All three business areas had a strong start to the year with an Operating Profit* improve-ment of SEK 127 M to SEK 111 M compared to the corresponding quarter in the previous year. The drivers behind the strong progress are primarily due to Principal Investment’s first property sale from the Infrahubs portfolio and last year’s positive growth of assets under management in Investment Management.

It was a strong start to the year across all three business areas, Investment Management, Principal Investments and Corporate Finance. Assets under management increased by SEK 17 Bn and operating profit attributable to the Parent Company shareholders increased by SEK 127 M to SEK 111 M year-on-year. The drivers behind the strong progress are primarily due to Principal Investment’s first property sale from the Infrahus portfolio and last year’s positive growth of assets under management in Investment Management.

The first quarter of 2022 was unfortunately impacted by the Russian invasion of Ukraine and a significant increase in macro economic uncertainty. The crisis brings the debate regarding energy efficiency and sustainability to the table as well as a global increase in interest rates and inflation. These challenges, and opportunities, for the real estate sector makes it even more important for Catella to refine and develop our company with a clear goal of being the link between property and global capital.

Following the divestments and liquidations of Catella’s non-core business segments, we have continued to develop and strengthen our remaining operations. As part of this, we performed a strategic review of Corporate Finance which resulted in the difficult decision to discontinue our operations in Germany and the Baltics where we have experienced limited synergies for the Group and losses for several years. The divestment impacted the first quarter with non-recurring costs but ensures that going forward we can focus further on growing the markets where we have a strong position, and further benefit from the existing synergies between Corporate Finance and our other business areas.

A focused company also gives us the ability to accelerate growth by broadening our product offering and expanding geographically. Our majority holding purchase of Warsaw Property Partners at the start of May is an example of opening up a new market which will immediately generate an Investment Management platform and opportunities to identify development projects for Principal Investments in collaboration with our new partners.

Stable inflow of new capital in Investment Management
In line with previous years, the first quarter was quiet and had lower acquisition activity and hence moderate growth in assets under management, which currently amounts to SEK 126 Bn. Behind the growth was a strong inflow to the CER III fund, Catella’s first dark green, article 9 classified, fund which reached the milestone of EUR 1 Bn in the quarter. I am also pleased that we launched our second dark green fund, Elithis Towers, which plans to develop approximately 100 energy-positive residential properties. This is an exciting and long-term partnership and also the world’s first ”Energy-positive Residential Impact Fund”.

To further meet our own and our investor’s sustainability ambitions, we have started a review of our current property holding within our funds. The aim of the review is to give us a clear picture of which properties we can, and should, adapt from a sustainability perspective and which should be divested in order to invest in more sustainability assets.

Year-on year, Investment Management’s operating profit improved by 70% and demonstrates the scalability of the business model. The interest in our investments remains strong and committed capital for future fund investments exceeds SEK 12 Bn which enables further growth. In the quarter we simplified the name of the business area to “Investment Management”.

First sale from the Infrahub portfolio and a total of seven development projects in Principal Investments which will be completed and divested during 2022
In March, the first sale of a development project from the partly owned Infrahubs was completed. There was great interest in the property, which confirms our solid business model of developing a portfolio of modern and sustainable logistics properties with long leases. The sale generated a total profit of SEK 102 M, with an additional SEK 30 M to be recognized when the installation of what will be the largest rooftop photovoltaic cell facility in the Nordics is completed.

To further simplify and clarify Catella’s organisational structure, all project development companies were moved to Principal Investments in the quarter. Currently, we have SEK 1.3 Bn invested in 16 projects in six countries. Seven of these are expected to be completed and divested during 2022.

A stronger and focused Corporate Finance
Despite a weaker transaction market, as usual during the first quarter, operating profit increased by SEK 20 M after excluding non-recurring costs related to winding-down the German operations (SEK 17 M).

Corporate Finance Sweden was the transaction advisor for the sale of the logistics property in Norrköping, which generated a successful sale for Principal Investments and a market based fee for Corporate Finance, proving the important role Corporate Finance plays for the rest of Catella.
Despite a more uncertain global outlook, we see a continuous stable pipeline of transactions in the upcoming quarters. We also see an increased demand for services within our newly launched business area, Debt Advisory, as an effect of a tighter credit market and refinancing needs.

Outlook
The macro economic and geopolitical uncertainties continue and are impacting the decisions we make for the future. In the short-term it is evident that we are entering a market with higher inflation and rising interest rates. Furthermore, we note an increased interest in sustainable assets, which to us is positive.
However, I feel secure in the quality of our current pipeline and the investment philosophy that we base decisions on.
Looking ahead, we will not comprise our return requirements nor risk control for future investment decisions in a more uncertain macro environment.

Next week, I will gather my European colleagues to discuss future challenges and opportunities in an environment with tighter monetary policy and increased focus on sustainability. The aim is to reach a clear agenda and consensus regarding areas where we can mitigate potential negative effects from an increasing uncertainties. But, more importantly, our aim is to identify and develop sustainable services and products better adapted to a changing world.

My personal ambition is that Catella will continue to create and refine its existing portfolio of partner companies and development platforms with a shared sustainability vision and the ability to deliver stable growth and a profitable project pipeline.

Catella has agreed to acquire 65% of Warsaw Property Partners (“WPP”) for a price of approximately SEK 40 million. The company is an independent real estate investment, asset, and development management company, operating exclusively in the Polish market with a broad offering to support investment strategies of clients. WPP has assets under management (“AUM”) of nearly SEK 2 billion and 18 employees.

Christian Fojtl, Jacek Wachowicz, and Bartosz Bzoma, Managing Directors, will remain shareholders in WPP and have committed to the company for at least another five years. WPP will continue to be run by its current management team to further pursue its successful growth strategy in Poland. Furthermore, becoming a part of Catella, it will generate significant synergies to the Group as asset and investment manager for existing and future Property Fund Investments, as well as development opportunities for Principal Investments.

“We are delighted to have agreed to enter a partnership with the Managing Directors of WPP and we look forward to continue to develop WPP together with its partners and employees. Poland is a key strategic market for us, where we see potential property development opportunities and significant investment management synergies across the Group. With the acquisition of WPP we get a highly skilled team with a strong track record and an exceptional knowledge of the Polish real estate market, who now will have a much increased ability to grow with Catella’s capital supporting their ambitious plans. The acquisition ties into Catella’s growth strategy through partly owned companies alongside local partners, which ensures commitment by local management and financial incentives that are aligned with Catella’s overall goals,” says Christoffer Abramson, President and CEO at Catella.

“We are excited about becoming a part of the Catella Group. Today, WPP is an agile, well-established real estate company serving the Polish market. By joining Catella we can add additional value and growth through Catella’s pan-European real estate infrastructure. We are confident that the combination will be successful and result in a strong asset management and development capabilities ready to serve both local, Catella internal and international clients” says Jacek Wachowicz, CEO WPP

The transaction is expected to be completed during the second quarter of 2022.

The presentation is now available on our website https://www.arise.se/en/annual-general-meetings

Today, on 4 May, 2022, the Annual General Meeting was held in Arise AB (publ). The Annual General Meeting was held only by advance voting (postal vote) in accordance with temporary legislation. A summary of the adopted resolutions follows below. All resolutions were adopted with the required majority of votes.

At the Annual General Meeting on 4 May, 2022 in Arise AB (publ) it was resolved:

• to adopt the profit and loss statement and balance sheet as well as the consolidated profit and loss statement and consolidated balance sheet,
• not to distribute any dividends for the financial year 2021,
• that remuneration to the Board of Directors and its Committees will be paid with SEK 1,892,000 in total and the remuneration to the auditor was resolved to be paid in accordance with customary norms and approved invoice,
• to re-elect the Board members Johan Damne and Joachim Gahm and to elect Eva Vitell and Mikael Schoultz as new Board members,
• to re-elect Joachim Gahm as Chairman of the Board,

• to re-elect the registered public accounting firm Öhrlings Pricewaterhousecoopers AB as the company’s auditor for the period until the end of the first Annual General Meeting held after 2022 whereby Öhrlings Pricewaterhousecoopers AB has informed that Ulrika Ramsvik will be the responsible auditor,
• to approve the Board of Directors’ remuneration report for the financial year 2021,
• to adopt instructions and rules of procedure for the next Nomination Committee,

• to authorize the Board of Directors to resolve on issues of ordinary shares and/or preference shares and issues of convertibles convertible to ordinary shares and/or preference shares,
• to authorize the Board of Directors to resolve on acquisition and disposal of own shares,
• to implement a warrant program for employees by way of (A) directed issue of warrants; and (B) approval of transfer of warrants.

The members of the Board of Directors and the CEO were discharged from liability for the financial year 2021.

In accordance with the proposal from the Nomination Committee, four ordinary Board members were elected: Johan Damne (re- election), Joachim Gahm (re-election), Eva Vitell (new election) and Mikael Schoultz (new election). Joachim Gahm was re-elected as the Chairman of the Board.

The remuneration for members of the Board of Directors and its Committees shall amount to a total of SEK 1,892,000 (SEK 1,842,000 previous year). SEK 707,000 is remuneration to the Chairman and SEK 285,000 is remuneration to every other member of the Board who is not employed by the company. SEK 275,000 in total is to be paid in remuneration for work in the Audit Committee (of which the Chairman receives SEK 110,000 and every other member SEK 82,500), and SEK 55,000 in total is to be paid for work in the Remuneration Committee (of which the Chairman receives SEK 55,000).

The Annual General Meeting resolved, in accordance with the proposal from the Nomination Committee, that a Nomination Committee shall be appointed before coming elections and remunerations. It shall be comprised of five members who shall be appointed by the four largest shareholders at the beginning of October together with the Chairman of the Board.

The Annual General Meeting resolved, in accordance with the proposal from the Board of Directors, to approve the Board of Directors’ remuneration report for the financial year 2021.

The Annual General Meeting resolved, in accordance with the proposal from the Board of Directors, to authorize the Board of Directors to, until the next Annual General Meeting, on one or several occasions, resolve on (1) issues of ordinary shares and/or preference shares and (2) issues of convertible bonds transferable to ordinary shares and/or preference shares, with or without deviation from the shareholders’ preferential rights. The authorization for the Board of Directors also includes the right to decide on issue in kind or right of set-off. Upon a resolution pursuant to the authorization and with deviation from the shareholders’ preferential rights, the total number of shares to be issued through the issue of ordinary shares and/or preference shares and/or convertible bonds transferable to ordinary shares and/or preference shares shall not exceed 10 percent of the outstanding shares in the company at the time of when the authorization is exercised for the first time (this shall not prevent convertible bonds from being combined with conversion terms which, if applied, may result in a different number of shares). The issue price shall, as a starting point, be the share’s market value at each time of issue.

The Annual General Meeting resolved, in accordance with the proposal from the Board of Directors, to authorize the Board of Directors to decide, until the next Annual General Meeting, on one or several occasions, on acquisition of no more than 1/10 of all outstanding ordinary shares from time to time with funds that can be used for appropriation of profits. The authorization includes the right to decide on exemption from the shareholders’ preferential rights. If the acquisition takes place at Nasdaq Stockholm the price shall be within the, at each time, registered price interval. It shall be possible to acquire shares in order to enable changes of the capital structure of the company, to finance acquisitions or other transactions, or otherwise for disposal or redemption.

The Annual General Meeting resolved, in accordance with the proposal from the Board of Directors, to authorize the Board of Directors to decide, until the next Annual General Meeting, on one or several occasions, on disposal of a maximum of 1/10 of all ordinary shares. The authorization includes the right to decide on exemption from the shareholders’ preferential rights, the conditions therefore and the way which the disposal takes place. It should be possible to dispose of the shares in connection with possible acquisitions or other transactions or by sale on the open market. When disposing of the shares on Nasdaq Stockholm the price shall correspond to the current quotation.

The Annual General Meeting resolved, in accordance with the proposal from the Board of Directors, to implement a warrant program for employees in the company based on issue and transfer of warrants (the “Warrants Program 2022”). To implement the Warrants Program 2022, it was resolved on (A) directed issue of warrants and (B) approval of transfer of warrants. A maximum of 750,000 warrants shall be issued in the Warrants Program 2022 and the right to subscribe for the warrants shall, with deviation from the shareholders’ preferential rights, only vest in a wholly owned subsidiary to the company. Each warrant shall entitle to subscription of one ordinary share in the company and subscription of shares by virtue of the warrants may be effected as from 1 June 2025 up to and including 30 June 2025.

The warrants shall be issued free of charge to a wholly owned subsidiary of the company. Transfer to participants in Warrant Program 2022 shall be made against cash consideration which shall correspond to the fair market value of the warrant at the time of the transfer which shall be established by an independent valuation institute in accordance with the Black Scholes formula.

The reasons for the implementation of the Warrants Program 2022 and the deviation from the shareholders’ preferential rights are to be able to create possibilities for the company to retain competent staff through the offering of a long-term ownership engagement for the employees in the company. Such ownership engagement is expected to stimulate the employees in the company to an increased interest for the business and the earnings trend as well as to increase the feeling of connectedness with the company. In case all warrants issued within the Warrants Program 2022 are utilized for subscription of new ordinary shares, a total of 750,000 new ordinary shares will be issued, which corresponds to a dilution of approximately 1.66 per cent of the company’s shares after full dilution, calculated on the number of ordinary shares that will be added upon full utilization of all warrants issued under the Warrants Program 2022.

FIRST QUARTER (1 JANUARY – 31 MARCH 2022)

• Net sales for the quarter amounted to MSEK 88 (47).
• Operating profit before depreciation and amortisation (EBITDA) totalled MSEK 61 (23).
• Operating profit (EBIT) was MSEK 46 (7).
• Profit/loss before tax, before items affecting comparability, was MSEK 42 (4) and after items affecting comparability MSEK 37 (-4).
• Profit/loss after tax totalled MSEK 37 (-4), corresponding to SEK 0.90 (-0.12) per share.
• Operating cash flow was MSEK 67 (15) and cash flow after investments amounted to MSEK 47 (8).
• Production generated 100 GWh (82) of green electricity as a result of stronger winds than in the same period previous year.
• Average income from Production was SEK 756 per MWh (463), of which SEK 748 per MWh (450) was from electricity and SEK 7 per MWh (13) was from electricity certificates, including guarantees of origin.
• In February 2022, Arise established a green financing framework that contains criteria for investments exclusively in renewable energy. Arise can include bonds as well as existing and future debt under the green financing framework.
• In March 2022, Markus Larsson was appointed the new CFO of Arise and joined Group management.
• In March 2022, Arise made an investment decision regarding construction of the wind farm project Lebo in Västervik municipality.

SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

• In April 2022, Daniel Cambridge was appointed as the new CCO, responsible for Business Development and M&A. He started his position on 2 May 2022 and joined Group management at the same time.
• In April 2022, Arise signed an asset management agreement with BlackRock regarding wind farms in Finland with an installed capacity of 219 MW.