Financial Definitions

Financial Key Figures

Return on shareholders’ equity: Net profit for the year according to the income statement excluding non-controlling interests, as a percentage of average shareholders’ equity.

Return on capital employed: Profit after financial items including results from participations in associated companies following the reversal of interest expense in relation to average capital employed. Return on capital employed is used to optimize the Group’s capital allocation and value generation.

Dividend yield: Dividend as a percentage of the market price at year-end.

Operating net: Profit from property management before depreciation.

EBITDA: Operating profit in accordance with the income statement with depreciation and impairment losses reversed (not construction-related projects) including impairment losses on properties classed as current assets and excluding depreciation of leases.

Average interest-rate maturity: The remaining interest-rate maturity weighted by interest-bearing liabilities outstanding.

Corporate net debt: Total net debt excluding lease liability and excluding pension debt.

Average shareholders’ equity: Average of recognized shareholders’ equity at January 1, March 31, June 30, September 30 and December 31.

Capital turnover rate: Net sales divided by average capital employed.

Net investments: Closing balance less opening balance plus depreciation and impairment losses less write-ups of fixed assets and properties classified as current assets

Net sales: The net sales of construction operations are recognized in accordance with the percentage-of-completion profit recognition principle. These revenues are recognized in pace with the gradual completion of construction projects within the company. Property sales are recognized on the date when material risks and benefits are transferred to the buyer, which normally coincides with the transfer of ownership. In the Parent Company, net sales correspond to recognized sales from completed projects.

Net debt/EBITDA: Corporate net debt divided by EBITDA.

Orders received: Value of received projects and changes in existing projects during the period concerned. Proprietary projects for sale are also included among assignments received, assuming that a decision to initiate the assignment has been taken, as well as sold completed housing units from inventory.

Order backlog: Year-end value of the remaining unrecognized project revenues for projects received, including proprietary projects for sale that have not been completed.

P/E ratio: Year-end market price of the shares, divided by earnings per share after taxes.

Earnings per share, after taxes: Net profit for the year attributable to NCC shareholders divided by the weighted number of shares during the year in question.

Interest-bearing Corporate Debt: Interest-bearing liabilities excluding lease liability and excluding pension debt.

Interest coverage ratio: Profit after financial items following the reversal of financial expenses divided by financial expense.

Operating margin: Operating profit as a percentage of net sales.

Debt/equity ratio: Net debt divided by shareholders’ equity.

Equity/assets ratio: Shareholders’ equity as a percentage of total assets.

Capital employed: Total assets less interest-free liabilities including deferred tax liabilities. Average capital employed is calculated as the average of the balances at January 1, March 31, June 30, September 30 and December 31.

Total return: Share-price performance during the year plus dividend paid divided by share price at the beginning of the year.

Total net debt: Interest-bearing liabilities and provisions for pensions and similar obligations less cash and cash equivalents, short-term investments and interest-bearing receivables.

Closing date interest rate: Nominal interest weighted by interest-bearing liabilities outstanding on the balance-sheet date.

Exchange-rate effect: Impact of changes in various exchange rates on current reporting in NCC’s consolidated accounts on translation into SEK.

Exchange-rate difference: Exchange-rate changes attributable to movements in various exchange rates when receivables and liabilities in foreign currency are translated into SEK.

Buyback of company shares (treasury shares) in share data: Treasury shares have been excluded from calculations of key figures based on the number of shares outstanding.

Sector Related Definitions

Buildings/other buildings: In descriptions of operations, this term pertains in part to commercial buildings, mainly offices, retail facilities, shopping malls, garages, hotels and industrial buildings and in part to such public premises and buildings as hospitals, schools, healthcare and care facilities and public administration buildings.

Construction costs: The cost of constructing a building, including building accessories, utility-connection fees, other contractor-related costs and VAT. Construction costs do not include the cost of land.

Detailed development plan: Municipal plan for the use of land in a certain area, which is legally binding and can form the foundation for the granting of building permits.

Development rights: Estimated possibility to develop a site. With respect to housing, a development right corresponds to an apartment or a semi-detached or detached house. Either ownership of a site or an option on ownership of the site concerned is a prerequisite for being granted access to a development right. For commercial properties, development rights are measured in square meters.

Function contract: Usually a multi-year contract in which the customer imposes functional requirements rather than detailed requirements concerning materials and design.

General plan: Municipal plan for the use of land in a certain area, which is not legally binding and normally necessitates being followed up and defined in greater detail in detailed development plans.

Leasing rate: The percentage of anticipated rental revenues matching signed leases (also called leasing rate based on revenues).

NCC Partnering: A cooperation format applied in the construction and civil engineering industry, whereby the client, consultants and contractor establish open and trusting cooperation at an early stage of the process based on shared goals, joint activities and joint financial targets in order to optimize the project.

Platforms: Group-wide standardized technical solutions have been developed for everything from sports arenas, offices, logistics facilities and bridges to single-family and multi-family housing.

Properties: In descriptions of operations, “properties” refers to buildings, housing or land.

Proprietary project: When NCC, for its own development purposes, acquires land, designs a project, conducts construction work and then sells the project. Pertains to both housing projects and commercial property projects.

Required yield: The yield required by purchasers in connection with acquisitions of property and housing projects. Operating revenues less operating and maintenance expenses (operating net) divided by the investment value.

VDC: Virtual Design and Construction.