Skanska AB (publ)

Good morning and a warm welcome to the presentation of Skanska's first quarter report for 2026. I'm Antonija Ljunlind, Senior Vice President for Skanska's Investor Relations. And here in the studio, I've got our President and CEO, Anders Danielsson. And Group EVP and CFO Pontus Winqvist. They will take you through the first quarter results in just a minute. And they will also provide you with a general business update and market outlook. And after the initial presentation, we will move over to questions. We're expecting questions from our invited guests, so both from the online audience. If you do have a question, please use the telephone conference number provided. And if we've got questions in the room, we will also accept them, of course. And I will ask you to start by stating your name and organization. But we will get back with more information on that. So now we're moving over to a comment on the first quarter performance. And Anders, on the first page here, we see a beautiful bridge. And this is an order that we booked in the first quarter, Vincent Thomas Bridge.

Yes, indeed. You can see it on the picture here to the right. And it's a proof of the very solid market we see now, especially in the US when it comes to traditional infrastructure. And we are well positioned to take advantage of that market. And I'm sure you have noticed the press releases we have sent out the last week. One of them, a bridge replacement in Boston, which was booked for 9.3 billion Swedish. So solid market indeed.

yes let's move into the first quarter and And we have had a solid start of the year.

encouraging construction started the year on the good good performance and we had come back to that but the good margin in the first quarter residential development with the strong performance in central europe a bit softer still in the nordic operation we started to to project and divested to it was in commercial property development Investment property portfolio was delivered very stable margin and good performance there. And the operating margin in construction, 3% in the isolated quarter. You can see it's above the last year comparison. And if you look at a rolling 12-month basis, we had 4.2%. Really encouraging and also above our recently increased target. return on capital employed in project development ended up at 2.1 percent on rolling 12. return on capital employed in investment property decent 4.7 rolling 12. same as the last time and the return on equity 10.4 percent so we have also robust financial position so we are and that's very important for us because that gives us a competitive advantage where we can start project when we think it's right And we managed to reduce the carbon emission with 66% so far compared to the baseline year in 2015. So I will go into each and every stream now. I will start with the construction. Revenue here is slightly decreased compared to last year. We'll go into details. Order booking is good. You can see we have a book to build of 107% on a rolling 12-month basis, which means we're winning more order than we produce, which is important for the future.

So if you look at the backlog order, the backlog in construction. Record highlight. Level. So historically, very, very good position here. And operating income, 1.5%. billion Swedish which represent the

Again, 3.0% operator margin. So healthy result in a seasonally slower first quarter. And very encouraging to see that all geographies are performing. That's important as well. So the order intake was good and backlog remains on the high level. Let's go into residential development. Here we have pretty much the same revenue as last year. It's still slow in the Nordic market, but very good performance in the Central European market. We're selling a lot of apartments and we have a really good profitability from those. So that's very encouraging for the future. We started one project in Central Europe and one in Finland, a smaller one. And we also have the strategic land acquisition both in Sweden and in Poland. And that's also depending on we have a really good financial position to be able to do that. We'll walk into commercial property development. They had the operating income in the quarter of 71 million. Also gain on sale of 174 million, which represent the return on the capital employed of 1.4%. We have 17 ongoing projects, which represent above 15 billion Swedish upon completion in total investment. We have 18 completed projects right now, and the value of those is 18.4 billion in total investment, and a decent leasing ratio in those completed projects of 72%, which means that we get some positive cash flow from those assets. Two divestments in the first quarter, and we also started two new projects. And several projects were handed over to external buyers during the quarter.

average leasing rates are both ongoing and in the complete as I said earlier. Investment properties. operating income 81 million and the Stable, 84% right now. Pretty much just

The same level as last quarter and also compared to last year. And the portfolio consists of seven high-quality office building properties in the three largest cities in Sweden, which represent a value of 8.3 billion. So a solid performance in the first quarter. I will now move back into the construction stream again and look at the order bookings. Here you can see the order backlog over time on the blue bar. And as I said earlier, we are on record high level and you can also see it here in the slide. And here you can see also the rolling 12 months basis, the lines here on book to build, revenue order bookings and order bookings per quarter. And I can say, as I said, record high level and the When you look at the first quarter, we were able to book a data center and semiconductor facility of 6.9 billion Swedish in the first quarter. So it's a strong market and contribution here. So when I look into the different geographies, we can see that we are on a very high level when it comes to book to build, 107%. And we have a good duration. We have 19 months of production. And the tendency is here that the duration of the project is getting more extended. It takes longer time. So we have a good position here. And basically in all geographies has contributed to this order backlog, which is good. With that, I hand over to Pontus.

Thank you, Anders. Then going a little bit deeper into the numbers. And you heard from Anders regarding the order situation. And you can also see that we have a slightly decline in revenue.

revenue during the first quarter. It's also the case that we have had a tough winter in many of our markets that to some extent is impacting the revenue and it's also so that we In some cases, especially in the West, we have revenue recognition of the backlog because some programs

are moving faster through revenue and that could be a little bit different between the different quarter and it was quite significant such an effect in the first quarter. If you then go down and looking into the operating income it's basically in line with the level that we saw the same period last year but it is an increase if we go to the local currency, actually the operating profit increased by 5%. So then... going more into the different geographies within construction there you can see that we had improvement or same margin level that we had last year and we had an average margin of three percent which i must say is quite strong for a first quarter with normal winter and seasonal effect but in this quarter i said it was a little bit more than normal You can also see there that the operating income is on healthy level on all units. Going then into RD. You can see that the revenue here is on a similar level as we saw last year, and also that the margin is increasing. You heard from Anders that our European residential development business is performing on a high level, while there are some challenges, I would say, in the Nordic businesses. We keep the selling and administrative costs on the same level as we did last year. And you can also see that that is impacting an increase in our gross margin. Looking then into the different geographies, and here you can see that we had a negative result in the first quarter in the Nordics.

while the central ...European... again is contributing with a strong margin

above 20% and the result then of 138 million.

So this... Of course, I would say... probably stronger than what you can expect going forward. from that business.

But on the other hand, we should expect better development from our Nordic operations. If we then look into the number of sold and started units, you can see that we started 212 units and the absolute majority, 176 of those, was started in the central European units. We had a smaller project and that was started in Finland. And if you look into the number of sold, we are on basically the same levels that we have been last year, which you also can see on the ruling 12-month basis that we are hovering around 1,500 units for the moment when it comes both to started and sold units. Then looking into what we have in production, you can say that we have around 3,000 units in production, also this stable level. You can also see that it's slightly improvement of the number of sold and a slight decrease on the number of unsold completed homes. Worth to mention there is that we see that we are selling more of this uncompleted homes in the nordic which is good because they are the low margin units that we have and it's actually increasing somewhat of the unsold units within the central european business and that is good because we have a very strong market there so there it's more a potential to have units to sell which haven't really been the case in the nordics

Going then into CD. With a revenue of 1.2 billion. I've invested to project during the first quarter. And you can see the gains coming out from this business or from the 74 million. four million, we also have an impact

from previously divested projects that we have sold, but they are not really completed. So then we are recognizing profit gradually when we are reducing the construction risk from a development perspective on that divestment. Having said that, we have said that a couple of times before, but sometimes that is a part of the business, that we are releasing gradually profits from divested projects that still are under some kind of construction. There have also been small land divestments included in that number. Looking into this slide, the unrealized gain from our commercial development business, you can see it's very stable. Not very much has happened since the first quarter. What you can see and what I also think is important to highlight is that the absolute majority of the unrealized gain is from the ongoing projects. And it's quite little of unrealized gain that we have in our completed portfolio within our CD business. This is normally a popular slide where you can see our profile, when to complete and what is completed, and the dots there that you see, they are representing the occupancy rate in those projects. So you see that we have completed a completed portfolio with NCD of 17.6 or something billions with an occupancy rate there of 71%. And then you can see that we will complete here during Q2, nothing in Q3 and so on with the different leasing ratios. And if you're following this and comparing this with...

previous slide you can also see that there are slight improvement. Some of those. future completing projects. leasing in CD during the quarter was 18,000 square meters of which three

3,000 came from rental residentials. You can see on a stable level, but of course we would like to lease out even more. But you can also see that there is a healthy difference here between the occupancy rate and the completion rate. So we continue to have a higher occupancy rate in our portfolio than the completion ratio. Going then into investment properties, I think it was a very stable quarter here. You can say that the revenue operating net is basically on, right now, a very stable level and same level as we have seen the last quarter. Also, the occupancy rate is basically on the same level, 84% that we have seen during the last quarter. And there has been no revaluation in this portfolio and the yield for the portfolio is 4.7% as we have seen then for a couple of quarters. Going then into the total group statement, here you can see that the operating income from the businesses is actually increasing. It's up 18% if you go into local currencies. That will be 5% in Swedish krona. Looking into this central costs here, you have a slight increase. It's also a slight lower contribution from our PPP business that's included in that. And it's also, I think, if you, because here we see something that sometimes that the estimations regarding our central items is not perfectly correct, but I think the ruling 12 months basis is what you should expect.

expect on an annual level when it comes to central. Then there will be some some effects during the different quarters That is so especially if you see a major impact from... ...from the PPP portfolio in that line. otherwise elimination I mean they

It will also vary a little bit depending on which project we are starting and selling because the majority there is of course the profit that is coming from construction for our internal projects that is then eliminated on a group level and that will then be reversed when we are selling those properties. Taxes, 316 million, 24%, quite representative, I would say, both for the quarter and what we could expect going forward with the business mix that we have right now. Cash flow, we had an operating cash from the businesses of minus 1.3 in the quarter. That is mainly because we have some development in the working capital and we also have net investments in our residential development business that is impacting this. looking into our free working capital within construction and as you can see it's also here on a very stable level it's an underlying outflow of 1.1 billion but that is met by a positive currency effect of the same amount so you can see it's the same as we had during the fourth quarter which also take us up when it comes to the relative number if we compare this with the revenue it's up from 18.3 to 18.6 percent which of course from an historical perspective is a very strong and high number And then if we look into our group, Investments and Divestments and Capital Employed, I said that we had some slight outflow from our...

investments in rd if you was to dig a little bit deeper into this you see that we had actually a net divestment situation from CD, but you see that it can happen. capital employed is increasing somewhat and that's because of currency effects. We had 1.1 billion in East value in Swedish krona in the capital and that's basically our yield. with properties because the currency... This relative strong currency or strong US dollar during the first quarter.

and our liquidity situation is continued strong i would say as you can see here it's we have available for funds of 27.7 billion and we can draw funds of above or around 20 billion within one week if that would be necessary So then the financial position of the group is, as you can see here, on a high and stable level. You can see that our... adjusted interest-bearing net receivable that we're following here is going down by around 2 billion and the reason for that is first we had as i said 1.1 billion in cash outflow but also then that we are increasing the number of restricted cash and that's cash that we have in our joint ventures together with other partners it's our cash but we deduct that number from our adjusted net cash position so exactly that we are getting more and are reducing that in this measurement that we are following So by that, Anders, I leave it to you to talk a little bit about markets.

Sure. Thank you. So look at the market stream by stream, starting with construction. We continue to have a strong civil market in the U.S., And we don't see any slowdown there, and it's very encouraging. And a stable market when it comes to the building sector. We are in the so-called social infrastructure, if you will. We're building schools, universities, hospitals, airports, and, of course, data centers.

if i go to the european market the civil market in Europe is stronger than building. Because we are more Exposed to the rest. market and commercial market in europe but we do see a strong civil market and stable in most countries, driven by infrastructure investment.

investment in defense facilities and also the energy sector. So that's encouraged. And in the short term, we don't see any impact from the Middle East conflict, but it's of course something we watch very carefully going forward. Residential development, again, strong market and activity in Central Europe. In the Nordics, the fundamentals are there. There is a demand and underlying need for apartments. And there have been some regulations easing up the mortgage and amortization rules and so on. So that helps, of course. But what needs to happen, the consumer needs to get their confidence back. So we need to see some stability in the world and... Also that the economy is growing more than it's doing right now. Commercial property development, transaction market is gradually improving, especially in Central Europe and in the Nordics. It's still slow. Investors are still hesitating in the U.S. market. And we can see that also the leasing activity is higher in Central Europe, in Nordics. But we also see that our asset in the U.S. market is attractive. So we lease out there as well and have a decent health leasing ratio in the U.S. as well. Investment properties, it's a polarized occupier market. You need to have class A buildings in the right location, and that's exactly what we can offer the market. So we have a stable leasing ratio, as you have seen, and we also have a stable performance. That's about the market. So I just want, before I leave it to Hanna-Utta Antonia to open up Q&A. So just to summarize, solid start of the year. Construction started in a very good way of good performance.

Residential splits. picture here. As we have been talking about. We started two projects and developed two projects in the commercial property development. And again, investment in properties stable result and of course we are maintaining our financial very strong So,

with that hand over to antonio thank you very much okay so it's time now uh for your questions um so first to the online audience if you have a question for us here then just use the telephone conference number provided and follow the instructions by the operator And we will be back to come back to you soon. But we will start with questions from our guests here in the studio. And I will ask you to limit your questions to maximum two at the beginning. And then if we have time for more, we will come back. And I can see that we have a question up front here. So can you please start by stating your name and organization?

Stefan Andersson, Danske Bank. So the first question is on CD. You made two divestments there and I was surprised about the realization profit there because looking at the Bucharest building, the biggest one, it seemed like you made a loss there of 50, 60 million or something like that. given the press release when you started the project. So I'm just trying to understand, was it a dramatic profit on the elderly care center that you sold, or is there some one-offs that I need to understand?

You know, Stefan, that we are not commenting project for project, but I think you are not really correct if you're assuming a big loss on that divestment. It wasn't.

When you press released that you started it, you said 450 million in investment and you sold at 400. So that's why I have a question.

I don't know exactly what's standing in the press release and the outcome, but what I know that it wasn't a big loss. So then... Things have happened, and that's quite common, that the project changed a little bit after you have released the press release from the project start. It might be some different areas, etc. But you shouldn't have expected a big loss on that, because it wasn't a loss at all.

And the second question. you had ambitions when you started that to grow that and We haven't seen growth in a while. Could you maybe just elaborate a little bit on that, if we should see something coming through? for some time now. We're still aiming at the range between to build up a portfolio between 12 to 18 billion. And we definitely have the pipeline to do that in the three larger cities you see in in In Sweden.

but the market has been tougher the last three years and so we haven't been able to start and complete projects in the recent time so we have a very firm rules to when we can have a transaction to investment properties and that is when we have at least 80% should be completed first of all and then at least 80% leased out and also at least 60% occupied, and then we take a decision. But I'm not concerned that we don't have the pipeline. We have an ongoing project, and the pipeline today definitely supports the upper part of that range.

Very good. So we've got another question up front here.

Hello, thank you. Albin Sandberg from SB1 Markets. So looking at the drop in sales in the construction division, you're referring to weather and also conversion from the backlog, as I understand it. But so does that mean there should be a catch up of the sales? I mean, that sales is not lost forever, or is that how we should view it? Just postponed to coming quarters?

Yes, you're right. We're referring to that. And I would say you can also see that we have announced quite a lot of orders. We have a positive book to build. So I think that should give some kind of indication that it's reasonable to believe that there will at least be some catch up.

And the other question is on just general capital allocation. Now, obviously, you mentioned the FX effect, but also higher investments in RD. And you still have your net cash position. Is your target to be a net investor for this year in your development stream? Is that what you want to use your cash for?

We don't give any forecast. We have said that we have enough capital in

in the pro overall and then of course it can be different between different schools Of course, we plan to release some capital from the completed project.

Thank you.

Very good. So then I believe that we're ready to move over to questions from our online audience. And I will ask, please, if you You can operate it if you can introduce our first caller here. This question is from . Please go ahead. Yes. Hi, Anne. Good morning.

I would like to start asking a question about the construction and the U.S. part. We see a decline year over year, and you say it's on FX. Is there something you see in the trends over there, any like softening in the U.S. public infrastructure activity or any other trend, or is it purely FX and timing?

Yes, we don't see any slowdown in the U.S. market. It's more on the order intake supports that, and we talked about the recent week as well. But what we have seen in the first quarter is more the combination of the current backlog. Some products take a little bit longer time to get rolling and get up to speed. So it's more that if you compare to... previous quarter when you look at single one so i'm not concerned over the market per se yeah yeah and a follow-up why does the project take some longer time to start up it could be that we are in a design phase we need to do some preparation mobilization work before we can get going so that's a typical example of why it can take a little bit longer time than other projects

Okay, perfect. And then a question on the Euro construction. The margin jumped quite a bit from 0.6 to 1.4 in the quarter year over year. Is this a jump that we should extrapolate further on in the year? Is it some one-off effect or what do you see here?

I think you should look more on a rolling 12-month basis when it comes to profitability. There can be quite a lot of differences between if you look year over year in a single quarter. So it's not a specific reason for that.

Okay, perfect. I will jump back into the queue. Thank you.

Thank you very much.

Okay, so moving on to the next. The person in line. The next question from Ivan Shivanpur, SEB. Please go ahead. Good morning. I have a couple of questions.

The first question relates to the unrealized gain for the CD portfolio, completions versus ongoing projects.

So you stated here are unrealized development gain of 23 percent for your ongoing projects, but the completed project again is down to 3%. maybe elaborate on the difference between the ongoing projects and the completed projects and what

What does that imply for the margins in the completed units?

Yes. Yeah, I think it's quite easy. The reason is that we within our completed portfolio has during now a couple of quarters and years adjusted the value in order to reflect the market values of that portfolio. And it has in some cases, as you have seen in the last time in Q3, resulted in write-downs. And of course, if you are writing down a project or you have first adjusted down the surplus value, which means that from a portfolio, total portfolio, it is a very little headroom between the market value and the book value. On the other hand, in the ongoing projects portfolio, this is when we are starting up new projects, and we are not starting up projects with a 3% margin. So therefore, I mean, we need to have the profitability that is good enough for us, and therefore you see above 20% on the ongoing projects portfolio.

that's of course based on the assumptions at this time things can change in both directions yeah okay and what makes you so comfortable in achieving our above 20 gain on this new product what is the difference uh other than that you have adjusted

development gains in the completed units i mean it's from a project by project basis and we we have a view on how much it will cost to build we have the our land that we are putting into this we have potential costs for financing and we add all this in together and then we get to compare it with the current market prices and then we get to a value and that difference then should be strong enough in order for for us to to support a startup project and that's always the case we're not starting a project if that's not supporting our target okay and then i have uh

questions and that is what can you say about their potential diverse

in the US for the completed projects to have any type of ongoing dialogues or such or do you believe that you would be able to make some

from that portfolio this year or given that you haven't made any divestment above one billion in over four years now?

Yeah, the market is... it is slowly recovering but what we see is more opportunistic investors and we see more mostly We are not interested in that. We know the value of our assets. We have a positive cash flow. So we are...

We want to get the full value out of those.

And we have a good relationship with our investors that we have done business with for many years. But right now they are waiting at the sideline, but they have the capital, they're ready to step in when the conditions are right for them. And when that happens, we have really good asset to offer the market. But I won't stand there and say when that will happen.

Okay, thanks. Those were my questions.

Thank you very much. Okay, so moving over to Jeffries, right?

The next question from Graham Hunt. Jeffries, please go ahead.

Yeah, thanks very much, guys. I think there's two questions from me. First one, if I could just go back to U.S. construction. You've seen some really large orders signed in Q2. I'd just like to get your sense, Anders, as to whether that's kind of a sign of things to come, what you're seeing in the... in the pipeline beyond what you've announced, just kind of in the awarded but not contracted stage. And I think some of your peers have talked to a really positive outlook through Q1 from the federal side and just wondering if you're seeing that as well and if that's making you confident on your margin target. And then second question, if I could just ask a little bit, I don't know if you can give us any color on what you've seen through the first month of Q2 in Resi, and particularly, I suppose, Sweden, where the market's been weak for some time. But just if you have any color on recent trading and if you can give us any snippets there, that would be super interesting. Thank you.

I can start with the U.S., but Pontus can give some color on the resume. The construction market in the U.S., the civil market, is really strong. You can see the order backlog is great. We have a book to build way above 100%. And to your point, we have announced a massive order the last week here in the beginning.

of q2 so we haven't changed our outlook that we strongly believe in the u.s infrastructure market and we are well positioned there and

We are in the right location.

We are strong on the coast where most of the investment takes place. And we have a fantastic organization that are ready to go and take on those orders.

The performance is great. I'm very confident. in in that operation going forward and maybe some color on the resin market yeah obviously we are commenting the first quarter and not the second quarter right now but what we are seeing I'm in from a general

market perspective we have seen some positive you probably have seen that as well when it comes to numbers from external parting that is looking into the residential market especially in sweden i think that it looks a little bit more positive in sweden compared to norway and finland where we also are but still having said that there is still a lot of uncertainty I mean there is a lot of people that has the potential or possibility to invest in new homes but on the same time there are many sitting on the sideline and waiting what will happen in the external economy so I don't that might not give you any good answer but we are following it closely and yeah

Very helpful. Thank you, guys.

Thank you. Okay, next one.

Next question from Arnaud Lehmann, Bank of America. Please go ahead.

Thank you very much, and good morning, gentlemen and Antonia. First question is a follow-up on U.S. construction. Indeed, you're doing well. I guess focusing a little bit more on data centers, I think you've won a few awards. data center projects in the last quarters, but maybe you haven't won as many as some of your U.S. construction competitors. So do you think you're doing well enough in the data center space, and do you think there's potential to gain more new contracts there going forward? And the second question, maybe a bit more for Pontus, on the net cash position, very comfortable at the end of Q1. What's the outlook there, excluding any potential large divestments when you think about working capital and, let's say, day-to-day investments? Do you think the net cash will remain at similar levels going forward?

Thank you. Thank you very much. I will take the first question about the data center. In the U.S., we won close to $7 billion. You can read in the report in the last quarter. We had a good order intake in the last quarter. quarter last year as well in q4 so so uh and we have been we have been building data center for decades uh in the u so we have a very good relationship with the large international players repeat clients and we are well positioned and we also specialize the organization so we can work nationally in the the US here so we do have the competency so I'm I'm confident

in our our position here and i'm confident also that we can win more work within that segment as well going forward so handover but regarding the cash situation yes first we would like to have a strong financial position and we have also you you might have seen that we did quite a big investment in residential development one in the nordics one in in central europe here during the first quarter that has consumed some cash we also which obviously is not a part of q1 but we distributed out 5.7 billion to the shareholders that's taking down the net cash at least for a while during the second quarter and and moving on uh So then hopefully we will continue to have a business that is performing also from a cash perspective and that the construction business is delivering working capital. We have right now a rate of 18.6%. That's, of course, very high. But I think that we should be able to to rely on a high level of working capital, maybe not as high as we are seeing right now, but there are still good cash flow in many of our projects. Was that an answer, or do you have any follow-up?

No, it's great. Thank you very much. I appreciate it.

Very good. So ready for the next question?

Next question from Jonathan Kubrow, Deutsche Bank. Please go ahead.

Thanks. Good morning. Firstly, on U.S. construction, you called out in Q1 that revenues were negatively impacted by uneven order book conversion. Has the same been for the margin in terms of the project mix going through the year? Could that have an impact? And can we extrapolate the margin improvement

in Q1 in the US through the rest of the year.

Secondly, in terms of the commercial property business, I mean, interesting to note that there were minimal write-downs in the quarter, despite rates having gone up. I wonder whether you think that disposal yields and values have changed at all since It's the start of the year.

Thanks very much. I'll start with the U.S. construction. We have seen very good performance. last few years uh in in the u.s i'm i don't see any reason why we don't perform going forward, but we don't give any forecast. I think you should look more again, not a single quarter, look more on the rolling 12-month basis when you sort of look into our performance here.

Regarding write-downs, We are following the values of our assets every quarter quite in detail.

We haven't seen any...

to do any adjustments of those values during this quarter. But of course, we are following that all the time and you can never rule out what will happen in the future. And of course, we are impacted if the war is dragging out, especially if that impacts the interest rates and they will go up and stay on high levels. So it's the best I can say.

Thank you. Now it's time.

Very good. So to me, it looks like we've sort of reached the bottom of the list of people that wanted to ask questions here. So I'm going to ask the question now if we have any sort of returning callers. And before we let them in, I'm going to turn to the audience here in the room and just double check if we've got any more questions here.

So we've got one up here. So a question on the Nordic residential margins. I mean, one way is the way you recognize the profit in your segment accounting. So I guess you need to start a little bit more projects to get some margins up. But I just wonder, is there any adverse impact from, you know, the sales you're carrying out at discounted prices or anything like that in Q1? Because obviously the unsold home went down. And also whether your overall cost base, is that assuming the current production rate or... Do you see that you can ramp it up with the same cost base or do you need to adjust that cost base in order for the margins to, let's say, improve?

First, when it comes to the cost base, yes, I think we have a cost base. I mean, we have been working through the Nordic residential development business for quite a while, and I think we have a stable cost base, and there is room for expansion within that current cost base. The other question when it comes to the relative low gross margin that we have had in our Nordic projects, it's of course that we have been... Because trying to sell out from our completed project portfolio in RD, as you saw, I mean, we have also sold out more from the Nordic business.

And with that... or some kind of marketing efforts that is impacting the gross margin. Yeah. Very good. So turning one last time to the online audience and operator. Do we have anyone else waiting in the line now? There are no more questions. Questions from the phone. very good so that means that we have answered all the questions that the audience had for us here today.

Thank you. Thank you, Anders and Pontus, for all of your answers and presentation. And thank you to everyone that joined us here in the studio for the first quarter report presentation. And of course, thank you for everyone watching online. A recorded version of this will be provided and ready on our webpage later today. And we will be back with more comments on the second quarter report in July. Thank you very much.