Selvaag Bolig (Oslo:SBO) Q3 2026 Earnings Call

0:00 Good morning and welcome to the results of the third quarter. I'm Sverre Molvik, I'm the managing director, and together with Christopher Brunvoll, we'll go through today's agenda. We'll start with some highlights, and then we'll look at the operational side. Then Christopher will take us through the financial side, and then we'll look at the market and some future prospects in the end. Vi hadde et bra kvartal igjen når det gjelder salg i forhold til den verden vi lever i. Det er veldig vanskelig å drive med boligutvikling og ikke minst selge nye boliger om dagen. Men vi har klart å selge litt over en om dagen også i tredje kvartal, som vi er godt fornøyd med.

0:48 Første to kvartalene var rekordsterke, så year to date har vi rett og slett rekord i forhold til salg. have never sold homes of such high value in the first nine months. We also have a good result in the quarter in relation to the number of delivered units, and also in relation to how difficult it is to earn money during the day with the high building costs and pressure on the income side. Vi har byggestartet en del enheter, også ferdigstilt, men vi har fortsatt en god pipeline på 7,2 milliarder, som er en årsreserve som sikrer resultater frem i tid. Vi har også byggestartet vår første 100% egenregiprosjekt i Stockholm, som vi er veldig godt fornøyde med, på Terrassen, som jeg kommer litt tilbake til.

1:44 If we look at the key figures, this is pro forma, that is to say including our shares in cooperating companies. In 3FRS we had 1.6 billion in revenue and an EBITDA adjusted to 15%. and after the current calculation, a gap of almost 1.1 billion and an EBITDA margin of almost 10%. This is the category. Christopher, more in depth in his analysis, So if we look at the sales, we sold 95 homes in the quarter to a value of 643 million. A little lower average values, and that is due to the fact that we have sold in areas with lower unit prices and a little less units than we have done in the previous quarter. So the average value has gone down from 8 to 6.8. It will vary depending on which projects we have in the market and which sales starts we run on, and where we sell, of course.

2:45 The year to date is 625 units, and as you can see, it's more than the previous 4-5 years, so it's a very good sale. And that's positive, considering the safe results in the future, and the start of construction, not least. The sales have also, so far this quarter, continued at the same pace, at about 1 a.m. So it seems to be a very good total sales for the year. 12 months circulating at a rate of 5.2 billion kroner and around 800 units in sales this year. Vi byggestarta 119 enheter i kvartalet, mens vi ferdestilte 226.

3:38 Kunne ha byggestartet faktisk litt mer, men vi sliter litt fram med å få godkjennelser både her og der. Det er dessverre sånn det har blitt, men vi regner med at det lander nå i Q4, så vi kommer i gang med flere enheter i dag. The order reserve is 7.2 billion kroner, slightly lower than the previous quarter, but still at a decent level. We still have over 1,000 units in production, and 64% of sales. and more now. We have sales for 2026 still at the same level, 688 units this year. Of that, 74% sold at the start of the quarter and more now. and so on, it will be a lot of unfinished work, and it will also be a lot more unfinished work than what needs to be finished in Q4. And that's how I've had it. A couple of places before, last year in 2024, there will be a lot of finished and unsold products.

4:52 Because of the season, it is more difficult to sell in Q3 and Q4 than it is in Q1 and Q2. So we have it with us over the years, and we will gradually sell it out over the spring. We are also going through the whole of 2027 with 390 finishes, so that is relatively low this year, but we are going to go over a lot of unsolved finishes as I said, so there will be a natural balance in relation to the result effect of IFRS. Yes, that was what I had now, Kristoffer.

5:35 Good morning. Let's take a look at the financial highlights of the quarter. We start as usual with the result after IFRS. Here we see the income and costs of the result by the delivery of the housing to our customers. We also focus here on the pro forma-regulation, that is, we include our share of collaborative projects, brutto. In the official regulation, this is on its own line after tax, so this gives more comparable figures over time. Tid vi har en del samarbeidsprosjekter i porteføljen vår. Så i kvartalet overleverte 186 enheter. Hovedoverleveringen i dette kvartalet er jo da fra Ballerud i Bærum, Snøbyn Plus i Lønnskog, Landås i Asker, og andre tidligere ferdigstilteprosjekter.

6:34 This gave us a total revenue of 1.6 billion, including other revenues of 20 million for our Drifta plus service centers and a factor of project management for collaboration projects. The project costs are 1.4 billion. We have strict cost control in the projects, and good project managers, as well as fixed price contracts on all our projects, which means that we manage to deliver affordable margins also in this quarter. Other costs amounted to 69 million kroner, something up from 60 million kroner in the beginning of last year. This is due to the fact that we have set aside a salary increase from last year, and we have increased sales and marketing costs to sell in a slightly slower new housing market.

7:25 We report an adjusted EBITDA of 239 million kroner. have adjusted the financial costs to 154 million. This is a significant amount of money. Here we have building loan interest, interest on sale rights, and of course option premiums for urban property. And when these pockets have been there for a long time, this becomes a large amount of money that is included in the cost of goods at IFRS. If we adjust this, we give a margin of 15%, compared to 14% in the corresponding period last year. At the bottom, we report a result per share in the quarter of 60 euros, which is up from 25 euros in the corresponding period last year. The main reason for this is of course that we exceed many more units in this quarter, compared to last year, 186 units versus 98 units last year.

8:24 If we take the corresponding results for the first 9 months, 397 units, where 9 of these were from co-operative projects, gave us total revenue of 3.3 billion, and a margin of 15% against only 1.2 billion, and a 9% margin in the first 9 months last year. Justeret EBITDA 491 millioner. Helt nederst rapporterer vi ett resultat per aksje på 1,35 kr første 9 måneder mot kun 5 øre i fjor. Igen betydelig resultatfram, og det skyldes økt volym overlevert. 397 enheter mot 172 i fjor.

9:15 Let's take a look at the segment reporting, which follows Norwegian regulatory rules. And here we have Proforma, where we include our share of the collaboration projects, which gives a better picture of our total operations. Segment reporting follows Norwegian regulatory rules, that is, this continuous calculation method, that is, you take all projects in production, then you take sales grade times completion grade, which gives an output grade. which means that we take out revenues and results in the course of the project. In this regime, we have a revenue of 1.1 billion and an EBITDA margin of 10% after overhead costs. This means that we still have good project margins for what is in production, about 15%. If we look at the 12 months rolling turnover, it increases to 4.2 billion kroner in the last 12 months, and a rolling margin of 11%.

10:19 Cash law entered the quarter with 171 million kroner in the bank. The main points in the quarter is that we have positive cash law from Drift at 118 million kroner. which is driven by positive results and reduced goods storage. The second main point is negative cash flow from financing at 168 million, which is described as net down payment of construction loans in the period, since we have a lot of annual deliveries in the quarter. Net down payment at 49 million brings us out of the quarter with 122 million in the bank. Let's look at the balance. There is no big change in the sum of the balance.

11:05 We have a total balance of 7.5 billion, and a solid equity share of 32.4%. This corresponds to a bookkeeping income per share of 25.8 kroner. The stock market is down by 279 million, coming back to that. Fordringen er økt noe fra forrige kvartal med 168 millioner. Det skyldes at vi har overlevert en god del prosjekter i slutten av kvartalet, hvor cashen da kommer inn i oktober, Q4. Cashen var da ned med 49 millioner, som vi var inne om i cashlovstillingen. Forskuddet fra kundemålet er nå på 42 millioner, og ligger da inkludert i annen kortsiktig gjeld. Dette er på samme nivå som tidligere kvartal.

11:53 Ja. If we look at the stock storage, which is down 279 million. If we look at the details, the book for tomato processing is up 67 million. This is due to the fact that we have bought back tomatoes from Arben Properly in the quarter. Storage work is down by 663 million. This is due to the fact that we have a lot of delivered units, where the stock storage is covered. And then we have the finished stock storage, which is up by 317 million. Here we have now 93 fully unsold at the beginning of the quarter, an increase from 41 in the previous quarter. And then we have in addition 44 sold units that are delivered in Q4 and Q1 of 2017. As Sverre was talking about, we will probably get an increase in more than the good number of units in the fourth quarter, as a result of slightly slower sales in Q4.

12:47 And we choose the strategy to try to push this out in the first quarter of 2017, which we see as a much better market, instead of putting this out with too many discounts in Q4. So we are confident. These are the areas where these new buildings are located, and this should be able to flow well through the coming quarters. If we look at the yield, we report a total interest rate of NOK 3.9 billion, where the building loan is the big one, at NOK 2.9 billion. In addition, we have yield to earn properly at about NOK 1 billion, which is sales credits and return on purchase payments.

13:32 In addition, we have a small interest loan of 32 million, on interest that lies in our own balance, which is not sold over to Urban Property. There is no change in the conditions for these loans, and we have not pulled up any of our top facilities. Adjusted for Kersh, we report a net profit per annum of 3.8 billion, which is on the same level as last quarter. Let's look at the return on the income tax. This is calculated as the result of the last 12 months after tax, and divided by the income and balance of the income tax during the period. Here we have delivered 255 million in the last 12 months, and an income tax return of 11%. This is due to the fact that we have had increased volume of deliveries in the last few quarters, after having had some quarters with a low number of deliveries.

14:28 So we are very pleased with that.

14:31 Now, Sverre will continue with an update on the market. Yes, we will start by looking at the imbalance in the markets. In Oslo Akershus, this is the requirement of housing in terms of facilities. who make the prognosis centre. It is a medium growth case, with a need for 9600 new homes each year in the next three years, in Akershus and Oslo combined. What has been completed and will be completed in the coming years is far below the prognosticated need.

15:25 And, as it will be this year, these estimates have fallen a little. Now it is at 6,006. I think it was at 6,007, 6,008 in the previous report. And then it has gone down in 2027 from 7,9 to 7,7. So these numbers vary a bit, but in any case, little is being done and little is being built in these regions now, so there is no reason to believe that this supply side or the pace of completion is increasing now with the first. There are record-low start-ups and poor sales these days. Even worse than, well, essentially worse than last year, which was also a bad year. So in any case, there is a gap between the prognosticated need and the offer, and it will remain so in the future, i.e.

16:12 in the new. If you look at Bergen, it is the same picture as in Oslo, but here it has also been built significantly less over time due to slow regulation, and that is something that has been the same in Oslo and Bergen, as the two worst things in the country have been. Something has improved in Bergen, among other things. Stavanger is built and completed far more than this estimated need. But here it has been produced very little with new homes in the last ten years due to the so-called oil crisis. So it is an established need. Therefore, there is still a strong price growth due to an established need and a much better working market, not least.

17:07 So if we look at this in relation to the amount of people in these cities, which is relevant, we still see that Oslo has a low supply. It has been down to 1,000 for a long time, now it has become something higher, so now it is 2,500 per 1,000 people. So the supply has increased a bit compared to what it used to be, but from a low level. In Akershus it has been around 5 in many years, which is a balanced supply side in relation to the population. But you have to look at it in comparison with Oslo, which means that it has been sold well because of the low supply in Oslo. In Bergen it is low, and in Stavanger it is more in balance in relation to the population.

17:59 In my experience, there are around 5 if it is to be a somewhat balance, that is to say neither buyer nor seller market. While in Bergen and Stavanger it is special, because there is a low level of production. In Stockholm I am not entirely aware of what this key number really is, because there is a slightly different composition of the population. It is both rents and BRFs, i.e. rental properties, so it's a bit more difficult to understand these, so I'm not entirely in touch with that right now. These numbers are just rental homes, but as I said, there are so many rental properties in addition, so I don't know exactly what the number of inquiries is here to come to the same balance as in Norway. But in any case, if you want to compare it with Norway, it's low.

18:51 If we look at the pressure on the new housing market, it is only in central Stockholm where there is a really good pressure in Sweden so far. It is interesting to look at the consumer market. If we look at Oslo Akershus, it looks like there is an imbalance in terms of what the prognosis center claims is the need. When we look here, we see that the supply side in Oslo has cut in the weather. There are many reasons for this. Among other things, a lot of rental homes have been put up, because many of the foreclosures and the large systems that have owned rental homes sell them because of foreclosure tax, among other things. Many seller-owners have been converted to rentals, and then they are sold out. Some sell out very quickly, and others, like the large systems, sell out one by one because people move.

19:57 So there are many that are offered. And then there is one more big effect, and that is that the banks, among other things, and not least the customers are unsure of what they get for their own housing. Helped by, for example, banks that require that you know how much you get for your own housing, then people have gone from buying housing first to selling the housing first. Then you get a shift in the market, which again depends on the offer side. So now there is quite a large supply side in Oslo and Akershus, as you can see. While in Bergen and Stavanger there is a very low supply side, so there is an undercurrent of homes in relation to demand, which of course affects prices sharply in those two regions, and that is especially so now. While in Oslo and Akershus we get the opposite effect on use. In Sweden this is much more stable, as you can see.

20:47 There are many reasons for this, and again, I don't know enough about the numbers, but I don't know what it actually means. In Sweden, there is also a completely different regime when it comes to both taxes and other things when it comes to profits when you sell a house and so on, than we have in Norway, so it's a different system. I unfortunately have to have some time to understand this well enough before I can begin to argue and claim things. If we are to follow the same numbers as in Norway, that is 3.8 per capita, we should be able to say that it is more a market for sellers than a market for buyers in Stockholm. So if we look at the price development, which actually is very much connected to this offer side used, as it should be, and you can see that there is price pressure here and there in Bergen and Stavanger, because there is such a low offer side in relation to the amount of people, and that is good, and here we also sell well, and there are many people on display, so it is very good with, I can say, the imbalance with the offer after the exchange.

21:50 In Oslo, the price is have developed with a 1% decline. That is still very good considering how the world picture looks like. It is very strong. One would think that the prices would have fallen much more when the interest rate had gone up and the supply side had increased so much. So I think it is very strong. It is only 1% down so far this year. And it will probably end on the same, maybe 2% or more. Akershuset Samhøl, plus minus null, 0,4% up. In Stockholm, a slightly different number, we have a 12-month rolling price increase, which is reasonable to look at. Last year in central Stockholm, the price went up almost 10%. It's a very strong market, and we notice that in relation to what we've had in the market there.

22:51 If we look at StorStockholm, which includes Central Stockholm, the price increase is much higher. If you correct for the 9.3%, it's probably only 3-4% price increase. StorStockholm, if you don't correct for Central Stockholm. We have a sales project in StorStockholm, but it's a completely different project. Trykk, er nok mer prega av arbeidsledigheten i Sverige og jobbsikkerhet og evnen til å få lån, så det er mye tyngre å selge i disse områdene i Sverige enn det det er i de områdene hvor det er mye middelklasse og høyere inntektsside og trygg inntektsside. Renten er jo ikke så høye i Sverige som i Norge, ikke på langt nær, men den gikk riktig nok opp med parting i går.

23:47 Let's take a look at some of the projects we have in the market. Just to reiterate, we have projects out there. We sell in a row, we start building that. When we have sold enough in a row, we put out a new one. It depends on how much the market takes away. In Snøbyn, for example, we still have several hundred units left. We have a lot out there in the market. and we will release a new trend when it is removed. Now it is quite late in sales, so we have not released anything new there now, so we will continue to sell on what we have first before we release anything new there. Telekvartal in Oslo, there we have the start of the first half and we will start building the next, the last trend on the ninth year, first quarter, second quarter, depending on the sale.

24:39 In Landås we have a new trend that we are going to start building this year. There is a lack of a start-up facility that the municipality is working on. It is a bit annoying, but it will probably be in place in a few weeks, hopefully. We will start building a new plus project there, which will be very nice. Solbærskogen, there we come with a new field now. There we have sold out what we have, and then we have some stores that we have to empty before we can start selling there, but there is a very high demand. So we have come to lay out on the new year, or the first half year. Yes, Skåre, there we have actually started everything. There we only sell what is not sold and what is started, as well as some unsold finished products on early retail.

25:29 And at Sandsley, we are putting out new lines again. This is just an example of what we are doing, but we like big projects where we can put out line after line after line, so we establish ourselves and have it as big projects that give results over a long period of time. Here we have the PLUS project that we started in Stockholm. It is a very good story that we got from another company that could not carry it out. So we delivered it back to the municipality. We bought the municipality a couple of years ago and it was already broken. It has become a very good project and we have started building.

26:16 The first 119, and we have sold enough to start building everything. So that's good, and that's a very high demand. It will be very nice to get started in Sweden. It will be a different leg to stand on, which is now in a different phase, economically, than it is in Norway. There is a much better market in Stockholm, central Stockholm, now, than there is in, for example, Oslo. So that's positive. It's been a good strategy. We will also come up with new projects in Stockholm, among other things the slaughterhouse area that you are standing on, starting up in the corner there. There is a project that will be responsible for this terrace, a little bigger, with a large plus project that is very high in demand. So it will be exciting.

27:03 Mellomåsveien is a big project we have in Follow. We have made some changes to the regulation plan to make this project more in line with what we want. We will talk about this depending on when we send in the framework, but probably in the first six months. Lilleaker i Oslo, der har vi også rammen inne. Vi tør ikke å selge uten rammetillatelse lenger i Oslo. Før gjorde vi det, vi solgte på regulering, men det tør vi ikke lenger, i måte det er såpass vanskelig å vite om det blir godkjent eller ikke. Så vi venter til vi får den godkjenning, så kommer vi til å legge ut det. Det blir et veldig fint prosjekt, så sentralt da på Lilleaker. Fredrikstad, we have now finally been able to get rid of a lot of difficult orderly requirements, or are being accepted now in these days, among other things by tearing down some old constructions that are expensive and difficult to build into or hopeless to take care of. So we expect that this will go well.

28:01 Then we can also start laying out projects here like this in the course of next year. It will also be a huge project of a couple of thousand units. There is a lot of excitement with the potential for have been working on this for many years. The same applies to Moss, where we have also been able to adjust the regulation plan and meet the requirements for a large collaboration project we have there. This will be foreshadowed in a couple of years, because we have had very good progress in relation to the state administration, the municipality, Not least the municipality that has been able to get rid of, among other things, the queue requirements on the roads and such unreasonable things that are in there. So that is also something we will take a look at next year, in the worst case 28. Bjerke, and many of you who have been here before, we are working on four regulation plans at once. We hope to get it out next year. We are doing it as fast as we can.

29:00 We'll see when it happens. Kallnes, there we have a regulation plan that was unfortunately, it is a project that was postponed for a year due to political, we went back to something that was partially taken over, so it is a bit boring, but we will at least get started there next time with a nice plus project. It says that there are 250 units, there is actually one more field, so actually 500 units, we will see when we can regulate it. and several other projects in Stockholm. I could have mentioned many more. We have many exciting projects underway. This is an illustration of Fredrikstad's project on the outside.

29:46 It turned out to be a very nice project. If we look into this good old crystal ball, There is a high demand, and there is actually a high demand, but it is not so easy for people to buy. So there are a lot of people, you get a lot of people on display, and there are far fewer landing than before. And many times it is dependent on funding and that they do not get their own home sold. It is exciting to see in the future if this can change a little in relation to what is happening in the world, among other things. The Stockholm market is good. It is very good, and we hope that it will improve in Oslo as well. I have a lot of faith in that.

30:31 It will be even better than it is now. It is generally very bad in Norway now, but it is an improvement, hopefully. We have proven that we are doing very well. and so on, and we are very pleased with that. So we have started building and managed to keep the volume up in these almost five difficult years. And we will continue on that track and assume that it will not get any better. We are working on keeping the momentum going in the future. We are lucky to receive help, which I think will happen in the future, for example from a more positive psychology market, and not least Maybe we will get some help from the political side.

31:22 At least there is a lot of talk. Politicians are talking a lot of nonsense, but at least now it can happen that there will be some pressure. Because now it is really serious. There are many big entrepreneurs who are competing. And you must soon realize that there are reasonably high technical requirements for a normal home in Norway now, which makes it all too expensive to be able to be built, apart from in these central areas where we operate. So it may be that there will be something sensible from a political point of view. We hope, we don't think, but we dare to hope. We have a fixed price. Our strategy on the enterprise has proved to be smart, and it will continue to be, and that is probably much of the reason that we manage, despite this difficult market, to make good money.

32:14 We are in a good situation. We have a partner in Urban Properties, so we can buy tomatoes. And we notice that there is a lot more pressure on that, and it is coming more and more now. Unfortunately, because it applies, but it is very difficult for other actors, many actors now, to sit on expensive tomatoes and not get them regulated, for example, or not get them out on the market when they are at high bookkeeping values. So, good opportunity to buy tomatoes, which we do all the time. To work with. So, summarized, then, is our sales pace, again, to conclude a little bit, we manage very well through a terribly heavy market.

33:03 We haven't sold that many homes yet, which is ironic, but that's very good. We deliver good results in relation to the difficult situation, and we have a good order reserve that ensures results again in the future. We manage to maintain a good speed in the company. and as NGAP margins show, to good margins, which again is very difficult in this perfect storm. And we have started building in Stockholm, which we are pleased with, so we are starting to build organic growth further there. That was what we had. Now we can ask some questions if there are any.

33:51 Vi har noen spørsmål på nett. Første fra Simen Mortensen, DNB. Færdigstilsplanen ser ut til å falle betydelig i 2027 til rundt 390 boliger. Hvorfor så mye lavere forventet inntjening i 2027? Hva skyldes færre salg eller færdigstilser versus utsatte overleveringer? Hvilke konkrete prosjekter kan dermed flytte seg fra 2027 til 2028?

34:16 No one can move from 2027 to 2028 unless there is a force majeure on it. It is also difficult to move so much from 2028 to 2027, since you have come so far in the production of the projects that are to be delivered. But it can happen that some of them do it, probably. But the question of why there will be 390 units is due to the production and development of about a year ago. There is not much to be done about that. We sell, we order construction, and it is built as fast as possible, and then that becomes the consequence of it.

35:05 And that's good. I can say that it's positive, as I said earlier, that we have so many unpaid employees that we can deliver next year, so it's a kind of compensation. But if you're going to sell something positive to that, then at least that's positive. But it's just a consequence of when it was started.

35:24 Question number two from Simen Mortensen. Dere har 992 millioner i ferdigstilte og usolte boliger. En beholdning som dere indikerer vil øke ytterligere i Q4, samtidig som bare 74% av boligene med ferdigstilse i 2026 er solgt. Hvilke forutsetninger legger dere til grunn for salgstakt, prising og eventuelle insentiver, særlig gitt finansieringskostnaden, knyttet til å holde denne beholdningen på balansen?

35:55 The unsold real estate is the same as we had last year. We didn't have that much unsold real estate at the end of Q4. Two years ago we had it, and it is a strategy that has been highlighted in the previous cases. There are seasonal variations in the housing market, a fairly large seasonal variation. And especially in the darkest time of the year, it is even more profitable than it is in the generally profitable market at the moment. And then there is a strategy instead of discounting too much and desperately pushing out apartments and apartments, then you put them out, run campaigns, and for example include white goods, and include selection and maybe extra parking and things like that.

36:51 But we don't push them out desperately, because we don't need it. And then we also sell it out over our part, one and one, with some incentives and some discounts if it comes in stock, then we can accept the underprice list in advance. But we don't do this in a desperate way, and lower the prices to the totals just to get it out, since we don't need the cash at that time. That answered everything. It was a comprehensive question. Was there anything else you wanted to add?

37:22 There is a lot that will be sold out by Q4, so we will get a solid increase up to 150 units per Q4. That is a bit more than the top 100 from Q4. But we follow the strategy. We believe it is worth selling this through Q7, instead of pushing it out now. As long as we are solid and have liquidity, we dare to sit on the stock storage on our own balance.

37:46 I have to add that this is nothing new, what we have done. Okay, the size of it, this year maybe we call it a record, it will be higher today than in 2024. But this strategy is something we have done every year, because it is at a top, always, unsolved, finished, at the end of Q4. And then it is sold better and easier in Q1-Q2. It is to point that out. Another question from Timon Mortensen. And how has the sales pace developed after the end of the quarter?

38:16 Den er så å si identisk med den var i Q3, altså ikke så bra som i Q1 og Q2, hvor vi lå på 2-3 om dagen, men 1 om dagen ish, ganske nøyaktig 1 et salg per dag, inklusive lørdag og søndag. Petter Nilsen

38:52 We will start building A and B first, and that will happen very quickly, but we have to get the framework permit first. We haven't gotten that yet. So it's A and B first. The project is connected, but it's A and B first, most likely before Christmas, given that we get the permit. The permit is in place, and then the next steps in the first quarter will most likely come. Vi har solgt nok til å byggestarte det første 95 menighetene er det vel allerede. Bra, da er det ingen flere spørsmål.

39:30 Takk for i dag, da ses vi. Da

39:33 ses vi, Brunvoll. Da ses vi, 11. februar.