginning 26, improvement from new leases will show. And the streak of positive net letting continues, plus 24 million in the quarter, plus 29 million for the period, and in total new leases at a yearly value of 235 million signed in the period. 41 quarters in a row, and this quarter the majority of new leases come from existing portfolios. Here are some of the tenants that we have signed during Q2. Per Årslöf at AB Industry Waste started the quarter well, but we also see good expansion from, for example, Arm in Lund. They continue their growth before they even have entered the first lease at Vätet 1. And growing demand from the security sector as Defensify and Cyber, who will also continue their growth. Here we have the net letting in a historical perspective. Lettings in green, termination in light blue and dark blue stacks are the net letting. The high volume with new and higher demand seems to continue. Our last goal was to beat the magic 40 quarters in a row. So the next goal is, of course, to reach 42 quarters. And the list are 10 largest tenants in alphabetic order, strong customers, and they contribute with 90% of rental income. 7 out of 10 are governmental tenants, and the public sector contributes with 22% of rental income. Rental value as of 1st of April, 4 billion, 810 million per year, plus 7.1% of rental income. 4,303,000,000 plus 4.9%. Effects from acquisition, indexation and higher willingness to pay for the right quality. Looking at the like-for-like figures, all the properties we owned a year ago, excluding projects compared with updated figures, we can see the rental value is up 2.1% and rental income is down 0.5%. The growth in rental value is supported by indexation of 1.6% in Sweden and approximately 1% in Denmark. Lower rental income is an effect of higher vacancy, and that comes partly from the timing effect with many new leases and a gap between moving in and out, but also higher vacancy in the market. In some areas, as the industrial portfolio in Helsingborg, I think that higher vacancy will follow us for a bit longer time. And in other areas, as in offices in Malmö, occupancy will pick up quite quickly when the market turns. We see very few new projects from competitors, and my best estimate is that we can continue to take advantage from that. We know that our number will improve towards the end of 25 and with continued good effects 26. And this has already started with, for example, Tule and Malmö University entered their new leases in Malmö 1st of July. Let's look at changes in the market value of our properties. We started the year with 59 billion 168 million in accordance with our 100% external valuation. We have made acquisitions with add-on 2 billion 552 million, investment 1 billion 265 million, divestment minus 90, changes in valuation plus 312 million, and together with currency translations of minus 476 million. That's summarized to a value of 62 billion 731 million Swedish kronor. This quarter, we have made extra external valuation by two different appraisers of approximately 20% of the portfolio value, just as an extra checkup. And the output from that is that our valuation is almost perfectly in line with their views. These figures, the running yield, show how we actually perform in relation to the valuation. So this is not the valuation yield. For the whole portfolio, the occupancy rate is 90%, excluding project and land, with an operating surplus of 3,273,000,000 that gives a running yield of 5.6%. Fully let, the portfolio would give a running yield of 6.4%. Good earnings capacity in relation to the value of the portfolio and good cash flow generation is the foundation also ahead. In the office portfolio, the market value is now over 50 billion. The occupancy rate is 91%. It's 92% in Malmö, improved to 89% in Helsingborg, 90% in Lund and 92% in Copenhagen. Same total number as year-end and last report, but on the decimal a bit improved. And the signed leases mean that we will improve ahead during the fall and 26th. The operating surplus from offices summarized to 2 billion 730 million and running yield of 5.4 percent, 6.2 fully let. Demand for logistic and production continues to be good in Malmö with an occupancy of 895 percent, lower in Helsingborg at 83, 99 in Lund and 95 in Copenhagen, 88 occupancy rate as a whole. with a running yield of 6.4%, 7.5% fully let, and a total value of 8 billion, 474 million. As mentioned before, we continue to see harder competition in the third part logistic segments, quick changes in needs and higher vacancy as an effect of a lot new build facilities. But our portfolio in Helsingborg still give a decent running yield of 6.4%, even with a high vacancy. and the market as such continues to grow. The development of our total portfolio running yield 5.6% brings stability, not least since the portfolio overall has a high quality and good locations. As noticed before, a high increase of the running yield since 2021. ESG results from Q2 certifications in Sweden offices continue up and Denmark has started the process in a good way. in the same way that we also continue with certifications in the industrial portfolio in Sweden. Energy consumption continues to decrease and we have a new target of maximum 75 kilowatt hours per square meter to be reached by 2030. As mentioned in the Q1 report regarding omnibus, we will continue our process with most of the metrics of CSRD, but we will exclude some of the data points. where our opinion is that the value of measurement is limited. But for many of the areas we have found a way where reporting actually can contribute to improving our operations. Other sustainable highlights from Q2. Billboards has been pointed out as one of Europe's climate leader by the Financial Times. We have renewed the climate contract with the municipality of Malmö. And not at least, we have reduced the energy consumptions at Värdshuset 2 by 22% by adding on our own skilled organization. More improvement to come, but 22% less consumption almost without investments is a good start. And we see that kind of improvements in the acquisition made the last years. Amage, Sandvej, Hedegårdsvej and Värdshuset. We update the product, improve some technical standard and reduce energy consumption and increase leasing. Some is already done and there's more to come. First of April, we added on eight properties in Malmö, Lund and Helsingborg in total contributing with 51,000 square meter lettable area 82,000 square meter land for industrial development in Lund, and 12,000 square meter building rights for offices also in Lund. This portfolio will contribute with an estimated yearly operation surplus of 130 million at the start. And here are the land areas included in the portfolio, as shown before. At Bryssel-Kolan, we have estimated that we can build between 40 and 50,000 square meter industrial building. A catalogue of our value and properties in our four cities and Q2. 40% of the value in Malmö, 22% in Helsingborg, 17% in London, 20% in Copenhagen. And as mentioned before, the diversity of different businesses in the region is a strength, but also the diversity in volume is interesting. Both in Q1 and Q2, we have signed leases of more than 20,000 square meters each in the office segment. And especially in Copenhagen area, we see more potential of interesting volume ahead. The combination of many small and some larger tenants also builds a strength. Our growth is of course related to the possibilities in our geography. And at this picture, we can see the employment growth in a comparison between Stockholm, Gothenburg, Malmö and rest of Sweden. Malmö have had a good growth and we have been able to meet that growing demand. Let me wrap up this part of the presentation with a quick update on the Öresund region. The Öresund bridge just turned 25 years, still young for a bridge and just in the beginning of its lifetime. But for Vilborg, it has been central to our growth for two decades. Infrastructure drives development. The Danish government clearly sees this, and they continued with their large-scale investments. The Ferman Belt, linked to Germany, now under construction, will open in 2029. That will strengthen the region's role as the northern gateway to Europe. Just this week, the Swedish government appointed Alan Widman as Special Investigator. His task is to develop a joint Swedish-Danish mandate for a strategic study on capacity and redundancy across the Öresund, with a long-term view towards 2050. The proposal will be delivered in November, and that's a strong step forward. Separately, the Swedish Transport Administration is already analysing future capacity for road, rail and maritime transport, including the potential for a fixed Helsingborg-Helsingør link. Meanwhile, cross-border integration is reaching record levels. In 2024, the integration index hit 234, up from 100 in 2001. More than 19,000 people now commute across the border for work. And the daily train commutes have also reached all-time high, over 40,000 passengers a day, alongside monthly records for both car and passengers crossing. These developments support long-term growth for the region, but also for Vilborgs. And time for financials. Over to you, Arvid.
Thank you very much, Ulrika, and good morning, everyone. If we look at the income statement for the second quarter 2025, you can see that rental income amounted to 1,097,000,000, up 6% versus the corresponding quarter during 2024. We had an operating surplus of 813 million kronor, also up 6%. And the income from property management was up a full 14% to 524 million in the quarter. And all these three numbers, as Ulrika mentioned, are actually record figures for an individual quarter for Vilborgs. with positive value changes in the quarter of 243 million. No differences in the underlying assumptions in the valuations, but rather a few minor effects from projects and from the net leasing, but minor changes overall. And if we sum up, we had a profit for the period of 452 million Swedish kronor in Q2. Looking at the balance sheet, property value now amounts to 62.7 billion Swedish kronor. That's up 5.6 billion versus 12 months previously. At the same time, equity grew by almost a billion, despite paying out a billion to shareholders. And our borrowings at 33.3 billion Swedish kronor was up 3.6 billion in a 12-month perspective. Translating this into key figures, our equity assets ratio stands at 35.8%. and the leverage now is 53%. That is up somewhat over the past quarter, as expected, since we chose to debt finance the acquisition, and we also paid a dividend of a billion during the quarter. We see the LTV gradually moving downwards from here as a result of our cash flow earnings, basically. The interest cover ratio during the first half was 2.8. In Q2 individually, it was actually 2.9 times. So the development of the interest cover ratio is positive. We had an EPRA NRV at the end of Q2 of 94.35 kroner per share. and that is up 10% versus 12 months previously adjusted for paid dividend. The EPRA NRV per share, the development you can see on this slide in the historic perspective, and over this time period since 2009, we've had an annual average growth of 15% adjusted for paid dividend. The financial ratios in a historic perspective is shown on this slide. The interest cover ratio now picking up after the sharp interest increase, which started during 2022, and that is good. The equity assets ratio in a historic perspective is still on uncomfortable levels for us, and that actually goes for the LTV as well. versus the limitations we've set up for ourselves. However, from the 53% LTV, our objective is, of course, to bring that downwards slightly from here. The net debt in relation to EBITDA is still on a strong level, 10.1 times at the end of Q2. And that, of course, takes into account the cash earnings capacity that we have, and that remains our prime focus. On the next slide, you can see the sources of financing. We now have 50% of our financing from bilateral bank agreements with Swedish Nordic banks. Bank margins are moving in the right directions for us as a borrower. And access to capital is quite advantageous, I would say. Bond financing is now 16% of the total. And also the bond market has, over the past few months, still been a bit volatile, but generally developed in a very positive way. So we have access to bond financing at attractive levels currently. And we have 34% of our financing from the Danish real mortgage system, which continues to work in a stable way. On the next slide, you can see the details of our loan portfolio. The average interest rate is now 3.29%. You can note, looking into the future, that we have some attractive interest rate swaps expiring both in Q3 and in Q4. At the same time, we have during the second half of 2025 a few bank renegotiations where we expect the margin development to be positive for us as a borrower, that is margins moving downwards. On the next slide, you can see the development of the fixed interest period, which now stands at 2.4 years, quite in line with our interest rate risk management policy. And we have loan maturity moving downwards a bit to 4.7 years. And that has been affected, of course, by us adding some new debt in relation to the acquisition made in Q2. And that debt has had a slightly shorter loan maturity than our average. And finally, looking at available funds, we had a very high number at the end of Q1. But as you're quite aware, on the 1st of April, we paid approximately 2.4 billion for the acquisition from Granito. And in May, we paid a billion in dividends. So available capacity has gone down. We've increased back facilities somewhat during the quarter. So available funds is now 2.5 billion, which is a comfortable level in the long-term perspective. And with that, I'll hand over the word back to you, Ulrika.
Thank you. And an update on our investments in progress and a quick overview of our largest projects. During the period, we have invested 1,265,000,000 and it remains 3,132,000,000 to invest in approved projects. A good volume also ahead. The quick improvement of yield on costs continues and the ongoing portfolio secures also decent gain from projects. A good mix of refurbishment and new build. Let's start in Copenhagen with our project at AB Industrivet. In the beginning, planned and decided for a multi-tenant transformation, but with the 15-year lease with Per Oslof turned into a single-tenant building. 24,000 square meters, investment 231 million Swedish krona, and yield on cost a bit above 6%. Completion in Q1-26. The large project at Amphitrite in Malmö has started off really well, a bit above 20,000 square meters for Malmö University. We have started at site with selective deconstruction of the building to enable reuse of parts of the existing building in the new one. And we expect building permission in September. Zoning plan is approved and procurement of contractors is ongoing in a very good way. In Lund, we're building a new modern office right beside the central station, post-torn at phase two, 10,100 square meters, yield on cost 6.5% and completion Q2 26. And at Vätet 1, also in Lund, we refurbish and add on areas for our new tenant arm. 5,700 square meters at the start, and they now have added on some extra. Seven years lease investment, 145 million excluded value of the land and yield on cost a bit over 10% and over 6.6% yield on cost, including in-going property value. A new modern facility and ARM has already signed, as mentioned, additional areas. In Malmö and Hylje, we have Black Hornet 1, Vista. An 884 million investment. The mobility hub has already been completed and has good occupancy. The office will be completed end 25 and during 26. Yield on cost 6.2% and 35% pre-let for the office part at end of June. But now in July, we signed additional 800-900 square meters at a seven-year lease. with a public tenant. So even if patient is important, the movement is in the right direction. The product is the best with great flexibility and the competition for new builds in the area is low. An example of refurbishment in Malmö is Bushhuset 1. This is an almost iconic building right beside the train station. 6,000 square meter office, restaurant and co-working and absolutely top rent in the Malmö perspective. Completion in Q4-25 and moving in will continue during 26, pre-let 95%. In the Dokkan area, the refurbishment for University of Malmö and the police education has been completed as of 1st of July. Gildan cost approximately 11%. And the same thing with Dockporten 1, headquartered from Tuvle. They entered the building 1st of July. A smaller investment, but a great result and a good impact for the area. In the southern parts of Lund, we have been able to continue the development of Maten. This project is for BPC, completion Q226. Gildan cost 7%. And next to that, at Stora Robi 3222, we have actually been able to improve even more. We have signed a new lease with Lund University, and that means that we can use the land area even better. So now in total, 14,500 square meters for NOTE and Lund University. Completion will start in Q2 26. Investments a bit lower, actually, 260 million. And yield on cost improved to 9.2%. At Galoppen 1 in Malmö, we build the facility for Caldit. Completion in Q3 25. Approximately 10,000 square meter production, logistic and office. Total investment 264 million and yield on cost 7%. And in Sundano, we built 17,000 square meters, 100% pre-let, and 15-year lease with completion in Q4 2025. Also 7%, close to 7%. In Harsland, Copenhagen, we invest for the school for NGG, 25-year lease, 11,600 square meters, completion in Q1 2026, And at Jidoströget in Höjutostup, the large refurbishment for Novo continues, 62,000 square meters. Our investment is limited to 423 million, and completion is expected in Q126. But Novo pays rent also during the refurbishment period. That was some of the ongoing projects. Just a quick... view on some of the future investment here are four possible projects in Lund and Helsingborg some 70 000 square meters for the future zoning plan are approved for the first three projects and ongoing at Västerbro in Lund and some of the office possibilities in Malmö in the area of Nyhamnen and Dokkan high interest for the future of course And a summary of Q2 again. A record quarter for rental income, operating surplus, income for property management, property value, acquisition and dividend. Net lasting positive at 24 million. Net EBIT to EBITDI at 10.1. Remain a good demand for good quality in good location. And project investment continue to give a good potential for growth. And with that, we are open for questions.
If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Lars Norby from SEB. Please go ahead.
Good morning, Eureka. Good morning, Arvid. Okay, let me just put the spotlight on what you're saying about the economy and the market. Looking particularly at you're sending out positive comment about the Copenhagen market, whereas in Sweden you say the economy is weaker. In Sweden, do you think we have now passed the low point in the cycle? Is it now turning up?
Of course hard to say. It's true regarding Copenhagen that we see really interesting discussion on larger areas and that's promising for the future. And many things in Copenhagen is working very well. So looking forward to see what will come from that. uh when it comes to sweden yes i mean everybody knows that the market is is weaker but still positive things is ongoing so i hate actually to speculate but i think that we see some some sunlight ahead definitely so maybe maybe i don't i don't think we should expect any quick race for the future, but a slow turn in a good way. Many things were from our customer's perspective seems to be pointing in the right direction, but a bit cautiousness of course is there.
I wouldn't call it speculative. I call it forecasts in my Excel model. Anyway, let me just be clear here. When you talk about Copenhagen and you talk about Sweden, are you talking about comparable segments of the market or is your own segment mix different in which in some way affects your market comments, if you see what I mean?
I think that Of course, I'm closer to our own portfolio and our own discussions. And let's be aware of that the Copenhagen market still haven't shown any dramatic changes in higher increasement of rental value. It's still a very slow-moving market in that way. But it's interesting to see that, I mean, the discussions we have ongoing is interesting. But it will never be the same as the Swedish market. You cannot expect that.
But it's not like this final clarification. It's not like when you're talking about Sweden, you're talking about some, what is it, 70, 75% offices, whereas in Copenhagen, it's less than that. Is it?
I mean, I talk about the office market mainly in Copenhagen.
Okay, very good. Thank you. Those were my questions.
The next question comes from John Vong from Van Lanshot Kempen. Please go ahead.
Hi, good morning. I just wanted to talk about the LTV, which has been trending up since its trough in 2021, and now at 53%. I think you mentioned your intent to bring this down a bit. I suppose this will be coming from retained earnings Just wondering, how do you see the LTV in light of investment opportunities that you're seeing in the market?
Well, I think the current LTV at 53%, given the way we look at the world around us, we would like to gradually bring it down and to be, say, around 50%. But as... as we have shown actually during this quarter, we feel that we've managed our balance sheet in such a way that we've been able to seize an acquisition opportunity in a good way. And focusing on improving income from property management per share, we've chosen to debt finance that acquisition. as we've talked about on different occasions previously, and I'm sure you're aware that we also have a mandate from the AGM to issue new shares up to 10% of the total number of outstanding shares. We've never used that mandate, but that is of course a tool which can be used if the right opportunity arises. So we don't feel that the current LTV limits us from looking at future opportunities in the market. But what will come up is, of course, very, very uncertain.
Okay, Claire. And then you also point out that the net to EBDA or net to operating profit is at 10 times. I understand that it's not an official KPI. Just curious to understand, is this a metric you look at and consider when you're considering investments?
Well, I mean, we track the number on the group level fairly closely because we think it makes sense to relate the debts to an approximation of the cash flow. And we're happy that that level... or that metric over the past few years has been stable and even improved. So that is, of course, one factor which we bear in mind when looking at investment opportunities.
But it's not necessarily a level that you target with this metric.
I think if we're at 10 times where we are, we're very comfortable. And we've been at 11 and above 11 as well, which also may be fine. But we don't feel from a financial stability perspective that it's important for us to significantly strengthen this ratio. If we're at 10 times, we're quite comfortable.
Okay, that's clear. Thank you. That's it from my side.
The next question comes from Oscar Lindquist from ABG Sundal Collier. Please go ahead.
Now we don't hear you, so maybe you... Oh, sorry.
Can you hear me now?
Yes, now we hear you. Perfect.
Ah, perfect. Good morning. So on occupancy, I think you alluded to it in the presentation, but given recent quarters net letting, how do you expect occupancy to develop in H2?
We expect to improve both in late 25 and even more to come 26.
Perfect. And then a more detailed question, but the current tax in the quarter was a bit higher than expected. Is there anything to highlight here?
Yes. As you can see in the report also, we divested some residential building rights from part of one of our properties in Copenhagen. And that... will also trigger a tax effect, which is what will distort that number somewhat from what you would have expected.
Okay, perfect. Thank you. And that's all for me.
Thank you.
The next question comes from Albin Sandberg from Kepler. Please go ahead.
Yes, I have two questions. First, the comment you're making about competitors not being too active in the market, is that a sign you think that they don't really have the same faith in the market as you have, or do you expect them to pick up paces? Obviously, the outlook seems quite good relative to other parts of the country. Yes.
Most of all, decisions for new projects competing, coming out to the market now in 25, 26 and early 27, these decisions were supposed to be made some time ago. So yes, Skanska have started a new project in Hyllien now, but that will be completed later. So the competition is very limited for new built projects. coming out to the market during 26, I would say. And there is also some other projects starting up a bit, and possibilities is there, of course, but things are, I mean, it's not like some years ago when everybody tried to do anything everywhere. So it's a fact of decisions made during the last years that now make us quite competitive, I would say.
Yeah, okay, that's good. And then, Arvid, the comments you're making about the swap expiring and possibly renegotiating lower margins, do you target to maintain the 3.3% or do you foresee... a slight uptick in your overall good cost of finance here for H2.
In the second half, we will have an effect of expiring swaps, meaning that the average interest rate would move upwards slightly. But as I also believe I mentioned, we're also having a few bank renegotiations during the second half, and my expectation is that those renegotiations will be beneficial for us. So, I mean, generally speaking, I think our financing terms are fairly much at market. We will continue to work with our interest rate risk management policy, entering into a few new swaps, basically on a quarterly basis. So I don't expect any major change in the average interest rate over the second half.
Great. Thank you very much. Those were my questions.
Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
And we've not seen any written questions coming in via mail here.
Okay. But as always, you're always welcome to come back to us with further questions. So with that, thanks for today. And we wish you all a great summer.
Thank you. Bye.