Addhome group distinguishes 2 target groups: business customers (B2B) and private customers (B2C). Depending on the target group, there is a different buyer persona & application (a buyer persona is a detailed description of a target group based purchasing behavior). The following is based on historical data of Addhome group stored in the CRM Teamleader of Addhome group since 2019.

BUSINESS CUSTOMERS (B2B):

INTERNATIONAL MODULAR CONSTRUCTION MARKET

A June 2019 McKinsey study estimated the global modular construction market at $111M in 2017 and is expected to grow to $193M by 2026. This equates to an annual global growth of approximately 7%.

Container construction still has a lot of growth potential in Belgium & Europe, as the Belgian (construction) market traditionally lags behind international trends.

BELGIAN RESIDENTIAL MARKET

The population continues to grow in Belgium. "Het Federaal Planbureau" estimates that the number of inhabitants will increase by +/-600.000 inhabitants between 2018 and 2030 to 12,0 million. In addition, there is estimated that Belgium will have +/- 13,0 million inhabitants by 2060. As a result, together with the evolution in the composition of households, the number of residential units/households will increase by +/-327.000 between 2018 and 2030. Hence, there is estimated that Belgium will have +/-5,8 million residential units/households by 2060.

This growth entails an inevitable shortage on the Belgian residential market. In order to follow the demographic evolution, +/-20.000 additional residential units must be added every year in Belgium in the coming years.

With an average age of +/-60 years, Belgian housing is among the oldest in Europe. An estimated 40% of all buildings (residential facilities, official buildings, workshops, etc.) date from before the end of the Second World War.

The current production of new residential properties annually comprises less than 1% of the total supply of residential properties. At the current rate, it will take more than a century before all existing, energy-wasting residential properties are replaced by nearly energy-neutral residential properties.

Today, more than 1 million residential units are of inadequate quality and suffer from problems with electricity, water, condensation, moisture, risk of CO poisoning, dangerous stairs, etc. A third of them struggle with structural problems and are therefore in urgent need of replacement.

Belgian housing is not adapted to current European standards and, despite the relatively mild climate, has a high energy bill. The average energy consumption of Belgian residential properties is +/-40% higher than in the Netherlands, and approximately as high as Finland. Without drastic measures, reaching European standards to significantly reduce greenhouse gas emissions by 2050 will become unattainable in Belgium.

The most successful Belgian renovation/energy premiums, those for double glazing and roof insulation, have led to an improvement of 10% and 8% of Belgian residential properties respectively in eight years (between 2005 and 2013). The impact of the Belgian renovation/energy premiums for floor insulation and wall insulation is even lower. More than half of the residential properties in Belgium have no floor insulation or wall insulation, and only half have pipe insulation. In 2018, more than 20% of residential properties still have no insulating glass.

How the rather limited space in Flanders is dealt with is a hot social issue. New housing/new construction does not automatically mean that the open space will be occupied. There are various ways to expand and renew the number of housing options. (Rural) expansion, reconstruction and renovation.

Expansion and reconstruction are forms of new construction and create additional, new housing options without taking up open space, which is wrongly perceived as such. Renovation, on the other hand, does not create an additional supply.

TRENDS IN THE BELGIAN CONSTRUCTION SECTOR ACCORDING TO EMBULD & KPMG

Potential customers get into contact with Addhome group's products through the following 3 channels:

1. Online via Facebook, Instagram &/or Google. The annual marketing cost is approximately 2-3% of Addhome group's total revenue. This is relatively small compared to various other sectors. The "cost/click" & "cost/lead" is actively monitored & adjusted weekly/monthly if necessary. Today, at the beginning of 2024, the average "cost/click" of Addhome group is +/-1,00-2,00 Euro, while the global "cost/click" across various sectors is 3,75 Euro. The average "cost/click" has increased in the last 24 months due to the arrival of several new players on the modular construction market.

2. "Offline" via friends and acquaintances whom are already customers of Addhome group. Addhome group has developed a "referral program" for existing customers whereby customers are encouraged to recommend Addhome group to friends and acquaintances.

3. Addhome group is strongly committed to strategic partnerships with other companies. This is done through partnerships with garden centres, furniture brands, kitchen builders, architects, etc. Some examples of this are strategic partnerships with:

PRICE SENSITIVITY

Addhome group's customers are in the middle class, henc the price is tailored to that segment. Sales prices vary between 1.200-1.700 Euro/m2 Excl. VAT. The sales team is well internally trained & very familiar with the (construction) market & competitor products.

Throughout the various crises (Corona crisis, raw materials crisis, energy crisis, ...), Addhome group has made every effort to maintain the above price range for its customers, mainly through an active purchasing policy. Some examples:

CREDIT TERMS

Since mid-2022, Addhome group is an officially recognized intermediary by the Financial Services and Markets Authority (FSMA) to obtain financing for modern container units &-homes. Some of our Sales Agents have the required certificate, for which they must regularly attend training courses and take exams. The recognized Sales Agents can help Addhome group's customers to obtain suitable financing for their modern container units &-homes.

Addhome group works together with Alpha Credit, a subsidiary of BNP Paribas Fortis. There are also other players on the financial market such as Cetelem, Record Bank, ... However, Addhome group has chosen to collaborate with Alpha Credit because:

The independent approval for financing by Alpha Credit is dependent on many different factors & each application is reviewed and analyzed on a case-by-case basis.