Morning and welcome to this Castellum webcast and Q&A session. From our side, it's myself, Christoffer Strömbäck, Acting CFO, and Pål Ahlsén, CEO. The topic for today is our new strategy that we announced two days ago. We will start with a short introduction, and then we will open up for Q&A. As always, if you'd like to ask a question by phone, please dial #Key5 on your keypad and then ask your question. Over to you, Pål. Good morning. As Christoffer said, the short introduction to the new strategy, which we have called Back to Basics, and then we'll open up for questions. Back to Basics, I would say, refers to going back to the core of how to manage real estate. As most of you know, we are a commercial real estate company, and we are predominantly owning properties in Sweden. Roughly 92% of our assets are located in Sweden. It is in Sweden we have our sort of the DNA arises from owning commercial real estate in Sweden. I think that will remain that way going forward. This does not exclude that we could both increase and decrease in other geographics that we already have: Finland and Denmark and through Entra in Norway. In the foreseeable future, one should probably think that we will continue to be predominantly in Sweden owning commercial real estate. What's really new and what I think will be the biggest transformation within Castellum is this crystal clear focus on profitability. Previous strategies, and probably from the beginning of the Castellum history, focus was more on growth rather than profitability. This is something we would like to switch, taking away all actions that are not meeting our return target on 10% return on equity. Another key thing we think is important for reaching our return target in the long run is increasing transaction pace. We think that we need to rotate the portfolio a bit at a higher pace than we've done historically. Buying properties we believe will meet our return targets and handing over properties where we are not the best owner going forward to others which have other return targets, other expectations for the future, or other views on risk. Increasing transaction pace will be an integrated part of our new strategy going back to basics. Decentralized property and asset management, that's something which we're really from the beginning of Castellum's history, then everything was basically decentralized and in the regions of the company. Since then, a bit more has been focused on headquarters, but we are turning that back a bit and putting more responsibility and accountability in the regions. We believe that's where the business is done when you own commercial real estate. Something which most companies really say that they are doing is continuously strive for improvements. This is something we also will do, but we will also take actions to actually do that. One of those actions is that we will increase our efforts in education by Castellum Business School. That is something that will be rolled out during next year. Before I hand over to Christoffer, the final point I would like to mention is an increased level of cost awareness. Most companies are obviously aware of costs, but we would like to increase that. I have mentioned the usage of consultants, for example, and other issues or other topics where we actually can reduce costs. One of the things we have announced and are in the midst of effectuating is reducing staff on headquarters. I will hand over to you, Christoffer, and you will talk a bit more about the passive side of the balance sheet. Yes, thank you. We have also decided to introduce a more strict capital allocation focus with sort of our shareholder value as top priority. As part of that, all investments should meet our return target of ROE of above 10%. All investments should also be evaluated against each other and against other investment opportunities, and that includes investing in ourselves through share buybacks. Excess capital, if and when we have such, shall be distributed to the shareholders, and that will be done in the most value-enhancing way possible. All of that also comes to that we have changed our dividend policy. We now call it a capital distribution policy. Instead of the dividend of at least 25% of the income from property management, the new policy states that it's still the 25%, but it will be distributed to shareholders either as dividend or through share buybacks. We do not have a specific sort of formula for when it will be dividend and when it will be share buybacks. That is something the board will decide from time to time and when relevant, of course, propose to the AGM for decision. When it comes to financial targets, we keep all of them. Still, as we have already said a few times, the overall financial target for us is a return on equity of at least 10% over a business cycle. That is the overall target, same as we have had for the last year or so. We also keep our financial targets or risk limitations with an LTV of below 40% and an ICR above three times. Those ones are also kept. One change we are doing is that we are adding our ambition to maintain an investment grade rating at all times to our financial policy. The ambition itself is not new, but that we are adding it to the financial policy is new. Yesterday, we also announced a process for amending the terms for our EMTN bonds. More specifically, it is the so-called cessation of business provision that we would like to change. The reason is that we think it would better allow us to execute on this new strategy when it comes to asset rotation. We are offering the bondholders a fee to vote in favor of the amendment. In addition, we are adding a step up to the coupon of the bonds should the investment lead to a downgrade to sub-investment grade. With that, it is time for a question. I repeat, if you would like to ask a question by phone, please dial #Key5 on your keypad and ask your question. The first question comes from Lars Norrby at SEB. Please go ahead, Lars. Thank you, Lars Norrby from SEB. The composition of the property portfolio, I guess in any company, may be the most important component regarding future development of the business. Now, you're using the expression focus on commercial properties predominantly in Sweden. That would, I guess, theoretically give room for you to have a higher share of your business outside of Sweden. Aren't you primarily looking at it to change it in the other direction? Specifically, what is your view on your portfolios in Finland and Denmark in terms of are they subscale? Are they big enough to generate efficiency in property management? Thank you, Lars. I think when we say commercial real estate predominantly or commercial properties predominantly in Sweden, we are referring to a couple of things, actually. One thing is that Castellum owns a pretty broad palette of different asset types within the commercial real estate. We own office, obviously, some public properties. We own light industry, warehouse, logistics, but also some hotel and also some retail. We are pretty good on managing all those types of assets or types of properties. The overall key here is the return rate on equity. There will be differences over time, what type of composition we have in our portfolio, depending on what we believe about future profit potential in different asset classes. That overall view on that, it's the expected return going forward. We sort of dictate where we are, how much is allocated, so to say, to Denmark or Finland or to Växjö or to Stockholm. We have not set up any target that we should be only in Sweden within five years. I could foresee that we actually grow in Denmark if we see profit potential there. Or if we do not, we have to reduce, obviously, if there are better opportunities in other areas within our portfolio. Okay, just one more follow-up question. You also have an indirect holding of properties, one could say, through Entra. You've been buying shares during the spring, and then that's been put on hold, if I use that expression, for quite a while. What's your view on Entra going forward? My impression is that the other major shareholder, Balder, may very well be open to selling the stake if the price is right. No, I think Entra is a great company, and we hope that company will continue to develop. As soon as we know anything of our future plans other than holding what we have right now, we will obviously tell you about those plans. Okay, thank you. Next question from Fredrik Stensved, ABG. Thank you. Thank you both. Can you hear me fine? Yes. Perfect. The first question is on almost the same theme as Lars' question. I mean, I read your bond document press release yesterday, and I assume that you do not sort of propose a cost increase of 25 basis points unless you actually have a thinking that you might divest Denmark and/or Finland in sort of the near future. Can you add any color or elaborate on your thinking? Are there already ongoing dialogues? Which market outside of Sweden do you think is the most likely to be divested and so on? I should not interpret it like that. As we deem the cessation of business clause in our bond agreement, it is that we are not allowed basically to do anything at all with the property portfolio. It puts strains on us what we can do. This has nothing to do with either Finland or Denmark. We would like to have a bit more freedom to rotate the assets within our portfolio. Okay, yeah. I think the way I read it was predominantly in Sweden, and this together sort of adds up to that conclusion. I hear your point. Second question on your capital distribution policy change. That's still sort of a portion of income from property management. How do you currently think about share buybacks and/or dividends versus other sort of capital allocation options in the case of divestments and your balance sheet being below 40% LTV and above three times in terms of ICR? In terms of divestment, it's sort of definitely an option to go down the route of share buybacks, definitely. Probably there are room in the current shape of the balance sheet as well. As you know, no such decision has been made. I mean, we have a strong financial position and definitely room for both dividends and share buybacks should we decide to go that way. Would you be open to selling assets for the sake of buying back shares? I think no. If we decide to sell assets, it's due to the fact that we see better opportunities elsewhere, not for the purpose of just buying back shares. Okay, that's clear. Thank you both. Thank you. Thanks. Next question from Nadir, UBS. Hello, good morning. Can you hear me clearly? Yes. Hello, good morning. Sorry. Thank you for having me on the call. My question is, I have a few questions, but I'll ask them one by one if that is okay. The first one, you mentioned maintaining the investment grade rating. Is there a bit of pressure from the rating agencies, or are you comfortable where you are now, and therefore there isn't any need to dispose or restructure the capital? In other words, what you're doing now, is that because you have been in discussions with the rating agencies and there is a risk of a downgrade at present? No, this is purely from sort of ourselves, also in connection with that we're adding that language in the proposed new bond terms. I mean, we thought it would make sense to also sort of add it to the financial policy. I mean, as I said, the ambition has been there for quite some time. It is more sort of highlighting that ambition. Okay, that's very clear. Staying on the topic of debt, my second question is, how do you define the 40% LTV? Does that include hybrids as per the EPRA definition, or are you using your own company-defined LTV there? How do we calculate that in your case? That's including the hybrid, as we are having the definition in our reports, i.e., that the hybrid is recorded as equity, as you know. Okay, so we're using your company-defined LTV. Our company is not LTV. Okay, okay. That's very clear. My third question is, your ROE on a net income basis versus the book value of equity was around, I believe, 3%-4% for full year 2024. We of course do not have that figure yet for full year 2025. How do you go about reaching your 10%? Is that going to be via net income growth, or will it be more through shrinking the equity book value on the balance sheet? Predominantly, it will be driven by returns from our assets. That comes in both form of yield from the properties or income return. If we manage to increase income, obviously, there will be some growth in values. It is a mix of those two. I think the increasing of asset rotation or transaction pace will also help us in always having the right properties with the best return probabilities in the portfolio. It is not the case of increasing debt to increase return on equity. Okay, that's very clear. The timing on when you reach this return on equity of 10% from your current standing, and also when you plan to reach the 40% LTV threshold and the ICR limits you have, what timeline do you have for reaching those metrics for the purpose of our forecasts? Our return target must be seen over a business cycle, obviously, since return on equity is influenced by the volatility of asset prices or property prices. Over a business cycle, if that may be 7 or 10 years, we would like to see an average of 10% return on equity. The past couple of years has obviously been quite challenging on that note with increasing interest rates and decreasing property prices. In that environment, it will be impossible, obviously, to meet return on equity 10%. We are looking on this over a business cycle. It is a long-term target. I think when it comes to commercial real estate or real estate overall, that you have to have a long-term perspective to reach good returns. That's very clear. On the LTV and ICR, do you have a timeline for how you want to go about reaching this and by when you expect to? Those two, we are already reaching. We are within those targets as of today. Those are more risk limitations, and we should keep being within those limitations. Okay, that's very clear. Thank you. My final question is, as of today, given the discount you're trading at and the current transaction markets and the capital opportunities you have, if you were to decide today as a board what your capital allocation would be, would you prefer share buybacks or dividends? That's a good question. Probably we should come back to that after, as it is a board decision. No such decision has been made, obviously, as we haven't announced it. It would probably not be the right way for us to comment on. Okay, that's very clear. Yeah. No, that's understood. That's fine. Thank you for taking my questions. That's all from me. Thank you. Next question is from Jonathan at Goldman Sachs. Good morning. Thank you for taking my question. I have two, if I may. The first one, you're talking about potential cost reduction. Are you able to give us any quantification of that? That would be super helpful, please. Just also to come back to your asset rotation policy, you want to accelerate that, should we then understand that you're looking, given your ROE target, to sell lower-yielding properties or higher-yielding properties or non-core properties? It is a bit unclear how you want to look at the properties that you want to dispose. Any specific? You've talked about hotels or retails or any specific more sub-sectors. How are you going to look at that rotation, please? Thank you. I think actually in our portfolio today, even though the weights on some of the asset classes are quite low, we have, as I said, a broad palette of different types of properties. That will probably change over time, but we have no targets for how big a proportion we should have of logistics or light industry or office. That will be more driven by the rates of return we believe we could have in those different types of properties. When it comes to your question regarding high-yielding, low-yielding, we are looking on this on more of a total return thinking. This means that we could very well have low-yielding properties in our portfolio if the growth potentials in those types of assets are good. It can also mean that we have high-yielding properties as well. We are not excluding anything here. We are looking on the long term to meet our return target of 10% on equity over the business cycle. Okay. It is my understanding, I think, that your documentation on the bonds would allow you some flexibility. Does that mean that you are looking to move quite big? Some seem to see some sort of case law about a 15% threshold. Below that, you would not need that consent. Was that a limitation for you, that 15% factor? Sorry, there is the cost question as well. I can answer the cost question, and then I'll hand it over to Christoffer. What we've said is that the reduction in the head office will save us probably around SEK 50 million next year. As we also mentioned in the Back to Basics new strategy of Castellum, it's continuous improvements, and that would lead to continuous cost reduction as compared to not doing that. I also think that we could be slightly more cost-aware within the company, and that will also continuously lead to lower costs compared to as if we wouldn't have had that focus. SEK 50 million for next year is what we've communicated regarding staff reduction on the headquarters for next year. Okay, clear. From the flexibility side, I mean, of course, there is room for some asset rotation within the current terms, of course. However, we think that more specifically, the material subsidiary definition that puts some constraints that, I mean, it's not that big figures in some of those subsidiaries. So there we would like to amend. Therefore, we would like to amend those. Okay, understood. In terms of your corporate structure, then do you have many subsidiaries? We have something like eight to ten, I think. I can check it up later, but something like that. Okay. Very helpful. Thank you so much. Thanks. Next question comes from [Florence] from Citi. Good morning. Thank you for taking my question. I have two. The first one is, do you have a plan B if you do not get the consent as expected? The second one is regarding hybrids. In your new financial policy, you do not make any reference to that. How do you look at hybrids in general, and how should we think about the call in a year's time? Thank you. I think I got the first question, and then sort of the answer to that one. I mean, now we have this process in the market, and we do not want to speculate in the outcome of that, of course. We will wait for that. We think that is the most prudent way to do it and sort of not speculating about the outcome. And then what was the second question? As of now, for sure. The hybrid, no news about the hybrid. As I mentioned before, it's recorded as equity. No difference made to our financial targets, no difference how we are seeing on the hybrid, and sort of no new message on that as well. As with most things, we have to come back to that when we have something to say about it, so to say. Okay, thank you. Next question from Neeraj at Barclays. Morning, everyone. Actually, my two questions are just being asked, but I would still go ahead and ask in a slightly different format. I mean, it's fine you don't want to speculate about the outcome of the consent solicitation process, but when you briefly spoke about it, you said the current documents are kind of restrictive. So adding this 200 basis point of step-up in the event of high-yield downgrade, do you think it makes it restrictive for future actions of the company? Can you take that once more? Sorry, I was just asking, do you think the bond documents become restrictive again for any future events the company may want to do? No, no. Okay, that one we know. Okay, cool. Coming to hybrids again, do you want to increase or decrease the size of your hybrid in the cap stack? Do you see it as an expensive debt instrument as you think about the cost savings and all those things? Any more thoughts about this if you can provide color? At this point in time, we actually don't have any more. Maybe we have thoughts about it, but we think it's more prudent to come back to that one when it's time for that and communicate properly, sort of formal communication to the market at the right point in time, so to say. Nice. Thank you very much, and all the best for the process. Thank you. Thank you. Next is Michael from BNP. Hi, I have three questions. If you do not get the consent to amend the EOD clause, say for the 29s or the others, would you still look to go ahead with the restructuring of the company? If the 29s did not give you consent, would it still make sense to give the early consent fee to the other bond maturities? My third question is, if you do the split, sell some assets, you are going to have a smaller company. We know the agencies tend to look unfavorably on scale. If the agencies did that, would you look to have a tighter financial policy, or would you say, "I accept that we're going to have the same financial, we're going to have a similar leverage, but just be one notch lower, and we're not going to try and keep the mid BBB rating"? Thank you. Plenty of questions. I mean, I think we have to answer the same answer as before, that we do not like to speculate late on the outcome of the process that we are in the middle of right now. We are in the market with that one, and I think we'll leave it as. Okay, maybe I can rephrase that then, because in the document, you talk a lot about interconditionality. Maybe can you give some thoughts on why you guys wanted to include that language in the document? I would imagine that most of this is for the 29s. Is that language there linked to basically for those 29s? Maybe anything you can share to give more color on that? We think it's good to have that flexibility in this ongoing process, given that, of course, we don't know the outcome. For us, it's natural to have that flexibility. As I said, we don't want to speculate about the outcome. Okay, thank you. I mean, I appreciate that. It's hard to comment on a live thing, but thank you for that. Oh, and anything on the S&P? Oh, I'm sorry, in the Moody's, if you had a smaller company, and they looked at unfavorably, would you want to tighten your financial policy to shore up your mid BBB rating, or it's more about protecting your financial policy regardless of how the agencies view on scale? I think also that one is sort of too many steps ahead. Let's see what the actions are taken from our side, what transactions we are able to do, and I mean, how we are looking at that in time. At this point, we are adding the language that we have done, communicating that we are having a strong ambition to maintain our investment grade rating, and that is what we have communicated two days ago, and that's what we stay at for the moment. Okay, thank you. Thank you. Next one is Viktor at Pareto. Hi, good morning, guys. Just one question left from my side. You mentioned increasing the M&A pace, but how do you view speculative projects like Sunnanå in Malmö or Infinity in Stockholm in order to help you achieve your return on equity target over the next two years? Our view on the projects is that they should have the same or even higher return rate, expected return rate than existing portfolios since, at least what you said, speculative projects come with a slightly higher risk. Yeah, how do you look like starting those? Are you looking to actually? If we believe. Yeah? Yeah, if we believe. That is obviously case by case what we believe in that particular market and that particular type of asset that are under discussion. What we believe that the expected rates of return will be. If I should speculate, I think that we might have slightly less speculative projects going forward, but that is difficult to say since we do not have anything before we have actually made any decision upon that. We are looking on many things we could do, divestments, acquisitions, and upgrades of our portfolio, and everything should meet 10% return on equity. On projects, you should probably expect a bit more since they are a bit more risky than what is already up and running. Okay, that's very clear. Thank you. Thank you, Victor. Next one is Stéphanie at Jefferies. Hello, good morning. I appreciate it's a bit tricky for you to answer our questions as you are in the middle of the process of reviewing the activities and so on, but maybe a follow-up on the close of solicitation to bondholders to modify, I quote, the cessation of business provision. Earlier this year, your main shareholders have been suggesting in press articles about splitting the company in several companies. Could you give us your view on this option? As you quoted also or you mentioned commercial properties to be the focus, I was wondering if there are non-commercial properties you are considering to divest. What would be the non-commercial properties in your portfolio in your view? Yes, that's pretty. Thank you. When we refer to commercial real estate, it's basically most of real estate besides residential real estate. We are not thinking about entering into the housing market, so to say. In the current portfolio, it's more or less only commercial properties. I think it's SEK 49 million rental income from RESI, but most of that is included in sort of one or two floors on a commercial building with apartments. And in the report, it's 0%, SEK 49 million out of roughly SEK 10 billion total rental income. Sorry, but you're not considering public properties as non-commercial? That's what I wanted to ask. No, our public properties is, in our definition, commercial properties. All right, thank you. You should not read it as anything large in our portfolio that sort of does not fit into our strategy anymore. Rather the opposite. Almost 100% of the portfolio is commercial properties. On your question on splitting the company into pieces, so to say, that's not at all on the table right now. Very clear. Thank you. Thank you. Thank you. That was actually the last question for today. Thank you all for participating and asking questions. Also, of course, thank you to all of those who were listening today. Bye-bye. Bye-bye.