Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bonava AB (FRA:66B, Financial) reported a 35% year-over-year increase in reservations and sold units, indicating strong demand.
- The company's gross margin improved to 14.7% from 13.5% the previous year, reflecting better profitability.
- Operational costs were reduced, achieving a run rate of SEK1.1 billion, surpassing the target of SEK1 billion.
- Net debt was significantly reduced to SEK3.1 billion from SEK5 billion, strengthening the balance sheet.
- The B2B market is showing signs of recovery, contributing positively to the company's pipeline for 2025.
Negative Points
- Net sales decreased to SEK3.1 billion from SEK5 billion a year ago, due to lower completion numbers.
- The Swedish and Finnish markets are lagging behind in the business cycle, affecting overall performance.
- Some projects in Germany were delayed into 2025, impacting the forecasted completions.
- The Finnish market remains challenging, with oversupply issues affecting new production starts.
- Financial expenses remain high, impacting profitability, with a focus needed on reducing financing costs.
Q & A Highlights
Q: What is your take on the potential impact of global market fluctuations on Bonava's business?
A: Peter Wallin, CEO: Short-term implications from tariffs and tolls between the US and China have no direct impact on us as we don't import from the US. However, stability is crucial for long-term business, as volatility can affect consumer confidence and the housing market. Our efforts to reduce net debt and costs will help us navigate any potential impacts.
Q: Can you comment on the average selling price in your consumer business in Sweden and Germany?
A: Peter Wallin, CEO: The average selling price varies based on project location and market conditions. While prices in Sweden are around SEK4 million and SEK5 million in Germany, margins are more important than prices. We are seeing improved margins in ongoing projects, despite challenging market conditions.
Q: What are the conditions for starting new rental apartment projects in Sweden?
A: Peter Wallin, CEO: Sweden is lagging behind other markets like Finland and Germany, but interest is increasing. We have rental projects in the pipeline that we are prepared to start once conditions are favorable.
Q: Could you elaborate on the impressive operating margin in Finland this quarter?
A: Peter Wallin, CEO: The operating margin in Finland was supported by a strong project margin of close to 19%, excluding EUR1.5 million in release provisions. This reflects a positive development in the Finnish market.
Q: Is the B2M segment in the Baltics expected to grow in 2025 and 2026?
A: Peter Wallin, CEO: Yes, we have been successful with pilot projects in Riga and Turku, and we plan to explore more opportunities in this segment to support growth and resilience in our business model.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
