Definitions

FINANCIAL DEFINITIONS

The effect of the implementation of IFRS 16
Atrium Ljungberg has applied IFRS 16 Leasing since 1 January 2019. 
The implementation of IFRS 16 Leasing has resulted in Atrium Ljungberg recognising a financial asset and liability for leaseholds in the balance sheet. In the income statement leasehold fees have been reclassified from ‘Property management costs’ to net financial expenses. Atrium Ljungberg has elected to use the simplified transition method and is not applying the standard retrospectively.
In order to increase comparability, Atrium Ljungberg has elected to reverse the effect of the implementation of IFRS 16 when calculating the alternative performance measures in this report.

This means that the definitions of the following alternative performance measures have been changed:
– Return on total assets, %
– Return on total assets excluding changes in value, %
– Gearing ratio, %
– Adjusted gearing ratio, %
– Interest coverage ratio, multiple
– Equity/assets ratio, %
– Operating surplus margin

Adjusted gearing ratio, %
Interest-bearing liabilities as a percentage of the sum of the properties’ fair values at the end of the period, less properties acquired but not possessed and plus properties sold but not vacated.
The adjusted gearing ratio is used to illustrate Atrium Ljungberg’s financial risk.

Average capital commitment, years
Average remaining term until final maturity of all credits in the liabilities portfolio.
The average capital commitment is used to illustrate Atrium Ljungberg’s financial risk.

Average fixed interest, years
Average remaining term until interest settlement date of all credits in the liabilities portfolio.
The average fixed interest is used to illustrate Atrium Ljungberg’s financial risk.

Average interest rate for interest-bearing liabilities, %
Weighted average contracted interest for all credits in the liabilities portfolio at the end of the period excluding unutilised credit facilities.
The average interest is used to illustrate Atrium Ljungberg’s financial risk.

Average number of outstanding shares
Weighted average number of outstanding shares calculated in accordance with IAS 33.

Cash flow per share, SEK
Cash flow from operating activities divided by the average number of outstanding shares.
Cash flow per share, SEK is used to illustrate Atrium Ljungberg’s cash flow, and particularly its dividend capacity.

Dividend pay-out ratio, %
Dividend per share as a percentage of the profit/loss per share before changes in value, less applicable nominal tax.
Dividend pay-out ratio is used to illustrate how large share of the results is shifted out to the Group’s owners and reinvested in the operations respectively.

Earnings per share, SEK
Net profit/loss for the period divided by the average number of outstanding shares after dilution.

EPRA
The European Public Real Estate Association is a trade organisation for publicly listed real estate companies and investors in Europe
which sets standards for the financial reporting.

EPRA NAV (Net Asset Value) per share, SEK
Reported shareholders’ equity with reversal of goodwill, interest derivatives and deferred tax, divided by the number of outstanding shares at the end of the period.
Long-term net worth (EPRA NAV) per share is used to provide stakeholders information on Atrium Ljungberg’s long term net worth per share calculated in a uniform manner for publicly listed property companies.

EPRA NNNAV) (Triple Net Asset Value) per share, SEK 
Reported shareholders’ equity with reversal of goodwill adjusted with estimated actual deferred tax, divided by the number of outstanding shares at the end of the period.
EPRA NNNAV per share is used to provide stakeholders information on Atrium Ljungberg’s current net worth per share calculated in a uniform manner for publicly listed property companies.

Equity/assets ratio, %
Reported shareholders’ equity as a percentage of the balance sheet total at the end of the period.
The equity/assets ratio is used to illustrate Atrium Ljungberg’s interest rate sensitivity and financial stability.

Equity per share, SEK
Reported equity divided by the number of outstanding shares at the end of the period.
Equity per share is used to illustrate the owners’ share of the company’s total assets per share.

Gearing ratio, %
Interest-bearing liabilities as a percentage of the sum of the properties’ fair value at the end of the period.
The gearing ratio is used to illustrate Atrium Ljungberg’s financial risk.

Gross profit/loss project and construction work
Project and construction sales minus project and construction costs.

Gross profit/loss property management
Rental income minus expenses for property management activities with a reversal of leasehold fees which, pursuant to IFRS 16, are recognised as an interest expense in the income statement.

Interest coverage ratio, multiple
Profit/loss before changes in value, plus interest expenses divided by interest expenses, excluding leasehold fees, which, according to IFRS 16, have been reclassified as an interest expense.
The interest coverage ratio is used to illustrate how sensitive the company’s results are to interest rate changes.

Management result less nominal tax (EPRA EPS) per share, SEK
Profit/loss before changes in value, less calculated current tax excluding loss carry-forwards, divided by the average number of outstanding shares. The deducted tax has been calculated by taking into account tax deductible depreciation and investments. 
Management result less nominal tax (EPRA EPS) is used to provide stakeholders information on Atrium Ljungberg’s management result per share calculated in a uniform manner for publicly listed property companies.

Number of outstanding shares
Number of registered shares at the end of the period less boughtback shares, which do not provide entitlement to dividend or voting rights.

Profit/loss before changes in value per share, SEK
Profit/loss before changes in value, less current tax, divided by the average number of outstanding shares.
Profit/loss before changes in value per share is used to illustrate the ongoing management operations.

Property expenses
The total of the ‘Property management costs’ with a reversal of the leasehold fees which, pursuant to IFRS 16 are recognised as an interest expense in the income statement, which excludes central administration.

Return on shareholders’ equity, %
Net profit/loss for the year as a percentage of average shareholders’ equity excluding changes in value.
Return on shareholders’ equity excluding changes in value is used to illustrate Atrium Ljungberg’s capacity to generate current cash flow on the owners’ capital in the Group.

Return on shareholders’ equity, excluding changes in value, %
Net profit/loss for the year as a percentage of average shareholders’ equity excluding changes in value.
Return on shareholders’ equity excluding changes in value is used to illustrate Atrium Ljungberg’s capacity to generate current cash flow on the owners’ capital in the Group. 

Return on total assets, %
Profit/loss before tax plus interest expenses as a percentage of the average balance sheet total, excluding leaseholds.
Return on total assets is used to illustrate Atrium Ljungberg’s capacity to generate profit on the Group’s assets uninfluenced by the Group’sfinancing.

Return on total assets excluding changes in value %
Profit/loss before changes in value plus interest expenses, excluding leasehold fees, as a percentage of the average balance sheet total, excluding leaseholds.
Return on total assets excluding changes in value is used to illustrate Atrium Ljungberg’s capacity to generate current cash flow on the Group’s assets uninfluenced by the Group’s financing.

Share dividend yield, %
The proposed share dividend as a percentage of the share price at the end of the previous year.
The share’s dividend yield is used to illustrate which current yield shareholders are expected to receive.

Share’s total yield, %
The year’s change in the share price plus the paid dividend during the year as a percentage of the share price at the end of the previous year.
The share’s total yield is used to illustrate the shareholders’ total yield on their ownership in Atrium Ljungberg.

PROPERTY-RELATED DEFINITIONS

BREEAM
Is an environmental certification system developed in Europe for built environments. BREEAM takes a big picture approach to environmental performance. There are two types of Breeam certifications; Breeam that relates to new production and BREEAM In-Use, which relates to existing properties. The areas addressed by BREEAM are energy and water consumption, health, transport, materials, waste, land usage, emissions, ecology and management.

Development properties
Development properties are properties that are built or unbuilt that the Group owns in order to develop and sell them as tenant-owned dwellings. These properties are recognised as current assets, even though some of the properties are managed and generate rental income while they are waiting to be developed.
They are recognised at the lowest of their accumulated acquisition value and their net realisable value.

Environmental Building
Environmental Building is a certification system for buildings which are based on Swedish construction practice and covers energy, the indoor environment and material.

EPRA Vacancy rate, %
The rental value of unlet premises divided by the rental value of the entire property portfolio. Project properties are excluded. 
The EPRA Vacancy rate is reported in accordance with the EPRA’s definition of vacancy rate, which enables comparison between different companies.

GFA, m²
GFA (Gross Floor Area) refers to the building’s total area, including outer walls.

Leasehold
The right of use for building plots In compliance with IFRS 16, leasehold rights are recognised as a right-of-use asset or leasing liability in the balance sheet

Leasehold fees
The fee paid for the utilisation of leasehold rights. Regarded according to IFRS 16 as an interest expense in the income statement.

Letting area, m²
Total area available for letting.

Letting rate, %
Contracted annual rents as a percentage of the rental value in conjunction with full letting. Reported figures are based on the immediately subsequent quarter.
The letting rate is used to illustrate the Group’s efficiency in the use of its investment properties.

Like-for-like portfolio
Comparable portfolio refers to the properties which were not classified as project properties and were owned throughout the period and entire comparison period.
Comparable portfolio is used to illustrate the trend of rental income excluding non-recurrent effects for premature vacating of premises and property costs uninfluenced by project properties as well as acquired and sold properties.

Net letting
Total contracted annual rent for new lets less annual rents terminated dueto clients vacating the premises for the period.
Net letting is used to illustrate the letting situation.

Operating surplus
This refers to the gross profit with a reversal of leasehold fees which, pursuant to IFRS 16, are recognised as an interest expense in property management.

Operating surplus margin, %
The gross profit for property management with a reversal of leasehold fees which, pursuant to IFRS 16, are recognised as an interest expense in the income statement as a percentage of recognised rental income.
Operating surplus margin is used to illustrate how large share of the Group’s rental income remains after property costs. The operating surplus margin also forms the basis of valuation of the Group’s investment properties.

Premises type
The operations managed in the individual premises determine the premises type: retail, offices, residentials or other. Other includes, among other things, education, culture and service enterprises.
The letting rate and yield requirement are reported per premises type.

Project property
An individual property or a clearly delimited part of a property that has been vacated in order to permit the renovation and upgrading of the property. The term, project property, also refers to buildings under construction and to undeveloped land and development rights. Reclassification from project property to completed property occurs on 1 January of the year after completion.

Project return, %
Market value after completed project minus total investment as a percentage of total investment.
Project return is used to illustrate value creation in the project activities.

Property type
The premises type which comprise the predominant share of the rental value of a register property determine the property type.
The market value and development of rental income in like-for-like portfolios recognised per property type.

Rental value
Contracted annual rents including rent surcharges (e.g. for property tax and electricity) and estimated market rents for vacant space in existing condition.
Rental value is used to illustrate the Group’s income potential.

SUSTAINABILITY-RELATED DEFINITIONS

Directly generated and distributed economic value
Generated value: Composed of Atrium Ljungberg’s net sales and fair value changes.
Distributed value: This comprises Atrium Ljungberg’s payments to suppliers,
salaries and remuneration to employees, fees and remuneration to the Board of Directors, the CEO and senior executives, net payments to financiers, taxes and fees to society, and the dividend to the shareholders.
Payments to suppliers: Composed of operative costs for purchases of materials, products, premises and services from suppliers.
Salaries and compensation to employees: Composed of the period’s total salary and pension costs, including benefits. Employees do not include consultants or other temporary staff.
Fees and compensation to the Board, CEO and senior executives: Composed of compensation to Board members, as well as fixed salary, other compensation and pension costs for the CEO and other senior executives. For more information, see note IK6.
Net payments to financiers: This comprises the period’s recognised interest expenses with a supplement for the consolidated capitalised interest and describes Atrium Ljungberg’s total remuneration to lenders.
Tax and fees to society: This comprises the total payment to the state during the period in the form of leasehold fees, as well as total taxes and charges to the Swedish state. Deferred tax is not included.
Dividends to shareholders: Composed of the period’s paid dividends.
Economic value — remaining in the company: Composed of generated value minus distributed value.

Energy intensity
Total energy consumption from Heating, Cooling, Tenant electricity and Property electricity divided by the average estimated total heated letting area, excluding garage.

Green lease contracts, %
Contracted annual rent for commercial premises excluding the garage and storage for lease contracts with green rent supplement in per cent of contracted annual rent for commercial premises excluding the garage and storage. Green rent supplement is a supplement to the agreement from the Swedish Property Federation in which the tenant and landlord jointly undertake to reduce the environmental impact and covers, for example, energy, waste and transport. Reported figures are based on the immediately subsequent quarter.