Good morning, everyone, and a very warm welcome to the first quarter of Bonava 2026. My name is Anna Falck Fyhrlund, and I am Head of Investor Relations here at Bonava. Standing here in a sunny Stockholm together with our CEO, Peter Wallin, and our CFO, Jon Johnsson. They will take you through the highlight of this report, and afterwards, we will end up with a Q&A. You can start already now to type in your questions. With that, Peter.
Thank you very much, Anna. Good morning, everyone. Looking forward to take you through the Q1 here. If we take on the top in Q1, looking at the markets, we are recording stable sales even though we have a lot of uncertainties kicking around in market. We are seeing the same trends as usual. We have seen for quite some time that the consumer segment is improving, and it's improving based on that we're seeing higher disposable income, maintaining a low level of unemployment, and pent-up demand for housing given that we have built so few sustainable new homes over the past three years in the markets. If I dig a little bit deeper, we are seeing very high sales across our Baltic cities that we are active in. We are also seeing a building reservation rate in Germany.
We started up a little bit weaker in the quarter, but then ending up at the same level more or less as at the end of last year. We see a good booking situation. Sweden, we are seeing an improving market conditions, and Finland remains to be a quite slowish, sluggish market. In all our markets, we are seeing increasing activity in transactions, so the investor segment is improving, and we have a very nice pipeline of investor products to come. We are all thinking what is happening around us in the world. The latest part now with the conflict in Iran is not the first one in the quarter. It's one of many things that has happened, and still we are seeing an improvement across our segments. It seems to be a quite resilient market situation despite uncertainty.
If we dig into our P&L, we improve the EBIT margins 4.8% in the quarter, and the rolling twelve-month 6.8%. This should, of course, be viewed across the guidance we're giving for the full year of between 8% and 9%. We are growing net sales by 11% adjusted by currency, and we're doing that despite implications of production due to the cold weather that we had during the first quarter, especially in Germany. That is actually accounting for as much in growth, around SEK 200 million in impact of revenue. We have increased ongoing projects to 4,200, which is more or less a 30% increase over last year, and at the very good stable sales rate at 60%. We only report binding agreements on the sales side. In addition to that, we also have reservations. Looking into the balance sheet, we still have a very solid financial position.
We are decreasing the central debt, and we are increasing project-related debt. According to plan. The borrowing statement according to plan. Taking a little bit look around our core markets now. Looking up on the left-hand side, you see our investor product in Finland of 61 units in Turku sold in 13. Going over to the right-hand side, we have in Langen outside Frankfurt very nice project for consumers. Continuing down on the left bottom side, we also have Hartmanns in Riga, a very strong market for Bonava. Last but not least, another strong market for Bonava in Lake Town in Vilnius. With that, I would like to hand over to you, Jon.
Thank you, Peter. Q1 is indeed a smaller quarter on the back of a strong Q4, and that's very traditional for Bonava. It comes with a seasonality effect in particular in Germany, which is our biggest market. I will come back to what it means and what you can expect in the coming quarters from that perspective. If we start with the ongoing production, as Peter said, close to 30% growth versus last year, 28% to be precise, and a stable sales rate. We have a sales rate excluding reservation, as Peter also mentioned, of 60%, and that is average in the group. We can say that Germany and Sweden are well above 60%. Finland tracking around 50%, and then Baltic around 40%. As I've said in previous telcos, Baltic has specific market conditions which where pre-sales is not so common.
It's more like when the building is ready, that's when the real sales of the units start. We do expect this to continue up both sales rate and also ongoing production to reach our targets for and the guidance for the full year. If we continue then with the P&L, as Peter mentioned, we have 11% organic growth in the quarter versus last year, and 37% growth in EBIT in absolute numbers. Including currency that was 7% in the quarter. We of course have a big Euro/SEK effect, as most of our sales is in Euro and only a smaller portion in SEK. All our other markets report in Euro, and that is a translation effect, we adjust for. We can see that the sales and admin expenses, partly by currency, but also because we're still very cost cautious and stable sales and admin expenses.
What is most important is that the twelve-month trend continue upwards and now to 6.8%, and it will steadily go up to this range between 8%-9%, for the full year we estimate. It's also important to highlight that in Bonava, we gradually built up the EBIT across the year. The trend you could see on last year's quarter, you can expect a similar trending also for 2026 with the buildup of result and sales. The rolling 12 is of course on 6.8% as I mentioned, which is an improvement. If we deep dive into the different segments, we see that Germany and the Baltics are still the main contributors to the profit. We do expect Sweden to grow rapidly this year into good positive numbers. With Finland, we repeat also the message because of a slightly weaker market, we will be cost and cash neutral.
You can expect a break-even result on EBIT also for this year in Finland. If we discuss a little bit the other, that is the group functions and also our guarantee business in Denmark, and that remains stable and on a low level. As we grow, that will further improve the margins across the year. We will have this volume kicker coming in as we grow net sales as expected. If we then talk about Germany and we talk about this seasonality. There are three effects which impacts why Q1 is a little bit lower, but bear in mind that still an improvement versus last year. The three effects we're talking about is the phasing of the investor deals, which is traditionally in the end of the year.
We have a lot of interest in the investor deals, but we do expect them to close them in the later part of the year, which is more traditional in Germany to do so in our business. The second one is the sales conversions, which after a very strong Q4 in Germany, it took some time to build up the reservation rates, but we are now back on track also with the reservation track. We think that will catch up now in the coming quarter. The last effect, which Peter also mentioned, is the weather. The cold and long winter really did have an impact on the construction pace in Germany. We are back already in April, May, with the construction plan, you could say. We are catching up with the sales and construction and the investor is coming later.
We are therefore very certain of the development in the coming quarters for Germany. There is also a high sales rate. I mentioned it's 67% of the ongoing production, so we don't have an issue with the sales speed either in Germany and an improved margin, as you can see in the EBIT margin versus last year as well, and they're stable on the rolling 12 of 10%. If we continue with Sweden, this is where we expect the biggest growth in percentage-wise this year, and it's we see an improved market situation. We gradually have an ongoing production, which is much higher than last year, 836 now in ongoing production versus the 368. That will generate in itself a good result in the coming quarters together, of course, with a high sales rate, which is around 62% adjusted for reservation.
No reservations included in those numbers. High sales rate, high ongoing production, a lot of promising signs on the Swedish market. We should also mention that in comparison with last year, there was a sale of land impacting in Q1 last year of SEK +15 million, which was not repeated this year. That is a reason why Q1 isolated looks a little bit stronger last year. It's timing of those items which can impact. Again, we believe that Sweden will have a strong growth in the coming quarters. Finland, I mentioned we have challenging market conditions still. Specifically point out that we only start projects with good profitability and good locations with high interest. That has proven to be successful so that we stay cost and cash neutral in a difficult market situation. We had one good investor deal in Turku during the quarter.
Another thing which is worth mentioning is that we have reduced the Completed Unsold to very low levels now in Finland. We are ready there also when the market returns to start. We don't have a legacy of old units. I can also mention for the full group, is that we now have a Completed Unsold of 208, which is a further reduction versus Q4, and we expect this to continue also. It's about starting projects, which is important in all the markets with the high sales rate we are and we have, and that will generate the sales and profit. Baltics is a specific shout-out in the quarter. As you can see, fantastic growth and really strong margins. I think that we further solidify our leading position in these three markets. We are market leader, and we further solidify that position with these numbers.
I think that the number of starts, number of sold, and also the margins and the growth is fantastic, is tremendous. We really have a unique offer there, which is attractive, and we will continue this. Also mention is that we, since we have a high occupancy rate in the BTM, built- to- manage projects, we decided to start another one now this time in Lithuania. The occupancy rates is above 95%, and the yields are still good on these markets. We further explore those opportunities in the Baltic markets. If we look at the Building Rights, that has grown a little bit in the quarter, and we continue to optimize the portfolio so that we have the right mix of on and off balance and give us optionality. Timing is particularly important in this aspect, so that we are ready when we need them.
Right now, we are ready in 2026, 2027 to be above this 3,500 units in the two years combined. This will be a gradual growth, and we won't fully reach there in 2026, but as previously communicated. That won't impact the, it rather solidify our full year estimate of the year, and then we are ready when the market returns to recover the full start, so to say. If we look at the net profit, we see that the 12-month trend continue to grow versus last year. That is not only because of the EBIT, which is stronger, but it's also because we continue to reduce net financial items. Net financial items is this time impacted by lower net debt in combination with lower interest rates, but also one-time item last year when because we renewed the green bond last year in Q1.
There was a one-time effect distorting the picture a little bit in the quarter. Nevertheless, the long-term trend is reducing net financial items, and we expect that to continue down. If we go into the cash flow and we previously called this operating cash flow, and now it's Cash Flow Before Financing and Tax, so it's a different terminology. The only difference is that we now adjust for the currency effect, so it gives a more true picture of the cash generation in the company. This is also how we follow the business internally because we follow it in local currency. It gives a more accurate picture than before in the cash flow, but it's only the currency which has changed compared to the numbers we have shown before.
We see that this is the first quarter in a while we actually have negative, and the reason for that is the high production we have ongoing right now, which requires, of course, working capital in the buildup phase. There will be a need for this increased liquidity and working capital to support our ongoing projects with high sales rate. That is fully expected. If we go into the net debt Peter mentioned that we have increased it, and that is due to the high activity again on the project. It's a project finance related, very much linked to the active projects we are running. Therefore you see this increase in the green field here in particular. We still have a high available liquidity of close to SEK 1 billion, and the market conditions for project financing have improved a lot.
We also have mature and good discussions regarding refinancing of the central debt, which will happen this year. We will come back as soon as we have more news on that one. It's ongoing and good discussions. If we dive a little bit into the balance sheet, I want to highlight a couple of things here. One is that the shareholder equity is now much stronger than the property held for future development, and that allows us to invest more in land and also still keep the good ratios. We see a lot of potential now in acquiring land in all markets actually, on and off balance sheet, as I mentioned before. We also discuss payments so that it fits with the construction start in an optimal way. We keep the Equity Ratio on net project asset value well above the financial framework.
As mentioned with the seasonality, you could also see the same trend on those curves going up from Q1 up to Q4. That is also what you should expect for 2026. That type of trends, because Q1 is lower and Q4 is our strongest quarter in Bonava. With that, I hand over back to you, Peter.
Yeah. It's time for me to sing again. Wrapping up this, thanks a lot, Jon, for a very good presentation. We are continuing our controlled growth journey. Small first quarter, still maintaining our outlook for the year with 8%-9% operating margin and 20%-25% top line growth versus 2025. We do that because we see a strong pipeline of starts. We are preparing. We are continuing the controlled growth with checking that we have a good sales situation, making sure that we have control of the costs, and we have the right team in place. I think we've worked according to this for quite some time, and this has built the consistencies that we are now starting to see across our businesses in profitability. This operational leverage when increasing up to the optimum levels of 3,500-4,000 production starts per year will also pay off in terms of leverage into the P&L.
This is something which we will gradually see an impact of, and that is also one of the reasons why we are maintaining our outlook for the full year. As Jon Johnsson also mentioned, we are currently also taking care of the balance sheet and the debt side of the balance sheet, and we have ongoing refinancing discussions. As Jon Johnsson also said, we will be back as soon as we have more news on that part. All in all, a small part of a long journey in the first quarter, 2026, but we are keeping the ship steady, and we are really looking forward to continue to come and talk about this, the progress we are making on our journey. Thanks a lot. Then over to you, Anna.
Thank you both. Very good presentation. As I mentioned in the beginning, we will open up for questions, and we have a few here. I will start with Mathias Carlson from Carnegie. Can you confirm that the SEK 200 million deferred accrued income will fully reverse in Q2, and outline what, if any, execution risk could still delay the recognition or affect margins? Maybe a question for you, Jon.
Yeah, I mean, we look at the sales rate, and we look at the construction pace in Germany, and this is particularly related to Germany. As of March, this has caught up a lot, and we are back on track. That's why we are confident in saying that in the CEO letter. Of course, anything can happen if there is another conflict in the world, which we don't know right now.
Yeah.
If a steady state from the current environment, we see no risk in that.
No. A question related to that from Erica. In Germany, you mentioned weather condition as a reason behind the weaker performance. Can you quantify how much of the slowdown you consider weather-related versus underlying market softness? Is it only weather-related?
Majority of it is weather-related, and it has to do with the construction pace. We also had this effect that we mentioned about the reservations from Q4, which was building up in January. It's very hard to estimate the exact effect of each of those items. We look at them both combined and see that they are both back on track in the KPIs. If I would guess, I would say that it's about 30%, 40% construction and 60% maybe sales and the reservation pace.
Yeah.
For the first quarter.
For the first quarter, I would guess. Exactly.
Yeah. Mathias Carlson writes, "With Q1 below expectations, can you walk us through the key building blocks required to reach the 8%-9% EBIT margin for the full year 2026, particularly the phasing between Q2 and H2?" So.
I think that, first of all, Q1 was actually not below our expectations to a large degree because we always plan for this build-up during the year. We acknowledge what you analysts and the market how you view it. For us, it's really connected to the ongoing projects and the starts we have in pipeline and the sales rate and the production pace. It's from a Percentage of Completion, it's for us, it's we have quite high accuracy, actually. We know what's coming in the next quarters. We see no real danger in that growth. The important thing is that we continue this 12-month trend upwards, which we did in Q1, and that will continue.
The main contributor will be Germany and Sweden to this compared to the Q1. Because in Germany, Q1 is very small.
Yeah.
You have the seasonality effect. In Sweden, we expect a faster ramp up.
Yeah.
Also building on what Jon said, a very important component is that we look at our numbers. We've done a lot of things with our operating expenses. In a small first quarter, those are really hitting back on the numbers because we have such a small top line number.
Yeah.
With the build-up of the quarters as we are seeing and expecting, that will, of course, mean that we have a lot of leverage on those numbers. We will cover more the costs, and we'll add more to the margin.
Yeah.
It will be a boost, automatic boost in a way. Also, if I can say that we have an ongoing project where we are very conservative on the profit expectations, and we have full control over the production cost. It was the production pace that was impacted in the early part of Q1. We see the reservations we have in our projects, and those will be converted to sales. As they are converted to sales, they will also help up the profit recognition curve, again, building up the operational leverage.
Yeah.
One more thing which will impact our profitability and growth is when the investor deals happen-
I was just gonna ask.
- during the quarter. Yeah. It is hard to estimate also for us. We know what we have and the dialogues we have, and we are confident that they will happen, but we don't know exactly which quarter-
No.
-they will come. In Germany, it's traditionally Q4.
Yeah. Is it only Germany, or do we see it in the other markets as well?
No, we see increased demand in both Finland and Sweden as well, I would say. It's those three markets in particular where the investor deals are,-
Yeah.
-more active.
In Baltics, we have not mentioned because we're not principally doing the investor deals there-
No.
-so that is why.
No, this is more of the same question, but you are reiterating your full-year 2026 guidance despite the weaker Q1. What specific drivers would give you confidence to maintain the outlook, and what needs to materialize over the coming quarters?
Starts, sales and ongoing production-
Yeah.
-the high sales rate. I think that we have all-
In place.
-in the pipeline.
Yeah.
And as Jon said, it was a weak quarter due to weather conditions-
Yeah
-and to some extent also sales. If we compare to our expectation, not a lot of difference compared to what we expected, so.
Yeah. Then we have a question from Gunn-Britt Karlsson. The situation in Finland is described as slowish next to the Baltic countries, et cetera. What is your message to private investors for ongoing productions in Helsinki?
That's a very specific Helsinki question. I'll see if I can answer it. Finland is coming from a situation where they have a lot of large volumes of new production. When the music stopped, when Russia invaded Ukraine, the number of ongoing projects being completed meant that the Finnish market had a lot of unsold completed. As we have also shown in our numbers, in Q1, we have gradually decreased that, and now we are at super low levels, and the same goes for the market. When the market has dealt with this excess supply of Completed Unsold apartments, the market will start to recuperate, and we already have started some consumer products. We have a very interesting pipeline on consumer products to start over the remainder part of the year.
There are some pockets in Helsinki which is still struggling a little bit, specifically the Espoo area in the northwestern part of capital regions. We have other parts of Helsinki which is doing very well, central Helsinki and on towards eastern part of Helsinki.
Yeah. You mentioned our Completed Unsold. Is it too low now, or?
The million-dollar question. No, but I think that where we come from, I don't think it's too low. I think that it has been healthy, the additional activities we have done to reduce this over time, and we have, as I mentioned, 208, and more than half of them are in Baltics where we have different market conditions. They are on a low level, but it has been good for us to get there. Going forward, I think that in a growing market, I'm not afraid of increasing that. It's not something we plan for, but we should allow starts. Still we do a good sales rate because that is a prerequisite in our control growth phase. It can grow if we-
Grow the ongoing.
-grow ongoing.
Yeah.
Yes.
Another Finland question here from Mathias Carlson. With the first investor start now executed in Turku, and overhead still not covered by the current volumes, is Finland's path to break even now entirely dependent on investor transactions? At what start volume does overhead coverage kick in?
No, but we had the results last year of close to 0% in EBIT or just a small positive and we expect the same in Finland this year. It's a combination of B2C and B2B projects. We will have also for this year in the three cities we operate in. It's important that we have the right projects there to support the current organization and we keep it cost and cash neutral. I think that's the only thing we can do in this market environment until it turns, but we are ready when it turns.
Mm.
It will. It's just a matter of time.
Yes. Here is a question on the financing. The syndicated credit facility matures March 2027, and the portion has already been reclassified to current liabilities. Can you give us a timeline for when the refinancing announcement should be expected, and what are you seeing in terms of available pricing versus your current 6.89 average rate?
Oh, very detailed questions. I think that we have ongoing dialogues and of course we want to finalize this as soon as possible. I think that we still want to allow ourselves to have the time enough to get better terms and conditions as Mathias alludes to. We do expect better terms and conditions, but we don't want to rush into something in the coming two quarters. Yeah.
Mm.
Terms and condition is not only the interest rate, it is also the ticket to play and the ticket to invest and the ticket to do partnership, et cetera.
Mm.
Having a loan agreement which actually supports the business is what we need to get into.
Yeah. Now we talk about the Baltic market, that it has been very successful. Is it across all three, or is there a difference between the capitals or?
Across all three, I would say, but in particular the Riga and Vilnius development is-
Mm. Mm.
-really good.
Yeah.
Mm.
I think the testament to, Jon explained the Baltics a little bit, but if you think about the Baltics, they have been operating on a higher consistent level for some years now, and the operational leverage that we talked about, the testament to their margins is a well-run business that has been sort of getting coverage of the cost and maintained and managed in a good way.
Mm.
That's to be expected of the other business units as well.
Yeah. I think that was all the questions here. Thank you both for good answers and a good presentation, and thank you all for listening, and if you have further questions, please reach out to me, and with that, we would like to wish you a good day. Thank you.