Income increased by 14 per cent to SEK 2,220 million (1,948). The operating surplus increased by 15 per cent to SEK 1,392 million (1,215).

Transcription

1 YEAR-END REPORT JANUARY DECEMBER Income increased by 14 per cent to SEK 2,220 million (1,948). The operating surplus increased by 15 per cent to SEK 1,392 million (1,215). Profit from property management increased by 21 per cent to SEK 636 million (524). Changes in value of properties amounted to SEK 28 million ( 33), of derivatives to SEK 337 million ( 175) and of financial assets to SEK 71 million (10). Net profit for the period amounted to SEK 808 million (339), corresponding to SEK 3.75 (1.24) per common share. Taking possession of 23 properties for SEK 1,020 million and sale of 12 properties for SEK 387 million. Acquisition of 29.8 per cent of the real estate company Tribona AB (publ). Tribona is reported as an associated company from 7 June. The Board of Directors is proposing a dividend of SEK 1.50 (1.50) per common share and a dividend of SEK (10.00) per preference share. At the end of January 2014 Klövern announced that a letter of intent regarding an acquisition of Globen City had been signed.

2 2 KLÖVERN YEAR-END REPORT JANUARY DECEMBER Profit 12 month 12 month Income , Property costs Operating surplus ,392 1,215 Central administration Net financial items Profit from property management Share of profits in associated company 2 5 Changes in value, properties Changes in value, derivatives Changes in value, financial assets Write-down of goodwill Profit before tax Current tax Deferred tax Net profit Other comprehensive income, items which may later be reversed in the income statement 2 Net comprehensive income Key ratios Q Q Q Q Q Q1 Operating margin, % Return on equity, % Equity ratio, % Adjusted equity ratio, % Leverage, % Leverage properties, % Interest coverage ratio, multiples Average interest, % Average fixed-interest period, years Average period of tied-up capital, years Occupancy rate economic, % Occupancy rate area, % Cover: Interior from the logistic property Lexby 11:236 in Partille, which was aquired in.

3 KLÖVERN YEAR-END REPORT JANUARY DECEMBER STATEMENT BY THE CEO 3 A good finish to the year Klövern can report the highest ever profit from property management in the company s history for the fourth quarter of the year. This is partly due to acquisitions and a mild winter but is also, maybe to an even greater extent, a result of our focus on consolidation and calm working conditions. The state of the economy is continuing to slowly improve and a number of indicators point to greater optimism in Sweden. Employment is continuing to increase. Efficient office premises are in demand not least by the services sector. There is also a high level of demand for warehouse/logistics facilities at many of our locations. In order for the Swedish economy and demand for office and logistics facilities to really take off from the present level the problems in the surrounding world must be solved. Things are moving in the right direction in most EU countries and in the United States but it is taking time. A very weak inflationary pressure in the Swedish economy is affecting Klövern slightly negatively as regards property valuations, although the rate cut to 0.75 per cent that the Riksbank made towards the end of the year will have a positive impact on the company. The economic occupancy rate continues to be high at over 90 per cent in our business units Gothenburg, Kalmar, Karlskrona, Kista, Karlstad and Örebro. A number of other units are also very close to achieving an occupancy rate of over 90 per cent. With a clear focus on letting, I expect that additional units will exceed this threshold relatively soon, which is very gratifying. Net letting during the last quarter of the year amounted to SEK 35 million, which we are very satisfied with. A major tenant moving-in was CGI which moved into newly renovated premises in Kista at the beginning of December, further strengthening Kista as an attractive choice for office premises in the Stockholm area. In recent years, Kista has moved on from being in principle wholly focused on the telecom and IT sectors to having a very varied group of companies mainly active in the services sector. With transport links that are in many cases as good as Solna/Sundbyberg, but with somewhat lower rental levels, it is an attractive alternative for many companies in the Stockholm region. During the quarter, two properties each were acquired in Gothenburg, Uppsala and Örebro and one property each in Halmstad, Kalmar and Västerås. All acquisitions have been made in locations where we have a strong organization. We have also reinforced our position generally by continuing to divest properties in peripheral locations. Towards the end of the year, a contract was entered into with ICA Fastigheter Sverige to construct a logistic facility in Uppsala on Klövern s own land. As regards financing, the situation on the bank market continues to be favourable where a number of banks demonstrate willingness to provide Klövern with financing. This is also clear on the bond market where margins are falling, which Klövern made use of towards the end of the year by issuing a further two bond loans within existing frameworks for a total of SEK 165 million. After the year-end, we also announced that we intend to acquire Globen City, mainly consisting of office premises with a low vacancy rate and retail premises on parts of the ground floor. This will be a very good addition for Klövern and the expanding Söderstaden will further increase the attractiveness of the area. To sum up, I can thus say that Klövern finished the year with a strong quarter. I can note that has meant a necessary consolidation and calm conditions for work after, which was a year of intensive transactions. Rutger Arnhult CEO Klövern

4 4 KLÖVERN YEAR-END REPORT JANUARY DECEMBER Klövern is a real estate company offering, with closeness and commitment, customers efficient premises in selected growth regions. Klövern is one of the larger listed real estate companies in Sweden specializing in commercial premises. The income statement items refer to the period January December and are compared with the corresponding period last year. The balance sheet items refer to the position at the end of the period and are compared with the preceding year-end. The quarter refers to October December and the year to January December. PROFIT Profit from property management, i.e. profit excluding changes in value and tax, increased to SEK 636 million (524) during the year January December and net profit for the year amounted to SEK 808 million (339). Besides the effect of net acquisitions of properties, profit from property management was affected positively by net moving-in. Net profit for the year was affected by SEK 28 million ( 33) for changes in value of properties, SEK 337 million ( 175) for changes in value of derivatives and SEK 71 million (10) for financial assets. The operating margin was 63 per cent (62). Dagon s profit was included from March onwards for the same period last year. Operating surplus for a comparable portfolio rose by 4 per cent to SEK 908 million (875). Income rose by 5 per cent to SEK 1,431 million (1,365), which is primarily attributable to a strong level of net moving-in. Property costs rose by 7 per cent to SEK 523 million (490), partly due to increased costs for property tax. The fair value of a comparable portfolio rose by SEK 667 million or 4 per cent, mainly due to investments made in connection with net moving-in. INCOME AND EXPENSES Income during the year increased to SEK 2,220 million (1,948). The increase in income is attributable to net acquisitions, net moving-in and index adjustment of rents. Owing to ongoing rental disputes, Klövern has reduced income during the period by SEK 15 million. Property costs increased to SEK 828 million ( 733) during the period mainly due to new acquisitions. Property costs include rent losses of SEK 4 million ( 5). Central administration costs amounted to SEK 78 million ( 86). The comparison figure includes one-off costs for the acquisition of Dagon. The quarter shows strong net moving-in of SEK 35 million (5) and the corresponding figure for the year was SEK 51 million (69). Among those moving in, the largest tenants include CGI with 10,700 sq.m. of offices in Kista, the Municipality of Uppsala with 6,600 sq.m. of offices in Uppsala and Åhléns with 2,400 sq.m. of retail premises in Eskilstuna. The largest vacating tenants are Post Nord Logistics in Järfälla and Oplana AB in Kista. The average remaining lease term was 3.5 years (3.4). The economic occupancy rate for all properties was 90 per cent (88) and area-related occupancy rate for these properties was 82 per cent (81). The financial occupancy rate for investment properties was 92 per cent (92) and 66 per cent (57) for development properties. Among the larger contracts signed during the year where the tenant has not yet moved in are a 20-year lease for 2,855 sq.m. with OHB Sweden in Kista, a seven-year lease for 1,520 sq.m. with Otto Bock Scandinavia in Malmö and a sixyear lease for 3,800 sq.m. with the Uppsala County Administrative Board. SHAREHOLDING On 22 October, Klövern acquired an additional 163,000 shares in Tribona AB (publ), whereafter the holding amounts to 11,614,399 shares corresponding to 29.8 per cent of the total number of outstanding shares. Tribona is reported as an associated company from 7 June. Klövern s share of income for the period 7 June to 31 December amounted to SEK 5 million. The unrealized change in value up until classification as shares in an associated company amounted to SEK 49 million. Tribona specialises in modern and strategically located logistics properties. The property holding consists of 21 properties in Sweden and one in Denmark. The lettable space amounts to 711,000 sq.m. and the property value to SEK 5,574 million. During the year, Klövern has divested the whole of its holding in Diös Fastigheter AB (publ) with a realized change in value of SEK 22 million, which is reported under NET MOVING-IN AVERAGE LEASE TERM INCOME & PROFIT SEK m Moving-in Moving-out Net Q1 12 Q2 12 Q Q1 Q2 Q3 SEK m Years Average remaining lease term Profit from property management, trailing 12 months Q1 12 Q2 12 Q Q1 Q2 Income, trailing 12 months Q3 2,800 2,400 2,000 1,600 1,

5 KLÖVERN YEAR-END REPORT JANUARY DECEMBER 5 Change in value of financial assets. To that amount can be added the change in value of SEK 10 million reported for. During the year, compulsory redemption of the remaining shareholders in Dagon AB has taken place at an amount of SEK 80 per share. The total redemption amount was SEK 2.7 million. CASH FLOW The cash flow from current operations was SEK 657 million (712) during the year and income tax paid amounted to SEK 1 million ( 1). Investment operations have affected the cash flow by SEK 1,625 million net (2,457), through a mix of acquisitions and investments in existing properties. The cash flow from financing activities has affected the cash flow for the period by SEK 677 million (2,109). Altogether, cash flow for the amount to SEK 291 million (364). Liquid funds at the end of the year amounted to SEK 84 million (375). Klövern has also unutilized credit volumes of SEK 1,306 million (581). FINANCING At year-end, the interest-bearing liabilities amounted to SEK 16,163 million (15,229) and the average financial interest rate for the whole of the financial portfolio amounted to 4.3 per cent (4.3). Net financial income for the period was SEK 678 million ( 605), of which financial income amounted to SEK 8 million. The average fixed interest term was 2.7 years (3.0) on 31 December. Credit volumes with swap agreements are treated as having fixed interest. At year-end, Klövern had interest rate swaps totalling SEK 8,317 million (7,420) and interest caps of SEK 855 million (1,355), of which SEK 855 million matures in The interest caps have redemption rates of per cent. The average remaining term of derivatives was 4.6 years. The average period of tied-up capital was 2.0 years (2.2) at the end of the period. Unutilized credit volumes, including unutilized credit facilities of SEK 390 million (300), amounted to SEK 1,306 million (581). Klövern s interest rate swaps and interest caps effectively limit the interest rate risk. An increase in the short market rates of one percentage point would increase Klövern s average borrowing rate by med 0.5 percentage points and Klövern s financial expenses by SEK 77 million. Changes in value of derivatives amounted during the year to SEK 47 million ( 78) realized changes and SEK 290 million ( 97) unrealized changes. On 31 December, the value was SEK 144 million ( 432). Unrealized change in value does not affect the cash flow. On maturity, the value of the derivatives is always zero. All derivatives are classified as Level 2 according to IFRS. No derivatives have changed classification during the period. Klövern considers that there is no important difference between the book value and the fair value of interest-bearing liabilities. During the year, Klövern has issued a covered bond of SEK 700 million and issued an additional SEK 500 million within the framework of a bond loan totalling SEK 2 billion, of which SEK 1,150 million has been utilized, as well as SEK 165 million within the framework of a bond loan of SEK 500 million, of which SEK 340 million has FIXED INTEREST AND TIED-UP CAPITAL Years Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q Fixed interest Tied-up capital FIXED INTEREST AND TIED-UP CAPITAL Floating Fixed interest Loan volume, Interest, % Tied-up capital Contract volume, Utilized, Unutilized, Floating 7, ,083 5, , ,277 7, , ,150 1, , ,744 1, , Later Total 16, ,469 16,163 1,306

6 6 KLÖVERN YEAR-END REPORT JANUARY DECEMBER been utilized. The value of unencumbered properties was around SEK 0.8 billion at the end of the period. During the autumn, Klövern has restructured its derivative portfolio, by closing interest rate swaps of SEK 1.9 billion in advance. Original maturity was in 2020 and New interest rates swaps of SEK 2.0 billion were agreed upon at the end of. PROPERTY TRANSACTIONS During the year, 23 properties (7) have been acquired for a total purchase price of SEK 1,020 million (7,459). Klövern has sold and transferred possession of 12 properties (11) during the period for a price of SEK 387 million (543). INVESTMENTS AND BUILDING RIGHTS Investments in existing properties often take place in connection with new lettings with the aim of customizing and modernizing the premises and thus increasing the rental value. During the year, SEK 830 million (861) was invested. A total of 281 projects (328) are in process with a remaining investment of SEK 632 million (446). Total estimated expenditure for these projects amounts to SEK 1,517 million (1,736). At year-end, assessed building rights and building rights with local plans totalled 1,397,000 sq.m (1,342,000). 587,000 sq.m. (562,000) of the building rights are included in local plans. Over half of the building rights that are included in local plans consist of offices and almost a third of housing. The building rights are valued at SEK 972 million (896), corresponding to SEK 695 per sq.m. (654). PROPERTIES AND CHANGES IN VALUE As at 31 December, Klövern s portfolio consisted of 402 properties (387). The rental value amounted to SEK 2,570 million (2,468) and the fair value of the properties was SEK 24,059 million (22,624). FAIR VALUE Fair value, as per January 1 22,624 14,880 Aquisitions 1,020 7,459 Investments Sales Change in value Fair value at the end of the period 24,059 22,624 The total lettable area amounted to 2,624,000 sq.m..m (2,529,000).During the year, the changes in value of the properties totalled SEK 28 million ( 33). The change in value include realized changes in value of SEK 22 million (46) and unrealized changes in value of SEK 50 million ( 79). The unrealized changes in value do not affect the cash flow. On average, Klövern s property portfolio has been valued, as at 31 December, with a required yield of 7.2 per cent (7.2). The values of the investment properties have decreased slightly, mainly due to a somewhat weaker development of the CPI and thus lower rent indexation than expected. Klövern values 100 per cent of its property portfolio each quarter, 20 to 30 per cent of which are valued externally. The external valuations have been performed by DTZ Sweden and Savills. Every property in the portfolio is externally valued at least once during a rolling 12 month period. DTZ has served as an advisor when the required yields have been determined in most of the internal valuations. All properties have been classified as Level 3 according to IFRS. No properties have changed classification during the period. See Klövern s annual report for for a more detailed description of the valuation principles. KLÖVERN S LARGEST PROJECTS IN PROGRESS City Property Project type Lettable area property, sq.m. Project area, sq.m. Economic occupancy rate after project, % Estimated investment, Remaining investment, Increase in rental value due to project, Rental value after project, Estimated completion, year Örebro Vindhjulet 3 Office 19,343 19, Kista/Stockholm Helgafjäll 1 Office 11,735 10, Norrköping Kopparhammaren 2 Education 36,6 5, Malmö Dragör 1 Office 2,322 2, Linköping Brevduvan 17 Office 7,603 4, Linköping Idéläran 1 Office 15,658 4, Eskilstuna Vampyren 9 Retail 16,524 2, Linköping Amor 1 Office 3,292 3, Halmstad Halmstad 2:49 Office 3,330 3, Kista/Stockholm Gullfoss 5 Office/warehouse 3,477 2, Total 119,897 59,

7 KLÖVERN YEAR-END REPORT JANUARY DECEMBER 7 CONTRACT VALUE BY CUSTOMER CATEGORY % PROPERTY HOLDINGS SQ.M. BY TYPE OF PREMISES % SHAREHOLDERS No. common shares, thousands No. preferance shares, thousands Share of capital, % Share of votes, % Private companies, 54% Listed companies, 27% Public sector, 19% Offices, 46% Industry/warehouse, 35% Education/health care/other, 11% Retail, 8% THE SHARE On 31 December, the total number of registered shares in the company was 185,080,698, of which 166, were common shares and 18,536,338 preference shares. A common share confers a right to one vote and a preference share to one-tenth of a vote. Klövern s shares are listed on NASDAQ OMX Stockholm Mid Cap. On 31 December, the share price was SEK per common share (25.60) and SEK per preference share (6.75), corresponding to a total capitalization of SEK 7,527 million (6,670). At the end of the period, the number of shareholders was around 35,800 (31,700) and 83 per cent (81) of the share of votes was Swedish-owned. During the year, Klövern has sold 5,000,000 common shares, corresponding to 3.0 per cent of the total number of registered common shares. Klövern has subsequently not held any of its own common shares (5,000,000) or preference shares ( ). Corem Property Group 32, Arvid Svensson Invest 26,599 1, Rutger Arnhult via companies 18, Länsförsäkringar funds 16, Swedbank Robur funds 5, Handelsbanken funds 5, JPM Chase 4, SEB Investment Management 2, Mellon AAM Omnibus 2, Avanza Pension 1, Aktie-Ansvar funds 1, Pareto Bank 1, Nordea Investment Funds 1, Robur Försäkring 1, Client OMI for Ishare Europe 1, Klövern s profit sharing system Skandia funds Invus Investment SIX SIS AG, W8IMY Alfred Berg Total largest shareholders 125,277 2, Other shareholders 41,267 15, Total outstanding shares 166,544 18, Repurchased own shares 0 0 Total registered shares 166,544 18,536 DEVELOPMENT OF SHARE CAPITAL Date Event Change no. common shares Total no. common shares Change no. preference shares Total no. preference shares Acc. share capital, SEK Opening balance 166,544, ,721, Cash new issue ,544, ,721, Bonus issue 4,163,609 4,163, ,539, New issue 7,544,531 11,708, ,262, New issue 66,638 11,774, ,595, New issue ,775, ,598, New issue 463,000 12,238, ,9, New issue 448,000 12,686, ,153, New issue 912,500,598, ,716, New issue 2,475,731, ,378, New issue 3,583,350 17,314, ,295, New issue 1,105,000 18,419, ,820, New issue 116,650 18,536, ,403, Closing balance 166,544,360 18,536, ,403,490

8 8 KLÖVERN YEAR-END REPORT JANUARY DECEMBER PROFIT AND KEY RATIOS The tables below show income statement items and key ratios broken down according to Klövern s regions and investment and development properties. Investment properties means properties currently being actively managed. Development properties refers to properties where conversion or extension projects are in process or planned, leading to a higher standard or changed use of the premises, The current operating surplus is affected by projects or restrictions on letting before development of the property. The income statement table shows current operations, including properties sold and investments made during the period. The table with key ratios shows the situation at the end of the respective quarter and the two tables are accordingly not wholly comparable. Comparability between years is limited due to large net acquisitions during. PROFIT PER PROPERTY SEGMENT AND REGION Income, Costs, Operating surplus, Operating margin, % Investments, Investment Development South Investment Development East Investment Development Stockholm Investment Development Central/North Investment 2,081 1, ,338 1, Development Total 2,220 1, ,392 1, KEY RATIOS PER PROPERTY SEGMENT AND REGION Fair value, Required yield 1), % Area, 000 sq.m. Rental value, Ec. occupancy rate, % Investment 2,734 2, Development South 3,677 3, Investment 5,373 5, Development East 5,623 5, Investment 8,607 7, Development 914 1, Stockholm 9,521 8, Investment 5,063 4, Development Central/North 5,238 4, Investment 21,777 20, ,276 2,143 2,360 2, Development 2,282 2, Total 24,059 22, ,624 2,529 2,570 2, ) Required yields are estimated excluding building rights. South: Borås, Göteborg, Halmstad and Öresund. East: Kalmar, Karlskrona, Linköping, Norrköping and Nyköping. Stockholm: Kista, Storstockholm and Uppsala. Central/North: Karlstad, Västerås, Örebro, Falun/Säter and Härnösand/Sollefteå. Comparable figures for have been recalculated in line with the new structure, where Kalmar and Karlskrona now belong to Region East instead of Region South.

9 KLÖVERN YEAR-END REPORT JANUARY DECEMBER 9 Properties in Haninge, aquired in. ORGANIZATION AND ENVIRONMENT Klövern s business model entails closeness to the customer by having our own staff locally based at all 17 business units allocated to four geographic regions. The regions are South (Borås, Gothenburg, Halmstad and Öresund), East (Kalmar, Karlskrona, Linköping, Norrköping and Nyköping), Stockholm (Kista, Greater Stockholm and Uppsala) and Central/North (Karlstad, Västerås, Örebro, Falun/Säter and Härnösand/Sollefteå). At the end of the period, Klövern had 192 employees (185). The average age was 46 (46) and the proportion of women amounted to 40 per cent (41). Since 2011, the company has been certified in accordance with the Swedish Environmental Standard (Svensk Miljöbas). TAXES Deferred tax of SEK 10 million ( 73) has been charged to profit on current real estate operations. Furthermore, among other things, the change in the difference between fair value and residual value of properties and derivatives for tax purposes has entailed an effect on deferred tax of SEK 168 million (183). In total, deferred tax of SEK 178 million (110) and current tax of SEK 1 million ( 2) has been included. After the end of the period, the Administrative Court of Appeal has decided in Klövern s favour concerning the Tax Agency s upward adjustment of Klövern s tax by around SEK 77 million for the 2008 income year. The Tax Agency may appeal against the judgment to the Supreme Administrative Court. SIGNIFICANT RISKS AND UNCERTAINTY FACTORS A property company is exposed to various risks and opportunities in its business activities. Internal regulations and policies limit exposure to different risks. Klövern s significant risks and exposure and their management are described on pages of the annual report. DISPUTES Klövern has an ongoing large rental dispute. The tenant has deposited SEK 60 million for the period January December, SEK 15 million for the period January March 2014 and SEK 15 million for at the County Administrative Board. Klövern has, by reducing rental income, reserved SEK 15 million for and SEK 15 million for. No reservation has been made for the fourth quarter of.

10 10 KLÖVERN YEAR-END REPORT JANUARY DECEMBER ACCOUNTING POLICIES This interim report for the Group has been prepared in accordance with the Annual Accounts Act and IAS 34 Interim Financial Reporting and, in the case of the parent company, the Annual Accounts Act. Since 1 January, Klövern has reported deferred tax net in the balance sheet. The comparison figures have been adjusted in accordance with the new policy. Since 1 January, Klövern has made additional disclosures on items valued at fair value in compliance with IFRS, where properties are classified in level 3 and derivatives in level 2. Other accounting policies applied this interim report are substantially those described in Note 1 of Klövern s annual report for. On 31 December, Klövern s shareholding in Tribona AB (publ) amounted to 29.8 per cent. The shareholding, which exceeds 20 per cent, but is less than 50 per cent of the votes, is reported as shares in an associated company. Klövern therefore reports the shareholding in Tribona as a share in an associated company from 7 June. The shareholding is reported in compliance with IAS 28 Investments in Associates and the equity method. This means that the book value for the Group of the holding is adjusted downwards by Klövern s share of the net profit for the period and other comprehensive income with the exception of any dividend received. The associated company is reported at acquisition value in the parent company. The participation rights in Tribona have previously been reported as financial assets valued in the statement of income. This means that the participation rights have been valued at fair value since 7 June when the company became an associated company. The holding in Tribona has affected Klövern s statement of income in the following way: Dividend is reported in net financial items. Changes of value to 7 June are reported as Changes in value, financial assets. Klövern s share of Tribona s net profit for the period is reported as Shares of profit of an associated company. Klövern share of Tribona s other comprehensive income is reported as Other comprehensive income. DIVIDEND The Board of Directors is proposing to the Annual General Meeting, for the financial year, a dividend of SEK 1.50 (1.50) per common share and a dividend of SEK (10.00) per preference share to be paid at SEK 2.50 per quarter. It is proposed that the record date for dividend to common shareholders be 28 April 2014 and the estimated payment date 2 May The record date for dividend to preference shareholders is the last weekday of the respective calendar quarter and the payment date around three bank days thereafter. During the fourth quarter of, a dividend of SEK 2.50 (2.50) per preference share, totalling SEK 46 million (46), has been paid. The Annual General Meeting will take place at Kistamässan in Kista at 4 pm on 23 April Notice of the Annual General Meeting and pre requisites for notifying attendance will be advertised in Post & Inrikes Tidningar and on Klövern s website, Information about this notice is provided in an advertisement in Svenska Dagbladet. Shareholders wishing to make proposals to the Nominations Committee may do so by . EVENTS AFTER THE END OF THE PERIOD After the end of the period, Klövern has signed a contract for acquisition of a property in Västerås at a price of SEK 175 million. Transfer of possession has preliminary been set to October. Klövern has also signed a contract to to divest a property in Akalla for an underlying value of SEK 180 million. Transfer of possession will be on 1 April. On 24 January, Klövern announced that a letter of intent regarding an acquisition of Globen City had been signed. The letter of intent encompasses the properties Arenan 2, 3, 6 and 8 in Stockholm; and Startboxen 3 in Solna. The total lettable area amounts to around 140,000 sq.m. and consists mostly of office space. Final purchase agreements are expected to be signed at the end of first quarter. Nyköping 12 February 2014 The Board of Directors of Klövern AB (publ)

11 KLÖVERN YEAR-END REPORT JANUARY DECEMBER 11 Consolidated Statement of Income 12 month 12 month Income ,220 1,948 Property costs Operating surplus ,392 1,215 Central administration Net financial items Profit from property management Share of profits in associated company 2 5 Changes in value, properties Changes in value, derivatives Changes in value, financial assets Write-down of goodwill Profit before tax Current tax Deferred tax Net profit Other comprehensive income, items which may later be reversed in the income statement 2 Net comprehensive income Earnings per common share, SEK Earnings per preference share, SEK No. of common shares outstanding at the end of the period, million No. of preference shares outstanding at the end of the period, million Average no. of outstanding common shares, million Average no. of outstanding preference shares, million There are no outstanding warrants or convertibles. Consolidated Balance Sheet ASSETS Goodwill Investment properties 24,059 22,624 Machinery and equipment Participation rights in associated company 488 Financial assets at fair value through statement of income 330 Other receivables Liquid funds TOTAL ASSETS 25,230 23,795 SHAREHOLDER S EQUITY AND LIABILITIES Shareholder s equity 7,198 6,696 Minority interest 0 0 Deferred tax liability Interest-bearing liabilities 16,163 15,229 Derivatives Accounts payable Other liabilities Accrued expenses and prepaid income TOTAL SHAREHOLDER S EQUITY AND LIABILITIES 25,230 23,795

12 12 KLÖVERN YEAR-END REPORT JANUARY DECEMBER Change in Consolidated Shareholders Equity Shareholders equity ,740 New issue 1,965 Repurchase/sale of own shares 39 Dividend 387 Net profit 339 Shareholder s equity ,696 Sale of own shares 1 Dividend 435 Other comprehensive profit 2 Net profit 808 Shareholders equity ,198 Consolidated Statement of Cash Flow Current operations 12 month 12 month Profit from property management Adjustment for items not included in the cash flow Income tax paid Cash flow from current operations before change in working capital Changes in working capital Change in operating receivables Change in operating liabilities Total change in working capital Cash flow from current operations Investment operations Divestment of properties Acquisition of and investment in properties ,850 2,541 Acquisition of subsidiaries 426 Acquisition of machinery and equipment Change in financial assets Realized change in value, financial assets Cash flow from investment operations ,625 2,457 Financing operations Change in interest-bearing liabilities ,942 Realized change in value, derivatives Repurchase/sale of own shares New issue of preference shares Dividend Cash flow from financing operations ,109 Total cash flow Liquid funds at the beginning of the period Liquid funds at the end of the period

13 KLÖVERN YEAR-END REPORT JANUARY DECEMBER Parent Company Statement of Income 12 month 12 month Net sales Cost of services sold Gross profit Central administration Operating profit Net financial items Profit after net financial items Current tax Deferred tax Net profit Other comprehensive income Net comprehensive income Parent Company Balance Sheet ASSETS Machinery and equipment 3 4 Participation in group companies 1,850 1,836 Participation in other companies Receivables from group companies 11,338 7,085 Deferred tax assets Accounts receivables Liquid funds TOTAL ASSETS 14,095 9,760 SHAREHOLDERS EQUITY AND LIABILITIES Shareholders equity 5,374 5,086 Interest-bearing liabilities 5,066 3,841 Liabilities to group companies 3, Accounts payable 7 8 Other liabilities Accrued expenses and prepaid income TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 14,095 9,760

14 14 KLÖVERN YEAR-END REPORT JANUARY DECEMBER Key ratios Property Number of properties Lettable area, 000 sq.m. 2,624 2,529 2,624 2,529 1,561 1,528 1,392 1,382 Rental value, 2,570 2,468 2,570 2,468 1,554 1,486 1,385 1,360 Fair value properties, 24,059 22,624 24,059 22,624 14,880,493 12,032 11,895 Direct yield requirement valuation, % Operating margin, % Occupancy rate economic, % Occupancy rate area, % Average lease term, years Financial Return on equity, % Equity ratio, % Adjusted equity ratio, % Leverage, % Leverage properties, % Interest coverage ratio, multiples Average interest, % Average fixed-interest period, years Average period of tied-up capital, years Interest-bearing liabilities, 16,163 15,229 16,163 15,229 9,345 8,517 7,646 7,645 Share Earnings per common share, SEK Earnings per preference share, SEK Equity per share, SEK Share price common share at end of period, SEK Share price preference share at end of period, SEK Market capitalization, 7,527 6,670 7,527 6,670 4,165 5,467 3,682 2,929 Total no. of registered common shares at end of period, million Total no, of outstanding common shares at end of period, million Total no, of registered preference shares at end of period, million Total no, of outstanding preference shares at end of period, million Dividend per common share, SEK 1.50* Dividend per preference share, SEK 10.00* Dividend in relation to profit from property management, % 68* *Proposed dividend.

15 KLÖVERN YEAR-END REPORT JANUARY DECEMBER 15 Definitions PROPERTY AREA-BASED OCCUPANCY RATE Let area in relation to total lettable area. DEVELOPMENT PROPERTIES Properties where conversion or extension projects are in process or planned, which lead to a higher standard or changed use of the premises. DIRECT YIELD REQUIREMENT, VALUATION The required yield of property valuations on the residual value. ECONOMIC OCCUPANCY RATE Lease value in relation to rental value at the end of the period. INVESTMENT PROPERTIES Properties currently being actively managed. LEASE VALUE Rent for premises, index and rent supplement according to lease. NET MOVING-IN Lease value of tenants moving in less lease value of vacating tenants. OPERATING MARGIN Operating surplus in per cent of total income. OPERATING SURPLUS Total income less rent losses, operating and maintenance costs, property administration, site leasehold charges and property tax. PROFIT FROM PROPERTY MANAGEMENT Profit before changes in value and tax. REALIZED CHANGE IN VALUE Property sales during the period after deduction of the properties most recent reported fair value and selling expenses. RENTAL VALUE Lease value plus assessed market value for space not rented at end of period. UNREALIZED CHANGE IN VALUE Change in fair value of the property portfolio after deduction of investments made. FINANCE EQUITY RATIO Reported equity in relation to reported total assets at the end of the period. EQUITY RATIO, ADJUSTED Reported equity adjusted for the value of derivates, write down of goodwill and deferred tax liabilities exceeding 5 per cent of the difference between taxable value and fair value of the properties in relation to reported total assets at the end of the period. INTEREST COVERAGE RATIO Profit from property management plus financial costs in relation to financial costs. LEVERAGE Interest-bearing liabilities after deduction of the market value of the listed share portfolio and liquid funds in relation to the fair value of the properties at the end of the period. LEVERAGE PROPERTIES Interest-bearing liabilities with secured financing in properties in relation to the fair value of the properties at the end of the period. RETURN ON EQUITY Profit for the period in relation to average equity. SHARE EARNINGS PER COMMON SHARE Profit for the period, after deduction for earnings to preference shares, in relation to average number of outstanding shares. EARNINGS PER PREFERENCE SHARE The periods accumulated share of yearly dividend of SEK 10 per preference share calculated on outstanding preference shares at the end of each quarter. EQUITY PER SHARE Shareholders equity in relation to outstanding common and preference shares at balance sheet date. Preference shares in connection with the liquidation of the Company, preferential rights to SEK 150 of equity plus the period s share of accumulated entitlement to annual dividend of SEK 10. Karlstad Göteborg Halmstad Borås SOUTH Malmö/Öresund CENTRAL/NORTH Falun/Säter Örebro Västerås Kalmar Nyköping Norrköping Linköping EAST Karlskrona Härnösand/Sollefteå Uppsala STOCKHOLM Kista Storstockholm

16 Calendar Final day for trading conferring right to dividend to preference shareholders 26 March 2014 Record date for dividend to preference shareholders 31 March 2014 Expected date for dividend to preference shareholders from Euroclear 3 April 2014 Interim report Jan March April 2014 Annual General Meeting April 2014 Final day for trading conferring right to dividend to preference shareholders 25 June 2014 Record date for dividend to preference shareholders 30 June 2014 Expected date for dividend to preference shareholders from Euroclear 3 July 2014 Interim report Jan Jun July 2014 Interim report Jan Sep Oct 2014 Year-end report Feb 2015 Contact persons Rutger Arnhult, CEO , rutger.arnhult@klovern.se Lars Norrby, IR , lars.norrby@klovern.se This information in the interim report is such that Klövern AB (publ) is obliged to publish under the Securities Market Act and/or the Financial Instruments Trading Act. The information was made available for publication on 12 February Klövern AB (publ), Box 1024, SE Nyköping, Sweden Telephone Fax Reg.no Registered office: Nyköping info@klovern.se