Quarterly Report • Nov 15, 2023
Quarterly Report
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* Recognised revenue and profit pertain to continuing operations, excluding St. Petersburg and Norway. As of the third quarter of 2022, St. Petersburg has been reported as operations to be discontinued. Norway is reported as discontinued operations as of the second quarter of 2023. Restated comparative figures are available at www.bonava.com.
Net sales amounted to SEK 8,281 M (8,322).
• On 18 October, Bonava signed an agreement for the divestment of its operations in St. Petersburg for EUR 50 M (SEK 578 M SEK) and received payment at the same time. Final approval from the relevant authorities was received on 2 November and the divestment has now been completed. Net assets as of 30 September were measured at the transaction price less selling costs, 564 MSEK, which corresponds to the fair value and increases equity with a corresponding amount. The purchase price, which was received the 18October will decrease the net debt during the fourth quarter, refer to note 8.
| recognized as items affecting comparability; refer to Notes 2 and 3. |
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| Bonava is evaluating strategic options regarding long-term capital structure and is in active dialogue with its creditors and major shareholders, refer to page 15, Other information and note 4. |
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| Earnings per share2) amounted to SEK -12.85 (0.26) |
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| * Recognised revenue and profit pertain to continuing operations, excluding St. Petersburg and Norway. As of the third quarter of 2022, St. Petersburg has been reported as operations to be discontinued. Norway is reported as discontinued operations as of the second quarter of 2023. Restated comparative figures are available at www.bonava.com. |
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| SEK M and excluding St. Petersburg and | 2023 | 2022 | 2023 | 2022 | Oct 2022 | 2022 | ||
| Norway unless otherwise stated | Jul–Sep | Jul–Sep | Δ% | Jan–Sep | Jan–Sep | Δ% | – Sep 2023 | Jan–Dec |
| Net sales | 2,765 | 2,604 | 6 | 8,281 | 8,322 | –1 | 13,945 | 13,987 |
| Gross profit | 205 | 265 | –22 | 748 | 1,106 | –32 | 1,331 | 1,689 |
| Gross margin, % | 7.4 | 10.2 | 9.0 13.3 |
9.5 | 12.1 | |||
| Operating profit before items affecting comparability¹⁾ | 30 | 76 | –61 | 197 | 507 | –61 | 547 | 858 |
| Operating margin before items affecting comparability, %¹⁾ | 1.1 2.9 |
2.4 | 6.1 | 3.9 | 6.1 | |||
| Operating profit after items affecting comparability | –1,213 | 76 | –1,692 | –1,046 | 507 | –306 | –751 | 802 |
| Operating margin after items affecting comparability, % | –43.9 | 2.9 | –12.6 | 6.1 | –5.4 | 5.7 | ||
| Profit before tax | –1,358 | 35 | –4,033 | –1,432 | 389 | –468 | –1,212 | 609 |
| Earnings per share, SEK²⁾ | –12.85 | 0.26 | –5,029 | –13.36 | 2.64 | –606 | –11.89 | 4.10 |
| Net debt³⁾ | 6,305 | 7,146 | –12 | 6,305 | 7,146 | –12 | 6,305 | 7,259 |
| Return on capital employed, R12, %³⁾ | 4.4 | 9.2 | 4.4 9.2 |
4.4 | 6.9 | |||
| Equity/assets ratio, %³⁾ | 27.9 | 31.4 | 27.9 | 31.4 | 27.9 | 31.2 | ||
| Number of building rights | 28,600 | 29,100 | –2 | 28,600 | 29,100 | –2 | 28,600 | 29,400 |
| Number of housing units sold | 469 | 519 | –10 | 1,137 | 1,931 | –41 | 1,742 | 2,536 |
| Sales value of housing units sold | 1,565 | 1,720 | –9 | 3,987 | 6,306 | –37 | 5,938 | 8,258 |
| Number of production starts | 388 | 860 | –82 | 939 | 1,979 | –64 | 1,242 | 2,513 |
| whereof investment properties | 231 | 231 | 231 | 231 | ||||
| 4,435 | 7,715 | –43 | 4,435 | 7,715 | –43 | 4,435 | 6,498 | |
| Number of housing units in production | 426 | 195 | 426 | 195 | 426 | |||
| whereof investment properties | 195 | |||||||
| Sales rate for ongoing production, %⁴⁾ | 65 | 68 | 65 | 68 | 65 | 69 |
3) Including Norway and St. Petersburg. Vendor notes recorded as asset in net debt. Refer to Note 8. 4) Excluding Build-to-Manage. Including Build-to-Manage, the sales rate totalled 63 per cent.
547 EBIT BEFORE ITEMS AFFECTING COMPARABILITY1), SEK M, R12
1,742 NUMBER OF HOUSING UNITS SOLD, RTM
28,600 NUMBER OF BUILDING RIGHTS
The market remained challenging in the third quarter. Germany and the Baltics had higher levels of activity than the Nordic markets, and we had 388 housing unit production starts and increased sales compared with the preceding quarters in 2023. Completions in the third quarter are in line with the forecast we presented in the second-quarter interim report. Interest-bearing liabilities decreased during the period, and moreover the sale of the operations in St. Petersburg was finalized after the end of the period. We are planning for a market that will remain challenging in 2024, and our main focus is on increasing flexibility by controlling the factors we can influence: reducing costs and to strengthen the cash flow.
Bonava's sales in the third quarter were stable. Our attractive offerings have garnered interest from both consumers and investors, which means that the number of housing units sold increased from 390 in the second quarter to 469 in the third quarter. The markets in Sweden and Finland remained the most heavily impacted, while Germany and the Baltics were more resilient. Activity levels also vary in the submarkets, where certain areas such as Berlin and Riga have a tremendous pentup need for housing units.
The total value of housing units sold that are to be delivered to customers over the coming 18 months is approximately SEK 11 Bn, corresponding to a sales rate of 65 per cent.
We believe that the market will remain challenging in 2024. Based on the underlying demand and the increasing deficit in sustainable and modern homes, we expect a gradual recovery in 2025 and beyond.
For the purpose of freeing up capital, we have been systematically and carefully reviewing investments and costs since last year. During the third quarter, net debt was reduced to SEK 6.3 Bn. We are meeting the covenant set for the equity/assets ratio, which amounted to 28.1 per cent (covenant: 25%). The restructuring costs have, after agreement with the creditors, for the time being been added back in the calculation of the interest coverage ratio. The interest coverage ratio amounted to 2.5 times after the adjustment (2.0 times according to the agreement). We are in an active dialogue with the creditors and larger shareholders and are evaluating different strategic options regarding our long-term capital structure.
The divestment of the operations in St. Petersburg that was agreed on and concluded after the end of the reporting period impacted earnings from operations to be discontinued and shareholders' equity by SEK 564 M, since the business unit was measured at fair value in profit/loss for the period and will lower net debt correspondingly in the fourth quarter. The transaction is a key milestone in an environment that is incredibly difficult to navigate.
Our 28,600 attractively located building rights are a prerequisite for our ability to develop new housing units. To ensure that we are not tying up too much capital and in order to make the correct investment decisions, we performed a market valuation of our building rights. The surplus value in the portfolio is estimated at SEK 1.2 Bn (after the impairment described below). The building rights are current assets and thus are carried in our books at the lower of market value and cost for each individual right. Individual building rights were subject to impairment of SEK 686 M, corresponding to 7 per cent of the market value. The impairment is linked to such factors as the assets that were not deemed necessary to support our business plan, which is why it is intended that they will be divested over time in a manner similar to the divestments that took place in the third quarter.
Net sales in the third quarter rose to SEK 2.8 Bn (2.6). Completions and deliveries were in line with the forecast that was presented in conjunction with the interim report for the second quarter. Sales are our highest priority in order to safeguard the cash flow. We applied selected price reductions to ongoing and completed production during the period. To reduce tied-up capital, we also made a number of sales of building rights and premises. Moreover, we have made certain risk provisions. In total, these impacted the gross margin negatively by SEK 66 M. The underlying gross margin, excluding these items, was 9.8 per cent (16.6).
Compared with other industries, Bonava can adapt its overheads to a lower business volume relatively quickly. Since the first quarter of 2022, we have gradually increased our cost adjustments in order to manage the lower expected business volume, and overall we will achieve gross savings of SEK 1 Bn on an annual basis starting on 1 January 2025. Of this amount approximately 620 M will come in the
form of reduced indirect costs and overheads. The effects of the implemented measures are progressing according to plan and amounted to approx. 240 M in annual run-rate, per the end of the period. The measures taken have involved personnel reductions and more structural measures whereby we changed our working methods.
On 29 September we announced the major restructuring of our operations in Germany, Finland and Sweden with gross savings that are expected to total approximately SEK 400 M, gross which is included in the figure above, on an annual basis. To ensure that we will achieve the intended savings as quickly as possible, we have established a provision of SEK 434 M pertaining to restructuring costs, up from the preliminary estimate of SEK 350 M that was stated in the press release dated 29 September 2023.
Operating profit before items affecting comparability totalled SEK 30 M (76), corresponding to an operating margin of 1,1 per cent (2.9). Operating loss after items affecting comparability was SEK -1,231 M.
The turbulent market conditions are reducing predictability. In the short term, we have demonstrated our ability to control the factors we can influence at an early stage. Bonava has been cautious with its investments in production starts, withheld investments in building rights, completed strategic divestments of operations and taken initiatives to reduce overheads since the start of the war in Ukraine in February 2022.
From a long-term perspective the need for sustainable housing units in Bonava's markets is significant. In the Baltics, there is a high need for increasing the standards and energy efficiency of housing units. Housing construction in Germany and Sweden has lagged behind both the pace of urbanisation and demand for some time now. In all our markets, the slowdown we are now seeing in housing construction will lead to greater imbalances in the years ahead.
I am extremely impressed with and proud of the work performed by my colleagues. Without them, none of this would have been possible. The work that we are doing today is creating the conditions for us to capitalise on the opportunities that will arise when the market turns around.
"We are planning for a market that will remain challenging in 2024, and our main focus is on increasing flexibility by controlling the factors we can influence: reducing costs and to strengthen the cash flow."
Population growth and urbanisation in combination with low levels of housing construction over many years has led to a shortage of housing units in destination regions. In the long term, we foresee a large need for sustainable and well-planned homes. However, the market situation at present is challenging, with a sharp fall in housing construction as a result.
Our business is local, there are many players, competition is fierce and market developments are rapid. Those who act decisively to meet these new conditions will be standing strong when the market turns around.
During the preceding year, we noted increased costs for materials. At present, cost increases have tapered off. Access to materials has stabilised while many subcontractors are competing for bids.
Demand for housing units remained cautious. High interest rates, high inflation, and increased uncertainty affected demand, primarily, but also the price trend. During the third quarter, the sales rate in our markets was stable although the levels were lower than in the previous year. The organisation has responded to the challenging market conditions through active, targeted sales initiatives and becoming even closer to potential customers. Some selective price reductions make housing buyers more prone to act.
Germany is Bonava's largest market. There has been a shortage of housing units in Germany for many years and this topic is high on the political agenda. The offering of new housing units is low, while customers are cautious. Housing prices in large cities were impacted to a greater extent than prices outside these areas. Berlin, Cologne and Dortmund are the regions in which we are seeing the greatest activity at present.
In Sweden, Bonava has an attractive breadth in our offering of housing units for investors and consumers, in or near large cities. Higher costs of living and rising interest rates have resulted in a cautious market and we are seeing a clear slowdown as regards both production starts and sales of housing units. In the third quarter we saw increased activity among our customers and more positive sentiment in the market. Overall market volumes remain low.
The housing market in Finland is concentrated primarily to the metropolitan regions with the largest population growth and expanded infrastructure: Helsinki, Tampere and Turku. The housing market in Finland has suffered greatly from rising interest rates and inflation, and customer activity is subdued.
The markets in all three Baltic capitals are growing economies with forecasts of a short-term downturn in their economies during 2023. The low standard of the existing housing stock combined with growing demand for rental housing presents opportunities to build and manage them. The favourable market conditions in the Baltic markets remain, with a low level of unemployment and a lack of supply. The prices for new housing units are stable in all markets, and Riga is the submarket that has the highest level of activity.
Due to the fact that Bonava has divested its operations in Norway and the divestment of the operations in St. Petersburg was in progress, the consolidated income statement is presented in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. This entails recognizing the result from the operations in Norway and St. Petersburg on a line in the income statement designated as operations to be discontinued and discontinued operations. The historical comparative figures in the consolidated income statement have been restated. Assets and liabilities attributable to the operations in St. Petersburg are recognised on one line for assets and one line for liabilities in the balance sheet as of 30 September 2023. In the cash flow statement, cash flow attributable to operations to be discontinued is indicated in its own table.
Net sales amounted to SEK 2,765 M (2,604). The change is attributable in part to exchange rate fluctuations that had a positive translation effect of SEK 251 M compared with the year-earlier period. Fewer housing units in total were recognized in profit, but at a higher average price. The average price per housing unit recognized in profit amounted to SEK 3.8 M (3.4).
During the quarter, 535 housing units for consumers (354) were recognized in profit, generating net sales of SEK 2,275 M (1,383).
Net sales to investors totalled SEK 457 M (1,213), and the number of housing units recognized in profit was 184 (403).
Gross profit amounted to SEK 205 M (748) and the gross margin was 7.4 per cent (10.2). The gross margin was impacted by us delivering high-margin products to both consumers and investors in the comparative period, which we did not do in the current quarter. In addition, the quarter was charged with risk provisions of SEK 17 M and net losses of SEK 49 M from the divestment of assets in. These divestments are part of the strategic review of our building rights portfolio that is being conducted and will help strengthen the Group's cash flow. These items have not been classified as items affecting comparability. In the previous year, operating profit was charged with impairment of SEK 155 M of previously capitalized project engineering costs and fixed assets as well as sale of land of 12 M. Adjusted for these items, the underlying gross margin was 9.8 per cent (16,6).
Operating profit before items affecting comparability amounted to SEK 30 M (76) and the operating margin was 1,1 per cent (2.9).
Exchange rate fluctuations had a positive impact of SEK 15 M on operating profit before items affecting comparability compared with the year-earlier period.
Bonava has initiated further reorganizations in Germany, Sweden and Finland in order to create a lower cost base and conditions for
increased flexibility. In the third quarter, costs of SEK 434 M pertaining to restructuring were recognized.
The review of the building rights portfolio that is being conducted has resulted in impairment of 7 percent of market value or 686 M. After the impairment the assessed market value is 9,5 Bn, corresponding to a excess value of 1,2 Bn. Moreover, a B2M project in Sweden was impaired by SEK 123 M.
The restructuring, impairment of properties held for future development, and the B2M project – SEK -1,243 M in total – are classified as items affecting comparability. Operating loss after items affecting comparability amounted to SEK -1,213 M (profit: 76). Exchange rate fluctuations had a positive translation effect of SEK 15 M on operating profit before items affecting comparability compared with the year-earlier quarter.
Net financial items, profit before tax, tax and profit for the quarter Net financial items were SEK -145 M (-42), attributable to increased interest expenses due to a higher financing volume and higher base rates. The net debt at the end of the reporting period was lower than during the corresponding period last year, however the average net debt during the quarter was higher.
Loss before tax for the quarter was SEK -1,358 M (profit: 35). Tax on profit for the quarter was SEK -20 M (-7), corresponding to a tax rate of 0 per cent (20).
Loss for the period for continuing operations amounted to SEK -1,377 M (profit: 28).
Profit for the period for operations to be discontinued was SEK 557 M (62) and pertains to a market valuation, 564 M, of net assets in St. Petersburg that took place in the third quarter; refer further to Note 8.
Net sales, excluding St. Petersburg and Norway Operating profit and operating margin, excluding St. Petersburg and Norway
Net sales totalled SEK 8,281 M (8,322), since slightly fewer housing units were recognized in profit compared with the year-earlier period – though at a higher average price. The average price per housing unit recognized in profit amounted to SEK 3.3 M (3.1).
During the period, 1,519 (1,645) housing units for consumers were recognized in profit, with net sales of SEK 5,853 M (5,664).
Net sales to investors totaled SEK 2,351 M (2,592), and the number of housing units recognized in profit was 1,006 (1,056).
Exchange rate fluctuations had a positive translation effect of SEK 535 M on consolidated net sales compared with the year-earlier period.
Gross profit amounted to SEK 748 M (1,106) and the gross margin was 9.0 per cent (13.3).
The gross margin was impacted by our delivery of high-margin products to both consumers and investors in the comparative period, which we have not done in the current year. Moreover, operating profit was charged with impairment of SEK 34 M in Germany, risk provisions of SEK 45 M in Sweden and net losses of SEK 43 M from the divestment of assets. These divestments are part of the strategic review of our building rights portfolio that is being conducted and will help strengthen the Group's cash flow. These items have not been classified as items affecting comparability. In the previous year, gross profit was charged with impairment of SEK 155 M of previously capitalized project engineering costs and fixed assets as well as sale of land of 6 M. Adjusted for these provisions, our underlying gross margin was 10.5 per cent (15,2).
Exchange rate fluctuations had a positive impact of SEK 26 M on operating profit before items affecting comparability compared with the year-earlier period.
Bonava has initiated further restructuring in Germany, Sweden and Finland in order to create a lower cost base and conditions for increased flexibility. In the third quarter, costs of SEK 434 M pertaining to restructuring were reported.
The review of the building rights portfolio that was carried out has resulted in impairment of properties held for future development of 7 percent of the market value or SEK 686 M. After the impairment a market value remains of 9,5 B SEK, corresponding to a market value in excess of the book value of 1,2 B. Additionally, in the third quarter, a B2B project in Sweden was impaired by SEK 123 M.
Both the restructuring and the impairment – SEK 1,243 M in total – are classified as items affecting comparability. Operating loss after items affecting comparability was SEK -1,046 M (profit: 507).
Exchange rate fluctuations had a negative impact of SEK 70 M on operating profit compared with the year-earlier period.
Net financial items, profit before tax, tax and profit for the period Net financial items were SEK -386 M (-118), attributable to increased interest expenses due to a higher financing volume and increased base rates. The net debt at the end of the quarter was higher than in the previous period last year, however the average balance was higher.
Profit before tax for the period was SEK -1,432 M (profit: 389). Tax on profit for the period was SEK 0 M (-106), corresponding to a tax rate of 0 per cent (27).
Loss for the period for continuing operations amounted to SEK -1,432 M (profit: 283).
Loss for the period for operations to be discontinued and discontinued operations totaled SEK -247 M (profit: 99), of which SEK -824 M pertained to capital losses from the divestment of the Norwegian operations in the second quarter while the remainder pertains to accumulated earnings and market valuation, 564 M, of the net assets in St. Petersburg, refer further to Note 8. 2023 2022 2023 2022 Oct 2022 2022
| Operating profit Operating profit before items affecting comparability was SEK 197 M (507) and the operating margin was 2.4 per cent (6.1). |
net assets in St. Petersburg, refer further to Note 8. | SEK -824 M pertained to capital losses from the divestment of the Norwegian operations in the second quarter while the remainder pertains to accumulated earnings and market valuation, 564 M, of the |
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| 2023 | 2022 | 2023 | 2022 | Oct 2022 | 2022 | |
| Continuing operations | Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | – Sep 2023 | Jan–Dec |
| Net sales | ||||||
| Germany | 1,882 | 1,648 | 4,129 | 4,480 | 7,435 | 7,785 |
| Sweden | 290 | 318 | 1,827 | 1,995 | 2,577 | 2,745 |
| Finland | 480 | 216 | 1,885 | 990 | 2,654 | 1,759 |
| Baltics | 116 | 117 | 438 | 450 | 820 | 832 |
| Other operations¹⁾ | –2 | 306 | 1 | 407 | 458 | 864 |
| Total | 2,765 | 2,604 | 8,281 | 8,322 | 13,945 | 13,987 |
| 2023 | 2022 | 2023 | 2022 | Oct 2022 | 2022 | |
| Continuing operations | Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | – Sep 2023 | Jan–Dec |
| Operating profit before items affecting comparability²⁾ | ||||||
| Germany | 157 | 186 | 242 | 521 | 625 | 904 |
| Sweden | –86 | –110 | 17 | 26 | –63 | –54 |
| Finland | –3 | –1 | 62 | 39 | 111 | 88 |
| Baltics | 6 | 10 | 30 | 48 | 90 | 108 |
| Other operations¹⁾ | –44 | –9 | –153 | –127 | –215 | –188 |
| Total | 30 | 76 | 197 | 507 | 547 | 858 |
2) The key figures in Jul–Sep 2023, Jan-Sep 2023, Oct 2022–Sep 2023 and Jan–Dec 2022 were impacted by items affecting comparability. Refer to Notes 2 and 3.
Total assets were SEK 22,851 M (28,313). At 31 December 2022, assets totaled SEK 25,579 M. The divestment of the Norwegian operations, impairment of properties held for future development, a B2M project as well as a lower number of ongoing housing projects contributed to a reduction in assets since the start of the year. These decreases where to a minor extent offset by the increase in the net assets pertaining to the S:t Petersburg operations of 564 M, refer to note 8. Exchange rate fluctuations increased assets by SEK 558 M compared with 31 December 2022.
Net debt amounted to SEK 6,305 M (7,146). At 31 December 2022, net debt totaled SEK 7,259 M. The decline was primarily due to the divestment of Bonava Norway. The part of the purchase price that will be paid via vendor note has been recognized as a financial asset in net debt. The purchase price less selling costs, in total 564 M, related to the divestment of the S:t Petersburg operations, will decrease the net debt in the fourth quarter with a similar amount. Exchange rate fluctuations increased net debt by SEK 229 M compared with 31 December 2022.
Capital employed amounted to SEK 13,850 M (16,560). At 31 December 2022, capital employed amounted to SEK 15,568 M. The divestment of the Norwegian operations, a decrease in the number of ongoing housing projects and impairment of properties held for future development and a B2M project have all reduced capital employed, while continued payments for land under previously signed agreements have increased capital employed as well as the increase of net assets pertaining to the S:t Petersburg operations. Exchange-rate fluctuations increased capital employed by SEK 314 M compared with 31 December 2022.
The equity/assets ratio was 27.9 per cent (31.4). As of 30 June 2023, the equity/assets ratio was 29.0 per cent. The net debt/equity ratio was 1.0x (0.9x at 30 June 2023).
The terms and conditions in Bonava's loan agreements with banks and the Swedish Export Credit Corporation are linked to covenants on the equity/asset ratio and interest coverage ratio. As of 30 September, and according to the calculation method in the loan agreements, the equity/assets ratio was 28,1 percent. According to an agreement reached with the creditors restructuring costs that were recognized in the third quarter were for the time being added back in the calculation of the interest coverage ratio. This considered the interest coverage ratio totaled 2.5x on 30 September. Since the agreement was reached after the balance sheet date, the loans that are covered by the covenants are classified as current in accordance with applicable reporting regulations.
Cash flow before financing was SEK 197 M (-1,219). The cash flow improved since a large part of the negative earnings consisted of noncash items in the form of impairment of land and provisions for restructuring. Cash flow from operating activities before change in working capital totaled SEK 246 M (120). Cash flow from changes in working capital amounted to SEK -29 M (-1,275). Sales of housing projects amounted to SEK 2,450 M (2,590). Investments in housing projects decreased to SEK -1,610 M (-3,950). Decreases took place in most markets. Cash flow from other changes in working capital amounted to SEK -868 M (85) with a reduction in customer advances, primarily in Germany, decreasing cash flow.
Cash flow before financing was SEK -223 M (-3,553). Negative earnings were offset by a large amount of non-cash items in the form of impairment of land and provisions for restructuring. Cash flow from operating activities before change in working capital totaled SEK 215
M (184). Cash flow from changes in working capital amounted to SEK - 598 M (-3,666). Sales of housing projects amounted to SEK 7,833 M (7,963) and investments in housing projects were reduced to SEK - 6,855 M (-12,042), where primarily Sweden and Germany saw lower investment levels. Cash flow from other changes in working capital amounted to SEK -1,576 M (pos: 413) with a reduction in customer advances, primarily in Germany, decreasing cash flow. The divestment of the Norwegian operations had a positive effect of SEK 737 M on cash flow, of which SEK 765 M in cash purchase price received was reduced by SEK 28 M in relinquished cash and cash equivalents.
1) Including operations to be discontinued (St. Petersburg) and including discontinued operations (Norway) up until the date of divestment, 30 June 2023.
Other net debt
Bonava's business model and the contract structure of the housing projects mean that when production is completed and customers have taken possession of the housing units, the sales value of these units is recognized under "Net sales" in the income statement. This applies to housing units for both consumers and investors.
The carrying amount of completed but not yet handed over housing units is transferred from "Ongoing housing projects" to "Completed housing units" in the balance sheet.
Completed housing units from earlier periods are added to net sales in the quarter when delivery to the customers occurs.
In our Build-to-Manage (B2M) model, we are building rental
apartments intended for own management. This entails constructing, retaining, and managing for a period instead of divesting immediately. Investments have been made in one project of this type in Sweden since the third quarter of 2022 and in two projects in the Baltics since the end of 2021.
According to the plan, a rental housing project in the Baltics was to have been completed in the third quarter but was instead completed early in the fourth quarter of 2023. The project is expected to generate rental income in 2024, since the occupancy rate for the property is expected to gradually increase. The other rental housing project in the Baltics is progressing more rapidly than planned and is also expected to be completed in the fourth quarter of 2023.
The development of Bonava's B2M project in Sweden was suspended in the preceding quarter, and in the third quarter the project was impaired by SEK 123 M. At the end of September 2023, the project was classified as property held for future development and thus measured as a building right.
For more information on Bonava's value chain, refer to our Annual Report, which is available at bonava.com.
The number of sold completed housing units not recognized in profit at the end of the quarter was 44 (12). As of 30 June 2023, this figure was 47.
The number of unsold completed housing units at the end of the quarter was 371 (82). As of 30 June 2023, this total was 285; 63 were sold during the quarter and 149 new housing units were added.
approximately. 630 consumer housing units would be completed in the third quarter. A total of 618 housing units were completed.
During the quarter, it was estimated that 280 housing units for investors would be completed, while 184 were completed. The change pertains to the postponement of a B2M project in the Baltics from the third quarter to the fourth quarter of 2023.
The number of housing units for consumers recognized in profit during the quarter was 535 (354).
During the quarter, 184 (403) housing units for investors were recognized in profit.
The value of sold housing units in production and completed housing units sold but not yet recognized in profit at the end of the quarter was SEK 6,559 M (11,220) for consumers and SEK 4,364 M (5,864) for investors.
1) The Baltic region pertains to B2M; refer to pages 10 and 13
The diagrams illustrate the estimated completion dates of projects that have been started for housing units for consumers and investors, respectively. The number of housing units have been rounded off since they are estimates of the point in time of completion and shifts between quarters are common.
The curves illustrate the percentage of units sold at 30 September 2023. The diagrams can give an indication of future net sales, provided that the housing units are also delivered to the end customers. For those bars that show unsold housing units, both sale and completion need to occur before they are recognized in profit.
The lines under the diagram clarify the changes that have occurred since the assessment presented in the interim report for the preceding quarter. One change of this kind is a B2M project with 231 planned housing units in Sweden being reclassified to property held for future development and no longer being included in the diagram.
The top line shows an amended estimate of when the units are expected to be completed, compared with the latest published interim report. Changes such as the date for receiving building permits, disruptions in the logistics and production chain or other factors could positively or negatively impact the estimated time of completion.
The bottom line shows the expected time of completion for the units for which production has started during the quarter. These units thus entail an increase in the total number of units included in the graph.
In light of the weaker market, we have been restrictive regarding new investments in land since mid-2022. We are developing existing building rights in our portfolio in order to have land ready for building and can quickly start projects up once demand turns around. Prioritizing cash flow also means that we are reviewing our building rights portfolio. We are evaluating where we have the greatest potential to create profitable projects and are divesting land and withdrawing from option contracts where we do not see the same potential.
In the third quarter, the value of the building rights portfolio has been assessed, through partly external valuations, partly through internal valuations of discounted cash flows. The building rights are current assets and therefore recognized at the lower of cost or market value per individual item. Over 80 percent of the book value has been subject to valuations performed by independent appraisers. In the third quarter impairment of SEK 686 M of development properties was recognized. After the impairments the assessed market value is 9,5 Bn, corresponding to an excess value compared to the book value of 1,2 Bn. Some properties remain where the external appraisal indicates that the market value is lower than the carrying amount. In these cases, the valuation is substantially supported by other external sources. Based on an overall assessment of the value of each property held for future development, which was made based on the value that Bonava
| Bn. Some properties remain where the external appraisal indicates that the market value is lower than the carrying amount. In these cases, the valuation is substantially supported by other external sources. Based on an overall assessment of the value of each property held for future development, which was made based on the value that Bonava |
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| 11BBuilding rights | ||||||
| On/Off balance sheet | Carrying amount, building rights portfolio | |||||
| 2023 | 2022 | 2022 | ||||
| 30 Sep | 30 Sep | 31 Dec | 10,000 | |||
| Number of building rights | 9,000 | |||||
| Germany | 9,300 | 10,100 | 9,800 | |||
| Sweden | 8,800 | 8,100 | 8,700 | 8,000 | ||
| Finland | 3,600 | 3,300 | 3,400 | 7,000 | ||
| Baltics | 6,900 | 7,600 | 7,500 | 6,000 | ||
| Sum | 28,600 | 29,100 | 29,400 | 5,000 | ||
| 4,000 | ||||||
| Of which, off-balance sheet | 3,000 | |||||
| Germany | 1,800 | 3,600 | 3,100 | 2,000 | ||
| Sweden | 2,800 | 3,300 | 2,900 | |||
| Finland | 2,300 | 2,100 | 2,100 | 1,000 | ||
| Baltics | 2,700 | 3,250 | 3,250 | 0 | ||
| Sum | 9,600 | 12,250 | 11,350 | |||
believes can be generated upon future sale of housing units as part of its normal operations, there is no need for further impairment as of 30 September 2023. For more information, refer to Note 10.
The total number of building rights at the end of the quarter amounted to 28,600 (29,100). Compared with the start of the year, the number of building rights was somewhat lower with reductions in the Baltics and Germany, while Sweden and Finland increased the number of building rights slightly. Bonava recognizes some of its building rights off the balance sheet, such as land that Bonava controls through a contract with options or other agreements where the land has not yet been taken into possession. The number of building rights off the balance sheet at the end of the quarter amounted to 9,600 (11,350). Refer also to Note 6.
The diagram below illustrates the development of the building rights portfolio during the last year and its composition in the third quarter of 2023. Properties held for future development amounted to SEK 8,265 M (9,836) at the end of the quarter. For continuing operations, property held for future development totaled SEK 8,089 M in the yearearlier quarter. The increase is due in part to currency effects, taking possession of land with attractive building rights, a low number of projects started and our reclassification of the B2M project in Sweden to property held for future development in the third quarter. 30 Sep 30 Sep 31 Dec
On/Off balance sheet Carrying amount, building rights portfolio
Number of building rights at 30 September 2023, excluding St. Petersburg and Norway
Distribution of building rights, excluding St. Petersburg and Norway
Germany is Bonava's largest market, with operations in the major city regions of Berlin and Hamburg as well as the Baltic Sea, Saxony, Rhein-Ruhr, Cologne/Bonn, Rhein-Main and Rhein-Neckar/Stuttgart. We offer apartments and single-family homes to consumers, and multi-family housing with rental apartments to investors.
In the quarter, 168 housing units for consumers (163) were started, and the number of housing units sold to consumers, 175 (181), was in line with the preceding year.
176 housing units (74) were started and sold to investors during the quarter. The sales rate for ongoing production was 67 per cent (67).
During the quarter, 338 (175) housing units for consumers and 55 (221) housing units for investors were recognized in profit. Net sales increased year-on-year to SEK 1,882 M (1,648), which is attributable to a higher number of housing units delivered to consumers.
Expenses of SEK 402 M for restructuring and of SEK 442 M for impairment of land have been classified as items affecting comparability.
Net sales decreased to SEK 4,129 M (4,480), due primarily to 351 fewer housing units being delivered to investors.
During the second quarter, the gross margin was charged with a provision of SEK 34 M for cost risk.
Expenses of SEK 402 M for restructuring and of SEK 442 M for impairment of land have been classified as items affecting comparability. Operating profit before items affecting comparability totaled SEK 242 M (521), with an operating margin before items affecting comparability of 5.9 per cent (11.6). A number of highmargin projects were delivered in the preceding year, which has not been the case this year. Jul–Sep Jul–Sep Jan–Sep Jan–Sep Jan–Dec
| impairment of land have been classified as items affecting comparability. Operating profit before items affecting comparability totaled SEK 157 M (186), with an operating margin before items affecting comparability of 8.3 per cent (11.3). The lower margin compared to the preceding year was attributable primarily to us having delivered a major investment project and two high-margin consumer projects in the third quarter that year. Operating profit after items affecting comparability amounted to SEK -687 M (186). |
impairment of land have been classified as items affecting comparability. Operating profit before items affecting comparability totaled SEK 242 M (521), with an operating margin before items affecting comparability of 5.9 per cent (11.6). A number of high margin projects were delivered in the preceding year, which has not been the case this year. Operating profit after items affecting comparability amounted to SEK -603 M (521). |
||||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | Jan–Dec | |
| Net sales | 1,882 | 1,648 | 4,129 | 4,480 | 7,785 |
| Gross profit | 231 | 261 | 449 | 747 | 1,213 |
| Gross margin, % | 12.3 | 15.8 | 10.9 | 16.7 | 15.6 |
| Selling and administrative expenses | –74 | –74 | –207 | –226 | –309 |
| Operating profit/loss before items affecting comparability | 157 | 186 | 242 | 521 | 904 |
| Operating margin before items affecting comparability, % | 8.3 | 11.3 | 5.9 | 11.6 | 11.6 |
| Items affecting comparability¹⁾ | –844 | –844 | –32 | ||
| Operating profit/loss after items affecting comparability | –687 | 186 | –603 | 521 | 872 |
| Operating margin after items affecting comparability, % | –36.5 | 11.3 | –14.6 | 11.6 | 11.2 |
| Capital employed | 7,305 | 6,614 | 7,305 | 6,614 | 7,074 |
| whereof carrying amount properties held for future development | 4,664 | 4,634 | 4,664 | 4,634 | 4,794 |
| Return on capital employed, %¹⁾ | 8.2 | 18.9 | 8.2 | 18.9 | 15.3 |
| Number of housing units sold | 351 | 255 | 678 | 679 | 972 |
| Sales value of housing units sold | 1,316 | 1,189 | 3,014 | 3,354 | 4,548 |
| Number of production starts | 344 | 237 | 523 | 666 | 879 |
| Number of housing units in ongoing production | 2,301 | 3,223 | 2,301 | 3,223 | 2,726 |
| Sales rate for ongoing production, % | 67 | 67 | 67 | 67 | 64 |
| Number of housing units completed, not recognised in profit | 107 | 26 | 107 | 26 | 35 |
| Number of housing units for sale (ongoing production and completed) | 853 | 1,095 | 853 | 1,095 | 1,015 |
| Number of housing units recognised in profit | 393 | 396 | 869 | 1,188 | 1,888 |
In Sweden, Bonava offers apartments and single-family homes to consumers in Stockholm, Gothenburg, Linköping, Uppsala and Umeå. We offer rental projects to investors in some 15 cities.
During the quarter, no (0) housing units for consumers were started. The number of housing units sold to consumers during the quarter was 33 (18). No housing units were started for or sold to investors, either during the quarter or in the year-earlier period. In the third quarter of the preceding year a rental housing project encompassing 231 housing units and intended for Build-to-Manage (B2M) was started. During the preceding quarter, the project was suspended, and in the third quarter
July–September 2023
During the quarter, 77 (78) housing units for consumers and no (0) housing units for investors were recognized in profit.
Net sales decreased to SEK 290 M (318) as a result of a lower average price for housing units delivered to consumers compared to the year-earlier period.
The gross margin was charged with SEK 17 M in risk provisions for cost risk and SEK 51 M in losses from divestment of assets. The divestments are part of the strategic review of our building rights portfolio and will strengthen the cash flow. These items have not been classified as items affecting comparability. In the third quarter of the preceding year, the gross profit was charged with impairment of SEK 155 M on previously capitalized project engineering costs and fixed assets.
it was impaired by SEK 123 M. At the end of September 2023, the project was reclassified to land held for future development and thus measured as a building right. Sweden thus has no projects intended for B2M in production, and all projects reported as housing starts for investors pertain to B2B. The sales rate for ongoing production was 60 per cent (81).
Net sales amounted to SEK 1,827 M (1,995). During the period, 327 (391) housing units for consumers and 258 (212) housing units for investors were recognized in profit.
The gross margin was charged with SEK 45 M in risk provisions and SEK 51 M in losses from divestment of assets. The divestments are part of the strategic review of our building rights portfolio and will strengthen the cash flow. These items have not been classified as items affecting comparability. In the previous year, gross profit was charged with impairment of SEK 155 M of previously capitalized project engineering costs and fixed assets.
| portfolio and will strengthen the cash flow. These items have not been classified as items affecting comparability. In the third quarter of the preceding year, the gross profit was charged with impairment of SEK 155 M on previously capitalized project engineering costs and fixed assets. Expenses of SEK 308 M have been classified as items affecting comparability, of which SEK 25 M was for restructuring, SEK 160 M for impairment of land and SEK 123 M for impairment of a suspended B2M project. Operating loss before items affecting comparability amounted to SEK -86 M (-110) and the operating margin was -29.8 per cent (-34.7). Operating loss after items affecting comparability amounted to SEK -394 M (-110). |
B2M project. 291 M (profit: 26). |
items affecting comparability. In the previous year, gross profit was charged with impairment of SEK 155 M of previously capitalized project engineering costs and fixed assets. Expenses of SEK 308 M have been classified as items affecting comparability, of which SEK 25 M was for restructuring, SEK 160 M for impairment of land and SEK 123 M for impairment of a suspended Operating profit before items affecting comparability amounted to SEK 17 M (26) and the operating margin was 0.9 per cent (1.3). Operating loss after items affecting comparability amounted to SEK - |
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|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | ||
| Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | Jan–Dec | ||
| Net sales | 290 | 318 | 1,827 | 1,995 | 2,745 | |
| Gross profit | –51 | –87 | 126 | 121 | 85 | |
| Gross margin, % | –17.5 | –27.4 | 6.9 | 6.1 | 3.1 | |
| Selling and administrative expenses | –36 | –23 | –110 | –96 | –139 | |
| Operating profit/loss before items affecting comparability | –86 | –110 | 17 | 26 | –54 | |
| Operating margin before items affecting comparability, % | –29.8 | –34.7 | 0.9 | 1.3 | –2.0 | |
| Items affecting comparability¹⁾ | –308 | –308 | –20 | |||
| Operating profit/loss after items affecting comparability | –394 | –110 | –291 | 26 | –74 | |
| Operating margin after items affecting comparability, % | –135.9 | –34.7 | –15.9 | 1.3 | –2.7 | |
| Capital employed | 3,275 | 3,758 | 3,275 | 3,758 | 3,825 | |
| whereof carrying amount properties held for future development | 2,321 | 2,326 | 2,321 | 2,326 | 2,420 | |
| Return on capital employed, %¹⁾ | –1.9 | 2.6 | –1.9 | 2.6 | –1.7 | |
| Number of housing units sold | 33 | 18 | 90 | 245 | 256 | |
| Sales value of housing units sold | 113 | 92 | 373 | 1,014 | 1,047 | |
| Number of production starts | 231 | 88 | 352 | 374 | ||
| whereof investment properties | 231 | 231 | 231 | |||
| Number of housing units in ongoing production | 556 | 1,594 | 556 | 1,594 | 1,326 | |
| whereof investment properties | 231 | 231 | 231 | |||
| Sales rate for ongoing production, % | 60 | 81 | 60 | 81 | 76 | |
| Number of housing units completed, not recognised in profit | 82 | 28 | 82 | 28 | 40 | |
| Number of housing units for sale (ongoing production and completed) | 283 | 505 | 283 | 505 | 285 | |
| Number of housing units recognised in profit | 77 | 78 | 585 | 603 | 881 |
The number of housing units sold to consumers during the quarter decreased to 15 (36). The sales rate for ongoing production was 95 per cent (87).
Net sales increased to SEK 480 M (216). During the quarter, 40 (14) housing units for consumers and 129 (102) housing units for investors were recognized in profit.
No housing units (73) for consumers were started during the quarter, and no housing units (93) were started or sold to investors.
Net sales increased to SEK 1,885 M (990). During the period, 235 (218) housing units for consumers and 529 (194) housing units for investors were recognized in profit.
| were recognized in profit. Operating loss before items affecting comparability amounted to SEK -3 M (-1) and the operating margin was -0.6 per cent (-0.4). Expenses of SEK 90 M have been classified as items affecting comparability, of which SEK 7 M was for restructuring, and 83 M in impairment of development properties (of which 80 M project development costs and 3 M land). Operating loss after items affecting comparability amounted to SEK -93 M (-1) and the operating margin was -19.4 per cent (-0.4). |
investors were recognized in profit. Operating profit before items affecting comparability amounted to SEK 62 M (39) and the operating margin was 3.3 per cent (3.9). Operating profit was affected by two completed and delivered projects that had low margins, which was known beforehand. The projects were started to fulfil existing contractual requirements and to avoid fines. Expenses of SEK 90 M have been classified as items affecting comparability, of which SEK 7 M was for restructuring, and 83 M in impairment of development properties. Operating loss after items affecting comparability amounted to SEK -29 M (profit: 39) and the operating margin was -1.5 per cent (pos: 3.9). |
||||
|---|---|---|---|---|---|
| 2023 Jul–Sep |
2022 Jul–Sep |
2023 Jan–Sep |
2022 Jan–Sep |
2022 Jan–Dec |
|
| Net sales | 480 | 216 | 1,885 | 990 | 1,759 |
| Gross profit | 17 | 28 | 126 | 112 | 183 |
| Gross margin, % | 3.5 | 12.8 | 6.7 | 11.3 | 10.4 |
| Selling and administrative expenses | –20 | –29 | –65 | –73 | –95 |
| Operating profit/loss before items affecting comparability | –3 | –1 | 62 | 39 | 88 |
| Operating margin before items affecting comparability, % | –0.6 | –0.4 | 3.3 | 3.9 | 5.0 |
| Items affecting comparability¹⁾ | –90 | –90 | |||
| Operating profit/loss after items affecting comparability | –93 | –1 | –29 | 39 | 88 |
| Operating margin after items affecting comparability, % | –19.4 | –0.4 | –1.5 | 3.9 | 5.0 |
| Capital employed | 851 | 1,071 | 851 | 1,071 | 974 |
| whereof carrying amount properties held for future development | 649 | 639 | 649 | 639 | 561 |
| Return on capital employed, %¹⁾ | 11.2 | 3.6 | 11.2 | 3.6 | 9.0 |
| Number of housing units sold | 15 | 129 | 129 | 599 | 838 |
| Sales value of housing units sold | 27 | 267 | 259 | 1,377 | 2,009 |
| Number of production starts | 166 | 75 | 545 | 765 | |
| Number of housing units in ongoing production | 707 | 1,586 | 707 | 1,586 | 1,470 |
| Sales rate for ongoing production, % | 95 | 87 | 95 | 87 | 88 |
| Number of housing units completed, not recognised in profit | 122 | 18 | 122 | 18 | 48 |
| Number of housing units for sale (ongoing production and completed) | 157 | 230 | 157 | 230 | 211 |
| Number of housing units recognised in profit | 169 | 116 | 764 | 412 | 718 |
The Baltics segment comprises the capital cities of Tallinn, Estonia; Riga, Latvia; and Vilnius in Lithuania. The offering is primarily targeted at multi-family housing for consumers, but we also have rental housing projects for investors.
The number of housing units sold to consumers was 70 (117). The number of housing starts for consumers totaled 44 (226), with one project started. The sales rate for ongoing production totaled 34 per cent (51), excluding Build-to-Manage (B2M). No housing units were started for or sold to investors during the quarter, or in the year-earlier period.
In late 2021, we began investments in rental housing projects intended for own management, in accordance with our Build-to-Manage (B2M) model. According to the plan, a rental housing project in the Baltics was to have been completed in the third quarter but was postponed and will be completed in the fourth quarter of 2023. The other rental housing project in the Baltics will also be completed in the fourth quarter of 2023, earlier than previously forecast. Both projects will generate rental income in 2024, which will gradually increase during the year in pace with a rising occupancy rate.
These housing units have been classified as investment properties. Refer to Note 9.
July–September 2023
Net sales totaled SEK 116 M (117), and 80 (87) housing units for consumers were recognized in profit during the quarter. The gross margin was 14.3 per cent (17.9).
Operating profit totaled SEK 6 M (10) with an operating margin of 4.8 per cent (8.7). Operating profit was burdened by one project completed and delivered with a low margin. The low margin in this project is attributable to a shortage of materials, which impacted the costs that were procured in the project.
Net sales amounted to SEK 438 M (450). A lower number of housing units delivered was offset by a higher average price per housing unit recognized in profit.
Operating profit for the period was SEK 30 M (48) and the operating margin was 6.8 per cent (10.7). The lower operating margin was attributable primarily to lower gross margins in housing units delivered compared to the year-earlier period and one low-margin project being recognized in profit during the period. The low margin in this project comes from a shortage of materials during procurement, which impacted the costs that were procured in the project.
| 2023 Jul–Sep |
2022 Jul–Sep |
2023 Jan–Sep |
2022 Jan–Sep |
2022 Jan–Dec |
|
|---|---|---|---|---|---|
| Net sales | 116 | 117 | 438 | 450 | 832 |
| Gross profit | 17 | 21 | 65 | 80 | 152 |
| Gross margin, % | 14.3 | 17.9 | 14.7 | 17.8 | 18.2 |
| Selling and administrative expenses | –11 | –11 | –35 | –32 | –44 |
| Operating profit/loss | 6 | 10 | 30 | 48 | 108 |
| Operating margin, % | 4.8 | 8.7 | 6.8 | 10.7 | 13.0 |
| Capital employed | 1,509 | 1,113 | 1,509 | 1,113 | 1,085 |
| whereof carrying amount properties held for future development | 639 | 501 | 639 | 501 | 515 |
| Return on capital employed, %¹⁾ | 7.2 | 12.2 | 7.2 | 12.2 | 11.3 |
| Number of housing units sold | 70 | 117 | 240 | 408 | 470 |
| Sales value of housing units sold | 110 | 171 | 341 | 562 | 654 |
| Number of production starts | 44 | 226 | 253 | 416 | 495 |
| whereof investment properties | |||||
| Number of housing units in ongoing production | 871 | 1,207 | 871 | 1,207 | 976 |
| whereof investment properties | 195 | 195 | 195 | 195 | 195 |
| Sales rate for ongoing production, %²⁾ | 51 | 34 | 51 | 39 | |
| Number of housing units completed, not recognised in profit | 34 | 22 | 104 | 22 | 53 |
| Number of housing units for sale (ongoing production and completed) | 104 | 513 | 544 | 513 | 531 |
| 544 | 87 | 307 | 397 | 676 | |
| Number of housing units recognised in profit | 80 |
1) The key figures were not affected by items affecting comparability, since no such items have been reported.
2) Excluding Build-to-Manage. Including Build-to-Manage, the sales rate totalled 27 per cent.
During the quarter, Bonava started the production of 388 housing units (860). All production starts are reported at https://www.bonava.com/en/investor-relations/housing-starts.
Simonsveedel Location: Cologne Housing category: Multi-family housing Number of units: 176 apartments for investors
In northern Cologne, Bonava is building the new Simonsveedel neighbourhood, which will consist of a total of 290 apartments distributed among six buildings. The apartments are suited for all age groups, and vary in size to attract both small and large households. The planning of the area is based on reducing the need for the daily use of motor vehicles. In addition to its proximity to supermarkets, preschools, schools, doctors' surgeries and pharmacies, the neighbourhood will also offer aspects of the sharing economy. By sharing access to cargo bicycles, wheelbarrows, and vehicles, each household will not need to own every item, thus lessening their environmental impact.
176 of the housing units were sold to an investor during the quarter and production was started.
On the border between the pulse of the city and the calm of the countryside lies Uus-Mustamäe, which is a 7,000-square-metre green space where Bonava is building a total of 750 modern apartments. The first of these was completed back in 2020, and there were a further 44 production starts in the third quarter of 2023. The neighbourhood features fruit trees, a picnic area, an outdoor gym and a skatepark for skateboarders and BMX riders. For the very smallest residents there is also a large playground.
Tresenwaldbogen Location: Saxony Housing category: Single-family homes Number of units: 6 new starts in the area out of a total of 196 housing units for consumers
In the new Tresenwaldbogen neighbourhood, Bonava has started production on the first six of a forthcoming 197 single-family homes. Energy efficiency is the highest priority in these newly constructed housing units, all of which will have air source heat pumps for heating both indoor environments and household water, as well as good insulation. Families that move in will have plenty of space, with two to four bedrooms as well as garden space and terraces. The surrounding area offers walking trails, bicycle paths and a golf course. Leipzig city centre can easily be reached by commuter rail.
Other operations consist of the Parent Company, Group adjustments, eliminations and the Danish operations as well as discontinued operations and operations to be discontinued.
The operations in Denmark has guarantee commitments for completed projects. The costs that were recognized pertaining to Denmark during the quarter are administrative in nature and comprise primarily salaries to remaining personnel.
Bonava's operations are exposed to various types of risks, both operational and financial. During the next 12-month period, there are a number of uncertainties that could affect our operations and sales. These include raised base rates, high inflation, refinancing risk, access to guarantees and concerns regarding the geopolitical situation in Europe. During the preceding year, we noted increased costs for materials. At present, prices have stabilized. Access to materials was normal, but we are working continually to secure deliveries of materials and services if disruptions arise.
The financial situation is continually assessed by the Board of Directors and the Executive Management Group. Bonava is now experiencing a slowdown in the market as the result of factors including inflation and rising interest rates. The company's business depends on sales of housing units. A downturn in sales has impacted earnings and resulted in a negative cash flow from operating activities for the January–September 2023 period. Bonava's Board and Executive Management Group are working on a number of measures to ensure access to the required liquidity as described under "Covenants in Loan Agreements" in Note 4. During the spring, the company also started to implement a programme under which robust measures are being taken for the purpose of reducing costs and limiting investments in building rights and new production starts. Additionally, efforts to reduce tied-up capital have intensified by reducing the unsold proportion of completed and ongoing production and divesting building rights that are not deemed necessary for realizing Bonava's business plan. Over the last three years, the company's geographic footprint has decreased with the divestment of operations in Denmark, Norway and St. Petersburg, which has reduced indebtedness and increased the focus on the markets that provide the best possibility of generating healthy returns over time. We are in active dialogue with Bonava's creditors and largest shareholders. It is the opinion of the Board and Executive Management Group that upon full implementation of the above-mentioned measures that our financial position will provide sufficient support for continuing to pursue and develop operations that create value.
On 18 October, Bonava signed an agreement for the divestment of its operations in St. Petersburg for EUR 50 M (SEK 564 M less selling costs). Completion of the divestment was conditional on approval from the authorities. Final approval from relevant authorities was received on 2 of November and the sale of the operations in St. Petersburg has now been finalized. As of 30 September, the net assets in St. Petersburg were measured at the transaction price less selling costs. After the divestment, no exposure to operations to be discontinued remains.
In the third quarter, the value of the building rights portfolio has been assessed, through partly external valuations, partly through internal valuations of discounted cash flows. The building rights are current assets and therefore recognized at the lower of cost or market value per individual item. Over 80 percent of the book value has been subject to valuations performed by independent appraisers. In the third quarter impairment of SEK 686 M of development properties was recognized. After the impairments the assessed market value is 9,5 Bn, corresponding to an excess value compared to the book value of 1,2 Bn. Some properties remain where the external appraisal indicates that the market value is lower than the carrying amount. In these cases, the valuation is substantially supported by other external sources. Based on an overall assessment of the value of each property held for future development, which was made based on the value that Bonava believes can be generated upon future sale of housing units as part of its normal operations, there is no need for further impairment as of 30 September 2023. For more information, refer to Note 10.
Given the large number of units that Bonava starts, produces and delivers, managing operational risks is a continuous process. The operations are overwhelmingly project based and comprise many different contract forms, which means that Bonava is involved in disputes and legal proceedings from time to time. During the period, an investigation was begun concerning guarantee errors in one project. The investigation is ongoing, and it is not possible to reliably estimate Bonava's potential obligations in this matter. Based on what is currently known, these disputes and legal proceedings are not expected, either individually or in aggregate, to materially impact Bonava's earnings or financial position.
Bonava has a Risk Committee that is responsible for organising, coordinating, and carrying out risk management. The Risk Committee regularly reports to the Audit Committee and the Executive Management Group. For further information on material risks and risk management, refer to pages 66–68 of Bonava's Annual and Sustainability Report for 2022, which is available at bonava.com.
The average number of employees in the Group for the period from January to September 2023, excluding St. Petersburg and Norway, was 1,537 (1,806).
Bonava has two share classes, Class A and Class B. Each Class A share carries ten votes and each Class B share one vote. Bonava's share capital was SEK 434 M on the balance sheet date, divided between 108,435,822 shares and 208,830,660 votes. At 30 September 2023, Bonava had 11,154,982 Class A shares and 97,280,840 Class B shares. The number of Class B shares in treasury totalled 1,245,355, corresponding to 1.1 per cent of the capital and 0.6 per cent of the votes. At the end of the quarter, the number of shareholders was 31,114 (31,828). Bonava's largest shareholders were Nordstjernan AB, with 24.5 per cent of the capital and 49.4 per cent of the votes; followed by the Fourth Swedish National Pension Fund with 9.2 per cent of the capital and 5.4 per cent of the votes; and Schroders, with 5.6 per cent of the capital and 2.9 per cent of the votes. The ten largest shareholders controlled a total of 60.9 per cent of the capital and 69.0 per cent of the votes. More information on the Bonava share and owners is available at bonava.com/en/investorrelations.
Bonava recognizes revenues and earnings from housing sales when sold and completed housing units are delivered to customers. Bonava's operations are affected by seasonal variations, which means that a majority of housing units are delivered to customers in the fourth quarter. Accordingly, earnings and cash flow before financing are usually stronger in the fourth quarter than in other quarters. This is shown in the charts depicting the estimated completions by quarter on page 8.
The number of votes in Bonava AB has changed as a result of the conversion of 40,000 Class A shares to 40,000 Class B shares. See further under "The Bonava share and largest shareholders" on this page.
On 31 May 2023, Bonava signed an agreement on the divestment of its operations in St. Petersburg; this agreement was later annulled, and a new divestment agreement was signed with a new buyer on 18 October. Some previous impairment of net assets in St. Petersburg was reversed. Refer also to Note 8.
On 12 June, Bonava signed the agreement to divest its operations in Norway and the transaction was concluded on 30 June. For further information, refer to Note 8.
On 18 October 2023, Bonava signed a new agreement with Star Development LLC for the divestment of its operations in St. Petersburg for EUR 50 M (SEK 564 M less selling costs) and received the purchase price at the same time. In conjunction with the conclusion of the transaction, Bonava has chosen to terminate the agreement with RBI Group that was signed on 31 May 2023. This is because the counterparty did not receive acquisition permits from the special committee established to oversee business transfers within the contractual time frame under the agreement. The new buyer, Star Development LLC, has received acquisition permits from the special committee established to oversee business transfers, and approval from the Russian competition authority was issued on 2 November 2023. The approval from the competition authority meant that the divestment of Bonava's operations in St. Petersburg was completed that same day.
Bonava has reached an agreement with banks and the Swedish Export Credit Corporation regarding the calculation of covenants. The agreement was obtained after the balance sheet date, which is why these loans are classified as current under applicable reporting regulations; refer also to Note 4.
The number of votes in Bonava AB has changed as a result of the conversion of 100 Class A shares to 100 Class B shares. The total number of votes in the company is thus 208,829,760.
Unless otherwise stated, amounts are indicated in millions of Swedish kronor (SEK M). All comparative figures in this report refer to the corresponding period of the previous year. Rounding differences may occur.
Stockholm, 15 November 2023 Bonava AB (publ)
Peter Wallin President and CEO
| Income statement Note 2023 2022 2023 2022 Oct 2022 2022 Continuing operations 1 Jul–Sep Jul–Sep Jan–Sep Jan–Sep – Sep 2023 Jan–Dec Net sales 2 2,765 2,604 8,281 8,322 13,945 13,987 Production cost –2,560 –2,339 –7,532 –7,216 –12,614 –12,298 Gross profit 205 265 748 1,106 1,331 1,689 Selling and administrative expenses –176 –189 –552 –599 –783 –831 Operating profit before items affecting comparability 2 30 76 197 507 547 858 Items affecting comparability¹⁾ 3 –1,243 –0 –1,243 –0 –1,298 –56 Operating profit after items affecting comparability 2 –1,213 76 –1,046 507 –751 802 Financial income 22 4 27 5 30 7 Financial expenses –167 –46 –413 –122 –491 –200 Net financial items –145 –42 –386 –118 –461 –193 Profit before tax 2 –1,358 35 –1,432 389 –1,212 609 Tax on profit for the period –20 –7 –106 –63 –169 Profit for the period²⁾ –1,377 28 –1,432 283 –1,274 441 Operations to be discontinued and discontinued operations 8 Net profit from operations to be discontinued and dicontinued operations after tax 557 62 –247 99 –1,089 –743 Net profit for the period from operations to be discontinued and discontinued operations 557 62 –247 99 –1,089 –743 Continuing, operations to be discontinued and discontinued operations Net profit for the period from continuing, operations to be discontinued and discontinued operations –821 90 –1,678 382 –2,363 –303 Per share data before and after dilution Profit for the period, SEK –12.85 0.26 –13.36 2.64 –11.89 4.10 Cash flow from operating activitites, SEK –2.02 –2.70 –7.58 –15.18 –5.34 –24.83 Shareholders' equity, SEK 59.52 83.05 59.52 83.05 59.52 74.49 No. of shares at the end of period, million³⁾ 107.2 107.2 107.2 107.2 107.2 107.2 |
1) Items affecting comparability totalling SEK 1,243 M were reported during the January–September 2023 period. All items affecting comparability in 2023 were recognised in the third quarter of 2023. In 2022, items affecting comparability totalling SEK 56 M were recognised in the fourth quarter. Refer also to Notes 2 and 3. |
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3) The total number of shares repurchased as of 30 September was 1,245,355 (1,245,355).
| Consolidated statement of comprehensive income |
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|---|---|---|---|---|---|---|---|---|---|---|---|
| Note | 2023 | 2022 | 2023 | 2022 | Oct 2022 | 2022 | |||||
| 1 | Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | – Sep 2023 | Jan–Dec | |||||
| Profit for the period Items that have or may be reclassified to profit for the period Translation differences during the period in translation of foreign operations |
–821 –70 |
90 43 |
–1,678 78 |
382 134 |
–2,363 131 |
–303 186 |
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| Translation differences during the period in translation of operations to be discontinued |
8 | 0 | –8 | –5 | 442 | –290 | 157 | ||||
| Other comprehensive income for the period | –70 | 36 | 73 | 577 | –160 | 344 | |||||
| Comprehensive income/loss for the period¹⁾ | 1 | –891 | 126 | –1,605 | 959 | –2,523 | 41 |
| balance sheet | ||||
|---|---|---|---|---|
| Note 1, 4, 5 |
2023 30 Sep |
2022 30 Sep |
2022 31 Dec |
|
| ASSETS | ||||
| Fixed assets | ||||
| Investment properties | 9 | 214 | 210 | 262 |
| Other fixed assets | 1,171 | 658 | 708 | |
| Total fixed assets | 1,385 | 868 | 971 | |
| Current assets | ||||
| Properties held for future development | 8,265 | 9,513 | 9,836 | |
| Ongoing housing projects | 9,639 | 13,834 | 12,091 | |
| Completed housing units | 1,305 | 503 | 799 | |
| Current receivables | 1,144 | 967 | 848 | |
| Cash and cash equivalents | 4 | 163 | 185 | 119 |
| Assets held for sale | 8 | 947 | 2,443 | 915 |
| Total current assets | 21,464 | 27,445 | 24,607 | |
| TOTAL ASSETS | 22,849 | 28,313 | 25,579 | |
| SHAREHOLDERS' EQUITY | ||||
| Shareholders' equity attributable to Parent Company shareholders | 6,374 | 8,897 | 7,979 | |
| Non-controlling interest | 5 | 5 | 5 | |
| Total shareholders' equity | 6,380 | 8,902 | 7,984 | |
| LIABILITIES | ||||
| Non-current liabilities | ||||
| Non-current interest-bearing liabilities | 4 | 236 | 3,938 | 3,593 |
| Other non-current liabilities | 11 | 318 | 369 | |
| Non-current provisions | 1,262 | 903 | 1,022 | |
| Total non-current liabilities | 1,509 | 5,159 | 4,983 | |
| Current liabilities | ||||
| Current interest-bearing liabilities | 4 | 7,040 | 3,065 | 3,532 |
| Other current liabilities | 7,539 | 9,934 | 8,165 | |
| Liabilities attributable to assets held for sale | 8 | 383 | 1,253 | 915 |
| Total current liabilities | 14,963 | 14,252 | 12,612 | |
| Total liabilities | 16,471 | 19,411 | 17,595 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 22,849 | 28,313 | 25,579 |
| Condensed consolidated changes | in shareholders' equity | ||
|---|---|---|---|
| Shareholders' equity attributable to Parent Company shareholders |
Non-controlling interest |
Total shareholders' equity |
|
| Opening shareholders' equity, 1 January 2022 | 8,318 | 5 | 8,322 |
| Comprehensive income for the period | 41 | 41 | |
| Dividend | –375 | –375 | |
| Performance-based incentive programme | –4 | –4 | |
| Closing shareholders' equity, 31 December 2022 | 7,979 | 5 | 7,984 |
| Comprehensive income for the period | –1,605 | –1,605 | |
| Performance-based incentive programme | 0 | 0 | |
| Closing shareholders' equity, 30 September 2023 | 6,374 | 5 | 6,380 |
| Condensed consolidated | ||||||
|---|---|---|---|---|---|---|
| cash flow statement | ||||||
| 2023 | 2022 | 2023 | 2022 | Oct 2022 | 2022 | |
| Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | – Sep 2023 | Jan–Dec | |
| OPERATING ACTIVITIES | ||||||
| Profit before tax¹⁾ | –776 | 133 | –1,639 | 542 | –2,273 | –92 |
| Adjustments for items not included in cash flow | 1,069 | 1 | 1,604 | –234 | 2,606 | 768 |
| Tax paid | –47 | –14 | –180 | –125 | –204 | –149 |
| Cash flow from operating activities before change in working capital |
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| 246 | 120 | –215 | 184 | 129 | 527 | |
| Cash flow from change in working capital | ||||||
| Sales of housing projects | 2,450 | 2,590 | 7,833 | 7,963 | 13,183 | 13,312 |
| Investments in housing projects | –1,610 | –3,950 | –6,855 | –12,042 | –10,850 | –16,037 |
| Other changes in working capital | –868 | 85 | –1,576 | 413 | –3,034 | –1,045 |
| Cash flow from changes in working capital | –29 | –1,275 | –598 | –3,666 | –702 | –3,769 |
| Cash flow from operating activities | 217 | –1,155 | –813 | –3,482 | –572 | –3,242 |
| INVESTMENT ACTIVITIES | ||||||
| Sale of goup companies | 737 | 737 | ||||
| Other cash flow from investment activities | –20 | –64 | –148 | –72 | –180 | –104 |
| CASH FLOW BEFORE FINANCING | 197 | –1,219 | –223 | –3,553 | –15 | –3,345 |
| FINANCING ACTIVITIES | ||||||
| Dividend | –188 | –187 | –375 | |||
| Increase in interest-bearing liabilities | 1,433 | 3,724 | 4,825 | 5,702 | 3,884 | 4,762 |
| Decrease in interest-bearing liabilities | –1,969 | –2,516 | –4,392 | –2,778 | –3,605 | –1,991 |
| Change in interest-bearing receivables | –1 | 12 | 89 | 2 | 91 | |
| Cash flow from financing activities | –537 | 1,219 | 433 | 2,824 | 94 | 2,486 |
| CASH FLOW DURING THE PERIOD | –340 | 209 | –730 | 79 | –859 | |
| Cash and cash equivalents at start of period | 850 | 489 | 303 | 1,066 | 492 | 1,066 |
| Exchange rate differences in cash and cash equivalents | –48 | 3 | –51 | 156 | –110 | 97 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD²⁾ | 462 | 492 | 462 | 492 | 462 | 303 |
2) The difference between cash and cash equivalents in the consolidated cash flow statement and the consolidated balance sheet corresponds to cash and cash equivalents in operations to be discontinued. Refer further to Note 8.
| Cash flow from operations to be discontinued and discontinued operations |
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|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | Oct 2022 | 2022 | |
| Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | – Sep 2023 | Jan–Dec | |
| Net cash flow from operating activities | –15 | 158 | 393 | –609 | 421 | –581 |
| Net cash flow from investment activities | –1 | –1 | 746 | 25 | 749 | 28 |
| Net cash flow from financing activities | 38 | –67 | –187 | 648 | –317 | 518 |
| Net increase in cash and cash equivalents, operations to be discontinued and discontinued operations¹⁾ |
23 | 90 | 952 | 64 | 853 | –35 |
This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting, the Swedish Annual Accounts Act and recommendation RFR 1 Supplementary Accounting Rules for Groups from the Swedish Financial Reporting Board. This Interim Report covers pages 1–33, and pages 1–15 are thereby an integrated part of this financial report. The accounting policies applied in the preparation of this Interim Report apply to all periods and comply with the accounting policies presented in Note 1 Significant accounting policies in Bonava's 2022 Annual Report, pages 73–77. The Annual Report is available at bonava.com.
In conjunction with Bonava divesting its operation in Norway and announcing its intention to divest its operations in St. Petersburg, the criteria were met for application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Operations to be discontinued consists of significant operations that have been divested or comprises a group of divestments that are being held for sale.
and the fair value less selling costs. Earnings after tax from operations to be discontinued and discontinued operations are recognised on their own line in the income statement. Transactions between continuing operations and operations to be discontinued or discontinued operations have been eliminated. Historical figures have been restated in accordance with the same principles. In accordance with IFRS, balance sheets for previous years are not restated.
Properties held for future development refer to Bonava's holdings of land and building rights for future residential development and capitalised project development costs. The valuation of properties held for future development takes into consideration whether the properties will be developed or sold. The valuation of land and building rights for future development is based on a capital investment appraisal. This appraisal is updated annually (as well as when market trends or other circumstances so require) with regard to the established sales price and cost trend. In the event a positive contribution margin from the development cannot be obtained with regard to normal contract profit, an impairment loss is recognised. Development expenses related to land over which Bonava has control is capitalised.
| The significance of a group of assets and liabilities being classified as being held for sale is that their carrying amount will be recovered primarily through divestment, and not through use. All assets included in this group are presented as a separate item in the balance sheet, and all of the Group's liabilities are presented as a separate item among liabilities. The Group is measured at the lower of the carrying amount |
land over which Bonava has control is capitalised. | development cannot be obtained with regard to normal contract profit, an impairment loss is recognised. Development expenses related to |
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| 14BNOTE 2 15BReporting of operating segments |
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| Jul–Sep 2023 | Germany | Sweden | Finland | Baltics | Other operations ¹⁾ |
Total |
| Net sales, consumers | 1,680 | 274 | 206 | 115 | 2,275 | |
| Net sales, investors | 183 | 1 | 274 | 457 | ||
| Net sales, land | 19 | 13 | 33 | |||
| Other revenue | –0 | |||||
| Operating profit/loss before items affecting comparability | 157 | –86 | –3 | 6 | –44 | 30 |
| Items affecting comparability | –844 | –308 | –90 | –1,243 | ||
| Operating profit/loss after items affecting comparability | –687 | –394 | –93 | 6 | –44 | –1,213 |
| Net financial items | –145 | |||||
| Profit before tax | –1,358 | |||||
| Capital employed | 7,305 | 3,605 | 851 | 1,509 | 580 | 13,850 |
| Other | ||||||
| Jul–Sep 2022 | Germany | Sweden | Finland | Baltics | operations ¹⁾ | Total |
| Net sales, consumers | 917 | 320 | 30 | 117 | 1,384 | |
| Net sales, investors | 731 | –3 | 185 | 299 | 1,212 | |
| Net sales, land | ||||||
| Other revenue | 1 | 6 | 9 | |||
| Operating profit/loss²⁾ | 186 | –110 | –1 | 10 | –9 | 76 |
| Net financial items | –42 | |||||
| Profit before tax | 35 | |||||
| Capital employed | 6,614 | 3,758 | 1,071 | 1,113 | 4,004 | 16,560 |
| Other | ||||||
| Jan–Sep 2023 | Germany | Sweden | Finland | Baltics | operations ¹⁾ | Total |
| Net sales, consumers | 3,358 | 1,338 | 720 | 437 | 5,854 | |
| Net sales, investors | 744 | 444 | 1,163 | 2,351 | ||
| Net sales, land | 26 | 40 | 1 | 68 | ||
| Other revenue | 5 | 1 | 1 | 1 | 8 | |
| Operating profit/loss before items affecting comparability | 242 | 17 | 62 | 30 | –153 | 197 |
| Items affecting comparability | –844 | –308 | –90 | –1,243 | ||
| Operating profit/loss after items affecting comparability | –603 | –291 | –29 | 30 | –153 | –1,046 |
| Net financial items | –386 | |||||
| Profit before tax | –1,432 | |||||
| Capital employed | 7,305 | 3,605 | 851 | 1,509 | 580 | 13,850 |
| 1) Other operations consist of the Parent Company, Group adjustments, eliminations and the Danish operations as well as discontinued operations and operations to be discontinued. 2) No items affecting comparability have been recognised for the period. |
| Other | ||||||
|---|---|---|---|---|---|---|
| Jan–Sep 2022 | Germany | Sweden | Finland | Baltics | operations ¹⁾ | Total |
| Net sales, consumers | 2,924 | 1,556 | 634 | 449 | 101 | 5,665 |
| Net sales, investors | 1,555 | 402 | 336 | 299 | 2,592 | |
| Net sales, land | 36 | 19 | 54 | |||
| Other revenue | 2 | 1 | 8 | 11 | ||
| Operating profit/loss²⁾ | 521 | 26 | 39 | 48 | –127 | 507 |
| Net financial items | –118 | |||||
| Profit before tax | 389 | |||||
| Capital employed | 6,614 | 3,758 | 1,071 | 1,113 | 4,004 | 16,560 |
| Other | ||||||
| Jan–Dec 2022 | Germany | Sweden | Finland | Baltics | operations ¹⁾ | Total |
| Net sales, consumers | 5,626 | 1,997 | 1,175 | 831 | 102 | 9,731 |
| Net sales, investors | 2,159 | 704 | 565 | 752 | 4,180 | |
| Net sales, land | 39 | 19 | 58 | |||
| Other revenue | 5 | 1 | 1 | 11 | 18 | |
| Net financial items | –118 | |||||
|---|---|---|---|---|---|---|
| Profit before tax | 389 | |||||
| Other | ||||||
| operations ¹⁾ | Total | |||||
| Net sales, consumers | 5,626 | 1,997 | 1,175 | 831 | 102 | 9,731 |
| Net sales, investors | 2,159 | 704 | 565 | 752 | 4,180 | |
| Net sales, land | 39 | 19 | 58 | |||
| Other revenue | 5 | 1 | 1 | 11 | 18 | |
| Operating profit/loss before items affecting comparability | 904 | –54 | 88 | 108 | –188 | 858 |
| Items affecting comparability | –32 | –20 | –4 | –56 | ||
| Operating profit/loss after items affecting comparability | 872 | –74 | 88 | 108 | –192 | 802 |
| Net financial items | –193 | |||||
| Profit before tax | 609 | |||||
| Capital employed | 7,074 | 3,825 | 974 | 1,085 | 2,610 | 15,568 |
| 1) Other operations consist of the Parent Company, Group adjustments, eliminations and the Danish operations as well as discontinued operations and operations to be discontinued. |
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| 2) No items affecting comparability have been recognised for the period. |
Items affecting comparability under 2023 pertain to development properties, capitalized development expenses, a B2M project and restructuring, and total SEK -1,243 M. For further information on the items affecting comparability and the segments they pertain to, refer to Note 2.
After a strategic review of its operations, Bonava has initiated further restructuring in the third quarter of 2023 in Germany, Sweden and Finland. The purpose of these restructuring efforts is to create a lower cost base, thereby improving future cash flows and providing conditions for increased flexibility. In the third quarter, costs of SEK 434 M pertaining to restructuring related to this were recognized. Of this amount, SEK 402 M was attributable to Germany, SEK 25 M to Sweden, and SEK 7 M to Finland.
Bonava has reviewed its building rights portfolio, which resulted in an impairment of development properties of SEK 686 M, of which impairment of land of SEK 442 M in Germany, SEK 160 M in Sweden and SEK 4 M in Finland. Furthermore, capitalized project development costs have been impaired by 80 M in Finland. After the impairments the assessed market value is 9,5 Bn, corresponding to an excess value compared to the book value of 1,2 Bn, refer to note 10.
The review also resulted in an impairment of SEK 123 M of a B2M project in Sweden; refer further to Note 9.
Items affecting comparability for full-year 2022 totaled SEK -56 M and pertained to costs resulting from organizational changes (severance pay) decided on in Sweden, Germany and central divisions. In total, net items affecting comparability of SEK -56 M were distributed as follows: SEK -20 M in Sweden, SEK -32 M in Germany and SEK -4 M in Other (central divisions).
| 2023 | 2022 | 2022 | ||
|---|---|---|---|---|
| Jan–Sep | Jan–Sep | Jan–Dec | ||
| Write down of land | –606 | |||
| Write down of B2M-Project | –123 | |||
| Write down of capitalized | ||||
| development costs | –80 | |||
| Organizational changes | –434 | –56 | ||
| –56 | ||||
| Sum of items affecting comparability | –1,243 |
| 16BNOTE 4 Specification of net debt |
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| 2023 | 2022 | 2022 | |||
| 30 Sep | 30 Sep | 31 Dec | |||
| Non-current interest-bearing | |||||
| receivables¹⁾ | 591 | 2 | 2 | ||
| Current interest-bearing receivables¹⁾ | 113 | 17 | 18 | ||
| Cash and cash equivalents | 462 | 492 | 303 | ||
| Interest-bearing receivables | 1,165 | 512 | 324 | during the period. | |
| Non-current interest-bearing | |||||
| liabilities | 430 | 4,590 | 4,050 | 1,200 M (1,203). | |
| Current interest-bearing liabilities | 7,040 | 3,068 | 3,533 | ||
| Interest bearing liabilities²⁾ | 7,470 | 7,658 | 7,583 | ||
| 7,259 | |||||
| Net debt | 6,305 | 7,146 |
2) Of which green loans SEK 3,097 M (3,255). The green asset base used consisted of assets in Sweden that are or will be Nordic Swan Ecolabelled as well as specific projects for investors in Finland.
3) The operations in St. Petersburg have been reported as operations to be discontinued. See Note 8.
Since Bonava appoints a majority of the Board members in tenantowner associations in Sweden and housing companies in Finland, issues guarantees and provides credit to or borrowing on behalf of tenant-owner associations and housing companies, Bonava exercises a controlling influence and therefore consolidates tenantowner associations and housing companies in full. As a consequence, these debts are included in Bonava's net debt. Cash and cash equivalents 88 36 17
| Since Bonava appoints a majority of the Board members in tenant owner associations in Sweden and housing companies in Finland, issues guarantees and provides credit to or borrowing on behalf of tenant-owner associations and housing companies, Bonava exercises a controlling influence and therefore consolidates tenant owner associations and housing companies in full. As a consequence, these debts are included in Bonava's net debt. Share of net debt pertaining to tenant-owner associations and |
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| housing companies | |||||
| 2023 30 Sep |
2022 30 Sep |
2022 31 Dec |
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| Cash and cash equivalents | 88 | 36 | 17 | ||
| Gross debt | 1,378 | 1,953 | 1,767 | ||
| Net debt in tenant-owner | |||||
| associations and housing companies | 1,291 | 1,917 | 1,751 | ||
| The Group's financing framework The table below specifies the Group's financing facilities. In addition to these, there are unutilized contractual credit frames for projects in Swedish tenant-owner associations and Finnish housing companies totaling SEK 77 M. |
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| Financing | Maturity, year | Amount | Utilised | Unutilised | |
| Overdraft facilities | <365 days | 658 | 70 | 588 | |
| Bond | <365 days | 1,200 | 1,200 | ||
| Loan | <365 days | 2,348 | 2,348 |
| Net debt in tenant-owner | |||||
|---|---|---|---|---|---|
| The Group's financing framework | |||||
| The table below specifies the Group's financing facilities. In | |||||
| addition to these, there are unutilized contractual credit frames for | |||||
| projects in Swedish tenant-owner associations and Finnish housing | |||||
| companies totaling SEK 77 M. | |||||
| Financing | Maturity, year | Amount | Utilised | Unutilised | |
| Overdraft facilities | <365 days | 658 | 70 | 588 | |
| 1,200 | 1,200 | ||||
| Bond | <365 days | ||||
| Loan | <365 days | 2,348 | 2,348 | ||
| RCF/commercial | |||||
| paper | <365 days | 3,000 | 2,356 | 644 |
The terms and conditions in Bonava's loan agreements with banks and the Swedish Export Credit Corporation are linked to two covenants. The first is the equity/assets ratio, or shareholders' equity in relation to total assets, which is not to fall below 25 per cent. As of 30 September and according to the calculation method in the loan agreements, the equity/assets ratio was 28,1 percent. According to an agreement reached with the creditors restructuring costs that were recognized in the third quarter were for the time being added back in the calculation of the interest coverage ratio. This considered the interest coverage ratio totaled 2.5x on 30 September. Since the agreement was reached after the balance sheet date, the loans that are covered by the covenants are classified as current in accordance with applicable reporting regulations.
In the table below, disclosures are made concerning how fair value is determined for the financial instruments that are continuously measured at fair value in Bonava's balance sheet. When determining fair value, assets have been divided into the following three levels. No transfers have been made between the levels during the period.
| is determined for the financial instruments that are continuously | ||||||||||||||||||||||||||||||||||
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| measured at fair value in Bonava's balance sheet. When determining fair value, assets have been divided into the following three levels. No transfers have been made between the levels during the period. |
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| At level 1, Bonava has one outstanding bond loan valued at SEK 1,200 M (1,203). Level 2 derivative instruments comprise currency swaps where |
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| the measurement at fair value of currency-forward contracts is based on published forward rates in an active market. |
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| 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||||||
| 30 Sep | 30 Sep | 31 Dec | ||||||||||||||||||||||||||||||||
| Derivatives | 137 | 36 | 17 | |||||||||||||||||||||||||||||||
| Total assets | 137 | 36 | 17 | |||||||||||||||||||||||||||||||
| Derivatives | 25 | 96 | 112 | |||||||||||||||||||||||||||||||
| Total liabilities | 25 | 96 | 112 | |||||||||||||||||||||||||||||||
| The fair value of non-current and current interest-bearing liabilities | ||||||||||||||||||||||||||||||||||
| differs only marginally from the carrying amount and is therefore | ||||||||||||||||||||||||||||||||||
The fair value of non-current and current interest-bearing liabilities differs only marginally from the carrying amount and is therefore not recognized separately in this interim report. For financial instruments recognized at amortized cost, the carrying amount of accounts receivable, other receivables, cash and cash equivalents, accounts payable and other interest-free liabilities is considered equal to the fair value. Vendor notes – recognized at amortized cost – that have been issued to the buyer of the Norwegian operations was measured at SEK 684 M as of 30 September 2023, and the nominal value before discounting totalled SEK 767 M. 30 Sep 30 Sep 31 Dec
Bonava has investment commitments for the purchase of building rights, which are contractual and conditional and have not yet been recognized as part of the financial statements. As of 30 September, the total value of these amounted to SEK 2.1 Bn. The investments are expected to be settled in the amount of SEK 0.3 Bn in 2023, SEK 1.1 Bn in 2024, SEK 0.3 Bn in 2025 and SEK 0.4 Bn in 2026 and beyond, provided that the conditions in the agreements are met. The agreements are often conditional on building permits being received or zoning plans being approved.
| 20BNOTE 7 2Pledged assets and contingent liabilities |
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|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2022 | ||||||
| 30 Sep | 30 Sep | 31 Dec | ||||||
| Pledged assets | ||||||||
| For own liabilities | ||||||||
| Property mortgages | 510 | 1,316 | 990 | |||||
| Other pledged assets | 11 | 10 | 11 | |||||
| Total pledged assets | 521 | 1,326 | 1,001 | |||||
| Surety and guarantee obligations | ||||||||
| Own contingent liabilities | ||||||||
| Counter guarantee to external | ||||||||
| guarantors¹⁾ | 600 | 1,488 | 1,576 | |||||
| Contingent liablities²⁾ | 339 | 266 | 236 | |||||
| Other guarantees and contingent | ||||||||
| 1,267 | 947 | 585 | ||||||
| liabilities | ||||||||
| obligations | Total surety and guarantee | 1,867 | 2,435 | 2,161 |
1) Counter guarantees pertaining to guarantees that constitute collateral for amounts paid to tenant-owner associations formed by Bonava Sverige AB totalled SEK 600 M (1,576 at 31 December 2022). Deposit guarantees are valid until one year after the final acquisition cost of the tenant-owner association's building has been established. Bonava AB's commitment is limited to SEK 600 M. Other guarantee obligations comprise Bonava AB's guarantee commitments for project financing in St. Petersburg of SEK 217 M (SEK 487 M at 31 December 2022), guarantee commitments for the payment of land investments in St. Petersburg of SEK 74 M (SEK 98 M at 31 December 2022) and SEK 976 M pertaining to guarantee commitments for the Norwegian operations to be taken over by the buyer, corresponding to NOK 955 M (957 on the handover date). Bonava's projects in St. Petersburg are financed through a foreign bank with licences to operate in the region. Of property mortgages, collateral for project financing on behalf of Finnish housing companies was SEK 382 M (871 at 31 December 2022), and SEK 128 M (119 at 31 December 2022) relates to assets associated with land acquisitions in St. Petersburg. 2) Expenses related to property held for future development that are deemed to arise even if housing projects are not started
Given the large number of units that Bonava starts, produces and delivers, managing operational risks is a continuous process. The operations are overwhelmingly project based and comprise many different contract forms, which means that Bonava is involved in disputes and legal proceedings from time to time. During the period, an investigation was begun concerning guarantee errors in one project. The investigation is ongoing, and it is not possible to reliably estimate Bonava's potential obligations in this matter. Based on what is currently known, these disputes and legal proceedings are not expected, either individually or in aggregate, to materially impact Bonava's earnings or financial position.
20BNOTE 8 23BOperations to be discontinued and discontinued operations
Bonava announced on 3 March 2022 that the operations in St. Petersburg would be wound-down. Since then, Bonava has reviewed various strategic alternatives to wind-down operations, with one alternative being a responsible divestment of the operations. On 7 October 2022, Bonava announced that an agreement to sell the operations in St. Petersburg had been signed. Consequently, the operations have been recognized as operations held for sale since the third quarter of 2022.
The intended buyer of the operations in St. Petersburg did not receive the required approvals from the Russian authorities, which is why the sales agreement was cancelled. After the contract was cancelled, a decision was made to impair the net assets of the operations in St. Petersburg. This totaled SEK 877 M and was reported under profit for the period from operations to be discontinued in the fourth quarter of 2022.
The decision to leave St. Petersburg stands firm, and on 31 May 2023 Bonava signed an agreement with residential developer RBI Group to sell the operations.
As of 18 October 2023, Bonava has signed an agreement with a new buyer, Star Development LLC, for the divestment of its operations in St. Petersburg for EUR 50 M (SEK 578 M) and received the purchase price at the same time. In conjunction with the conclusion of the transaction, Bonava has chosen to terminate the agreement with RBI Group that was signed on 31 May 2023. This is because the counterparty did not receive acquisition permits from the special committee established to oversee business transfers within the contractual time frame under the agreement. The new buyer, Star Development LLC, has received this permit, and conclusion of the transaction was conditional on the approval of the Russian competition authority. The Russian competition authority approved the transaction on 2 November 2023, which means that the divestment of Bonava's operations in St. Petersburg has been finalized
The net assets in St. Petersburg were measured at SEK 564 M on 30 September, which corresponds to the transaction price of EUR 50 M (SEK 578 M) less selling costs, which was received on 18 October. During the third quarter, an increase in the fair value corresponding to SEK 564 M was recognised through reversal of the previous impairment.
The divestment of the operations is an event after the balance sheet date that confirms the fair value as of the balance sheet date.
In 2023, the operations generated a positive profit before tax of SEK 164 M (109). Total earnings from operations to be
discontinued amounted to SEK 549 M (87).
Bonava AB has guarantee commitments of SEK 74 M (321; 98 at 31 December 2022) for payment of land investments in St. Petersburg that will be taken over by the buyer.
| 31 December 2022) for payment of land investments in St. Petersburg that will be taken over by the buyer. Guarantee commitments for project financing in St. Petersburg of SEK 217 M (645; 487 at 31 December 2022) were finalized in the fourth quarter of 2023. Adjusted historical comparative figures were published on Bonava's website, https://www.bonava.com/en/investor relations/financial-information. |
|||
|---|---|---|---|
| Balance sheet, pledged assets, and contingent liabilities, St. Petersburg |
|||
| 2023 30 Sep |
2022 30 Sep |
2022 31 Dec |
|
| Fixed assets | 48 | ||
| Properties held for future | |||
| development | 615 | 1,980 | 729 |
| Other current assets | 34 | 107 | |
| Cash and cash equivalents | 298 | 308 | 185 |
| Total assets | 947 | 2,443 | 915 |
| Provisions | 38 | 23 | 23 |
| Non-current liabilities | 267 | 857 | 577 |
| Advances from customers | 10 | 150 | 117 |
| Other current liabilities | 68 | 224 | 197 |
| Total liabilities | 383 | 1,253 | 915 |
| Net assets | 564 | 1,190 | |
| Pledged assets and contingent liabilities |
|||
| 129 | 128 | 119 |
| Petersburg | |||
|---|---|---|---|
| 2023 | 2022 | 2022 | |
| Net sales | Jan–Sep | Jan–Sep | Jan–Dec |
| Production cost | 680 | 381 | 526 |
| Gross profit | –481 | –249 | –365 |
| 199 | 132 | 161 | |
| Selling and administrative expenses | –24 | –29 | –70 |
| Operating profit | 175 | 103 | 91 |
| Financial income | 0 | 19 | 22 |
| Financial expenses | –12 | –13 | –23 |
| Net financial items | –11 | 6 | –1 |
| Profit before tax | 164 | 109 | 90 |
| Tax on profit for the period | –33 –21 |
–21 | |
| Profit from operations to be | |||
| discontinued after tax | 131 | 87 | 69 |
| Costs to sell | –14 | ||
| Write-down of net assets | 433 | –877 | |
| Profit for the period from operations | |||
| to be discontinued | 549 | 87 | –808 |
| Translation differences for operations | |||
| to be discontinued Other comprehensive income from |
436 | 142 | |
| operations to be discontinued | 436 | 142 | |
| Net cash flow from operating activities |
340 | –440 | –472 |
| Net cash flow from investment | |||
| activities | 8 | 9 | |
| Net cash flow from financing | |||
| activities | –154 | 383 | 363 |
| Net increase in cash and cash | |||
| equivalents from the subsidiary | 186 | –49 | –100 |
On 30 June, Bonava signed the agreement to divest its operations in Norway. The buyer is the Union Residential Development property fund. The purchase price totalled SEK 1,532 M, of which SEK 765 M was paid in cash upon completion of the transaction, and the remainder – SEK 767 M – has been paid via vendor notes. The remaining amount will be paid over time as the buyer sells apartments and hand them over to customers. In the transaction currency, the purchase price totalled NOK 1,515 M.
In conjunction with Bonava signing agreements on divesting its operations in Norway, the criteria were met for application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The discontinued operations in Norway including capital gain from the divestment were recognized separately in the consolidated income statement, on a separate line under the heading "Operations to be discontinued". Previous periods in the consolidated income statement have been restated in accordance with the same principles. Intra-Group transactions between continuing operations and discontinued operations have been eliminated. Adjusted comparative figures have been published on Bonava's website. As of the date of divestment, when controlling interest transferred to the buyer, assets and liabilities attributable to the operations in Norway ceased to be recognized as part of the Group's total assets and liabilities.
Financial information regarding the discontinued operations for the period up until the date of divestment are presented below.
The vendor notes will be paid in pace with the conclusion of the property projects in the Norwegian operations. The majority of the reversals are expected to be paid in 2024 and 2025.
Vendor notes are recognized in the balance sheet as a noncurrent financial asset measured at amortized cost using the effective rate method. As of 30 June, the financing was measured at SEK 666 M; the nominal value before discounting amounted to SEK 767 M, and interest income will be routinely recognized as financial income up until the vendor notes fall due.
As of 30 June 2023, Bonava AB had guarantee commitments for the Norwegian operations in the form of counter guarantees in relation to external guarantors as well as direct guarantee commitments at an aggregate total of SEK 967 M (NOK 957 M), and these will be assumed by the buyer within 120 working days from the finalization of the transaction in accordance with the agreement. At 30 September 2023, the remaining guarantee commitments totaled SEK 976 M (NOK 955 M).
Adjusted historical comparative figures were published on Bonava's website, https://www.bonava.com/en/investorrelations/financial-information.
| Financial information regarding discontinued operations, | |||
|---|---|---|---|
| 2023 | 2022 | 2022 | |
| Jan–jun | Jan–Sep | Jan–Dec | |
| Net sales | 627 | 1,222 | 1,719 |
| Production cost | –538 | –1,122 | –1,551 |
| Gross profit | 89 | 100 | 168 |
| Selling and administrative expenses | –24 | –51 | –76 |
| Operating profit | 65 | 49 | 92 |
| Financial income | 1 | –0 | 1 |
| Financial expenses | –1 | –4 | –6 |
| Net financial items | 0 | –4 | –5 |
| Profit before tax | 65 | 45 | 87 |
| Tax on profit for the period | –6 –33 |
–21 | |
| Profit from discontinued operations | |||
| net of tax | 59 | 12 | 66 |
| Costs to sell | –30 | ||
| Loss on sale, net of tax | –824 | ||
| Profit for the period from discontinued | |||
| operations | –795 | 12 | 66 |
| Translation differences for | |||
| discontinued operations | –5 | 6 | 16 |
| Other comprehensive income from | |||
| discontinued operations | –5 | 6 | 16 |
| Net cash flow from operating | |||
| activities | 53 | –169 | –109 |
| Net cash flow from investment | |||
| activities | 746 | 17 | 19 |
| Net cash flow from financing activities | –33 | 265 | 155 |
| Net increase in cash and cash | |||
| equivalents from the subsidiary | 766 | 113 | 65 |
| Net cash flow from financing activities | –33 | 265 | 155 | |
|---|---|---|---|---|
| Net increase in cash and cash | ||||
| Disclosures on divestment of subsidiary, Norway | ||||
| 2023 | ||||
| 30 Jun | ||||
| Sales proceeds received or to be received | ||||
| Cash | ||||
| Discounting of vendornote | –101 | |||
| Total sales proceeds | 340 | |||
| Reported value of net assets sold | –1,119 | |||
| Profit before tax and reclassification of currency | ||||
| translation reserve | –779 | |||
| Reclassification of currency translation reserve | –45 | |||
| –824 | ||||
| Loss on sale, net of tax |
| Divested assets, Norway | ||
|---|---|---|
| Goodwill | 56 | |
| Fixed assets | 50 | |
| Properties held for future development | 2,529 | |
| Other current assets | 37 | |
| Cash and cash equivalents | 28 | |
| Total assets | 2,700 | |
| Provisions | 53 | |
| Non-current liabilities | 1,242 | |
| Advances from customers | 30 | |
| Other current liabilities | 257 | |
| Total liabilities | 1,582 | according to IFRS 13. |
| Net assets | 1,119 | |
| Pledged assets and contingent liabilities | ||
| Pledged assets¹⁾ | 202 |
| Pledged assets and contingent liabilities | ||||
|---|---|---|---|---|
| Pledged assets¹⁾ | 202 | |||
| 1) Pertains to security for loans in J/V Solberg Öst. | ||||
| Operations to be discontinued and discontinued operations, | ||||
| total for Norway and St. Petersburg | ||||
| 2023 | 2022 | 2022 | ||
| Profit for the period from operations to be discontinued and discontinued operations, total |
–247 | 99 | –743 | |
| Translation differences for operations to be discontinued and discontinued operations, total |
–5 | 442 | 157 | |
| Net increase in cash and cash equivalents from operations to be discontinued and discontinued |
||||
| operations, total | 952 | 64 | –35 | |
| Asset held for sale, total | 947 | 2,443 | 915 | |
| Liabilities attributable to asses held for sale, total |
383 | 1,253 | 915 | |
Investment properties are measured at fair value in accordance with IAS 40. Investment properties are initially recognized at cost, which includes fees directly attributable to the acquisition. A rental housing project in Sweden was suspended in the second quarter of 2023. The same project was impaired by SEK 123 M during the period and since 30 September 2023 has been classified as land held for future development and is therefore measured as a building right. At 30 September 2023, fair value was deemed to correspond to the carrying amount, which is why no unrealised change in value was recognised. Classification is at level 3 according to IFRS 13. 30 Sep 30 Sep 31 Dec Investments 107 48 102
| period and since 30 September 2023 has been classified as land held for future development and is therefore measured as a |
|||||
|---|---|---|---|---|---|
| building right. At 30 September 2023, fair value was deemed to | |||||
| correspond to the carrying amount, which is why no unrealised | |||||
| change in value was recognised. Classification is at level 3 | |||||
| according to IFRS 13. | |||||
| 2023 | 2022 | 2022 | |||
| Fair values at start of period | 262 | ||||
| Investments | 107 | 48 | 102 | ||
| Write-down | –123 | ||||
| Reclassification | –36 | 162 | 156 | ||
| Translation differences for the year | 4 | 5 | |||
| Fair value at end of period | 214 210 |
262 | |||
| 2023 2022 Jan–Sep Jan–Sep |
2022 Jan–Dec |
||||
| 20BNOTE 10 25BProperties held for future development |
|||||
| In the third quarter, the value of the building rights portfolio has |
In the third quarter, the value of the building rights portfolio has been assessed, through partly external valuations as well as valuation of discounted cash flows. As the building rights are classified as current assets, they are recognized at the lower of cost or market value per individual item. 83 percent of the book value has been validated by third parties. The value has been estimated by analyzing future discounted cash flows and then to validate the assessed value, independent appraisers have made independent assessments. A discount rate of 12,5 percent has been applied for group level valuations. Investments ongoing have been valued internally via a cash flow-approach. The assessment has led to impairments of properties held for development of 686 M, which corresponds to 7 percent of the market value.
The assessed value after the impairments described above amounts to 9,5 B which corresponds to an excess value of 1,2 B. Some properties remain where the external appraisal indicates that the market value is lower than the carrying amount. In these cases, the valuation is substantially supported by other external sources. Based on an overall assessment of the value of each property held for future development, which was made based on the value that Bonava believes can be generated upon future sale of housing units as part of its normal operations, there is no need for further impairment as of 30 September 2023. For more information, refer to Note 10.
| Properties held for future development |
Book value in scope of |
Assessed | |
|---|---|---|---|
| BSEK | incl.Cap dev cost | valuation, % | value¹⁾ |
| Germany | 4.7 | 83 | 5.0 |
| Sweden | 2.3 | 94 | 2.8 |
| Finland | 0.6 | 83 | 0.8 |
| Baltics | 0.6 | 36 | 0.8 |
| Sum | 8.3 | 83 | 9.5 |
1) Valuation made based on Bonavas assessment with external valuations as starting point.
The Parent Company comprises the operations of Bonava AB (publ). Net sales for the period totaled SEK 167 M (204). Loss after financial items was SEK -1, 542 M (profit: 404). The Group company Bonava Norge AS was divested at a loss of SEK 812 M in the second quarter of 2023. Capital gains include selling costs of SEK -30 M. Receivables from the Group's German company were impaired in the third quarter of 2023. The impairment was attributable to previously recognised anticipated dividends that will not be received, which is why the transaction was reversed. The effect will be that profit/loss from participations in Group companies has been reduced by SEK 390 M and the receivables from subsidiaries have decreased by a corresponding amount. In the third quarter, a capital contribution of SEK 330 M was paid to the Group company, Bonava Sverige AB, and an impairment of participations in Group companies pertaining to the holding in Bonava Sverige AB was recognised in the corresponding amount. Bonava AB's interest-bearing liabilities are classified as current as of 30 September 2023, refer further to foot note 4 and the section "Covenants in loan agreements". INCOME STATEMENT 1 Jan–Sep Jan–Sep Jan–Dec Net sales 167 204 269 Selling and administrative expenses –288 –332 –456
| Capital gains include selling costs of SEK -30 M. Receivables from the Group's German company were impaired in the third quarter of 2023. The impairment was attributable to previously recognised anticipated dividends that will not be received, which is why the transaction was reversed. The effect will be that profit/loss from participations in Group companies has been reduced by SEK 390 M and the receivables from subsidiaries have decreased by a corresponding amount. In the third quarter, a capital contribution of SEK 330 M was paid to the Group company, Bonava Sverige AB, and an impairment of participations in Group companies pertaining to the holding in Bonava Sverige AB was recognised in the |
||||
|---|---|---|---|---|
| corresponding amount. Bonava AB's interest-bearing liabilities are classified as current as of 30 September 2023, refer further to foot note 4 and | ||||
| the section "Covenants in loan agreements". | ||||
| Note | 2023 | 2022 | 2022 | |
| Net sales | 167 | 204 | 269 | |
| Selling and administrative expenses | –288 | –332 | –456 | |
| Operating loss | –121 | –128 | –187 | |
| Profit from participations in Group companies | –1,533 | 417 | 353 | |
| Financial income | 482 | 199 | 320 | |
| Financial expenses | –370 | –84 | –140 | |
| Profit after financial items | –1,542 | 404 | 345 | |
| Appropriations | –45 | |||
| Profit before tax | –1,542 | 404 | 300 | |
| Tax on profit for the period | 3 | 21 | ||
| Profit for the period | –1,542 | 407 | 321 | |
| Since there are no transactions to recognise in Other comprehensive income, the profit for the period corresponds to comprehensive income. | ||||
| Note | 2023 | 2022 | 2022 | |
| BALANCE SHEET | 1, 2 | 30 Sep | 30 Sep | 31 Dec |
| Assets | ||||
| Fixed assets | 2,090 | 2,668 | 2,632 | |
| Current assets | 11,251 | 10,878 | 10,960 | |
| Total assets | 13,341 | 13,546 | 13,592 | |
| Shareholders' equity and liabilities | ||||
| Shareholders' equity | 5,867 | 7,494 | 7,409 | |
| Provisions | 10 | 10 | 11 | |
| Non-current liabilities | 0 | 3,135 | 3,174 | |
| Current liabilities | 7,463 | 2,908 | 2,999 | |
| Total shareholders' equity and liabilities | 13,341 | 13,546 | 13,592 |
The company has prepared its Interim Report pursuant to the Swedish Annual Accounts Act (1995:1554) and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities.
The accounting policies applied in the preparation of this Interim Report apply to all periods and comply with the accounting policies presented in Note 1 Significant accounting policies in Bonava's 2022 Annual Report, pages 73–77 and 102. The Annual Report is available at bonava.com.
| 28BNOTE 2 Pledged assets and contingent liabilities |
|---|
| 2023 2022 2022 30 Sep 30 Sep 31 Dec |
| Counter guarantee to external guarantors¹⁾ 7,790 10,364 9,898 |
| Guarantees for project-specific financing²⁾ 996 2,062 1,775 |
| Guarantees for Group companies³⁾ 2,829 4,165 3,785 |
| Other guarantees⁴⁾ 976 1,381 1,498 Other pledged assets 11 10 11 |
| Total 12,601 17,982 16,966 |
| owner associations and housing companies | |||
|---|---|---|---|
| 30 Sep | 30 Sep | 31 Dec | |
| Counter guarantee to external | |||
| guarantors⁵⁾ | 600 | 947 | 1,576 |
| Guarantees for project-specific | |||
| financing | 779 | 2,062 | 1,287 |
2) Of which guarantee commitments of SEK 217 M (487 at 31 December 2022) for project financing in St. Petersburg are included. Bonava's projects in St. Petersburg are financed through a foreign bank with licences to operate in the region.
3) Of the guarantees for Group companies, SEK 74 M (98 at 31 December 2022) comprises guarantees for the payment of land investments in the Russian operations.
4) Guarantee commitments of NOK 955 M (957 on the handover date) pertaining to the Norwegian operations are to be assumed by the buyer in accordance with the agreement.
5) Counter guarantees pertain to guarantees that constitute collateral for amounts paid to tenant-owner associations formed by Bonava Sverige AB. Deposit guarantees are valid until one year after the final acquisition cost of the tenant-owner association's building has been established. Bonava AB's commitment is limited to SEK 600 M.
| Sector-related key figures | |||||
|---|---|---|---|---|---|
| for the Group | |||||
| No. unless otherwise stated | 2023 Jul–Sep |
2022 Jul–Sep |
2023 Jan–Sep |
2022 Jan–Sep |
2022 Jan–Dec |
| Building rights | 28,600 | 29,100 | 28,600 | 29,100 | 29,400 |
| Of which, off-balance sheet building rights | 9,600 | 12,250 | 9,600 | 12,250 | 11,350 |
| Housing development for consumers | |||||
| Housing units sold | 293 | 352 | 886 | 1,451 | 1,682 |
| Sales value of housing units sold, SEK M | 1,154 | 1,289 | 3,419 | 5,185 | 6,096 |
| Production starts | 212 | 462 | 688 | 1,268 | 1,428 |
| Housing units in ongoing production | 2,794 | 4,892 | 2,794 | 4,892 | 3,871 |
| Sales rate for ongoing production, % | 48 | 59 | 48 | 59 | 51 |
| Reservation rate for ongoing production, % | 3 | 2 | 3 | 2 | 1 |
| Completion rate for ongoing production, % | 67 | 54 | 67 | 54 | 56 |
| Completed housing units not recognised in profit | 415 | 94 | 415 | 94 | 176 |
| Housing units for sale (ongoing and completed) | 1,837 | 2,112 | 1,837 | 2,112 | 2,042 |
| Housing units recognised in profit | 535 | 354 | 1,519 | 1,645 | 2,744 |
| Value of sold housing units, not yet recognised in profit, SEK M | 6,559 | 11,220 | 6,559 | 11,220 | 8,220 |
| Housing development for investors | |||||
| Housing units sold | 176 | 167 | 251 | 480 | 854 |
| Sales value of housing units sold, SEK M | 411 | 431 | 568 | 1,121 | 2,162 |
| Production starts | 176 | 398 | 251 | 711 | 1,085 |
| whereof investment properties | 231 | 231 | 231 | ||
| Housing units in ongoing production | 1,641 | 2,823 | 1,641 | 2,823 | 2,627 |
| whereof investment properties | 195 | 426 | 195 | 426 | 426 |
| Sales rate for ongoing production, %¹⁾ | 100 | 85 | 100 | 85 | 100 |
| Completion rate for ongoing production, % | 61 | 46 | 61 | 46 | 47 |
| Housing units recognised in profit | 184 | 403 | 1,006 | 1,056 | 1,625 |
| Value of sold housing units, not yet recognised in profit, SEK M | 4,364 | 5,865 | 4,364 | 5,865 | 5,746 |
| 1) Excluding Build-to-Manage. Including Build-to-Manage, the sales rate totalled 88 per cent. | |||||
| 2023 Jul–Sep |
2022 Jul–Sep |
2023 Jan–Sep |
2022 Jan–Sep |
2022 Jan–Dec |
|
| Number of housing units in production for consumers | |||||
| Housing units in ongoing production at start of period | 3,207 | 4,763 | 3,871 | 5,271 | 5,271 |
| 1) Excluding Build-to-Manage. Including Build-to-Manage, the sales rate totalled 88 per cent. | |||||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | Jan–Dec | |
| Number of housing units in production for consumers | |||||
| Housing units in ongoing production at start of period | 3,207 | 4,763 | 3,871 | 5,271 | 5,271 |
| Production starts | 212 | 462 | 688 | 1,268 | 1,428 |
| Housing units recognised in profit | –535 | –354 | –1,519 | –1,645 | –2,744 |
| Decrease (+)/increase (–) in completed housing units not recognised in profit |
–90 | 21 | –246 | –2 | –84 |
| Housing units in ongoing production for consumers at end of period | 2,794 | 4,892 | 2,794 | 4,892 | 3,871 |
| Number of housing units in production for investors | |||||
| Housing units in ongoing production at start of period | 1,880 | 2,828 | 2,627 | 3,168 | 3,168 |
| Change in opening value¹⁾ | –231 | –231 | |||
| Production starts | 176 | 398 | 251 | 711 | 1,085 |
| Housing units recognised in profit | –184 | –403 | –1,006 | –1,056 | –1,625 |
| 1,641 | 2,823 | 1,641 | 2,823 | 2,627 |
| Sector-related key figures | |||||
|---|---|---|---|---|---|
| for the segments | |||||
| Germany | 2023 Jul–Sep |
2022 Jul–Sep |
2023 Jan–Sep |
2022 Jan–Sep |
2022 Jan–Dec |
| no. unless otherwise stated | |||||
| Building rights | |||||
| Building rights | 9,300 | 10,100 | 9,300 | 10,100 | 9,800 |
| of which, off-balance sheet building rights | 1,800 | 3,600 | 1,800 | 3,600 | 3,100 |
| Housing development for consumers | |||||
| Net sales, SEK M | 1,680 | 917 | 3,358 | 2,924 | 5,626 |
| Housing units sold | 175 | 181 | 502 | 605 | 744 |
| Sales value of housing units sold, SEK M | 904 | 935 | 2,579 | 3,083 | 3,825 |
| Production starts | 168 | 163 | 347 | 592 | 651 |
| Housing units in ongoing production | 1,651 | 2,491 | 1,651 | 2,491 | 2,033 |
| Sales rate for ongoing production, % Completed housing units not recognised in profit |
54 107 |
57 26 |
54 107 |
57 26 |
51 35 |
| Housing units for sale (ongoing and completed) | 853 | 1,095 | 853 | 1,095 | 1,015 |
| Housing units recognised in profit | 338 | 175 | 650 | 618 | 1,126 |
| Housing development for investors | |||||
| Net sales, SEK M | 183 | 731 | 744 | 1,555 | 2,159 |
| Housing units sold | 176 | 74 | 176 | 74 | 228 |
| Sales value of housing units sold, SEK M | 412 | 255 | 434 | 270 | 723 |
| Production starts | 176 | 74 | 176 | 74 | 228 |
| Housing units in ongoing production | 650 | 732 | 650 | 732 | 693 |
| Sales rate for ongoing production, % | 100 | 100 | 100 | 100 | 100 |
| Housing units recognised in profit | 55 | 221 | 219 | 570 | 762 |
| Average no. of employees during the financial year | 854 | 935 | 932 | ||
| 2022 | |||||
| 2023 | 2022 | 2023 | 2022 | ||
| Sweden no. unless otherwise stated |
Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | Jan–Dec |
| Building rights | |||||
| Building rights | 8,800 | 8,100 | 8,800 | 8,100 | 8,700 |
| of which, off-balance sheet building rights | 2,800 | 3,300 | 2,800 | 3,300 | 2,900 |
| Housing development for consumers | |||||
| Net sales, SEK M | 274 | 320 | 1,338 | 1,556 | 1,997 |
| Housing units sold | 33 | 18 | 90 | 245 | 256 |
| Sales value of housing units sold, SEK M | 113 | 85 | 367 | 1,003 | 1,035 |
| Production starts | 88 | 121 | 143 | ||
| Housing units in ongoing production | 394 | 781 | 394 | 781 | 675 |
| Sales rate for ongoing production, % | 43 | 67 | 43 | 67 | 61 |
| Completed housing units not recognised in profit | 82 | 28 | 82 | 28 | 40 |
| Housing units for sale (ongoing and completed) | 283 | 274 | 283 | 274 | 285 |
| Housing units recognised in profit | 77 | 78 | 327 | 391 | 507 |
| Housing development for investors | |||||
| Net sales, SEK M | 1 | –0 | 444 | 402 | 704 |
| Housing units sold Sales value of housing units sold, SEK M |
1 | 8 | 6 | 11 | 12 |
| Production starts | 231 | 231 | 231 | ||
| whereof investment properties | 231 | 231 | 231 | ||
| Housing units in ongoing production | 162 | 813 | 162 | 813 | 651 |
| whereof investment properties | 231 | 231 | 231 | ||
| Sales rate for ongoing production, % | 100 | 100 | 100 | 100 | 100 |
| Housing units recognised in profit | 258 | 212 | 374 |
| 2023 | 2022 | 2023 | 2022 | 2022 | |
|---|---|---|---|---|---|
| Finland | Jul–Sep | Jul–Sep | Jan–Sep | Jan–Sep | Jan–Dec |
| no. unless otherwise stated | |||||
| Building rights | |||||
| Building rights | 3,600 | 3,300 | 3,600 | 3,300 | 3,400 |
| of which, off-balance sheet building rights | 2,300 | 2,100 | 2,300 | 2,100 | 2,100 |
| Housing development for consumers | |||||
| Net sales, SEK M | 206 | 30 | 720 | 634 | 1,175 |
| Housing units sold | 15 | 36 | 54 | 193 | 212 |
| Sales value of housing units sold, SEK M | 28 | 98 | 132 | 537 | 582 |
| Production starts | 73 | 139 | 139 | ||
| Housing units in ongoing production | 73 | 608 | 73 | 608 | 382 |
| Sales rate for ongoing production, % | 51 | 65 | 51 | 65 | 55 |
| Completed housing units not recognised in profit | 122 | 18 | 122 | 18 | 48 |
| Housing units for sale (ongoing and completed) | 157 | 230 | 157 | 230 | 211 |
| Housing units recognised in profit | 40 | 14 | 235 | 218 | 414 |
| Housing development for investors | |||||
| Net sales, SEK M | 274 | 185 | 1,163 | 336 | 565 |
| Housing units sold | 93 | 75 | 406 | 626 | |
| Sales value of housing units sold, SEK M | –0 | 169 | 127 | 840 | 1,427 |
| Production starts | 93 | 75 | 406 | 626 | |
| Housing units in ongoing production | 634 | 978 | 634 | 978 | 1,088 |
| Sales rate for ongoing production, % | 100 | 100 | 100 | 100 | 100 |
| Housing units recognised in profit | 129 | 102 | 529 | 194 | 304 |
| Average no. of employees during the financial year | 179 | 237 | 232 | ||
| Baltics (Estonia, Latvia and Lithuania) | 2023 Jul–Sep |
2022 Jul–Sep |
2023 Jan–Sep |
2022 Jan–Sep |
2022 Jan–Dec |
| no. unless otherwise stated | |||||
| Building rights | |||||
| Building rights | 6,900 | 7,600 | 6,900 | 7,600 | 7,500 |
| of which, off-balance sheet building rights | 2,700 | 3,250 | 2,700 | 3,250 | 3,250 |
| Housing development for consumers | |||||
| Net sales, SEK M | 115 | 117 | 437 | 449 | 831 |
| Housing units sold | 70 | 117 | 240 | 408 | 470 |
| Sales value of housing units sold, SEK M | 110 | 171 | 341 | 562 | 654 |
| Production starts | 44 | 226 | 253 | 416 | 495 |
| Housing units in ongoing production | 676 | 1,012 | 676 | 1,012 | 781 |
| Sales rate for ongoing production, % | 34 | 51 | 34 | 51 | 39 |
| Completed housing units not recognised in profit | 104 | 22 | 104 | 22 | 53 |
| Housing units for sale (ongoing and completed) | 544 | 513 | 544 | 513 | 531 |
| Housing units recognised in profit | 80 | 87 | 307 | 397 | 676 |
| Housing development for investors | |||||
| Net sales, SEK M | |||||
| Housing units sold | |||||
| Sales value of housing units sold, SEK M | |||||
| Production starts | |||||
| whereof investment properties | |||||
| Housing units in ongoing production | 195 | 195 | 195 | 195 | 195 |
| whereof investment properties | 195 | 195 | 195 | 195 | 195 |
| Sales rate for ongoing production, % Housing units recognised in profit |
| Key performance indicators at end of period | |||
|---|---|---|---|
| Including operations to be discontinued, and for historical comparison figures also discontinued operations. | |||
| 2023 | 2022 | 2022 | |
| 30 Sep | 30 Sep | 31 Dec | |
| Return on capital employed, R12, %¹⁾ | 4.4 | 9.2 | 6.9 |
| Interest coverage ratio, R12, multiple²⁾ | –1.0 | 7.8 | 4.4 |
| Equity/assets ratio, %³⁾ | 27.9 | 31.4 | 31.2 |
| Return on equity, R12, % | –29.4 | 11.3 | –3.6 |
| Interest-bearing liabilities/total assets, % | 32.7 | 27.0 | 29.6 |
| Net debt | 6,305 | 7,146 | 7,259 |
| Debt/equity ratio, multiple | 1.0 | 0.8 | 0.9 |
| Capital employed | 13,850 | 16,560 | 15,568 |
| Capital turnover rate, multiple | 1.0 | 1.2 | 1.1 |
| Share of risk-bearing capital, % | 28.0 | 31.8 | 31.4 |
| Average interest rate at period-end, %⁴⁾ | 6.81 | 3.06 | 4.03 |
| Average fixed-rate term, years⁴⁾ | 0.2 | 0.2 | 0.2 |
| 5.49 | 2.76 | 3.70 | |
| Average interest rate at period-end, %⁵⁾ |
| 1) Before items affecting comparability. | ||||||
|---|---|---|---|---|---|---|
| 2) For disclosures on interest coverage ratio under the terms of the loan, refer to the section on "Covenants in loan agreements" in note 4 | ||||||
| 3 ) For disclosures on equity/assets ratio under the terms of the loan, refer to the section on "Covenants in loan agreements" in note 4. |
||||||
| 4) Excluding loans in Swedish tenant-owner associations, Finnish housing companies, and leases. | ||||||
| 5) Pertains to loans in Swedish tenant-owner associations and Finnish housing companies. | ||||||
| EXCHANGE RATES | ||||||
| Average rate | Rate on balance sheet date | |||||
| Text | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
| DKK | 1.54 | 1.41 | 1.43 | 1.54 | 1.47 | 1.50 |
| EUR | 11.48 | 10.52 | 10.63 | 11.49 | 10.91 | 11.13 |
| NOK | 1.00 | 1.05 | 1.05 | 1.01 | 1.04 | 1.06 |
Key performance indicators per quarter and full-year are available at https://www.bonava.com/en/investor-relations/financial-information Definitions of key figures and reporting of Bonava's alternative performance measures can also be found here.
To the Board of Directors for Bonava AB (publ) corp. reg. no. 556928-0380
We have reviewed the condensed interim financial information (interim report) of Bonava AB (publ) as of 30 September 2023 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Without having an effect on our above conclusion we want to draw attention to information included in the interim report under the section Significant risks and uncertainties on page 15 and in note 4 on page 22. It is there described that after the end of the reporting period an agreement was reached with the lenders regarding that the calculation of the interest rate coverage covenant for the time of measurement 30 September 2023 would be done with an addback of the restructuring costs. There is an active dialogue with the company's creditors and largest shareholders. The company's result and cash flow from operations for the nine- month period 2023 are negative. The Board of Directors and executive Management of the Group are working on a number of measures to reduce cost and limit investments in building rights and new production starts and to reduce tied up capital through by sale of certain assets not deemed necessary to pursue and realize the business plan for the company. The measures are taken to ensure access to the liquidity required pursue the development of the company according to plan.
Stockholm, 15 november 2023 Öhrlings PricewaterhouseCoopers AB
Patrik Adolfson
Authorized Public Accountant Auditor in charge
Linda Andersson
Authorized Public Accountant
We create happy neighbourhoods for the many.
Bonava is a leading residential developer in Europe with the purpose to create happy neighbourhoods for the many. The company is the first residential developer in Europe to receive approval from the Science Based Targets initiative for its climate targets.
With its 1,400 co-workers, Bonava develops residential housing in Germany, Sweden, Finland, Estonia, Latvia and Lithuania, with net sales of approximately SEK 14 Bn in 2022. Bonava's shares and green bond are listed on Nasdaq Stockholm.
1,400 EMPLOYEES END OF Q3 2023
14.0 SEK BN NET SALES 2022
Lars Granlöf, CFO [email protected], +46 790 631 609
Susanna Winkiel, acting Head of Investor Relations [email protected], +46,704,612,828
This information is such that Bonava AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was issued for publication through the agency of the contact person set out above on 15 November 2023 at 7:30 am CET.
President and CEO Peter Wallin and CFO Lars Granlöf will present the report on 15 November 2023 at 9:00 a.m. CET.
Follow the webcast live at: https://bonava.videosync.fi/2023-11-15-q3
To participate in the teleconference, register using this link: https://events.inderes.se/teleconference/?id=100365 After registration, you will receive a telephone number and conference ID to be able to participate in the presentation.
The presentation material will be available at bonava.com.
Bonava AB (publ), Corp. Reg. No.: 556928-0380 Lindhagensgatan 72, SE-112 18 Stockholm, Sweden Tel: +46 8 409 544 00 bonava.com
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