Interim Report January – September 2018

Hemfosa’s extraordinary general meeting on 13 September 2018 resolved in accordance with the proposal of the Board of Directors to distribute all shares in the subsidiary Nyfosa AB to Hemfosa’s ordinary shareholders. Accordingly, the information in this report refers to Hemfosa excluding Nyfosa (Continuing operations), unless otherwise stated. Nyfosa is recognized in this report as Operations to be distributed to shareholders in accordance with IFRS 5 and IFRIC 17. This means that Nyfosa’s profit for the period is recognized on a separate line in the consolidated statement of profit/loss and comprehensive income and that assets and liabilities attributable to Nyfosa are recognized on a separate line in the balance sheet. Nyfosa’s equity is also recognized on a separate line. For more information, refer to Note 1 Accounting policies on page 18 and Note 11 Operations to be distributed to shareholders on page 21.

• Rental income amounted to MSEK 642 (528) for the quarter and MSEK 1,842 (1,558) for the period. Net operating income amounted to MSEK 468 (403) for the quarter and MSEK 1,282 (1,106) for the period.

• Profit from property management including the share in profit in part-owned companies amounted to MSEK 330 (280) for the quarter, an increase of 18 percent, corresponding to SEK 1.80 per ordinary share (1.60), and to MSEK 839 (897) for the period, corresponding to SEK 4.70 per ordinary share (5.16). Profit from property management for the period in the preceding year was impacted by a significant increase in value of part-owned properties, recognized in share in profit from joint ventures.

• Profit after tax amounted to MSEK 1,290 (775) for the quarter, corresponding to SEK 7.51 per ordinary share before dilution (4.73), and to MSEK 2,881 (2,635) for the period, corresponding to SEK 17.20 per ordinary share before dilution (16.06).

• EPRA NAV amounted to SEK 126,72 (107,56), an increase of 18 percent.

• The earnings capacity at September 30, 2018 amounted to MSEK 1,300.

SIGNIFICANT EVENTS DURING AND AFTER THE QUARTER

HEMFOSA

• In August, Hemfosa took possession of a property portfolio located in northern and central Sweden at an underlying property value of MSEK 1,145, a rental value of MSEK 141 and a property area of approximately 155,000 square meters. The largest tenants are Transportstyrelsen, Högskolan Dalarna and the municipalties of Härnösand, Sollefteå and Falun.

• Hemfosa’s extraordinary general meeting on 13 September 2018 resolved in accordance with the proposal of the Board of Directors to distribute and list the subsidiary Nyfosa AB.

• On September 14, Caroline Arehult took office as CEO of Hemfosa Fastigheter AB.

NYFOSA

• In September, Nyfosa took possession of a property portfolio in southern and central Sweden for which an agreement was signed in July. The acquisition took place at an underlying property value of MSEK 3,600 and comprised a total area of 460,000 square meters.

• In August, Nyfosa divested the Kungsängen 15:1 property in Uppsala, with an underlying property value of MSEK 1,000.

COMMENTS FROM CEO – Hemfosa 2.0

As someone who has always been interested in community building, I am delighted to be taking over the helm at Hemfosa, which specializes in community service properties. As CEO of Hemfosa, I have the important and exciting mission to lead and develop our operations. We have now started drawing up a plan for Hemfosa in its new form after the pending demerger of the company. Until then, it is business as usual, with property management and transactions moving at a high tempo.

A STRONG CORPORATE CULTURE
Hemfosa has completed a fantastic journey under the leadership of Jens Engwall. I am impressed by the strong corporate culture I have seen at Hemfosa – an organization of driven employees with a strong sense of personal responsibility, entrepreneurship and engagement. Change is something our employees are used to and this experience will stand us in good stead during the transition we now face. Hemfosa’s corporate culture is a good match for me, given my background of team spirit and decentralized decision making. I also fi nd it highly motivating to have a large property portfolio to manage, with long-term tenant relationships that give us the confi dence and security to develop.

THE WAY FORWARD
I am arriving at a phase when we are shaping the new Hemfosa. The direction has been set – we will consolidate Hemfosa’s position and continue to grow. Now we are determining the best way forward, which initiatives are the most important and how we can best meet our tenants’ needs. What is clear is that we will need to set an aggressive strategy, with new builds of community service properties representing an important parameter in our growth.

How to best include sustainability in our work is also something we need to integrate into our strategy. As a large company, it goes without saying that we must assume responsibility when it comes to these issues.

CONTINUED HIGH ACTIVITY
Acquisitions will continue to be a central part of Hemfosa’s growth strategy, and our activity level remains high. During the third quarter, in parallel with the work related to the demerger of the Group, we took possession of properties amounting to approximately SEK 1.2 billion, including the property portfolio in northern and central Sweden for slightly more than SEK 1.1 billion, for which we entered into an agreement in June. Through this transaction, we are adding properties with a healthy return that are a good fi t with our growing Swedish community service property portfolio.

FOCUS ON THE FUTURE
We are now looking forward to the conclusion of the demerger of the Group in the final quarter of the year, with the distribution of Nyfosa to Hemfosa’s ordinary shareholders. Both companies will subsequently be able to truly focus on the future and the exciting opportunities we have ahead of us. Personally, it feels incredibly inspiring to be able to lead Hemfosa’s continued eff orts, as a major property operator, to contribute to the development of sustainable community building.

Caroline Arehult, CEO

Caroline Arehult, CEO
+46 70 553 80 26, caroline.arehult@hemfosa.se

Karin Osslind
+46 70 794 93 37, karin.osslind@hemfosa.se

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