WALLENSTAM INTERIM REPORT - Cision · WALLENSTAM INTERIM REPORT JANUARY 1–MARCH 31, 2019 JANUARY...

WALLENSTAM INTERIM REPORTJANUARY 1–MARCH 31, 2019

JANUARY 1–MARCH 31, 2019

• Net asset value per share amounted to SEK 83.60 (75.80), which meant an increase of SEK 1.30 per

share in the quarter and SEK 4.40 per share to date during the business plan, where the goal is an

increase of SEK 40 per share through 2023.

• Income from property management increased by 20 percent and amounted to SEK 260 million (217).

• Rental income increased by just over 6 percent and amounted to SEK 497 million (467).

• Construction of properties amounted to SEK 770 million (451).

• On closing day, we had 2,933 apartments under construction.

• Changes in value of investment properties amounted to SEK 285 million (126).

• Profi t before tax amounted to SEK 416 million (397) and profi t after tax amounted to

SEK 340 million (310), equivalent to SEK 1.1 per share (1.0).

Comparisons in brackets refer to the corresponding period of the previous year unless otherwise stated.

“The profi t for the quarter is in line with our plan. Our income from property management increased by about 20 percent

compared to the same quarter last year and we created net asset value that added a further SEK 1.30 per share –

SEK 4.40 in total to date – on the way towards our goal of an increase in net asset value of SEK 40 per share through 2023.”

“In March, we started the largest project in Wallenstam’s history, Kallebäcks Terrasser. Here, we intend to build a mixed-use

district featuring 1,800 apartments, offi ce workplaces, shops and school, etc. We are fi nancially strong and are planning for

investments of about SEK 3 billion per year in new residential properties and we also have commercial projects at the plan-

ning stage, which can add more commercial fl oor space in central locations of the city.”

HANS WALLENSTAM, CEO

• No. of investment properties: 216 • Investment property value: SEK 47 billion • Market capitalization: SEK 31 billion • Occupancy rate, lettable area: 99% • Occupancy rate, lettable area: 1,2 million sq m

• No. of apts. under construction: 2,933 • No. of wind turbines: 66

Read more about Wallenstam on page 20.

IMPORTANT EVENTS FIRST QUARTER

WALLENSTAM IN BRIEF

During the quarter, construction started of 766 apartments in

four projects: 305 rental apartments in Söra Kvarter, Österåker,

50 co-op apartments in the New York block at Gärdet, Stock-

holm, 141 rental apartments in phase 2, Umami Park in Hal-

lonbergen, Sundbyberg and 270 rental apartments in Kallebäcks

Terrasser, Gothenburg.

Th e property Mässhaken 2 in Helsingborg was sold to

Willhem. Th is was the last property included in the agreement

entered into with Willhem in December 2015 on a gradual ac-

quisition by the company of Wallenstam’s properties in Helsing-

borg. Th e agreed property value amounted to SEK 229 million,

and the property was vacated on February 27, 2019.

In February, Wallenstam signed an agreement with SEB

Trygg Liv for the acquisition of a commercial property at Lo-

rensbergsgatan 2-4/Vasagatan 45 in the Avenyn area of central

Gothenburg, which was taken into possession on April 1, 2019.

In March, an agreement was signed with Jämtkraft, which

will take over electricity sales to end customers through the

company Svensk NaturEnergi from April 1, 2019. Th e transac-

tion does not include the wind farms, which will continue to be

owned by Wallenstam, which will produce and continue to be

self-suffi cient in renewable energy.

During the quarter, it was also confi rmed that Wallenstam

will be one of six construction and property companies that

together with Landvetter Södra Utveckling and Härryda Muni-

cipality will develop Landvetter Södra, an entirely new town for

at least 25,000 inhabitants.

GOAL 2023Goal 2023 – Increase in net asset value of SEK 40 per shareIn the business plan 2019-2023, Wallenstam’s goal is to deliver

an increase in net asset value of SEK 40 per share. Th e goal is

measured from October 1, 2018 when the net asset value per

share was SEK 79.20. On March 31, 2019, the net asset value

per share was SEK 83.60, which meant an increase of SEK 1.30

per share in the quarter and SEK 4.40 in total to date during the

business plan.

Net asset value Net asset value describes the Group’s total generated value and

includes equity and deferred tax liability and amounted to SEK

27,011 million (24,548) on closing day. Deferred tax liability

refers mainly to diff erences between carrying amounts and resi-

dual values for tax purposes in Group properties. A net deferred

tax liability of SEK 4,671 million (4,132) is recognized in the

balance sheet, which consists of a deferred tax asset of SEK 392

million (846) and a deferred tax liability of SEK 5,062 million

(4,978). Th e non-current net asset value (EPRA NAV), which

in addition to reversal of deferred tax liabilities also reverses the

eff ects of unrealized changes in value of derivatives, amounted to

SEK 27,210 million (25,123).

INCREASE IN NET ASSET VALUE SEK/SHARE

3.10

Q4 2018

20232022202120202019

40

30

20

10

0

2 WALLENSTAM | INTERIM REPORT JAN 1-MAR 31, 2019

Goal 2023: An increase in net asset value of SEK 40 per share

4.40

commercial projects at the planning stage, which can add more

commercial fl oor space in central locations of the city.

Our major urban development project in Umami, Sund-

byberg, has got off to a good start with Convendum’s coming

venture. Convendum’s establishment features several parts,

including a coworking center and a conference center, the “Big

Offi ce” concept, which off ers fl exible, larger premium offi ces with

an all-inclusive solution incorporating furniture, technology and

ancillary service. It also includes the “Coliving” concept, which

off ers fl exible corporate housing with an all-inclusive solution.

Residential and commercial strengthen each otherIn Umami, we have also recently conducted viewings for our

fi rst, soon ready for occupation, rental apartments in the area –

viewings that pleasingly attracted very strong interest. Th e com-

bination of residential and commercial in an area is the key to

what we call a mixed-use district, where the residential properties

provide the basis for services and a commercial off ering such as

restaurants, gyms, shops, while the commercial space contributes

to the attractiveness of the residential area. Th is mix leads to a

greater city pulse during all hours of the day – a lively city.

In March, we started the largest project in Wallenstam’s

history, Kallebäcks Terrasser. Here, we also intend to build a

mixed-use district featuring 1,800 apartments, offi ce workplaces,

shops and school, etc.

Our renewable energyIn March, it was announced that we are initiating cooperation

with Jämtkraft, which through a business transaction took over

Svensk NaturEnergi and its electricity customers from April 1.

Th is is taking place, in light of the increasingly complex rules

and regulations in the electricity trading market, among other

reasons. Th is is diffi cult for a smaller electricity company such

as Svensk NaturEnergi to manage and pay for by themselves. It

feels natural to initiate cooperation with Jämtkraft in particular,

which shares the same values as us when it comes to customer

service and renewable energy. It is important to point out that

Wallenstam still owns the wind farms and will also continue to

produce and be self-suffi cient in renewable energy.

Learn from history, live with a view to the future We have now also entered our anniversary year, where we will

celebrate the fact that Wallenstam, which was established in No-

vember 1944, is now turning 75! We are marking this through

our 75-year symbol and through various activities during the

year, highlighting small and major milestones in the company’s

history. Developments that contributed to where the company is

today, events that became the basis for our strategies, and stories

that demonstrate our roots and provide reassurance when we

take on new challenges. We learn from our history, but we live

with a view to our future.

Hans Wallenstam, CEO

Strong profi t in the fi rst quarterTh e profi t for the quarter is in line with our plan. Our income

from property management increased by about 20 percent com-

pared to the same quarter last year and we created net asset value

that added a further SEK 1.30 per share – SEK 4.40 in total to

date – on the way towards our goal of an increase in net asset

value of SEK 40 per share through 2023.

Interest expenses have essentially halved, still as a result of the

restructuring we carried out during 2018, where we redeemed

derivatives with a higher interest rate and entered into new de-

rivatives with a lower interest rate. I think that interest rates will

remain extremely low for a long time to come. Using derivatives,

we can secure a low interest rate for a long time in the unlikely

event that this situation should change. However, the interest

rate has fallen further from an already low level, which in our

income statement has generated a theoretical defi cit value in the

derivative portfolio.

Record number of apartments in productionChanges in value amounted to SEK 285 million, of which about

half came from our cost-effi cient new construction. Th ere were

a record number of construction starts during the quarter, some

766 apartments in total, and this means that we now have 2,933

apartments in production ‒ also a record number. Th is is great

in several respects – naturally because we are advancing our pro-

jects, but also the fact that these production starts will gradually

become new homes for many families, and not least because the

absolute majority are rental apartments, which we are building

for our own management operations.

Strong demand for commercial premisesOur commercial properties have also had a very good develop-

ment during the quarter. Th ere is still strong demand for our

commercial premises in the city of Gothenburg. Th e vacancy

rate remains very low, demand is high, and we are continuing to

densify with new commercial space in central areas such as the

Sturefors project in the Avenyn area, for example. We are fi nan-

cially strong and are planning for investments of about SEK 3

billion per year in new residential properties and we also have

COMMENTS BY THE CEO

.

H W ll t CEO


SEK million Note Jan-Mar

2019 Jan-Mar

2018 Apr-Mar

2018/2019Jan-Dec

2018

Rental income 497 467 1,940 1,910

Operating expenses -133 -126 -488 -481

Net operating income, properties 364 341 1,452 1,429

Management costs and administrative expenses -58 -52 -217 -211

Financial income 2 3 5 6

Financial expenses -48 -75 -185 -212

Income from property management 260 217 1,054 1,011

Realized changes in value, fi nancial instruments - - -767 -767

Income from natural energy management operations 1 10 7 -32 -35

Participation in profi ts/losses of associated companies -1 - -1 -

Revenue, development property sales 262 23 776 537

Expenses, development property sales -186 -20 -587 -421

Profi t before changes in value and impairment losses 345 228 441 324

Changes in value, investment properties 285 126 1,991 1,832

New construction 132 93 637 598

Other 153 33 1,354 1,234

Unrealized changes in value, fi nancial instruments -202 43 533 778

Unrealized changes in value, synthetic options* -12 - -25 -13

Impairment losses and reversals, wind turbines - - 524 524

Profi t before tax 416 397 3,464 3,445

Taxes -76 -87 -436 -447

Profi t for the period, after tax 340 310 3,028 2,998

OTHER COMPREHENSIVE INCOME

Items that may be transferred to profi t/loss for the period 1 0 1 0

Items that may not be transferred to profi t/loss for the period 0 0 2 2

Tax attributable to other comprehensive income -1 -1 -2 -2

Comprehensive income 340 309 3,029 2,998

DISTRIBUTION OF PROFIT FOR THE PERIOD

Profi t for the period attributable to parent company shareholders 340 310 3,028 2,998

Average number of outstanding shares, thousands 323,000 325,050 321,804 323,854

Profi t after tax, SEK per share; dilution does not occur 1.1 1.0 9.4 9.3

SEK million Jan-Mar

2019 Jan-Mar

2018 Apr-Mar

2018/2019Jan-Dec

2018

Electricity revenue 171 136 450 415

Electricity expenses -133 -90 -343 -300

Depreciation -19 -24 -90 -95

Management costs and administrative expenses -5 -9 -27 -31

Financial expenses -4 -7 -22 -25

Income from natural energy management operations 10 7 -32 -35

NOTE 1 – INCOME FROM NATURAL ENERGY MANAGEMENT OPERATIONS

CONSOLIDATED INCOME STATEMENT


JANUARY 1–MARCH 31

Rental incomeRental income for the period increased by SEK 30 million,

which is equivalent to just over 6 percent and amounted to SEK

497 million (467). Growth in rental income during the period

was mainly the result of occupations in our recently construc-

ted rental properties as well as renegotiated rental rates. Rental

income included re-invoicing of increased property tax of just

over SEK 2 million.

Our residential property holdings are fully let. Rent negoti-

ations for the year for residential properties are in progress. In

the negotiations concluded in Stockholm to date, an average

increase of 2 percent was agreed.

We are experiencing strong and stable demand for premises,

especially in central locations in Gothenburg where our com-

mercial properties are situated. Rental income for our commerci-

al properties in comparable holdings increased by 4.5 percent, as

a result of successfully completed new lets, cost index escalations

and lower vacancy rates. Th e rental rates in renegotiated agre-

ements increased by 8 percent. Th e surrender rate, which refl ects

how large a proportion of the cancellable leases are extended,

amounted to about 93 percent for the period and net letting of

commercial properties amounted to SEK -3 million. Our oc-

cupancy rate for commercial properties in terms of lettable area

amounted to 97 percent on closing day.

Operating expenses & net operating incomeOperating expenses for the period amounted to SEK 133

million (126) and increased as a result of additional recently

produced properties, among other things. Seasonal eff ects at

Wallenstam consist mainly of variable operating expenses. Th ese

are usually highest during quarters one and four when expenses

for heating and property maintenance are generally higher. Cli-

mate-related expenses were SEK 2 million lower during the fi rst

quarter of 2019 compared to the year-earlier period. New tax

assessment values mean that property tax is increasing compared

to the previous year, which resulted in higher operating expenses

of about SEK 3 million. Even if the largest part of the increase

for commercial properties is paid by the customers, the increased

tax assessment values have a negative impact on the surplus ratio.

As a consequence of new accounting rules, site leasehold rents

are recognized within net fi nancial items starting from 2019,

which had a positive impact on operating expenses of almost

SEK 3 million.

Net operating income increased by almost 7 percent and

amounted to SEK 364 million (341). Additional effi cient new

production accounted for just over two thirds of this growth and

the existing holdings for the remainder. Th e surplus ratio was

73.2 percent (73.0).

Management costs & administrative expensesManagement costs and administrative expenses are distributed

among property management, SEK 58 million (52), energy

management, SEK 5 million (9) and transactions, properties of

SEK 2 million (2), SEK 65 million (63) in total.

Financial income & expensesFinancial income amounted to SEK 2 million (3) and fi nancial

expenses totaled SEK 52 million (82), of which SEK 48 million

(75) related to property operations and SEK 4 million (7) to

natural energy operations. Capitalized interest amounted to SEK

17 million (13).

Th e average debt for the period was SEK 2.3 billion higher

than the year-earlier period, due to continued investments in

new production. Th e average interest rate on closing day, which

refl ects future interest to pay in relation to our loans, was 1.25

percent (1.90). Th e reason why the average interest rate on clo-

sing day was lower than the previous year is mainly because we

realized and simultaneously entered into new interest rate deri-

vatives at lower average interest rates during May and June 2018.

COMMENTS ON THE CONSOLIDATED INCOME STATEMENT

Rental income Income from property management

RENTAL INCOME AND INCOME FROM PROPERTY MANAGEMENT

0

400

800

1,200

1,600

2,000

Q1 2019*2018201720162015600

700

800

900

1,000

1,100

* Latest rolling twelve-month period

Rental income,SEK million

Income from property management,SEK million


Net operating income Surplus ratio

NET OPERATING INCOME AND SURPLUS RATIO

0

400

800

1,200

1,600

Q1 2019*201820172016201572

73

74

75

76

* Latest rolling twelve-month period

Net operating income, SEK million Surplus ratio, %

During the period, the average interest rate (excluding early

redemption of derivative instruments) was 1.15 percent (1.88).

Th e interest coverage ratio, which is 1.5 times (3.6), is also aff ec-

ted in the short-term (twelve months) by the early redemption

of interest rate derivatives. Excluding this, the interest coverage

ratio is 7.0 times, see table on page 19.

Realized changes in value, fi nancial instrumentsDuring May and June 2018, Wallenstam decided to realize de-

rivative contracts with a defi cit value for the purpose of adapting

the Group to the new corporate taxation rules, which apply from

January 1, 2019. In total, derivative contracts with a market value

of SEK -776 million were realized up to and including Decem-

ber 31, 2018.

Income from natural energy management operationsTh e comments on the results below are based on the segment

reporting as this includes the profi t/loss from electricity hedges

and therefore better refl ects the business area’s income for the

period. Income from natural energy management operations

consists of revenue less expenses, depreciation and changes

in value of electricity derivatives as well as administrative and

interest expenses attributable to electricity trading and electricity

generation. Income from management operations is also aff ected

by realized sales results from renewable energy certifi cates.

Th e segment’s income from natural energy management ope-

rations amounted to SEK 25 million (12). In 2019, 117 GWh

(85) was produced and 133 GWh (134) was sold to end custo-

mers. Production is higher than the previous year, due to more

wind during 2019. In addition, the electricity price is higher

than the previous year, which resulted in increased income and

increased expenses.

Th e value of renewable energy certifi cates is lower than

the previous year and is also lower than at year-end 2018. On

closing day, the consolidated value was SEK 81 per renewable

energy certifi cate compared to SEK 135 at year-end and SEK 97

in the previous year.

Income from sales of development properties A profi t or loss from sales of development properties is recog-

nized when the apartment or property is taken into possession

by the purchaser. Apart from the cost, selling and marketing

expenses are included, which are expensed as they arise.

Net profi t for the period amounted to SEK 76 million (3)

and included sales of the development property Pålsjö (Mässha-

ken 2) in Helsingborg and a small number of individual co-op

apartments including costs.



THE TEN LARGEST COMMERCIAL TENANTSTenant Floor space, sq m

City of Gothenburg 23,762

SF Bio AB 14,508

Essity Hygiene and Health AB 13,317

Academedia AB 11,382

Gothenburg Regional Archives 11,000

Västra Götaland County Council 7,590

ICA Fastigheter AB 6,906

Sandryds Handels AB 6,730

Folkuniversitetet 6,308

Frisk Service i Göteborg AB 6,212

Total 107,715

Our total commercial fl oor space is approximately 510,000 sq m.

Changes in value, investment propertiesChanges in value of investment properties during the period

amounted to SEK 285 million in total (126), of which the

increase in value generated from our own work in cost-effi cient

new construction accounted for SEK 132 million (93). Th e value

growth in investment properties, which were in operation for

one calendar year or more amounted to SEK 153 million (33)

and was mainly due to higher net operating income.

Unrealized changes in value, fi nancial instrumentsTh e change in value of fi nancial instruments in the income sta-

tement includes changes in value of interest rate and electricity

derivatives and holdings of listed shares.

Th e value of interest rate and electricity derivatives developed

negatively during the period, SEK -197 million (24) and SEK

-6 million (18), respectively. On closing day, the 10-year swap

rate amounted to 0.83 percent, compared to 1.12 percent at the

start of the year. Changes in value of other fi nancial instruments

amounted to SEK 0 million (1) on closing day.

Unrealized changes in value, synthetic options Th e Annual General Meeting on April 24, 2018 resolved to in-

troduce a synthetic options scheme directed to all personnel. Th e

term of the scheme runs until May 31, 2024 and the expected

cost in the event of a maximum outcome is SEK 330 million.

At the start of the scheme in May 2018, personnel were invited

to acquire the allotted number of options at a market price. Th e

value of the synthetic options, which varies with Wallenstam’s

share price, increased during the year. Th e unrealized expense

including costs connected to the scheme, amounted to SEK

12 million (-) during the period. To date, the total recognized

expense for the scheme amounts to SEK 25 million (-).

TaxesTh e tax expense for the period, which consists in its entirety of

deferred tax, amounted to SEK 76 million (87) net.

Tax was calculated at 21.4 percent on current taxable income,

while deferred tax liabilities and receivables were calculated

at the lower tax rate of 20.6 percent that applies starting from

2021. Wallenstam’s assessment is that the new rules, which apply

from January 1, 2019, will not have any material impact on the

calculation of taxes for the year 2019 provided that an effi cient

balancing can occur in the Group of net interest income and

expense.

Residential, 45%

Office, 27%

Industry/warehouse, 3%

DISTRIBUTION, RENTAL VALUE

Retail, 10%

Garage, 3%

Education, 3%

Other, 9%

SEK million Mar 31, 2019 Mar 31, 2018 Dec 31, 2018

ASSETS

NON-CURRENT ASSETS

Investment properties 47,289 42,187 45,811

Wind turbines 1,166 658 1,167

Participations in associated companies 112 - 113

Financial assets 417 355 408

Financial derivative instruments 7 19 11

Other non-current assets 63 66 64

Total non-current assets 49,054 43,285 47,574

CURRENT ASSETS

Development properties 156 656 317


Other current assets 221 205 249

Cash and cash equivalents 496 266 83

Total current assets 891 1,141 688

Total assets 49,945 44,426 48,262

EQUITY AND LIABILITIES

EQUITY

Equity 21,949 19,570 21,609

Equity attributable to non-controlling interests 2 2 2

Total equity 21,951 19,572 21,611

NON-CURRENT LIABILITIES

Provisions for deferred tax 4,671 4,132 4,595

Other provisions 108 55 86

Interest-bearing liabilities 9,121 2,330 8,545


Lease liability 421 - -

Other non-current liabilities 36 49 5

Total non-current liabilities 14,636 7,337 13,313

CURRENT LIABILITIES

Interest-bearing liabilities 12,699 17,001 12,699

Other current liabilities 659 516 639

Total current liabilities 13,358 17,517 13,338

Total equity and liabilities 49,945 44,426 48,262

CONSOLIDATED BALANCE SHEET, CONDENSED


CHANGES IN PROPERTY HOLDINGS, INVESTMENT PROPERTIESBook value, SEK million

Property holdings, January 1, 2019 45,811

+ Acquisitions 32

+ Construction 759

+ Changes in value, properties 285

+ Right-of-use asset, site leasehold right 402

Property holdings, March 31, 2019 47,289

OUR PROPERTIES

Development during the periodDuring the year, we invested a total of SEK 802 million (700), of

which SEK 791 million (651) in investment properties and SEK

11 million (49) in construction of development properties. New

construction projects in progress involve 2,933 apartments. Total

investments in rental apartment and development projects in

progress amounted to SEK 4.0 billion (4.0) on closing day.

From January 1, 2019, property companies must report the

right of use to land granted with site leasehold rights as an

asset and an equally large lease liability. Th e value of the right of

use for the land has been estimated at SEK 402 million and is

recognized as part of the properties’ value.

Investment propertiesChanges in value aff ected the value of investment properties

positively by SEK 285 million (126) in total, of which SEK 132

million (93) came from new construction of rental apartments

and the remainder from properties that have been in operation

for one calendar year or more.

For the commercial holdings, the average yield requirement

amounts to 4.6 percent (4.8). For residential properties in opera-

tion, the average yield requirement amounts to 3.3 percent (3.2).

Th e average yield requirement was unchanged from the previous

quarter. Th e approved value of investment properties was SEK

47,289 million (42,187) at the end of the period.

Development propertiesDevelopment properties include 15 apartments in the Vasaga-

tan 33 project in Gothenburg and the recently started co-op

apartment project New York at Gärdet in Stockholm. For new

construction in progress, also see the table on page 10. Th e book

value of Development properties amounted to SEK 156 million

(656) at the end of the period.

Our marketsTh e cities in which we do business are characterized by strong

growth and heavy demand for housing. Only a minor proportion

of our rental apartments become available for rent due to reloca-

tion, and demand for fi nished, newly built rental apartments is

high.

We build mainly rental apartments, but also cooperative

apartments, for example when the land available for rental

apartment construction is limited. Our fl exible 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 strong demand for offi ce and retail space in Gothen-

burg, particularly in the central parts of the city, which is also

refl ected in the low vacancy rate for the period.

ValuationInvestment propertiesWallenstam measures all of its investment properties internally

at fair value. We enjoy good market and property intelligence

through active property trading, which provides us with a fi rm

basis for performing internal valuations of our property holdings.

However, we must emphasize that a property’s fair value only

becomes a reality when the property is sold, for which reason a

valuation is always an estimation.

In its assessments of property values, Wallenstam has used

diff erent yield requirements. Th e yield requirements refl ect mar-

ket conditions and diff er based on where a property is located

and its type, e.g. housing or offi ces, etc.

A valuation is calculated based on a property’s net operating

income, 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. Th is is in turn based on expenses incurred.

Land rights and building rights for zoned land are measured

at market value.

Development propertiesDevelopment properties are properties where we intend to

construct co-op apartments that shall be divested on comple-

tion. Development properties are recognized at the lower of cost

(investments incurred) and the estimated net realizable value.

Th e profi t/loss is recognized when the property or apartment is

completed and handed over to the buyer.

TOTAL VALUE, PROJECTS IN PROGRESSBook value, SEK million

Land for future new production 743

Projects in progress, rental apartments 3,082

Development properties 156

Total projects in progress 3,981

COMMENTS ON THE CONSOLIDATED BALANCE SHEET


NEW CONSTRUCTION IN PROGRESS, MARCH 31, 2019Project No. of apts. Expected occupation * Sq m**

STOCKHOLM

Umami Park, phase 1A, Sundbyberg 147 Q2 2019 12,000

Norrgårdshusen, Österåker 128 Q4 2019 7,000

Terrassen Elva, Tyresö 54 2019/2020 2,500

Allén, Tyresö 221 2020 13,500

New York, Gärdet (co-op)*** 50 2020 3,500

Parkstråket 1, Haninge 162 2020 13,500

Parkstråket 2, Haninge 131 2020 7,500

Söra Kvarter, Österåker*** 305 2020 15,500

Trollesunds gårdar, Bandhagen 158 2020 14,500

Umami Park, phase 1B, Sundbyberg 75 2020 3,000

Umami Park, phase 2, Sundbyberg*** 141 2020 9,500

UPPSALA

Tre vänner, Rosendal 141 Q2 2019 6,500

GOTHENBURG

Vasagatan 33 (co-op) 30 Q3 2018 3,500

Stallbacken Nivå5, Mölndal 109 Q3 2019 6,500

Sten Stures Kröningar, Regenten 29 2020 8,500

Elisedal 336 2021 24,000

Godhems Backe 138 2021 6,500

Kallebäcks Terrasser Kv. 11*** 270 2021 16,000

Kv. Rosengången, Mölnlycke Fabriker, Härryda 123 2021 7,000

Kv. Kvarnen, Mölnlycke Fabriker, Härryda 185 2022 10,500

CommercialKvarteret Sturefors, Avenyn Q3 2019 2,000

Total 2,933 193,000

* 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.

*** Started during quarter 1, 2019.

CHANGE, CONSTRUCTION IN PROGRESS

No. of apts.

New construction in progress,Jan 1, 2019 2,167

- Completed -

+ Started 766

New construction in progress, Mar 31, 2019 2,933


APARTMENTS, CONSTRUCTION IN PROGRESS

0

500

1,000

1,500

2,000

2,500

3,000

Total Stockholm business area Gothenburg business area

Q12019

Q4Q3Q2Q12018

Q4Q3Q2Q12017

No. of apts.

Public use properties, 5%

Commercial properties, 39%

Residential properties, 56%

PROPERTY TYPE

Shows the distribution of our property holdings per

category. See definitions on page 19.

PROPERTY ACQUISITIONS, 2019

Name of property Address

Year of construction/

conversion

Residen-tial

sq m Offi cesq m

Retailsq m

Industry/warehou-sing sq m

Education sq m

Garage sq m

Other sq m

Total sq m

No. of

apts.

GOTHENBURG

Inom Vallgraven 60:9*

*Land that was previously site leasehold right

PROPERTY SALES, 2019

Name of property Address

Year of construction/

conversion

Residen-tial

sq m Offi cesq m

Retailsq m

Industry/warehou-sing sq m

Education sq m

Garage sq m

Other sq m

Total sq m

No. of

apts.

HELSINGBORG

Mässhaken 2 Kantorsgatan 1-7 2018 5,116 - - - - - - 5,116 96

Total 5,116 - - - - - - 5,116 96


PROPERTY HOLDING STRUCTURE AS OF MARCH 31, 2019

Lettable area, sq m Residential

sq m Offi cesq m

Retailsq m

Industry/warehousing

sq m Education

sq m Garage

sq mOther sq m

Total sq m

Distribu-tion, place

No. of

apts.

Stockholm 286,937 25,616 18,358 15,350 4,479 49,578 3,292 403,610 34% 4,682

Uppsala 21,491 1,982 933 93 - 5,732 - 30,231 3% 401

Gothenburg 249,454 202,997 90,802 87,057 25,849 58,284 32,907 747,350 63% 4,019

Total 557,882 230,595 110,093 102,500 30,328 113,594 36,199 1,181,191 100% 9,102Distribution by type of premises

47% 20% 9% 9% 3% 9% 3% 100%

WIND POWER

On closing day, Wallenstam had 66 wind turbines in operation

divided among 20 wind farms. Th e installed output amounted to

143 MW (139).

Wind turbines are measured at cost less depreciation and

impairment losses. Depreciation for the period amounted to SEK

19 million (24). Due to the introduction of IFRS 16, Leases, the

right of use to land through land leases shall be recognized as a

right-of-use asset and an equally large lease liability from January

1, 2019. Estimated value in use of land leases, based on so-

called minimum rents, amounted on closing day to SEK 18

million (-) and is recognized as part of the wind power value. On

March 31, 2019, the consolidated book value of wind turbines

amounted to SEK 1,166 million (658). Th e renewable energy cer-

tifi cate inventory amounted to SEK 9 million (16) on closing day.

FINANCING

EquityShareholders’ equity, including non-controlling interests amoun-

ted to SEK 21,951 million (19,572), equivalent to SEK 68 per

share (60). Th e equity/assets ratio was 44 percent (44).

Interest-bearing liabilitiesOn closing day, outstanding bond loans amounted to SEK

2,950 million (3,050), the outstanding volume of commercial

paper, with a framework amount of SEK 4 billion, amounted to

SEK 3,526 million (2,861), and total interest-bearing liabilities

amounted to SEK 21,820 million (19,331).

All the bond loans of SEK 2,950 million (2,150) are con-

tained within the framework of our MTN program (Medium

Term Notes), which has a total framework amount of SEK 5

20192018201720162015Acquisition

New constructions

and conversions

Divested

Reclassification

development properties

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

SEK million

ACQUISITION, CONSTRUCTION AND SALES

OF INVESTMENT PROPERTIES


billion. Th e bond loans are listed on Nasdaq Stockholm.

Th e average remaining fi xed interest term is 44 months (34).

Of the loan portfolio, 45 percent (51) of the loans have fi xed

interest terms longer than one year. On closing day, the average

interest rate on our loans was 1.25 percent (1.90).

Financing of the loan portfolio is mainly secured by mort-

gage deeds for properties. Th e commercial paper program has

underlying credit commitments for the outstanding volume of

commercial paper at each date. Covenants are issued for this.

Lease liabilityDue to the introduction of IFRS 16, Leases, from January 1,

2019 a lease liability is recognized as a separate line item, equiva-

lent to the rights of use for land leases and site leasehold rights.

On March 31, 2019, the liability amounted to SEK 421 million.

Derivative instrumentsWallenstam’s fi nancial derivative instruments consist of interest

rate and electricity derivatives. On closing day, Wallenstam had a

net indebtedness in respect of derivative instruments of SEK 254

million compared to a net indebtedness of SEK 32 million on

December 31, 2018. Of this, interest rate derivatives accounted

for SEK -279 million (-82) and electricity derivatives for SEK

25 million (49).

During the fi rst quarter, the Group entered into new interest

rate derivative contracts totaling SEK 1.5 billion with a matu-

rity of 10 years. Th e total volume of outstanding interest rate

derivatives, where Wallenstam pays fi xed interest, subsequently

amounts to SEK 9.5 billion (9.7)

Interest rate derivatives are used to obtain a desired interest

maturity profi le in a fl exible, cost-effi cient way. Th ey are measu-

red through discounting future cash fl ows at present value based

on observable market interest rates and are classifi ed at level 2.

Th e arising defi cit or surplus value for interest rate derivatives,

which refl ects how the Group’s hedged interest rates relate to the

market rate of interest on closing day, is recognized in the balan-

ce sheet and in unrealized changes in value, fi nancial instruments

in the income statement.

Electricity derivatives are used to mitigate the eff ect of

market fl uctuations by hedging income for future electricity

production. Th ese are measured at market value and the changes

in value are continually recognized in the Group in the line item

unrealized changes in value, fi nancial instruments. Surpluses and

defi cits arising on electricity derivatives are adjusted in advance

on a daily basis (futures contract), for which reason, the closing

balance sheet item for electricity derivatives only refers to older

contracts (forward contract). As we do not apply hedge accoun-

ting for electricity derivatives, no reversal eff ect arises in unrea-

lized changes in value in the consolidated income statement in

connection with realization of electricity derivatives. However, in

the segment reporting, hedge accounting is applied and therefore

all comments on the income from natural energy management

operations are based on the segment reporting, which thereby

provides a fairer presentation.

Currency derivatives are used to a limited extent in order to

hedge purchasing from foreign countries. Hedge accounting is

applied and therefore translation eff ects are recognized in other

comprehensive income.

Available liquid assetsAvailable liquid assets, including available bank overdraft

facilities and excluding blocked bank balances with Nasdaq

Commodities of SEK 3 million (-) amounted to SEK 1,293

million (1,066). Approved overdraft facilities amounted to

SEK 800 million (800). None of these were used on closing

day. Th e Group also has an approved credit commitment and

credit facilities of SEK 4,000 million (4,238). Th e entire amount

SEK 4,000 million (4,088) was available for use on closing day.

On March 31, 2019, available liquid assets totaled SEK 5,293

million (5,154), of which SEK 3,526 million (2,861) represented

a credit commitment for issued outstanding commercial paper.

Accordingly, SEK 1,767 million (2,293) was available for use on

closing day.

FIXED TERMS, AVERAGE INTEREST RATES, MARCH 31, 2019

Interest maturity structure

Amount, SEK million

Average inte-rest rate, % Proportion, %

0–3 mths 11,171 1.44* 51.2

3 mths–1 year 749 0.48 3.4

1–2 years 400 2.42 1.8

2–3 years - - -

3–4 years - - -

4–5 years - - -

5–6 years 1,200 0.67 5.5

6–7 years 1,300 0.87 6.0

7–8 years 1,500 1.00 6.9

8–9 years 1,500 1.16 6.9

> 9 years 4,000 1.16 18.3

Total 21,820 1.25 100

* Variable interest loans with an interest maturity within three months have

an average interest rate of 0.77%. 1.44% includes the effect of swap

agreements that mature within the three-month period.

AVAILABLE LIQUID ASSETS

Available liquid assets including overdraft facilities.

0

200

400

600

800

1,000

1,200

1,400

Q1 2019Q4Q3Q2Q1 2018

SEK million

_ Equity attributable to parent company shareholders _

SEK million Share capitalOther capital contributed

Otherreserves

Profi t brought forward

Non-controlling interests Total equity

Opening equity, Jan 1, 2018 165 359 4 18,880 2 19,410Profi t for the period - - - 310 - 310

Translation difference - - 1 - - 1

Changes in value of currency derivatives - - -1 - - -1

Tax attributable to other comprehen-sive income - - -1 - - -1

TRANSACTIONS WITH SHAREHOLDERS

Dividends - - - - - -

Repurchase of own shares - - - -147 - -147

Closing equity, Mar 31, 2018 165 359 4 19,042 2 19,572

Opening equity, Jan 1, 2019 165 359 4 21,081 2 21,611Profi t for the period - - - 340 - 340

Translation difference - - 1 - - 1

Changes in value, owner-occupied properties - - 0 - - 0

Tax attributable to other comprehen-sive income - - -1 - - -1

TRANSACTIONS WITH SHAREHOLDERS

Dividends - - - - - -

Repurchase of own shares - - - - - -

Closing equity, Mar 31, 2019 165 359 4 21,421 2 21,951

SEK millionJan-Mar

2019 Jan-Mar

2018Apr-Mar

2018/2019 Jan-Dec

2018

Profi t before changes in value and impairment losses* 345 228 441 324

Adjustment for items not included or arising in cash fl ow -40 -9 -96 -65

Taxes paid 0 0 0 0

Cash fl ow before change in working capital 305 219 345 259

Change in working capital 65 38 138 111

Cash fl ow from operating activities 370 257 483 370

INVESTMENTS/DIVESTMENTS

Investment in properties and individual co-op apartments -777 -700 -2,758 -2,681

Investments in wind turbines, intangible assets & property, plant and equipment -26 -2 -33 -9

Investments in fi nancial assets - -100 -6 -106

Investments in associated companies - - -113 -113

Divestment of other securities held as non-current assets 0 - 35 35

Divestment of properties, development properties & property, plant and equipment 267 23 799 555

Cash fl ow from investing activities -536 -779 -2,076 -2,319

FINANCING

Raised interest-bearing liabilities 3,110 3,148 10,240 10,278

Amortization of interest-bearing liabilities -2,415 -2,518 -7,753 -7,856

Net change in overdraft facilities -119 - - 119

Advance payment futures contracts 3 - 10 7

Amortization of fi nancial assets - 77 -9 68

Dividends paid - - -583 -583

Repurchase of own shares - -147 -82 -229

Cash fl ow from fi nancing activities 579 560 1,823 1,804

Changes to liquid assets 413 38 230 -145

Cash and cash equivalents at beginning of the period 83 228 266 228

Cash fl ow for the period 413 38 230 -145

Cash and cash equivalents at the end of the period 496 266 496 83

Unutilized overdraft facilities at the end of the period 800 800 800 681

Blocked bank balances -3 - -3 -3

Available liquid assets 1,293 1,066 1,293 761

*Includes interest paid and received, including gross fl ows from interest rate swap contracts, of SEK -75 million (-89) and SEK 2 million (1) respectively, of which SEK 17 million (13) was capitalized as a non-current asset.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS


2019SEK million

Gothenburg Jan-Mar

Stockholm Jan-Mar

Natur al energy* Jan-Mar

Other Jan-Mar

Elimination Jan-Mar

Total Jan-Mar

INCOME STATEMENT

Rental income 345 158 - - -6 497

Operating expenses -86 -47 - - - -133

Electricity revenue - - 171 - -171 -

Electricity expenses - - -135 - 135 -

Net operating income 259 111 35 - -41 364

Management costs and administrative expenses -31 -24 -5 -8 11 -58

Net fi nancial items -58 -27 -5 39 5 -46

Income from management operations 170 59 25 31 -25 260

Income from natural energy management operations - - - - 10 10

Unapportioned itemsParticipation in profi ts/losses of associated companies -1

Sales result, development properties 76

Profi t before changes in value and impairment losses 345Changes in value 71

Profi t before tax 416

BALANCE SHEET

Investment properties 29,598 17,691 - - - 47,289

Wind turbines - - 1,166 - - 1,166

Development properties 79 77 - - - 156

Unapportioned assets - - - - - 1,334

Total assets 49,945

Equity - - - - - 21,951

Interest-bearing liabilities and lease liabilities 12,645 7,993 1,241 362 - 22,241

Unapportioned liabilities - - - - - 5,753

Total equity and liabilities 49,945

Property investments in progress including land 1,301 2,680 3,981

2018SEK million

Gothenburg Jan-Mar

Stockholm Jan-Mar

Natur al energy* Jan-Mar

Other Jan-Mar

Elimination Jan-Mar

Total Jan-Mar

INCOME STATEMENT

Rental income 326 147 - - -6 467

Net operating income, properties 245 102 - - -6 341Income from property management operations 167 74 12 -24 -12 217Electricity revenue - - 132 - -132 -

Income from natural energy management operations - - - - 7 7

Unapportioned itemsSales result, development properties 3

Profi t before changes in value and impairment losses 228Changes in value 169

Profi t before tax 397

BALANCE SHEET

Investment properties 26,758 15,429 - - - 42,187

Wind turbines - - 658 - - 658

Development properties 576 80 - - - 656

Unapportioned assets - - - - - 925

Total assets 44,426

Equity - - - - - 19,572

Interest-bearing liabilities 10,214 2,879 1,242 4,996 - 19,331

Unapportioned liabilities - - - - - 5,523

Total equity and liabilities 44,426

Property investments in progress including land 1,812 2,224 4,036

* Difference between segments and the consolidated income statement relates to the presentation of unrealized and realized electricity deriva-tive instruments and unrealized remeasurement effect of renewable energy certifi cates. For more information see Annual Report, Note 2.

SEGMENTS REPORT


SHAREHOLDINGS, MARCH 31, 2019A shares B shares Equity, % Votes, %

Hans Wallenstam and family, and company 34,500,000 48,078,000 25.02 62.05

AMF – Insurance and funds 32,660,000 9.90 5.16

Agneta Wallenstam 22,204,000 6.73 3.50

Anna-Carin B Wallenstam and Anders Berntsson, and company 20,100,000 6.09 3.17

Henric and Ulrika Wiman 12,037,752 3.65 1.90

Bengt Norman and company 8,180,000 2.48 1.29

Monica and Jonas Brandström 7,673,326 2.33 1.21

Vanguard 5,692,626 1.73 0.90

David Wallenstam 5,640,000 1.71 0.89

BlackRock 5,158,965 1.56 0.81

Other owners 121,075,331 36.69 19.12

Total number of shares 34,500,000 288,500,000Repurchased shares* 7,000,000 2.11

Registered shares 34,500,000 295,500,000

Total registered shares 330,000,000 100.00 100.00Total outstanding shares 323,000,000

The proportion of institutional ownership amounted to around 15 percent of equity and around 8 percent of votes.Foreign ownership amounted to around 10 percent of equity and around 5 percent of the votes.

Source: Modular Finance, Monitor*Repurchased own shares lack voting rights.

Th e Wallenstam B share is listed on Nasdaq Stockholm, Large

Cap. During 2019, the Wallenstam share price has increased by

14.2 percent. Th e property indices OMX Stockholm Real Estate

and OMX Stockholm PI rose by 15.6 percent and 11.7 percent,

respectively, during the same period.

At the end of the period, the Wallenstam share price was

SEK 93.85 compared to SEK 82.20 at year-end 2018. Market

capitalization was SEK 30,971 million (27,126) based on the

total number of registered A and B shares. Equity per share

amounted to SEK 68 (67).

Wallenstam has a mandate from the Annual General

Meeting (AGM) to repurchase so many shares, such that the

company’s holding at any one time does not exceed 10 percent of

all shares in the company. No shares have been repurchased so

far during 2019. On closing day, the company held a total of

7,000,000 treasury shares, repurchased at an average price of

SEK 76.16 per share.

Dividend Th e Board of Directors will propose a dividend of SEK 1.90 per

share (1.80) to the Annual General Meeting for the 2018 fi nan-

cial year, an increase of 5.6 percent, spread over two payment

dates of SEK 0.95 each per share.

TurnoverDuring the fi rst quarter, the Wallenstam share had an average

daily turnover on Nasdaq Stockholm of about SEK 16.8 million

(24.0).

THE WALLENSTAM SHARE*


* Comparisons in brackets refer to amounts as of December 31, 2018.

AVERAGE SHARE LIQUIDITY PER DAY

Refers to trading on Nasdaq Stockholm.

0

5

10

15

20

25

20192018201720162015

SEK million

OMX Stockholm Real Estate PI OMX Stockholm PI

Wallenstam B share

50

60

70

80

90

100

110

120

SHARE PRICE TREND 2014–2019, SEK

2014 2015 2016 2017 2018 2019

Th e parent company’s primary operations are the performance

of Group-wide services. In addition, the parent company owns a

small number of properties.

Total revenue during the period amounted to SEK 111 mil-

lion (109), of which management revenue amounted to SEK 80

million (80) and rental income was SEK 31 million (29).

Th e performance was aff ected by changes of SEK -217 mil-

lion (24) in the value of fi nancial derivative instruments. Profi t

after tax amounted to SEK -138 million (-15).

Investments in non-current assets during the period amoun-

ted to SEK 5 million (4). Parent company external loans amoun-

ted to SEK 9,249 million (8,826) on closing day.

INCOME STATEMENT, PARENT COMPANY

SEK million Jan-Mar

2019 Jan-Mar

2018 Jan-Dec

2018

Revenue 111 109 389

Expenses -122 -106 -446

Profi t/loss from participations in Group companies -1 -2 3,106

Net interest income/expense 48 -49 -728

Unrealized changes in value, fi nancial instruments -217 24 761

Profi t/loss before tax -181 -24 3,081

Group contributions 1 - 641

Taxes 41 9 -185

Profi t/loss after tax -138 -15 3,538

Changes in value of currency deri-vatives - -1 -1

Tax attributable to other comprehen-sive income - 0 0

Comprehensive income -138 -16 3,537

BALANCE SHEET, PARENT COMPANY

SEK millionMar 31,

2019Mar 31,

2018Dec 31,

2018

AssetsProperties 1,355 1,378 1,361

Participations in Group companies 5,372 5,369 5,369


Receivables from Group companies 19,635 20,072 19,929

Other assets 245 396 248

Cash and cash equivalents 489 222 77

Total assets 27,122 27,444 27,034

Equity and liabilitiesEquity 10,712 7,962 10,850

Provisions 55 - 32

Interest-bearing external liabilities 9,249 8,826 9,802

Liabilities to Group companies 6,713 9,742 6,152


Other liabilities 114 143 115

Total equity and liabilities 27,122 27,444 27,034

PARENT COMPANY


OPPORTUNITIES & RISKS

Wallenstam’s opportunities and risks, and how we manage them,

are presented in the 2018 Annual Report on pages 34–37. No

signifi cant changes have taken place since then.

SENSITIVITY ANALYSIS

As of March 31, 2019, the estimated market value of properties

amounted to around SEK 47 billion. A change in value of plus/

minus 10 percent is thus equivalent to about plus/minus SEK

4.7 billion. A general change of 0.25 percentage points in pro-

perty yield requirements is equivalent to about SEK -2.8 billion

or SEK +3.2 billion.

A change in the electricity price of 1 öre per kWh is equi-

valent to about plus/minus SEK 43 million during valuation of

wind turbines, while a change in the renewable energy certifi cate

price of 1 öre per kWh is equivalent to about plus/minus SEK

23 million during valuation of wind turbines.

TRANSACTIONS WITH RELATED PARTIES

Wallenstam’s related parties consist chiefl y of Group 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 companies. Individuals

related to Board members and the Group Management rent

apartments and are also electricity customers. Insurance services

are purchased from companies where members of Wallenstam’s

Board of Directors are Board members, for a total equivalent to

almost SEK 4 million in net expenditure for the year. In addi-

tion, a company to which one of Wallenstam’s Board members

was related at the time of contracting, performed building con-

tract services with a total contract value of SEK 89 million. Th is

company is an electricity customer of Svensk NaturEnergi.

Th e CEO is a joint owner (50 percent) of Aranea Holding

AB. Aranea Holding AB owns 48 percent of Renew Group

Sweden AB , a fl oorball equipment manufacturer. Aranea is a

tenant of Wallenstam with an annual rental value equivalent to

SEK 0.6 million. Aranea and Renew Group are both electricity

customers.

Wallenstam’s involvement in environmental and social

responsibility issues is described in more detail on pages 27–33

of the 2018 Annual Report. As part of its social responsibility

work, the Wallenstam Group not only contributes fi nancially 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

discounts equivalent to SEK 0.7 million. Th e Rescue Mission

in Gothenburg and Barn i Nöd rent premises from Wallenstam

equivalent to annual rental income of about SEK 4.7 million

and SEK 0.1 million, respectively. Both organizations are Svensk

NaturEnergi electricity customers.

All transactions take place on market-related terms.

ACCOUNTING PRINCIPLES

Th is report was prepared in accordance with IAS 34. Th e

accounting principles are unchanged compared to the 2018

Annual Report, and the accounting principles mentioned below

have been adopted from 2019. Th e Parent Company’s accoun-

ting principles comply with the Swedish Annual Accounts Act

and the Swedish Financial Reporting Board’s recommendation

RFR 2.

New accounting principles that entered into force on January 1, 2019 and subsequently IFRS 16 Leases Th e standard replaced IAS 17 on January 1, 2019 and means,

among other things, that lessees must report leases in the

balance sheet. Wallenstam does not apply the standard retro-

spectively. As a landlord and lessor, the change does not impact

Wallenstam’s reporting. However, as a lessee, the handling of site

leasehold rents and minimum rents for land for wind turbines is

of importance. As of January 1, 2019, the lease liability for site

leasehold rents amounted to SEK 402 million and for minimum

rents for land it amounted to SEK 18 million. Th e liability is

recognized on a separate line item in the balance sheet. Corres-

ponding right-of-use assets are recognized in the balance sheet

and are included as part of the items Investment properties and

Wind turbines, respectively. Th e expense for site leasehold rents

is recognized as a fi nancial expense. For minimum rents for land,

the new standard means that the rent shall instead be distributed

between depreciation and fi nancial expenses, respectively. Th is

means that fi nancial expenses will be higher during the start of

the lease term and will then decline in line with amortization

of the liability. Th e depreciation is the same over the entire lease

term. However, income from property management is only

impacted by the accrual eff ect arising for the land leases, which

is extremely marginal.

Calculation of key ratios is based on the current accounting,

which means for example that net fi nancial items includes

interest for leases. Comparative fi gures for previous years have

not been restated.

No other new and amended standards approved by the EU

and interpretations from the IFRS Interpretations Committee

are deemed to have a material impact on the Group’s fi nancial

position.

EVENTS AFTER THE END OF THE REPORTING PERIOD

On April 1, 2019, Wallenstam initiated deeper cooperation

with Jämtkraft, which through a business transaction took over

Svensk NaturEnergi AB and electricity sales to end customers.

Wallenstam is retaining all 66 wind turbines and through its

own production of wind power will remain self-suffi cient in

renewable energy.

OTHER INFORMATION


Accumulated during periodMar 31,

2019Dec 31,

2018Sep 30,

2018Jun 30,

2018Mar 31,

2018Dec 31,

2017Sep 30,

2017Jun 30,

2017Mar 31,

2017

PROPERTY-RELATED KEY RATIOS

Net operating income, properties, SEK million 364 1,429 1,078 706 341 1,264 953 615 301

Surplus ratio, property management, % 73 75 76 75 73 74 76 74 73

Income from property management, SEK million 260 1,011 758 462 217 806 621 391 191

Changes in value, new construction* 132 598 421 267 93 733 389 247 132

Value of investment properties, SEK million 47,289 45,811 44,360 43,446 42,187 41,410 39,660 38,797 37,025

Area, sq m (thousand) 1,181 1,186 1,197 1,196 1,175 1,145 1,090 1,078 1,064

Occupancy rate – lettable area, % 99 99 99 99 99 98 98 98 98

Development properties, net, SEK million 156 317 658 691 656 606 850 875 765

FINANCIAL KEY RATIOS

Profi t after tax, SEK million 340 2,998 1,769 1,310 310 2,421 1,781 1,447 540

Return on equity, % 14.6 14.8 12.2 11.8 11.5 13.0 19.3 20.0 21.6

Return on total capital, % 9.5 9.7 8.4 8.3 7.2 8.0 11.6 11.9 12.7

Interest coverage ratio, times 1.5 1.3 1.2 1.1 3.6 3.8 3.8* 3.8* 3.9*

Loan-to-value ratio, % 45 45 46 46 44 43 43 42 41

Average interest rate on closing day, % 1.25 1.06 0.98 1.01 1.90 1.88 1.92 1.95 2.08

Average fi xed-interest term, months 44 39 36 38 34 36 34 36 38

Equity/assets ratio, % 44 45 44 44 44 44 45 45 46

Equity, SEK million 21,951 21,611 20,688 20,252 19,572 19,410 19,073 18,826 18,281

Net asset value, SEK million 27,011 26,574 25,608 25,113 24,548 24,314 23,866 23,505 22,741

Non-current net asset value (EPRA NAV),SEK million 27,210 26,595 25,560 25,110 25,123 24,915 24,491 24,163 23,460

Market capitalization, SEK million 30,971 27,126 27,786 26,582 25,031 26,037 26,763 27,591 24,565

Repurchase of shares, SEK million - 229 204 182 147 235 220 129 46

PER SHARE DATA

Net asset value per share, SEK 83.60 82.30 79.20 77.60 75.80 74.60 73.20 71.80 69.30

Profi t after tax , SEK 1.1 9.3 5.5 4.0 1.0 7.4 5.4 4.4 1.6

P/E ratio, times 10.0 8.9 11.3 11.5 11.3 10.7 7.7 7.7 6.6

Cash fl ow from operating activities, SEK 1.1 1.1 0.2 -0.8 0.8 2.6 2.1 1.6 1.1

Equity, SEK 68 67 64 63 60 60 58 57 56

Share price, SEK 93.85 82.20 84.20 80.55 75.85 78.90 81.10 81.15 72.25

Shares outstanding, average, thousands 323,000 323,854 324,073 324,405 325,050 327,333 327,728 328,208 328,583

Shares outstanding at end of period, thousands 323,000 323,000 323,310 323,550 324,000 326,000 326,200 327,325 328,350

Jan-Mar 2019

Oct-Dec2018

Jul-Sep 2018

Apr-Jun 2018

Jan-Mar 2018

Oct-Dec2017

Jul-Sep 2017

Apr-Jun 2017

Jan-Mar 2017

Rental income, SEK million 497 488 480 475 467 444 428 415 414

Net operating income, properties, SEK million 364 351 372 365 341 311 338 314 301

Surplus ratio, property management, % 73 72 77 77 73 70 79 76 73

Income from property management, SEK million 260 253 296 245 217 185 230 200 191

Return on equity, % 14.6 14.8 12.2 11.8 11.5 13.0 19.3 20.0 21.6

Net asset value per share, SEK 83.60 82.30 79.20 77.60 75.80 74.60 73.20 71.80 69.30

Earnings per share after tax, SEK 1.1 3.8 1.4 3.1 1.0 2.0 1.0 2.8 1.6

Cash fl ow per share from operating activities, SEK 1.1 0.9 1.0 -1.6 0.8 0.4 0.6 0.4 1.1

Equity per share, SEK 68 67 64 63 60 60 58 57 56

Share price, SEK 93.85 82.20 84.20 80.55 75.85 78.90 81.10 81.15 72.25

Earnings-based key ratios are calculated on the average number of outstanding shares; yield fi gures are calculated on rolling twelve-month profi t or loss. * Has been updated after changed distribution in the income statement regarding realized and unrealized changes in value of investment properties.

KEY RATIOS – MULTI-YEAR SUMMARY

QUARTERLY OVERVIEW


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

Share total yieldThe 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 fi nancial measures that are outside IFRS defi nitions

(Alternative performance measures, according to ESMA’s guidelines) with the aim of enabling

effective evaluation of the company’s fi nancial 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 defi ned according to IFRS. Wallenstam applies these alternative key ratios

consistently over time. The defi nitions 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 sharesThe 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.

Residential propertyProperty, which predominantly consists of residential space.

Loan-to-value ratioInterest-bearing liabilities and lease liability less cash and cash equivalents in relation to

the Group’s investments in properties, development properties and wind power at the end of

the period.

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

Net operating incomeRental income less operating and maintenance expenses, and property tax.

Development propertiesDevelopment properties refer to properties constructed with the intention of being sold after

completion.

Rental value*Rental income and the estimated market rent for vacant space.

Cash fl ow per shareCash fl ow for the period in relation to the average number of shares outstanding.

Cash fl ow from operating activities per shareCash fl ow from operating activities for the period in relation to the average number of shares

outstanding.

Commercial propertyProperty, which predominantly consists of commercial space.

Non-current net asset value (EPRA NAV)Equity with reversal of deferred tax liabilities and the net effect of unrealized changes in

value of derivative instruments after tax and less adjusted in advance fi nancial electricity

contracts.

Net lettingNet lets entered into during the period less cancellations and removals.

P/E ratioShare price at the end of the period in relation to profi t after tax for the average number of

shares over the latest rolling 12-month period.

*Operational key ratios, are not considered alternative key ratios according to ESMA’s guideli-

nes.

Earnings per share after taxProfi t after tax in relation to the average number of outstanding shares, in accordance with

IFRS.

Return on equityProfi t after tax in relation to average equity, calculated on a rolling 12-month basis.

Return on total capitalProfi t before tax with reversal of interest expenses and early redeemed derivatives for the

latest rolling 12-month period in relation to average total capital employed.

Interest coverage ratioProfi t or loss before changes in value and impairment charges with reversal of net fi nancial

items and early redeemed interest rate derivatives for the latest rolling 12-month period

in relation to net fi nancial items and early redeemed interest rate derivatives for the latest

rolling 12-month period.

Interest coverage ratio excl. early redeemed interest rate derivatives **Profi t or loss before changes in value and impairment charges with reversal of net fi nancial

items and early redeemed interest rate derivatives for the latest rolling 12-month period in

relation to net fi nancial items for the latest rolling 12-month period.

Community propertyProperty, which is predominantly used by tax funded activities and is specifi cally adapted for

community services.

Average interestInterest expenses for the period including profi t or loss on swap agreements realized during

the period in relation to interest-bearing liabilities.

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

Net asset valueEquity with the addition of deferred tax liabilities.

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 – lettable areaLet fl oor space in relation to total fl oor space.

Changes in value, investment properties Gains or losses from sales of investment properties during the period less expenses and the

assessed market value of the properties at the previous reporting period and gains or losses

from the change in the assessed market value of investment properties compared to the

previous reporting period.

Changes in value, New construction: The increase in value is gradually recognized during the

construction of the property until the fi rst year the property is taken into operation. Change in

value new construction recognizes the difference between the cost of construction of a new

rental apartment and the value it has on completion.

Change in value Other: Refers to changes in the value of investment properties, which have

been in operation for one calendar year or more.

Surrender rate Proportion of leases extended in relation to the proportion of cancellable leases.

Surplus ratioNet operating income as a percentage of rental income.

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

**Shows interest expenses for current liabilities in relation to profi t/loss on a rolling

12-month basis, which both exclude the non-recurring effect that arose from the early

redemption of interest rate derivatives.

SEK million2018/2019

Apr-May

Profi t before changes in value and impairment charges 441

Reversal prematurely realized fi nancial instruments 776

Reversal net fi nancial items 202

Profi t before interest expenses, changes in value and impairment charges 1,419

Net fi nancial items 202

DEFINITIONS


BUSINESS PLAN 2023

GoalTo achieve an increase in net asset value of SEK 40 per share

starting from October 1, 2018 through December 31, 2023.

Guiding principles• We shall exceed customer expectations and improve the ove-

rall impression of Wallenstam every year through attractive

apartments and premises as well as good service.

• Th rough our strong corporate culture, we shall be an attracti-

ve employer and improve our Engagement Index score every

year.

• We shall reduce our environmental impacts every year,

through initiatives within the focus areas energy, transports

and resources.

Defi ned key ratios• Th e equity/assets ratio should not be less than 30 percent.

VISION

Wallenstam shall be the natural choice of people and companies

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.

BUSINESS PROCESS

Business processWallenstam builds, develops and manages properties and areas based on the needs of people and society, and based on the wishes and requirements of customers and shareholders.

Through cost-effi cient construction, development and management as well as a high level of service and long-term sustainability, we are creating value growth.

Profi ts are reinvested and used to develop the business further. Shareholders receive a share of the profi ts in the form of dividends.

WALLENSTAM TODAY

Wallenstam was founded in 1944 and is celebrating 75 years as

a company during 2019. Th e head offi ce is located in Gothen-

burg. Th e 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 concen-

trated towards inner city locations in Gothenburg. All in all,

Wallenstam has just over 9,000 apartments and 1,000 commer-

cial tenants. Wallenstam is a major producer of homes in the re-

gions where we operate and we build primarily rental apartments

for our own property management.

Wallenstam is self-suffi cient in renewable energy through its

own wind turbines in operation.

Operations are conducted in the Stockholm business area, the

Gothenburg business area and Natural Energy.

StockholmTh e majority of our apartments, just over 5,000, are located

in the Stockholm business area. Approximately 400 of these

apartments are located in Uppsala. At present, most of our new

construction also takes place in the Stockholm region, including

Uppsala. We had just over 1,700 apartments under construction

in the Stockholm business area on closing day.

Gothenburg Our property holdings in Gothenburg consist of about 4,000

apartments and about 900 commercial tenants that rent offi ce

and retail premises, mainly in inner city locations. Th e Go-

thenburg business area had just over 1,200 apartments under

construction on closing day.

Natural EnergyTh e operations consist of both the generation of and trade in

renewable energy. Production covers our own properties’ needs

and those of our tenants.

Value growth

Cost-effi cient development

and management of

residential properties and

commercial premises

with a high level of service

and long-term sustainability.

Demand

Construction and acquisition Sales

Profi t

Dividend

THIS IS WALLENSTAM


CALENDAR

CONTACT

Interim report Q2, 2019 July 17, 2019

Interim report Q3, 2019 October 22, 2019

For further information, please contact

Susann Linde, CFO and Head of IR

tel: +46 705-17 11 34

e-mail: [email protected]


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 CET on May 2, 2019.

WALLENSTAM AB ( publ ) SE-401 84 Göteborg

Visiting address : Kungsportsavenyen 2Telephone +46 31 - 20 00 00

www.wallenstam.seCo reg. no. 556072 -1523

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