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Fast. Balder

Quarterly Report Jul 16, 2021

2887_ir_2021-07-16_165c1dce-af47-4900-90b3-03a2dbef4a87.pdf

Quarterly Report

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FASTIGHETS AB BALDER INTERIM REPORT

JANUARY-JUNE 2021

FASTIGHETS AB BALDER is a listed property company which shall meet the needs of different customer groups for premises and housing based on local support. Balder's real estate portfolio had a value of SEK 163.4 billion (149.3) as of 30 June 2021. The Balder share is listed on Nasdaq Stockholm, Large Cap.

  • Profit from property management attributable to parent company shareholders amounted to SEK 2,249m (1,993), corresponding to an increase per share by 9 % to SEK 12.06 (11.07)
  • Long term net asset value amounted to SEK 418.12 per share (354.98)
  • Rental income amounted to SEK 4,249m (4,049)
  • Profit after tax attributable to parent company shareholders amounted to SEK 4,877m (1,874) corresponding to SEK 26.15 per share (10.41)

THE PERIOD IN BRIEF

Comparisons stated in parenthesis refer to the corresponding period of the previous year.

APRIL-JUNE 2021

  • Rental income amounted to SEK 2,131m (2,026) of which effect of changes in exchange rates amounted to SEK –55m (13).
  • Net operating income amounted to SEK 1,615m (1,573) of which effect of changes in exchange rates amounted to SEK –40m (10).
  • Profit from property management attributable to parent company shareholders increased by 13 % to SEK 1,161m (1,028), which corresponds to an increase of 9 % per share to SEK 6.22 (5.71).
  • Unrealised changes in value in respect of investment properties amounted to SEK 1,677m (318). The average yield requirement amounted to 4.5 % (4.5) which is unchanged compared to the first quarter.
  • Changes in value of interest rate derivatives amounted to SEK 28m (–50).
  • Net profit after tax for the period amounted to SEK 2,618m (968).
  • Net profit after tax for the period attributable to parent company shareholders amounted to SEK 2,213m (811) which corresponds to SEK 11.86 per share (4.51).
  • Two investment properties (3) and land have been acquired at a property value of SEK 685m (879).
  • One development property (2) was divested and recognised as income during the quarter. Sales profit amounted to SEK 13m (59) including the portfolio's ongoing selling and marketing expenses.

JANUARY-JUNE 2021

  • Rental income amounted to SEK 4,249m (4,049) of which effect of changes in exchange rates amounted to SEK –110m (27).
  • Net operating income amounted to SEK 3,142m (3,062) of which effect of changes in exchange rates amounted to SEK –79m (19).
  • Profit from property management attributable to parent company shareholders increased by 13 % to SEK 2,249m (1,993), which corresponds to an increase of 9 % per share to SEK 12.06 (11.07).
  • Unrealised changes in value in respect of investment properties amounted to SEK 3,075m (575). The average yield requirement amounted to 4.5 % (4.5) which is unchanged compared to year-end.
  • Changes in value of interest rate derivatives amounted to SEK 327m (–221).
  • Net profit after tax for the period amounted to SEK 5,514m (2,195).
  • Net profit after tax for the period attributable to parent company shareholders amounted to SEK 4,877m (1,874) which corresponds to SEK 26.15 per share (10.41).
  • 64 investment properties (16) and land have been acquired at a property value of SEK 6,189m (2,586).
  • Two investment properties (–) and condominiums and land were divested at a property value of SEK 1,306m (311). Sales profit amounted to SEK 152m of which realised changes in value of investment properties amounted to SEK 116m (12) and deferred tax income amounted to SEK 36m.
  • Three development properties (2) were divested and recognised as income during the period. Sales profit amounted to SEK 37m (59) including the portfolio's ongoing selling and marketing expenses.
2021
Jan-June
2020
Jan-June
2020
Jan-Dec
2019
Jan-Dec
2018
Jan-Dec
2017
Jan-Dec
2016
Jan-Dec
2015
Jan-Dec
2014
Jan-Dec
Rental income, SEKm 4,249 4,049 8,134 7,609 6,714 5,915 5,373 2,711 2,525
Profit from property management, SEKm1) 2,249 1,993 4,244 4,023 3,304 2,804 2,265 1,780 1,275
Changes in value of investment properties, SEKm 3,191 587 3,453 9,577 8,007 5,336 4,932 3,388 3,050
Changes in value of derivatives, SEKm 327 –221 –141 –180 –34 144 –114 227 –624
Profit after tax, SEKm1) 4,877 1,874 6,641 8,958 9,308 7,118 5,474 4,916 3,128
Investment properties, SEKm 160,582 146,181 149,179 141,392 116,542 98,360 86,177 68,456 37,382
Development properties, SEKm 2,769 3,125 2,803 2,344 1,598
Data per share
Average number of shares, thousands 186,500 180,000 180,515 180,000 180,000 180,000 173,598 162,753 161,786
Profit after tax, SEK 26.15 10.41 36.79 49.77 51.71 38.71 30.38 28.98 18.10
Profit from property management, SEK 12.06 11.07 23.51 22.35 18.35 14.74 11.89 9.71 6.64
Outstanding number of shares, thousands 186,500 180,000 186,500 180,000 180,000 180,000 180,000 172,397 162,397
Shareholders' equity, SEK 340.50 281.86 312.12 272.28 223.03 173.86 139.23 103.24 70.10
Long-term net asset value (NAV), SEK 418.12 354.98 387.38 341.70 277.60 218.10 180.09 134.35 86.33
Share price on the closing date, SEK 537.00 355.10 428.90 433.20 252.00 219.40 184.10 208.70 110.25

1) Attributable to parent company shareholders.

COMMENTS BY THE CEO

Dear shareholder,

The first half of 2021

Profit from property management attributable to the parent company's shareholders increased by 9 % per share to SEK 12.06 (11.07). Hotel properties, some retail premises and residential properties in Finland continued to be negatively affected by the pandemic. Larger positive changes in value compared to last year meant that profit after tax increased from SEK 10.41 to SEK 26.15 per share. Compared to the same time last year the net asset value and current earning capacity have improved by 18 % and 25 % per share respectively.

Investments and financing

Total investments amounted to SEK 8.7 billion during the first half of the year, and right after the end of this quarter we also took possession of ABP. It is gratifying that, despite tough competition, we have managed to find both good acquisitions and projects. The interest in buying and renting housing is continuously large and access to financing has remained favourable from both banks and the bond market.

Associated companies

Profit from our associated companies has strongly increased due to a positive development and the fact that the group has grown, in particular through the share holding in Entra.

The future outlook for the group continues to be positive.

Balder 16

With this interim report, Balder has been established in its present form for 16 years. The net asset value and subscription/share price development has been as follows as of 30 June each year:

Year Net asset value Share price (2005 refers
to subscription price)
2005 6.59 7.075
2006 11.08 13.33
2007 16.46 17.50
2008 23.44 11.15
2009 22.39 9.00
2010 26.57 16.47
2011 36.04 31.70
2012 44.85 31.30
2013 54.41 48.50
2014 70.82 90.50
2015 106.16 127.90
2016 169.39 212.90
2017 215.59 204.00
2018 246.51 233.80
2019 297.32 311.00
2020 354.98 355.10
2021 418.12 537.00

Average increase per year: net asset value: 30 %

share price: 31 %

Another different anniversary

Compared to this time last year the overall situation feels a lot better, even though the covid pandemic is still ongoing. Balder has turned 16 and it is with great happiness and enthusiasm I look back on the past 16 years and on everything that we have achieved together in the Balder family. We are almost 1,000 coworkers and we are operating in many places in several countries.

I look forward with great curiosity to Balder's continued journey, and despite the difficult times right now, we are trying to see over the brow of the next hill and to continue developing the business. The future is always uncertain, but it is bright and filled with opportunities.

To date, we have made the assessment that the best total return for Balder's shareholders is achieved by reinvestment of the profits generated. The goal is also the same going forward and I am optimistic about the possibility of being able to continue finding investments over time that will generate a reasonably good return.

Erik Selin Chief Executive Officer

CURRENT EARNING CAPACITY

Balder presents its earning capacity on a twelve-month basis in the table below. It is important to note that the current earning capacity should not be placed on a par with a forecast for the coming 12 months. For instance, the earning capacity contains no estimate of rental, vacancy, currency or interest rate changes.

Balder's income statement is also impacted by the development in the value of the real estate portfolio as well as future property acquisitions and/or property divestments. Additional items affecting the operating result are changes in value of derivatives. None of the above has been considered in the current earning capacity.

The earning capacity is based on the real estate portfolio's contracted rental income, estimated property costs during a normal year as well as administrative costs.

The costs of the interest-bearing liabilities are based on the group's average interest rate level including the effect of derivative instruments. The tax is calculated using the effective tax rate during each period.

CURRENT EARNING CAPACITY ON A TWELVE-MONTHS BASIS

SEKm 2021
30 June
2021
31 March
2020
31 Dec
2020
30 Sep
2020
30 June
2020
31 March
2019
31 Dec
2019
30 Sep
2019
30 June
2019
31 March
2018
31 Dec
Rental income 9,100 8,505 8,545 8,335 8,240 8,100 8,000 7,830 7,435 7,175 7,000
Property costs –2,220 –2,210 –2,225 –2,130 –2,120 –2,090 –2,080 –2,060 –1,940 –1,875 –1,885
Net operating income 6,880 6,295 6,320 6,205 6,120 6,010 5,920 5,770 5,495 5,300 5,115
Surplus ratio, % 76% 74 % 74 % 74 % 74 % 74 % 74 % 74 % 74 % 74 % 73 %
Management and
administrative costs
–770 –720 –675 –690 –690 –680 – 670 –640 –640 –620 –595
Profit from property management
from associated companies
1,370 1,340 1,110 735 735 760 785 775 750 775 735
Operating profit 7,480 6,915 6,755 6,250 6,165 6,090 6,035 5,905 5,605 5,455 5,255
Net financial items, including
ground rent
–1,600 –1,580 –1,450 –1,380 –1,420 –1,420 –1,330 –1,330 –1,270 –1,250 –1,125
Of which non-controlling interests –605 –625 –630 – 670 – 670 – 670 –675 –655 –620 –580 –565
Profit from
property management 1)
5,275 4,710 4,675 4,200 4,075 4,000 4,030 3,920 3,715 3,625 3,565
Tax 2) –1,085 –975 –970 –870 –825 –870 –875 –855 –775 –765 –750
Profit after tax 4,190 3,735 3,705 3,330 3,250 3,130 3,155 3,065 2,940 2,860 2,815
Profit from property
management per share, SEK
28.28 25.26 25.06 23.33 22.64 22.22 22.39 21.78 20.64 20.14 19.81

1) Attributable to parent company shareholders. 2) Mainly refers to deferred tax, which does not affect the cash flow.

Current earning capacity as of 30 June 2021 includes the acquisition of Asset Buyout Partners (ABP) which will be taken into possession on 1 July 2021.

In the current earning capacity as of 30 June 2021 the following exchange rates have been used for translation of the foreign subsidiaries' income statement items.

EUR: 10.13 DKK: 1.36 NOK: 1.00 GBP: 11.67

INCOME, COSTS AND RESULTS

Profit from property management

Profit from property management for the period amounted to SEK 2,538m (2,347), of which effect of changes in exchange rates amounted to SEK –51m (13). Profit from property management attributable to parent company shareholders increased by 13 % and amounted to SEK 2,249m (1,993), which corresponds to an increase per share of 9 % to SEK 12.06 (11.07). Profit from property management includes SEK 570m (287) in respect of associated companies.

Net profit after tax

Net profit after tax for the period amounted to SEK 5,514m (2,195). Net profit after tax attributable to parent company shareholders amounted to SEK 4,877m (1,874), corresponding to SEK 26.15 per share (10.41). Profit before tax was affected by unrealised changes in value in respect of investment properties of SEK 3,075m (575), realised changes in value in respect of investment properties of SEK 116m (12), profit from sales of development properties of SEK 37m (59), changes in value of interest rate derivatives of SEK 327m (–221) and profit from participations in associated companies of SEK 1,070m (257).

Rental income

Rental income increased by 5 % to SEK 4,249m (4,049), of which the effect of changes in exchange rates was SEK –110m (27). The increase was primarily due to acquisitions and completed projects for own management. The leasing portfolio was estimated to have a rental value on 30 June of SEK 8,998m (8,626). The average rental level for the entire real estate portfolio amounted to SEK 1,881/sq.m. (1,929) excluding project properties.

The like for like rental income has increased with 1.0 % (1.0) after adjustments for currency changes.

Rental income shows a considerable diversification of risks as regards tenants, sectors and locations. The economic occupancy rate amounted to 95 % (96) on 30 June. The total rental value of unlet areas at the end of the period amounted to SEK 493m (386).

Property costs

Property costs amounted to SEK –1,107m (–987) during the period, of which the effect of changes in exchange rates was SEK 31m (–7).

Net operating income increased by 3 % to SEK 3,142m (3,062), which implies a surplus ratio of 74 % (76).

Operating costs normally vary with the seasons. The first and fourth

quarters have higher costs than the other quarters, while the third quarter usually has the lowest cost level.

Management and administrative costs

Management and administrative costs amounted to SEK –390m (–357) during the period, of which the effect of changes in exchange rates was SEK 12m (–3).

Participations in the profits of associated companies/joint ventures

Balder owns property managing and project developing associated companies, see note 14 in Balder's Annual Report for 2020, and 44.1 % in Collector AB (publ) which is a listed niche bank. Brinova Fastigheter AB (publ) is also listed and Balder's share amounts to 19.9 %.

During the period, Balder has invested in Next Step Group AB, Balder's share amounts to 33.3 %. The company is an urban developer and today operates three larger urban development projects in Gothenburg: Nya Hovås, Wendelstrand and GoCo Health Innovation City, for more information see nextstep.se.

Balder also acquired 33.7 % of the shares in Emra gruppen AB during the period. Emrahem is a company in Emra gruppen focused on developing good housing for people with special needs (LSS housing), for more information see emrahus.se.

During the period, Balder also continued to acquire shares in the Norwegian listed real estate company Entra ASA. Balder's share as of 30 June 2021 amounts to 32.7 %, for further information see entra.no.

Profit from participations in associated companies/joint ventures amounted during the period to SEK 1,070m (257) and Balder's participation in the associated companies profit from property management amounted to SEK 570m (287).

Profit before tax was impacted by SEK 775m (45) as a result of unrealised changes in value in respect of properties and interest rate derivatives. The tax expense for the period amounted to SEK –275m (–75).

Net financial items and changes in value of derivatives

Net financial items amounted to SEK –715m (– 613), of which the effect of changes in exchange rates was SEK 16m (–3).

Changes in value of interest rate derivatives amounted to SEK 327m (–221). The positive change in value of derivatives during the period is due to the fact that the long interest rates have increased during the period. Unrealised changes in value do not affect the cash flow. The average interest rate for net financial items was 1.4% (1.6) on the closing date.

Changes in value of investment properties

Balder carried out an individual internal valuation on 30 June of the entire real estate portfolio, see page 8. Unrealised changes in value during the period amounted to SEK 3,075m (575). Realised changes in value amounted to SEK 116m (12) and referred to sale of two investment properties in Norway and condominiums and land. The average yield requirement as of 30 June amounted to 4.5 % (4.5), which is unchanged compared to yearend. The change in value during the period is attributable to improved net operating income and completed projects.

Profit from sales of development properties

Profit from sales of development properties is recognised when the property is taken into possession by the buyer. Apart from the cost, selling and marketing expenses are included, which are expensed on an ongoing basis, these amounted to SEK –10m (–7) during the period.

Three projects have been recognised as income during the period. The sales result for the quarter totaled SEK 37m (59) after deduction of selling and marketing expenses and includes sales of the development projects Brf Bergsjö Hage, Brf Bovieran Salem and Brf Lilla Berget Norrmalm.

Taxes

The group's total tax amounted to SEK –1,078m (–546), of which effect of changes in exchange rates amounted to SEK 23m (–4). Current tax expense for the period amounted to SEK –136m (–196), mainly attributable to SATO Oyj and Balder Denmark.

Deffered tax expense for the period amounted to SEK –942m (–350). Tax was calculated based on the applicable tax rate in each country. The group's deferred tax liability has been calculated as the value of the net of fiscal deficits and the temporary differences between the carrying amounts and values for tax purposes of properties and interest rate derivatives. Deferred tax liabilities amounted to SEK 13,489m (11,645).

Cash flow

Cash flow from operating activities after changes in working capital amounted to SEK –1,611m (1,195). Investing activities have burdened the cash flow by SEK –13,295m (–5,763). Cash flow from financing activities amounted to net SEK 23,193m (6,770).

Total cash flow for the period amounted to SEK 8,287m (2,202). Exchange rate difference in cash and cash equivalents amounted to SEK 32m (–).

In addition to unutilised credit facilities of SEK 8,044m (8,692), the Group's cash and cash equivalents, financial investments and unutilised overdraft facilities amounted to SEK 15,815m (5,439) on 30 June.

Second quarter 2021

Profit from property management for the second quarter of 2021 increased by 8 % and amounted to SEK 1,310m (1,211). Profit from property management attributable to parent company shareholders for the second quarter of 2021 increased by 13 % and amounted to SEK 1,161m (1,028) which corresponds to SEK 6.22 per share (5.71). Profit from property management included SEK 305m (161) in respect of associated companies. Rental income amounted to SEK 2,131m (2,026) and property costs amounted to SEK –516m (–453), which meant that net operating income increased by 3 % to SEK 1,615m (1,573), of which the effect of

changes in exchange rates was SEK –40m (10). The surplus ratio amounted to 76 % (78).

Net profit after tax for the period amounted to SEK 2,618m (968). Profit after tax attributable to parent company shareholders amounted to SEK 2,213m (811) corresponding to SEK 11.86 per share (4.51).

The result was affected by unrealised changes in value in respect of investment properties of SEK 1,677m (318), realised changes in value of investment properties of SEK 1m (9), profit from divestments of development properties of SEK 13m (59), changes in value of interest rate derivatives of SEK 28m (–50) and profit from participations in associated companies of SEK 554m (158). The Group's total tax amounted to SEK – 660m (–576). Current tax expense for the period amounted to SEK –83m (–112), which is primarily attributable to SATO Oyj and Balder Denmark. Deferred tax expense for the period amounted to SEK –576m (–464). The deferred tax expense has been affected by positive exchange rate differences that have arisen from the translation of the parent company's Euro bonds during the quarter. In the Group these are used for hedging of foreign net investments and are transferred to "Other comprehensive income".

Employees and organisation

The number of employees on 30 June amounted to 920 persons (799), of whom 382 were women (346). Balder is organised into seven regions. The head office with Group-wide functions is located in Gothenburg.

Parent Company

The parent company's operations mainly consist of performing Groupwide services but an important part relates to sales of services, principally to associated companies. Sales in the parent company amounted to SEK 211m (191) during the period.

Net profit after tax amounted to SEK 271m (909). Other net financial items amounted to SEK 1m (138) of which exchange rates differences amounted to SEK –286m (– 6), change in value of interest rate derivatives amounted to SEK 290m (–221).

Reported exchange differences mainly refer to the translation of the company's Euro bonds, which from a Group perspective are used for hedging of foreign net investments.

REAL ESTATE PORTFOLIO

On 30 June Balder owned 1,458 investment properties (1,338) with a lettable area of 4,771 thousand sq.m. (4,451) and a value of SEK 160,582m (146,181). Balder's total rental value excluding projects amounted to SEK 8,975m (8,587).

In addition to investment properties Balder owns development properties with an acquisition cost of SEK 2,769m (3,125). The value of the total property portfolio amounted to SEK 163,351m (149,306). Balder's

commercial properties are mainly located in the central parts of the major cities. Balder's residential properties are located in metropolitan areas and places that are growing and developing positively in each country. Balder's ambition is to continue growing in selected markets.

BALDER'S REAL ESTATE PORTFOLIO ON 30/06/2021 1)

Number of
investment
properties
Lettable area,
sq.m.
Rental value,
SEKm
Rental value,
SEK/sq.m.
Rental
income,
SEKm
Economic
occupancy
rate, %
Carrying
amount,
SEKm
Carrying
amount, %
Distributed by region
Helsinki 616 1,152,833 2,710 2,351 2,563 95 42,941 26
Stockholm 89 728,305 1,463 2,009 1,377 94 29,251 18
Gothenburg 187 1,070,318 1,719 1,606 1,622 94 31,605 19
Copenhagen 21 296,848 772 2,599 748 97 16,704 10
South 80 404,432 646 1,597 584 90 10,819 7
East 324 748,674 1,186 1,584 1,125 95 15,854 10
North 141 370,025 479 1,295 461 96 7,604 5
Total excluding projects 1,458 4,771,435 8,975 1,881 8,481 95 154,778 95
Projects for own management 24 24 5,803 4
Total investment properties 1,458 4,771,435 8,998 1,881 8,505 95 160,582 98
Development properties 2,769 2
Total real estate portfolio 1,458 4,771,435 8,998 1,881 8,505 95 163,351 100
Distributed by property category
Residential 1,137 2,822,682 5,399 1,913 5,147 95 90,166 55
Office 118 695,240 1,629 2,343 1,468 90 30,657 19
Retail 116 659,809 855 1,296 820 96 12,784 8
Other 87 593,704 1,092 1,839 1,046 96 21,170 13
Total excluding projects 1,458 4,771,435 8,975 1,881 8,481 95 154,778 95
Projects for own management 24 24 5,803 4
Total investment properties 1,458 4,771,435 8,998 1,881 8,505 95 160,582 98
Development properties 2,769 2

1) The above table refers to the properties owned by Balder at the end of the period. Sold properties have been excluded and acquired properties have been estimated using full-year values. Other properties include hotel, educational, care, industrial and mixed-use properties.

Total real estate portfolio 1,458 4,771,435 8,998 1,881 8,505 95 163,351 100

CARRYING AMOUNT DISTRIBUTED BY REGION, TOTAL REAL ESTATE PORTFOLIO, %

CARRYING AMOUNT DISTRIBUTED BY PROPERTY CATEGORY, TOTAL REAL ESTATE PORTFOLIO, %

Residential, 60 Oice, 19 Other, 14 Retail, 8

CHANGES IN REAL ESTATE PORTFOLIO

Investment properties

Balder's investment properties are reported on the basis of internal valuations. The properties in Sweden, Denmark, Finland, Norway, Germany and United Kingdom are valued using the cash flow based method.

In Finland, in addition to the cash flow based method, valuation at acquisition cost is used. The properties in Russia are valued using the sales comparison method.

Properties under construction and project properties for own management are valued at market value reduced by estimated building expenditure and project risk, which usually results in valuation at cost.

On 30 June, Balder's average yield requirement amounted to 4.5 % (4.5) excluding project properties for own management, which is unchanged compared to year-end.

In order to quality-assure its internal valuations, Balder regularly allows parts of its portfolio to be externally valued and obtain second opinions1) on internal valuations. Historically, deviations between external and internal valuations have been insignificant.

Unrealised changes in value investment properties

The overall carrying amount of Balder's investment properties amounted to SEK 160,582m (146,181) on 30 June. The unrealised change in value during the period amounted to SEK 3,075m (575) of which 65 % is attributable to residential properties. Of the total unrealised change in value, 4 % is related to completed projects. The change in value during the period is attributable to improved net operating income and completed projects.

Investments, acquisitions and divestments

During the period, a total of SEK 8,745m (4,390) was invested relating to investment properties, of which SEK 6,189m (2,586) related to acquisitions and SEK 2,556m (1,804) related to investments in existing properties and projects for own management. During the period two investment properties in Norway and condominiums and land have been divested at a sales value of SEK 1,306m (311). Profit from the sales amounted to SEK 152m of which realised changes in value of investment properties amounted to SEK 116m (12) and deferred tax income amounted to SEK 36m resulting from the fact that the sales were made as company transactions.

CHANGE IN CARRYING AMOUNT OF PROPERTIES 2021 2020
SEKm Number2) SEKm Number2)
Investment properties, 1 January 149,179 1,362 141,392 1,298
Investments in existing properties and projects 2,556 1,804
Acquisitions 6,189 64 2,586 16
Sales –1,190 –2 –299
Change in value of investment properties, unrealised 3,075 575
Currency changes 773 123
Reclassification 34 24
Investment properties, 30 June 160,582 1,458 146,181 1,338
Development properties, 1 January 2,803 2,344
Reclassification
Investments in projects 404 1,151
Sales –438 –370
Development properties, 30 June 2,769 3,125
Total real estate portfolio, 30 June 163,351 149,306

1) Review performed by external valuation company of used valuation method. 2) Number of investment properties.

PROPERTY TRANSACTIONS 2021

Quarter Number Name of property Municipality Property category Lettable area, sq.m.
Acquisitions
One 1 Prästtäkten 20 Falun Office 4,246
One 1 Hattmakaren 10 Falun Residential 1,483
One 1 Bokbindaren 2 Falun Residential 3,289
One 1 Sparbanken 6 Falun Residential 2,361
One 1 Smeden 9 Falun Residential 6,547
One 1 Kronomagasinet 8-9 Falun Residential 2,528
One 1 Kronobränneriet 4 Falun Residential 2,997
One 1 Bergsrådmannen 9 Falun Residential 3,463
One 1 Bokbindaren 4 Falun Residential 935
One 1 Kronomagasinet 3 Falun Residential 527
One 1 Hästbryggan 1 Falun Residential 1,375
One 1 Bergsrådmannen 3 Falun Residential 616
One 1 Arkivet 1 Falun Office 2,061
One 1 Köpmannen 12 & 13 Falun Retail 2,125
One 1 Vedkompaniet 1 Falun Residential 3,780
One 1 Repslagaren 4 Falun Residential 5,790
One 1 Kardmakaren 21 Falun Residential 6,268
One 1 Kronomagasinet 5 Falun Residential 771
One 1 Hattmakaren 9 Falun Office 1,240
One 1 Balder 8 Borlänge Office 11,634
One 1 Balder 4 Borlänge Residential 1,714
One 1 Frithiof 6 Borlänge Residential 2,268
One 1 Domnarvet 50:31 Borlänge Residential 12,172
One 1 Sigge 1 Borlänge Residential 1,651
One 1 Balder 9-10 Borlänge Residential 1,530
One 1 Balder 6 Borlänge Residential 2,081
One 1 Lugnet 2:6 Falun Hotel 7,907
One 1 Lugnet 2:5 Falun Education/Care 3,376
One 1 Norslundsskogen 1-4 Falun Residential 28,413
One 1 Posten 6 Falun Office 8,193
One 1 Ingarvsmon 3 Falun Other 5,084
One 1 Frithiof 9 Borlänge Office 3,613
One 1 Frigga 6 Borlänge Residential 793
One 1 Främby 1:39 Falun Other 4,427
One 1 Helge 7 Västerås Other 4,179
One 1 Jarl 1 Västerås Office 7,200
One 1 Borrkronan 1 Västerås Residential 8,666
One 1 Dragarbrunn 11:1 Uppsala Office 15,280
One 1 Dragarbrunn 14:3 Uppsala Residential 3,983
One 1 Svartbäcken 51:3 Uppsala Office 3,500
One 1 Hattmakaren 15 Falun Office 2,621
One 1 Sparbanken 7 Falun Office 2,637
One 1 Munken 1 Falun Other 3,496
One 1 Torkel 8 Borlänge Office 3,101
One 1 Engelbrekt 1 Västerås Residential 6,662
One
One
1
1
Bryggaren 16
Bryggaren 26
Falun
Falun
Residential
Residential
1,250
1,684
One 1 Hanrö 2 Falun Residential 1,110
One 1 Lagmannen 7 Falun Residential 1,441
One 1 Färgaren 4 Falun Residential 3,564
One 1 Sandviken 17:1 Falun Residential
PROJEKT HALLONBERGEN, SUNDBYBERG
2,272
One 1 Sandviken 28:1 Falun Residential 347
One 1 Lallarvet 17 Falun Residential 7,033
One 1 Dahlian 21 Falun Residential 409

PROPERTY TRANSACTIONS 2021

Quarter Number Name of property Municipality Property category Lettable area, sq.m.
Acquisitions
One 1 Dragarbrunn 19:6 Uppsala Office 3,321
One 1 Hasseludden 1:73 Nacka Hotel 7,159
One 1 Kronomagasinet 1 Falun Residential 542
One 1 Fjärdingen 27:8 Uppsala Office 960
One 1 Dragarbrunn 22:1 Uppsala Office 6,645
One 1 Prästtäkten 5 Falun Residential 1,187
One Vitsippan 5 Falun Project
One 1 Bolsheden 1:54 Kungsbacka Office 989
One 1 Bolsheden 1:64 Kungsbacka Industrial/Warehouse 5,146
Two 1 Gnr. 136, bnr. 38 Vestby, Norway Retail 1,052
Two 1 Gnr. 136, bnr. 64 Vestby, Norway Retail 1,259
Total 64 255,953
Quarter Number Name of property Municipality Property category Lettable area, sq.m.
Divestments
One 1 Elverum 13/1059/0/1 Hamar, Norway Other 16,400
One 1 Trondheim 5001/416/105 Trondheim, Norway Residential 3,577
Total 2 19,977

PROPERTY DEVELOPMENT

Within the frame of property development, both new production and conversion projects of residentials and commercial spaces are carried out. Investments are made primarily in areas where the company already operates with a focus on the metropolitan regions of Stockholm, Gothenburg, Helsinki and Copenhagen. The building rights portfolio mainly includes building rights for the construction of both rental apartments and apartments for sale but also commercial properties.

Project properties for own management

Projects for own management under construction has an estimated total investment of SEK 9.2 billion (6.4), of which SEK 4.0 billion (3.7) is invested and SEK 5.2 billion (2.7) remains to be invested. Most of the ongoing projects relate to residential projects with owner apartments for rental use. The projects comprise about 3,650 apartments (1,900) and mainly refers to about 1,500 apartments in Helsinki, about 950 apartments in Copenhagen and about 350 apartments in Gothenburg.

Development properties for sale

A development property is a property that is held for refinement with the intention of being divested. These properties are continually recognised at cost and profit/loss is recognised when each property is completed, sold and handed over to the buyer.

Development projects under construction has an estimated total investment of SEK 3.7 billion (2.3), of which SEK 1.3 billion (1.4) is invested and SEK 2.4 billion (0.9) remains to be invested. All of the projects are residential projects that will be sold to end customer. The projects involve approx. 980 apartments (690) and mainly refers to approx. 830 tenantowner's apartments in Sweden.

Sales result from one development project is reported in the second quarter. The sale during the quarter refers to the development project Brf Lilla Berget Norrmalm. The cost of the project amounted to SEK –175m (–370) and the profit from the sales amounted to SEK 13m (59), including the marketing and sales costs of the quarter of SEK –5m regarding all development properties.

PROJECT PROPERTIES FOR OWN MANAGEMENT UNDER CONSTRUCTION

Country Region Project Property
category
Lettable area,
sq.m.
Number of
apartments
Estimated total
investment, SEKm
Estimated
completion
Sweden Stockholm Hedin Haninge Retail 3,841 75 Q3 2021
Finland Helsinki As Oy Kirkkonummen Manhattan Residential 3,960 165 178 Q3 2021
Finland East As Oy Oulun Mallasmaisteri Residential 4,032 168 137 Q3 2021
Finland Helsinki Kappelitie 5 Residential 3,400 77 167 Q4 2021
Finland Helsinki Sompasaaren Priki Residential 2,890 57 199 Q4 2021
Finland Helsinki Virtakuja 6 Residential 2,695 76 131 Q4 2021
Finland East As Oy Turun Montana Residential 2,781 89 108 Q4 2021
Finland East As Oy Nokian Värjäämö Residential 3,033 105 106 Q4 2021
Sweden East Mörtlösa Mercedes Retail 6,300 135 Q1 2022
Sweden East Mörtlösa Porsche Retail 4,200 89 Q1 2022
Denmark Copenhagen Lynghaven Residential 14,835 184 533 Q2 2022
Denmark Copenhagen Ofeliahaven Residential 9,079 109 322 Q2 2022
Denmark Copenhagen Fyrkanten HTC A10 Residential 8,854 107 371 Q2 2022
Finland Helsinki Lupajantie 2 Residential 4,505 112 197 Q2 2022
Finland Helsinki As Oy Hämeenlinnan Asemanranta Residential 2,802 100 108 Q2 2022
Finland East As Oy Oulun Sokurin Hyve Residential 2,109 68 69 Q2 2022
Finland East As Oy Olun Toppilansalmi Residential 1,804 55 56 Q2 2022
Finland East As Oy Turun Henning Residential 3,595 118 150 Q2 2022
Finland Helsinki Jokiniityntie 28 Residential 3,400 79 142 Q2 2022
Finland Helsinki Jokiniementie 46 Residential 4,548 104 235 Q3 2022
Finland Helsinki As Oy Kirkkonummen Pyssy-Seppä Residential 1,770 74 80 Q3 2022
Finland Helsinki As Oy Järvenpään Herttua Residential 2,530 43 67 Q3 2022
Finland Helsinki As Oy Kirkkonummen Soho Residential 1,770 74 80 Q4 2022
Finland East As Oy Turun Kirstinpuiston Helmi Residential 3,771 129 167 Q4 2022
Sweden Gothenburg Hedin HK Office 12,286 496 Q4 2022
Denmark Copenhagen Rubinhaven HTC A17 Residential 8,646 124 360 Q4 2022
Denmark Copenhagen Triumphbyen Hovvej Residential 10,800 138 433 Q4 2022
Sweden Gothenburg Stenhuggaren Residential 5,233 88 138 Q3 2022
Sweden Gothenburg Bergsjön Residential 8,916 177 253 2022-2023
Sweden Gothenburg Bergskristallen Residential 5,079 89 186 Q2 2023
Finland East Heittoniitynkuja 5 Residential 5,759 132 189 Q2 2023
Finland Helsinki Jokiniementie 48 Residential 5,355 118 276 Q2 2023
Finland Helsinki Runoratsaunkatu 15 Residential 5,355 135 284 Q2 2023
Finland Helsinki Kotkatie 6 Residential 3,685 100 186 Q3 2023
Denmark Copenhagen Green Hills Residential 24,886 294 942 Q3 2023
Sweden Gothenburg Hotell Draken Hotel 28,166 1,280 Q3 2023
Finland Helsinki Raudikkokuja 7 Residential 5,780 161 238 Q4 2023
Total 232,450 3,649 9,162

DEVELOPMENT PROPERTIES FOR SALE UNDER CONSTRUCTION

Country Region Project Property
category
Lettable area,
sq.m.
Number of
apartments
Estimated total
investment, SEKm
Estimated
completion
Sweden South Bovieran Staffanstorp Residential 4,273 54 179 Q3 2021
Finland Helsinki Virtakuja 4 Residential 2,117 55 106 Q4 2021
Sweden Gothenburg Fixfabriken Residential 19,038 270 897 2021-2023
Norway North Sandefjord Residential 6,500 46 292 Q1 2022
Sweden Gothenburg Bergsfallet Residential 5,440 87 238 Q3 2022
Sweden Stockholm Gladan Residential 7,630 144 646 Q2 2023
Finland East Hervantajärven Helmi Residential 2,741 52 92 Q2 2023
Sweden Gothenburg Västra Gatan Kungälv Residential 8,213 128 421 Q3 2023
Sweden Gothenburg Hovås Höjd Residential 10,616 146 822 Q3 2023
Total 66,568 982 3,693

PROJECT PROPERTIES FOR OWN MANAGEMENT ESTIMATED CONSTRUCTION START Q3 2021-Q3 2022

Country Region Project Property
category
Lettable area,
sq.m.
Number of
apartments
Estimated total
investment, SEKm
Construction
start
Sweden Gothenburg Frölunda Residential 21,220 392 778 2021-2022
Denmark Copenhagen Strandby Huse D och Höje A Hundige Øst Residential 22,332 339 846 2021
Sweden Stockholm Basaren plan 9-10 Commercial 1,655 145 2021
Sweden Gothenburg Citygården Gullön Residential 3,225 69 37 2021
Finland Helsinki Lincolninaukio 4 Residential 5,100 137 244 2021
Finland Helsinki As Oy Riihimäen Pesispolku Residential 2,430 100 87 2021
Finland East As Oy Oulun Antiikva Residential 2,279 75 95 2021
Finland East As Oy Oulun Toppilansalmen Legenda Residential 1,807 55 58 2021
Finland East As Oy Turun Olva Residential 2,573 82 117 2021
Sweden Gothenburg Gårdsten Residential 6,414 150 736 2022
Sweden Stockholm Barkarby City E1 Residential 10,971 242 486 2022
Finland Helsinki Kaskilaaksontie Residential 2,559 63 115 2022
Finland Helsinki Peijinkuja 6 Residential 5,950 140 307 2022
Finland Helsinki Kruunuvuorenranta I Residential 3,995 85 228 2022
Finland Helsinki Kruunuvuorenranta II Residential 3,808 80 217 2022
Finland Helsinki Pataljoonantie Residential 4,339 90 174 2022
Finland Helsinki Niittykummuntie Residential 2,550 55 131 2022
Finland Helsinki Peijinkula 10 Residential 4,505 121 234 2022
Finland Helsinki Saturnuksenrinne Residential 2,550 55 96 2022
Finland East Suorannankatu Residential 2,125 42 69 2022
Total 112,387 2,372 5,200

DEVELOPMENT PROPERTIES FOR SALE ESTIMATED CONSTRUCTION START Q3 2021-Q3 2022

Country Region Project Property
category
Lettable area,
sq.m.
Number of
apartments
Estimated total
investment, SEKm
Construction
start
Finland Helsinki Nihtisillankuja Residential 5,270 129 269 2021
Sweden Gothenburg Bastuban Residential 11,000 133 531 2022
Sweden Gothenburg Bohusgatan Residential 18,856 326 1,104 2021-2022
Sweden Stockholm Basaren Residential 4,334 65 294 2021
Sweden Stockholm Caprea Residential 3,742 28 440 2021
Sweden Gothenburg Bergsjö Glänta Residential 3,619 31 115 2021
Sweden South Bovieran Svedala Residential 4,273 54 162 2021
Sweden Stockholm Bovieran Haninge Residential 2,586 36 137 2022
Sweden Stockholm Bovieran Nykvarn Residential 4,273 54 176 2022
Sweden Gothenburg Långström Bärnstenen Residential 5,440 87 80 2022
Sweden Gothenburg Långström Obelisken Residential 2,000 30 36 2022
Norway North Ski Linåskollen Residential 16,600 169 762 2022
Norway North Trondheim Steinan Residential 34,000 732 1,918 2022
Norway North Drammen Residential 42,020 118 439 2022
Total 158,013 1,992 6,463

Total 270,400 4,364 11,663

FUTURE PROJECTS ESTIMATED CONSTRUCTION START 2022 AND ONWARDS

Country Region Gross area, sq.m Number of apartments
Sweden Gothenburg 710,519 6,516
Sweden Stockholm 595,271 6,002
Finland Helsinki 228,667 4,099
Finland East 30,850 565
Denmark Copenhagen 49,949 328
Total 1,615,256 17,510

CUSTOMERS

In order to limit the risk of lower rental income and consequently a weakened occupancy rate, Balder strives to develop long-term relationships with the company's existing customers. Balder has a good diversification as regards the distribution between commercial properties and residential properties as well as the geographical distribution. The diversification strengthens the possibilities of maintaining a steady and satisfactory occupancy rate. Balder's

commercial leases have an average lease term of 6.4 years (6.8). Balder's 10 largest leases represent 4.4 % (4.5) of total rental income and the average lease term amounts to 10.4 years (11.6).

No individual lease accounts for more than 0.7 % (0.7) of Balder's total rental income and no individual customer accounts for more than 3.9 % (3.6) of total rental income.

LEASE MATURITY STRUCTURE 30/06/2021

Maturity date Number of
leases
Proportion, % Contracted
rent, SEKm
Proportion, %
2021 847 22 178 2
2022 1,082 28 397 5
2023 708 18 415 5
2024 628 16 412 5
2025– 586 15 1,976 23
Total 3,851 100 3,379 40
Residential 1) 43,065 5,023 59
Car park 1) 6,329 27 0
Garage 1) 6,024 76 1
Total 59,269 8,505 100

1) Normally runs subject to a period of notice of three months.

RENTAL INCOME AND PROFIT FROM PROPERTY MANAGEMENT

Rental income Profit from property management attributable to parent company shareholders

BALDERS 10 LARGEST CUSTOMERS

as of 30/06/2021

  • The municipality of Gothenburg
  • I.A. Hedin Bil AB
  • ICA Sverige AB
  • Kesko Oyj
  • Ligula Hospitality Group
  • Scandic Hotels
  • City of Stockholm
  • Stureplansgruppen
  • The municipality of Sundbyberg
  • Region Västra Götaland

MATURITY STRUCTURE OF COMMERCIAL LEASE CONTRACTS

FINANCING

Balder has assets in Sweden, Denmark, Finland, Russia, Norway, Germany and United Kingdom which means that the Group is exposed to currency risks. Balder therefore has a diversified financing structure with bonds issued under a domestic MTN programme and a EMTN programme. In addition to bonds, bank financing in each country's currency and a commercial paper programme in Euro and Swedish kronor are used. The single largest source of funding is bonds issued on the European bond

market in Euro. In addition to these financing sources, Balder also has issued Hybrid capital which has a original maturity of 60 years and is considered as 50 % equity by the credit rating agencies.

2021 2020 2020
FINANCIAL KEY RATIOS 30 June 30 June 31 Dec
Interest-bearing liabilities excl. Hybrid capital, SEKm 104,010 84,084 85,476
Hybrid capital, SEKm 8,606 3,668 3,513
Available liquidity including confirmed loan commitments, SEKm 23,859 14,131 20,509
Average fixed credit term, years 6.1 5.7 5.9
Average interest rate refixing period, years 3.8 3.2 3.5
Net debt to total assets (financial covenant 1) < 65), % 44.6 48.3 46.1
Interest coverage ratio (financial covenant 1) > 1.8), times 4.7 5.0 5.3
Secured debt/Total assets (financial covenant 1) < 45), % 14.4 15.4 15.6
Net debt/EBITDA, times 14.2 13.5 13.2
BBB Stable BBB Stable BBB Stable
Credit rating S&P outlook outlook outlook
Calculation of net debt
Interest-bearing liabilities excl. Hybrid capital, SEKm 104,010 84,084 85,476
Other liability 2) 3,009
Hybrid capital (50 % is treated as equity by rating agencies), SEKm 4,303 1,834 1,757
Cash and cash equivalents and financial investments, SEKm –15,402 –5,089 –7,127
Net debt 92,911 80,829 83,115

1) Financial covenants refers to obligations that Balder has to its financiers in the form of financial key ratios. 2) Other liability relates to obligation regarding purchase of shares in Entra ASA.

FINANCIAL TARGETS Target Outcome
Equity/assets ratio, % min. 40.0 37.5
Net debt to total assets, % max. 50.0 44.6
Interest coverage ratio, times min. 2.0 4.7

FINANCING SOURCES, %

Secured bonds, 0

Commercial papers, 1

Secured bank loans, 26

Unsecured bank loans, 8

Secured loans, 30,019 Unsecured loans, 82,598

DEBT MATURITY STRUCTURE 30/06/2021

Year SEKm Proportion, %
2021 4,767 4
2022 12,047 11
2023 17,038 15
2024 12,120 11
2025 10,168 9
2026 12,994 12
2027 5,975 5
2028 8,511 8
2029 6,326 6
2030 7,909 7
2031- 14,761 13
Total 112,616 100

INTEREST MATURITY STRUCTURE 30/06/2021

Year SEKm Interest, % Proportion, %
2021 35,400 0.6 31
2022 7,812 1.4 7
2023 9,614 2.4 9
2024 4,163 1.5 4
2025 7,817 2.1 7
2026 13,957 2.3 12
2027 6,494 1.2 6
2028 8,070 1.6 7
2029 9,363 1.3 8
2030 6,548 1.4 6
2031- 3,378 1.8 3
Total 112,616 1.4 100

FIXED CREDIT TERM

DEBT MATURITY STRUCTURE 30/06/2021

FIXED INTEREST TERM

NET DEBT TO TOTAL ASSETS

ASSOCIATED COMPANIES

Balder is a partner in a large number of property managing and project developing companies as well as in the niche bank Collector, for further information on Balder's associated companies, see pages 34-36 and 69-70 in Balder's annual report 2020.

During the period, Balder invested SEK 6,152m in associated companies, which mainly relates to an additional 15 % of the shares in Entra ASA. Other companies that have been added are Next Step Group AB 33.3 % and Emra gruppen AB 33.7 %. The table below shows Balder's share of property managing associated companies. Companies included in the table are Tulia AB 50 % (50), Fastighets AB Centur 50 % (50), Trenum AB 50 % (50), Anthon B Nilsen Eiendom AS 50 % (–), Sinoma Fastighets AB 49 % (49), Serena Properties AB 56 % (56), Tornet Bostadsproduktion AB 33 % (33), Entra ASA 32.7 % (–) and Brinova Fastigheter AB 19.9 % (23.2).

BALDER'S PARTICIPATION IN THE PROPERTY MANAGING ASSOCIATED COMPANIES' REAL ESTATE PORTFOLIO ON 30/06/2021 1)

Number of
investment
properties 2)
Lettable area,
sq.m.
Rental value,
SEKm
Rental value,
SEK/sq.m.
Rental income,
SEKm
Economic
occupancy rate,
%
Carrying
amount,
SEKm
Carrying
amount, %
Distributed by region
Stockholm 85 205,512 338 1,645 324 96 6,532 17
Gothenburg 45 165,628 206 1,241 195 95 2,952 8
Öresund 142 135,963 206 1,516 197 96 3,269 9
East 46 158,844 198 1,247 194 98 2,979 8
Oslo 41 206,237 534 2,589 511 96 11,590 30
Other Norway 39 168,935 314 1,858 308 98 5,861 15
Total excluding projects 398 1,041,119 1,796 1,725 1,730 96 33,184 87
Projects for own management 1 1 4,826 13
Total real estate portfolio 398 1,041,119 1,796 1,725 1,731 96 38,010 100
Distributed by property category
Residential 115 146,485 271 1,850 263 97 5,547 15
Office 108 464,366 989 2,129 949 96 19,859 52
Retail 69 258,988 312 1,203 299 96 4,301 11
Other 106 171,280 224 1,310 219 97 3,477 9
Total excluding projects 398 1,041,119 1,796 1,725 1,730 96 33,184 87
Projects for own management 1 1 4,826 13
Total real estate portfolio 398 1,041,119 1,796 1,725 1,731 96 38,010 100

1) The above table refers to the properties owned by the associated companies at the end of the period. Sold properties have been excluded and acquired properties have been estimated using full-year values. Other properties include hotel, educational, care, industrial and mixed-use properties.

2) Refers to the entire associated companies' portfolio.

BALDERS PARTICIPATION IN THE BALANCE SHEETS OF THE PROPERTY MANAGING ASSOCIATED COMPANIES

SEKm 2021
30 June
2020
30 June
2020
31 Dec
Assets
Properties 38,010 14,987 27,860
Other assets 1,140 317 759
Cash and cash equivalents 526 249 282
Total assets 39,676 15,553 28,901
Shareholders' equity and liabilities
Equity/interest-bearing shareholder
loan 18,231 6,963 12,952
Deferred tax liability 3,455 796 2,179
Interest-bearing liabilities 16,109 7,202 12,234
Other liabilities 1,881 592 1,537

Total equity and liabilities 39,676 15,553 28,901

CARRYING AMOUNT DISTRIBUTED BY PROPERTY CATEGORY, TOTAL REAL ESTATE PORTFOLIO, %

CARRYING AMOUNT DISTRIBUTED BY REGION, TOTAL REAL ESTATE PORTFOLIO, %

OTHER DISCLOSURES

Events after the end of the period

As of 1 July 2021 Balder has taken possession of the shares in the Norwegian real estate company Asset Buyout Partners (ABP). ABP is a leading independent Norwegian industrial real estate company with real estate assets located in mission critical energy and maritime clusters along the Norwegian coast, primarily in the cities of Bergen and Stavanger. The property value amounts to approximately NOK 9,000 million distributed over 106 properties.

After the end of the reporting period no other significant events has occured.

Related party transactions

Balder receives fees from associated companies and Erik Selin Fastigheter AB for property and company management services. These fees amounted to SEK 39m (40) during the period and are reported in management and administrative costs. All transactions have been priced on market terms.

Risks and uncertainties

Balder's operations, financial position and results may be affected by a number of risks and uncertainty factors. These are described in the Annual Report for 2020, on pages 42-45. Otherwise, no significant changes has been noted.

Accounting policies

Balder applies IFRS (International Financial Reporting Standards) as adopted by the European Union in its consolidated accounts and the interpretations of these (IFRIC). This interim report is prepared in accordance with IAS 34, Interim Financial Reporting. In addition, relevant provisions of the Swedish Annual Accounts Act and the Swedish Securities Markets Act have also been applied. The parent company has prepared its financial statements in accordance with the Annual Accounts Act, the Securities Markets Act and RFR 2, Accounting for Legal Entities. The accounting principles follow those reported in the Annual Report 2020.

New and changed standards and principles that came into force as of January 1, 2021 or later, is not considered to have any material impact on the Group's financial reports.

This interim report has not been subject to review by the company's auditors.

Signature and verification

The Board of Directors and the CEO declare that the undersigned interim report provides a true and fair overview of the parent company's and the group's operations, financial position and performance as well as describing material risks and uncertainties facing the parent company and other companies in the group.

Gothenburg 16 July 2021

Christina Rogestam Chairman of the board

Fredrik Svensson Sten Dunér Board member Board member

Anders Wennergren Erik Selin Board member Board member and CEO

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEKm 2021
April-June
2020
April-June
2021
Jan-June
2020
Jan-June
2020/2021
July-June
2020
Jan-Dec
Rental income 2,131 2,026 4,249 4,049 8,334 8,134
Property costs –516 –453 –1,107 –987 –2,039 –1,919
Net operating income 1,615 1,573 3,142 3,062 6,296 6,216
Management and administrative costs –205 –178 –390 –357 –709 – 676
Participations in the profits of associated companies/joint ventures 554 158 1,070 257 1,710 897
– of which profit from property management 305 161 570 287 946 663
– of which changes in value 414 43 775 45 1,219 489
– of which tax –165 –46 –275 –75 –455 –254
Other income/costs –23 –23 –69 –32 334 371
– of which unrealised change in value of long-term financial asset 462 462
Net financial items –383 –322 –715 –613 –1,314 –1,212
– of which cost of leases/ground rent –17 –16 –33 –33 –65 –64
Profit including changes in value and tax in associated companies 1,558 1,208 3,038 2,317 6,318 5,597
– of which Profit from property management 1,310 1,211 2,538 2,347 5,091 4,900
Changes in value
Changes in value investment properties, realised 1 9 116 12 128 24
Changes in value investment properties, unrealised 1,677 318 3,075 575 5,929 3,429
Income sale development properties 188 428 486 428 1,310 1,253
Costs sale development properties –175 –370 –448 –370 –1,158 –1,079
Changes in value derivatives 28 –50 327 –221 408 –141
Changes in value total 1,719 336 3,555 424 6,617 3,486
Profit before tax 3,278 1,544 6,593 2,741 12,934 9,083
Income tax –660 –576 –1,078 –546 –2,340 –1,807
Net profit for the period/year 2,618 968 5,514 2,195 10,594 7,275
Net profit for the period/year attributable to:
Parent company shareholders 2,213 811 4,877 1,874 9,644 6,641
Non-controlling interests 405 156 637 321 950 634
Other comprehensive income – items that may be
subsequently reclassified to profit or loss
2,618 968 5,514 2,195 10,594 7,275
Translation difference relating to foreign operations (net after hedge
accounting) –199 –563 259 –78 –368 –705
Cash flow hedges after tax 32 –14 104 –33 117 –20
Participation in other comprehensive income of associated companies/joint
ventures
–310 –20 186 –11 160 –37
Total comprehensive income for the period/year 2,141 370 6,064 2,074 10,503 6,513
Total comprehensive income for the period/year attributable to:
Parent company shareholders 1,831 794 5,295 1,729 9,839 6,273
Non-controlling interests 309 –423 768 344 664 240
2,141 370 6,064 2,074 10,503 6,513
Profit from property management 1,310 1,211 2,538 2,347 5,091 4,900
Of which non-controlling interests part of profit from property manage
ment –149 –183 –289 –354 –591 –657
Profit from property management attributable to parent company share
holders
1,161 1,028 2,249 1,993 4,500 4,244
Profit from property management per share, SEK 6.22 5.71 12.06 11.07 24.49 23.51
Profit after tax per share, SEK 11.86 4.51 26.15 10.41 52.48 36.79

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

SEKm 2021
30 June
2020
30 June
2020
31 Dec
Assets
Investment properties 160,582 146,181 149,179
Development properties 2,769 3,125 2,803
Lease contract; Right-of-use assets 1,522 1,514 1,532
Other fixed assets 166 163 160
Participations in associated companies/joint ventures 22,847 8,080 15,593
Other receivables 4,945 3,329 4,007
Cash and cash equivalents and financial investments 15,402 5,089 7,127
Total assets 208,233 167,481 180,401
Shareholders' equity and liabilities
Shareholders' equity 1) 73,819 60,811 67,885
Deferred tax liability 13,489 11,645 12,497
Interest-bearing liabilities 112,616 87,752 88,989
–of which Hybrid capital 2) 8,606 3,668 3,513
Derivatives 987 1,516 1,540
Lease contract 1,521 1,510 1,536
Other liabilities 5,800 4,247 7,955
Total equity and liabilities 208,233 167,481 180,401
1) Of which non-controlling interests
2) 50 % of Hybrid capital is treated as equity by the rating agencies and thus decreases interest-bearing liabilities
10,317 10,076 9,676
when calculating the debt/equity ratio and net debt to total assets ratio and increases equity when calculating the
equity/assets ratio.
4,303 1,834 1,757

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

SEKm 2021
30 June
2020
30 June
2020
31 Dec
Opening equity 67,885 58,725 58,725
Total comprehensive income for the period/year 6,064 2,074 6,513
Transactions with non-controlling interests –3 –301
Dividend to non-controlling interests –129
Shareholder contributions from non-controlling interests 17
Share issue, after issue costs 16 2,930
Closing equity 73,819 60,811 67,885

CONSOLIDATED STATEMENT OF CASH FLOW

SEKm 2021
April-June
2020
April-June
2021
Jan-June
2020
Jan-June
2020
Jan-Dec
Net operating income 1,615 1,573 3,142 3,062 6,216
Other income/costs –23 –23 –69 –32 –91
Management and administrative costs –205 –178 –390 –357 – 676
Selling and marketing expenses development properties –5 –10 –20
Reversal of depreciation 11 10 22 20 41
Net financial items paid –528 –355 –901 –640 –1,174
Taxes paid –75 –105 –189 –222 –310
Cash flow from operating activities before change in working capital 789 922 1,604 1,831 3,986
Change in operating receivables –159 –113 –518 –710 –901
Change in operating liabilities –544 38 –2,697 74 3,435
Cash flow from operating activities 86 847 –1,611 1,195 6,520
Acquisition of investment properties –685 –879 – 6,071 –2,586 –3,491
Acquisition/Divestment of property, plant and equipment –6 –1 –27 –18 –36
Purchase of financial investments –116 –11 –142 –45 –1,665
Acquisition of shares in associated companies/Capital contribution to associated com
panies/Loans to associated companies/joint ventures
–535 –160 – 6,115 –977 –8,128
Investment in existing properties and projects –1,860 –1,436 –2,960 –2,955 –5,572
Transactions with non-controlling interests –1 –3 –301
Sale of investment properties 157 206 1,306 311 366
Sale of development properties 188 428 486 428 1,253
Sale of financial investments 46 46 62 561
Dividend paid from associated companies/joint ventures 183 19 184 19 20
Cash flow from investing activities –2,629 –1,835 –13,295 –5,763 –16,993
Share issue, after issue costs 2,930
Amortisation of lease liability –11 –13 –20 –15 –19
Shareholder contributions from non-controlling interests 16 18
Dividend paid to non-controlling interests –129 –129
Loans raised 15,847 5,009 29,048 11,183 20,472
Amortisation/redemption of loans sold properties/changes in overdraft facilities –2,720 –2,432 –5,706 –4,413 –9,838
Cash flow from financing activities 12,986 2,564 23,193 6,770 13,563
Cash flow for the period/year 10,444 1,576 8,287 2,202 3,089
Cash and cash equivalents at the start of the period/year 2,380 2,004 4,468 1,379 1,379
Exchange rate difference in cash and cash equivalents –37 32
Cash and cash equivalents at the end of the period/year 12,787 3,581 12,787 3,581 4,468
Available liquidity, SEKm
Cash and cash equivalents 12,787 3,581 12,787 3,581 4,468
Unutilised overdraft facilities 413 350 413 350 350
Unutilised credit facilities 8,044 8,692 8,044 8,692 13,032
Financial investments 2,615 1,508 2,615 1,508 2,659
Available liquidity including confirmed credit commitments 23,859 14,131 23,859 14,131 20,509

SEGMENT INFORMATION

SEKm 2021
April-June
2020
April-June
2021
Jan-June
2020
Jan-June
2020/2021
July-June
2020
Jan-Dec
Rental income
Helsinki 595 642 1,182 1,272 2,404 2,495
Stockholm 363 324 724 654 1,407 1,338
Gothenburg 407 387 811 760 1,612 1,561
Copenhagen 180 160 364 329 693 657
South 144 139 290 284 590 584
East 324 308 640 616 1,242 1,218
North 116 66 238 134 386 282
Total 2,131 2,026 4,249 4,049 8,334 8,134
Net operating income
Helsinki 425 491 827 932 1,715 1,820
Stockholm 297 267 576 526 1,145 1,095
Gothenburg 321 313 622 590 1,269 1,237
Copenhagen 136 115 274 253 519 499
South 113 110 225 218 466 460
East 246 228 468 447 909 888
North 78 49 150 95 273 218
Total 1,615 1,573 3,142 3,062 6,296 6,216

The group's internal reporting of operations is divided into the above segments. Total net operating income corresponds with reported net operating income in the income statement. The difference between net operating income of SEK 3,142m (3,062) and profit before tax of SEK 6,593m (2,741) consists of changes in value of investment properties of

SEK 3,191m (587), profit from sales of development properties SEK 37m (59), other income/costs SEK –69m (–32), management and administrative costs of SEK –390m (–357), participations in profits of associated companies/joint ventures of SEK 1,070m (257), net financial items of SEK –715m (–613) and changes in value of derivatives of SEK 327m (–221).

SEKm 2021
30 June
2020
30 June
2020
31 Dec
Real estate portfolio
Helsinki 42,941 41,667 40,938
Stockholm 29,251 26,810 27,364
Gothenburg 31,605 30,222 30,863
Copenhagen 16,704 14,181 15,272
South 10,819 10,214 10,439
East 15,854 13,877 14,448
North 7,604 4,914 5,238
Total excluding projects 154,778 141,885 144,562
Projects for own management 5,803 4,297 4,617
Total investment properties 160,582 146,181 149,179
Development properties 2,769 3,125 2,803
Total real estate portfolio 163,351 149,306 151,982

The carrying amounts of properties have during the period changed by investments, acquisitions, divestments, unrealised changes in value and currency changes, with SEK 2,003m in the Helsinki region, SEK 1,887m in the Stockholm region, SEK 742m in the Gothenburg region, SEK 1,432m in the Copenhagen region, SEK 381m in the South region, SEK 1,405m in the East region and SEK 2,366m in the North region. The Group's projects for

own management has increased by SEK 1,186m and the Group's development properties has decreased by SEK –34m. SATO's property portfolio is divided between the regions Helsinki and East. The real estate holdings in Norway are classified in the North region, the real estate holdings in Denmark in the Copenhagen region and the properties in Germany and United Kingdom in the South region.

KEY RATIOS

2021
April-June
2020
April-June
2021
Jan-June
2020
Jan-June
2020/2021
July-June
2020
Jan-Dec
Share-related
Average number of shares, thousands 186,500 180,000 186,500 180,000 183,750 180,515
Profit after tax, SEK 11.86 4.51 26.15 10.41 52.48 36.79
Profit after tax excluding unrealised changes in value, SEK 4.37 3.17 10.49 8.80 20.39 18.69
Profit from property management, SEK 6.22 5.71 12.06 11.07 24.49 23.51
Net operating income, SEK 7.32 7.15 14.24 13.95 28.89 28.61
Outstanding number of shares, thousands 186,500 180,000 186,500 180,000 186,500 186,500
Shareholders' equity, SEK 340.50 281.86 340.50 281.86 340.50 312.12
Long-term net asset value (NAV), SEK 418.12 354.98 418.12 354.98 418.12 387.38
Share price on the closing date, SEK 537.00 355.10 537.00 355.10 537.00 428.90
Property-related
Rental value full-year, SEK/sq.m. 1,881 1,929 1,881 1,929 1,881 1,893
Rental income full-year, SEK/sq.m. 1,777 1,842 1,777 1,842 1,777 1,809
Economic occupancy rate, % 95 96 95 96 95 96
Vacancy rate, % 5 4 5 4 5 4
Surplus ratio, % 76 78 74 76 76 76
Carrying amount, SEK/sq.m. 32,438 31,877 32,438 31,877 32,438 32,114
Number of investment properties 1,458 1,338 1,458 1,338 1,458 1,362
Lettable area, sq.m. thousands 4,771 4,451 4,771 4,451 4,771 4,502
Profit from property management, attributable to parent company
shareholders, SEKm
1,161 1,028 2,249 1,993 4,500 4,244
Financial
Return on equity, % 7.4 4.7 11.0 6.8 16.9 12.4
Return on total assets, % 4.1 3.8 5.3 3.8 7.6 6.1
Interest coverage ratio, times 4.6 5.0 4.7 5.0 5.1 5.3
Equity/assets ratio, % 37.5 37.4 37.5 37.4 37.5 38.6
Debt/equity ratio, times 1) 1.5 1.4 1.5 1.4 1.5 1.3
Net debt to total assets, % 1) 44.6 48.3 44.6 48.3 44.6 46.1
Net debt/EBITDA, times 1) 13.7 13.1 14.2 13.5 14.2 13.2

1) The key figures for 31 December 2020 include SEK 3,009m which is included in Other liabilities and relates to obligation regarding purchase of shares in Entra ASA.

CONDENSED PARENT COMPANY INCOME STATEMENT

SEKm 2021
April-June
2020
April-June
2021
Jan-June
2020
Jan-June
2020/2021
July-June
2020
Jan-Dec
Net sales 108 93 211 191 369 349
Administrative costs –107 –92 –209 –191 –372 –353
Operating profit 1 1 1 –0 –2 –4
Profit from financial items
Dividends from subsidiaries
3 975 3 975 3 975
Other net financial items 604 1,341 1 138 1,462 1,599
– of which exchange rate differences 349 1,283 –286 –6 505 785
– of which unrealised change in value of long-term financial asset 462 462
Changes in value of derivatives 23 –50 290 –221 370 –141
Profit before appropriations and taxes 630 2,267 296 891 1,833 2,429
Appropriations
Group contributions –821 –821
Profit before tax 630 2,267 296 891 1,012 1,608
Income tax –97 –266 –25 17 –35 7
Net profit for the period/year 1) 533 2,001 271 909 978 1,615

1) The parent company has no items reported in other comprehensive income and therefore total comprehensive income for the period/year is equal with net profit for the period/year.

CONDENSED PARENT COMPANY BALANCE SHEET

SEKm 2021
30 June
2020
30 June
2020
31 Dec
Assets
Property, plant and equipment 22 24 22
Financial non-current assets 26,097 13,866 20,710
Receivables from Group companies 61,861 55,949 57,787
Current receivables 296 293 184
Cash and cash equivalents and financial investments 14,004 2,806 3,437
Total assets 102,282 72,938 82,140
Shareholders' equity and liabilities
Shareholders' equity 17,069 13,161 16,798
Interest-bearing liabilities 54,121 48,506 46,366
–of which Hybrid capital 8,606 3,668 3,513
Liabilities to Group companies 29,932 9,988 14,419
Derivatives 477 847 767
Other liabilities 683 435 3,790
Total equity and liabilities 102,282 72,938 82,140

THE SHARE AND OWNERS

Balder's share is listed on Nasdaq Stockholm, Large Cap segment. The company's market capitalisation as of 30 June amounted to SEK 100,151m (63,918).

The principal owner in Fastighets AB Balder is Erik Selin Fastigheter AB, which owns 35.1 % (36.4) of the capital and 48.8 % (49.9) of the votes. Foreign ownership amounts to approximately 33 % (28) of outstanding shares.

The share

At the end of the period, approximately 21,400 shareholders (24,000) held shares. During the period, approximately 32.3 million shares were traded (78.0) which corresponds to an average of about 262,000 shares per trading day (635,000). The annual turnover rate amounted to 35 % (87). The price of the share was SEK 537.00 (355.10) on 30 June, corresponding to an increase of 25 % since year-end.

Share capital

On 30 June, the share capital in Balder amounted to SEK 186,500,000 distributed among 186,500,000 shares. Each share has a quota value of SEK 1, where of 11,229,432 shares are of Class A and 175,270,568 of Class B. The total number of outstanding shares as of 30 June amounts to

186,500,000. Each Class A share carries one vote and each Class B share carries one tenth of one vote.

Annual General Meeting

The Annual General Meeting (AGM) of Fastighets AB Balder on 12 May 2021, resolved on the following matters, among others:

The AGM adopted the annual accounts for 2020 and resolved that no dividend shall be declared.

The AGM discharged the Board and the CEO from liability and reelected the Board members Christina Rogestam, Erik Selin, Fredrik Svensson, Sten Dunér and Anders Wennergren according to the nomination committee's proposal. Christina Rogestam was selected as Chairman.

The meeting resolved to authorise the Board, during the period until the next Annual General Meeting, on one or more occasion, to be able to decide on new issue of shares of Class B corresponding to not more than 20,000,000 shares.

The AGM further resolved during the period until the next Annual General Meeting, to authorise the Board on one or more occasion to decide on acquisition of own shares of Class B but that the combined holdings of own shares in the company may not exceed 10 % of all shares in the company.

OWNERSHIP LIST AS OF 30/06/2021

Total number
Owner A shares B shares of shares Capital, % Votes, %
Erik Selin via company 8,309,328 57,210,900 65,520,228 35.1 48.8
Arvid Svensson Invest AB 2,915,892 13,542,540 16,458,432 8.8 14.8
Swedbank Robur fonder 7,803,366 7,803,366 4.2 2.7
SEB Investment Management 6,853,427 6,853,427 3.7 2.4
Länsförsäkringar fondförvaltning AB 5,385,483 5,385,483 2.9 1.9
Handelsbanken fonder 5,213,674 5,213,674 2.8 1.8
AMF Försäkring och Fonder 4,093,402 4,093,402 2.2 1.4
Folksam 2,456,388 2,456,388 1.3 0.9
CBNY - Norges Bank 2,403,132 2,403,132 1.3 0.8
Livförsäkringsbolaget Skandia 1,776,600 1,776,600 1.0 0.6
Other 4,212 68,531,656 68,535,868 36.7 23.8
Total 11,229,432 175,270,568 186,500,000 100 100

DEVELOPMENT SHARE PRICE, NET ASSET VALUE AND PROFIT FROM PROPERTY MANAGEMENT

SHARE PRICE/NET ASSET VALUE & SHARE PRICE/PROFIT FROM PROPERTY MANAGEMENT

Share price/Net asset value (NAV) Share price/Profit from property management

DEFINITIONS

The company presents a number of financial metrics in the interim report that are not defined according to IFRS (so-called Alternative Performance Measures according to ESMA's guidelines). These performance measures provide valuable supplementary information to investors, the company's management and other stakeholders since they facilitate effective evaluation and analysis of the company's financial position and performance. These alternative performance measures are not always comparable with

FINANCIAL

Return on equity, %

Profit after tax in relation to average equity. The values were converted to a full-year basis in the interim accounts without taking account of seasonal variations that normally arise in the operations and with the exception of changes in value.

Return on total assets, %

Profit before tax with addition of net financial items in relation to average balance sheet total. The values were converted to a full-year basis in the interim accounts without taking account of seasonal variations that normally arise in the operations and with the exception of changes in value.

Net debt to total assets, %

Net debt in relation to total assets.

EBITDA

Profit from property management with addition of profit from sales of development properties with reversal of net financial items. In the interim financial statements, EBITDA was converted to a full-year basis, with the exception of profit from sale of development properties.

Profit from property management, SEKm

Profit including changes in value and tax in associated companies with reversal of changes in value and tax as regards participation in profits of associated companies. When calculating profit from property management before tax attributable to parent company shareholders, the profit from property management is also reduced with the non-controlling interests' share.

Average interest, %

Net financial items in the period recalculated to annual value in relation to the average interest-bearing liabilities.

Hybrid capital

A bond with a maturity of 60 years. The bond is reported as interest bearing liability but is treated as 50 % equity by the rating agencies.

Net debt, SEKm

Interest-bearinging liabilities decreased by cash and cash equivalents, financial investments and 50 % of Hybrid capital which is treated as 50 % equity by the rating agencies.

Interest coverage ratio, times

Profit including changes in value and tax in associated companies with reversal of net financial items excluding ground rents and changes in value and tax as regards participation in profits of associated companies, in relation to net financial items excluding ground rents.

Debt/equity ratio, times

Interest-bearing liabilities decreased by 50 % of Hybrid capital in relation to shareholders' equity.

Equity/assets ratio, %

Shareholders' equity including non-controlling interests and 50 % of Hybrid capital in relation to the balance sheet total at the end of the period.

measures used by other companies and shall therefore be considered as a complement to measures defined according to IFRS. Fastighets AB Balder will apply these alternative performance measures consistently over time. The key ratios are alternative performance measures according to ESMA's guidelines unless otherwise stated. A description follows below of how Fastighets AB Balder's key ratio's are defined and calculated.

SHARE RELATED

Equity per share, SEK

Shareholders' equity in relation to the number of outstanding shares at the end of the period.

Profit from property management per share, SEK

Profit from property management attributable to the parent company shareholders divided by the average number of outstanding shares.

Average number of shares

The number of outstanding shares at the start of the period, adjusted by the number of shares issued during the period weighted by the number of days that the shares have been outstanding in relation to the total number of days during the period.

Long term net asset value per share (NAV), SEK

Equity per share with reversal of interest rate derivatives and deferred tax according to balance sheet.

Profit after tax per share, SEK

Profit attributable to the parent company shareholders in relation to average number of shares.

PROPERTY RELATED

Yield, %

Estimated net operating income on an annual basis in relation to the fair value of the properties at the end of the period.

Net operating income, SEKm

Rental income less property costs.

Economic occupancy rate, % 1)

Contracted rent for leases which are running at the end of the period in relation to rental value.

Development properties

Refers to properties constructed with the intention of being divested after completion.

Real estate portfolio

Refers to both investment properties and development properties.

Property category

Classified according to the principal use of the property. The break-down is made into office, retail, residential and other properties. Other properties include hotel, educational, care, industrial/warehouse and mixed-use properties. The property category is determined by what the largest part of the property is used for.

Property costs, SEKm

This item includes direct property costs, such as operating expenses, utility expenses, maintenance and property tax.

Investment properties

Refers to properties that are held with the objective of generating rental income or an increase in value or a combination of these.

Rental value, SEKm 1)

Contracted rent and estimated market rent for vacant premises.

Surplus ratio, %

Net operating income in relation to rental income.

1) The key ratio is operational and is not considered to be a alternative key ratio according to ESMA's guidelines.

CONTACT

For additional information, please contact CEO Erik Selin, telephone +46 706 074 790 or Head of Finance Marcus Hansson, telephone +46 768 369 848.

FINANCIAL INFORMATION

Overall information about the company's operations, board of directors and management, financial reporting and press releases, may be found on Balder's website, balder.se.

CALENDAR

Interim report Jan-Sep 2021 11 November 2021 Year-end report 2021 11 February 2022

This report is a translation of the Swedish Interim Report January-June 2021. In the event of any disparities between this report and the Swedish version, the latter will have priority.

FASTIGHETS AB BALDER (PUBL) BALDER.SE · [email protected] · ORG.NR: 556525-6905

HEAD OFFICE Parkgatan 49 · Box 53 121 · 400 15 Gothenburg ·
Tel: +46 31-10 95 70 ·
LETTING Tel: +46 20-151 151
CUSTOMER SERVICE Tel: +46 774-49 49 49
REGION
GOTHENBURG Parkgatan 49 · Box 53 121 · 400 15 Gothenburg · Tel: +46 31-10 95 70
Timmervägen 9 A · 541 64 Skövde · Tel: +46 500-47 88 50
HELSINKI Panuntie 4 · PO Box 401 · 00610 Helsinki · Tel: +358-201 34 4000
NORTH Forskarvägen 27 · 804 23 Gävle · Tel: +46 26-54 55 80
Sandbäcksgatan 5 · 653 40 Karlstad · Tel: +46 54-14 81 80
Affärsgatan 4 D · 862 31 Kvissleby · Tel: +46 60-52 45 50
STOCKHOLM Tulegatan 2A · 113 58 Stockholm · Tel: +46 8-735 37 70
Vårby Allé 18 · 143 40 Vårby · Tel: +46 8-735 37 70
SOUTH Kalendegatan 26 · 211 35 Malmö · Tel: +46 40-600 96 50
Esplanaden 15 · 265 34 Åstorp · Tel: +46 42-569 40
Bryggaregatan 7 · 252 27 Helsingborg · Tel: +46 42-17 21 30
COPENHAGEN Vesterbrogade 1 E, 5. sal · 1620 København V · Tel: +45-88 13 61 51
EAST Hospitalsgatan 11 · 602 27 Norrköping · Tel: +46 11-15 88 90
Rönnbergagatan 10 · 723 46 Västerås · Tel: +46 21-10 98 90

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