Transcription

About Liven

A brief overview for all new listeners – Liven is a residential real estate developer, with most projects in Tallinn and one construction ongoing in Berlin, a project we are looking into further.

Our land portfolio expanded slightly last quarter, and we have more than 1,600 apartments awaiting development. Primarily, these are all in Tallinn or its vicinity. Last year, according to

Kantar Emor, we were the most reputable developer in Estonia.

Key indicators for Q3:

Looking at the third quarter indicators, sales revenue primarily came from the handover of row houses in the Iseära project, where the next phase was completed. About half of these were handed over, and the other half moved into the fourth quarter. Some homes are not yet sold.

This revenue result of €5.1 million, given the profitability of current projects, allowed us to achieve a net profit of €0.1 million. We mainly look forward to the end of the year when the largest handovers will take place in the Regati project, which began in October and will bring the highest revenue. During the quarter, we signed a total of 66 contracts under the law of obligation, which is more than in the first two quarters combined. The total number is 116 by the end of the third quarter. Last year, this number was 95 at the same time, and last year's total was slightly under 130. This shows that in terms of sales, we are doing better this year than last year. Customer feedback has noticeably improved compared to last year. This year,

343 new residential and commercial spaces have been added to our development pipeline through new acquisitions we made.

Sales overview

A bit more detail on sales during the last quarter and the first nine months. Since handovers were few, the volume of sold but still under construction apartments swelled to a record high, totaling €56.1 million in sales revenue. €39 millions of this will be completed this year, mainly in the Regati project and some Iseära row houses that had not yet been handed over by the end of the third quarter. Buildings worth €16.2 million are set for completion next year. Finished units were sold for two million euros, meaning these were sales contracts that immediately became revenue and could be handed over. €3.1 million was the handover of units pre-sold earlier, mainly in the form of Iseära row houses.

Important events

Several constructions started. In Luuslangi, we continued the construction of the second phase, where a total of 39 apartments will be completed. In the Olemuse project in Nõmme, we started the construction of 72 homes in a total of twelve smaller buildings. In the Peakorter project, which is a joint project with Oma Grupp, we also started the construction of homes. www.liven.ee

Additionally, the next phase in Iseära includes the construction of 30 row house units.

Construction works also started in October in the Virmalise project, which is right next to

Tallinn University of Applied Sciences. And finally, the start of construction for the Iseära apartment buildings, 36 units. Sales-related events: In the third quarter, the first sales contracts were finally concluded in the Wohngarten development project in Germany. Three units in the third quarter, and one more has been added in the fourth quarter. The total is 24 apartments.

Also, during the quarter, the completion and handover of the Iseära second phase row houses took place, which I already mentioned. In addition, we reached the point in October where the first Regati homes were handed over to the homeowners. Two more properties were acquired, both through public auction. One is in Lasnamäe, Linnamäe tee 21a, and the other is in

Haabersti, Järveotsa tee 16c. A detailed spatial plan is required for both. In Lasnamäe, we would certainly like to find a property where we could start immediately, as we currently have no projects in that area. Järveotsa tee in Haabersti fits well into our land portfolio, as we believe that by the time the detailed plan there is completed, most of our current projects, mainly

Iseära and Luuslangi, will be sold out. It is also important that we had the detailed plan for the

Juhkentali 48 property enacted, and we have now begun the next steps, which involve moving towards a building permit.

Environmental factors affecting demand

Now, looking at the general sales situation, the environment has not changed much. However,

Liven's sales are much better compared to 2024. If we look at the sales activity ratio, the peak, from our perspective, was reached in the summer when we received many reservations related to the start of new phases. In the third quarter, we put a lot of effort into making these paid reservations into contracts under the law of obligation. Some reservations have fallen through, some have been replaced, but in the weekly sales activity ratio, we consider immediate customer interest and reservations, not just contracts under the law of obligation, because otherwise, the picture might be slightly distorted. We often collect reservations for a long time before they are converted into contracts under the law of obligation. The weekly sales activity ratio shows the immediate arrival of customers who sign a written reservation agreement and pay a small fee for it. Of course, with reservation agreements, they have the right to get the fee back. Sales are mostly supported by the rise in average real wages. Euribor has stabilized in recent months, meaning there has been no change (it has fluctuated between 2.0 and 2.1).

Broadly speaking, we are still affected by the same external environmental factors and quite high competition.

Project overview

Two new projects were added, whose beginnings we expect in late 2029 and in 2030. This greatly depends on the speed of the detailed planning process, which is generally unpredictable. However, we see that certain changes have been made in the city, and whether they will continue under the new city government remains to be seen. At least the problem at the city government level or in front of the public is sharply in the spotlight, and perhaps this will genuinely help to improve it. For other projects, we will go through them quickly one by one.

In the Iseära project, we have a total of 233 row house units and 151 apartments in apartment buildings. A little over half, or 51%, is still available for sale and construction. This is our "good workhorse," meaning some buildings are completed, and the next ones go into construction.

If the market were perhaps more supportive and the overall sales volume were larger, we could do more. Many permits have already been obtained in advance, but it is purely a matter of demand. So far, this has been enough to keep the project continuously running. We have www.liven.ee typically signed contracts for five row houses and three apartment buildings at a time so far.

Here is an example of the row houses and apartment buildings, the first of which were completed and handed over in the second quarter of this year.

The Regati project is one of our largest projects, with a total of 110 apartments in the first phase, which has also just been completed. Approximately 65% of the units are sold.

Handovers began in October. We expect that most of these homes will be handed over by the end of the year. Perhaps some will move into the next year due to technical or other reasons, but we hope to hand over the vast majority this year. Here is also an example of the community room in the Regati project, which many clients like. It is possible to organize events, do yoga, or light stretching before running or after cycling. It is a place for neighbors to socialize.

The Luuslangi project, whose first buildings are completed and visible on the left. Construction of the next two buildings, which share a parking lot, has begun, and construction of two more next buildings is ready to start immediately. Over half of the part that has gone into construction is sold as of today. Here is another picture of the same buildings.

Our Wohngarten project in Berlin has a total of 24 units, of which 17% are sold. Construction has begun, and although demand is high there, the competitive situation is a bit difficult, as a competitor also started sales a few hundred meters from us after we did. Some home buyers went there afterward, finding a better offer. Generally, there was little supply in that area, but now another project with 80 units is adding supply, which significantly increased the overall offering. However, construction is underway, and customer interest is high, so there are certainly people to work with.

The Olemuse project in Nõmme. One third is sold as of today. There are a total of 12 small buildings, with six apartments in each building. Construction has begun, and the general contractor is NOBE, with whom we have not cooperated before, but we have very much looked forward to this cooperation. We are glad we could start and expect its completion by the end of next year. Here is another 3D picture of the buildings.

The Virmalise project, located right next to Tallinn University of Applied Sciences and the Uus

Maailm district. 28 apartments, one third sold, and the main construction contract was signed with Bildgren Ehitus in October, and we also expect its completion by the end of next year.

Whether all the apartments will be successfully handed over by the end of next year is not completely certain, but the vast majority of construction work should be completed by then.

Peakorter Phase I. Our joint project with Oma Ehitaja, or Oma Grupp to be more precise. Oma

Ehitaja performs the construction work there. More than 25% are sold, and construction began in September. We expect this project to be completed in the first quarter of 2027. We do not consolidate this project in our numbers precisely because it is a 50/50 participation for us.

Juhkentali 48. Purchased at an auction just before the start of the corona pandemic. The detailed spatial plan was already quite far along there, but it still took many years to get it enacted. Now that enactment has been done, and 30 days have passed, and no one challenged the decision to enact it. We are preparing an architectural competition where the concept of our project will be developed. 63 apartments and approximately 4,000 square meters of commercial space. The commercial space could be used, for example, as a hotel or apartment hotel or something similar. We are not planning a classical office there initially.

Peakorter Phase II. The detailed spatial plan was adopted in 2025. We are now continuing to process the detailed spatial plan and hope to get it enacted. It is difficult to say when this might happen, as internal processing is still underway, and we are also slightly affected by the city government changing. As long as this changeover process is underway, such decisions are www.liven.ee not moving much there either. Six apartment buildings and 137 apartments. It is located right next to the Arsenal shopping center and shares an entrance to the same property where we are already building with Oma Ehitaja, doing a joint project.

The next project is called Kadakadabra, located at Kadaka tee 88. We have been working on the detailed spatial plan since 2017, and it has been adopted, but its enactment is also quite close. The drafts are ready, but we are also waiting for the new city government and the new council to take office so that it can move to the council for enactment. Here, we have already started the design of the preliminary project. Once the enactment is fully done, we will immediately start applying for a building permit. We still hope to start building it by the end of next year.

Overview of financial results

Now Joonas will continue, who will talk to us about the numbers. Hello again from my side as well. As Andero said, we did not have many home handovers this quarter, with 15 contracts under the law of property, and therefore sales revenue was also slightly over five million euros.

Given the cost structure and the profitability of the projects, this is a level where we remained slightly in the plus. Operating profit was €120 thousand and net profit was €132 thousand.

Otherwise, marketing and general administrative expenses are at a customary level. Perhaps in previous quarters, there was more fresh sales activity for new projects, which is why the marketing expenses for this quarter are somewhat lower than in previous periods. In terms of the financial position, the change during the quarter was primarily related to the construction of the Regati project, which increased our consolidated asset volume to over one hundred million euros. The volume of loan obligations reached €62.5 million at the end of the quarter, of which construction financing was €25.4 million. The equity ratio without construction loans has remained at the 25% level. If you look at the graph of different inventories below left, with many projects moving into construction, they are classified under "construction in progress." I should clarify that this also includes multi-phase projects where construction has begun. It does not mean that the entire volume of a multi-phase project is in construction. We have classified the project into that group where construction has begun. There are no very significant changes in terms of loan obligations. As mentioned, the volume of construction loans increased primarily due to the construction of Regati.

Outlook

We look to the future in two views

one, the near view, or the last quarter of this year, and the other, a bit longer, 2026. We will continue sales in several projects that are in construction or moved into construction during this quarter. We enter the quarter with a pre-sale volume of

€39 million. Handovers from the Regati project are the main volume and source from which we will derive sales revenue. Since the handover has been delayed slightly later than initially hoped due to a delay in construction completion, it is possible that the handover of some homes will be postponed to the beginning of next year. Looking at the estimate, it seems that total sales revenue for the entire year could be between €45-50 million. This primarily depends on the timing of handovers. Nevertheless, this volume is still sufficient to achieve the 20% return on equity target. The equity size at the beginning of the year was €18 million, which indicates a minimum net profit of approximately four million euros for the year. Looking ahead, we do not see any very significant changes in the environment for next year. We expect the situation to gradually improve. The projects where we started construction in summer-autumn, the third quarter, and October have a total of 205 homes being completed. The estimated sales volume upon handover for all these 205 homes is €55 million. Again, today it is difficult to forecast both sales pace and handovers until the very end, but this is an order of magnitude, www.liven.ee the vast majority of which we can hand over during the next year. In addition, homes completed in 2025 that we have not handed over in 2025 will be sold and handed over on an ongoing basis during the next year. We are also preparing new phases of earlier projects and new projects to bring them to both sales and construction – this includes Kadakadabra, Juhkentali, and probably the second phase of Peakorter towards the end of the year. In short, work continues primarily to achieve the 2027 result.

Loan dynamics and outlook

Finally, the estimated forecast for the dynamics of loan obligations. The total level of loan obligations today exceeded €60 million. Due to handovers in the Regati project, which began in October, and depending on how exactly that goes, we expect a general decrease in the balance of loan obligations in the following quarters, supported by a drop in construction loans. With the ongoing constructions reaching a later phase in the middle and at the end of next year, we can expect the balance of construction loans to rise to a higher level again. As the comment below the table states, these forecasts are very sensitive to various factors, such as the volume of pre-sales, sales, and the timing of the start and end of construction work.

This is today's best view and estimate.

This concludes the official part of the presentation, and we will now offer the opportunity to ask questions if desired. As Andero introduced at the beginning, there are buttons and places in the bottom right corner of the screen where you can write questions. If you do not wish to ask questions here, you can, of course, always write questions to the email [email protected].

The presentation, video recording, and transcript used in the webinar will also be uploaded to the website liven.ee/investor, where materials from previous seminars are also available. We thank the listeners and viewers and will likely meet in three months when we give an overview of the full 2025 results and the fourth quarter results. Thank you very much. www.liven.ee