JM AB (publ) (JMM.F) Earnings Call Transcript & Summary

Hello, everybody, and welcome today. I'm really happy to see all of you here in this building -- Kulturhuset JM building. Before we start the presentations today, we will start with some movie time. So sit down, relax and enjoy a little film. [Presentation]

Great. isn't it? [indiscernible] next. The best movie I have seen this year. I'm really proud to be here standing in the middle of JM land and talk about what JM are doing today to be as successful as possible. When I was young, I grew up in a small town called Enköping. Enköping is most famous for their slogan Sveriges närmaste stad, the closest city in Sweden. And it was pretty ironic I think, that we were famous because we were close to other more interesting cities. My uncle lived in Stockholm. And when I came to him to Malmö, I was always fascinated about the hustle and bustle, all the buildings, all the subway, the people who are walking around and all the cranes. There was always some things that was building -- about building in Stockholm. So I long to move from Enköping someday, and I wanted to move to my dreamland, Stockholm. And now I'm standing here in a building, Kulturhuset that JM have developed. This building was completed in 1972. It was the same year as I was born. So the circle is almost closed, I think. And when we are standing here, we can also see [indiscernible] almost see behind that. [indiscernible] that we also have built during the -- I think it was at the beginning of the 70s. And you can also see Nordic Light Hotel there. So everywhere JM is developing and building something. All these buildings are examples of JM's history of 80 years of developing the societies and improving the societies and people's lives. We are now the leading developer in the Nordics with over 0.5 million people who lives in buildings that we have created. And I think that's a huge responsibility, but it's also rewarding to have been a part of that. Last year, when I became the CEO, 1.5 years ago, everybody or almost everybody thought that from now on, everything will improve. And now we are standing here 1.5 years later, and a lot of things have improved. The underlying conditions are better, almost all the underlying conditions are better this year. But the market is still challenging, the residential market and the construction market in the Nordics. Today, we are going to talk about what we at JM are doing, today and tomorrow. We are going to talk about the market situation, and we are also going to talk about our new strategy that will help us to succeed with even more profitability, hopefully, soon. Before we start, I want to introduce to you my dear group management, all the managers who are doing everything for JM. First, Tobias, our CFO; Lundquist, everything we work with development, you are part of it; Hilde responsible for Norway; Susanne responsible for Residential Sweden; Maria, our HR Director; Marcus responsible for Finland; another Maria who knows everything about the legal issues. And [indiscernible] is the construction expert at JM. Did I -- I remember everybody, I think. [indiscernible] isn't here today. He's leaving the group management in the end of this year. So this will be the group management from the 1st of January, I think. And before I speak anymore, over to you, Arvid.

Thanks a lot, Mikael. Great. Well, Arvid Lindqvist, it's my name, and I'm a portfolio manager at Catella and also responsible for Catella's Swedish Property Research, and I will be your moderator here for this event today. Well, before -- just before we start off some practical issues to start with. We have fire exits back -- in the back of the room and there. We have toilet. We have also a photographer that's going around, taking some pictures, so well aware of that. And also please turn off your cell phones during the presentations. Good. Well, that said, let's start off this day and these interesting presentations. Well, to start with just the introduction of the different presentation -- different people that will hold these presentations today then. And well, we have Mikael Åslund, CEO; also Tobias Bjurling, CFO, holding the kind of keynote presentations starting off today. And then we also have Per Lundquist, Hilde Vatne and Johanna Wikander holding some following on presentation in more specific topics. Great. And well, we start off with the key note. Mikael, taking a broad picture of the company and the -- what is -- what has happened and what is about to happen and the road ahead for JM followed also by Tobias Bjurling that will go more into the figures, detailed economy and so on. And after that, we have a Q&A session. And here it would be great if you just use the link you received and ask all your questions, and I will do my best to try to bring up as many as possible of your tricky questions here that we'll try to bring up to the management. After that, we have a coffee break, and the presentation continues after that with following up presentations on different topics and themes. And after that, we have a second Q&A session. And just write down your questions in this link, and we will bring up as many as possible. And we end this day with some networking and refreshments at the bar afterwards. So that said, let's get started. Over to you, Mikael.

Thank you. If we look back at the last 4 years in the world, a lot of things have happened. First or maybe before this, there was the COVID pandemic that have done positive impact on our industry. But then we have seen almost 4 years of recession in the construction industry. First, we saw the innovation of Ukraine right after COVID. And after that, the inflation and the interest rates were increased. Last year, when we were seeing stabilized inflation and also lower inflation and interest rates and hoping for a better time. Everything was going in the right direction. But this year, there was a new president in the United States, and we saw U.S. tariffs that caused an uncertainty in the world and also give an economic volatility that was huge. So the customers and the people who live in the Western world and the Nordics are more cautious now than they should be, if you look at the underlying conditions. So even if the underlying conditions have changed for a better, the market is still challenging. So where are we today at JM? JM has a strong foundation. We have experts or employees in all the phases in the project development cycle. And that's a great advantage for us, I think. We have had some challenging years behind where we have combined long time and short time focus. And at the same time, we have handled the impact financially on the -- our business and our company. We have been forced to take actions, and we also want to take actions in the short term to handle the situation. And we have taken measures for increasing our competitiveness in the short term. And we see that we have started more units than the competitors when it comes to '24 and '25, this year. Now we see more optimistic forecasts. So the future looks a little brighter or much brighter. We have a high underlying demand. We see real wage increases in Sweden, especially. We see that the inflation and the interest rates are on much lower levels, especially in Sweden, we see that. And we also have forecast for rising prices. So all this is good. But JM won't rely on the market and that the market will come back soon. So we are doing things that -- where we can impact our own situation. So we are not relying on the market. And today, we will present the new strategy with things, both directions and initiatives that will help us reach our targets. And you will also hear about the initiatives or some of the initiatives that we are doing to reaching the targets. Okay. So what are the targets for JM? This morning, the targets decided by the Board was announced. We still want to grow from a small position and our target when it comes to growth are that we are going back to 3,800 production starts and 4% yearly from that on. And that's the same target as before. So that's no news. We are aiming to start more units this year than last year, and all of you who can count that means 2,200 at least this year. And we want to start more next year. And at the latest in 2028, we will reach 3,800 starts. When it comes to profitability, the target is still that we want to reach an operating margin on 12%. But in the short term, the market is challenging and our margins are under pressure. So there will be low margins this year and next year. almost on the same level as we are today when it comes to the margins. And why is that? It's because the costs are higher. So even if the inflation are low, the costs are on a higher level. And when we look at the margins in our completed projects, they are lower than the margins in the projects we have started recently or are about to start now. The margin seems going up but it will take some time to sell off the completed projects. I want to push this bottom. When it comes to financial return, we have changed the target to return on capital employed on 20%. It was return on equity before. But we want to change the return on capital employed because that's a better target when it comes to capital intensive business. And it's also more comparable to the peers out there. And sustainability, the Board also decided a target in sustainability. One of the planet's biggest challenges is the climate change, of course, and JM want to contribute to a better world for the future generations. And our target is offensive, but we want to reach 85% decreased emissions when it comes to 2030. We also have some financial guidelines. We will have a debt ratio under 0.5 and also continue with a dividend of 50% of the profit. We will come back soon on how we will reach the targets more specifically. Over to JM in brief. In these modern times, some of you or us are still watching streamed television. Me and my wife, we have one common interest and that's looking at TV series. And that's very fun, of course. Now I have a new movie that you saw, just tonight. But every week, there is TV -- a top list of TV programs in Sweden. And almost always, there is at least one program about housing on that top list. So one of the most popular TV programs in Sweden these days is [indiscernible] that's the way Sweden it was built. And this program is both educating and entertaining. And that's my point. We are working in a fantastic business. We are working with things that have an impact on the societies and impact on people's lives, how they live, how they work, how they enjoy theirselves. So it's very rewarding to be a part of this business. It's the most fun business to be in. And of course, JM is the most best company to work in. It's a huge responsibility, but also a possibility to be in that kind of business because people have opinions about what we are doing, and opinions can be hard to handle. But JM have always have a large customer focus. That's one of our biggest strengths, I think, that everybody at JM have a customer focus. And our vision is that we are laying out the foundation for a better life. And the customer focus is also included in the business concept and, of course, in the customer promise. When it comes to residential development, the most important thing is the location. We are today located in 3 countries, as you know. Sweden is the largest market for JM with 75% of the starts, followed by Finland and Norway. In the countries, we are, of course, located and have business in the capitals, Stockholm, Oslo and Helsinki. All of these capitals have growing economies and also a growing population. And we also have business in other cities with growing population and also universities in the Nordics such as Bergen, [indiscernible] Lund, Malmö, and since last year, also Tampere. Another thing with JM, is that we are active in the whole value chain when it comes to residential development. And that distinguishes JM from the competitors because we have knowledge and expertise in all phases of this circle or this value chain from acquisition all the way to managing the properties that are built and completed. And we think that's a competitive advantage for us. We also have all the employees in the same income statement. And that's also -- we are not a lot of different companies in the company who is -- they arguing with each other a lot. That's not the way in JM because everybody is focusing on the same income statement and the same customer. So that's also a competitive advantage if you compare us to other companies. Value developed all the way through the chain with the greatest value increase in the first phases when it comes to acquisition or most primarily development and preconstruction. But JM is learning from all phases, of course. And therefore, we can improve the value increase. And how are we doing this? Our foundation is our long-term focus on structured project development. From the beginning of the 21st century, we have focused on this. First out was design and purchasing. After that, we work with all the processes, sales, production, logistics and more. And last year, we have worked with -- improved the digitalized tools. Since I became the CEO last year, we have developed a new strategy. And in that, the largest focus is on what can be -- have an influence on or impact to be more profitable short and in the long term. We have more focus on shortening the lead times, on reducing the costs, more standardization or best practice. It's a more positive word maybe best practice in the group and also optimizing the building rights portfolio and learn from what we are doing in the group. We want to do that and we work more intensively with that now in the new strategy. You will hear much more about it soon. And we also, at the same time, will continue to reduce the carbon emissions and also have a great customer office -- offer or the best customer offer on the market. And because we are so customer-focused, I'm especially proud that we are always in the top positions when it comes to customer satisfied -- satisfaction index. Last year, we won in Norway, we were Best Company when it comes to customers. And we also won the Customer Satisfaction Index 2, which is very important for JM because we are measuring that 2 years after the occupancy, so people have lived in the apartments for 2 years. We had the best index in Sweden of all companies 2 years after occupancy. So that shows that our work, it's functional. We have a customer focused that is working, and the customers like it. We have quality in our products. If we go over to the business units, first out JM Norway. The market for new production in Norway is highly affected by high costs and high interest rates. They haven't come down as much as in Sweden yet. And that holds the starts back both in the market and for JM. Since the second world war, I think there has never started so few apartments as they have started this year and the last year, '24. So all the companies are challenging in Norway to start new projects. We also have a lower revenue in Norway due to the fewer starts but margins in Norway are almost maintained. And in Norway, we have a solid land bank, but the regulations take too long time. A lot of you live in Stockholm, you know that the regulations take a long time. But in Oslo, they also take a long time. And that is influencing JM because it takes longer time in the prime locations, and we need to have more A locations in the future in Oslo. Yes. So hopefully, it will go faster in the future, but these days, it takes too long time with the regulation in Norway. There have also been high prices on land in Norway and that has held back JM's investment, and we want to find more land in Norway because Norway have even more or better forecast than Sweden have when it comes to prices in the future. You will see more about that soon also. And we also have a great organization with customer focus and always focusing on quality. So more investments in Norway, hopefully in the future, in good locations. If we go to Finland, everybody knows that the Finnish people are the most happy people in the world, but they may have the lowest customer confidence these days. They have a long border to Russia. So that may have something to do with it. So Finland has the lowest customer confidence when you compare to Sweden and Norway. And also some decisions from the government in Finland that's not helping the market to start. Recently, Marcus told me about substantially reduced housing and lower sales for students. So students have to move home to their parents, again, and that's not helping the market to start. So there has been a weak price development in Finland, weaker than in Norway and in Sweden. But we are happy that we successfully have converted projects to investor projects or rental projects that we have sold to investors. So therefore, we have continuing our starts even if they are lower than a couple of years ago. The revenue are almost maintained despite the challenging market because the sales to the investors, and we have a slightly weaker margin, but it's positive margin. We have been successful in investing in this weaker market in Finland. We have over SEK 1 billion in carrying amount and also some surplus value there. So even if the market is challenging, we see small positive signs in Finland this autumn. Volume of transactions have increased on the secondary market and all services small price increases. So I think that JM are well positioned in Finland when the market will come back. If we go with Residential Sweden. In Residential Sweden, we have had increasing housing starts this year compared to last year when you look at the first 9 months. But we have lower sold and starts when you compare it to a couple of years ago. The secondary market in Sweden have record high amounts out there and the times for selling apartments are very long in Sweden these days. So it's a challenge. In some cities in Sweden, the prices are on the same level as 10 years ago. And when we have had an inflation of 30% during this -- or something 25% to 35% maybe. That's, of course, challenging in some cities. But at the same time, we see in the right locations, we are on selling on record high levels. For example, the top apartments in docks that we have sold for maybe SEK 25 million, so over that SEK 35 million, it's expensive. And our subsidiary, Seniorgården, their little project, Lilla Tvärgatan in Lund, we are selling for, I think, over SEK 90,000 per square meter, and that's a lot when it comes to Lund. So in the right locations, the prices are high. But in the worse locations, the prices are very, very low and challenging. The revenue and the margin is lower than a couple of years ago. Even if the revenue is slightly up, if I'm nice the last 12 months. The land bank in Residential Sweden is almost SEK 2 billion with a surplus value on over SEK 1 billion. So even if there is a huge problem with regulation in Sweden, I see that Sweden outside of Stockholm have a slightly better situation than Stockholm when it comes to regulations. I'm also glad that we have done some investments this year. In Uppsala, you heard about before the summer, we bought the best land in Uppsala. So next year, we will start one great project in the central parts of Uppsala. Maybe we will set price records, I hope so, in Uppsala, also. Over to Stockholm then. Stockholm has had a really challenging market. There are many objects out for sale and the times are long in Stockholm. But also in Stockholm, the market is very differentiated. In the best locations in the central parts of Stockholm and the largest apartments, the prices have come up again. So we are almost on record high levels in some projects and some apartments, the larger apartments. But at the same time, prices have fallen in the less attractive locations, such as the Western parts of Stockholm or Söderdalen, Järfälla, Upplands-Bro. The prices there are almost not 10% lower, they are almost 20% to 30% lower than a couple of years ago in some locations. So it's a very differentiated market in Stockholm. Even if we have seen slightly increased prices in some areas, in Stockholm this year, this -- Stockholm has fewer starts and sales compared to a couple of years ago, but it's higher than '23. So that's also a positive sign. The revenue in Stockholm has also decreased and the operating margin, as all of you know, it was negative in the last quarter. Now we have been here for almost 4 years of recession, a lot of things indicate that this is the end of the recession, and we have a more positive forecast for '26 when it comes to prices. And one sign when the recession ends is often that the prices are increasing in the best locations and the larger apartments. And that's exactly what's happening now. So that's also a good sign that something is going to happen and get better the next year. We are doing a review of the business in Stockholm. I will come back to that soon. In Stockholm, we have a solid land bank. We have almost 100% surplus value there. We have many projects in good locations. For example, Alvik, Alviks Strand, [indiscernible] a great property. We have [indiscernible] and so on but at the same time, we are struggling with long lead times when it comes to the authorities. So it's not only the market that's limiting for us in Stockholm and in Sweden. It's also the authorities and how they are handling the situation. We see that the times are increasing. The lead times are increasing in average, and that's awful. I don't -- you could have thought that the times would be shortened when we have a recession, but they have increased. So it's not only a problem for JM, it's a problem for all the companies in the construction business. And also, I think it's a problem for Sweden and for the competitiveness for Sweden, when it comes to the energy sector, the defense industry, we have to do something about this with the authorities and how they are handling detailed planning and building permits. But we at JM, we have been here for 80 years. We have been in the market for a long time. We have been here in a weak markets before and handled the situations before. So the challenging times and the authority's behavior may be a competitive advantage for JM, if you compare us to other companies also. In Stockholm, one month more from now, we have JM Property Development. And when it comes to the commercial and rental market, they are also challenging in all parts of Sweden, I think mostly in the rural cities of Sweden. We see that margin has been pretty stable, but it will decrease when [indiscernible] , our commercial project was completed in the beginning of this year. So next year, the margin will go down a little. We have seen an increase in transactions when it comes to rental properties the last quarters. And we sold Järfälla in this summer, and [indiscernible] sold one property in Nacka for a record high price when it comes to rental properties, I think it was over SEK 80,000 per square meters in Nacka for a rental property, and that's pretty high. So that's good. And we want to convert more projects to rental projects, if possible. But it's hard in Sweden. In the middle of Stockholm, you can't almost convert the projects to rentals because of the regulation of rents and because of the land prices that are too high. Also in the rural cities, it's hard and challenging to convert projects because there, the costs are too high and the rents are too high there. So it's somewhere in between in a circle around the most popular parts of the cities where it's possible to convert projects to rental projects. And we have some projects and some land in our land bank where that may be possible. So we hope we will start more rental projects in the future. If we summarize our building rights. We have many building rights. This is our gold. I think it's 36,000 building rights or something like that we have. Some of them are possible as both rentals, freehold apartments or TOAs. Approximately 40% of these are off balance. We are struggling with regulations and decision-making but we have the competence and we have the experience to handle this. We also have the competence to find land with potential and that has been a success factor for JM in the history. And it's also a success factor in the future because we want to find land and convert land from, say, a B location to an A location. And some of you this morning, you were out on Kvarnholmen. Some years ago, this was a B location in Stockholm. But these days, this is a A location with prices over SEK 100,000 per square meters at Kvarnholmen in some apartments. And I'm glad that we started a new project in Kvarnholmen in this Friday. And that's when we are converting land from less attractive location to a better location, that's value increase when it's best, I think. We are doing a review of the business in Stockholm. And this Friday, we announced some changes due to this review. First of all, we are mergering Property Development and Residential Stockholm to one single unit from 1st of January. We want that to create more synergies and also enhance collaboration. And it's also similar to the other business units from that one. We have JM Stockholm, JM Sweden, JM Norway and JM Finland. We are also redesigning our development organization. We are doing that to improve the efficiency in JM, now and build strength for the future. We want to accelerate the time lines. We want to be even more standardized and standardize the processes, not only the product, and we want to reduce the cost. So this is one important step to reduce the costs for JM. And you can say that's delivering on our strategy. If we shall do that, we are redesigning the development organization. And we are starting a new unit that will work with the product and design at JM. The current business unit manager in Stockholm, Pär Vennerström, will handle this new unit and build up this unit and work with the development. And I will be the acting manager while we are recruiting a new business unit manager, which we are doing now and working with. We are continuing the strategic review of Stockholm. We want to identify more opportunities for improvement and long-term success and reducing costs. But at the same time, review is a big word. Some of the things we are doing in Stockholm, we are doing for JM as a group. We are, for example, having the productivity boost that you will hear more about soon, optimizing the building rights portfolio. And also, we are taking measures that will reduce the costs in every business unit and the whole JM. And that will also help Stockholm to improve the profitability in the future. Over to the targets and the strategy. Three major factors impact our success at JM. In the short term, you can say that these factors are challenges for JM and for the market. But at the same time, you can also say that there are possibilities maybe and the competitive advantage for JM may be. First, demand. Now the demand is pretty low in all our countries. We have seen weak price development, but in the long term, we have the knowledge, the experience and the structure to profit from an increased demand. Costs. We have had a huge inflation for a couple of years. We are on a significantly higher cost levels in all our countries and in the construction industry, say, 25% to 35%. JM are on lower cost levels because of all our work with reducing costs. I think these costs will stay on a higher level. But still, JM have lower cost levels, and we have the competencies and knowledge in all phases, so we can work with it to reduce it even more. Also, the capital turnover is very important to work with, especially when the interest rates are high, but also now. So we are working a lot with that. We will hear more about it soon. When we started to work with the strategy, we also said that we have to capitalize on our strengths on JM because we have some strengths. First of all, our main focus and also most important strength is the focus on customers. We know what they want. We would know what -- where they want to live. We know the trends, the needs and what they are willing to pay for it. Second, we are the leading developer and residential specialist in the Nordics with 80 years in the market. We have the experience through all the phases. We have skilled employees. Almost everybody who's working at JM starts to tell how long they have worked at JM. If you see this, I have been here for 25 years at JM. My name is Mikael, I have worked for 25 years. We are proud to be in a company for a long time at JM and there are a lot of skilled people who is working here. So we are a specialist in this and everybody is focused on contributing lower costs, higher profitability and great quality for the customers. We also know where people want to live, what they are expecting. And we can see the possibilities when it comes to places and locations and know what the cost and income will be on one specific location. We know how the process works with a detailed planning, and we have been successful in acquiring land over the years. And this makes it possible for us to find more land and develop it to even more profitable than it looks like it should have been in the first site. We design and produces homes cheaper and better than the competitors. I have repeated that and I will, in the future. Thanks to a high degree of standardization and an industrial approach, where lead times are constantly shortened at JM. That's competent project execution. Our projects lead to proud employees that proudly show their pins and satisfied customers. The employees carried the JM culture over time and the customers speak to friends of how fantastic their homes are that JM have developed. And all this lead to strong relationships with municipalities and investors. And this enabled us to secure land and project financing regardless of the macroeconomic environment. And it also helps us in the processes in the cities when it comes to detailed planning and building permits because they know JM are professional and we want to build great products for the -- all the people who's living in the cities and all the people who's going to live in the buildings. Since I became the CEO, we have worked out a strategy to reach the targets. Now we are ready to present the strategy. The strategy is based on the challenges or possibilities and the strength. Overall, we want the organization to focus most -- only focus on the measures that are most important. So that has been a mindset for us when we were talking about the strategy. The foundation is the customer focus and customer promise. We have 4 target areas. It's the targets from the Board. We have some strategic directions. And the strategic directions shall work as a compass for everybody that everybody shall have in their head and follow always when appropriate. And also, we have some strategic initiatives that will help us reach the targets. In that, we are adding resources to greatly improve our routines, our organization and to succeed with reaching the targets. When it comes to growth, the direction is to expand the addressable market. We have one initiative here that Hilde will tell more about soon, that's called Broadening the Offerings. In that, we use the know-how and offerings we are familiar with in some parts of JM in new markets where JM are located. So we are broadening the market, thanks to Broadening the Offerings. For example, I talked about Lilla Tvärgatan, Seniorgården project in Lund. We have populations that are getting older in all the Nordics. Maybe we can use these routines in Finland and in Norway and sell homes to more senior people or more adult people in the future. And then we are broadening the market with using the offerings that we are familiar with. So Hilde will tell more about that soon. When it comes to profitability, we want to increase the standardization, shorten the lead times and own the whole value chain that's still very important for us. The initiative here is called Productivity Boost. Per will talk more about that. In that, we will find standardized measures that will reduce the costs when it comes to every home with SEK 250,000. If we start 4,000 homes, that's SEK 1 billion in cost savings. We have organized skilled employees from all phases, of course, to focus on cost reductions, category-based purchase, standardization, shortened lead times and everything. And it works. Because we see now that we have shortened the lead times the last year with up to 30% and we have found a lot of SEK already. Maybe that's a cliff hanger, how many -- how much, Per will talk more about it. So it works. You can find cost savings if you are focused on it, and we are doing that. So even if it takes time to see all of this in the income statement, we -- it will help us to start more projects, be more profitable and buy the right land. We are also working with a more active portfolio management. Tobias will tell you more about an initiative about optimizing the building rights portfolio. In that, we want to find ways and tools to increase the capital turnover and also -- that also will help us to make good decisions when it comes to transactions. And with transactions, we mean both acquisition and sales. 20 to 30 years ago, we were only focusing on acquisition. Now we have to be more active in the portfolio management. So we are also focusing on which properties we are about to sell and where do we want to buy more, Tobias will tell you more. And also sustainability, the key words are profitable sustainability because we think it's profitable to be sustainable. One topic of sustainability is work environment. We want to have great workplaces and few accidents. We want people to thrive and feel safe when they are working on JM places. And the other topic, of course, is the planet's biggest challenge, the climate change. We are doing multiple things to reduce the carbon dioxide emissions. And all of this is, as shown in the climate road map, which Johanna will tell you more about soon. My degree project in the '90s was about environmental work, including measures about reducing carbon dioxide emissions. It was 30 years ago. So this is close to my heart. There is still some things to do, you can say. We also have capabilities that we want to improve. First, we always want to be attractive, an attractive employer. We want to attract the right employees. We also want them to thrive. We want them to develop and deliver and contribute to the success of JM. We want to improve the governance and management. We want to have more focused targets at JM. We want better routines, if possible, but of course, it is possible. We want to have more target-oriented managers. We also want to have the right organization for decision-making. So we've decided to do the right things in the right time and maybe faster decision-making than before. Digitalization is another topic. All -- everybody is talking about AI. We are talking about digitalization. We want to have the right foundation for digitalization. We want to have the right environment, the right tools and the knowledge to use the tools in a proper way. So there is things to do there. So the strategy as a whole, helps us to focus on and allocate resources to the most important areas for us to succeed. And I want to say now that we are more focused now on reducing costs, be more standardized in the group and optimizing the portfolio than a couple of years ago. And we know it works because we see results even if they are small and the margins are weak, we see results. It works when you are focusing on the right things. Once again, we, at JM, we are working with the most fun thing there is to work with, in the best company. Everybody cares about their homes. Developing homes and societies is fantastic. And this upcoming Christmas times, it is significant that the best Christmas Carol ever is, of course, about housing. And you know it is "Christmas (Baby Please Come Home)" by Darlene Love. He's singing about what we are doing, and I think that's great. JM are the customer experts in the Nordics. JM have a robust building rights portfolio. JM has 80 years of proven experience. We have thrived through multiple economic cycles, and have the most skilled employees in all phases, as you have heard, we are focused on what we can control and not relying on a better market, but taking focused actions through our strategy. So we are well positioned in challenging times, I think. Thank you for listening to me. And I think it's over to you now, Arvid.

Thanks a lot. Thanks a lot, Mikael. Very interesting presentation. I can take -- I have a few just follow-up questions here before the formal Q&A session. And it's quite interesting that you mentioned here that -- I mean, real housing prices have had a quite tough development over the recent years. I mean, due to the inflation. We had a few years with perhaps in total, like 25% inflation, which has, of course, I mean, reduced real household incomes and it has been really tougher households really demand in the product. How has that impacted demand? What type of apartments do you see that the customers are demanding now in relation to a few years ago?

In the market a few years ago, a lot of competitors to us, they were only building small apartments. So there is a lot of buildings out there with many small apartments. These days, small apartments are not the most popular ones. It's the larger apartments in the most popular or prime areas. That's the most popular and where the prices have increased first in this cycle. So larger apartments are -- they are maybe not always expensive -- more expensive but the price increase are larger in the larger apartments.

I mean you also mentioned what's quite interesting, I think the difference between condominiums and rental homes. And you also say that your figures are stronger for, I mean, the rental -- the Rental Construction business rather than the rest of the business. I mean also in this business, we see very small apartments and rents have increased quite significantly, in listing Sweden and Stockholm, specifically Stockholm. What's your view of -- I mean, is this -- is this -- will this market be saturated? Or what's -- I mean, what's the challenges when it comes to grow within the rental home market?

I think the biggest challenge when it comes to rental, it's the location of the projects and the land because you can't build rental apartments in the central parts of Stockholm if it's not subsidized. You have to do that in some way because the land are too expensive. Almost always in rental properties, I think the apartments are a little smaller than in freehold apartments or a tenant-hold apartments. They are a little bigger in average. I think I'm on ice now, I think. But I think we have approximately 70 square meters in average in tenant-owned apartments and I think between 55 and 60 when it comes to rental apartments. And I think that will continue to be so. Rental apartments shall be smaller. But Vennerström said that apartments in their property that they are sold on high, record high levels. It was a little larger. So maybe that's the beginning of a trend with larger rental apartments also.

Yes, yes. I mean, interesting, interesting, yes. I mean also, you also say that speak about the different markets that you have, and you see a little bit weaker development in Finland and Helsinki perhaps compared to the other Nordic Capitals. I mean what's your view for the future going 5 years ahead? Where do you see strongest growth, what market?

Polite answer is to say that we will grow everywhere. And I hope we will grow in all our business units, and I see a potential for growth in all the business areas, the following 5 years. But probably, in Norway, the price increases will be higher. We don't have the regulated land in that amount that we want to have, but there is a possibility to grow more in Norway than we are today. In Finland, we want to grow more also. But there, we have more land, and I think we are well positioned in Finland. But hopefully, we will grow everywhere with the price increases the most in Norway. If they also can control the inflation in Norway, they have had a challenging time with inflation in Norway.

I mean, definitely. And I guess, production costs, that's impacted the production cost.

One more thing. Of course, we want to grow more in Stockholm. Stockholm is small now, too small. I said, in Sweden, we have started more units this year than last year. But we want to grow in Sweden, but we also have to grow more in Stockholm because we have land in Stockholm. We have land with surplus value. So if the regulations is going on as we want it to be in the future, hopefully, we can start much more in Stockholm.

Also any kind of -- because, I mean, ambition to grow the business is one thing, but also the underlying macro and demand growth. How just -- how do you see the differences between the regions in -- when it comes to underlying macro demand growth, households demand for apartments?

There is a demand in all our areas. Finland has more well-working residential market with market rents that works. Therefore, the price increases on freehold apartment has been lower in Finland. So I think it's more challenging in Norway that are on the weakest level since the Second World War, when it comes to starts and in Sweden. There is possible to grow more. I think Tobias have some picture about this. The possibility to grow in all our countries.

Perfect. That's a perfect segue to Tobias, next speaker. As I have to leave Mikael Åslund. Thank you. We will have more Q&A afterwards. Tobias Bjurling, CFO, JM. Please welcome up on stage.

Well, thank you, Arvid. And thank you, Mikael. Yes, I will try to take you through the financial overview and also explain a little bit more about how we actually will achieve these financial targets for JM. And as you can see, the targets were that our Board has set, they're ambitious. But -- and that might be a challenge for JM, but we really like a challenge. So we take it on. We have a long journey today to reach these targets, but we will also show you that we can and will reach them. We've also updated the financial guidelines. So equity assets is now replaced by debt-to-equity ratio. So to indicate also that we should be self-sufficient financially over time. And JM has, and if we should always forward give strong returns to our shareholders. So the dividend policy is also kept at 50%. We also changed the financial metric for returns. So we have changed from return on equity to return on capital employed. And return on equity has been a strong indicator as long as we had excess cash and the focus was always on how to maximize the shareholder returns. But I think it's maybe not a strong indicator on how we actually are performing with the capital that we have been keeping. So we believe that the return on capital employed is better indicator for a capital-intensive business. And it also has the threshold of debt that maybe we don't see in return on equity. So I think it's a good combination to have return on equity and capital employed, together with the debt-to-equity ratio for JM. So it really show how well we are performing with our capital. So if we look into our financial targets and then we start with the growth. We have kept -- maintained the target of 3,800 starts, that we should -- we say at JM that we should reach this level at the latest in 2028. And from then on, we should grow by 4%. Of course, this is depending on the market development. We need the markets to improve to be able to reach these levels. And we also need to gain market share. And as Mikael mentioned, we will broaden our offering to reach this. But even in today's market, we will start more units in '26 than we have done in '25. If we move on to the margin target. It also has been maintained at 12%. And of course, as you can see, we're a long way away from reaching that target today. But we will also show you that this is an attainable target. We can and will get back to the 12% level. And you will hear this many times today, we cannot sit back and rely on the market to solve this issue for us. We have to do what we can impact. So we are focusing really much on cutting our costs so that we don't need to rely on increasing prices only. We do have a backlog of older projects with lower margins. This will take some time. We need to work those out of the balance sheet and out of the P&L. And -- but reaching the targets in the future is only possible, we think, with the Productivity Boost to cut our costs. We also have a high target for return on capital employed of 20%. And this is all based on our segment reporting, I should say. But you can see that we have been at 20% return on capital employed in the past. The biggest impact will have that we are growing our volumes, so we can turn the capital over faster. But that's not enough. We need to be working more efficiently with our capital. And most of our capital is tied up in the land bank. So we need to be able to turn the land bank over faster to be able to reach the 20% target. But as I said, we have done this in the past and we will do it again in the future. And the next challenging -- and this might be the most challenging target is that we should be close to zero emissions company in 2030, and that's only a few years away. We are happy and proud that we managed to succeed or exceed our target -- the local target for Sweden in 2024, but there's a lot of work left to be done here, which Johanna will show you later. But it's still a target we're aiming for and where we should reach to do our part of saving the planet. But if we stop for a moment and look at the retrospective again and the picture that Mikael showed you before, we have had 4 years of recession, 4 long years of recession, if we go at least when we come to February. And this is the longest recession that we have probably ever experienced. You might have seen harder recessions in the '90s, but this is probably the longest one. So these have been difficult times for JM. But we do believe that we have reached the bottom now. You might say, we heard that before. But there are so many things in the underlying demand and the price forecasts that we should have reached the bottom by now. But what has this had -- what kind of implication has this recession had for JM? Well, if we take the starting point from when Ukraine was invaded by Russia, and we saw that the inflation started to boom and the interest rates peaked. We saw a severe price drop on all our markets. Norway has actually recovered rather quickly, and we see a strong price development in Norway. But if we take Sweden for a whole, we would say, we're back on peak levels. Yes, we are in downtown Stockholm. But if we look into outskirts of Stockholm or others in many other cities where we are also located, prices are still decreasing. So we're a long ways away from reaching the peak levels in pricing. And if you look at Finland, the prices are way below the peak levels. And that, of course, has had an impact. And in the same time period, our cost -- construction costs have increased by over 20%. So how can anyone make money in this kind of business, in this kind of market? Well, then we're just -- if we're playing with the numbers a little bit, and we say that all the -- these cost increases and the price reductions would have impacted us immediately and given the volumes that we've had, we actually should have made a huge loss already in '23. And then that's with having the same starting point of 50% in '21. But of course, we haven't. And this is where the -- our revenue recognition has played in our favor historically that we had the really strong projects coming into this recession that helped us through '22 and '23, with strong margins before those paid. But those projects were all but consumed by the end of '23. Then we are at a really strong office project here in Stockholm called K1, that has helped us in '24, and partly even in '25 to hold up the margins. But even if we take all those things away, we should have made substantial losses ever since '23. And the only thing that has kept these margins up is that we have really strong sales capabilities. We have strong salespeople because we have a strong product. So we have been able to sell even in a really tough market. And also, we have been able to keep these margins because we have lower costs. The structured production we're talking about, and hopefully, that when you leave today, you will learn more about this actually keeps our costs lower than the competition. We do this because we do everything in the same way always. It means we know what to buy, when to buy it, how to build it. And this keeps costs below the index. And also when we do also have total contracting in some projects, and we see that the cost price from the contractor is always higher than if we build it ourselves, even if we are on a decent margin. So this is the reason why we're actually at plus levels. And mind you, we have not made any severe write-downs of land here. Yes, we have done write-downs but on percentage of our total portfolio, they're very, very small. So we're working with the same input values of land that we had for many years ago. And of course, that puts a strain on the margin. But if you look at the future, situation is much brighter. So we have a huge housing shortage on all our markets. This picture is from Sweden. But if you look at Finland and Norway, you will see a similar picture, where actually demand is almost 100% higher than the supply. And this also, of course, driving the expectations on the price development, together with a strong macro. These numbers are from evidence, and we have added the inflation. So there are nominal values. But we see -- we see they're supported by many analysts that prices will increase even in Finland, even in Finland prices are expected to increase year-on-year, because there's a housing shortage and because of the demographic changes in our countries with more people moving into the cities. And of course, if you have this strong underlying demand, and you have these expected price increases. There's also an expectancy that we will start more that housing production will increase in the near future. This is the forecast [indiscernible], we've taken out only the locations where we are working. And we can see that on our markets, we expect a growth of 13% per year, and this is just the market that's not JM. So -- and even if these volumes are much lower than the peak volumes, it's a clear indication that our markets will grow. But if we then look at our targets and how are we to achieve these ambitious targets. If we start looking at the growth. So we should reach 3,800 starts. And then an operating margin of 12%, going from 4% to 12% and we should go from a return on capital employed of 4% to 20% in just a few years. Well, we can start with the growth. And historically, we've had around 3,200 starts. We have been at close to 4,000 starts in a year or two. But the market is expected to go by 13%. That will put us over 3,000 -- over 3,200 starts if we just do what we do today. But that's not enough. We want 3,800 starts. So we have to gain market shares. And it could be that it's enough what we're already doing because we have lower costs, and we have strong sales capabilities. But we don't rely on this. We can't sit back and just wait for a better future. So we want to address the bigger market, and by broadening our offering. And that should put us up to this 3,800 mark. And from then on, we should increase by 4% every year, and that probably doesn't mean that we need to take any further market shares. But it is a big jump to up to 3,800 starts, and that's a challenge for us, of course. But -- so it's not an easy task, but we are confident that we can reach this. The next tricky part is then the margin. So how are we to reach 12% margin again. And if you're not relying on the market prices to help us. And before we go into that, I just want to walk you through and take a quick reminder of how we recognize profit at JM and how we work with our project forecasting. So just take a normal project. At the beginning of a project, we always set off a provision for the project because there are a lot of uncertainties in the housing development. So you can never be sure that your initial forecast actually will play in every time. And this is based on both our historical evidence, our experience, but it's also an individual risk assessment in each and every project. And this is not just what we do, this is what -- this is market practice. I would say, all housing developers -- I hope, all housing developers are doing the same. So that doesn't differentiate from what others are doing. Then you can see that we have slightly different revenue recognition methods in our business. And accounting principle for JM is, of course, percentage of completion, but with sales rate elimination. So the accounting principle determines how projects revenues or costs are allocated over the project time. And revenue are reported as they're being implemented. So as we work up, we take up revenues. And then the meaning of this or the purpose of this is that you should see in the revenues, you should see a clear link to what's actually being produced out on our projects. But the profit is only recognized as we can release the provisions and what we have -- from what we have sold. And that means in the early stages of a project, yes, we have a bump because we start the project and we move the land into production. So you have 20% perhaps of the total project volume comes over on day 1, and you might jump -- the revenue might jump at that time. But we -- in the beginning of the project, we only release parts of the project provisions because it's a very early stage, a lot of risks left. And we only sold 30% because our presales requirement is 30%. So if you have -- if you have a 10% project, actually, and you only have 30% of the volume and then you only take out of that, you only take 30% of what has been sold, you have a very, very small profit in the beginning of the project. But then as we move along, and we see that we are -- the price is right and the construction costs hold and actually, I want to mention that construction costs, they always hold the JM. I've been in this business for many years, and I've never seen any company that has this small variances in the production costs. And it's because we have this structured production. So that's rarely a surprise. What is challenging is the price to the customer and that's where the risks are. And that's what we have seen in recent years. We have had to reduce our forecast due to price decreases that were difficult to predict. And also, since we are seeing that the sales are being skewed towards the end of the project because most customers they want to buy and sell in the same market. They need some -- or most -- in Sweden, many need to sell the current home before they buy a new one. So we have more and more sales towards the end of the project, and unfortunately, also after the project is completed. So with the sales provision can't be released until the end of the project. So the projects that we start today, even if they have only 18 months of production instead of 24, would probably not show much profits until sometime early '27. That's when you start to see real margin to kick in. And we have a backlog. And this is why we also try -- we have been more explicit in our margin and the margins that we probably have been in the past. So we have low margins today, and it's because we have been -- we had to cut the prices, and that's most evident in what we have on the balance sheet, the units that are completed and that we had bought back. We have very low margins there, and that will affect us all through 2026. So we have to -- this inventory has to be sold off, and that will have a major impact through most of 2026. Also, we still have some projects that we started with lower margins. We knew that the margins were lower. We were, of course, hoping that the prices would increase, but they were started intentionally to keep the volumes up at slightly lower margins. And since then, the prices have dropped. So we still have some projects with lower margins in ongoing production. And of course, they also have to be sold off during 2026. And this is the reason why we say that the margins will probably not come back to the -- they won't go up much in 2026. We still have a large share of sound margins and we see sound margins or solid margins. I dare not say great or fantastic margins yet. But the projects we are starting now for housing developers have sound margins. But as I showed you before, even though they have started this year, much of the profit won't come until next year, and then we need that to cover the low margins from the inventory. So it's not until maybe the end of 2026 that we will see some margin improvements. And I also have to point out, you should never look at the margin in an individual quarter. It doesn't say very much because it depends on which units we sold. Did we sell units with low margins or did we sell units with high margins, has a major impact on every quarter. But on a rolling 12 months, that's where you can see the trend. And the trend for JM right now is 4% margin. So we're not satisfied with that, and that's why we're working so hard to improve these margins. But this is just an attempt to explain why it takes so long. And Per will also show you why it takes even longer before we can see the impact of all these cost reductions we're doing. The 12%, we have been there before. And also, we were able to sustain a 12% margin even in really -- in some really difficult times. And it has helped us -- with this revenue recognition model has helped us to maintain margins if we have shorter drops or shorter times of recessions. The issue now is that it's been on for 4 years. So we don't have any of these older good projects left, but we have shown that over time, we are able to keep a 12% margin. But like we said, we don't rely on the market prices to help us to fix the problem for us. So this is just a scenario, just what would happen. And here, we counted on -- if prices go up net by 1% every year for the foreseeable future for the next 3 years, we won't be able -- that won't help us. That's only an 8%, we'll be running on 8%, if we don't do anything. So what can we do? And this is also just a scenario. But what we will show you today is that through the Productivity Boost, we can actually find an additional 4%. If we can find SEK 250,000 per apartment or EUR 13,000 in Finland, that actually combined is a 4% margin increase. It will take some time before we get there, but we can and will do it. But this is also just to show you that they will take some time before this kicks in. So margin will start to increase probably at the end of '26 or early '27. Looks long way. Another thing that is changing is the sales pattern. And historically, any developer will tell you this, you always want to sell at the same price that you're producing, then you know the price is right. And when you complete the project, you have sold everything and you don't have to worry about any inventory. Well, that works fine if you can sell from drawings and in a perfect market. But today, it's not a perfect market. Today, we see that just since we have the projects in the right locations at the right price, we can still find the 30% presales that we require from ourselves and also the most banks require from us on average for a project to get the project financing. But then it's really hard to sell in the beginning of a project when it's a long ways until completion and where you can move in. So today, we see that most of the sales actually occur at the end of the project or even after the project is completed. And this has pushed our sales rate in ongoing production down to 53% now. And we expect that this trend will actually, even if the market improves, we still think that many customers maybe not have to sell before they can buy, but they want to. And that this -- the careful customer that we see in the market today is maybe here to stay. Then it might be that you -- that we see that people are starting to get concerned that, oh, my partner might be gone tomorrow, let's jump on this today. And we could -- that's a psychological effect. And that could -- that we have seen in the past that the market can change rapidly, but this is not something we're counting on. So we are counting on that the customers will remain cautious in the future. That will also drive that we will have much sales towards the end of the project. And again, this is both good and bad. We are cutting lead times by 30%. So a project that used to take 2 years now take 18 months. It's great from a sales perspective because you get much shorter time to market, but then you also have a more narrow time frame for when you can sell. So we expect that more units will actually continue to be sold after completion and that we will -- we have to get used to have some inventory actually on the balance sheet. Not as much as today, but maybe the new normal is that we will be around 200 units in inventory. We'll see how that proceeds. But for sure, we will not be on today's levels. And for sure, we will not be on 0. And you have to remember, we need around 50 to 100 show apartments. So even if we reach the 12% margin and even if we reach the 4,100 starts in 2030, that's actually not enough to reach the ROCE target. So we have to work more efficiently with our capital. And to be able to reach a 20% return on capital employed, we need to double our turnover rate. Most of this is, of course, done by just doubling up on the starts, but that's not enough. So we need to actually do more with our -- with the current portfolio, and we need to be able to grow without growing the land bank at the same pace. And I will come back to that. The answer to that question is to optimize our building rights portfolio. So what I want you to take with you from this session is that we have been through 4 really tough years. And it's only that the key strengths that Mikael talked about in the beginning that has actually kept our margins above 0. And these strengths will help us going forward, but that's not enough. We still have to improve from where we are today. We have a really good market outlook, but we don't rely on that market outlook. We have seen that market outlook fail before. So we need to do what we can ever we can do to improve our situation ourselves. And we have a strong plan on how to do that.

Good. Thank you, Tobias. Now it's time for -- let's give him a hand. Excellent. And now it's time for CEO, Mikael Åslund, to come up on stage as well, and let's do a Q&A session here, short Q&A session and before we have some coffee and so on. Good. Well, thank you for 2 good and informing presentations here. Well, to start off, this is just -- I've got a number of questions here, and I'll try to bring up as many as possible here. But we start up, how many production starts are needed to reach the margin target? It's a question from private investors. I mean you have your 3,800 apartment target, but what's connected to the margin? I mean what's needed?

Well, actually, to reach the margin target, we need to do more than just starting more. The 3,800 is not enough to reach 12%. We need to improve margins as well. So there's no easy answer to that question. We have -- but we do have -- we're -- today, we're equipped for close to 3,000 starts probably because we have kept our resources to maintain production capabilities and development capabilities. So our overheads are too high. So the first thing is to get the volumes up so that our overheads, the market practice is around 6% is usually what you say that the housing developers should have. So we need the volumes up to get that down to 6%. But that's not enough. So from then on, it's improving the margins. And Per Lundquist has all the answers to that question later today.

Excellent. Good. Well, do we have any other more questions from the floor here to start off with? Yes.

If you take the 4%, also from 4% to 12% today [indiscernible] your hands, how much is utilization of the organization? And how much is improvement in productivity? It's more of a spin-off question you had earlier.

It's both, I think. So it's hard to say an exact figure, I think, about that. But we have to increase our productivity. We told you that it was 4% of the 12% that's connected to the productivity boost, but we also have to start much more. So we have to do both, I think.

Yes. And I think we have an organization today to carry at least close to 3,000 starts without having to add on external contractors in a large volumes or more staff, depending on location because it's different in different locations.

From utilization?

The answer is that we -- yes, we can utilize the current organization more. But then you can just count backwards when the organization is at 6% overheads, that's probably the best indication we can give you. If we look at the organization, I think we are 1,800 employees now. And at the highest, we were 2,700. So 1/3 have left us, maybe an indication, but we want to be more effective, of course, also.

A follow-up question on that one from me. What's your competitive advantages in relation to the competitors when it comes to productivity and ability to increase productivity in the construction process?

The most competitive advantage is that we have the people from all the phases. And it's -- you can -- we repeat that always, but it's very, very good for us that we have that. So we can take the craftsmen or the blue collar workers and talk to them when we are working with the detailed planning. And we also except from having people in all the phases, we have the structure to handle it. We have structural design instructions, assembly instructions, and we can use the knowledge and put it -- and improve the instructions. And then I don't think that anybody else have that in that same amount in that way in Sweden. So that's a real competitive advantage.

Yes. I mean -- and you mentioned previously also that you don't have that much fluctuation in your costs either that you're quite comfortable with that one. I guess that has something to do with that as well.

Exactly. I think it was worse in the '90s. But these days, we have almost no fluctuations in the costs. So we are very good at predicting the costs in the projects. And I don't think that everybody, every company is as good as we are on that one.

Yes. I mean good, good. Another question.

Just a question on Stockholm. It used to be your core market. You've been so successful here and you're talking about a very good land bank. And in 2025, you haven't been able to start that much. I think Besqab even started more than you did, which is surprising. So you can't just blame the market. Just wondering, have you slipped in the Stockholm organization? Are you blaming planning and zoning a little bit, but others are passing you? Or have you missed out on your land bank owning land in the wrong locations? Maybe if you can elaborate a little bit about the Stockholm organization.

I still think the biggest challenges in Stockholm is the work from the authorities. We have a great land bank, and we haven't executed the land. We haven't managed to get a detailed plan in the pace that we wanted. And because of that, we couldn't -- we haven't started so many units that we wanted to start. But we are still starting more this year than '23. So we are increasing. And we are selling more and starting more, I think, than almost every competitor out there. So we are starting more and -- but we -- of course, we want to be more forward leaning in Stockholm always. And also -- so we have to continue the review of Stockholm and see how we can start more in the future. Do we have the right land? Maybe we shall sell some land and buy other land in other locations to be even more profitable. So we have sold land in Stockholm that we have had for a long time. We sold a small one [indiscernible] and one land in Nacka in the quarter 3. But we also want to buy land, and we bought some land in Telefonplan and Aspudden in the second quarter. So I think we have to work with optimizing the building rights portfolio, be more forward leaning and reduce the costs in Stockholm.

Good. Another question.

Two questions to your presentation, Mikael. You speak about -- or when you speak about the sort of growth target, you mentioned expand addressable markets. So maybe you can elaborate a little bit what that means in practice. And then secondly, when speaking about profitability, you said own the value chain. Can we get any sort of concrete examples of what that might mean?

If we start with expanding in market, Hilde will tell you more later. But we think that we can use some of the things we are using in some markets. If we take Finland, we are selling to a lot of investors and continue -- we are changing the project to rental projects. We have done that in Stockholm. We think that we can do it on other markets if we are focusing more on that. We have an older population. So maybe we can use [indiscernible] in other markets or senior housing in some way. So that's a sort of expanding the market but be on the same geographic market as we are today. Our prime focus is not to find new countries to start developing in. It may be in the future, but not now. And we also always think about can we expand to new cities. But these days, when it comes to Sweden, it's hard to be in the cities where we have been in for a long time if it comes to Örebro and Linköping are pretty challenging markets. Hopefully, they are coming back now. So our primary focus in Sweden are to start more units in the markets where we are or have been. In Finland, we started Tampere last year. That's sort of expanding the market also. So primarily expand the markets in the geographies that we are in today with more products in the market. That's the one thing. The other question was about the value chain, how we are using that we -- and back then to that we have the experience and knowledge in every phase of the value chain. If you are a developer and don't have the knowledge about construction fully, you are buying construction on the market. Then you can't rely on that the constructor tells you what will change the project to be as cost efficient as possible. But in JM, we can talk to our blue-collar workers, our site managers, how shall we develop the projects so they are as cheap as possible, but with as much customer offer and customer quality as possible. So we can talk and use the knowledge to develop land in the first phases in the value chain, so we get more value for the money in the end. So we are using the knowledge that we have in all phases to get more profitable. And we see that it works because you also have the structure to fill it in and use the structure.

Do we have more? Any more questions from the floor? Well, I have a question regarding the capital turnover issue. I mean that's 1 of 3 important parts, I mean, to improve the performance. We have improving starts, the operating margin and the turnover. And now pretty much you say that -- I mean, the sales process has turned out so that you are selling more at a later stage of the projects and building more inventory that way. How should you think about the balance sheet versus the land and project bank when you also have this increasing inventory? I mean it must be some of a balancing act there. What's your thought about that for the coming years when it comes to improving turnover? Is it a way forward to actually start to reduce the project bank just to keep the balance sheet lighter?

That's an excellent question. So one of the major challenges for us today is that as we sell more towards the end of the project, we have a lower sales rate in ongoing production at the same time as we're building inventory. And of course, this is tying capital. So this is part of the reason. If we didn't expect to tie any more capital in inventory, maybe it will be enough to just start more projects. But we have to compensate for that. And to compensate for us to get cash flow, well, it's to pay for the land later or not pay for it at all in early stages. And I will get back to this more of the tools that we're using. But we have to think differently than from the past. It creates all other things being equal, we would have a higher capital employed if we don't do anything. So this is part of the reason we have to focus so much on the turnover. But again, the biggest impact on turnover is just starting more units that we don't turn over the land bank faster. That's where we -- that's our main focus, of course. I'm just saying that, that's not enough. And that historically, the JM -- the theme in JM has been if you find land, buy it. it's always good to own land. And that's true if you have excess cash. But now it's been 4 years of recession. We don't have that bag of money anymore to rely on. So we have to be more efficient.

And one more thing about that is shortening the lead times in the regulation process, not only the authorities, we are talking about what they are doing, but we can help them maybe to shorten the lead times with our knowledge. So we have to focus on how can we shorten the lead times in the regulation process. That's also good.

Yes, a follow-up question here.

Just a follow-up on that one. If you were to do more off-balance sheet structure with your land bank, doesn't that mean lower margins for you?

Exactly. So the million-dollar question is where is the right balance? If -- it could be easy if we just park all the land off balance like some competitors have done, then your IRR will be fantastic. But then you sometimes have to buy that land back probably at market price or then you pay a high interest on the financing of the cost and then your margins are gone. But our Board has been wise enough to say you have to have high capital turnover or return on capital employed and a high margin. And that's exactly this balance. That's the million-dollar question right now. Where is the right balance? And I think we have found it going forward, but it is a very tricky question.

Good. Any more questions regarding the balance sheet or any other questions from the floor? No, I've got -- actually, we have a few more minutes, I think. And I got -- if you have -- yes, because I got some interesting questions here from Keivan at SEB. And he speaks about the EBIT margin of 4% for the group in '26. Could you break this down on division? Or is it applied to all divisions? Or can you say anything more breaking it up?

No, we cannot break it down by division. That's the quick answer. No, it is -- of course, we don't want to go with a negative profits in Stockholm, so that has to come up. But we also see challenges both in Finland and Norway going forward on the markets. So this will be a balance. What we see overall is that we can't expect -- and we didn't say 4%, by the way. We said that we will be on the same level as today. And then -- because to indicate on a 1 percentage scale of the margin of the next year, that's very difficult. But we'll be on the same level as today because we have these challenges going forward. We need to get rid of that inventory with low margins, and we need to get more -- the fresh projects out there and start to work those up and then margins will hopefully come back at the end of next year. But we don't want to break it down by business unit.

Yes, yes. Then about the 3,800 unit start target, could you break that down in business-to-business and business to consumer? I guess he means pretty much condominiums, owners apartments and rentals.

No. No, but that's also difficult. It will depend on the market situation and how fast we can convert projects. And so -- and also, that's also will be a forecast 3, 4 years from now or 3 years from now, '28 is 3 years away. So that's very difficult. What we see that we have the land for it. We have the demand for it. And then if it's going to be rental apartments or consumer, that will be decided by the market, I think. But we -- all the underlying factors are there for us to be able to find if Hilde can solve the broadening offering problem for us, then we will reach it. And it's a combination, I would say.

Good. Final question from Keivan then. A question about the staffing. Do you see current staffing level as optimal based on your 3,800 target, I guess? Or are there any changes in that respect? Or is that a later question for coming years?

Yes, it's sort of a later question, but we are following the staff always. And we say that we have staff to start approximately 3,000 -- up to 3,000 units. But after that, we may need some more.

Good. Thanks for that. And now it's time for coffee break. I see everybody really need some coffee here. So we start up at 14:30. [Break]

Excellent. Well, I hope you enjoyed the coffee break and good discussions. Let's start off the next session then. In this session, we have a number of relatively short, like 15 minutes deep dive strategy presentations. So we'll start up here with the first presenter here, Per Lundquist, Director of Operations Development. Welcome on stage, Per.

Good afternoon. I'm pleased to share how we, through operational excellence, will capture margin expansion during the coming years. And today, I want to present the productivity boost. It's a strategic initiative designed to strengthen our financial performance by focusing on the things we control independent of external market conditions. This initiative accelerates our core JM strategy that is transforming us into a fully industrialized housing developer. And this means 3 things: product standardization at scale, reducing complexity and variation, lean design processes, eliminating waste from conception through delivery and optimized production methods, compressing time lines and cost per unit. In an environment where market conditions are still tough, operation efficiency becomes our competitive advantage. The things we are working with are not new. We started this journey more than 20 years ago, building a strong track record of standardization, how we develop houses and working with continuous improvement. In the beginning, we focused on design and purchasing by standardizing how we design our product, we could implement strategic purchasing. Then came a period of process standardization of the full value chain from sales to project management to production. In recent years, we have sharpened our focus on operational efficiency using digitalization as a key enabler to reduce cost and risk. We have digitized many of the administrative parts from design to production, letting our craftsmen consume blueprints, work instruction, quality checklist, et cetera, on smartphones and tablets. This is not unique, but we do it in the exact same way in every project, in every region, in all countries, which gives huge scale effect. And in 2023, we launched an internal design department and so starting to cut cost in the design phase. For those who were with us at our Capital Market Day in Oslo 2019, you might remember we presented an ambitious set of development targets for the coming years. One of the most challenging target was our commitment to radically shorten production lead times by 30%. Many questioned if this was achievable. But this target was grounded in detailed analysis. We mapped our production planning in detail and identified that modern industrialized production methods were substantially underutilized in our operations. That diagnosis pointed to a clear opportunity, and that's what we spent the last years executing on. So I'm very proud that we, since 2019, have reduced our production lead times by more than 30%, corresponding to roughly 140 construction days. And this strengthens our resilience in a tougher market environment. And this improvement has played an important role in offsetting parts of the pressure from higher material and construction costs, helping us to protect margin despite high cost inflation. Some examples. We have successfully shortened our lead times by working with both processes and different building parts of our product. We have shortened our lead time by planning improvements that is space planning and look ahead scheduling to identify resource conflicts early. We have also shortened lead times by using more prefabrication and standardized construction parts. Typical examples are precast concrete elements and roofs. Another example is our internal logistics planning department and the use of consolidation centers to reduce storage and handling time. We deliver construction materials into our partially completed buildings during evenings and nights so to ensure full productivity when the operation starts the next morning. And these are just a few examples. The good news is there are still so much more we can do to further improve. We are now capitalizing on past development. It is helping us when our margins are under pressure. but the productivity boost is forward-looking. It's about accelerating our industrialization by optimizing our product even more, continue to shorten our lead times in design and in production and develop our supply chain to be more similar to other manufacturing industries. In the productivity boost, we have identified great potential in cost savings. Right now, at the end of Q3 or as of today, we have implemented SEK 75,000 in our structural capital in Sweden, SEK 71,000 in Norway and EUR 6,200 in Finland. And by the end of this year, we will reach SEK 100,000 in cost savings in Sweden, the same in Norway and well, same as we have today in Finland. And our target at the end of 2026 next year is SEK 250,000 per unit in Sweden and Norway and EUR 13,000 per unit in Finland. The reason why it differs between Sweden, Norway and Finland is because of construction methods and local regulations. Our target of SEK 250,000 in cost savings per unit will be implemented in our structural capital by the end of 2026 as described in this picture. And with the word structural capital, we mean all design and product instructions, purchasing and logistic instructions, assembly instructions and all description of supporting processes. This means that projects entering their design phase in 2027 will be able to adopt the new design rules and product specifications. However, the resulting effect will not become visible until the end of the production phase, which typically occurs 3 years after the design phase has initiated. Consequently, it takes several years before full impact of our productivity improvements can be realized. The productivity boost gradually strengthens our financial performance from today and forward. As an example, projects that start 2027 and use our updated structural capital are planned to get 3.5% in additional margin improvements when they are ready at the end of 2029. You can also see how projects starting before 2027 will be able to harvest from our productivity improvements when they end. So as an example, a project that end 2027 will get an additional 1% in margin improvement. The productivity boost program supports us to reach our long-term financial targets. This is our tool to reach historical levels during a period where we believe we have modest improvements regarding sale prices. We strongly believe there are so many more opportunities to improve productivity in our industry, and we look at how other industries are working, and we take best practices from the most successful companies that improve their productivity every year. The productivity boost program focused on the many areas where we can make a difference. The program spans 2025 and 2026, but our ambition extends far beyond that. With our structured way of working, we have a unique opportunity to accelerate industrialization of our entire business. We continue to standardize our products and processes while delivering the highest customer satisfaction levels. And we share the tools we find with all our projects in all regions in all countries. And this is what sets JM apart. This is our competitive edge. Thank you.

Thank you, Per. And I think we have the questions later on, but just a reminder to all of you at home and also all of you at the floor that there is a link you can write in your questions or if you want to take them verbally, you can just think about your question and we bring them up later on. Next speaker is Hilde Vatne, which is Business Unit Manager at JM Norway. Welcome up, Hilde. Stage is yours.

Hello, everybody, and let's return to our strategic house. The key initiative broadening the offering supports our growth ambition. The new build residential sector has faced significant challenges for several years, and JM is no exception. Weak market conditions make starting new projects very difficult the last years. The industry is suffering from low demand and declining sales volumes. This is a key issue we will address proactively through sales excellence and broadening the customer offering. And over the next few minutes, I will describe how we plan to address this challenge and what we will do to ensure our business moves forward. At JM, we have built a diversified portfolio of products over the years, tailored to different target groups and offered through various ownership structures. Some products, as Mikael has mentioned, such as senior housing and certain ownership models like selling larger parts of projects to professional investors have so far only been available in one or a few of our regions. In recent years, we have successfully introduced freehold apartments, which is the most common ownership form in Norway across all regions in Sweden. In the same way, we plan to bring concepts like senior housing from Sweden to Norway and Finland, and I will return to and elaborate on this on the next few pages. Today's new housing market is characterized by costs often exceeding revenues, which prevents many projects from being realized in JM and in the market in general. In previous downturns, this issue was partly mitigated by the market itself. Lower interest rates drove higher market prices. However, this time, the situation may be different due to other macroeconomic circumstances. Even though prices are showing some upward movement, we cannot rely solely on the link between falling interest rates and rising prices. Instead, we will, as Per just described, focus on our own costs, which we can control. We take pride in having one of the strongest land portfolios in the Nordic region. Our land bank comprises 36,000 building rights, most of them located in highly attractive areas, close to major cities and well-connected transport hubs. We are committed to continuously expanding this portfolio by securing new plots with significant potential for long-term profitability. And finally, we will do everything we can to win customers and to achieve that, we need the best tools, the strongest expertise and the right organizational setup. We are continuously reviewing our customer systems, websites and the structures behind them to ensure the best possible customer journey and to secure an efficient conversion from prospect to buyer. So we are expanding the use of familiar products and concepts across additional regions to broaden our addressable market. We have taken a deep dive into both external and internal factors such as market demand and demographic trends and conducted a thorough analysis of our products, concepts and tenancy patterns across our locations. Based on this, we have developed a plan to capitalize on existing products and concepts. The goal is to increase market share by utilizing market opportunities and building on what we already know works. We have taken a look at some residential concepts that reveal potential. One example, which I have already mentioned is the senior residences, which have been successful in Sweden, but haven't yet been introduced in Finland or Norway. We have also built a care home in the Stockholm area, and we have now analyzed both the demand and the regulatory framework for care homes in all our countries. Further, we have developed and sold rental buildings in all countries and are exploring how to develop this segment more systematically going forward. Co-living is another emerging trend driven by rising living costs and perhaps as a response to growing social isolation as well. We expect this concept to gain significant momentum in the years ahead. JM is present in major cities, including those with large universities, where there's a clear demand for student residences. We have analyzed both the potential and the regulatory conditions for entering this space. And finally, we're continuously evaluating whether to increase our volume of single-family homes, especially in Finland, where our activity in this segment has been limited in recent years. The demographic change we are facing represents an opportunity for our industry. One of the most evident trends is the aging population across JM's markets. Over the next 50 years, the number of people aged 70 and above is projected to grow by around 70%, reaching approximately 2.5 million individuals in 2075 in Sweden, Finland and Norway. For 35 years, we have successfully built senior residences in Sweden. Even in a market with a generally low demand, senior apartments attract strong interest. And this project has already been mentioned today. It's Lilla Södergatan in Lund, which demonstrates this demand in practice. The project was launched recently, and we have so far, I think, sold 25 of 29 apartments sales started in an otherwise very weak new build housing market. Right now, we are looking into concrete opportunities for senior residences in Tuusula in Finland and [indiscernible] Oslo municipality in Norway. Realizing senior housing projects in Finland and Norway within the next few years will unlock significant growth opportunities and should strengthen our presence in these countries. By expanding JM's current customer offerings within regions where we already have a strong presence, we project based on external market data and analysis that our addressable market could grow up to 30%. The most significant upside is in the rental segment, which represent a high growth opportunity, while the senior segment also offers substantial potential for long-term value creation. The broadened customer offering allows for an increase in construction starts beyond growth in line with the market. Capturing a small part of the projected 30% increase in our addressable market will enable us to reach our target of 3,800 construction starts in 2028. From 2028, a 4% growth is projected. Summarized, our plan is to grow the core business in line with or ahead of market growth. We will drive additional growth by expanding our addressable markets through broadening current projects to known regions. Our priority is developing senior housing in Norway and Finland, meeting the demand from the aging population and explore additional opportunities in the rental market, and we are evaluating potential expansion within the B2B segment. Thank you.

Thank you. Thanks for that, Hilde. And the next person up for a second time here is Tobias Bjurling, CFO, speak a little bit about optimizing building rights portfolio. Good. The stage is yours, Tobias. Thank you.

Yes. So I will dig a bit deeper into the strategic initiative of optimizing the building rights portfolio. Of course, this is just a part of a more active portfolio management that you can expect to see from JM in the future. At JM, we have always been good. It has been and maybe -- might be the most important strength that we've had that we have been really good at finding the best land at the right price. This has always been a key strength of JM. And we have bought land and we have developed it over time and thereby gaining value to get fantastic profits later on in the future. But often, the land that we have bought has been sitting on the balance sheet for some time. And this has been an excellent strategy as long as we had the excess cash. But now as I said before, we had 4 years of recession. So we need to think differently, need to work differently. And at JM, we have SEK 7.5 billion tied up in the balance sheet for land. And also over SEK 5 billion in surplus values that is also tied up in the land. And much of this value is tied up in early stages, but we have quite a long ways to go before we can get to the building permit and then we can start the project. So it's not only that we are tying up capital in the balance sheet. It is also that we are tying up future profits in the balance sheet. And the main task as a housing developer is, of course, to develop this faster. And Mikael has talked about this much today, how can we do the zoning faster. And the best and biggest way to influence this is, of course, to get those 3,800 starts as rapidly as we can. That's the major impact. But we also have to work differently with our ongoing -- what we already have on the balance sheet. So we have put together a small toolbox that we have rolled out in all our business units on how to work and we're trying to learn from each other and share experiences on how to optimize the building rights portfolio. And I mean, these are not unique things. This is something that most developers are working on, but they're quite new to JM. We haven't always thought this way. And -- but through our fantastic organization, and this is another thing about JM, when we say something at JM, we also do it. So I've only been there for 2 years, and I see a dramatic change in how we operate in both procurement of land and development of land and actually sales of land. So the first thing is to trade land, and this can be a double bonus actually. And we have identified land that is nonstrategic to JM that might be strategic to others. And so we're working on -- well, that could be because the demographics have changed or it could be that the zoning is not going in the way we intended it to. But if it is a logistics site we wanted to make into housing, that has proven difficult. It will take some time. That could be very valuable as logistics. That could also be that we have other developers that are focusing more on the long term. So that might be a strategic fit for others. So let's trade. And also, even if we have some really good land, but we see that the zoning is not -- hasn't come that far. And we -- maybe we can trade it for some other land with maybe lower profits, but where we can start tomorrow and get a much better IRR from that piece of land. And then come back to your question, where is the trade-off because we can't give away too much profits. So it's really this trade-off on -- define the optimal land. But we have identified some cases, and we hope to be able to proceed with those in the near future. So we would have -- might have a lower margin, but a higher IRR, and that will help to improve our return on capital employed. We also are working -- and this is -- actually, we have been working with this. We have some really good cases where we found alternative financing solutions. For example, at Täby Park, we're working together with partners in JV setups so that we don't tie up all the land on our balance sheet from day 1. We are also working actively to find external financers to share the risk, but also again, that would share the profit. So the key is, of course, again, to find the right balance. Also, we're working with external financers. But we are also working really hard to find favorable payment terms. Maybe we can find a new land where we actually would pay later at a slightly higher price, and that will benefit us. Because we still need to invest in new land. You might ask yourself, so you have 36,000 building rights and you're starting 2,200 units every year, why do you need more land? Well, we don't need more land perhaps, but we need new land. We need to replenish the land bank always, always. It's like any inventory. The other thing that we have done successfully is to convert consumer projects into rental projects for investors. And I must say I'm quite impressed with the operations that we have in Finland. They have been working with this for some time and developed some really good skills because we shouldn't be able to do this with maintaining a good margin because since -- if you find an investment early stage, you don't have any sales risk. But we have managed to do this by having the best product and the best location for this kind of product. And then you get a good price because it's worth it. So we have been successful in Finland with doing this at high volumes and decent margins. We have also done it in Sweden and in Norway. But here is also where we can expand and do more of this. We should be able to find more projects we can convert from consumer to rental projects. And again, if you do this, the margins are likely to be lower than in the consumer projects. But if you could do it at a high speed with a good turnover, it might be a good idea. And the next thing which has always been -- almost been forbidden is actually to sell land. And this -- of course, we -- and again, we have identified nonstrategic land that we should sell regardless of the market, but it might also be a good idea to sell a land that is actually -- would be a good project, but in the future. If the zoning will take 10 years, you need a really high margin on that project for it to be worthwhile to keep on your balance sheet. So you can expect that we will be more active also in sales of land, not huge volumes, but to be more active on this to be able to tweak the capital turnover rate. Because if we look at this, and again, the main factor, the most important thing for us to get the capital turnover rate that we need to get the 20% return on capital employed is to start more projects. And that's where we need to be successful. But what we're saying here is that's actually not enough. Even if we have 3,800 starts in 2028, we need to be working more actively with our land bank so that we can grow without growing the land bank. And hopefully, we will see even higher relationship between off-balance and on-balance building rights. But we're also quite confident that we can reach this because we are skilled at this. So the key takeaways from this session is, yes, we have a lot of land tied up in the current building rights portfolio and also much surplus values that we need, we would like to enjoy earlier. So increasing the capital turnover is essential for us to reach our targets. And we will be working more actively in achieving this by optimizing the building rights portfolio.

Great. Thank you, Tobias. Good. Well, next on stage is Johanna Wikander, Group Head of Sustainability. Welcome, Johanna. Stage is yours.

Thank you. Sustainability and profitable sustainability is 1 of 4 target areas in our strategy. We firmly believe that integrating sustainability in what we offer to the market and our customers strengthen and continue to position JM as a leading housing developer in the Nordics. It makes our homes attractive to private customers. Our sustainable homes can also provide our private customers with the possibilities for green loans. We are a more attractive company for value-driven employees, strengthening our ability to recruit core competencies. JM's focus on profitable sustainability and our structural capital makes us proactive and highly adaptive in meeting new regulations, which gives us a competitive advantage. Several directives and regulations such as the Energy Performance of Buildings Directive, which includes requirements on climate are being implemented in our markets. Through our structural capital, we can secure that we effectively meet current and new demands on energy efficiency and coming requirements related to climate. CSRD for reporting on sustainability will increase transparency in reporting, which brings opportunities for JM in communicating to the market our ambitious targets and our performance. We also experienced in several of our prioritized local markets that the municipalities are declaring ambitious sustainability and climate-related targets in relation to new construction of buildings. Last but not least, we experienced interest from the financial sector and investors in what JM can offer related to sustainability, and it enhances the attractiveness of our stock. Being customer-focused and to assure a strong enabler in delivering sustainable homes, JM certified all our self-operated housing units in accordance with the Nordic Swan Ecolabel criteria. In December 2024, we were the first being an approved basic licensee in Sweden, Norway and Finland according to the Nordic Swan Ecolabel Generation 4 criteria, introducing not only new criteria but also stricter criterias. And all our projects will implement the new criteria, which also facilitates reporting in accordance with the EU taxonomy. Being an approved basic licensee means that we successfully have implemented the requirements in our products, process and project execution, ensuring an efficient implementation of the criteria in all our projects. And our homes certified with the Nordic Swan Ecolabel, they are energy efficient. They promote climate mitigation and climate adaptation. They have a healthy indoor environment and promotes biodiversity and waste management. Building on the foundation provided by the Nordic Swan Ecolabel, our strategic initiative focused on our climate road map. We have defined a target of reducing our project's carbon footprint per gross floor area with 85% by 2030. This is one of the most ambitious climate reduction targets in our sector in the Nordics. And we define this target as we firmly believe that an ambitious agenda on climate will help us keep our leading position in the market. We started our journey already ahead of the industry with a baseline of 336 kilo CO2 per gross floor area compared to the mean carbon footprint for multifamily houses in Sweden assessed to approximately 358 kilo CO2 per gross floor area in accordance with the Swedish National Board of Housing. This favorable starting point, we can relate to our structural capital and project execution, which secures but also drives efficiency. In the last year, we have also defined the baseline for Norway and Finland to include all our markets in our road map. And as you can see, we have had a good progress so far year-on-year, reducing our footprint in Swedish project with 17% between the years '22 and '24, which in kilo CO2 per gross for area equals a result of 279 kilos, which is actually below the defined target for the year. However, to meet our 2030 target, we need to further analyze opportunities within every building component and category and further develop our process and methods. But we're also dependent on acceleration of innovation in our value chain, providing us with solutions ready to be on the market in a rather short time frame. Important is that our climate road map is fact-based. We do carbon calculations of all our projects to enable fact-based priorities and decisions. As shown in the graphics, which are based on our baseline on emissions from projects, the vast majority of carbon emissions are related to materials. It is also clear that the concrete is the material with the largest carbon footprint. And consequently, we also know which building categories and components carries the largest footprint. And based on this analysis, we have and are focusing on resource efficiency by streamlining quantities of materials used and of course, concrete in particular, the use of the right concrete class for the intended application and the use of low-emission concrete. This has provided results. And as you can see in the previous slide, we have reduced our footprint year-on-year '23 and '24. And consequently, we have also lowered the footprint related to concrete from 60% towards 50%. And with our structural capital and project execution, we can go far. But when the market conditions are favorable, it provides us with business opportunity to go even further. The city of Uppsala has one of the most ambitious targets and requirements in Sweden on carbon reduction for new construction. As a developer, to be part of the development of the area at Rosendal, you have to meet these very ambitious targets translated to requirements when the city allocates land. And we can meet these requirements, making use of our current standardized product and process, which also have room for flexibilities. Our project Bonica and Rosendal reduced their carbon budget to 200 kilo per gross floor area by using our structural capital. And this ambition was reached due to, as I mentioned previously, resource efficiency is key. And in Bonica, we succeeded in streamlining quantities of concrete and the use of concrete plus. The key to those results was a close collaboration with our supplier of concrete and with our building designer. The project will also use low-emission concrete with even further reduced carbon footprint, and the building has a wooden facade and roofing construction in wood. But as already been said, we can achieve a lot, but we're also dependent on innovation in our value chain to reach our 2030 target. As a leading housing developer in the Nordics, we have the opportunity to influence and accelerate innovation within our supply chain. We're actively searching for new solutions to bring us further on our journey, solutions that are close to market introduction. We're unique in being a housing developer with the level of structural capital we have, and this drives efficiency but also provides us with opportunity to implement new innovative solutions tested in pilot projects on a large scale faster than others in our industry. This makes us an attractive partner for innovative suppliers that wish to enter the construction industry, which typically due to its project-focused nature, has challenges in implementing innovation. And we have 2 examples of innovative solutions related to our prioritized materials. JM and Cemvision have entered into a strategic partnership, and we have together with Cemvision started to pilot test their product. As already stated, the production of materials and concrete, in particular, constitutes a significant part of the construction industries and JM's carbon footprint. Approximately 90% of the emissions produced in concrete relates to cement. Cemvision's technology enables the production of cement on an industrial scale using recycled industrial waste from, among other things, the mining and the steel industries, while fossil-free energy is used in the production process. This provides an opportunity to reduce the carbon footprint from cement with up to 95% compared to traditional cement. JM also has a partnership with the innovative Made of Air and their products can make use of biochar in building materials. And we have recently started to pilot test a facade material, and this offers an opportunity to convert facades into carbon sinks. So to summarize, our structural capital and project execution and working with continual improvement in combination with an active agenda on innovation delivers results and profitable sustainability. Thank you.

Well, thanks, Johanna. A good presentation here. And now it's time for Mikael Åslund to come up on stage here for a brief summary of today's presentations and topics. Thank you.

I want to repeat this picture that I showed you in the beginning today. JM has a strong foundation with skilled employees in all the phases. We have seen some challenging years behind us, but we are doing the things that we can have an impact on. We are doing actions both for the short term and for the long term. We see that the market forecasts are more optimistic. We are close to the end of the 4-year recession, hopefully and probably and that's great. But we won't rely on the market coming back. So we are doing what we can have an impact on. And recently now, you heard about the initiatives, some of the initiatives that we are working with to improve our profitability. If we start with the productivity boost, we are working to find SEK 250,000 in cost savings. It's not easy for any company, but we are using all our employees to find this. And we see that it works. Per told you that we have already implemented SEK 70,000, and that will help us a little in the short term, but more in the long term. Then we heard about broadening offerings, offers that we know works in some areas and some locations and some countries. We have the structural capital. We want to use this to find new customers in new markets or the markets where we are today. Then we heard about the optimizing of the building rights portfolio, which will help us be financially stronger and probably find business opportunities in the future that will help us. And finally, Johanna told us about fact-based climate road map. What we are doing to reducing the carbon dioxide emissions, we are working with it. We are succeeding with it. We have to have help from innovations. It both helps the world, and it also improves our customer offer, I think, because the customers are expecting us to handle this situation, be more and reduce the carbon dioxide emissions. All these initiatives are important for us regardless of how the market is working. And all this will help us to be more competitive and resilient and reach our financial targets. Thank you for listening. I think it's time for some Q&As now before the end this afternoon.

Exactly. You're absolutely correct. Well, if -- let's do the final Q&A session. If please all the entire team here, presenters come up on stage. And as I said, just either raise your hand when it's time for your questions or you click the link and just write your questions. And I will try to bring up as many questions as possible for the JM team here. Great. Well, let's start off. Do we have any questions from -- one question from the floor.

I have a question regarding the way that you look at your building rights portfolio and how that connects to your growth ambitions. Given the, well, 36-odd-something thousand building rights, how are they aligned with your future target of moving into different areas for JM because historically, TOA has obviously been the majority of the land bank.

Yes. We think we have a great portfolio. But historically, it has been mostly TOAs. These days, we are building more rentals, and we can convert some of the buildings and the building rights to rentals and other new projects. But I think we also have to and want to buy new projects for new customers or new offers and maybe also sell some land in some locations and buy land in other locations. So that's why we're working with the optimizing of the building rights portfolio to have the right land in the right places. But the amount of land is pretty good to have -- we have a solid land bank.

Yes. Actually, if you don't have any follow-up questions on the floor, I have a follow-up question on that. Would forward finance or forward purchase deals of kind of rental properties, would that be a possibility going forward to reduce the balance sheet and perhaps have a more efficient land bank?

Can you repeat the first part of the question?

Yes. If like forward purchase or forward finance would be a possibility of kind of rental properties as a means to reduce the weight of the balance sheet?

It may be one of the tools in alternative financing. But we're looking into actually any and every way to offload the balance sheet. But it always comes back to the cost and the price for any kind of financial structures. And we do have interest from international investors and so on, but they usually require quite a high yield on their investment. And then it's oftentimes better for us to just develop ourselves. So we need to find the right partner at the right time for the right price.

Yes, exactly. So -- and I mean that includes also discussions when it comes to JVs or other type of cooperations.

Yes, yes.

Good. Another question. Yes, excellent.

A follow-up. A question on the cost savings, which you have guided for. Obviously, you stated that James misses on its cost and you've been in operations for [ 80 ] years, as you can see on stage. What is new this time around that you can actually make this cost? And also how easy is it to move this and the kind of knowledge between Norway and Sweden? Perhaps also Hilde kind of influence you know very much about the debate going on in Norway about the difference in building costs between Sweden and Norway. And how is this actually going to be in practical? And where do you see the cost savings going forward?

Perhaps I can start. We've been doing this for more than 20 years, trying to standardize. But I would say that now we are going to the next level, looking at how our industries are working with modularizations, creating and not having so many variations. For instance, if we look at the specific building part, we could have 30 or 40 variations, which is not necessary. We go down to perhaps 10 variations, and we can use that in a modular way to be flexible for the customer. So we are reducing the variations in our product without decreasing customer satisfaction levels. And it's a huge potential. We haven't needed to do that earlier, to be honest. But now we are forced and we see that it works. So by just examining our product, our processes, reducing waste, eliminating different variations, we save lots of cost. Next question is how can we then get this to work in all our regions and all our countries. And yes, that can be a challenge, both to -- due to local regulations, culture, the way -- how we build things are -- differs between the markets. But I would say that we have now a very clear strategy where we go towards industrialization, even more standardization. So that is the only way to address our challenges. Perhaps you can comment also how you in Norway take on this challenge.

Yes. It's -- actually, it's 2 different problems or questions. It's about decreasing the production cost in general, which we are working on, on the group level. And then we have a national cost level in Norway. And there has been some reports lately from [indiscernible], which I think you referred to, which shows that it costs SEK 18,000 more to build a square meter in Norway than in Sweden. So that we are working on politically to get the regulations down in Norway because I think it's quite possible to live in a Swedish built home. So we don't need those surplus demands in Norwegian regulations.

Yes. And I also have a follow-up question there regarding the cost structure and standardization of production. And in that in relation to customer satisfaction of the product, so to say. I mean you also say that the micro location is very important that you need to produce in attractive locations. Is there a risk that you end up with a 2 standardized production, which make the product dull in an attractive location because you pay a lot for new apartments and you expect perhaps something extra. Is that a risk? Or how do you see that balance?

I think we can balance that because what we are trying to reduce is all the variations behind the scenes that the customer doesn't see or notice at all. Why do we need to have 30 different types of windows? The customers have no clue if we go to 10 windows or 8 type of variations when it comes to windows. So I think by always having the customer in focus, we can definitely reduce the cost for producing our products. But this starts in the product development and in the category purchasing process very, very early in our projects.

Yes. And we also have a follow-up question from the audience here via the link. Nick from Nicklas. Is the cost saving of SEK 250,000 per unit until '26, a steady state? Or is there even higher potential going forward?

It's higher. We have already identified higher potential. But the target for 2026 is SEK 250,000. We will have a new target for 2027 for sure.

But we have to know that it's 2 parts. First, we want to find the cost savings. And after that, we have to implement them and then following them and see them in the income statement. So it's a lot of work to make it happen, but there is more to find there.

And also, it takes time until the cost savings materialize in the margins since we have the project lead times of almost 3 years from design to production ends.

Yes, yes, exactly.

I think this is kind of telling for our business. This is not the most efficient business on the planet. So there's huge potential. What we are doing, this is not rocket science. This is not AI. This is just taking away waste, the waste. And doing things right for the first.

A follow-up question. Why has productivity growth been so low within this business for the last 50 years?

What has been the price increases over the past [ 50 ] years? We haven't had to work with these issues. Prices go up 10% per year, why should I worry about 1% on cost? So...

It's all about interest rates. Good, good. Well, any more questions regarding this, regarding costs or productivity or so on? I have a short-term -- more short-term question or we call it from Emil. Is JM on track to have more building start for '25 compared to '24? So this is very short term.

Yes, we are. Our goal is to start more this year than we did last year. And we still think that we will do that. It's only 1 month left. Hopefully, we have to hurry up.

Excellent. Well, any more from the floor here? Any more?

Can I just clarify one thing? I got a question during the coffee break. Regarding the guidance that we've given on the margins and that we said that we will have the same margin in the housing business. The guidance is that, yes, this year, we have had profits coming from the property development office profits. But we also had write-downs in -- particularly in the Stockholm region. And these 2 balance each other. So the guidance is that we will have overall relatively the same margin as we had in rolling 12 months in 2025, also in 2026, so that you don't misread that.

Well, I've got a question more of a kind of a broader perspective, perhaps to you, Mikael. I mean when it comes -- because in all presentation, what comes up on and on pretty much is the project start, the operating margin and the turnover of capital. I also saw a slide here from Tobias where on the base case when it comes to turnover, the return on capital employed was 11%. And with the improvement, it ended up towards the target of 20%. So that's quite a lot. That's almost half, like 45% or something of return on capital employed. Is the capital turnover the absolute core issue here or compared to the other 3 kind of issues with project starting and operating margin, is capital turnover the absolute most important part you're looking for now? Or what's the -- how are we steering the business?

It's one of the most important parts. But the most important for us now is to do some cost savings for now on and for the future. It's to increase the profitability. That's the most important part for us. And to increase the profitability, we have to increase the margins. We have to reduce the costs, and we have to increase the capital turnover. So it's important, but not only -- or the most important thing, I can say. It's important, but you have to handle 2 things at a time. Without -- and all this, we have to do it without reducing the customer quality. Some of you were talking about -- you asked us about the standardization. Is that a problem in better locations? I don't think it is a problem. The answer was very good. It's sort of like small LEGO parts that we are using to put things together to different kind of products, very expensive and attractive products with high quality and more cheaper products, but still with quality when it comes to sustainability and stuff like that.

Absolutely. Well, I have another question as well if you don't have anything on the floor, which is more related to sustainability. And that is the sustainability work you have with the focus on CO2 reductions and so on. How is that supporting the growth agenda for JM overall and creating a more attractive product? How is that plan looking?

Well, as I started, our sustainability work is, of course, comes from what we see that our different stakeholders value in what JM how we operate. But also what I think I mentioned in -- when I spoke is that the key to sustainability is resource efficiency. And of course, resource efficient -- resource efficiency cuts costs. And so that is one-to-one relation almost.

You create a more attractive product with lower running costs basically based on the work and a more efficient.

Yes, more efficient, more attractive company, and that's part of cutting costs and being more resource efficient. Of course, so that is how sustainability supports what we're doing and what Per was talking about as well.

Exactly.

And it helps us to buy more land because the municipalities expect this from us or want it. So it's great for us when it comes to buy land. Bonica is one of this.

Unica is one example. We see that in several of our local markets or in our markets. We also see that in Gothenburg and in Malmö coming as well, so yes.

You become a more attractive partner to the local municipals.

Yes, for sure.

And also the customers love it. We are talking a lot about cutting carbon dioxide emissions, but also if the energy consumption is lower, then it's cheaper for the customers to live in newly produced homes from JM. And then we can -- they can pay more for it. So it's good both to the municipalities and for the customers if we work with this in an efficient way.

Yes, absolutely. And that is -- do you see any difference in this respect when it comes to the business-to-business versus business to consumers, the rentals versus the condominiums? Is it -- is this more of a focus on -- for rental projects than on condominiums? Or how is your view at the preferences among the end consumer?

I think the investors are more willing to pay for it than the consumers today, especially in weaker times or challenging times. I think some of you buy cheaper food the last 2 years than you did 5 years ahead. So the investors are more willing to pay for it, but the consumers are also willing to pay for it and expect a good product.

Exactly. Thanks. Well, yes, one more question here.

Two questions on the debt target that you implemented. First, 50%. Why is that -- why is it 50%? Why is it isn't 40% or 60% or some other figure? Is that a covenant or just your feeling of where debt should be on a maximum level? And then secondly, on the same theme, you talked about sort of higher inventory on a normalized basis going forward, given where consumers are and they're buying later in the sort of project phases. Where do you think JM will be on a normalized basis in terms of leverage?

Well, the debt -- now this is, of course, a Board question why they set this target. But if you have this debt level, it indicates that we shouldn't increase our debt situation from today. We are at 0.4 at the end of the quarter. So the indication is that we should not be a borrowing company. We should buy land, finance new land with our own money. So I guess that's the indication that you're getting from the Board on that case. Why it's 0.5 or 0.4? You can argue that. But it is also an indication that we should not borrow money to give dividends. That would not be possible with this leverage that we have today. Yes, we will probably have more inventory on the balance sheet of completed unsold units. But it's not dramatic. It's much less than we have today. And already today, we are sufficient. We will -- we have positive cash flow in the third quarter. So we should expect this to come down, but to expect that it will be 0 again like it was in the good years, that's probably not the case. And then we -- what we can see is that probably just by calculating, we'll have maybe SEK 200 million on the balance sheet just on a normalized basis, given the sales pattern that we see. Then depending on the price levels and so on, maybe we can cut it further, but it's difficult to go below 100 because then that's what we need is to show apartments. So I'm not talking about a substantial amount here, but it's not irrelevant either.

Just a quick question. I mean, you've very prudently shown what you -- what JM can do and the initiatives to support higher profitability going forward and reduce costs. At the same time, you also say that you cannot rely on the sort of market to recover, while the graphs in the earlier indicated that most economic estimators sort of think the market will recover with 4% to 6% given the, well, stronger outlook for the economy. Would it be fair to assume that JM would also be supported, although with lead times on your profitability already end of next year if prices are to develop in the same way as estimators 4% to 6%? Or is it more a tilt into '27 also with the delays?

If the prices increase rapidly, then it will help us, of course, because then we can sell more and the price is increasing, but we can't rely on it. And therefore, we are doing everything we can to handle the situation, even if it's -- everything looks that it's going to be better in the following years. Because 4 years ago, I also think that everybody thought that it will only take 1 or 2 years before we're back to normal. And we have said that every year almost. So we have to do what we can handle. And if the market is coming back faster and more rapidly, that's good for us. So we'll see.

But it's difficult to have a major impact on the '26 because most of that, the price is already set. although here is an upside actually on the inventory. If we see rapid price increases, we can increase prices on what we have bought back. But everything in production, we have already set the price for. So it's really difficult to affect the price on what's ongoing production, especially for Sweden, I would say. And if we have rental projects in Finland, the price is already set also. So -- but then we see probably a bigger positive impact at the end of '26 and through '27, but it's not a major impact if prices come up.

So is it prudent to expect JM to sort of perform in line with the market? Or will mix factors, which you also elaborate a little bit on more rentals, et cetera, and maybe a slightly weaker Finland and Norway compared with peers? But is it still prudent for you to sort of perform in line with the market and not underperform going forward?

We have 2 Swedish peers that have been giving quite positive outlooks for next year. It will be difficult for us to have the same margin level as they are forecasting. But overall, we should perform better. Long term, we should perform better than the market.

And some of the competitors out there have done massive write-downs. We talked about this later. And that's -- of course, that has an impact on the margins in the short term. We haven't done that.

Good. Well, I got one question here for Tobias. I can read it. This is a little bit detailed, but let's read it and see if we can answer it here. You indicated that you need to be at 6% selling expenses versus revenues. This implies 3% to 3.5% potential to the margin from higher volumes. And then you need some 4% to 5% higher margin on project level due to higher productivity. Is this correct to start with?

Well, yes and no, the margin from overheads is also a dilution when you're going -- when -- you dilute the numbers when you go up in volumes. So in absolute numbers, probably not 100% accurate. But yes, we need more volumes to have lower overheads in percentage, yes. That is part of it. Getting the volumes up is part of the equation.

Also, is the margin in new start in Q4 and in '26 in line with that if apartments are sold at expected prices and built at expected costs? Is the same margin in '26? Is it applicable on '26 pretty much?

No, the margins in new products is much higher. That's what I tried to show in one of the slides. But those margins will not come in '26, they will come in '27 and on.

Okay. Yes. Thank you. Well, if we don't have any more questions from the floor, I've got one more question. I take mine. When we speak about new -- tapping new submarkets and tapping new types of demand, so to say, we see -- I mean, we have -- in the Nordics, we have a quickly aging population and so on. When it comes to senior houses, how is that market? And how is the -- what is the demand and what is the ability to pay among that age group?

I think the market segment is growing naturally and elderly people, especially or the older people, the senior segment has to be careful here, has a lot of savings in Sweden are special there, but we also have good economy, private economy in our adults here in Norway. So I think the ability to pay is good. And I think that supports the belief in this senior segment. So I don't think that should be any difficulties with getting paid for the apartments.

And even if that doesn't sound like a lot of the seniors are pretty wealthy in the Nordics. So they expect quality. And we see that, for example, in Lilla Tvärgatan, they are ready to pay more for a senior housing offer with some qualities that's not included when it comes to ordinary tenant owner associations.

Have you standardized the product for seniors?

Yes.

Is there any differences? Do you see any cultural differences or preference differences and so on between the Nordic capitals?

No, I don't think there are any differences. And the product is not really so different from an ordinary product. We have to plan for some meeting places on social interaction, et cetera, and they may -- we need some common areas. But apart from that, it's very like our ordinary apartments. It's about communication and making a concept and bringing it to the market in the right form.

One more question.

Just a question on your land bank. So historically, and you don't have to go too far back, say, the last 5 years, what's the ratio of your projects which have been developed on land, which you bought from the municipality as opposed to land that you bought in the private market? And how do you see this ratio going forward?

A couple of years ago, the ratio from the municipalities was slightly higher than from the private market. It differs these days how the municipalities is handling the market situation. In some municipalities, they don't sell to market price. And therefore, you can't buy land in some municipalities because the price are too high. They say the price -- the price on land that was in '22 is the same price now, but it's not like that because of the inflation. But on the private market, there is more sort of a market price on land. So therefore, it's more possible for us to buy land from private owners these days than from some municipalities. But other municipalities are working with market prices, and then we can go in there in this. So one city or town is [indiscernible] who have reduced the prices on land to continue to build during the recessions, and it works. We bought land in Baerum 2 years ago. We started the project 1 year ago, but other municipalities doesn't do that. But we'll see. It depends on how the municipalities will handle this in the future and what will happen on the market. I don't know exactly the percentage, and we haven't released the percentage exactly.

I'm just wondering, is it logical to assume that if you have a higher turnover of your land bank, a higher capital turnover, as you guys talked about, then you will see more transactions from the private sector using land -- more land from the private sector as opposed to from the municipalities.

It's a possibility, but it depends on how the municipality is handling the situation. So we'll see what will happen in the future. We are ready to buy from both private investors and municipalities.

Good. Well, if we don't have any more questions from the floor, I think we can give the panel a hand. Thank you. Thanks. And then I think we are approaching the end of the Capital Markets Day. And some closing remarks from Mikael and after that, some networking at the bar.

And I will do them very short, the closing remarks. You have heard about the challenging market that we are facing today, but the forecasts are optimistic, and we think that there will be a better future. We are focusing on what we can influence. We have the right land bank or a great land bank. We have the most skilled employees that is in the business today, and we are forward leaning. So I think JM is well positioned in a market that is about to turn around during '26. And I want to thank all of you that you have been here today and this afternoon with us and have asked some great questions. I did also get some questions during the coffee break about the best Christmas carol, but we can take that afterwards, which is the best Christmas carol. Thank you very much for your attendance today.