Besqab AB (publ)

Välkommen till presentationen av Beskabs bokslutarapport för det tredje kvartalet 2024. Jag heter Magnus Andersson och är vd på Beskab och med mig har jag Magnus Sundell som är CFO. Vi kommer gå igenom en presentation över kvartalets utveckling och tar väldigt gärna emot frågor och de här frågorna ställer ni genom att mejla in dem under presentationens gång så hanterar vi dem efter presentationen. I will summarize the third quarter as what we consider a very stable quarter, where we deliver according to the business plan that we communicated earlier this year on the capital market day. We had a strong sales during the quarter, we sold 101 homes on binding contracts and we booked 21 homes. This is an increase from both the previous quarter and above all if you compare with the same quarter previous year. And we see that the market conditions are improving. The share of booked or sold housing is still at a high level of 85% and the share of rental rights is still at 70%. We continue to start projects and during the quarter we started Aspen in Stockholm and Utsikten Norrberget in Vaxholm with a total of 77 houses. and we completed 116 homes in the Solna Parade project, which means that at the start of the quarter we had a total of 1,785 homes in ongoing production. During the quarter, we acquired 60 building rights in Värmdö municipality, which means that at the start of the quarter we had a building rights portfolio of a total of 7,345 building rights. distributed to 23 municipalities in the Storstockholms region and Uppsala. After the start of the quarter, we have announced that we have issued 195 building permits in the Solna center. This business will receive results during the current quarter and will both have a positive result effect, but above all a very positive liquidity effect. Finally, the integration between Norås Bostad and Bäskab continues with high activity during the quarter. form the new bag. If we then move on to look at the financial key figures, we have a quarter with increased revenue and improved results. The net revenue rose according to the segment review to 509 million kronor in the quarter, an increase of 316 million kronor in the same period last year. Bruttoresultatet uppgick i kvartalet till 94 miljoner kronor. Det motsvarade en bruttomarginal på 18,5 procent. Rörelseresultatet under kvartalet uppgick till 38 miljoner kronor. Det motsvarade en rörelsemarginal på 7,4 procent. Rörelseresultatet påverkas i sånt planerat av att vi fortsatt har högre omkostnader på grund av samgåendet. Vi har tidigare kommunicerat att det finns en potential på kostnadssidan på upp till 100 miljoner kronor årligen från 2026 och framåt. De här kommer gradvis att realiseras. Under det här året har vi bedömt att vi har förhöjda kostnader om ungefär 60 miljoner kronor som kommer att påverka rörelseresultatet. According to IFRS, the end of the balance at the end of the quarter is 5.4 billion SEK, and the end of the balance has increased its own capital to 3.2 billion SEK, corresponding to a solidity of 58%. Finally, the drop in its own capital is a new key figure that we follow, and it is at the end of the quarter at 5%. The housing market continues to strengthen. We see that the market continues to improve and that the sentiment is strengthened. The improvement of the market is driven above all by the fact that inflation has now come down properly and that the Riksbanken has carried out a number of reductions in the interest rate and also that there is a forecast for further reductions during autumn and spring. The expectations of the household as the price development progresses and we see a clear difference in our projects that customers are more willing to carry out their housing purchases. The interest increases and we see more customers at our shows. Even if the supply of newly produced housing is relatively low, we have a supply on the succession market that is on historically quite high levels, and it has a depressing effect on price development. During the quarter, the housing prices actually decreased slightly in the Stockholm area, with about 2%, but this year we have price development in Stockholm up by about 6%. There are more real estate businesses, the volume of transactions increases, and during the first nine months of the year, the volume of transactions increased by 11% compared to the same period the previous year. This is positive, but our assessment is that it will take a little longer until we see a significant improvement in the housing prices. During the quarter, we had an increase in sales despite the offer we are competing with. We sold 101 homes during the quarter, and out of that, we booked 21. This is a significant improvement compared to the previous quarter, when we sold 73 homes. And if we look at the whole period, we sold 212 homes during the first three quarters of the year. And if we count in Beskabs' entire sales during the first quarter before the end of the year, we have a total sales of 266 homes. Even during this quarter, we maintain a high percentage of sold homes in ongoing production, at 85%. This is partly due to the fact that we have a large number of projects that are coming to an end. A large part of the project volume is also rental rights, where we have signed binding sales agreements. Exclusively for these rental rights, the booking rate is at 70%. It is very positive that the proportion of finished but not sold homes in final production is low. We have 18 homes that are on the balance sheet, each of which three are eviction homes. We now see that the market gradually begins to improve. We started a project during the quarter, and that is the Tegeltorn in Sundbyberg, with a total of 164 homes. We started the first stage. We experienced a good reception and great interest. Under the autumn, we have continued to have a large number of housing projects that are being prepared for sale start. We are now moving on to more sale start with sales requirements before production starts, since we see that the conditions for that exist. The building rights portfolio. At the beginning of the quarter, the building rights portfolio consisted of 7,345 building rights. It is divided into 78 future housing projects. i Storstockholmsregionen och Uppsala. Under kvartalet så förvärvade vi 60 byggrätter i ett skönare läge i Värmdekommun. Detaljplanen pågår, möjlig produktionsstart är bedömd till 2030. Vi avyttrade också 44 byggrätter i ett projekt i Linköping under kvartalet. Den avyttringen gjordes i linje med bokförd värde. Det är ett projekt som är utanför vår kärngeografi och där vi har bedömt att vi inte har tillräckligt goda förutsättningar för lönsamhet. Efter kvartalets utgång avyttrades 195 byggrätter i Solna till Alekta fastigheter. Den här affären redovisas i det fjärde kvartalet och kommer ha en både positiv resultat och framförallt likviditetseffekt i det fjärde kvartalet. In total, about a third of the construction portfolio has been built under a detailed plan, and another third is far ahead in the detailed planning process, which means that we at BestGab are well prepared to start new projects in the hope that the market will recover. In terms of production, we started two projects during quarter one. They are Aspen in Stockholm and Utsikten in Vaxholm. That's a total of 77 residences. These projects could be started after we reached our sales requirements. They started last summer. During the quarter, we finished Solna Parade with 116 homes. That means that at the start of the quarter, we had a total of 19 projects in production in nine municipalities, with a total volume of 1,785 homes in ongoing production. Approximately half of the production volume is due to rents. Vi förbereder oss för fler produktionsstarter under hösten. Vi tycker att förutsättningarna för entreprenadupphandlingar förbättras. Byggkostnadsinflationen har planat ut och vi ser möjligheter att göra upphandlingar på bra prisnivåer. Det är inte minst drivet av de låga volymerna av projekt i marknaden. Vid kvartalets utgång hade vi ett förvaltningsbestånd bestående av två hyresgäster. och ett vårdboende i Nacka kommun. Det underliggande fastighetsvärdet, inklusive det som färdigställs under 2024, uppgick vid kvartalets utgång till 759 miljoner kronor, med ett underliggande driftnetto på 31 miljoner kronor i årstakt. Tidigare under året gjorde vi en affär, avyttrade ett bestånd av hyresrätter, förskola och ett vårdboende, och det här beståndet frånträddes under kvartalet. In the result calculation, we have an unrealized increase of SEK 15 million, which is equivalent to one of the remaining rental rights projects, which will be ready in the third quarter. As we have communicated earlier, we are currently distributing opportunities for the sale of administrative properties, if we see that there are opportunities for better implementation in building rights for project development of housing. The integration between Noros Bostad and Beskav continues with intensive work in the ambition of creating a leading housing developer by combining two organizations with complementary strengths. This collaboration started on March 15 this year and we have the goal of building a company with a strong sales organization and a solid project and production competence and a very strong focus on profitability. In May this year, we held a capital market day where we presented the business plan until 2027 and the financial goals of delivering a gross margin of 20%, a moving margin of 15% and a drop in our own capital by 15% over a contract cycle. During this quarter, we have continued to optimize processes and realize cost synergies. This work is also part of the preparations to be able to make a list change to the main list that we plan for next year. We have introduced an operational management group to increase the focus and control of the project business and thus also reduce the size of the management. Finally, Magnus Sundell has joined as CFO, taken over the management and I now hand it over to Magnus who presents the results and balance calculation.

Thank you, Magnus, and thank you for the confidence to join this fine company. Yes, this is the second quarter end of the year that companies present after the closing of the year. The comparison is therefore mainly relevant, I would say, compared to Q2. And compared to just Q2, we show a certain turnover of 509 million compared to 487 in Q2. But we also show a slightly lower margin, which means that the gross profit is somewhat lower for Q2, 94 million compared to 100 for the quarter. This is mainly due to the fact that we have completed one project during the quarter and started two new ones, as Magnus just mentioned. Typically, we carry a slightly higher cost reserve in the early stages of the project, where the uncertainty is greater than what we do at the end of the project, which makes the profit calculation a little more careful in the beginning. Then there is also always a bit of a one-off in relation to project conclusions and project starts, which also affects. Prepared administration costs in the third quarter fell to 47 million, which is actually 15 million less than in Q2. And that is mainly driven by seasonal variations, i.e. semester months during Q3. that the initial costs in Q2 were higher than they were in Q3. And these are the initial costs that mainly happened due to the acquisition of the bags that Aarhus made during the spring. And as Magnus mentioned earlier, we still carry with us costs for N&A-realized synergies from the agreement, which are calculated to cost 24 million SEK as a whole with up to 60 million SEK. Värdeförändringen i förvaltningsportföljen har vi redan nämnt. Det uppgår till totalt 18 miljoner, huvudsakligen hänföljt till kvarnjärdet i Uppsala. Det är 127 lägenheter. Där har vi en pågående försäljningsprocess som har påverkat hur vi har redovisat det i utgången av Q3. Periodens resultat landar på 50 miljoner i kvartalet. Det jämförs med 11 för Q2 och det motsvarar 49 öre per stamaktie. Nästa bild. As we have talked about earlier, early on in the process, we have analyzed the cost synergies that this could contribute to. Synergies are mainly in savings opportunities within personnel, IT systems, office rent, accounting costs and a number of other costs. The assessment was and still is that costs up to SEK 100 million per year should be able to be saved, which will mainly affect... Yes, everything ends up in the movement result, but part of it will also affect the gross result of this assessment. During the quarter, for example, the survey of 25 people, i.e. the march that was held in May, has been carried out. And now, during the current quarter, under the last month of the year, budget work is underway for the coming year, where these savings measures will be further concretized. As for the financial position, we can note that the balance sheet from December 31, 2023, of course, only covers Ares Bostad, which Magnus has also commented on earlier, so the balance is a bit off. But we still want to point out a few short comments on the balance sheet. Poster revenue includes SEK 75 million, one of the 18 apartments that Magnus mentioned earlier that we have on our own balance from the final project. We mentioned this because we think it is a good and low figure. We have a strong liquidity, approximately SEK 400 million in the cash register. This is, among other things, affected by this departure early in the third quarter when we sold properties. and has affected liquidity with approximately SEK 120 million. The company IFRS solidity is stable at 58% and total ready-made equity capital at a little over SEK 3.1 billion can be compared with our combined stock value if we count both STAM and PREF at 3.8. That's what it looks like. That's about it I was going to say about the book.

Good. Thank you, Magnus. And with that, we conclude the presentation over the third quarter of 2024. It is a stable quarter where we deliver according to the business plan that we communicated earlier. We have a great focus on the integration of goods, housing and goods that go according to the plan. We are a market that shows signs of recovery and we think we have a good willingness to be able to develop the company towards the goals that we have set up in our business plan. And with those closing words, we open up for questions. And then we'll see. We've got a few questions in. Then we'll see. Fredrik Stensved from ABG Sundahl Collier has emailed in a few questions. Is the sales rate exclusive to rental rights? Is it up to 70% and sales in the quarter increased? Is it driven by a better market or that you have many projects that are clear in absolute near time? That is to say Q4 or both. I would say a combination of both. We have a large volume that is in the final stages where we have sorted out a lot of the homes. So that is the driving factor and we have a priority now to start up more projects. So we see that the rate of booking, which today is 85%, will go down in the coming quarter. Går det att säga någonting i nästa fråga om försäljningsgraden i de projekt som färdigställs nu i Q4, exempelvis vid Beängar och Ella Allé i Täby eller Fabriksparken i Sundbyberg? Eller Nivå i Mariehäll? Ja, man kan säga att generellt så är den hög. Den speglar den höga bokningsgrad som vi har. Tittar man på bokningsgraden bara i äganderätt eller bostadsrätter så ligger den på 70 procent. Jag skulle säga att de här projekten ligger... i linje eller till och med ännu bättre än dem därför att de kommer mot ett avslut under året. Fråga nummer tre. Det finns ett förslag om att höja gränsen för belåningsgrad från 85% till 90% i kombination med lättare amorteringsregler. Kan ni beskriva hur ni tror detta påverkar marknaden och er? Vilka kundgrupper det underlättar för och hur stor andel av er verksamhet som skulle gynnas? Vi tycker att det här förslaget som har presenterats är väldigt välkommet. Det vi ser i marknaden är att framför allt unga köpare som naturligtvis siktar in sig på mindre lägenheter, den delen av marknaden är väldigt inaktiv. Vi tror att det här förslaget kommer att hjälpa till att sänka trösklarna in på ett ägt boende. Det tycker vi är väldigt välkommet. Vi har i debatten pratat om det här under lång tid. And we think it would be good and welcome if this proposal could be implemented as soon as possible. Question number four. I estimate that increased costs related to getting synergies in the process will go up to 60 million kronor. How much of these 60 million is taken and how much is left? Q4, would you like to take that, Magnus?

Yes, I think you should look at it this way. When we say that 60 million will hit the whole year, it is quite evenly distributed over Q2, Q3 and Q4. The analysis of exactly what it consists of and how we should concretize and bring forward these synergies and savings that will kick in from the coming year is the work we are doing right now. If you are to analyze this, you should see it roughly as I said, evenly distributed over three quarters, and there we have one quarter left to reduce.

Good. The fifth and last question from Fredrik is that you mention that you evaluate sales and administrative duties Om det finns möjlighet till bättre avkastning, går det att säga något mer specifikt om detta? Har ni exempelvis pågående diskussioner, processer igång om försäljningar? Vilken eller vilka förvaltningsfastigheter rör det i så fall? Om ni får blicka framåt, tror ni att ni har sålt någon av dessa om 6-12 månader? Vi är ute och sonderar marknaden hela tiden. Vi har nu ett av hyresrättsprojekten i Uppsala som vi är ute och sonderar marknaden med, vilket också är skälet till att vi kan göra en värdejustering i resultaträkningen så att The main plan is that we will probably make additional deductions if the price is right. Do you have anything to add?

No, I think it was well-formulated. That's exactly it.

We have a question from Mattia from Carnegie. So far this year, you have started production with 199 units, and at the Capital Market Day this year, the forecast was 390 homes for the whole of 2024. Is this forecast fixed? For 2025, there was a forecast for about 850 production starts, which is a dramatic increase. Given how the market is developing, is a 2025 forecast reasonable? The answer to the first question is that we still have that forecast. We prioritize starting up more projects in the fourth quarter, so we keep that forecast. As for 2025, we have the same forecast there as well. Our priority is to see that the market comes back and that the conditions exist to start the project, but we work according to that plan.

You can also mention that you sell quite a few projects in the near quarter.

Yes, we sell a lot of projects. Now, both in quarter four and especially in quarter one, we have many sales starts that go out. I think it's five in total. And we see, as we mentioned in the presentation, that the opportunity to sell on rent is back now in a much better way than it was a year ago. That was the last question, I think, that came in. There we have another question from Mattias again. You say that it will take time for the housing prices for new production to rise, given that the supply on the succession market is high. Do you think the time is right for higher prices? Yes, that is a very difficult question. But we believe that it will take a few quarters. And a little late, we believe that sometime during the spring after the change of year, we hope that this big expansion on the succession market will come down so that we see a more substantial increase in the prices for new production. So, with that, we have answered all questions. We thank them. Thank you for calling in and listening to this call.