Kojamo Oyj

Quarterly Report • Aug 15, 2024

15 August 2024 Jani Nieminen, CEO Erik Hjelt, CFO

Half-Year Report 1 –6/2024

Kojamo plc

• Financial development
• Outlook and financial targets

Summary of January–June 2024

Kojamo plc's Half-Year Financial Report January−June 2024 3

Total revenue and net rental income increased, renting was impacted by the continued abundant supply on the market

• Total revenue and net rental income increased in the first half of the year
• Financial occupancy rate decreased from the comparison period
• There is still plenty of supply on the market, and the competition is intense. The correction of the oversupply situation has been delayed
• FFO decreased due to the increased financial expenses and maintenance expenses. Financial income of the comparison period includes profit of EUR 8.9 million from the repurchase of bonds
• Saving programme is progressing according to the plan
• Balance sheet is strong, and our financial key figures and liquidity situation have remained good
• The yield requirements for the valuation of the investment properties were increased on average by 0.1 percentage points during the second quarter

Operating environment

General operating environment

• The outlook for the global economy is improving as inflation is slowing and real incomes are growing
• Strong economic growth in the United States continues. Growth in the euro area remains weak this year, especially in Germany, which is an important market for Finland, but growth in the euro area is also expected to pick up next year
• The Finnish economy is not expected to grow on an annual level from last year, but economic growth is about to start
• Employment will decrease slightly this year but will grow from next year, supported by the increased demand and the government's employment measures
• The European Central Bank's decision to cut key interest rates bolsters confidence in economic development in the euro area

Operating environment key figures

	2024E	2023
GDP growth, %	0.0	-1.0
Unemployment, %	7.9	7.2
Inflation, %	1.8	6.2
Prices of old block-of-flats in	0.5	-7.0
the whole country, change, %
Prices of old block-of-flats in	-1.1-	-8.8-
the capital region, change, %	1.7	-7.9
Rents of non-subsidised apartments in	2.0	1.4
the whole country, change, %
Rents of non-subsidised apartments in	1.2-1.6	0.4-1.0
the capital region, change, %

Sources: Ministry of Finance, Economic Survey, 6/2024; Pellervo Economic Research PPT, Housing 2024 forecast

Operating environment

Housing production

• The number of residential start-ups plummeted last year. The residential start-ups for non-subsidised block-of-flats has fallen by 20,000 apartments from the peak years
• Housing starts are predicted to continue to decline in 2024 and to turn to weak growth only in 2025
• The number of completed apartments has begun to decline, and new supply coming to the market is decreasing sharply

Industry key figures

	2024E	2023
Residential start-ups, units	16,500	17,500
of which non-subsidised block-of-flats	2,000	3,600
start-ups in the capital region	n/a	8,513
Building permits granted, annual, units*	18,422	21,097
Construction costs, change, %**	0.5	1.1

Housing production need 2020–2040, % Residential start-ups in Finland 2014–2024E

* Rolling 12 months, May 2024; **Rolling 12 months, June 2024

Kojamo plc's Half-Year Financial Report January−June 2024 6 Sources: CFCI's economic survey, March 2024; Nordea's Housing Market Review June 2024; Housing production information of the municipalities in the capital region; Statistics Finland, Building and dwelling production, Building cost index; Housing production need: VTT, Need for housing 2020-2040

Operating environment

The rental market situation

• There is still oversupply in the market which will decrease as urbanisation continues and the new supply declines sharply
• Urbanisation and decreasing average household size support the long-term demand
• Helsinki, Espoo, Vantaa, Tampere and Turku were Finland's most growing municipalities in the first half of the year
• Strong net immigration was the most significant factor in terms of population growth, and migration between municipalities played a big role in the growth of especially Helsinki

Development of household sizes

Population growth forecast 2022–2040, %

Development of rental household-dwelling units (% of all households)

Kojamo plc's Half-Year Financial Report January−June 2024 7 * Helsinki, Espoo, Kauniainen, Vantaa ** Capital region, Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Mäntsälä, Nurmijärvi, Pornainen, Porvoo, Riihimäki, Sipoo, Tuusula, Vihti Sources: Statistics Finland, Preliminary population statistics 2024; MDI, Population forecast 2040 (urbanisation scenario), September 2023; Statistics Finland, Dwellings and housing conditions 2023 and 2022

Key figures 1–6/2024

Lumo – Easily best living

Kojamo plc's Half-Year Financial Report January−June 2024

Total revenue and net rental income increased

• Total revenue increased due to the growth of property portfolio but was weakened by the development of rents and the financial occupancy rate
• Net rental income was positively impacted by higher total revenue and lower repair expenses and negatively impacted by increase in property maintenance expenses, which was caused by the growth of property portfolio, increased heating and water costs and the increase in property taxes

Profit before taxes and FFO

• Profit before taxes decreased from the comparison period
• FFO decreased compared to the comparison period, which was particularly affected by higher financial and maintenance expenses. Financial income of the comparison period includes a profit of EUR 8.9 million from the repurchase of bonds
• Administrative expenses and repair expenses decreased

Profit before taxes, M€

Funds From Operations (FFO), M€ and € / share

* Changes in value = Profit/loss on fair value of investment properties The formula used in the calculation was changed in 2021 regarding current taxes from disposals. The comparison figures for 2020 have been adjusted to reflect the current calculation method

Kojamo plc's Half-Year Financial Report January−June 2024

Financial occupancy rate decreased from the comparison period

• Financial occupancy rate was 91.7 (92.2) per cent for the review period
• Tenant turnover increased from the previous year's level
• During the first half of the year, renting was impacted by seasonal variation and the abundant supply of rental apartments

Financial occupancy rate, %

Tenant turnover, % excluding internal turnover

Financial occupancy rate = (rental income / potential rental income at full occupancy) * 100. Financial occupancy rate does not include apartments under renovation Tenant turnover = (terminated rental agreements under the period / number of apartments) * 100

Development of Like-for-Like rental income

The past 12 months compared to the previous 12-month period

Development of Like-for-Like rental income as at 30 June 2024

As a part of the saving programme, investments decreased substantially

• We will not make new investments nor will we launch modernisation projects for the time being
• The last ongoing development project was completed in June
• We will focus repairs to support renting of apartments

Gross investments and sales of investment properties, M€

Modernisation investments and repairs, M€

The value of investment properties was EUR 7.9 billion

• Valuation yield requirements of the investment properties were increased on average by 0.1 percentage points during the second quarter
• The fair value change of the investment properties was EUR -138.8 million
• Net result on the valuation of the investment properties was negatively impacted by the change in yield requirements by EUR -165.9 million and the decrease in net rental income by EUR -7.3 million, and other items impacted positively by EUR 34.3 million
• From 404 apartments coming out of restrictions, there will be an expected uplift in the fair value of EUR 20−40 million by the end of 2024

Changes in fair value

M€	1–6/2024	1–6/2023
Change in yield requirement	-165.9	-
Change in net rental income	-7.3	-25.9
Other	34.3	30.9
Profit/loss on fair value of investment properties	-138.8	5.1

Fair value of investment properties, M€ *

* Investment properties include completed apartments, development projects and land areas as well as investment properties held for sale

Equity ratio and Loan to Value (LTV) at a strong level

• Equity ratio and Loan to Value (LTV) have remained strong
• Moody's affirmed Baa2 rating in December 2023. There's a significant buffer to LTV limit of 50 per cent

Loan to Value (LTV), %

Equity ratio, %

Loans maturing in 2024 and 2025 are covered

• In January, we issued a new EUR 200 million bond
• In March, we signed a new EUR 250 million secured term loan facility agreement
• In June, the bond we issued in 2017 was repaid. The outstanding amount of the bond at maturity was EUR 434.5 million

The Group's liquidity, M€ Financing key figures

	30 Jun 2024
Interest-bearing liabilities, M€	3,861.4
Hedging ratio, % ¹⁾	78
Average interest rate, % ²⁾	3.2
Coverage ratio	2.8
Average loan maturity, years	3.1
Average interest rate fixing period, years	2.5

¹⁾ Bonds maturing within 12 months are included in fixed rate loans

²⁾ Includes interest rate derivatives

Distribution of the Group's loan maturities, M€

Kojamo plc's Half-Year Financial Report January−June 2024

• Key figures per share did not change significantly from the year-end

30 Jun 2024

Outlook and financial targets

Kojamo plc's Half-Year Financial Report January−June 2024 21

Outlook for Kojamo in 2024

Kojamo reiterates its outlook issued on July 15, 2024, in which Kojamo estimates that in 2024, the Group's total revenue will increase by 2–4 per cent (previously 4–7 per cent) year-on-year. In addition, Kojamo estimates that the Group's FFO for 2024 will amount to between EUR 142–152 million, excluding non-recurring costs (previously EUR 152–164 million).

The outlook is based on the management's assessment of total revenue, property maintenance expenses and repairs, administrative expenses, financial expenses and taxes to be paid as well as the management's view on future developments in the operating environment.

The outlook takes into account the estimated occupancy rate and rises in rents. The outlook does not take into account the impact of potential acquisitions or disposals on total revenue and FFO.

The management can influence total revenue and FFO through the company's business operations. In contrast, the management has no influence over market trends, the regulatory environment or the competitive landscape.

M€	1–6/2024	2023	2022	2021	2020	Target
Annual growth of total revenue, %	3.9	7.0	5.5	2.0	2.3	4–5
Annual investments, M€	19.3	190.7	501.6	356.9	371.2	200–400
FFO/total revenue, % *	30.2	37.8	38.9	39.1	39.5	> 36
Loan to Value (LTV), %	45.0	44.6	43.7	37.7	41.4	< 50
Equity ratio, %	43.0	44.5	45.3	49.0	45.6	> 40
Net Promoter Score (NPS)**	53	50	45	20	36	40

* Actual 1-6/2024: The whole year's property taxes are recognized in Q1's result.

** The calculation method has changed in 2022 for example including digital services in calculation. Actual for 2021 and 2020 have not been adjusted to reflect the current calculation method.

Total revenue and net rental income increased

FFO decreased due to increased financial and maintenance expenses

Occupancy rate weakened from previous year. The oversupply situation of the market did not start to dissipate yet

Balance sheet is strong, and our financial key figures and liquidity situation have remained good

Saving programme is progressing according to the plan

Kojamo plc's Half-Year Financial Report January−June 2024 24

Thank you!

Contact details:

CEO Jani Nieminen, tel. +358 20 508 3201

CFO Erik Hjelt, tel. +358 20 508 3225

Director, Treasury & Investor Relations Niina Saarto, tel. +358 20 508 3283

www.kojamo.fi

Interim Report for January-September 2024 to be published on 7 November 2024

Appendix

Saving programme

• We launched a saving programme in August 2023 which aims to achieve total savings of EUR 43 million in costs and investments in 2024, of which the share of costs is estimated to be EUR 18 million
• The measures of the programme aim at maintaining the company's profitability and safeguarding credit rating
• The saving programme has progressed according to the plan
• For the time being, we have refrained from making new investments, and we have reduced repairs other than those supporting renting of apartments
• Our last ongoing development project was completed in June
• As a part of the saving programme, change negotiations were conducted last autumn, and the layoffs that began afterward are still in effect
• The Annual General Meeting decided in the spring that no dividend be paid for 2023
• We may also carry out property sales during 2024

Immigration and its impact

• Both migration within the country and immigration that has increased in the 2020s will advance urbanisation
• Immigration is heavily focused on the capital region and other large cities
• Number of immigrants from Asia has nearly tripled in last two years and continues on a strong upward trend, representing 40% of net immigration in 2023

Kojamo's apartment portfolio

Apartment distribution, % Fair value distribution, %

Oulu

Jyväskylä

Kuopio region

Lahti region

Others

Region	Number of apartments, units	Number of commercial and other leased premises, units	Fair value, M€	Fair value, € 1,000/unit	Fair value, €/m²	Financial occupancy rate, % ³⁾	Share of revenue, %
Helsinki region	25,686	489	5,686	217	4,068	90.4	67
Tampere region	3,949	111	658	162	3,175	94.0	9
Turku region	2,122	25	327	152	2,872	94.6	5
Others	9,216	145	1,026	110	2,079	94.3	19
Total	40,973	770	¹⁾ 7,698	184	3,479	91.7	100
Others			²⁾ 225
Total portfolio	40,973	770	7,923			91.7

1) The figures reflect income-generating portfolio assets, which excludes new projects under construction, plots owned by the group and ownership of certain assets through shares Kojamo plc's Half-Year Financial Report January−June 2024 29

2) Fair value of ongoing projects under construction, plots owned by the group and ownership of certain assets through shares and fair value of right-of-use assets 3) Financial occupancy rate does not include commercial premises and other leased premises

Housing stock and customer distribution

• Kojamo's housing stock meets the demand nicely
• All age groups are well represented among the tenants

Customers by household type, %

Housing stock by apartment Customers by age group, %

Strategic focal points

Delivering the best customer experience Strong growth Operational excellence Responsibility and sustainable development Renewal through digital We offer easy and effortless services for our customers and create added value through services We create competitiveness and profitability through industry-leading operating models We are known for dynamic and effective corporate culture. We ensure our future competitiveness through competence

We seek profitable growth with multi-channel approach and optimised financing structure

Responsibility is a part of our DNA and plays important role in the work of everyone at Kojamo

The most competent personnel and a dynamic place to work

development and employee experience

solutions

We improve our business and create added value to our customers by taking advantage of solutions enabled by digitalisation

Topical with our sustainability work

• In February, we updated our Green Finance Framework to align future financing activities with market best practices and standards
• We are implementing an AI-powered sustainability and energy management system which provides up-to-date information to support decision-making and enables the quicker response to consumption deviations. During the review period, we have been preparing for the phased implementation of the tool. The system has been in use since the beginning of May
• We have started preparing for reporting in accordance with the EU sustainability reporting directive, which will apply to Kojamo from 2025. We have conducted a double materiality analysis and worked on a gap analysis comparing our current sustainability reporting with the reporting requirements of the sustainability reporting directive
• In response to residents' wishes, all new tenancy agreements will be made smokefree from 1 June 2024 onwards. Lumo homes will become smoke-free one apartment at a time in the buildings that are not already completely smoke-free

Key figures of sustainability 1–6/2024

Sustainability is visible in our every day life

Kojamo plc's Half-Year Financial Report January−June 2024 35

Sustainability commitments and reporting

Our sustainability commitments

Our target is carbonneutral energy use in our properties by 2030

We are committed to complying with the UN Sustainable Development Goals

We are committed to improve our energy efficiency by 7.5% during 2017–2025

Our sustainability reporting and recognitions

78/100

We participated in the global GRESB sustainability assessment

We apply EPRA's Best Practice Recommendations in our reporting

We report on our sustainability work with reference to GRI Standards

Our memberships

We are a member of FIBS, the largest corporate responsibility network in the Nordic countries, accelerating sustainable and responsible business.

Dividend policy

Kojamo's objective is to be a stable dividend payer whose annual dividend payment will be at least 60 per cent of FFO, provided that the Group's equity ratio is 40 per cent or more and taking account of the company's financial position

The Annual General Meeting decided in the spring that no dividend be paid for the financial year 2023 as proposed by the Board of Directors in order to strengthen the company's financial position

Dividend history

Kojamo's ten largest shareholders (as at 30 June 2024)

Shareholder	Number of shares	% of shares
Nominee-registered shareholders	79,984,100	32.4
Heimstaden Bostad AB	49,389,283	20.0
Ilmarinen Mutual Pension Insurance Company	20,537,814	8.3					15,361
Varma Mutual Pension Insurance Company	19,362,375	7.8	13,201
The Finnish Industrial Union	15,788,503	6.4
Trade Union of Education in Finland	11,414,417	4.6	53.5%	52.9%	53.7%	53.2%	52.4%
Trade Union PRO	4,904,150	2.0
Finnish Construction Trade Union	4,868,575	2.0
Elo Mutual Pension Insurance Company	3,842,000	1.6
Danske Invest Finnish Equity Fund	2,073,755	0.8
10. OP-Finland Fund	2,054,047	0.8	30 Jun 2023	30 Sep 2023	30 Dec 2023	31 Mar 2024	30 Jun 2024
Other shareholders	32,925,380	13.3
			Share of nominee-registered and direct foreign ownership, %
	Total	247,144,399	100.0		shareholders 13,635	13,452 Number of shareholders	Development of the number of the 14,651

Source: Euroclear Finland

	4–6/2024	4–6/2023	Change, %	1–6/2024	1–6/2023	Change, %	2023
Total revenue, M€	112.3	108.9	3.1	225.6	217.1	3.9	442.2
Net rental income, M€	82.1	79.0	3.9	142.7	138.5	3.0	297.2
Net rental income margin, %	73.1	72.6		63.3	63.8		67.2
Profit/loss before taxes, M€	-104.3	71.7	-245.5	-65.0	95.7	-167.9	-112.3
Gross investments, M€	10.9	61.3	-82.2	19.3	116.3	-83.4	190.7
Funds From Operations (FFO), M€	42.7	51.7	-17.4	68.2	80.5	-15.3	167.2
FFO per share, €	0.17	0.21	-19.1	0.28	0.33	-15.2	0.68
Financial occupancy rate, %				91.7	92.2		93.0
Fair value of investment properties, Bn€				7.9	8.3	-4.2	8.0
Number of apartments				40,973	39,819		40,619
Number of apartments under construction				-	1,152		354
EPRA NRV per share, €				18.16	19.50	-6.9	18.45
Equity ratio, %				43.0	45.3		44.5
Loan to Value (LTV), %				45.0	43.8		44.6

Consolidated income statement

M€	4–6/2024	4–6/2023	1–6/2024	1–6/2023	1–12/2023
Total revenue	112.3	108.9	225.6	217.1	442.2
Maintenance expenses	-24.4	-22.0	-71.1	-64.4	-115.7
Repair expenses	-5.8	-7.9	-11.8	-14.2	-29.3
Net rental income	82.1	79.0	142.7	138.5	297.2
Administrative expenses	-10.4	-12.0	-19.5	-21.9	-45.6
Other operating income and expenses	0.2	1.0	0.6	1.3	3.7
Profit/loss on sales of investment properties	0.0	-0.1	-0.8	-0.1	0.2
Profit/loss on fair value of investment properties	-149.9	14.0	-138.8	5.1	-295.4
Depreciation, amortisation and impairment losses	-0.3	-0.3	-0.6	-0.6	-1.3
Operating profit/loss	-78.3	81.7	-16.5	122.3	-41.1
Total amount of financial income and expenses	-26.0	-10.0	-48.5	-26.6	-71.3
Share of result from associated companies	-	-	-	0.0	0.1
Profit/loss before taxes	-104.3	71.7	-65.0	95.7	-112.3
Current tax expense	-3.6	-6.2	-6.4	-10.2	-16.5
Change in deferred taxes	24.6	-8.2	19.5	-9.0	39.8
Profit/loss for the period	-83.4	57.3	-51.9	76.5	-89.0

Balance sheet

M€	30 Jun 2024	30 Jun 2023	31 Dec 2023
Non-current assets
Intangible assets	0.5	0.6	0.6
Investment properties	7,921.3	8,268.1	8,038.8
Property, plant and equipment	27.7	28.2	28.0
Investments in associated companies	2.2	1.4	2.0
Financial assets	0.8	0.7	0.8
Non-current receivables	6.4	6.6	6.5
Derivatives	29.4	52.6	29.8
Deferred tax assets	4.6	4.4	4.9
Total non-current assets	7,992.8	8,362.7	8,111.4
Non-current assets held for sale	1.3	0.1	-
Current assets
Trading properties	-	0.1	-
Derivatives	0.6	0.1	0.6
Current tax assets	1.2	3.9	11.1
Trade and other receivables	16.4	15.6	17.0
Financial assets	27.9	32.7	3.3
Cash and cash equivalents	300.1	38.1	15.0
Total current assets	346.1	90.4	46.9
TOTAL ASSETS	8,340.2	8,453.2	8,158.3

Balance sheet

M€	30 Jun 2024	30 Jun 2023	31 Dec 2023
Equity attributable to shareholders of the parent company
Share capital	58.0	58.0	58.0
Share issue premium	35.8	35.8	35.8
Fair value reserve	19.5	41.8	11.2
Invested non-restricted equity reserve	164.4	164.4	164.4
Retained earnings	3,305.1	3,521.8	3,356.4
Equity attributable to shareholders of the parent company	3,582.9	3,821.8	3,625.9
Total equity	3,582.9	3,821.8	3,625.9
Non-current liabilities
Loans and borrowings	3,342.6	2,902.1	3,007.2
Deferred tax liabilities	811.6	885.3	829.3
Derivatives	5.6	0.7	17.3
Provisions	0.1	0.2	0.1
Other non-current liabilities	4.7	5.0	4.9
Total non-current liabilities	4,164.6	3,793.3	3,858.9
Current liabilities
Loans and borrowings	518.8	756.7	593.2
Derivatives	-	0.0	-
Current tax liabilities	1.1	2.8	4.9
Trade and other payables	72.7	78.6	75.4
Total current liabilities	592.6	838.0	673.5
Total liabilities	4,757.3	4,631.4	4,532.4
TOTAL EQUITY AND LIABILITIES	8,340.2	8,453.2	8,158.3

Financial key figures

	30 Jun 2024	31 Mar 2024	30 Dec 2023	30 Sep 2023	30 Jun 2023
Equity ratio, %	43.0	44.3	44.5	45.0	45.3
Interest cover	2.7	3.0	3.2	3.4	3.6
Coverage ratio	2.8	3.3	3.6	3.9	4.1
Loan to Value (LTV), %	45.0	44.5	44.6	44.3	43.8
Hedging ratio, % ¹⁾	78	94	93	86	86
Average interest rate, % ²⁾	3.2	2.6	2.4	2.3	2.3
Average loan maturity, years	3.1	2.8	2.8	2.9	3.2
Average interest rate fixing period, years	2.5	2.8	2.9	2.8	3.1

¹⁾ Bonds maturing within 12 months are included in fixed rate loans

²⁾ Includes interest rate derivatives

Important information

This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securitites in any jurisdiction. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision.

This presentation includes forward-looking statements, which include statements regarding the Kojamo's business strategy, operating and financial targets, financial condition, profitability, results of operations and market data, as well as other statements that are not historical facts. Words such as "believe," "anticipate," "plan," "expect," "target," "estimate," "project," "predict," "forecast," "guideline," "should," "aim," "continue," "could," "guidance," "may," "potential," "will," as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. By their nature, forwardlooking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Undue reliance should not be placed on these forward-looking statements. Except for any ongoing disclosure obligation as required by applicable law, Kojamo does not have any intention or obligation to publicly update or revise any forward-looking statements, whether to reflect any future events or circumstances or otherwise.