Kategori: Catella

The nomination committee before the annual general meeting 2023 in Catella AB has been appointed in accordance with the current instruction for the nomination committee.

The nomination committee before the annual general meeting 2023 comprises Eje Wictorson, appointed by Claesson & Anderzén, Erik Eikeland, appointed by Alcur Fonder and Mia Arnhult, appointed by M2. Eje Wictorson has been appointed as chairman of the nomination committee.

Information about the work of the nomination committee can be found on the company’s website, www.catella.com. Shareholders who wish to submit proposals to the nomination committee may do so in writing via e-mail to valberedning@catella.se or by post to Catella AB, Att: Nomination Committee, P.O. Box 5894, SE-102 40 Stockholm, Sweden.

The annual general meeting in Catella AB will be held on Wednesday, 10 May 2023 in Stockholm.

In a turbulent market, Catella continues to make positive progress. Compared to the third quarter previous year, assets under management increased by SEK 30 Bn to SEK 142 Bn and operating profit improved to SEK 62 M, an increase of over 30 percent. A strong financial position gives us the right opportunities to continue developing the company going forward.

I am pleased to present improved profits and continued growth in assets under management in a challenging and uncertain economic environment. We are however not unaffected by the macro climate, where uncertainty is dampening investment activities and making financing challenging. The transaction market declined sharply in the second part of the year, which affects all three of our business areas. We believe it will take additional time before sellers’ expectations are sufficiently reduced and buyers perceive that the market has reached the necessary stability for long-term investment decisions, after which the property market will enter a stronger phase. During a cautious period, our strong financial position enables us to make long-term investments in areas such as product development, M&A, opportunistic direct investments, and digitalization.

Over SEK 140 Bn in assets under management but lower expectations on capital inflows going forward
Assets under management increased by SEK 7 Bn to SEK 142 Bn in the third quarter, and we are pleased that our real estate funds and mandates continue to deliver strong returns coupled with a strong sustainability focus. However, a likely scenario until markets stabilize is that capital inflows and growth will decrease in the near term, due to a slower transaction market and a lower investment appetite. In the current market environment, we will continue to develop our fund offering with products with a sustainable profile, which has been a growth driver in recent years. We are also developing new value-add product strategies, driven by demand from our pan-European clients.

During the quarter, Catella signed an agreement for the sale of 26 rental properties in Germany and eight in the Netherlands with approximately 4,000 apartments to ZBI Group from two of our residential funds. The rationale for the sale is to modernize the property portfolios and to enable new investments with an improved sustainability profile. The transaction is expected to be completed and accounted for around year end.

Investment Management’s operating profit improved by 60% year-on-year. This was largely driven by fixed fees from our continued growth in assets under management, and also by performance-based income from specific asset management mandates.

Divestments postponed due to market uncertainty
In Principal Investments, we continue to develop our projects as planned. However, the timing of planned sales has been delayed slightly. Investors are less active than previously, which is natural in an environment where underwriting and macro parameters are less predictable. In such an environment, it is an advantage to be well-capitalised and stay calm during the current turbulence, as our projects remain attractive in the long term. We are also looking at a number of opportunistic investments in various European segments and geographies.
As of September 30, Principal Investments had approximately SEK 1.3 Bn invested in 11 projects in six countries.

Weaker transaction market
Before buyers’ and sellers’ expectations align, the transaction market will continue to be relatively inactive. Corporate Finance sees a stable pipeline of transactions during the upcoming quarters, albeit at a slower pace than normal. On the other hand, demand for valuation services is strong in the current uncertain market with material price movements.
Operating profit for the quarter was SEK 6 M, an increase of SEK 10 M compared to the previous year. This is primarily due to divestments of loss-making operations earlier in the year.

Outlook
We predict, and are adapting to, continued uncertainty in the macro-economic and geopolitical environment, with a dampened transaction market affecting all of our business areas. We continue to develop product offerings in sustainable investments and management mandates to promote energy transition, an area in which investor interest remains strong. We are also working with our investment partners to develop new product strategies with increased focus on long-term value-add investments in areas where we see business opportunities. Thanks to our strong financial position and attractive assets, we are in the comfortable position to hold our own assets until the market has stabilized, and instead focus on evaluating new opportunistic investments. In Corporate Finance, we continue to help our customers in a more sluggish transaction market, primarily through larger portfolio transactions, including financing advice.
At Parent Company level I am pleased to welcome Peter Umegård as Chief Digitalization Officer. With Peter’s experience added by further recruitment of leading-edge competencies in data and digitalisation, we will raise our level in data, analysis, research, AI and new product strategies. As always, our aim is to help our investors and customers to create value, based on intelligence-driven, future-focused strategies and investment opportunities.

Thank you for your continued confidence in Catella.
 
Christoffer Abramson, CEO and President
Stockholm, Sweden, 28 October 2022

Continued strong growth and profitability driven by a transformed strategy with three property-focused business areas. In the second quarter, assets under management increased by SEK 10 Bn to SEK 135 Bn and operating profit totalled SEK 328 M (9), resulting in one of the best quarters ever for Catella.

Catella continues its strong growth and continues to deliver on our refined strategy with three property-focused business areas.
Investment Management reported its best quarter to date, driven by both growth in assets under management (AUM) and performance-based fees. Principal Investments completed two sales from its property portfolio that significantly exceeded the business area’s target return of 20 percent IRR. Corporate Finance noticed a slightly weaker transaction market due to a gap in the price expectations between sellers and buyers.
AUM increased by SEK 23 Bn over the past 12 months and SEK 10 Bn since previous quarter, showing that interest in our product offering remains strong among investors. At Group level, operating profit attributable to Parent Company shareholders was SEK 328 M, delivering one of the best quarterly results ever.

The world continues to be impacted by Russia’s invasion of Ukraine and a general macroeconomic uncertainty. In addition to increasing inflation and rising financing costs, energy costs are also increasing. For Catella, this leads to accelerated efforts for energy transition in our investments, fund and mandate offerings, and in transaction advisory. As always, challenges of this type also give rise to new opportunities, and Catella sees the accelerated development as a positive force in the property sector. We recently adopted a long-term ESG strategy at Group level, which harmonizes our long-term ambition and goals across subsidiaries and business areas.

We continue to enjoy a strong financial position where liquidity is further strengthened by Principal Investments’ sales of development projects. Without near-term refinancing needs and a strong cash position, we are well positioned to explore long-term and opportunistic investments for continued profitable growth.

New milestone in Investment Management, exceeding SEK 130 Bn in assets under management
In the second quarter, Catella’s AUM increased by SEK 10 Bn to SEK 135 Bn. This marks a new milestone in the business area’s history. Inflows remain strong to funds with residential focus and Catella’s first dark green, article 9 classified fund, CER III.
Asset Management mandates also contribute to the growth, and our acquisition of Catella WPP (Poland) increased AUM by nearly SEK 1.5 Bn. In an uncertain macro environment with lower property investments, our competencies and well-implemented projects for adapting and repositioning properties is meeting market demand.
We continue to review the current property holdings in our funds to further meet our own and our investors’ sustainability ambitions. In 2022, we expect to sell certain portfolio assets to facilitate a transition to other investments as well as sustainability profiled investments.
Investment Management’s operating profit improved by over 40% year-on-year, driven by underlying strong growth in AUM and performance-based fees. We continue to see strong interest from investors, and committed capital for future fund investments exceeded SEK 10 Bn at the end of the quarter.

Two additional successful sales in the property portfolio reducing Catella’s risk exposure in development projects
During the second quarter, two further sales of development projects were agreed in the partly owned Infrahubs. Interest in the logistics properties was strong and resulted in profit of nearly SEK 100 M, corresponding to an IRR of 58 percent.
We continue to see strong interest in the modern, sustainable logistic properties that we develop. Uncertainty regarding construction and financing costs has however increased for development projects. In light of this, stronger focus will be given to co-investments with partners in order to open up new revenue streams in Investment Management and Corporate Finance. Additionally, we expect good opportunities for opportunistic investments in the current market.

After the end of the quarter, Principal Investments’ investments in six countries totalled approximately SEK 1 Bn in eleven projects, four of which are expected to be divested in 2022. All development projects have financing and expected development costs in line with our return requirements.

Slower transaction market during the quarter
Catella Corporate Finance continues to enjoy a strong market position in all five remaining markets. However, the current bid-ask spread between sellers and buyers slowed and post-poned transactions during the quarter. Before the gap is closed, we expect a continued tentative transaction market. Despite lower revenues, Corporate Finance delivered a solid operating profit of SEK 26 M (43) during the quarter.

In Sweden, Corporate Finance was the transaction advisor for the sale of the logistics properties in Örebro and Ljungby. At group level, we continue the work of facilitating synergies between our business areas. During the past year we have seen many good examples and these sales highlight additional ones.

We continue to see a stable transaction pipeline into the coming quarters, albeit at a slightly slower pace. However, tighter credit markets and future refinancing needs will likely benefit our newly established segment in Debt Advisory.

Outlook
We continue to operate within macroeconomic and geopolitical uncertainties, which significantly impact the decisions we make for the future. We are currently taking a slightly more cautious approach to own investments in development projects. We have a strong balance sheet, which we will continue to strengthen. In a turbulent market, we want to be able to act on opportunistic investment opportunities and invest long-term in our business for future revenue streams in all our business areas.

We will also continue to develop our offering in sustainable investments and mandates to promote energy transition in the property sector, a market in which we have built a strong position that we aim to continue to grow.
In terms of results, we expect one of the best years in the company’s history. This is supported by a refined strategy that focuses on growing assets under management in our property funds and an attractive total product and service offering targeted at the property sector.

Thank you for your confidence. We will continue the exciting work of creating customer, societal and shareholder value in 2022 and beyond.

Christoffer Abramson, CEO and President
Stockholm, Sweden, 19 August 2022