Kojamo Oyj

Quarterly Report • Nov 7, 2024

Interim Report 1–9/2024

7 November 2024 Erik Hjelt, Interim CEO

Kojamo plc

• Financial development
• Outlook and financial targets

Summary of January– September 2024

Kojamo plc's Interim Report January−September 2024 3

Total revenue and net rental income increased, the fair value of investment properties unchanged

• Total revenue and net rental income increased
• Financial occupancy rate decreased from the comparison period. Occupancy rate in the third quarter nevertheless improved compared to the second quarter of the year
• There is still oversupply in the market but it has turned to a decline
• FFO decreased due to the increased financial expenses and maintenance expenses
• There was no significant change in the fair value of investment properties during the third quarter
• Saving programme is progressing according to the plan
• Balance sheet has remained strong, and our liquidity situation is good. Our next financing need is for loans maturing in 2026

Operating environment

General operating environment

• Global economic uncertainty has increased particularly due to geopolitical tensions
• Strong growth in the United States continues, driven by private consumption, although the labour market is cooling down. Economic development in the euro area remains modest but economic growth has started and is expected to accelerate from next year onwards
• The Finnish economy is contracting this year, but a turn towards growth has begun
• Employment will weaken this year, but it is expected to recover next year with economic growth
• Monetary policy easing has begun in the euro area and the United States, which is reflected in declining market interest rates

Operating environment key figures

	2024E	2023
GDP growth, %	-0.2	-1.2
Unemployment, %	8.0	7.2
Inflation, %	1.8	6.2
Prices of old apartments in	0.5	-7.0
the whole country, change, %
Prices of old apartments 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, 9/2024; Pellervo Economic Research PPT, Housing 2024 forecast

Operating environment

Housing production

• Construction is recovering slowly. The number of residential start-ups this year is forecast to fall below last year's level, reaching 17,000 apartments
• Construction of non-subsidised apartments remains at a standstill, and the number of new start-ups is expected to remain at a low level in the next few years
• In the capital region, new supply coming to the market is decreasing sharply

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

Industry key figures

	2024E	2023
Residential start-ups, units	17,000	18,000
of which non-subsidised apartments	2,000	3,400
start-ups in the capital region	n/a	8,513
Building permits granted, annual, units*	16,732	21,097
Construction costs, change, %**	-0.5	1.1

* Rolling 12 months, August 2024; **Rolling 12 months, September 2024

Kojamo plc's Interim Report January−September 2024 6 Sources: CFCI's economic forecast, September 2024; Nordea's Housing Market Review October 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

Rental market situation

• There is still oversupply in the market, but the supply of apartments has turned to a decline
• Urbanisation and decreasing average household size support the long-term demand
• Population growth continues supported significantly by increased immigration and will be strongly concentrated in the largest cities
• Migration within the country has returned to its prepandemic trend, concentrating the population in major urban areas

Development of household sizes

Population growth forecast 2022–2040, %

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

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

Key figures 1–9/2024

Financial development

Kojamo plc's Interim Report January−September 2024 9

Total revenue and net rental income increased

• Total revenue increased due to the rental apartments completed at the end of last year and the beginning of the year, and it 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 it was 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

Kojamo plc's Interim Report January−September 2024

Profit before taxes and FFO

• FFO decreased from the comparison period, which was particularly affected by higher financial and maintenance expenses. Financial income of the comparison period includes a profit of EUR 8.7 million from the repurchase of bonds
• Administrative expenses and repair expenses were EUR 8.8 million lower than in the comparison period

Profit before taxes, M€

Profit excluding changes in value Changes in value*

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

Financial occupancy rate

• Financial occupancy rate was 91.5 (92.7) per cent for the review period. Occupancy rate in the third quarter nevertheless improved compared to the second quarter of the year
• Tenant turnover increased from the previous year
• Renting was impacted by the abundant supply of rental apartments in the market

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 September 2024

As a part of the saving programme, investments decreased significantly

• We will not make new investment decisions nor will we launch modernisation projects for the time being
• At the end of this year, we will start the construction of a project which is based on a previously signed binding preliminary agreement. 119 apartments will be completed in Helsinki in the beginning of 2026
• 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

• The fair values did not change significantly from the end of second quarter. The valuation yield requirements of the investment properties were not changed in the third quarter
• During the review period, the fair value change of the investment properties was EUR -137.9 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 -1.3 million, and other items impacted positively by EUR 29.2 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€	1–9/2024	1–9/2023
Change in yield requirement	-165.9	-154.1
Change in net rental income	-1.3	-24.9
Other	29.2	42.3
Profit/loss on fair value of investment properties	-137.9	-136.7

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
• There's a significant buffer to LTV maximum limit of 50 per cent

Loan to Value (LTV), %

Equity ratio, %

Loans maturing in 2024 and 2025 are covered

• Following the financing arrangements made in the beginning of the year, our liquidity situation is good
• The next financing need is for loans maturing in 2026
• The average interest rate of loans decreased
• In the autumn, Moody's confirmed Kojamo's previous Baa2 (negative) credit rating

The Group's liquidity, M€ Financing key figures

	30 Sep 2024
Interest-bearing liabilities, M€	3,860.7
Hedging ratio, % ¹⁾	93
Average interest rate, % ²⁾	3.0
Coverage ratio	2.7
Average loan maturity, years	2.9
Average interest rate fixing period, years	2.7

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 Interim Report January−September 2024

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

30 Sep 2024

Outlook and financial targets

Kojamo plc's Interim Report January−September 2024 19

Outlook for Kojamo in 2024 unchanged

Kojamo estimates that in 2024, the Group's total revenue will increase by 2–4 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.

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€	1–9/2024	2023	2022	2021	2020	Target
Annual growth of total revenue, %	3.1	7.0	5.5	2.0	2.3	4–5
Annual investments, M€	21.6	190.7	501.6	356.9	371.2	200–400
FFO/total revenue, %	33.6	37.8	38.9	39.1	39.5	> 36
Loan to Value (LTV), %	44.7	44.6	43.7	37.7	41.4	< 50
Equity ratio, %	43.1	44.5	45.3	49.0	45.6	> 40
Net Promoter Score (NPS)*	54	50	45	20	36	40

* 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.

Summary

Total revenue and net rental income increased

FFO decreased due to increased financial and maintenance expenses

Financial occupancy rate decreased from the comparison period but improved in the third quarter compared to the second quarter of the year

The supply in the market has turned to a decline

Saving programme is progressing according to the plan

Balance sheet has remained strong, and our credit rating remained unchanged in the yearly review

Kojamo plc's Interim Report January−September 2024 22

Thank you!

Contact details:

Interim CEO Erik Hjelt, tel. +358 20 508 3225

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

www.kojamo.fi

Financial Statements for 2024 to be published on 13 February 2025

23

Appendix

Strategic focal points

Delivering the best customer experience	We offer easy and effortless services for our customers and create added value through services	Growth	For now, we focus on growing total revenue in the existing apartment portfolio
Operational excellence	We create competitiveness and profitability through industry-leading operating models	Responsibility and sustainable development	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	We are known for dynamic and effective corporate culture. We ensure our future competitiveness through competence development and employee experience	Renewal through digital solutions	We improve our business and create added value to our customers by taking advantage of solutions enabled by digitalisation

Lumo – Easily best living

Kojamo's apartment portfolio

62.7 9.6 5.2 5.4 5.0 4.1 3.54.5 Helsinki region

Apartment distribution, % Fair value distribution, %

• Tampere region Turku region
• 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	490	5,691	217	4,071	90.3	67
Tampere region	3,949	111	659	162	3,178	93.9	9
Turku region	2,122	25	327	153	2,873	94.5	5
Others	9,216	145	1,028	110	2,083	94.0	19
Total	40,973	771	¹⁾ 7,705	185	3,483	91.5	100
Others			²⁾ 221
Total portfolio	40,973	771	7,926			91.5

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 Interim Report January−September 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

Housing stock by apartment Customers by age group, %

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 have implemented 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
• We have started preparing for reporting in accordance with the EU corporate 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
• During the summer, we visited the waste collection points of Lumo houses to ensure that our residents have up-to-date sorting instructions and sorting options that support proper recycling
• The European Public Real Estate Association (EPRA) has awarded Kojamo's financial statements and sustainability report for 2023 with the highest possible recognition, a gold award

Key figures of sustainability 1–9/2024

2023 was changed to correspond the current method.

Sustainability is visible in our every day life

Kojamo plc's Interim Report January−September 2024			33

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

74/100*

We participated in the global GRESB sustainability assessment

We apply EPRA's Best Practice Recommendations in our reporting

* Result published after review period

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.

Kojamo plc's Interim Report January−September 2024 34

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 September 2024)

		Number of
	Shareholder	shares	% of shares
	Nominee-registered shareholders	79,254,521	32.1
1.	Heimstaden Bostad AB	49,389,283	20.0
2.	Ilmarinen Mutual Pension Insurance Company	20,537,814	8.3
3.	Varma Mutual Pension Insurance Company	19,362,375	7.8
4.	The Finnish Industrial Union	15,788,503	6.4
5.	Trade Union of Education in Finland	11,414,417	4.6
6.	Trade Union PRO	4,904,150	2.0
7.	Finnish Construction Trade Union	4,092,132	1.7
8.	Elo Mutual Pension Insurance Company	3,824,000	1.5
9.	Danske Invest Finnish Equity Fund	2,728,755	1.1
10.	OP-Finland Fund	2,704,047	1.1
	Other shareholders	33,144,402	13.4
	Total	247,144,399	100.0

Development of the number of the shareholders

Source: Euroclear Finland

	7–9/2024	7–9/2023	Change, %	1–9/2024	1–9/2023	Change, %	2023
Total revenue, M€	113.2	111.5	1.5	338.8	328.6	3.1	442.2
Net rental income, M€	85.7	83.1	3.1	228.4	221.6	3.1	297.2
Net rental income margin, %	75.8	74.6		67.4	67.4		67.2
Profit/loss before taxes, M€	50.6	-88.5	157.2	-14.3	7.2	-299.1	-112.3
Gross investments, M€	2.2	45.0	-95.1	21.6	161.3	-86.6	190.7
Funds From Operations (FFO), M€	45.6	48.5	-5.9	113.8	128.9	-11.8	167.2
FFO per share, €	0.18	0.20	-10.0	0.46	0.52	-11.5	0.68
Financial occupancy rate, %				91.5	92.7		93.0
Fair value of investment properties, Bn€				7.9	8.2	-3.0	8.0
Number of apartments				40,973	40,192		40,619
Number of apartments under construction				-	779		354
EPRA NRV per share, €				18.34	19.11	-4.0	18.45
Equity ratio, %				43.1	45.0		44.5
Loan to Value (LTV), %				44.7	44.3		44.6

Consolidated income statement

M€	7–9/2024	7–9/2023	1–9/2024	1–9/2023	1–12/2023
Total revenue	113.2	111.5	338.8	328.6	442.2
Maintenance expenses	-22.7	-21.4	-93.8	-85.7	-115.7
Repair expenses	-4.7	-7.0	-16.6	-21.3	-29.3
Net rental income	85.7	83.1	228.4	221.6	297.2
Administrative expenses	-8.8	-10.5	-28.3	-32.4	-45.6
Other operating income and expenses	1.0	1.2	1.6	2.6	3.7
Profit/loss on sales of investment properties	-	-	-0.8	-0.1	0.2
Profit/loss on fair value of investment properties	0.9	-141.8	-137.9	-136.7	-295.4
Depreciation, amortisation and impairment losses	-0.3	-0.3	-0.9	-0.9	-1.3
Operating profit/loss	78.6	-68.2	62.0	54.1	-41.1
Total amount of financial income and expenses	-27.9	-20.3	-76.4	-46.9	-71.3
Share of result from associated companies	-	-	-	0.0	0.1
Profit/loss before taxes	50.6	-88.5	-14.3	7.2	-112.3
Current tax expense	-4.4	-4.7	-10.8	-14.9	-16.5
Change in deferred taxes	-5.9	22.4	13.6	13.4	39.8
Profit/loss for the period	40.4	-70.8	-11.5	5.7	-89.0

Balance sheet

M€	30 Sep 2024	30 Sep 2023	31 Dec 2023
Non-current assets
Intangible assets	0.4	0.6	0.6
Investment properties	7,924.6	8,171.4	8,038.8
Property, plant and equipment	27.6	28.1	28.0
Investments in associated companies	2.2	1.8	2.0
Financial assets	0.8	0.7	0.8
Non-current receivables	6.3	6.5	6.5
Derivatives	17.9	53.7	29.8
Deferred tax assets	6.8	2.8	4.9
Total non-current assets	7,986.6	8,265.7	8,111.4
Non-current assets held for sale	1.3	0.1	-
Current assets
Trading properties	-	0.1	-
Derivatives	0.7	0.1	0.6
Current tax assets	1.2	6.0	11.1
Trade and other receivables	16.9	16.2	17.0
Financial assets	37.7	27.9	3.3
Cash and cash equivalents	316.9	32.4	15.0
Total current assets	373.4	82.6	46.9
TOTAL ASSETS	8,361.3	8,348.4	8,158.3

Balance sheet

M€	30 Sep 2024	30 Sep 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	-6.2	42.5	11.2
Invested non-restricted equity reserve	164.4	164.4	164.4
Retained earnings	3,345.5	3,451.1	3,356.4
Equity attributable to shareholders of the parent company	3,597.6	3,751.9	3,625.9
Total equity	3,597.6	3,751.9	3,625.9
Non-current liabilities
Loans and borrowings	3,341.2	2,897.6	3,007.2
Deferred tax liabilities	813.2	861.5	829.3
Derivatives	26.4	0.4	17.3
Provisions	0.1	0.2	0.1
Other non-current liabilities	4.6	5.0	4.9
Total non-current liabilities	4,185.6	3,764.6	3,858.9
Current liabilities
Loans and borrowings	519.4	752.7	593.2
Derivatives	0.0	0.0	-
Current tax liabilities	2.8	3.9	4.9
Trade and other payables	55.9	75.3	75.4
Total current liabilities	578.2	831.8	673.5
Total liabilities	4,763.7	4,596.5	4,532.4
TOTAL EQUITY AND LIABILITIES	8,361.3	8,348.4	8,158.3

Financial key figures

	30 Sep 2024	30 Jun 2024	31 Mar 2024	30 Dec 2023	30 Sep 2023
Equity ratio, %	43.1	43.0	44.3	44.5	45.0
Interest cover	2.5	2.7	3.0	3.2	3.4
Coverage ratio	2.7	2.8	3.3	3.6	3.9
Loan to Value (LTV), %	44.7	45.0	44.5	44.6	44.3
Hedging ratio, % ¹⁾	93	78	94	93	86
Average interest rate, % ²⁾	3.0	3.2	2.6	2.4	2.3
Average loan maturity, years	2.9	3.1	2.8	2.8	2.9
Average interest rate fixing period, years	2.7	2.5	2.8	2.9	2.8

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.