Skanska AB (publ)

Good morning, and a warm welcome to the presentation of Skanska's First Quarter Report for 2025. I'm Antonia Junelind.

I'm the Senior Vice President for Investor Relations here at Skanska. And with me on stage here today, I have our President and CEO, Anders Danielsson; and our CFO, Jonas Rickberg.

Shortly, they will take you through a presentation walking through our first quarter performance, financial position and the market outlook for the coming 12 months. And after their initial presentation, we will move over to questions.

And if you are joining us online, then you can use the telephone conference number or the audio online call to join us here in the studio so that you can ask questions to us. But more instructions will follow later.

So with that introduction, I will hand over to you, Anders, to start this presentation.

Thank you, Antonia, and welcome, everybody. And before we start to jump into the figures, I want you to look at the picture here on the slide.

It's from the project Slussen in the middle of Stockholm, a fantastic project that has been ongoing for many years now, but it's starting to getting close to completion, and that it will be a fantastic meeting place for all the inhabitants in Stockholm. But it's also a resilient project, preventing Stockholm from being flooded in the event of a major rain.

To summarize the first quarter, on a group level, it's growing revenue and solid performance, solid margin within the Construction stream. We have increased macroeconomic uncertainty for Residential given that we have reduced the sold apartments somewhat.

In Commercial Property Development, we have started 2 new projects, and we haven't seen any divestment in the single quarter. Investment Properties is continuing to produce stable profit and cash flow.

Operating margin in Construction, 2.8% in the single quarter, and that's an increase compared to last year, 1.8% last year. Return on capital employed in the project development, including Residential and Commercial, 2.8% on a rolling 12-months basis, and the return on capital employed in Investment Properties 4.5%, also rolling 12.

Return on equity, rolling 12, 10.5%. And we remain in a very solid financial position, which is really important for us.

We also managed to reduce the carbon emission for the group for our own operation, meaning Scope 1 and 2 with 62% compared to our base year 2015. Now I will go into the different streams, starting with Construction.

Here, we're increasing the revenue compared to last year and given the very record high order backlog we have. And the order bookings is down a bit, but we remain positive or book-to-build ratio of 115% on a rolling 12 for the group.

And the order backlog is also on record -- remains on record high level, SEK 264 billion. Operating income increased a lot here to almost SEK 1.2 billion and the operating margin, again, 2.8%.

So revenue growth and good margin in all main geographies, which is really encouraging, and rolling 12-months operating margin was 3.7%, well above our target of 3.5%. So we have a very high order backlog and we also have a good quality in the backlog.

I will come back to that. Residential Development, we reduced -- decreased our revenue here to SEK 1.5 billion, and that's the reason, of course, that we have sold less apartments compared to last year in the same quarter.

We also, as a consequence, started fewer homes in the quarter. And we have operating income of SEK 63 million and return on capital employed 1.8% in the single quarter -- or in the rolling 12.

So here, there is more -- has increased the uncertainties and the consumer confidence has decreased somewhat during the quarter, and that is, of course, impacting the willingness to sign contract and there's more hesitation definitely in the Nordics. In Central Europe, on the other hand, we can see a continuous stable market, and we see that we -- our clients, our customers, they are signing contracts, and we also see healthy profitability there.

Overall, we have an operating margin of 4.2%. Commercial Property Development, we haven't seen any divestment during the quarter.

We have started 2 new projects, as I said, one in Stockholm, one in Malmo. We have 16 ongoing projects, and the total investment upon completion is close to SEK 16 billion of those.

We have 24 completed projects corresponding to SEK 18 billion in total investment, and we have 71% leasing ratio in that portfolio. No divestment, as I said, but one project, a previously sold property, was handed over in the quarter, generating cash.

Investment Properties, we have an operating income of SEK 80 million compared to SEK 50 million last year, and the economic occupancy rate in that portfolio we have is 84%, slightly lower than the year-end. And we have some contracts that are under negotiations here.

They haven't left the building, but they are under negotiation. Total property portfolio is SEK 8.2 billion.

Order bookings, a very healthy level. The order backlog has decreased in Swedish crowns, but if you look at the local currency, the decrease is only 1%.

So a very high level continues. And here you can see over time how the order backlog has developed from 2020, '21 and up until -- so you can see that it's a steady increase, and we are on a very good level.

You can also see the different rolling 12 development of the order bookings, revenue and the book-to-bill ratio. And if I look into the different geographies, healthy -- a very healthy backlog, overall, 19 months of production.

So the order backlog is large. It's also have a longer duration compared to if you look at the history, and it's also very high quality in the backlog.

And that, of course, gives us a good foundation to produce a good profitability, which we have seen for a long time now for many, many years, actually. And overall, book-to-build ratio of 115%, very confident in that.

We are well positioned. We can continue to be selective and go for projects where we have a competitive advantage and where we can see that we have a good track record, a good history.

And if you look at U.S., 132%, which is very good and 23 months of production. So overall, very well positioned for us.

With that, I hand over to Jonas.

Thank you, Anders, and welcome from my side as well here. We will go through a little bit more on the financial side, and we start off here with the Construction.

And as you said, Anders, we are then increasing the revenue to SEK 41.8 billion for the quarter. That is an increase in local currency with 14% and 16% with Swedish SEK.

Moving on then to the gross income. You can see that is on a SEK 2.8 billion level.

And more stable here that we are looking for -- sorry, if you're looking there for 7.5% in the gross margin, you can see that it's for the quarter, but please focus also here on the rolling 12 due to the fact that we are a seasonality company here. Also worth mentioning is that we have a selling and admin in percent of revenue, that is 4%.

It's a healthy level on a rolling 12 with 3.8%, actually, lower than we had for the full year. And that is also a sign that we are actually taking measures and looking over our cost situation depending on how the market is developing and so on.

Operating margin, 2.8% for the quarter. And as you were into Anders, it's 3.7% for the rolling 12.

That is then better than we had for the last full year of 3.5%. So a very strong result, I would say, for Construction here.

Moving on to the geographies. You can see that it's strong deliveries all over the different regions.

The Nordic is within natural variation, so to say. You can see that Sweden is flat on 2.3 percentage.

And the low -- normally low, I would say, in Europe here due to the seasonality effect that we have quite high fixed cost and not doing asphalt and so on. You can see here, we have a margin of 0.6%, and that is a substantial then increase from last year where we had a write-down actually in one of the projects connected there.

Worth mentioning here is that we are very stable on the margin side on the U.S., 3.4%, actually increasing a little bit. But please look into the left side here that you can see the economic contribution here of SEK 770 million, which is a big increase here.

So here, you can also see that the big impact from U.S. is coming through there once we are keeping the margin here.

So overall, a very solid quarter for Construction and how we are moving there. If we move on then to Residential Development side, we -- as you said here, we had -- we are facing then a situation with uncertainty in the macroeconomic, of course, and that we foresee that the recovery that should have been coming here in quarter 4 -- in quarter 1, it has been slowing down a little bit and -- in the later part here of quarter 1.

And of course, the revenue is down a little bit due to the fact that we are not selling so many units here. Also here, we are selling many from -- that we've produced earlier, so to say, and not from the new produced, and that is impacting a little bit here that -- we are coming up to the next slide here.

SG&A is too high, and we have over the years taken it down, and we are right now in a situation that we can handle more volume than we are for the situation right now. Operating margin, as you were into Anders, is 4.2% and delivering on SEK 63 million here, and that is an improvement since last year.

If we move on then to the different regions, you can see that it's improving then from SEK 23 million to SEK 63 million for the different geographies here. Worth mentioning here is that we -- BoKlok right now is separate as a business unit, and that's connected then to the Swedish Residential Development organization.

And the small losses here that you can see on the left side here, Nordic, that is mainly related to Finland and the situation we have there, where we have quite much unsold complete in the inventory there. Also worth mentioning is that we have a good market, as you were into also Anders, when it comes to Europe, where we have really good profitability of SEK 12.9 million, delivering a good result of SEK 67 million.

So a good contribution here. And that is the most stable market that we have here.

And of course, that is connected then to how we are starting things as well. If we move on then to how we have started projects, you can see that we are starting -- we have sold 365 units, and that is down then since last year or the corresponding period of 511, and that is, of course, impacting.

Fewer homes started as well of 203 compared to 459. So that is a slight decline there as well.

The one we have started is -- in the market there, we actually have good profitability right now, and that is in Central Europe and in Prague and more in specific location Emil Kolben District, where we also had -- 45% of the homes were already sold once we started the project, and that is a good sign here. We also started a project in Sweden.

Also, I would say that we have a good pipeline here. And of course, we have -- we are really looking into our inventory and doing our utmost to really turning that into a good situation for us.

We can see that we have a great demand for our housing, how we are producing things. And that is, of course, a strong sign for things when the market is picking up later on.

If we move on then to homes in production, you can see that we right now -- we have started, as I said, 203 and completed 507. That means that we are up to a number of 2,470 homes in production.

That is then corresponding to 49% of which is sold then. And this is then reflecting a little bit of the insecurity that we have in the market right now that you as a private customer would like to buy and sell in the same market, and that's why also you are hesitant to really sign up for things right now.

And that, of course, will gradually then develop in our favor going forward once the market is turning to a better situation. Unsold completes, we are totally here of 475 units -- 457 units, and that is then mainly related to Finland and in Sweden, I would say.

If we move on then to Commercial Property. And you can see that the income statement here is that we had the revenue from the leasing of SEK 346 million, same level as last year.

But then the fact that we had a gross income of SEK 81 million and then that -- which of SEK 29 million is coming from divestment of properties earlier and so on. And this is -- it's an on/off business, and it can vary quite much from quarter-to-quarter.

Selling and admin was SEK 181 million, and that is then giving an operating loss then at the moment of SEK 100 million. If we move on here to the unrealized gains that we have, you can see that, that is increasing of SEK 300 million up to a total level of SEK 3.4 billion.

That is due to the fact that we have 2 new started projects in Solna Link in Stockholm following the huge success that we have in Solna United that we divested then in 2020, and in Regndroppen, where we build next to the station in Hyllie in Malmo. These 2 are then affecting and increasing then the gain of SEK 300 million.

Comparing then this value of unrealized gain here of SEK 3.4 billion corresponding to the market value then, we have 9% of the surplus value in the portfolio, so to say. A substantial variation of the portfolio that we can see.

And of course, this is then corresponding a little bit where we have the weakest and the hottest market and so on. And of course, it's continued to be a little bit weaker here in U.S., and that is affecting here as well.

Rolling 12, we hovering around SEK 2 billion here, as you can see on the line. If we move on then to the completion profile, and as you were into Anders earlier, we have SEK 18 billion right now, and that is up a few billion from SEK 15.6 billion in quarter 4.

And we have then increased the leasing ratio from 65% to 71%, which is then generating a lot of money, and that's, of course, to prepare for the market of selling later on. Also, you can see here in the light blue and blue is the ones that are completed, and we are looking forward here to go on with this.

Still on the Commercial Property Development -- here it's right now, yes -- you can see that it's going down a little bit, and that is mainly then to the fact that we have started 2 new projects with no pre-let that is then impacting then the economic occupancy rate and the degree of completion here as well. The market has been quite stable, and it's good activity, I would say, also when it comes to the leasing.

Even if we can see that it's a little bit of a downturn there, in the quarter 1 stable. And this is mainly driven by the fact that there is a slow recovery to come back to office, and that is -- you can see that is both in Europe and U.S., a little bit less in U.S., I would say.

So this is Commercial Property Development. If we move on then to the Investment Properties, it's a very good quarter, I would say, there.

It's no acquisition here, and we are then having an operating income of SEK 80 million. And that is due to the fact that -- and it has increased due to the fact that we have acquired a building then in 2024, which is right now then contributing a lot here.

Solid operating income of SEK 80 million, as I said. Earlier here -- you can see that we have a negative net leasing of SEK 60 million, and that is then corresponding to the fact that we have a fact of 84% occupancy rate versus then that we have 87% earlier and so on.

Moving on here to the income statement. As we were into -- we have SEK 1.2 billion that is coming from the operating income.

We have a central cost here that is SEK 104 million, and that is a little bit increased due to the fact that we have a temporary effect of IT. That is due to the fact that we are outsourcing global infrastructure, and that will then gradually take down the cost going forward.

Also, we can see some periodization and a little bit related then to our legacy operations. Also, our PPP portfolio will gradually go down, so the revenue streams from this will also impact here the central stream.

Also, BoKlok is now included in this line, and that is totally impacting here of SEK 50 million. Group operating is coming then in SEK 1.1 billion, and the tax rate are similar on 26%, 27% here versus last quarter.

And the fact that it's high is due to the fact that we have higher share in high tax countries and no divestments that is then tax exempt, and that is giving this level at the moment we have right now. Bottom line, SEK 991 million for the period and then is then an earning per share of SEK 2.4.

Moving on to the cash flow. It's very good that we have delivered then from operation -- from the business operation of SEK 1.5 billion.

That is higher than last quarter. And that is positively impacted by the net divestments in project development with the handover that we had.

I also will come back here when it comes to the working capital and so on. As you all know, we have taken the decision that we have dividend of SEK 8 per share, and that is not impacting here.

That is then coming here in quarter 2. If we move on to the other part that is driving the cash flow -- and here is Construction here.

And here, I would say it's a positive sign. Even if it's a negative contribution of SEK 0.5 billion, it's in a better situation versus last year of SEK 2.6 billion.

So it's actually then following other seasonality pattern that we have right now, and it's still in the mobilization effect that we are actually then getting prepayment from big projects that we have and so on. And also worth mentioning here is that we had a very strong inflow from second half of the year, and that is, of course, giving a good position right now, and we can see how that will go -- how that will impact going forward.

Worth mentioning -- the last one here is actually you can see that the bar from Q4 is SEK 34.5 billion, and that is then coming down to a level of SEK 31.9 billion. And the majority there, actually, SEK 2 billion, is coming from currency and how that is impacting the free working capital.

If we look into the divestments and -- investments and divestment phase, you can see that we are in a divestment phase, and that is according to plan, of course. We have reduced the investment pace and are focusing our -- and to really churn our portfolio when it comes to Residential and Commercial Development right now.

First quarter, we handed over one previously divested property in Commercial Development. This then translates, as you can see here bottom, to a lower capital employed, right now SEK 62.8 billion, and that is lower both compared to last quarter 1, but also since the year-end.

And that is then following what we are focusing on here right now. Moving on, we are looking into our available funds.

That is right now of SEK 29.8 billion, whereof we have SEK 9.6 billion that is related then to RCF, so to say. Worth mentioning here as well is that we since 1st of January have available funds included in short-term investments, which is SEK 3.6 billion.

That was before then including in the current financial assets. The borrowing side or the funding side here is that we hold a balanced debt portfolio of SEK 9.7 billion, which 58% is secured to the bond market and 42% is then to bilateral loans.

And that is, as you can see here also when it comes to the maturity of the portfolio, it is very balanced, I would say. Closing by looking into our financial situation.

You can see that we had SEK 61.8 billion here in equity, and that is impacted then by currency of SEK 2.2 billion, and a net cash position here, as you can see on the line, of SEK 11.6 billion, which is very, very strong and correct then, corresponding to the level that we have in quarter 4. The equity-to-asset ratio stands for 37.7%, and that is, of course, very strong as well.

So in summary, we can see that we are remaining on a very strong financial position, and that is, of course, very good for the company. We are here for the customers regarding what is happening.

We can actually be here to deliver. Secondly, of course, we can really impacting and be part of selling -- or bidding for and win large projects here that we are trying to do all the time, and that's required in a financial situation that is strong.

And of course, we can be long term when it comes to doing the investments in Commercial Development as well as in Residential Development. And this is very important then for Skanska going forward.

So by that, I hand over to you again.

Sure. And I will go through the market outlook, starting with Construction.

Here, we can see pretty much unchanged market outlook. We have lowered the market outlook somewhat for the U.S.

building operation. So now we can see it's more normalized market.

So we still see a pipeline, but we can also see that it takes a little bit longer time for our customers to take the decision to invest and start a project, but it's stable. And the civil market in U.S.

is continuing to be strong. We can see a very healthy pipeline, and we don't see any decrease in the activities here.

It's our clients, and they are starting projects, which is really encouraging. The European market outlook is unchanged.

The civil market in Europe is stable, and we can see a slower market on the building side due to the fact that the residential construction is still slow and the same for commercial buildings. That is offset somewhat by the social infrastructure, the investment in defense and also more prisons and that sort of activity, especially in the Nordics.

On the Residential Development, we can see good activity in Central Europe, continue to be stable, and you saw that on the figures as well. And we can see outlook in the Nordic is still weak.

I think it will take some time before the market comes back. And the consumer confidence has decreased somewhat, and I think it will require growth in the economy overall to get the confidence back amongst the consumers.

Commercial Property Development also still weak outlook for the coming 12 months, but we can see that in transaction market investors are more active in Europe. We have more discussions there.

We can also see that we have more hesitant investors in U.S. And on the leasing market, pretty good activity in Europe, and we can also see some active leasing potential tenants in the U.S.

as well. But there's a clear flight to quality here, both for potential tenants and investors.

And we can offer that. We have high-quality offices in the right location and very high standards on that.

Investment Properties, it continued to be a polarized market, strong demand for high-quality spaces compared to the older stock. And it's a competitive market, but rents are expected to be mostly stable.

So if I conclude this presentation, we have a good start of the year. We have growing revenue and solid margins in Construction.

And the Residential Development, the sales has decreased compared to last year due to the uncertainty that we have talked about here. No divestment in the quarter, but we have started 2 new projects in Commercial Property Development.

And Investment Property remains to be stable result. And very important, of course, we are maintaining a very solid financial position.

With that, I hand over to Antonia to open up for Q&A.

Thank you very much. Yes.

So now we will open up for your questions. And if you're watching us online, then I encourage you to either use the telephone conference number or, even better, use the HT audio link.

That will provide a better sound quality for you, but also for us here in the studio so that we will hear your questions loud and clear. Shortly, you will get further instructions by the operator, but I will actually turn to our physical audience here in the room to ask if there are any questions here.

In that case, I will just ask you to raise your hand and we will bring a microphone and I will ask you to start by stating your name and organization. We have a question upfront here.

Two questions. Stefan from Danske Bank.

I'll start with what was the bigger disappointment for me. There were some positives and some negatives.

But on the negative side, resi, it's very sluggish, I know that. And -- but going back a quarter, you said that you wanted to step up the activity, have more starts because you saw the consumer and customer wanted to buy closer to completion.

And in order to be ready for that, you wanted to step up. Now you're down to 200 in starts all of a sudden.

So my question is, is that just because of -- I know it's lumpy and occasionally you could have less starts one quarter and more another. Is it more of that?

Or is it a change in strategy?

I can start on this one. I would say you should not put too much into one single quarter.

It's more -- we still have the capacity and willingness to start new projects. So that's a priority going forward in the right location, and we have the financial strength to do so.

So more of that. But we can see also that the uncertainty amongst the consumer has increased.

So that is also -- we need to be careful and selective where we start projects. We need to believe in that.

But we have a good pipeline. So we are ready to start when we think it's right.

And then on the Commercial Properties in the U.S., I mean you're saying it's lagging when it comes to transactions. Do you see any interest at all?

Or do you have any discussions ongoing at all on any of the properties?

Right now, I think it will require that the uncertainty goes away a little bit, and it will also require that the long-term interest rate needs to go down a bit before we can see our normal investors, institution and so on coming back.

And to add on to that question, could you see any situation where you start an IP business also in the U.S.?

That's not in our strategy. But having said that, we will not do any fire sale.

We have a good leasing ratio and good cash flow from the completed project. So we will wait for the right occasion to divest, and we'll do so.

We don't want to leave a lot of money on the table.

Very good. So we will then move over to our online audience.

And I will ask you, please, operator, can you clarify the instructions for people calling in and then introduce the first caller. Thank you.

[Audio Gap] more color on where you're seeing within…

Sorry, Graham. I'm cutting in there.

We didn't hear the start of your question. So could you please repeat that for us?

It didn't get through to us in the studio.

Can you hear me now?

Yes, we can.

Perfect. Yes.

So just 3 questions. One, on U.S.

building construction, can you give any more color on where you're seeing delays in investment decisions? Is there a particular sub-segment within buildings where you're seeing that weakness specifically?

Second question just around longer-term opportunities in Europe. We've seen a lot of commentary around increased infrastructure spend, increased spend on defense.

How is Skanska positioned for that? And when could we expect that potentially to start coming through into the orders?

Or are you hearing anything around that? And then third one just on working capital.

You mentioned that there was, I think, if I didn't miss here, a SEK 2 billion headwind from FX. But I think the working capital outflow was less than SEK 2 billion.

So am I right in thinking that the underlying would have been neutral to small positive? Just trying to understand the seasonal flows there.

We would normally expect a meaningful outflow in Q1. So has that been pushed back to Q2?

Any color around the working capital flows in Q1 would be helpful.

Okay. I will start, Graham, with the 2 first questions, and Jonas will take the working capital question.

U.S. building, yes, we see some delays in the investment decisions, and we are mainly operating in the more social infrastructure, like schools, university, hospitals, airports and so on.

And we're also operating in the data center. So we can see that it's not -- I think it's not a specific segment or specific clients.

It's more that they feel some uncertainties in the market and the boards of our clients they're taking a bit longer time before they take the decision. We haven't seen any cancellation yet of project, but they are -- we see some hesitations.

But the projects are there, and we expect the vast majority of them to be executed at some point. But it's more normalized market.

So don't get me wrong and say it's -- it's not a weak market. It's a normalized market.

That's important to say. And infrastructure Europe, yes, we see a stable market in Europe.

And we can see that European funds coming into -- especially into the Central Europe, and we also see a stable market outlook for infrastructure in the Nordics. The exception in the European market is in U.K., where we see a slow market due to the lack of financing funding from government.

Yes. And the working capital question is more that it's related then to the difference, as we said in quarter 4, that was SEK 34.5 billion.

And then right now, in quarter 1, it's SEK 31.9 billion. Actually, a delta of SEK 2.5 billion, more or less.

SEK 2 billion out of that is FX, SEK 0.5 billion negative is then coming from the operations, so to say. And this SEK 0.5 billion is actually an improvement from last quarter.

There, it was SEK 2.5 billion. So we are in a better situation right now.

So that was the point. I hope it clarified.

I have just a couple of questions. First, a follow-up question on this longer lead times.

Could you maybe elaborate how long the lead times are within the project? And given that, I would assume that this hasn't really impacted demand in Q1.

So could we maybe expect some type of delayed effects for orders maybe in upcoming quarters instead?

You can see if you look at overall in U.S., we have a book-to-bill ratio of 132% for -- on a rolling 12-months basis. So we have a very good position, and we don't need to chase any volume or any projects.

But we are -- have a close cooperation with our clients. We have good relationships.

I'm not concerned of the situation. Then I don't -- I will not give you any kind of forecast of the order intake.

We gave you the outlook, and it's strong for the civil market in U.S. and stable for the next 12 months for U.S.

building. So I'm confident in that.

Okay. So for instance, you have preannounced some orders now in Q2.

These investment decisions, were they made how long time ago, roughly?

Yes, it's difficult to say. But normally, in the U.S.

building operation, we work with 2-stage projects mainly, which means that we get selected from a client and then we work with the client, helping out to design the project, get the business case okay for the clients so they can take the decision. And that normally takes 6 to 12 months.

So that's the process pretty much how it looks like.

Okay. And I also have a question on FX.

So I noticed that your average USD-SEK rate is SEK 10.7 in the quarter. And as you may know, there's quite a bit of change there.

So maybe if you could elaborate how you hedge FX risks.

Okay. At the moment, we are not hedging at all when it comes to things.

We are a quite natural hedge, I would say, because we are buying things in the local markets in U.S. dollar as well as we're getting our revenues.

So we are naturally protected in a very, very strong way. So the only effect that we have is more or less when we are translating things into the balance sheet from dollar, for example, then into SEK.

Okay. And I also have a...

And...

Yes.

No. But I would say just to conclude that we are a natural hedge.

I think that is for our industry very common, of course. But if you compare to other industries, that is a different situation when you are producing things and selling in a different currency, of course.

But we are a natural hedge in almost all things we're doing here.

Okay. And I also have a question on the net financials.

So financial income was quite high in Q1 versus Q4 despite similar level of debt. Could you maybe elaborate on the discrepancy versus last quarter?

Would you say that Q1 is representative? Or is there any type of extraordinary financial income in Q1?

Okay. No.

But I will say that -- I would like to say that -- you can contact more to the Investor Relation regarding that question, I would say.

Okay. And just a question here on the Europe margins.

So you mentioned seasonality, which is somewhat impacting profitability. Would you say there are any type of other diluting factors to the margins in Europe?

No. That's definitely a seasonal effect.

That's a good performance, a good execution in Europe. And we also have higher profitability compared to last year.

Okay. Just one final question then on RD.

So there's quite a lot of discrepancy between the Europe margin and the Nordic margins, which is -- so it's 12.9% in Europe and minus 0.4% in Nordics despite half the volume in Europe. Could you maybe elaborate why this is and what is required to turn the margins around in the Nordics?

Yes. It's a couple of things that are impacting that.

In Europe, we have a very good -- a very stable market and a very good performance. We are taking advantage of that.

We're starting projects. We have a good profitability when we sell the homes and apartments.

In the Nordics, it's 2 things. It's a volume issue, and we can see the decrease in volume, which impact the profitability.

And we also see that the apartment and the homes sold is -- quite a big part of that is from homes that has been completed. We mentioned Finland here, for example.

And the profitability in those divestment is very low. So that is also impacting the profitability in the Nordics.

Okay. So I would then assume that this pretty weak margin trend in Nordics should endure given the lower volumes.

And also there's quite a lot of inventories still remain.

Yes. We have some unsold completed homes in the Nordic that we're putting a lot of effort to get out from the balance sheet, definitely.

Perfect. Thank you very much.

So operator, do we have anyone else in the queue?

Excellent. So that means that we've answered all the questions that you had for us here today.

So I will start by thanking you, Anders and Jonas, for your presentation and your answers. And then I'd like to thank all of you that made it here to our studio in Stockholm today.

And lastly, I want to say thank you to those of you that have been watching us online, of course. And a recorded version of this broadcast will be available on our web page shortly.

And then we will be back in July with more comments in relation to our second quarter report. Thank you, and have a lovely day.