Good afternoon and welcome to this annual report 2023 presentation and Q&A with Movinn. With us today we have CEO Patrick Blok. First there will be a presentation and afterwards a Q&A where the CEO will answer questions submitted via stokk.io. We also have Johan Larsson, equity analyst from Västra Hamnen Corporate Finance, who will ask questions in the Q&A. There have already been pre-submitted questions on stokk.io and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to Movinn to start the presentation. Patrick, your line is now open.
Thank you, Hannes. Thank you for the introduction and thank you for hosting this event. Yeah, we'll be going through a presentation of the annual report 2023 so I'll jump right in and afterwards of course be available to answer any question there might be. So yeah, in general a year of kind of mixed results to be fair. We succeeded on some parameters that we set out to do and then we failed on some other expectations that we had going into the year. We have realized a revenue of DKK 83.4 million on group level which is an increase of roughly 14% from last year. We have added 14 new units in total. This is as expected.
Again, I'll come back to it a bit later but the overall plan was to kind of capitalize on the very aggressive growth we did the year before and then kind of slow down a bit on investments in this year. So that is as expected. We did a new market in Sweden which is also good. It has had a very positive reception from a strategically important client so that's great. And then we also signed a very big kind of master operating lease on a big development in Copenhagen. We relayed that information in Q3 so that was also a very good result.
It's a testament to that sourcing strategy that we, what do you call it, published some time ago where we wanted to change the way we grow from that incremental kind of smaller unit by unit into doing bigger, bulkier projects which will have a longer lead time but on the plus side, way more efficiency in operations, stronger concepts, that sort of stuff. Where we failed is on the bottom line metrics for sure. We had some volatile demand in primarily secondary domestic markets. We were hit with some unexpected changes in the market equilibrium and we've been kind of struggling ever since to replenish that kind of shift in the supply-demand curves.
But realized an EBITDA which was below expectations going into the year, which is of course disappointing to all of us, and in that sense delivering, and then that kind of trickles down to underperforming bottom line metrics, be that EBITDA margins, return on invested capital, etc. So a year of kind of mixed performance of course and with a disappointment on financials for sure. So carrying this slide on from last year's presentation, I'm trying to keep it fairly kind of comparable to what we did last year. And last year the trend lines were a bit more attractive than they are right now, but it's part of the game to both relay kind of disappointing results as well as delivering when you're doing well. But as you can see here on our five-year trend lines, you can see that the revenue has plateaued a bit.
We went into the year expecting higher revenue growth than what we delivered. Because our inventory is perishable, it means that a lot of that missing revenue—when we miss a target—a lot of it can be seen and read on the bottom line performance. Moving on to the EBITDA slide, you can see a nice trend line there being disrupted in 2020 by a year of COVID-19 lockdowns but then kind of back on track and back on in a fairly aggressive kind of growth. Then going into 2023 where we then kind of see an unexpected and a disappointing EBITDA result. Similarly, you can see the unit growth has kind of plateaued a bit and that was basically as expected because we did so many new units in 2022.
Then the overall idea was to take a breather, capitalize on that, and then work on marginal gains, so to say, adjusting the cost base and these sorts of things when we went into 2023. Then a mix between external circumstances and some internal as well meant that we then disappointed ourselves on the bottom line. That is what it is. Our group structure is the same as it was last year. We continue to push a decent or very kind of strong growth and presence in Sweden, covering more international and strategic important markets. In Germany, we are not kind of displaying any progress which is a mix between the macroeconomic climate in Germany meant that some of the projects and developments that we were in talks with got postponed or delayed or for different reasons didn't materialize.
But on the other hand, right now we focus on domestic markets. We focus on the existing portfolio. So in a sense, it is in line with our current focus not to do or push or rush into new things in Germany. In here, you can see the financial highlights in a segmented way. This is a similar slide as we've shown earlier. So you can see the key figures segmented per country and then compiled into the group level on the column to the right and then comparable to the last year. And as mentioned earlier, we realized a 14% revenue growth. However, we kind of missed the target on that. We expected to do more going into the year, meaning our cost base has been kind of higher than symbolizing an expected higher revenue level as well.
So even though we did a good or two-digit growth, it was not enough and our cost of operations, be that variable, fixed staff, was kind of geared for more. So that combination meant that we missed out on bottom line targets. If you look at our balance sheet, it's fairly comparable to last year. We've taken our debt down a bit. Our equity is down because of the reported loss, of course, but in general, we maintain a pretty good kind of solidity ratio and those sorts of things that we, of course, are currently monitoring and constantly monitoring. On the cash flow statement, we're reporting a negative cash flow of DKK 1.6 in Denmark and DKK 1.75 on group level from operations. That's down from a positive of DKK 4.2 in 2022, which is unexpected and disappointing.
Again, the bottom line metrics trickle down and then has a negative effect on the operating cash flow. Investment activities, we've invested DKK 3 million in Denmark and DKK 3.6 million on group level. So we've taken those investments down a lot from last year, which was also kind of part of the plan. We did add 14 new units, which symbolizes an increase, and we continue to invest in technology, which is a big part of kind of the implementation of our long-term strategy. So that's unchanged.
We took down our debt, so our financing activities is down, and that results in a net changing cash flow of roughly DKK 6 million, taking our closing balance to just below DKK 7 million going out of the year. Looking at the key ratios, again, this is segmented on Denmark and on group level. So we've seen a very substantial growth in Sweden. We've taken that revenue up by 470%, I think it is. It's because that boomerang effect of adding new units. Of course, you don't get the full year effect in the base year.
So that effect then comes through the year after that. So that's kind of a combination of the continuously adding of new units and then getting the full year effect from the units the year before. So a steep growth, which is as expected and within the guided target. So that's good. It's taking our overall revenue growth up to the 13.9% mark, which is lower than we expected but still in double digits. EBITDA margins is below the targets that we want to see, and then that trickles down into the EBIT margins, the return on invested capital, that sort of stuff as well. Operational data, we display this as well.
Key takeaways here is that we have added 14 units, which, again, thinking about the original guidance, it's within the targets. We wanted to slow the unit growth. We wanted to change the sourcing strategy with it. We wanted to pivot away from adding a handful here and there because it was tearing a lot on our margins, doing that incremental ongoing growth. Again, people who have been listening in for more than just this event will also remember that as I've said earlier, if you're delayed in Q1 on launching new units, you'll be delayed throughout the year. So you'll be chasing your tail. You'll be chasing your costs.
And a lot of that was what we did in 2022, so we didn't want to do that in 2023, meaning we changed the sourcing strategy, went after signing bigger bulk projects, and stopped adding these smaller increments with the expectation of massive improvement on margins, of course, which unfortunately didn't pan out this year. But that's kind of the future focus for us to get that back on track. Revenue per unit, again, it's within the guided range. Last time we did this, I kind of promised that we would do a present value, so to say, of the revenue guiding bracket, going back to when we did the original guidance in 2021.
Of course, there's been massive inflation ever since. So money at that time is not as valuable today as they were back then. But my accountants didn't agree. They thought it was too theoretical. So we've kept it as it is. But in this kind of revenue per unit, there is some sort of present value deterioration if you compare it to the 2001 numbers. Yeah. And again, and of course, then the vacancy is above where we want to be, and it's also having kind of a significant impact on our revenue potential, and then that trickles down to our bottom line.
So vacancy above where we want it to be. And that's kind of the core focus now to figure out how we can use the or implement how we can use the existing capacity better instead of just going business as usual, trying to chase percentage here and there. We are really changing a lot. Another thing I thought would be important to mention is throughout the year, we've had fluctuating demand in secondary markets, always being one of them. Instead of playing the waiting game and hoping for better times, hope is not a great strategy, we can do these kind of calculated reshaping of the portfolio.
We can downsize in markets where we believe that there's a systemic change in the equilibrium. That's what we did in Aarhus. It came at a cost, so it's an exercise to be used lightly. But of course, if you're not feeling confident about a market or a smaller market, then downsizing it and cutting the costs going forward is, of course, a fairly prudent tool in the toolkit, but it should be used lightly. But what we basically did, we cut off 13 units, which symbolizes an annual savings just on our direct costs of just below DKK 1.7 million. So it was a necessary exercise, and we've never done that before, really. It's been growth, growth, growth.
So doing that is, of course, also something we can do and can continue to do, but we have to do it carefully. It deteriorates our relationships with the landlords, and it's not free either to kind of give back units. Focusing on the future and on our guidance for 2024, we expect to see a significant improve in demand across all markets starting from Q2. Q1 is historically a weak quarter, so Q2 has this kind of seasonality pattern working for it. We also expect some of the more underlying demand drivers to be replenished in Q2.
Of course, and again, we're not just sitting around and waiting for the market to improve. We're doing a lot of stuff in-house as well. We're doing a lot of good work on key accounts. We're doing a lot of kind of good stuff on our technology stack, which we expect will improve our kind of performance significantly alongside more macroeconomic circumstances. So that's why we are reporting improved top-line growth. Most of it is going to come from the existing portfolio. We know the potential of the portfolio.
We saw what it could do in 2022. We were disappointed back in 2022 as well because we kind of, we know it can do more, so we want to do marginal improvements, and those sorts of things. So that is the core focus now. It's just getting the existing portfolio performing like it has done historically, but also with an expectation to do better than we've done historically by implementing some tech changes, etc. So that's where all the most of the improvements are going to come in 2024.
It's going to be from the existing portfolio. This means that we're not expecting to do any new market launches of any significance. We have already done one in Sweden, Investo. Sweden is a bit different than Denmark, of course. Denmark is where it's a home market. It's where we have been operating for a long time and have a fairly consolidated platform. So that's kind of where we need the existing capacity to improve. Sweden, we can still be opportunistic, do some growth, look at smaller launches in new markets when we do so together with key kind of important clients.
But that then trickles into some guided targets here. And we expect to do an EBITDA in Denmark in the range of DKK 8 million to DKK 11 million. We expect Sweden to be at DKK 0 million to DKK 1 million. And again, Sweden is a growth market still. So launching new units is going to tear on the bottom line. We only have 60-ish units in the market, meaning that if you're launching 10 and there's a lead time and a market intro to that, it can still have that deteriorating factor. But we expect that to be EBITDA positive going out of the year, which is fairly good.
Our investments in general are going to be lower. The expected growth of units is not going to be as ambitious as it's been historically. And that is a combination of what I just mentioned, getting the existing portfolio up, focusing on that, and then planning for longer-term growth on doing bulkier projects, which will have a longer lead time. It'll take time to build a big property. It's just a natural thing. So that's why. New markets in Sweden, we've put in 1. We've already relayed it in a company announcement that we did, Västerås.
Very important market in Sweden, driven by a lot of interesting industries, which is kind of anti-cyclical. So that's why we like that market a lot. The current portfolio remains the same. We have no intention of doing new products or anything like that at the moment. As I said just a few minutes ago, the focus is on the core product, which is the entire corporate housing portfolio, getting that back to normal levels and performing like we know it can. Our furniture rental kind of subproduct was launched early in 2023 with a great kind of reception. It's a great business model, for sure, but it takes the focus away.
We don't want to take our focus away from where the lower hanging fruit is, so to say, meaning that even though the furniture rental has been doing pretty good in 2023, it's kind of been put back on the shelf for now because there's way more potential in getting the core business back to historical levels. Client concentration, it's a geeky slide, I know, but we monitor this. Earlier this year, one of you might remember, or a couple of you might remember, that we had an issue in Odense.
Odense is a secondary market in Denmark. It's been super strong ever since we launched there. It's been driven by long-term, big infrastructure projects. Demand has been completely stable. During COVID-19, demand was totally stable. So it's been a great kind of engine room for the group and a great market to be in, very kind of entrepreneurial growth, new initiatives, a very good kind of political climate in the town hall that's doing a lot of good stuff.
But what happened was that even though we had a lot of diversification on the client portfolio, a lot of those underlying oh, sorry, a lot of those clients was kind of working on a few underlying things, one of them being Meta's data center, which was abruptly canceled and the work won't really resume. So we could see demand from that slowly trickling away. It was a big project, a big value driver. Other than that, there's been a lot of infrastructure works, and those were kind of completing at the same time. So it left us on a vacuum.
So that's why this is so important to us, and it's important to us to monitor and monitor more closely now and not just looking at the face value of each client we have, but also looking at what is the underlying demand driver? What is the underlying industry? Is it a countercyclical industry? Is it a high beta industry? That sort of stuff. And coming from that point, you can see that our top client is continuing to increase their margin or their revenue share. It's still within a super well-diversified kind of overall client portfolio.
And a client like that is in an industry which is anti-cyclical. So we're looking at that and monitoring that. But you can see that the concentration is going up a bit. It means that fewer clients are taking bigger revenue shares. But it also means that there's loyalty and consistency, of course, in the portfolio. So tech development, I've been talking about this a couple of times, and now we've really floored the accelerator on this. We've had our tech development up to, I would say, Q3 in 2023 has been very focused on the operational side, on the user experience side, creating a super strong user experience and a smooth kind of operating machine that could be scalable in the way we service clients when they are inside the door.
And then having these kind of disruptions that we experienced throughout the year that really accelerated the need for changing our entire kind of tech development focus towards more sales-oriented stuff. And one of you might ask, "Why didn't you do that sooner?" And it would be a great question. But we've had a recipe that worked, and you're looking at and you're not really looking to change a winning team or change a recipe that's working until it's not working anymore. And that was kind of what we faced. And so now we are flooring the technology development with a sole focus on doing new sales stuff.
And one of the things we did, which has already been a very good success to us, is that we opened up the platform to doing direct bookings. And again, it sounds basic. People are used to booking hotels and flight tickets and what do I know. But it's not as simple as it sounds, actually, because of the way we've built our entire technology infrastructure. So all our units are available in real-time availability. People fall in love with a unit.
So they want, "I want that unit," but the dates then don't add up. So there's a lot of clever stuff you have to do before you can make a meaningful open platform for everyone to just go in and book. We needed the system to dynamically price the product. We needed the system to price in vacancies. So if a client wants a unit where the dates are not matching up, what do we do with the gap period, so to say, or the lost days? So that has to be priced in. There's a lot of clever stuff we've done on that. And the last thing which I'm pretty proud of is that there's no hurdle rates. There's no stopping factors.
So one of you might say, "I can book an Airbnb apartment tomorrow." Yes, you can probably try, but you will not be able to book it and get it all done in the click of a button. You'll have to wait for someone to approve your booking or whatever. Do I know? Here, we have a completely automated and digital order flow, meaning that the orders are just coming in without us doing anything. And we can see the orders being made on weekends. We can see the orders being made on holidays. We can see the orders being made off hours. So coming back to it, so in the old days, we would be like, "Come in Monday morning." We would have 100 emails that need to be replied to.
We would be constrained by office hours and people capacity and whatever hour there is in the day or minute in the hour. At the moment, we are just open for business 24/7. It has great potential, and we can see it working extremely well already. It's delivering over 20% of all the bookings we get, which is great. It's taking a lot of administrative pressure off the team, and it's giving us more speed and more velocity in how we sell. If a client is sitting at their home on a Saturday and want to book a unit, they can't get a hold of anybody because their office is closed, they might go elsewhere. Who knows? Not now. They can just floor it and book and be done with it. Everything is digital. It's fairly intriguing to monitor.
Another thing we are doing is building a white-label platform for our structural partners. We have a lot of them. This is a way for us to kind of do the same thing with the direct booking, which is mostly walk-in clients, people that we don't have an ongoing relationship with. They kind of use the online feature. This platform that is currently being built is kind of putting nitro into that feature or whatever we call it, steroids into that feature because it will allow all our kind of structural partners, company clients, third-party agents to have their own user go in and book their own apartments. So it'll give us a lot of, again, a lot of velocity, a lot of speed. That's also why we call the platform Velocity.
It's also going to make us less reliant on in-house staff because basically, we will have, I don't know, 60 salespeople in theory that could do orders on their own. So this is great. When that is complete, which is soon, we expect, again, an even more kind of automated sales structure. And that Velocity of sales is definitely something we can see already moving well and performing well. So we just need to do more and push more. Other than these two, we have some other tricks as well, but it remains a bit early to disclose what sort of stuff we're working on. But a big focus on this to turn our platform into a very highly automated selling machine. This is a good old one.
The only change from last time to now is that we actually did launch the furniture platform now. Again, it has zero focus. It looks fantastic. It has a great brand value for us when we pitch to new clients and real estate partners. It's a great story that we have this sort of capacity, and we focus that much on the details and on the quality. It doesn't have any commercial focus. But again, it does the trick. It keeps our investments fairly low on growth and on reinvesting in worn-out stuff because the entire FF&E concept is designed to be replaced and easy to maintain at a kind of keeping investments in check. The current market is, as you can see, we have the three kind of main cities in Denmark, Aarhus, Odense, and Copenhagen.
We have the three in Sweden, two in the south, Malmö and Lund. We did Ludvika throughout the year. After the year ended, we did Västerås. Those are in the Stockholm region. Even though we are still pushing for the big Stockholm breakthrough, which is, of course, the most important market in Sweden, that's how it is. The capital is always big growth kind of engines. We're closing in on it. In Ludvika, there's some very big companies. You wouldn't know the city if you're not a Swede or a local. I didn't know it for sure. No offense intended. Fortunately, we have a very kind of good Swedish director who knows those markets very well. She's kind of steering towards the launches we do in Sweden. The reception is good, and the demand is stable.
Even though Sweden is currently facing some economic troubles, we can see that a lot of our clients are anti-cyclical and based in industries that are not affected by whatever recession or whatever Sweden might be in at the moment. The other target markets are the same. Again, Hamburg, Berlin, Stockholm, Göteborg, close to home, strategically strong. Unfortunately, we haven't been able to secure any long-term pipeline in these markets yet. We've had several talks on several projects, but for several reasons, it didn't pan out. A lot of it has to do with the macroeconomic climate in Germany. Inflation has been super high. Energy prices have been skyrocketing. And that has halted a lot, and then interest rates crawl up. It's kind of a similar story in Sweden. But that has halted a lot of developments.
And the real estate investors in these markets have been playing more of a waiting game instead of just progressing forward. So unfortunately, some of the talks we had have been halted. Some of the other negotiations we had, we couldn't agree. That's also part of the game, I guess. So fortunately, there's no kind of long-term securement of the pipeline. But yeah, it's still the target markets. A big result or a good result in 2023 was to kind of we had the growth strategy flipped on its head.
We wanted to source bigger projects. And luckily for us, an opportunity arose, and we were able to enter into talks with a super strong team of both advisors and developers. And as time went on, we ended up agreeing on a super good deal, we believe. And I hope that the developer thinks so too. It's a 94-unit apartment hotel in Copenhagen. There'll be a spa in the basement. The concept is going to be extremely strong, and it's going to tap into that kind of a pivot toward doing more short-stay, also capitalizing on the seasonality pattern, but in general, operating everything under one roof or a lot of stuff under one roof instead of having to drive and service and cover huge geographical distances.
Everything can be done from walking from one flat to the next. So it's a testament to what we want to do in the future. And so we're, of course, happy with that and that we were able to secure that agreement. The roadmap to 2025 has been adjusted somewhat. Launching new products, it says in the bracket, it's halted. The reason for that is, as I kind of mentioned earlier, why do new products when there's lower hanging fruits on just improving what's already around? And so strategically doing new products is a good way to grow.
It's a cheap way to grow. But it makes no sense when there's easier stuff lying around. So that's been halted. The sourcing strategy, taking on bigger projects, it won't be a linear growth pattern. It won't be that increment X% a year. But when these projects then launch and go into operation, it'll, of course, have a big effect and a massive kind of growth hike and both metrics in unit numbers and revenue and that sort of stuff. So it is totally as planned. We are also looking to see what we can do.
If there's other ways to kind of achieve our goals and our strategic targets, then just the good old going alone, traditional strategy. So should we enter into partnerships or that sort of stuff? That's also things that we're considering at the moment. If we track progress, again, unit growth, we do this every quarter where we're kind of like, "Where are we at on our long-term guiding targets?" We are brutally honest here.
The stuff in red, not good enough, is disappointing to us. It's disappointing to our shareholders. The stuff in green is within kind of the guided range. The unit growth is in yellow. The reason why it's not in red is because it is kind of we had this very aggressive unit growth from 2022. It put us way in front of our linear curve. We're still looking to capitalize on that aggressive growth pattern. Not taking in that many units is part of the plan, part of the sourcing strategy. That's why it's not in red.
Of course, measured in real numbers, it's not a 20% increase. That is as expected. That's it for me for now. It's the same format we did last time. It's the similar slide stuff that we go through. Of course, I have to put on the disclaimer here because the forward-looking guidance is, of course, subject to uncertainty and risks that it doesn't pan out as expected. Thank you for your time, and thank you for listening. I'll be happy to answer any questions you might have.
Perfect. Thank you for that, Patrick. Let's move directly into the questions. So first question from the audience here. How data-driven are you on forecasting vacancy in specific periods? Can you forecast how vacancy will be down to days and weeks and maybe invest more in marketing for these periods to private renters or tourists or something like that?
It's a fantastic question. We are data-driven in that sense that we, of course, have our historical seasonality pattern that we know extremely well. There have been some smaller changes to that, actually. But I guess that's as expected. You can't rely on historical data completely. And then, of course, we monitor the underlying demand drivers, so to say. So in 2023, there was a lot of talk about recession and that sort of thing going into 2023. A lot of economists were worried about how the economy would fare.
So we then kind of go in and target our marketing efforts differently. We look at anti-cyclical industries, energy, maybe also, even though it's the oil industry, medicine, that sort of thing. So we kind of target our efforts towards those industries we know are more countercyclical. So that's on a broader scale. However, our seasonality pattern, people who have been listening on can remember that it's kind of boring in January, February, and then it picks up in March. And then there's a lot of historical demand in March, April, May, June.
And then it dies down in July. And half of August picks up again, dies down in December. And back in the day, we would be more like, "Okay, what can we do on order-to-order basis? Can we get this order outside the seasonality pattern? If we had a big company contract where people would stay for nine months or whatever throughout some of the slow season, that would be good for us." But now we've grown to a size where it's tricky to kind of juggle with that, with the current size we have.
So we have been looking or are looking at what sort of different segments can we tap into? And one of the things with our direct booking platform is that in the early days or early days, which is a few months ago, you could put in a request, or people would fall in love with an apartment and not with their dates. And now we can see that already, people are looking way more at their dates because they only show options that are matching up with their dates. So it allows us to be way more flexible.
We can do more flexible rental periods. We can do shorter periods and that sort of thing. And then we're also looking at, is there any meaningful way where we could tap into doing more tourism within the boundaries of what's possible technically? And of course, also, what can be done and that sort of stuff? So looking at that, also very data-driven. We monitor that. My background is as an analyst, so I do that a lot.
And the funny thing with tourism, all shorter stays, whatever we call it, is that you can achieve higher daily rates, and you can do it in times of the year where our classical segment is down. So in July, in December, in these sorts of periods, that segment is rising. So that is definitely something we're pivoting more towards and gearing our platform and our tech stack more towards because the data fits in very neatly with the current seasonality pattern we have. And yeah, so great question. That's one of the things we're looking into.
Okay. The next question maybe falls a bit in that category as well. Can I, as a small company owner or private person, now book directly on your website for just a few stays in Copenhagen, or do I have to go through any kind of gatekeeping?
Nope. You can just no, you can't. It's totally open. There is, of course, we've built the platform to both fit. If you are a private person, then you can just do your thing, sit in the sofa, put in your name, your details, and then book. And in the validation step, you'll be asked to validate your ID, which is, of course, important for us, KYC. And also, we don't want to let in people who have ill will or bad intentions or whatever we call it. So there is that sort of gatekeeping, which is you validate your ID.
You do a little, I think, you do a little scan of your face or your passport or stuff like that. So we know who is in the unit, of course, which is important. But basically, they can just follow through. Pay by credit card if they want. They can pay by bank transfer if they select that. So there's a lot of flexibility and no sticking points at all. So that was the initial feature. And then shortly after that, we launched a corporate feature as well. And we've gotten a few bookings on that as well. One of them is a client I've been chasing around for ages.
And then all of a sudden, I came into the office, and there was a booking from that client. So I had a very good excuse to kind of ring them up and say, "Should we do some more?" So again, it's like you can compare it to a fishing net, or you're probably getting bookings you wouldn't get if we didn't have that. And so it's widening our reach. And there's—I'm that type of person myself.
I don't want to talk to anybody on the phone. I don't want to write an email and wait. And if I'm in Singapore, whatever, I don't want to be in a if I'm in a different time zone, it'll take days before we can finalize. I don't want to do that. I just want to do it on my own, in my own kind of sofa from my phone or whatever. So that is possible, and it's completely open under the little snag that, of course, you need to validate that you are a real person and not some kind of criminal kingpin wanting to do a brothel or a little whatever. So yes.
Yeah. You have previously discussed a project in Germany looking like a hotel from the outside. What is going on in Germany? Is this not happening, or can you elaborate on the German market?
I can, for sure. We had those fancy 3D renderings we had made. It was part of a rental negotiation we had. Those 3D renderings were needed to the municipality because they have to approve the signage. So that's just to give you an idea on kind of how close that one was. It's halted at the moment. We have a first right of refusal. We were meant to go sign it, and then the developer postponed it. They had some snags with financing or things like that. Then it turned into an exclusivity thing that was extended for some time.
Now we have a first right of refusal. So they've halted the project. It's a great project. You can compare it to Strøget in Denmark or Stureplan in Stockholm. It's something like that. It's very central, very well located. But it was outside our control. So it's currently on hold, but we have right of first refusal when the developer then kind of resumes his ambition for the property.
Yeah. Is there anything you can do in the future to make your business model less volatile when looking at the EBITDA development? Anything you can internally do about this?
Yes. Again, not trying to sound like a broken record, but it became very clear that we were not as strong or solid as we wanted to be on our sales stuff. It was very relationship-driven, very personally driven, not just within our internal stuff. It was also people change jobs. You have a stakeholder in some big kind of important, strategically important client changing positions. A new one comes in. You don't know what's what. There's been a lot of shifts in the market. You also see a lot of the big corporate clients, they are pivoting towards a more international supply chain.
That's also why it's important for us to be able to deliver in Sweden, Denmark, Odense, Aarhus, you name it, because it gives us more reach. It gives us more relevance to these kind of bigger clients. There's been a lot of shifts like that. How we fix it is by tech development and by focusing all our tech energy into the sales side of things and being happy with the way the operation stuff is now. It's working fine. Of course, you can always improve, but we're happy with it and then pivoting all our energy towards that.
So not being bound by office it sounds ridiculous to say that out loud, and I'm painfully aware of this, but we're only open for like 9:00 A.M. to 5:00 P.M., and we're open from Monday to Friday. And if you're in Australia or the U.S. or wherever, you're probably not going to be awake when we're awake when the office is open. And it just creates a lot of lag and time lag in our efficiency to do the orders. So just by implementing that little. It was a big project, but by implementing that, we can snag all of that, and we can snag it.
I get a ping on my phone every time a new order comes in, and it's 10:00 P.M. at night, Sunday evening, in Easter, that sort of thing. So that's an important one. And then it's also trying to tap into more kind of channels, trying to widen your net a bit, being more visible. We're doing some integrations to be more visible in all sorts of kind of places and not just our own. So we try to disconnect, okay, ad spend, and how often do people kind of find us and not one of our competition? We try to really widen the net. And that's also tech-driven, completely tech-driven. So that's the focus.
Q4 revenue was below Q4 in 2022. How can that be? And what are you seeing here in the beginning of 2024? Is the trend continuing?
Yeah, good question. Again, Q4 is always kind of sad. And that's one of the things we're trying to structurally change with the things we're currently doing. But it has to do with the fact that the secondary markets has just been phasing away, so to say. So if you take last year, for example, Odense was fully booked, like 100% rented out, zero vacant units, zero vacant days. It was driven by long-term kind of client relationships. And then Facebook and again, I hate to say this out loud, but it was something we didn't see coming.
Of course, nobody saw it coming, but we didn't like the correlation we had in the client portfolio from a big project like the Meta data center. And if any one of you have been up there, it's a building that goes as far as the eye can see. They were meant to do two more stages of that. So it was like 10 years of bonanza. And then they halted it. They canceled everything. We had a relationship with all the subsuppliers on that project, tech-wise, construction, all that. And from the one day to the other, they vanished.
So that's the main factor to that, I would say. We've, of course, not just sat on our hands. Again, we've been out and done new, have done more locally, got some good local clients in. But again, I can relate to what the sales team went through. If the mountain comes to Muhammad, why go out and try to chase new business when everything is just falling into your lap? It's a natural thing. But the downside was that it was too correlated.
So in the meantime, we've been out and talking and doing some very good partnerships, I would say, as well. But we still need that kind of big breakthrough in a city like Odense. And we expect it to come in Q2. So answering to the question relating to the first quarter here, it is, I don't know if I can properly say this, but it is going as expected, but with some pickup potential coming in the coming quarters. And also, of course, the effects from all the internal things. We're not just sitting around waiting for the clients.
Again, we're also doing a lot of strategically important stuff to change the way we sell and our reach. So yes, Q1 is going as expected, but the breakthrough is not expected to pop in until Q2. And again, if I go market by market, it's again, Odense is a bit in that waiting position. All of you, we have this no-name policy, so we're not naming anybody. But all of you can read the news, and all of you know what's kind of going on in Odense and what's in the pipeline in Odense. And we know that that's going to create a big influx of demand, and it's going to be a super long-term thing.
There's stuff going on in the harbor. There's stuff going on in the defense industry. There's a lot of stuff going on, infrastructure, that sort of thing. And so that is going to change the market conditions a lot, which is going to be great for us. And then it's going to be a 10-year stretch again where it's stable. Aarhus has been affected by, I think, we also touched on it earlier in the year, big oversupply of units. We had a very big colleague launching a massive property of 600+ units. I'm very impressed and kind of in awe of that kind of gamble or whatever we call it.
Of course, when these sorts of supply stuff happens to Aarhus, it's going to take a while before the market finds itself again. So that's why we downsized Aarhus. We can see it's kind of performing way better, lower cost base, higher demand. Then, of course, we're also doing stuff in Aarhus to structurally fix demand in that market. Copenhagen is going as normal, steady on.
Perfect. Before I hand over the word to Johan for some questions, I will just take one last question here and then have a pause from my side. The question is, Novo Nordisk is growing significantly and investing in new facilities. Are you expecting to see any kind of Novo effect in your business in the coming years, both when building new facilities and hiring more employees from outside of Denmark?
Yeah. Yeah. I like the way it's generally phrased, but because, again, no-name policy and all that. But yes, we do. Yes, we do.
Perfect. Then I will hand over the word for Johan for his questions.
Yes. Thank you very much, Anders. Thank you, Patrick. I know we already talked quite a bit about it, but my first question was regarding your online booking function. You talk about it as an additional salesperson that never sleeps. I was wondering, do you also see it as something that could significantly improve your current operational performance and replace some existing sales channels, perhaps?
Yes, for sure. It's a very good question. Yes, we use the phrase, "It's a salesperson that never sleeps," because it is. And again, right now, I haven't done the numbers recently. But last time I looked, it was doing 21.7% of every booking we did. And so either we're doing too few bookings in general, or the sales machine is working extremely well. So seeing those conversion numbers is, of course, fascinating and interesting. And from an operational perspective, it's taken on a comparable basis, it's taken 20% of workload off the staff.
So we will be able to do more with less people going forward. And the energy we save on administrative tasks, like doing orders, following up on clients, sending off, "What do you think about this and that?" And then a decision time that's too long and then whatever. The time saved on that will allow us to spend more time with the clients and the key clients. I love every client we have, small and big. But the direct booking feature is mainly generating what we call walk-ins. Walk-ins is mainly one-off relationships.
It's people who find us and like what they see and whatever and book. Then they're here with us for some months, and then they leave. Then they give us a good review if we've been doing well or a bad one if we've been disappointing them. Then they're off. But the time we spend on a walk-in client, like one person, is the same time we spend on a big structural client who's booking multiple units. So it's or maybe we might even spend more time on the walk-in.
They might have a lot of questions, and they are insecure. How are the things in Denmark where the structural partner's booking a lot? They know how everything works. They don't need to ask the questions over and over. The time we free up is time we can spend on structurally important clients and being closer to them and cultivating that relationship, which is ultimately, in the long run, the most important thing, even though we love everybody equally. Yeah.
Yeah. Yeah. Thank you. So turning to 2024, where you guide for some growth, I was just wondering, where do you see the main revenue growth? Do you think it will come from some incremental additions in Sweden or mainly that the vacancy rates in Denmark are expected to drop to more normal levels?
Yeah. I'm sorry, I kind of missed the other part of your question 1, but it relates nicely to question 2, so it's fine. Another thing about the booking platform is that we've built a pretty good pricing calculator. It kind of prices in everything. If you want to stay for shorter, it's going to cost you more. If you want to stay for longer, it's going to cost you less. If you are booking a stay with too much vacancy in between the 2 bookings, we will price that in as well. Then you're being presented with a number. If you like the number, then you can book it. If you don't like the number, then don't.
But then the people that like what they kind of see, they are we're kind of training it to price stuff more dynamically and then ultimately achieve a higher margin per booking. And that's then relating to your question, too. We will probably if some opportunities arise, if we can get some more units in some existing stuff, then yes. But the main growth and kind of both bottom line and top is going to come from the existing capacity and hopefully achieving higher revenue per unit than we've been used to. And again, the technology side of it is a big reason for that expectation.
Thank you. Okay. So turning to your Master Lease Agreement in Copenhagen, I was just wondering if you could say anything about what the divestiture process looks like. Because if I understand it correctly, it will take about almost 2 years to construct, but the construction won't begin until the project is divested.
Yeah, that's true. That's true. Of course, the real estate market, it's looking up. Interest rate is plateauing. There's some murmuring that the Fed might lower their rates and stuff like that. So there is a bit more optimism on the market. But it's true that two years ago, it would have been faster and easier to sell off a project like that. So I know that the advisor team is working on a structured process. I don't know how we don't know yet. So that's an uncertainty, for sure. But we remain optimistic.
And then, yeah, as you say, that there'll be a construction period of roughly 18 months. So there is some time until the project kind of can open its doors and open for business. But in the meantime, we can then look for other long-term opportunities, build the pipeline, and then just perform extremely strong on the existing market and the existing stuff we have, which is a lot.
Do you carry any costs for this project right now, consultants or whatever? Or does all the cost basically occur when the construction begins?
Yeah. Great. No, no. There's no cost at all. Everything has been kind of of course, there was some advisor stuff when we did the negotiations, but that's kind of done. And there's no idle costs in the waiting time. There is going to be some guaranteed structures that has to be put in place, but that's not until I think it's three months before we get the keys. So there's a lot of time for that. And that's, of course, deliberate. We don't want to have idle costs in the period, especially not when there is this uncertainty on where and when it will launch. So the short answer is no. There's no costs relating to it.
Sounds good. Okay. Since you already touched upon most of my questions, I actually only have one quick question left. And it was regarding your downsizing of 13 units in Odense. And I was wondering, since in Denmark, you have quite a significant deposit when you rent units, right? And I was wondering, will you get this deposit back now when these are removed? And also, just a quick, your units now with 399, that's including these 13 still, right?
Yeah, yeah. Because they were given back on the status day or whatever. So technically, they were still part of the portfolio from an accounting perspective. But yes, they're going out. We were probably a bit too focused on just growth and racking in the unit numbers. We wanted to impress the theme from the IPO scene. And after that, it's like, "Can you get enough units? Can you get enough units?" And so we really wanted to prove that, yes, we can, yes, of course, we can.
But answering the question on deposits, no, we're not getting all of it back. There is cost in giving these units back to the landlord, which is why it is something that has to be done carefully. So without having the exact figures, I think maybe half of the deposit is a sunk cost in that exercise. That's taken on the P&L. The deposit is a balance sheet item, but everything's taken on the P&L.
Okay. Yeah. That's all from me. Thank you very much, Patrick.
Perfect. Thank you for that, Johan. Then I just have a few questions left here from the audience. The first question is, Co-Living grew 17% in 2023. Can you explain what was the driver behind this growth and also why this segment is not receiving any further attention when it can grow without attention? I'm just thinking, what could happen if it actually got some attention?
Great, great, great question. No, the growth is mainly improved. It's super popular. Of course, it hurts to say it like that because it is very popular. The client's extremely happy with it. It's a great kind of story, yada, yada, yada. Vacancy has been strong. Occupancy has been strong in the segment. That's explaining some of the growth. Then, of course, I think we also added a few or we did. We added a few units late year in 2022. The full-year effect of that unit hasn't kicked in until the year after that.
It's a great supplement to what we do. I love that little kind of revenue stream a lot, mainly because we can see that the clients are so happy with it. It's also a fairly expensive way to grow. There's massive investments related to getting these sorts of units operational. The cost base is higher. So it's still fundamentally a very strong kind of whatever idea. But the investments related with it is significant. That's why there are smarter ways to do that. Pivoting back to the project we have in the pipeline in Copenhagen, there's just other when you do these sorts of deals, a big deal, a big house, anchor tenants, there's way more valves and things that you can negotiate on.
From our perspective, there are cheaper ways to grow. That's why Co-Living right now is just a fantastic supplement to our core product and performing well. Later on, we can adjust and assess what we want and need and that. But there are cheaper ways to grow. Even though it sounds weird, doing a 100-unit project like the ones that we have in the pipeline on a comparable basis, like on an investment per unit, it's way lower than Co-Living. So that's kind of why we're kind of trying to disconnect the relationship between our growth and our investments.
So even though when we reported early, when our fundamentals are as they should be, we have reported return on equity or invested equity in around the 15, 12, 13, 15, etc., mark, which is great. It can go higher. But if you disconnect the relationship between your investments needed and your growth, of course, your ROIC can explode. And that's kind of what I'm more interested in. So I hope that kind of explains it.
Yeah. And then the last question. With no changes to the current number of rental units, your guidance show you are expecting around DKK 187,000 in revenue per unit in 2024. This is still in the low end of your long-term goals. How do you expect to get that number up in the high end of the range?
Yeah. It's like on a full-year effect. That's the guidance. And again, we're still kind of coming out of a Q1. Again, hopefully, we can do a positive surprise this year instead of doing a negative one where we have to kind of downgrade our guidance. So hopefully, we can do the opposite exercise. But the way we expect to achieve this is to offset our seasonality pattern by tapping into new segments and kind of unexplored segments. And it's also using our again, sorry, to sound like a broken record, but to use those platforms we're building, the booking stuff we're building, we can see that the margin per order is higher than we've been used to.
So the sum of that on a full-year basis, you should be able to get that up. And it might not be in Q1. And then we will have kind of still a Q1 in the, as we've said, we expect it to fully kick off in Q2. But we'll still have a Q1 in this waiting position. Q1 is historically weak. And then so on. But going into future quarters, we expect that the range can pick up. But on a full-year thing with a slower Q1, that's where we guide to. Yeah, that's where the guided range is.
That was all the questions. Before we end the webcast, I will just hand over the word for you if you have any kind of final remarks to end with.
No, thank you for another great event, excellent questions. Really happy with that. It allows us to go to speak a bit more freely than just to sit and yap and to put in some more details in what we're doing because we are doing some really good stuff. And even though it doesn't show on the numbers for 2023, we are strengthening our structural kind of competitive performance. So yeah, thank you so much for listening. And see you again in a couple of months when we do Q1.