JM AB (publ)

Hello and welcome to the presentation of JM's quarterly report for Q3 2025. I will start with a summary of the situation. The activity on JM's markets was low in the summer, but at the end of the quarter, during September, we could see a recovery. We saw that the turnover speed on the second-hand market began to increase somewhat. We also saw that we had increased prices on the second-hand market in Stockholm, which was positive. During the quarter, macroeconomic conditions were also strengthened in a positive way. Since we, among other things, had reduced interest rates further in Sweden and Norway, households also received more money in the budget in the form of lower tax pressures. In Sweden, a budget was also presented that stimulates households' economy further forward. This combined with the fact that we have a surplus of housing in all of our markets is positive underlying factors. We also hope that in Sweden we will have simplified amortization rules for the spring, which can further strengthen the macroeconomic conditions for the market. At the same time, we see that there is a record number of properties on the second-hand market in our countries. This creates a sluggishness. In addition, there is a continued geopolitical uncertainty out there, which creates a caution in investing in us, both investors and consumers. This means that the recovery in the market will take time. During the quarter, JM has sold fewer homes and started fewer homes than the previous year. But in the face of the macroeconomic conditions being strengthened during the quarter, and we have seen an increase in sales during September, we sense a beginning market optimism. We have also noticed that we have reduced our storage of unsold housing, both after the final inspection and the housing that we have in our balance sheet, which is positive. If we look forward to quarter four, we will complete fewer projects with unsold housing. So our plan and our prognosis is that we will continue to reduce the storage of unsold housing in the future. We at JM are of course not waiting for the market to recover, but we are working with what we can influence, and that is to constantly have the best customer service, to systematically work with cost reductions and to become more efficient. And we have found that our work with lead times continues to give results. All the production starts that we have started during the quarter also have over 25% shorter lead times compared to a few years ago, which is very good conditions for us. Under the condition that we sell to consumers and investors in quarter four, we plan to start more homes in quarter four. And in total, our plan is to start more homes in 2025 than in 2024. So I feel confident about the future, based on the optimism that we can see at the end of the quarter. Therefore, I turn to the report. The number of sold homes was lower than the previous year, and also the number of production starts is significantly lower than the previous year in this quarter. If we look at ongoing production, we now have 4,341 homes in ongoing production, which is also lower than the previous year. This is due to the fact that we have started fewer homes than we have ended during the quarter. The revenues also decreased and are now at approximately 2.1 billion SEK per quarter. The results also decreased, where Stockholm's results were weaker due to price adjustments during the quarter. But even the other units have a weaker result, or a somewhat weaker result, than the previous year. On the other hand, the cash flow is positive during the quarter. A little lower than the previous year, but it is positive, as I said, and that is due to the fact that we have sold out in a good way. The homes we have in the warehouse that are unsold. But at the same time, we have started fewer homes than the previous year, and therefore the cash flow is somewhat weaker than the previous year. The housing prices on our market are relatively stable this quarter. But if we look at Stockholm, we actually have a weak increase in September, which is positive. Price development in Norway has been somewhat lower this year than we thought and predicted when we entered this year. And the price development in Finland has been relatively stable during the quarter, but we see that the prices are on significantly lower levels than they were a few years ago, around 2022, when we had the top levels in the Helsinki and Tammefors regions. As I said, we have a reduced sales in the quarter. If you look at the breakdown, it is mainly sales towards consumers that are lower this quarter than the corresponding quarter last year. We have sold to investors, including a project in Järfälla, 205 homes in Bovetet, Söderdalen. A very nice project that we are happy to have sold. If we look at the first nine months, sales are also lower than last year. If we go over to production-started housing, we also see that we have fewer production-started housing in the quarter. Stockholm has a little more than the previous year, but in general it is less. However, so far this year, the first nine months, we have started more housing than we did in the previous year and also clearly more than 2023. We have, as I said, fewer homes in ongoing production, marginally fewer than they have been in the last quarter, and we really hope to get that up in the future. A positive signal this quarter is, however, that the proportion of booked and sold in ongoing production goes up compared to the previous quarter at the end of Q2. So now we have 53% booked and sold in our ongoing production. If we look at our building rights portfolio, it still consists of many attractive and good projects. We have not made any major acquisitions during the quarter, but as you remember, we made a number of nice acquisitions during quarter two, including in Stockholm and in central parts of Uppsala. What we are working on now is to optimise the construction portfolio, and that could mean that we sell some projects where we see that we have a long way to go in terms of potential production start, in order to get a lot of capital and be able to invest in projects with a greater chance of production start. During the quarter, we have sold two projects in Nynäshamn and Nacka. And as we sell our unsold homes in the warehouse, we aim for more potential acquisitions here in the future. And with that, I'm going to hand it over to you, Tobias, for a moment.

Thank you very much. Yes, as I said, we have been careful with new acquisitions lately, but we have also managed to make capital-efficient acquisitions, so that we have managed to keep the building rights outside the balance sheet. And now we have over 15,000 building rights off balance. The balance of our operating assets has dropped somewhat compared to previous years, both because we have launched several startups, but also because we have been careful with acquisitions. The run time has increased somewhat compared to Q2, but we see that as soon as we get started in the pace we want, we will quickly be down to our target value of five to six years. And as we said in the Q2 report, we had a few finished homes unsold this quarter, and the number of unsold homes after the end of the year fell. The weak sales during the summer made us lower prices in Stockholm, but it also gave an effect, and we have also reduced the number of unsold homes in the balance sheet. And we have, as I said, a few unsold properties in the fourth quarter and we expect that this balance will gradually decrease. And it was still Stockholm that had the most unsold properties in the balance sheet. The reduced storage also gave a positive cash flow this quarter. It is very important for us to continue to reduce storage to continue to have a good cash flow, while at the same time we want to get our start-ups to continue to improve our cash flow. Compared to previous years, we see that the cash flow is somewhat lower, and that is precisely because we had fewer start-ups in this quarter. The positive cash flow allowed us to turn the negative trend that we had in our net loan debt and the available liquidity increased. We used our RCF at the same level as in Q2, but we did not use our Czech credit in this quarter. And as you can see, the credit agreement has a well-balanced portfolio with a total running time of far over two years. And we have no declines until the end of 2026. And you can also note that the solidity is still very good. If we then go into the various components in the successive profit calculation, you can clearly see the effects of having fewer homes in ongoing production, since the cost-based effect was lower than in previous years. The evaluation effect was positive, thanks to positive prognosis changes in Norway, Finland and Riks, while the price adjustments in Stockholm had a negative effect. The sales effect was positive, partly because we had two starts and a low turnover, which meant that sales exceeded the turnover in the quarter. And if we dig a little deeper into the evaluation effect, then here you can clearly see how the price adjustments are in Stockholm with minus 45 million in the evaluation effect in the individual quarter, while the other business units have had a positive evaluation effect. And back to you, Michael.

Thank you Tobias. If we look at JN Bostad Stockholm, we see that the global uncertainty, even in quarter three, has had a dampening effect on customers' willingness to sign contracts, both in early stages and later in the project. Sales were low in July and August. We chose to include some price adjustments in the project, and that gave effect. and thus we got the sales up at the end of the quarter, along with the fact that the price picture on the second-hand market went up somewhat in Stockholm at the end of the quarter. Despite that, we have a lower sales in the quarter as a whole in Stockholm. And I am not satisfied with the result in Stockholm, which is partly compensated by sales of the property in Nynäshamn. And there is now a disclosure of the business for that reason. However, we started producing more homes, and among other things, we started producing this beautiful first property ownership project in Nacka, called Aqua. It is very close to the shopping center, the upcoming subway, and not least Nyckelviken, which is a very nice natural area. So we are happy to start more projects. If we go over to Bostad Riks, we see that even there, the second-hand market has a large spread, and that makes the sales times unusually long. In general, customers are waiting to sign contracts in the early stages, but it depends a little on which project we have and which market we are in. In quarter two, we saw that we had several fine projects in Lund, where it went very well. The customer interest was large, and it went well to sign a contract. Among other things, the project here in the picture is a plant in Västerbro, near central Lund. In total, we had lower sales and did not start any homes in Riks in the third quarter. However, in Riks, we have started more homes during the first nine months than in previous years, due to the starts we had in the second quarter. Income and results are slightly lower, but the emphasis on operating capital is higher in the business sector. In Norway, we saw that Norway's bank made another interest rate drop during the quarter, but at the same time they planned out the interest rate line. That is, fewer interest rates to be expected in the future than we thought at the beginning of this year. Price development in housing is also lower than expected, especially in Oslo, where price development is slightly higher than in Bergen. There is a large supply of housing in Oslo that is also driven by rental housing that comes out on the market. This is due to a tax policy that makes it less profitable to own rental properties. Several property owners then choose to sell out rental housing on the property market. This spurs out a large supply on the second-hand market. At the same time, we see that sales and the start of newly produced housing in Norway are still at a very low level. JN's sales are also lower than in 2024, but the result in Norway is at a level with previous years. The margin is somewhat lower. The decline in operating capital is lower, but if we adjust to the property sales we did in Norway in early 2024, the decline is at a level with previous years. We have started yet another stage outside of Bergen on Asköy, in a very high and nice location. There are 25 homes in our area Örnafjället, which we have started in the quarter. In Finland, the activity on the second-hand market continues to increase in the third quarter, but from very low levels. The exchange rate is also record high here, and despite the fact that housing costs are decreasing in Finland, the consumer confidence is very low, and this affects the ability to buy housing and also affects price development, which in itself has been relatively stable during the quarter, but is on low levels compared to a few years ago. JN's sales is on the same level as last year, and we have increased the number of production starts, which in itself would not be so difficult if we did not start something in Q3 last year. But we have started a project in Finland, including this project, which is the first project in our area in Nokia outside of Tammerfors, and the project is called Kartonrannan Kunlilja. Otroligt fint naturnära och sjönära läge i Tammefors. Så det är kul att vara igång där för fullt. Intäkter, resultat och marginal är något lägre än föregående år i Finland. If we look at the market for newly produced rental housing, it is still characterized by high drop-off levels. And depending on the project, depending on the location, depending on the builder and also the time for the completion of the project, they are at about 4.5 to 5.5 percent at the moment. But we have seen single transactions at just under 4 percent or close to 4 percent. We also see during the quarter that positive trends are starting to be noticed and the intensity of transactions has gradually increased in this quarter. Our revenue in JN Fastis development and our result fell this year compared to previous years due to lower production and also that we have completed the project K1, our office project near Kungsholmen. Under kvartalet sålde vi ett projekt, och det är de 205 bostäderna, ett hyresrättsprojekt som heter Borvetet i området Söderdalen i Järfälla. Det projektet färdigställs i slutet på 2027 och frånträds även i slutet på 2027, men resultat redovisas successivt. Sustainability is always central to IEM, and our work to reduce carbon dioxide emissions is ongoing. We have introduced new ways of working to analyse and plan climate-improving measures in our projects, which we hope will have an effect in the future. We are also continuing our full-scale tests with climate-improved concrete. Now we are testing concrete with 40% lower carbon dioxide emissions. We are doing sustainability tests and moisture tests. These tests are positive, which indicates that we can continue to reduce carbon dioxide emissions. In the future, we will test concrete with up to 90% lower carbon dioxide emissions, which is very good. In all the projects we have completed this year, the swans are marked according to generation 3. At JM, we have also received a license for generation 4 of the swans, which we are now implementing in the projects we are starting in the future, which also feels good to continue working with. In addition to the climate, it is also very important when it comes to working sustainably with housing development that we work with the work environment. And we at JM take this most seriously. We are going to secure jobs and a good work environment. And this week we have our annual Safety Week, where all of JM's employees discuss and focus on measures that can make our work environment even better and can help us have even safer jobs. JM's main focus has always been and is our customers. And I am proud that we are constantly at the top in satisfied customer measurements. I am also happy and proud that our work with reducing warranty marks gives results. And this, together with our fine construction portfolio, our competent and committed staff, our competitive production costs and our well-measured risk profile, creates good conditions for us to continue or continue to be able to start profitable and sustainable projects. And even if the still-awaiting housing market affects both the industry and JM's results, we have seen the first signs of recovery in Sweden during September. And that gives reason for a beginning optimism, both on the market and for me, if you look into the future. Vi på JM har under 80 år av samhällsbyggande etablerat oss som den ledande bostadsutvecklaren i Norden. Och jag ser fram emot vår fortsatta resa. Tack för att ni har lyssnat. Och därmed är jag och Tobias redo för frågor.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. Our first question comes from Kayvan Shirampur from SEB. Please go ahead.

Good morning. I have a few questions. The first is regarding the activity. You mentioned that it was a low day, but then it took off a little in September. September tends to be seasonally stronger. Could you put this in context to a normal season pattern, how this September has been compared to previous years?

Based on how the market has been earlier this year, and based on how it was in the summer, there was a clear improvement in September. And there was a clearer improvement in September this year than what was usually seasonally adjusted. So we saw a clearly better market, especially in Sweden, I would say. But there are optimistic signals in general.

Okay. Can you tell us roughly how much of the sales happened in September?

We don't have an exact number, but there was clearly lower sales for us during July and August and better in September. But we don't have the exact number to communicate.

Okay. And then I also have a question regarding the big start. I'm thinking a little bit about what the pipeline looks like. For Q4, you have talked a bit about that you want to increase the number of starts, but now you are at about the same level as last year. And I check here that for you to achieve about as much as you had last year, it implies about 700 starts in Q4 versus about 300 in Q3. Do you think it is realistic to be able to get up to 700 starts or more in Q4?

Vi har projekt så att vi kan starta tillräckligt i fjärde kvartalet. Så det är absolut realistiskt. Sen förutsätter det här att vi har investerare och konsumenter med oss i fjärde kvartalet i tillräcklig omfattning. Men vår plan är fortsatt att starta mer än 2024, det vill säga mer än 700 blir det då i Q4.

Det låter bra. Sen bara en fråga på det här med Stockholm. Kan ni lite mer konkret berätta vad den här genomlysningen betyder? innebär och vad det är som driver den här svaga prestationen? Och sen kanske även någonting om det här kan resultera i några omstruktureringskostnader.

Om man börjar med det hela så tittar man på det enskilda kvartalet så har ju resultatet i Stockholm tydligt försämrats av att vi har gjort prisjusteringar i projekten. Så det är en bild av Stockholm att prisjusteringen har sänkt resultatet i kvartalet. Men sen är det viktigt för oss att genomlysa om vi kan find cost savings so that we can get started with more projects. We have to get the production in Stockholm up with good projects that deliver results that also contribute to profitability in the future. And that also means a lightening of our sales, so that we do exactly what we can to keep a high sales and also be able to keep up with the customer value so that we optimize revenue in Stockholm. But to really focus on getting more projects started, that's the primary thing in Stockholm. And above all, to get more profitable projects started, which we also assess that we have in the pipeline. Then there is also a consideration of the construction portfolio, as I mentioned earlier, that there can be projects in Stockholm that are Okay, that was my question. Thank you. Thanks.

As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Fredrik Stensvedt from ABG Sandal Collier. Please go ahead.

Thank you very much. Good morning. I have a few questions about the price reductions that have been made. Question one is simply, are there only finished housing that you have lowered the price on, or is it also what is ongoing? And maybe to the background of that, if it is possible to describe, if it is in that case, given that you only lower the price for the team, is the whole effect taken in Q3 then? And the next question is, is there anything that says that So the price level of what you have going on is better or lower than what is already set? That is to say, what says that you will not lower the price for what is done in three months or six months?

I can start with that. The price drops we've made this quarter are primarily in our stock. I'm not going to say it's completely exclusive, but it's primarily in what is already finished and unsold. And then the recent effect comes now. Then, of course, if we have lowered prices on what is not yet sold during the quarter, we have a lower margin in what will come, but it will not be negative. If the project goes below zero, we take that effect now, upfront, in the quarter. So it can be a project where we've had a small margin of a lower margin in what we're going to sell in the future, but not negative. And then, the other question, can you repeat the other part of your question?

Yes, if there is really any difference in the price level between what you have started and what you have actually lowered. Is there something that says that there will be no price drops in three months or six months when other things are also done?

Yes, I understand. You have to remember that the storage we have now has been priced in a different market. In earlier stages, when we started those homes, the price level has often dropped in those markets where we have made price reductions. The projects we are starting now are priced in today's market. We are not pricing with what we think the price will be in the future, but they are priced based on today's situation. So given that we have If the market doesn't get worse, then we don't see any risk of essential price drops in the future.

Okay, so if the price and market are completely flat here, from neither up or down, or better or worse, then you don't need to lower the price that is clear in six or nine months, but you lower the price that is clear now?

Exactly.

Okay, and then one more question. I understand that you are lowering the price because you think that the level of the law is too high. What is the limit here? Should you think externally about the level of the law? When will you act and when will you wait and hope that the market will get better?

I can take it. It's the same thing here. As long as we see that we have a turnover in the stock market, we know that we have the right price picture, and we don't need to lower the prices any more. During the summer, we saw that we didn't have the turnover we had expected, and that's why we lowered the prices. But if we see that the market is holding up and that we are at the level we are today, we don't need to lower the prices any more. We will gradually lower the stock market. We will have a positive cash flow from the stock market. With that said, I also think we might have to get used to the fact that we will have a certain amount of storage. Historically, Jime has not had any storage at all. On a market like this, where many people have to buy and sell, or rather have to sell before they can buy, it will mean that we will have more finished, unsold housing. Of course, we will try to sell them before they enter the storage. But we can't rule out that we will always have a small stock of finished, unsold housing. So we can't expect it to be at zero, but that it will drop from today's level is our expectation.

If we look at the current market, we see that customers tend to buy early before the project. Then it is a little more careful to buy from the start of production until about six months before completion. Then the big sales bulk also comes at the end. This also contributes to the fact that the banks say that customers must sell their current property before buying a new one. And that suggests that there might be a little more homes that will be sold in a later stage. And maybe also a slightly larger warehouse, even in the new normal after all, depending on what the purchase pattern looks like. But we see a positive trend in the purchase behavior earlier as well.

Yes, that's clear. Questions related to the market. A question about Kayvon. You are in the report and the presentation that September feels better. And you said on that question that September is better than earlier this year. One question is, is it better than what it was in summer? Q2 was very weak. Or is it also better than Q1? And one question is, till har det fortsatt in i oktober?

Jag kan börja svara på den. Trenden är att det går uppåt tydligt i september, och septembermånaden ska jag vilja säga, jag har inte exakta siffror, men det ligger bra till jämfört med tidigt i år, i Q1, när vi hade en bättre försäljning än i Q2. Så september var bra. Vi ser att det följer med in i oktober, nu är det lite för snabbt att dra slutsatser i oktober. But it depends on which projects are doing well. As I said before, the projects that we have released on the market now, which is exciting, that we are going to start production, there we see a good level of booking, which will be a contract. And we continue to sell the warehouse. But those that are in ongoing production, the speed is somewhat lower. So the hope is that it will continue in October, but it is not obvious that it will go up even more in the first weeks in October. That is too early to say.

Okay, thank you. Then I jumped to the states that will grow year over year, and we were talking about over 700 in Q4. Can you specify which share markets you think are better or higher than 25 or 24?

Ladies and gentlemen, that was the last question.

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