Castellum (CAST) investor relations material

Executive summary

• Back-to-basics strategy emphasizes portfolio simplification, less bureaucracy, efficiency and leasing; the operating model is moving from four Swedish regions to Region Svea and Region Göta.

• 9M income and like-for-like NOI declined amid rising vacancies, while disposals, buybacks and planned cost reductions reshaped the portfolio and organization.

Financial highlights

• Jan-Sep income was SEK 6,987m, down 2.9% YoY; like-for-like rental income fell 1.7% and NOI fell 3.6%.

• Income from property management was SEK 3,427m, or SEK 7.39 per share versus SEK 7.06, up 4.7% per share; Q3 was SEK 1,126m, or SEK 2.55 per share.

• Net income reached SEK 2,873m versus SEK 1,050m; Q3 net income was SEK 939m versus SEK 858m.

• Property fair value was SEK 129.3bn at 30 September, down 0.5%; property value changes were SEK -684m for Jan-Sep and SEK -953m in Q3.

• Jan-Sep included SEK 84m of non-recurring income from an annuity reversal; Q3 interest costs included SEK 21m of non-recurring loan-redemption costs.

Outlook and guidance

• Administration costs targeted to fall 15%, or nearly SEK 100m, as the operating structure is simplified and efficiency improves.

• Return-on-equity target is at least 10% over a business cycle; annualized 9M return was 5.2%, while LTM return at 30 September was 3.6%.

• Of the SEK 13.3bn Wihlborgs disposal proceeds, SEK 8bn is intended for share repurchases and SEK 5bn for debt repayment.

• Management expects ICR to remain near the 3.0x target for several quarters, potentially years; average interest cost is expected to remain stable over the next couple of quarters based on current forward STIBOR and hedging.