INTERIM REPORT · 10.11.2015 · Profit margin 46,6 53,0 48,5 50,5 42,3 Income from property...

INTERIM REPORT JANUARY– SEPTEMBER 2015

2015Q3

2 D. Carnegie & Co AB (publ)

INTERIM REPORT JANUARY – SEPTEMBER 2015

KEY FIGURES Jan – Sept2015

Third quarter2015

Jan – Sept 2014

Third quarter 2014

Full year 2014

Rental income, SEK m 900,7 308,8 326,9 240,0 608,7

Net operating income, SEK m 420,8 164,2 159,2 121,6 257,6

Profit margin 46,6 53,0 48,5 50,5 42,3

Income from property management, SEK m 138,0 91,0 51,6 35,2 42,4

Profit after tax, SEK m 404,9 191,9 90,7 9,0 233,1

Earnings per share SEK, basic 5,72 2,71 1,28 0,13 4,80

Earnings per share SEK, diluted 4,52 2,14 1,15 0,10 4,30

Equity per share, SEK 51,68 51,68 44,00 44,00 45,70

Equity EPRA NAV per share, SEK 60,53 60,53 48,61 48,61 51,99

Fair value properties, SEK m 12,591,5 12,591,5 10,216,0 10,216,0 11,520,8

Solidity, % 25,3 25,3 26,6 26,6 25,4

Solidity EPRA NAV, % 29,7 29,7 29,6 29,6 28,8

INTERIM REPORT JANUARY– SEPTEMBER 2015

• Rental income of SEK 901 million (327)• Net operating income of SEK 421 million (159)• Income from property management of SEK

138 million (52)• Changes in the value of investment properties

of SEK 440 million (78)• Changes in the value of derivatives of

SEK -50 million (-17)• Profi t after tax of SEK 405 million (91)• Earnings per share of SEK 5.72 (1.28)

before dilution• Earnings per share of SEK 4.52 (1.15)

after dilution*

• Rental income of SEK 309 million (240)• Net operating income of SEK 164 million (122)• Income from property management of SEK 91

million (35)• Changes in the value of investment properties

and derivatives of SEK 180 million (0)• Changes in the value of derivatives of

SEK -51 million (-17)• Profi t after tax of SEK 192 million (91)• Earnings per share of SEK 2.71 (0.13)

before dilution• Earnings per share of SEK 2.14 (0.10)

after dilution*

SIGNIFICANT EVENTS AFTER THE THIRD QUARTER• Entered into an agreement regarding the sale of

Hammarkullen in Gothenburg containing 890 apartments and the agreed underlying property value is SEK 493 million

• At the time of the publication of this report, a further 9 apartments have been renovated, in addition to the 232 apartments for which renovations had been completed at the close of the period. In addition, renovations have com-menced in respect of 280 apartments and are expected to be completed during 2015

SIGNIFICANT EVENTS DURING THE THIRD QUARTER• Properties with 1 009 properties in Jordbro och

Vårberg taken in possession July, 1

• Properties with leasable space of 30,000 sq. m., rental value SEK million 28.5 acquired in Norrköping

• Properties with leasable space of 8,550 sq .m., rental value SEK million 9.2 acquired in Norrköping

• Björn Sundberg employed as head of communication

JANUARY–SEPTEMBER THIRD QUARTER 2015

* Upon calculation of the profit per share after dilution, the annual interest savings regarding the convertible debenture in the amount of SEK 51 million has been taken into consideration. The effect of the savings per share is SEK 0.72/year.

January–September 2014 constitutes a development period and is not really comparable to January–September 2015.

D. Carnegie & Co AB (publ) 3

JANUARY – SEPTEMBER 2015 INTERIM REPORT

During the period, we completed the acquisition of just over 1,000 apartments in Jordbro and Vårberg and 285 apartments in Norrköping, which further strengthens our earning capacity. The acquisition in Stockholm was at an attractive level and the valuation as of September 30 exceeded the acquisition price by approximately SEK 70 million.

During the period, we entered into contracts with addi-tional suppliers of materials and construction firms and expanded the central management of the business. During and after the quarter, we commenced approxima-tely 300 renovations, making us confident that we will achieve our forecast of renovating approximately 500 apartments in 2015. We also believe that we will achieve a rolling annual pace of 1,000 apartments per year during the fourth quarter.

We have also continued to invest at a high level in façades, heating facilities, laundry facilities, etc., which increases our rental income and reduces the cost for repairs and maintenance. This is reflected in improvements in net operating income which, for the quarter, amounted to SEK 164 million as compared with SEK 122 million for the same quarter of last year and SEK 136 million for the preceding quarter. The earning capacity increased to SEK 316 million at an annual rate as per September 30 as compared with SEK 235 million on 30 June. For the comparable portfolio, i.e. the portfolio we owned during

the entire period adjusted for divestments, the increase is SEK 31 million (266 and 235 respectively).

Interest rate levels have dropped somewhat further since June 30 and the net interest at an annual pace for the com-parable portfolio decreased from SEK 154 million to SEK 150 million.

Increases in the value of the property portfolio during the quarter amounted to SEK 281 million, of which SEK 180 million affected profit, i.e. after deductions for investments. The average direct return calculation in the valuation, 5.16 percent, is unchanged compared to the second quarter.

Taken as a whole, improvements have led to a strong growth in reported profit. The profit for the quarter before tax is a full SEK 202 million, which can be compared with SEK 19 million for the third quarter of 2014. The profit per share after tax amounted to SEK 2.71, as com-pared with SEK 0.13 for the third quarter of 2014. This yields a profit after tax for the first nine months of the year of SEK 405 million which corresponds to SEK 5.72 per share.

Stockholm, November 9, 2015

ULF NILSSONCEO of D. Carnegie & Co

Statement from the CEO

The third quarter of the year has been characterised by a consolidation of the business and we are now beginning to harvest the fruits of the very high level of activity over the preceding 18 months. This quarter demonstrates that efficient management and renovation of our properties yields a good financial return. During the quarter, we also completed the acquisition of approximately 1,300 additional apartments in Stockholm and Norrköping. We also entered into agreements to sell our properties in Gothenburg since they are not within our geographic area of operations. We have also reorganised our structure for renovating apartments, which means that we will be achieving our internal targets during the year.

The number of completed housing in Stockholm County

Housing needs (600 units per 1,000 inhabitants)

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

1975

1977

1979

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

2013

Population growth in Stockholm County

Number



D. Carnegie & Co is a property company focusing on owning and developing rental properties in the “Million Program” housing program in the Stockholm region.

Good return – low risk

There are good possibilities for creating value through renovations since few extensive improvement programs have been implemented since the buildings were con-structed from 1965 – 75, but the buildings are often in very good locations with well-built basic structures. The need for renovations also means that they often can be acquired at an advantageous price.

The rent levels are generally low in the Million Program buildings. This means that the potential for increased rents after renovation is great. Maintenance costs are also significantly reduced through renovation. Renovations not only have a positive effect on cash flow, they also generate significant increases in the value of the properties.

D. Carnegie & Co.’s model entails that individual apart-ments are renovated in conjunction with natural tenant turnover rather than an entire wing of the building being dealt with on a single occasion. In this way, lengthy and expensive evacuations can be avoided and the vacancy

cost held to a minimum. This method of renovating apartments is also appreciated by the tenants since it takes place when natural vacancies occur or when an agreement has been reached with the tenants.

The geographic concentration of properties means that D. Carnegie & Co can manage the properties cost-effec-tively. The property management is conducted through local area offices which also contributes to creating a close relationship with the tenants. In order to reduce costs and increase the level of service, many of the work-men, such as painters, are even employed by D. Carnegie & Co.

The terrific pressure on the residential market in the Stockholm region is expected to continue in the foreseeable future. This means that the risk of vacancy is almost nonexistent in D. Carnegie & Co.’s portfolio. D. Carnegie & Co currently has an average of a six-year waiting list in the portfolio.

Source: Statistics Sweden

THE DEVELOPMENT OF THE NUMBER OF HOUSING VERSUS POPULATION GROWTH IN STOCKHOLM

Despite the fact that the number of newly constructed residences has significantly risen over the past few years and that the trend is expected to continue, the shortage of residences in the Stockholm region is increasing since the population growth is significantly outpacing new construction.

OWN AND DEVELOP RENTAL PROPERTIES FOCUSING ON STOCKHOLM

THIS IS D. CARNEGIE & CO

Commenced residential construction

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

Number

2011 2012 2013 2014 2015 2016

Population growth



Our market

There is a great shortage of residential housing in the Stockholm region – a shortage which is expected to con-tinue for the foreseeable future since relocations to the Stockholm area far exceed new production of housing. It is on this market that D. Carnegie & Co owns properties.

With respect to rental apartments, the waiting time in the Stockholm region for a residence is estimated to be nine years on average. Over 500,000 people are currently in line for an apartment. Last year, only 12,000 people acquired a new residential lease in Stockholm.

The lack of residences is so great that 700,000 new residences are needed in Sweden by 2025, according to a forecast by the Swedish National Board of Housing. The shortage is largely a consequence of the continued significant increase in population. A large part of this need is found in the Stockholm region. Even if the new construction of residences is at a high level and expected to be 50,000 next year, the shortage of rental properties is expected to increase.

The large growth in population means that the housing shortage is expected to continue for the foreseeable future. In 2025, the shortage of residences in the country is expected to be 700,000, and a very large percentage of the need is expected to be in the Stockholm region.

LARGE DEMAND FOR RESIDENCES IN THE “MILLION PROGRAM” BUILDINGS

Source: National Board of Housing, Building and Planning

PROJECTIONS FOR THIS YEAR AND NEXT WILL INCREASE THE DEMAND FOR HOUSING

Märsta



Amounts in SEK thousand 2015Jan – Sept

2014Jan – Sept

2015 July – Sept

2014 July – Sept

2014 Jan – Dec

Rental income 900,653 326,872 308,796 239,985 608,727

Other income 2,903 1,012 919 1,012 2,441

Operating expenses -356,426 -118,990 -103,220 -78,996 -254,301

Maintenance expenses -97,377 -36,003 -32,117 -31,877 -76,429

Property tax -17,436 -6,988 -5,988 -5,000 -12,496

Ground rent -11,538 -6,662 -4,222 -3,508 -10,356

Net operating income 420,779 159,241 164,168 121,616 257,586

Central administration -74,270 -18,481 -13,735 -13,489 -48,775

Costs related to acquisition of business - -15,299 - -15,299 -15,276

Net finance items -208,546 -73,830 -59,431 -57,662 -151,181

Income from property management 137,963 51,631 91,002 35,166 42 354

Changes in value of investment property 439,588 77,515 180,130 451 278,427

Realized value changes of investment property -43,674 - -5,874 - -

Changes in value of financial instruments -50,138 -16,752 -51,060 -16,752 -14,214

Imparment of goodwill -15,004 - -12,619 - -

Profit before tax 468,735 112,394 201,579 18,865 306,567

Tax -63,790 -21,743 -9,721 -9,899 -73,512

Net profit for the period 404,945 90,651 191,858 8,966 233,055

Other comprehensive income 0 0 0 0 0

Total comprehensive income for the period 0 0 0 0 0

Total comprehensive income for the period 404,945 90,651 191,858 8,966 233,055

Profit attribute to:

Owners of the parent company 404,369 89,350 191,858 9,092 234,649

Non-controlling interests 576 1,301 0 -126 -1,594

Total comprehensive income for the period 404,945 90,651 191,858 8,966 233,055

Profit after tax per share SEK, before dilution 5,72 1,28 2,71 0,13 4,80

Profit after tax per share SEK, after dilution 4,52 1,15 2,14 0,10 4,30

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN BRIEF



The period January–September 2015

Rental income and net operating incomeIncome for the period amounted to SEK 904 million (328). The strong increase in income is largely a conse-quence of the acquisitions carried out from July 4, 2014 until the close of the period. The income for the period also increased due to the fact that the pace of apartment renovations increased leading to higher income, as well as the general increases in rent for 2015 which were in the range 0.5 – 1.3 percent, with a weighted average of 1.1 percent. The rent increases as a consequence of invest-ments and general rent increases during the period increased the rent value by SEK 35 million.

The costs for the period amounted to SEK -483 million (-169). The increase in costs was primarily a consequence of the acquisitions carried out, which significantly expan-ded the property portfolio. The cost for management include operating costs, day-to-day maintenance and repairs, property taxes and other management costs directly related to the management of the properties. Seasonal variations affect the costs differently for the dif-ferent quarters, with the first and fourth quarter normally having the highest costs, primarily with respect to costs for heating and measures taken to prevent people from slipping on ice.

The net operating income for the period amounted to SEK 421 million (159), which generates a profit margin in management of 46.5 percent (48.7). The significantly increased net operating income, an increase of 265 per-cent, is largely linked to the acquisitions carried out from July 4, 2014 until the close of the period.

Administration costs Administration costs during the period amounted to SEK -74 million (-18). These costs consist primarily of personnel costs, costs for group-wide functions, marke-ting and sales costs and, during this period, costs of a one-time nature amounted during the period to approx-imately SEK -27 million which arose in conjunction with relisting to Mid Cap and in conjunction with changes in the organisation in order to adapt it to new, significantly more extensive, operations. The organisation has been gradually adapted to the current business and all appoint-

ments to important positions in the organisation have now been made.

Net financial itemsNet financial items during the period amounted to SEK -209 million (-74). Financial income during the period amounted to SEK 12 million (0), which primarily con-sists of interest on vendor notes. Financial costs consist primarily of interest costs for loans regarding the Group’s property portfolio. Financial costs also include interest on the subordinated debenture in the amount of SEK 1 billi-on issued in April 2015. In conjunction with the refinan-cing which was carried out during the first quarter of approximately one-half of the Group’s loans, net financial items increased by approximately SEK -18 million in one-time costs related to costs in conjunction with early redemption of loans and interest derivatives. This results in an interest coverage ratio for the period of 1.7 times.

Income from property managementIncome from property management (i.e. profit before changes in value and taxes) for the period amounted to SEK 138 million (52).

Changes in value in management properties, realised changes in valueThe Group carries out valuations of the properties on a quarterly basis and the properties are reported at fair value in accordance with IFRS 13 in accordance with level 3. At the end of the accounting period, 25 percent of the properties had been valued externally and 75 percent of the properties valued internally, where a model for valuation and assump-tions was used which corresponds to that used in the exter-nal evaluations carried out by Savills. The average direct return has been calculated at 5.16 percent. During the peri-od, changes in value on management properties affected the profit in the amount of SEK 440 million (78). The valua-tions were affected positively by the rent increases during the period which resulted in higher net operating income, and a somewhat lower required return. The total increase in rent during the period amounted to just over SEK 35 million on an annual basis. During the period, investments which increased the value were made in the amount of SEK 217 million (78). During the period, properties were sold and

The earnings items reported below relate to the period January – September 2015. The comparison items stated within parentheses refer to amounts for the corresponding period during the preceding year. January – September 2014 constitutes a development period and is not really comparable to January – September 2015.

Sollentuna



affected earnings by SEK -44 million (0). Following a test of impairment of goodwill, which the Group carries out on a quarterly basis, a write-down charge was taken which affected earnings by SEK -15 million (0) during the peri-od, which largely was a consequence of sales of properties, properties included in the acquisition of Hyresbostäder i Sverige II AB. The result of the period has influenced positively in the same range by impairment of deferred tax.

Changes in value in derivativesThe group uses derivative swaps to limit the interest risk in the earnings. Interest rate derivatives are reported each quarter at the market value and the value is depen-dent on changes in interest rates. The change in the value is reported in the income statement. The market value for the period affected the profit by SEK -50 milli-on (-17) due to the fact that interest rates fell during the period. These changes in value do not affect cash flow.

Tax The tax cost for the period amounted to SEK -64 milli-on (22) and consists of deferred tax related to temporary differences on management properties SEK -152 milli-on (-11), changes in value for derivatives SEK 8 million (-), and loss carry forwards SEK 76 million (-), and cur-rent tax attributable to earnings for the year and adjust-ments of previous tax years SEK 2 million (-). The effective tax rate for the period is 13.6 (12.7) percent. The lower effective tax rate can be explained by tax-free sales of companies.

ProfitThe profit for the period after tax amounted to SEK 405 million (91), which corresponds to SEK 5.72 (1.28) before dilution, and SEK 4.52 (1.15) after full dilution.



Third quarter, July–September 2015

Rental income and net operating incomeThe profit and net operating income increased signifi-cantly during the third quarter of the year as compared with the second quarter. This increase is a consequence of acquisitions for which closing took place during the quar-ter, rent increases on fully renovated apartments, and the fact that general rent increases took effect fully during this quarter.

Income during the third quarter amounted to SEK 309 million, as compared with SEK 295 million during the second quarter. The largest portion of the increase in income relates to the portfolio acquired in Jordbro, which closed on July 1, 2015. Income for the third quarter also increased as a consequence of increased rental income for the fully renovated apartments, and that the general rent increases took full effect in all portfolios, with the increases being in the range of 0.5 to 1.3 percent. The average general rent change in 2015 was 1.1 percent.

Costs for the third quarter amounted to SEK -146 milli-on, as compared with SEK -158 million for the second quarter. The significantly lower costs can be explained in part by seasonal variation due to the fact that the third quarter is the quarter in the year which has the lowest seasonally-linked costs, and in part due to active manage-ment resulting in lower costs for other operating and maintenance costs.

Net operating income for the third quarter amounted to SEK 164 million, as compared with SEK 136 million for the second quarter. The profit margin in management amounted to 53 percent, as compared with 46.3 percent for the second quarter. The direct return was 4.7 percent and the average financing costs on the interest-bearing liabilities was 2.6 percent.

Profit The costs for central administration amounted to SEK -14 million, as compared with SEK -30 million for the second quarter. However, the second quarter figures were encumbered by costs of a one-time nature totalling SEK -14 million which, cleared of these items, would mean a comparison figure for the second quarter of SEK -16 mil-lion. The important positions in the organisation were filled at the end of the third quarter.

Net financial income for the third quarter amounted to SEK -59 million as compared with SEK 62 million for the second quarter. Despite higher interest expenses for the recent acquisition in Jordbro, the improvment in net financial income depends on the fact that derivative expenses from previous quarters have been reclassified from financial expenses to the change in value of derivati-ves. Income from property management (i.e. profit before changes in value and taxes) for the third quarter amoun-ted to SEK 91 million, as compared with SEK 45 million during the second quarter. The Group’s average interest rate for total interest-bearing liabilities amounted to 2.6 percent at the end of the third quarter including derivati-ves, as compared with 2.8 percent for the second quarter. The interest coverage ratio for the third quarter was 2.5 times.

Income from property management, i.e. profit before changes in value and tax, for the third quarter amounted to SEK 91 million, as compared with SEK 45 million for the second quarter.

During the third quarter, changes in value in manage-ment properties affected profit by SEK 180 million, as compared with SEK 126 million for the second quarter. The valuation is based on an average required return of 5.16, percent, which is the same required return which, in conjunction with the most recent valuation, was made at the end of the second quarter. The increase in value can be explained by investments carried out, and increased net operating income, and a higher valuation than the acquisition price for the new acquisition in Jordbro, by approximately SEK 71 million.

Changes in value on derivatives affected profit for the third quarter by SEK -51 million, as compared with 75 for the second quarter, as a consequence of the fact that interest rates continued to decline. In total, the derivative portfolio had a nominal value of SEK 3,401 million, which consists exclusively of interest swaps.

Profit after tax for the third quarter amounted to SEK 192 million, to be compared with 166 million for the second quarter, which corresponds to a profit per ordinary share of SEK 2.71.

The earnings items set forth below refer to the third quarter, July – September 2015. The comparison is to the second quarter 2015, comparison to the third quarter previous year is not relevant.



Amounts in SEK thousand 2015 September 30

2014 September 30

2014December 31

ASSETS

Non-current assets

Goodwill 685,874 698,397 698,397

Investment properties 12,591,516 10,216,770 11,520,820

Equipment 4,599 6,182 4,176

Shares 1,291 - -

Non-current receivables 56,692 176,214 172,824

Deferred tax asset 142,141 30,193 55,094

Total non-current assets 13,482,113 11,127,756 12,451,311

Current assets

Current assets 461,369 289,265 77,866

Cash and cash equivalents 487 828 199,111 253,170

Total current assets 949,197 488,376 331,036

TOTAL ASSETS 14,431,310 11,616,132 12,782,347

EQUITY AND LIABILITIES

Shareholders’ equity 3,657,398 3,086,197 3,251,455

Non-current liabilities

Non-current interest-bearing liabilities 7,185 832 7,127,547 4 759,257

Other non-current liabilities 3,653 4,596 777

Deferred tax liability 1,210,353 993,614 1,060,947

Interest rate derivatives 101,649 58,650 65,153

Total non-current liabilities 8,501,487 8,184,407 5,886,134

Current liabilities

Current interest-bearing liabilities 1,982 591 5,026 3,363,811

Other current liabilities 289,834 340,502 280,947

Total current liabilities 2,272,425 345,528 3,644,758

TOTAL EQUITY AND LIABILITIES 14,431,310 11,616,132 12,782,347

Equity attributable to:

Parent Company shareholders 3,657,398 3,042,156 3,210,308

Non-controlling interests - 44,041 41,147

Total equity 3,657,398 3,086,197 3,251,455

CONSOLIDATED STATEMENT OF FINANCIAL POSITION, SUMMARY



Consolidated statement of financial position

Management properties, goodwill The Group’s property portfolio at the close of the period consisted of 1,256,588 m² (1,037,872) with a current ren-tal value of SEK 1,187 million (1,165). The management properties are reported at fair value based on a valuation of the entire portfolio and amounted, at the close of the period on September 30, 2015, to SEK 12,592 million (10,217) which corresponds to a value of SEK 10,020/m2 (9,840). The goodwill value at the end of the period amounted to SEK 686 million (698), a value which arose in conjunction with the acquisition of Hyresbostäder i Sverige II AB, according to current accounting policies regarding deferred tax. A review of the value of goodwill at the end of the period resulted in an impairment write-down of the value of goodwill in the amount of SEK -15 million (-), largely a consequence of the fact that proper-ties were sold during the period. A corresponding rever-sal of deferred tax has been carried out.

Long-term receivablesLong-term receivables at the end of the period amounted to SEK 199 million (206), and primarily relate to a claim under a promissory note and a deferred tax asset on unu-sed loss carry forwards.

Current assetsCurrent assets at the close of the period amounted to SEK 461 million (289), and relate primarily to a claim under a promissory note, investments in listed shares, accounts receivable, and prepaid costs.

Cash and cash equivalents The Group’s cash and cash equivalents at the end of the period amounted to SEK 488 million (199). Some of the cash during the period was used in conjunction with acquisitions of properties and investments in listed sha-res. Cash on account was strengthened with a net loan during the period amounting to SEK 572 million (-189). The cash on account will be used for future acquisitions and to increase the pace of apartment renovations.

Equity The Group’s shareholders’ equity as per September 30, 2015 amounted to SEK 3,657 million (3,086) and the equity ratio was 25.3 percent (26.0). The change in the Group’s shareholders’ equity is primarily related to the profit for the period, but partially related to the issuance of warrants to employees in the amount of SEK 1 million.

Deferred tax Deferred tax liabilities amounted to SEK 1,210 million (994) and primarily relate to the difference between the fair value and the tax residual value of properties.

Interest-bearing liabilities The Group’s total interest-bearing liabilities amounted to SEK 9,236 million (7,128). The Group’s non-current interest-bearing liabilities to credit institutions amounted to SEK 5,512 million (5,794). In addition to liabilities to credit institutions, there is an unsecured debenture in the amount of SEK 1 billion, a convertible debenture in the amount of SEK 1,020 million, of which SEK 11 million is reported as shareholders’ equity and SEK 675 million as a non-current liability. The interest-bearing liabilities include a vendor note in the amount of SEK 133 million of which SEK 66 million is non-current. The Group’s current interest-bearing liabilities to credit institutions amounted to SEK 1,583 million (5). These consist mainly of so-called revolving loans will be extended continuously. Current liabilities Current liabilities amounted to SEK 290 million (341) and consist primarily of accounts payable and accrued costs.

The balance sheet items below refer to the position at the close of the period, September 30, 2015. The comparison items stated within parentheses refer to amounts for the corresponding period during the preceding year.



Amounts in SEK thousand Share capital Other additional

paid-incapital

Profit brought forward

includingprofit for

the period

Equityattributable toshareholders

of the parent

Non- controlling

interests

Total equity

capital attributable to shareholders

Equity, 01-01-2014 2,989 11,544 -10,995 3,538 - 3,538

Total comprehensive income January - September 2014 - - 89,350 88,049 1,301 89,350

Contributed capital, offset issue 898,773 2,037,187 - 2,935,960 - 2,935,960

Additional paid-in capital at acquisition - 14,608 - 14,608 42,741 57,349

Other comprehensive income January - September 2014 - - - 0 - 0

Equity, 30-06-2014 901,762 2,063,339 78,355 3 042 155 44,042 3,086,197

Contributed capital, tights issues - - - 0 - 0

Equity component convertible bonds - 16,000 - 16,000 - 16,000

Profit for the period July - December 2014 - 5,553 143,705 152,153 -2 895 149,258

Other comprehensive income July - December 2014 - - - 0 - 0

Equity, 31-12-2014 901,762 2 084,892 222,060 3,210,308 41,147 3,251,455

Total comprehensive income Januari - September 2015 - 41,723 404,945 446,092 -41,147 404,945

Equity component subscription warrants - 998 - 998 - 998

Other comprehensive income Januari - September 2015 - - - 0 - 0

Closing equity, 30-09-2015 901,762 2,127,613 627,005 3,657,398 0 3,657,398

CONSILIDATED STATEMENT OF CHANGES IN EQUITY

Statement of changes in equity On September 30, 2015, consolidated shareholders’ equity amounted to SEK 3,657 million (3,086).

During the period, equity of SEK 1 million was added under a warrants program. Equity without controlling influence was divested in connection with the sale of

Vårberg Förvaltning AB, carried out in the second quarter amounting to SEK 41 million.



Consolidated statement of cash flows

Amount in SEK thousand 2015Jan – Sept

2014Jan – Sept

2015Juli – Sept

2014Juli – Sept

2014Jan – Dec

Income from property management 137,963 51,631 91,002 35,166 42,355

Adjustment for items not included in cashflow 16,569 4,255 12,044 2,363 15,412

Taxes paid -403 - -11 - -

Cash flow before change in working capital 154,129 55,886 103,035 37,529 57,767

Increase (-) decrease (+) of working capital -178,525 101,643 -37,535 134,736 215,182

Cash flow from operating activities -24,396 157,529 65,500 172,265 272,949

Investing activities

Investments in existing properties -216,983 -87,631 -101,210 -47,656 -163,999

Acquisition of Group companies/properties, business combination

- -1,487,656 - -1,444,874 -1,181,519

Acquisition of Group companies/properties -341,497 - -338,528 - -388,034

Acquisition of inventories -1,741 -2,185 -251 -685 -1,970

Acquisition of intangeble assets - - - - -

Sale of properties 247,234 - 28,940 - -

Investment in financial fixed assets -400 -15,000 121,310 35,000 -15,000

Share and participations, net - 19 - - 19

Cash flow from investing activities -313,387 -1,592,453 -289,739 -1,458,215 -1,750,503

Financing activities

New issue 998 659,469 - 395 666,326

Raised loans 5,248,585 988,000 435,053 988,000 1,485,774

Amortization of loans -4,677,140 -14,598 -623,994 -10,320 -422,542

Dividend - - - - -

Cash flow from financing activities 572,443 1,632,871 -188,941 978,075 1,729,558

Cash flow for the period 234,659 197,947 -413,181 -307,875 252,004

Cash and cash equivalents at beginning of the period 253,168 1,164 901,008 506,986 1,164

Cash and cash equivalents at end of period 487,827 199,111 487,827 199,111 253,168

Operating activities Cash flow from operations, before changes in working capital, amounted to SEK 154 million (56). After a change in working capital of SEK -179 million (102), cash flow from operations amounted to SEK -24 million (158).

Investing activitiesCash flow from investing activities amounted to SEK -313 million (-1,592) and largely comprises investments in existing properties, sales of properties, and invest-ments in new properties.

Financing activitiesCash flow from financing activities amounted to SEK 572 million (1,633). The reported cash flow includes loans raised in the amount of SEK 5,249 million (988) as well as loan repayments totaling SEK -4,677 million (-15). The newly raised loans include the subordinated SEK 1,000 million bond.

Cash flow for the period Cash flow for the period amounted to SEK 235 million (198) and, at the end of the period, cash and cash equiva-lents had increased to SEK 488 million (199).

CONSOLIDATED STATEMENT OF CASH FLOWS, SUMMARY

Comparative figures in parentheses refer to amounts for the corresponding period of last year.



Property portfolio D. Carnegie & Co.’s property portfolio consists primarily of residential properties in Greater Stockholm and growth areas in Mälardalen. The property portfolio mainly comprises residential properties built between 1965-1974 as part of the “Million Program”. The centerof gravity of the total property portfolio (66 percent) is located in Greater Stockholm. Comparative fi gures in parentheses relate to amounts for the corresponding period of last year.

Amounts in SEK thousand Property holdings at beginning of period

2015 January 1

2014January 1

Existing properties 11,520,820 -

Acquisitions 861,000 10,051,624

Investments in existing properties 216,983 87,631

Reclassifications - -

Divestments -446,875 -

Change in value investment properties, unrealized 439,588 77,515

Property portfolio at end of period 12 ,591,516 10,216,770

As of September 30, 2015, the property portfolio has been valuated with an assessed market value of SEK 12,592 (10,217) million. The valuation is based on the methodo-logy described below, of which 25 percent of D. Carnegie & Co.’s property portfolio was valued independently and 75 percent was valued internally. The independently valued part of the portfolio is changed every quarter, mea-

ning that over a period of 12 months the whole portfolio have been valued independently. The external property valuations were carried out by Savills. Comparative fi gu-res in parentheses relate to amounts for the corresponding period of last year.

STOCKHOLM

CHANGE IN CARRYING AMOUNT OF PROPERTIES

Property value

Apartment renovations In total, 394 apartments out of the existing stock of 16,249 apartments were renovated using the Bosystem method since 2014, of which 232 were renovated during the period. Rents for these apartments have increased from an ope-ning average of SEK 976 /sq. m. to SEK 1,355 /sq. m. At the time of the publishing of this interim report, a further 9 apartments have been completed. In addition, renovations commenced of 280 apartments, which are considered to be completed in 2015.

During the period, the property portfolio has changed as shown below.

Investments and divestments Investments during the period totaled SEK 1,078 million (10,139), of which SEK 217 million (88) relates to investments in existing properties and SEK 861 million (10,052) to acquisitions of new properties. Investments relate to the refurbishment of apart-ments as well as renovation of facades and roofs. During the period, fi ve property sales were completed which, in the valuation as of December 31, 2014, corresponded to a market value of SEK 447 million. Net investments during the period amounted to SEK 630 million (10,139).



The valuation is based on a cash flow analysis whereby the property’s value is based on the present value of fore-cast cash flows and the residual value during the calcula-tion period of five years.

The return requirement on units included in the valua-tion varies from 4.5 percent to 8.0 percent, with an average of 5.16 percent (5.44), which is the return requirement used in last valuation carried out in the second quarter. The average return requirement at the end of the year 2014 was an average of 5,42 percent. The assumption regarding the future cash flows is based on an analysis of: • Future development of the market and the immediate

vicinity• The market conditions and market position of the

property• Rent terms and conditions in line with the market • Operating and maintenance costs of similar properties

in comparison with those in the property in question

Based on the analysis, the resulting net operating income during the calculation period (2015-2020) and a residual value at the end of the calculation period have subsequent-ly been discounted applying an estimated cost of capital in the range 6.6-10.2 percent, with an average of 7.26 per-cent (7.60), which is the return requirement used in last valuation carried out in the second quarter. The average return requirement at the end of the year 2014 was an average of 7,52 percent The parameters that influence value and are used in the valuation correspond to the external appraiser’s interpretation of how a prospective buyer in the market would reason, and the sum of the pre-sent value of net operating income and the residual value can thus be taken as an expression of the fair value.

Building rights and potential building rights have been valued based on market comparison studies, the status in the planning process and established sales values. Buil-ding rights been valued at SEK 700 – 7,500 /sq. m. gross floor area (GFA), with an average of 1,842 /sq. m. gross floor area (GFA).

City/Neighborhood Lettable area

Number of apartements

Average rent

Percentage renovated

Fair value September 30 2015

Greater Stockholm

Kista/Husby 110,030 1,528 1,038 10,9% 1,314,910

Bromsten/Rinkeby 111,917 1,303 1,039 11,3% 1,237,036

Sollentuna 33,656 454 1,072 1,1% 441,000

Flemingsberg 40,107 573 931 0,2% 448,000

Vårby/Vårberg 66,631 863 1,023 0,2% 593,000

Jordbro 157,780 1,953 1,065 1,9% 1,443,000

Södertälje 159,933 2,110 1,133 0,5% 1,821,050

Bro 43,749 540 979 0,0% 396,020

Märsta 56,614 675 972 0,0% 568,000

Total Greater Stockholm 780,417 9,999 1,050 3,7% 8,262,016

Uppsala 71,484 938 981 0,1% 701,000

Eskilstuna 135,561 1,827 948 1,4% 1,214,300

Strängnäs 35,510 411 1,071 0,7% 413,800

Norrköping 164,179 2,184 1,001 3,1% 1,454,400

Göteborg 64,899 890 912 0,0% 480,000

Total other locations 471,633 6,250 976 1,6% 4,263,500

Other (land, building rights, etc) 4,508 0 66,000

Total 1,256,558 16,249 1,002 2,9% 12,591,516

D. CARNEGIE & CO PROPERTY PORTFOLIO SEPTEMBER 30, 2015



Financing

Interest-bearing liabilities At the end of the period, D. Carnegie & Co had interest-bearing liabilities totaling SEK 9,236 million, correspon-ding to an loan-to-value of approximately 67 percent (56), of which liabilities to credit institutions accounted for SEK 7,094 million (1,750), corresponding to an loan-to-value LTV of approximately 56 percent (56). In addition to liabi-lities to credit institutions, there are also interest-bearing subordinated debentures of SEK 1,020 million, interest-bearing vendor notes of SEK 122 million (-), and a bond loan of SEK 1,000 million (-).

Maturity The average term to maturity on loans owed to credit insti-tutions is 4.9 years. Of interest-bearing liabilities to credit institutions, SEK 631 million mature in 2015. Refinancing negotiations regarding these liabilities are in progress and will be completed during Q4 2015, which will further extend the fixed-rate term. Loans owed to security institu-tions are secured through mortgages on properties and/or pledged shares, as well as undertakings to maintain certain covenants, which in certain cases limit the ability of subsi-diaries to issue dividends. The interest rate maturity structure for the liabilities owed to credit institutions is shown in the tables on page 17.

Fixed interest and average interest rate The average interest rate on total interest-bearing liabilities at the end of the period is 2.62 percent, as compared with 2.83 percent at the end of the the second quarter. The aver-age rate on liabilities owed to credit institutions at the end of the period was 2.11 percent, as compared with 2.31 per-cent at the end of the the second quarter. The interest on the convertible debentures is 5 percent, while the interest rate on the SEK 113 million vendor note is 3 percent. Inte-rest payments to Kvalitena AB on the vendor note redee-med in Q2 amounted to 6.75 percent. The interest rate on the bond loan is 3.75 percent. The interest rate maturity structure for the interest-bearing liabilities is shown in the tables on page 17.

Interest rate derivatives D. Carnegie & Co uses interest rate derivatives to hedge the maturity structure. Interest rate derivatives represent a flexible and cost-efficient method of achieving the desired fixed rate. In accordance with accounting standard IAS 39, interest rate derivatives are marked to market. If the agreed interest rate deviates from the market rate, irrespective of the credit margin, a theoretical surplus or deficit arises on the interest rate derivative where the non-cash change in value is recognized in the income statement. As of Septem-ber 30, 2015, the market value of the interest rate derivati-ves portfolio was SEK -102 million (-59).

Financial targets D. Carnegie & Co has the following long-term financial targets.• Profit margin in management in excess of 50 percent• Annual 10 percent growth in value of existing portfolio • Loan-to-value ratio on properties not exceeding 65 percent• Equity ratio of at least 30 percent

As of September 30, 2015, the equity ratio was 25.3 percent which is below the financial target. The interest-bearing liabilities include convertible debentures of SEK 1,020 mil-lion, and in the event of implemented conversion these SEK 1,020 million will convert from interesting-bearing debts to equity. This means that equity ratio would exeed long-term financial target. The ongoing investments will create growth in value, which will also strengthen the equity ratio. For this reason, the equity ratio is comfortable even though D. Carnegie & Co did not achieve this financial target on September 30, 2015.

Investments in existing properties generate a solid return and thus no dividends will be issued to the shareholders in the coming years. Dividends will be issued when it is not possible to invest the entire surplus in this way.

D. Carnegie & Co endeavors to achieve a balance between debt financing and equity, with the long-term objective that the equity ratio should not fall below 30 percent and that the loan-to-value ratio shall not exceed 65 percent. On September 30, 2015, D. Carnegie & Co.’s assets were valued at SEK 14,433 million (11,616), financed through equity of SEK 3,657 million (3,086), deferred tax liability of SEK 1,210 million (994), interest-bearing liabilities of SEK 9,168 million (7,133), as well as non-interest-bearing liabilities of SEK 396 million (404).



INTEREST RATE TERM AND LOAN MATURITY SEPTEMBER 30, 2015, INTEREST BEARING DEBTS

INTEREST RATE TERM AND LOAN MATURITY SEPTEMBER 30, 2015, TOTAL INTEREST BEARING DEBTS

DERIVATIVES SEPTEMBER 30, 2015

Maturity SEK million Interest Percentage SEK million Percentage

2015 3,089 1,4% 44% 631 9%

2016 194 1,1% 3% 998 14%

2017 410 1,9% 6% 410 6%

2018 - - 0% 843 12%

2019 - - 0% - 0%

2020 795 1,7% 11% 989 14%

2021 - - 0% 130 2%

2022 2,606 3,2% 37% 2,823 40%

2023 - - 0% - 0%

2024 - - 0% - 0%

2025 - - 0% 270 4%

Total/Average 7,094 2,11% 100% 7,094 100%

Maturity SEK million Interest Percentage SEK million Percentage

2015 4,089 2,0% 44% 631 7%

2016 527 3,6% 6% 1,330 14%

2017 543 2,2% 6% 543 6%

2018 336 5,0% 4% 2,180 24%

2019 340 5,0% 4% 340 4%

2020 795 1,7% 9% 989 11%

2021 - - 0% 130 1%

2022 2,606 3,2% 28% 2,823 31%

2023 - - 0% - 0%

2024 - - 0% - 0%

2025 - - 0% 270 3%

Total/Average 9,236 2,62% 100% 9,236 100%

Amounts in SEK million Nominal amounts

Percentage Fair value Sept 30, 2015

Fair value Dec 31, 2014

Change for the period

Nominal interest rate swaps 3,401 100% -102 -65 -44

Total 3,401 100% -102 -65 -44

CAPITAL SEPTEMBER 30, 2015 INTEREST BEARING DEBTS FINANCIAL INSTITUTIONS

CAPITAL SEPTEMBER 30, 2015 TOTAL INTEREST BEARING DEBTS

0

1 000

500

1 500

2 000

2 500

3 000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

SEK m

0

1 000

500

1 500

2 000

2 500

3 000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

SEK m

Maturity

Maturity

Fixed interest term

Fixed interest term



EventsAmong other things, during the period, D. Carnegie & Co continued to acquire new properties and employed a new head of communications.

SIGNIFICANT EVENTS DURING THE THIRD QUARTER

D. Carnegie & Co acquires properties in NorrköpingD. Carnegie & Co has acquired properties in Norrköping with a portfolio consisting of 285 apartments with leasable space of 30,000 sq. m. The underlying property value is SEK 261 million.

D. Carnegie & Co has commenced extensive renovations in SödertäljeD. Carnegie & Co has begun an investment project regarding façades, windows, etc. in Södertälje for approximately SEK 60 million.

D. Carnegie & Co acquires additional properties in NorrköpingD. Carnegie & Co has acquired properties in Norrköping with a portfolio of 113 apartments, and with leasable space of 8550 sq. m. The rental value is SEK 9.2 million.

D. Carnegie & Co employs head of communicationsD. Carnegie & Co has employed Björn Sundberg, who comes most recently from his own PR and communica-tions agency, Stairway. Björn Sundberg also previously worked at Springtime, a PR and communications agency, and with communications at the Swedish Trade Confe-deration.

D. Carnegie & Co revises earnings capacityD. Carnegie & Co has revised its earnings capacity follo-wing the acquisition of a portfolio in Jordbro, by SEK 32 million to SEK 260 million.

SIGNIFICANT EVENTS AFTER THE THIRD QUARTER

D. Carnegie & Co has entered into an agreement regarding the sale of its Gothenburg portfolio D. Carnegie & Co has entered into an agreement regarding the sale of Hammarkullen in Gothenburg. There are 890 apartments and the agreed underlying property value is SEK 493 million.

D. Carnegie & Co reports additional apartment renovations At the time of the publication of this report, a further 9 apartments have been renovated, in addition to the 232 apartments for which renovations had been completed at the close of the period. In addition, renovations have commenced in respect of 280 apartments and are expected to be completed during 2015.

Flemingsberg



Parent company

Amounts in SEK thousand

2015 Jan – Sept

2014 Jan – Sept

2014 Jan – Dec

Net sales 4,454 - 1,164

Operating expenses -43,939 -6,783 -21,190

Profit/loss before financial items -39,485 -6,783 -20,026

Financial items

Net interest -66,186 -20,235 -42,392

Profit/loss before tax -105,671 -27,018 -62 418

Taxes 23,238 14,437 15,354

Profit for the period -82,433 -12,581 -47,064

Amounts in SEK thousand

2015 Sept 30

2014 Sept 30

2014 Dec 31

ASSETS

Non-current assets

Equipment 1,838 1,500 1,524

Shares and participations in subsidiaries 4,827,870 4,827,870 4,827,872

Shares, other companies - - -

Receivables from group companies 57,198 55,002 55,961

Deferred tax assets 45,449 14,437 15,000

Non-current receivables - 15,002 22,211

Total non-current assets 4,932,355 4,913,811 4,922,568

Current assets

Receivables from group companies 855,637 51,643 1,455

Receivables from associate companies - 3 000 176,071

Current placement 91,895 - -

Current receivables 124,307 8,751 4,405

Cash and cash equivalents 227,154 15,868 22,598

Total current assets 1,298,993 79,262 204,529

TOTAL ASSETS 6 231 348 4 993 073 5 127 097

Equity and liabilities

Shareholders equity 2,832,556 2,925,582 2,913,991

Non-current liabilities

Interest-bearing liabilities 1,727,672 2,020,000 1,937,000

Total non-current liabilities 1,727,672 2,020,000 1,937,000

Current liabilities

Interest-bearing liabilities 399,500 - 67,000

Other non-interest bearing liabilities 24,685 20,298 21, 064

Liabilities to Group Company 1,246,935 27,193 188,042

Liabilities to subsidiaries - - -

Total current liabilities 1,671,120 47,491 276,106

TOTAL EQUITY AND LIABILITIES 6,231,348 4,993,073 5,127,097

INCOME STATEMENT IN BRIEF BALANCE SHEET IN BRIEF

Operations in D. Carnegie & Co consist of overarching Group functions. The Parent Company does not own any properties directly. During the period, the Parent Company’s revenues amounted to SEK 5 million (-) and

the profit/loss after tax was SEK –106 million (-27). Revenues relate mainly to services. Cash and cash equiva-lents at the end of the period amounted to SEK 227 milli-on (16).



The share and shareholders

Date Event Change in numberClass A-shares

Change in numberClass B-shares

Total number A + B-shares

Equitychange

Equity total

July-14 Issue of shares/ at aquisition

- 26,000,000 70,768,876 331,301,084 901,761,744

May-14 Issue of shares - 2,307,692 44,768,876 29,405,418 570,460,660

April-14 Issue of shares - 15,384,615 42,461,184 196,036,139 541,055,242

March-14 Off issue of shares 5,369,866 21,479,459 27,076,569 342,123,480 345,019,103

March-14 Redemption of preferred shares

- - 227,244 -98,893 2,895,623

Dec-13 Aggregation 2 000 / 1 - 227,244 227,244 - 2,994,516

Sept-13 Issue of shares - 376,010,360 454,488,000 2 395,613 2,994,516

Sept-09 Issue of preferred shares - - 78,477,640 98,903 598,903

June-09 Reduction of capital - - 78,477,640 -156,457,912 500,000

The shareAt the end of the period, D. Carnegie & Co had 7,881 (7,757) shareholders. The market capitalization was SEK 3,680 (-) million. D. Carnegie & Co has two classes of shares: class A and class B ordinary shares. The shares are listed on NASDAQ Stockholm, Midcap. In total, there are 70,768,876 outstanding ordinary shares, of which 5,369,866 are class A shares and 65,399,010 class B shares. After full exercise of warrants program 1 (1,473,000 shares), warrants program 2 (998,200 shares) and conversion of convertible debentures (16,266,230 shares) there will be in total 89,506,306 ordinary shares.

Dividends The annual general meeting held on May 12, 2015 resol-ved that no dividend would be issued in respect of the 2014 financial year.

Warrants program The Company has two warrants programs carrying an entitlement to subscribe for class B shares. Warrants program 1, which was issued in 2014, covers 1,473,000 warrants, corresponding to 2.1% of the number of outstanding ordinary shares. The warrants carry an entitlement to subscribe for new class B ordinary shares in D. Carnegie & Co. The warrants may be exercised to subscribe for shares commencing January 1, 2017 up to and including June 30, 2017. The subscription price for class B ordinary shares pursuant to the warrants is SEK 48.50 kronor. The warrants program is directed at the CEO and CFO of D. Carnegie & Co AB, the CEO of Bosystem Nordic AB, and all staff employed at Slottsfabriken Egendomsförvaltning AB at the time D. Carnegie & Co was listed on NASDAQ OMX First North (April 9, 2014). Market-based pricing was applied in conjunction with the warrants offering. Warrants program 2 was issued in 2015 and covers 998,200 warrants, corresponding to 1.45% eller 1,4% of the number of outstanding shares. The warrants carry an entitlement to subscribe for new class B ordinary shares in D. Carnegie & Co. The

warrants may be exercised to subscribe for shares commencing May 21, 2018 up to and including August 31, 2018. The subscription price for class B shares pursuant to the warrants is SEK 72.84 kronor. The warrants program is directed at all staff permanently employed by the D. Carnegie & Co Group on May 12, 2015. Market-based pricing was applied in conjunction with the warrants offering.

Convertible debentures In connection with the acquisition of Hyresbostäder i Sverige II AB, three convertible debentures were issued, each for SEK 340 million These three convertible deben-tures are held by Svensk Bolig Holding AB. The maturi-ties of the various debentures are as follows: debenture 1 matures on June 30, 2016 with an option, up to June 9, 2016, to convert to 5,112,782 class B ordinary shares at a conversion price of SEK 66.50; debenture 2 matures on June 30, 2018 with an option, up to June 9 2018, to con-vert to 4,473,684 class B ordinary shares at a conversion price of SEK 76.00; debenture 3 matures on June 30, 2019 with an option, up to June 9 2019, to convert to 4,473,684 class B ordinary shares at a conversion price of SEK 76.00. In the event of full conversion, 16,266,230 shares in D. Carnegie & Co will be issued, corresponding to 23.0 percent of the number of outstanding ordinary shares.

Share performance The share has performed positively during the period, but the share price dipped somewhat during the second quar-ter. During the period, the price increased from SEK 45.4 /B share to SEK 53.0 on September 30, 2015, an increase of 16.7 percent. Since the introduction at a price of SEK 39 /B share on April 9, 2014, the share price has increased by 35.9 percent.

Shareholders A list of the largest shareholders in D. Carnegie & Co AB (publ) is presented on the next page.

THE SHARE, DEVELOPMENT

0

2 000

4 000

6 000

8 000

10 000

12 000

SEPT.AUG.JUL.JUN.MAYAPR.MAR.FEB.JAN.DEC.NOV.OCT.SEPT.AUG.JUL.

40

45

50

55

60

65

70

Carnegie Real Estate Return IndexSIX Return Index

D. Carnegie & Co B (Total return)

2014 2015Source: SIX Financial Information

Number of shares traded in thousands per week



Shareholders as of September 30, 2015 Holding, A-shares

Holding, B-shares

Capital, % Votes, %

Kvalitena AB 5 270 523 13 169 804 26,1 42,8

Svensk Bolig Holding AB 0 10 252 874 14,5 11,1

Frasdale Int. BV 0 5 442 359 7,7 5,9

Länsförsäkringar Fastighetsfond 0 4 029 143 5,7 4,4

J P Morgan Clearing Corp, W9 0 2 854 542 4,0 3,1

SEB-Stiftelsen 0 1 650 000 2,3 1,8

Svenskt Näringsliv 0 1 500 000 2,1 1,6

Per Josefsson via bolag 0 1 300 000 1,8 1,4

CBNY-Norges Bank, Citibank NA 0 1 180 927 1,7 1,3

Danske Invest Sverige Fokus 0 1 136 317 1,6 1,2

Lannebo Sverige Plus 0 824 491 1,2 0,9

Lancelot Avalon 0 814 456 1,2 0,9

Danske Invest Sverige 0 633 916 0,9 0,7

Cancerfonden - Riksföreningen mot 0 600 314 0,8 0,7

MSIL IPB Client Account 0 580 862 0,8 0,6

Staffan Rasjö 0 542 656 0,8 0,6

Humle småbolagsfond 0 500 000 0,7 0,5

Lannebo Sverige 0 436 597 0,6 0,5

Others 99 343 17 949 752 25,5 20,0

Total number of shares 5 369 866 65 399 010 100,0 100,0

THE SHARE

LARGERST SHAREHOLDERS



Other disclosures EmployeesAt the end of the period, the Parent Company had nine employees. The Group had 155 employees at the end of the period. The breakdown was 59 women and 96 men.

Party-related transactions Kvalitena AB: In connection with the acquisition of Hyresbostäder i Sverige II AB, a party-related transac-tion took place between Kvalitena AB and Markarydsbo-städer Holding AB, a subsidiary of Hyresbostäder i Sve-rige II AB. The transaction consists of a claim under a promissory note whereby Markarydsbostäder Holding AB has a claim against Kvalitena AB in the amount of SEK 150 million. SEK 100 million under this promissory note becomes due and payable on October 31, 2015, and the remaining SEK 50 million will fall due on October 31, 2016. The average rate of interest during the period was 6.75%, and SEK.8.1 million was paid in interest during the period. The acquisition of Östgötaporten AB included a note payable to Kvalitena AB in the amount of SEK 150 million. This debt was repaid in full during the period. During the period, interest was paid amounting to SEK 2.2 million. D. Carnegie & Co has a claim on Kvalitena in the amount of SEK 104 million. The interest rate is 4 percent. The interest income during the period was SEK 1.5 million.

Svensk Bolig Holding: SEK 200 million of the purchase price in connection with the acquisition of Hyresbostäder II i Sverige AB comprised a vendor note. This note is held by the seller of Hyresbostäder i Sverige II AB, Svensk Bolig Holding AB. One-third of the note (SEK 67 million) was paid on July 4, 2015. The note carries interest at an annual rate of rate of 3 percent. Interest during the period have been paid in the amount of SEK 6.0 million.

Bosytem Nordic AB: During the period, the D. Carnegie & Co Group made purchases worth SEK 25.1 million from Bosystem Nordic AB, a company which is 50 per-cent owned by Kvalitena AB. These purchases of materi-als have been made on market terms.

RisksRisks and uncertainty factors relate mainly to changes in macroeconomic factors that may lead to higher vacancy rates and interest rates, increased costs and lower rents. There is a risk that tenants will not pay the agreed rent on time. Operating expenses may increase and not be fully compensated for in lease agreements; unforeseen and extensive renovation needs may lead to increased mainte-nance costs. Other than these risks and uncertainty fac-tors, which are described on pages 58-59 of D. Carnegie & Co AB annual report, no other material risks have been identified during the period.

Accounting policiesThis interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.

The same accounting and valuation principles and cal-culation methods were applied as in the most recently published financial information; see D. Carnegie & Co AB annual report, pages 70-74, except that the new interpretation of IFRIC 21: Levies will be applied com-mencing the 2015 financial year. Investment properties are valued in accordance with IFRS 13 in accordance with level 3.

The fair value of financial instruments corresponds in all material respects to the reported values. Derivatives are valued in accordance with level 2 in the fair value hierar-chy, based on external valuation. The Parent Company applies the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities.



Board of directors

The Board of Directors and the CEO affirm that the report provides a fair review of the operations, financial position and results of the Parent Company and the Group and des-

cribes the material risks and uncertainty factors facing the Parent Company and the companies included in the Group.

The Board’s affirmation

Knut Pousette, Chairman of the Board Mats Höglund

Ronald Bengtsson Ranny Davidoff

Terje Nesbakken Eva Redhe Ridderstad

Ulf Nilsson, CEO


Review report

To the Board of Directors of D. Carnegie & Co AB (publ)

Corporate identity number 556498-9449

IntroductionWe have reviewed the condensed interim report for D. Carnegie & Co AB (publ) as at September 30, 2015 and for the nine months period then ended. The Board of Directors and the Managing Director are respon-sible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

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

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


Ernst & Young AB

Mikael Ikonen Ingemar RindstigAuthorized Public Accountant Authorized Public Accountant



THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL



DefinitionsPROPERTY

DIRECT RETURN, %, Net operating income recalculated on an annual basis in relation to the average market value of the manage-ment properties during the period.

NET OPERATING INCOME, SEK ‘000, Total income minus bad debt losses, operating and maintenance costs, property administra-tion, rents on leasehold interest in government owned land, and property taxes.

INCOME FROM PROPERTY MANAGEMENT, SEK ‘000, Profit before changes in value and taxes.

CHANGES IN VALUE IN MANAGEMENT PROPERTIES, SEK ‘000, Change in the fair value after deductions for investments made.

REALISED CHANGES IN VALUE IN MANAGEMENT PROPERTIES, SEK ‘000, Property sales carried out after deductions for the most recent reported fair value of the properties and costs in conjunction with sale.

PROFIT MARGIN IN MANAGEMENT, % Net operating income as a percent of total income.

FINANCE

RETURN ON EQUITY, %, Profit for the year in relation to average shareholders’ equity.

LOAN-TO-VALUE RATIO, %, Interest-bearing liabilities including net reported vendor notes after deductions for market value on listed shareholdings and cash and cash equivalents in relation to the fair value of the properties at the close of the period.

LOAN-TO-VALUE RATIO PROPERTIES (LTV), %, Interest-bearing liabilities with security in properties in relation to the fair value of the properties at the close of the period.

INTEREST COVERAGE RATIO, times, Income from property management plus financial costs (EBIT) in relation to financial costs.

EQUITY RATIO, %, Reported shareholders’ equity in relation to reported total assets at the close of the period.

EQUITY RATIO, ADJUSTED, % Reported shareholders’ equity adjusted for the value of derivatives, goodwill and deferred tax liabilities.

SHARES

SHAREHOLDERS’ EQUITY PER SHARE, SEK, Shareholders’ equity in relation to the number of outstanding ordinary shares on the balance sheet date.

ADJUSTED SHAREHOLDERS’ EQUITY PER SHARE, Normally designated EPRA NAV, SEK, reported shareholders’ equity adjusted for the value of derivatives, goodwill and deferred tax liabilities, in relation to the number of outstanding ordinary shares on the balance sheet date.

PROFIT PER SHARE, SEK, Profit for the period after taxes in relation to the average number of outstanding ordinary shares prior to dilution.

PROFIT PER SHARE AFTER DILUTION, SEK, Profit for the period after tax in relation to the average number of outstanding ordinary shares, including full coverage and conversion of outstanding option programmes and convertible debentures. Upon calculation of the profit per share after dilution, the annual interest savings regarding the convertible debenture in the amount of SEK 51 million has been taken into consideration. The effect of the savings per share is SEK 0.72/year.



CALENDAR 2015-2016

Year-end report 2016 Feb, 26, 2016

Interim report Q1 April, 27, 2016

Annual General Meeting 2016 May, 12, 2016

Investor information

FOR MORE INFORMATION, PLEASE CONTACT:

Ulf Nilsson, CEO+46 (0)8 12 13 17 25

Per-Axel Sundström, CFO+46 (0)8 12 13 17 25

D. Carnegie & Co ABStrandvägen 5A114 51 Stockholm

[email protected]

The information in this interim report is that which Carnegie & Co to publish under the securities market act and/ or the act on trading in financial investments. The information was submitted for publication on November 10, 2015 at 07.00 (CET).



Earning capacity

Amounts in SEK thousand September 30 2015

September 30 2015

June 30 2015

March 31 2015

January 1 2015

September 30 2014

Rental income 1,292,903 1,174,125 1,162,355 1,154,765 1,138,647 1,021,721

Other income 602 602 602 602 1,831 7,423

Operating expenses -517,322 -473,650 -477,874 -477,874 -470,921 -409,818

Maintenance expenses -115,965 -104,091 -118,169 -118,169 -114,043 -95 089

Property tax -25,639 -22,930 -22,930 -22,930 -22,550 -20,679

Ground rent -15,348 -14,642 -14,642 -14,642 -14,482 -12,020

Net operating income 619,231 559,414 529,342 521,752 518,482 491,538

Central administration -55,559 -55,559 -51,820 -51,820 -51,205 -41,150

Net financial items -159,528 -149,623 -154,155 -174,060 -221,205 -203,280

Financial cost convertible bond/other bond -88,500 -88,500 -88,500 -51,000 -51,000 -51,000

Income from property management 315,644 265,732 234,867 244,872 195,072 196,108

CURRENT EARNINGS CAPACITY

Current earning capacityThe table below reflects D. Carnegie & Co.’s earning capacity on a 12-month basis as of September 30, 2015. It is important to note that the current earning capacity is not to be equated with a forecast for the coming 12 months. For example, the earning capacity does not include assessment of rent trends, vacancies, or changes in interest rates.

The figures are adjusted to show a comparable portfolio, which means that divestments have been eliminated in earlier periods presented below.

Furthermore, D. Carnegie & Co.’s income statement is affected by changes in the value of investment properties as well as future property acquisitions and/or property divestments. Additional items affecting earnings include changes in the value of derivative instruments. None of the foregoing factors have been taken into account in the current earning capacity.

The rental value is based on the property portfolio’s invoicing list, assessed budgeted property expenses for the coming 12 months, and central administration costs. Net financial items were calculated based on interest-bea-ring liabilities and assets as of September 30, 2015, and with consideration taken to the new interest rate terms after refinancing, were based on the Group’s average interest level.

APPENDIX 1

Current portfolio Comparable portfolio

D. Carnegie & Co AB (publ) Strandvägen 5a se-114 51 Stockholm dcarnegie.se

INTERIM REPORT · 10.11.2015 · Profit margin 46,6 53,0 48,5 50,5 42,3 Income from property...

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