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Selvaag Bolig ASA
2/12/2025
Good morning, and welcome to the fourth quarter's presentation of Selvåg Bolig. My name is Sverre Malvik, and I'm the managing director. Together with the financial director Kristoffer Brunemål, we'll go through today's agenda. We'll look at some highlights from the quarter and the year first, then we'll look at the operational, then Kristoffer will go through the financial, then we'll take the market and future prospects and questions at the end. 2024 was a very good result in relation to the market situation, both Q4 and this year in total. We sold almost 1.8 billion more in total in 2024 than in 2023, which we are very pleased with, given the market. We managed to start building, in Q4 isolated, 298 units, which is the best in three years. We have increased the order reserve significantly, more than expected, up to 829 units, over 6 billion. We have purchased 880 units in 2024. We are purchasing in the opposite direction, Good morning and welcome to the fourth quarter's results presentation for Selvåg Bolig. My name is Sverre Malvik and I am the managing director. Together with the financial director Kristoffer Brunemog, we will go through today's agenda. We will look at some highlights from the quarter and the year first, then we will look at the operational, then Kristoffer will go through the financial, then we will take market and future prospects and questions at the end. 2024 was a very good result in relation to the market situation, both Q4 and this year in total. We sold bruttos for almost 1.8 billion more in 2024 than in 2023, which we are very pleased with, given the market. We managed to start building, in Q4 isolated, 298 units, which is the best in three years. We have increased the annual reserve significantly, more than expected, up to 829 units, over 6 billion. We have purchased 880 units in 2024. We are buying motorbikes in low-conjuncture and have made good deals there. The board is setting up an exchange based on the results and future prospects, considering that we have sold a lot of unsold, The future outlook is generally at 1.25 kroner per share. If we look at the key figures, we had a turnover after IFRS of about 0.5 billion, and a adjusted EBITDA margin of 17.4%, a sliver of 2 billion per year, and a adjusted EBITDA margin of 16.2%. The current estimate is 877 million kroner per quarter, with a margin of 11, and 2.5 billion kroner per year, and 8.7 billion kroner per year in EBITDA margin after NGAAP. Kristoffer will go into more detail about the results. Looking at the operational aspect, we have a very safe and good business model. We have a pre-sale cooperation with our banks, which is usually 60%. We also start at 50%, depending on the profitability of the projects. It is very safe to have at the bottom. This is due, among other things, to the fact that we have closed enterprise contracts at a fixed price level, including wages and price increases, with solid entrepreneurs. We have had this as a rule for many, many years. This is very important, and it gives us a lot of visibility on wages. We basically know what we will have in costs when we start building a project, so we don't get any uncertainty due to inflation, for example. What we have started to do after the war is to take precautions for our customers in single projects. We have been unsure if we have been able to contract cheap enough at the time when sales start, so we have postponed it to later. We have had the advantage that we have been able to contract at a later time and have had a lower building cost, so that we have had profitability to start building. This is part of the secret to the fact that we have managed to go through the last three years. Generally, when it comes to sales, we have sold a lot because we have had good products over the years, both our concepts and the way we use our projects. That is, we manage to draw, get as many saleable areas as possible, as high net and brutto factors as it is called, so we do not build areas that either A, the customer does not want to pay for, or B, is called waste of space, which goes over to corridors and other things. We have PTF 500 units in the market for projects that are both under production and in the sales phase, and unsold and finished, and have the opportunity to release about 1,000 more over the course of the year, given that the market takes away The conclusion is that we have a lot of goods in the shelves and we have regulated property that we can put out that is positive. We are of course in the Oslo area, but we have enough to put out a lot. So we also expect and start building a lot more in the next three quarters than what we have, or increase the annual reserves further. We have very few deliveries in the next couple of quarters, or actually in the next three, so we will try to get started and get the volume back to 1,300 production in the future, which we have a lot of faith in. Tomtebanken har kjøpt 880 enheter. Vi er inne i et samarbeid med Ferd, som har stått omtalt i avisen på en stor regnedom i Moss på 800 enheter, så det vil si 400 på vår hånd. In Stockholm, we have bought two units in the north of Jøregårdsdalen, in the eastern Malm district. Very attractive units, which we have received much thanks to our plus concept and what we have built in Stockholm before. And in Bergen, we have also bought up more sensibly. As I said a little initially, we use, we go a little counter cyclical. We have not bought very much when it has been high consumption, we rather buy in low consumption to get a more reasonable price of units. If we look at the sales, we sold a total of 568 units in 2024 against 360 in 2023. The market in Norway generally increased by 12% from 2023 to 2024, and we have an increase of 57-58%, so we have taken a lot of market shares in the course of 2024, which we are pleased with. We sold isolated in Q4 for about 850 million, and a fairly high unit price of 7 million. The 12-month rolling sale is also starting to get a good speed of the year, which we are trying to work with to increase further. We can add here that so far this year, we are more than a little over 122, so Q1 has started very well. The price growth in the used market tends to be very good in January, while the new housing sales have a tendency to be a bit slow at the start of the first few weeks, but that has been the case this year. This is probably due to, among other things, the delay in the housing tax, and that there were many who were able to do both. We have also sold a lot of unsold finished products, which we are aware of keeping back in Q4, or actually Q3 and Q4 last year, in order to avoid rebating so much. It came back to the market side. The good sales have meant that we have started building 300 units isolated in that quarter, and that is more than what we have done in the last three years, so that is positive. We completed 168, so that means that we have made a real leap in our order reserve, which of course is essential in terms of creating results and earnings per share, dividend per share ultimately in the coming years. So 1.6 billion up in the annual reserve is good news. So this growth is higher than we internally dared to expect in such a short time. So we are pleased with that. 61% of this was sold out of the quarter. A low sales rate is due to a combination of a lot of things that have started in Q4. It is also due to the fact that we do not want to have too high sales rates when prices are low. Most likely, there will be increasing prices in the future. Then it is much better to have something to sell on. You would rather sell linearly through the construction period and take out margins, increased margins. Good morning. Let's look at the financial highlights.
We started with the result management at IFRS, which is the official result, where the revenue and costs from the overhauled projects meet the customer's results. We overhauled 172 units online, 63 of which were from collaboration projects. The main overhaul this quarter was our project with Nordr at Lilleørn Park in Sinsen. The collaboration project we have with Reitan at Ringve Plus in Trondheim. And then there is a project at Skårebyen in Lønnskog, which is the main supplier. There is a large number of co-operative projects, which means that the turnover falls because they are not consolidated. In addition, of the units that are consolidated, we have delivered an extension block of 71 units, where there are relatively fewer units with small unit prices. So the average volume of the consolidated units is 4.4 million in isolated quarters. We deliver revenue of 498 million NOK, including 20 million NOK from the DRIFTA plus service this year, as well as project management for collaboration projects. The project cost is 406 million kroner. We run as known this fixed price regime with included wages and price increase. This contributes to that the costs are well within the budget. At the same time we have good project managers who manage the projects well. Then we deliver 406 million kroner in costs that are well within the budget. This contributes to good margins in the isolated quarter. Other costs come in at 80 million. We have a relatively stable cost base, despite the number of employees and operating costs at the bottom. This is some down from the same period last year at 84 million. This is due to the fact that we have managed to cut a number of other operating costs and consultant costs this year. I report an adjusted EBITDA of 87 million, corresponding to 17%. Adjusted EBITDA is that we have adjusted the financial costs that lie in the goods cost after IFRS. This is interest on construction loans, interest on sales credits and option premiums to urban property. So it is a significant financial element in the goods cost. At the bottom, the report has a profit per share of 50 euros, which is quite a lot lower than the previous quarter, or the corresponding quarter last year, at 1.16 kroner. This is due to the fact that we have many fewer units delivered in this quarter compared to last year. We have 276 units last year versus 172 in this quarter. Let's look at a pro-forma result strategy. After IFRS, the income and costs from the co-operative projects come on their own line, net and after tax, in the result. So here, to get a more comparable picture, we have then brutificated the result, that is, we have taken in our share of the income and costs in these co-operative projects, in order to get the turnover and stock costs. In this regime, we see a turnover of 918 million kroner and a margin of 17%, against the corresponding period last year at 1.4 billion kroner and a margin of 16%. Adjusted EBITDA at 158 million kroner, and the same result at the bottom at 50 euro per share. Then we can look at the results for the year. Also this proforma to get a more comparable year-to-year results. Here we had 532 units, which gave us revenues of 3.1 billion, and a margin of 16%. Compared to last year, where we had 655 units, which gave us revenues of 3.5 billion, and a margin of 14%. Adjusted EBITDA of 482 million for the year, and a result of the same, per share of 1.90 kroner. This is down from 2023, where it was 2.62 kroner. And the main causes of this fall are, as I said, fewer delivered units. And more information about these pro forma activities can be found in the quarterly report for those who are interested. Then we will look at the segment reporting, which follows Norwegian regulation rules and this running calculation method. This means that we take all the projects we have in production, then we take sales grade in these times the return grade, which gives an output grade, which means that we continuously take out revenue and results through the project's lifetime. This gives a much better picture of the ongoing value creation that occurs throughout the year. In this regime, we report a revenue of 877 million kroner and a margin of 11% after overhead costs. Here you can see a good increase from last quarter, and this is due to many start-ups in the quarter. As mentioned earlier, the margin has come under pressure, as you can see in the following charts, and it is due to low contribution from the projects in production. When we have obtained the volume and the results of these projects, there will be more contribution from there to cover fixed costs in the bottom. So we see this margin jump. If we look at the 12-month rolling turnover, we increase it up to 2.5 billion, and a rolling margin of 9%. We have then made a performance result also on segment reporting, Norwegian regulation rules. Also according to Norwegian regulation rules, the results of the co-operative projects come on their own line under EBITDA. Here we have lifted our share of revenues up, so that we get it with the EBITDA-agreement, and this gives a much better picture of what is currently happening in our company with our share of collaboration projects. Here we see a revenue of 1.1 billion, and a margin after overhead of 13%. Again, a good margin increase, as a result of greater volume and contributions from the projects. If we look at the 12-month stipend, it increases to 3 billion in revenue and a rolling margin of 10%. More information on this in the quarterly report. This is the one we will focus more on in the future, because this gives the best picture of what is happening in the company with the co-operative projects. Let's look at the cash flow. It went into the quarter with 189 million in the bank. The main points in the quarter are a negative cash flow from operations at 47 million, and this is mainly due to an increase in goods storage, as a result of many start-ups and factorization into price costs. We have a positive cash flow from investment. This is due to the fact that we have received The joint projects that have been paid out in the quarter and the repayment of loans. And then we have positive cash law from financing, which follows the introduction of construction loans. There is a lot of activity in the introduction of construction loans in the quarter at 219 million. Netto, we see an increase in cash at 195 million. This brings us, at the beginning of the quarter, to 384 million in the bank per 1.312. Let's look at the balance. There are no major changes in the balance sheet. We have a total balance of 5.2 billion, and a single capital share of 46.4 percent, according to a book for DK of 25.40 kroner per share. The single capital share is now down. We have a slightly higher balance, of course, of the start-ups, including loans, which increases the total balance. That happens when we get more speed in our escutas. The warehouse is up to 151 million, which I will come back to. Customer orders are down by 20 million. We have received orders from the money on Megler's account in the quarter. Cash was through, up to 195 million. It is important to note that the balance is still to be exchanged for 1.25 kroner, i.e. the equivalent of 117 million kroner is not reflected in this balance. The balance is first met in the quarter it is paid out, and it is paid out in May. If this had happened, we would not have had a single capital, but it will be in the second quarter. The revenue from our customers has now increased by 37 million kroner, and is included in other short-term accounts. The stock market is relatively stable compared to the previous quarter. There is a small increase. Booking for volume holdings at 641 million, on the same level as last year. Wares in work up 112 million. This is due to many start-ups, add-ons to price increases that are activated on the stock market. And then we have the finished goods warehouse, which is up to 36 million. We have a decline in the number of finished goods sold in the warehouse, but the average price of these is slightly higher. We are now down to 81 finished goods sold at the beginning of the year. Per 6. februar er vi på 63 enheter færdigstilt usoldt, så det har solgt under bra, og vi har solgt enda mer etter denne datum. I tillegg har vi 26 som er solgte færdigstilte, som overleveres i Q1 og Q2. We are very pleased with the fact that we have not sold these units through 24, nor have kept our heads cold and sell them at much higher prices in the market today than we did just two months ago. So we are very pleased with that strategy. We are not worried about this hardware warehouse. in areas where there is little new housing for sale. So we expect this to sell well through the coming quarter. Then we have an annual valuation of our own rental property, which we have in our own balance. As we saw, we have 641 million, we have recorded value on rental property in our own balance. This is largely unregulated property that has not been sold to Urban Property. We have included the external value of this, which says a market value of 904 million. This corresponds to a market value of 263 million, which corresponds to about 3 kroner per share. This is a property that is unregulated, as a matter of fact, as soon as it is modelled and is close to regulation, it can be sold over to Urban Property. And as most people know, the head of our bank is in Urban Property from before. Let's look at the yield. We report a total interest rate of 1.6 billion. It is up from last quarter, as a result of the start of construction, of course. The big one here is the construction loans, with 1.1 billion. We also have yield to urban property of 504 million, which is added to the purchase agreements and sales credits. In addition, we have a small loan on the empty building in Egen Balance for 34 million. That was the one we saw was booked for 641 million, so there is almost no empty loan left in our balance. We have not drawn on any of our top facilities. There are also no changes in the margins or conditions for these loans. It reports a net profit margin of 1.2 billion, which is on the same level as last quarter. Let's look at the exchange rate. Here on the left we can see the exchange rate from the stock market in 2012. Selvvoli has prioritized good and solid exchange rates for shareholders since the stock market. We have an exchange rate policy that says that we should pay at least 60% of the annual exchange rate. Exchanges will of course be directed towards future prospects, solidity and our liquidity promises. The board has now decided that we will pay an exchange rate of 1.25 kroner per share for 2024, which is 66% of the result per share at 1.90 kroner. If we look at the accumulated data, we have earned 61 kroner in the budget and paid about 56 kroner. That makes up 92 percent, including the UPP exchange rate. If we correct the UPP exchange rate, we are at 68 percent on average. For those who have owned the stock through 2024, we have a total return to the shareholders of 12.1 percent, including the exchange rate, which was paid out in 2024. We have been through three tough years in the new building market. We have managed to remain solid. We have good liquidity and are happy that we can present an exchange to the shareholders. It is also our goal to continue to give good direct return to our shareholders in the future. In the end, we will look at the return on net capital. This is calculated as net profit after tax in the last 12 months, divided by the incoming balance of the net capital. In the last 12 months, we have delivered 177 million in net profit, and we fall to 8% return on net capital per Q4 2024. That was the financial part. Now we will go through the market.
If you look at the market, you start to look at Oslo, which has an estimated annual housing demand of 3,800 units. In a medium growth case. It has been completed much less than that, as you can see, and has been completed much less in recent years than what has been the need. which is not a question, but an estimated need. Of course, there are far more people who want to move in, but it is an estimated need, as I said. 1,333 homes are estimated to be completed next year, 2,000 in 2026. It is quite high in 2027, but there is an expectation that a lot will be built this year. I think it's a bit high. Traditionally, these estimates, if you look at the reports back in time, end the year with fewer buildings than what we guide on. So it can end up being even fewer than this. But it's not so strange that prices are rising in Oslo and that it's expensive to buy apartments. You can understand that when you see how little has been built and built in the last few years. In Akershus a lot of municipalities have been taken away, for example Lørenskog, where we have also built a lot. But there will also be a fall now, because Lørenskog Municipality is not able to build enough schools and kindergartens to follow up, so they have said stop now, regulation stop. So there will also be an offer from the side to be lower. As you can see here, there is already a lower rate of completion without a regulation stop, so 4,000 units, which is essentially down from this year, down from 2024, in relation to the need there, which I estimated to be only 5,500 units. This market is more or less one market, so it is important to look at the total. And here we see that there is a significant gap between the total expected need and future achievements. This has been written about a lot, of course, and we notice the consequences of price growth and the madness that occurs in the consumer market in today's housing market. The offer and demand is completely unbalanced. If you look at it in more detail, then it is through 2024, the beginning of the year, there were a little over 1,000 units in Oslo. Then it was put out 1,200-ish and sold more than that, down to 875, which I am quite sure is the lowest I have reported here at least. And if you go to Finland, I was in Finland the other day, there were 700. If you go to Finland and look at new homes, there are 700 out there, which is very, very low considering the population of 750,000 people right now. Akershus is more balanced, but this is exactly the same picture as it has been in the last quarter. It sells about the same as it is sold, but it is actually a pretty good offer so far. Bergen again is low in relation to the population, but it sells roughly what is put out. Trondheim is a bit lower, with a relatively high supply side, and sells a little less than what is put out. Stavanger also has a little increase in the stock market. It is a bit easier to look at this one, where you can see the population in these cities or areas at the same time. We see that the low supply side of 1.2 new homes per thousand capita in Oslo is very low. Likewise, it is low in Bergen. And in Akershus, as I said, it has been very stable. There it will fall in the future. Trondheim is the exception. There it is a very buyer's market. In terms of experience, I would say that around 5 is a good balance in the market. If it is above, it is the buyer's market, and if it is below, it is the developer's market with price growth potential. Stavanger is also fine, and we notice that. This is also interesting. These are the assessments we make around our finished goods warehouse. We link this to the second-hand market. A year ago, the red columns were much higher than the earlier this year, but I said that we believe that this will fall, and it has something to do with the purchase pattern in the used market. And when you are anxious and the interest rates rise, the market tends to buy housing first, also because the banks require it. And then they sell their own home first, because the banks demand it. And then they have to turn when you are more optimistic and maybe also get more loans and the opportunity to buy the new home first. The supply side is very crumbling, as we can see now. I think it will continue to be strengthened, this effect. We also had this effect quite strongly in 2016. Here you can see that the availability is actually quite low, which drives the prices. If you look at the year as such in our markets last year, it is abnormal that the price growth should be so strong with the higher interest rates and high rental costs. At 6.8% in Oslo, Bergen at over 11% and Stavanger also very, very strong. Trondheim tends to be lower, because the supply side is much larger. It is the supply and demand balance that determines this, of course. If we look at how the year has begun, the effect is again that the supply side is lower, which makes it completely wild on the indicators, and there are bid rounds that drive up the prices by 4.5% in a month. January is usually strong, but if you look at Oslo, it is significantly stronger than the previous year. And that is scary for those who are going into the market. So over 100,000 per square meter in Oslo now. Bergen is also strong, but a little more on average compared to earlier this year. Stavanger is also stronger than usual, while Trondheim is much lower. We have a lot of projects, big projects that we just put out according to the trend. For example, Snøbyen in Lørnskog, where we recently put out a plus project, and we put out according to the trend because we sell enough. in one line, then we put a new one all the time. We do this both at Skåresletta, Snøbyen and Landås. All three of them we have now put out new ones to sell on and take out the market. We also like to have revocable loans, which means that we get the opportunity to start new construction lines and build rationally and keep the building costs down. We have again some units in Kalnæs Brygge. There is a lack of regulation before we can put out the next line. Sandsli in Bergen, we have a new project now at the end of the month. A new line. Solheimsvannet, we have a new line. Now we have just laid out a new line on the plus project, which we have not yet started building, but have sold enough to start building. Public approval, which is right around the corner, has come. It could have been built before, but things take time. We started building Solbergskogen yesterday, and will launch a new project a couple of weeks from now. Barkaby in Stockholm is heavier. In the Swedish market, the unemployment rate is around 8%. Even though the interest rate is halved, or it is approximately, or it is very new, it is half the interest rate of what it is in Norway, 2.25, then it is delayed. There is more interest in the evidence, but it is delayed for so long. But it is beginning to increase sales of new homes in Stockholm center, Østermalm and so on, and it is growing out there. So we expect that it will loosen during the spring. Lørebrygget will also have several construction sites. These are some of the projects we are working on. We have new projects. I have mentioned the Lørenvagn 20 times, but I expect that it will be released this year. I hope it will be released in August. Mindemyrn is a project that is under regulation, which is on the side of what we have just started selling. It is estimated that it will also come this year. Terrace Kvartalet in Stockholm is one of the tombs I mentioned initially, A very nice property, which we received a market report on and signed a purchase contract on now. Because it was an actor who took part in a competition in Sweden, who did not have the opportunity to carry it out. It is a very nice project for us. It is located in Østermalm, the city part. The regulation has been sent in, so we hope that it will be treated quickly, and that it will be put out as soon as it is treated, and that is in the hands of the municipality. But there has been a very good cooperation, so I expect that it should go quickly and that there will be no fuss about it. Hornsberg is another project that is quite exciting. I mention it because it is the first city project we are building. We call it an Avaart Avaart Plus concept, but with more compact apartments that are more business people, or for younger people, first time established. A slightly different customer group. The slaughterhouse area is another project that will be implemented in 2027. Just to mention some, we have a good pipeline, and we have got new ones that are not included. I can also mention Fredrik's, where we have regulated 1300 units. which is already regulated, but it is a development agreement that must be landed first before we get started. We hope that this will also happen quickly and effectively. The Levner Lilleaker is also a project that is also fully regulated, but a bit annoying when it is the municipality again that tries to We have to get rid of a large amount of the development agreement that we have to land first. The construction of walkways and other things that are far outside of our planned area, which we have to get rid of. Summing up, we have been through three heavy years, and it is this supply imbalance, among other things, in all of our areas. It has also caused a lot of other, or very few, who manage to start building because it is so expensive to build. We have proven that they have done it and will do it to an even better degree in the future. We see a very positive effect on the new housing market in the future. There is also higher purchasing power, and it will most likely be, I have to say, despite the political things that are happening in the world, I am quite confident that in Norway there will be increased purchasing power among people in the form of increased good wages and probably some interest rates. But even without interest rates, there will be increased purchasing power. Vi har en stor tomtebank og har mange prosjekter å tilby markedet, regulert allerede, og vi kommer til å få regulert mye mer fremover, også attraktive Oslo-prosjekter. We will certainly increase the number of units in production throughout the year. It will be exciting to see just how much. We also have a strong capital partner in Urban Property and will buy units in our core areas in the future. In summary, it was a good result in 2020-2024, and in a quarterly, isolated way, given the market situation. A very strong sales increase. We are probably the largest developer of our, or we are the one who started building the most homes last year, of all the developers, apart from the system house suppliers. 559 units in total. And we have bought fine units for sensible conditions, and are investing in an exchange rate of 1.25 kroner for 2024. That's all we had, so we can take some questions if there are any. Yes? After the operation,
Åsne Olsen, ABG. A question. You guide on finishes, and see that there are zero finishes in Q1. Can you comment on this, or say something about what you want to have for deliveries in that quarter?
Yes, there is no completion. There will be some survived units, which for example was sold in December, with an acquisition in Q1. But that is due to the fact that we have been through these years of war, where it was completely hopeless to start building something It was very difficult to start building, so we focused on this strategy, which had to be contracted later. Therefore, we managed to get a recovery of quite a few failures over the course of the year to save the year. But it's not just Q1, but it's probably Q2 and Q3 as well, or it's a series of projects that will be delivered in between. But it is important to think about the current calculation and the year as such. It is a consequence that we did not start building anything two years ago in that quarter.
We have some questions from the web, from Petter Nilsen. You say that there are only a few units left in Trondheim. When they are sold, does that mean that your party is out of that market?
That means that we are at least out of that market for some time. I will never say never, but that is true. We have not sold anything more in that market. We do not plan to start selling anything more in Trondheim in the short term. We do not have any tokens right now that we are developing, so that is correct.
In addition to the question, the politicians have said that they will vote faster to approve the expansion plan. Have you noticed any of this in practice?
No. Absolutely not.
Thank you. See you next time.