Welcome to the Cibus Q3 2023 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to CEO Sverker Källgården and CFO Pia-Lena Olofsson. Please go ahead. Thank you very much, and once again, warm welcome to the Q3 interim report presentation from Cibus Nordic Real Estate. My name is Sverker Källgården, and with me today is, as usual, Pia-Lena Olofsson, the Group CFO. Pia-Lena will take us through the numbers later on in the presentation, so we'll turn to the next slide. Significant events during the period. On July the 11th, we announced that Cibus had launched an updated Green Financing Framework and a new Sustainability-Linked Financing Framework. On the 20th of July, we announced that we had updated our MTN Program and published an updated Basic Prospectus. On the thirtieth of August, it was announced that Cibus Board of Directors and myself had together agreed that I would step down from my role as CEO, and the Board of Directors have initiated the process of appointing a new CEO, and I will continue in the role until the process have been completed. On the 22nd of September, it was announced that the nomination committee in preparation for the next annual general meeting had been appointed. The nomination committee as appointed, based on voting rights of the largest shareholders on the last trading day in August 2023. Yesterday, we announced that we had sold two properties in Finland to S Group for EUR 9 million, and the sale price was consistent with the reported property value. The proceeds from the divestment will be used to reduce debt, strengthen the balance sheet, and will have a positive effect on cash flow per share. Cibus Nordic, we are a real estate company focused on daily goods properties. 99% of our rents are linked to CPI development, and over 90% of the leases are either net net or triple net, which means that a lot of the costs in the properties are carried by the tenants. The insensitivity to the broader economic trends makes our operations more akin to infrastructure than retail. We have been listed since March 2018 and moved to the Stockholm mid-cap main list in June 2021. We have a clear Nordic focus. We are present in all four larger Nordic countries, Finland, Sweden, Norway, and Denmark. As the only company on the Nordic Stock Exchange, we pay out monthly dividends to our shareholders, currently EUR 0.9 for the coming 12 months. The story about Cibus is the story about portfolio diversification. Traditionally, these kind of assets were owned as either single assets or in small portfolios, which meant you had a very high-risk concentration. If the tenant left, you lost all your cash flow, which meant you came in a weak negotiation position with the tenant. The bankability was low, which meant that you had a very high risk, but also a very high return business. What Cibus realized is that if you own 450 assets all over the Nordics, you diversify the risk and lower the concentration. When you own a lot of properties with a handful of tenants, you become an active cooperator with the tenant and not just the landlord. The banks realized this, so the bankability is higher, which means that you have lower the risk, but you have the same return as for a single asset. We say that we are more akin to infrastructure than to retail, and the one thing that really sets us apart from retail is that we see a resilience towards e-commerce in the portfolio. We've seen a negligible negative effect. The share of online trade is around 4% and is decreasing every month. And a large portion of that is of that volume that still is traded online, is click and collect from the stores. If you look worldwide, you see very few operators who make a profit on online food sales. On the other hand, we see a notable positive effect, that the existing stores, they can work as a natural distribution network and pickup point for other goods purchased online. Looking at the shareholders list on the last day of September 2023, Fjärde AP-fonden was still the largest shareholder, followed by Länsförsäkringar Fonder, Vanguard, Avanza Pension, Nordnet Pension, BlackRock, and Sensor Fonder. And on the last day of September, we had 47,000 shareholders. Looking at the share price performance, the average daily volume is around SEK 47 million, of which SEK 21 million is traded through Nasdaq with around 2,000 transactions a day. The stock market unease and the turbulence experienced since the outbreak of the war in Ukraine, as well as rising inflation and interest rates, have affected Cibus share price. On the last day of September, the share price was SEK 108.3. But today, just before the call started, we were trading at around SEK 121. Then over to Pia-Lena for the financial overview. Thank you, Sakke. Here are some key figures for the third quarter. Rental income was EUR 29.8 million. Net operating income grew with 18% to EUR 31 million. Profit from property management was EUR 16.8 million, and earnings after tax, EUR 8 million, or EUR 0.13 per share. If we go into details, there are some items affecting comparability in the third quarter. Net operating income includes non-recurring income of EUR 2.7 million due to remuneration from a project developer in, Denmark, as well as compensation in connection with a canceled acquisition. Net financial items include a redemption premium of -EUR 0.2 million and a positive exchange rate gain of +EUR 0.1 million. Profit from property management, excluding non-recurring items and exchange rate effects, amounts to EUR 14.2 million. Unrealized changes in property value was minus EUR 5.5 million, due to slightly higher yield requirements, as well as the company's own adjustments. We also have a negative effect on unrealized changes in the value of interest rate derivatives of minus EUR 1.7 million in the quarter. Our properties, we have 454 properties at the end of the third quarter, with a property value of EUR 1,828 million. Properties with grocery and daily goods tenants contribute with 97% of our net operating income. Looking at our segments, the segments are countries, and Finland is the largest market, with 66% of NOI in the third quarter, Denmark was second with 18%, Sweden with 12%, and Norway with 4%. Cibus' strategy is to give our shareholders a strong dividend on a monthly basis. We currently pay out EUR 0.90 per share, divided into 12 installments. The dividend yield on the closing share price of SEK 108.3 at the end of the quarter was 9.6%. Looking at the balance sheet, property value was EUR 1,828 million. Secured debt was EUR 923 million, giving a loan-to-value on secured debt of 50.5%. Unsecured bonds amount to EUR 148 million, giving a net loan-to-value of 56.7%, which is within our current finance policy between 55%-65%. The target is under revision and will be updated later in November. Our net asset value, EPRA NAV, was EUR 744 million, or EUR 13 per share. Our average remaining lease time was 4.9 years at the end of the third quarter and continues to be very stable around five years. Regarding funding, 84% of our external funding is bank loans. A 100% of the bank loans are interest rates hedged and can maximum amount to 3.97%, up to and including December 2024. Interest can maximum amount to 4.05% during the first half of 2025, after which the interest rate hedges gradually matures. The remainder of Cibus interest rate hedges, not hedging bank loans, cover about 80% of the unsecured bond loans. Based on the earnings capacity, taking all interest rate hedges into consideration, an increase of the market interest rate with 1% would affect profit with -EUR 380,000 annually, and an increase with 2% would affect profit with -EUR 760,000 annually. Cibus target is to maintain the interest cover ratio above 2. For the next 12 months, the exposure to floating interest rates is only 4%, while the debt maturities to be addressed will be marginal. Cibus, therefore, expects that the target of 2 can be maintained even if underlying reference rates were to rise most significantly. The ICR covenant and the bonds are 1.75x. All right, what about the future? What are we focusing on going forward? Our focus is on our balance sheet. We optimize it to safeguard increasing cash flow and dividend over time, but we also look on ESG projects to reduce energy efficiency or to increase energy efficiency to reach our goal of climate neutrality by 2030. And last but not least, the primary reasons to invest in the Cibus share: we produce a high and stable yield. There is the potential for favorable value growth. 99% of our rents are CPI linked, which will yield noticeable growth in our NOI, even without acquisitions. We pay out gradually rising monthly dividends. Since October 2020, we pay out the dividends monthly and aim to gradually increase them over time. Last but not least, we are present in a segment with long-term resilience and stability. The grocery and daily goods sector has experienced stable, non-cyclical growth over time. Thank you very much. That was about it for us. Please feel free to ask any questions. We do have some questions on the web. Do we start with them? What you going to do about the vacancy in Sweden two Coop stores were closed. Yeah, it was announced in the papers that Coop were to close two of our stores in our portfolio. And bear in mind that when we bought this portfolio, we bought it with 10-year triple net leases, which ends in 2030, so they are still under long contracts. Although we are having discussions with both Coop and other tenants to potentially fill them with another food store, and we know that there are interest in several of these locations, but cash flow-wise, they're very secure until 2030. Yeah. We have another question. Can you give some more color on the non-recurring items of EUR 2.7 million? Yeah. The non-recurring items, there were two. One in Finland, when we canceled a previously made acquisition, when the, due to that, the property wasn't in a good condition, as was said when we bought it. So, that was transferred back to the developer, and we got a compensation of EUR 1 million for that. In Denmark, we own smaller local center, and in that, in the contract that was made with the local authorities in Denmark, when that center was built, there was that if another developer were to build another grocery store in that local community, we should be compensated, which now has happened. So we have been compensated because of that fact. So nothing dramatical at all, but we have been given compensation for it. Could you also comment on the acquisition of EUR 13.7 million during the quarter? Is it deal that is completed now or something new, the Swedish acquisition? Oh, that's been done a long time ago, but we closed the deal now. So we bought it, I think it was a year ago. Yeah. It's newly constructed grocery store. Could you, what does the current future dividend policy look like? Well, we have lowered the dividend earlier this year from EUR 0.99 to EUR 0.9 per share, which is a sustainable level. The aim now in the short term is to continue that level, but we aim to increase it over time. Could you please provide insights into the valuation process for Q3 reporting, in light that 99% of the Swedish portfolio consists of Coop? That is not completely true, we do have other than Coop. Yeah. No, but the valuation process for the third quarter is exactly the same as all other quarters, that we externally evaluate all our assets. And what we do is that we get the valuations from the evaluators, and then there is a management and Board opinion due to that. And this quarter, we have been slightly more conservative than the evaluators. So, the Board and the company lowered the valuations of certain assets, so we came in on a bit lower figure than the valuator, but not dramatic at all. No, no, no big deals. Yeah, I'm perhaps also wish that we do have index increases that, of course, is dampening the effect of the higher yield. Requirements, yeah. Requirements. Absolutely. That is positive. How much will yesterday's sales strengthen in earnings per share? It is just slightly that we will strengthen the balance sheet and buy back debt. So depending on what kind of bonds or if we do amortize on bank loans, but of course, it will have effect on the bank loans that we, first of all, will. Repay. Repay, yeah. How are Cibus financials affected by SEK, euro exchange rate? It's a strong euro compared to SEK, good or bad for Cibus? I mean, most the, the, the by far largest part of Cibus is in, in, in Finland, as you saw, 66% of the NOI came from Finland. The next largest is Denmark. 80% of NOI came from Denmark, and Danish kroner is pegged to the euro. So we don't have any exchange rate effect in Denmark either. So what we do have exchange rate effects is on the SEK and the NOK. So 12% and 4%, so 16% of the NOI, we do have exchange rate effect. And of course, we do have higher income than costs. So usually, a stronger SEK is good for, or NOK is good for, Cibus. Mm-hmm. Here's a question: If you have been compensated in Denmark, have the valuation for the property affected been adjusted? I don't know the details on each and every one of the properties, but the valuator's view on certain properties has nothing to do with if we are compensated for something else. But they have an open mind, that they look at each and every property for itself when it comes to competition, but also market rent. So I doubt that they would change the valuations for that property just because we are compensated. Yeah. What explains the pickup in actual tax in Q3, whether going forward or just high for the quarter? We have come in a tax position now in Denmark, which we weren't either. So we will be a little bit higher in tax going forward, but still lower than the tax rates. What's the reason for reviewing the LTV target? Well, we feel in this interest environment that a lower LTV target is more suitable for the company, but in the end, that's for the Board to decide, and the Board will communicate in November, late in November, the changes regarding LTV, if they choose to do that. Could you kindly provide insights on how Cibus is currently addressing the ESG criteria in the business framework? Especially, I'm interested in understanding environmental practices. What steps are Cibus taking to minimize the environmental footprint? This may include initiative related to energy efficiency, waste management, sustainability resources. Yeah. Yeah. Well, as we have a lot of net and triple net leases, we have to work together with the tenants when it comes to ESG and sustainability. Luckily, the leading grocery tenants in the Nordics are among the best in Europe, working with the ESG matters. So they are really taking this seriously, and their waste management is excellent. They try to reduce all waste. We are looking together with them if we have properties suitable, for example, for solar panels. Otherwise, in Finland, we can buy green energy to a higher level than we have been. You have green district heating, so which you can now buy that and purchase that on the open market as well. So we work a lot together with the tenants, but we also look upon if we have assets that we really need to take care of and to improve if we see a long-term use for them in the portfolio, of course. But as I said, mostly, we work together with the tenants, and if we can provide green energy or green electricity by producing solar panels, the interest from the tenants is getting bigger and bigger. The interest has been a bit low up until now, but looking at the energy prices, especially from last year, the interest has improved. So we're looking into that and are currently building a pilot plant. We have finished one in Sweden, in Charlottenberg, which is very successful, and also in the other Nordic countries. We have a target of becoming climate neutral by the end of 2030. Yeah, let's see. How much has rents gone up now in Denmark since their regulation? Yeah, I mean, we do have index on the rents in Denmark, but we do have corridors on about 50%, slightly more than 50% of the contracts, and the corridors usually are between 2% and 4%. Yeah. Should we go to the calls, the questions the one that are called in now? Yes. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Svante Krokfors from Nordea. Please go ahead. Thank you, and good morning, Sverker and Pia-Lena. Good morning, good morning. I have a couple of questions left. It will be interesting to hear. I think you said that it's going to be still in November regarding your new LTV targets, for example. But if you look at the secured part, you have a secured LTV of 50.5%. Could you remind us what is the theoretical and practical increase in secured debt that you could have? I mean, we have taken on more secured debt in order to buy back bonds, which we have done. During the nine months, we have bought back bonds of EUR 110 million. We used both the new share issue that we did in March, that was decided in April then, or established in April by the extra general meeting. But also taking additional bank loans to buy back bonds. So, for the short to mid-term, then probably bank financing will increase, and bond financing will decrease. But we do think that in the long term, we will be active also on the bond market. Okay, thank you. And then on the transaction market, good to see that you have been able to participate in there, despite this time by selling. May I ask if the S Group sale announced yesterday was that initiated by you or S Group? It was a combination. Of course, we always have a close connection and cooperation with our tenants. So we know. In this case, we were contacted by S Group, who were more than willing to buy these assets. But we know approximately what kind of assets they want to are interested in buying, and when times are right, then we, as in this case, when they were willing to pay what we have the value that we have in our books, we came to an agreement, so that was good for S Group and good for us. Thank you. That's helpful. And then you also mentioned that has been individual transactions also with institutional actors. Does that refer to the Swedish pension fund-owned investors, or where have the institutional transaction taken place? Yeah, that could be, or the AP funds also have these kind of companies, and they have bought some smaller assets in the market. Okay. And then, I think it was good to see that your earnings capacity-based EPS, after obviously coming down for several quarters now, had a positive move quarter-on-quarter. So, should we interpret this as we can trust your SEK 0.9 dividend and policy of growing it? Yes, that's our absolute aim to, to grow our cash flow per share, and that's something that we're working actively to do. Yeah, and it's super positive that we see that we can harvest from the work we've done with optimizing the balance sheet, and we have Pia-Lena and Thomas on the Company N etwork extremely hard to secure our financial costs. And for the first quarter, for a long time, we see that the financial costs are lower this quarter than the previous, which is very positive, and we're super happy about that. Good. Thank you. That's all from me. Thank you, Svante. I also think we have a- The next question comes from Victor Krüger from Pareto Securities. Please go ahead. Sverker and Pia-Lena, a few questions from my side as well. Starting with a transaction in Finland. What's your view on yield levels in Finland compared to other Nordic markets? The yield levels in Finland has always been a bit higher, but not dramatically higher than other markets. They are maybe 20, 30, 50 basis points higher in general. But in this transaction, they were willing to pay the fair value of the property. But otherwise, to answer your question, the yield requirements are a bit higher in Finland than the rest of the Nordics, but not dramatically. Okay, perfect. And do you expect to continue to divest properties now in Q4 or during next year? If we get the opportunity and we can make an agreement with the buyers, we are definitely going to look into selling more. But, there has to be buyers in the market as well. Understand. What's your view about the properties without the grocery chain as the major tenants? I think you have around 20 properties classified as other retail. Is these the properties that you primarily want to divest? That could be a possibility, yes, as they are non-core assets. So that's one of the things we're looking into. But also other if we have properties that are better suited with someone else, or if there are maybe development potential, and we can get a good price for them, so we are willing to sell. Okay, sounds good. And then finally, I noticed that you have dropped your target to grow the portfolio value to EUR 2.5 billion-EUR 3 billion, euros sorry. Any comments on that? I think we did that quite a while ago, as we took a pause on that because there's no substance in talking about growing the portfolio at the moment, when it's more profitable for us to maybe sell assets and buy back bonds. That gives the shareholders more value at the moment. So, when time is right and when we can talk about growth again, we will communicate if we have any targets regarding portfolio size. Okay, perfect. Thanks for taking my questions. Thank you. We do have some more questions on the web, if we don't have any more on the call. No. Will available cash be used to repay bonds, which are in December 2022, 2024? What is the current strategy for handling bond maturities? I mean, we have bought back bonds, and as you see, on the bond that matures in December 2024, it was, in the beginning, EUR 50 million. We have, as in the report, bought back 2022. So we have EUR 28 million left of that. And, and of course, we are looking into to be able to buy back more and also have the financing to, to pay that one back. Then we see how we refinance that, if we do it with bank financing, if we pay by cash that we have, or if we do another bond. We haven't decided that yet. Yeah. Do we have anything more? There is one question here with a recent announcement regarding the resignation of myself and the financial controller. Could you detail the interim management structure that people have put into place? We have no interim structure at the moment. We have a new Financial Controller or Head of Finance in Sweden, and myself, I will stay on my post until late February, if there is no new CEO coming in earlier. So I will remain on the post and our financial controller, the new one is already in place, and we have had an overlap with the old one as well. And Pia-Lena is still in the company. She's been in the company since early 2019, and that's also a very secure and very good asset to have, when myself, when I'm leaving this company. I think that was all the questions. Yes. Thank you very much. And if this is my last financial hearing, it's been a true honor to lead the company, and I will stay on as shareholder and looking forward to the coming journey of Cibus. So once again, thanks for listening, and the company will of course have a new call in regarding the Q4 in February. Yeah. Thank you. Thank you, and bye-bye.