Financial Definitions

Financial Key Figures

Average period of fixed interest: The remaining period of fixed interest weighted by interest-bearing liabilities outstanding.

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

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.

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.

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

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

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

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

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

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

Exchange-rate effect: The impact of changes in various exchange rates on current reporting in NCC’s consolidated financial statements on translation into SEK.

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

Net indebtedness: Interest-bearing liabilities and provisions less financial assets including cash and cash equivalents.

Net investments: Closing balance less opening balance plus depreciation and impairment losses less write-ups pertaining to fixed assets and properties classed as current assets.

Net sales: The net sales of construction operations are recognized in accord- ance with the percentage-of-completion principle. These revenues are recognized in pace with the gradual completion of construction projects within the company. For NCC Housing, net sales are recognized when a housing unit is transferred to the end customer. Property sales are recognized on the date when significant risks and rewards 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.

Order backlog: Year-end value of the remaining non-worked-up project reve- nues for projects received, including proprietary projects for sale that have not been completed.

Orders received: Value of projects received 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 assign- ment has been taken, as are finished properties included in inventory.

Operating margin: Operating profit as a percentage of net sales. Operating net: Result from property management before depreciation. P/E ratio: Market price of the shares at year-end divided by earnings per
share after taxes.

Return on capital employed: Profit after financial items including results from participations in associated companies following the reversal of financial expenses in relation to average capital employed.

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.

Share of risk-bearing capital: Sum total of shareholders’ equity and deferred tax liabilities as a percentage of total assets.

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

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 acquisi- tions of property and housing projects. Operating revenues less operating and maintenance expenses (operating net) divided by the investment value.

VDC: Virtual Design and Construction.