Welcome to Catena Q4 report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to CEO Jörgen Eriksson, CFO Sofie Bennsten, and Chief Treasury Officer David Silvesjö. Please go ahead. Hi, and warm welcome everyone. In today's presentation, we start with a short summary of the report, followed by a short overview of our business, and we will then proceed to the business update, where we will touch upon our current projects. Sofie and David will, as always, walk through the numbers in the financial update and sustainability, and then, at the end, we will open up for Q&A. Next slide, please. So let us summarize 2023. We report 17% increase in the rental income, driven by acquisitions, projects, and stronger like-for-like numbers, driven by our CPI-linked contracts. The profit from property management increased by 16% in total, and per share, the increase is 4%. The balance sheet is very solid, with an LTV at 37.1%. In the last quarter, we have an increase in our property values, much due to two land areas, where we now have zoning plan and water judgment in place, and the value change in combination with our earnings in Q4 adds to increase in the NRV per share with SEK 24, and ends up at SEK 392 per share. With all this in mind, we are comfortable to grow further and to make some acquisitions and more projects, and in that way, increase our LTV a bit, and at the same time increase our earning capacity. Next slide, please. The business overview now, and next slide, please. Talking about 2023, it's obvious that it was a trying world from a geopolitical and economic perspective. This has resulted in low transaction volume and a sort of wait-and-see mode for our customers in general. When we now have started 2024, we can see a bit more positive attitude in the transaction market, where buyers and sellers starts to be agreed on values. And at the same time, we have quite many discussions about new projects, both from existing customers as well as with potential new customers. The processes for signing new lease agreements, it'll take longer time, but we just have to accept that. All in all, I'm optimistic that we are capable to present some new projects during the coming quarters. And regarding the e-commerce, no one couldn't miss that it has been trending down in terms of value, namely 8% for 2023. The more interesting point to talk about it is, at the same time, the number of parcels has increased by 8%. That means that people still use internet for shopping, but they consume cheaper items. Even more interesting news that came the other day, actually, is that for January 2024, the e-commerce turnover increased by 19% compared to January 2023. Another thing that we have talked about during the year is our possibility within the energy area. We have started to install solar panels and some batteries, but it takes time to solve challenges with energy companies and their connections and infrastructure. A new thing that we see is coming more and more in, is charge stations for electric trucks. It's still early in the process, but we clearly see that we have a role in those solutions in the future. Lastly, we can now ascertain that there are new build vacancies around the Stockholm, Mälardalen, but we cannot see any impact in our business yet, and the trend speaks for logistics and higher demand for more spaces going forward. The clear trend in January 2024 for e-commerce, as I mentioned before, speaks in favor for that. Next slide, please. Regarding our customer base, there has not been any major changes. The top 10 customers now stands for 44% of their contractual value, and as before, logistic and transport, together with food and beverage, are now the two big segments in our portfolio. Next slide, please. During the last quarter, we acquired a piece of land in Helsingborg, which brings the portfolio to a total of 132 properties, with a rental value of almost SEK 1.9 billion. We also see uplift in the fair value compared to last year, more than SEK 3.5 billion. A major part of this is, of course, the deployment in on our ongoing projects and acquisition, but also the value changes that I talked about before. Next slide, please. Let's have a look at our business update. So next slide again. Thank you. Current development in our ongoing project is impressive and totals around SEK 3.8 billion, where SEK 1.9 billion is remaining investments. When all is completed, we can add approximately 320,000 sq m to the portfolio. And the Yield on Cost is around 6.5%, and for new projects, we are aiming for 7%, as we presented the last one to Rugvista in Malmö. Next slide, please. This is namely the Rugvista in Malmö, where we now have started a project of approximately 14,000 sq m to Rugvista. After completion, we have turned this brownfield project to something very modern and attractive, located really close to the center of Malmö. Next slide, please. This project in Jönköping is also one of our latest project and ongoing. The new facility will cover an area of approximately 33,000 sq m, part of which will be consist a high bay storage of 30 m height. And this will be the first high bay in wood frame construction. And Catena has signed a nine-year lease agreement with third-party logistics company Nowaste Logistics, for the facility, with an option to lease the remaining space. And in the facility, Nowaste Logistics will handle flows of goods for Granngården, a leading retail company in gardening and agriculture. Next slide, please. And this is Jönköping and Elgiganten, and we are nearing a completion, and our tenant, Elgiganten, is ready to move in in May this year, and they will rent approximately 86,000 sq m. Next slide. And at the Logistic Position Landvetter in Gothenburg at the airport, as we speak, we have completed the first building to MM Sports, and they move in to a brand-new facility of approximately 8,700 sq m. And the construction for Menigo, as a neighbor to MM Sports, is ongoing and is expected to be completed at the end of this year. Next slide, please. Sure, development possibilities, in regards to our land bank, we have had great success in Söderåsen and in Stockholm South. Now we are ready for more projects on our land banks. The land bank speaks in our favor to be capable to deliver many new projects going forward, and the potential of new GLA is somewhat 1.7 million square meters. Next slide, please. Looking at our leasing operations, our letting ratio continues to be high, standing at 96.6%, compared to 96.4% the last quarter, reflecting the strong demand in the segment, and our net letting was in Q4 actually flat. With that said, I would like to hand over to Sofie for the sustainability and financial updates. Next slide, please. Thank you, Jörgen, and hi, everyone. Next slide. Our sustainability work continue. We now have reached 39% of our lettable area as environmentally certified. We continue to maintain a high level of EU taxonomy alignment for our CapEx at 74%. Produced energy from our solar cells increased 18% since last year and reached almost 8,000 MW. Now for some financial update, the next slide, and over to income. Rental income for the year amounted to SEK 1.8 billion, a growth of 17% since last year. The increase was primarily driven by indexation, acquisitions, and some projects being finalized. The higher rental income increased our net operating surplus with 19% to SEK 1.4 billion. The higher surplus ratio is explained primarily by us divesting older facilities and replacing them with efficient facilities with lower property costs, either through acquisitions or finalized projects. Profit from property management grows 17% to SEK 1.1 billion compared to last year, SEK 954 million. Over to next slide, please, for some rental development. The largest positive impact on our rent is our CPI-linked contracts that came to effect the start of the year, giving a like-to-like growth of 11.6%. Acquisitions contributed with SEK 73 million, with, for example, the two properties in Denmark and two properties that we bought on ICA during the year. Divestments made a negative contribution of SEK 32 million, and within projects, the main contributors were, same as last quarter, the completion of the PostNord and the Nowaste facility, both in Helsingborg. Now over to David for some comments on finance. Next slide, please. Thank you, Sofie, and good morning. On balance day, the equity ratio of almost 52% signals a resilient financial standpoint. EPRA NRV of SEK 392 per share signals another strong profit contribution in 2023, as Jörgen and Sofie has pointed out. The fourth quarter of 2023 was characterized by a significant drop in long-term interest rates on back of a combination of lower inflation and from fear of economic recession. With interest rate peak likely behind us, we expect investment sentiment to gradually pick up in 2024. Over the last months, we have witnessed a huge demand from credit investors, and credit spreads has compressed quite significantly in comparison to 12 months ago. For investment-grade companies, we expect this trend to continue over the year to come, creating a viable and flexible alternative to grow. Given our financial position, we should be able to use both debt and equity alternatives to continue facilitate value-accretive investments. Next slide, please... On balance day, our financial KPI screens, there is comfortable headroom to our financial policy and to our existing financial covenants. A net debt EBITDA of 7.2x signals operations are doing fine and is well balanced against our net debt position. With an interest coverage ratio of 4x, there is plenty of resilience built into the structure. With our loan-to-value policy limit of 50%, which was implemented already in 2021, before rates took off, combined with our view that markets has turned somewhat more positive over the last months, makes us less concerned about using a bit more leverage going forward. With the mind of keeping a safety margin and taking into consideration the uncertainty that still prevails in the market. Next slide, please. During the last quarter, we refinanced SEK 1 billion of bank debt at satisfying terms. Over the next 12 months, approximately SEK 2.5 billion of debt is set to mature, which equals just over 20% of outstanding debt. There is sufficient liquidity to cover for refinancing operations should that deem seem like the proper choice. With the current trend in mind, with credit margins, sorry. With credit margins getting lower, we expect to make use of a blend of capital market funding and bank debt going forward. Next slide, please. During the quarter, we utilized a window of lower rates in December and acquired interest rate swaps for SEK 500 million with a fixed rate of 2.4% and a maturity of five years. Following this, our consolidated interest maturity structure implies we have currently 68% of total debt fixed, with an average term of three years. Our derivatives portfolio and fixed interest loans combined have a mix of maturities up to 10 years from now. The interest sensitivity implies that if short-term market rates would move out another 1 percentage point momentarily from here, we would still be able to keep interest coverage ratio comfortably well over 3 x. And walking you through capital deployment and valuations, I hand over to Sofie. Next slide, please. Thank you very much, David. During 2023, we made acquisitions of SEK 1.2 billion, whereas the biggest were the Danish property in Horsens and the two assets we bought from ICA as a sale and leaseback in Örebro and Gothenburg. We've made one small divestment during Q1, which came to SEK 9 million. Our development CapEx ended at SEK 521 million during the quarter. These investments are mainly related to our large ongoing project with Elgiganten in Jönköping, with Menigo and MMM Sports in Landvetter, and the now finished project with Leka in Malmö. Total development CapEx for the year came to SEK 1.9 billion. We go to the next slide, please. With regard to the property valuation, we've registered write -up of SEK 1.1 billion in the fourth quarter. The write-up was mainly due to the zoning plan that gained legal force in a logistics position, Söderåsen, and a water judgment that was decided at Stockholm South, giving a value increase of SEK 1 billion. Otherwise, the value changes were driven by higher yield requirements, which were partially offset by CPI and renegotiated leases, and also some successful projects. The average weighted valuation yield for the portfolio came to 5.8% by the end of the period, and the EPRA NRV came to 5.4%. 94% of our portfolio has been externally evaluated. Moving to next slide and some closing remarks from Jörgen. Thank you, Sofie and David. The takeaway from Catena Q4 can be summed up into two points. First one is that Catena delivered a record-breaking 2023. Secondly, we have very good opportunities to continue growing through acquisitions and new projects. With that said, we would like to open up for Q&A. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from John Vuong from Kempen. Please go ahead. Hi, good morning. Thank you for taking my questions. On that last bullet point that you just mentioned on new projects, you expect that you're going to present new projects in the coming quarters. How should I think about the size of the pipeline by year-end, given that you have quite some development completions over this year? Sorry, I didn't get you. Can you take the question one more time, John? Was it the size of new projects, or? Yeah, yeah. So exactly, how should we think about the overall size of the total pipeline by the year, by the end of the year, given that you have got quite some development completions? Yeah, that's very good to answer. Based on what I said, the discussions we have with customers and potential customers, we feel that we can present projects, but the size of those, it's very tough to guide you on. And of course, some of our ongoing projects will be completed during the year. So tough question to give you any besides numbers. All right, fair. I suppose that's also driven by the fact that you're also saying that negotiations are taking a bit longer. How should I read into that? Does that mean that you are seeing slowing demand for a new stock, or is that more on the renegotiations on your current stock? No, I would say everything takes a longer time, and the customers need more board meetings before they are feel confident to sign new agreements. We see a demand, but I would also say that a lot of players, they prefer the profitability before growth today. So if they can stay in their existing facilities a bit longer, many of them are happy with that, but at the same time, they say, "We see that we need more space." So that's a balance walk, actually. If we go back a couple of years, the processes were much shorter, so to speak. All right, that's clear. And when you're saying that, they prefer to stay in existing facilities, I suppose that also offers opportunities for extension of facilities, or is that not the case at all? Office expansions? It can lead- Oh, sorry, extension of space, so just adding more space to the current property. Yeah, could be a case where we if we have building rights next to the existing building. That's also discussions we have, of course. So yeah, with that said, we are quite positive that there will be some projects, but how and how big and when, it's tougher to say. Okay, that's clear. And just onto the revaluation gain, how much of that SEK 1 billion is driven by zoning approval, and how much is driven by development gains? No, that's only from the land. We, as you know, buy farming land, and we do the process in-house. Once there is a zoning plan, so you can start constructions, there is a totally different value of the land. And this is, of course, confirmed by the external valuators, and we are also totally safe compared to transactions in the market of buying land. So it's the SEK 1 billion has nothing to do with projects. Okay, then just to understand, the standing portfolio didn't see any write-downs or value gains. It's really just the land. The, the- The uplift of SEK 1 billion in this quarter- Yeah ... is for the land. Yeah. But all in all, we came to a positive of SEK 500 million. So therefore, you have a SEK 500 million write -down on the rest of the properties. Okay, that's fair. Thank you. Yeah. That's it from my side. The next question comes from Erik Granström from Carnegie. Please go ahead. Thank you, and good morning, everyone. I would just like to start off with a question on your CapEx investment expectations for 2024. It came to SEK 1.9 billion for 2023. What do you think you will end up for 2024? As I said before to John at Kempen, it's very tough to guide, so well, I can't at this moment disclose any numbers because the only thing we know is that it won't be that number. It's very tough. It depends on how our ongoing discussions with new projects turns out and when they are finalized. Okay, but assuming the ongoing portfolio that you have, you have an additional SEK 1.9 billion that needs to be invested in that, but up until early 2026, I believe. Yeah. Is there a major reason for us to believe that investment CapEx will come down substantially, even if you don't find that many new projects to do? Well, you should take those SEK 1.9, and you should have them for 2024, 2025, and a bit in 2026 at one of the projects. You can sort of divide it in two pieces, 2024, 2025. And then on top of that, if we are negotiating good and we present new contracts in Q1, Q2, it's fair to believe that they will kick in after the summer, but the substantial values will then be in first of 2025 and going forward, without giving any numbers. Okay, thank you. And then moving on to the market and yield requirements, what have you seen in terms of transactions, and what do you think will happen to yield requirements this year? You mentioned a bit that you saw some new vacant space in the Stockholm Mälardalen region. Do you think that there would be a substantial move in terms of yield requirements in the market for this year? Depending 100% where the interest rates will—if they will drop or not. What we can see in the market for prime and with prime. It's now the buyers are more keen that it should really be prime with sort of location, customers, and so on, and then they are willing to pay low 5% or 5% maybe. But two years ago, the players were not that picky about what is prime or not. Talking about the vacancies that now are out in the market, what we can see is that the expectations of the rent levels are the same as of year and the year ago, so there hasn't been any drops in the rental value or the expectations of the rents. Okay. And then with regards to that, you also mentioned that Yield on Cost for new project you're starting is targeted at 7%, and we can see that that is the case for the new projects, in the report. Do you think that that's still doable, for this year? That the projects that you are in discussions with, are those targeted to be at 7% as well? Around 7%. Of course, we need to be comfortable with what the market rent is in those areas we are discussing, but around 7%. And of course, we also have to see where the interest rates are and so on, and what the customer can stand, and what our requirements are. But yeah, it's fair to assume around 7%. Okay. Thank you. And my final question is regarding the net letting that you mentioned. For the year, it came in, I believe, flat or, basically zero. Assuming that you are filling up projects, what does the terminations come from? Because I would assume that you normally have positive net letting, not the least, because of your project portfolio, which then adds to new leases. So what has anything specifically happened in the management portfolio during the year? What we have told the market before is that we have had some padel players, not the player that plays padel, but the ones who have the lease agreements that they have been struggling. So some of those have been shut down, and that take some time to find new tenants, and the net letting for the Q4 was flat. Okay, but do you expect to have that same sort of headwind in this year when it comes to those kind of tenants needing to leave their, their space? I think we should be humble for 2024, that maybe some tenants can have a struggling time. But, I think also we are pretty comfort that our letting ratio is around 96.5%-97%. That's somewhere where I think it's fair to believe that we are. Okay. Thank you. Those were my questions. Thank you. The next question comes from Jan Ihrfelt from Kepler Cheuvreux. Please go ahead. Okay, good morning. I actually have two questions. First one regards loan to value, LTV. You're currently at 37%, and you were talking about the expansion of the company using both debt and equity. So my question is really: what kind of LTV level are you happy with that? With... Is it like 40%, or could you just give us some kind of flavor on that matter? Yeah. Thank you, Jan, for the question. Well, it's also that will be a decision from our part in combination with the opportunity that we will assess at the time. But I think it's fair to assume that if we end up somewhere over 40%, we feel still great comfort. Our take on interest rates, even though even though two months ago, we expected a lot of cuts from the central bank. Now, obviously, there is a pushback on those expectations, but we still expect interest rates to be lower in 2024, and that's one of the reasons also that we feel comfort in raising loans. Sorry, my voice is a bit bad today. So that's the reason. Basically, we feel loan-to-value can be raised, and if it ends up just over 40%, that's, that's fine. Still great comfort, great resilience. Okay, and the second question regards your projects on page 10 in the report, the Swedish version. You have possibly larger possible projects, and some of them could be started quite soon, I suppose. But could you just elaborate a little bit, which project is closest to start here? Well, we cannot disclose any specific projects. It's fair to assume that we discuss with existing customers and new potential customers. And as we now have the zoning plan in place at Söderåsen, close to Helsingborg, and we have the water judgment in Stockholm South, those two areas look very promising from our perspective. Okay. Thanks for taking my questions. Thank you. Thank you. The next question comes from Paul May from Barclays. Please go ahead. Hi, everyone. Thanks for taking the question. Just a few of them, a couple of clarifying points, which should be quite quick. Just on the earnings capacity, just wanted to check that excludes developments that are completing this year, and does it include or exclude the 6.5% inflation rate that should come through? Hi, Paul, good question. It includes the CPI for 2024. It also include those projects that we see will be completed during the year. So, the signed lease agreements that we have, they are in the earnings capacity. Cool. Thank you. And then also just another clarifying point, what is the operating surplus ratio that you use in your developments? You mean, compared to those 80% we have in the report? Yeah, broadly. Is it broadly what you have, or is it a higher operating surplus for interest? In the new project, it's fair to assume that we have much higher, without mention any specific numbers. But, I mean, the first 10 years in a new building, there are practically no maintenance and things like that. Then there could be like, if the customer don't can have the subscription with the energy companies, it has to go through us, then there will of course be a lower margin. Sure. So, some could be some of those cases. Okay. Okay, that makes sense. Just on rates, obviously, you mentioned about potential rate cuts and that being pushed back. Obviously, that's just on the central bank policy rate, the Riksbank rate. Obviously, five-year swaps are already significantly lower, so the inversion of the yield curve. Why are you not looking to fix more of your debt today and immediately take advantage of lower rates, rather than waiting for the central bank to maybe or maybe not cut rates? Thank you, Paul. That's obviously a very good question, and one of the questions that any real estate company with debt are thinking about. Will this, will the STIBOR basically, will it get more expensive to stay with STIBOR over the next, five years, or should you do a swap for five years? Well, that's a good question. We have been very consistent in how we deal historically with interest rate management, which has been quite successful from our perspective. We were at 68% of fixed interest, and we are quite happy with that. So, that's how we think about it. But obviously, the question is good, and it's something we always think about, but right now we feel happy with the situation we have. Okay, cool. Thank you. And then just final question on acquisitions. I think you've sort of highlighted those as being a potential moving forwards. Is there a slight shift in your thought process? Because obviously, it was very much expansion through development with a bit of acquisitions. It seems you're sort of pushing the acquisitions a little bit more as an opportunity now. Is that because you do see or expect to see some, should we say, motivated sellers in the market and some quite attractive opportunities emerging, or is it still more of the same? It's, I suppose, getting. Is there a subtle change in your expansion aspirations? Thank you. Well, the main expansion strategy is new projects. That's the same as it has been, but from time to time, we can consider to do some acquisitions if we find the opportunities. That could be some motivated sellers, or that could be some really good assets up for sale. And in combination with our financial capacity and the low LTV that we have, we see that we can look into some acquisitions going forward. Just on the leverage that you consider, obviously, everyone talks LTV still. There's, there has been an increasing focus on net debt to EBITDA, which I see has sort of moved positively for your, for your business. Do you also consider that as a metric on financing, or is it still very much our LTV as, as the sort of main focus? It's both. It's both. And when we do these assessments, obviously, we have a forecast in mind of, you know, the next five to 10 years, basically, and the net debt EBITDA is extremely important to keep track on. So it's a combination when we do these assessments. We want to make sure that we stay below 9x, as you know. So, yeah. Okay. And is 9x an appropriate level moving forward, just considering, yeah, the change that we've seen in the rate environment and rates are going to be higher moving forward? Is that still considered to be the right policy, or would you look to bring that lower, more akin to where US companies are? I think you have to look at the market you're at, and 9x is the assessment we have made. It's a good number for us. We have no intention to changing that right now, but obviously, as you point out yourself, you should always value these things, and that's something we do continuously. But right now, 9x is a good number. It facilitates a lot of good things. The rating agencies would like to see us stay below 9x, and so we are happy with that. Cool. Thank you very much. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. Yes, thank you. And we have one written question, and it's: What are your observations on the 2023 acquisition of Bockasjö and its impact on Catena's expected 2024 operational performance? Well, we closed the deal with Bockasjö in October, and the development and business development team is now in place and working with some of our existing projects. They also with some of the joint venture projects that we now have with Platzer, and Platzer will be the final 100% owner of them. We think that this is very promising for 2024, and with the old Bockasjö network and the business developer and the project team in place, I think that the process for having new customers and having even more efficient projects is very promising. Now, another written question: Is the higher market supply of new development a potential headwind to new development starts for you in 2024? Good question. Let's put it this way, we will not kick off a new project in speculation terms in the area where there are existing vacancies, then it should be a pre-let version. So of course, we sense the market and assess carefully where to start new projects, but it's fair to assume that the new projects we hopefully present, they are pre-let more or less to 100%. And with that question answered, I think that was the last one. So from the Catena team, I say thank you very much and have a nice day. Thank you. Goodbye. Bye-bye. Thank you. Bye.