Bonava AB (publ)

Good morning, everyone, and a very warm welcome to the first quarter of Bonava. 2026. My name is Anna Falk-Fidlund and I am head of investor relations here at Bonava, standing here in a sunny Stockholm together with our CEO Peter Wallin and our CFO Jonsson. They will take you through the highlight of this report and afterwards we will end up with a Q&A and you can start already now to type in your questions. So with that, Peter.

Thank you very much, Anna. And good morning, everyone. Looking forward to take you through the Q1 here. So if we take on the top MQ1, looking at the markets, we are recording stable sales, even though we have a lot of uncertainties kicking around in market. We are seeing the same trends as usual. We have seen for quite some time that the consumer segment is improving, and it's improving based on that we're seeing higher disposable income, maintaining a low level of unemployment and pent up demand for housing, given that we have built so few sustainable new homes over the past three years in the markets. If I dig a little bit deeper, we are seeing a very high sales across our Baltic cities that we are active in. And we are also seeing a building reservation rate in Germany. So we started up a little bit weaker in the quarter, but then ending up at the same level more or less as at the end of last year. So we see a good booking situation. And then Sweden, we are seeing an improving market conditions. And Finland remains to be a quite slowish, sluggish market. In all our markets, we are seeing increasing activity in transactions. So the investor segment is improving and we have a very nice pipeline of investor projects to come. And then we are all thinking what is happening around us in the world. And the latest part now with the conflict in Iran is not the first one in the quarter. It's one of many things that has happened. And still we are seeing an improvement across our segments. So it seems to be a quite resilient market situation despite uncertainty. If we dig into our P&L, we improved the EBIT margin to 4.8% in the quarter and the rolling 12-month 6.8%. This should, of course, be viewed across on the guidance we're giving for the full year of between 8% and 9%. We are growing net sales by 11% adjusted by currency. And we are doing that despite of implications of productions due to the cold weather that we had during the first quarter, especially in Germany. And that is actually accounting for as much in growth. So around 200 million second impact of revenue. We have increased ongoing projects to 4,220, which is more or less a 30% increase over last year, and at a very good stable sales rate at 60%. And we only report binding agreements on the sales side. So in addition to that, we also have reservations. Looking into the balance sheet, we still have a very solid financial position. We are decreasing the central debt and we are increasing project-related debt. So according to plan, the boring statement according to plan. Taking a little bit look around our core markets now, looking up on the left-hand side, you see our investor project in Finland of 61 units in Turku, Solina 13. Going over to the right-hand side, we have Inlangen outside Frankfurt, a very nice project for consumers. Continuing down on the left bottom side, we also have Hartmans in Riga, a very strong market for Bonava. And last but not least, another strong market for Bonava in Lake Town in Vilnius. So with that, I would like to hand over to you, John.

Thank you, Peter. And Q1 is indeed a smaller quarter on the back of a strong Q4, and that's very traditional for Bonava. And it comes with a seasonality effect in particular in Germany, which is our biggest market. And I will come back to what it means and what you can expect in the coming quarters from that perspective. If we start with the ongoing production, as Peter said, close to 30% growth versus last year, 28% to be precise, and a stable sales rate. We have a sales rate excluding reservation, as Peter also mentioned, of 60%. And that is average in the group. But we can say that Germany and Sweden are well above 60%. Finland tracking around 50%. And then Baltic around 40%. And as I've said in previous telcos, Baltic has a specific market conditions where pre-sales is not so common. It's more like when the building is... ready, that's when the real sales of the units start. So we do expect this to continue up both sales rate and also ongoing production to reach our targets and the guidance for the full year. If we continue then with the P&L, as Peter mentioned, we have 11% organic growth in the quarter versus last year and 37% growth in EBIT in absolute numbers, including currency that was 7% in the quarter. So we, of course, have a big Euro-SEC effect as most of our sales is in Euro and only a smaller portion in SEC. But all our other markets report in Euro and that is a translation effect we adjust for. We can see that the sales and admin expenses partly by currency, but also because we are still very cost cautious and stable sales and admin expenses. And what is most important is that the 12-month trend continues upwards now to 6.8, and it will steadily go up to this range between 8 and 9 for the full year, we estimate. And it's also important to highlight that in Bonava, we gradually built up the EBIT rate, across the year so the trend you could see on last year's quarter you can expect a similar trending also for 2026 with the buildup of the result and sales and the rolling 12 is of course on 6.8 as i mentioned which is an improvement If we deep dive into the different segments, we see that Germany and the Baltics are still the main contributors to the profit. We do expect Sweden to grow rapidly this year into good, positive numbers. And with Finland, we repeat also the message that because of a slightly weaker market, we will be cost and cash neutral. So you can expect a break-even result on EBIT also for this year in Finland. If we discuss a little bit the other, that is the group functions and also our guarantee business in Denmark. And that remains stable and on a low level. And as we grow, that will further improve the margins across the year. So we will have this volume kicker coming in as we grow net sales as expected. If we then talk about Germany and we talk about the seasonality, so there are three effects which impacts why Q1 is a little bit lower. But bear in mind, that's still an improvement versus last year. But the three effects we're talking about is the facing of the investor deals, which is traditionally in the end of the year. We have a lot of interest in investor deals. But we do expect them to close them in the later part of the year, which is more traditional in Germany to do so in our business. The second one is the sales conversions, which after a very strong Q4 in Germany, it took some time to build up the reservation rates. But we are now back on track also with the reservation trend. So we think that that will catch up now in the coming quarter. And the last effect, which Peter also mentioned, is the weather. The cold and long winter really did have an impact on the construction pace in Germany. But also here, we are back already in April, May. with the construction plan, you could say. So we are catching up with the sales in construction and the investor is coming later. So we are therefore very certain of the development in the coming quarters for Germany. There is also a high sales rate. I mentioned it's 67% of the ongoing production. So we don't have an issue with the sales speed either in Germany and an improved margin, as you can see. see in the EBIT margin versus last year as well, and they're stable on the rolling 12 of 10%. If we continue with Sweden, this is where we expect the biggest growth percentage-wise this year, and we see an improved market situation, and we gradually have an ongoing production, which is much higher than last year, 836 now in ongoing production versus the 368. That will generate in itself a good result the coming quarters, together, of course, with the high sales rate, which is around 62% adjusted for reservation. So no reservations included in those numbers. So high sales rate, high ongoing production, a lot of promising signs on the Swedish market. We should also mention Mention that in comparison with last year, there was a sale of land impacting in Q1 last year of plus 15 million, which was not repeated this year. And that is a reason why Q1 isolated looks a little bit stronger last year. But it's timing of those items which can impact. And again, we believe that Sweden will have a strong growth in the coming quarters. Finland, I mentioned, we have challenging market conditions still. Specific point out that we only start projects with good profitability and good locations with high interest. And that has proven to be successful so that we stay cost and cash neutral in a difficult market situation. We had one good investor deal in Turku during the quarter. And another thing which is worth to mention is that we have reduced the completed unsold to very low levels now in Finland. So we are ready there also when the market returns to start. We don't have a legacy of old units. And I can also mention for the full group is that we now have a completed unsold of 208, which is a further reduction versus Q4. And we expect this to continue also. So it's about starting projects, which is important in all the markets with the high sales rate we have, and that will generate the sales and profit. Baltics is a specific shout out in the quarter. As you can see, fantastic growth and really strong margins. I think that we further solidify our leading position in these three markets. We are market leader and we further solidify that position with these numbers. I think that the number of starts, number of sold and also the margins and the growth. It's fantastic. It's tremendous. We really have a unique offer there, which is attractive. And we will continue this. Also mentioned is that we, since we have a high occupancy rate in the B2M, built to manage projects, we decided to start another one now, this time in Lithuania. And the occupancy rates is above 95% and the yields are still good. on these markets. So we further explore those opportunities in the Baltic markets. If we look at the building rights, that has grown a little bit in the quarter and we continue to optimize the portfolio so that we have the right mix of on and off balance and give us optionality in timing is particularly important in this aspect so that we are ready when we need them. And right now we are ready in 26, 27 to be above this 3,500 units in the two years combined. This will be a gradual growth and we won't fully reach there in 2026, but as previously communicated, but that won't impact, it rather solidify our full year estimate of the year. And then we are ready when the market returns to recover the full If we look at the net profit, we see that the 12 month trend continue to grow versus last year. And that is not only because of the EBIT, which is stronger, but it's also because we continue to reduce the net financial items. And net financial items is this time impacted by lower net debt in combination with lower interest rates, but also a one-time item last year because we renewed the green bond last year in Q1. So there was a one-time effect distorting the picture a little bit in the quarter. But nevertheless, the long-term trend is reducing net financial items, and we expect that to continue down. If we go into the cash flow, and we previously called this operating cash flow, and now it's cash flow before financing and tax. So it's a different terminology, but the only difference is that we now adjust for the currency effect. So it gives a more true picture of the cash generation in the company. And this is also how we follow the business internally, because we follow it in local currency. So it gives a more accurate picture than before in the cash flow. But it's only the currency which has changed compared to the numbers we have shown before. And we see that this is the first quarter in a while. We actually have negative. And the reason for that is the high production we have ongoing right now, which requires, of course, working capital in the build-up phase. So there will be a need for this increased liquidity and working capital to support our ongoing projects with high sales rate. And that is fully expected. If we go into the net that Peter mentioned that we have increased it, and that is due to the high activity again on the project. So it's project finance related, very much linked to the active projects we are running. And therefore, you see this increase in the green activity. field here in particular. And we still have available liquidity of close to one billion SEK and the market conditions for project financing have improved a lot. We also have mature and good discussions regarding refinancing of the central debt, which will happen this year. And we will come back as soon as we have more news on that one. But it's ongoing and good discussions. If we dive a little bit into the balance sheet, I want to highlight a couple of things here. One is that the shareholder equity is now much stronger than the properties held for future development, and that allows us to invest more in land. and also still keep the good ratios and we see a lot of potential now in acquiring land in all markets actually on and off balance sheet as I mentioned before and we also discuss payments so that it fits with the construction start in an optimal way. and we keep the equity ratio net product asset value well above the financial framework but as mentioned with the seasonality you could also see the same trend on on those curves going up from q1 up to q4 and that that is also what you should expect for 2026 and that type of trends and because q1 is lower and q4 is our strongest quarter in bonava And with that, I hand over back to you, Peter.

It's time for me to sing again. So wrapping up this, and thanks a lot, John, for a very good presentation. And we are continuing our controlled growth journey. So small first quarter, still maintaining our outlook for the year with 8-9% operating margin and 20-25% top line growth versus 2025. And we do that because we see a strong pipeline of starts. We are preparing, we are continuing to control growth with checking that we have a good sales situation, making sure that we have control of the costs and we have the right team in place. And I think we've worked according to this for quite some time, and this has built the consistencies that we are now starting to see across our businesses in profitability. This operational leverage, when increasing up to the optimum levels of 3,500 to 4,000 production starts per year, will also pay off in terms of leverage into the P&L. So this is something which we will gradually see an impact of, and that is also one of the reasons why we are maintaining our outlook for the full year. As June also mentioned, we are currently also taking care of the balance sheet and the debt side of the balance sheet. And we have ongoing refinancing discussions. And as June also said, we will be back as soon as we have more news on that part. So all in all, a small part of a long journey in the first quarter 2026, but we are keeping the ship steady and we are really looking forward to continue to come and talk about the progress we are making on our journey. Thanks a lot. Then over to you, Anna.

Thank you both. Very good presentation. And as I mentioned in the beginning, we will open up for questions and we have a few here. So I will start with Mattias Karlsson from Carnegie. Can you confirm that the SEK 200 million deferred accrued income will fully reverse in Q2 and outline what, if any, execution risk could still delay the recognition or affect margins? Maybe a question for you?

Yeah, I mean, we look at the sales rate and we look at the construction pace in Germany, and this is particularly related to Germany. And as of March, this has caught up a lot and we are back on track. So that's why we are confident in saying that in the CEO letter. Of course, anything can happen if there is another conflict in the world, which we don't know right now. But if a steady state from the current environment, we see no risk in that.

And a question related to that from Erika. In Germany, you mentioned weather condition as a reason behind the weaker performance. Can you quantify how much of this slowdown you consider weather-related versus underlying market softness? Is it only weather-related?

majority of it is weather related and it has to do with the construction pace. But then we also had this effect that we mentioned about the reservations from Q4, which was building up in January. So it's very hard to estimate the exact effect of each of those items. We look at them both combined and see that they are both back on track in KPIs. But if I would guess, I would say that it's about 30-40% construction and 60% maybe sales and the reservation pays.

For the first quarter.

Exactly.

Mattias Karlsson writes, with Q1 below expectations, can you walk us through the key building blocks required to reach the 8-9 EBIT margin for the full year 2026, particularly the facing between Q2 and H2? So,

I think that, first of all, Q1 was actually not below our expectations to a larger degree because we always plan for this build-up during the year. But we acknowledge what you analysts and the market, how you view it. And for us, it's really connected to the ongoing projects and the starts we have in pipeline and the sales rate and the production pace. And it's from a percentage of completion, for us, we have a Quite high accuracy, actually. We know what's coming in the next quarters. So we see no real danger in that growth. The important thing is that we continue this 12-month trend upwards, which we did in Q1, and that will continue. And the main contributor will be Germany and Sweden to this compared to the Q1. Because in Germany, Q1 is very small. Yeah. And you have the seasonality effect. And in Sweden, we expect a faster ramp up.

And also, building on what Jung said, a very important component is that we look at our numbers. We've done a lot of things with our operating expenses. In a small first quarter, those are really hitting back on the numbers because we have such a small top line. And with the buildup of the quarters, as we are seeing and expecting, that will, of course, mean that we have a lot of leverage on those numbers. We will cover more the costs and we'll add more to the margin. So it will be a boost, automatic boost in a way. And also, if I can say that we have an ongoing project where we are very conservative on the profit expectations and we have full control over the production cost. It was the production pace that was impacted in the early part of Q1. And then we see the reservations we have in our projects and those will be converted to sales. And as they are converted to sales, they will also help up the production. the profit recognition curve, again, building up the operational leverage.

And one more thing which will impact our profitability and growth is when the investor deals happen.

I was just going to ask.

And it is hard to estimate also for us. We know what we have and the dialogues we have, and we are confident that they will happen, but we don't know exactly which quarter they will come. And in Germany, it's traditionally in Q4. Yeah.

And is it only Germany or do we see it in the other markets as well?

No, we see increased demand in both Finland and Sweden as well, I would say. So it's those three markets in particular where the investor deals are more active.

And in Baltics, we have not mentioned because we're not principally doing the investor deals there. So that is why.

And this is more of the same question, but you are retraining your full year 2026 full guidance despite the weaker Q1. What specific drivers would you confidence to maintain the outlook and what needs to materialize over the coming quarters?

Start sales and ongoing production and the high sales rate. I think that we have all in the pipeline.

And as you understand, it was a weak quarter of weather conditions and to some extent also sales. But if we compare to our expectation, not a lot of difference compared to what we expected. So...

And then we have a question from Gunbrit Karlsson. The situation in Finland is described as slowish next to the Baltic countries, etc. What is your message to private investors for ongoing productions in Helsinki?

That's a very specific Helsinki question. I'll see if I can answer it. But Finland is coming from a situation where they have a lot of large volumes of new production. And when the music stopped when Russia invaded Ukraine, the number of ongoing projects being completed meant that the Finnish market had a lot of unsold completed. And as we have also shown in our numbers in Q1, we have gradually decreased that. And now we are at super low levels. And the same goes for the market. So when the market has dealt with this excess supply of completed unsold apartments, the market will start to recuperate. And we are already... have started some consumer projects we have a very interesting pipeline and consumer projects to start over the remainder part of the year and there are some pockets in helsinki which is still struggling a little bit specifically the espoir area in the northwestern part of capital regions but we have other parts of helsinki which is doing very well central helsinki and on towards eastern part of helsinki yeah

And you mentioned our completed unsold. Is it too low now?

A million dollar question. No, but I think that's where we come from. I don't think it's too low. I think that it has been healthy, the additional activities we have done to reduce this over time. And we have, as I mentioned, 208 and more than half of them are in Baltics where we have different market conditions. So they are on a low level, but it has been good for us to get there. Going forward, I think that in the growing market, I'm not afraid of increasing that. It's not something we plan for, but we should allow starch, but still with a good sales rate, because that is a prerequisite in our controlled growth phase. But it can grow if we... Grow the ongoing.

And another Finland question here from Mattias Karlsson. With the first investor start now executed in Turku and overhead still not covered by the current volumes, is Finland's path to break even now entirely dependent on investor transactions? At what start volume does overhead coverage kick in?

No, but I mean, we had a result last year of close to zero percent in EBIT or just a small, small positive. And we expect the same in Finland this year. And it's a combination of B2C and B2B projects. So we will have also for this year in the three cities we operate in, it's important that we have the right projects there to support the current organization. And we Keep it cost and cash neutral. I think that's the only thing we can do in this market environment until it turns. But we are ready when it turns. And it will. It's just a matter of time.

Yes. And he has a question on the financing. The syndicated credit facility matures March 2027 and the portion has already been reclassified to current liabilities. Can you give us a timeline for when a refinancing announcement should be expected? And what are you seeing in terms of available pricing versus your current 6.89 average rate?

Oh, very detailed questions. I think that we have ongoing dialogues. And of course, we want to finalize this as soon as possible. I think that we still want to allow ourselves to have the time enough to get better terms and conditions, as Mattias alludes to. So we do expect better terms and conditions, but we don't want to rush into something. So in the coming two quarters.

And terms and condition is not only the interest rate. It is also the ticket to play and the ticket to invest and the ticket to do partnership, etc. So having a loan agreement which actually supports the business is what we need to get into.

And we talk about the Baltic market, that it has been very successful. Is it across all three or is there a difference between the capitals?

Across all three, I would say. But in particular, the Riga and Vilnius development is really good.

Yeah. And I think the testament to June explained the Baltics a little bit. But if you think about the Baltics, they have been operating on a higher consistent level for some years now. And the operational leverage that we talked about, the testament to their margins, is a well-run business that has been sort of getting coverage of the cost and maintained and managed in a good way. So that's to be expected of the other business units as well.

Yeah. And I think that was all the questions here. So thank you both for good answers and a good presentation. And thank you all for listening. And if you have further questions, please reach out to me. And with that, we would like to wish you a good day. Thank you.