Besqab AB (publ)

Välkommen till presentationen av Beskad's bokslut och rapport för det fjärde kvartalet 2024. Jag heter Magnus Andersson och är vd på Beskad och med mig har jag Magnus Sundell som är CFO på Beskad. Vi kommer tillsammans att gå igenom en presentation över kvartalets och årets utveckling. Vi tar väldigt gärna emot frågor och frågor ställer ni genom chattfunktionen och så kommer vi att besvara frågorna efter att presentationen är klar. And we end by summarizing the fourth quarter as a quarter where we have had a good sales development, we have had an increased turnover and a higher brutto result. The turnover during the quarter is SEK 784 million, which corresponds to a brutto result of SEK 128 million and a brutto margin of 16.3%. Rörelseresultatet i kvartalet blev 65 miljoner kronor. Det motsvarar en rörelsemarginal på 8,3 procent. Under kvartalet sålde vi 69 bostäder på bindande avtal och vi bokade 21 bostäder under kvartalet av de bostäder som var i pågående produktion. Under helåret sålde vi 280 bostäder på bindande avtal och bokade 21 bostäder. Det här gör att andelen bokade och sålda bostäder i pågående produktion hamnar på en hög och bra siffra. Vi har också i tillägg till det under kvartalet säljstartat ett antal nya projekt som ännu inte är produktionsstartade och i de projekten bokade vi ytterligare 59 bostäder. Vi fortsätter att starta projekt och under fjärde kvartalet startades två projekt, totalt 169 bostäder och under helåret så startade vi totalt 368 bostäder. Vi färdigställde under kvartalet 382 bostäder i tre projekt och under helåret 2024 hade vi en hög färdigställande grad och färdigställde totalt 1802 bostäder. This means that at the start of the quarter we had a total production volume of 1,572 houses in ongoing production. We continue to be active in refining our building rights portfolio. We carried out a number of acquisitions during the quarter and at the start of the quarter we had a total building rights portfolio with future houses of 7,270 building rights. If we then go over to look at the financial development during the quarter, or sorry, during the whole year, we had a significantly increased turnover during the quarter and also an improved gross profit. The net turnover according to the segment review came in at 2 billion 241 kronor and that is an increase of almost 1 billion compared to the previous year. The gross profit 384 million kronor, which corresponds to a gross margin of 17.2 percent. And the moving result came in on the whole year to 156 million kronor. This corresponds to a moving margin of 7 percent. The moving result is loaded as planned by costs that occur in connection with the connection between Norges Bostad and Beskad. But at the same time, we see that these additional savings measures are completely in line with the plan to implement the cost synergies in the context. According to IFRS, the balance agreement reached 5.6 billion SEK, which is a significant increase compared to the previous year's shift, and the solidity reached 57.1%.

Finally, the rejection of own capital increased to 5.1% according to the segment review.

We continue to be active in converting our building rights portfolio by acquiring building rights in strong and good central locations in Stockholm and Uppsala. And during the fourth quarter, we made an acquisition of Byggrätter för 170 bostäder på Kungsholmen genom en affär med Electrolux. De här byggrätterna har färre detaljplan. Vi har som ambition att kunna produktionsstarta det här projektet under 2025. Vi förvärvade även under kvartalet byggrätter för cirka 100 bostäder i Nackastrand. Här pågår detaljplanarbete och vår bedömning är att en produktionsstart kan ske tidigast 2027. Under the quarter, we also carried out the sale of building rights in the Sona Center to elected properties. This sale mainly contributed to a positive equity effect of about 300 million in Q4. In addition to this, we also participated in a market presentation for the Tegelvik project in Södermalm in Stockholm. It is a market presentation from Stockholm City, and in connection with the participation, we also started production in the project. And after the start of the quarter, we also submitted a land registration from Solna for about 250 homes in the capital, Solna, and here the detailed planning work will start. We assess a production start that can take place as early as 2028. These activities during the quarter means that we at the start of the quarter had a building rights portfolio of a total of 7,270 building rights in attractive locations in the Storstockholmsregion and Uppsala. This map shows the distribution of our building rights. Where we see that about 25% of our building rights are located in Stockholm municipality. The rest of the building rights are located in nearby and outskirts around Stockholm municipality. We have the rule of thumb to acquire building rights that are within one hour of collective traffic from Stockholm central. In addition, we have Uppsala as our own region where we have about 15% of the total building rights portfolio. Vi tycker att vi har en bra mognadsgrad i våra byggradsportfölj. Vi har ungefär cirka en tredjedel som har en antagen eller laga kraftvunnen detaljplan och ytterligare 40 procent som ligger långt framskridet i planskedet, antingen i samråd eller granskning. Det här gör att vi tycker att vi har en bra beredskap att kunna starta upp nya projekt i takt med att marknaden nu återhämtar sig. If we then go over to the market, then our picture here is that the housing market in the Stockholm area is starting to speed up and that the sentiment is strengthened. The volume of transactions is increasing and in the Stockholm area, during the last quarter last year, they were about 20-30% higher compared to the same quarter previous year. The supply is still at relatively high levels and it has a certain dampening effect on price development, but despite that, the housing rights prices in Stockholm's county increased by about 7% in 2024. This improvement of the market is of course driven by the fact that inflation is going down properly. Riksbanken har genomfört ett antal sänkningar av styrräntan och det börjar nu ge effekt hos hushållen. Det minskar osäkerheten hos kunderna och det gör att vi återigen ser bra möjligheter att kunna sälja bostäder på ritning även innan produktionsstart och långt innan inflyttning. This positive trend is also confirmed by the expectations of households if the future price development increases. We follow the housing price indicator that measures this. The housing price indicator per February 2025 is 58 in Stockholm and 50 in the country. These are high levels. Our assessment in the future is that the development of housing prices will be driven primarily by the strengthening of the economy of households. By implementing rent reductions, strengthening real wages and tax easing for households. And the prognosis we have for 2025 is that housing prices will rise roughly at the same rate as they did in 2024. We see signs that the market is also starting to accelerate in our own sales at Beskad. During the quarter, despite a relatively large supply, we have sold 69 homes on binding agreements, booked 21 homes from the projects that were in ongoing production. The corresponding figure for the entire year is a total of 301 sold or booked homes for 2024. And that means that the proportion of sold or booked housing in ongoing production is 77%. And that's a high level. And excluding rental rights from that figure, rental rights that are in ongoing production and that we count as sold, we have a rate of booking of exclusive rental rights at 61% of the projects that were in ongoing production. And as I said at the beginning, we have started several projects during the quarter. And in the projects that have not yet started production, we have booked another 59 homes. And that means that our total sales, including that, in the quarter lands on 149 booked or sold homes under Q4. And that's a high figure. And in total during the year, our total sales of booked or sold housing became 360, which is significantly higher than in previous years. What is also very positive is that we have been good at selling out the stock of housing that is in the project during completion, which means that at the start of the quarter we only had 10 unsold houses in completed production, and three of which are display apartments that we keep. We have a high activity to self-start new projects. We see that the market is starting to come back and we want to take market shares. At the beginning of 2024, we had sales in 12 ongoing and two non-production-started projects. And we have had a good sales activity during the year, strong sales. We have had a few homes left in the old stock. At the same time, we have started selling 12 projects for printing during the year, of which 5 are only in Q4. And during the remaining quarter, we plan to start selling another 6 projects in Q1. At the same time, these projects have received a lot of reception, we see an increased interest, a satisfactory booking degree in the project, and this makes it possible for new production starts. And we see that we now, by setting up projects for sales, can increase our market share and stand for a larger part of the supply of new production in Stockholm and Uppsala. And the circle diagram to the left shows our share of the market that we have per February this year in Stockholm and Uppsala.

This strong sales development is a possibility.

As I mentioned earlier, we started producing 169 homes in two projects during the quarter. This is the Hertha in Danderyd project, and this is also the project we see in the picture, Tegelvik in Södermalm in Stockholm. We think that the conditions for entrepreneurial projects are still good. The construction cost inflation has been planned out and we see opportunities to do projects at good price levels. Not least due to the fact that there are still very low volumes of construction sites in Stockholm, which means that we have a good competitive situation. During the quarter, we completed three housing projects with a total of 382 homes. One of these projects was in Vännäshöjden, stage 2. It is the first transfer of rental rights in the large portfolio of rental rights that we announced to Patricia in 2022. And during the year, we have had a high degree of completion. We have completed a total of 1,082 homes during 2024. This means that at the start of the quarter, we had a total volume of 1,572 homes in ongoing production. It is divided into 18 projects in nine municipalities, where about 60% are housing or property rights. Since we have had a high degree of completion and completed more than we have started this year, the volumes have dropped somewhat to 1,572 homes in ongoing production. Our priority now is to sell and, above all, start production projects successively in order to reach the target that we have, which is to lay more than 2,000 homes in ongoing production over time. We assess that we can achieve this at the end of the business plan period. And with that picture, I ask you to hand it over to Magnus to go through the balance, the results calculation and the management facilities.

Thank you, Magnus. Good. Let's see. I'll start with the first picture. As a complement to our core business, we have a management portfolio. which can vary in size over time, both up and down. And at the start of 2024, we had three administrative properties in the balance sheet, which is estimated at approximately SEK 760 million. This portfolio has contributed to a turnover during the year, and they are included as part of the gross profit. In Q4, there was SEK 9 million in contribution to this portfolio. and 18 million for the whole year, 2024. If we look at the income capacity per year, it goes up to approximately 32 million per last December. And that is, as I said, a complement to our core business that can both grow and decrease over time. A look at our results and balance sheet. Then we look at the segment presentation regarding the result and we look at IFRS Balanceräkningen. Några kommentarer på det. Vi ser en betydande ökning av vår intjäning under fjärde kvartalet. Om vi jämför med de jämförebara kvartalen Q2-Q3, de relevanta jämförelsekvartalen för oss, så ser vi att ökningen är faktiskt 32 procent i Q4 jämfört med snittet för de två förevarande kvartalen. Och detta till en i alltförsämtligt bibehållen bruttomarginal. 16.3 percent gross margin in the quarter and 17.2 percent for the whole year. Still a bit under our long-term goals of 20 percent. The increase here under Q4 partly has its explanation in initial positions. There are initial positions both in the quarter and in the comparison quarter that go in a few different directions. But most importantly, it also depends on what Magnus just said, that we have started production, especially at Hegelvik, which is a large project that contributes to almost 200 million in gross revenue in the quarter. And with a really good margin there as well. As we have previously communicated, we are a little careful with the profit calculation through earlier stages of the project. And then it gradually increases as the uncertainty in individual projects decreases over time. And that is probably one of the explanations for the fact that the gross margin in Q4 is somewhat lower than the year in its entirety. As for our costs for administration, they are still higher than long-term. And it is fully planned. It is, as I said, a sequence of the relationship between Aarhus and Beskab. But we can see that the plan that we have set for cost savings that was set for 2024, we follow very well. And there, as we have previously said, we have a long-term plan to reduce the total cost savings of about 100 million kronor. It will take until the end of 2025 or the middle of 2026 before we see that it is fully implemented. But we can already see that in Q4 we have saved about 40 million, a little over 40 million even compared to the budget for 2024, despite the fact that we had a lot of operating positions in Q4 that were not budgeted. Unrealized value changes in the administrative portfolio for Q4 go up to about 21 million, 37 million for the whole year. And that is completely driven by the fact that we have market-adjusted our booked values in relation to the ongoing sales processes that we have for a pair of properties in the portfolio. The balance settlement went up to about 5.6 billion SEK in the IFRS balance calculation, which also gives us a solidity of 57%. In the segment, it is even higher, but as I said, we prefer to focus on IFRS. The liquidity is very strong with over 460 million kronor in the cash register. I briefly mentioned the synergy effects. We have communicated at several occasions during 2024 that the relationship between Aarhus and Bäskel would involve certain synergies in the form of savings in IT, office premises, exchange costs and of course within the organization. And these 100 million kronor are in good and well plan to be delivered with more than 40 million already saved under 2024. So our assessment is that this savings plan is essentially stuck as previously communicated. So to sum up, we have conditions in place for continued growth with good profitability. Vi har god framdrift i projekt- och förverksarbetet. Det har varit bolagets fokus under 2024 att... Den fokus under 2024 har varit inriktad på integrationen- -"mellan Aarhus och Besqab." Den integrationen är på plats. Organisationen har jobbat hårt med att linjera- -"arbetsprocessen och affärsmodellerna." Besqab i dag är ett well-trimmat bolag med tydlig affärsmodell. Therefore, we have very good conditions to scale up production volumes and grow with profitability in the future. We also have a very good and well-developed strategy in place for systematic sustainability work and to meet our highest goals, for example, to reduce climate impact by 50% by 2030. And in the future, one of the most important goals for 2025 will be to make a list change to Nasdaq Stockholm's main list. And it is a process that has been initiated and has been approved for about six months.

It's over to you.

Thank you Magnus for that. Then we summarize the presentation over the fourth quarter and the end of 2024. We think, as I started with, that this is a stable quarter, it is a good result. We see above all that the real estate market is starting to take off. We have carried out several successful sales starts. We see that this good sales development gives the opportunity for further production starts during 2025. And as Magnus says, it is a big priority for us to do that. We have a strong position after the meeting. The integration is now beginning to come to an end. Vi ser fram emot att kunna genomföra fler produktionsstarter och driva tillväxt med en bra lönsamhet framåt. Med det så rundar vi av för frågor. Vi har fått in några frågor här. Det är tre stycken. The first question is from Mattias Karlsson at Carnegie. In the VD word, you indicate that the market is on its way back and that the market has taken a real step towards Q4 and into 2025. Given this, do you feel safe with the previous prognosis given that construction will start between 800 and 900 units by 2025? You also have as a goal to lay a production volume of at least 2,000 flats. Our prognosis now is that we are somewhere between 700 and 800 building starts. That is what we have planned for. And with that prognosis, we see that it is possible to reach our production volume of over 2,000 apartments sometime at the end of the business plan period, the end of 2026, beginning of 2027. That is our prognosis and it follows the business plan that we have learned. The next question is also from Mattias from Carnegie. The gross margin has dropped quarter by quarter under Q3 and Q4, from Q1 and Q2 to Q4. Given the project portfolio you now have in production, how do you assess the development of the gross margin in 2025?

Våra projektuppföljningar och analyser pekar på att vi ska över tid nå upp till målet om 20%. Det kommer ta en liten stund, för vi bär i några projekt med oss ganska höga ingångsvärden, vilket är en av huvudförklaringarna till att vi fortfarande inte riktigt är där. Men vi har got hop om att kunna nå dit och de förvärv vi gör nu när vi backar in dem i våra projektalkyler så ser vi att vi har goda möjligheter att nå 20%. Så det kommer ta lite tid när vi har jobbat igenom befintlig portfölj för att nå dit.

Då har vi en fråga från Kayvan Chilvampur på SCB. Första frågan är 1572 bostäder i pågående produktion. Planerade färdigställningar i Q1439, Q2223, Q288 totalt 750 under 2025. Förväntan är att enheter i pågående produktion är högre eller lägre vid utgången Q425 mot Q42024. We are right to say that we have a high degree of coloration even during 2025. We have an average of 700-800 construction starts during 2025. This means that we will remain on these volumes until the end of 2025. Then in 2026 we will be able to get up to 2,000 homes in ongoing production. So that is our prognosis as it is now. Then the completion can slide between the quarter, depending on whether we hand over the project later to the OECD associations. So there can be some flexibility there as well. Number two, have you at the turn of the year carried out external evaluation of the building rights portfolio? In that case, what is the overall value and what is the difference in a comparable portfolio year on year?

The answer is that we have not carried out any external evaluation of the building rights portfolio, and therefore have not included any such information in our report. When you look at this, you should bear in mind that if you read backwards in time on our press releases for a couple of years, both from the ARA side and from BESCAB, we have communicated that at some different times, discrepancies have occurred and adjustments of the recorded values in the building rights portfolios. Resultatet av det är det vi bär med oss i vår byggräspåfölj just nu. Så vi är ganska trygga med att vi ligger på rätt sida. Sättet för oss att bli trygga med det är också när vi analyserar tidiga skeden och ser de projekt som ska starta under de kommande åren. Så är vår analys internt att det är de som ska leverera 20 plus marginal för oss framåt i tiden. Men vi har inte gjort någon extern värdering och heller inte kommunicerat något eventuellt i övervärdet.

Nästa fråga. Förvaltningsfastigheter, förutsättningar för avryttning, pågående diskussioner, frågetecken. Ska du också ta det här, Magnus?

Ja, vi har inte så stor förvaltningsportfölj som jag nämnde tidigare. Vi har tre stycken. Vi har pågående diskussioner. Det är väl inte osannolikt att vi kommer att göra avryttningar under året här. Vi får se lite grann hur de där diskussionerna går. And if we do that, it is so that we see that we have better use for the money in our projects with higher deductions.

With that, we have no further questions. And with that, we end the presentation and the Q&A. Thank you for your attention.