Strategic decision-making is an iterative process

1. Strategy workshop

2017-05-17
08/06/2017
1

2. Strategic decision-making is an iterative process

2
Market attractiveness
Long-term market potential
Potential to convert demand to deals
3
1
Financial ambition
• Dividend share of 40%
• Equity to asset ratio
>30%
• ROCE between 10-15%
Where to play &
How to win
Bonava potential to
capture
Historical performance
RMS position
Ability to achieve
competitive advantage
4
Resource limitations
Capital
Management attention
Resources/capabilities
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3. Slowing down of housing price increases most common

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4. Large difference in size of Bonava’s regions

Large difference in size of
Population in our regions. million inhabitants
Berlin incl. Brandenburg
3.7 (Berlin)
Rhein-Ruhr
St Petersburg
Rhein-Neckar/Stuttgart
Rhein-Main
Köln/Bonn
Stockholm county
2.3
Copenhagen
1.8
Hamburg
1.8
Sachsen
1.5
Greater Helsinki
1.4
Riga
1.2
Greater Gothenburg
1.0
Ostsee
0.6
Tallinn
0.6
Bergen
0.4
Tampere
0.2
Uppsala
0.2
Oulu
0.2
Turku
0.2
Linköping
0.2
Umeå
0.1
Source: Data collections
regions
2.5 (Brandenburg)
3.0
4.0
4.5
5.3
5.5
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4

5. All regions have positive population growth rate

Population vs. population growth. %
2.0%
1.9%
1.5%
0.4% 0.4%
Ostsee
0.5%
Hamburg
0.5%
Rhein-Ruhr
Turku
Köln/Bonn
Tampere
Riga
Greater Helsinki
Umeå
Tallinn
Bergen
Oulu
Copenhagen
Greater Gothenburg
Linköping
Uppsala
St Petersburg
Stockholm county
Sachsen
Rhein-Main
0.5% (only
Berlin 0.95%)
Rhein-Neckar/Stuttgart
1.5% 1.5%
1.1%
1.2% 1.1% 1.0%
1.2%
1.0%
1.0% 0.9%
0.8%
0.7% 0.6%
Berlin incl Brandenburg
Yearly population growth
1.7%
Total population
Note: For Sachsen and Köln/Bonn assumed provided figure was for period
2010-2016. Recalculated to get a yearly value
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6. Differences in market risk parameters between our markets

Ease of doing business (ranking 1 = Best
country in the world)
Copenhagen
Norway
Sweden
Estonia
Finland
Latvia
Germany
Lithaunia
Denmark
Currency volatility (compared to SEK). %
Sweden 0%
3
6
9
12
13
14
17
Denmark
5%
Germany
5%
Finland
5%
Estonia
5%
Latvia
5%
Lithaunia
5%
Norway
21
40
Russia
6%
11%
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7. Backup: What is included in ease of doing business

Ease of doing business
Included sub parameters
Best performing of our
markets (global position)
Worst performing of our
markets (global position)
• Ranking by The World
Bank
Starting a business
Estonia (14)
Germany (114)
Dealing with construction permit
Denmark (6)
Russia (115)
Getting electricity
Germany (5)
Latvia (42)
Registering property
Estonia (6)
Germany (79)
Getting Credit
Latvia (7)
Norway (75)
Protecting Minority investors
Norway (9)
Finland (70)
Paying taxes
Denmark (7)
Russia (45)
Trading cross borders
Denmark (1)
Russia (140)
Enforcing contracts
Norway (4)
Finland (40)
Resolving insolvency
Finland (1)
Russia (51)
• Purpose:
• Economies are ranked
on the ease of doing
business. from 1 190
• A high ease of doing
business ranking
means the regulatory
environment is more
conducive to the
starting and operation
of a local firm
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8. Market attractiveness model weight together scores

Step 3
Step 2
Step 1
Data collected centrally and in
the business units
• Each metric assigned a
score between 1 and 5
• Best 5 and worst 1
(percentage distributed
between)
• All scores weighted
together with individual
weight per metric
Market
attractiveness
ranking
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9. Back up: Details of model

Sweden and Germany in top
Market attractiveness ranking score
Including short term factors i.e.. economic sentiments
Stockholm county
Greater Gothenburg
Linköping
Uppsala
Umeå
Rhein-Main
Copenhagen
Rhein-Neckar/Stuttgart
Bergen
Riga
Berlin
Rhein-Ruhr
Sachsen
Tallinn
Hamburg
Greater Helsinki
Köln/Bonn
Ostsee
Oulu
St Petersburg
Tampere
Turku
3.0
3.0
3.0
2.9
2.9
2.8
2.8
2.8
2.8
2.7
3.7
3.6
3.5
3.5
3.5
3.4
3.4
3.3
3.3
3.2
3.2
3.2
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10. Sweden and Germany in top

Agreed current situation at EMG meeting
Experience curve
Current maturity
Low
Construction cost
(cost/m2)
• Sweden
• Norway
• Finland
• Denmark
• St Petersburg
High
• Single family SE
• Baltics
Germany
Accumulated production volume
in same platform
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11. Agreed current situation at EMG meeting

Agenda
Market attractiveness
Data driven strategy process
Strategic ideas
Beyond 2020
What if the crisis comes
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12. Agenda

Beyond 2020 we should accelerate growth
2021-2025
2016-2020
• Mature all markets for future
strength
• Establish Design & Production.
procurement
• Build brand awareness
• Set the company culture
• Ensure a not to wide spread
footprint
Germany
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13. Beyond 2020 we should accelerate growth

Scenarios to proceed with and
develop scenarios for
To achieve 10% growth 2020-2025 different potential scenarios
Number of completed units Consumers + Investors, Units
2020
Example scenarios 2025 leading to 10% net sales growth
12,850
2,738
7,979
1,700
13,077
12,850
2,333
2,525
Sweden
3,936
Germany
5,300
4,268
2,650
2,624
2,235
1,629
540
720
740
870
1,160
1,192
741
988
2020 (F1)
Scenario 1 - 10 %
growth all markets
2,419
Finland
Denmark/Norway
1,480
802
1,069
1,099
1,000
Scenario 2 - Double
Germany, Estonia,
Latvia. 6.5% growth
other markets1
Scenario 3 - 1000
units in new markets.
8.2% growth existing
markets
1) Since average sales prices per units are lower in Germany. Latvia and Estonia
units increase more when increasing net sales with 105 per annum
total number of
St Petersburg
• Net sales grows from ~19
BSEK (2020) to ~32 BSEK
(2025)
• No margin improvements
included Improving
margins could reduce the
needed for top line growth
• No adjustment done for
housing price increases
Baltics
New markets
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