JM AB (publ)

Good morning and welcome to the presentation of JM's quarterly report for the second quarter of 2025. I will start with a brief summary of the quarter. The second quarter has been marked by the increased geopolitical uncertainty that we see in the world. So it has been a watchful housing market. The sweltering stock markets, together with the concern about what the tariffs will mean and the conflicts around them in the world, make that housing buyers and investors are a little more cautious. So this has affected our sales pace at JM and also the opportunity to start new projects. We see some signs that the market is starting to recover, but it is difficult to say how far it will go until it comes back. But I note that the recovery in the housing market, which began in 2024, is decreasing. At the same time, we see that the underlying market conditions have improved during the quarter. We still have a large housing deficit in all of our markets, but we have also now had real wage increases among our customers or residents in the countries. We see that we have tax easing in Sweden. The interest rates have now been lowered in all of our three countries during the second quarter, where even Norway chose to make the first interest rates. We also see that in Norway and Sweden, it is possible to expect simplified amortization rules in the future. All of this together makes the forecasts for price development in the future look positive, both for a good market in the long term. So in this segment, it is extremely important that we work seriously and professionally with our sales, which we always do at JM. And we are happy to note that we are reducing the number of unsold homes since the end of the year, after the end of the year. At the same time, the number of unsold homes that are finished, that are coming into balance, is increasing. But we are happy that we have a change in the number of homes that have been completed. And during the second half of the year we will complete fewer projects. So we feel safe that we will continue to reduce the number of homes in our warehouse. We at JM don't just rely on the market coming back, we work with what we can influence. And what we can influence is to have a really good customer service, and also to work systematically and engaged with efficiencies. And we can happily see that our work with efficiency results, both in the form of strongly shortened lead times, but also in the form of real cost reductions. This gives us increased competitiveness, and it contributes to the fact that we can start more projects with slightly better margins. This, together with the long, weak housing market, also makes it possible to do acquisitions when good acquisitions emerge. And the joy in this quarter is that we have made several good capital-efficient acquisitions, including in Stockholm, Uppsala and Helsingfors during the quarter, where we have payment close to the target and in many cases aim to start production projects already in 2026. So the increased competitiveness makes us aim to, after we get a greater available liquidity, to actually make more profitable land acquisitions. All in all, I feel cautious about the future, even though there is geopolitical uncertainty around the world at the moment. I will now read the report. Under the quarter, we had fewer sold homes compared to the corresponding quarter last year. We also had a somewhat lower production start than last year. We will return to that. And the homes in ongoing production are lower than last year. But we see that the homes in ongoing production are at the same level as they were at the end of quarter one. Income decreased due to the fact that we have fewer homes in ongoing production compared to previous years. And the result decreased compared to previous years, mainly due to JIN's real estate development, which produces a weaker result this year, when previous years had a very good result from the K1 Karlbergs strand project. Kassaflödet är också lägre i år än motsvarande kvartal föregående år och där är det främst på grund av att vi i år inte har sålt några färdigställda projektfastigheter och dessutom att vi har reglerat vissa förvärvade exploateringsfastigheter under kvartalet i år. Prices on the second-hand market in Sweden have been stable or even marginally increasing during the first half of the year. In Norway, we see that prices have increased significantly in the first half of the year, but have plummeted somewhat during quarter two. In Finland, housing price development has planned out during quarter two, but is lower than previous year. If we look at our sales, it is lower than the previous year, but at the same time better than 2023. We have lower sales in Stockholm, but the big explanation for the lower sales is that we have fewer sales to investors. Under quarter two this year, we sold 479 fewer homes to investors than the corresponding quarter last year. But it is good news that a few days after the quarter, we sold a housing rights project in Järfälla for 205 homes, which was very positive. Looking at the entire first half of the year, we also see that sales are somewhat lower this year due to fewer sold to investors, but at the same time also better than sales during 2023. If we go over to production starts, we have a little less production starts this year than in the previous quarter, but at the same time we have more starts than in 2023. The joy this year is that Riks has greatly increased the starts, not least by starting three fantastic projects in Lund, where we have received a lot of interest from the market. And if we look at the first half of the year in total, we have significantly increased production starts this year compared to previous years, which is also positive. We have fewer properties in ongoing production, as I said. We have fewer properties in ongoing production, but we have parity with what we had in quarter one. Our rate of bookings and bookings and sold, the number of bookings and sold in ongoing production is 51% at the end of the quarter. But if you add up the sold rental project that was sold on Friday a week ago, we are now 55% booked and sold in our production, which is in parallel with what we went out with in quarter one this year. We are still very happy with our attractive building rights portfolio, and it has become even more attractive and better furnished during quarter two, since we have managed to make some really good acquisitions, including an acquisition in central parts of Uppsala, which we aim to start at the end of 2026. Two nice acquisitions in Stockholm, the Stockholm Centre, which also aims to start in late 2026, and an acquisition in Helsingfors. All of these with payment close to access, which is capital-efficient. We also see that our risk level in the building rights portfolio has actually decreased this quarter, because we have a larger share of housing with a low-power detail plan when we leave this quarter. than what we had before. So it feels like a really good building portfolio for the future. With that, I'm going to hand it over to you, Tobias. Thank you, Mikael.

As Mikael said, we have a strong building portfolio, and that has meant that we have also been able to be careful with new land acquisitions lately. And since the start-ups have actually increased, the balance of our operating assets has decreased compared to previous years. The growth time was stable this quarter, but it has decreased compared to a year ago. As we can continue to start new projects, we will soon be close to our target value in five to six years. We decreased the number of unsold homes in completed production, after the final inspection. We have gone down from 750 in the beginning of the year to a little over 600 now. But since we had so many homes completed at the beginning of the year, more and more have entered the warehouse. We see that even in this quarter, we have had a reduction in our storage facilities, but perhaps not in the same high pace as in the first quarter, and the balance in the balance calculation has increased. But we also see, as Mikael said, that we only have a few projects that are finished in the second half of the year, so we feel comfortable with the balance gradually decreasing over the rest of the year. That we had fewer production starts had a negative effect on our cash flow in the quarter, and also that we in this quarter last year received a higher payment for a property project called Dyverskulle. I also see that we have made payments for land in Q2 this year, and the increased number of unsold properties has had a negative effect on the rest of the capital. The financing activity was in a very negative progress because we amortized on our RCFs. Even though we had a negative cash flow, we still have good liquidity. It is still close to 3 billion. And we saw that we had somewhat increased net loan debt in the quarter, especially in Norway and Finland. Our credit statements have still We have a good balance and we have an average term of more than two years. We also have no declines in our credit statements until the end of 2026. As you can see, the solidity is still very good. It has gone over 50%. If we then look at our various components in the successive profit calculation, we clearly see the effects of having fewer homes in ongoing production. So the processing, i.e. the cost-based effect on our results, was much lower than in previous years. The joy of this quarter is that we have a positive effect of revaluation. This is due to the fact that we didn't have to make any new price adjustments- and that we were able to increase some project forecasts. What holds the result back in the second quarter is the lower sales. As you can see, we have a negative sales effect. That is, we have sold less than we have processed, even though the processing was quite low. So we get a negative sales effect. But if we go further and look at the effect of revaluation, we see that all of our businesses have had a positive development in this quarter. And perhaps above all, in Stockholm and Riks, we have had many projects where we have been able to increase our forecasts. And this will also lead to the fact that when the sales start, the result will recover faster. And with that positive message, I would like to return it to you, Mikael. Thank you, Tobias.

If we go over to Stockholm and the various business units here. In Stockholm, we see that there has been a large supply of new products in the second-hand market, but at the same time a very low supply of new products. This increased geopolitical uncertainty has dampened customers' ability and willingness to sign contracts early in the project. And a difference compared to earlier is that when we have previously sold more in attractive projects, we now see that we sell a little less housing in several different types of projects during this quarter. So we are preparing lower sales in the quarter, we are preparing fewer production starts in Stockholm and lower revenues. But at the same time, the result is in line with the previous year. The result includes a one-time compensation in this quarter for a court hearing that gives 44 million kronor. The court hearing concerns quality shortcomings in the package floor, where we previously have lowered costs for this and now get back 44 million kronor, which is positive for us. The withdrawal of operating capital has improved and we have started 117 homes in Nacka and Täby during the quarter. And as I said, I am happy that we have found two really good acquisitions in Stockholm. One in Midsommarkransen and one in Hägersten. A total of 200 homes, where we aim to start at the end of next year. And the project in Hägersten will be a project of about 24 floors high, where many apartments have a broad view of Mälaren. So it will be a very, very nice project. If we go over to Riks, we can also see that the second-hand market has grown. This has made sales times longer within Riks. Price development and demand vary depending on what market we are in at Riks. But in general, customers are also more eager to sign contracts in the early stages. We have a slightly lower sales than the previous year, but we started at the same time more homes, since we see that we have a very large interest in several of our newly released projects. And one example is these three projects in Lund, where we have three different offers that we can start on the same market. So it shows how important it is to work with good offers and sometimes different offers to be able to start more homes and attract more customers. Partly it is an ownership project in Brunnshög on the outskirts of Lund. And then there is the first housing rights association in Västerbro, which is a larger project right central to Lund. and not least the senior garden project Lilla Tvärgatan in a completely unique central part of Lund. It is 44 apartments that we started there and all apartments in the first sales stage are already booked before the start of production. The result and the margin in the Riks is slightly higher than the previous year and the cost of operating capital is also higher than the previous year. If we go over to Norway, we see that we are surprised, but positively received the first interest rate drop from Norway's bank. The forecast is that there will be more interest rates during the year. We see that the prices on the second-hand market have planned out something in the second quarter. And sales and starts on the Norwegian market are at a very low level. JM's sales in the quarter was lower than the corresponding quarter last year, but if you look at the first half of the year, we actually sell more. The result in the quarter is in level with previous years and the margin is slightly higher. We have not made any acquisitions in Norway during this quarter, nor any production launches, but that is more of a question of timing. If you look at the production launches, we have actually started production more if you look at the entire first half year compared to previous years in Norway. The activity on the housing market in the Helsinki-Fors region continues to increase somewhat in the second quarter. We see that prices are on a lower level than last year, but price development has planned out. The demand is also still low, but given that we increased the number of sales to consumers this year compared to last year, However, sales to consumers are still at a low level, even for JM. Here in Finland, we have been successful in balancing the somewhat weaker sales to consumers with making good sales to investors. This quarter, we are happy that we sold another project, a project in the GVS area in Helsinki. We continue to be successful in selling projects to investors and at the same time we see a weak improvement in the consumer market. Vi har en något lägre försäljning än föregående år och inga produktionsstarter i det här kvartalet. Intäkter, resultat och marginal är dock i linje med föregående år och vi har, som jag sa tidigare, förvärvat ett projekt ytterligare i Helsingfors, cirka 160 byggrätter. Så det känns positivt att vi kan fortsätta och hitta bra, attraktiva förvärv även i Finland. During quarter two, the number of transactions on the housing market increased within the housing segment in Sweden. However, we still see that we have high requirements for direct issuance in the transactions that are made. J&M's revenue and results fell somewhat due to the fact that we have a lower production volume. The margin, on the other hand, improved due to the fact that we resolved cost reserves in the final project. Under kvartalet så färdigställde vi och överlämnade hyresrättsprojektet Flora till köparen. Vi startade glädjande nog ett nytt hyresrättsprojekt i Vässjön i Sollentuna. Det är 165 bostäder som vi kommer att genomföra i egen balans. And right after the end of the quarter, we sold the rental rights project Bovetet in Gärfälla, which will be continuously covered in revenue and results. So when we stand here today and present, we have one project in ongoing production in its own balance. Sustainability is always central to IAM. Our work to reduce carbon dioxide emissions is going unnoticed. During this quarter, we have started pilot studies with 40 percent climate-improved concrete. It is very interesting to continue to reduce emissions from concrete. We are also proud that for the fifth year in a row, we have been assigned to one of Europe's climate-leading companies, Financial Times. This is due to the fact that we have managed to reduce our real climate emissions. In our case, we have reduced climate emissions by 33% from our business between 2018 and 2023. The key to sustainability is also to have safe jobs and always have a good working environment. During this quarter, I am a little extra happy that we have not had a single serious job failure. So this work is also fast approaching with having really safe jobs and a good working environment in all our operations. JM's main focus has been and is, as always, that we should have really satisfied customers. And we see that we are constantly at the top in satisfied customer measurements, which is extremely positive. We also see that our work with reducing warranty marks and really having a quality product that lasts over time bears fruit. So that is positive for us. De 36 800 byggrätterna i byggrättsportföljen tillsammans med våra kompetenta medarbetare, våra konkurrenskraftiga produktionskostnader, vår väl avvägda riskprofil, det gör att vi har goda långsiktiga förutsättningar för att fortsätta utveckla lönsamma och hållbara projekt. And even if we see that the ongoing housing market affects the industry and JM, JM is well positioned to deliver attractive and sustainable societies for at least another 80 years. Because that's how it is. We are celebrating this year, as we said in the previous report. Vi har under 80 år av samhällsbyggnande skaffat oss positionen som Nordens ledande bostadsutvecklare. Och det ska vi fortsätta att vara. Så jag ser fram emot den här fortsatta resan med JM. Tack för att ni har lyssnat. Och därmed tänkte jag att vi lämnar över till frågor till mig och Tobias.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 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, may press star and 2. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star 1 at this time. The first question comes from Fredrik Stensvedt for ABG. Please go ahead.

Thank you very much.

I hope you can hear me well.

Great. I'd like to start with two questions on sold units. First, is there a big difference during this quarter? I mean, you couldn't sell anything in April when it was messy on... on the market and high uncertainty, and that it will get better in May or June, or is it just generally a warning from the consumer, as you indicated in your presentation during the whole quarter? That was the first question.

There was somewhat weaker sales in the beginning of the quarter, and there has been some strengthening at the end. But in general, it is a relatively warning sales during the quarter.

Very good.

And then I wonder if there is any difference in, if we now confirm that it is a bit delaying, is there any big or material difference that is worth taking into account when in the process it is delaying or worse? Is it before the project starts? Or is it during the project's time? Or is it three months before completion?

If you simplify the picture, we sell relatively well before the start of the project and when the project is nearing its end. So a little lower sales in the early stages during production, you could say, compared to how it was before the weaker housing market started.

Okay, very good. Then I have two questions on the BOW. It starts to be counted in Q3, but you already started it for, if I'm not mistaken, Q4 last year. How much of the total points will be worked up here at Q3? I think it will be a little initial kick, or whatever you call it.

It's not that much that's going to be worked on so far. But like with all our projects, we have a gradual improvement. But in this project, we haven't worked that much yet.

I don't want to give an exact number, but... Okay, and the other question about the same project. You wrote in the press release that you are selling this for 692 million SEK with a discount for the latent tax on 5 million SEK. If I take into account where the market is on latent tax, a 25% discount is quite common. 5 million SEK indicates in some way that your project cost It's about 100 million less than these 692, and it makes a project margin of 16%. Comments? No, we can't comment on that, unfortunately. Do you want to say what you're aiming for for project marginals in the mortgage rights project in Stockholm today?

I can't give you an exact figure, but in a market like this, the marginals are under pressure, also on the rental project. There are high casting requirements.

Okay, and then one last question about the marginals. Stockholm, in the previous quarter report, or rather the presentation and question time that followed, you mentioned that the margin in Stockholm would gradually improve during this year. Now we have one more quarter, it's about the same margin in Q2-Q1 as Q1. Is there anything that changes this picture, or do you still believe in a gradual recovery during 2025?

Vår bedömning är fortsatt en gradvis återhämtning under 2025. Som sagt, det här kvartalet var något osäkrare och mer avvaktande bostadsmarknad än vad vi hoppades och trodde vid inledningen av det här året. Men bedömningen med de underliggande marknadsförutsättningar som finns och det intresse vi ser är att det successivt ska bättras över tid.

Okej, det var allt för mig. Tack.

As a reminder, if you wish to ask a question, please press star, followed by one. The next question comes from Kivan Srivampur from SEB. Please go ahead.

Good morning. I could start with a follow-up question on the Stockholm margin. As you mentioned, it was a one-time replacement, 44 million in the quarter. So I get the adjusted margin to minus 6%. So that means that the margin is significantly lower than in Q1. and the turnover is probably marginally lower. Could you comment on what drives this weakness in the marginals and also when you talk about the marginals successively improving and maybe you can give some kind of indication of what degree it will happen in the coming quarter?

To begin with, the margin in Stockholm is driven by the fact that we have sold too few homes and sold too few homes that give results. This affects the margin during quarter two. But our assessment is that the market is there and that we will sell more homes in the future. Plus, we see that the projects we have started in Stockholm lately and at the end of last year will positively contribute to our margin once the market recovers. So we feel comfortable that it will get better, but of course it became a little lower and a little below what we hoped for during quarter two.

But should you expect a weak positive Q3-Q4 margin, given that the adjusted margin is clearly negative?

It depends a lot on the sales. We need to raise the sales in Stockholm to raise the margins. When we look at the effect of revaluations, we've had positive prognosis changes in Stockholm in this quarter. And if we get the sales going, the margins will come back. So it's a question of volume.

Yes, and also...

Just to add to that, here we see that we have a very good control over our business at the moment, which contributes to the prognosis changes being positive, while the sales are a bit neglected during the quarter. And our work with efficiency, cost reductions, short lead times really gives effect. So this will certainly contribute positively when the sales rattle on a little better in the future.

That sounds good. I also have a question here on property development. If we could break down in Q2 what has happened to what when it comes to the movement and the result? For example, how big is what has happened to Carlberg in Q2?

Carlberg had a big positive effect in this quarter, but it is not the only positive effect. It is not 100% Carlberg.

Would you be able to say roughly how much Carlberg is and is Carlberg completely finished or will it continue to have an impact in the coming quarter?

No, we can just say that a large part of the result will continue to come from Carlberg. Now Carlberg has finished and left, so we do not expect any major results from there during the rest of the year.

Okay, then also a question when it comes to these law levels. down compared to last quarter, but at the same time, the repurchased units were up quite a bit. And you mention here that you expect to finish quite a few units during the second half of the year. You might be able to ask first and foremost, how have the finishes looked in Q2? Is there some kind of timing effect that makes the repurchased volume increase so much compared to last quarter?

I can't hear you. The fact that we're more balanced is due to the fact that we had almost 700 finished at the start of the quarter. We don't have time to sell all of them, and then they naturally get into the balance calculation. At the same time, we've had quite a few finished projects in this quarter, and we've had a pretty good sales level in that we've been able to sell off from those projects. That has caused the total balance to decrease from 0 to 616. But it's more the timing that makes it more in the balance sheet, since we had such a large number at the beginning of the quarter. So, since we don't get as many or more orders, both the total number will decrease, but we will also be able to sell more from what is in the balance sheet.

Then I have one last question here, and maybe you can say something about what your pipeline looks like for starters during the second half of the year. Given that you believe that the lag levels will go down, do you have any expectations for the second half of the year when it comes to starting new projects?

We basically repeat what we said earlier, that our ambition is to continue to gradually increase the number of production starts. However, this quarter's dampened housing market has caused the recovery to slow down. But provided that we continue to sell in a good way, we have good projects that are ready to be produced at the end of the year. So hopefully we can continue to start projects in perhaps a higher pace. But a lot depends on the market out there.

Okay, then I have a final question, and it's also a question for Bovetet. You say that there is not such a high degree of completion now that came in in Q3, but should one expect that there will be a linear processing of that project in the future? Or how will the profile look at completion?

For any further questions, please press star followed by one on your telephone.

Ladies and gentlemen, there are no further questions.

I would now like to turn the conference back over to JM for any closing remarks.