Besqab AB (publ)

Hi, and a warm welcome to Best Gaps presentation of the third quarter of 2025. My name is Mattias Karlsson and I will be moderating today's broadcast. And with me here in the studio is the CEO Magnus Andersson and CFO Magnus Sundell. A warm welcome, gentlemen. Thank you. I'll just mention before we get started that you can ask questions in the chat, and we'll take them after the presentation with a joint Q&A session. And with that, I'll hand over the word and picture to Magnus Magnus.

Thank you, Mattias, for that, and welcome to all of you who have signed up for this presentation about the BESCAB's part-year report for the period from January to September and the third quarter of 2025. I will start by summarizing the part-year period from January to September as a period where we see that Beskav's business model really shows its strength. We deliver completely according to our business plan and a strong result. We improve both revenue, gross profit and turnover during the part-year period. The turnover is 1.85 billion kronor compared to 1.46 billion kronor last year. The gross profit is 286 million kronor and the turnover is 115 million kronor. This corresponds to a gross margin of about 16% and a turnover margin of over 6%. We have had a stable sales during the period, despite a somewhat very lagging market, especially during the second quarter. We have so far this year booked or sold a total of 420 homes compared to 233 for the same period last year. And we have started 520 units so far this year. We have no starts during the individual quarter Q3, that is completely according to plan. But we are left with our forecast to have a total of about 750 production starts during the entire year 2025. This also means that we expect a strong turnover increase in the fourth quarter. We then give a turnover result that we see ahead of us at 230 to 250 million kronor for the entire year 2025. Finally, we also see that the market conditions during the part-year period have been watchful. Now they have further strengthened, especially during the third quarter. We have a lot of macroeconomic factors that have moved in the right direction. Inflation, interest rates have been further lowered. But we also see more signs in the market that the sentiment of the housing market has improved. If we look at the third quarter isolated, we have a stable sales and good results. We have a turnover of 405 million kronor, which is somewhat lower than the comparison quarter in the same third quarter last year. This is entirely dependent on the fact that we do not have any production starts and the profit calculation model that we add, which we will explain a little closer later. In the comparison quarter we had two production starts. We have a good income in the project business, the gross profit is SEK 78 million, and we have a gross margin of 19.2% per quarter, which is an improvement from the comparison quarter. We have a turnover result of SEK 30 million, which corresponds to a turnover margin of 7.5%. The sales have been stable. We have sold or booked 120 homes during the quarter. And what we find particularly delightful is that we only have 13 unsold homes in completed projects at the end of the quarter. Byggrättsportföljen är otroligt viktig för oss. Den förvaltar vi aktivt. Det är förutsättningen för att vi ska kunna öka produktionsvolymerna. Vi har under kvartalet adderat ytterligare drygt 400 nya byggrätter i fyra stycken projekt under det tredje kvartalet. When it comes to the market, we see positive signs. In the part-year period until September, the price development in the Stockholm region was weak, at 2-2.5%. We had a strong start to the year. We had a very watchful Q2, the second quarter. We had steady prices. The prices also went down during the summer, which is quite normal seasonally. Then the prices rose again after the summer. We see the same pattern when it comes to the turnover of the number of sold housing on the market. compared to the same period last year. During the beginning of the year, it fell back during the second quarter, and now we see that the turnover levels are at the same level as in the corresponding period of 2024. This is an important sign that we see that activity in the market is starting to increase again. We follow many confidence indicators, there is a lot of psychology in the market. The housing price indicator measures the expectations of households regarding the future housing price development. And there we see that the levels for the housing price indicator in the Stockholm area are again at good levels, 42. We also note that there is a pretty big difference between Stockholm and the rest of the country. Under this quarter, there have been further decreases in the government interest rate, we see a decrease in inflation, we also have eased the remuneration requirements and the housing loan ceiling that will come into play during 2026. This combined with the fact that we see more signs that the Swedish economy is beginning to recover, and we also have large stimulus measures in the autumn budget that was presented a few months ago, aimed at households. This means that we see that the conditions are strengthening. Vi är också aktiva i Stockholmsområdet och Uppsala, som vi ser i Sverige, är den starka regionen, där vi har en positiv befolkningsutveckling, vi har en inflyttning på vår geografiska marknad, kombinerat med att vi har ett underskott av nyproducerade bostäder i Stockholm efter flera år av väldigt lågt antal produktionsstartade bostäder. Det gör att vi sammantaget ser att marknadsförutsättningarna för vår affär i Stockholm och Uppsala har stärkts under kvartalet. It is also reflected in our sales. In this market, it is crucial to have access to the right project in the right place, and we think we have. During the quarter, we have sold 90 homes in projects that are in the process of production. We have sold four more in completed projects. In addition, we have booked another 26 homes in projects that have not yet started production, especially in Källhagen in Stockholm, which is the project in the picture. A project in Stadshagen on Kungsholmen in Stockholm that was launched during the period with very good results. This means that by the end of the quarter we have a rate of booking on the proportion of sold or booked housing that goes up to 66% of what is in ongoing production. It is a very safe and stable figure that we are pleased with. Again, at the start of the quarter, we only had 13 unsold homes in completed projects. This is a strong sign that our marketing and sales strategy works, that we don't have a bunch of unsold homes in a completed project. We are actively working at Beskab to increase our market share. We want to take a position as a leading housing developer in Stockholm and Uppsala. In this market, it's really about having the right product at the right price. Vi jobbar i en väldigt lokal marknad, vi investerar i attraktiva mikrolägen, där efterfrågan styrs av flyttmönster, arbetstillfällen, familjesituation och köpkraften styrs av lönesumma, räntor och sparande. Vi gör en noggrann utformning av produkten och noggrann analys av den här målgruppen för att möta målgruppens behov. This is combined with a very structured sale process, where we are actively working to optimize the price picture and ensure that we have the last home sold by completion. This means that we have successfully increased our market share over the past quarter. The circle diagram to the right shows Stockholm and Uppsala, where we now see that we have a market share of 14%. What I think is especially exciting during the isolated quarter is that we have a good profitability in our underlying project business. We deliver a gross margin in the quarter of 19.2%. We had at the start of the quarter 1,455 homes in ongoing production. This is divided into 20 projects in 8 municipalities, where the absolute majority are multi-homes. Vi färdigställde två projekt under kvartalet. Det är ett flerbostadshusprojekt i Täby och det är ett småhusprojekt i Stockholm Bromma. Vi hade inga nya produktionsstarter under Q3 och det är naturligt i vår verksamhet att produktionsstarterna sprids ut över året och det är helt enligt plan. Men vi räknar som jag sa inledningsvis med att vi fortfarande kommer att hålla ungefär 750 starter på helåret 2025. Det innebär att vi har ungefär 230 enheter som ska startas under det innevarande kvartalet Q4. Vi har en bra konkurrenssituation för våra entreprenadupphandlingar. Vi har sett under en längre tid att byggkostnaderna har planat ut. Vi ser det också i den konkurrenssituation vi har, där det är väldigt få antal byggstarter i Stockholm, att vi kan pressa priserna och få ner byggkostnaderna. Det förstärker också möjligheten att hålla bra marginaler i projektverksamheten. We have a goal to reach a volume of at least 2,000 units in ongoing production. We assess this to be reasonable to achieve by 2027. This is due to the building portfolio we have, which we feel safe with, and that the market is developing as we expect. An important condition for this increase in volume is that we have access to building rights in the right place. We have a fantastic building rights portfolio, we think. It covers, at the beginning of the quarter, 6,716 future building rights in Stockholm and Uppsala. It is divided into 79 future projects in 22 municipalities. The fourth part of the portfolio has an assumption or a low-power detail plan. This means that we feel safe in the fact that we have a project in our portfolio that we can start to meet the ramp-up in production volume. Under Q1, two projects received a low-power detail plan. A total of 190 homes in Täby, respectively Nacka. The first project is Hägenäs Strand in Täby. Both projects are now being prepared for production start in 2026. We have been assigned a map after Q1. It's a nursing home, or so-called Säbo, with about 80 apartments in central Nynäshamn. Det här är ett bra tillskott. Det är en bra affär för Bestgab. Vi har lång erfarenhet av att både genomföra och förvalta vårdboenden med bra resultat. Så det här är ett bra tillskott till vår byggnadsportfölj. Vi har också under kvartalet rekryterat en ny affärsutvecklingschef i Sara Westerlund som kommer att tillträda under november och också vara del av koncernledningen. Vi har gjort ett större antal förvärv under kvartalet. Det här är viktiga förvärv, strategiska förvärv, där vi ytterligare stärker vår närvaro i centrala Stockholm och också Nacka. Det första förvärvet är Heights. Det är byggrätter för 235 bostäder i Hagastaden i Stockholm, fördelat på två etapper. Där har vi en möjlig produktionsstart av det här projektet, den första etappen, under 2026. The second is the building rights for 90 homes in north-western Kungsholm, where we also have a possible production start in 2026. The last is the building rights for 28 homes in Nackastrand. This is a project that we have communicated that will be carried out in the Valin Bostads Regie. Valin Bostad has 50% shareholding. The reason for this is that we have a shareholder in Valin Bostad. Valin is a smaller housing developer with long experience of housing development in Stockholm, and above all with a strong focus on the premium segment. We see that In the premium segment in Stockholm, we have seen a high demand for good sales in general and also in Valin's business during the last quarter. We see this as a good way for us to have a presence in the premium segment through the shareholding of Valin. Vi ser framför oss att vi vill utöka det här samarbetet. Det första samarbetet är byggrätterna i Nackastrand som kommer att genomföras i Wallin Bostads regi i syfte att öka omsättningen, resultatet. Det här är ett projekt som heter Ellensevik och det planeras för en produktionsstart under 2026. Det här är ett fint samarbete som vi ser fram emot. With that, Magnus, I'll hand it over to you.

Thank you, thank you. Then we go into my part, talk a little more about the third quarter and the part of the report that we have published today in the morning. Magnus has been on some highlights, where we mainly want to communicate, as we have already heard, that we have no project starts in the quarter, which I will come to in the coming pictures, affects revenue very clearly based on the profit calculation model that we add. More about that in a little while. But we have a high and nice profitability of 19.2% in this quarter, which is not disturbed by the start of the project, but it is a pure quarter where we can clearly see the profitability of the underlying projects, the 20 projects. There we are, we have a long-term goal of a gross margin of 20%, as I have said, and we are on our way to reaching it now at 19.2, which we think is very strong. After the withdrawal for sales and administration costs, we have a moving margin of 7.6%, and what I also want to point out there is that this quarter, the third quarter, is also quite clean in this respect. The costs are not disturbed by the essential one-off positions that we have had during the previous two quarters of the year. And we can therefore also see in the outcome that these synergistic effects that we have talked about earlier after the convergence between Aros and Beskab, we have said that we will try to pick up 100 million kronor from our cost costume. It starts to show. We have a turnover of 47 million SEK in the quarter. Partly due to seasonal effects, but I think you can see it as if we have about 15 million SEK in the quarter, which is completely in line with... prognoses to bring forward these synergies. In short, part of the year, January-September, 26% higher turnover than the previous year and a gross margin of 15.5%. We have a higher turnover than the previous year, but the gross margin is somewhat lower than what we had in the comparison period the previous year, where we were at about 17%. The reason for this is also related to the mix of projects, which we will get to on the next page here. Mattias, I'm going to have a little economics lesson here. We have talked about this before. You have asked questions about how we should look at revenue development quarter by quarter. When we were here three months ago, we had a very high turnover in the second quarter, which was driven by the fact that we had seven project launches in the second quarter. And then we had a high turnover, but a slightly lower gross margin. Now we are with Q3 and we have exactly the opposite. We have no project starts in the quarter and therefore a fairly low turnover, but a high gross margin. And that is completely connected to this. I have made a page here with a fictitious project that stretches over nine quarters. The stacks in the diagram show the timing of how we invest costs in the project. The first quarter is always the most expensive, because that's where the market cost comes in, which is often about a third of the entire project entrepreneur budget. The subsequent quarter can go up or down a little depending on what we have. It can be a big trip that comes in, a large part of it, and then it takes off towards the end. The rising curve is our rate of improvement up to 100% of costs. To this we then put our expected gross margin on the project, so when we lift this the cost into the result calculation, we take the cost in the quarter plus the expected gross margin. That will be the turnover. Then we subtract the costs and what remains is the margin. Then we have the one below the curve there, which is weakly upward leaning. It shows just the project's expected gross margin, which in this fictitious example is 20% on average over a project. But it is not pointed straight, it leans weakly upwards. And that is due to the fact that we are careful in the initial quarter with how much profit we release. We call it that we have a sales break. And successively, after the risk and uncertainty in the project decreases over time, we release more profit. So that in the later part of the curve, we are over 20%. And that's exactly what happened when we look at the previous year's nine-month period. There we had more mature projects in our portfolio, which meant that we had less sales break. And the opposite is happening now. So this is very important to keep in mind when you look at the next picture. This is our last six quarters, how our concern, Beskabs, was trained in our segment training looks like. We have quite a shaky turnover, and it can be seen as that it is uncertain and so on, and especially when you look at Q3, you could think that we have a stagnant business. This is absolutely not the case, and what we want to convey here are two things. You can see the increase in the yellow curve. We are in the underlying portfolio at a 19% drop. This is a clear indicator that profitability in the project portfolio is good. We have zero project starts in Q3, which means that the turnover per quarter goes down. Men vi känner oss föranledda att frångå våra principer här och faktiskt guida på helår av exakt det här skälet. För vi vill inte att man ska dra slutsatsen att vi har en inbromsande affär. Vi ser precis tvärtom. Vi har de här projektstarterna som kommer att ske nu under fjärde kvartalet. And when we are here in three months, I expect that that stack will jump up again and as a result of that, we will produce more profit kronor and on the moving results row, we will guide to 230 to 250. I take it as a quote that we have a very profitable business at the bottom. We have good control of our costs, which is the difference between gross and turnover, and that we believe that we will be able to deliver even forward according to given indications. So that's what I think we should take with us. To you as an analyst and everyone who listens.