Magnolia Bostad Quarterly Report Group Jan–March 2015 Q1 January-March 2015 The quarter in brief 1) · Magnolia Bostad wins another and land next to the Märsta com- · Net sales: 19.4 (3.5) three land allocation competi- muter train station where Magno- · Operating profit: 146.1 (–2.6) tions: lia Bostad is planning to build 180 · Profit after tax: 138.7 (–2.9) – Lundbyvassen in Frihamnen, apartments. · Earnings per share: 4.43 (–0.09) Gothenburg: production of a · Magnolia Bostad is allocated · Equity (March 31): 427.2 (187.1) hotel covering 12,000 sqm and an additional block in the devel- · Equity per share: 11.32 (5.98) 150 rental apartments covering opment of the new Bålsta cen- 10,500 sqm. trum, in Håbo Municipality in the Significant events during the – Bålsta centrum in Håbo Munic- northern region of the Greater quarter ipality, in the northern Greater Stockholm area. The total area of · Magnolia Bostad is strengthening Stockholm region: production the project is around 11,000 sqm, its organization and has recruit- of around 200 apartments roughly 140 apartments and a ed twelve employees within the with a total area of around grocery store totaling 3,000 sqm. areas of transactions, finance and 20,800 sqm. · Risto Silander and Andreas marketing. – Oceanhamnen in Helsingborg: Rutili are elected to the Board of · Magnolia Bostad is increasing its production of 109 rental apart- Directors of Magnolia Bostad at ownership in the Mustard Factory ments with a total area of 8,500 the Annual General Meeting on (Senapsfabriken) through acqui- sqm. April 22. sition and a forward contract to · Magnolia Bostad announces its 80.25 percent, and thus is entitled Significant events after the quarter intention to proceed with an initial to 76.30 percent of the profit. · Magnolia Bostad signs an agree- public offering of the company's · Fredrik Lidjan assumes the post ment with SigtunaHem for the shares on Nasdaq First North, of President. He succeeds Andreas acquisition of two properties in with the goal of commencing Rutili, who was elected to the Märsta, Sigtuna Municipality. trade in the share in June 2015. company's Board of Directors at The agreement covers 42 tenant- the Annual General Meeting in owned apartments under con- 1) Information in parentheses refers to April. struction next to Valsta centrum Q1 2014. Key ratios – Group 2015 2014 2014 SEK million March 31 March 31 Dec 31 Sales 19.4 3.5 140.5 Operating profit/loss 146.1 –2.6 47.3 Operating margin (%) 754.4 –74.2 33.7 Profit/loss after financial items 138.7 –2.9 29.8 Net profit/loss for the year 138.7 –2.9 29.2 Cash flow from operating activities 30.9 –16.6 –229.1 Return on equity (%) 45.7 1) –1.6 13.4 Equity/assets ratio (%) 32.4 2) 52.6 32.0 Earnings per share (SEK) 4.43 –0.09 0.95 Number of outstanding shares 31,288,942 31,288,942 31,288,942 Return on capital employed (%) 14.9 –0.5 9.1 Return on total equity (%) 13.9 –0.5 8.7 Interest coverage ratio (multiple) 17.8 –1.6 2.4 Equity per share (SEK) 11.32 3) 5.98 8.10 1) Excluding the minority 2) Including the minority 3) Excluding the minority share Magnolia Bostad | Q1 2015 2 A word from the President Magnolia is now taking the next step in its development I am pleased to report the results ployees will result in lower interest burg and Helsingborg. The projects from my first quarter as President. expenses, improved possibilities further strengthen our project port- The company starts 2015 with for new business and continued folio and play an important role, not a strong quarter and reports an development of Magnolia Bostad's in least because they help solidify operating profit of SEK 146.1 million organization. our already strong reputation in the (–2.6) for the period. Profit after tax country's municipalities. Magnolia was SEK 138.7 million (–2.9). Project portfolio Bostad is now viewed as a natural Over the past few years we have partner and welcome participant Initial public offering built up an attractive project portfo- in land allocation competitions. We We have recently initiated a process lio that is now beginning to gener- are proud of this confidence and that will lead to an initial public of- ate solid profits for the company. we believe it will lead to many new, fering of the Magnolia Bostad share The portfolio currently consists of interesting transactions. on Nasdaq First North. The aim around 5,000 apartments in around of the IPO is to give the company 25 projects. Construction on the ma- Enhanced organization financial strength for continued jority of the projects will be relatively During the quarter we enhanced the growth. evenly distributed over the next organization with twelve new em- three years. ployees within transactions, finance In addition to infusing new capital and marketing. It will be exciting to into Magnolia Bostad, an IPO is also During the first few months of the continue to develop Magnolia Bos- a sign of quality. The increase in year, we have won no less than three tad's organization, which is already credibility that the company gains land allocation competitions – in strong and contains some of the among credit institutions, munici- Bålsta in the northern part of the industry's best forces. palities and potential future em- Greater Stockholm region, Gothen- Well-equipped for growth I have followed Magnolia Bostad since it was founded, first as a member of the Board of its par- ent company and a member of its investment committee, and later in my role to develop its rental apart- ment business, and now as the President since March. The company is well-equipped for future growth, with a healthy balance sheet, a competent organization and a well- stocked, attractive project portfolio that has an appropriate balance of risks. I am pleased to have the privilege of leading Magnolia Bostad now that, with the listing on Nasdaq First North, we are starting a new chapter in the company's history. The listing is the next natural step in Magnolia Bostad's development. Stockholm in May 2015 Fredrik Lidjan President Magnolia Bostad's President Fredrik Lidjan. Magnolia Bostad | Q1 2015 3 Residential projects Oceanhamnen Helsingborg Oceanhamnen at the entrance to Helsingborg's harbor has a spectacular location looking out over Öresund, and it is only a mere stone's throw from the central train station. A new neighborhood is being planned for this area, with apartments, offices, restaurants and stores close to the water. The project places considerable focus on the environment and sus- tainability, with well thought-out material choices and smart techno- logical solutions. In order decrease Project info Location: Helsingborg the need for a car, the area will Type of ownership: Rental offer both a car sharing and a bike Total area: 8,500 sqm sharing service, and the buildings Number of apartments: will be equipped with schedules 109 that show the departures of nearby Architect: Link Arkitektur public transportation in real time. and Batteriið Arkitekter Magnolia Bostad | Q1 2015 4 Market and the organization Market trends has fallen steadily since 2008. owned apartments increased by 5 Today's investment market is char- This development shows that the percent, the Greater Gothenburg acterized by considerable demand residential sector is judged to be area by 11 percent and the Greater for newly constructed apartments. a stable investment sector facing Malmö area by 3 percent. According to a report published low risks. According to NAI Svefa by the National Board of Housing, Analys, the direct return require- Changes to the organization Building and Planning in March, ment for centrally located residen- Erik Rune took over as CFO in Feb- more than 70,000 apartments will tial units in Stockholm, Gothen- ruary. He has considerable expe- need to be built every year in the burg and Malmö during Q1 2015 is rience in the real estate industry. next few years, compared to the estimated to be 1.50 percent, 2.25 Erik comes most recently from a most recent years’ production of percent and 2.75 percent, respec- position as CFO in the Nordic region less than 30,000 new homes a year. tively. within CBRE Global Investors. Before that he was the President of The macroeconomic situation is According to Statistics Sweden, the Nordic operations for London & also beneficial, with the economy growth of rents for newly con- Regional Properties. experiencing good growth and structed apartment buildings in households and companies in Sweden is showing an increase In March, Fredrik Lidjan took over Sweden taking a positive approach of 10 percent during the period as President of Magnolia Bostad. to the future. Low inflation has re- 2009–2013. Since the introduction He was previously responsible for sulted in record-low interest rates, of presumptive rents between 2006 rental apartment development which further increases demand as and 2013, average rent increased by within the company, and before well as our possibilities for securing 32 percent from SEK 1,211/sqm to this he was active in the owner's good, cost-efficient financing. SEK 1,602/sqm. Board of Directors and the compa- ny's investment committee. Fredrik The liquidity in the property market Lidjan's predecessor, Andreas Rutili, continues to increase. In 2014, the Tenant-owned apartments was elected the Board of Directors total transaction volume in Swe- Apartment prices in Sweden's at Magnolia Bostad's Annual Gen- den was SEK 158 billion, which is a metropolitan areas continued to in- eral Meeting in April to.