Hi, welcome to Catena's podcast for the Q2 of 2021. Jörgen Eriksson Sofie Bennsten, and we will do today's presentation. We move over to slide number three. It's a quick view of today's content, where we will start with some highlights, and as usual, we will end today's session with a Q&A. Jörgen, you're welcome to start, and we go to slide four. Thank you, Sofie, and here are some highlights. Catena came out strong in the Q2 with an eight percent increase in the rental income. Year-to-date, our profit from property management has increased by 11% year-over-year. EPRA NRV has increased by 34% to SEK 278 per share. The earnings per share came out to SEK 27.87. New leases of SEK 27 million were initiated. Our net leasing operations summarized to SEK 19 million in the quarter. Worth to mention is that we came out this quarter with net LTV around 45%. The zoning was in Q2 approved for additional land in Sunnanå next to Malmö. We also acquired a property in Gothenburg. We feel that our business are backed by strong occupier demand, especially from segments such as groceries and 3PL. Moving to slide five, please. COVID-19. The impact from the coronavirus has had a limited effect on Catena in the first half of 2021. Summarizing, a rental value of SEK 11 million was agreed to change from quarterly to monthly payments, of which they all have been paid for according to the plan. Discounts linked to the government rent subsidy amounted to just under SEK 2.8 million. Moving to slide six, then further on to number seven. We are proud to present the history of profitable growth. Profits from property management has paced at 14% compounded annual growth for the last five years, and the earnings per share has paced at 41%. At the same time, the dividend has compounded annual growth at 20%. Moving to slide eight. Our rental income amounted to SEK 673 million in the period. The total growth in rental income was eight percent year-over-year. Project developments contributed 5.6%, and net transactions 3.3%. Like-for-like, rent growth contributed 0.5%, which comprises a combination of lease reviews and renewals, as well as inflation and changes in vacancy. There was also a one-off effect related to prepayment of an early lease expiry amounting to 1.3%. Moving to slide nine, and over to Sofie. Yeah, we have some comments on the income statement. Our rental growth, due mostly to development projects and acquisitions, are eight percent higher than same period last year. The increase of income from property management are 11% higher. The surplus ratio is 79.9%, compared to last year's 84.4%. One should still keep in mind the effects of a positive one-off in the rental income of SEK 40 million that we had in the Q1 last year. Also, the harsher winter in the beginning of the year, and the temporary increase of the cost for electricity, has affected the surplus ratio. Furthermore, we also see a normalization of the maintenance. We now see a more normal surplus ratio for the period. Unrealized changes in property value amounted to SEK 880 million, corresponding to 4.3% of our value. The value changes of derivatives amounted to SEK 110 million. All in all, the profit for the period ended at SEK 1.1 billion, resulting in an earnings per share of SEK 27.87. Moving over to slide 10 and Jörgen. As indicated by the diagram, our cash flow has been growing consistently since 2016. For Q2, we have performed another strong cash flow period, where we retain 59% from revenues in property management income. Cash flow is a key for stability and enable us to generate investment capacity for a continued focus on our profitable development pipeline. Our target is to maintain a level above 50% of rental income, and our dividend objective is to distribute 50% of profit from property management, less standout costs. Moving to slide 11, and further to slide 12, Sofie. Catena have now a total of 123 properties, well-located along highways and around the three major metropolitan areas. Since a year back, the portfolio has grown with SEK 4 billion, corresponding to a growth of 22% to a total of SEK 21.2 billion. The nine properties in Denmark amounts to seven percent of the contractual annual rent. The economic letting ratio has gone up since last quarter from 94%-95%. It's the vacancy in Borås of 16,000 sq m that has been filled, and also it has been a quarter characterized by good rental growth. Going to slide 13. Catena have a diversified asset portfolio, both in term of geography, tenant concentration, and asset price. 41% of our rental value is derived from critical logistic and transport providers, and 39% is from retail and wholesale, with a booming e-commerce sector where a part of it is in form of food distribution. Going to slide 14. There again, on this slide, we present a part of our customer whom Sofie talked about in the previous slide. Many of them are experiencing a strong growth, and we will do our best to supply them with more spaces where needed, and we hope that it will be an exciting second half of 2021, where we hope to present some more investments. Moving to slide 15. Here we show our rent levels in our regions. As you can see, we have the highest levels in Stockholm, Malmö, and Gothenburg. Moving to slide 16. Talking about the letting operations, we have a net rental of SEK 28.5 million for the first half of 2021. The weight is a bit more than five years, the letting rate here, as Sofie said, is around 95%. Moving to slide 17. Further on to 18. The EPRA NRV has grown by 16% annual since 2016, we came out Q2 with SEK 278 per share. At the same time, the five-year average return on equity has been 17%. Moving to slide 19, Sofie. During the year, we've done two share issues of a total of SEK 1.3 billion, equity has grown with 51% since same period last year and amounts to SEK 9.6 billion. Since same period last year, the balance has grown with 24%, amounting to SEK 23 billion. Moving to slide number 20. Property value was appraised at SEK 21.2 billion, and the net EPRA Net Initial Yield came to 5.3%. Unrealized value changes amounted to SEK 680 million during the Q1 and another SEK 200 million during the second. The increase in value changes is due to the ongoing market year compression and projects being finalized. Moving on to slide 21. In May, Catena was awarded an investment-grade credit rating of BBB- with stable prospects from credit rating agency Nordic Credit Rating. This rating reflects both our fine financial position and our leading market position and also establishes additional conditions for long-term financing at favorable terms. Moving on to slide 22. In addition to launching our new MTN program, we also launched a Green Financing Framework, making it possible to issue green bonds. To ensure that the framework meets strict environmental requirements, it has been reviewed by the independent climate and environmental research institute, CICERO, which has given the framework the rating CICERO Medium Green. The first issued bond of SEK 1.4 billion was green, and Catena's green financing now amounts to 14% of interest-bearing liabilities. Our current target is to reach at least 50% share of green characterized loans until 2025 at latest. Moving over to slide 23. The green finance framework stipulates three sub-categories for new construction and major renovations, for existing buildings, and for energy efficiency. The framework will be controlled yearly. Most of our assets qualify for green financing and achieve at least a certificate of Miljöbyggnad Silver and/or an energy performance certificate of A or B. Moving over to slide 24. Catena's new MTN program was established in May, amounting to a price of SEK 5 billion, and shortly thereafter, the first senior unsecured green bonds was issued with a total volume of SEK 1.4 billion. Rate terms was set to STIBOR three months plus 1.35% for a floating rate loan of SEK 950 million, and mid-swap plus 1.35% for a fixed loan of SEK 450 million, both with a tenor of four years. On balance date, the LTV amounted to 45.1%, and the average interest rate stayed at the same as in Q1 of 2.3%. Equity ratio was reported at 41.5%. Moving over to slide number 25. As part of our efforts to favor our credit rating, we have been committed to extend our average debt maturity. With the establishment of our MTN program and issuing our Catena's first green bonds with a four year tenor, the average debt maturity has changed to 3.3 years, which is an extension with 1.1 year since last year. 2.2 years. Interest maturity went from 2.7 years last quarter to three years this quarter. The portfolio has currently a hedge ratio of 71%. Moving over to slide number 26, and moving over to slide 27, capital deployment, and Jörgen. Thank you, Sofie. Our goal is to focus the majority of our investments into development. Although during the first Q2, we have acquired properties for around SEK 1.2 billion, whereof around DKK 700 million is in Denmark. We have also invested SEK 450 million in development projects. Looking into the coming years, we see that the amount invested in projects will increase from the figures today. Moving to slide 28. Here we have a slide of our transactions. I talked about this. You can see the major part has been concentrated in Denmark. Next slide, please, 29. Here are our large development projects in progress. The project in Åstorp is about to be finalized this month, and our tenant, FREJA, have moved in the other week. Next slide, please. Potential future development. On the balance day, we have the potential of about 5 million sq m of land, where almost 1 million sq m are consolidated and with development plans in place. Rest of the land bank, it's conditional on various contractual agreements such as detailed development plans having to gain legal force. The search of new land continues along with ongoing zoning plan in progress. Next slide, 31, please, and further to 32, Sofie. Catena's sustainability work progresses. We are happy that our implementation of green financing through our own green bonds went well, and it will give us additional flexibility in our loan portfolio. Also that we can match Catena sustainability ambitions fully by offering green bonds as an investment alternative. We are committed to take our responsibility concerning environmental aspects of our operations and to make sure we follow the Paris Agreement. Right now, we are assessing the implications of the EU taxonomy and how the regulations will impact our future reporting standards. Moving over to slide 33. The work with certification has been intensified, and 12 buildings are now certified according to BREEAM In-Use, and another 10 is ongoing. We have added solar cells on several roofs and have now 15 installations ready. The positive news that the government increases the level for tax system to 500 kilowatts for solar cells installation will give us an opportunity to more cost-efficient and larger installations. Moving over to slide 34 for some market insights and ongoing. Yes, 35. Some interesting signals from our customers that confirm our thoughts around the strong market. On ICA, it's 149% growth in Q1 regarding online sales of groceries. PostNord identify online shopping grew by 53% in Q1 2021 compared to 2020. MTG, who is a large customer in Denmark, came out in Q1 2021 with the best quarterly result ever. Once again, we feel very confident with the market, a very strong market, and we can see that our customers, they are in need of more logistics spaces in the coming years. Moving to slide 36. We can show here a large growth in different segments of e-commerce on the left side. On the right picture, we can see that the share of online shopping for groceries has doubled from two percent in 2019 - four percent in 2020, and the trend has continued in 2021. Moving to slide 37. As I started with, highlight in Q2, we had a new zoning plan approved in Sunnanå, close to our large area where we have finalized all the projects. Now we have a plot of 110,000 square meters, and we can build up to 55,000 square meters. After the summer, we will intensify work to prepare the farming land, so we can be good to go when we have finalized discussions with potential customers. Moving to slide 38. It's a picture of an amusement park, Liseberg, very famous in Sweden. We acquired a property in the region of Gothenburg, and the property is just over 7,500 square meters, and it's fully leased out to Liseberg AB for the 10-year contract. We move on to the Q&A session, please. Thank you. If you wish to ask a question, please press 01 on your telephone keypad. The first question comes from the line of Niklas Wetterling from DNB. Please go ahead. Your line is open. Hi. I have two growth-related questions. The first one is, it was no project starts in Q2 and the remaining investment volume is in a declining trend. What's your near-term outlook for project starts? I think I hope that we can present some new projects after the summer or at least the coming six months. That's my very best guess. We are fully aware that it has been declining figures in that investment trend and that we have instead made some acquisitions. Once again, as I said, we will focus on our own developments in the coming years. I don't know exactly what you mean by near-time, but if we are talking the second half of this year, I'm sure that we will present some new projects. Okay, great. Do you think the SEK 600 million in investment volume is a fair target, or are you likely to overshoot it? It's very tough to mention any figures, but we will step up for sure. Yes, secondly, a question about transaction activity. It was also rather low in Q2, I noticed your competitor SLP has made three acquisitions in the last weeks in regions where Catena has a strong market position. Why is not Catena the taker those assets? It goes hand in hand with the strategy that we will for sure focus on developments. In these cases, we have not been focused on acquiring those facilities. We will focus on developments in the coming months. Okay. You have not been bidding for those? No comment on that one. Do you prefer to buy cash flow assets in Denmark before Sweden? Yes, as the market is right now, I think that we prefer to go further on in Denmark. Okay, great. Thanks. That was my question. Thank you. Thank you. The next question comes from the line of Victor Krüeger from ABG. Please go ahead. Your line is open. Perfect. Thank you. I assume you guys can hear me. Yes. How are you going? Yeah. Thanks. Hi. I have two questions. The first one relates to what Niklas just asked. That is to Stockholm and the detail plan that was described in your Q1 telco. I was just wondering what the status is there and if you have any updates to give us with regards to the detail plan. It's the same answer as in last quarter. We are working with water permission, handling all documents and for having the right papers in place and then give it to the court, to the environment court to take a decision. We have no update concerning any date, but we are working on it. Okay. Thanks. The other one was regarding the paid tax that went down again this quarter. Should we still expect the paid tax rate to be in line with Q1 for the full year, or has something changed in this regard? Well, we never calculate what we call paid tax in the quarters. We only do that when we come to in the full year. All the tax that we calculate during the deferred tax, because you can't really do it beforehand. You see this figure for the full year of 2022 in the annual report, you have a division. It's divided between paid tax and deferred tax. It's more in line with that we can see. It will grow, and of course, it's going to grow a little bit with us. The paid tax will be around that going forward. The deferred tax is a calculation that goes up and down with the interest and the property values changing. When you were guiding in Q1 for a higher tax rate, was that only referring to deferred tax? Yes, it is. It is the calculation of it. Yep, it is. Perfect. That's all for me. Thank you. Thank you. Thank you. The next question comes from the line of Jan Ihrfelt from Pictet Trevaux. Please go ahead. Your line is open. Okay. Thanks for taking my questions. First one is really on your financial net. There were SEK 5 million in financial income this quarter. I just wanted to know what that refers to. Yes. That's the one-off. Currency currency when we bought the properties in Denmark. We hedged the currency at a certain point, and then when we took up loan, we got another currency. From all this, we came out on the plus side. We actually had a SEK 4.5 million currency win. This is a one-off, so it won't come another one. It's there. That's the reason. Okay. Looking at the financial costs, if you look to the earnings capacity for the Q1, it indicated a cost of almost SEK 56 million, and it actually came in at SEK 60 million. I just wonder if there were any extraordinary items also in the costs. No, I think it's more a thing that we are growing. You compare it to last year? No, the earnings capacity in the first quarter indicated a run rate of SEK 66 million per quarter, and it came into at SEK 60 million this quarter. I just wonder if there were. Right. Yeah. Well, I think that the earnings capacity is for Q4, and it's divided by four. I think we can see some lower costs in the coming quarters, regarding to, for example, the MTN program and so on. Okay. Yeah. You think your average interest rate will come down in 2021 compared to 2020? Yes. Absolutely, we hope for. Okay. To what extent? Is it 10, 15 basis points? That's difficult to say. I'll leave it at that. Okay. Yeah. Okay. Moving on to your property uplifts, a little bit lower this quarter. I just wonder, how much of the property uplifts this quarter referred to the finalization of the Sunnanå project? The Sunnanå project in terms of the buildings. Just looking at the property uplifts, I suppose there was some of it that referred to finalization of projects. I just wonder how much of the SEK 200 million were actually referring to projects. We don't have the exact figures. No. I haven't looked at it like that, but I don't know. Maybe half of it, give and take. I don't know. It can come in different. Sometimes it's not only the big projects that give this effect. There can also be smaller projects that we do investments in that we've given uplift when the tenants move in, and we made an investment in the project. It's a very mixed, I think. We cannot describe exactly how much it was regarding to Sunnanå. For sure, Sunnanå and Tostarp, they have been some of the best cases where we have made a lot of uplifts during the past quarters. Okay. Just also on the property uplifts and your property values, do you see that your current property values reflect what is happening in the market right now, or is there a time lag that the current transactions are not into your books, so to say? We have now made a lot of external valuations, and we feel very confident with the values. For sure, there is a lagging in time between the broker's view of the market and the valuators. I think we can see that maybe the yields are going down also in the valuator's perspective in the coming six, 12 months, but who knows. Today, we feel confident with the values. I just saw that Tritax EuroBox bought a property in Gothenburg Port of 3.6% yield. Is that an indication of lower yields going forward? That could be. It's also very difficult to just relate to one very low yield transaction. There could be some other reasons why they really wanted that one so badly, so to speak. Okay. Of course, if the market presents a lot of transactions where the yield is below four, then I think we can see also some changes in the external valuator's reports, so to speak. Okay. My final question really regards your CapEx level for this year. Do you have some kind of soft guidance for what you expect it to be? No, as I said before, it's very tough to mention any figures, but we feel very confident that we can present some more projects after the summer in the coming six months. We have exciting discussions on the table. Yeah, we know that the pace hasn't been that high the last 12 months, but we feel that we are very eager to increase the figures again. Okay. Thanks very much. Thank you, John. Thank you. Thank you. Just a reminder that if you would like to ask a question, please press zero one on your telephone keypad. There will now be a further pause while any further questions are registered. We have a question from John Voung from Kempen. Please go ahead. Your line is open. Hi. Good morning. Thank you for taking my questions. I was wondering whether you had a bit more color on the reletting spreads, given that your like-for-like is still at 0.5%. Yeah, I would have indicated before it is something between that one and one percent like-for-like over the years. It could also vary a bit between quarters. We have very long contracts, and it's not that often that we renegotiate the contracts. If we, for example, had had a renegotiation in a smaller city than compared to Stockholm and Gothenburg, that would show in those figure 0.5% next quarter or next year, maybe we renegotiate somewhere else and then maybe the figure is a bit higher. That's just a bit more flavor on that figure. Okay, thanks. I suppose it's fair to say that the renegotiations you had in the first half are mostly in the smaller cities, essentially. Yeah. Could be the way to interpret, yes. Okay. Thank you. Perhaps then as a follow-up on that, what are you expecting for the coming 6-12 months in terms of like-for-like? That is very tough to indicate. As we have said before, it's hovering around this 0.5% up - 1%, maybe in some good cases it could be up to 1.5%, but it's hovering around one percent. That's the best guess/forecast. All right. Thank you very much. Thank you, John. Thank you. I will pass back for any closing comments. No, we would like to thank you all for listening and wish you all a wonderful summer and see you soon again after the summer. Take care, everybody. Yeah. Take care and have a wonderful summer.