Catella AB (publ) (CATB) Earnings Call Transcript & Summary

Welcome to the Catella Q2 2026 Report Presentation. [Operator Instructions] Now I will hand the conference over to the CEO, Rikke Lykke; and CFO, Gustav Jansson.

Good morning, and welcome to our Q2 2026 earnings call. As just announced, I'm Rikke Lykke, Group CEO of Catella, and I'm joined by our CFO, Gustav Jansson. Let me start with a brief introduction to Catella. We're a leading European real estate investment and advisory firm. What sets us apart is our combination of local market insight, long-standing strong client relationships and our cross-border execution power. Today, we manage SEK 161 billion of assets, have just under 500 employees across 12 countries, and we generated SEK 1.7 billion in revenues over the past 12 months. Since we announced our strategic opportunities -- priorities, sorry, in May, our focus has been clear. We want to improve quality of earnings. We want to strengthen operational excellence and we want to invest in capabilities that make Catella more competitive over time. A stronger base of recurring, predictable revenue gives us a greater resilience and a better platform for profitable long-term growth. So we're also simplifying the group. We want to reduce complexity, increase our accountability and improve our execution speed. As you may have noticed, we have in Sweden this quarter, discontinued our previous investment management setup and returned the AIFM license. With this, we reduced our complexity, and we released approximately SEK 20 million in cash. In Corporate Finance, we have optimized our French operations through a new office and a more integrated structure. These actions alone in Sweden and France are expected to generate annual savings of around SEK 6 million. At the same time, we continue to invest selectively in capabilities that strengthen competitiveness and support long-term growth. The appointment of Nils Sommersel as Chief Digital Officer is to reinforce our capabilities and improve how we operate. We're also investing into our European platform to create a more consistent client offering and scale our earnings base over time. In Investment Management, we have strengthened our capital raising capabilities through a new group capital raising strategy and partnerships role. Recently, we've seen a stronger market momentum during the quarter, particularly in Sweden, Denmark and Spain. Examples in Corporate Finance is our involvement in a major office transaction in Sweden and one of the largest residential land transactions, one of the largest of the year in Spain. And just this morning, in Investment Management, we announced the joint venture deal that we entered into in Denmark. We continue to align our European investment management platform, and that includes the phased rebranding of our investment management team and business in France. This is to reinforce and emphasize a more consistent market position across Europe. Across both business areas, closer collaboration is strengthening our client offering and our ability to capture opportunities across Europe. Capital allocation remains a key priority. We're progressing existing projects. We're handling legacy investments, and we are selectively deploying capital where we see attractive long-term opportunities. And finally, during the same quarter, we also initiated a SEK 100 million share repurchase program. And with that, I'm going to hand over to you, Gustav, and I know that you will address the share repurchase program.

Thank you, Rikke, and good morning, everyone. Looking at the key highlights for the second quarter, for the group in total, the reported revenues fell significantly compared to the previous year from SEK 754 million to SEK 400 million. This is driven primarily by the sales of Kaktus and CatWave. In the 2025 numbers, disposals represent revenues of almost SEK 360 million. Adjusted for this, gross profit on an underlying basis is an improvement of 5% with second quarter '26 net revenue of SEK 310 million compared to an adjusted '25 number of SEK 294 million. In the quarterly results, Corporate Finance is up SEK 28 million year-over-year. Investment Management is down SEK 21 million, and the balancing figure is spread across multiple other movements. I will discuss these results in more detail later on in the presentation. Other highlights, earlier this morning, we announced the sale of the development project GreenPoint in Copenhagen as part of a strategic asset swap with Ikano Bolig. As part of this transaction, Catella, our partners, Nordkranen and an international investor, acquired an adjacent development site with the ambition to develop a new residential project. Rikke mentioned as well the share buyback progress. In the second quarter, we launched a share buyback program. To date, more than 250 (sic) [ 2.5 ] million shares have been repurchased at an average share price of SEK 20.5. In aggregate, circa SEK 52 million has been used of the SEK 100 million mandate that was approved at the AGM in May. Further highlights, we believe that supporting our view of the market, transaction volumes data show that activities are starting to pick up. As mentioned, our Corporate Finance team have been well positioned to benefit from this, and we're carefully optimistic about the near-term future. So going a little bit more into the details and turning our attention on the business areas, starting with Investment Management. In the quarter, asset under management is helped by currency movements. But otherwise, the trend of net outflow and downward valuations continue. This is true also for the last 12-month basis, where reported growth is supported only by an accounting change that now includes assets under development in the AUM number. In terms of revenue, that translates to our management fees falling in the quarter. Variable fees are also down as limited dispositions in the funds happened in the '26 number, where we saw more activity in '25. The low activity in 2026 is partially related to timing, and we expect to see some more activity in the funds going forward. The EBIT is down 7% as the revenue shortfalls are offset by lower costs. In particular, personnel costs have been managed effectively. Moving on to Corporate Finance. Revenues are flat on a reported basis, but up if adjusting the previous year numbers for fees related to the Kaktus disposal. The strong result on an adjusted basis is a reflection of the increased number of transactions completed in the quarter, and we saw that on the market activity chart earlier. EBIT is largely flat compared to last year. This is a reflection that we invested in the business last year despite the slower market to be positioned to succeed as the markets picked up again. Hence, costs are largely flat. Moving on to the balance sheet investments, our legacy there. Again, the key variance in the numbers is driven by Kaktus disposal. Adjusting for that, the net revenue number is SEK 12 million better than previous year. This includes a positive impact of the Metz-Eurolog project worth SEK 5 million. Moving on to looking at the financials on a consolidated basis. I think we have explained the net revenue performance in the business area sections, and I will therefore now focus on a few items further down the income statement. Operating expenses are SEK 20 million lower, a decrease of 6%. This is mainly driven by lower variable salary costs and expenses no longer incurred following the Kaktus and Catella Valuations disposals. Offsetting those positive movements are negative movements in fair value adjustment, which creates a negative impact of SEK 8 million between '25 and '26. On an underlying basis, the result in EBIT is, therefore, largely a flat year-over-year performance. Looking below the EBIT line, the largest impact come from FX, which in Q2 '26 had a positive impact of SEK 50 million, while the impact in Q2 '25 was a positive SEK 40 million. There were also some costs incurred related to the bond repurchase made in April this year. At the end, this results in a net loss for the quarter of SEK 12 million, which excluding FX impacts, would have been a negative SEK 27 million. Clearly, not the results we would have liked, but we also see some positive signs in market recovery and opportunity for further actions. Having said that, I'm handing it back to Rikke, and thank you.

Thank you. Before we open for Q&A, I would like to return to the bigger picture. Our priority is to sharpen Catella's strategic focus and concentrate our resources behind a clear, scalable growth path. The European real estate market is gradually recovering. And whilst uncertainty does remain, the opportunities are emerging. The actions we're taking now are designed to strengthen Catella beyond the current cycle. By improving earnings quality and simplifying the organization, strengthening our European platform and allocating capital with discipline, we're building a more resilient Catella and a stronger foundation for sustainable value creation. We're not waiting for the market to improve before we act. We're making Catella sharper, more scalable and better positioned to lead as markets recover. Thank you. We will now open for questions.

[Operator Instructions] The next question comes from Gustaf Jörgensen from ABG Sundal Collier.

I have a couple of questions. I can start with this one regarding Investment Management. We saw lower variable fees in Q2 despite improving transaction activity in the broader market. What needs to happen for that improvement to translate into higher transaction and performance-based fees? And should we expect any meaningful catch-up in H2?

Well, what needs to happen is that some of our funds are ready again to invest or to divest because our variable fees in investment management are coming from transactions. We manage on behalf of third party, and it is the third party who and us that are discussing whether we are to sell or acquire. So what needs to happen is that there is a confidence in the market that it's the right time to divest or the right time to sell. Will we see a take-up here? I do believe so. But I also will have to say that as we said here earlier is that we see really strong momentum in Sweden, Denmark and Spain, but our main AUM is in Germany. And currently, Germany is still -- let's put it this way, they're observing the market. So unfortunately, I would love to tell you that we're definitely going to get -- see a lot more transactions, but I can't promise that.

And adding to your question regarding performance fees, Gustaf, given -- this is a general answer, it doesn't apply to every fund. But we -- given high watermark clauses and so on in the bigger funds and where the trend has been, I wouldn't expect any performance fees or major performance fees in the second half of this year.

So variable fees come from transaction and performance fees.

Yes.

Okay. Then I have a question regarding -- so advised transaction volumes increased from SEK 11.4 billion to -- from SEK 8.7 billion, but the Corporate Finance EBIT remained at SEK 6 million. So how should we think about the lag between improving transaction volumes and the earnings conversion? And when would you expect to see more meaningful operating leverage?

The EBIT on the -- so just to think about the cost of our Corporate Finance business, we believe that it's important to maintain a team in place also through the slower market turns, ready to capitalize when the markets become active again. So I think that's true. So with more transactions, I wouldn't expect the cost base to increase either. So if activities continues in the second half, we're confident about our position in the market, and we're optimistic about our pipeline, you should see an improving profitability in the Corporate Finance segment, yes.

Fair enough. And then I have a last question also. So you mentioned that simplification in Q2, including the around EUR 6 million of annual savings in the French Corporate Finance and the wind-down of Catella Property Investment Management in Sweden. Should we expect further structural cost measures? Or is the cost base now broadly where you want it to be?

I've only acted now as the CEO for a year. I spent the first half year and 9 months to understand, listen, listen and learn and analyze. First of all, the bonds buyback that we are -- have noticed before that we've said that we might want to do is definitely going to give us further cost savings. But also, I am of the conviction that you should always look at your cost side. And that said, we will continue to optimize the cost side.

[Operator Instructions] The next question comes from Rasmus Jacobsson from Redeye.