Diös : Diös Fastigheter’s Interim Report Jan-March 2025

About this update from Dios Fastigheter Ab

Diös Fastigheter Interim Report 0B Q1 2025 The office's role as a brand builder and a meeting place is becoming increasingly clearer. David Carlsson, CEO Introduction Sustainability Income statement Our tenants Balance sheet Cash flow Key ratios Share information Other About the company ‌Highlights for the quarter Revenue increased by 3 per cent to SEK 661m (639). Net letting was SEK 1m (1). Operating surplus increased by 5 per cent to SEK 427m (407). Target follow-up Our two main targets are to reach an average return on equity over a five-year period of at least 12 per cent, and to reduce our carbon dioxide emissions by 50 per cent by 2030, compared with the base year 2018. RETURN ON EQUITY, % GREENHOUSE GAS EMISSIONS, TONNES CO 2 E Property management income increased by 10 per cent to SEK 221m (200). Unrealised changes in value of properties were SEK 6m (6) and unrealised changes in value of derivatives were SEK -1m (226). Profit for the period was SEK 162m (259). Earnings per share were SEK 1.14 (1.83). Significant events during the quarter David Carlsson took over as CEO on 1 January. 25 10% 20 15 10 5 - 2021 2022 2023 2024 LTM 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 -33% 2018 2022 2023 2024 LTM We signed an agreement to acquire a portfolio of centrally located properties in Umeå for SEK 1,600m. The seller is Lerstenen and completion will take place on 2 June. Leasing to Almi Invest and Almi AB of 1,500 sq.m in central Östersund. Today, the premises are home to Diös' head office. Occupancy will take place in September 2025. Dalarna University's campus in Borlänge was nominated for the 2025 Solar Energy Prize. Average return 2025 2024 LTM 2024 Jan-Mar Jan-Mar Apr-Mar Jan-Dec 6 SUMMARY OF EARNINGS, SEKM Q1 2025 Scope 1 Scope 2 Q1 2025 Income 661 639 2,549 2,527 0perating surplus 427 407 1,748 1,728 Property management income 221 200 912 892 Profit before tax 226 363 756 893 Profit after tax 162 259 594 691 Surplus ratio, % 66 65 70 69 0ccupancy rate, % 90 92 91 91 Return on equity, % 5.1 -2.2 13.4 6.1 Property management income per share, SEK 1.6 1.4 6.5 6.3 Equity ratio, % 36.9 35.8 36.2 Property loan-to-value ratio, % 52.8 53.9 52.9 Interest coverage ratio, times 2.2 2.1 2.2 2.2 Equity per share, SEK 83.5 79.4 82.4 EPRA NRV per share, SEK 102.2 96.0 100.6 Introduction Sustainability Income statement Our tenants Balance sheet Cash flow Key ratios Share information Other About the company CEO statement Stable in a troubled world During the first quarter and up to today, we have been experiencing turmoil and unpredictable market reactions to the United States' actions and counter-reactions from other countries. We continue to deliver a stable profit and create the best conditions for long-term profitable growth. Increased property management income Property management income increased by 10 per cent compared with the first quarter of 2024, mainly due to higher revenue and stable costs. Net financial items are stable while the average interest rate dropped to 4.2 per cent at the end of the quarter compared with 4.3 per cent at the end of the year. Net operating income was positively impacted by completed projects while the net result of last year's transactions is unchanged overall. Net leasing was marginally positive at SEK 1m (1). Revenue in comparable portfolios increased by 0.7 per cent related to index adjustments and renegotiations. At the end of the quarter, the occupancy rate was 90 per cent (92). The change is due to the divestment of fully leased residential properties and completed new production, which created short-term market vacancies in the older portfolio when tenants move to newly built premises. We see that the vacancy rate will turn around in the second half of 2025 as we get the effect of the positive net leasing in recent quarters. On the cost side, we have a relatively mild winter behind us, which means lower costs for heating and snow clearing. At the same time, index adjustments on tariff-based costs led to cost increases. The rental market continues to show resilience During the quarter, we noted Northvolt's bankruptcy. We have no direct exposure to Northvolt in Skellefteå, meaning no lease agreements or ongoing projects with them as a counterparty and we are experiencing a limited impact on the rental market centrally in the city, where the occupancy rate is unchanged compared to the previous year. We believe in the long-term growth of Skellefteå, where the construction of the North Bothnia Line railway will have a positive impact on the city. The office's role as a brand builder and a meeting place is becoming increasingly clearer. We continue to see a strong trend that tenants prioritise attractive locations and that the willingness to pay is high for modern and efficient premises. The vacancy rate is significantly lower centrally where we are well positioned, which means that the resilience of our portfolio is high. This is a trend that continued through both the recession and the pandemic. Bad debts continue to be at historically low levels. Net leasing that ended up on the marginally positive side is a result of a good underlying activity where renegotiations have taken place at levels adjusted upwards to the CPI and new leases at higher rent levels than previous tenants, but we have also been affected by some bankruptcies. Several dialogues are currently under way with new and existing tenants at good levels. We see that the time to decision is noticeably shorter than a year ago. The letting of our current head office in central Östersund is a clear example of the above trends. Almi, who is moving into the premises in September, was looking for central and brand-enhancing premises to create a meeting place for its employees. Acquisitions that increase property management income Umeå has long been a priority market for us to grow in based on the size of the city and its underlying growth. The possibility of acquiring a portfolio for SEK 1.6 billion in central locations is very rare. Once again, our local presence and good reputation are essential to being able to do business "outside the market" of this kind. The acquired portfolio primarily consists of Umestan's business park, a portfolio with a large number of new tenants, development potential and strong cash flows. We estimate that property management income will increase by approximately four per cent through the acquisition. At the beginning of April, we signed an agreement to acquire three properties in Sundsvall and divest one property in Sundsvall and two in Luleå. The divestments are made above book value, which confirms our valuations and the transfer is part of refining the portfolio and our investments where we can create the best value. Net cash impact is close to zero, but the impact on property management income is positive with nearly one per cent growth. We expect the valuation yields to remain relatively stable during the year, so we are most likely to be net sellers in order to reduce the loan-to-value ratio so that we can create room for further growth if and when opportunities arise. Continuous operational optimisation yields results We continue to see good results during the first quarter from our energy work where energy consumption in comparable properties decreased by 6.6 per cent, adjusted for daily temperatures, which is very strong. It is mainly the daily work that yields results through continuous optimisation, rounding and a close tenant dialogue. Good financing conditions The capital market continued to be strong during the first quarter, but in April it became more volatile. We see lower bank margins and good appetites for new lending at our banks, which bodes well for both new financing and renegotiations. Our strong cash flow in relation to net debt is something that is appreciated by our financiers and something that we ourselves make sure to maintain. Net debt in relation to EBITDA is strong at ten fold. Good conditions for profitable growth now and in the future The uncertainty that is now affecting the market is not positive for the willingness to take risks and make forward-looking decisions. Nevertheless, we notice that the activity in our cities is increasing and that the effects linked to increased defence spending are beginning to show. In Östersund alone, with around 65,000 residents, the defence establishment is expected to create 750 new direct jobs and an equal number of indirect jobs, according to the Swedish government. This has a positive impact on the city's growth and the opportunity for profitable property development. The same also applies in Falun, where the Dalarna Regiment is gradually being re-established to have 250 conscripts and roughly the same number of employees in 2028. After around 100 days in office, I can see what a strong position Diös has in all our cities. Our local teams together with the combined strength in total, with good financial conditions and a high level of expertise both locally and centrally, are really driving the development of the cities forward. These are incredibly good conditions for creating conditions and delivering growth in property management income per share by increasing revenue, reducing costs and making profitable investments - long-term profitable growth. David Carlsson Introduction Sustainability Income statement Our tenants Balance sheet Cash flow Key ratios Share information Other About the company This is Diös We are the property company that is investing entirely in northern Sweden. With a unique position in our ten cities, we are creating sustainable growth through commercial property development for our tenants, our shareholders and ourselves as a company. We offer commercial premises - in the right location to the right tenant. One third of our rental income comes from tax-funded operations and just over half of the total rental income is from offices. 323 No. of properties 31.6 1,580 Property value, SEKbn Leasable area, thousand sq.m Business concept We own and develop commercial properties in cities with growth potential in northern Sweden. With the right tenant in the right place, we create attractive properties and a long-term sustainable business. Vision To create Sweden's most inspiring cities. ‌PROPERTY VALUE, SEKM PROPERTY VALUE BY BUSINESS UNIT 35,000 30,000 25,000 20,000 15,000 10,000 5,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q1 2025 Luleå, 5687m Skellefteå, 2466m Umeå, 4874m Östersund/Åre, 4526m Sundsvall, 4762m Gävle, 3790m Dalarna, 5516m PROPERTY MANAGEMENT INCOME, SEKM RENTAL VALUE BY TYPE OF PREMISES 1,200 1,000 800 600 400 200 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 LTM Q1 2025 Office, 55% Retail, 14% Hotel/Restaurant, 9% Residential, 6% Care/Education, 8% Industrial/Warehouse, 3% Other, 5% RENTAL INCOME, SEKM CONTRACT VALUE BY CATEGORY 3,000 2,500 2,000 1,500 1,000 500 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 LTM Q1 2025 Private, 60% Public, 33% Residential, 7% Introduction About the company Income statement Our tenants Balance sheet Cash flow Key ratios Share information Other Sustainability ‌Sustainability Through clear sustainability goals, we run the business in a responsible way and create long-term business. Climate targets Our goal is to reduce scope 1 and 2 emissions by 50 per cent by 2030, compared with the 2018 baseline, and to reach net zero by 2045. Scope 2 and energy-re-lated emissions in category 3.3 depend on actual energy consumption. Green properties Since 2024, our criteria for classifying properties as green have been aligned with the energy requirement of the EU Taxonomy. This means that the primary en- Projects and investments New development and renovation generate both direct and indirect emissions and involve significant resource use. Conducting life cycle analyses at an early stage helps us identify measures needed to reduce climate impact, enable greater comparability and allowing us to set stricter requirement on material choices in our projects. LTM EU taxonomy We voluntarily report in accordance with the EU Taxonomy to enhance transparency and comparability. Indicative and simplified reporting is conducted quarterly. Primary business is acquisition and ownership of properties (activity 7.7); thus, our entire operations are subject to the Taxonomy and the economic activities exposed to environmental objective 1, climate change mitigation. ergy figures must meet Fastighetsägarnas' threshold values for the top 15 per cent of national building stock at time of qualification. Alongside ongoing climate risk and vulnerability analyses, and environmental certifications, this alignment enables the expansion of green properties within our portfolio. Energy consumption Energy and power needs in properties are affected by external factors such as temperature, wind and solar radiation, as well as by indoor comfort demands. These factors constantly change, requiring active optimisation efforts to manage costs and emissions. During the reporting period, we achieved our energy-saving target, reducing energy consumption by 6,6 per cent. In addition to optimisation work, we sign green leases to increase tenant engagement and create incentives for both parties to contribute to efficient energy solutions, bringing us closer to our climate goals. Energy performance and energy class Monitoring the energy performance of our assets is key to future-proofing our property portfolio. In addition to tracking metrics for green properties and energy efficiency, interest in monitoring the energy class of the portfolio is increasing. The metric is a straightforward tool for stakeholders to track our transition progress, with the majority of our portfolio currently classified as energy class C or better. CLIMATE¹ Unit Apr-Mar 2024 2018 Commentary Scope 1 and 2 GHG emissions, R12 tonnes CO e 4 706 5 123 7 022 Target: -50 percent by 2030. Assessed and approved by SBTi Scope 3 GHG emissions tonnes CO e 707 707 844 Fuel-related emissions and business travel 2025 2024 2023 Electricity and district heating, LfL kWh/sq.m Atemp 43,9 45,3 45,5 Normalized district heating Cooling, LfL kWh/sq.m Atemp 1,0 1,7 1,6 Not included in the energy savings target Energy savings % -6,6 -1,8 -1,4 Target: -3 procent Energy consumption, Abs kWh/sq.m leasable area 45,8 53,2 51,2 Non-normalized district heating Solar electricity generation MWh 115 26 1 466 Generated electricity 2023 refers to full year Fossil-free energy, annual % 99 99 98 Emissions data from Swedenergy 2023 ENERGY CONSUMPTION Jan-Mar Jan-Mar Jan-Mar Portfolio per EPC % of total Atemp 55 34 11 Follow Boverket's regulations ENERGY PERFORMANCE CERTIFICATES, EPC A-C D E-G 2025 PROJECTS AND INVESTMENTS 31 Mar 2024 2023 Green assets² % of MV 37 31 25 Target: 55 percent green properties by 2026 Environmentally certified % of MV 47 42 33 Level BREEAM In-Use, very good or equivalent Energy efficiency² % of MV 57 48 52 Aligned with the EU Taxonomy's top 15 per cent Climate assessment % of MV 60 60 51 Climate risk assessment Green lease % of contract value 31 29 18 2025 Aligned turnover % / mSEK 38 / 225 32 / 729 25 / 558 Aligned capital expenditure % / mSEK 24 / 49 17 / 785 10 / 158 Aligned operating expenditure % / mSEK 29 / 14 32 / 682 25 / 520 TAXONOMY REPORTING, indicative 31 Mar 2024 2023 1 The base year is 2018. The conversion of historical data based on the Swedenergy's 2023 emissions catalogue will take place in the second quarter of 2025 after new figures are published. 2 As of 2024, energy performance threshold align with the national portfolio's top 15 per cent according to the EU Taxonomy. Previous threshold was ≤85 kWh/sq.m. Atemp.

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