JM AB (publ)

Good morning and welcome to the presentation of JM's quarterly report for the first quarter of 2025.

Welcome. We will start with a brief summary. Then we will go through the report briefly and as usual there is a chance to ask questions at the end.

J.M. has started the year with an increased number of sold homes and an increased number of production starts. This despite the fact that there has been a geopolitical uncertainty during the quarter that has had a dampening effect on the housing market. This geopolitical uncertainty has increased during April and it is difficult today to predict exactly what consequences this will have for the housing market. What we see, however, is that uncertainty may lead to customers and investors being a little more careful in their decisions. This may tend to have a dampening effect on the recovery in the housing market that we are currently in. This, together with the fact that we also have a generally higher cost level, means that the industry and J&M will have to live with somewhat pressured margins for a longer period. At the same time, we see that the underlying factors are still good. We have a housing deficit on all of our markets. We have real wage increases this year. We see that the interest rate is slightly lower. And hopefully we will also get eased amortization rules in Sweden this year. In addition, continued price increases are forecast. So all in all, it speaks for a good market in the long run. We at JM follow the market development closely and we constantly monitor that we have a balance in sales and production starts to successfully reach our target of 3800 production starts per year. We hope and believe that the market will recover, but we do not trust that it will happen. Our focus and our work focuses on what we can influence. And what we can influence is that we have a great customer service, while we improve our efficiency and lower our costs. For example, we see that our intensified work to shorten our lead times in recent years has led to that all of our projects today have 20-30% shorter lead times than what we had a few years ago. This leads to lower financing costs, it leads to lower costs and it also leads to that customers get the opportunity to move closer to the time they sign the contract. So even if today feels uncertain in the world around us, I look forward to the future. Therefore, I would like to move on to the report. As I mentioned, we have increased the number of sold homes by 70 compared to the previous year. And we have significantly increased the number of production starts compared to the previous year. Over 400 more production starts this year. Despite this, we have a lower number of homes in ongoing production. There are 4,511 homes in ongoing production now. Our work to reduce the cost is now fully completed. So today we have 1,860 employees at JM. We see that the revenues have decreased due to the fact that we have a lower number of homes in production. The result also decreased somewhat in the quarter compared to the previous year, mainly due to lower results in JM Norway. In Norway, in the previous year's quarter 1, we had a sale in Gessheim that contributed positively to the result. Apart from that sale, we have a better result this year. The happy result is that the result in Stockholm has increased significantly this year compared to the previous year. We also see that the cash flow is improved compared to 2023, mainly thanks to the fact that we have a lower amount of moving capital in our upcoming projects. This is partly counteracted by purchased apartments in the balance account. The housing prices on the second-hand market in Sweden have been stable, or weakly increasing on some markets. In Norway, prices have increased more, or quite clearly during the first quarter, while in Finland we have had a weak, or rather a weakly decreasing price development. As I said, sales have been better, and it is mainly Norway and Stockholm that contribute to increased sales. And production has increased significantly as you can see, both compared to 2024 but also compared to 2023. We have fewer homes in ongoing production, and this is due to the fact that we end projects with more projects with more homes than what we have started, even though we increase the number of startups. Hopefully, in the long run, this will start to go up again. And we have a decreasing percentage booked and sold in ongoing production. So it is now at 0.56, just below our normal threshold of 60 to 65 percent. Here is our gold, I was about to say. It is our building rights portfolio with 37,100 building rights in attractive conditions. We continue to look at potential acquisitions and during the first quarter we are for example happy that we have bought 450 building rights in Espoo in Finland. Therefore, I was going to hand it over to you, Tobias.

Thank you very much, Mikael. Yes, as Mikael said, we have a strong grain portfolio. Right now, we have 7.6 billion in the balance sheet, corresponding to 21,600 grain. We have an increasing number of starts, which means that the turnover time has dropped to eight now, and we are on our way to our target value in five to six years. We have actually reduced the number of fully furnished housing in total from 750 per year to 692 per quarter. But the number that came into the balance sheet has increased. Now it is close to 1.3 billion in value in the balance sheet. It is a high value for JM, but perhaps not so strange since we had a large number of fully furnished housing in total during the year shift, which now gradually has come into the balance sheet. But we still see that we have a good sale of our warehouse, and that we convert it continuously. And as long as we do that, we see no need to make any further price reductions. But that we still have 692 houses that are finished, makes this balance can increase further to Q2. But as I said, as long as we sell from the warehouse, we see no need for more price reductions. The cash flow was negative for the quarter, but greatly improved compared to previous years. This is due to the fact that we have been careful with land acquisitions, but also that we have had a good project balance in our projects, and we have had an advantage that has been regulated for project K1 during the quarter. What contributes negatively is the increased number of repurchased homes in the balance account. But even though we have a negative cash flow, we still have good liquidity, and available liquidity amounts go up to almost 3 billion. Unusual Czech credits are on the same level as previous years, and the credit statements, which we have in a good portfolio, last for more than two years. The solidity is still very strong. If we then go into the various parts of our successive profit calculations, we have an increased sales effect in the quarter compared to Q4. It goes from 37 to 54 million, and that is thanks to the fact that we have increased sales compared to the upgrade. The cost-based effect is lower than the previous year, and the cost-based effect is the upgrade we have in the quarter times the forecast we had in the quarter's entry. and it is lower because we have fewer homes in production. The impact of overvaluation is greater than last year, mainly because we have lower price adjustments. And as I said, the sales effect is positive. And if we then delve into the evaluation effect itself, you can clearly see the effects of price adjustments, where we had a strong minus in Stockholm last year, which we do not see now. We have stable project forecasts in Riks, which has meant that we can release a little more results in projects there. And we also clearly see the effects of the sale of Yesheim in Norway last year, which gave a strong positive effect last year. And thus we have a more positive evaluation effect this quarter compared to a year ago. And with that, we'll be back to you, Mikael.

Thank you, Tobias. In Stockholm, we see that the willingness to sign contracts in the early stages has gradually increased. We have an increased sales this year compared to previous years. We have also managed to start a project in Högtöver Bällstaviken in Solna, a fantastically nice location. It's fun that we do it during the quarter. The result in Stockholm is now positive, mainly due to lower price adjustments in ongoing production and also due to increased sales. We also see that the drop in operating capital is better than last year. In the Riks, the housing market is somewhat more conservative, and the willingness to sign contracts is below the normal level, except for some markets and projects. We have a somewhat lower sales than the previous year, but we have still been able to start production more because we see that we have a great interest in more of our new projects, which is exciting. And one of the projects that we have started during the quarter is Silveraxet, which is located in the Eriksberg area in Gothenburg. And it is located near Gothenburg's new fine landmarks. And everyone knows that the finest landmark that has been built in the last few years in Gothenburg is developed by JM and it is called Kronjuvelen. So we are happy to be able to start more homes near Kronjuvelen. We see at Riks that the result, margin and reduction in operating capital is in parity with previous years. On the Norwegian market, sales and the start of newly-produced apartments are at a very low level. You can also see that in the next two years, very few newly-produced apartments will be completed in Norway. But despite that, you can see that prices on the second-hand market have increased during the first quarter. We at JM have managed to both sell significantly more and start more projects or housing than last year. Among other things, 83 homes in Langhusgård. Result and margin is lower than last year due to the fact that last year we did the sale in Gessheim, pre-developed land. The drop in operating capital is also somewhat lower, but if we adjust for that sales in previous years, we are in line with previous years when it comes to the drop in operating capital. In Finland, the activity on the housing market increased in line with two more rent reductions from the ECB. On the other hand, there is a low consumer confidence in Finland, which limits customers' willingness to sign contracts and buy. The prices also dropped somewhat in Finland during the first quarter. We increased the start-ups compared to previous years, but had a lower sales. Previous years, we sold projects to investors, which we haven't done in quarter one. We have a lower income level in Finland and a lower margin due to low employment in the project, as well as the lower sales that we have now. But the drop in operating capital in Finland is in line with previous years. And we are happy that we have been able to acquire good and attractive land. About 500 buildings in Helsinki and Espoo. The transaction market is very demanding in Sweden. There have been few transactions of housing during the first quarter. Our income and our results have fallen due to declining production in property development. We have had a decline in two commercial projects. Partly in the commercial office that we have built in Karlberg for the Fortification Agency, which was cancelled in the first quarter, and also a care and care home in Värmdö. The rejection of operating capital, however, increased. And now we have two ongoing projects, one of which is in its own balance. Sustainability has always been central to JM, and we are happy to note that we have lowered our carbon dioxide emissions by 17% in recent years. This is better than what our offensive objectives are. We have objectives to successfully work towards close to zero carbon dioxide emissions by 2030. We also see in the first quarter that all projects that we have completed in our own direction, all projects in our own direction that have been completed in the quarter are swan marked. So that's exciting. And in the quarter we have also initiated cooperation with Semvision, which has an alternative to cement with 95% lower carbon dioxide emissions. And tests with this product will start during the year. So keep working hard to achieve your goals in the long run. Our main focus at JM has always been our customers. And we are very happy that even in 2025 we found out that we were in the top three in the satisfied customer measurement that is carried out on all projects in principle in the industry. We are even more proud that we won in Norway and had the best satisfied customer index in Norway. Plus, when you measure during the guarantee period when customers have lived in the housing sector for a while, then we also have the most satisfied customers in the industry. It is a credit to our work with quality housing and areas that customers can enjoy, that it bears fruit. So it's very good. The continuing delay in the housing market and the high cost level will affect profitability both for the industry and JM for a longer time. But JM has 37,100 building rights in attractive conditions. We have competent staff and really good structural capital. We have competitive production costs and a well-weighted risk profile. All this together gives us good long-term conditions to continue to start more projects and to get closer to the 3,800 start-ups per year. All this work aims at JM continuing to develop nice, attractive projects and societies for a long time, as I have done for 80 years. Because that's how it is. On April 6, JM had its birthday. That was 80 years ago when John Mattsson started what is today JM. It has been 80 years of building and developing society, 80 years of impacting people's lives, and hopefully 80 years of improving society and improving people's lives. Jag och alla medarbetare på JM, vi gör allt för att JM ska fortsätta leva och frodas i minst 80 år till. Avslutningsvis tänkte vi visa en kort film. Därefter är jag och Tobias redo för att svara på frågor.

We are convinced that where people are happy and feel good, is where society develops. Since the start of 1945, we have worked to create attractive living environments. And that is an ambition that is still at the center of everything we do. For 80 years, JM has shaped society in the north. With city parts, Iconic landmarks. And housing environments for the future. Our projects start with a piece of land that we inherit. And decades of experience help us make wise choices. Not for our own sake, but for the people who will live and work there. Because we know that where we live affects our quality of life. JM's leading market position, our strong structural capital and the fact that we own the entire value chain gives us a number of advantages, but at the same time a great responsibility. We take a responsibility for reduced production costs and shorter lead times, while at the same time we are leading in sustainability issues and reduce our climate-affecting emissions to close to zero by 2030. Our employees' knowledge and ability to think and do new things gives us good conditions to be market leaders in the north for at least 80 more years. We continue to lay the foundation for a better life. Today, tomorrow and for future generations. That is what we call 80 years of future building.

Visst var det en fin film. Det värmer hjärtat för mig när jag såg den. Jag hoppas det gör det för er också. Därmed är vi redo för att svara på frågor.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. And the first question comes from Kivan Shivanpour from SEB. Please go ahead.

Good morning and thank you for the presentation. I might start with a question about Stockholm. You mention here in the quarter The results of the movement have been strengthened due to negative price adjustments, but at the same time the margin is 0.1%. Could you explain what is the reason that the margin is so low, even though the price reductions have decreased?

The projects that exist in Stockholm, those that are about to end or are in production, have in some cases had price adjustments earlier. And the projects that have started the past year have started with slightly lower margins. And there is our result presentation model so that we are very careful in the result presentation early. in the project, and the result effect often comes later in the project due to carelessness. But it is positive for us that we have significantly lower price adjustments, of course, during quarter one. And we also have an increase in sales in general, which is good.

Men om man liksom ska försöka få ut någon typ av trend för kommande kvartal ska man kanske anta då att den här marginalen kommer vara in de här nivåerna med tanke på att resultatbidraget är så lågt från nya projekt och sen har ni en del som är färdigställt där marginalen är lägre helt enkelt.

Vi räknar med att marginalerna i Stockholm successivt kommer att förbättras, förutsatt att marknaden är med oss. Vi har haft lägre prisjusteringar, vi har en bättre försäljning, och marginalerna är en bit över noll procent. Så vi räknar med förbättrade marginaler, förutsatt en bättre marknad framöver.

Eftersom vi frågar om inventariebalansen, som är ner en del, om man tänker färdigställda rakt av. How does it look with the finishes in the coming quarter? I think that Q4 and Q1 are seasonally many finishes, but then we take them off during the year. Is there any kind of indication?

We have finishes that come in also in the second quarter, but we still believe that we will be able to work down this balance during the year, given that the market is still with us, of course.

Okay. I also have a question about the fascist development. I think the results from Carl Berg were quite impressive. If we think about the Ebit 80 million that was in the quarter, what is related to the K1 and what is related to Flora, the other project that you have?

A large part of the 80 million is related to the K1.

And then I have one last question, and that is on Finansnettet. The financial costs were up from 26 to 47 million compared to last quarter. What drives this increase?

We have an increased net and loan debt that drives the costs.

So the level in Q1 is more representative than in Q4?

You have to look at the rolling 12 to get a better representative picture. The trend on the rolling 12 in individual quarters is difficult to see.

Thank you for the questions.

The next question comes from Stefan Andersson from Danske Bank. Please go ahead.

Thank you very much. I'm sorry, the introduction was in English. A few questions from me. First of all, following up on Carl Berg. Are we completely clear with Carl Berg's calculation now?

Carlberg has been calculated and completed now, so what can come from Carlberg is smaller amounts in the future, in the form of, yes, we go over a guarantee scheme, you could say, in Carlberg.

Yes, so it's very small money, so that's good. And then I'm thinking a little bit about, I think you answered on the finance network, I agree with that, I know that you say that it's, It's about the same level as last year's Q1, and the debt is the same, and the interest rate is down a bit. I think the interest rate should have... Actually, the financial costs should have gone down a bit, but I don't think it says anything more than that we should look at 12 months instead of individual quarters.

Yes, I can't go into more detail. I'll let it go.

The tax is still quite high, and it's that we haven't had the opportunity to withdraw. We could possibly just be able to... I'm sure it's a complicated thing to answer, but I'm trying to understand why I continue to be on such a high level and what it is that should normalize it.

No, it's the high costs that make the tax rate increase. As you said, it's a complicated equation to go into. That's what's behind it. To get this down, we have to increase the volumes and get a bigger turnover. With bigger volumes, the tax rate will normalize.

That's perfect. Thank you. My last question is... Stockholm is a strong market. It's hard to build there, but it's a strong market. You mentioned it yourself. There weren't many startups in Stockholm. How do you see the market for the rest of the year? It's a good market. Do you have things in the pipeline plan-wise, that would be possible to start? Or is it part of the tight sector, since you say that the market there is good?

We expect to continue to start more projects over the rest of the year, provided that the market is with us. And then you can say, do we have detailed plans? Yes, we have detailed plans to start significantly more homes over the year. But even the detailed planning in general is limiting for us at JM. If the market is with us, we want to start significantly more. And then there are some cases of projects that are in the planning phase that we hope will go quickly forward.

And the comment you just made, was it Stockholm specifically, or was it a general comment?

The answer is mainly Stockholm, but it's actually a general question with the detailed planning in the whole of Sweden, and also Norway, you could say.

Great, thank you for everything.

And the next question comes from Fredrik Stensved from ABG Sundar Kulje. Please go ahead.

Thank you very much. Good afternoon. I was going to start with a follow-up question on unsold apartments. It came down as familiar, but at the same time the unsold apartments are going up in the balance from Q4. Can you remind us first of how long it will take before this goes into the balance sheet? And then you were saying that in Q2 it is much more difficult, but I hope that the number goes down in Q2. Does that also apply to apartments in the balance sheet? Or is it just the number that you think goes down in Q2?

The first question, when we have completed a project, we have to, after a few months, buy it back to the balance sheet. So it's about three months of lag in between, from the fact that we have completed it and noted it as completed unsold, so that it comes into the balance sheet. Plus minus for a month. And since we had 750 homes in the balance sheet at the end of the year, and we see that we are selling from this warehouse, then we don't want to lower prices so that we don't lose too much in results. And that means that all 750 have not been able to sell during the first quarter, and then more will be included in the balance calculation, which is a natural consequence. And since we are still at 692 at the start of Q1, we may not be able to calculate that all 692 will be able to be sold in three months, because then we have probably had too low a price picture. So some of them will be included in the balance calculation. We have more finishes, but we hope to sell more than what we finish. And sales are largely... Since we have a different buying behavior, sales are largely done on projects that are close to completion or right after completion. that we do not want to lower the prices any more, but we see that we will gradually sell from this warehouse, so that in the long term we will lower the balance. But as I said, what was previously unsold at the time of the year shift has now entered the balance in Q1. What is at the beginning of Q1 will enter the balance in the end of Q2, most likely. But as long as we see that we are reversing it, we will maintain the price levels and we will be able to lower the balance over time.

Thank you very much. And then a question related to this. What are you comfortable with? What do you think? are the most important factors or the most important keys for us to continue to be comfortable with net debt or to be prepared to lower prices or do other actions for net debt.

For us it is mainly a matter of liquidity. As long as we see that we have good liquidity, you have to remember that more than half of the pension debt is pension debt and the rest of the debt is related to land. So as long as we have a good liquidity and a lot of available loans, we will not be particularly worried about net loan debt. It is important that we get the turnover started, get new projects started, because then the cash flow will come and then the net loan debt will be able to be worked down. So it is important for us that the market helps us to get started with more projects and get the cash flow in the project started. That is important for us.

Jättebra, tack. Sen har jag en fråga också på, ni nämner i vd-ordet att en osäker geopolitisk omvärld riskerar att fördröja återhämtningen. Det låter rimligt. Har ni sett några konkreta datapunkter på detta nu under de veckorna eller under april månad här när kanske Omvärlden har varit mer osäker än vad den var innan. Är det färre påvisningarna eller diskussioner eller går det att kvantifiera det här på något sätt?

We see that the increased uncertainty during April has made the customers a little more vigilant in making decisions about entering bookings. But the customers still show a great interest in our projects, but there may be a caution there. Then we have no official quantification figures on that, but there is a certain caution out there. And then we have to see how it is shaped, because it is also partly new messages and new Yes, decisions around the world, daily, that can affect that.

It's a bit too short a time horizon to set only during the month of April. It's hard to know how much is Easter and how much is Donald Trump.

Yes, it's incredibly difficult, Enig. Last question. Earlier, we talked about the margins in Stockholm. You say that you expect it to increase forward. I think it applies to all business areas, even if Stockholm has the lowest margin in the quarter. At the same time, you say that the high cost level will weigh the margins throughout the year. and so on, you have mentioned that earlier as well. This successive improvement in the future, is it in the year, or is it far away?

We assess that we have a successive improvement of the margins and results in Stockholm already during this year. There are many environmental factors that affect it at the moment, but that is our assessment when it comes to Stockholm. In some of the other business areas, we have had a slightly higher margin during the past year. So it is in Stockholm that the major increase in margin is expected to come in the near future.

Ladies and gentlemen, as a reminder, anyone who wishes to ask a question may press star and one on your telephone. And the next question comes from Jan Eerfeldt from Keppner Sjöfröde. Please go ahead.

Okay, thanks. A lot of questions here. Yes, now I'm taking it in English, sorry. Now I'm taking it in Swedish. We've had a question and answer session here, so we have two completions. I was just going to clarify that when it comes to pre-sold unsold, these 692, if I understand correctly, I think you hinted that it will be at a relatively high level even in Q2 due to high completion. Is that a correct understanding of your statement there?

What we can say is that since there are 1692 unsold, that all of them may not sell. So we will probably have more in the balance sheet than at Q2. Then the sales will determine how much we will have in total. But it is not impossible that the balance sheet will be increased to Q2.

And then, just because of this financial problem on the market, can it be that it stops you from starting in Q2 here, and that you would rather go out to start in Q3?

It's almost too early to speculate. We have a plan to start a project in the future, and we have a plan and a belief that we will sell well. If we don't do that, then we will be forced to be more careful in starting in the future. Then if it happens in Q2 or Q3, or not at all, we'll see. But our hope is to continue to be able to start.

And then the last question, what is the margin in Stockholm that you calculated? It's around zero now, the result, 0% growth margin. When you look at increasing margins, is it up towards mid-single-digit towards the end of the year, which can be a reasonable estimate, or what? What do you see?

Ladies and gentlemen.

There are no more questions at this time and I would now like to turn the conference back over to Mikael for any closing remarks.