Good morning. My name is Paulie, and I will be your conference operator today. At this time, I would like to welcome everyone to the HusCompagniet first quarter 2022 presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. I would like to hand the presentation over to CEO Martin Ravn-Nielsen. You may begin your conference.
Thank you so much, and thank you all for diving in to this conference call of Q1 2022 trading statement. Today with me, I have Mads Winther, our CFO. Let's go to the disclaimer and to the summary on page two. Let's start with Q1. I would say an absolutely decent result for the first quarter. We saw a revenue growth actually of DKK 2.173 billion. It is 23% up compared to last year. We also saw the sales decreased 40% from a very extraordinary high level in Q1 that we have talked about earlier as well. The EBITDA, it is DKK 99 million. It's a margin with 8.5% despite an extraordinary challenged market that we see now.
What I am very satisfied around is that we actually do deliver 98% of our houses still on time. It's a proof that we have a very, very strong business model that we are associated to have the materials on site the building plots as well. I will come back to also the highlight here around the factory in Esbjerg that we have acquired last week. Also the market actually on the next page, I will have a deep dive in the market, so I will come back to that and the outlook for 2022, who we have adjusted. Mads will come back to that later.
Let's go to page two, where we see here. Sorry, page three. Here we can see the market updates. I will give you some, you can say some here and now words around the current market, around the sales activity, our supply chains, our subcontractors for now, and also, of course, our resilient business model as well. When we saw the sales in Q4, there was a decreased demand, and we also saw that in the first two months of 2022. What we also talked about when we were on our call with the result for 2021, we saw a better March actually in the sales. We also succeeded with a better March sales. We have a more normalized level.
also here in April, we see a more normalized sales. Therefore, yes, it is absolutely better what we have seen in March and April, compared with the five months before then. Of course, often someone asks me why we are seeing that actually we have better sales now. It is that when the market overall is in, you can say it is burning a bit out there. There's a lot of customers who is going to safe haven and absolutely HusCompagniet is a safe choice. Therefore we see that the demand overall in the market, it is less than before. We in HusCompagniet is associated with some normalized sales.
Looking into the months for the rest of the year, yes, it's absolutely the very big question, how will the market be seen there because there's a lot of you can say price increases and so on. Therefore, some of our customers are holding their horses for now and waiting maybe to build the new houses. It is therefore that we also come back to a sales flow with a large spread in our expectations. Around the supply chains, yes, I mentioned before that 98% of our houses still deliver on time. We are having the materials as expected. So overall that is a strong result for us.
What we are seeing, the Russian invasion in Ukraine, it has absolutely reduced our visibility. It is the dark horse you can say for the rest of the year as well. What is extraordinary, because we saw in 2021 that we have a very strong model against having the right sales price around against the customers versus our cost prices. You can see that we have some strong margins as well in our result for 2021. We also see here in the first quarter of 2022 that we have strong results also is in our margins.
For the last, I will say the last weeks, we have seen some very extraordinary here because we have seen a lot of, you can see here and now, extraordinary prices from our suppliers and subcontractors as well, mainly because the energy costs have increased significantly. Therefore, we see now some cost prices that we haven't seen before. Therefore, the visibility going forward is on another level that we haven't seen before, and it is why we have adjusted our guidance, as we'll come back to that later. The subcontractors we see in Jutland and Funen that it is starting to normalize. Our order backlog there is, you can see back on a more normalized level.
Therefore, there isn't the kind of bottlenecks in Funen and Jutland as we have seen before around the subcontractors. In Zealand we still have some challenges here that will be what we can see that we will expect that we have a kind of bottlenecks for the whole 2022. Do we deliver the houses that we have expected? Yes, we are. There is extraordinary pressure on Zealand, also a price pressure as well. All in all, we still have a very resilient business model because we have a strong supply chain, and we do deliver, as I mentioned before, the houses on time. It's the market where overall what we are looking into for now.
On page four, I will give you some words around our acquisition in the factory in Esbjerg, Danhaus. Let me be clear that it is absolutely a part of the strategic area when we are going forward. It is a way that we and also with the management team, Mads and I, and with the board, we have a clear focus on what we are calling the four S's. It is our strategy test, that is, the strategy we were giving to that market in 2020.
We have succeeded with selling more than expected, but we want go faster and in a higher level on the semi-detached, and therefore sustainability factory-produced semi-detached houses, it is absolutely what the big funds and the customers want. Therefore, we have now a significant you can say change in our industry because we now can offer that. It will be a kind of a game changer as well in the semi-detached business that we have. Therefore we also have increased our guidance with 50% actually up to 750 sales in the end of 2025. The other S is the supply chain. That way we will eliminate the bottlenecks in the current situation around the subcontractors.
Other things when we are talking the four S's, it is sustainability. We will in the future see more sustainable houses. We are absolutely the market leader that we will drive that agenda as well. Therefore you will see much more sustainability around the semi-detached houses. We also now have some possibilities around sustainable detached houses going forward as some very standardized models, because when we are talking factory, we are also talking standardized productions. Therefore it is also give us some possibilities that way.
The last S in the four S's, it is the synergies, because a lot of people have asked Mads and I during the last years. VårgårdaHus, it is a factory in Sweden as well, but it is only around less than 10% of your total company. Here we can see now that we now have a lot of, you can see more synergies because we now will have factory-produced houses in Denmark and Sweden as well. There's a lot of things that we can look here, what is best in class. Is it the factory on some areas in Denmark or is it Sweden and so on as well, so we can learn a lot over the border actually.
It is the four S's who is a very strong strategic focus in the coming years that we will see more and more that way from us. If we are going to page four, sorry, page five, it is you can see the detached demand decreased in the sales. We have a dip in the sales in Q4, as I mentioned before, a bit better sales in Q1, and it was primarily the very low sales in January and February, and March is much more normalized. We are looking into a better Q2 actually in the sales. Again, the visibility is a bit of a challenge for now.
So all is that the way that we are thinking. We have adjusted the organization in February with 28 of our teams. It is reflecting what we are looking into the orders that we have to build for the rest of the year. We have to have sales on the normalized level only just in March or in April, but also in the coming months. We have the normalized level also in 2022, 2023. Do we not succeed with that, then we have to adjust the organization again for 2023. That is we are ready for that. We are on top of that as well. In the bottom of the figure, you can see the permits.
Yeah, you can see the permits, normalized is around the 6,000 every year. 2021 have a pickup, and it is because the sales in 2021 have been better. Also important for me to see that from sales to the permits, there is a period shift around four-six months. It's also what you can see in the figure there as well. Over to you, Mads, to dive into some more highlights and numbers.
Yeah. If we move to page six here, we have reflected our Q1 numbers, which Martin also alluded to. I think, as Martin mentioned, a very decent Q1, a strong Q1 for us, also historically speaking. We expected this due to the very high sales we had, especially in the H1 of 2021. Without these, sort of, what we have seen here, we would probably also have seen higher margins, without these turmoils we've seen in around the war, et cetera. Generally, as Martin said, you know, close to DKK 1.2 billion in revenue. We delivered 480 houses, which is 22% more than we did last year.
Martin mentioned almost DKK 100 million in EBITDA. Our margins of 8.5% still quite strong EBITDA margins in the environment. Looking at, I think, EBIT close to DKK 90 million also again up quite significantly from 2021 with 42%. Our EBIT margin 7.5% versus 6.5% in Q1 2021. Clearly we still have a lot of cash available, so very strong financial position also illustrated by the financial gearing, which is 1.8x at the end of the quarter.
Moving to page seven, very clearly we can see that we were able to increase our deliveries, which hopefully also will lead to a year where we have more even deliveries than we saw in 2021. We expect this year to be more even distributed throughout the year. Clearly, we are also seeing that these deliveries are mainly benefiting from our new or our two segments that increased the activity quite a lot. It's semi-detached, but also Sweden we can see there are more activity versus in the past. Very happy to see this.
Utilizing our factory a bit more in Sweden, and we're seeing semi-detached starting to ramp up from the sales we have delivered throughout the 2020 and 2021. Moving to page eight, this is around the sales. Clearly here we can see the decrease in sales versus Q1 2021. Not a surprise, we have flagged that we are seeing the market more normalized, and even that it was a weak Q1. You can see to the graphs to the right that it's of course mainly driven by our detached being very. We're happy to see that our semi-detached keep the momentum. Then Sweden with the 52, we sold less there. That's a deliberate choice, not a surprise to everyone on this call.
We sold a lot of houses throughout 2021. Of course, we are now very focused on making sure that our agents are, and our customers are taking these sales and make sure that they are moved to production. We have a much higher focus from agents to actually get these orders into production than necessarily selling a lot more. You will also see this probably next quarter, and then we'll start seeing sales ramping up again, just to manage expectations.
Moving into page nine on our segments, I think, first on the pie charts to the left, we are continuously seeing that our detached business, despite it actually growing, we're still seeing that semi-detached and Sweden are starting to gain ground, and especially around the semi-detached. So we are quite happy to see that. So I think generally, worth noting is of course that our gross margins, especially in our semi-detached Swedish business, have taken a small hit, but still a quite strong quarter in Q1. Moving to the order backlog on page ten.
Here we have, of course, we should note that we just moved the graphs out to the left, so it's a more intuitive, hopefully you think that as well. On page ten here, the backlog graphs is this DKK 3.7 billion. Noting that the net order backlog is what we are still lacking to put into our P&L and that is DKK 2.7 billion. It's 62% of our revenue. We still have order backlog, so we feel very comfortable of our revenue coming into 2022. I think so this is a very important point for us to highlight that our revenue targets, and you can also see that from updated guidance there, we are quite comfortable on what we are delivering in 2022.
Quite solid business model from that sense. It's very much driven by, of course, still from the change in Q1, it's mainly driven by VårgårdaHus in Sweden as also we've seen in the other numbers, no big surprises there. Moving to page eleven. This is our outlook for 2022. We have taken the outlook down on different metrics. Starting with revenue, we are taking it down DKK 100 million. But please bear in mind, we also had the DKK 100 million in here from Danhaus. De facto downwards with DKK 200 million. Our EBITDA, we have taken that down from previously DKK 420 million-DKK 450 million. It's DKK 370 million-DKK 410 million.
The reason for us expanding the guidance a bit on EBITDA is of course the big uncertainty in the market that we're experiencing right now. Still believe this is a quite solid result, taking into what has happened in the world. Remember, we guided this in November, fifth of November. We believe that with what we have seen in the world, it's still a quite strong result and we hope you agree with us. Unfortunately, we had to downgrade it due to events of the war in Ukraine and energy prices. EBIT, we think it's down along the lines, DKK 320-DKK 360 new EBIT guidance versus the DKK 370-DKK 400 previously.
The leverage ratio we signaled when we bought Danhaus, we bought it for approximately DKK 100 million, and we are increasing our leverage ratios with approximately the same. That is, we will have a leverage ratio of below 2.25x, and we reduced it previously two turns. That's clear. On the assumptions, we're taking a wider spread, and also Martin mentioned that the sales, that is the big question right now. Mainly that of course will hit us in 2023. But we are taking it down with opening the bottom with 200 units. We still feel that we have good momentum, as Martin mentioned, both in March and April.
We also think that May will be good, but still uncertainty around price increases and interest rate environment, what that will do to the market as well as consumer confidence. Deliveries, we're taking those down a little bit, mainly due to that we might have some phasing into 2023 due to the harsh supply chains. We might agree with customers that we're extending a little bit on some of the projects we are selling now, that we are taking a little bit more safety margin on delivery of those houses when we agree that with the customers. Semi-detached, we're not changing anything on the outlook for our revenue. Not changing anything on the sale of land that we're delivering.
Capex remains unchanged. We are still unwavering in our efforts on digitizing, automating and investing in sustainability together with the factory we acquired. Our cash conversion, we're taking that down a bit together with our lowering of EBITDA to 50% versus the 60% we had previously. Special items was very clear when we did the Danhaus that we will have special items between DKK 2- DKK 5. As we also expressed when we announced the Danhaus, we're expecting a revenue around DKK 100 million and a breakeven around the EBITDA result the first year, and then of course we expect more from the factory. To the right, we're still reflecting we have positive development in our business.
Clearly we would hope for a little bit better guidance in 2022. Still believe we are quite, we're delivering quite strong results. I think you should follow the industry moving ahead, and then hopefully you will see that our data-driven efforts, we are ahead of the market and this will be a very strong year from us in comparison to the industry. Moving to page 12. We're just highlighting that we are very focused on distributing our earnings to the shareholders unless we have better needs for it, which we actually believe we did in the acquisition of Danhaus.
still a very strong flow is coming out to the shareholders, either in form of dividends, illustrated well by the dividends we paid out here in April. We're happy to distribute to our shareholders DKK 132 million , equal to DKK 7.335 per share, which is a fairly good dividend versus the share price we listed at and also where we're trading at the moment. With that, I think we are moving on to Q&A. Moderator, over to you.
Thank you. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from the line of Claus Almer of Nordea. Your line is now open.
Thank you. Yeah, I have a few questions, and I will take them one by one. The first question goes to your new updated guidance. What is actually the assumptions behind the low and the high end of the range? That will be first question.
Thank you, Claus. I think that it's fair to say that if things is not turning out worse than today, then we would expect to be in the mid to the higher range. If they expect to worsen, which we are expecting a little bit, we are seeing things coming in the next months or so, then we would be in the mid to the low range.
Can you just repeat that? You're saying you are seeing a worsening situation in the last month and therefore-
No, no. I think. Yeah, we are expecting that things will come our way and that's why we leave the guidance, right? You should see us as we're leaving. When we guide, we expect to be in the middle of the guidance and we are seeing that in the next month, we would expect that there come more price increases and then with that we would be in and around the middle of the guidance.
I'm sorry. You know, you're just broke out. You think prices will increase further in the coming months and then it will improve and if do not improve, you will end in the mid to lower end or how? I don't understand that actually.
No, no. Okay, I'll try again, Claus. I think what we are saying is when we guide, we of course guide towards something that is in the middle range or at least maybe too high where we guide, right? Because we perceive ourselves as conservative. We expect that the next months there will still come price increases and with that it will be in where we would normally guide, so in the middle to high end. What we are saying is that we saw gas prices one day go up by 17%. If this kicks in and is a reality continuously throughout the year, then we will not be in the middle to high end.
Okay. Also I understood what you said.
Thank you. I might have been unclear, so apologize for that, but yeah.
No, it's okay. Second question goes to the comment you are including that you saw a lower level of provisions in Q1 versus Q1 last year. What does that actually mean? Could you put your numbers to this?
Yeah. Of course, we had a massive sales or we had a very good year of sales in 2021, so clearly we paid sales provisions.
Okay. Sales provisions.
Yeah.
Yeah. Okay.
Sales provisions.
Okay. That makes sense. Can you put a number to that then?
No, I first of all, we're not disclosing these numbers. I think it's fair to say that of course, I think last year we said we had an extraordinary of around these. I think we spoke about DKK 5 million-DKK 10 million at some point, and you should expect that it's the same reserve in any other instance. Of course it's versus the normal sales, right?
Okay. The last question, which, you know, given the profit warning that makes your upgrade of semi-detached segment just one week ago look a little bit strange. Maybe you could put some color to the way you are, you know, working out this guidance. Upgrading one segment for what is going to happen in 2025 and then the week after your profit warning for the short-term outlook, you know, it just looks a little bit strange. Maybe a few words on that.
Martin here. What we are looking into now, Claus, it is two different kind of customers, because a lot of the B2B big areas, it is for they want to build a house also for to for rent out. Therefore they, the professional customers are still on track. It is also what we are looking into. When we also now have the factory, then we see that we have some advantages against the competitors and therefore we can take market share. Yes, maybe the market also will decrease in the semi-detached, but we see we have now a position that's not before and therefore we are comfortable around that guidance.
I think, Claus, one thing is we announced a deal where we have a clear, as Martin alluded to, the strategic logic around our acquisition of the factory. Here we are talking about midterm guidance that we are quite comfortable about the interest we are seeing from similar tax. As Mads said, it's very different customers. We have a lot of dialogues. We've also got clear indications of where they would like to go with the customers. I can fully appreciate your comment.
I think one thing is the medium-term in our single-family market was a growing market, and the other one is more, you can say, a current market element where we're seeing extraordinary energy and fluctuations and mainly increases of course, and that's two little bit different things. Appreciate your point, and we appreciate that the coming, one week with an acquisition, an upgrade of a medium-term target, and then the next week coming with a downgrade of our 2022 results looks odd. We appreciate that. That was just the timing of things. We had to announce the acquisition when it's done, and it changes our medium-term outlook for single-family.
We had to announce straight away when we can see that we need to downgrade our guidance, and unfortunately those happen within one week, but they are actually not that correlated as such.
No, it's all about, you know, visibility. No visibility short-term, but very good visibility to 2025. It always looks a bit odd. When are we going to see some, you know, proof for this 750 units ambition? When are the pipelines starting to be converted to more firm projects? Is that this year or is next year or yeah.
I would think that we will start seeing it this year, the sales, absolutely, because we already now for the last week have spoken with a lot of investors, who really look into that as a good way. Yes, I think that we will see it for this year and the coming years. But in this year we will see more sales.
You don't see professional investors saying, "Okay, prices of these houses are going up, you know, significantly, interest rates going up quite dramatically too. Maybe we should wait a half a year, a year to see if things are stabilizing." How do you actually price your house, semi-detached houses for professional customers as to inflation?
Yes, we see that. I think that we'll see some of the professional investors will step up and take a break. There will be some of those. Therefore, we can see that the market and the semi-detached will decrease. We still believe that we will take the market share. We will increase our market share. We still believe that also because we are already now in a dialogue with a lot of the investors also for this year. We're also looking into some new sales and new areas that they still want to make some deals around. Therefore, we are actually rather confident around that. How we talk about the prices.
We have some index in our contracts with the professional investors that help us that way. We don't have it with the private investors in B2C sales. We don't use the index regulations as we do in the B2B.
Okay. That makes sense. Thank you so much.
You're welcome.
Your next question comes from the line of Kristian Johansen from SEB. Your line is now open.
Yes. Thank you. I also have a couple of questions. First question goes to these supplier surcharges. If you can elaborate a bit more on that. Obviously you say up to 30%, which is a pretty amazing increase. What kind of materials is this primarily hitting? I mean, being a surcharge, what does that mean? Is it temporary? If so, when does it go away?
We're seeing steel, we're seeing concrete, we're seeing insulation as some of the big factors for now, who had significant increases. We're also seeing that a lot of other things. It is mainly where you can see some of the materials, which is up around 30%. Yes, we see it is temporary for now, but it has an impact for 2022, and therefore we have re-reduced our guidance. To be honest, it is very, very difficult to say how will the world actually see us for the coming months, and therefore we are a bit conservative.
I think, Kristian, what we're doing is we're getting surcharges, but of course making all efforts that it's these that are a surcharge that is there for only a certain period. It's only for something that you remove, right? It's a charge that come on top of the pricing of the product. That's, you know, so I think that was also your question, right?
Yeah. This is not list price increases, right?
No.
Typically what's the duration of such a surcharge? Is that possible to say?
Not really, because I think it's the market. I think the reality we live in is that, you know, everybody comes with force majeure like increases. Is it really contractual force majeure? Then you have a debate with your supplier, and then they say, "Yeah, but we can of course go into a lawsuit, but you're not gonna get your materials, right?
Because we're closing down the factory or we'll give it to somebody else because everybody else want it, right?" I think where we have really accomplished, which I think is probably something that we potentially are not good enough in explaining, is that we are still looking at delivering 98% of our houses, and that is extraordinarily high in this current market versus other people. That is due to our size. The scale of our business, and it's due to the relationships we have. Are we hit by price increases?
Yes.
Is it like force majeure?
Yes, it is.
We are trying to make sure it's on list prices, but it is surcharges. Sort of the duration of these is a little bit unknown.
What is important for us is that we continuously try to narrow it out, that we have this specific price increase that is related to energy prices. If those comes down, then we have a different dialogue, then they are gone.
Okay. That's quite clear. To sort of the other part of the equation on this topic, what you sort of can do on your own sales prices. You in your statement, you say that these surcharges have hit in the past couple of weeks. What action have you taken so far on your own sales prices?
Yeah. We can say we increased our prices by mid-April by 5%. This of course is significant increase. You will also see us increasing here in May in Zealand, and that's mainly due to that the subcontractor area in Zealand, as Martin also explained in the previous slide, that's still a very congested or a very heated market. And we need to make sure that we in Zealand can cater for those specific issues that we have here. So this is what you may have seen, and you'll probably see more from us if it continues in this environment. For us, we want to protect our margins.
As Martin said, you know, we are seeing, and we can see that by our leads, et cetera, we expect it versus our competitors, that we are seen as the ones that will stand no matter what happens, and we stand by our prices, et cetera. There has been a little bit of turmoil on our detached market, but also just adding, Claus Almer, he asked us, so what about this in the detached market? I think here you have professional investors that looks at the solidity of the companies they are actually asking to produce something for them.
I think if you look at us versus the competitors in our semi-detached market, I think you see much more realism coming into the investors, that they really want to team up with people that are actually able to deliver on what they promise. I think that is why we are quite comfortable also on the semi-detached when we look at the next few years. I think, yeah, we feel quite sort of like we're in a good spot, but of course we also, you know, working. We have great suppliers, great employees that are fighting every day. It's not an easy market, right?
No, no, that's quite evident. Just getting back to the 5% price increase you've done in April. Is that then fully compensating the price surcharges you've seen from suppliers so far? The gross margin-
Yes. Yes, it is.
you have on your
Yeah. Yeah. The 5% it is, but also in the 5%, we are we here have to what we are expecting from increasement going forward. We actually have done that all the time also in 2021. We have increased the prices to what we are looking into now and what we see from expectations in our order backlog. But what is extraordinary and significant here it is the extraordinary, you can say force majeure, not price list increasement, but some extra who is here now. It is what we have been hitting now with extraordinary.
Okay. That's quite clear. Then just to your comments on sales in April and also an optimism for May. Obviously if we take Danish consumer confidence, it hit a lower point in April than during the financial crisis. With the price increases you flag here, surely the customer dialogue must be more difficult, yet it doesn't seem like you've seen any negative impact so far. Can you maybe just elaborate a bit on sort of your current customer dialogues, fully appreciating visibility's extremely low, but what can you see at this point?
Yeah. If you imagine the customers who is the market for now, maybe they have sold their old house and so on. They have bought a plot, and they have to make the family dream to be realized.
Therefore, they have to make a decision, what company do we have to build our house? Here we see now that we absolutely, HusCompagniet is the safe haven, as I mentioned before. Therefore, the current customers have to make a decision because they are in a situation in the family that they have to build a new house. What we are looking into, it is more there in the future. There can be some customers who don't want to start up the process, and therefore the visibility going forward is not on a normal level as we are looking into. I hope that it makes sense. That is the current.
It makes sense.
Yeah. I think, Kristian, so the question is of course, what we are uncertain around is of course the element that we have increased our prices quite a lot. It is becoming more expensive to buy a new house, and people are getting scared. Will they wait a bit to see if things, you know, clear up? That we don't know. I think, sort of generally, I think all of us are sort of getting into the accepting the notion that things are getting more expensive and we are seeing inflation, and it's happened quite fast, right? When people are coming, they are not surprised that prices have increased. I think, so that's us. We just don't know the reaction on that.
It's not like when you come and you say the price have increased, they're like, "Whoa, what has happened?" That they understand, but we don't know how they will react on that pricing, if it will hit their... If it will hit our sales volumes moving forward. That's the big question.
Just one thing more, Kristian. It is also important that the old, you can say, the old to the current house market is increased in the house prices over the last couple of years, around 15%-20%. Maybe it will decrease a bit now, we don't know. It is the level.
The new house, we did increase our prices with 10% in 2021, and if we are increasing the prices around 10% again here in 2022, yeah, then it's 20% and together actually for the two years. It is around the same level, 15%-20%, that the current housing market has increased. It is also one of the things in the greater perspective that you have to take in your mind.
I understand. Maybe just to follow up. The sale you have on your own land plots, have you seen any hesitation there?
No. We haven't. But our own land plots for now, it is on a low level. We only have 10% around in this year. What we are looking into, you can see in the future, own land, we haven't sold that yet. Therefore it is with strong margins that we will sell that. It is actually a good position for our own land in the future.
Okay, great. If I may, just two quick housekeeping questions from me, and then I'm done. In the semi-detached segment, obviously the gross margin in Q1 is quite low, and you talk about this intersegment impact. Can you maybe just help us a bit for the coming quarter? Should we expect the level to remain around this 7% due to this VårgårdaHus project continuing, or how's the dynamics for the semi-detached segment gross margin going forward?
They will go up, so this is mainly due to the, of course, the VårgårdaHus. When we have a lot of B2C, which we had here for H1 and Q1, then you see the margins being low. If you have less, they go up, of course, because you don't have this intersegment related revenue, right? You will see it go up and yeah.
Okay. A bit different mix this on B2B versus B2C in the current quarters.
Yes. Because there you have the full, basically, P&L and then semi-detached and then of course, you have much higher gross margins.
Perfect. My other housekeeping question, just on the acquisition of the Danhaus factory. You say breakeven this year on EBITDA. What level of depreciation should we expect for this asset?
That I can send to you, Kristian, because I can't remember it in my head, to be honest. I can just look for my notes. I'm not sure I have it. We will just send it to you and Claus.
All right. Thank you. Great. Thanks. That was all for me.
Thank you.
As a reminder, if you would like to ask a question, press star then the number one on your telephone keypad. Your next question comes from the line of Frederikke Dahl Olsen. Your line is now open.
Yes. Thank you. I also have a couple of questions, and we'll also be taking them one by one. You have downgraded your revenue guidance for 2022 by DKK 100 million, which, as you said, Mads, is effectively a downgrade by DKK 200 million, taking into account the revenue from your new factory. With the visibility you have of your order backlog, I would expect that around March you would have practically no downward risk on your guidance. Could you maybe comment on that and what has changed since you reiterated your revenue guidance in March? Also relating to that, maybe a quick comment on your lowered expectations on deliveries for 2022 and what segments the effect from phasing these deliveries into 2023 primarily relates to.
Yeah. Thank you. Good question, Frederikke . I can just, I just found the number on the depreciations on Danhaus . That's DKK 2 million for Kristian and the rest of you. Just sort of skip. Then on basically on your question around our visibility of revenue, the way we take our P&L, we of course also have three months in, basically we have four months in 2023. That also affects the revenue, right? If the sales is lower in March, you still have basically one year revenue, and we haven't had sort of one year of booking of our full P&L. You basically have two months, right?
When we sell a house, it's the work in progress we are taking for the first four months of 2023, we would have that in, right? If we're delivering a house in January, you will see it's the end of January, you will have 80% of that revenue and P&L would be in basically in 2022. If it's end of February, it would be 60%. The reason why we are taking the revenue down is of course because if we have lower sales, we have lower activity.
Part of the revenue we'll generate in the work in progress at the end of the year as well as we are still in Funen, for example, we are selling in a shorter distance from sales to actual deliveries that can be even as close as six-seven months. There is also areas in Funen and in Jutland where we also have an impact. It's a fair question, but that's also why we are not taking it down more due to the sales. That's because of the of these of this. You asked about sort of the second question. Just come again, Frederikke . What was that? That was-
Just relating to your lowered expectations on deliveries, if you could comment on what segment?
Yeah, sorry. Deliveries. Sorry. Yes. Yeah.
What segment do you expect from phasing? Yeah.
Yeah. It's mainly our detached and then it's a little bit semi-detached, but mainly detached. Think of it as detached. It's mainly due to that. If we have, as I mentioned, we would have these, you know, you come in to buy a house from us now, and then we would deliver this by December. Then what we would do now is potentially saying we will deliver it in the end of January. We have a little bit more wiggle room around the delivery. We are taking a protection perspective from our view that we will put in a little bit more cushion around deliveries. That's why we are moving a little bit on deliveries.
Right.
We have more cushion if we are concerned, right? So we will have different areas where we have different challenges.
It's also important for us that, as I mentioned before, 98% of our houses we do deliver right on time. Therefore, when we are talking about talk to the customers, what can they expect from us, then it is important for us maybe now have a bit more wiggle room as I mentioned. Therefore there's that way not to overpromise.
Okay, that's clear. On your margin guidance, you're taking this down by close to a percentage point. I know that's not a lot, but you have previously stated that of course some months you will be a little bit behind and some months you'll be a bit ahead of the curve, but that you're overall very comfortable around your margins. Just wondering how we should think about this downgrade. Is it primarily due to lower activity levels? Is it uncertainty around raising your selling prices or what are the primary reasons for this downgrade?
Yeah. I think the main reason for it is this force majeure, like the energy prices. I think we have been extremely. We hope you feel at least that we have been very good at foreseeing what comes ahead of us. Therefore we were expecting, you know, increase in margins. What has happened is that we've seen these very instant price increases that takes effect immediately. Those we haven't foreseen, and we haven't foreseen the war in Ukraine, et cetera. What has happened here is unprecedented. Therefore, it's these elements that made us downgrade. When you talk about the sales, yeah, we are making a wider spread in our sales.
If the sales go down, it will hit us. That's not necessarily a 2022 thing. It will marginally, but of course we had some of that. It will mainly be marginal because it might hit into the WIP by the first, you know, the first period of 2023. It's not that we would have had room for, but it's more the sort of energy prices. That basically escalates the impact on our results. It's very extraordinary. That's why we are saying that, or at least we think it's extraordinary. It might be that this is the future we are looking ahead of, hopefully not.
If we get sort of more normalized world, what we have been used to the last 20 years or at least the last 10 years, then we would be very much in control of our margins and you would see us increasing. Here we are just seeing something that is a little bit different than what we've been used to.
Right. That's clear. With these new and lower expectations for your houses sold in 2022, will you be making any additional changes to your organization? Maybe relating to that and just taking a step back, could you talk us through the organizational changes you did in 2021, where I believe you spoke about ramping up the organization in the first three quarters and then adjusting your organization with 28 people in Q4. Maybe a comment on that, please.
Yeah. It's a very good question. Clearly, if we see lower activity, you will see us decreasing our staff, FTE. That's just simple fact. Alongside our activity, we will adjust the organization, as Martin also said. I think that's the comment we have to that. When we saw we ramped up around sales, around the drafters, around tech, around the construction managers, we upgraded that. We upscaled those in throughout 2021, which as we're alluding to here. In February, we did the adjustment of the organization of these 28 people, and those were also reflecting. It was mainly in our Jutland part of our business, which has the shorter backlogs, that we adjusted our organization.
It is within these three areas that we also adjusted, but of course less around our construction managers, given that we are still having a high activity, as you saw in Q1, right? This is to the extent that we can probably share information around that.
But, but-
But, but this-
If I may. Q4 2021 and in January, February in 2022, it was low sales. Therefore, we adjusted the organization to what we had to deliver in 2022. What we saw here was that March and also here in April, that we now again have increased our sales. Now we are in a more normalized sales situation. Therefore our FTE level now is actually in the right position against what we are looking into in our order backlog. If we see now, as I also mentioned before, the current customers come out, we see that they want HusCompagniet, and they are buying from us. What happened in the coming months, it is the big question.
Therefore, if our sales are going down again from the summer and the month after, then we can see that our activity in 2023 is not as expected, and therefore we will adjust the FTE again. We are on top of that every month.
Right. Okay. Understood. Thanks. That's all from my side.
Thank you. Thank you.
Thank you. Your next question comes from the line of Marcus Solander. Your line is now open.
Thank you very much. Just one question, if I may. Your net debt to EBITDA is 2.25x now. It's a little bit above your target, and the macroeconomic situation is a little uncertain, to say the least. I'm just wondering if you are doing any kind of contingency planning or taking any measures to sort of bring your debt down quickly. If you are, what kind of measures are those?
Just to make it clear, Marcus, our net debt is 1.8x turns. Just so that we said our guidance for the year is that we're below 2.25x turns. Currently we're at 1.8x. We will be managing our leverage. We have sufficient facilities in place. We have, as also in one of the pages with the highlights, it says that we have DKK 400 million already available cash. We feel very comfortable around our financial position. We will be moving down towards below 2x turns again. We've said that this transaction, because we've spent money, we are upgrading our guidance.
It's going from 2x to 2.5x, which is exactly the number that we acquired the company for. We are at 1.8x turns, so we will be below the end of the year, we'll be below 2.25x turns. What actually sort of affects whether or not we will be in the higher end or even lower than 2x turns, that is more how successful we are at acquiring attractive land.
Some of these land, just to calm people down, some of the land that we will acquire is something that we have been looking at for many years. Other instances, the reason why we might have land on our books might be because we sell a product or we sell a project, sorry, in our B2B, where we have a back-to-back with a customer, let's say a pension fund, where we then keep the land on our books, and then we deliver the projects in phases or in different stages, and then we basically also deliver the land together with the projects. I should probably not have mentioned a pension fund. It's mainly because it's real estate funds where they get allocated cash, and when they call the money like a private equity firm, the clock starts ticking on carry, et cetera. Right?
On these, we might take the piece of land, but we have a full firm agreement that we will deliver the land plus the houses we are building on the land. We're very comfortable around our leverage position. If we are, at the end of the year, around these 2.2x turns or 2.1x turns, it will be because we've gotten a lot of land on our hands, either to B2B with back-to-back or to B2C, which we're very comfortable that we can sell, and we bought them at prices that was from the past and not at current levels.
Okay. That's reassuring. Maybe just a follow-up. Have you disclosed your covenants?
Basically, yeah. We have a grid, basically, we disclose it together with our listing. We can send it to you, Marcus. We had, you know, covenants are way above the current levels. We more have a grid of our interest payments, and they are affected by the different levels. We're paying 145 basis points at below returns. Then, you know, you take 10 basis points up when you move up above that. It's, you know, it's insignificant in this sort of. We have a very comfortable loan documentation facilities in case of not financing from our two great banks, Nordea and DNB.
Okay. That's great. Thank you.
There are no further questions at this time. I would like to turn the call back over to our presenters.
Yes. From Mads and I, we'll just say thank you for this call with a lot of good questions, and have a nice day. Bye.
Have a nice day, everyone. Cheers.
This concludes today's conference call. You may now disconnect.