Thank you. Good morning, everyone.

Welcome to our Q1 2026 earnings call. Our CEO, Kruno Crepulja, and our CFO, David Dreyfus, will walk you through our presentation and give you an update on our current business performance and our outlook.

As usual, this will be followed by a Q&A session. With this, I would like to hand over directly to Kruno.

Hello everyone, and thank you for joining our Q1 earnings call. Looking at the overall picture, I think it's fair to say that we have had a solid start to the year.

The first quarter is traditionally marked by weaker seasonality, and the conflict in the Middle East has certainly had a negative short-term impact, which should not come as a surprise. A key achievement was the good progress we made in institutional deals.

This gives us confidence that the recovery in demand remains on track. In our retail business, January and February are generally quiet months following a very busy year-end period.

The recovery in demand during March and April was affected by increased uncertainty, although this has already begun to normalize again. One key aspect worth highlighting is that the leading indicators of underlying demand have shown a steady year-on-year improvement, even though the conversion rate in March and April was lower.

Nevertheless, the high level of reservations gives us confidence that there will be catch-up effects once geopolitical tensions ease. Sentiment has already started to improve somewhat.

In the coming months, we also expect an additional boost from the planned sales starts of new projects. In our institutional business, we have made very good progress.

At this relatively early stage of the year, we are in advanced negotiations for two deals with a total volume of approximately €80 million. We expect these transactions to be signed shortly, which would already represent an important milestone toward our full-year sales target.

We are also in discussions regarding further institutional transactions. Overall, this positive momentum reinforces our confidence that despite short-term disruptions, the recovery in demand is continuing.

Another area impacted by the Middle East crisis is construction costs. The rise in crude oil prices is, of course, having an impact on certain oil-based and energy-intensive building materials.

Nevertheless, we remain confident that we will stay well within our overall cost budgets for 2026. This is supported by prudent cost assumptions and clearly by our strong market position.

Let us now take a brief look at our financial KPIs for the first quarter of 2026. Adjusted revenues amounted to €79.3 million.

The colder than usual winter had a negative impact on construction output, but we expect this to be caught up in the coming months. We anticipate significantly higher revenues in the upcoming quarters, supported by rising sales.

Our gross margin remained at a very healthy level of 27.6%, which clearly represents a benchmark in our industry. While this level should not be extrapolated, we are very comfortable with our full-year target of more than 24%.

Adjusted earnings after tax totaled €0.9 million. This figure is distorted by the low top line in Q1.

Accordingly, we expect a significant improvement as revenues rise and operating leverage unfolds in the coming quarters. Sales volume was broadly stable at €41.7 million.

In our private customer business, sales increased by 5.9% year-on-year, despite the short-term negative impact from the macro environment. Supported by sales launches and our institutional business, we expect a marked acceleration in growth as of Q2.

As an additional value indicator, tangible book value per share stood at €14.50. Based on business performance in the first few months of the year and the continued positive underlying trend in demand indicators, we confirm our guidance for 2026.

We expect revenues of €550 to €600 million, a gross margin of more than 24%, and adjusted net earnings of €35 to €40 million. As a leading indicator for our business, we expect sales to increase to €650 to €750 million.

There remains a prolonged or intensified crisis in the Middle East, which has already lasted longer than most of us initially expected. We cannot ignore the fact that a certain stabilization of the macro environment remains a key factor for the short-term development of our business.

Turning to slide 4 in our presentation. Our sales ratio shown in the upper chart reflects the combined effects of weaker seasonality at the beginning of the year and the recent dip caused by geopolitical tensions.

This temporary decline has been amplified by increased uncertainty on the banking side, with mortgage approval processes currently taking much longer. Sales in our private customer business are nonetheless up by roughly 6% year-on-year.

The development of underlying demand as reflected by our lead indicators looks considerably stronger. Reservations are significantly above the levels of previous year.

We assume that a large portion of this demand will materialize once tensions in the Middle East ease. We have already observed some improvement in sentiment following the shock in March.

In addition, we expect a meaningful boost from the new supply recently brought to the market. All of these products are ideally aligned with attractive tax incentive schemes for energy-efficient new builds.

The first sales launches such as the second tranche of our Duisburg project near Düsseldorf via our subsidiary nyoo have already generated a high number of reservations within just a few weeks. This is very encouraging.

The coming months are expected to be very busy with several upcoming launches that should significantly accelerate our sales momentum. A particularly positive development is the progress on the institutional side, which is exceeding our expectations from the beginning of the year.

We are close to signing of two transactions with a total volume of around €80 million. This represents a major step toward our full-year sales target at an early stage in the year.

As institutional business is typically skewed toward the second half of the year. We are also in discussions regarding additional transactions, including potential JV partnerships with international investors.

Overall, we are seeing encouraging momentum, which further supports our full-year sales outlook. On slides 5 and 6, we provide an overview of the key market indicators relevant to our business.

Despite heightened macro uncertainty and continued interest rate volatility, prices for new builds in Germany's top seven cities are at least stable or moderately increasing, underscoring the resilience of this asset class. This assessment is consistent with our own on-the-ground experience.

We have already started to implement selective price adjustments in certain projects aimed at buy-to-let investors. The persistent scarcity of residential space in metropolitan areas, combined with sustained healthy rental growth, is a key driver of positive underlying market dynamics.

This is especially true for high-quality, energy-efficient new builds. The price premium for energy-efficient buildings continues to rise, and a renewed energy crisis is likely to further reinforce this trend.

The lower chart shows rental growth in the top cities based on data from bulwiengesa. While growth has moderated from elevated levels, it remains on a robust long-term upward trajectory.

Slide 6 illustrates construction price inflation over time. The latest data from the Federal Statistics Office confirms a broadly stable trend over recent quarters.

These figures do not yet reflect the most recent increase in oil prices, which is already affecting certain oil-related building materials. Nevertheless, as also evidenced by our Q1 margin, we remain well-positioned to outperform the market.

Far this year, costs have remained below our internal projections with only limited inflation. Our strong market position and bargaining power with mid-sized construction companies are key factors.

Nonetheless, we should be realistic and prepare also for rising construction costs as of next year, although capacity utilization in the industry is currently very low. A significant portion of this year's construction volume has already been secured.

Turning to slide 7. Our gross development value, GDV, remained broadly stable at €7 billion during the quarter, excluding our share in joint ventures.

The share of projects in presales continues to increase, reflecting our high level of land acquisitions. The operational risk profile remains very low, with 89% of units under construction already been sold.

The presold volume of €2.7 billion provides high visibility for future revenues and cash flows. Revenue not yet recognized amounts to approximately €435 million.

We continue to create value through our business model by securing building rights for our land bank over time. Over the past 12 months, we have made further progress on approvals, increasing our zoned land bank to around €2 billion.

This enhances our flexibility and allows us to bring additional product to market as soon as demand strengthens further, including the institutional segment. Since the beginning of 2025, we have secured land plots for projects with a GDV of around €1.3 billion, of which approximately €500 million are allocated to our JV business.

These JV projects are accounted for at equity and, under our current definition, are not included in the €7 billion GDV figure, which reflects only fully consolidated projects. The Instone share of these JV projects now exceeds €800 million.

We remain active on the acquisition side with an extensive pipeline. Further land acquisitions are expected in the coming months, and we are on track to acquire projects with a total GDV of at least €2 billion by the end of 2026.

As stated previously, we see a very attractive window of opportunity given increased supply and still limited competition. The current macro environment may further support this dynamic.

We continue to prioritize shorter-duration projects, which should further strengthen our growth profile over the next two to three years. With that, I would now like to hand over to David for the financial section of the presentation.

Thank you, Kruno. Let me now walk you through our Q1 2026 results in a bit more detail, starting with our adjusted results of operations on slide 9.

In Q1, our adjusted revenues were still below the prior-year level, largely due to the comparatively cold winter in Germany and the resulting lower construction output. This will not affect our full-year targets.

Together with our construction partners, we have put plans in place to ensure that this work is made up over the course of the year. Higher construction output, combined with increasing revenue contribution from accelerating sales, is expected to lead to significantly higher revenues in the coming quarters.

We continued to deliver a very strong gross margin of 27.6%, once again reflecting our industry-leading profitability. Overall, construction costs came in slightly below our expectations, supported by our strong market position and prudent cost assumptions.

While the Q1 results should not be extrapolated, we remain well on track to achieve our full-year gross margin target of more than 24%. We are seeing some cost inflation in building materials.

However, as mentioned by Kruno, we do not anticipate a material impact on our 2026 results, as the majority of this year's construction volumes have already been fixed. On a quarterly basis, platform costs were somewhat higher than last year.

This was partly driven by non-recurring items such as expenses related to the LTIP program. Despite general cost inflation, we do not expect a significant increase in platform costs for the full year 2026.

Further down in the P&L, net interest expenses increased slightly. This was mainly due to a modest increase in net debt driven by higher investment activity, as well as a lower share of capitalized interest resulting from the ramp-up in construction starts.

The tax rate was also slightly higher and broadly in line with our full-year budget, reflecting lower expected profit contributions from joint ventures. The bottom-line result of approximately €1 million in Q1 has only limited relevance for the full year.

It is distorted by the low level of construction output during the winter quarter. The low top line in Q1 represents an outlier, and due to the operating leverage of our business model, profitability is temporarily depressed.

In the coming quarters, both operating and financial leverage will work in the opposite direction, and we anticipate significantly higher profits. Moving on to page 10.

Thanks to the strong cash generation from our projects, we have ample headroom for growth, which we have already started to deploy through the acquisition of high-margin projects. Our still low loan-to-cost ratio of only 18.8% and net debt to EBITDA of 4 times at the trough of the earnings cycle continue to underscore our very solid financial position.

We will continue to pursue our land acquisition strategy in 2026 in order to capitalize on the current window of opportunity. Higher investment activity will result in a temporary increase in leverage ratios until cash conversion starts to kick in.

Nevertheless, a strong balance sheet remains a core pillar of our business model. Turning to the next slide.

Over the past few years, we have repeatedly demonstrated the strong cash-generating capability of our business model. While we continue to expect substantial cash inflows from presold projects, we have now entered a new growth and investment phase.

Since Q1 2025, we have acquired land plots for projects with a gross development value of approximately €1.3 billion. We expect total acquisitions with a GDV of at least €2 billion by the end of 2026, corresponding to cumulative acquisition costs of around €300 million for 2025 and 2026.

These investments will be financed partially on our balance sheet and partially together with project partners. You can expect further updates on this in the coming months.

In addition to land investments, cash requirements will temporarily increase for projects that have entered the construction phase. This reflects the natural cash flow profile of retail projects, where working capital investments are required early on, with cash flows turning positive as construction and sales progress.

Nevertheless, as you can see, we generated a positive operating cash flow even in the first quarter. Building on the strong cash generation of recent years, our liquidity position at the end of the quarter amounted to nearly €220 million, which is largely available to fund growth investments and the planned ramp-up in construction activity.

At the corporate level, only a small part of debt remains drawn. As a result, our net cash position at corporate level exceeds €110 million.

In addition, we have undrawn credit facilities of more than €190 million, providing further financial firepower. Accordingly, the financing of our planned growth investments is fully secured.

Chart 12 shows the current financing structure of our corporate debt, which is largely unchanged. We intend to draw our term loan, raised at the end of 2025 and which amounts to close to €50 million, over the course of the year, which will more than offset the scheduled debt repayments in 2026.

Turning to our outlook. Based on our business performance to date, we confirm our guidance for 2026.

We continue to expect sales volumes of €650 to €750 million. As discussed, numerous sales launches and expected institutional transactions should drive a significant acceleration in growth in the coming months.

We anticipate adjusted revenues in the range of €550 to €600 million, a leading gross margin of more than 24%, and adjusted earnings after tax of €35 to €40 million. As already mentioned, a prolonged crisis in the Middle East, accompanied by sustained uncertainty and economic disruption, remains the main risk factor to our outlook.

With this, I would like to conclude the presentation and hand over to the Q&A session.

Hi, morning. A couple of questions.

The first one is on the institutional business. Just wondering if you would call the recovery a sustainable recovery, and also just to understand what are the drivers basically.

You point to further institutional deals with JV partners, just wondering if you could provide more color maybe also on the magnitude what we could expect.

Hi, Thomas. Thank you for your question.

I think it's good to mention that we clearly see that our cost advantage we have with our affordable housing segment is now paying out. We are able to offer a product achieving our margin, but also achieving the return requirements of investors, and this clearly helps us currently a lot.

That we have always said that for the social housing segment, the demand has stayed very stable and is not influenced by any interest rate development. We also see an increase of appetite from different investor types for free-financed residential investments.

If you get to the corridor of a cash-on-cash yield of 4% to 4.5%, you will find investors who are willing to invest. Again, what helps us is that we are, as Instone, a cost leader in the market, and we are able to meet the requirements of the investors and our gross margin expectation.

Looking at the JV, and here maybe also to be mentioned that we make here very good progress, we have one very large project in Düsseldorf where we are finalizing the negotiation with a potential partner. We have other projects where we are currently discussing with many interested parties who are willing to build, to hire Instone as a company providing the construction works and the planning, and who think that currently is the best way, or let's say time period, to invest, and then to sell the product when it's finalized in a time period where the broader market has come back and offering very attractive returns.

Hopefully, I've answered your question.

Yep. No, great.

Thank you. The second one is on your sales guidance, which is €700 million, midpoint actually.

As I remember correctly, I think it was like €200 million at the beginning of the year you earmarked basically for the institutional business. Just wondering if you would assume a different composition nowadays after the first quarter.

I would say the potential is there. If there is for us the chance to sell more to institutional buyers I would say for a good margin, we will of course take this chance.

I believe there is the chance we can do more. I also want to mention that we are still confident that we also get to the target what we have made ourselves for the B2C business, which is of course a bit dependent of the further activities in Iran.

Only also to be mentioned is that if you compare the first quarter sales volume, which is nearly the same as the first quarter in 2025, I have to say that we haven't had any sales start in this year. We had very strong sales starts in '25 with Duisburg and Frankfurt [Landwarte?]

. Now we are starting a couple of projects.

We have prepared now eight sales starts in the second quarter, which clearly already have an influence because we have roughly 40 units where we already have notary deeds agreed and another 110 reservations, which of course will lead to a notary deed in a couple of weeks. We make clearly progress also in the B2C business.

Good. The last one is actually on sales starts.

Did you change your plans for this year? Maybe it seems like you have at least turned a bit more cautious with sales starts in the first quarter obviously under weaker sentiment from the Mideast conflict.

Just to get a better understanding on what we should expect for the rest of the year.

I think we will get to the number we initially planned. We had in the first quarter maybe a delay of three to four weeks for the one or the other project.

I don't see this as a massive shift in comparison to what we have planned.

Great. Thank you.

Thank you, Thomas.

Yes, good morning. Thanks for the presentation, taking my questions.

I have two. The first is on cost inflation.

You mentioned that the high oil price is starting to have an impact on construction costs. I was wondering what is your guesstimate for cost inflation this year and next year?

Do you think that house price inflation will at least match cost inflation? Or is there any risk that margins might come under pressure in the medium term?

That's the first question.

Hi, Thomas. Looking at the construction costs and CPI development, I think we have initially calculated for this year a CPI growth 2% to 3%, which from my perspective we will stay below that.

We clearly have in the first four months now very successfully purchased works where we are really significantly below our budgets. The reason for that is that the construction industry has currently an average capacity utilization which is slightly above 60%, which is really low.

The construction companies, let's say, in this segment of our business, they are suffering currently through the overall situation. This helps us with our negotiation power to get to really attractive prices.

Now looking at the Iran conflict, of course, and we currently are in negotiation with construction companies, and what we clearly see on the ground is that they are still accepting fixed prices over a longer time period, and only a few are discussing with us prices which are more flexible due to price inflation rates. Here we still see on the ground that the construction companies are willing to make fixed prices, and we are very, very comfortable with our budgeting.

We believe that for this year, construction CPI won't have any negative influence on our gross margin. If I look to the next year, and I was more skeptical a couple of weeks ago when the war started or when we have seen the first reactions and the first inflation discussion, but currently I would say that due to the low utilization rate, which won't get better really, let's say, in the next couple of months, I believe that CPI growth will stay on the level maybe of inflation of roughly 3%.

This is our current assumption. This is also plays true if I go through the different scenarios.

The demand will catch up if the Iran conflict ends, the same scenario I would say for the CPI. Also in the weaker scenario, if the conflict stays longer, then the construction companies are suffering further.

For all these scenarios, I think a 3% CPI inflation number for next year, from my perspective, should be realistic.

Yes, thank you. My next question is on the acquisitions.

You still target more than €2 billion of GDV in total until the end of this year. I was wondering if you can provide more color on if there are any projects in the pipeline which might materialize in the short term, and generally on the market situation on the ground.

Are there more projects in the market now than, let's say, three or six months ago? Is there more or less demand, more competition for projects?

What do you see, and what do you think?

I think overall the situation, let's say, in the last six months hasn't really changed massively. We are in a very good position in the competition.

We have the capacities. There is competition, but it's, of course, a limited one when you look at the different negotiations we are currently working on.

You have always one, two competitors, but it's not like 10, 15. These competitors are often family offices or it's combination of private equity for zoned land.

I have to say that we are overall very confident. We are currently finalizing two bigger acquisitions, which clearly will pay in to reach our target of the €2 billion.

Big cities, one bigger project in Berlin, for example. We are here very confident.

Looking at the overall strategy, I have to say that zoned land or land which could be zoned in a short time distance in the top cities is a very rare, let's say, product. I believe that it makes a lot of sense for us now to invest.

You have to also have in mind that after the Ukrainian war started, the companies haven't really invested time to develop new projects. We have a four years, if you like, time lag of developers not investing work into new projects.

This will lead to a massive scarcity of zoned land in good locations, where we also believe that if the market recover, the land price inflation will start to go on massively due to the fact that there's a very scarce product there, and it takes a lot of time to activate land plots.

Perfect. Thanks for the detailed answer.

Thank you, Thomas.

Thank you. Good afternoon.

I have three questions, please. Firstly, if the €80 million of potential sales volume to institutionals were to be signed soon, may we assume these contracts to generate around €25 million of adjusted revenues in either Q2 or Q3?

That would be the first question. Second one, basically a follow-up again on institutional sales.

Are you confident that demand by institutional investors in the second half of the year might be at least as high as in the second half of last year? The last question, do you expect to reach the 30% pre-marketing ratio for some projects in either Q2 or in Q3?

These are my questions. Thank you.

Let me start with question number one. I think the assumption that approximately €25 million from the €80 million will translate into revenues during the course of 2025 is approximately right.

Thank you. Yeah.

Regards the second one and of course, the second half is the stronger part of the year. I hope that we won't see the same hockey stick.

Hopefully we will see a bit more in the first half in comparison to what we have seen last year. Hopefully the year rally in the last quarter won't be as strong as we have seen last year.

The third one, we have a couple of projects where we expect the 30% hurdle rate to be achieved and also construction start this year.

Thank you very much.

Welcome.

Hello, everyone. Thanks for the presentation, and thanks for taking my questions.

Just a couple of follow-ups. Starting with revenues, due to the kind of soft start to the year, the H2 weighting for this year is now extreme.

Could you walk us through the key revenue recognition triggers for the, yeah, last three quarters to get a feeling how comfortable you are to reaching your guidance?

Maybe the first answer, let's say, we have started a bit weaker than initially expected for this year due to the strong winter we have seen. What helps us is that, as mentioned before, the capacity of the construction companies is available.

We are forcing now to bring more people on the ground and to catch up with what we have maybe missed in the first quarter. Here we feel very comfortable due to the low capacity utilization of the construction companies.

Of course, when you look at the overall development of this year, it's fair to say that the revenue recognition quarter-by-quarter will increase due to the fact that we are increasing the sales start activities, increasing the sales volume step by step. We want to launch roughly 20 sales starts.

This leads clearly to the highest revenue number in the last quarter. You have a I would say a continuous step-up of revenues over the course of the year.

Perfect. Thanks a lot for the clarification.

You mentioned the low capacity helps you. Have the construction sites already caught up by April or early May?

Do you see any catch-up effects already on the construction sites?

I think it won't completely be recovered in the second quarter what we have missed in the first one. We will see this more spread over the year because the biggest, let's say, delay was in the shell construction over the winter months.

What we are currently doing is to increase the speed in the other works. Of course we try to increase the speed in the shell works, but in addition, we are bringing more power on the ground in the other parts of the construction activities to compensate and speed up with the overall construction activities.

Okay. Thanks a lot.

Very, very helpful. Then with regards to the retail segment, just a quick follow-up.

Have you seen reservation activity normalize or start picking up from the temporary negative effect in March and April into early May? Any picking up here?

It has picked up. I already mentioned the number.

We clearly have, let's say, increased the number of notary deeds in preparation, and also the reservation numbers, by launching also new projects. I also see that the people have been shocked a bit, I would say, of course, through the war, and we have seen an increase of interest rates for 100% financing from 4% to 5%, which is of course a lot.

On the other hand, you know that the overall depreciation scheme is not really completely, I would say, it's still very attractive as a program, but the people needed time. In addition, what we also see is that the banks needed more time to give feedback and agree to financing.

This has a bit normalized. The people have accepted this situation.

The banks are, I would say, also working now more regular, I would say, and this gives us some confidence. Of course, it's also helpful if the war stops.

That we have said at the when we have guided through the year that the war should stop in a couple of weeks. Now we are in the 10th week, and this is fair to say if the war is further ongoing, then we have to look at it again.

Currently we feel very comfortable, but of course the war is influencing our business clearly.

Okay. Thanks a lot.

Very helpful. My next one is on the leverage.

What's your peak leverage tolerance during the current investment cycle? Or is it more like opportunity-driven?

I think we always mentioned that our focus will be on LTC, loan-to-cost, where we think we will be at the peak somewhere between 30% and 40%, definitely below 40%. That is our key driver to look at.

Now on the net debt to EBITDA, I think, as long as we have a bit of a depressed EBITDA, you might see an increase also in Q2 of net debt to EBITDA, which can go somewhere to 5 times. We definitely also keep that under a close scrutiny, and believe that EBITDA should increase again towards the second half or in the following years again, so that should also come down.

Perfect. Thanks a lot.

My very last question at regards to Westville. The sale of Westville 2 and 4 GmbH generated roughly €30 million of one-off other operating income, but also a materially reshaped your balance sheet.

How much of the entire Westville project is now still in the portfolio, and what is the residual revenue and probably margin contribution you expect for this year and maybe also next year?

I'll start off, I think, Westville will be finalized by mid of this year. That's number one.

Therefore, you will have only effects from revenue contribution during the course of this year. Now in terms of remaining revenues, I am not 100% sure how much remaining revenues there are to not give you unprecise numbers, I think we should come back to you.

Very helpful. That's will be finalized mid this year, that helps a lot.

That would be my last questions. Thanks for the helpful answers.

Go back in the queue.

Thank you.

Hello, gentlemen. Thank you for taking my questions.

I have two questions from my side, maybe one by one. The first one would be coming back to the Iran war.

One aspect is prices, another aspect could be supply chains. Have you seen or heard about any effects on the supply chains that are concerning for you or supply chain issues which could appear because that might affect also the construction work?

Maybe you could give some color on that, please.

Hi, Manuel. We don't see any effects in comparison to what we have seen with the Ukrainian war when it started.

There's, from our perspective and our analyze, no risk for supply chain problems for our business, what we currently see here.

Okay. Right.

My second question would be on potential investors. I think there was an article in the German press about US investors looking for houses in Germany.

Is that something that you have seen as well that maybe some US investors might approach you for JVs or something similar?

For JVs, this article is based on this townhouse investments of the one or the other US investor. This is, I would say, only a few, where we see broader activities are renting products or investment in resi developments in the top cities.

Here we are in a lot of conversations with potential partners who would love to do projects with Instone. As we said a few times before, is the clear strategy of ours to increase our access to developments by partnering with international investors.

Our interest here is, of course, to increase our return on equity and in addition have access to land plots for a very, very reasonable pricing in the current market environment. It makes a lot of sense to secure land and clearly benefiting from, let's say, the market development in future.

Clearly a part of our strategy to partner with international money here.

Okay. All right.

Thank you very much.

Welcome.

Maybe just your last question, Philipp Kaiser, on Westville revenue contribution. There's approximately €21 million of revenues remaining on the Westville side.

Thank you for your participation. If you need further information, please do not hesitate to contact the Instone IR team.

Thank you and goodbye.

Thank you. Bye-bye.

Thank you.