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Platzer Fastigheter Holding

Interim / Quarterly Report Jul 7, 2017

2955_ir_2017-07-07_c43eb3e3-b4a5-4957-ab32-c8ff81053497.pdf

Interim / Quarterly Report

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Interim Report 1 January — 30 June 2017

  • Rental income increased to SEK 497 million (316)
  • Income from property management improved by 71% to SEK 249 million
  • Profit for the period amounted to SEK 432 million (84)
  • Property portfolio increased in value to SEK 13,972 million (13,615)
  • Long-term net asset value (EPRA NAV) per share was SEK 48.78 (45.72)
  • Earnings per share amounted to SEK 3.60 (0.85)
  • Acquisition of Piren2 in Lindholmen
  • Acquisition of 50% of the Merkur building in the Skeppsbron area
  • Agreement with NCC on joint project development in Gårda and option on acquisition of office project in the centre of Mölndal

PLATZER - THE BEST LOCATIONS IN GOTHENBURG

Platzer is one of the largest and leading commercial property companies in Gothenburg, primarily in office property. We are proud to be participating in the creation, preservation and regeneration of the best locations in Gothenburg. Best in Gothenburg, best for Gothenburg. Quite simply the best Platzer in Gothenburg. We own and develop 68 properties with a total area of 800,000 sq. m., worth SEK 14 billion.

Business concept

Platzer creates value by owning and developing properties in the Gothenburg area.

Vision

Platzer aims to be the leading property company in commercial premises in the Gothenburg area.

Strategy

  • Grow and be a leading player in the Gothenburg area, focusing on selected segments.
  • Develop long-term relationships on a commercial, sustainable and ethical basis by actively working with customers and suppliers.
  • Conduct continuous improvements of the property portfolio through value added property and project development.
  • Debt financing of the business based on the value of properties. Use existing cash for valueadded property investments.

Sustainability

Sustainability is about continually taking decisions that facilitate long-term, sustainable development. This is achieved by reaching a balance

between several factors - a healthy financial position, satisfied employees, minimal environmental impact and a positive contribution to society. Platzer's sustainability activities are integrated into operating activities and incorporate financial, ecological and social sustainability. The Company takes a systematic approach to day-to-day environmental performance and Platzer has held ISO 14001 certification since 2009.

Financial targets

  • Long-term net asset value (EPRA NAV) to increase by > 10% per year
  • Equity/assets ratio > 30%
  • Loan-to-value ratio must not exceed 65% in the long term
  • Interest coverage ratio > 2.0
  • Property and project investments to achieve a return on investment of >20%

For outcome, see Key Performance Indicators on page 14 and Key Performance Indicators per share on page 25.

Value-generating

Platzer adds value through letting and management, property projects and urban development, as well as acquisitions and disposals of properties. Platzer prioritises good relationships with tenants and offers a service that focuses on close relationships and commitment.

A WOR D F ROM T HE CEO

Large property transactions create value and growth

The second quarter was a busy period in terms of property transactions, with many ongoing and completed transactions. We signed an agreement with NCC on a joint development project involving our property Gårda 16:17 and on acquisitions in the centre of Mölndal. At the same time, we acquired Piren 2 in the Lindholmen area of Gothenburg from Skanska and 50% of the property Merkur in the Skeppsbron area from Bygg Göta. Säve Depot was sold to Serneke. Sales of future building rights in Södra Änggården continued apace and we hope to be able to reach agreements with buyers already in the next quarter. None of the transactions in the second quarter had an impact on the Q2 results, however.

Strong growth in property management portfolio

The property transactions, development projects and lettings that were implemented in 2016 will continue to boost operating profits. Compared with the same period in the previous year, the operating surplus increased by 57% to SEK 367 million, while income from property management rose by 71% to SEK 249 million. The net asset value increased by nearly 7% in the first half of the year,

compared with our target of 10% for the full year. This shows that all aspects of our business are creating value, be it day-to-day property management, transactions or development projects.

Multiple sources of finance

Our commercial paper programme with a framework amount of SEK 2 billion was launched in the second quarter and the first tranche raised SEK 400 million as planned. The commercial paper programme means that we now have multiple financing opportunities on favourable terms and this programme also offers us greater flexibility because it gives us access to unsecured borrowing.

Berättarministeriet is establishing a writing workshop in Gamlestaden

Platzer's sustainability activities focus on implementing concrete measures in areas where we are able to have a lot of influence. The environment is one such area, and we are continuing to reduce the energy consumption of our properties and we are also signing green leases and obtaining environmental certification for our properties.

Berättarministeriet's launch in Gothenburg is proceeding to plan, and we are looking forward to the opening in Gamlestaden in November and to being able to offer the first writing workshops in the Gothenburg area. Berättarministeriet is a nonprofit organisation, run by volunteers, that offers writing workshops to children between the ages of 8 and 18 in areas with high unemployment. Platzer has joined the project as a long-term collaborator, assuming social responsibility that seeks to encourage more children to finish compulsory education with qualifications that meet higher requirements.

Economic boom in Gothenburg benefits Platzer The Gothenburg region is currently enjoying an economic boom. Industry, spearheaded by the vehicle manufacturing industry, is buoyant and there is a shortage of both housing and business premises. As I write, Geely of China has announced that it is establishing an innovation centre in Lindholmen which will create 3,500 jobs. Municipal land development offices are working as hard as possible to be able to produce zoning plan to increase production of housing and business premises, but they are not managing to keep up with demand. This means that the prices of building rights and developed land are continuing to increase, making it very profitable to be involved in urban development, project development and property development.

We are a large and active player in Gothenburg with the resources to manage development projects and this know-how enables us to take advantage of the current economic conditions by having many different current and potential development projects underway. At the same time, we enjoy a stable cash flow from our dayto-day activities, with a high surplus ratio and high occupancy rates, which means we are able to rapidly change our approach if the economic situation were to change.

P-G Persson CEO

COMMENTS JAN-JUN 2017

Comparative values for income statement items refer to the corresponding period in the previous financial year and for balance sheet items as at 31/12/2016.

Financial performance

Income from property management in the first half of the year amounted to SEK 249 million (146), corresponding to an increase of 71%. The improved performance compared with the previous year was primarily due to the acquisition from Volvo (the Artosa portfolio) in December 2016. In addition, results were boosted by completed development projects, which are now occupied, and increased letting in existing properties. Changes in the value of properties in the period amounted to SEK 260 million (172), while changes in the value of financial instruments totalled SEK 43 million (-213). Profit after tax for the period amounted to SEK 432 million (84).

Rental income

Rental income for the period amounted to SEK 497 million (316), an increase of 57%. The bulk of the increase in rental income, SEK 147 million, was attributable to the Artosa portfolio, with the remainder primarily due to completed development projects and new lettings. Rental income from existing leases as at 30 June 2017 was estimated to amount to SEK 1,000 million (707) on an annual basis, a sharp increase that is primarily attributable to the Artosa portfolio. The economic occupancy rate for the period was 95% (93), representing a recovery compared with the previous year because several large projects/conversion projects have been completed in the past year.

Property costs

Property costs for the period amounted to SEK -130 million (-82). The increase was primarily due to the larger property portfolio. Property operating expenses and maintenance costs are subject to seasonal variations. Costs in the first and fourth quarter are normally higher than in the second and third quarters, primarily due to consumption costs and snow clearance costs.

Operating surplus

The operating surplus improved by 59% and amounted to SEK 367 million in the first half of the year (234). The surplus ratio was 74% (74). The investment yield for the properties was 5.3% (4.6). The increase was primarily attributable to the acquisition of the Artosa portfolio, which was acquired at an investment yield of 7.3%.

Central administration

Central administrative costs for the first half of the year amounted to SEK -21 million (-20). The increase was primarily due to an increase in the number of employees, up to 67 at end-June 2017 from 62 as at 30 June 2016. The ongoing share incentive programme weighed down the result for the period by SEK -1.1 million (-1.0).

Net financial income/expense

Net financial expense for the period amounted to SEK -97 million (-68). Net financial income/ expense, too, was affected by the larger property portfolio, with the associated larger borrowings accounting for almost the entire increase in financial expense. Market rates were more or less unchanged compared with the same period a year ago. At the end of the period, the average interest rate, including the effects of signed derivative instruments, was 2.32% (2.24).

Tax

Tax for the period amounted to SEK -120 m (-21). Property disposals, which give rise to realised capital gains/losses, are normally conducted as company divestments. This means the gains are exempt from tax, which also had an impact on tax for the period. The government's so-called "paketeringsutredningen" inquiry into taxation of the property sector and the taxation proposal put forward by the government in June, which among other things, means that interest costs will not be tax deductible, is creating uncertainty in the property sector with regard to future tax rules. Because Platzer focuses on developing properties in order for the company itself to be involved in longterm management of those properties, the effects of the inquiry in the long term may be limited. In the short term, the proposal is causing uncertainty around future regulations.

Cash flow

Investments in existing properties totalled SEK 205 million (237), while sales amounted to SEK 108 million (42). No acquisitions took place in the period (437). The investments were fully financed from the company's cash assets. Cash flow for the period, after dividends worth SEK 132 million had been paid out to shareholders, totalled SEK -13 million (22). Cash and cash equivalents stood at SEK 119 million (132) as at the balance sheet date. In addition to cash and cash equivalents, as at 30 June 2017, the company had available credit facilities and an unutilised overdraft facility of SEK 1 298 million.

Investment properties and changes in the value of properties

Properties were recognised at a fair value of SEK 13,972 million (13,615), which was based on an internal valuation as at the balance sheet date. The properties are valued internally at the end of each quarter, using a ten-year cash flow model for all properties. Once a year, Platzer also carries out an external valuation of a selected number of properties that constitute a cross-section of the property

portfolio, corresponding to around 30% of the total value of the property portfolio, in order to ensure the quality of the internal valuation. The investment properties are valued within level 3 in the IFRS 13 fair value hierarchy.

The internal property valuation for the period showed a change in the value of investment properties of SEK 260 million (172). Around two-thirds of the change in value in the period was due to project development and active management, while the remainder was due to lower yield requirements in the market. The average required yield based on the valuation as at end-June was 5.6%, up from 5.4% as at 30 June 2016. The change was due to lower yield requirements in the market, but also the higher market yields of the Artosa portfolio.

In the second quarter, Platzer concluded an agreement with Skanska Fastigheter on the acquisition of Lindholmen 39:3, a newly built office building comprising around 9,000 sq. m. The property was valued at SEK 410 million in the transaction and the completion date is 29 September 2017. Furthermore, we concluded an agreement on the acquisition of 50% of the property Inom Vallgraven 49:1 from Bygg-Göta, which retains ownership of the remaining 50%. The transaction will be carried out as a company acquisition and is worth SEK 150 million. The acquisition will be completed in second half of 2017.

In June, we reached an agreement with NCC on the sale of 50% of the property Gårda 16:17 in a deal that involves jointly developing a future building right of around 25,500 sq. m. of lettable area over the next few years. Once the property is finished, the parties have concluded an agreement for Platzer to acquire NCC's share of Gårda 16:17. The transactions are being conducted as company acquisitions. At the same time, Platzer has also acquired an option to acquire NCC's future office project in the centre of Mölndal.

The properties Balltorp 1:135 and Fänkålen 2 were sold in the first quarter through company divestments.

Investments in existing properties in the period amounted to SEK 205 million (237), with the largest individual investment being the new build project Gamlestaden 740:132.

In May, the company concluded an agreement on the sale of Åseby 7:2 to Serneke for an underlying property value of SEK 100 million. The transaction will take the form of a company divestment and

the sale will be completed on 1 September this year.

Equity

Consolidated equity as at end-June totalled SEK 5,004 million (4,703) following the payment of a dividend of SEK 1.10 per share. The equity/assets ratio as at the balance sheet date was 35% (34). Equity per share as at the balance sheet date stood at SEK 41,41 (38.90), while the long-term net asset value (EPRA NAV) was SEK 48.78 (45.72).

Debt financing and changes in the value of derivatives As at the balance sheet date, interest-bearing liabilities amounted to SEK 8,012 million (7,989), which corresponded to a loan-to-value ratio of 57% (59). Current interest-bearing liabilities refer to loans that will be renegotiated in the next twelve months. Debt financing primarily comprises bank loans secured by mortgages on property. In addition, Platzer is borrowing SEK 800 m through two Green Bond issues via Nya SFF. In the second quarter, Platzer established a certificate programme with a framework amount of SEK 2 billion. The first tranche involved the issue of SEK 400 million of commercial paper. In the first half of the year, Platzer repaid loans mostly in connection with the sale of properties. The average fixed interest term, including the effect of derivatives contracts, was 3.7 years as at 30 June 2017 (3.8). The average loan term was 1.6 years (2.0), which is in line with the strategy to distribute loans over the next four years.

In order to achieve the desired fixed interest rate structure the company uses interest rate derivatives in the form of interest rate swaps, which are recognised at fair value in the balance sheet, while gains/losses are recognised through profit or loss without applying hedge accounting. Platzer has concluded interest rate swap agreements totalling SEK 4,920 million, of which SEK 1,100 million refers to swaps with forward start dates. The market value as at 30 June was SEK -287 million, which corresponded to a change in value of SEK 43 million for the period. The changes in value do not affect cash flow. During the remaining term of the derivatives, the undervalue will be resolved and will reduce financial costs in the income statement by an equivalent amount.

The financial assets and liabilities that are measured at fair value in the Group comprise the derivative instruments and capital redemption policies described above. Both the derivative instruments and the capital redemption policies are included in Level 2 in the IFRS 13 fair value hierarchy. The fair value of non-current, interest-bearing liabilities is equivalent to their carrying value because

the discounting effect is not significant when the interest rate on the loans is variable and in line with market rates.

Personnel and organisation

The workforce increased by 3 people during the period and the company had 67 employees at the end of June (64). Platzer's property portfolio was previously organised into three market segments with responsibility for daily operation, management and development of properties. As of 1 June this year, the market segments have been amalgamated into two. The market segments are supported by two specialist units: Project development and Lettings. Platzer's Group and staff functions comprise the CEO, business development, finance and accounting, HR, communication/marketing and sustainability/procurement.

Q2 2017

Rental income for the second quarter amounted to SEK 246 million (159), an increase of 55%. The bulk of the increase, SEK 73 million, was attributable to the Artosa portfolio. In the same quarter, the operating surplus increased to SEK 181 million (122). Income from property management amounted to SEK 123 million (79), an improvement of 56%. In the first half, changes in the value of investment properties amounted to SEK 122 million (95), while changes in the value of financial instruments weighed down results by SEK 30 million (-85). Profit after tax for the period amounted to SEK 214 million (69).

Significant events during the fourth quarter: - An agreement was concluded with NCC on joint project development of Gårda 16:17, 50% of which will be acquired by NCC, which will later sell its share to Platzer when the project has been completed. Platzer will also receive an option to acquire NCC's future office project in the centre of Mölndal, which is estimated to be finished in April 2022 (completion will be staggered).

  • We signed an agreement with Skanska Fastigheter on the acquisition of Lindholmen 39:3 in a deal worth around SEK 410 million. Completion will take place on 29 September this year.

  • We signed an agreement with Bygg-Göta on the acquisition of 50% of Inom Vallgraven 49:1 in a deal that values the entire property at around SEK 150 million. Completion will take place in the second half of 2017.

  • An agreement was signed with Serneke on the sale of Åseby 7:2 for SEK 100 million. Completion will take place on 1 September this year.

Events after the end of the reporting period

No significant events have taken place after the end of the reporting period.

Parent company

The parent company does not own any properties of its own, but instead manages certain groupwide functions relating to management, strategy and financing. Parent company revenue is solely derived from invoicing for services to Group companies.

Significant risks and uncertainty factors

The property business, as all businesses, is always exposed to risks. Good internal controls and audits performed by external auditors, well-functioning administrative systems and policies, as well as proven procedures for property valuations are among the methods used by Platzer to manage and reduce risks. The main risks and uncertainty factors that affect Platzer have not changed over the year, and they are described in detail in the Annual Report for 2016 on pages 42-43, 48-50 and 64-65.

Related party transactions

The company's ongoing transactions with related parties are described in the Annual Report for 2016, page 77. There are no significant transactions with related parties apart from these continuing agreements, and this situation did not change in the first quarter.

Accounting principles

Platzer prepares its consolidated financial statements in accordance with IFRS (International Financial Reporting Standards) as adopted by the EU. The same accounting policies and measurement principles have been applied as in the most recent annual report. New or revised IFRS standards that have come into force in 2017 have not had any material effect on the Group's financial statements. The interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The parent company applies the Annual Accounts Act and RFR2.

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

The Board of Directors and the CEO hereby confirm that the interim report, to the best of their knowledge, offers a fair presentation of the activities, position and financial performance of the parent company and of the group, and describes the material risks and uncertainties that the parent company and the companies that form part of the group face.

Gothenburg, 7 July 2017

Platzer Fastigheter Holding AB (publ)

Fabian Hielte Caroline Krensler Chairman of the Board Board member

Anders Jarl Cecilia Marlow Board member Board member

Board member Board member

Ricard Robbstål Charlotte Hybinette

P-G Persson CEO

CONSOLIDATED INCOME STATEMENT

CONDENSED

SEK million 2017
Apr-Jun
2016
Apr-Jun
2017
Jan-Jun
2016
Jan-Jun
2016
Jan-Dec
2016/2017
Jul-Jun
Rental income 246 159 497 316 687 868
Property costs - 65 -37 -130 - 82 - 181 - 229
Operating surplus 181 122 367 234 506 639
Central administration - 9 -9 -21 - 20 - 39 - 40
Net financial income/expense - 49 -34 -97 - 68 - 145 - 174
Income from property management 123 79 249 146 322 425
Change in value, investment properties 122 95 260 172 450 538
Change in value, financial instruments 30 -85 43 - 213 - 137 119
Profit before tax 275 89 552 105 635 1,082
Tax on profit for the period -61 -20 -120 - 21 - 135 -234
Profit for the period 1) 214 69 432 84 500 848
Profit for the period attributable to:
Parent company's shareholders 213 67 430 81 494 843
Non-controlling interests 1 2 2 3 6 5
Earnings per share 2) 1,79 0.71 3,60 0.85 4.92 7,66

1) There is no other comprehensive income for the Group, and therefore the consolidated profit for the period is the same as the comprehensive income for the period.

2) There is no dilution effect because there are no potential shares. However, the number of outstanding shares will increase by 250,000 when the share savings scheme is completed.

CONSOLIDAT ED BAL ANCE SHEE T C O N D E N S E D

SEK million 30/06/2017 30/06/2016 31/12/2016
Assets
Investment properties 13,972 10,588 13,615
Other non-current assets 6 5 6
Non-current financial assets 45 38 45
Current assets 103 115 67
Cash and cash equivalents 119 249 132
Total assets 14,245 10,995 13,865
Equity and liabilities
Equity 5,004 3,581 4,703
Deferred tax liability 603 408 493
Non-current, interest-bearing liabilities 4,570 4,325 5,764
Other non-current liabilities 312 415 358
Current interest-bearing liabilities 3,442 2,030 2,225
Other current liabilities 314 236 322
Total equity and liabilities 14,245 10,995 13,865

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED

SEK million 2017
Jan-Jun
2016
Jan-Jun
2016
Jan-Dec
Equity attributable to parent company's shareholders
At the beginning of the period 4,656 3,548 3,548
New issue - - 708
Reversal, share saving scheme 1 1 2
Comprehensive income for the period 430 81 494
Dividend -132 -96 -96
At the end of the period 4,955 3,534 4,656
Equity attributable to non-controlling interests
At the beginning of the period 47 44 44
Consolidation of subsidiary - - 1
Withdrawals - - -4
Comprehensive income for the period 2 3 6
At the end of the period 49 47 47
Total equity 5,004 3,581 4,703

CHANGE IN VALUE OF PROPERTIES

2017 2016 2016
SEK million
Value of properties, opening balance
Jan-Jun
13,615
Jan-Jun
9,784
Jan-Dec
9,784
Investments in existing properties 205 237 521
Property acquisitions - 437 3,112
Property sales -108 -42 -252
Changes in value 260 172 450
Value of properties, closing balance 13,972 10,588 13,615

CONSOLIDATED CASH FLOW STATEMENT

CONDENSED

2017 2016 2017 2016 2016 2016/2017
SEK million Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec Jul-Jun
Operating activities
Operating surplus 181 122 367 234 506 639
Central administration -7 -8 -19 -18 -35 -36
Net financial income/expense -49 -34 -97 -68 -144 -173
Income tax -2 -4 -16 -16 -20 -20
Cash flow from operating activities before
changes in working capital
123 76 235 132 307 410
Change in current receivables 0 -22 -9 -30 - 21
Change in current liabilities -58 -19 -33 -15 60 42
Cash flow from operating activities 65 35 193 87 367 473
Investing activities
Investments in existing investment properties -120 -132 -205 -237 -502 -470
Acquisitions of investment properties - -437 - -437 -3,112 -2,675
Sales of investment properties - - 108 42 252 318
Other investments - -1 - -1 -2 -1
Cash flow from investing activities -120 -570 -97 -633 -3,364 -2,828
Financing activities
Change in interest-bearing liabilities 157 696 23 664 2,299 1,658
Changes in non-current receivables - - - - -6 -6
Dividend -132 -96 -132 -96 -96 -132
New issue - - - - 705 705
Cash flow from financing activities 25 600 -109 568 2,902 2,225
Cash flow for the period -30 65 -13 22 -95 -130
Cash and cash equivalents at the beginning of
the period
149 184 132 227 227 249
Cash and cash equivalents at the end of the
period
119 249 119 249 132 119

The group has an unutilised overdraft facility of SEK 50 million (50) and unutilised credit facilities of SEK 1 248 million (210).

INCOME STATEMENT, PARENT COMPANY

CONDENSED

SEK million 2017
Jan-Jun
2016
Jan-Jun
2016
Jan-Dec
Net sales 7 6 16
Operating expenses - 8 - 7 - 16
Net financial income/expense - 46 - 42 - 86
Change in value, financial instruments 43 - 213 - 137
Profit before tax and appropriations -4 - 256 - 223
Appropriations - - 242
Tax 1 56 - 7
Profit for the period 1) -3 - 200 12

1) The parent company has no other comprehensive income and total comprehensive income is therefore the same as the profit for the period.

BALANCE SHEET, PARENT COMPANY

C O N D E N S E D

SEK million 30/06/2017 30/06/2016 31/12/2016
Assets
Participations in Group companies 1,809 1,053 1,809
Other non-current financial assets (primarily financing of Group companies) 2,785 2,473 2,784
Receivables from Group companies 924 892 735
Other current assets 21 23 13
Cash and cash equivalents 0 34 0
Total assets 5,539 4,475 5,341
Equity and liabilities
Equity 2,410 1,623 2,544
Untaxed reserves 50 50 50
Non-current liabilities 1,556 2,776 2,702
Current liabilities 1,522 26 45
Total equity and liabilities 5,539 4,475 5,341

KEY PERFORMANCE INDICATORS

2017
Jan-Jun
2016
Jan-Jun
2016
Jan-Dec
2016/2017
Jul-Jun
Financial
Debt/equity ratio (multiple) 1.6 1.8 1.7 1.6
Interest coverage ratio (multiple) 3.6 3.1 3.2 3.5
Loan-to-value ratio, % 57 60 59 57
Equity/assets ratio, % 35 33 34 35
Return on equity, % 13,0 5.4 12.0 19,9
Property-related
Investment yield, % 5.3 4.6 4.9 5.2
Surplus ratio, % 74 74 74 74
Economic occupancy rate, % 95 93 94 95
Rental value, SEK/sq. m. 1,328 1,463 1,538 1,427
Lettable area, sq. m. (thousand) 801 478 801 801

For definitions and calculations of Key Performance Indicators, please see pages 26-27.

REPORTING BY SEGMENT JAN-JUN 2017

Project
Investment properties properties Total
Central
Gothenburg
South/West
Gothenburg
North/East
Gothenburg
Artosa
Gothenburg
SEK million 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Rental income 195 185 44 53 95 77 149 0 14 1 497 316
Property costs -46 -42 -11 -18 -26 -21 -41 0 -6 -1 -130 -82
Operating surplus 149 143 33 35 69 56 108 0 8 0 367 234
Investment properties,
fair value
6,749 6,537 1,023 1,279 2,568 2,539 2,790 0 842 233 13,972 10,588

In the Group's internal reporting, activities are divided into the segments shown above. The total operating surplus shown above is in line with the operating surplus reported in the income statement.

The difference between the operating surplus of SEK 367 million (234) and profit before tax of SEK 552 million (105) consists of central administrative costs of SEK -21 million (-20), net financial expense of SEK -97 million (-68) and changes in the value of property and derivatives of SEK 303 million (-41).

INTEREST-BEARING LIABILITIES

Loan maturity
Year Loan amount,
SEK million
Average
interest, %
Credit agree
ments, SEK m
Utilised,
SEK m
2017 3,581 1,54 1,972 1,972
2018 120 3.52 2,757 1,890
2019 791 1.31 2,711 2,561
2020 300 4.27 1,589 1,589
2021 670 3.09
2022 550 3.61
2023 100 3.61
2024 1,600 3.18
2025 300 2.62
Total 8,012 2.32 9,029 8,012

The table takes into account the effect of current derivatives contracts. In addition, the company has interest rate swaps worth SEK 1,100 million with forward start dates.

Pledged assets as at 30 June 2017 amounted to SEK 6,797 million (6,682). Contingent liabilities as at 30 June 2017 amounted to SEK 8 million (8).

QUARTERLY SUMMARY

2017 2016 2015
SEK million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Rental income 246 251 195 176 159 157 160 146
Property costs -65 -65 -53 -46 -37 -45 -44 -35
Operating surplus 181 186 142 130 122 112 116 111
Central administration -9 -12 -14 -5 -9 -11 -11 -8
Net financial income/expense -49 -48 -38 -39 -34 -34 -34 -34
Income from property management 123 126 90 86 79 67 71 69
Change in value, investment properties 122 138 199 79 95 77 205 196
Change in value, financial instruments 30 13 114 -38 -85 -128 63 -74
Profit before tax 275 277 403 127 89 16 339 191
Tax on profit for the period -61 -59 -86 -28 -20 -1 -66 -42
Profit for the period 214 218 317 99 69 15 273 149
Investment properties 13,972 13,730 13,615 10,813 10,588 9,924 9,784 9,491
Investment yield, % 5.2 5.4 5.0 4.9 4.8 4.6 4.8 4.8
Surplus ratio, % 74 74 73 74 77 71 73 76
Economic occupancy rate, % 94 96 95 94 94 93 92 91
Return on equity, % 10.2 10.6 12.7 8.2 7.1 4.7 12.3 9.7
Equity per share. SEK 41.41 40.72 38.90 37.91 36.92 37.20 37.05 34.32
Long-term net asset value (EPRA NAV)
per share, SEK 48.78 47.87 45.72 46.96 45.33 44.57 43.16 40.51
Share price, SEK 51.25 43.70 46.20 56.75 44.60 44.50 38.00 34.70
Earnings after tax per share, SEK 1.79 1.81 2.95 0.99 0.71 0.14 2.74 1.56
Cash flow from operating activities per
share, SEK 0.54 1.08 1.35 1.41 0.37 0.55 1.22 0.85

EARNING CAPACITY

Number of
properties
Lettable
area,
sq. m.
Fair
value,
SEK
million
Rental
value,
SEK
million
Economic
occupancy
rate, %
Rental
income,
SEK
million
Operating
surplus,
SEK
million
Surplus
ratio, %
INVESTMENT PROPERTIES
Central Gothenburg 22 206,515 6,749 420 95 400 312 78
South/West Gothenburg 8 60,245 1,023 86 97 83 61 73
North/East Gothenburg 9 142,880 2,568 202 97 195 145 74
Artosa 5 341,489 2,790 303 95 289 201 70
Total investment properties 44 751,129 13,130 1,011 96 967 719 74
Project properties 24 50,273 842 42 79 33 21
Total Platzer 68 801,402 13,972 1,053 95 1,000 740 74

The summary comprises the property portfolio as at 30 June 2017 and provides a snapshot of the company's earning capacity, which does not constitute a forecast.

Nine properties in Högsbo are included under project properties in the summary with effect from 2017. These comprise the project Södra Änggården, which is now out for consultation. The information in the table on rental value, income and operating surplus for project properties refers to the current situation, before project start.

The profit-related columns include valid lease agreements, including for future occupancy over the next six months, if occupancy relates to existing properties. Lease agreements with a later occupancy date or for properties currently under construction are not included.

Rental value refers to rental income plus the estimated market rent for vacant premises in their existing condition.

Rental income refers to contracted rental income including agreed supplements, such as payments for heating and property taxes, and excluding limited period discounts of approximately SEK 10 million.

The operating surplus shows the properties' earning potential on an annual basis, defined as contracted rental income as at 30 June 2017, less estimated property costs including property management for a rolling 12-month period.

PROPERTY PORTFOLIO

Platzer owns and develops commercial properties in the Gothenburg area. The properties can be divided into four geographical areas: Central Gothenburg (City centre, Gårda, Krokslätt and Gullbergsvass), South/West Gothenburg (Högsbo, Långedrag and Mölndal), North/East Gothenburg (Backaplan, Gamlestaden, Lindholmen and Mölnlycke) and Artosa (the properties that were acquired from Volvo and which comprise the areas Arendal, Torslanda and Säve). Platzer aims to be the leading player in all prioritised areas through profitable growth. Today, the company is the leading player in Gullbergsvass, Gårda, Gamlestaden and Högsbo.

Property portfolio

As at 30 June 2017, the property portfolio comprised 68 properties, 24 of which were project properties, with a fair value of SEK 13,972 million. The total lettable area was 801,402 sq. m., divided as follows: offices 76%, retail 2%, industrial/warehouses 11% and other 11%.

The economic occupancy rate in the period was 95% (93).

Rental performance

Platzer has 811 lease agreements for non-residential premises generating total rental income of SEK 1,000 million. The largest tenants include DFDS, the Swedish Migration Agency, Volvo, Schenker, the Swedish Social Insurance Agency, Nordea, Plastal, SSAB, DHL, Damco, the National Courts Administration and AcadeMedia.

The twenty largest lease agreements accounted for 36% of the rental value.

The average remaining maturity was 43 months.

Platzer has also signed leases for new build projects and conversion projects for occupancy in the period 2016 – 2018.

Apart from leasing contracts for non-residential premises, there are parking agreements for indoor and outdoor and parking, short-term parking, agreements for advertising signs and masts with a total rental value of SEK 39 million.

Contract structure per year of maturity

R EN TAL AND PROPER T Y MAR KE T

The property market in Gothenburg remained strong in the first half of 2017, with the volume of transactions totalling around SEK 7.5 billion, compared with SEK 14 billion for the whole of 2016. The rental market, too, has been good, with low vacancy rates and large growth in rents. Aside from the Port of Gothenburg conflict, there are currently few clouds on the horizon in Gothenburg. Unemployment and interest rates are low, industry is booming and a large volume of new construction is being planned.

Strong transaction market

Gothenburg remains an attractive location for property investments. One sign of this is that national and international players have expressed an interest in the Gothenburg market, while players who are already established here remain active. As a result of the large interest and demand, yield requirements have continued to fall. This has occurred despite numerous uncertainty factors, such as the risk of interest rates rising and the tax proposal concerning property transactions being brought forward.

Properties in central locations remain the most requested but properties suitable for development in more peripheral areas are also attracting a lot of interest. Tough competition for assets is also making investors look outside their focus areas towards other segments and other types of property.

High level of activity in rental market

The office rental market is also under pressure. Because of Gothenburg's growing, strong economy, many companies and organisations are looking to expand. This is one of the reasons why the vacancy rate, particularly in more central locations, is very low.

The vacancy rate is putting a damper on letting volumes because companies are finding it difficult to find the kind of premises they require in their preferred areas. Instead, they are expanding their workforce within their existing premises.

Lindholmen has become an increasingly attractive location in recent years. Platzer, too, has been expanding its portfolio in Lindholmen through several acquisitions. The vacancy rate in Lindholmen is very low and demand for premises is high, which has pushed up rents. One of the main reasons for this is the current boom experienced by AB Volvo and Volvo Cars, which has pushed up demand for premises among subcontractors, consultants and related companies.

The economic boom in the Gothenburg region, together with low supply of office premises in central locations and future new construction projects, is paving the way for continued good demand in the letting market.

Commercial property transactions carried out in 2017

Price, SEK
Asset Buyer Seller million Price/sq. m.
Lindholmen 30:1, (Waterfront) Atrium Ljungberg Blackstone/Areim 1,260 34,000
Volvo's central warehouse facility NRP (75%) + Söderport (25%) Söderport 979 7,300
10 properties in Mölndal + Partille Klövern Castellum 498 12,300
Backa 22:3 & 22:8 Not disclosed Axfast 453 11,600
Piren2 Platzer Skanska 410 45,000
Kallebäck 3:4 & Hönekulla 1:571 Wallenstam Castellum 350 44,000
Stampen 6:17 Folksam Elof Hansson 330 44,000
Krokslätt 20:6 & part of 154:6 Castellum Wallenstam 290 9,400
Portfolio Nordstan + Sisjön Klövern Cromwell 230 15,900
(formerly Valad)
Merkurhuset building Platzer Bygg-Göta 150 28,400

Source: JLL's property market data

PROPERTY TRANSACTIONS

Acquisitions

Platzer signed an agreement in April on the acquisition of Lindholmen 39:3 (Piren2 ). The property, which comprises a total of 9,000 sq. m., is valued at SEK 410 million in the transaction and the completion date is 29 September 2017. The property is fully let to Zenuity, a self-driving technology joint venture between Volvo Cars and Autoliv which will have its head office in Lindholmen. The transaction takes the form of a company acquisition. The seller is Skanska Fastigheter.

In addition, Platzer concluded an agreement to acquire 50% of Inom Vallgraven 49:1 (the Merkur building) at Skeppsbron 5-6. The property, which comprises a total of 5,300 sq. m., is valued at SEK 150 million in the transaction. The seller is Bygg-Göta, which still owns the other 50% of the property. The acquisition takes the form of a company acquisition and completion is expected to take place in autumn 2017.

In June, Platzer and NCC signed an agreement on an option for Platzer to acquire NCC's future project comprising around 25,000 sq. m. of lettable area in the centre of Mölndal. The properties will be completed in stages in the period 2021-2023.

Disposals

In the first quarter, Platzer sold two office properties in Mölndal/Åbro for an agreed price of SEK 108 million. The sold properties are Balltorp 1:135 and Fänkålen 2, which were sold to L2 Fastigheter. The sale took the form of a company divestment and the price of SEK 108 million is slightly above the carrying amount. The sale was completed on 31 March.

At the beginning of June, Platzer entered into an agreement on the sale of the property Åseby 7:2, known as Säve Depå, to Serneke. The property has an underlying value of SEK 100 million. The transaction will take the form of a company divestment and the sale will be completed on 1 September.

In June, Platzer and NCC concluded an agreement to jointly develop the property Gårda 16:17, which is currently owned by Platzer. Under the agreed deal, Platzer will sell 50% of the property for SEK 300 million, which corresponds to the underlying property value for half of the property, plus an additional purchase consideration of SEK 45 million

on completed development. Platzer will buy back NCC's share once development of the property has been completed. The project is estimated to comprise future lettable area of 25,500 sq. m. and it is expected to be completed in late 2020. The deal is conditional on a legally binding detailed development plan.

Blocks Property
designation
Area Address Segment in
Gothenburg
Inv./Proj.
property
Lettable
area, sq. m.
Vacated Agreed
property value,
SEK million
1 Balltorp 1:135 Mölndal Taljegårdsgatan 11 South/West A 6,407 31/03/2017 72
1 Fänkålen 2 Mölndal Johannefredsgatan 4 South/West A 4,494 31/03/2017 36
Total 10,901 108

DEVELOPMENT PROJECTS

Platzer's ongoing and potential development projects include everything from office buildings incorporating retail and service units to mixed use developments incorporating residential properties. Projects currently underway comprise around 45,000 sq. m. of lettable area, while the potential development projects have a gross floor area (GFA) of around 500,000 sq. m.

The total project volume is worth approx. SEK 12 billion, of which SEK 7 billion comprises commercial properties and SEK 5 billion residential properties. Platzer develops detailed development plans for housing and then sells these building rights so that the company itself can focus on developing the commercial properties.

Property and project development

Platzer's project portfolio consists of property development and project development. Property development is the development of existing buildings, for instance by means of additions, extensions or conversion. Project development involves new construction on unbuilt land or on sites where existing buildings are demolished.

In spring 2017, Platzer started on yet another property development project, Gullbergsvass 5:10. The property is located in the centre of Gothenburg and will undergo extensive development, reconstruction and conversion, as well as the creation of around 2,000 sq. m. of new office space. Letting is underway and Platzer, too, will be moving its head office to this property.

The occupancy rate for current major projects is shown in the table on the next page.

Urban development

Platzer is also involved in urban development of entire areas in collaboration with other players. Currently, the most significant urban development projects are Backaplan, Södra Änggården and Gamlestaden.

Södra Änggården

Norra Högsbo is in the process of being developed from an industrial area into a vibrant city district geared towards housing. At the same time, the area is changing name to Södra Änggården. A total of 2,000 new housing units are planned, 600 of which form part of BoStad 2021, the housing project launched by the City of Gothenburg to celebrate the city's 400th Anniversary. The planning process for this project will be fast-tracked.

The detailed development plan for the first phase went out to consultation in January 2017 and a decision is expected around the turn of the year. Construction is expected to start in 2018.

Platzer's estimated total volume in Södra Änggården comprises around 200,000 sq. m. of which 75% will be housing. The sale of Platzer's future building rights to cooperation partners is underway and is expected to be completed during the second half of the year.

Gamlestaden

Gamlestaden is one of the most interesting districts in Gothenburg. In the next 10 years, large changes will take place in this district, where Platzer owns three large properties and projects.

Construction has now started on the Gamlestads torg project and occupancy is anticipated in summer 2018.

Gamlestads torg comprises 17,000 sq. m. and is situated in a location that has one of the highest levels of public transport services in Gothenburg. Letting is underway and Platzer has signed a lease for parts of the ground floor with Västtrafik, which is setting up a travel hub in the property.

Adjacent to Gamlestads torg is Gamlestadens Fabriker (Olskroken 18:7), where the detailed development plan process is underway. Platzer previously sold future residential building rights to JM, which is now participating in development of the area.

In the neighbouring property Bagaregården 17:26, Platzer has completed an architectural tender and has now submitted an application for an amendment to the detailed development plan for an increased volume of housing, commercial activity and parking of a total of around 60,000 sq. m.

Backaplan

Backaplan is to be developed into vibrant city district with housing, offices and retail. Work on the detailed development plan is currently underway. Platzer owns properties comprising around 80,000 sq. m. in the area.

Major projects underway

Converted area, New area, Total inv. Of which
lettable area,
lettable area,
incl. land,
outstanding inv.,
Occupancy
Property Type 1) sq. m. sq. m. SEK million SEK million rate, % Completed
Livered 1:329 Property Dev. 14,000 110 25 100 Q3 2017
Gamlestaden 740:132 Project Dev. 16,800 510 275 10 Q2 2018
Gullbergsvass 5:10 Property Dev. 12,000 2,000 250 245 50 *)
Q3 2019
Total 26,000 18,800 870 545

*) The current occupancy rate is 97%, the stated 50% refers to leases with long-term tenants

Potential development projects

Type of New floor
area (gross)
Potential
construction
Property Type 1) property sq. m. Project phase start 2)
Gårda 4:11
(Källhuset building)
Project Dev. offices 2,000 detailed development plan available 2017
Gårda 2:12 Project Dev. offices 30-35,000 detailed development plan in progress 2017
Gårda 16:17 Project Dev. offices 20-25,000 detailed development plan in progress 2017
Olskroken 18:7 Project Dev./
Property Dev.
mixed use
development
100-120,000 detailed development plan in progress 2018
Södra Änggården (multiple
properties) multiple
development phases
Project Dev./
Property Dev.
mixed use
development
approx. 200,000 detailed development plan in progress 2018
Backaplan
(multiple properties)
Project Dev. mixed use
development
60-90,000 detailed development plan in progress 2019/2020
Bagaregården 17:26 Project Dev. mixed use
development
60,000 decision on detailed development
plan applied for, Nov 2016
2019/2020
Krokslätt 34:13 Property
Dev./Project
Dev.
mixed use
development
10-15,000 detailed development plan to
commence 2018
2019/2020
Skår 57:14 Project Dev. offices 20,000 detailed development plan in progress 2019/2020
Älvsborg 178:9 Property Dev. housing 10-12,000 detailed development plan to
commence 2018
2021
Total 512,000 - 579,000

The summary includes potential projects that have been identified for properties that the company owns or has agreed to acquire.

1) Type refers to property development (Property Dev.), which mean existing buildings are used as a base, or project development (Project Dev.), which involves new construction from ground up.

2) Possible construction start means when it is estimated the project could start, provided planning proceeds to plan and leasing has reached a satisfactory level.

REAL ESTATE INVENTORY AS AT 30 JUNE 2017

Lettable area, sq. m.
Investment property Area Address Year of
construction
Offices Retail Industrial/
warehouse
Other Total
Krokslätt 148:13 Almedal Mölndalsvägen 40-42 1952 2,581 616 20 3,217
Krokslätt 149:10 Almedal Mölndalsvägen 36-38 1952/98 6,928 6,928
Skår 57:14 Almedal Gamla Almedalsvägen 1-51 1929 8,286 119 8,405
Arendal 764:720 Arendal Arendal 1960/2009 231,825 68 31,919 18,464 282,276
Backa 173:2 Backaplan Deltavägen 4 1979 151 5,380 420 5,951
Brämaregården 35:4 Backaplan Vågmästaregatan 1 1984/1991 12,384 222 855 13,461
Tingstadsvassen 3:8 Backaplan Krokegårdsgatan 5 1991 29 3,966 11 859 4,865
Tingstadsvassen 4:3 Backaplan Motorgatan 2 1943/1986 517 3,268 3,785
Lorensberg 62:1 City centre Götabergsgatan 17 1932/1965 4,541 4,541
Nordstaden 13:12 City centre Packhusplatsen 6 / N Hamngatan 2 1929/1993 5,070 5,070
Nordstaden 14:1 City centre Postgatan 5 / Smedjegatan 2 1993/1995 8,607 8,607
Nordstaden 20:5 City centre Packhusplatsen 3 / Kronhusg 1A 1943 2,537 53 2,590
Stampen 4:42 City centre Odinsgatan 8-10 / Barnhusgatan 1 2009 5,769 2,847 8,616
Stampen 4:44 City centre Polhemsplatsen 5-7 / Odinsg 2-4 1930 13,538 13,538
Bagaregården 17:26 Gamlestaden Gamlestadsv 3 / Byfogdeg 1-3, 11 1941/2010 24,977 365 7,306 2,555 35,203
Olskroken 18:7 Gamlestaden Gamlestadsvägen 2-4 1729/1960 41,796 102 6,842 13,273 62,013
Gullbergsvass 1:1 Gullbergsvass Lilla Bommen 3 1988 16,003 16,003
Gullbergsvass 1:17 Gullbergsvass Lilla Bommen 8 1993 5,400 5,400
Gullbergsvass 5:10 Gullbergsvass Kämpegatan 3-7 1988 11,736 336 463 12,535
Gullbergsvass 5:26 Gullbergsvass Kilsgatan 4 2010 15,298 1,417 16,715
Gårda 1:15 Gårda Vestagatan 2 1971/1992 11,896 11,896
Gårda 13:7 Gårda Johan Willins gata 5 2003 14,925 14,925
Gårda 16:17 Gårda Drakegatan 6-10 1986 15,234 278 564 16,076
Gårda 3:12 Gårda Anders Personsgatan 2-6 1956/2015 3,503 242 165 3,910
Gårda 3:14 Gårda Anders Personsgatan 8-10 2015 8,758 8,758
Gårda 4:11 Gårda Anders Personsgatan 14-16 1965/2002 7,468 481 7,949
Högsbo 1:4 Högsbo Olof Asklunds gata 11-19 1980 1,638 1,444 3,082
Högsbo 2:1 Högsbo Olof Asklunds gata 6-10 1991 6,300 6,300
Högsbo 32:3 Högsbo J A Wettergrens gata 5 1974 6,381 1,053 570 8,004
Krokslätt 34:13 Krokslätt Mölndalsv 91-93 / Varbergsg 2 A-C 1950/88 10,905 725 1,308 375 13,313
Lindholmen 30:2 Lindholmen Lindholmspiren 9 2003 8,667 996 9,663
Älvsborg 178:9 Långedrag Redegatan 1 1993 9,659 296 3,862 13,817
Stigberget 34:12 Masthugget Masthuggstorget 3 1967/1999 4,457 2,801 264 253 7,775
Stigberget 34:13 Masthugget Fjärde Långgatan 46-48 1969 7,246 120 2,382 9,748
Bosgården 1:71 Mölndal Södra Ågatan 4 1988 4,711 56 4,767
Forsåker 1:196 Mölndal Kvarnbygatan 10-14 1955/2002 5,317 150 5,467
Hårddisken 1 Mölndal Betagatan 1 2016 2,146 2,608 4,754
Livered 1:329 Mölndal Streteredsvägen 100 1962 13,937 13,937
Solsten 1:110 Mölnlycke Företagsvägen 2 1991 1,658 1,089 356 3,103
Solsten 1:132 Mölnlycke Konstruktionsvägen 14 2002 4,953 4,953
Åseby 7:2 Säve Säve Depot 3,864 773 700 5,337
Syrhåla 3:1 Torslanda Bulyckevägen 25 1975 2,758 21,984 3,280 28,022
Sörred 7:24 Torslanda Gunnar Engellaus väg 1972 11,035 4,006 15,041
Sörred 8:11 Torslanda Amazonvägen 8-10 1984 10,813 10,813
Total investment properties 567,340 16,851 79,183 87,755 751,129
Project properties Area Address Site area Lettable area, sq. m.
Gamlestaden 740:132 Gamlestaden Gamlestads torg 1,600 -
Gårda 2:12 Gårda Venusgatan 2-6 3,600 -
Högsbo 2:2 Högsbo Gruvgatan 1 4,400 -
Högsbo 3:5 Högsbo Fältspatsgatan 14 11,300 -
Högsbo 3:11 Högsbo Fältspatsgatan 6 1964 6,000 8,243
Högsbo 3:12 Högsbo Fältspatsgatan 2-4 1964 8,400 10,363
Högsbo 3:13 Högsbo Fältspatsgatan 2 3,100 -
Högsbo 3:6 Högsbo Fältspatsgatan 8-12 1964 8,200 6,535
Högsbo 3:9 Högsbo Olof Asklunds gata 14 1971 4,700 4,333
Högsbo 33:1 Högsbo Gruvgatan 5,500 -
Högsbo 34:13 Högsbo Gruvgatan 2 1981 3,200 1,780
Högsbo 39:1 Högsbo Ingela Gathenhielms gata 4 1972 8,200 3,390
Högsbo 4:1 Högsbo Fältspatsgatan 1 / A Odhners gata 8 1965/1972 10,400 4,643
Högsbo 4:4 Högsbo Fältspatsgatan 3 1962 10,300 6,388
Högsbo 4:6 Högsbo A Odhners gata 14 1974 6,500 3,898
Högsbo 757:118 Högsbo Fältspatsgatan 2,800 -
Högsbo 757:121 Högsbo Fältspatsgatan 1,000 -
Högsbo 757:122 Högsbo Fältspatsgatan 1,000 -
Backen 2:18 Mölndal Streteredsvägen 100 6,900 -
Syrhåla 2:3 Torslanda Hamneviksvägen 60,000 -
Syrhåla 4:2 Torslanda Bulyckevägen 7 172,000 700
Sörred 7:21 Torslanda Hisingsleden 65,000 -
Sörred 8:12 Torslanda Sörred Norra 254,000 -
Sörred 7:25 Torslanda Sörredsrondellen 110,000 -
Total project properties 768,100 50,273

TOTAL investment properties and project properties 801,402

THE SHARE AND SHAREHOLDERS

Platzer's Class B shares have been listed on NAS-DAQ OMX Stockholm, Mid Cap, since 29 November 2013. In conjunction with the listing, the company carried out a new issue of shares priced at SEK 26.50 each, which raised SEK 651 million net of issue costs. The company's share price as at 30 June 2017 stood at SEK 51.25 per share, corresponding to a market capitalisation of SEK 6,134 million based on the number of outstanding shares. In the first half of the year, a total of 5.3 (11.2) million shares, worth a total of SEK 244 million (460), changed hands. Average daily turnover was around 43,000 (91,000) shares.

Share capital

Platzer's share capital as at the balance sheet date amounted to SEK 11,993,429.20, divided between 20,000,000 Class A shares with 10 votes per share, and 99,934,292 Class B shares carrying one vote per share. Each share has a quotient value of SEK 0.10. Platzer's holding of own shares still comprises 250,000 Class B shares. The most recent change in share capital took place in the fourth quarter of 2016, when Platzer carried out a rights issue of SEK 718 million.

Dividend policy and dividend

The long-term policy is to pay a dividend of 50 per cent of income from property management after tax (22 percent flat-rate tax).

The Annual General Meeting on 27 April 2017 approved a dividend of SEK 1.10 per share (1.00) for 2016.

Ownership

The number of shareholders as at 31 May stood at 4,086 (3,894). Foreign ownership amounted to three per cent of equity.

Information for shareholders

Platzer's primary information channel is platzer. se. All press releases and financial reports are published here. Press releases and reports can be obtained by email or SMS in connection with publication. The website also includes presentations, general information about the share and reports on corporate governance and financial data.

Share price performance

MAJOR SHAREHOLDERS

Major shareholders in Platzer Fastigheter Holding AB (publ) as at 31 May 2017

Owners Number of
Class A shares
Number of
Class B shares
Number of
shares
Voting
rights, %
Share of
equity,%
Ernström & Co 10,000,000 3,973,164 13,973,164 34.7 11.7
Länsförsäkringar Göteborg och Bohuslän 5,000,000 15,203,112 20,203,112 21.8 16.9
Backahill 5,000,000 1,250,000 6,250,000 17.1 5.2
Family Hielte/Hobohm 22,644,016 22,644,016 7.6 18.9
Länsförsäkringar fondförvaltning AB 11,482,932 11,482,932 3.8 9.6
Fourth Swedish National Pension Fund 11,244,443 11,244,443 3.8 9.4
Carnegie Fonder 7,350,000 7,350,000 2.5 6.1
Lesley Invest (incl. private holdings) 3,464,362 3,464,362 1.2 2.9
Svolder AB 2,043,404 2,043,404 0.7 1.7
J P Morgan 1,048,405 1,048,405 0.3 0.9
Other shareholders 19,980,454 19,980,454 6.7 16.7
Total number of shares outstanding 20,000,000 99,684,292 119,684,292 100.0 100.0
Buyback of own shares 250,000 250,000
Total number of registered shares 20,000,000 99,934,292 119,934,292

KEY PERFORMANCE INDICATORS PER SHARE

2017
Jan-Jun
2016
Jan-Jun
2016
Jan-Dec
2016/2017
Jul-Jun
Equity, SEK 2) 41.41 36.92 38.90 41.41
Long-term net asset value (EPRA NAV), SEK 2) 48.78 45.33 45.72 48.78
Share price, SEK 2) 51.25 44.60 46.20 51.25
Profit after tax, SEK 1) 3.60 0.85 4.92 7.66
Income from property management, SEK 2.08 1.52 3.21 3.87
Cash flow from operating activities, SEK 1.62 0.91 3.66 4.30
Number of shares as at the balance sheet date, thousand 119,684 95,747 119,684 119,684
Average number of shares, thousand 119,684 95,747 100,534 110,109

For definitions and calculations of Key Performance Indicators, please see pages 26-27.

2) The rights issue conducted in December 2016, in which shareholders were offered 1 new share for every 4 shares held at a price of SEK 30, has had an impact on Key Performance Indicators relating to net asset value and also on the share price.

1) There is no dilution effect, as there are no potential shares.. However, the number of outstanding shares will increase by 250,000 when the share saving scheme is completed.

DEFINITIONS

Platzer applies ESMA guidelines on alternative performance measures. The Company discloses some financial performance measures in its interim reports which are not defined in IFRS. The Company believes that these measures provide valuable supplementary information to investors and Company management since they facilitate evaluation of the Company's performance. Because not all companies calculate financial measures in the same way, these are not always comparable with measures used by other companies. These financial measures should therefore not be seen as replacing measures defined according to IFRS. The table below shows the alternative performance measures considered relevant. Platzer uses the alternative key performance indicators debt/equity ratio, interest coverage ratio, loanto-value ratio, equity/assets ratio and return on equity because these are considered to provide relevant supplementary information to readers

of the report to enable them to assess the ability to pay dividends, carry out strategic investments and also to assess the Company's ability to meet its financial commitments. In addition, the Company uses the key indicators investment yield and surplus ratio, which are measures that are considered to be relevant to investors who want to understand how the Company generates results. As a listed company, Platzer has also opted to use key performance indicators per share that are relevant to the industry sector, such as longterm net asset value (EPRA NAV).

The performance measures are based on statements of financial performance, financial position, changes in equity and cash flow. In the event that the performance measures cannot be directly derived from the above statements, the basis for and method by which these indicators are calculated is shown below.

ALTERNATIVE PERFORMANCE MEASURES

DEFINITION AND CALCULATION METHOD

Debt/equity ratio Interest-bearing liabilities divided by equity.
Interest coverage ratio Profit after financial income divided by interest expenses.
See next page for calculation.
Loan-to-value ratio Interest-bearing liabilities divided by the value of properties.
Equity/assets ratio Equity divided by total assets.
Return on equity Profit after tax as a percentage of average equity, translated into full-year
value for interim periods. Attributable to parent company's shareholders.
See next page for calculation.
Key performance indicators per share:
Equity, Long-term net asset value (EPRA NAV),
Profit after tax, Income from property manage
ment, Cash flow from operating activities
Equity and long-term net asset value are calculated on the basis of the
number of outstanding shares on the balance sheet date. Other key
ratios are calculated on the basis of the average number of outstanding
shares. Profit after tax refers to profits attributable to the parent
company's shareholders (definition as per IFRS).
Long-term net asset value (EPRA NAV) Equity as per the balance sheet including reversals of interest rate
derivatives and deferred taxes. Attributable to parent company's
shareholders. See next page for calculation.
Investment yield Operating surplus as a percentage of the average value of the properties,
translated into full-year value for interim periods. See next page for
calculation.
Surplus ratio Operating surplus as a percentage of rental income.
Economic occupancy rate* Rental income as a percentage of rental value, where rental income is
defined as rents charged plus supplements for heating and property tax,
and rental value is defined as rental income plus estimated market rent
(excluding supplements) for vacant areas (in their 'as is' condition).
Rental value, SEK/sq. m.* Rental value divided by lettable area, where rental value is defined as
rental income plus estimated market rent (excluding supplements) for
vacant areas (in their 'as is' condition). Translated into full-year value
for interim periods.

*) The key performance indicators are operational and are not considered to be alternative performance measures according to ESMA guidelines.

CALCULATION OF KEY PERFORMANCE INDICATORS

2017 2016 2016 2016/2017
Jan-Jun Jan-Jun Jan-Dec Jul-Jun
Interest coverage ratio (multiple)
Operating surplus 367 234 506 639
Central administration -21 -20 -39 -40
Interest income 0 0 0 0
Total 346 214 467 599
Interest expense -97 -68 -145 -173
3.6 3.1 3.2 3.5
Return on equity, %
Attributable to parent company's shareholders:
Profit after tax 494 843
Income from property management (translated into full year for interim periods) 495 286
Change in value, investment properties 260 171
Change in value, financial instruments 43 -212
Total (adjusted for 22% tax) 622 191 494 843
Average equity 4,806 3,541 4,102 4,245
13.0 5.4 12.0 19.9
Long-term net asset value (EPRA NAV), SEK
Attributable to parent company's shareholders:
Equity 4,956 3,535 4,656 4,956
Reversal of deferred tax 595 401 486 595
Reversal of interest rate derivatives 287 404 330 287
Total 5,838 4,340 5,472 5,838
Number of shares 119,684 95,747 119,684 119,684
48.78 45.33 45.72 48.78
Investment yield, %
Operating surplus (translated into full year for interim periods) 734 468 506 639
Average value of properties 13,793 10,186 10,432 12,280
5.3 4.6 4.9 5.2

With regard to lettable area used to calculate rental value, the weighted average for the full year 2016 has been calculated using an average area of 470,000 sq. m. for 11.5 months and 801,000 sq. m. for 0.5 months (following the acquisition from Volvo as at 15 December 2016), which gives an average for the full year of 484,000 sq. m. The same method has been used to calculate average area for Key Performance Indicators on a rolling 12-month basis.

With regard to the property value used to calculate investment yield, the weighted average for the full year 2016 has been calculated by taking the average of the opening value of SEK 9,784 million and the closing value excluding acquisitions of SEK 10,850 million, plus the value of the Volvo portfolio for the 15-day period of ownership, which gives an average for the full year of SEK 10,432 million (see Key Performance Indicators above).

With regard to the number of shares used to calculate performance-related indicators, the weighted average for the full year 2016 has been calculated by taking an average of 95,747 shares for four quarters (31/12/2015 to 30/09/2016) and 119,684 shares for one quarter, which gives an average for the financial year 2016 of 100,534 shares. The same method has been used to calculate the average value for Key Performance Indicators for the quarter and on a rolling 12-month basis.

CALENDAR

Interim Report January-September 2017 26 October 2017 08:00 Year-end Report 2017 8 February 2018 08:00

For further information, please visit platzer.se or contact P-G Persson, CEO, +46 (0)734 11 12 22 / Lennart Ekelund, CFO, +46 (0)703 98 47 87

P l a t z e r F a s t i g h e t e r H o l d i n g A B ( p u b l ) , P O B o x 2 11 , S E - 4 0 1 2 3 G O T H E N B U R G Office Address: Anders Personsgatan 16 Tel. +46 (0)31 63 12 00, Fax +46 (0)31 63 12 01 [email protected] platzer.se Registered office of Board of Directors: Gothenburg Corp. ID No: 556746-6437

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