Nyfosa

Interim / Quarterly Report • Apr 21, 2021

NYFOSA AB INTERIM REPORT JANUARY – MARCH 2021

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INTERIM REPORT

JANUARY–MARCH 2021

THE PERIOD JANUARY–MARCH 2021

• Income amounted to MSEK 571 (430), up 33 percent.
• Profit from property management amounted to MSEK 421 (344), up 22 percent.
• Profit from property management excluding changes in value and tax in joint ventures amounted to MSEK 283 (260), up 9 percent.
• Distributable cash flow per share amounted to SEK 1.15 (1.20), down 4 percent.
• Profit after tax amounted to MSEK 639 (659).
• Profit after tax per share was SEK 3.46 (3.80).

KEY FIGURES

	Jan-Mar		Last	Full-year
	2021	2020	4 quarters	2020
Income, MSEK	571	430	2,177	2,035
Net operating income, MSEK	360	282	1,493	1,415
Surplus ratio, %	63.0	65.8	68.6	69.5
Profit from property management, MSEK	420	344	1,410	1,334
— per share, SEK	2.28	1.98	7.64	7.35
Profit from property management excluding changes in value and tax in joint ventures, MSEK	286	260	1,173	1145
— per share, SEK	1.55	1.50	6.36	6.31
Profit after tax, MSEK	638	659	2,204	2,225
— earnings per share after dilution, SEK	3.46	3.80	11.94	12.25
Distributable cash flow, MSEK	212	209	1,258	1254
— per share, SEK	1.15	1.20	6.82	6.91
Interest-coverage ratio, multiple	3.4	5.7	3.5	3.8
Property value on balance-sheet date, MSEK	30,605	24,782	30,605	29,411
EPRA NRV on balance-sheet date, MSEK	15,496	11,769	15,496	14,744
— per share, SEK	83.99	71.18	83.99	79.91
Net loan-to-value ratio of properties on balance-sheet date, %	56.5	55.3	56.5	56.9

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SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

• £ In February, a retail property was divested for MSEK 220.
• £ In March, a 12-year lease for the establishment of a new production facility in Eskilstuna was signed. The lease encompasses an area of 14 thousand sqm with a planned expansion to a total of approximately 70,000 sqm.
• £ In March, a combined acquisition and divestment agreement was entered into, comprising acquisitions of five properties for MSEK 657 and divestments of two project properties for MSEK 477.
• £ After the period, Nyfosa announced that the company has established a green finance framework and considers issuance of a green bond, and announces a conditional tender offer for the company's outstanding bonds.
• £ After the period, Nyfosa announced the decision to build up a diversified property portfolio with a long-term perspective in the Finnish property market together with Brunswick Real Estate.

COMMENTS FROM THE CEO

During the first quarter of the year, Nyfosa showed continued stability with positive net leasing and strong key figures. In March, we leased a property in Eskilstuna for a unique establishment in the Swedish battery industry. The Chinese company Senior is planning to expand its operations and create one of Europe's largest production facilities for deliveries to customers including Northvolt. Of course, it is very positive that Nyfosa can contribute to such an investment in Sweden, in which we will be an important piece of the puzzle for the continued expansion of Senior's operations.

In April, we took another step in building up cash flow and value. We are now entering the Finnish market, which does not have an opportunistic player like Nyfosa. Our assessment is that there are attractive opportunities for good business. The aim is to build up a diversified property portfolio with a sustainability profile in the Finnish market and achieve a property value of SEK 7 billion within five years. The start-up phase will be short for us based on our partnership with Brunswick Real Estate, which is already established in Finland.

We continue as we have always done, by doing business where we see opportunities. A strong banking and capital market provides an opportunity to continue to grow profitably. With a green finance framework in place, we are also creating a platform for various forms of green financing, while at the same time providing yet another tool in our sustainability efforts.

Stina Lindh Hök, CEO

"Positive net leasing and strong key figures"

NYFOSA LEASES TO SENIOR FOR UNIQUE ESTABLISHMENT FOR SWEDEN'S BATTERY INDUSTRY

Nyfosa has signed a 12-year lease with Shenzhen Senior Technology Material, which is now making a major investment in Sweden by establishing a production facility in the battery industry. The company will initially lease 13,900 sqm in one of Nyfosa's industrial properties in Eskilstuna, with the intention of expanding the production space to a total of approximately 70,000 sqm. The modern industrial facility will become one of the largest factories for production of separator film for lithium-ion batteries in Europe and will supply companies including Northvolt. Nyfosa actively participated in the talks between Senior and the Municipality of Eskilstuna regarding establishing operations in Sweden – the company's first investment in a European production line.

Nyfosa will be the property company in Sweden that is the best at creating value.

BUSINESS CONCEPT

With its opportunistic approach and its agile, marketcentric and bold organization, Nyfosa will create value by accumulating sustainable cash flows and continuously evaluating new business opportunities.

STRATEGY

• Attract and develop the best employees.
• Be active in the transaction market.
• Prioritize commercial properties in high-growth municipalities.
• Add value to the portfolio through sustainability.
• Act long term and close to the tenants.

Total property value on March 31, 2021, MSEK 30,605

Nyfosa's properties are located throughout Sweden, mainly in high-growth municipalities and at transportation hubs.

CONDENSED STATEMENT OF PROFIT/LOSS

	Jan-Mar		Last 4	year
MSEK	2021		2020 quarters	2020
Rental income	566	425	2,141	2,001
Other property income	5	5	35	35
Total income	571	430	2,177	2,035
Property expenses
Operating expenses	-128	-83	-369	-324
Maintenance costs	-37	-31	-146	-140
Property tax	-26	-19	-100	-93
Property administration	-20	-14	-68	-63
Net operating income	360	282	1,493	1,415
Central administration	-35	-30	-138	-132
Other operating income and expenses	3	1	-24	-26
Share in profit of joint ventures	188	135	457	404
Financial income and expenses	-95	-44	-378	-327
Profit from property management	420	344	1,410	1,334
Profit from property management excluding changes in value and tax in joint ventures	286	260	1,173	1,145
Changes in value of properties	322	480	905	1,063
Changes in value of financial instruments	2	-1	4	1
Profit before tax	744	824	2,319	2,399
Tax	-106	-164	-115	-174
Profit	638	659	2,204	2,225
Earnings per share before dilution, SEK			11.95
Earnings per share after dilution, SEK	3.46 3.46	3.80 3.80	11.94	12.25 12.25

STATEMENT OF PROFIT/LOSS AND OTHER COMPREHENSIVE INCOME

MSEK
Profit	638	659	2,204	2,225
Other comprehensive income	-	-	-	-
Comprehensive income	638	659	2,204	2,225

INCOME AND NET OPERATING INCOME PER QUARTER

PROFIT FROM PROPERTY MANAGEMENT PER QUARTER

Profit from property management excl. changes in value and tax in joint ventures

Profit from property management

COMMENTS ON THE CONSOLIDATED STATEMENT OF PROFIT/LOSS

JANUARY–MARCH 2021 QUARTER

Net leasing amounted to MSEK +13. New leases were signed for a total of MSEK 39 while terminations amounted to MSEK 25. Confirmed bankruptcies amounted to MSEK 1. The net result of renegotiations was MSEK +9. The average remaining lease term was 3.7 years. Nyfosa has a highly diverse tenant list featuring only a small number of dominant tenants. The ten largest tenants represent only 13 percent of total rental income and are distributed between 214 leases. Of total rental income, tax-financed rent contributed 27 percent.

The ongoing pandemic once again impacted the

company's financial statements to a minor extent this quarter. The organization is continuing to closely monitor developments in the market. Solid resilience in the portfolio could be maintained based on successful property management, low exposure to tenants in the tourism industry and a relatively low rent level. To assist tenants who had payment difficulties due to the pandemic, quarterly rent payments were rescheduled to monthly payments or arranged as payment plans. Leases were renegotiated, with extended leases combined with initial rent discounts. The government's rental discount aid was resumed in the first and second quarters. Discounts agreed under the aid scheme will, as previously, be recognized as rental income in the statement of profit/loss.

Rent losses were in line with a normal quarter before the pandemic. 97 percent of rents invoiced for the second quarter of 2021 that fell due on March 31, 2021 had been paid at April 16, 2021, which does not deviate significantly from a normal quarterly closing.

Rental income and net operating income

Income amounted to MSEK 571 (430), up MSEK 141 or 33 percent. The larger portfolio was the main reason for the growth. The total leasable area on March 31, 2021 was 2,471 thousand sqm (2,222) and the economic leasing rate for the quarter was 92.4 percent (91.3).

Net operating income for the quarter amounted to MSEK 360 (282) and the surplus ratio was 63.0 percent (65.6). The lower surplus ratio was primarily due to higher operating expenses for heating and snow clearing compared with the same quarter in 2020, which was an unusually mild first quarter with little snow.

Profit from property management

Costs for central administration amounted to MSEK 35 (30). The main reason for the increase was growth in the property portfolio.

Profit from participations in joint ventures of MSEK 188 (135) comprised Nyfosa's share of Söderport's earnings for the quarter. Söderport's profit from property management amounted to MSEK 54 (51). Revaluations of property values and derivatives had an impact of MSEK 181 (119) on earnings.

Financial income and expenses amounted to MSEK –95 (–44). The increase was due to higher net debt.

Profit from property management amounted to MSEK 420 (344). Excluding changes in value and tax in joint ventures, profit from property management amounted to MSEK 286 (260).

Changes in value

Revaluation of properties amounted to MSEK 322 (480) and was mainly impacted by the positive net leasing and changed yield requirement. Given continuing low interest rates, properties remain an attractive type of investment and the limited supply of properties on the market means that the yield requirements were marginally adjusted downward.

Tax

The tax expense for the quarter was MSEK –106 (–164). The deviation from the nominal tax rate of 20.6 percent was mainly due to the fact that profit from participations in joint ventures comprised profit after tax, and thus did not constitute taxable income for Nyfosa. The effective tax rate was –14.2 percent (–20.0).

CONDENSED STATEMENT OF FINANCIAL POSITION

	Mar 31
MSEK	2021	2020	2020
ASSETS
Investment properties	30,605	24,782	29,411
Assets with right-of-use	171	182	163
Participations in joint ventures	2,104	1,947	1,916
Derivatives	5	1	3
Other assets	2	1	2
Total non-current assets	32,887	26,913	31,495
Current receivables	204	131	99
Cash and cash equivalents	552	966	312
Total current assets	756	1,097	412
TOTAL ASSETS	33,643	28,011	31,907
EQUITY AND LIABILITIES
Equity attributable to Parent Company shareholders	13,971	11,769	13,333
Non-current interest-bearing liabilities	16,921	12,717	16,127
Liabilities attributable to right-of-use assets	165	176	158
Other non-current liabilities	20	17	19
Deferred tax liabilities	855	770	760
Total non-current liabilities	17,960	13,679	17,064
Current interest-bearing liabilities	931	1,951	928
Other current liabilities	782	612	582
Total current liabilities	1,713	2,562	1,510
Total liabilities	19,673	16,241	18,573
TOTAL EQUITY AND LIABILITIES	33,643	28,011	31,907

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Mar 31
MSEK	2021	2020	2020
Opening equity	13,333	9,781	9,781
Transactions with shareholders
Issue/buyback of warrants	0	0	0
New share issue	0	1,329	1,327
Total transactions with shareholders	0	1329	1,327
Comprehensive income	638	659	2,225
Closing equity	13,971	11,769	13,333

CONSOLIDATED STATEMENT OF CASH FLOWS

	Jan-Mar			Last 4 Full-year
MSEK	2021	2020	quarters	2020
Operating activities
Profit from property management	420	344	1,410	1,334
Adjustments for non-cash items	-178	-128	-419	-368
Dividend from holdings in joint ventures	0	0	300	300
Income tax paid	-29	-7	-34	-11
Distributable cash flow1	212	209	1,258	1,254
– per share, SEK	1.15	1.20	6.82	6.91
Change in operating receivables	-21	-33	4	-8
Change in operating liabilities	178	139	59	21
Cash flow from operating activities	369	315	1,321	1,267
Investing activities
Direct and indirect acquisitions of investment properties	-1,025	-4,599	-8,452	-12,026
Direct and indirect divestments of investment properties	213	-1	3,917	3,703
Investments in existing investment properties	-103	-44	-344	-285
Other	0	0	0	0
Cash flow from investing activities	-916	-4,644	-4,879	-8,608
Financing activities
New issue of shares/warrants	-1	1,329	-3	1,327
Loans raised2	966	3,407	8,077	10,518
Repayment of loans	-178	-29	-4,930	-4,781
Cash flow from financing activities	786	4,707	3,144	7,064
Cash flow for the period	240	378	-414	-276
Cash and cash equivalents at the beginning of
the period	312	588	966	588
Cash and cash equivalents at the end of the	552	966	552	312
period
Interest received	0	0	0	0
Interest paid	-78	-57	-322	-301
1 Cash flow from operating activities before changes in working capital

2 Allocated arrangement fees attributable to loans raised were previously recognized in operating activities. From this interim report, the expenses were added back to

Loans raised in financing activities to better reflect cash flow. Historical periods have been restated.

CASH FLOW LAST FOUR QUARTERS

The distributable cash flow comprises the company's profit from property management, excluding non-cash items, such as share in profit of joint ventures and depreciation of equipment, including dividends received from holdings in joint ventures and tax paid.

The company's target is to achieve annual growth in cash flow per share of 10 percent.

The blue line in the graph shows growth in cash flow per share. Compared with the last four-quarter period on March 31, 2020, growth in cash flow per share amounted to 31 percent. The change compared with the last four quarters on December 31, 2020 was mainly due to the unusually mild winter with little snow in Q1 2020.

INVESTMENT PROPERTIES

The property portfolio on March 31, 2021 primarily comprised office properties in high-growth municipalities and warehouse/logistics properties at transportation hubs in Sweden, which jointly accounted for 76 percent of the total property value. During the quarter, the portfolio was supplemented by warehouse, industrial and wholesale properties in connection with the acquisition of a portfolio from Galjaden Fastigheter AB for a total value of SEK 0.9 billion.

In addition to the office and warehouse/logistics properties, retail properties comprised 9 percent of the total property value. The largest properties in terms of area are situated at the Storheden commercial area in Luleå, on Göteborgsvägen in Borås and Pentagonen in Kungens Kurva. The largest tenants in the retail category are City Gross, Coop and Decathlon. Retail properties are essentially external commercial areas. The leasing rate was 95.4 percent and the remaining lease term was 4.6 years.

The remaining properties in the portfolio, which are categorized as Other, primarily generate rental income from industrial, office and warehouse premises. The leasing rate was 96 percent and the remaining lease term was 5.0 years. Skepparen 11 in Karlstad and Öjebyn 119:1 are two of the largest properties in terms of area. Tenants include Nordic International School and ABB.

Net leasing amounted to MSEK +13 for the quarter, of which tenant bankruptcies comprised MSEK –1. New leases were finalized during the quarter for Grönsta 2:52 in Eskilstuna, Furudal 7 in Stockholm and Gångjärnet 2 in Karlstad for a total annual rental value of MSEK 14.

The net result of finalized renegotiations and notices of termination for renegotiation received amounted to MSEK 9.

The total rental value on the balance-sheet date amounted to MSEK 2,515, of which vacancy rent was MSEK 169. The share of rental income connected to the consumer price index (CPI) corresponded to 88 percent of total rental income. Nyfosa had 5,725 leases including 2,387 leases for garages and parking spaces. Nyfosa has a highly diverse tenant list featuring only a small number of dominant tenants. The ten largest tenants represent only 13 percent of total rental income and are distributed between 214 leases. The largest tenants are Telia, the Swedish Transport Agency, Saab, Försäkringskassan and the Swedish Public Employment Service, meaning a large share of companies that conduct tax-funded operations. Of total rental income, tax-financed rent contributed 27 percent.

In addition to the wholly owned property portfolio, Nyfosa owns 50 percent of the shares in the property company Söderport, whose property portfolio has a total value of SEK 12.3 billion.

KEY FIGURES FOR THE PROPERTY PORTFOLIO

	Mar 31		Dec 31	600
	2021	2020	2020
Property value, MSEK	30,605	24,782	29,411	500
Rental value, MSEK	2,515	2,132	2,451	400
Leasable area, 000s sqm	2,471	2,222	2,380
No. of properties	385	308	361	MSEK 300
Economic leasing rate, %	93.3	91.5	93.1	200
Remaining lease term, years	3.8	4.1	3.7
Surplus ratio1 , %	71.5	70.2	70.5	100
Yield1 , %	5.4	5.4	5.4
1. According to earnings capacity on the balance-sheet date.				0

LEASE MATURITY STRUCTURE

53% 23% 9% 15% PROPERTY VALUE BY CATEGORY Offices, MSEK 16,231 Warehouse/Logistics, MSEK 7,013 Retail, MSEK 2,649 Other, MSEK 4,712 51% 23% 10% 16% RENTAL VALUE BY CATEGORY Offices, MSEK 1,286 Warehouse/Logistics, MSEK 575 Retail, MSEK 248 Other, MSEK 405 17% 18% 11% 14% 10% 11% 2% 18% PROPERTY VALUE BY REGION Mälardalen, MSEK 5,341 Greater Stockholm, MSEK 5,373 Coast of Norrland, MSEK 4,214 Småland, MSEK 3,274 10% 11% 2% 19%

• Värmland, MSEK 3,312
• Greater Gothenburg, MSEK 479

TREND IN PROPERTY PORTFOLIO

Other, MSEK 5,623

RENTAL VALUE BY REGION

• Mälardalen, MSEK 425
• Greater Stockholm, MSEK 368
• Coast of Norrland, MSEK 370
• Småland, MSEK 315
• Greater Malmö, MSEK 243
• Värmland, MSEK 268
• Greater Gothenburg, MSEK 44
• Other, MSEK 481

TREND IN PROPERTY PORTFOLIO

CHANGES IN VALUE

		Jan 1–Mar 31	Jan 1– Mar 31	30 000
MSEK	2021	2020	2020	28 000
At the beginning of the	29,411	19,602	19,602	26 000
period				24 000
Acquired properties	986	4,654	12,217	MSEK 22 000
Investments in existing properties	102	44	285	20 000
Divested properties	-217	1	-3,756	18 000
Realized changes in value	-3	-1	327	16 000
Unrealized changes in value	326	482	737	14 000
At the end of the period	30,605	24,782	29,411		31 mar Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 -19 -19 -19 -19 -20 -20 -20 -20 -21

TRANSACTIONS AND INVESTMENTS

Acquired properties, January-March 2021

During the quarter, Nyfosa took possession of a portfolio of warehouse, industrial and wholesale properties in connection with the acquisition of a portfolio from Galjaden Fastigheter AB for a total value of SEK 0.9 billion.

A combined acquisition and divestment agreement was also signed involving the acquisition of five properties with a total leasable area of 40 thousand sqm for a value of MSEK 657. The annual rental value amounts to MSEK 50 and the lease has an average remaining term of 6.6 years. The properties are located in Uppsala, Norrtälje, and Nacka and consist mainly of offices and industry/warehouses with a mix of different operations and companies. The leasing rate is 97 percent. Closing is scheduled for May and November 2021.

Municipality	No. of properties	Category	Area, 000s of sqm
Malmö	1	Offices	5
Linköping, Norrköping, Södertälje, Hudiksvall, etc.	14	Logistics/ Warehouse	42
Sandviken, Märsta, Sollentuna, Malmö	4	Retail	9
Landskrona, Söderköping, Norrköping, Habo, Köping	6	Other	44

Investments and major leasing in existing properties, January–March 2021

A 12-year lease was signed with Shenzhen Senior Technology Material during the quarter, which is now making a major investment in Sweden by establishing a production facility in the battery industry. The tenant will initially lease 14 thousand sqm in the Grönsta 2:52 industrial property in Eskilstuna, with the intention of expanding the lease area to a total of appropriately 70 thousand sqm. The lease is valid from 1 April 2021. The modern industrial facility will become one of the largest factories for production of separator film for lithium-ion batteries in Europe.

Investments of MSEK 102 were made in the existing property portfolio. The majority of investments were for projects, tenant-specific modifications and improvements related to finalized leases. The largest ongoing investments are presented in the table below. We are constructing a new building for the tenants Byggmax and Skånska Byggvaror in Botkyrka. The premises in Mården 11 in Luleå are undergoing a complete renovation and modification for the Municipality of Luleå, which signed a ten-year lease and with occupancy scheduled for 2022. The premises in Norr 12:5 in Gävle are being renovated and modified for the existing tenant Försäkringskassan. The Kitteln 5 project in Örebro involves the renovation of existing premises, upgrading fixtures, fittings and systems, and creating new areas.

				Area, 000s of	Total accrued,	Estimated investment,	Scheduled completion,
Municipality	Property	Category	Tenant	sqm	MSEK	MSEK	year
Botkyrka	Genetikern 2 Retail		Byggmax & Skånska Byggvaror	48	32	73	Q3, 2021
Luleå	Mården 11	Offices	Luleå municipality	11	13	68	Q4, 2021
Gävle	Norr 12:5	Offices	Försäkringskassan	6	1	69	Q3, 2021
Örebro	Ånsta 20:262	Logistics/Ware house	Schneider Electrics	6	10	59	Q4, 2021

Divested properties, January-March 2021

A property centrally located in Södertälje was divested for a value of MSEK 200 during the quarter.

A combined acquisition and divestment agreement was also signed involving Nyfosa divesting two properties in Lund and Haninge for a value of MSEK 477. A change of zoning for residential units has begun, with a total leasable area of 27 thousand sqm and a rental value of MSEK 40. The leasing rate for the two properties amounts to 80 percent with an average remaining lease term of 3.2 years. The properties will be vacated in May 2021.

YIELD REQUIREMENT FOR VALUATION OF INVESTMENT PROPERTIES

The weighted yield requirement for externally valued properties on March 31, 2021 was 5.92 percent, and the weighted cost of capital for the present value calculation of cash flows and residual values was a nominal 7.70 percent and 8.02 percent, respectively. When last valued on December 31, 2020, the yield requirement was 6.03 percent, the weighted cost of capital for the present value calculation of cash flows and residual values was 7.70 percent and 8.02 percent, respectively.

Sensitivity analysis – change in value for changes in valuation parameters

Mar 31, 2021	%	MSEK
Change in net operating income1	+/–5	+/–1,078
Change in yield requirement	+/–0.25	+/–1,350
Change in growth assumptions	+/–5	+/–135
Change in discount rate	+/–0.25	+/–1,027

1. According to earnings capacity.

VALUATION TECHNIQUES

The value of the properties has been assessed based on a market-adapted cash-flow estimate in which, by simulating the calculated future income and expenses, an analysis has been made of the market's expectations with respect to the subject property.

The yield requirement used in the estimate derives from sales of comparable properties. For additional information on valuation techniques, refer to Note 13 of Nyfosa AB's 2020 Annual Report on www.nyfosa.se.

The company engages external, independent appraisers every quarter to quality assure the fair value measurement of the company's properties. All properties are valued every quarter, except for those properties for which possession was taken during the current quarter or properties for which a sales agreement exists. In these cases, the agreed property value is used. The prevailing uncertain business environment caused by the pandemic did not

have any significant impact on Nyfosa's property values, mainly because the portfolio has a low exposure to tenants in the tourism industry and other operations that were markedly affected by pandemic.

ENVIRONMENTALLY CERTIFIED BUILDINGS AND SUSTAINABILITY INITIATIVES

In 2020, concerted efforts were made to conduct a stock-take of the energy consumption and environmental impact of most of the property portfolio and the opportunities to obtain green certification in the future were analyzed. An important part of our property management is to review the portfolio from a certification viewpoint. In addition to studying the buildings' certification potential, such analysis provides valuable documentation about the technology in the buildings and evaluates potential energy-saving measures. This information is useful and will form the basis of the Group's continued work on achieving its sustainability targets in 2021.

Nyfosa prepared a green finance framework after the end of the quarter and is evaluating the potential for issuing a green senior unsecured bond. The green finance framework has been drawn up in accordance with the Green Bond Principles set by the International Capital Markets Association (ICMA) and has been audited by an independent third party, CICERO Shades of Green. More information is available on Nyfosa's website www.nyfosa.se.

Municipality	Property	Category	Certification	Year of certification
Värnamo	Bodarna 2, Gillet 1, Jungfrun 11, Lejonet 11, Vindruvan 4, Vindruvan 15	Offices and retail	BREEAM In Use Good	2020
Malmö	Byrådirektören 3	Offices	Sweden Green Building Council Bronze	2015
Sollentuna	Tackan 9	Offices	Green Building	2020
Sundsvall	Högom 3:178	Offices	Green Building	2020
Jönköping	Stensholm 1:754	Offices	LEED Gold	2018
Gävle	Söder 18:19	Offices	Sweden Green Building Council Silver	2019

Building with sustainability certification

Nyfosa came joint first in Allbright's annual equality survey of Swedish listed companies. Allbright continually identifies the gender balance of business management teams and boards of directors to highlight the issue of representation.

EARNINGS CAPACITY

	Mar 31
MSEK	2021
Rental income	2,322
Property expenses	-597
Property administration	-65
Net operating income	1,660
Central administration	-95
Share in profit of joint ventures	237
Financial expenses	-384
of which ground rent	-5.5
Profit from property management	1,419
Equity per share on balance-sheet date, SEK	7.69

The company's current earnings capacity on a 12-month basis on March 31, 2021 is presented above. Current earnings capacity is to be considered solely as a hypothetical instantaneous impression and is presented only for illustrative purposes. The aim is to present annualized income and expenses based on the property portfolio, borrowing costs, capital structure and organization at a given point in time. The earnings capacity does not include an assessment of future periods in respect of rents, vacancy rates, property expenses, interest rates, changes in value or other factors impacting earnings, other than the index-linking found in existing leases. The data does not include the possible effects of property transactions. The current earnings capacity must be considered together with other information in the interim report.

The following information is used as the basis for assessing current earnings capacity:

• annual rental income (including supplements and taking rent discounts into account), plus other propertyrelated income based on current leases;
• operating and maintenance costs consist of an assessment of operating expenses and maintenance measures during a standard year;
• property tax has been calculated on the basis of the current tax assessment value of the properties;
• costs for central administration have been calculated on the basis of the existing organization and the current size of the property portfolio;
• Nyfosa's shares of profit from property management from joint ventures before changes in value, calculated using the same method as Nyfosa;
• the assessment of earnings capacity does not assume any financial income; and
• financial expenses have been calculated on the basis of the company's average interest rate on March 31, 2021, including allocated opening charges, a total of 2.21 percent. The item also includes ground rent.

PARTICIPATIONS IN JOINT VENTURES

Nyfosa owns 50 percent of the shares in the property company Söderport Holding AB ("Söderport"). The remaining portion of the shares is owned by AB Sagax (publ). The joint venture is governed by shareholders' agreements giving both owners equal power of decision, meaning that neither partner has a controlling influence. The holding is classified as Participations in joint ventures and Nyfosa's share in the profit of Söderport is recognized in the Group's profit from property management. The holding contributed SEK 15.07 per share to Nyfosa's EPRA NRV on the balance sheet date.

Söderport's property portfolio primarily comprises industrial, warehouse and office properties, which essentially presents a supplement to Nyfosa's wholly owned property portfolio. Söderport owns properties for a total value of MSEK 12,311 (11,192). The focal point of the property portfolio is in the Stockholm and Gothenburg regions. Söderport does not have its own operational organization. Instead, it procures property management and financial administration from Sagax. A small part of property management is procured from Nyfosa.

Söderport's net operating income amounted to MSEK 166 (163) and profit from property management to MSEK 117 (111) and the loan-to-value ratio to 48 percent (50). The impact of the coronavirus pandemic on Söderport's operations has been limited.

The total rental value for Söderport's property portfolio amounted to MSEK 900 (839). Leases have an average remaining term of 4.7 years (5.0). The total leasable area amounted to 778 thousand sqm (762). The economic leasing rate was approximately 94.6 percent (95).

TORSLANDA PROPERTY INVESTMENT AB

78.4 percent of the company Torslanda Property Investment AB ("TPI") is owned and is thus consolidated with Söderport's statement of profit/loss and statement of financial position below. The minority share in TPI, corresponding to 21.6, is the reason that Nyfosa's participation does not correspond to 50 percent of Söderport's earnings and equity.

TPI is a Swedish property group that owns and manages office properties in Gothenburg and Stockholm. The property portfolio, which is valued at MSEK 3,225 (3,024), encompasses 196 thousand sqm (194) of leasable area that is mainly utilized as office space. The leasing rate is 100 percent (100), and the primary tenant is Volvo Cars. TPI's share has been listed on Nasdaq First North Growth Market since January 2015.

KEY FINANCIAL DATA, SÖDERPORT

	Jan-Mar		Full-year
MSEK	2021	2020	2020
Rental income	213	202	818
Net operating income	166	163	679
Net interest income	-41	-45	-185
Profit from property management	117	111	466
Changes in value of properties and derivatives	376	241	594
Tax	-100	-72	-217
Profit for the period	394	279	844
Of which, Nyfosa's share	188	135	404

	Mar 31	Dec 31
MSEK	2021	2020	2020
Investment properties	12,311	11,192	11,910
Cash and cash equivalents	211	291	161
Other assets	373	349	338
Equity	4,530	4,184	4,136
of which, Nyfosa's share	2,104	1,947	1,916
Interest-bearing liabilities	6,330	5,884	6,354
Deferred tax liabilities, net	1,174	967	1,087
Derivatives, net	177	227	221
Other liabilities	684	572	612

PROPERTY VALUE BY CATEGORY

• Offices, MSEK 3,105
• Warehouse, MSEK 7,727
• Industry, MSEK 1,466
• Other, MSEK 13

Greater Stockholm, MSEK 626

• Greater Gothenburg, MSEK 247
• Other, MSEK 27

PROPERTY VALUE

MSEK

FINANCING

Both the credit and capital markets are deemed to be stable.

Nyfosa finances its assets through equity, bank loans with Nordic banks and bonds issued in the Swedish capital market. Equity on the balance-sheet date amounted to MSEK 13,971 and interest-bearing loans from the credit and capital markets to MSEK 17,946, of which bank loans with properties as collateral amounted to MSEK 16,446 and senior unsecured bond loans to MSEK 1,500.

The total net loan-to-value ratio of the properties was 56.5 percent (55.3). To support growth, the company has three prearranged lines of credit with banks, which have not always been fully utilized. The total scope in these revolving credit facilities can amount to a maximum of MSEK 3,880. This means that, against collateral in existing properties, Nyfosa can rapidly increase its borrowing at fixed terms to, for example, finance new property acquisitions. After having utilized the credit scope, the company has the opportunity to renegotiate credit facilities to a standard bank loan, at which point the unutilized portion of the facilities increases. On the balance-sheet date, the company had utilized MSEK 1,822 of the total amount granted of MSEK 2,367 against collateral in existing properties. To utilize the remaining MSEK 1,513 under this credit framework, recently acquired properties are firstly used as collateral. In addition to the revolving credit facilities, the company has unutilized overdraft facilities with banks totaling MSEK 200.

Combined, the available liquidity and strong financial position provide a solid platform to continue to grow and resilience to any negative effects from the business world. The company continuously monitors liquidity in the operations so that it can rapidly counter any negative impact.

Available liquidity, March 31, 2021

MSEK		Mar 31
	2021	2020	2020
Cash and cash equivalents	552	966	312
Unutilized revolving credit facility1	545	603	896
Unutilized overdraft facilities	200	200	200
Total	1,297	1,769	1,408

1. Unutilized and previously granted loans on the balance-sheet date with existing properties as collateral. The loans are available to the company at short notice.

Revolving credit facilities, March 31, 2021

		Amount	Amount	Unutilized
MSEK	Framework	granted	utilized	amount
Total	3,880	2,367	1,822	545

Interest-bearing liabilities

The company raised new fixed-term loans totaling MSEK 519 in connection with acquisitions during the quarter. The utilization of revolving credit facilities increased by a net MSEK 321. Ongoing repayments of MSEK 48 were made for fixed-term loans, and repayments of revolving credit facilities in connection with divestments amounted to MSEK 130. As a result, the company's fixed-rate periods and loan maturity on the balance-sheet date were as presented in the tables below.

Changes in interest-bearing liabilities for the

quarter	Jan-Mar		Full-year
MSEK	2021	2020	2020
Interest-bearing liabilities at the beginning of the period	17,055	11,282	11,282
Repayment of bank loans	-178	-29	-4,781
Bond loans issued	-	-	-
Bank loans raised	970	3,428	10,583
Changes in borrowing fees	6	-12	-29
Interest-bearing liabilities at the end of the period	17,852	14,665	17,055

Bank loans of MSEK 690 fall due for payment in 2021. There are no indications that it will not be possible to refinance the liabilities with our Nordic relationship banks.

Loan maturity in the table shows the payment of outstanding principal loan amounts on the balance-sheet date, not including ongoing repayments.

	Fixed-rate period1		Loan maturity
Year	MSEK	%	MSEK	%
Within 1 year	9,821	55	690	4
1–2 years	1,500	8	5,263	29
2–3 years	1,275	7	2,410	13
3–4 years	5,350	30	9,063	51
4–5 years	0	-	519	3
>5 years	0	-	0	-
Total	17,946	100	17,946	100

Fixed-rate periods and loan maturity structure, March 31, 2021

1. Interest-bearing liabilities in the statement of financial position include allocated arrangement fees, which is the reason for the deviation between the table and the statement of financial position.

Exposure to interest-rate changes

Nyfosa mainly works with floating interest rates in its loan agreements. Exposure to interest-rate risk is managed by making use of derivative instruments, currently exclusively interest-rate caps. The sensitivity analysis below presented the estimated impact on earnings if the market interest rate were to change and if the company's average interest rate were to change. Limiting interest-rate risk increases the predictability of profit from property management and changes in interest-rate levels in the market do not fully impact the company's interest expenses. The nominal volume of outstanding interest-rate caps amounted to MSEK 8,425 on the balance-sheet date, corresponding to 47 percent of interest-bearing liabilities.

Sensitivity analysis

			Mar 31
Earnings effect of change in average interest on debt, MSEK	Change	2021	2020
Interest expenses assuming current fixed-interest periods and changed interest rates1	+/–1% point	+166/–15	+133/–38
Interest expenses assuming change in average interest rate2	+/–1% point	+/–179	+/–147
Revaluation of fixed-income derivatives attributable to shift in interest rate curves	+/–1% point	+/–10	+/–3

1. Taking into account derivative agreements

2. Today's average rate increases/decreases by 1 percentage point. Increase/decrease does not take into account eventual effects of the derivative portfolio.

Each variable in the table above has been addressed individually and on the condition that the other variables remain constant. The analysis refers to liability against the wholly owned property portfolio and does not pretend to be exact. It is merely indicative and aims to show the most relevant, measurable factors in the specific context.

Key figures for interest-bearing liabilities, March 31, 2021

	Mar 31		Dec 31
	2021	2020	2020
Debt/equity ratio, multiple	1.3	1.2	1.3
Average interest1 , %	1.9	2.1	1.9
Average remaining fixed-rate period, years	1.4	0.9	1.6
Average remaining loan maturity period, years	2.6	2.9	2.9
Interest-rate hedged portion of liabilities, %	46.9	33.0	49.0
Fair value of derivatives, MSEK	5	1	3

1. Interest expense excluding opening charges charged to earnings over the term of the loan.

KEY FIGURES

Presented below are the key figures for a period encompassing the results of the past four quarters that Nyfosa believes provide valuable supplementary information to investors and the company's management in their assessment of the company's performance. The table presents the key figures and performance measures that are not defined by IFRS which is why a reconciliation of key figures is also provided. Definitions can also be found on page [28] of this year-end report.

Under the company's new financial target, cash flow from operating activities, before changes in working capital ("Distributable cash flow"), is to present annual growth per share of 10 percent. The financial risk limits are unchanged and stipulate that the company is to report an equity/assets ratio of at least 25 percent, the loan-tovalue ratio is not to exceed 65 percent and the interest-coverage ratio is not to fall below a multiple of two.

	Last 4 quarters
	Mar 31 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Property-related key figures
Income, MSEK	2,177	2,035	1,860	1,637	1,478
Property expenses, MSEK	-615	-557	-516	-480	-441
Property administration, MSEK	-68	-63	-55	-53	-50
Net operating income, MSEK	1,493	1,415	1,289	1,104	988
Surplus ratio, %	68.6	69.5	69.3	67.4	66.8
Property value on balance-sheet date, MSEK	30,605	29,411	28,587	24,882	24,782
Share-related key figures
Profit from property management per share, SEK	7.64	7.35	8.05	7.58	7.49
Profit from property management excluding changes in value and tax in joint ventures, SEK	6.36	6.31	6.11	5.52	5.27
Distributable cash flow per share, SEK	6.82	6.91	6.65	6.03	5.21
Earnings per share before dilution, SEK	11.95	12.25	12.80	10.50	11.12
Earnings per share after dilution, SEK	11.94	12.25	12.80	10.50	11.12
EPRA NRV per share on balance-sheet date, SEK	83.99	79.91	77.32	72.78	71.18
EPRA NTA per share on balance-sheet date, SEK	79.00	75.33	72.55	67.57	66.11
EPRA NDV/equity per share on balance-sheet date, SEK	75.72	72.27	69.57	65.13	63.79
Key financial data
Return on equity, %	17.1	19.3	20.6	17.4	18.5
Equity/assets ratio on balance-sheet date, %	41.5	41.8	40.5	41.6	42.0
Loan-to-value ratio of properties on balance-sheet date, %	58.3	58.0	59.9	61.3	59.2
Net loan-to-value ratio of properties on balance-sheet date, %	56.5	56.9	56.4	53.2	55.3
Interest-coverage ratio, multiple	3.5	3.8	4.0	4.1	4.5

INCOME AND NET OPERATING INCOME PER SHARE, LAST FOUR QUARTERS

PROFIT FROM PROPERTY MANAGEMENT PER SHARE, LAST FOUR QUARTERS

Profit from property management excluding changes in value and tax in joint ventures

Profit from property management

RECONCILIATION OF KEY FIGURES

	Last 4 quarters
Distributable cash flow	Mar 31 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Profit from property management last four quarters, MSEK	1,410	1,334	1,429	1,314	1,267
Depreciation of equipment, last four quarters, MSEK	1	1	1	0	0
Allocated arrangement fees on loans, last four quarters, MSEK	38	35	24	15	7
Share in profit of joint ventures last four quarters, MSEK	-457	-404	-554	-566	-576
Dividend received from joint ventures last four quarters, MSEK	300	300	300	300	200
Income tax paid last four quarters, MSEK	-34	-11	-20	-18	-17
Average number of shares, last four quarters, millions	185	182	177	173	169
Distributable cash flow per share, SEK	6.82	6.91	6.65	6.03	5.21

The performance measure corresponds to the items in profit from property management that affect cash flow, plus dividends received from holdings in joint ventures and income tax paid. Cash flow is stated in SEK per share.

	On balance-sheet date
	Mar 31	Dec 31,	Sep 30,	Jun 30,	Mar 31,
Net asset value	2021	2020	2020	2020	2020
Equity, MSEK	13,971	13,333	12,836	12,016	11,769
Deferred tax, MSEK	855	760	806	813	770
Derivatives, MSEK	-5	-3	-3	-3	-1
Deferred tax in joint ventures, 50%, MSEK	587	544	511	488	484
Derivatives in joint ventures, 50%, MSEK	89	110	115	114	112
Number of shares, millions	185	185	185	185	185
EPRA NRV per share, SEK	83.99	79.91	77.32	72.78	71.18
Estimated actual deferred tax, MSEK1	-463	-419	-474	-576	-557
Estimated actual deferred tax in JV, Nyfosa's share, MSEK1	-458	-425	-406	-385	-379
EPRA NTA per share, SEK	79.00	75.33	72.55	67.57	66.11
Deferred tax, MSEK	-391	-341	-332	-237	-213
Derivatives, MSEK	5	3	3	3	1
Deferred tax in JV, Nyfosa's share, MSEK	-129	-118	-105	-103	-104
Derivatives in JV, Nyfosa's share, MSEK	-89	-110	-115	-114	-112
EPRA NDV/equity per share, SEK	75.72	72.27	69.57	65.13	63.79

1. Assumptions include that loss carryforwards are expected to be used in the next five years with nominal tax of 20.6 percent. The property portfolio is expected to be realized over 50 years when the entire portfolio will be indirectly sold via companies and the purchaser's deduction for deferred tax is 7 percent. The discount rate amounted to 3 percent.

Net asset value is the total capital that the company manages on behalf of its owners and the value can be calculated in different ways depending on the time perspective and turnover rate in the property portfolio. EPRA NRV (Net Reinvestment Value) is based on the company never selling its assets and aims to reflect the value required for building up the operations again. Equity in the statement of financial position was adjusted for items that do not involve any payment in the near future, such as derivatives and deferred tax liabilities, both in Nyfosa's statement of financial position and Nyfosa's share of derivatives and deferred tax in joint ventures' statement of financial position. EPRA NTA (Net Tangible Assets) assumes that the company will make property transactions and thus be liable to pay certain taxes. The performance measure comprises equity according to the statement of financial position adjusted for the portion of deferred tax, both in Nyfosa's statement of financial position and Nyfosa's share of deferred tax in joint ventures' statement of financial position, measured at market value taking into consideration how the company has carried out property transactions in the past few years. EPRA NDV (Net Disposal Value) comprises equity according to the statement of financial position.

	Last 4 quarters
	Mar 31	Dec 31,	Sep 30,	Mar 30,	Mar 31,
Return on equity	2021	2020	2020	2020	2020
Profit after tax last four quarters, MSEK	2,204	2,225	2,271	1,820	1,881
Average equity for last four quarters, MSEK	12,870	11,557	11,036	10,442	10,161
Return on equity, %	17.1	19.3	20.6	17.4	18.5

This performance measure is calculated by using profit after tax for the most recent 12-month period in relation to average equity during the same period.

	On balance-sheet date
	Mar 31	Dec 31,	Sep 30,	Mar 30,	Mar 31,
Equity/assets ratio	2021	2020	2020	2020	2020
Equity, MSEK	13,971	13,333	12,836	12,016	11,769
Total assets, MSEK	33,643	31,907	31,673	28,876	28,011
Equity/assets ratio, %	41.5	41.8	40.5	41.6	42.0

The performance measure is calculated as equity as a percentage of total assets according to the statement of financial position. The performance measure shows how large a share of the company's assets are financed by the company's equity.

	On balance-sheet date
	Mar 31	Dec 31,	Sep 30,	Jun 30,	Mar 31,
Loan-to-value ratio and net loan-to-value ratio	2021	2020	2020	2020	2020
Interest-bearing liabilities, MSEK	17,852	17,055	17,136	15,249	14,667
Property value, MSEK	30,605	29,411	28,587	24,882	24,782
Loan-to-value ratio, %	58.3	58.0	59.9	61.3	59.2
Cash and cash equivalents, MSEK	552	312	1,012	2,016	966
Net loan-to-value ratio, %	56.5	56.9	56.4	53.2	55.3

The loan-to-value ratio is calculated by using interest-bearing liabilities as a percentage of the value of the properties according to the statement of financial position. The net loan-to-value ratio is calculated by using net loans, meaning interest-bearing liabilities less cash and cash equivalents, as a percentage of the value of the properties according to the statement of financial position.

	Last 4 quarters
	Mar 31	Dec 31,	Sep 30,	Jun 30,	Mar 31,
Interest-coverage ratio	2021	2020	2020	2020	2020
Profit from property management last four quarters, MSEK	1,410	1,334	1,429	1,314	1,267
Share in profit of joint ventures last four quarters, MSEK	457	404	554	566	576
Depreciation last four quarters, MSEK	-1	-1	-1	0	0
Financial income and expenses last four quarters, MSEK	-378	-327	-290	-245	-200
Interest-coverage ratio, multiple	3.5	3.8	4.0	4.1	4.5

The interest-coverage ratio is calculated by excluding shares in profit in joint ventures, depreciation/amortization and financial income and expenses from profit from property management. The performance measure treats ground rent as a property expense, similar to previous calculations. This profit is then expressed as a percentage of financial income and expenses to calculate the interest-coverage ratio.

OTHER DISCLOSURES

SHARE AND SHAREHOLDERS

The volume weighted average price on the interim period's last day of trading, March 31, 2021, was SEK 90.49, corresponding to a total market capitalization of MSEK 16,695. Nyfosa had 19,803 shareholders, of which Swedish investors, institutions and private individuals owned 73.4 percent of the shares and voting rights, and the remaining shares and votes were owned by foreign shareholders.

		Share of
List of owners	No. of shares	Capital, %	Votes, %
Länsförsäkringar Funds	17,334,658	9.4	9.4
Swedbank Robur Funds	14,100,416	7.6	7.6
AB Sagax	13,952,429	7.6	7.6
Handelsbanken Funds	9,370,467	5.1	5.1
SEB Funds	7,895,138	4.3	4.3
BlackRock	6,300,933	3.4	3.4
Vanguard	5,443,009	3.0	3.0
Jens Engwall	5,243,857	2.8	2.8
Kåpan Pensioner Försäkringsförening	4,995,527	2.7	2.7
Norges Bank	4,531,862	2.5	2.5
Other	95,332,777	51.7	51.7
Total	184,501,073	100.0	100.0

ANNUAL GENERAL MEETING

Nyfosa's 2021 Annual General Meeting (AGM) will be held in Stockholm on April 21, 2021. For more information about the AGM, visit www.nyfosa.se.

ASSURANCE FROM THE CEO

The CEO gives her assurance that this interim report provides a fair review of the company's and the Group's operations, financial position and earnings, and describes the material risks and uncertainties facing the Parent Company and the companies included in the Group.

Nacka, April 21, 2021

Nyfosa AB (Corp. Reg. No. 559131–0833)

Stina Lindh Hök

Chief Executive Officer

FINANCIAL CALENDAR		CONTACT INFORMATION
Annual General Meeting Interim report January–June 2021 Interim report January–September 2021	April 21, 2021 July 13, 2021 October 21, 2021	Nyfosa AB Tel: +46 (0)8 406 64 00 Street address: Hästholmsvägen 28 Postal address: Box 4044, SE-131 04 Nacka, Sweden www.nyfosa.se
		Stina Lindh Hök, CEO Tel: +46 (0)70 577 18 85 E-mail: stina.lindh.hok@nyfosa.se Ann-Sofie Lindroth, Head of Financial Control
		Tel: +46 (0)70 574 59 25 E-mail: ann-sofie.lindroth@nyfosa.se

This interim report is unaudited.

The information is inside information that Nyfosa AB is obligated to disclose in accordance with the EU Market Abuse Regulation. The information was submitted for publication through the agency of the aforementioned contact persons on April 21, 2021 at 7:30 a.m. CEST.

NOTE 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES

This condensed interim report for the Group has been prepared in accordance with IAS 34 Interim Reporting, as well as the applicable regulations of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with Chapter 9 Interim Reports of the Annual Accounts Act. The accounting policies and calculation methods were unchanged compared with 2020 Annual Report. Disclosures in accordance with IAS 34.16A are provided not only in the financial statements and the accompanying notes but also elsewhere in this interim report.

All amounts in the report are stated in millions of SEK ("MSEK") unless otherwise stated. There may be rounding errors in tables that have combined sums from already rounded amounts. Amounts in parentheses refer to the same period in the preceding financial year. Key figures regarding an earnings or cash flow measure, stated per share, are calculated on a weighted average number of shares during the period referred to. Key figures based on an amount in the statement of financial position, stated per share, are calculated on the number of shares on the balance-sheet date.

NOTE 2 ESTIMATES AND ASSESSMENTS

The preparation of the interim report requires that company management make judgments and estimates, and make assumptions that affect the application of the accounting policies and the amounts of assets, liabilities, income and expenses recognized. The actual outcome may deviate from these judgments and estimates.

Measurement of investment properties

For significant assumptions and assessments affecting the measurement of Nyfosa's investment properties, refer to Note 13 of the 2020 Annual Report on www.nyfosa.se. Nyfosa's property portfolio is recognized in the statement of financial position at fair value, Level 3 according to IFRS 13, and the changes in value are recognized in profit or loss. The fair value is based on internal valuations that are performed continuously and the properties are also valued every quarter by an external independent appraiser. The value of the properties is affected not only by supply and demand in the market but also by a number of other factors, in part property-specific factors such as the leasing rate, rent level and operating expenses, and in part such market-specific factors as the yield requirement and the cost of capital, which are derived from comparable transactions in the property market. Deterioration in either a property or the market could cause the value of the properties to decline, which could have a negative impact on Nyfosa's operations, financial position and earnings.

Valuations require assessments of and assumptions about future cash flows and determination of the discount factor (yield requirement). An uncertainty interval of +/- 5–10 percent is usually applied to property valuations to reflect the uncertainty of assumptions and assessments made.

Measurement of loss carryforwards

The regulatory framework governing taxation of the type of business operated by Nyfosa is complex and comprehensive in terms of both income tax and VAT/property taxation. Moreover, interpretation and application of these regulations by courts of law can change over time. Changes in these regulations, or in their interpretation by judicial bodies, could impact Nyfosa's earnings and position either positively or negatively. From time to time, Nyfosa has cases under review by, and ongoing dialog with, the Swedish Tax Agency regarding individual taxation matters. The Tax Agency makes tax rulings that can be appealed and reviewed in administrative courts of appeal. The regulations governing the recognition of taxes, and the property sector's application of these accounting regulations, are also complex. The regulatory framework is complex, the Tax Agency's review possibilities are comprehensive and the judicial bodies' interpretation and reviews take place in many stages, which means that it can take a long time to establish the correct application of legislation in complex taxation matters. This may entail that actions taken or completed transactions that were previously considered permissible according to the regulatory framework may need to be reappraised at a later juncture. Nyfosa monitors the taxation laws and practices that are in effect whenever it files tax returns. Nyfosa's assessments and calculations in the tax area, and the accounting of these matters, are reassessed at the end of each reporting period. Nyfosa had loss carryforwards from prior years. The Tax Agency decided in a review decision in 2018 not to grant the company full deductions for these loss carryforwards. The loss carryforwards in question amount to MSEK 1,215. Unutilized loss carryforwards are valued at MSEK 221, corresponding to 20.6 percent, in the statement of financial position. Nyfosa has not remeasured this amount since it believes that it is overwhelmingly probable that the deduction claimed will be granted following a court ruling.

Classification of acquisitions

The IFRS 3 accounting standard states that acquisitions must be classified as business combinations or asset purchases. An individual assessment of the character of the acquisition is required for each individual transaction. Nyfosa's corporate acquisitions in 2021 encompass only properties and no material processes, which is why the transactions are deemed to be asset purchases.

NOTE 3 OPERATING SEGMENTS

Nyfosa's operations comprise one operating segment, that is to say, Nyfosa's operations comprise a business that generates income and expenses and whose operating profit is regularly assessed by the company's chief operating decision maker as a basis for monitoring earnings and allocating resources.

NOTE 4 TAX

The Group's effective tax rate for the interim period was 14.2 percent (20.0). The deviation from the nominal tax rate of 20.6 percent was due to the profit from participations in joint ventures comprising profit after tax, and thus did not constitute taxable income for Nyfosa, but was also due to any non-taxable capital gains on the divestment of properties via companies, and valuations of loss carryforwards.

According to the applicable rules, deferred tax is to include temporary differences on all assets and liabilities, except for temporary differences on properties when assets are acquired. The residual value of investment properties for tax purposes totaled MSEK 13,297, which means that temporary differences of MSEK 12,934 were not recognized in the statement of financial position.

Reconciliation of effective tax, MSEK	%
Profit before tax		745
Tax according to applicable tax rate for Parent Company	-20.6%	-154
Non-deductible costs and tax-exempt income	0.2%	2
Profit from participations in joint ventures	5.2%	39
Capitalization and utilization of loss carryforwards not capitalized in prior years	0.0%	0
Non-taxable sales of properties	0.7%	5
Other	0.2%	2
Recognized effective tax	-14.2%	-106

NOTE 5 EARNINGS PER SHARE

A long-term incentive program for employees of the Nyfosa Group was implemented in accordance with the resolution of the Annual General Meeting in May 2019. To establish the program, the Meeting resolved on a directed issue of a maximum of 1,950,000 warrants. Each warrant entitles the holder to subscribe for one new share in Nyfosa AB.

The subscription price per share is based on the average share price at the time of the issue of the warrants with an increase or decrease calculated according to Carnegie's Real Estate Index (CREX) until September 2022, when it will be finally set. Subscription of shares in accordance with the terms and conditions for the warrants may be exercised during a two-week period from the day following the disclosure of the company's interim report for the period July – September, 2022, the company's year-end report for 2022 and the interim report for the period January – March, 2023, although not later than June 10, 2023. 1,304,300 of the issued warrants were subscribed for, and the remainder are held by a company in the Group.

The average share price during the quarter was slightly higher than the average exercise price of the warrants, which meant a marginal dilution effect of 0.11 percent arose. A dilution effect of 0.04 percent arose during the period of "last four quarters."

NOTE 6 FAIR VALUE OF FINANCIAL INSTRUMENTS

Nyfosa measures its financial instruments at fair value or amortized cost in the statement of financial position, depending on the classification of the instrument. Financial instruments include rent receivables, derivatives and cash and cash equivalents among assets and interest-bearing liabilities, derivatives and accounts payable among liabilities. All derivatives are classified in Level 2 according to IFRS 13 and are measured at their fair value in the statement of financial position. Nyfosa has binding framework agreements for derivative trading (ISDAs), which enable Nyfosa to offset financial liabilities against financial assets in the event of the insolvency of a counterparty of other event, a process known as netting. No offset currently takes place.

The table below presents the fair value of the Group's derivatives, which is reflected in the statement of financial position. The carrying amount of accounts receivable, other receivables, cash and cash equivalents, accounts payable and other liabilities provides a reasonable approximation of the fair value.

	Mar 31		Dec 31
Fair value, MSEK	2021	2020	2020
Derivatives with positive values	5	1	3
Derivatives with negative values	-	-	-

NOTE 7 FINANCING

For information regarding changes in loans, interest rates and credit terms, refer to pages 16–17 of this interim report.

NOTE 8 SHAREHOLDERS' EQUITY

Date	Event	Change in share capital (SEK)	Change number of shares	Share capital after change (SEK)	Number of shares after change
October 17, 2017	New formation	-	-	50,000.00	500
May 21, 2018	Division of shares	-	99,500	50,000.00	100,000
May 21, 2018	New share issue	78,814,124.50	157,628,249	78,864,124.50	157,728,249
August 21, 2018	New share issue	5,000,000.00	10,000,000	83,864,124.50	167,728,249
February 17, 2020	New share issue	3,231,412.00	6,462,824	87,095,536.50	174,191,073
March 9, 2020	New share issue	5,155,000.00	10,310,000	92,250,536.50	184,501,073

NOTE 9 RELATED PARTIES

The Group owns participations in joint ventures, refer to page 15 of this interim report. Söderport is managed by AB Sagax, except for property management which is managed by Nyfosa. The company TPI, of which Söderport owns 78.4 percent, also purchases management services from Nyfosa and Sagax.

Property management fees between the companies are based on market terms. Nyfosa's fee totals MSEK 3 per year. The Group has no receivables from joint ventures on December 31, 2020.

The company signed a consultancy agreement with Board member Jens Engwall in 2020. His assignment under the agreement is to provide advisory services, in the first instance to the company's CEO, and also to continue to serve as the company's Board member in Söderport Holding AB and Torslanda Property Investment AB. The agreement came into effect on March 1, 2021 and expires on December 31, 2022. No fees were paid during the quarter.

NOTE 10 SIGNIFICANT EVENTS AFTER THE END OF THE INTERIM PERIOD

In April, Nyfosa and Brunswick Real Estate created a joint venture with the aim of building up a property portfolio in Finland with a value of about SEK 7 billion within five years. The acquisition focus will be broad and in line with Nyfosa's operations in the Swedish market. It will include all property categories except residential properties, and be concentrated on Finnish regional towns and cities.

Nyfosa prepared a green finance framework in April and is evaluating the potential for issuing a three-year green senior unsecured bond at a floating interest rate, and announcing a conditional repurchase offer for the company's outstanding bond. This may be followed by a capital market transaction, subject to the prevailing market conditions. The issue proceeds from the potential transaction will be used in accordance with the company's recently established green finance framework and include financing or refinancing of green assets and investments in energy enhancements, and for the repurchase of the company's outstanding non-covered bonds with ISIN code SE0012569655, which expire in 2022.

PARENT COMPANY

Nyfosa AB is a holding company whose operations comprise owning and managing shares. The company owns 50 percent of the participations in Söderport Holding AB, which indirectly owns properties for SEK 12.3 billion. Furthermore, the company owns 100 percent of the participations in Nyfosa Holding AB, which indirectly owns properties for SEK 30.6 billion.

The company's organization comprises 67 people who work with property management, transaction operations, Group-wide administrative services and services specific to the listed company. Relevant services are provided to the subsidiaries in the Nyfosa Group through internal service level agreements.

STATEMENT OF PROFIT/LOSS

	Jan-Mar		Full-year
MSEK	2021	2020	2020
Net sales	25	17	87
Personnel costs	-26	-19	-86
Other external costs	-13	-12	-42
Depreciation/amortization	0	0	0
Loss before financial income and expenses	-14	-13	-42
Profit from participations in joint ventures	0	0	300
Profit from participations in Group companies	0	0	1,850
Interest income and similar income items	30	1	82
Interest expenses and similar expense items	-15	-16	-62
Profit before appropriations	1	-29	2,128
Appropriations
Provision to tax allocation reserve	0	7	7
Group contributions paid/received	0	0	35
Profit before tax	1	-22	2,170
Tax	-5	0	1
Profit	-3	-22	2,171

Profit/loss for the period is the same as comprehensive income for the period.

STATEMENT OF FINANCIAL POSITION

	Mar 31		Dec 31
MSEK	2021	2020	2020
ASSETS
Participations in Group companies	0	0	0
Participations in joint ventures	412	412	412
Receivables from Group companies	5,377	90	5,377
Deferred tax assets	-	-	1
Total non-current assets	5,789	503	5,791
Current receivables from Group companies	5,863	9,568	5,239
Other current receivables	4	6	8
Cash and bank balances Total current assets	223 6,091	151 9,726	145 5,391
TOTAL ASSETS	11,880	10,228	11,181
EQUITY AND LIABILITIES
Restricted equity	92	92	92
Unrestricted equity	8,361	6,174	8,365
Equity	8,453	6,266	8,458
Untaxed reserves	0	0	0
Bonds	1,493	1,487	1,491
Other non-current liabilities	3	8	4
Total non-current liabilities	1,496	1,496	1,495
Liabilities to Group companies	1,865	2,402	1,174
Other current liabilities	62	64	55
Total current liabilities	1,931	2,466	1,229
Total liabilities	3,427	3,962	2,724
TOTAL EQUITY AND LIABILITIES	11,880	10,228	11,181

GLOSSARY

Return on equity	Profit/loss for the most recent 12-month period in relation to average equity during the same period.
	Purpose: The performance measure shows the return generated on the capital attributable to shareholders.
Loan-to-value ratio, properties*	Interest-bearing liabilities at the end of the period in relation to the value of the properties (in the statement of financial position).
	Purpose: The loan-to-value ratio is a measure of risk that indicates the degree to which the operation is encumbered with interest-bearing liabilities. The performance measure provides comparability with other property companies.
Yield*	Net operating income according to earnings capacity in relation to the fair value of the properties on the balance-sheet date.
	Purpose: The performance measure indicates the yield from operational activities in relation to the properties' value.
Net operating income*	Net operating income comprises the income and expense directly connected to the property, meaning rental income and the expenses required to keep the property in operation, such as operating expenses, maintenance costs and personnel costs for those who take care of the property and tenant contacts.
	Purpose: The measure is used to provide comparability with other property companies, but also to illustrate operational performance.
Economic leasing rate	Rental income before rent discounts as a percentage of the rental value at the end of the period.
	Purpose: The performance measure facilitates the assessment of rental income in relation to the total value of the leased and unleased floor space.
Property	Properties held under title or site leasehold.
Property value	The carrying amount of investment properties according to the statement of financial position at the end of the period.
	Purpose: The performance measure facilitates better understanding of the value development in the property portfolio and the company's statement of financial position.
Profit from property management*	Profit from property management comprises net operating income plus property management and administration expenses as well as financial income and expenses. This earnings measure does not include effects of changes in the value of wholly owned investment properties and derivatives. These are reported separately in the statement of profit/loss. However, changes in value and tax are included in the share in profit of joint ventures in profit from property management.
Rental income	Rents charged including supplements for heating and property tax.
Rental value	Rental income before rent discounts for leased areas and assessed market rent for the vacant floor space.
	Purpose: The performance measure facilitates assessment of the total potential rental income since the assessed market rent for vacant floor space is added to the rental income charged.

EPRA NRV*	Equity plus derivatives and deferred tax liabilities according to the statement of financial position.
	Purpose: To show the fair value of net assets from a long-term perspective. Accordingly, assets and liabilities in the statement of financial position that are not adjudged to be realized, such as the fair value of derivatives and deferred taxes, are excluded. The corresponding items in the company's participations in joint ventures are also excluded from the performance measure.
EPRA NTA*	Equity plus derivatives and adjusted for actual deferred tax liabilities instead of nominal deferred tax.
	Purpose: To show the fair value of net assets from a long-term perspective but under the assumption that assets are traded. Accordingly, assets and liabilities in the statement of financial position that are not adjudged to be realized, such as the fair value of derivatives, are excluded but the market value of deferred tax is included. The corresponding items in the company's participations in joint ventures are also excluded from the performance measure.
EPRA NDV*	Equity according to the statement of financial position.
	Purpose: The performance measure shows how large a share of the company's recognized equity each share represents.
Net loan-to-value ratio, properties*	The net of interest-bearing liabilities and cash and cash equivalents at the end of the period as a percentage of the fair value of the properties in the statement of financial position.
	Purpose: The net loan-to-value ratio is a measure of financial risk that indicates the degree to which the operation is encumbered with interest-bearing liabilities, but taking into account bank balances. The performance measure provides comparability with other property companies.
Net leasing	Signed new leases for the period less terminations.
Revolving credit facility	An agreement between a lender and a borrower that gives the borrower the right to use funds for a certain period of time and up to a certain amount, and repay at its own discretion before a certain date.
Interest-rate cap	An interest hedging instrument whereby the lender pays a variable interest up to a predetermined interest-rate level. The aim of interest-rate caps is to reduce interest rate risk.
Interest-coverage ratio*	Profit from property management before financial income and expenses, depreciation/amortization and shares in profit in joint ventures as a percentage of financial income and expenses.
	Purpose: The interest-coverage ratio is a measure of financial risk that shows how many times the company can pay its interest charges with its profit from operational activities.
Debt/equity ratio*	Interest-bearing liabilities as a percentage of equity.
	Purpose: The debt/equity ratio is a measure of financial risk that shows the company's capital structure and sensitivity to movements in interest rates.
Equity/assets ratio*	Equity as a percentage of total assets.

Distributable cash flow*	Profit from property management excluding non-cash items in the earnings measure, such as share in profit of joint ventures and depreciation of equipment, including dividends receive from holdings in joint ventures and tax paid.
	Purpose: The performance measure shows the amount of cash flow generated by the existing property portfolio under the company's management and the company's dividend capacity.
Leasable area	The total premises area that can potentially be leased. Purpose: Shows the total area that the company can potentially lease.
Vacancy rent	Assessed market rent for vacant floor space. Purpose: The performance measure states the potential rental income when all floor
	space is fully leased.
Surplus ratio*	Net operating income for the period as a percentage of total income.
	Purpose: The surplus ratio shows the percentage of each Swedish krona earned that the company can keep. The performance measure is an indication of efficiency that is comparable over time and among property companies.

* Refers to alternative performance measures according to the European Securities and Markets Authority (ESMA).

Tel: +46 (0)8 406 64 00 www.nyfosa.se

Street address: Hästholmsvägen 28 Postal address: Box 4044, SE-131 04 Nacka, Sweden