PRELIMINARY FINANCIAL RESULTS 2022

28 Feb 2023 16:04 CET

PRELIMINARY FINANCIAL RESULTS 2022

Steen & Strøm‘s shopping center portfolio showed positive recovery during 2022,
mainly following administrative closure of shopping centers in Denmark and
Norway and several restrictions in Sweden during the first semester of 2021.
Despite facing continuous macro challenges including Russia’s war against
Ukraine, high inflation and overall uncertainty, Steen & Strøm has managed to
mitigate the financial impacts of the ongoing crisis, and thus maintaining a
solid financial position.

Steen & Strøm holds ten shopping centers, located in major regional cities'
catchment areas. The portfolio comprises resilient, large and modern assets,
adapted to consumer needs and expectations. This has been confirmed during 2022,
despite the ongoing, economic challenges, with tenant sales approaching
pre-covid levels (-1.8% versus 2019), a relatively moderate impact on vacancy
levels (5.5% at 31 December 2022) and overall satisfying collection rates (98.6%
as of 31 December 2022).

Net rental income on a like-for-like basis increased by +2.4% in 2022 (Norway
+7.9%, Denmark +2.3% and Sweden +0.2%), mainly following last year lockdowns in
Norway and Denmark, increased variable revenues, indexation and less discounts,
to some extent off-set by general increases in service charges and some
bankruptcies (impacting provision for credit losses). For the Group as a whole,
the indexed linked effect on net rental income was +2.2% and the reversion rate
was +0.9% in 2022.

In 2022 Steen & Strøm AS sold its fully owned subsidiaries Hamar Storsenter AS,
Gulskogen Senter AS and Stavanger Storsenter AS. All these sales took place with
effect from 1 July 2022. Profit and loss from the sold companies have been
included in the group accounts for Steen & Strøm AS for the first half of 2022.
The transfers were formally made and cash proceeds received 1 July 2022.
Proceeds from the three disposals amounted to in total NOK 1 671 million.

GRESB, the leading Environmental, Social and Governance (ESG) benchmark for Real
Estate, awarded Steen & Strøm a five-star rating in 2022. Steen & Strøm is
recognized as a global sector leader within retail, which means the Group is
amongst the top three most sustainable shopping center operators in Northern
Europe. This confirms the relevance of our Group impact strategy, “Act for
good”.

Profit before tax amounted to NOK 598.6 million (NOK 507.6 million). Adjusted
for fair value changes related to the investment property portfolio and income
from disposals, the pre-tax profit equals NOK 1 468.9 million, which is an
increase of NOK 286.3 million from 2021.

Total assets for the Group as at 31 December 2022 have been reduced from 2021
due to divestments and amounted to NOK 30.5 billion (NOK 33.4 billion), of which
investment properties amounted to NOK 26.6 billion (NOK 30.1 billion). Change in
fair value of Investment properties amounted to NOK -1 027.5 million in 2022
(NOK -969.1 million in 2021), driven by the current impacts of increased
inflation and interest levels in general. The valuation of the portfolio
corresponds to an average net initial yield of 4.7% (4.5%) of which 4.4% in
Norway, 5.4% in Sweden and 4.2% in Denmark.

Booked equity amounted to NOK 17.8 billion at year-end 2022, corresponding to a
book equity ratio of 58.1% (55.4%). Net interest-bearing debt amounted to NOK
7.5 billion (NOK 9.2 billion) at 31.12.2022. Net interest-bearing debt (not
including lease liabilities) decreased by NOK 1 763.1 million to NOK 7 468.7
million 31 December 2022 and is reflected in the Group’s Loan-to-Value of 26.2%
(29.1%). The average cost of debt was 1.6% in 2022, compared to 1.7% in 2021.

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