Wallenstam — Interim / Quarterly Report 2023

Oct 20, 2023

WALLENSTAM

Interim Report

JANUARY 1–SEPTEMBER 30, 2023

January 1–September 30, 2023

• The equity/assets ratio amounted to 46 percent and the loan-to-value ratio was 46 percent.
• Investment in construction of properties amounted to SEK 1,861 million (1,991).
• On closing day, 1,163 apartments were under construction.
• Rental income amounted to SEK 2,036 million (1,863).
• Income from property management amounted to SEK 828 million (993).
• Changes in value of investment properties amounted to SEK -810 million (374).
• Changes in value of financial instruments amounted to SEK -12 million (1,723).
• Profit before tax amounted to SEK 95 million (3,497) and profit after tax amounted to SEK 42 million (2,904), equivalent to SEK 0.1 per share (4.4).
• Net asset value per share amounted to SEK 57.20 (61.50).

July 1–September 30, 2023

• Rental income amounted to SEK 697 million (626).
• Income from property management amounted to SEK 297 million (343).
• Changes in value of investment properties amounted to SEK -199 million (0).
• Profit after tax amounted to SEK 212 million (754), equivalent to SEK 0.3 per share (1.1).

Comparisons in brackets refer to the corresponding period of the previous year for performance measures, and the latest year-end for balance sheet measures, unless otherwise stated.

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HANS WALLENSTAM, CEO

Good position in a turbulent global climate

"A long-term approach and low risk-taking characterize Wallenstam and I can see that we really benefit from that now in a less favorable global climate. We have prepared well, financially and organizationally but also in terms of the composition of our property holdings."

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Wallenstam in brief

Number of investment properties: 207
Value of investment properties: SEK 63 billion
Market capitalization: SEK 24 billion
Occupancy rate, lettable area: 96%
Lettable area: 1.4 million sq m
Number of apartments under construction: 1,163
Number of wind turbines: 53

46 percent

EQUITY/ASSETS RATIO

Read more about Wallenstam on page 22.

Events third quarter

During the quarter, 75 apartments were completed in four different projects in Gothenburg, Härryda and Uppsala. In a reconstruction project in the property Kvillebäcken 5:6 on Lantmätaregatan in Gothenburg, 18 new rental apartments were completed. The property, which comprises a total of 37 apartments, was part of the transaction that Wallenstam carried out with Ikano Bostad in 2022, and it was vacated on September 29, 2023, according to agreement. In Uppsala, 33 rental apartments were completed in the Bersån development project, which is now fully completed, as well as 16 rental apartments in the Kompositören project. In addition to this, eight co-op terraced houses in the Pixbo Sjöterrass project in Härryda Municipality were completed, and sales have commenced.

Two public use properties, a nursery school and a school with a total combined floor space of about 7,000 sq m, were also completed in the urban development project Kallebäcks Terrasser during the quarter.

A sports hall in Mölnlycke Fabriker has been sold to Härryda Municipality for SEK 37 million. The property was vacated on September 4, 2023.

Business plan 2030 – Goal: Achieve a net asset value of SEK 100 per share

During the business plan 2030, Wallenstam has a goal of increasing the net asset value through a continued productive, cost-efficient and service-oriented business in the growth regions of Gothenburg, Stockholm and Uppsala. Successful letting, efficient management, value-creating investments, profitable new construction and profitable transactions will contribute to this net asset value growth. During the business plan, the equity/assets ratio shall not be less than 35 percent.

On September 30, 2023, the net asset value per share amounted to SEK 57.20 (61.50).

WALLENSTAM | INTERIM REPORT JAN 1 – SEP 30, 2023

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Comments by the CEO

Our driving force

To create functioning, safe meeting places, provide new housing, supply commercial premises for companies to conduct their businesses in – this is our mission in society and our driving force as a company. We want to play our part in contributing to solutions to the societal challenges that exist in our business sector. Therefore we do not focus only on ownership. We create new buildings, new areas, new city silhouettes. Urban development projects become new districts, such as Mölnlycke Fabriker, Kallebäcks Terrasser, Umami Park and Ålta Torg. When we construct one or a few buildings in an existing area, we further develop and supplement what was already in place. We are proud of the fact that what we construct and develop has a societal benefit! And what we do, we should do in a profitable and sustainable way.

Several completed projects

In Kallebäcks Terrasser, we have completed a school and a nursery school just in time for the start of term. With 700 children in both the school and nursery school, this creates a sense of vibrancy and life, which feels really great! To date, tenants have also moved into 1,000 apartments, which we have constructed in the new district. A number of other businesses such as a convenience store, healthcare center, restaurants and a bakery are already established or will open shortly. Soon another 500 apartments will be ready for occupation, and a further 500 apartments will be constructed in the future before this fantastic area is fully completed.

Many people are noticing our refinement of the property on Birger Jarlsgatan in Stockholm and I can now also tell you that the restaurant Noema will open in the entrance floor in November! We are just in the final stage of the reconstruction and renovation work. The restaurant will be a wonderful meeting place and, I hope, an appreciated part of the area!

Hans tested our assets

We have very good assets in extremely attractive areas in the two metropolitan regions Gothenburg and Stockholm. When my namesake, storm Hans, brought gales and extreme amounts of rain over Sweden in August, it was a real stress test for our properties. We received a confirmation that the buildings stood solidly and without damage. Despite this, we naturally see challenges with the climate transition and we are working with climate hedging measures in both our new construction and existing holdings in order to be able to withstand future extreme weather events. On the sustainability side, energy efficiency improvements are also in focus where we are making investments to improve the energy classification of our properties.

Stable financing

Wallenstam has a stable financial situation, with a strong equity/assets ratio and a low loan-to-value ratio. Maintaining and strengthening our balance sheet is something we have worked with for a long time and even focused on during the so-called "good times". Even before interest rates started to rise, we chose to hedge our loans with interest rate derivatives which means that about 60 percent of our loans are now hedged for an average period of about 5 years. In combination with a microscopically small share of bond loans and the fact that we chose not to have any rating, I can state that we have created such a stable and comfortable position with regard to our financial situation that we can concentrate wholeheartedly on our business – our properties and our customers.

Strong demand

Demand for housing is enormous and there is also strong demand for our commercial premises. We can see that the decision-making time among our potential commercial customers has become longer, which is completely normal in times like these. However, the business sector in the Gothenburg region has performed very positively with both new establishments and expanding companies. Visitor flows in the city are also returning to pre-pandemic levels. This feels positive!

Good position in a turbulent global climate

A long-term approach and low risk-taking characterize Wallenstam and I can see that we really benefit from that now in a less favorable global climate. We have prepared well, financially and organizationally but also in terms of the composition of our property holdings. We are now in a consolidation phase until conditions change and in the meantime we are working on finding opportunities and preparing for new construction starts as soon as the opportunity arises, hopefully already in the coming year. We create value, both for society at large and for the individual, and this is our real driving force!

Hans Wallenstam, CEO

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Consolidated income statement

SEK million	Jan-Sep 2023	Jan-Sep 2022	Jul-Sep 2023	Jul-Sep 2022	Oct-Sep 2022/2023	Jan-Dec 2022
Rental income	2,036	1,863	697	626	2,663	2,490
Operating expenses	-518	-423	-151	-129	-697	-602
Net operating income, properties	1,519	1,440	547	498	1,967	1,888
Management costs and administrative expenses	-218	-204	-67	-60	-286	-272
Financial income	3	4	2	1	5	6
Financial expenses	-475	-247	-184	-97	-598	-370
Income from property management	828	993	297	343	1,087	1,252
Participation in profits/losses of associated companies	-2	-1	-1	0	-4	-3
Revenue, development property sales	24	62	2	25	41	79
Expenses, development property sales	-13	-28	0	-10	-34	-49
Other income	205	199	49	35	289	283
Other expenses	-128	-113	-36	-30	-171	-156
Financial expenses, other	-28	-11	-10	-3	-31	-14
Profit before changes in value and impairment losses	886	1,100	300	360	1,178	1,392
Change in value, investment properties	-810	374	-199	0	-3,811	-2,627
Change in value, financial instruments	-12	1,723	112	311	-89	1,646
Change in value, synthetic options	-29	-	0	-	-29	-
Reversal of impairment loss on wind turbines	59	300	-	300	59	300
Profit before tax	95	3,497	214	970	-2,691	711
Current tax	0	-3	0	-1	-1	-4
Deferred tax	-53	-589	-2	-215	933	397
Profit after tax	42	2,904	212	754	-1,759	1,103
DISTRIBUTION OF PROFIT AFTER TAX
Profit attributable to shareholders in the parent company	42	2,904	212	754	-1,759	1,103
Average number of outstanding shares, thousands	658,645	660,000	658,500	660,000	658,893	659,904
Profit after tax per share (SEK), dilution does not occur	0.1	4.4	0.3	1.1	-2.7	1.7

Other comprehensive income, condensed

SEK million	Jan-Sep 2023	Jan-Sep 2022	Jul-Sep 2023	Jul-Sep 2022	Oct-Sep 2022/2023	Jan-Dec 2022
Items that may be transferred to profit/loss for the period	-	0	-	-	-	0
Tax attributable to other comprehensive income	-	0	-	-	-	0
Comprehensive income	42	2,904	212	754	-1,759	1,103

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Comments on the consolidated income statement

JULY 1-SEPTEMBER 30

Rental income in the third quarter amounted to SEK 697 million (626), an increase of 11 percent or SEK 71 million, of which the majority came from comparable holdings, SEK 51 million. Newly constructed properties and larger projects added a further SEK 33 million. In late 2022, a number of properties were divested, which comparatively resulted in SEK 14 million in lower income during the third quarter of 2023.

Operating expenses amounted to SEK 151 million (129), an increase of SEK 22 million compared to the same quarter last year. Just over half of the increase was due to higher electricity prices in 2023 and the remainder was a result of general price increases. However, since the Group is a net electricity producer, the higher electricity expenses in our property operations do not mean a cost increase for the Group overall as an equivalent increase in revenue is found under other income. Net operating income increased by almost 10 percent and amounted to SEK 547 million (498), which corresponds to a surplus ratio in the quarter of 78.4 percent (79.5).

Net financial items investment properties amounted to SEK -183 million (-95) and increased due to the higher STIBOR rate. Capitalized interest amounted to SEK 35 million (22). Income from property management amounted to SEK 297 million (343).

In September, SEK 20 million was received in electricity support from the Swedish Government. This support relates to the Group's business but just over SEK 9 million has already been passed on as discounts to tenants with submetering. This part of the support is reported against income from property management and the remainder as Other income.

Changes in value of properties amounted to SEK -199 million (0) mainly due to write-downs in future projects. The properties' yield requirements are unchanged compared to the previous quarter.

Swap interest rates have risen during the quarter, which resulted in a positive change in value on our interest rate derivatives of SEK 116 million (310).

Profit after tax for the third quarter of 2023 amounted to SEK 212 million (754), which corresponds to earnings per share of SEK 0.3 (1.1).

JANUARY 1-SEPTEMBER 30

Income from property management amounted to SEK 828 million (993). Profit after tax for the period amounted to

SEK 42 million (2,904), which corresponds to earnings per share of SEK 0.1 (4.4).

Rental income

Rental income for the period increased by SEK 174 million and amounted to SEK 2,036 million (1,863). Adjusted for transactions, the increase was SEK 213 million where just over 40 percent came from added properties and larger projects and the remainder from comparable properties. The increase in comparable holdings primarily consisted of rent increases from indexations and rent negotiations as well as higher extra charges due to increased property tax and higher electricity prices.

The year's rent negotiations for the residential holdings are mainly effective from the first quarter of 2023. On average, the year's agreements mean a rent increase for apartments of 3.3 percent in total.

The rents in the commercial holdings were impacted by indexations and new lettings. In comparable holdings, the base rent for commercial increased by 9.1 percent compared to the previous year.

Wallenstam's revenue is evenly distributed between residential properties and commercial premises. The residential property holdings are fully let. Our commercial properties are mainly situated in central locations in Gothenburg, with offices as the largest type of commercial premises. The surrender rate, which reflects how large a proportion of the cancellable leases are extended, amounted to 89 percent (90). Our occupancy rate for commercial in terms of lettable area amounted to 91 percent on closing day which is unchanged compared to the previous quarter. In Gothenburg, where the majority of our commercial floor space is located, the occupancy rate is 93 percent.

In September, the Group received support from the Swedish Government of SEK 20 million for electricity, of which the part that was equivalent to the discounts provided is reported against the properties' income, just over SEK 9 million in total, and the remainder is reported against Other income.

Operating expenses & Net operating income

Seasonal effects at Wallenstam consist mainly of variable operating expenses, which are usually highest during quarters one and four when expenses for heating and property maintenance are generally higher.

RENTAL INCOME AND INCOME FROM PROPERTY MANAGEMENT

NET OPERATING INCOME AND SURPLUS RATIO

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Operating expenses for the period amounted to SEK 518 million (423). Just over two thirds of the increase was due to higher electricity expenses as a result of higher electricity prices, which also led to increased expenses for non-deductible VAT. Since the Group is a net electricity producer, the higher electricity expenses in our property operations are offset by an equivalent increase in income within electricity revenue under Other income so the higher electricity expenses do not mean a cost increase for the Group overall. Weather-related expenses were SEK 4 million higher during the period compared to the same period in the previous year.

Net operating income increased by SEK 79 million. The surplus ratio amounted to 74.6 percent (77.3).

Management costs and administrative expenses

Management costs and administrative expenses totaled SEK 237 million (221) and are distributed among property management SEK 218 million (204), energy management SEK 9 million (4) and property transactions SEK 10 million (12).

Financial income & expenses

Financial income amounted to SEK 3 million (4) and financial expenses totaled SEK 510 million (258), and are distributed among investment properties in operation, expensed project-related interest and other which mainly consists of wind power and financial investments. Capitalized interest amounted to SEK 104 million (56).

The average debt for the period was SEK 0.7 billion higher than the same period last year and SEK 0.6 billion higher than year-end. The average interest rate was 2.76 percent compared to 1.40 percent in the same period last year, due to rising market interest rates.

Other income & Other expenses

Other income amounted to SEK 205 million (199) and other expenses totaled SEK -128 million (-113). The Group's electricity production as well as additional other income and expenses are recognized as other income and other expenses. For 2023, Swedish Government support for electricity is included of almost SEK 11 million while the previous year included non-recurring income of SEK 69 million from the sale of wind turbines.

The electricity price is higher compared with the same period of the previous year, and a share of the sales is made to the Group's own properties. Electricity production amounted to 200 GWh (252). The decrease in production was mainly due to the divestment of 13 wind turbines in May 2022 (39 GWh). In comparable holdings, production decreased by 13 GWh due to less wind in 2023.

Changes in value, investment properties

The change in value during the period amounted to SEK -810 million (374).

The average yield requirements on closing day amounted to 4.5 percent (4.5) for the commercial holdings and to 3.5 percent (3.0) for residential properties in operation. Compared to the previous quarter, the properties' yield requirements are unchanged. Added properties have a marginal impact on the average yield requirement. See also on page 8.

Change in value, financial instruments

The change in value of financial instruments includes changes in value of interest rate derivatives and holdings of listed and unlisted shares that constitute financial investments.

The value of interest rate derivatives developed positively during the period, SEK 29 million (1,957), due to rising interest rate levels. On closing day, the 10-year swap rate amounted to 3.44 percent, compared to 3.12 percent at the start of the year.

Change in value synthetic options

The AGM on May 3, 2023 resolved to introduce a synthetic options scheme of a maximum of 10,000,000 options directed to all personnel. The term of the scheme runs until March 1, 2027, and the expected cost in the event of a maximum outcome is SEK 350 million. At the start of the scheme in May 2023, personnel were invited to each receive 20,000-100,000 options. The value of the synthetic options varies with Wallenstam's share price. The option ceiling amounts to SEK 75 per share, which provides a value of SEK 30 per option in the event of a maximum outcome.

On closing day, the number of outstanding options amounted to 5,989,000, which were valued at SEK 21 million. Costs for social security contributions associated with the scheme amounted to SEK 7 million, which gave a total expense for the scheme of SEK 29 million (-).

Tax

The recognized tax for the period amounted to SEK -53 million (-592) net, of which SEK -53 million (-589) was deferred tax and SEK 0 million (-3) was current tax.

DISTRIBUTION, RENTAL VALUE

THE TEN LARGEST COMMERCIAL TENANTS BY FLOOR SPACE

Tenant	Floor space, sq m
City of Gothenburg	19,846
Essity Hygiene and Health AB	15,639
Filmstaden AB	14,508
The National Archives of Sweden	11,000
Västra Götaland County Council	10,832
Convendum AB	10,497
Frida Utbildning AB	8,088
Academedia AB	7,501
Ica Fastigheter AB	6,906
Svenska Handelsbanken AB	6,369
Total	111,186
Our total commercial floor space is approximately 530,000 sq m.

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Consolidated balance sheet, condensed

SEK million	Note	Sep 30, 2023	Sep 30, 2022	Dec 31, 2022
ASSETS
NON-CURRENT ASSETS
Investment properties	1	62,777	64,997	62,092
Site leasehold rights		505	472	500
Wind turbines		1,008	1,038	1,017
Land leases		9	10	9
Participations in associated companies		281	257	255
Financial assets		257	347	287
Financial derivative instruments		1,919	1,963	1,900
Other non-current assets		95	93	100
Total non-current assets		66,852	69,176	66,161
CURRENT ASSETS
Development properties		282	194	217
Other current assets		335	231	489
Cash and cash equivalents		275	34	181
Total current assets		891	460	887
Total assets		67,743	69,636	67,049
EQUITY AND LIABILITIES
EQUITY
Equity		31,257	33,474	31,432
Total equity		31,257	33,474	31,432
NON-CURRENT LIABILITIES
Deferred tax liability		6,009	6,948	5,963
Provisions		80	86	77
Interest-bearing liabilities		4,603	4,716	5,131
Financial derivative instruments		16	36	23
Lease liability		514	482	510
Other non-current liabilities		14	17	16
Total non-current liabilities		11,236	12,285	11,720
CURRENT LIABILITIES
Interest-bearing liabilities		24,582	23,171	23,151
Financial derivative instruments		-	3	3
Lease liability		1	1	1
Current tax liability		-	-	4
Other current liabilities		668	703	738
Total current liabilities		25,250	23,878	23,897
Total equity and liabilities		67,743	69,636	67,049

Note 1. Investment properties

SEK million	Sep 30, 2023	Sep 30, 2022	Dec 31, 2022
Investment properties in operation	57,886	59,681	55,862
Projects in progress, rental apartments	1,945	1,875	2,965
Land and projects for future new construction	2,946	3,441	3,265
Total investment properties	62,777	64,997	62,092

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Comments on the consolidated balance sheet

OUR PROPERTIES

Development during the period

During the period, we have invested a total of SEK 1,880 million (3,289), of which SEK 1,813 million (3,192) in investment properties and SEK 67 million (97) in development properties. New construction projects in progress involve 1,163 apartments. The total value of rental apartment and development projects in progress, including land and projects for future new construction, amounted to SEK 5.2 billion (6.4) on closing day.

The right of use value for land granted with site leasehold rights has been estimated at SEK 505 million (500).

Investment properties

In view of the increased risks due to uncertainty about deliveries, inflation and increased construction costs, no gradual value growth on new construction is reported in the first nine months of the year.

The average yield requirements on closing day amounted to 4.5 percent for the commercial holdings and to 3.5 percent for residential properties in operation. The equivalent information for the third quarter of 2022 was 4.5 percent for commercial and 3.0 percent for residential. Compared to the previous quarter, the properties' yield requirements are unchanged.

The value of investment properties amounted to SEK 62,777 million (62,092) at the end of the period.

Development properties

Development properties mainly consist of the projects Bersán in Uppsala, which by agreement will be handed over to ASPER upon completion in 2023, Pixbo Sjöterrass in Mölnlycke, construction of eight co-op terraced houses, where sales started during the third quarter of 2023, and Sóra radhus in Österåker, construction of 11 co-op terraced houses, where sales started during the first quarter of 2022. As of September 30, seven of the terraced houses in Österåker have been taken into possession. The book value of Development properties amounted to SEK 282 million (217) at the end of the period.

Our markets

The cities in which we do business are characterized by growth and heavy demand for housing. Only a minor proportion of our rental apartments become available for rent due to relocation, and demand for finished, newly built rental apartments is high. For example, we currently have about 270,000 people in our housing queue for new construction.

We build mainly rental apartments, but also cooperative apartments, when there is a need for mixed forms of tenure. Our flexible business model, where co-op apartment sales do not start until the project is approaching completion, makes it possible to convert a co-op apartment project into a rental apartment project if demand for co-op apartments is uncertain.

We see that demand for commercial floor space in central Gothenburg is still stable.

Valuation

Investment properties

Wallenstam measures all of its investment properties internally at fair value. We enjoy good market and property intelligence through active monitoring, which provides us with a firm basis for performing internal valuations of our property holdings. However, we must emphasize that the real value of properties only becomes a reality when they are sold, and therefore a valuation is always an estimation.

In its assessments of property values, Wallenstam has used different yield requirements. The yield requirements reflect market conditions and differ based on where the property is located and type of property (housing or offices, etc).

A valuation is calculated based on a property's net operating income including site leasehold rents, set in relation to the yield requirement for each property.

As our properties are valued separately, no consideration is given to the portfolio premium that may exist in the property market.

New constructions of rental properties are measured at fair value, which is determined as cost plus the estimated surplus on the completion date in relation to the degree of completion of the construction. This is in turn based on expenses incurred. The surplus value on new production is gradually recognized during the construction period.

Land rights and building rights for zoned land are measured at market value.

Development properties

Development properties are properties that we intend to construct in order to divest on completion, for example co-op apartment properties. Development properties are recognized at the lower of cost (investments incurred) and the estimated net realizable value. The profit/loss is recognized when the property or apartment is completed and handed over to the buyer.

CHANGE DURING THE YEAR, INVESTMENT PROPERTIES

	Book value, SEK million
Investment properties, January 1, 2023	62,092
+ Acquisitions	20
+ Construction	1,793
- Sales	-308
- Unrealized changes in value, properties	-820
Investment properties, September 30, 2023	62,777

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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NEW CONSTRUCTION IN PROGRESS, SEPTEMBER 30, 2023

Project	No. of apts.	Occupation*	Sq m**	of which occupied apts to date
STOCKHOLM
Älta Torg Kv. 1, Nacka	191	2024	21,000
Nacka Grace	169	2024	13,000
Ädellövet, Farsta	172	2025	8,500
UPPSALA
Kompositören, Rosendal	185	Q2 2023	9,000	34
GOTHENBURG
Kallebäcks Terrasser Kv. 5	182	2024	12,000
Kallebäcks Terrasser Kv. 6	298	2025	17,000
Commercial
Stampgatan, reconstruction and extension		2024	2,000
Total apartments in projects	1,197		82,500
of which in progress on September 30	1,163

• Refers to estimated start of occupation. Occupation will occur gradually, often over several quarters.
  ** Number of sq m includes garage, and is rounded off to the nearest 500.

CHANGE, CONSTRUCTION IN PROGRESS, APARTMENTS

	No. of apts.
New construction in progress, July 1, 2023	1,238
- Completed	-75
Pixbo Sjöterrass (terraced houses, co-op) (8)
Reconstruction, Lantmätaregatan (18)
Bersån, Uppsala (33)
Kompositören, Uppsala (16)
New construction in progress, September 30, 2023	1,163

APARTMENTS, CONSTRUCTION IN PROGRESS

PROPERTY HOLDING STRUCTURE AS OF SEPTEMBER 30, 2023

Lettable area, sq m	Residential sq m	Office sq m	Retail/ Restaurant/ Cinema sq m	Industry/ warehousing sq m	Education/ Care sq m	Garage sq m	Other sq m	Total	Distribution, place	No. of apts.
Stockholm	346,876	28,653	13,155	8,283	5,466	61,149	2,496	466,078	33%	5,853
Uppsala	26,512	145	462	12	532	3,454	-	31,117	2%	540
Gothenburg	330,652	228,298	94,602	91,266	47,504	98,940	7,640	898,902	65%	5,554
Total	704,040	257,096	108,219	99,561	53,502	163,543	10,136	1,396,097	100%	11,947
Distribution by type of premises	50%	18%	8%	7%	4%	12%	1%	100%

PROPERTY SALES

Name of property	Address	Year of construction	Residential sq m	Office sq m	Retail/ Restaurant/warehousing sq m	Education/ Care sq m	Garage sq m	Other sq m	Total sq m	No. of apts.
GOTHENBURG
Kvillebäcken 5:6	Lantmätaregatan 12A-D, 14A-C / Långängen 19	1954	2,089	114	559	-	-	-	2,762	37
UPPSALA
Dragarbrunn 20:6	Kungsgatan 47 A-E / Vaksalagatan 14	1938/2017	372	1,846	707	80	-	-	3,005	3
Total			2,461	1,960	1,266	80	-	-	5,767	40

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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FULLY COMPLETED NEW CONSTRUCTION

Name of property	Address	Year of construction	Residential sq m	Office sq m	Retail/Restaurant/Cinema sq m	Industry/warehousing sq m	Education/Care sq m	Garage sq m	Other sq m	Total sq m	No. of apts.
GOTHENBURG
Majorna 303:29*
(Project: Djurgårdsgatan)	Amiralitetsg. 2A-2B, 4-8 / Bang. 21-39 / Djurgårdsg. 26-40	2023	371	-537	-	-	-	-	-	-166	14
Kallebäck 18:6
(Project: Kallebäcks Terrasser Kv.7, Kedjan)	Separatorgatan 10, 12, 14, 16 / Skummjölksgatan 2, 4A, 4B, 4C, 6, 8	2022	9,291	-	381	-	-	-	-	9,672	189
Kallebäck 18:7
(Project: Kallebäcks Terrasser Kv.8, Utsikten)	Filmjölksgatan 1, 3, 5 / Skummjölksgatan 10,12,14, 16 / Separatorsgatan 6, 8	2021	14,259	-	153	-	-	705	-	15,117	266
Mölnlycke 1:164
(Project: Kv. Skogsvaktaren)	Disponentvägen 1-11	2023	7,228	-	-	-	-	322	-	7,550	128
Kallebäck 18:12
(Project: School, Kallebäcks Terrasser)	Smörkärnegatan 17-19	2023	-	-	-	-	1,260	-	-	1,260	0
Kallebäck 18:11
(Project: Nursery school, Kallebäcks Terrasser)	Kallebäcks Torggata 32-36	2023	-	-	-	-	5,319	-	-	5,319	0
Kvillebäcken 5:6*
(Project: Lantmäta regatan)	Lantmäta regatan 12A-D, 14A-C / Långängen 19	2023	839	-	-	-	-	-	-	839	18
Pixbo 1:294
(Project: Pixbo Sjöterrass, brf)	Rådavägen 2	2023	1,276	-	-	-	-	-	-	1,276	8
UPPSALA
Kvarngärdet 71:1
(Project: Bersån, development property)	Gamla Uppsalag 61A-E, Kantorsgatan 11-17	2023	4,943	82	78	12	-	870	-	5,985	98
Total		38,207	-455	612	12	6,579	1,897	-	46,852	721

*Reconstruction commercial premises to apartments

ACQUISITION, CONSTRUCTION AND SALES OF INVESTMENT PROPERTIES

MARKET VALUE

WIND POWER

On closing day, Wallenstam had 53 wind turbines in operation divided among 17 wind farms. The installed output amounted to 112 MW (143). Wind turbines are recognized at cost less depreciation and impairment losses.

On closing day, the consolidated book value of wind turbines amounted to SEK 1,008 million (1,017). During the second quarter of 2023, a reversal was made of a previously recognized impairment loss in electricity price zone 2 of SEK 59 million (-) as the write-down requirement no longer exists. During 2023, our process for identifying the expected electricity price has been updated. As an input for the electricity price, an average price is used based

on expectations of future electricity prices based on the Board's and Management's best estimate using external, independent, market data reports. The electricity price from the market data report forms the basis for estimation of the cash flow for the 2023-2030 period and an average growth rate of 1.5 percent (1.5) has subsequently been assumed. The yield requirement is 6 percent (6).

Estimated value in use of land leases, based on minimum rents, amounted on closing day to SEK 9 million (9). Depreciation for the period amounted to SEK 68 million (52). The increase was due to the reversal of previous impairment losses.

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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DEFERRED TAX

A net deferred tax liability of SEK 6,009 million (5,963) is recognized in the balance sheet, which consists of a deferred tax asset of SEK 963 million (907) and a deferred tax liability of SEK 6,973 million (6,870) where SEK 6,402 million (6,393) relates to temporary differences in property investments and SEK 571 million (477) relates to derivative instruments, site leasehold rights and wind turbines.

FINANCING

Equity

Shareholders' equity amounted to SEK 31,257 million (31,432), which is equivalent to SEK 47.50 per share (47.70). The equity/assets ratio was 46 percent (47).

Interest-bearing liabilities

Wallenstam has 97 percent of its financing in the form of traditional loans from Swedish banks and the European Investment Bank. The remainder of the financing consists of commercial paper and bond loans.

On closing day, total interest-bearing liabilities amounted to SEK 29,184 million (28,283). Of the liability, outstanding bond loans amounted to SEK 334 million (890), and the book volume of commercial paper, with a framework amount of SEK 4,000 million, amounted to SEK 430 million (1,034). Total interest-bearing liabilities consist of SEK 10.9 billion (8.8) green financing, of which SEK 10.6 billion (7.9) of green loans and SEK 0.3 billion (0.9) of green bonds, issued according to the terms of Wallenstam's green framework and within Wallenstam's then MTN program (Medium Term Notes). The bond loans are listed on Nasdaq Stockholm.

The average remaining fixed interest term is 37 months (44). Wallenstam uses interest rate derivatives to obtain a desired interest maturity profile. The first interest rate derivative maturity will occur in 2025, see table below. Of the loan portfolio, 57 percent (59) of the loans have fixed interest terms longer than one year. On closing day, the average interest rate on our loans was 3.14 percent compared to 2.21 percent at year-end.

Financing of the loan portfolio is mainly secured by mortgage deeds for properties. The bond loans, commercial paper and the loan from the EIB are unsecured. The commercial paper program has underlying credit commitments in the form of overdraft facilities. Covenants are issued for the loan from the EIB.

Lease liability

The recognized lease liability corresponds to the rights of use for land leases and site leasehold rights. The liability on closing day totaled SEK 515 million (511).

Derivative instruments

Wallenstam's financial derivative instruments consist of interest rate derivatives. On closing day, Wallenstam had a net receivable in respect of derivative instruments of SEK 1,903 million compared to SEK 1,874 million as of December 31, 2022.

The total volume of outstanding interest rate derivatives, where Wallenstam pays fixed interest, amounts to SEK 16.0 billion (16.3).

Interest rate derivatives are measured through discounting future cash flows at present value. Arising deficit or surplus values for interest rate derivatives, which reflect how the Group's hedged interest rates relate to the market rate of interest on closing day, are recognized in the balance sheet and as changes in value, financial instruments in the income statement.

Available liquid assets

Available liquid assets, including available bank overdraft facilities, amounted to SEK 1,510 million (2,093), of which SEK 435 million is allocated as back up for issued outstanding commercial paper. During the quarter, Wallenstam has chosen to reduce the overdraft facilities. Approved overdraft facilities amounted to SEK 1,325 million (1,912), where SEK 90 million (-) was used on closing day.

FIXED TERMS, AVERAGE INTEREST RATES, SEPTEMBER 30, 2023

Year	Amount, SEK million	Average interest rate, %	Proportion, %
2023	12,685	5.96	43.5
2024	-	-	-
2025	2,000	0.72	6.9
2026	2,000	0.78	6.9
2027	2,000	1.05	6.9
2028	2,000	1.16	6.9
2029	2,000	0.93	6.9
2030	2,000	0.95	6.9
2031	2,000	0.67	6.9
2032	2,000	1.31	6.9
2033	500	1.91	1.7
Total	29,184	3.14	100.0

ACCESSIBLE LIQUIDITY

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Consolidated statement of changes in equity

SEK million	– Equity attributable to parent company shareholders –
	Share capital	Other capital contributed	Other reserves	Profit brought forward	Total equity
Opening equity, Jan 1, 2022	165	359	-3	30,246	30,767
Profit after tax	-	-	-	2,904	2,904
TRANSACTIONS WITH SHAREHOLDERS
Dividends	-	-	-	-198	-198
Closing equity, Sep 30, 2022	165	359	-3	32,953	33,474
Opening equity, Jan 1, 2023	165	359	-3	30,911	31,432
Profit after tax	-	-	-	42	42
TRANSACTIONS WITH SHAREHOLDERS
Dividends	-	-	-	-198	-198
Repurchase of own shares	-	-	-	-19	-19
Closing equity, Sep 30, 2023	165	359	-3	30,736	31,257

Consolidated statement of cash flows, condensed

SEK million	Jan-Sep 2023	Jan-Sep 2022	Jul-Sep 2023	Jul-Sep 2022	Oct-Sep 2022/2023	Jan-Dec 2022
Profit before changes in value and impairment losses*	886	1,100	300	360	1,178	1,392
Adjustment for items not included in cash flow	28	-48	21	-2	60	-16
Change provisions	-	-43	-	8	-1	-44
Taxes paid	-5	-3	-	-1	-6	-4
Cash flow before change in working capital	910	1,007	321	365	1,230	1,328
Change in working capital	108	114	-81	-53	-134	-129
Cash flow from operating activities	1,018	1,120	240	312	1,097	1,199
INVESTMENTS/DIVESTMENTS
Investment in properties and individual co-op apartments	-1,882	-3,288	-488	-588	-3,156	-4,562
Investments in intangible assets and property, plant and equipment	-7	-14	-1	-2	-19	-27
Investments in financial assets	-16	-5	-	-	-16	-5
Divestment of financial assets	-	111	-	-	27	137
Investments in associated companies	-28	-41	-	-	-28	-41
Divestment of properties, development properties and property, plant and equipment	324	2,005	171	21	1,498	3,179
Cash flow from investing activities	-1,608	-1,232	-318	-569	-1,695	-1,318
FINANCING
Raised interest-bearing liabilities	20,025	14,349	6,302	2,589	28,835	23,159
Amortization of interest-bearing liabilities	-19,214	-14,327	-5,682	-3,286	-27,596	-22,709
Net change in overdraft facilities	90	32	-694	32	58	-
Net change promissory notes	-	58	-	-	0	58
Dividends paid	-198	-198	-	-	-396	-396
Repurchase of own shares	-19	-	-	-	-62	-43
Cash flow from financing activities	684	-86	-73	-664	839	69
Changes to liquid assets	94	-198	-150	-922	241	-51
Cash and cash equivalents at beginning of the period	181	232	425	955	34	232
Cash flow for the period	94	-198	-150	-922	241	-51
Cash and cash equivalents at the end of the period	275	34	275	34	275	181
Unutilized overdraft facilities at the end of the period	1,235	768	1,235	768	1,235	1,912
Available liquid assets	1,510	802	1,510	802	1,510	2,093

*Includes interest paid and received, including gross flows from interest rate swap contracts, of SEK-564 million (-299) and SEK 3 million (2) respectively, of which SEK 104 million (56) was capitalized as a non-current asset.

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Segments report

| Sep 30, 2023
SEK million | Gothenburg
Jan-Sep | Stockholm
Jan-Sep | Other
Jan-Sep | Elimination
Jan-Sep | Total
Jan-Sep |
| --- | --- | --- | --- | --- | --- |
| INCOME STATEMENT | | | | | |
| Rental income | 1,380 | 676 | 0 | -20 | 2,036 |
| Operating expenses | -340 | -178 | - | - | -518 |
| Net operating income | 1,040 | 498 | 0 | -20 | 1,519 |
| Management costs and administrative expenses | -133 | -81 | -24 | 20 | -218 |
| Net financial items | -339 | -155 | 22 | - | -472 |
| Income from property management | 568 | 262 | -2 | - | 828 |
| Unapportioned items | | | | | |
| Participation in profits/losses of associated companies | | | | | -2 |
| Sales result, development properties | | | | | 11 |
| Other income and expenses | | | | | 77 |
| Financial expenses, other | | | | | -28 |
| Profit before changes in value and impairment losses | | | | | 886 |
| Changes in value | | | | | -791 |
| Profit before tax | | | | | 95 |
| BALANCE SHEET | | | | | |
| Investment properties | 40,609 | 22,147 | 21 | - | 62,777 |
| Site leasehold rights | 52 | 453 | - | - | 505 |
| Wind turbines | - | - | 1,008 | - | 1,008 |
| Land leases | - | - | 9 | - | 9 |
| Development properties | 60 | 222 | - | - | 282 |
| Unapportioned assets | - | - | - | - | 3,162 |
| Total assets | | | | | 67,743 |
| Equity | - | - | - | - | 31,257 |
| Interest-bearing liabilities and lease liabilities | 17,566 | 10,360 | 1,773 | - | 29,700 |
| Unapportioned liabilities | - | - | - | - | 6,786 |
| Total equity and liabilities | | | | | 67,743 |
| Property investments in progress including land | 2,048 | 3,125 | - | - | 5,173 |
| Sep 30, 2022
SEK million | Gothenburg
Jan-Sep | Stockholm
Jan-Sep | Other
Jan-Sep | Elimination
Jan-Sep | Total
Jan-Sep |
| INCOME STATEMENT | | | | | |
| Rental income | 1,254 | 629 | 0 | -20 | 1,863 |
| Net operating income | 981 | 479 | 0 | -20 | 1,440 |
| Income from property management | 649 | 315 | 30 | - | 993 |
| Unapportioned items | | | | | |
| Participation in profits/losses of associated companies | | | | | -1 |
| Sales result, development properties | | | | | 34 |
| Other income and expenses | | | | | 86 |
| Financial expenses, other | | | | | -11 |
| Profit before changes in value and impairment losses | | | | | 1,100 |
| Changes in value | | | | | 2,397 |
| Profit before tax | | | | | 3,497 |
| BALANCE SHEET | | | | | |
| Investment properties | 41,265 | 23,732 | - | - | 64,997 |
| Site leasehold rights | 52 | 420 | - | - | 472 |
| Wind turbines | - | - | 1,038 | - | 1,038 |
| Land leases | - | - | 10 | - | 10 |
| Development properties | 19 | 175 | - | - | 194 |
| Unapportioned assets | - | - | - | - | 2,924 |
| Total assets | | | | | 69,636 |
| Equity | - | - | - | - | 33,474 |
| Interest-bearing liabilities and lease liabilities | 17,645 | 9,436 | 1,289 | - | 28,370 |
| Unapportioned liabilities | - | - | - | - | 7,792 |
| Total equity and liabilities | | | | | 69,636 |
| Property investments in progress including land | 3,567 | 1,942 | - | - | 5,510 |

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Wallenstam's sustainability work

Climate targets 2023–2030

During fall 2022, Wallenstam’s new climate targets were validated by the Science Based Targets Initiative (SBTi). The climate targets mean that Wallenstam undertakes to reduce its direct emissions from combustion of fuels and refrigerant leakage in Scope 1 and to reduce its indirect emissions in Scope 2 from purchased energy. The targets also include reducing emissions in Scope 3 from the construction operations.

Environmentally certified properties

During the third quarter, the recently constructed property Kv. 10 Hållbarheten in Kallebäcks Terrasser was certified according to Miljöbyggnad Silver rating. At the end of the third quarter of 2023, Wallenstam now has a total of 15 properties certified according to Miljöbyggnad Silver level and three properties certified according to Miljöbyggnad iDrift (Environmental Building In-Use) Gold level.

CSRD

We are preparing the business and our processes for adaptation to the ESRS reporting standards according to the Corporate Sustainability Reporting Directive (CSRD) legal requirement. During the quarter, among other things, we have conducted training for the Board of Directors, Management and key people in the organization and we started the work on a double materiality assessment according to the CSRD.

WALLENSTAM | INTERIM REPORT JAN 1 – SEP 30, 2023

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The Wallenstam share

The Wallenstam B share is listed on Nasdaq Stockholm, Large Cap. During 2023, Wallenstam's share price has decreased by 16.6 percent. The property index OMX Stockholm Real Estate PI fell by 12.0 percent and the OMX Stockholm PI index rose by 1.7 percent during the same period.

At the end of the period, the Wallenstam share price was SEK 36.62 compared to SEK 43.90 at year-end 2022. The market capitalization was SEK 24,169 million (28,974) based on the total number of registered A and B shares. Equity per share amounted to SEK 47.50 (47.70).

Buyback

Wallenstam has a mandate from the Annual General Meeting to repurchase shares. During the first quarter of 2023, 500,000 shares were repurchased, and no shares were repurchased during the second or third quarters. On closing day, the company held a total of 1,500,000 repurchased shares, acquired at an average price of SEK 41.31 per share, including brokerage.

Dividend

The AGM resolved on a dividend of SEK 0.60 per share (0.60) for the financial year 2022, spread over two payment dates of SEK 0.30 each per share.

In May, SEK 198 million was disbursed to the shareholders. The next payment will take place in November. In 2022, a total of SEK 396 million was disbursed.

Turnover

During the period, the Wallenstam share had an average daily turnover on Nasdaq Stockholm of about SEK 25.6 million (37.2).

SHARE PRICE TREND Q4 2018-Q3 2023

AVERAGE SHARE LIQUIDITY PER DAY

SHAREHOLDINGS, SEPTEMBER 30, 2023

	A shares	B shares	Equity, %	Votes, %
Hans Wallenstam and family, and company	69,000,000	98,779,600	25.42	61.65
AMF - Insurance and funds		88,162,972	13.36	6.89
Henric and Ulrika Wiman		23,990,504	3.63	1.87
Agneta Wallenstam		23,368,000	3.54	1.83
Anna-Carin B Wallenstam and Anders Berntsson		21,529,200	3.26	1.68
David Wallenstam		17,040,276	2.58	1.33
Christian Wallenstam		16,000,000	2.42	1.25
Monica and Jonas Brandström		13,468,604	2.04	1.05
Bengt Norman		12,500,000	1.89	0.98
Elin Wallenstam Sjögren		12,261,480	1.86	0.96
Other owners		262,399,364	39.77	20.51
Total number of shares	69,000,000	589,500,000
Repurchased own shares*		1,500,000	0.23
Total registered shares	660,000,000		100.00	100.00
Total outstanding shares	658,500,000

The proportion of institutional ownership amounted to around 19 percent of equity and around 10 percent of the votes.
Foreign ownership amounted to around 11 percent of equity and around 5 percent of the votes.
* Refers to repurchased shares up to closing day. Repurchased shares do not carry voting rights.

Source: Euroclear Sweden AB

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Parent Company

The parent company's operations are focused on managing all of the Group's companies. In addition, the parent company owns a small number of properties.

Total revenue during the period amounted to SEK 426 million (399), of which rental income amounted to SEK 110 million (99).

The result was impacted by the item changes in value of derivative instruments, SEK 29 million (1,957). Profit after tax amounted to SEK 146 million (1,917).

Investments in intangible assets and property, plant and equipment during the period amounted to SEK 27 million (82). Parent company external loans amounted to SEK 11,277 million (11,406) on closing day.

Since the end of 2022, the parent company is part of a so-called income tax law commission with several subsidiaries, and is also part of a value added taxation group since January 2023.

INCOME STATEMENT, PARENT COMPANY

SEK million	Jan-Sep 2023	Jan-Sep 2022	Jan-Dec 2022
Management revenue	306	291	336
Rental income	110	99	132
Revenue, sales of renewable energy certificates	7	3	5
Other revenue	3	6	6
Total revenue	426	399	479
Management costs and administrative expenses	-307	-294	-396
Operating expenses	-32	-24	-38
Depreciation and impairment losses properties	-27	-22	-29
Expenses, sales of renewable energy certificates	-7	-4	-11
Expense, synthetic options scheme	-29	-	-
Other expenses	-3	-6	-7
Total expenses	-405	-348	-481
Operating income	21	50	-2
Profit/loss from participations in Group companies	5	227	224
Interest income and similar profit/loss items	857	457	550
Interest expenses and similar profit/loss items	-713	-333	-338
Changes in value, derivative instruments	29	1,957	1,908
Net financial items	178	2,308	2,343
Profit/loss after financial items	199	2,359	2,341
Appropriations	-	-	-194
Tax on net profit/loss	-53	-442	-40
Profit/loss after tax	146	1,917	2,107
OTHER COMPREHENSIVE INCOME
Changes in value, currency derivatives	-	0	0
Tax attributable to other comprehensive income	-	0	0
Comprehensive income	146	1,917	2,107

CONDENSED BALANCE SHEET, PARENT COMPANY

SEK million	Sep 30, 2023	Sep 30, 2022	Dec 31, 2022
Assets
Properties	1,377	1,392	1,383
Participations in Group companies	4,076	6,231	5,692
Financial derivative instruments	1,919	1,963	1,900
Receivables from Group companies	29,275	26,602	25,631
Other assets	162	108	113
Cash and cash equivalents	274	34	181
Total assets	37,083	36,329	34,901
Equity and liabilities
Equity	14,380	14,501	14,451
Provisions	80	424	28
Interest-bearing external liabilities	11,277	12,533	11,406
Liabilities to Group companies	11,207	8,708	8,870
Financial derivative instruments	16	39	26
Other liabilities	124	124	119
Total equity and liabilities	37,083	36,329	34,901

WALLENSTAM INTERIM REPORT JAN 1-SEP 30,2023

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Other information

OPPORTUNITIES & RISKS

Wallenstam’s opportunities and risks, and how we manage them, are presented in the 2022 Annual Report on pages 25–28. No significant changes in the management of these risks have occurred during 2023.

SENSITIVITY ANALYSIS

As of September 30, 2023, the estimated market value of the properties amounted to around SEK 63 billion. A change in value of plus/minus 10 percent is thus equivalent to about plus/minus SEK 6.3 billion. A general change of plus/minus 0.25 percentage points in property yield requirements is equivalent to about plus/minus SEK 4 billion, while a general change in revenue of 5 percent is equivalent to about plus/minus SEK 3.6 billion.

A change in the interest rate of plus/minus 50 points is equivalent to about plus/minus SEK 63 million in interest expenses.

TRANSACTIONS WITH RELATED PARTIES

Wallenstam’s related parties consist chiefly of Group and associated companies. Board members, company management and their families and the companies they control are also related parties. Transactions with related parties mainly consist of administrative fees and the renting of premises between Group and associated companies. Individuals related to Board members and the Group Management rent apartments and premises. Insurance services are purchased from companies where a member of Wallenstam’s Board of Directors is a Board member, for a total equivalent to about SEK 5 million in net expenditure for the year. The CEO is a joint owner (50 percent) of Aranea Holding AB. Aranea is a tenant of Wallenstam with an annual rental value equivalent to SEK 0.7 million.

A member of Wallenstam’s Board, through his own consulting company, sold consulting hours to Wallenstam for SEK 0.1 million.

Wallenstam’s involvement in environmental and social responsibility issues is described in more detail on pages 17–24 of the 2022 Annual Report. As part of its social responsibility work, the Wallenstam Group not only contributes financially to a number of organizations but also gives its time in the form of e.g. board work. As a result of such board positions, related party status arises in the case of the Rescue Mission in Gothenburg and Barn i Nöd (Swedish International Help for Children). During the year, the Rescue Mission in Gothenburg received contributions and discounts equivalent to SEK 3.3 million and Barn i Nöd received contributions of SEK 0.1 million. The Rescue Mission in Gothenburg and Barn i Nöd rent premises and apartments from Wallenstam equivalent to annual rental income of about SEK 6.4 million and SEK 0.1 million, respectively.

All transactions take place on market-related terms.

ROUNDING OFF

As a result of rounding off, figures presented in this report do not, in some cases, sum up exactly to the total and percentages may differ in order for them to correspond to the actual numerical data.

ACCOUNTING PRINCIPLES

This report was prepared in accordance with IAS 34. The accounting principles are unchanged compared to the 2022 Annual Report. The Parent Company’s accounting principles comply with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2.

New and amended standards and principles that entered into force on January 1, 2023 or subsequently are not expected to have any material impact on the Wallenstam Group’s financial statements.

EVENTS AFTER THE END OF THE REPORTING PERIOD

No events of material importance for the company’s position have occurred after the end of the reporting period.

WALLENSTAM | INTERIM REPORT JAN 1 – SEP 30, 2023

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Key ratios – multi-year summary

Accumulated during period	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021
PROPERTY-RELATED KEY RATIOS
Net operating income, properties, SEK million	1,519	972	462	1,888	1,440	942	459	1,763	1,322
Surplus ratio, property management, %	74.6	72.6	70.1	75.8	77.3	76.2	74.5	75.9	76.8
Income from property management, SEK million	828	532	265	1,252	993	650	322	1,280	968
Changes in value, investment properties, SEK million	-810	-611	0	-2,627	374	374	187	3,674	1,496
Value of investment properties, SEK million	62,777	62,671	62,712	62,092	64,997	64,441	63,392	63,480	60,485
Area, sq m (thousand)	1,396	1,386	1,356	1,356	1,342	1,342	1,314	1,330	1,306
Occupancy rate – lettable area, %	96	96	96	97	97	97	97	98	97
Development properties, net, SEK million	282	269	251	217	194	169	147	123	88
FINANCIAL KEY RATIOS
Profit after tax, SEK million	42	-170	48	1,103	2,904	2,150	1,207	4,717	2,650
Return on equity, %	-5.5	-3.8	-0.2	3.4	15.7	16.5	17.8	16.9	13.4
Return on total assets, %	-3.0	-2.1	-0.1	1.6	9.5	9.6	9.3	8.9	6.8
Interest coverage ratio, times (rolling 12 months)	2.9	3.3	4.1	4.7	5.5	6.1	6.1	6.1	6.1
Loan-to-value ratio, %	46	46	45	45	42	43	43	43	44
Average interest rate on closing day, %	3.14	2.98	2.61	2.21	1.84	1.43	1.34	1.17	1.22
Average fixed interest term, months	37	38	41	44	46	47	50	40	41
Equity/assets ratio, %	46	46	47	47	48	47	47	46	46
Equity, SEK million	31,257	31,045	31,461	31,432	33,474	32,720	31,975	30,767	28,899
Net asset value, SEK million	37,660	37,473	37,908	37,825	40,557	39,697	38,864	37,795	35,388
Market capitalization, SEK million	24,169	24,103	25,912	28,974	26,783	29,535	45,177	55,440	42,834
PER SHARE DATA
Profit after tax, SEK	0.1	-0.3	0.1	1.7	4.4	3.3	1.8	7.2	4.1
P/E ratio, times	Neg.	Neg.	Neg.	26.3	5.4	5.9	8.7	11.7	11.8
Cash flow from operating activities, SEK	1.5	1.2	0.8	1.8	1.7	1.2	0.6	1.5	1.1
Equity, SEK	47.50	47.10	47.80	47.70	50.70	49.60	48.40	46.60	44.20
Net asset value per share, SEK	57.20	56.90	57.60	57.40	61.50	60.10	58.90	57.30	53.60
Share price, SEK	36.62	36.52	39.26	43.90	40.58	44.75	68.45	84.00	64.90
Repurchased shares at end of period, thousands	1,500	1,500	1,500	1,000	-	-	-	-	-
Shares outstanding, average, thousands	658,645	658,719	658,875	659,904	660,000	660,000	660,000	655,334	653,778
Shares outstanding at end of period, thousands	658,500	658,500	658,500	659,000	660,000	660,000	660,000	660,000	660,000

Quarterly overview

	Jul-Sep 2023	Apr-Jun 2023	Jan-Mar 2023	Oct-Dec 2022	Jul-Sep 2022	Apr-Jun 2022	Jan-Mar 2022	Oct-Dec 2021	Jul-Sep 2021
Rental income, SEK million	697	679	660	627	626	620	616	603	585
Net operating income, properties, SEK million	547	510	462	448	498	483	459	441	462
Surplus ratio, property management, %	78.4	75.0	70.1	71.4	79.5	77.9	74.5	73.1	79.0
Income from property management, SEK million	297	267	265	259	343	328	322	312	358
Return on equity, %	-5.5	-3.8	-0.2	3.4	15.7	16.5	17.8	16.9	13.4
Interest coverage ratio, times	2.5	2.6	3.3	3.3	4.6	5.6	6.0	6.2	6.8
Earnings per share after tax, SEK	0.3	-0.3	0.1	-2.7	1.1	1.4	1.8	3.1	1.3
Cash flow per share from operating activities, SEK	0.4	0.4	0.8	0.1	0.5	0.6	0.6	0.4	0.5
Equity per share, SEK	47.50	47.10	47.80	47.70	50.70	49.60	48.40	46.60	44.20
Net asset value per share, SEK	57.20	56.90	57.60	57.40	61.50	60.10	58.90	57.30	53.60
Share price, SEK	36.62	36.52	39.26	43.90	40.58	44.75	68.45	84.00	64.90

Earnings-based key ratios are calculated on the average number of outstanding shares; yield figures are calculated on rolling twelve-month profit or loss.

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Report signatures

The Board and CEO certify that the interim report provides a fair view of the Parent Company's and Group's operations, financial position and results and describes the significant risks and uncertainties to which the Parent Company and Group Companies are exposed.

Gothenburg, October 20, 2023

Lars-Åke Bokenberger
Chairman of the Board

Karin Mattsson
Vice Chairman of the Board

Agneta Wallenstam
Board member

Mikael Söderlund
Board member

Rebecka Wallenstam
Board member

Hans Wallenstam
CEO

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Review report

To the Board of Directors of Wallenstam AB (publ)
Corp. id. 556072-1523

Introduction

We have reviewed the condensed interim financial information (interim report) of Wallenstam AB (publ) as of 30 September 2023 and the nine-month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

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

Göteborg

KPMG AB

Signed on the Swedish original

Mathias Arvidsson
Authorized Public Accountant

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Definitions

Share yield

The proposed dividend as a percentage of the share price at the end of the period.

Share total yield

The share price trend during the year including distributed dividend as a percentage of the share price at the start of the period.

Alternative performance measures (APM)

Wallenstam presents a number of financial measures that are outside IFRS definitions (Alternative performance measures, according to ESMA's guidelines) with the aim of enabling effective evaluation of the company's financial position and performance for investors and for the company's management. This means that these measures are not always comparable with measures used by other companies and shall therefore be considered as a complement to measures defined according to IFRS. Wallenstam applies these alternative key ratios consistently over time. The definitions describe how Wallenstam's key ratios are calculated. The key ratios are alternative performance measures according to ESMA guidelines unless otherwise stated.

The number of shares

The number of registered shares at any given time.

Number of shares outstanding: the number of registered shares less repurchased own shares at any given time.

Average number of shares: weighted average number of shares outstanding at any given time.

Return on equity**

Profit after tax on a rolling 12-month basis in relation to average equity.

Return on total assets**

Profit before tax with reversal of interest expenses for the latest rolling 12-month period in relation to average total assets.

Loan-to-value ratio

Interest-bearing liabilities and lease liability less cash and cash equivalents in relation to the Group's investments in properties, site leasehold rights, development properties, wind power and land leases at the end of the period.

Residential property

Property, which predominantly consists of residential space.

Market capitalization

Share price multiplied by the number of registered shares on the closing day.

Net operating income

Rental income less operating and maintenance expenses, and property tax.

Development property

A property that is constructed with the intention of being divested, either in its entirety or per share, upon completion.

Income from property management

Rental income from investment properties less operating expenses, management costs and administrative expenses and net financial items attributable to investment properties.

Average interest rate

Interest expenses for the period in relation to interest-bearing average debt.

Average yield requirement

Normalized net operating income in accordance with the valuation model in relation to the estimated market value of yielding investment properties.

Rental value*

Rental income and the estimated market rent for vacant space.

Cash flow per share

Cash flow for the period in relation to the average number of shares outstanding.

Cash flow from operating activities per share

Cash flow from operating activities for the period in relation to the average number of shares outstanding.

Commercial property

Property, which predominantly consists of commercial space.

P/E ratio

Share price at the end of the period, in relation to profit after tax per average number of outstanding shares for the latest rolling 12-month period.

Earnings per share after tax

Profit after tax in relation to the average number of outstanding shares.

Interest coverage ratio

Profit or loss before changes in value and impairment losses with reversal of net financial items in relation to net financial items.

Public use property

Property, which is predominantly used by tax funded activities and is specifically adapted for community services.

Equity/assets ratio

Equity in relation to total capital employed at the end of the period.

Net asset value

Equity with the addition of deferred tax liabilities related to investment properties.

Net asset value per share

The Group's net asset value in relation to the number of outstanding shares at the end of the period.

Occupancy rate – floor space

Let floor space in relation to total floor space, excluding garage, project properties and voluntary vacation.

Changes in value, investment properties

Profits or losses from sales of investment properties during the period less expenses and the assessed market value of the properties at the immediately preceding reporting period and profits or losses from the change in the assessed market value of investment properties compared to the immediately preceding reporting period.

Surrender rate

Proportion of commercial leases, which are extended in relation to the proportion of cancellable commercial leases.

Surplus ratio

Net operating income as a percentage of rental income.

For further information, please refer to: www.wallenstam.se/glossary

*Operational key ratios, are not considered alternative key ratios according to ESMA's guidelines.

** Bridge alternative performance measures	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021
Equity, SEK million	31,257	31,045	31,461	31,432	33,474	32,720	31,975	30,767	28,899
Average equity, SEK million	31,734	32,026	32,212	32,074	31,567	30,486	29,198	27,915	26,714
Total assets, SEK million	67,743	67,659	67,157	67,049	69,636	69,397	67,616	66,698	63,504
Average total assets, SEK million	67,849	68,180	68,171	68,079	67,370	66,028	64,482	63,075	61,531

For average values, add the latest five periods and divide by five.

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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This is Wallenstam

BUSINESS PLAN 2030

Goal

The net asset value shall amount to SEK 100 per share.

Focus areas

• We shall improve the customer's overall impression of Wallenstam every year through attractive apartments and premises as well as good service.
• We shall strive to ensure increased security for our customers that live and work in our properties.
• Through our strong corporate culture, we shall be an attractive employer and improve our Engagement Index score every year.

Defined key ratios

• The equity/assets ratio shall not be less than 35 percent.

VISION

Wallenstam shall be the natural choice for housing and premises.

BUSINESS CONCEPT

We develop and manage people's homes and workplaces based on a high level of service and long-term sustainability in selected metropolitan areas in Sweden.

WALLENSTAM TODAY

Wallenstam was founded in 1944 and its head office is located in Gothenburg. The company's B share is listed on Nasdaq Stockholm, Large Cap and Wallenstam is one of the larger listed property companies in Sweden.

Our residential properties are located in Stockholm, Uppsala and Gothenburg, while our commercial properties are concentrated towards inner city locations in Gothenburg. All in all, Wallenstam has approximately 12,000 apartments and 1,000 commercial tenants.

Wallenstam also builds rental apartments for its own management operations.

Wallenstam produces renewable electrical energy through 53 of its own wind turbines in operation. As we produce at least as much electrical energy as our properties consume, we are self-sufficient in renewable electricity.

Operations are conducted in the Stockholm business area and the Gothenburg business area.

Stockholm

The majority of our apartments, about 6,400, are located in the Stockholm business area. Approximately 550 of these apartments are located in Uppsala. On closing day, we had about 700 apartments under construction in the Stockholm business area.

Gothenburg

Our property holdings in the Gothenburg business area consist of around 5,600 apartments and about 900 commercial tenants that rent office and retail premises, mainly in inner city locations in Gothenburg. On closing day, the Gothenburg business area had about 500 apartments under construction.

BUSINESS PROCESS

Wallenstam builds, acquires, develops and manages properties and areas based on the needs of people and society, and according to wishes and requirements of customers. We create value growth through construction, development and management with a high level of service and long-term sustainability. Profits are reinvested and used to further develop the business. The shareholders receive a share of the value growth through these reinvestments and through dividends.

WALLENSTAM | INTERIM REPORT JAN 1 - SEP 30, 2023

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Calendar

Record day dividend no. 2 November 1, 2023
Expected disbursement of dividend no. 2 November 6, 2023
Year-end report 2023 February 8, 2024
Interim report Q1, 2024 April 24, 2024
Annual General Meeting 2024 April 25, 2024

This is information that Wallenstam is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 CEST on October 20, 2023.

Contact

For further information, please contact
Susann Linde, CFO and Head of IR
tel: +46 705-17 11 34
e-mail: susann.linde@wallenstam.se

in f