Serneke Group

Interim / Quarterly Report • Oct 28, 2021

INTERIM REPORT JANUARY–SEPTEMBER 2021

STRENGTHENED MANAGEMENT AND POSITIVE TREND

JULY – SEPTEMBER 2021

• Order bookings amounted to SEK 1,195 million (961)
• Income amounted to SEK 1,968 million (1,498)
• Operating profit amounted to SEK 25 million (loss 79)
• Cash flow from operating activities amounted to SEK 207 million (outflow 167)
• Cash flow for the period amounted to SEK 268 million (7)
• Profit for the period amounted to SEK 37 million (negative 66)
• The equity/assets ratio was 36.7 percent (33.2)

JANUARY – SEPTEMBER 2021

• Order bookings amounted to SEK 4,595 million (5,787) and the order backlog was SEK 12,642 million (10,623)
• Income amounted to SEK 6,192 million (4,705)
• Operating profit amounted to SEK 164 million (loss 367)
• Cash flow from operating activities amounted to SEK 255 million (outflow 556)
• At the end of the period, available cash and cash equivalents totaled SEK 803 million (305)
• Profit for the period amounted to SEK 262 million (negative 286)

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Income	1,968	1,498	6,192	4,705	8,358	6,871
Operating profit	25	-79	164	-367	117	-414
Operating margin, %	1.3	-5.3	2.6	-7.8	1.4	-6.0
Profit/loss for the period	37	-66	262	-286	190	-358
Earnings per share, SEK, before dilution	1.32	-2.94	9.38	-12.75	7.10	-15.82
Earnings per share, SEK, after dilution	1.32	-2.94	9.38	-12.75	7.10	-15.82
Equity per share, SEK, after dilution	84.90	84.52	84.90	84.52	84.90	78.68
Equity/assets ratio, %	36.7	33.2	36.7	33.2	36.7	32.5
Net debt/receivable	-863	1,640	-863	1,640	-863	20
Net debt, or receivable/EBITDA	-4.3	-4.1	-4.3	-4.1	-4.3	-0.1
Net debt/equity ratio, %	-36.4	86.5	-36.4	86.5	-36.4	1.0
Order bookings	1,195	961	4,595	5,787	9,447	10,639
Order backlog	12,642	10,623	12,642	10,623	12,642	13,619

CEO STATEMENT

A year has now passed since we launched a new business plan and charted a new course for the company. Closing the books for the third quarter, we can report that the strategy is working – we are on the right track.

Although the third quarter is normally weak in the industry, our third quarter profit of SEK 25 million (loss 79) was our best since 2017. Most gratifying in the quarter was that Serneke Sweden's contracting operations reported profit of SEK 20 million, improving its earnings for the fifth consecutive quarter. While far from complacent, we do find strength in our hard work and discipline, primarily regarding the projects we undertake, also being reflected in the figures.

The company's growth remains favorable, increasing both for the quarter, as well as accumulated over the year. While production of both the Karlatornet tower and other parts of the Karlastaden district are contributing, we are also seeing growth in other parts of the operations. Driven by continuing strong market demand, order intake rose 25 percent (against the comparative period) for what is normally a weak quarter. The order book has been strengthened by the property transactions we have conducted over the past year, generating significant volumes for the contracting operations.

We are now taking the next step in the company's development, recruiting four new members of Group Management. Kaia Eichler, Carole Lindmark, Johanna Rutberg and Mikael Hultqvist bring additional expertise and initiative, reinforcing the conditions for keeping our business sustainable in the long term.

Management now aims to pick up the pace, increasing the effectiveness of our efforts towards stability and profitability. Although the trend is positive, we still have some way to go to the levels we seek to maintain over time. While intensifying our efforts here and now, we are also looking ahead, taking steps to develop the Serneke of tomorrow.

We operate in a changing world in which a pandemic, cement crisis, rising prices for materials and an escalating climate challenge are factors imposing demands on our capacity to adapt and develop our operations her and now. However, a changing world and industry also provide opportunities to develop and sharpen a unique offering with competitive advantages and added value. For customers, employees and society in general.

With a clear focus on customer-oriented operations and market needs, we now intend to advance our positions in areas that we believe will be central in a changing world. A business subject to increasing demands from the perspective of sustainability, increased use of digital tools, reliable

deliveries building stable customer relationships and a clear brand that is lived and expressed through the company's culture. These are all examples of areas where we are now increasing our efforts to build sustainable competitiveness for the long-term.

At Karlastaden, the tallest building in the Nordic countries is now rapidly gaining height. Following complex reinforcement work in the summer, construction is now advancing at a rate of one floor per week. At the time of writing, the core of the building has reached the 23rd floor of a total 74. The Capella district is also in full production and planning is in progress for the three blocks we are developing in a joint venture with Balder. The remaining three blocks, of eight in total, are being offered to the market to find new partners.

Finally. During Safety Week, currently in full swing, we focus on our culture regarding critical work environment issues. This includes how we work with safety on our projects and how we behave towards one another. A safe and secure work environment that fosters the health and well-being of our employees is the most important prerequisite for our continued development.

Michael Berglin, President and CEO

Order bookings	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Contracting	1,195	961	4,595	5,787	9,447	10,639
Order backlog	Sep 30	Sep 30	Dec 31
SEK million	2021	2020	2020
Contracting	12,642	10,623	13,619

ORDER BOOKINGS AND ORDER BACKLOG

External order intake for the quarter amounted to SEK1,195 million (961), which is an increase of 24 percent compared with the corresponding quarter last year.

The emphasis of the assignments secured during the quarter is primarily on housing production. The quarter's largest order amounted to SEK 502 million and pertains to a turnkey contracting agreement signed with Magnolia for the new production of 412 rental apartments in Knivsta. Construction commenced in the third quarter and is scheduled for completion in the first quarter of 2025.

The market trend and prospects remain relatively unchanged compared with the preceding quarter.

Underlying demand remains, although reflecting a certain shift from private clients for residential projects to local government clients, with increased orders for public spaces and public properties.

At the end of the third quarter, the external order backlog amounted to SEK 12,642 million (10,623). This entails an increase of 19 percent compared with the corresponding quarter last year.

Of the order backlog over the next three years, green projects account for SEK 1,800 million. The projects involve constructing properties in accordance with established certification requirements that agree with Serneke's green framework.

Order backlog (SEK million)

Project allocation order backlog

ASSIGNMENTS WITH ORDER VALUES OF MORE THAN SEK 100 MILLION IN JULY – SEPTEMBER 2021

Assignment	Location	Order value (SEK million)	Anticipated start of construction
Housing	Knivsta	502	Third quarter 2021
Housing	Nacka	293	Third quarter 2021
Housing	Lidingö	157	Fourth quarter 2021
Industry	Helsingborg	147	Third quarter 2021

Serneke signed a turnkey contract with Patriam to construct 48 tenant-owned apartments on the island of Lidingö, outside Stockholm. The homes will be completed in the summer of 2023.

INCOME AND PROFIT

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Income	1,968	1,498	6,192	4,705	8,358	6,871
Operating profit	25	-79	164	-367	117	-414
Net financial items	8	-3	18	-16	-54	-88
Earnings after financial items	33	-82	182	-383	63	-502
Tax	4	16	80	97	127	144
Profit/loss for the period	37	-66	262	-286	190	-358

JULY – SEPTEMBER 2021

Consolidated income amounted to SEK 1,968 million (1,498), an increase of 31 percent. Business Area Sweden increased its income by 21 percent to SEK 1,925 million (1,592), Business Area Invest increased its income to SEK 22 million (28), with the increase consisting primarily of contracting income for Karlatornet AB (joint venture) of SEK 194 million.

Operating profit amounted to SEK 25 million (loss 79) and was mainly positively affected by contracting operations in Sweden. Compared with the preceding year, the margin in our ongoing projects for the quarter is indicative of operating profit moving in the right direction.

Net financial items amounted to SEK 8 million (negative 3) the increase is mainly attributable to the shareholder loan arising in connection with the sale of the Karlatornet tower in the fourth quarter of 2020 for approximately SEK1.4 billion. During the quarter, borrowing costs of SEK8 million (17) on project properties were capitalized.

The Group reported an estimated tax expense of SEK 4 million (16). The positive tax effect for the quarter is explained by non-taxable income and a change in deferred tax related to loss carryforwards.

Profit for the period amounted to SEK 37 million (loss 66) and earnings per share after dilution for the quarter were SEK 1.32 (loss 2.94).

JANUARY – SEPTEMBER 2021

Consolidated income amounted to SEK 6,192 million (4,705), an increase of 32 percent. Business Area Sweden increased its income by 15 percent to SEK 5,714 million (4,965). Business Area Invest's income increased to SEK 1,106 million (102), with the increase consisting of, for example, the net reporting of Fastighets AB Balder's acquisition of its part of the joint venture, but also of asset sales in accordance with a business settlement during the fourth quarter of 2020 and contracting income for Karlatornet AB (joint venture) of SEK 491 million.

Operating profit amounted to SEK 164 million (loss 367) and was mainly affected positively by Business Area Invest through the formation of a joint venture in which Balder acquired 50 percent, to construct three buildings within the Karlastaden district. Compared with the preceding year, the margin in our ongoing projects is indicative of operating profit moving in the right direction.

Net financial items amounted to SEK 18 million (negative 16) the increase is mainly attributable to the shareholder loan arising in connection with the sale of the Karlatornet tower in the fourth quarter of 2020 for approximately SEK1.4 billion. During the period, borrowing costs of SEK35 million (42) on project properties were capitalized.

The Group reported an estimated tax expense of SEK 80 million (97). The positive tax effect for the period is explained by non-taxable income and deferred tax effects of transactions.

Profit for the period amounted to SEK 262 million (loss 286) and earnings per share after dilution for the period were SEK 9.38 (loss 12.75).

The production of the Karlatornet tower on Lindholmen is progressing at full speed and the building is seriously starting to become part of the cityscape. The tower is now growing in height by one floor a week. Photo: Kasper Dudzik

6 | SERNEKE

FINANCIAL POSITION

	Sep 30	Sep 30	Dec 31
SEK million	2021	2020	2020
Total assets	6,465	5,719	5,992
Total equity	2,372	1,896	1,946
Net debt	-863	1,640	20
Net debt/EBITDA	-4.3	-4.1	-0.1
Cash and cash equivalents	603	81	234
Equity/assets ratio, %	36.7	33.2	32.5

On September 30, the consolidated balance sheet total was SEK 6,465 million (5,992) and the equity/assets ratio was 36.7 percent (32.5). Cash and cash equivalents at the end of the period amounted to SEK 603 million (234), with the Group also having a credit facility of SEK 300 million, of which SEK 76 million are made use of for guarantees that have been issued. At the end of the period, available cash and cash equivalents totaled SEK803 million (646). The Group also has granted but unused building credits of SEK 286 million. In addition to this, the joint venture, Karlatornet AB, which is 50 percent owned by Serneke, has a granted but unused building credit of SEK 2,527 million.

At the time of reporting on 30 September, net debt, excluding interest-bearing receivables, in relation to EBITDA amounted to 2.6. The covenant in the credit agreement requires 2.5. The bank has waived the covenant. The waiver is valid until the next reference date, December 31, 2021.

On September 30, equity amounted to SEK 2,372 million (1,946). The change consists of profit for the period of SEK 262 million, a new share issue of SEK 167 million including issue costs and share-based remunerations of SEK 2 million.

As of September 30, net debt amounted to SEK 863 million (20). The foremost changes concern the amortization of bonds by SEK 200 million, an increase in long-term interest-bearing receivables of SEK 500 million in connection with the establishment of a new JV with Fastighets AB Balder and an increase in cash and cash equivalents.

Interest-bearing receivables increased significantly in December 2020, arising in connection with Serneke and Balder entering into a share transfer agreement entailing Balder acquiring 50 percent of the shares in Karlatornet AB (the joint venture). The joint venture acquired all Karlatornet assets from Serneke at book value, with

projects and development properties amounting to SEK1,574 million, against a promissory note in the form of interest-bearing shareholder loans of SEK 1,386 million.

Net debt	Sep 30	Sep 30	Dec 31
SEK million	2021	2020	2020
Bank loans	260	188	204
Utilized bank overdraft facility	-	176	-
Construction credits, housing cooperative projects	159	68	42
Bonds	515	721	719
Financial lease liabilities	83	84	82
Additional lease liabilities, IFRS 16	260	259	286
Loans from the Swedish Tax Agency	275	275	275
Other interest-bearing liabilities	-	-	-
Interest-bearing receivables	-1,812	-50	-1,354
Cash and cash equivalents	-603	-81	-234
Net debt	-863	1,640	20

GROUP FINANCIAL TARGETS

Equity/assets ratio

The equity/assets ratio shall exceed 30 percent. The return on equity shall exceed 15 percent.

The operating margin shall exceed 6 percent. Positive operating cash flow each quarter on a rolling six-month basis.

Operating cash flow

CASH FLOW

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Cash flow from operating activities	207	-167	255	-556	459	-352
Cash flow from investment activities	-25	7	16	-8	4	–20
Cash flow from financing activities	86	167	98	483	59	444
Cash flow for the period	268	7	369	-81	522	72
Cash and cash equivalents at beginning of period	335	74	234	162	81	162
Cash and cash equivalents at end of period	603	81	603	81	603	234

JULY – SEPTEMBER 2021

Cash flow from operating activities amounted to SEK207 million (outflow 167), of which cash flow from changes in working capital amounted to SEK 111 million (outflow 82).

Cash flow from investing activities amounted to an outflow of SEK 25 million (inflow 7), consisting primarily of positive cash flows linked to the Group's associated companies and joint ventures.

Cash flow from financing activities amounted to SEK 86 million (167) and is mainly explained by newly raised loans of SEK 108 million.

Cash flow for the period amounted to SEK 268 million (7).

Cashflow before financing

JANUARY – SEPTEMBER 2021

Cash flow from operating activities amounted to SEK255 million (outflow 556), of which cash flow from changes in working capital amounted to SEK 156 million (outflow 208).

Cash flow from investing activities amounted to SEK 16 million (outflow 8) and was mainly affected by cash flows associated with the Group's associated companies and joint ventures.

Cash flow from financing activities amounted to SEK 98 million (483) and is mainly explained by the amortization of bonds for SEK 200 million, amortizations of SEK 189 million on other loans, newly raised loans of SEK 316 million and a new share issue for SEK 167 million.

Cash flow for the period amounted to SEK 369 million (81).

OVERVIEW BUSINESS AREAS

In early 2020, the Group was reorganized, resulting in a new segmentation. This was applied as of September 30, 2020 and has been adjusted retroactively in accordance with IAS 8. This means that attributable items from previous periods have been reclassified for correct comparability. These re-classifications have not had any effect on the Group's previously reported key figures.

The Serneke Group is divided into three segments: Sweden, Invest and International, which are reported as individual operating segments.

Business Area Sweden conducts contracting operations in the areas of construction, civil engineering and infrastructure, as well as project development operations by developing project and development properties. The business area conducts construction contracting for both external customers, as well as Business Area Invest.

Business Area Invest conducts development projects with a higher degree of complexity, a higher transaction risk and a greater need for capital to be tied up. The business area generates internal assignments for Serneke Sweden's contracting operations.

Business Area International brings the Group's international investments together. The business area is in the start-up phase and currently comprises an interest in an Australian construction company and an ongoing project-export initiative. Due to its current scope, the segment will not be described in this report, other than in the tables below on this page and in the "multi-year overview" on page 19.

Other operations are reported under Group-wide, which primarily comprises Group functions and Group-wide provisions.

SALES

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Sweden	1,925	1,592	5,714	4,965	7,739	6,990
Invest	322	28	1,106	102	1,329	325
International	0	0	0	0	0	0
Group-wide	46	20	113	71	130	88
Eliminations	-325	-142	-741	-433	-840	-532
Total	1,968	1,498	6,192	4,705	8,358	6,871

OPERATING PROFIT

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Sweden	21	-62	24	-266	-41	-331
Invest	7	-10	245	-87	241	-91
International	-4	-3	-12	-10	-15	-13
Group-wide	15	0	-61	6	-67	0
Eliminations	-14	-4	-32	-10	-1	21
Total	25	-79	164	-367	117	-414

*The comparative figures have been recalculated in accordance with the new segment reporting

SEASONAL VARIATIONS

To a certain extent, Serneke's operations are subject to seasonal effects. The contracting operations normally experience lower activity in the first quarter of the year due to fewer production days and, to a greater extent than normal, the weather during the winter months. Earnings are also affected by where public holidays fall, as this affects the number of production days.

SWEDEN

Sweden

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Income	1,925	1,592	5,714	4,965	7,739	6,990
Operating profit	21	-62	24	-266	-41	-331
Operating margin, %	1.1	-3.9	0.4	-5.4	-0.5	-4.7

JULY – SEPTEMBER 2021

Income amounted to SEK 1,925 million (1,592), an increase of 21 percent. The increase is mainly attributable to more projects being in full production as a consequence of the larger order backlog compared with the corresponding quarter last year.

Operating profit amounted to SEK 21 million (loss 62) and the operating margin was 1.1 percent (negative 3.9). In comparison with the corresponding quarter last year, the margin was positively affected, primarily due to nonrecurring costs incurred in the corresponding quarter of the preceding year. The operating margin for the quarter reflects a trend in the right direction.

Project and development properties

On September 30, 2021, the total book value of the project development portfolio amounted to SEK 466 million.

Development rights	Sep 30	Sep 30	Dec 31
Number (GFA)	2021	2020	2020
Development rights on own balance sheet	24,449	22,917	18,066
Development rights through joint ventures	400	2,300	2,300
Agreed development rights not yet taken into possession	238,371	259,528	259,527
Total	263,220	284,745	279,893

Housing construction projects developed in-house	Sep 30 2021	Sep 30 2020	Dec 31 2020
Number of housing units under construction during the period	65	24	24
Number of housing units sold during the period	27	18	23
Total number of housing units under construction at the end of the period	148	140	107
Number of repurchased housing units on the Company's own balance sheet at the end of the period	0	4	4

JANUARY – SEPTEMBER 2021

Income amounted to SEK 5,714 million (4,965), an increase of 15 percent. The increase is mainly attributable to more projects being in full production as a consequence of the larger order backlog compared with the preceding year.

Operating profit amounted to SEK 24 million (loss 266) and the operating margin was 0.4 percent (negative 5.4). In comparison with the corresponding period last year, the margin was positively affected, primarily due to nonrecurring costs incurred in the corresponding period of the preceding year. The operating margin for the period reflects a trend in the right direction.

At the Långeberga industrial site in Helsingborg, we are building two logistics facilities totaling 25,000 square meters for Castellum.

INVEST

Invest

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Income	322	28	1,106	102	1,329	325
Share in profit of associates and joint
ventures	2	7	9	16	7	14
Operating profit	7	-10	245	-87	241	-91
Operating margin, %	2.2	-35.7	22.2	-85.3	18.1	-28.0

JULY – SEPTEMBER 2021

The business area's income amounted to SEK 322 million (28), with the increase comprising contract revenues from Karlatornet AB (joint venture). In addition to this, the income mainly consists of contracting income from the manufacture and assembly of steel pipe structures, property sales, as well as hotel revenues.

The share in the profit of associates and joint ventures amounted to SEK 2 million (7).

Operating profit amounted to SEK 7 million (loss 10). The positive operating profit is explained mainly by property sales. The hotel operations continue to make a loss, with reduced activity due to the

corona pandemic, although it is worth noting that the booking situation has improved over the two past quarters and is thus developing in the desired direction.

Project and development properties

On September 30, 2021, the total book value of the project development portfolio in Invest amounted to SEK1,185 million.

Development rights	Sep 30	Sep 30	Dec 31
Number (GFA)	2021	2020	2020
Development rights on own
balance sheet	212,721	235,863	227,621
Development rights through
joint ventures	50,000	50,000	50,000
Agreed development rights
not yet taken into possession	299,629	359,128	359,129
Total	562,350	644,991	636,750

JANUARY – SEPTEMBER 2021

Income amounted to SEK 1,106 million (102), with the increase consisting of, for example, the net reporting of Fastighets AB Balder's acquisition of its part of the joint venture, but also of asset sales in accordance with a business settlement during the fourth quarter of 2020 and contracting income from Karlatornet AB (joint venture). In addition to this, the income mainly consists of contracting income from the manufacture and assembly of steel pipe structures, property sales, as well as hotel revenues.

The share in the profit of associates and joint ventures amounted to SEK 9 million (16).

Operating profit amounted to SEK 245 million (loss 87). The positive operating profit is mainly explained by the formation of a joint venture with Balder regarding three buildings within the Karlastaden district. Sales of assets in accordance with the business settlement in the fourth quarter of 2020 also have an effect. In addition, the hotel operations have had a negative effect on operating profit.

In-house-developed tenant-owner housing production projects	Sep 30 2021	Sep 30 2020	Dec 31 2020
Number of housing units under construction during the period	0	0	0
Number of housing units sold during the period	0	0	0
Total number of housing units under construction at the end of the period	305	594	297
Number of repurchased housing units on the Company's own balance sheet at the end of
the period	0	0	0

PARENT COMPANY

Serneke Group AB's (publ) operations mainly comprise Group management and Group-wide services.

Income for July-September amounted to SEK 46 million (22) and consisted primarily of intra-group services. Operating profit for the same period amounted to SEK 15 million (3).

The Parent Company is indirectly affected by the risks described in the section Significant risks and uncertainty factors.

RELATED-PARTY TRANSACTIONS

The nature and extent of transactions by related parties can be found in Note 35 of the 2020 Annual Report. During the year, related party transactions have occurred with Lommen Sjöbefälet AB, Kongahälla Shopping AB, Ola Serneke Holding AB, Kviberg Skidanläggning AB, Limestone Management AB, JV Sersund AB, JV Karlatornet AB, JV Karlastaden Group AB and the associated company Änglagården. Transactions with related parties have been made on market terms.

Presented below are transactions that Serneke has carried out with related parties since 1 January 2021 until 30 September 2021:

Transactions with Lommen Sjöbefälet AB are considered to be related party transactions as the company's main owner, Ludwig Mattsson, is a member of the Board of Serneke Group AB. The transactions consist primarily of the rent for Serneke's head office and purchases amounting to SEK 9.4 million. Transactions with Kongahälla Shopping AB are considered to be related party transactions as the company's main owner, Ludwig Mattsson, is a member of the Board of Serneke Group AB. The transactions primarily involve contracting income amounting to SEK 3.8 million.

Transactions with Ola Serneke Holding AB are considered to be related party transactions as Ola Serneke is the principal shareholder in Serneke Group AB. Purchases amounted to SEK 0.5 million and sales to SEK 3.2 million. The transactions mainly comprise income/expenses relating to the settlement of the assets that took place in 2020 between Serneke and Kviberg Skidanläggning AB, which is owned by Ola Serneke Holding AB, and are thus considered to be related party transactions. Transactions with Limestone Management AB, Per Åkerman's consulting company, are considered to be related party transactions as Per Åkerman is a member of the Board of the Company. The transactions relate to consultancy fees for tasks beyond the Board assignment and amount to SEK 1.3 million. Transactions with Sersund AB (joint

venture) are considered to be related party transactions as Serneke holds 50 percent of Sersund and the transactions consist mainly of income of SEK 59.8 million from contracting services. Transactions with Karlatornet AB (joint venture) are considered to be related party transactions as Serneke owns 50 percent of Karlatornet AB as of December 17, 2020. The transactions primarily involve contracting income of SEK 609.1 million. Transactions with Karlastaden Group (JV) are considered to be related party transactions as Serneke owns 50 percent of Karlastaden Group AB. The transactions primarily involve contracting income of SEK 82.4 million. Transactions with the associated company Änglagården are considered to be related party transactions as Serneke owns 40 percent of Änglagården. The transactions primarily involve outsourcing of staff, rent for premises and rent for the arena, respectively. Income amounted to SEK 3.3 million and purchases to SEK 17.6 million

SIGNIFICANT RISKS AND UNCERTAINTIES

Serneke's operations entail several types of risks, both operational and financial. Operational risks are related to the daily operations and can apply to tenders or project development, assessment of profits, risks linked to production or the price trend. Operational risks are managed by the internal business management that has been developed within the Group. Identifying and managing Serneke's risks is crucial to the Group's profitability. Each segment manages its risks based on the business management and developed procedures and processes. Serneke's financial risks such as interest rate, liquidity, financing and credit risks are managed centrally in order to minimize and control risk exposure. The liquidity situation is assessed on an ongoing basis by the Board and Group Management. Work with sales of the Group's project portfolio is part of Serneke's operations and continues to balance, for example, capital tied up, and to free up liquidity. The Board's assessment is that Serneke acts on the basis of good rules of procedure and ensures that sufficient liquidity is obtained to safeguard its continued operation.

For further information on risks, as well as critical estimates and assessments, see the Board of Directors' Report and Notes 3 and 4 in the 2020 Annual Report. The descriptions in the Annual Report remain relevant. The Annual Report is published at www.serneke.group.

OTHER SIGNIFICANT EVENTS DURING THE REPORT PERIOD

The corona virus pandemic

Serneke is monitoring the development of the corona virus pandemic closely to assess its effects in the short and long term. Although the entire economy is affected, the extent and how it will affect Serneke's operations in the long term is difficult to assess. During the quarter, the corona pandemic had an indirect impact on ongoing production in the form of delays.

SIGNIFICANT EVENTS FOLLOWING THE REPORT PERIOD

On 27 October, the company appointed four new members of Group Management. Mikael Hultqvist is stepping in as President of Serneke Sweden, while three new roles are added, with Carole Lindmark stepping into the role of Head of Communications, Johanna Rutberg being appointed General Counsel and Kaia Eichler being appointed Head of Sustainability.

THE SERNEKE SHARE (SRNKE)

Serneke Group AB has two share series, Series A and B. On September 30, 2021, Serneke had approximately 7,795 shareholders and the closing price on September 30, 2021 was SEK 46.5.

Serneke's ten largest shareholders, September 30, 2021

			Total number	Percentage of shares outstanding,	Percentage
	Series A shares	No. of B shares	of shares	%	of votes, %
Ola Serneke Holding AB	3,710,000	2,409,883	6,119,883	21.91%	52.80%
Lommen Holding AB	540,000	3,646,482	4,186,482	14.98%	12.09%
Christer Larsson i Trollhättan AB	380,000	497,000	877,000	3.14%	5.74%
Ledge Ing AB	330,000	554,157	884,157	3.16%	5.15%
Vision Group i väst AB	250,000	550,662	800,662	2.87%	4.08%
Fastighets AB Balder	0	2,300,000	2,300,000	8.23%	3.07%
Svolder Aktiebolag	0	2,077,608	2,077,608	7.44%	2.78%
Försäkringsaktiebolaget Avanza	0	889,768	889,768	3.18%	1.19%
Mediuminvest AS	0	659,981	659,981	2.36%	0.88%
Novobis AB	0	366,708	366,708	1.31%	0.49%
Total, 10 largest	5,210,000	13,952,249	19,162,249	68.59%	88.27%
Other shareholders	0	8,775,996	8,775,996	31.41%	11.73%
Total shares outstanding	5,210,000	22,728,245	27,938,245	100.00%	100.00%
Repurchased shares	0	814,987	814,987
Total shares registered	5,210,000	23,543,232	28,753,232

Source: Euroclear and Serneke

Share class, number of shares and votes, September 30, 2021.

Share class	Shares	Votes
Series A shares	5,210,000.00	5,210,000.00
Series B shares	22,728,245.00	2,272,824.50
Total	27,938,245.00	7,482,824.50

FINANCIAL CALENDAR

Year-end report 2021	February 9, 2022
Annual General Meeting 2022	April 26, 2022
Interim report January-March 2022	May 5, 2022

The Board hereby certifies that this interim report provides a fair overview of the operations, position and earnings of the Parent Company and the Group and describes the significant risks and uncertainties that Serneke faces.

This report has not been reviewed by the Company's auditors.

Gothenburg, October 28, 2021 Serneke Group AB (publ)

Board of Directors

Jan C. Johansson Chairman

Mari Broman Member

Ludwig Matsson Member

Veronica Rörsgård Member

Mariann Östansjö Member

Fredrik Alvarsson Member

Per Åkerman Member

Lars Kvarnsund Member

For further information:

Michael Berglin, President and CEO e-mail: michael.berglin@serneke.se Phone: +46 (0) 31712 97 00

Anders Düring, CFO E-mail: anders.düring@serneke.se Phone:: +46 (0)70 88 87 733

This information is such that Serneke Group AB (publ) is obliged to publish pursuant to the EU Market Abuse Regulation. The information was submitted for publication on October 28, 2021, at 8:00 a.m.

REVIEW REPORT

Serneke Group AB (publ) Corp. ID No. 556669–4153

INTRODUCTION

We have performed a summary review of the interim financial information (interim report) for Serneke Group AB (publ) as of 30 September 2021 and the nine-month period ending on that date. The Board of Directors and the President are responsible for the preparation and presentation of this interim financial report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

SCOPE OF REVIEW

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Gothenburg, October 28, 2021 PricewaterhouseCoopers AB

Ulrika Ramsvik Konstantin Belogorcev Authorized Public Accountant Authorized Public Accountant Principal auditor

QUARTERLY DATA AND MULTI-YEAR REVIEW

			Jan–
	Jul–Sep	Apr–Jun	Mar	Oct–Dec	Jul–Sep	Apr–Jun	Jan–Mar	Oct–Dec
SEK million	2021	2021	2021	2020	2020	2020	2020	2019
Income
Sweden	1,925	2,019	1,770	2,025	1,592	1,461	1,912	2,095
Invest	322	447	337	223	28	28	46	250
International	0	0	0	0	0	0	0	0
Group-wide	46	33	33	17	20	14	37	43
Eliminations	-325	-225	-190	-99	-142	-110	-181	-135
Total	1,968	2,274	1,950	2,166	1,498	1,393	1,814	2,253
Operating profit
Sweden	21	14	-10	-65	-62	-134	-70	43
Invest	7	167	71	-4	-10	-4	-73	-118
International	-4	-4	-4	-3	-3	-3	-4	0
Group-wide	15	-59	-17	-6	0	5	1	-12
Eliminations	-14	-10	-9	31	-4	-3	-3	-10
Total	25	108	31	-47	-79	-139	-149	-97
Operating margin, %	1.3	4.7	1.6	-2.2	-5.3	-10.0	-8.2	-4.3
Profit after net financial items	33	111	38	-119	-82	-147	-154	-85
Profit/loss for the period	37	178	46	-72	-66	-114	-106	-63
Balance sheet
Fixed assets	2655	2522	2,158	2156	757	779	678	661
Current assets	3810	3775	3,807	3836	4962	4872	4,927	5,073
Total assets	6,465	6,297	5,965	5,992	5,719	5,651	5,605	5,734
Shareholders' equity	2,372	2,340	2,161	1946	1,896	1,959	2,074	2,179
Non-current liabilities	1,200	1,177	1,182	1058	1,245	1,262	1,430	1,719
Current liabilities	2,893	2,780	2,622	2988	2,578	2,430	2,101	1,836
	6,465	6,297	5,965	5,992	5,719	5,651	5,605	5,734
Total equity and liabilities
Orders
Order bookings	1,195	2,221	1,179	4,852	961	1,851	2,975	2,969
Order backlog	12,642	13,372	13,126	13,619	10,623	11,072	10,576	8,943
Employees
Average number of employees	1,205	1,189	1174	1161	1,180	1,202	1195	1,153

KEY INDICATORS

IFRS-based key indicators

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Income	1,968	1,498	6,192	4,705	8,358	6,871
Earnings per share, SEK, before dilution	1.32	-2.94	9.38	-12.75	7.10	-15.82
Earnings per share, SEK, after dilution	1.32	-2.94	9.38	-12.75	7.10	-15.82
Weighted average number of shares before dilution	27,938,245	22,433,465	27,938,245	22,433,465	26,753,717	22,625,132
Weighted average number of shares after dilution	27,938,245	22,465,800	27,938,245	22,476,579	26,753,717	22,657,467

Other key indicators

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Operating profit	25	-79	164	-367	117	-414
Growth, %	31.4	8.9	31.6	5.2	20.1	2.2
Order bookings	1,195	961	4,595	5,787	9,447	10,639
Order backlog	12,642	10,623	12,642	10,623	12,642	13,619
Organic growth, %	31.4	8.9	31.6	5.2	20.1	2.2
Operating margin, %	1.3	-5.3	2.6	-7.8	1.4	-6.0
Cash flow before financing	182	-160	271	-564	463	-372
Cash flow from operations per share, before dilution	7.40	-7.44	9.12	-24.78	17.15	-15.56
Cash flow from operations per share, after dilution	7.40	-7.44	9.12	-24.78	17.15	-15.56
Equity per share, SEK, before dilution	84.90	84.52	84.90	84.52	84.90	78.68
Equity per share, SEK, after dilution	84.90	84.52	84.90	84.52	84.90	78.68
Working capital	917	2,384	917	2,384	917	848
Capital employed	3,830	3,667	3,830	3,667	3,830	3,539
Return on capital employed, %	4.4	-12.2	4.4	-12.2	4.4	-11.4
Return on equity after taxes, %	8.9	-16.9	8.9	-16.9	8.9	-17.4
Equity/assets ratio, %	36.7	33.2	36.7	33.2	36.7	32.5
Net debt	-863	1,640	-863	1,640	-863	20
Net debt/equity ratio, %	-36.4	86.5	-36.4	86.5	-36.4	1.0
Net debt/EBITDA	-4.3	-4.1	-4.3	-4.1	-4.3	-0.1

SUMMARY FINANCIAL STATEMENTS

SUMMARY OF CONSOLIDATED INCOME STATEMENT

SEK million	Jul–Sep 2021	Jul–Sep 2020	Jan–Sep 2021	Jan–Sep 2020	Oct–Sep 2020/2021	Jan–Dec 2020
Income	1,968	1,498	6,192	4,705	8,358	6,871
Production and administration expenses	-1,906	-1,563	-5,933	-5,027	-8,124	-7,218
Gross profit	62	-65	259	-322	234	-347
Sales and administration expenses	-26	-19	-93	-57	-116	-80
The effect on profit of establishing the joint venture	-	-	-	-	2	2
Share in profit of associates and joint ventures	-11	5	-2	12	-3	11
Operating profit	25	-79	164	-367	117	-414
Net financial items	8	-3	18	-16	-54	-88
Profit after financial items	33	-82	182	-383	63	-502
Tax	4	16	80	97	127	144
Profit/loss for the period	37	-66	262	-286	190	-358
Attributable to:
Parent Company shareholders	37	-66	262	-286	190	-358
Non-controlling interests	0	0	0	0	0	0
Earnings per share before dilution, SEK	1.32	-2.94	9.38	-12.75	7.10	-15.82
Earnings per share after dilution, SEK	1.32	-2.94	9.38	-12.75	7.10	-15.82
Average number of shares before dilution	27,938,245	22,433,465	27,938,245	22,433,465	26,753,717	22,625,132
Average number of shares after dilution	27,938,245	22,465,800	27,938,245	22,476,579	26,753,717	22,657,467

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Profit/loss for the period	37	-66	262	-286	190	-358
Other comprehensive income	0	0	0	0	0	0
Total comprehensive income	37	-66	262	-286	190	-358

CONDENSED CONSOLIDATED BALANCE SHEET

	Sep 30	Sep 30	Dec 31
SEK million	2021	2020	2020
Assets
Fixed assets
Intangible fixed assets	24	23	24
Other tangible fixed assets	365	391	416
Investments in associates/joint ventures	155	148	148
Deferred tax assets	94	0	15
Non-current interest-bearing receivables	1,812	50	1,354
Other non-current receivables	205	145	199
Total fixed assets	2,655	757	2,156
Current assets
Project and development properties	1,653	3,325	1,740
Inventories	1	1	1
Accounts receivable	789	922	1,012
Accrued but not invoiced income	523	479	420
Other current receivables	241	154	429
Cash and bank balances	603	81	234
Total current assets	3,810	4,962	3,836
Total assets	6,465	5,719	5,992
Equity and liabilities
Shareholders' equity	2,372	1,896	1,946
Non-current liabilities
Non-current interest-bearing liabilities	975	860	840
Other non-current liabilities	66	149	31
Deferred tax liability	-	31	-
Other provisions	159	205	187
Total non-current liabilities	1,200	1,245	1,058
Current liabilities
Current interest-bearing liabilities	577	911	768
Current tax liabilities	-	-	2
Accounts payable	1,194	913	1,058
Invoiced but not accrued income	791	490	618
Other current liabilities	331	264	542
Total current liabilities	2,893	2,578	2,988
Total equity and liabilities	6,465	5,719	5,992

SUMMARY OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY

	Sep 30	Sep 30	Dec 31
SEK million	2021	2020	2020
Equity attributable to Parent Company shareholders
Balance at beginning of period	1,946	2,179	2,179
New share issue	166	-	121
Share-related compensation	-2	3	4
Conversion, convertible debenture loans	-	-	-
Transactions with non-controlling interests	-	-	0
Changed accounting policy	-	-	-
Comprehensive income for the period	262	-286	-358
Non-controlling interests
Acquisition of non-controlling interests	-	-	-
Comprehensive income for the period	-	-	-
Balance at end of period	2,372	1,896	1,946

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

SEK million	Jul–Sep 2021	Jul–Sep 2020	Jan–Sep 2021	Jan–Sep 2020	Oct–Sep 2020/2021	Jan–Dec 2020
Operating activities
Cash flow before change in working capital	95	-85	98	-348	87	-359
Change in working capital	111	-82	156	-208	371	7
Cash flow from operating activities	207	-167	255	-556	459	-352
Investing activities
Increase/decrease in investing activities	-25	7	16	-8	4	–20
Cash flow from investing activities	-25	7	16	-8	4	-20
Cash flow before financing	182	-160	271	-564	463	-372
Financing activities
Newly raised borrowings	108	31	316	354	99	137
New share issue	-	-	167	-	289	122
Amortization of liabilities	-24	-21	-389	-296	-468	-375
Increase/decrease in financing activities	2	157	4	425	139	560
Cash flow from financing activities	86	167	98	483	59	444
Cash flow for the period	268	7	369	-81	522	72
Cash and cash equivalents at beginning of period	335	74	234	162	81	162
Cash and cash equivalents at end of period	603	81	603	81	603	234

PARENT COMPANY CONDENSED INCOME STATEMENT

						Jan–
	Jul–Sep	Jul–Sep	Jan–Sep	Jan–Sep	Oct–Sep	Dec
SEK million	2021	2020	2021	2020	2020/2021	2020
Income	46	22	113	71	130	88
Sales and administration expenses	-31	-19	-109	-72	-132	-95
Operating profit	15	3	4	-1	-2	-7
Net financial items	-13	-27	-52	-95	-65	-108
Profit after financial items	2	-24	-48	-96	-67	-115
Appropriations	0	0	0	0	0	0
Profit/loss before tax	2	-24	-48	-96	-67	-115
Tax	-2	3	7	18	-11	0
Profit/loss for the period	0	-21	-41	-78	-78	-115

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

SEK million	Jul–Sep 2021	Jul–Sep 2020	Jan–Sep 2021	Jan–Sep 2020	Oct–Sep 2020/2021	Jan– Dec 2020
Profit/loss for the period	0	-21	-41	-78	-78	-115
Other comprehensive income	0	0	0	0	0	0
Total comprehensive income	0	-21	-41	-78	-78	-115

PARENT COMPANY CONDENSED BALANCE SHEET

SEK million	Sep 30 2021	Sep 30 2020	Dec 31 2020
Assets
Fixed assets
Tangible fixed assets	8	9	9
Investments in Group companies	307	304	306
Deferred tax assets	20	31	13
Other non-current receivables	3	3	3
Total fixed assets	338	347	331
Current assets
Project and development properties	2	2	2
Other current receivables	1,438	1,615	1378
Cash and bank balances	352	0	115
Total current assets	1,792	1,617	1,495
Total assets	2,130	1,964	1,826
Equity and liabilities
Shareholders' equity	552	341	428
Non-current liabilities
Non-current interest-bearing liabilities	518	724	522
Other provisions	1	2	2
Total non-current liabilities	519	726	524
Current liabilities
Current interest-bearing liabilities	7	183	207
Accounts payable	9	16	9
Other current liabilities	1,043	698	658
Total current liabilities	1,059	897	874
Total equity and liabilities	2,130	1,964	1,826

NOTES

NOTE 1 – Accounting policies

This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The Interim Report has been prepared in accordance with International Financial Reporting Standards (IFRS), as well as interpretations of current International Financial Reporting Interpretations Committee (IFRIC) standards as adopted by the EU. The Parent Company's reports have been prepared in compliance with the Annual Accounts Act and the Financial Reporting Board's recommendation RFR 2, Accounting for Legal Entities. ESMA's guidelines on alternative key indicators are applied in the report.

The Interim Report has been prepared in accordance with the same accounting principles and calculation methods as in the 2020 Annual Report. For detailed information regarding accounting policies, see Serneke's 2020 Annual Report, see www.serneke.se.

NOTE 2 – Financial assets and liabilities at fair value

Financial assets and financial liabilities measured at fair value in the balance sheet are classified according to one of three levels based on the information used to establish the fair value. The Group only holds financial assets and liabilities valued in level 3, which is why levels 1 and 2 have been omitted in the table below. No transfers have been made between the levels during the periods. A more detailed description of the levels can be found in Note 4 of the 2020 Annual Report.

Level 1 – Valuation is made according to prices in active markets for identical instruments.

Level 2 – Financial instruments for which the fair value is established based on valuation models that are based on observable data for the asset or liability other than quoted prices included in Level 1.

Level 3 – Financial instruments for which fair value is established based on valuation models where significant inputs are based on non-observable data.

			Dec
	Sep 30	Sep 30	31
Group SEK million	2021	2020	2020
Financial assets
Non-current interest-bearing
receivables*	1,834	-	1,320
Available-for-sale financial
assets**	2	2	2
Total financial assets	1,836	2	1,322
Financial liabilities
Other short- and long-term
liabilities	18	23	23
Of which, additional purchase considerations***	18	23	23

* As of 30 September 2021, the shareholder loan for Karlatornet amounted to SEK 1,335 million. The remainder of the receivable is attributable to the joint venture established with Fastighets AB Balder in the second quarter of 2021.

** In the fair value calculation of available-for-sale financial assets at level 3, the market price method has been applied and the yield value assumption has been used.

*** In the fair value calculation of the additional purchase considerations at level 3, project estimates, budgets and forecasts have been applied.

The fair value of the bond amounts to SEK 500 million. For the Group's other financial assets and financial liabilities, the reported values are assessed as corresponding to FAIR VALUE. No significant changes in valuation models, assumptions or inputs were made during the period.

NOTE 3 – Pledged assets and contingent liabilities

The Group pledges collateral for external loans. The Group's contingent liabilities arise primarily in connection with different property disposals, whereby various operational guarantees may occur, as well as performance guarantees for future contracts. Serneke Group AB (publ) has also

entered into a guarantee undertaking, which means that the co-owners in Prioritet Serneke Arena are jointly responsible for the correct fulfillment of interest and repayment of the associate's liabilities to credit institutions in the event that the associate is unable to pay.

Pledged assets and contingent liabilities in the consolidated balance sheet:

	Sep 30	Sep 30	Dec 31
Group	2021	2020	2020
Pledged assets	2,190	1,917	2,017
Contingent liabilities	1,247	244	888

Parent Company

Pledged assets	300	500	500
Contingent liabilities	3,252	2,343	2,628

Note 4 – Breakdown of income

Jul–Sep 2021, SEK million	Sweden	Invest	International	Group-wide	Eliminations	Total
Construction income	1,907	267	-	-	-279	1,895
Sale of properties and development rights	15	38	-	-	-	53
Rental income	0	1	-	3	-3	1
Other income	3	16	-	43	-43	19
Total income	1,925	322	0	46	-325	1,968
Date of income recognition:
At a specific time	18	54	-	43	-43	72
Over time	1,907	268	-	3	-282	1,896
Total income	1,925	322	0	46	-325	1,968
Jul–Sep 2020, SEK million	Sweden	Invest	International	Group-wide	Eliminations	Total
Construction income	1,525	16	-	0	-122	1,419
Sale of properties and development rights	62	-	-	-	-	62
Rental income	0	3	-	3	-3	3
Other income	5	9	-	17	-17	14
Total income	1,592	28	0	20	-142	1,498
Date of income recognition:
At a specific time	67	9	-	17	-17	76
Over time	1,525	19	-	3	-125	1,422
Total income	1,592	28	0	20	-142	1,498
Jan–Sep 2021, SEK million	Sweden	Invest	International	Group-wide	Eliminations	Total
Construction income	5,688	640	-	1	-629	5,700
Sale of properties and development rights	18	250	-	-	-	268
Rental income	0	4	-	9	-9	4
Other income	8	212	-	103	-103	220
Total income	5,714	1,106	0	113	-741	6,192
Date of income recognition:
At a specific time	26	462	-	103	-103	488
Over time	5,688	644	-	9	-638	5,703
Total income	5,714	1,106	0	112	-741	6,191

Jan–Sep 2020, SEK million	Sweden	Invest	International	Group-wide	Eliminations	Total
Construction income	4482	71	-	0	-362	4,191
Sale of properties and development rights	466	-	-	-	-	466
Rental income	0	6	-	9	-9	6
Other income	17	25	-	62	-62	42
Total income	4,965	102	0	71	-433	4,705
Date of income recognition:
At a specific time	483	25	-	62	-62	508
Over time	4,482	77	-	9	-371	4,197
Total income	4,965	102	0	71	-433	4,705

Construction income

Income from contracting agreements are reported in accordance with IFRS 15 Revenue from Contracts with Customers, either by fulfilling the performance undertaking over time (that is, gradually) or at one specific time. Contracting agreements entail the construction contract being performed on the customer's land, where an asset is created over which the customer gains control in pace with the completion of the asset. This entails income being recognized gradually (over time), applying percentage-of-completion. When applying percentageof-completion, the input method applies whereby income is reported based on the degree of completion, which is calculated as the ratio between the expenses incurred for work performed at the end of reporting period and the estimated total expenses for the assignment. Revaluations of the projects' final forecasts entail corrections of previously accrued profits. If it is probable that the total contract expenses will exceed the total contract income, the anticipated loss should be immediately recognized as a cost in its entirety. Modification and supplementary orders are included in the commission income to the extent that they have been approved by the customer.

Sale of properties and development rights

On disposal of properties or development rights directly or indirectly through a sale of shares, the underlying property or development right's value is recognized in the Group as income. Income from property sales is reported on gaining access to the property. When agreements include both property sales and building rights, as well as a contracting agreement for the planned building for the buyer, an assessment is made as to whether the property and/or building rights transactions and the contracting agreement, respectively, are separate performance commitments. Depending on the design and terms of the agreement, the sale can be seen as one or several

performance undertakings. Sales are reported at the point in time at which control is transferred to the buyer. Control is transferred over time if the seller has no alternative use for the property sold and the seller is entitled to payment from the customer for the work performed. In such cases, income is reported applying percentage of completion. If any of the above criteria are not met, income is reported at a single point in time, on completion and transfer to the customer. Sales of development rights can be dependent upon decisions regarding future detailed development plans. An assessment is then made as to the likelihood of the respective detailed development plan. Sales income and earnings are recognized when the probability is deemed to be very high. When sales income is recognized, all remaining commitments in the sales earnings are also taken into account. Occasionally, property projects are sold with guarantees of a certain level of leasing and, at the time of sale, any rental guarantees are reported as a reserve in the project, which then has a positive effect on successive profit recognition as letting takes place.

Rental income

Income also includes rental income, which is to be considered as operating leasing. Rental income is announced in advance and accrued on a straight-line basis in the income statement based on the terms of the leases. Rent paid in advance reported as prepaid rental income. In cases where the rental contract allows a reduced rent for a certain period of time, which is compensated for by higher rent during another period, this is allocated across the term of the contract.

Other income

Other income refers to income not classified as construction income, property sales and building rights, or rental income such as hotel revenues, government subsidies, or income from central companies.

FINANCIAL DEFINITIONS

Indicator	Definition			Purpose
Growth	Income for the period less income for the previous period				In the Company's view, the key indicator
	divided by income for the previous period.			allows investors, who so wish, to assess the
				Company's capacity to increase its earnings.
Organic	Income for the period, adjusted for acquired growth, less			In the Company's view, the key indicator
growth	income for the previous period, adjusted for acquired			allows investors, who so wish, to assess the
	growth, divided by income for the previous period,			Company's capacity to increase its income
	adjusted for acquired growth.			without acquiring operating companies.
		Jul-Sep	Jul-Sep	Jan–Sep	Jan–Sep	Oct–Sep	Jan–Dec
	Calculation of organic growth	2021	2020	2021	2020 2020/2021		2020
Income current period		1,968	1,498	6,192	4,705	8,358	6,871
	Income corresponding to previous period	1,498	1,376	4,705	4,472	6,958	6,725
Income change		470	122	1,487	233	1,400	146
	Adjustment for structural effect	0	0	0	0	0	0
Total organic growth		470	122	1,487	233	1,400	146
Total organic growth (%)		31.4%	8.9%	31.6%	5.2%	20.1%	2.2%
Order	The value of new projects and changes in existing projects			In the Company's view, this key indicator
bookings	during the period.			allows investors, who so wish, to assess the
				Company's sales in Business Area Contracting
				for the current period.
Order	The value of the Company's undelivered orders at the end			In the Company's view, this key indicator
backlog	of the period excluding cooperation agreements.			allows investors, who so wish, to assess the
				Company's income in Business Area
				Contracting over upcoming periods.
Operating	Operating profit divided by income.			In the Company's view, the key indicator
margin					allows investors, who so wish, to assess the
				Company's profitability.
Operating	Current assets less current liabilities.			In the Company's view, the key indicator
capital				allows investors, who so wish, to assess the
				Company's tied-up capital in relation to its
				competitors.
Capital	Consolidated total assets less deferred tax assets less non			In the Company's view, this key indicator
employed	interest-bearing liabilities including deferred tax liabilities.			allows investors, who so wish, to assess the
				total capital placed at the Company's
				disposal by shareholders and creditors.
				Sep 30	Sep 30		Dec 31
	Calculation of capital employed			2021	2020		2020
	Total assets			6,465	5,719		5,992
	Deferred tax assets			-94	0		-15
	Less non-interest-bearing liabilities including deferred tax liabilities			-2,541	-2,052		-2,438
	Capital employed			3,830	3,667		3,539

Indicator	Definition		Purpose
Return on	Profit after net financial items plus financial expenses	In the Company's view, the key indicator
capital	divided by average capital employed for the period.		allows investors, who so wish, to assess the
employed	Accumulated interim periods are based on rolling 12-		Company's capacity to generate a return on
	month earnings.		the total capital placed at the Company's
			disposal by shareholders and creditors.
			Sep 30	Sep 30	Dec 31
	Calculation of average capital employed		2021	2020	2020
	Sep 30, 2021 (3,830) + Sep 30, 2020 (3,667) / 2		3,749
	Sep 30, 2020 (3,667) + Sep 30, 2019 (3,813) / 2			3,740
	Dec 31, 2020 (3,539) + Dec 31, 2019 (3,602) / 2				3,571
			Sep 30	Sep 30	Dec 31
	Calculation of return on capital employed		2021	2020	2020
	Profit after net financial items		63	-468	-502
	Plus financial expenses		93	11	96
	Average capital employed		3,749	3,740	3,571
	Return on capital employed		4.2%	-12.2%	-11.4%
Equity per	Total equity according to the balance sheet divided		The Company believes that key indicators give
share,	by the number of shares outstanding on the closing date. The difference between before and after		investors a better understanding of historical return
before/after	dilution is accounted for by the convertibles issued		per share at the closing date.
dilution	by the Group.
Cash flow	Cash flow from operating activities divided by the		It is the Company's view that the key indicator gives
from	average number of shares during the period. The		investors a better understanding of the operations'
operations	difference between before and after dilution is accounted for by the convertibles issued by the		cash flow in relation to the number of shares,
per share,	Group.		adjusted for changes in the number of shares during
before/after			the period.
dilution
Earnings per	Profit for the period divided by the average number		It is the Company's view that the key indicator gives
share,	of shares during the period. The difference between before and after dilution is accounted for by the		investors a better understanding of profit per share.
before/after	convertibles issued by the Group.
dilution

Indicator	Definition	Purpose
Return on equity	Profit for the period as a percentage of	In the Company's view, the key indicator allows
	average shareholders' equity. Accumulated	investors, who so wish, to assess the Company's
	interim periods are based on rolling 12-	capacity to generate a return on the capital
	month earnings.					shareholders have placed at the Company's disposal.
		Sep 30 Sep 30			Dec 31
	Calculation of average shareholders' equity			2021	2020	2020
	Sep 30, 2021 (2,372) + Sep 30, 2020 (1,896) / 2			2,134
	Sep 30, 2020 (1,896) + Sep 30, 2019 (2,238) / 2				2,067
	Dec 31, 2020 (1,946) + Dec 31, 2019 (2,179) / 2					2,063
				Sep 30	Sep 30	Dec 31
	Calculation of return on shareholders' equity			2021	2020	2020
	Profit/loss for the period			190	-349	-358
	Average shareholders' equity			2,134	2,067	2,063
	Return on equity			8.9%	-16.9%	-17.4%
Equity/assets ratio	Shareholders' equity less minority interests as					The equity/assets ratio shows the proportion of total
	a percentage of total assets.					assets represented by shareholders' equity and has been included to allow investors to be able to assess
		the Company's capital structure.
Net debt	Interest-bearing liabilities less liquid assets					Net debt is a measure deemed relevant for creditors
	less interest-bearing receivables.	and credit rating agencies.
Net debt/equity	Interest-bearing net debt divided by					Net debt/equity ratio is a measure deemed relevant for
ratio	shareholders' equity.	creditors and credit rating agencies.
EBITDA	Operating profit excluding					EBITDA is a measure deemed to provide investors a
	amortization/depreciation.	better understanding of the Company's earnings.
			Sep 30	Sep 30		Dec 31
	Calculation of EBITDA		2021	2020		2020
	Operating profit		117	-464		-414
	Depreciation		84		62	71
	EBITDA		201	-402		-343
Net debt/EBITDA	Interest-bearing liabilities less liquid assets					Net debt/EBITDA is a measure deemed relevant for
	less interest-bearing receivables divided by	creditors and credit rating agencies.
	EBITDA.

SERNEKE IN BRIEF

Serneke is a growing corporate group providing comprehensive services in contracting and project development with more than 1,100 employees. Through novel thinking, we drive development and create more effective and more innovative solutions for responsible construction. The business has a good mix of public and

Serneke Group AB (publ) Headquarters: Kvarnbergsgatan 2 SE-411 05 Gothenburg Phone +46 (0)31-712 97 00 | info@serneke.se commercial assignments, providing strength over economic cycles.

Serneke's annual reports and other financial information are available under the tab Investors at www.serneke.se

Presentation of the Interim Report for January–September 2021

On October 28, 2021 at 9:00 a.m. (CET), Serneke Group will comment on this Interim Report in a conference call with an online presentation for investors, analysts and the media. The presentation will be in Swedish and can be followed live via webcast at https://tv.streamfabriken.com/serneke-q3-2021. Presentation materials for the presentation will be available on the website one hour before the webcast begins.

To participate, please dial: +46 8566426 92