Magnolia Bostad — Year-End Report 2014
2014 Magnolia Bostad
Year-End Report
Group January–December
1
Magnolia Bostad — Year-End Report 2014
October–December
2014
The quarter in brief
■■
■■
■■
■■
■■
■■
■■
Net sales: 128.1 (39.2)
Operating profit: 52.2 (17.2)
Profit after tax: 45.0 (16.2)
Earnings per share: 1.46 (0.52)
Equity (December 31): 253.4 (190.0)
In November, Magnolia Bostad won a land
allocation competition for Östra Sala Backe in
Uppsala. The project includes the production
of around 100 rental apartments (a total area of
around 6,600 sqm) and production will start in
2016.
Significant events after the quarter
Equity per share: 8.10 (6.07)
Magnolia Bostad strengthens its organization
by recruiting twelve employees within the areas
of transactions, finance and marketing.
■■ In January, an additional 4.5% was acquired in
the Kungsängen 25:1 project in Uppsala as well
as another 13.0% through a forward contract
with possession in 2016 and 2017.
■■ Fredrik Lidjan assumes the post of President.
He is taking over after Andreas Rutili, who has
been nominated for election to the Board of Directors at the Annual General Meeting in April.
■■ Magnolia Bostad wins another three land allocation competitions:
• Lundbyvassen in Frihamnen, Gothenburg:
production of a hotel covering 12,000
sqm and 150 rental apartments covering
10,500 sqm.
• Bålsta centrum in Håbo Municipality, in the
northern Greater Stockholm region: production of around 200 rental apartments
with a total area of around 20,800 sqm.
• Oceanhamnen in Helsingborg: production
of 109 rental apartments with a total area
of 8,500 sqm.
■■
Significant events during the quarter
In October, SEB's property fund, Domestica II,
acquired 401 rental apartments from Magnolia
Bostad. The deal includes two projects: 133
rental apartments in central Kungsängen and
268 rental apartments in central Norrköping
covering a total area of around 24,500 sqm.
Construction started on the apartments in December and occupancy is planned for 2016.
■■ Magnolia Bostad and Helsingborg Municipality
are signing a land reservation agreement for the
development of 260 rental apartments covering a total area of 13,000 sqm in Mariastaden,
Helsingborg.
■■ A new local plan for the development of more
than 1,550 apartments, with a planned building
right of around 95,000 sqm of living space, in
the Kungsängen 25:1 property (previously the
Slotts mustard factory) in Uppsala has been
approved. The construction of apartments in
the property is planned to start at the end of
2015/beginning of 2016.
■■
2014
Oct–Dec
2013
Oct–Dec
2014
Jan–Dec
2013
Jan–Dec
128.1
39.2
140.5
143.6
Operating profit/loss
52.2
17.2
47.3
23.7
Operating margin (%)
40.7
44.0
33.7
16.5
Profit/loss after financial items
45.7
16.2
29.8
20.5
Net profit/loss for the year
45.0
16.2
29.2
20.5
–86.1
–47.6
–229.1
–46.6
Return on equity (%)
13.4
11.4
13.4
11.4
Equity/assets ratio (%)
32.0
51.4
32.0
51.4
Earnings per share (SEK)
1.46
0.52
0.95
0.66
31,288,942
31,288,942
31,288,942
31,288,942
Return on capital employed (%)
9.1
8.5
9.1
8.5
Return on total equity (%)
8.7
8.3
8.7
8.2
Interest coverage ratio (multiple)
7.6
8.2
2.4
4.3
8.10
6.07
8.10
6.07
Key ratios – Group
Sales
Cash flow from operating activities
Number of outstanding shares
Equity per share (SEK)
2
Magnolia Bostad — Year-End Report 2014
A word from the
President
Looking back at 2014, we are pleased to report
that 2014 was a successful year for Magnolia Bostad. The company took strides forward during the
year and is progressing in line with our strategy.
Net sales for the full year were reported at SEK
140.5 million (143.6) and operating profit at SEK
47.3 million (23.7). Profit after tax was SEK 29.2
million (20.5).
During the year the company added six large
housing projects to its project portfolio – four
through acquisition and two by winning land allocation competitions. These projects include a total
of almost 1,300 apartments and have a total area
of close to 100,000 sqm. This means that during
the year we increased the number of planned
apartments in our projects by more than 50% and
the total area by 55%. In total, our project stock
is now around 4,000 apartments, with occupancy
planned up to 2019, and corresponds to around
300,000 sqm in total area.
During 2014 Magnolia Bostad worked intensely
with recruitment, and thanks to these efforts we
have been able to recently welcome twelve new
employees to the company's new premises on
Grev Turegatan in downtown Stockholm. Six of
these employees were in the Transactions area,
which considerably strengthens our transactions
team and opens new opportunities for business.
The financial side of the company also received a
strong addition with the appointment of Erik Rune
as CFO.
Our project portfolio is very promising and, together with these strong additions to our team, we are
Åby Ängar
Development of 245
space-efficient rental
apartments in Åby Ängar in
Vallentuna.
Location: Vallentuna
Type of ownership: Rental
Total area: 13,500 sqm
Number of apartments: 245
Architects: ETTELVA
Occupancy: 2017/2018
3
going into the future with a strong base. During
2015 we will start production on a number of
projects, and we are also working on completing a
number of new rental apartment transactions. Given this background, the coming year looks bright,
and we are expecting a strong improvement in
profits in 2015.
After six fantastic years as the President of Magnolia Bostad, I have now decided to leave the
operational side of the business. I would therefore
like to take this opportunity to thank all of my
committed employees within the company, as
well as the Board of Directors, for always creating
excellent conditions for both me and the organization to continuously expand the operations.
I have had the pleasure of working closely with
Fredrik Lidjan and I think it is extremely positive
that he will now take over as President. With his
broad background in real estate and his expertise
in running housing development projects, he is the
right person to lead Magnolia Bostad forward. As
a founder of the company, I am now looking forward to continuing to contribute to the company's
development in my role as a member of the Board
of Directors.
Stockholm, March 2015,
Andreas Rutili
President
Magnolia Bostad — Year-End Report 2014
Market
Housing prices in Sweden's major cities continued to increase during the fourth quarter, even if
the trend varies between markets. According to
an analysis conducted by SBAB, the increased
demand and low supply resulted in increasingly
shorter sale times and rising prices. According to
the same survey, prices are expected to continue to increase during the first quarter of 2015,
although at a slightly lower rate.
Across the country as a whole, the price of
tenant-owner apartments rose by 4 percent during
the fourth quarter and the price of single-family
Organizational
structure
Erik Rune took over as CFO in February. He has
considerable experience in the real estate industry.
Erik comes most recently from a position as CFO
in the Nordic region within CBRE Global Investors.
Before that he was the President of the Nordic
operations for London & Regional Properties.
In March, Fredrik Lidjan took over as President
of Magnolia Bostad. He was previously responsible for rental apartment development within the
company, and before this he was active in the
owner's Board of Directors and the company's
investment committee. Fredrik Lidjan's predecessor, Andreas Rutili, will be nominated at the Annual
Publiken 1
Magnolia Bostad is building
268 rental apartments in
central Norrköping. The
purchaser of the property
is SEB's property fund,
Domestica II.
Location: Norrköping
Type of ownership: Rental
Total area: 16,600 sqm
Number of apartments: 268
Occupancy: 2016
4
homes by 1 percent. In the Greater Stockholm
region, the price of tenant-owner apartments increased by 1 percent, and the price of single-family homes by 4 percent. In the Greater Gothenburg
region, the price of tenant-owner apartments increased by 1 percent and the price of single-family homes remained unchanged. In Malmö the
price of tenant-owner apartments increased by 3
percent and the price of single-family homes by 2
percent, and in Uppsala the price of tenant-owner
apartments increased by 1 percent and the price
of single-family homes fell by 6 percent.
General Meeting in April for election to the Board
of Directors.
The organization was strengthened with an additional eleven employees in transactions, marketing
and sales and finance, including Henrik Meeths
(Analysis Manager), Andreas Wallin (Regional
Manager South and West Sweden) and Magnus
Ericsson (Regional Manager Mid-Sweden).
We anticipate that we will continue to recruit
new employees in coming quarters. In total, the
company's organization currently consists of 30
employees.
Magnolia Bostad — Year-End Report 2014
Residential projects
Property
City
Type of project
Type of
ownership
Traversen 18
Sollentuna
New production
Rental
Svedje 1:307 and others
Åre
New production
Muttern 6
Stockholm
Kvarngärdet 28:7
Number
of
housing Total area
units
(sqm)
230
13,600
C
2015
Condominiums
14
1,300
S
2016
Renovation
Tenant-owner
56
3,000
CD
2016
Uppsala
New production
Tenant-owner
45
3,000
CD
2016
Kungsängens-Tibble 19:1
Kungsängen
New production
Rental
40
2,350
C
2016
Kungsängens-Tibble 20:2
Kungsängen
New production
Rental
93
5,500
C
2016
Publiken 1
Norrköping
New production
Rental
268
16,600
C
2016
Trapphuset 1
Sollentuna
New production
Tenant-owner
85
6,000
CD
2016
Vallentuna-Åby 1:94
Vallentuna
New production
Rental
119
6,750
CD
2017
Kungsängen 25:1 1)
Uppsala
New production
Rental
1,150
66,000
CD
2017
Östra Sala Backe, E2, kv 5
Uppsala
New production
Rental
100
6,600
CD
2017
Slagan 1
Helsingborg
New production
Rental
260
13,000
CD
2017
Kvarngärdet 28:6
Uppsala
New production
Tenant-owner
45
3,000
CD
2017
Vallentuna-Åby 1:149
Vallentuna
New production
Rental
126
6,700
CD
2018
Orminge 52:1
Nacka
New production
Rental
300
20,000
P
2018
Kungsängen 25:1 1)
Uppsala
New production
Tenant-owner
400
29,000
CD
2018
Sandumseter 2)
Norway
New production
Condominiums
275
28,000
CD
2018
Norefjell 2)
Norway
New production
Condominiums
100
12,000
CD
2018
Part of Gamla Staden 1:1,
among others.
Helsingborg
New production
Rental
109
8,500
P
2019
Part of Väppeby 7:7
Bålsta
New production
Rental
200
20,800
P
2019
Part of Lundbyvassen
736:168
Gothenburg
New production
Hotel
–
12,000
P
2019
Part of Lundbyvassen
736:168
Gothenburg
New production
Rental
150
10,500
P
2019
Skogskarlen 3 3)
Solna
8,950
MP
Stockholm
5,850
MP
Stockholm
500
MP
Instrumentet 2 3)
Kopplingsboxen 26
Total
3)
4,165
309,500
Magnolia Bostad's share totals 67.3%. Partitioned off in accordance with the local plan.
Magnolia Bostad's share totals 16%.
3)
Management property. The area refers to lettable area.
1)
2)
P Planning work
5
Estimated
complePhase
tion year
CD Concept development S Sales C Construction MP Management Property
Magnolia Bostad — Year-End Report 2014
Financial performance
Profit/loss for Q4 2014
Cash flow and financing
Consolidated net sales for Q4 2014 totaled SEK
128.1 million (39.2). Sales for the quarter were impacted by the sales in Norrköping and Kungsängen. Operating profit/loss was SEK 52.2 million
(17.2) and was primarily burdened by operating
costs and other operating expenses. The operating margin was 40.7 percent (44.0). Net financial
items were SEK –6.5 million (–1.0), and the change
is due to the higher interest expenses attributable
to an increase in bank funding in conjunction with
investments in new projects and the bond that
was issued during the year. Profit before tax was
SEK 45.7 million (16.2).
Consolidated available liquidity at the end of the
period was SEK 37.4 million (23.3). Cash flow from
operating activities in the fourth quarter totaled
SEK –86.1 million (–47.6). During the quarter, cash
flow from investing activities totaled SEK –1.1
million (–6.4). Financing activities were primarily
impacted by changes to loans and dividends, and
totaled SEK 37.7 million (71.3).
Profit/loss for the period January-December
2014
Net sales were SEK 140.5 million (143.6). Operating profit was SEK 47.3 million (23.7) and the
operating margin was 33.7 percent (16.5). Net
financial items were SEK –17.5 million (–3.2). Profit
after tax was SEK 29.2 million (20.5).
Balance sheet as at December 31, 2014
The balance sheet total at the end of the fourth
quarter was SEK 792.4 million (369.7), which
is an increase of SEK 422.7 million compared
to December 31, 2013. The strong increase is
mainly due to the acquisition of the Skogskarlen 3
property in Bergshamra and the issued bond loan.
Equity in 2014 increased to SEK 253.4 million
(190.0), which had an effect of SEK 39.0 million
using the equity method applied in the associated
company, Moutarde Holding AB. Equity/assets
ratio decreased to 32.0 percent (51.4).
Balance sheet total and equity (SEK thousand)
800 000
Stock
F. Holmström Fastigheter AB, in which Fredrik
Holmström has a controlling interest through companies, holds a 78.0 percent interest in Magnolia
Bostad. As of December 31, 2014, the company
had issued 31,288,942 shares to 21 stockholders.
The stock is not traded on an active market.
Accounting and measurement principles
The company applies the Swedish Accounting
Standards Board's general guidelines and statements. In situations where there are no general
guidelines from the Swedish Accounting Standards Board, recommendations from the Swedish
Financial Accounting Standards Council have
been applied.
The accounting and measurement principles are in
agreement with those applied in the 2013 Annual
Report and which are reported there under Note 1
on pages 48–50.
600 000
400 000
200 000
Key ratio definitions agree with those applied in
the 2013 Annual Report and can be found there
on page 64.
0
This report has not been audited by the company's auditors.
2012
Balance sheet total
Equity
6
Cash flow from operating activities for the period
January-December totaled SEK –229.1 million
(–46.6). The considerable increase in working capital is attributable to the balance sheet item, sales
properties, which increased following the acquisition of Skogskarlen 3, and investments in existing
project properties. Cash flow from financing activities was impacted by the company's increase in
funding in conjunction with new investments, the
bond that was issued during the year and dividends to shareholders. The total interest-bearing
borrowings amounted to SEK 506.5 million (152.1)
on December 31.
2013
2014
Magnolia Bostad — Year-End Report 2014
Consolidated income
statement
2014
Oct–Dec
2013
Oct–Dec
2014
Jan–Dec
2013
Jan–Dec
Net sales
128,108
39,198
140,541
143,576
Total income
128,108
39,198
140,541
143,576
–71,679
–17,356
–75,420
–105,631
–3,962
–2,787
–9,679
–7,740
1,215
–1,678
–5,560
–5,541
–374
–138
–1,399
–953
Profit/loss from participations in associated
companies
–1,152
–
–1,152
–
Operating profit/loss
52,157
17,239
47,332
23,710
375
1,254
3,412
3,062
Interest expenses and similar profit/loss
items
–6,874
–2,251
–20,940
–6,262
Profit/loss before tax
45,658
16,242
29,804
20,510
–608
8
–608
8
45,050
16,250
29,196
20,518
SEK thousand
Operating income
Operating expenses
Production and operating costs
Other external costs
Personnel costs
Depreciation, amortization and impairment
of property, plant and equipment and
intangible assets
Profit/loss from financial items
Interest income and similar profit/loss items
Tax on profit/loss for the year
NET PROFIT/LOSS FOR THE YEAR
7
Magnolia Bostad — Year-End Report 2014
Consolidated
balance sheet
SEK thousand
12/31/2014
12/31/2013
Goodwill
5,946
7,146
Other intangible assets
8,304
314
14,249
7,460
Equipment, tools, fixtures and fittings
199
217
Total property, plant and equipment
199
217
Participations in associated companies
39,832
4,525
Receivables from associated companies
23,541
26,541
Other securities held as non-current assets
30,614
30,614
Other long-term receivables
24,201
14,950
Total financial assets
118,188
76,630
Total non-current assets
132,636
84,307
Property held for resale
424,231
209,608
Total inventories, etc.
424,231
209,608
Accounts receivable
1,057
1,507
Receivables from associated companies
9,598
46,973
186,952
3,714
517
332
Total current receivables
198,123
52,525
Cash and bank balances
37,399
23,256
Total current assets
659,753
285,389
TOTAL ASSETS
792,389
369,696
ASSETS
Non-current assets
Intangible assets
Total intangible assets
Property, plant and equipment
Financial assets
Current assets
Inventories, etc.
Current receivables
Other receivables
Prepaid expenses and accrued income
8
Magnolia Bostad — Year-End Report 2014
Consolidated balance
sheet (cont'd)
SEK thousand
12/31/2014
12/31/2013
125,156
125,156
Equity method reserve
38,068
–
Other capital
60,997
44,389
Net profit/loss for the year
29,196
20,518
253,416
190,063
Provision for deferred taxes
169
–
Total provisions
169
–
494,353
146,130
100
4,000
494,453
150,130
Liabilities to credit institutions
12,000
2,000
Accounts payable
15,131
6,465
Liabilities to the parent company
–
12,311
Liabilities to associated companies
–
3,904
Income tax liabilities
1,138
15
Other current liabilities
5,336
1,062
Accrued expenses and deferred income
10,746
3,747
Total current liabilities
44,350
29,503
Total liabilities
538,803
179,633
TOTAL EQUITY AND LIABILITIES
792,389
369,696
EQUITY AND LIABILITIES
Equity
Share capital
Total equity
Provisions
Liabilities
Long-term liabilities
Liabilities to credit institutions
Other long-term liabilities
Total long-term liabilities
Current liabilities
9
Magnolia Bostad — Year-End Report 2014
Consolidated cash
flow statement
2014
Oct–Dec
2013
Oct–Dec
2014
Jan–Dec
2013
Jan–Dec
Profit/loss after financial items
45,658
16,242
29,804
20,510
Adjustments for non-cash items, etc.
–1,191
–20,406
4,407
–30,636
3,462
–9
3,635
–44
47,929
–4,173
37,846
–10,170
40,223
–32,542
–68,335
–36,748
–198,912
–26,290
–203,373
–1,754
24,619
15,413
4,750
2,088
–86,141
–47,592
–229,111
–46,584
–2
–
–8,083
–58
101
–
–88
–19
–1,238
–6,875
–6,660
–21,975
–
500
–
500
–1,139
–6,375
–14,831
–21,552
53
55
53
55
47,776
73,324
366,704
77,324
–10,137
–2,037
–103,666
–5,897
–
–
–5,006
–
37,692
71,342
258,085
71,482
–49,588
17,374
14,143
3,346
Cash and cash equivalents at the beginning
of the year
86,987
5,882
23,256
19,910
Cash and cash equivalents at the end of the year
37,399
23,256
37,399
23,256
SEK thousand
Operating activities
Income tax paid
Cash flow from operating activities before changes
in working capital
Cash flow from changes in working capital
Decrease(+)/increase(-) in property held for resale
Decrease(+)/increase(-) in current receivables
Decrease(+)/increase(-) in current liabilities
Cash flow from operating activities
Investing activities
Acquisition of intangible fixed assets
Acquisition of property, plant and equipment
Investment in financial assets
Disposal/reduction of financial assets
Cash flow from investing activities
Financing activities
Shareholders’ contributions received
Borrowings
Repayment of borrowings
Paid dividends
Cash flow from financing activities
Cash flow for the year
10
Magnolia Bostad — Year-End Report 2014
Change in equity
SEK thousand
Amount at beginning of the year
Share Equity method
capital
reserve
125,156
–
Profit carried forward
Write-up
Other equity
Net profit/
loss for the
year
44,389
20,518
20,518
–20,518
39,000
164 1)
Shareholders' contributions
Dividends
Change in equity method reserve
–932
–5,006
–
932
–
Net profit/loss for the year
Amount at the end of the period
c1)
11
Warrants
–
29,196
125,156
38,068
60,997
29,196
Magnolia Bostad — Year-End Report 2014
Financial calendar
Annual General Meeting: April 22, 2015
Report January-March: May 11, 2015
■■ Report January-June: August 17, 2015
■■ Report January-September: November 9, 2015
■■ Report January-December: February 26, 2016
■■
■■
Contact
Magnolia Bostad AB
Grev Turegatan 11 A
Box 5853
SE-102 40 Stockholm Sweden
Phone: +46 8-470 50 80
[email protected]
www.magnoliabostad.se
12
For additional information, please contact:
Fredrik Lidjan, President
[email protected]
+46 8-470 50 80