Half-year review, 6 August 2024 at 8:00

FINANCIAL PERIOD 1 JANUARY–30 JUNE 2024 KEY EVENTS

• Revenue EUR 28.4 (19.7) million.
• Contracts for building a total of 173 (50) apartments were signed
  during the period under review.
• 85 (76) apartment start-ups during the period under review.
• 159 (199) apartments were completed during the period under review.

PROSPECTS FOR 2024

• The company expects the operating profit without changes in values of investment properties for the financial year of 1 January–31 December 2024 to be EUR 6–12 million.
• The company expects the operating profit for the financial year of
  1 January–31 December 2024 to be EUR 8–14 million.

CONSOLIDATED KEY FINANCIALS*

CEO MARKUS MYLLYMÄKI

The market environment for property developers and property investors changed significantly in 2022. Money now had a price. The period of rising values had temporarily come to an end. Strong cash flows began to be valued again.

At Toivo, we began active market research and scenario analyses. We decided to update our strategy and business model to make them more effective in the new market environment. We focused on the disciplined execution of the new strategy and business model.

Market shares are now being actively distributed in the market for property developers and property investors. Thanks to our disciplined, creative and hard work, we won seven significant contracts in the second quarter, with a total value of approximately EUR 100 million.

The market remains difficult, but the outlook 6–12 months from now is better. The contracts we signed in the second quarter, approximately EUR 100 million in value, are also an indication that it is still possible to do sensible business and make deals in the current market. You have to be disciplined, creative and hard-working.

DEVELOPMENT: Toivo has a strong project development portfolio, which is why the company takes a highly selective approach to new contracts. During the second quarter, the company signed contracts for a total of 173 apartments and two community properties.

CONSTRUCTION: During the second quarter, Toivo began construction on 85 apartments and three properties. The company is preparing to start several construction sites during the second half of 2024.

OWNERSHIP: Toivo handles lease activities and management in-house by using the company's own Asuntomestarit®. The company carried out rent increases of 4–5% in autumn 2023. The rent increases and the large number of completed apartments are currently reflected in a declining occupancy rate. It is typical of the rental housing market that leases start in August–September when the new school year begins. We expect to see an improvement in the occupancy rate in the autumn.

SELLING: In the second quarter, the company signed seven significant commercial contracts with a combined volume of approximately EUR 100 million. The most significant of the contracts were the sale to Nuveen of an apartment portfolio that is mostly still under development, and the sale to Niami of completed residential properties.

Toivo’s business is very capital-intensive, and an optimal financial structure is important for the company. The company’s debt financing consists primarily of long-term bank financing. The company’s equity ratio was 43.0% and the financial loan to value (LTV) rate of its properties was 51.3%.

I would like to thank all customers, partners and Toivo employees for a promising first half of 2024.

ANALYST AND MEDIA EVENT

A public media and analyst conference in Finnish will be held on Tuesday, 6 August 2024 at 9:00 as a webcast. Use the following link to join the webcast: https://toivo.videosync.fi/q2-2024

The results will be presented by Toivo Group’s CEO Markus Myllymäki and CFO Samuli Niemelä. Presented material will be available at company website sijoittajille.toivo.fi/en after the event.

Toivo Group Plc

Board of Directors

Further information
Markus Myllymäki
CEO
Toivo Group Plc
Tel. +358 (0)40 847 6206
markus.myllymaki@toivo.fi

Certified Adviser: Nordic certified adviser.

About Toivo

Toivo is a Finnish real estate company that was founded in 2015. Its business consists of developing apartment lots, constructing housing and ownership of apartments. The Company’s business model is unique as Toivo’s business combines the value chain of real estate business from development and construction to ownership, management and rental of a completed property. Toivo manages the entire life cycle of residential real estate with its own team, from raw land development to renting apartments. This way Toivo is able to generate additional value to its customers, shareholders and stakeholders.

Toivo’s strategy is to develop apartments in accordance with the Toivo concept. The apartments aim for a strong development margin and a stable and attractive return, and this way enable long-term ownership and the generation of higher additional value to Toivo’s customers. Toivo has a knowledgeable and experienced team of experts with strong merits in the real estate business. The members of Toivo’s team have been involved in the development and construction of over 17,000 apartments, and they have an average of ten years of experience.

Toivo’s revenue in 2023 was EUR 43.7 million and its operating profit was EUR -0.3 million.