Bonava AB (publ)

everyone and very welcome to the presentation of Bonava second quarter 2025. My name is Anna Falk-Fyrlund and I am head of investor relations here at Bonava. I am sitting here in a warm and sunny Stockholm together with our president and CEO Peter Wallin and our deputy CEO and CFO Jon Jonsson. They will take you through the highlights of this report and after their presentation, we will open up for questions. You can ask them through the phone conference and then you will press star five or you can type your questions online. And you can already now start to type your questions and I will read them out after the presentation. So with that short introduction, I will leave the word over to you, Peter.

Thank you very much, Anna, and great to have you back again from maternity leave. So, starting with the market highlights. There, of course, is no question about that we're living in a world with a turbulent global environment at the moment. But our markets are stable, supported by a lowered base interest rates, higher disposable income, and a pent-up demand for housing. And we do note a higher interest from customers. But I would also like to say that given the circumstances in the market, it does take longer time to convert from a booking or reservation to a binding sales contract. And that is especially true for the Swedish market. We are also noting, as we also commented upon in the first quarter, that we are seeing an increasing interest in the investor segment, our B2B deals. So we have an... interesting pipeline to work from and of course one might ask yourself so we are seeing a lot of improvements in underlying macro etc but why doesn't it pick up quicker and broader and the reason for it is the general uncertainty in the market base and of course also as we are seeing that the general increase in spending from governments is also increasing the long-term interest rate somewhat. Turning into the Bonava figures for the second quarters, we are increasing the number of starts exactly according to our plan and we are maintaining a good sales rate. So we are increasing the number of starts to 584 homes during the second quarter. We are maintaining a good sales rate in the ongoing production of 60% and of course this is down from the first quarter but it's according to plan I would say when we do increase the number of consumer projects where we are starting more or less along 30% as a default rate. We are in a very early stage on the ramp up of our business from a very low level and this of course has an implication with our conservative and prudent way of reporting when we build up of net sales and margins and this is something that Jun will come into more into details. We are improving despite this our operating margin to 4.3% and we are also maintaining a very solid financial position. We have started a number of very interesting and attractive projects in the quarter, starting off on the left hand side with Seminariet in the university town of Uppsala, where we started the second and last phase of Seminariet with attracting very good and strong interest. The same is true for Evalda Valtera in Riga. And then turning to Aschen on the very west part of Germany, we started a project of 139 units, which is a mix of regular consumer projects and also student housing. And then last but not least, which is also the picture you saw on the first slide, the green wave in Vilnius, Lithuania. We have really come up in a good level now in Vilnius, and a green wave marks the first phase in a multiple number of phases in a very interesting and attractive location in Vilnius. And then just as we started the third quarter, we were also able to start the development of Fredman, 120 homes in a very nice location in the city of Stockholm. And this is also a very eco-friendly housing. So this has also attracted a very strong interest by our customers. So we are off to a good start in the third quarter. So with that, I hand over to you, John.

Thank you, Peter. And as you mentioned, Q2 further solidify our view on stable profitable growth to come in the second half of this year. I think the number of units in ongoing production continue to grow compared to last year with 21% period M. And this together with a higher sales rate, which is a prerequisite for us to start new projects, ensure this controlled growth in net sales for coming periods. The B2C sales is a dominant business model for us right now, year to date. But recently, there is also an increased interest in B2B and investor business, as also Peter alluded to. As communicated in the last quarter, we have further reduced our inventory of completed unsold in the period. A majority of the units relates to the bolting markets where, to remind you, to purchase a unit before it's completed is very rare. We are overall on healthy levels, but expect to reduce it even further in the second half of the year in order to release cash as long as we do not compromise our margins. The net reduction in the period was 41 units, but the reduction of inventory older than three months was 101. If we take a look at the segment performance, we continue to strengthen our margins, both the operating gross margin driven by good projects and the operating EBIT margin. Cost levels are kept lower than last year in absolute value. The net sales is down compared to last year as a result of a conservative percentage of completion accounting method, which delays impact in the projects until they have reached above 70% in completion, something we mentioned in the capital markets day. And last year we had a lot of projects with a higher completion rate, although they were less number of units. And when the growth in net sales now come in the second half of the year, as we mature the bulk in the current project portfolio, this will further strengthen the margins in line with our guidance of five to six percent in operating EBIT margin for the full year. And next to the picture of our new project in Germersheim in Germany, we see here an overview of the market performances. Germany and the Baltics continue to be the core in Bonava's business. And although we can see a lot of progress on positive signs in Sweden and Finland, it will take time until the end of the year and a bit into 26 before these markets have fully recovered. And if we take a look at Germany specifically, we see strengthened project gross margins in combination with lower cost of the restructuring last year, resulting in an operating EBIT margin of above 10%. There is an increased number of starts of 58% in the quarter, and we have invested in new building rights in the fast-growing regions like, for example, Berlin. In Sweden, we have started and we are starting a lot of new great projects. As we require high sales and reservation rates before we are starting to secure the controlled growth, the financial performance will take a little longer time. But project margins continue to improve and activity levels are very high, which gives confidence for the future. The market in Finland is also gradually improving, but as we have communicated earlier also, they are behind Sweden in the recovery. And we will start selected projects in the second half of 2025, sufficient to maintain the business with good margins, and we see early interest from the customer in these micro locations in Finland. In the Baltic states, Regen and Vilnius grow strong, while Tallinn, very much like Sweden and Finland, is recovering slower. Margins continue to improve and outlook is promising in the growing regions of nations. And this is something we do expect to continue. In our building rights portfolio, not so much has changed in distribution between the markets since previous periods, but we further strengthen our portfolio in the growing markets in Germany and the Baltic states. The projects ready to start are on sufficient level to support our growth short term, but we plan for new investments to continue both on and off balance to support future growth. The total number of building rights needs to be well balanced for short, mid and long term needs. The trend for interest cost and net financial item is continuing to decrease with relatively low net debt and falling rates. The EBITDA generation from completed contracts supported the operating cash flow a lot and that is then the IFRS measurement completed contracts. and that was even stronger in the quarter than the percentage of completion. But as we now start more projects and increase activity level, we do expect the working capital to grow further in the coming periods, which then requires project financing, where we are in dialogue with a lot of banks for the coming projects. Here is an overview of the development of net debt. And as you can see, we remain low at 3.1 as the last two quarters. But as mentioned, we do expect the project financing part to grow in the coming periods to support our also rapidly growing business. So it reflects that growth. And we have noticed increased activity among many of our partner banks, and we will start funding projects in Germany locally and not through central DEF. which will further support the interest cost development and give us much better flexibility. The available liquidity as per quarter end was sufficient at 1.3 billion SEK Last but not least, we are also well above our set ranges for our financial framework. The equity to asset ratio is 43%, and the net project asset value over net debt is 1.5 times. This creates the solid foundation we're talking about as growth now will start to come. Over to you, Peter.