Selvaag Bolig ASA

Good morning, and welcome to the first quarter's report on housing. My name is Sverre Målvik, I am the director of administration, and together with the financial director Kristoffer Brunemål, I will go through today's agenda. We will start by looking at the highlights of the quarter, then we will look at the operational aspects, then Kristoffer will take us through the financial aspects, and finally we will look at the market and future prospects. It's good to report that we had a record sale in the company's history in the first quarter. Sold for over 2.5 billion in a very difficult market. We are very pleased with it. We also have satisfactory results in terms of the fact that we did not have any finished three quarters. In other words, we have only delivered some unsold finished products that were finished in previous quarters. But good margins on what was delivered. We have, with the good sales and initiatives, a very strong order reserve of 7.8 billion, which ensures results for the next few years. If we look at the key figures, we had very few deliveries, but that gave 188 million in revenue and a negative EBITDA of 2.9%. In the current calculation, which is the one that best reflects the valuation, there is a very good figure of over 1 billion in revenue and a margin of 11.3%. This includes our ownership shares in cooperating companies. Kristoffer will come back to the details later. In terms of operations, we had very good sales, driven by good start-ups in facilities, which are more in demand than in the country. Among other things, we had a good start-up in Lørn, where we sold at our old headquarters. A good start, and also in Stockholm, in Jurgårdstaden, on the terrace there, we have sold very well. And then we sold in Bergen at Sansli, a block, also an investor sale. In total, very good. Of these sales of 2.5 billion, there were 680 million linked to Swedish booking agreements, which I will come back to later. So far in the quarter, sales have also been good. We had feared that it would stop a bit, but it hasn't. We sold 96 units per year yesterday, in Q2 as well. So 454 units have accumulated so far this year. It's almost the same as we sold last year. A very good start to the year, so we'll see how it goes on. We haven't really noticed any major decline in sales after the interest rates went up. So there are probably a lot of people who think that this is what it is, and it's not necessarily much better now in the short term, and think that we buy anyway, it looks like. We also have many projects that are coming up, so we have about 700 that we can publish, and maybe more than that as well, since the market suddenly takes away more than we expect. So it will be exciting to see what happens in the second half of this year. In Sweden, we have noticed that the market has improved a lot, especially in the inner city of Stockholm. We have launched a project on Terrassekvarteret, which is located in the north of Djurgårdsdalen. We have sold 60% of the entire project already, that is, we have booking agreements. In Sweden, it is true that you often choose to write booking agreements first, and then they are converted into a purchase agreement before we start building. These booking agreements are a less binding agreement than an ordinary sales agreement in Norway, which means that the customer pays a booking fee, or a fee, which we have set at 50,000 for this terrace apartment. If the customer then chooses to jump off, that they have a reason for, they lose half of the booking fee. So that would be 25,000. So it's less firm, less binding than a regular agreement. But when you have a regular flat market, as I would say they have in Sweden now, maybe a little higher, then it's a very high percentage that converts to a sales contract, maybe up to 100%. If the market falls, it will be even worse earlier than now, for example, then it will be easier to withdraw by taking up this booking fee. I thought I would just inform you about that, because we report it as sales, but we inform you about how many of these sales that are booking fees, then there is a small risk that someone can withdraw in the future. But as I said, after they have written a converted contract, there is no reason to withdraw. Then it becomes as firm as a Norwegian contract. This is done before the start of construction. Back to sales. We sold 358 units in the quarter to a value of 2.5 billion. As you can see, it is a record high year-to-date. We had 466 units last year, and it is almost the same now. We are very pleased with that. The 12-month roll-up will also increase, of course, given that we have a quarter that is so strong. Much stronger than the quarter that is going out. 4.5 billion in the year, right now. 688 units. We did not complete any units in the quarter, but we started building at 166, so now we have an annual reserve of 7.8 billion. 1,078 units. This is what we are working with to keep up, keep up the pace in Skuta. 65% of this was sold at the beginning of the quarter and more now. And we get a lot of projects in the future, as you can see. We are still guiding at 688 units a year. So, We have to sell a lot in order to be able to start building as many as we have completed over the years. It is good that we have sold well so far already, and that it continues to be able to start building as many as we have completed.

The financial highlights of the talk start with the result after IFRS, where the income and costs in the projects meet the results by overloading the homes for our customers. Here we focus on our pro forma result, where we take in our share of the co-operative projects, that is, 50% of the income and costs. In the official calculation, this is on its own line, so we have brutificated this to make it more comparable over time, since we have many projects that are 50% ownership. So we delivered 24 units, including 8 units from collaboration projects. As Sverre said, no completion in the quarter, so these deliveries are from previously completed projects, mainly in the quarter from Skårer in Lørnskov and Lille Lørn Park in Oslo. This gave us revenue on 188 million, including other revenue of 23 million. This is revenue from invoiced project management to co-operative projects, and operation of our plus service center. The project cost came in at 137 million, including 16 million in financial costs. After IFRS, there are a number of financial costs in the concept of commodity costs. These are building loan interest rates, sales interest rates and option premiums. We manage to deliver a good margin on the delivered units in the quarter. It is very project-dependent what is delivered, but here we have a solid margin. This is due to the fact that we have fixed-price contracts on everything we build, which means that we manage to deliver costs within the budget, also this quarter. Other costs came in at 75 million, which is now up from 67 million in the corresponding period last year. This is mainly due to increased sales costs in the quarter compared to last year. There is a much higher activity on sales this year. In addition, we have placed behind us an increase in wages last year. The main explanation is increased sales costs in all our regions compared to last year. We report an adjusted EBITDA of minus 6 million, which is now up from minus 8 million last year. We see an adjusted EBITDA margin of minus 3% against minus 4% last year. At the bottom, we have a result per share of minus 20 euros versus minus 22 euros last year. We managed to improve the result per share, even with 10 fewer units delivered this year. The main explanation for this is that there is a better margin for units delivered last year, compared to what was delivered last year. So this is the project mix that has been delivered. Then we move on to segment reporting, which is followed by Norwegian regulators, what we call NGAP. This is that you take all the projects in production and take sales grade times sales grade, which then gives an output grade, where the runs take out revenues and results from the projects in the project's implementation time. In this regime, we increase the turnover up to roughly 1.1 billion, and then an EBITDA margin of 11%. This is after the overhead costs, which means that we still deliver good project margins of about 15%. If we look at 12 months in a row, we have increased the speed More start-ups, and then we increase to 3.7 billion in revenue in the last 12 months, and a margin of 12%. If we look at the cash loan, it went into the quarter with 255 million in the bank. The main point in the cash flow is that we have negative cash flow from operations at 993 million. This is due to high construction activity in the quarter and several construction starts. We have positive cash flow from investments. This is due to the exchange rate from the collaboration project at 3 million. And then we have a big positive cash flow from financing, net income from construction loans of about 1.1 billion. This income from construction loans finances the construction of the warehouse, which is the negative cash flow from operations. An increase in cash of 95 million brings us out of the quarter with 350 million in the bank. Looking at the balance, there are no major changes in the balance sheet, but we have a significantly increased total balance. It has increased by 7.8 billion. This is due to the fact that we have very few facilities, so we build well with goods in the quarter, with several start-ups and high activity. This total balance will fall in the next quarter, because then we have a lot of cash deliveries. Then we get cash and pay down the building loans, so the total balance will fall significantly. We have a bookkeeping revenue of 25.30 kroner per share, in response to a revenue share of 30.5%. The change from last quarter is that the stock market is up by 1 billion, coming back to that. The demand is down by 46 million. This is due to the fact that we had received a number of payments that had previously been overpaid. The cash flow was up by 95 million, which we went through on the cash flow. The revenue from our customers is now 49 million, and is then included in another short term. This is on the same level as previous quarters are now. Let's look at the goods storage. This has increased by about one billion from the previous quarter. Tomte-preservation is up by about 100 million. This is due to the fact that we have bought Tomte back from UP in the quarter. The warehouse is up by about 1 billion, which means that we have high activity on the start of construction and construction in the quarter, and few finished products, which means that this value of work increases. The finished warehouse is down by 87 million from last quarter. This is due to the fact that we have succeeded in selling down from 45 to 32 finished unsold units. In addition, we have 11 sold units that are delivered in Q2 and Q3. We are comfortable with the warehouse maintenance Pt and expect it to be sold in the coming quarters. Given that we have a lot of finished products remaining in the quarter, we will most likely see an increase in the warehouse, depending on sales, of course. Let's take a look at the yield. There are no major changes in the balance sheet. The total revenue per year is 4.2 billion kroner. The building loan is the big one with 3.3 billion kroner. This is a strong quarter. We finance the building. When we deliver a lot in the future, the building loan will pay off quite strongly in the future. It also applies to Urban Property, which includes sales credits and the return on purchase amount of 868 million. And then we have some cash loans, 33 million in equity in our own balance. We have not pulled up on any of the top-end facilities at the beginning of the quarter, and there are no changes in the conditions for the loans we have in our portfolio. In total, we reported a net interest rate of 3.8 billion kroner, which is up from 2.8 billion kroner in the previous quarter. Let's take a look at the return on equity. This is calculated as the last 12 months net interest rate, divided by the equity at the beginning of this 12-month period. We have delivered 135 million kroner in the last 12 months, which gives an equity return of 6%. This low return we have seen in the last quarter is of course due to the long run-up in 2022 and 2023, as well as in the beginning of 2024, which gives weak deliveries to IFRS. We expect this to increase now in the future, when we get a lot of results in the next quarter, with many delivered units. Then we went through the financial. Now we will, unfortunately, move on to the market.

Looking at the market, starting to look at Stor-Oslo or Oslo Akershus, it is actually the same story that has been going on for a couple of years now. There is a lower supply side than the estimated need, as it is called. It has nothing to do with demand, really. It is a publication that It is calculated based on the number of previous construction sites in the area. It is assumed that there is an assumption in relation to how many people think there is a need. If you have built little, there is a low need in the future. If you have built a lot, there is a high need in the future. Regardless, the offer side is much lower in Oslo Aksjø, which it has been for a long time. I must also say that these estimates in the future have a tendency to be on the conservative side, that is to say that they are a little too high. What I am saying now is probably too high compared to what it actually becomes. Akershus has been pretty good over time, and Lav in Oslo is the same story as it has been for several years. If we look at Bergen, It's a fairly low offer there, even worse than in Oslo, and it has been over time. We notice that very well, which sells well up there, despite heavy times in terms of interest and other things. But there it is on the way of improvement, and it is much more likely that we have started quite a lot there. So there will be at least more projects in the future, but still good pressure in Bergen, perhaps the best market for builders for our part, in London, here at PT. Stavanger as well. Here you can see a school example of how this forwarding takes place. Here it is an estimated demand in the future of 1,400 units, while a lot more is being completed than that now and in the future. And that is due to the fact that for many, many years, as you can see right back to the oil crisis of 2015, very little has been built in Stavanger. I think the need is much greater than those 1,400 units because, among other things, this is perhaps the best working market in the P3 country. So there are people who move back to work there, and then there is population growth and pressure on the housing side, which we also notice. I have brought Stockholm with me for the first time, and here there is an enormous need. The Swedes have a slightly different model here, so this is probably closer to a real question than a description, as you can see, because there is a big gap between what has been established over time, earlier this year, and what is estimated to be a need. Here we have a very large gap, and that fits quite well. Very few properties in Stockholm have been built in recent years. More rental properties. But a large gap here. If we look at what is available in Oslo on the offer side, if you go to Finn and buy a new home, there has been a little jump. The offer side in Oslo has increased for the first time in a long time. It jumped from about 1,000 units, which has been there for a couple of years, to now almost 1,700. A lot of developers have put out new projects in the area to test if we can get them started. I just saw a little jump over the entire fleet, as you can see. And that is probably also a part that has been optimistic, even considering the interest rate earlier this year. So we'll see if it sells well, according to expectations. Stockholm also has a slightly higher supply side, but if you look at the population, it is a very low supply side in Stockholm compared to the beginning of Norway. 1.3 per 1,000 capital in the Stockholm municipality, or in Lene, Storstockholm, which is 2.5 million people. There are 1.3 units per 1,000, and 0.9 in central Stockholm. That's a very low supply side. It should perhaps be at 5 to have a balance in the market. And that explains something. One of the reasons we have sold so well now is that there is a low supply side in central Stockholm. If we look at the second-hand market, In Norway we have a bit of a jump again. A good supply side in Oslo. This is due, among other things, to these outpatient facilities that are put out during the day. It is probably a bit lower than we had feared it would be, so I think there will be a little less effect of it now than we had at worst last fall, among other things. But in any case, there is a higher supply side than there has been in the last two years at the same time. in Oslo, but not in Akershus, and a very low supply side in Bergen and Stavanger in use, as you can see. It reflects something, and we also notice that Bergen and Stavanger is a good market. In Stockholm, you can see that there are around four quite well-functioning, reasonably used markets in Stockholm, with a usable supply side, actually balanced in use. The price growth, even in April, in Oslo, is relatively weak compared to the last few years, at 2.5%. Again, this is mainly due to the fact that the supply side of these rental properties is decreasing. The price growth, and in your house as well, there might be a spillover effect there. While in Bergen and Stavanger, there is still good pressure and much less effect and less rental properties being sold. In those cities, where there is probably a good price increase in rental income, which is maintained to a greater extent. These larger rental systems probably do not have such a large exposure in those cities. In Stockholm, the price growth is not even comparable to March. It is only in the first quarter. But 4% in central Stockholm, which is quite strong compared to the last couple of years. And in Greater Stockholm, it is a record quarter compared to the last target periods. The use rate is stronger in April, 0.5% and 0.7%, as you can see, which is quite a lot. It will be exciting to see how it will turn out. Even in March, the growth in April was 1.5% and maybe a bit lower than expected. have made this change in the Swedish housing law in Sweden. They have reduced the amount of amortization and the amount of equity, so that it is actually more profitable now for Swedes to buy housing. It has not caused any violence yet, almost nothing. So we will be curious to see if that happens. It will probably take some time. We have many of our big projects that are in full swing. For example, in Snøbyen we have a plus project, a project that is being completed in a few days. We are putting out a new project as it is being absorbed. We have a lot left to do there. We are considering a new trend if we get started in the summer or if it will be in the autumn. In Landås we have a plus project out in the market, while we are also finishing a trend on a previous project. project, so there it is good activity. Skårebyen, there we are actually now starting with the last steps, so everything has started. It's just both a combination of unsold started and unsold finished again actually on our big project there. Before we get started with the Nava project, which is also big, but it takes a few years. Solheimsvannet in Bergen has been a great success, there we just have a 20-30 units, Tikkere and Gård, which have been very popular. Solbergsskogen, where we also came up with further steps on our plus project that goes there. And in Sansli, we have several projects in progress, two or three projects in progress, and we are going to regulate a large area in the vicinity that will also come. The old Equinor Head Office. We can dive a little bit into these sales starts that we had, which was part of and drew a lot of our sales success so far this year. This is an example of Telekvartalet, for example, which is our old headquarters. We have sold very well at very good prices. 71 of the first 108. We can start building that at any time, we just haven't got the framework for it yet. It takes an awful long time, unfortunately. Completely unnecessary. have gone far beyond the 12-week deadline. As soon as we get it, we'll start building it. Rådhus Hagenergi, where we sold 38 of the first 89, is a great project with good interest, so we'll start building it now in Q2. Sandslåsen in Bergen is a new trend we have created. We sold one block to Investor, and then we have created a new trend, which we have sold 16 of 57. We start building that when it fits, because the first trend is already more practical, production-technical. It will probably start building in the fall, I think. And then we have the project that ended up on the terrace apartment, where we have sold so well. We have sold 85 of these 166. Expensive, large apartments and small. It was a great project, a plus project. And a little surprisingly, we built the bridge tunnel here, which is A new trend in Lervik in Stavanger we launched a couple of weeks ago, on the 6th of May, and we have sold 24 out of 54 so far, so we will probably start building that now, whether it will be Q2 or Q3. A bit surprising good sales, or not so surprising, it is a good labor market, as I said, and little that has been built over many years, which makes it an established need. We have a lot to add to the market, and now we have the first step in Fornebu, which we will release in June. It will be exciting to see how it is received, and then we will successfully release new ones as the market moves away. We have regulated the first 500 units. Then it will be both an ordinary project now, or what we call home, and then we will come up with a plus project also in the new years, probably. Lilleaker looks to be regulated now in these days. It has passed through the City Development Committee, has been approved there. It is also an exciting, nice, called the Oslo Vest project, which is not offered much, so it will also be exciting to see how the market takes it. We also came up with Mellomåsen, a project we're working on. We're releasing it in the fall, or in the new year. We'll see how we evaluate the market situation. Bjerke is late again and is struggling to get it regulated, so we are working on that very intensively. We hope that it will be on sale in 2027. I cross my fingers for that. Fredrikstad has a huge project together with partners. It is the partners who work on getting some follow-up requirements and some hiccups before we go out. Then it is regulated and finished. Høyden i Moss also has good development, so we can probably come out of it next year. That was a project that we did together with Ferb. Then there are several projects in Stockholm. Slakthus is a nice central area in the inner city. Hornsberg as well. These are projects that come, as soon as they are regulated, they will to be sold as soon as possible. These are central entities that want to sell enough of what we have seen on the terrace for good prices, or very little that is offered by homes in central Stockholm. So, how do we look at the future now? It is a bit the same as it has been for a while, that we will do well in our core areas, and I think we have proven that we are doing very well. We have managed to do that in five years, or in the fifth year, with crisis time, so I mean It was good to keep that heading, and I think it will continue for the rest of the year. We have a very good sales momentum, and I think we will continue at the same pace as in Q2 and Q1. It is difficult to copy further into autumn, but it can be good. It will be very exciting with Fornebu, among other things. We demonstrate that we manage through these difficult times. We have a very good pipeline, and we have secured it for the next couple of years. We hope that things will get better. There are some positive signs from the municipal minister. We will talk a bit more, and we will see if he is capable of making words into action. They haven't managed to do that. earlier, but I'm allowed to hope. We manage well without it, but we have to take it from the outside, since we get some leverage on the technical requirements. If it had been better, it would have been positive for us as well. Then we have the opportunity to buy tomatoes. We have a good tomato bank. And we will buy tomatoes, but we buy them at the price we think is right, and we don't dare to... We don't dare to look at the market as buying something too expensive. It's like step one after doing stupid things in this industry. If you buy an expensive tomato, you sit there. So, summed up, we have... A good quarter compared to a huge quarter in terms of sales, but a good quarter that makes this sale a safer result in the future. So a strong order reserve of 8 billion ish. We will try to keep it at that level in the future, through the coming times, we will see how it goes. Hadda. Noen spørsmål?

When it comes to sales for 2026, you said it was 64%. There are a lot of finishes in Q2 and Q3. How can you tell us about the sales profile? You mentioned that there could be a small increase in the number of finished unsold items. Can you be more precise about those?

You saw that the sales rate is higher on what is under production than what is finished this year. This is due to the fact that you have sold a block that was finished later, with a 100% basis, or 97%. What I can say is that we focus on selling what comes first in the nearest quarters. Our main business model is to sell out the projects for completion, but not at a high price. I won't be able to guide on whether it will be 50, or at the end of the year. At the end of the year, in Q4, most of the sales will be unsold.

Should we know how much is sold? For example, maybe the percentage sale in Q2? That's much higher.

I can say that the report also describes that, but the sales rate in Q2 is about 85%.

Yes, that's the most relevant we know.

Yes, but otherwise it is difficult to say. We will do it as usual, in a sensible and responsible way. So if we are left with unsolved problems for 2, 3, 4 or 500 million in the end of the year, we will see. But if we do it, it will be because we think it is the smartest thing, and we have hit it every time before.

Fornebo is most likely to come now, also known as the country of OBOS. How do you see the competition situation? What does your project look like when you design it against OBOS?

We are not afraid to compete against OBOS. We do it in the terrace, we have projects right next to each other, and that is quite remarkable. we manage to take higher prices than what OBOS does. It is not a problem to compete with OBOS or others. We have our own We call it products. We are good at getting properties and getting good planning solutions. We are in it in all the projects we have in almost all areas, so we compete against, among other things, Oboz and others. But of course, the offer and demand have something to say afterwards, but the question is whether they can sell something cheaper than we do. I don't think so. There are many who have bought expensive items around here and have expensive enterprises, so it is very difficult to sell something very cheap.

I saw a project that is coming back. It's Lervik Brygge. It's a tomter that has been trending since the stock market. How do you see the Stavanger market now? How much do you have? Are you still buying more tomters in the market? I think it's been a long time since you've been there.

Yes, we have a large project in Sandnes, then we have one in Jåsen. I don't remember how many units there are, 600 maybe. No, we haven't been very eager to buy there, and we haven't seen that either. We'll see, we'll have to see. Even if we sell well there, it's a cool market. The prices are not very high, because the use rate in Stavanger is low. There are also very good local actors who can keep the prices down.

Is it interpreted that you are almost on the way out of that market?

That can be the case. We are like that in several markets. We have left Trondheim. We like to be in the markets where we can have a significant share and make good money. If we don't get that, we will leave. Thank you.

Bengt Jonasson, ABG. I also have some questions. If we just start with, there is some change in the phase of the final decisions. It has moved a bit forward from the fourth quarter to the second quarter, it looks like. A little background for that.

The fact that this is happening constantly, if that is what you are referring to, is called unfortunately constant, even if you try to be strict about it. We are very good at not booming on the year as a rule, because that is the most important thing. If there is something going on between the quarters, it is actually due to the fact that the foreign trade from the entrepreneur's side is being forced.

It is getting faster.

Much faster, and that's generally because the rules are so strict when you sign a contract with the end customer. You have to give up a time horizon, and if you sell faster, for example, and build earlier, And that is the reason, and we try to be very good at guiding that early, otherwise you shouldn't notice it, or there shouldn't be any change in the five quarters. But sometimes there is. I call it sorry, but it's positive. There were some concerns earlier, but it's a bit difficult to get everyone in the company structured and understand the importance of it.

On the project margin in TS this quarter, it looks like it's about 10%, which is perhaps a bit unusually low, while on NGAP For what is in production, it looks like there is a high of 20%, which may be unusually high. A little background music behind it.

Ennigat Margin is what is in production, and it is a project in Bergen with good margins. When it comes to the IFRS, it is the one that has the impression that there is Lille Løren in Oslo that comes in, which is the annual channel there, but then we have a lot of other TS's where sales costs go down. So it's not just Lille Lørn that is on the TS line. There are also other projects that go down where we don't have deliveries.

I understand. So the comments around increased activity and increased sales costs are also caught up there? My last question is, what is the margin for new construction loans, compared to what we saw earlier, given that you have a fairly strong activity growth and construction starts, so the construction loans go up. Can you say something about the margin picture there? You have given a range, but... Are you in the high end or the low end?

I would say that there are a lot of banks that want to give us building loans, and there is enough pressure to get the money down in the low end of that interval.

We will talk about this even lower in the future. Thank you.

We have a couple of questions online from Petter Nilsen. You mentioned in the previous quarter's presentation that you wanted to re-regulate Bjerke, so that you could build more small apartments. What is the progress here?

We have been regulating Bjerke for 28 years. The progress is very slow with the municipality of Oslo. The average regulation time in Oslo is extremely long. Our hope is to be able to put out sales next year. I can't promise anything on behalf of the Oslo municipality that won't be able to keep up. We'll see. I hope next year. It could soon be two years.

Last question from Petter Nilsen. There has been a project on the home page in Sandnes for a long time. Is there any progress in the planning of this?

The progress in the planning is regulated. We took part in the competition where Equinor had a new head office, which we didn't win. We didn't do anything else in the competition period, which took a year. In the same way, the cost of living is low. With the daily cost of building, we struggle with profitability. We have to wait and rent out instead. There is a constant flow on that property. So, we'll see when we submit it. The easy answer to that is when it pays off. That is, when we can count it back, we submit it.

Then there are no more questions.

Great. Thank you for today. I'll see you again next quarter, August 6th.

Thank you for today.