Heimstaden Property GmbH

Berlin

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

Heimstaden Bostad AB

Malmö/Schweden

Annual, Governance, and Sustainability Report as at 31.12.2023

Contents

About

Investment Properties

Key Characteristics

The Year in Brief

CEO Letter

DCEO Letter

Strategy

Property and Asset Management

Investments and Divestments

Investment Properties

Portfolio Overview

Capital Structure

Environmental Sustainability

Social Highlights

Governance Report

Share Structure and Owners

Corporate Governance Structure

Board

Manager's Senior Executives

Governance, Risk, and Compliance

Risk Management

Internal Control

Our Policy Framework

Financial Information

Consolidated Financial Statements

Parent Company Financial Statements

Proposed Appropriation of Accumulated Profit

Signatures

Auditor's Report

Alternative Performance Measurements

Quarterly Financial Information

About

Key Characteristics

Long-term Ownership and Value Creation

Heimstaden Bostad is owned by Heimstaden and long-term institutional investors who share a philosophy for evergreen and sustainable investments. As Group Manager, Heimstaden has substantial experience in acquiring, developing, and actively managing residential real estate.

Attractive and Resilient Asset Class

Residential real estate is the world's largest asset class and an essential part of the global economy. Noncyclical in nature, it is a basic human need without risk of disruption and with strong supportive demographic trends, such as decreasing household sizes, supply shortages, and urbanization.

Diversified Portfolio Across Strong European Markets

Heimstaden Bostad's property portfolio is diversified across attractive European markets with growing economies and favourable residential fundamentals. The portfolio has a balanced exposure to regulated and unregulated rental regimes, which provides Heimstaden Bostad with stable and secure cash flows as well as the ability to capture upsides from positive market developments.

Integrated Operating Platform with Proven Track Record

An integrated and scalable operating platform ensures a common experience for our customers combined with cost-efficient integration across our markets.

Operational Resilience

Heimstaden Bostad follows a strategy for responsible growth and value creation and has continuously improved its operating performance. We adhere to conservative financial principles that support Heimstaden Bostad's long-term strategy and misson as an evergreen investor.

The Year in Brief

•	Residential real estate fundamentals remain strong, reflected in our operational results which include solid 5.1% like-for-like rental growth, high 98.2% real economic occupancy, and a NOI margin of 67.4%
•	Yield expansion continued to impact property valuations negatively but is trending towards stabilisation
•	We have maintained a focus on asset-backed financing, securing significant volumes with SEK 33 billion closed in 2023
•	Increased the hedge position to 86% in the context of recent rate movement to improve predictability of ICR
•	The privatisation plan shows strong initial results, and we have made good progress in covering funding needs
•	Board has proposed that no dividend shall be paid to any of the Share Classes
•	We have set new ambitious social targets, aiming for 5,000 inclusive housing contracts within the next three years, with 4,767 already signed
•	On track to meet climate targets aligned with the Paris Agreement, reducing greenhouse gas emissions by 10% (Scope 1-3, downstream leased assets)
•	Reduction in climate corrected energy intensity by 8% compared to 2022 for comparable properties
•	Our recent Morningstar Sustainalytics ESG Risk Rating was upgraded to 'Negligible Risk' from 'Low Risk' last year

	Q1	Q2	Q3	Q4
Fair Value, SEK	335 billion	340 billion	332 billion	319 billion
Homes	159,089	160,517	161,532	161,553
Real Economic Occupancy	98.2%	98.1%	98.1%	98.4%
Net LTV	52.7%	54.4%	55.1%	56.3%
	Greater Manchester Pension Fund, one of the largest governmental pension funds in the UK, joined as a shareholder	Obtained SEK 3 billion in asset backed financing	The Board approved a privatisation plan targeting 25% of the portfolio value over 8-10 years, with a short-term target of SEK 20 billion by the end of 2025, prioritising credit metric support	Successful privatisation launch - sold units for SEK 1.2 billion, achieving a 32% gross premium in 2023
	Completed a buyback of senior unsecured bonds of appr. SEK 10 billion financed with existing liquidity and new shareholder equity	The Diversity Board was established to promote a safe, inclusive workplace with equal employee opportunities	The Board aligned financial policy levels with 'BBB' rating thresholds from S&P	S&P Global Ratings lowers Heimstaden Bostad's long-term issuer credit rating to 'BBB-' from 'BBB' and assigns Negative Outlook
	Obtained SEK 12 billion in asset backed financing	Helge Leiro Baastad appointed new Chairperson of the Board with Rebecka Elkert and Klas Åkerbäck as new Board Members	Obtained SEK 13 billion in asset backed financing, including EUR 700 million in sustainability-linked bank financing from EBRD and other banks	Completed a buyback of senior unsecured bonds of appr. SEK 1.5 billion financed with existing liquidity
	Revised the Climate and Social Roadmaps, introducing a target to provide 5,000 inclusive housing contracts by 2026	Announced Rutger Kaeding as new Head of Corporate Finance	Fitch affirmed our BBB (investment grade rating) with revised outlook to Rating Watch Negative	Obtained SEK 5 billion in asset backed financing and extended our banking relationships by signing our first Polish secured financing
	Helge Krogsbøl became CEO and Thomas Hansen joined as CFO		Morningstar Sustainalytics improved Heimstaden Bostad's ESG Risk Rating to "Negligible Risk" from "Low Risk"	Increased the hedge position to 86% in the context of recent rate movement to improve predictability of ICR
			Appointed Christian Fladeland as Deputy-CEO and Louise Schaldemose as Group Director of Letting	Appointed Rita Berg Hansen as Group Director of Privatisation and Eva Bienias as Group Director of Environmental Sustainability

Resilience in a Challenging Market

As we enter a new year and start executing on our 2024 plans, let us reflect on the challenges and opportunities of 2023. Last year, market dynamics, interest rates, credit ratings, and news cycles repeatedly drove industry conversations and international headlines. Underneath the 'noise', we delivered stronger than ever operational results supported by low vacancy, strong rental growth, and industry-leading ESG performance all while delivering customer satisfaction figures we are proud of.

Exiting a Turbulent Period

The funding environment dominated 2023 as a strong headwind impacted our S&P-defined interest cover ratio (ICR), which declined from 2.7x in Q4 2022 to 1.7x in Q4 2023. Though the decline was anticipated when entering the year, the reduction in our coverage prompted negative action from our two rating agencies in the second half of the year. These events coincided with substantial media coverage, inaccurately portraying Heimstaden Bostad as a company in crisis.

Entering the New Year With a Stronger Foundation

Despite the turbulence, our portfolio remains resilient as we enter 2024, sustaining a strong operational performance across all nine markets. Key operational indicators, including an improving net operating margin (67.4%), strong like-for-like rental income growth (5.1%), and high real economic occupancy (98.2%), have shown consistent strength. As an operator of a unique and diversified portfolio, holding a leading position in European residential real estate, we expect these favourable trends to persist into 2024, driven by strong fundamentals across our markets.

Accelerated Privatisation is a Major Focus in 2024

Our privatisation programme finished its first quarter of execution ahead of expectations, with a 32% premium on book value on sales of SEK 1.2 billion by end year. As we enter the planned ramp-up phase, the new business area is firmly established in the organisation and on track to deliver on our SEK 20 billion sales value goal by the end of 2025. The proceeds will support our deleveraging efforts and improve our credit metrics.

Support Credit Ratings With Prudent

Financial Management

To maintain an investment-grade rating is instrumental for Heimstaden Bostad. While our ambition is to reestablish a 'BBB' rating, our current focus is resolving the negative rating outlook. We continue to engage in a close dialogue with the rating agencies, acknowledging that delivering our base case forecast - which includes a stabilised ICR well above the downgrade threshold - is key for resolving the negative outlook. In parallel, we prioritise funding access and manage maturities cautiously through key banking partnerships, having raised over SEK 50 billion in funding in 2022 and 2023. Finally, the Board's unanimous proposal to forgo dividends will bolster liquidity, and strengthen our credit profile.

Continuing Best Practices in Governance

Adopting the Swedish Code of Corporate Governance in 2021 initiated transformative reforms aligning our framework with international best practices. The recent addition of Board Chair Helge Leiro Baastad in the fall of 2023 has brought great contributions, elevating governance topics as we advance our industry leading pan-European platform.

Validation of Our Progress Towards

Our Climate Commitments

As a major property owner, we are dedicated to combating climate change by reducing our greenhouse gas emissions in line with the Paris Agreement. Last year's initiatives achieved energy reductions of 8% per square metre compared to 2022, aligning well with our ambitious 42% CO ₂ reduction target by 2030. Attaining top rankings globally, regionally, and industrially by Morningstar Sustainalytics serves as a strong validation of our commitment to sustainability.

People are Our Foundation

I am deeply impressed by our colleagues' dedication and hard work, which has been instrumental in achieving robust operational results and impactful societal contributions in the past year. They consistently place our customers at the heart of our Friendly Homes mission. The 78% overall customer satisfaction score for 2023 serves as good documentation of last year's performance.

With unwavering commitment from our teams, we will continue to enhance our operational platform to seize opportunities and achieve our 2024 goals.

Helge Krogsbøl, CEO Heimstaden Bostad

Market Update

2023 turned out to be another year of geopolitical tensions maintaining uncertainty about economic growth and inflation. As the year progressed, macro data provided comfort that inflation had come down at a swift pace and interest rates had peaked, supporting the outlook for sectors of real estate with fundamental tailwinds, such as residential.

Inflation Target is Within Reach

The consequences of the unprecedented pace of interest hikes have been questioned by economic commentators with opinions shifting as macro indicators continuously pointed in opposite directions. Ultimately, inflation has come down quickly allowing for a loosening of financial conditions and the 'sticky' core inflation seems to not be that sticky. With households proving to be resilient to increased interest rates and reduced purchasing power, the odds for a soft-landing look promising. Demand is cooling and supply chains have restored together with a reversal of energy prices from 2022 highs, providing comfort we will reach the ECB's 2% inflation target without forcing the economy into a deep recession.

Consensus can Change Quickly

By end-2021, the idea of interest rates increasing seemed unimaginable. However, by end-2022, the scenario of interest rates decreasing similarly looked unimaginable. It's human nature to use recent data to explain the present and what to expect of the future, and this leads to noise in understanding structural trends in inflation. There has been a lot of events in the past two years to digest, an energy crisis fuelling expectations of significant energy transition investments and geopolitical events leading to deglobalisation trends and scaling up military investments. These trends are indeed net inflationary but can also easily lead to confirmatory bias for why recently observed inflation levels will remain higher with limited consideration for the overall demand deterioration observed.

Tectonic Movements Within Real Estate

Entering the financial crisis there was a uniform impact across real estate sectors: commercial real estate experienced increasing vacancy rates and decreasing rent levels, due to lowered employment rates and reduced consumption. Residential, at the time, was not widely recognised as an institutional asset class and had little investor attention.

The situation is different today, and consequently the impact is not uniform. Today, real estate sectors are not only impacted by cyclical trends or tightened financial market conditions, but fundamentally changed framework conditions. E-commerce's impact on retail has been evident for years and offices have come into the spotlight post-COVID. But has it really been only post-COVID that offices have experienced structural changes? Work-from-home trends have tangible impact on office demand, but even before this we have seen changing requirements by office tenants which include reduced space requirements and material changes to how attractive office space looks like, resulting in significant capex requirements.

This is set to impact real estate portfolio compositions going forward, and the institutional darlings of the past are set to be replaced with the more resilient demographic-driven real estate sectors, where risk of assets becoming obsolete is low and long-term supply/demand imbalances are destined, such as residential.

Historical Spread between Rental and Ownership Housing

Rental capital values have observed nominal setbacks in the range 5-20% over the past 18 months, reflecting real price drops of 20-35%. This is unprecedented in a non-cyclical asset class that is undersupplied and where replacement costs have increased substantially. An investment market vacuum exists with many buyers in recent years having acquired residential real estate as a low-beta fixed income substitute and with risk-free rates having risen 300-400 bps, the spread to residential yields have narrowed and these buyers disappeared. During such period, it should have been the 'true' real estate investors or long-term institutional investors who filled the gap, but with institutions having to recalibrate their portfolio allocations to a new interest rate environment and real estate companies focused at strengthening their credit metrics, this gap has been allowed to persist, causing pressure on rental capital values.

The dynamics in the private ownership market have been remarkably different. Despite rising interest rates having had an impact on affordability, the exacerbated supply/demand imbalance combined with high employment and increasing wages have made ownership housing prices highly resilient. While there are variations across markets, the ownership markets have been impacted by a factor of less than 0.5x of the rental capital values with ownership markets typically down 5-10% in real prices from peak.

Portfolio Management More Important than Ever

The relationship between rental capital values and ownership values is something we continuously monitor and is the key rationale for our extensive privatisation plan covering 25% of our fair value portfolio. By end-2023, we had sold more than 300 units with proceeds exceeding SEK 1.2 billion (in properties with total book value of SEK 20 billion), reflecting an average premium of 32%.

Optimising capital allocation is always important, but in an environment with swiftly changing cost of capital and inflation it becomes even more important. Yield thresholds for apartment upgrades, repairing vs replacing a roof, etc. have changed materially in the past 18 months and an organisation should be ready to embrace sudden shifts, which I'm proud to say we have succeeded in the fullest.

Supply Shortage is Accumulating and Set to Dominate

As the resilient ownership values indicate, residential does not follow ordinary commercial real estate dynamics and should be considered like a commodity with due consideration to its substance value and the supply/demand balance. While for a commodity the substance value can be measured as its marginal cost of exploration, residential can be measured by its replacement cost (i.e., cost of building new), which has increased materially in recent years. The supply shortage is only set to increase until residential values are to recover to motivate new supply, and as the resilience in ownership values reveal the strength of supply shortage should not be underestimated. Continuous pressure on values cannot withstand gravity of supply shortage and increased replacement costs for something as fundamental to everybody's lives as residential real estate, making it rather a question of when, and not if, values will start to recover.

Christian Fladeland

Deputy Chief Executive Officer & Chief Investment Officer

Heimstaden Bostad

Strategy

Delivering Friendly Homes

The real estate sector has undergone a transformative period marked by unprecedented financial market corrections in 2022 and 2023. This shift highlights the importance of factors such as financing access, cost efficiency, and operational excellence. Consequently, our strategy has evolved. We are shifting our focus from growth to recalibration of our capital allocation strategy. This change adapts to the higher cost of capital and is underscored by a rigorous commitment to financial and funding discipline.

Having consistently delivered strong operational results, Heimstaden Bostad is well-positioned for sustained growth once the financial turbulence resides.

Why We Love Residential Real Estate

The allure of residential real estate lies in its irreplaceable nature as a fundamental human need, it cannot be digitised. Trends of urbanisation and smaller households drive demand for housing, while limited supply in central locations intensifies demand for rentals. With housing shortages and increasing ownership costs, rental growth is expected to outpace inflation in the coming years. Additionally, as new builds are not viable at current yields and rental levels, the risk-adjusted returns of the asset class are further supported.

Why Heimstaden Bostad

Heimstaden Bostad, as the only pan-European residential company, leverages its scalable digital platform for economic profitability, sustainability, and customer satisfaction. With inhouse operations and skilled local teams, we have a proven track record in operational excellence. Our unique position enables us to evaluate relative pricing across markets and ensure efficient capital allocation, optimising the risk-adjusted returns for our owners.

Mission and Goals

Guided by Scandinavian entrepreneurial values and strong governance, we have a clear strategy to fulfil our mission of enriching and simplifying lives through Friendly Homes. Beyond providing homes, we ensure sustainable, long-term returns for our owners and meaningful contributions to society. This is facilitated by fostering a stimulating work environment and satisfying tenants. Commercial excellence is foundational, driving the creation and growth of Friendly Homes. We are focused on delivering high-quality, efficient, and innovative operations by continuously striving for improvement at every level.

Top Level KPIs

Commercially Outstanding	Efficient & Innovative Operations	Quality Living for Customers	Friendly Workplace	Society Contribution
NOI Margin: 68% (2024)	Real Economic Occupancy: Greater than 98.5% (2024)	Total service: 80% (2026)	Top 25 ^th percentile in Engagement, Diversity & Inclusion, and Health & Wellbeing scores (2024)	Reduce GHG emissions by 42% from 2020 as base year (2030) ¹
Privatisation: Sales of SEK 20 billion (2025)	Yield on Tenant Improvements: +10% (2024)	Take Customer Seriously: 86% (2026)	Equal gender representation (50/50)	Reduce the amount of purchased energy by 2% per sqm per year (2025)
Gross Premium of +20%	Rent increase (LFL): 4.7% (2024)	Security: 80% (2026)	Vision of zero work accidents	At least 1% reduced water consumption per sqm per year (2030)
ROE +10% (long term)		Overall Customer Satisfaction: >78% (2024)		5,000 inclusive housing contracts (2026)
BBB rating (target)				240 inclusive jobs (2026)
				100% of employees have signed the Code of Conduct and 100% of suppliers have signed the Business Partner Principles
				Require that suppliers covering 27% of our spend should set science-based targets (2027)
¹ Reduce absolute scope 1, 2, and 3 GHG emissions covering downstream leased assets by 42% by 2030 from a 2020 base year.

Property and Asset Management

Active Asset Management to Ensure Efficient Capital Allocation

We entered 2023 with a continued mission to create long-term stakeholder value. Responding to macroeconomic changes, we increased hurdle rates for new value-add projects in-line with our commitment to safeguarding credit metrics. This disciplined approach fortifies our financial position, enabling us to continue delivering accretive results. A detailed portfolio review identified strategic privatisation of selected properties as a viable path, enhancing long-term value and operational efficiency.

Executing on Our Ambitious Emission Targets

In 2023, we expanded our climate roadmap to include acquired properties up until the year of 2022 and strategically shifted the responsibility for the Climate Roadmap to Asset Management. This change places Asset Management at the forefront of climate roadmap project execution.

We have accelerated our efforts to reduce carbon emissions in line with the Paris Agreement and are seeing our plans in action across our portfolio. It estimates savings through energy intensity reductions of 7.5%. This demonstrates our progress towards achieving the ambitious CO ₂ emissions reduction targets of 42% by 2030, using 2020 as the base year.

Aligned with our sustainability investment strategy, we continue to prioritise insulating buildings to reduce winter energy consumption, transitioning from fossil fuels to renewables, and optimising energy efficiency through digital controls. This approach not only delivers net savings for tenants but also generates a 6% unlevered yield on investment.

Tenant Improvements Continue to Boost Rental Growth

Quickly adapting to the rising interest rates and inflation's impact on material costs, we adjusted yield thresholds for value accretive investmets like Tenant Improvements (TI) and other opportunistic value-add projects. This led to reduced volumes and higher relative returns, emphasising those with immediately accretive ICR impacts while maintaining the option to execute others in the future or at the next churn. Throughout the year, we renovated 4,602 units with an average rental uplift of 40%, delivered at an 8% yield on cost with a return on investment of 35.5%.

Fewer value add projects initiated and a more cautious approach to planned maintenance, resulted in a Year on-Year decreased CAPEX of 13.4% or SEK 700 million.

Looking ahead to 2024, our focus will remain on cash management. We anticipate a reduction of TI unit volume of roughly 30%, but with an emphasis on increasing the yield on investment even further.

Completing New Production Commitments

Following years of active investments and growth, we completed a substantial portion of new production projects, delivering 4,526 apartments in 2023. This included Forward Funding, Forward Purchase, and Own Development projects, with the majority of associated spending for the remaining pipeline already accounted for. Through bilateral negotiations with turn-key development partners, we reached agreements allowing them to buy-out of delivering 1,556 homes for a price of SEK 138 million, reducing our future funding commitments by SEK 1,713 million.

In 2024 we plan to deliver 79% of our remaining development pipeline, amounting to 2,957 units and representing an estimated SEK 305 million in additional NOI potential.

Efficient Property Management

After implementing our Operational Handbook across all markets, which standardised our operational processes and enhanced cost efficiency, we have successfully reduced operational costs and our cost-efficiency programme will persist throughout 2024.

Digitising the Operational Value Chain

We work in an increasingly data-driven manner, and through the implementation of our internal portal MyWork and our customer portal Heimstaden Property Platform, we have integrated useful tools in our way of working. Digitising the customer journey not only offers more opportunities to deliver best-in-class service to our tenants, but also holds the potential to improve the efficiency of day-to-day operations with controlled and readily accessible data, optimised administration, and reduced costs. This digital transformation is also crucial for achieving our climate targets.

We have initiated the roll-out of Heimstaden Property Platform in Germany, providing on-hand relevant contract and payment documentation for our customers, enabling us to allocate resources more efficiently and enhancing customer experience.

While operational savings from the rollout are not yet fully realised, there are promising developments in our digitalisation efforts. Taking a deeper, rather than wider, approach in the German market has allowed us to digitise the entire rental process, including contract signing and complex rental calculations. These efforts drive operational efficiency and positively impact profit margins.

Digitising Our Value Chain

With the introduction of our new digital customer portal, Heimstaden Property Platform, in Germany in 2023, we are improving the way we communicate with our tenants. Now, they have access to a transparent and 24/7/365 communication channel for all their concerns.

Tenants can access documents and data related to their homes and the properties they reside in. They can also submit service requests and report damages at any time. With the assistance of a digital tool, tenants are guided through their requests and supported in recording problems. This ensures that inquiries reach the right contact immediately.

Approximately 20% of our tenants in Germany are already taking advantage of the benefits offered by Heimstaden Property Platform, and more are joining every day.

Privatisation - Crystallising Significant Premiums

In Q3, the Board approved a Privatisation Plan for unit-by-unit sales, aiming for SEK 20 billion in sales by 2025 at a +20% premium.

Based on a detailed analysis, we have identified appr. 25% of our portfolio, or about SEK 85 billion in book value, suitable for transition to the home-ownership market when tenants move out.

This assessment considered forward looking returns, achievable profits, operational fit, and existing funding. Consequently, we have selected five of our nine markets to be included and expect premiums to exceed 20% of book value.

Initial results are promising, with a 32% premium on book value from the sale of SEK 1.2 billion by end year. This plan will intensify over the coming quarters, supporting our deleveraging and improving our credit metrics. You can read more about privatisation at page 15.

We have appointed a Group Director of Privatisation to spearhead this strategic initiative, overseeing the privatisations team, and advancing the ramp-up of privatisation across our markets.

Sustainability-Linked Financing

In September 2023, Heimstaden Bostad secured EUR 700 million in sustainability-linked financing from European Bank for Reconstruction and Development (EBRD) and a consortium of Central European banks. These funds will support sustainability projects in our Czech properties, including thermal insulation, heat pumps, and renewable fuel adoption. EBRD, with the support of 71 countries, the EU, and the European Investment Bank, promotes responsible and sustainable development.

Energy Efficiency Efforts

Throughout the year, we introduced an advanced AI control system to enhance heating system efficiency, as described in our Sustainability Report on page 141 and 172. Our primary goal has been to bolster our ability to report property-related sustainability data, facilitating monthly updates across our markets.

The AI control system will help identify and follow up on where we can save the most energy in the most efficient way to cut costs and lower our CO ₂ emissions.

Investments and Divestments

Consolidation and Exploration of Opportunities

Following years of growth, we consolidated our business in 2023 and continued realising synergies from recent years acquisitions, while calibrating capital allocation to reflect the higher interest rate environment, supporting shareholder value creation and our financial objectives.

A Stagnant Transactional Market

By late 2023, after consecutive quarters of rising interest rates and record inflation, rates have started to compress while inflation has come down significantly, bringing inflation closer to central banks' targets.

Uncertainty about real rate stabilisation and the varying ability of different real estate segments to pass through inflation to net operating income has resulted in a stagnant transactional market.

As a result, residential development has reached a decade-long low, exacerbating supply/demand imbalance in all our markets. Therefore, we expect like-for-like rent increases to exceed inflation in the coming years and capital values to gradually recover after six quarters of yield expansion dominating value development.

Limited residential transactions reflect a significant bid-ask spread. Buyers are cautious as they await stabilisation in yields, while sellers feeling the tailwinds of the asset class through historical strong operations and fundamentals that are only set to improve with the increased replacement costs and yield requirement keeping new supply constrained.

Residential real estate uniquely benefits from a broad consumer market, providing transaction alternatives between homeownership and rental strategies. Homeownership markets have been significantly less exposed to the increasing interest rates due to prudent credit restrictions in the zero-interest rate environment and the non-cyclical nature of residential demand. Transactions are occurring across all cycles and supply/demand are the primary determinants of equilibrium price points.

Based on these dynamics observed in our markets, we expect that the significant value declines are in the past, and residential values will recover in the coming years.

Privatisation Plan

In 2023, despite a slow professional transaction market, the private homeowner market remained resilient with minimal price drops. The Board approved the Privatisation Plan in Q3 to capitalise on the strong homeownership market, selling selected assets at attractive premiums, and creating substantial shareholder value.

Our portfolio assessment revealed a substantial opportunity for unit-by-unit sales (privatisation), instead of bulk property sales.

We aim to achieve SEK 20 billion in sales by the end of 2025 at an above 20% premium to book value, contributing to deleveraging and strengthening our credit metrics.

While our long-term growth strategy remains unchanged, we will continually engage in active portfolio management to optimise profitability. Currently, this entails leveraging a robust homeownership market. At the latter part of 2023, we built a competent and experienced privatisation team, setting the stage for acceleration in 2024.

End of Interest Hikes and the 'Transition'

Residential real estate sustains strong fundamentals, due to its universal necessity and a fundamental supply shortage in our markets, reinforcing its value. The ongoing demand growth for residential real estate is reassuring, especially amid urban population and household expansions. In many markets, new construction has significantly decreased, and its eventual resumption would necessitate capital values higher than pre-inflation levels in early 2022.

Our operations continue to demonstrate strength, with rental growth again exceeding inflation and consistent improvement in NOI margins. This, combined with supply and demand imbalances in our markets, supports high occupancy and the long-term prospects of our business.

With strong evidence that inflationary pressures have levelled off and the increased interest rates feeding into the economy, where the slowdown is increasingly apparent, we consider its fair to say the transition to a new interest rate level has completed. The question is now whether it has become too restrictive and how quickly we will see a pivot by the central banks. The 'higher for longer' narrative is surely set to be tested with the rapid slowdown in inflation and economic activity during second half of 2023.

Investment Properties

The real estate market has the last two years faced a higher interest rate environment than the past decade and low transaction volumes were observed as buyers and sellers adjusted to the new economic conditions. Asset prices have undergone significant adjustments due to higher yields, outweighing the effects of increasing rental levels. Towards the end of the year, however, we have seen signs that bid-ask spreads are narrowing, transaction volumes are starting to pick up, and values are beginning to stabilise across most markets.

After six quarters of falling property values, we believe we are well into the current correction and expect that on a like-for-like basis aggregate portfolio values will stabilise in the first half of 2024. This view is based on Heimstaden Bostad's expected portfolio operational performance and our assessment of how current sentiment will feed into the market in the coming quarters.

The privatisation plan launched during Q3 2023 is gradually being ramped up with initial results trending above expectation. In 2023, a total book value of SEK 1.2 billion has been disposed at a blended average yield of 2.8%. The scarce supply of units in our locations and at our price point is supporting the levels achieved. We are also continuing to upgrade the portfolio, delivering on our sustainability strategy, and supporting affordability for our tenants. Affordability continues to be a key priority for us across all markets.

As of the balance sheet date, the investment properties portfolio includes 161,553 (161,532) homes across nine markets.

Independent external valuers perform the valuation of Heimstaden Bostad's portfolio. For more details, see Note 3.1 on page 61 of this report.

The fair value of investment properties decreased to SEK 319 billion, from SEK 345 billion on 31 December 2022, mainly through an unrealised fair value loss of SEK 31.1 billion, divestment of SEK 3.0 billion and negative currency effects of SEK 1.9 billion, partly offset by capital expenditures of SEK 7.9 billion.

The decrease in fair value in Q4 2023 was primarily driven by negative valuation movements in Sweden and Germany, where yield increases (supported by a limited number of individual comparable transactions) outweighed the positive effects of rental increases. In Norway, declining prices in the owner-occupier market led to a weakening valuation. Meanwhile, in Denmark and the Netherlands, values have stabilised as rental performance and owner-occupier price developments mitigated the effects of increasing yields. Strong rent roll performance in the Czechia, United Kingdom, and Poland positively impacted values.

Capital Structure

Funding Overview

Owning, operating, and optimising residential real estate benefits from stable and favourable access to capital. We safeguard the availability of borrowed capital at attractive terms through a well-diversified financing structure. Heimstaden Bostad's portfolio quality makes it attractive to finance given its highly resilient cash flow, supported by locations in areas with housing shortages and strong affordability metrics.

Funding Strategy

With persisting constraints in the capital markets, we continue to focus our funding efforts on obtaining local asset-backed financing. Our portfolio diversification with a presence in nine countries benefits the strategy by limiting the required volumes in any single market. So far, the tightening credit market and the increasingly selective approach banks have adopted towards real estate have not affected Heimstaden Bostad materially. We are continuously securing sizeable volumes of secured credit facilities. In 2023, we signed credit facilities totalling SEK 33 billion, primarily from Danish, German, and Czech banks. In Q4, we successfully raised SEK 5 billion, and further extended our banking network with the closing of the first bank financing in the Czechia and signing of the first facility in Poland. Secured financing is taken out by local property subsidiaries within Heimstaden Bostad with group-level recourse as an extra guarantee for the banks, providing support for larger credit lines.

The process to obtain new credit lines is work-intensive and lengthy and usually involves 3-6 months of work with banks analysing detailed portfolio documentation. The debt service capacity is key in the bank's assessments. Following higher interest rates, the obtainable LTV levels have fallen as the ICR and debt yield requirements have become the deciding factor in terms of achievable volumes on a specific portfolio. Even though bank lending margins have increased marginally throughout the year (10 - 20 basis points), bank lending remains a competitive option.

We consider the capital markets to remain closed due to the less favourable pricing. However, we continue to prioritise active investor relations engagement and transparent communication to the market in order to support our longer-term ambition of being an active capital markets issuer with a continued diversified capital structure. During the year we repaid in Q3 a EUR bond of EUR 350 million outstanding at maturity and in Q4 two SEK bonds of SEK 950 million outstanding at maturity. In Q4 we bought back senior unsecured bonds for a total consideration of SEK 1.5 billion with volumes coming from tenders on NOK and SEK Floating-Rate Note bonds, all paid with cash at hand.

Accumulated over the year the total buyback amount was close to SEK 12 billion and have overall reduced the capital market commitments with SEK 17 billion. The share of secured loans has consequently increased to 61% (49%) and the secured LTV increased to 31.8% (22.6%).

At the end of the year, Heimstaden Bostad had SEK 74,037 million in senior unsecured bonds and SEK 26,468 million in hybrid bonds outstanding.

See Note 8.4, page 85 for more information on exchange and debt issuance/repayments after the balance sheet date.

For more detailed information on Heimstaden Bostad's debt instruments, see our website.

As a supplemental strategy to strengthen Heimstaden Bostad's financial position, the rollout of the privatisation program was initiated in Q3. All proceeds from the program will be directed for debt servicing, and as such gradually will limit financing needs and be stabilising factor for credit metrics. For more detailed information on the privatisation please see page 15.

Financial Policy and the Credit Rating

To adapt to the current market circumstances, in Q3 2023 the Board did a thorough review and updated the financial policy. This better aligns with the current market circumstances and longer-term fluctuations of business cycles of varying inflationary and interest rates environments and is in accordance with S&P's 'BBB' rating guidelines. In line with the policy, Heimstaden Bostad's rating ambition remains at 'BBB'.

The key credit metrics, Interest Coverage Ratio (ICR) and Net loan-to-value (LTV) continued to weaken due to the increasing cost of debt and valuation yields, with particularly the declining ICR being a driver for negative rating actions from both agencies. Fitch affirmed the BBB Investment grade rating but revised outlook from negative to rating watch negative, while S&P lowered Investment Grade Rating to 'BBB-' with negative outlook. Our immediate rating focus is to resolve the negative outlook with the ambition to return to a 'BBB' rating in line with policy.

In December 2023, the hedge ratio was increased to 86% from 76% in the previous quarter using interest rate swaps. The decision to increase the hedge position was assessed in the context of recent rate movement and the benefit of gaining certainty on future interest expense and, correspondingly, the ICR. The average term of fixed interest in the loan portfolio, including derivatives, was 3.28 years as of Q4 2023. In line with the general market view, we anticipate interest rates to trend down gradually. Our hedge position will be monitored and altered accordingly and, in line with financial policy, be at a minimum of 75%.

Financial Policy

		Policy	2023	2022
Interest coverage ratio, S&P method	Multiple	≥ 1.8	1.7	2.7
Net debt / net debt + equity, S&P method	%	≤ 60	58.6	52.6
Average loan tenor	Years	≥ 4	8.0	8.3
Loan maturity in individual year	%	≤ 25	20	18
Loans from individual lender	%	≤ 20	7.7	8.1
Interest rate hedge ratio	%	≥ 75	86	76
Liquidity ratio	Multiple	≥ 1.25	1.40	1.49

Environmental Sustainability

We consider environmental sustainability across our value chain and set ambitious targets where our impact is greatest. Robust reporting is integral to measuring our progress, ensuring compliance with relevant laws and regulations, and being transparent in stakeholder communication. Our commitment to environmental sustainability not only benefits the planet but also supports our financial performance. This encompasses annual cost savings from energy-efficient measures, access to sustainability-linked financing, and positive stakeholder engagement.

Climate Strategy

As a major property owner and operator, we have a responsibility to combat climate change, primarily through reducing greenhouse gas (GHG) emissions resulting from our properties' energy usage. Our emission reduction and energy consumption targets, validated by the Science Based Targets initiative in 2022, are in alignment with the Paris Agreement's goal of limiting global temperature increase to 1.5°C and the EU's commitment to climate neutrality by 2050.

Climate Roadmap

To reach our ambitious targets, we have developed a roadmap and committed appr. SEK 7.7 billion in investments by 2030. This roadmap was updated in 2023 to include properties acquired up until and including the year of 2022 (see page 147 for details).

Our primary strategies to cut GHG emissions across all three scopes involve fuel shifts, improving energy efficiency, and promoting sustainable behaviours among our customers. A key strategy is fuel transition, such as shifting from district heating to heat pumps or from coal to gas in suitable cases in Czechia.

These efforts not only reduce GHG emissions but also yield cost savings for both our business and customers. We anticipate annual savings of SEK 450 million, offering an estimated yield of 6%.

Reducing Energy Usage

We proactively reduce energy consumption, reaching our 2023 target of a 2% reduction in climate corrected energy per sqm across all countries. Achievements include insulating attics and walls, upgrading windows, and optimising heating systems and ventilation control.

In 2023, we evaluated various potential energy-conserving measures to identify the most effective ones, which included:

•	AI control systemsDegassing and filtering of heating systems
•	Insulating pipes
•	Hydraulic balancing
•	Switching to LED lighting
•	Modernisation of sub-centrals

Through this evaluation we saw great potential to further increase the number of AI control systems and hydraulic balancing in our portfolio and plan to implement these in 2024.

Investing in Renewable Energy

Renewable energy is a key focus for reducing our carbon footprint. We are incorporating renewable energy generation into all new builds, exploring geothermal heating in accessible regions, and adding solar panels to existing structures. In 2023, we installed 1,284 Kilowatt Peak (kWp) in Denmark, Sweden, and Poland, and invested in geothermal heating in Finland.

ESG Rating Achievements in 2023

We are proud of our growing external recognition for our sustained sustainability efforts. In 2023, we achieved a noteworthy improvement in our Morningstar Sustainalytics ESG Risk rating, shifting from "Low Risk" to the more favourable "Negligible Risk" category. This transformation reflects a great improvement of -4.3 points compared to 2022 and -10.3 points compared to 2020.

Our progress in ESG areas has also garnered recognition from Danske Bank Credit Research on Real Estate companies. We elevated our ESG Reporting score from "Good" to "Excellent". This acknowledgment stems from our commitment to having long-term environmental strategies integrated into our business operations, as well as our clear budget allocations for investments in energy efficiency.

Reporting & Regulations

EPBD

We closely monitor proposed changes in the EU's Energy Performance of Buildings Directive (EPBD) and assess their potential impact on our business. We have mapped our EPC labels across markets, and identified priority assets for sustainability projects to enhance their EPC labels.

CSRD and ESRS

We are preparing for the Corporate Sustainability Reporting Directive (CSRD) effective from fiscal year 2024, along with the European Sustainability Reporting Standards (ESRS). We are carefully following the implementation in Swedish legislation.

CSDDD

We adhere to the OECD-recommended due diligence process, ensuring our readiness for the upcoming Corporate Sustainability Due Diligence Directive (CSDDD). This directive mandates companies to identify, cease, prevent, mitigate, and account for negative human rights and environmental impacts in both their operations and value chain.

GRESB

We are preparing to engage in the 2024 Global Real Estate Sustainability Benchmark and have established an internal task force for this initiative.

Climate Risk Assessment

The effects of climate change are already impacting regions where our properties are located, with increased severe weather events like floods and extreme heatwaves. We are committed to adapting to these changes and preparing for future climate-related risks.

In 2022, we developed a process for climate risk and vulnerability assessments, covering three stages: assess property exposure, assess property vulnerability, and implement adaptation measures. In 2023, we completed property exposure assessments for our entire portfolio, identifying flooding as the most relevant risk. Our goal is to assess vulnerability for our entire portfolio and implement appropriate adaptation measures.

Science Based Targets for Our Suppliers

To further strengthen our climate change commitment, we actively encourage our major suppliers to adopt science-based targets and have a target that 27% of our suppliers by spend, covering purchased goods and services, will have science-based targets by 2027.

Preserving Natural Resources & Ecosystems

Climate change is a crucial challenge, but our strategy goes beyond GHG emissions and energy use, extending to areas such as resource use and biodiversity.

Reducing Water Usage

Reducing water usage is crucial for the planet and an area where we can make a positive impact due to our customers' substantial water usage. While we have limited direct control, we strive to encourage sustainable practices among our customers and actively reduce water consumption by providing water-efficient equipment.

We have set a target to reduce water use by at least 1% per sqm annually and our actions include water system monitoring and replacing taps, mixers, toilets, and showers during renovations.

Total water consumption increased by 18% from 2022 to 2023 due to better data quality and including more estimates for missing values in Denmark and Germany in 2023. However, we are on track related to our 2030 target as can be seen at page 145.

In 2023, we replaced outdated water equipment in a major Norwegian project, resulting in an almost 10% reduction in water consumption. In selected properties in Sweden, Norway, and Czechia, we have installed smart meters for continuous leakage monitoring to detect abnormal water usage promptly.

Replacing Ecosystems & Enhancing Biodiversity

Healthy ecosystems and biodiversity are essential for a sustainable planet, but urbanisation poses a threat to them. In our new builds, we are committed to recreating an equivalent amount of ecosystem services. Our Ecosystem and Biodiversity Management Guidelines are implemented in our projects.

In Sweden, we include green roofs in many new developments, and we plan to build an orangery, greenhouse, and courtyards to promote biodiversity and community well-being.

In Czechia, Germany, and Denmark, we enhance biodiversity through green roofs, sedum roofs, wildflower planting, and beehives.

Responsible Waste Management in Our Properties

Better waste management is essential to lower the environmental impact and is also a high priority for our customers, as indicated by surveys. Our current measures address significant waste generation in construction, tenant areas, and offices, and next year we will finalise and implement a waste management guideline for the organisation.

We set specific requirements for new builds, ensuring that 70% of non-hazardous waste is prepared for reuse, recycling, or material recovery. In existing properties, we actively engage with our customers to ensure good waste practices, safe recycling, and accessibility. We also preserve existing buildings through frequent maintenance and renovations, increasing circularity by reducing the need for new construction through our evergreen approach.

Group Director of Environmental Sustainability

To further cement our commitment to strong environmental policies and practices we created a group role in November 2023. Our Group Director of Environmental Sustainability is responsible for our environmental strategy to ensure we are ready for upcoming additional regulations and legalisation.

Rooftop Home for Over 50,000 Bees

In Ostrava, Czechia, we have three beehives on the roof of properties. These hives are home to over 50,000 bees and have special sensors that monitor the bee's health and activity. They work to enhance the biodiversity of the area, with the additional bonus of producing over 60kgs of honey annually.

Social Highlights

Our foundation is people - our valued customers for whom we create Friendly Homes, our dedicated employees, and the communities and wider society we impact. Our social sustainability strategy recognises our role with each of these stakeholder groups and promotes a safe and inclusive environment for all.

In 2023, the Board approved our new Social Roadmap, outlining our social sustainability strategy in three key focus areas. This roadmap enhances efficiency and ensures a coordinated, strategic approach across all markets.

Friendly Workplace

Our employees are vital to our success, delivering Friendly Homes to our customers daily. In 2023, we advanced our diversity, inclusion, and gender equality efforts by introducing the Diversity Board. We remained committed to employee engagement and talent development through training and leadership programmes. Continued optimisation of work processes mandated downsizing and cost-efficiency measures, emphasising the importance of Managers engaging with their teams and evaluating employee sentiments.

Enhancing Employee Experience in 2023

This year, we continued to enhance our employee experience. We implemented a new employee survey tool to listen to our employees' feedback and identify areas for improvement. We set ambitious targets to be among the top 25% of users globally to ensure we maintain a Friendly Workplace commitment.

Employee satisfaction and growth opportunities are crucial. In 2023, we improved our learning platform for easier content access, and introduced a specialised onboarding program in Facilitiy Management and Letting. We also launched trainings on finding your next role, leading through change, and introduced anti-bribery and corruption training.

We support our leaders with a Toolkit for Leaders and quarterly Spotlight newsletters, focusing on leadership topics and tips and tools for leaders to use in their daily work. Country Summits foster collaboration and best practice sharing. Selected new leaders benefit from our New@Leading program, keeping us at the forefront of leadership and management practices.

Making Diversity Part of Our DNA

We view diversity and inclusion as essential for creating a Friendly Workplace and driving productivity, innovation, and overall success. Our aim is to foster an inclusive environment that enables a diverse range of people to thrive, backed by tangible actions.

Recognising the challenge posed by a relatively homogenous manager population, we established a Diversity Board in 2023 to listen to diverse employee voices and take meaningful actions to promote a sense of belonging. In addition, we have made our recruitment process less biased by using testing tools for objectivity and including bias training in our leadership programmes, particularly related to recruitment.

Promoting Equality and Gender Balance

Rooted in Scandinavian values, we prioritise equality. We work consistently on gender equality, striving to achieve balanced gender representation and equal remuneration for equivalent work company wide.

Using the Mercer platform, we conduct an annual gender pay gap analysis across our organisation to identify disparities in remuneration between men and women in similar roles. The results are available in our Sustainability Report, page 161, empowering us to make data-driven decisions that promote fairness and equality.

We actively encourage women to enter the real estate sector and take on leadership roles, addressing the industry's male-dominated nature. In Germany and Czechia, local organisations organised career and recruitment events for young women interested in real estate, resulting in some participants joining our Company. Additionally, on International Women's Day, we hosted a panel for female employees to provide career advice and discuss progression within the Company, featuring our strong female leaders.

Promoting a Safe Work Environment

In real estate, safety is paramount. In 2023, Heimstaden Denmark held a successful Safety Day with a new digital tool for managing equipment and safety. It included inspections, product reviews, and assessments, followed by an annual Award Show to promote a secure workplace through collective responsibility. Read page 159 in the Sustainability Report for 2023 scores.

Diversity Board

In 2023 we established a Diversity Board to bring new perspectives to Group Management and challenge the way we work with Diversity, Inclusion, and Belonging (DIB). The Diversity Board includes six employees from diverse backgrounds and meets monthly to discuss and advise on actions we can take to make our workplace more inclusive.

Launched in June, they have already recommended several concrete actions, that we will look to implement in 2024.

These include:

•	Developing a DIB training program for all employees
•	Highlighting DIB matters in our company communication
•	Increasing our focus on mental health

Quality Living for Customers

Our tenants are at the heart of our mission. We are dedicated to simplify and enrich customers' lives through Friendly Homes. This commitment begins with their first interaction and extends all the way through to a transparent and move-out process.

The Voices of Our Customers

Despite the macro-economic climate, we have been able to maintain good customer scores across most markets. We are especially proud of our strong positive results in Poland and UK in 2023, as it marks the first year we have measured results in these countries.

In line with our new Social Roadmap, we have set ambitious targets for our customer survey results. These targets reflect our ambition to create safe and inclusive homes and neighbourhoods for all our customers.

See 2023 customer satisfaction results on page 169 in the Sustainability Report or on our website.

Safety and Inclusion

We know from customer surveys that safety is one of the most important things across all markets. Therefore, we are always actively working to make sure our homes and the surrounding areas are safe and provide our tenants a sense of security.

Making our homes and buildings feel safe includes adequate lighting around entrance ways and surrounding areas, secure storage areas, and making sure doors and locks are maintained to a high standard.

Inclusion of our customers is another key area of importance for us. Across our homes we make room for a range of customers from all parts of society. In 2023 we conducted several activities that promoted inclusion, such as the Children's Day in Norway, support for senior citizens in Czechia, and a national financial inclusion partnership in the Netherlands.

Innovation to Enrich Daily Lives

We are always looking for ways we can develop and innovate our services to improve the lives of our customers. In 2023 we rolled out our digital Heimstaden Property Platform to Germany. Alongside our customers in Denmark, Norway and the Netherlands, tenants in Germany can now enjoy streamlined digital services and make service requests online.

Heimmade, a platform for collecting ideas, encourages our employees to share ideas that will bring our mission to life and strengthen customer satisfaction. This brings innovation to our customer journey and every year we select the best proposal and implement it into our business.

Promoting Financial Inclusion

In the Netherlands, we have partnered with a national public-private initiative, the Nationale Schuldhulproute (NSR), joining forces with other companies and municipalities. We utilise NSR to proactively identify and assist tenants facing financial challenges by connecting them with professional advice and resources to improve their financial well-being.

IKEA Student Collaboration in Sweden

In 2023, we piloted a partnership with IKEA in Sweden to enhance the student experience with Heimstaden. Moving away from home for the first time presents numerous practical challenges, and our goal is to streamline this transition while promoting functional and sustainable living spaces. Through pre-designed, custom home furnishing packages at an e-platform by IKEA and Heimstaden, we simplified and made furnishing new apartments more cost-effective for students. We are now evaluating the collaboration's potential expansion to other cities and markets.

Society Contribution

As a large residential real estate company in nine European markets, we recognise our potential to influence society significantly. Extending our Friendly Homes mission to create a safe and inclusive society for everyone, aligns with our strategic goal of society contribution and responds to the growing demand from stakeholders for corporate responsibility.

To reach our targets we are working with local authorities and third-party organisations.

Inclusive Housing

A safe home is the foundation for building a good life and it is natural that we take an active role in supporting vulnerable groups who may not otherwise get access to safe homes. In 2023 we set an ambitious target of having 5,000 inclusive housing contracts by 2026 and by end-2023 we had in total 4,767 inclusive housing contracts, see page 169 for more details.

Inclusive housing for us includes affordable housing contracts and social contracts. Affordable housing contracts are contracts that are regulated by the authorities which have both a regulated maximum rent level and a regulated maximum income level for the tenants. Social contracts are made in collaboration with third-party organisations that are specifically targeted to help vulnerable groups.

Social contracts are by nature short-term contracts. However, our ambition is to bring about lasting change for tenants, enabling them to achieve self-sufficiency. By transitioning from social contracts to regular lease agreements, we provide long-term stability for residents. This also means that we retain them as tenants and the third-party organisation can go on to support more vulnerable people.

Inclusive Jobs

Having a stable job is another area we see that can make a real difference in someone's life. In 2023 we set a strong target of offering 240 inclusive jobs by 2026. In 2023, we offered 299 inclusive jobs, see page 169 for more details.

To be able to measure inclusive jobs we have defined two groups who face difficulties entering the job market; young people with no previous work experience and people who face societal biases that keep them out of the job market e.g., immigrants, long-term unemployed, or people with disabilities.

Impact Beyond Daily Operations Through Partnerships

While we can achieve a lot through our own operations, we want to create additional impact through partnerships. This allows us to engage more broadly with our local communities and also contribute to alleviating some of society's biggest challenges beyond our own markets.

The country management choose partnerships that are relevant to their communities, including things like local sports clubs for children, homeless shelters, refugee support, and support for youth in foster care.

Social Contracts for Ukrainian Refugees

In response to the war in Ukraine, we offered 650 social contracts, in addition to 200 regular contracts, for Ukrainian refugees in Czechia. When the legal conditions changed, we proactively supported our Ukrainian tenants and provided alternative long-term housing solutions. As a result, 73% of the Ukrainian refugees chose to continue leasing with us.

New Partnership With Stockholm City Mission

In 2023, we broadened our reach through social contracts, including a partnership with Stockholm City Mission, focusing on housing for individuals in or at the risk of homelessness. Through this collaboration, Stockholm City Mission oversees housing mediation and personal support while we supply the homes. Their support helps tenants become self-sufficient, with the goal of eventually transferring the lease to them.

A Home for a Home

Through our partnership with SOS Children's Villages, we have reached over 73,000 vulnerable children across 26 countries since the partnership began in 2021.

Supporting A New Strategic Direction

Through our global portfolio we have been able to support SOS Children's Villages' strategic shift to focus on preventing family separation. This strategic shift takes a holistic approach to address the root causes of children losing parental care. Through this approach SOS Children's Villages focuses on strengthening families, working with communities to educate on children's rights, and with local governments to create systemic change. As a significant partner for SOS Children's Villages, we are able to support this strategic move, and base our portfolio around these kinds of programmes which create more long-term impact for children.

Encouraging Innovation

Through A Home for a Home, we have also been able to support new pilot programmes in Rwanda, Ethiopia, Tanzania, Somalia, and Ghana. These programmes focus on reunifying children in street situations with their families, preventing child labour, and sustainable hydroponic farming to combat food shortages due to droughts. Supporting pilots like these aligns with Heimstaden Bostad's entrepreneurial spirit and empowers SOS to challenge their thinking. These programmes have the potential to be replicated in other countries and create even more impact for vulnerable children.

Fighting Child Labour in Ghana

In Ghana there are over 2.4 million economically active children. Children are often forced into harsh child labour situations due to extreme poverty in their family. With the support from A Home for a Home, SOS Ghana have been able to start a pilot programme addressing the causes of child labour and supporting the rehabilitation of these children. The programme works together with the police and other partners to rescue children from child labour situations, and provides access to medical care, including psychosocial support sessions and other rehabilitation support. The programme also works with families to support them to become economically independent, preventing children from needing to work, and with local governments to advocate for stronger legislation and enforcement.

Family Visitation Apartments Oslo

In Norway, Child Protection Services (CPS) can, under certain conditions, separate children from their families and place them with suitable caregivers. Often, children have visitation sessions with parents to reduce trauma and maintain family ties. These visits typically occur in inadequate spaces like CPS offices or busy cafes, causing distress. In response, we collaborated with SOS and local CPS offices in Oslo to provide a Heimstaden Bostad apartment for these visits. These spaces is well-equipped with a kitchen, furnished lounge, bedroom, and toys, offering children a comfortable and normal family experience, resulting in more positive visits. Starting as a pilot in 2022, this unique programme has shown great results in 2023, which has proved the model, and CPS is planning to take over the lease and costs mid-2024.

Governance Report

Good corporate governance is pivotal in Heimstaden Bostad's culture, fostering trust among shareholders, customers, employees, and communities where we operate. The corporate governance model supports the Board and Group Management in ensuring the Company's sustainable success through effective day-to-day management.

The shareholders' mandate is to target an attractive long-term risk-adjusted return. This necessitates effective corporate governance with a clear separation of responsibilities among shareholders, the Board, and Group Management.

Rules and Regulations

As a Swedish public limited liability Company with corporate bonds listed on Euronext Dublin and the Oslo Stock Exchange, the Company is subject to numerous rules and regulations.

The framework for corporate governance includes the following:

•	the Swedish Companies Act
•	the Swedish Annual Accounts Act
•	the Company's Articles of Association
•	the Shareholders' Agreement between Heimstaden AB and the institutional investors ('the Shareholders Agreement')
•	directions given by the general meeting
•	the Swedish Corporate Governance Code (the Code)
•	other Swedish and foreign laws and regulations, as applicable
•	Heimstaden Bostad's Key Policy framework

The Company contracts Heimstaden AB (through its subsidiary Heimstaden Group Manager AB, 'the Manager') as Group Manager. The Manager holds the strategic and administrative responsibility of the operations of the Company, and the Board performs the oversight of the Manager's execution and the Company's obligations. The responsibilities of the Manager are stipulated in the Group Management Agreement.

Heimstaden Bostad owns, through its subsidiaries, the operational platform performing the portfolio property and facility management. The Manager has the supervision and oversight of the performance under the Country Management Agreements.

In addition to the Shareholders' Agreement, Group Management Agreement, and the Articles of Association, the Company also adheres to an internal key policy framework defining the way we work.

Heimstaden Bostad has decided to follow those parts of the Code that the Board considers to be relevant for the Company in relation to its operations and the ownership structure. This Corporate Governance Report has been prepared in accordance with the Annual Accounts Act and the Code. Deviations from the Code can be seen on page 34.

Share Structure and Owners

Heimstaden Bostad is owned by Heimstaden, together with long-term institutional investors. Heimstaden has substantial experience in acquiring, developing, and actively managing residential real estate and is the manager of Heimstaden Bostad.

Shareholders hold a stapled combination of B shares and common shares. B shares have seniority and rights to a predefined level of dividends but carry lower voting rights than common shares. Dividends on common shares are determined at the Annual General Meeting and are subject to the profit of the year, the financial policy, and overall liquidity needs. B shares dividends are subject to certain conditions paid-in-kind to rebalance the relationship between common shares and B shares, and any cash payout is subject to profit in a given year, the financial policy, and overall liquidity needs.

Heimstaden holds a higher proportion of common shares to B shares compared to the institutional investors.

Partnership with Allianz

Allianz has more than SEK 15 billion (approx. EUR 1.4 billion) invested with us in two partnerships, comprising part of our Swedish and German portfolios respectively.

2023 Share Issuance

Raised SEK 3.3 billion in new equity from existing owners in March 2023.

Ownership Structure as of 31 December 2023

SEK billion

	Year of initial investment	Total Capital ²	Capital Share, %	Voting Share, %
Heimstaden AB	2013	41	34.8	50.1
Alecta	2013	46	39.4	30.4
Ericsson Pension Fund	2013	2	1.6	1.2
Folksam Group	2020	23	19.2	14.5
Swedish Pensions Agency	2021	2	2.1	1.6
Others		3	2.8	2.2
Total		117	100	100

¹ SEK 2.4 billion of dividends were reinvested in new share issues. See page 72 for more detals.

² Net asset value excluding non-controlling interest and Hybrid bonds with accrued interest. See page 102 for details.

General Meetings

Shareholders exert influence at the Annual General Meeting (AGM), Heimstaden Bostad's highest decision-making body, held annually. Shareholders can attend and vote either in person or through a proxy.

The AGM approves the Articles of Association, elects Board members, appoints the Chairperson and auditors, and establishes their fees. It also approves Financial Statements, profit disposition, and decides on discharging Board Members and the CEO from liability.

2023 Annual General Meeting

The 2023 AGM took place per capsulam on 6 March 2023. All shareholders participated at the AGM. A summary of the minutes and information about the 2023 AGM can be found at www.heimstadenbostad.com.

Among other things, the AGM:

•	approved the Financial Statements
•	allocated the Company's profit in accordance with the proposal - that is, a maximum of SEK 6,741,871,901 was distributed to the shareholders and SEK 112,561,627,514 was carried forward to a new account
•	discharged the Board and CEO from liability for the 2022 financial year
•	re-elected Board Members Casper von Koskull, Ivar Tollefsen, Anna Magnusson, John Giverholt, Axel Brändström, Birgitta Stenmark, Vibeke Krag, and Bente A Landsnes and discharged Stefan Attefall from his position as Board Member
•	re-elected the Chairperson Casper von Koskull
•	re-elected EY as auditors
•	approved the remuneration proposed for the Board and the auditor

2023 Extraordinary General Meetings

In 2023 the Company held three Extraordinary General Meetings adopting the Share issuance further described on page 72 and resolving that the Board shall consist of the following 9 people:

•	Helge Leiro Baastad, Chairman (replacing Casper von Koskull from August 2023)
•	Klas Åkerbäck
•	Daniel Kristiansson (replacing Axel Brändström from December 2023)
•	Ivar Tollefsen
•	John Giverholt
•	Fredrik Reinfeldt
•	Rebecka Elkert (replacing Birgitta Stenmark from August 2023)
•	Vibeke Krag (resigned 31 ^th December 2023)
•	Bente Landsnes

For information regarding shareholders and Heimstaden Bostad's corporate bonds, see page 78 and www.heimstadenbostad.com.

Nomination Committee

Board Members are elected by the AGM until the subsequent AGM. Due to a limited ownership base, Heimstaden Bostad shareholders have decided not to establish a Nomination Committee, as the Shareholders' Agreement governs the right to nominate Board Members. At most, six out of eleven Board members are nominated by the majority shareholder, Heimstaden. The largest institutional owner may nominate two members and the second and third-largest institutional owners may nominate one member each.

Highlights of the Board's agenda in 2023

First Quarter

•	Approved 2022 Annual, Governance, and Sustainability Report
•	Review of balance sheet including capital structure and dividend recommendation
•	Met with external auditors
•	Reviewed Finance, Rating, Market and Investment strategies
•	Approved Social Roadmap
•	Notice for Annual General Meeting
•	Constitutive meeting with the new Board
•	Approved updated Governance Framework
•	Approved Financing Agreements, Tender Offer and EMTN Programme update
•	Election of new CEO
•	Approved new CEO instruction
•	Approved Group Authorisation Matrix

Second Quarter

•	Approved Q1 report
•	Financial liabilities analysis
•	Market update and review of finance and operations
•	Orientation from the Chairman of the Audit and GRC Committee on status
•	Change to board composition
•	Media coverage analysis
•	Strategy session in Berlin

Third Quarter

•	Approved Q2 report
•	Market update and review of finance and operations
•	Orientation from the Chairman of the Audit and GRC Committee
•	Updated Financial Policy
•	Approved the mandate for the establishment of an Internal Audit Function from 2024
•	Approved Financing Agreements
•	Orientation on Privatisation Strategy

Fourth Quarter

•	Approved Q3 report
•	Market update and review of finance and operations
•	Status on GRC and implementation of Governance/Policy Framework
•	Orientation on Media Coverage
•	Approved Tender Offer
•	Update on Privatisation Strategy
•	Approved 2024 Budget

Board

The Board is responsible for overseeing and organising Company operations. Per the Articles of Association, the Board comprises three to 11 members, with up to five deputies. Annual AGM elections determine their tenure until the subsequent AGM.

The Board has adopted Rules of Procedure that regulate the Board's work as well as an instruction to the Audit & GRC committee.

The Chairperson is responsible for the work of the Board being well organised and conducted efficiently, and for the Board fulfilling its commitments. The Chairperson is responsible that the other Board Members receive the information and documentation necessary for a high level of quality in discussions and decision-making, and for verifying that the Board's decisions are implemented.

The tasks of the Board include, inter alia:

•	execute and oversee that the Company delivers on the overall objectives and strategy of the Company
•	approval of material financial and real estate transactions
•	appointing, evaluating and, if necessary, dismissing the CEO
•	defining appropriate internal guidelines in internal steering documents on the Company's ESG policy, with the aim of ensuring its long-term value creation capability
•	approval of budgets, annual reports, and quarterly reports
•	approve sustainability strategy and review the Company's performance
•	ensuring that there is an effective system for follow-up and control of the Company's operations and the risks to the Company that are associated with its operations
•	ensuring that there is a satisfactory process for monitoring the Company's compliance with laws and regulations relevant to the Company's operations, as well as the application of internal guidelines in internal steering documents
•	ensuring that the Manager's execution of the Company's external communications is characterised by openness, and that they are accurate, reliable, and relevant

The Board's work follows a yearly plan. In 2023, the Board held 24 meetings. The relevant Senior Executives at the Manager and the Board secretary participate in Board meetings. Other executives of the Manager participate whenever required. The Manager's CEO and other executives present the operational and financial development at ordinary Board meetings. The Board conducts reviews with the auditor, at which reports from the auditor are addressed. The auditor also holds meetings with the Board without management attending.

For further information regarding Board Members, see pages 35 and Note 2.6 on page 57.

Audit and GRC Committee

The Board's overarching responsibility cannot be delegated. However, the Board has, as part of its strong commitment on governance, risk, and compliance, expanded the Committee's mandate to deal with Audit and Governance, Risk and Compliance issues, and to prepare such issues for decision by the Board.

The Committee is a preparatory and advisory working committee for the Board of Heimstaden Bostad with regard to governance, risks, financial reporting, external audits, internal control, compliance, risk management processes and systems. The Committee is appointed by the Board and shall report to it regularly. If necessary, the Committee proposes measures on which the Board decides.

In 2023, the Committee consisted of the following members: John Giverholt (Committee Chairman), Axel Brändström (Daniel Kristiansson from December 2023), and Bente Landsnes. All members are independent in relation to the Company and its Senior Executives, one member is independent in relation to the larger shareholders, and the Chairperson is the financial expert in accounting.

Evaluation of the Board

The Chairperson of the Board is responsible for evaluating the Board's work, including the efforts of its individual members. This is achieved by means of an annual, structured evaluation. This is sent out from management annually; it is anonymous, and the results are discussed in a Board meeting as a separate agenda item. From 2024 it will be part of our Board Portal to get more continuity and to easier measure the improvement areas and actions.

Remuneration to Board Members and Senior Executives

The remuneration to the Board is indirectly regulated by the Shareholders' Agreement, which stipulates that no remuneration shall be paid out to the Board Members, except for the Chairperson and Board Members nominated in accordance with the Shareholders' Agreement (and who is not employed by a party to the Shareholders' Agreement).

No remuneration is paid to the Senior Executives since the Manager function is provided by Heimstaden.

The AGM sets the total fees for the directors of the Board and decides how the fees are to be distributed among the directors and the Board's committees. The independent directors are renumerated as follows; Casper von Koskull/Helge Leiro (Chairperson) SEK 960,000 and Bente A. Landsnes SEK 400,000, respectively.

Composition and Diversity

The Board shall comprise a well-balanced mix of individuals holding the required skills, expertise, background, gender, age, as well as independence from Company and main shareholders, ensuring that the Company delivers on its strategic goals in a responsible and successful manner. Heimstaden Bostad is working to achieve a balanced diversity mix and in 2023, the Board comprised 33% women and 67% men.

Furthermore, the Board ensures focus on diversity in its operations via the Manager. Diversity is covered in our Code of Conduct and our People & Culture Manual. It is a focus area within recruitment, equal pay, reporting and is one of the building blocks of our "Friendly Workplace" framework forming the culture we build for our employees. In 2023, a Diversity Board was formed through employee applications to provide regular insights and propose improvements beyond the perspectives of management meetings and board rooms. Diversity is also part of the monthly employee engagement and well-being questionnaire.

Board Independence

Heimstaden Bostad complies with the Swedish Corporate Governance Code (the Code) regarding requirements that the majority of the Board Members elected by the AGM must be independent in relation to Heimstaden Bostad and its Senior Executives, and that at least two of these are also independent in relation to Heimstaden Bostad's main shareholders (i.e., shareholders holding more than 10% of the shares and votes in the Company).

Deviations from the Code

Heimstaden Bostad complies with the rules set out in the Code, except as explained below.

In 2023 the Company deviated from the rules set out in 1.1 and 1.2 in the Code since all general meetings were held per capsulam and no physical meetings were held. Due to the limited shareholder group and the fact that all shareholders consent thereto, there is no need for public disclosures of general meeting dates or for carrying out physical meetings.

The Company deviates from the rules set out in 1.3, 2.1-2.7, 4.6 and 8.1 in the Code since no nomination committee has been established. Due to the limited shareholder base and the fact that the shareholding and appointment of Board Members is regulated by the Shareholders' Agreement, there is no need for a nomination committee. Any responsibility normally vested in a nomination committee is regulated either by the Shareholders' Agreement or handled by the Board as a whole.

The Company deviates from the rules set out in 9.1-9.9 in the Code since no remuneration committee has been established and no formal remuneration guidelines are applied by the Company. In Heimstaden Bostad, Board remuneration is decided by the Annual General Meeting in accordance with the Shareholder Agreement. No remuneration is paid to the Senior Executives as the Manager function is provided by Heimstaden.

In 2023, the Board authorised the establishment of an Internal Audit Function, with the Audit and GRC Committee approving its mandate in October. Anticipated implementation is by summer 2024.

External Auditor

The Auditor is appointed by the AGM based on a proposal from the Board. At the 2023 AGM, audit firm EY was elected for the period up to and including the 2024 AGM, with Authorised Public Accountant Jonas Svensson as the principal auditor.

Remuneration To Auditor

SEK million	2023	2022
Audit assignment	29	26
Other assurance services	3	2
Other services	-	1
Total	32	29

Manager's Senior Executives

Heimstaden Bostad contracts the Manager and thus has no Senior Executives of its own.

The CEO's responsibilities are governed by the Group Management Agreement and a written instruction defining the division of responsibilities between the Board and the CEO. The CEO reports to the Board and presents a CEO report at each Board meeting, including information on how the operations are developing based on the decisions made by the Board.

The Senior Executives at the Manager comprises 13 individuals, as illustrated at page 37.

The Manager has organised its operations with a Group Executive Management to deliver on the scope of services under the Group Management Agreement, ensuring the Company's strategic and operational development and monitoring of performance.

To ensure the continued success of the Company, the Manager has organised its work under different Committees, currently the following:

Executive Investment Committee: consists of key Senior Executives of the Manager and is chaired by the Board Member John Giverholt. It is responsible for reviewing and deciding on all real estate transactions, supported by the relevant investment teams, and ensuring attractive deal structuring and solid underwriting. The committee decides on the following matters:

•	discretionary approval of real estate transactions below 500 million SEK
•	decisions to recommend transactions above 500 million SEK to the Board of Heimstaden Bostad
•	decisions to recommend entries into new markets in line with the Shareholders' Agreement

Executive Sustainability Committee: The Chief Sustainability Officer chairs this committee and is responsible for developing the corporate sustainability strategy and ensuring implementation in all areas within the Company. The committee decides on the following matters in order to secure the best interest for the Company:

•	matters that are to be presented to the Board
•	matters of major importance or of importance as to principles
•	matters of common concern to several departments
•	sustainability-related policies and position statements
•	KPIs and targets for the Company

Executive GRC & Internal Control Committee: A group-wide committee that addresses all governance, risk, and compliance (GRC) and internal control matters relevant for management in order to evaluate our business from a comprehensive GRC and internal control perspective. The committee is tasked to:

•	organise GRC and alignment within management
•	evaluate GRC matters in the Company's activities
•	support Management in embedding GRC considerations into all major decision-making processes
•	ensure that the GRC policy framework is implemented.
•	evaluate relevant audit findings presented by internal audit and discuss/suggest improvement and focus areas for management to focus on in alignment with the Audit & GRC Committee of the Board

Board of Directors

	Helge Leiro Baastad	Daniel Kristiansson	Rebecka Elkert	John Giverholt	Klas Åkerbäck
	Chairperson	Member	Member	Member	Member
Year elected	2023 (August)	2023 (December)	2023 (August)	2019	2023 (March)
Born	1960	1974	1974	1952	1973
Nationality	Norwegian	Swedish	Swedish	Norwegian	Swedish
Education	MSc in Business from NHH Norwegian School of Economics	MSc in Finance, Stockholm School of Economics	MSc in Business and Economics, University of Uppsala	BSc, University of Manchester and MSc Accounting and Auditing, NHH Norwegian School of Economics	MSc in Financial Economics, Stockholm University
Other assignments	Chairperson of the Board at Bertel O. Steen and Kavli Holding AS		Head of Alternative Investments at Folksam	Board Member at Heimstaden AB and Fredensborg AS	Senior Portfolio Manager Real Estate, leading Alectas indirect international real estate investments
Employment and work experience	Two decades of experience as CEO of the Nordic insurance and pension company Gjensidige and has extensive experience in financing and corporate governance	Daniel Kristiansson serves as a Stewardship and Corporate Governance Specialist at Alecta. Previously, he was Investment Director at the Swedish Ministry of Finance, focusing on state-owned enterprises. His board experience includes positions at Vattenfall, Swedfund International, and Industrifonden	Extensive investment experience and has previously held roles as Head of Sustainable Investments at Carnegie Investment Bank and Portfolio Manager Alternative Investments and ESG Responsible at SEB Liv	Extensive capital markets background as CFO of DNB and CEO of Ferd. Formerly served on the Boards of Telenor, Kongsberg Gruppen, Gjensidige Forsikring, and Scatec Solar, in addition to board assignments with family-owned businesses	Extensive real estate investment experience from Trophi Fastighets AB and Tredje AP-fonden, where he led the evaluation and implementation of investment strategies. Additionally, he was involved in the founding and management of several real estate companies, including Fastighets AB Regio and Trophi Fastighets AB
Independent of Company	Yes	Yes	Yes	Yes	Yes
Independent of Main Shareholder	Yes	No. Dependent in relation to the Company's main shareholders through his employment with Alecta	No. Dependent in relation to the Company's main shareholders through her employment with Folksam	No. Dependent in relation to the Company's main shareholders by relationship with ultimate principal shareholder of Heimstaden AB as a Board member	No. Dependent in relation to the Company's main shareholders through his employment with Alecta
Own shareholdings and those of related parties in 2022	-	-	-	-	-
Attendance at Board meetings	9 of 24	2 of 24	9 of 24	23 of 24	15 of 24
Attendance at Audit and GRC Committee meetings			-	Chairperson, 4 of 4	-

	Vibeke Krag	Fredrik Reinfeldt	Bente A Landsnes	Ivar Tollefsen
	Member	Member	Member	Member
Year elected	2021 ¹	2023	2021	2021
Born	1962	1965	1957	1961
Nationality	Danish	Swedish	Norwegian	Norwegian
Education	MSc in Law, University of Copenhagen	MSc in Business Administration, Department of Business Administration at Stockholm University
Other assignments	Board Member of ATP, Gjensidige Forsikring ASA, Nykredit A/S, and the Danish Competition and Consumer Authority	Chairperson of the Board of the Center for AMP, Visita and Drivkraft Sverige, and President of the Swedish Football Association	Vice Chair in Norbit ASA. Chairperson of the Board of Hvitsten AS and member of the Zagreb Stock Exchange Supervisory Board.	Chairperson of the Board of Fredensborg AS and Heimstaden AB
Employment and work experience	Extensive experience of international leadership, portfolio management, law, and insurance from an operational career in financial services	Experienced politician who led the New Moderates for 12 years and served as Sweden's Prime Minister for two terms. After retiring from politics in 2015, Fredrik has had assignments as an advisor to Nordic Capital and Bank of America Merrill Lynch	Extensive experience in financial services, licensed financial activities from e.g., Oslo Børs, digital transformation, change and reputation management, financial reporting, investor relations, corporate governance, and ESG. Strong relationships with major international investors and former Board Member of Infront ASA, Oslo Clearing ASA, Verdipapirsentralen ASA, Danske Bank A/S and Feberation of European Securities Exchanges (FESE).	Founder and majority shareholder of the voting rights of Fredensborg AS. Due to his control over Fredensborg AS, Ivar effectively controls 50.1% of the votes of Heimstaden Bostad. In addition to his controlling shareholding
Independent of Company	Yes	Yes	Yes	No
Independent of Main Shareholder	No. Dependent in relation to the Company due to her Board position with Heimstaden AB	No. Dependent in relation to the Company due to his Board position with Heimstaden AB	Yes	No. Indirect majority shareholder in Heimstaden Bostad AB
Own shareholdings and those of related parties in 2022	-	-	-	Indirect majority shareholder in Heimstaden Bostad AB
Attendance at Board meetings	23 of 24	16 of 24	24 of 24	24 of 24
Attendance at Audit and GRC Committee meetings	-	-	4 of 4	-
¹ Resigned as per 31 December 2023.

Senior Executives

	Helge Krogsbøl	Christian Fladeland	Thomas Alexander Hansen
	Chief Executive Officer	Deputy Chief Executive Officer & Chief Investment Officer	Chief Financial Officer
Employed since	2018	2019	2023
Born / Nationality	1968 / Norwegian	1986 / Danish	1975 / Norwegian
Education	The Norwegian School of Marketing, Oslo	MSc in Economics, University of Copenhagen	MSc in Business and Economics, and State Authorized Public Accountant, Norwegian Business School
Previous experience	Helge has extensive experience in executive positions as SVP in Pandox AB, Regional Director at Thon Hotels Benelux, MP Room2Room and as CEO at First Hotels	Christian has extensive experience within real estate capital markets management from his position as Partner at Colliers International Denmark	Thomas has extensive experience from positions within finance, international tax, and commercial operations in Scatec ASA, Circle K Europe and as a Senior Manager at KPMG

	Eddo Rats	Katarina Skalare
	Chief Operating Officer	Chief Sustainability Officer
Employed since	2020	2018
Born / Nationality	1971 / Dutch	1963 / Swedish
Education	BCs in Hotel Administration/Management, Hotelschool Hague, and MRE in Real Estate, University of Amsterdam	BA in Social Science, Malmö University
Previous experience	Eddo has more than 20 years of management experience, built up in both the residential real estate as well as the hotel industry	Katarina holds considerable experience within sustainability, and in addition to an entrepreneurial background, has worked with sustainability at Kraftringen, PwC, AstraZeneca, and E.ON Nordic

	Suzanna Malmgren	Steen Lønberg Jørgensen	Paul Spina	Christian Vammervold Dreyer	Rodin Lie
	Chief People and Culture Officer	Head of Capital Raising & Client Relations	Chief Asset Management and Development Officer	Chief Corporate Communications Officer	Chief Technology Officer
Employed since	2017	2022	2020	2020	2020
Born / Nationality	1971 / Swedish	1970 / Danish	1987 / American	1974 / Norwegian	1974 / Norwegian
Education	MSc, Uppsala University	MSc in Economics, University of Copenhagen and MBA in Finance, NYU	BA in Economics, Fordham University, New York	Economics and Property, BI Norwegian Business School	Computer Science and Psychology, Bergen University, and Officers' School, Norwegian Coastal Artillery
Previous experience	Suzanna has extensive experience within Management Consulting and HR, including 11 years as executive search consultant and Partner at Alumni	Steen has extensive experience with capital raising and investment from executive roles at Copenhagen Infrastructure Partners (CIP), as well as from Nordea and Dansk Kapitalanlæg	Paul brings years of experience from international real estate from WeWork as the position of Head of Project Delivery EMEA. Previous experience from both consulting and contracting	Christian holds substantial experience in the real estate sector, as former CEO for Real Estate Norway, CEO of Eie Eiendomsmegling, and Chairman of the Board of the Norwegian Realtor Association	Rodin brings a strong background in technology and innovation, with previous positions as CDO in Selmer, CDO in Innovation Norway, and CTO in NOS Clearing

	Kristian Berentsen	Karmen Mandic	Nikolaj Degn Brammer
	Chief Legal Officer	Chief Brand and Marketing Communications Officer	Chief Business Development Officer
Employed since	2020	2015	2021
Born / Nationality	1982 / Norwegian	1971 / Swedish	1992 / Danish
Education	Msc in Law, University of Oslo	BSc in Business Administration, Lund University	BSc in International Business, Copenhagen Business School, and MSc International Finance, HEC Paris
Previous experience	Kristian is a corporate lawyer with expertise within real estate, M&A, and financing from positions as Chief Legal Officer at Adolfsen Group, Corporate Counsel at Entra ASA, and Senior Lawyer at DLA Piper	Karmen holds substantial international experience from global brands within Fin-Tech, Telecom, IT, and Food Processing. Previous leadership roles at Sony Mobile Communications, OctoFrost Group, and Fexco	Nikolaj has a background in corporate transformation, private equity, and strategy from Bain and Company, Goldman Sachs, and Maersk

Governance, Risk, and Compliance

Heimstaden Bostad is committed to high standards of corporate governance, risk management, and compliance. Our centralised GRC function develops and oversees the Company's Policy framework and Risk and Compliance tools. In 2024, we will enhance our focus by introducing an internal audit function.

The GRC function is responsible for the following:

•	Code of Conduct development, implementation, and ownership on behalf of the Board
•	Establishment, implementation, and follow-up of a common and simplified Group Policy framework for the Company
•	Planning, implementation, and follow-up of a Compliance Management System consisting of the relevant elements and tasks for the countries to adopt
•	Relevant training and awareness related to the GRC area
•	Participate in relevant projects related to GRC
•	Implement and follow-up Risk and Compliance tools, reporting and processes to management and Board

In the fall of 2022, an updated Code of Conduct was approved by the Board, based on the values of the Company and the commitment to ethical business conduct. The Code of Conduct is complemented by detailed policies, manuals, guidelines, and routines - all available on the intranet, in the group HR system, and incorporated in the Staff Handbooks. Together, these documents form our governing framework that guides us in our daily work. The Group policy framework is now being implemented in the countries followed by relevant training and Governance elements like Authorisation matrices (both Group and Country matrices were presented in 2023 with relevant training material for implementation). An initiative was started fall of 2023 to focus on the most important and critical standard operating procedures (SOPs). A prioritised set of SOPs were finalised by year-end and a new set will be focus area in 2024.

The Board owns and approves the Code of Conduct. In 2023, a formal sign-off of the Code of Conduct was conducted for all employees and 98.6% has signed. A mandatory Anti-Bribery and Corruption course was launched on the International Anti-Corruption Day together with updated Policy and Manual.

We expect our business partners to comply with ethical standards consistent with our own, and they are expected to sign our Business Partner Principles when signing an agreement with us.

Heimstaden Bostad will work continuously to improve the governing framework - together with the Country organisations. Breaches of the Code of Conduct or governing documents should be reported through the whistleblower function on our website.

Risk Management

Heimstaden Bostad's risk management objective is to maximise returns at acceptable risk levels without compromising the Company's mission, values, or Code of Conduct. Heimstaden Bostad is exposed to a range of risks that may affect the business, thus it is of key importance to have a comprehensive risk management programme to optimise the risk/return balance.

We prioritise and integrate risk management into daily operations as an ongoing, continuous process. In 2023, we enhanced the risk management framework by introducing new categories and sub-categories. This update emphasises clearer and more specified risk mitigation actions, with progress now measured as a percentage of completion. Quarterly Business Review reports now include matrices showcasing risks, comments, and the latest updates on action items.

The Risk Management function consolidates and analyses risks across our diverse markets within the Executive GRC and Internal Control Committee. Identified risks, risk actions, and risk processes are presented to Executive Management, the Audit &GRC Committee, and the Board minimum bi-annually.

In 2023, our updated Risk Policy was disseminated across operational countries. It outlines key principles for comprehensive risk management, ensuring evaluation and measurement of foreseeable risks impacting operations and ambitions. Managers are mandated to take responsibility for risk management within their areas, embedding it in daily processes. Country Management is tasked with quarterly updates to the risk register, reporting new risks and the status of mitigating actions, closely aligning risk management with existing business operations.

Financial Risks

Refinancing Risk

Refinancing risk involves securing favourable terms in debt markets, including capital markets, bank financing, or alternative credit, for Heimstaden Bostad's debt rollover/refinancing, aligning with current market conditions.

We have established a comprehensive granular financial model of its business where significant attention is devoted to its debt instruments, as well as the impact of refinancing those instruments. This enables real-time sensitivity analysis on several key performance indicators (KPIs), including debt covenants, ensuring that we are well-informed in advance if any KPI is at risk of being breached.

We use various funding sources with a diversified maturity structure to minimise refinancing risk. Our Financial Policy stipulates the level of key credit ratios, which include leverage thresholds, average tenor, maximum amount of maturity in a given year and minimum metrics. To further manage financial risks, we also maintain ample cash reserves and unutilised sources of liquidity. We have access to bank financing which to a large extent covers short- and medium-term bond maturities. For more information of interest rate risk, see Note 6.2 Financial risks in the financial section.

Currency Risk

Heimstaden Bostad owns assets in other currencies than the reporting currency. Currency fluctuations may result in accounting volatility into our quarterly results, potentially negatively impacting key credit ratios and leading to rating pressure if the funding currency mismatches the currency of the asset.

Our policy is to primarily fund investments in the local currency (to the extent financially justifiable), which provides a natural hedge against currency changes on a consolidated level.

Valuation Risk (Decline of Property Value)

Declining property values in isolation have impacted Heimstaden Bostad's credit metrics, which in December 2023 resulted in a rating downgrade from S&P to BBB- with a negative outlook. The valuation decline risk was increasing when entering the year and value declines materialised throughout 2023, but decreased in the 2 ^nd half of 2023 for most markets, providing a more positive outlook for 2024.

To manage and balance this risk, the company has a diversified property portfolio across many countries, with no market exceeding 30% of GAV, and regional locations with strong economies and favourable demographics. The property portfolio is valued by reputable third-party valuers each quarter.

Investment Risk

New property acquisitions may introduce various risks associated with legal, financial, tax, and technical perspectives. Furthermore, M&A involving entire companies could result in additional company-specific risks after closing. Heimstaden Bostad has access to an experienced investment team with local presence across all markets who have significant experience within real estate transactions and M&A. All acquisitions are subject to customary due diligence (DD) from a legal, financial, tax, sustainability, and technical perspective.

Third-party expertise is frequently utilised to advise on various aspects of transaction processes, including structuring, legal, tax, and technical factors, among others. When necessary and/ or possible, a Warranty & Indemnity (W&I) insurance may also be included as part of an acquisition to reduce the risk of potential breaches in representations and warranties at a later stage. This risk had a lower likelihood and impact in 2023 as the company reduced investment activity significantly.

Strategic Risks

Regulatory Changes/Environment

Heimstaden Bostad's exposure to regulatory changes mainly relates to political agendas, or as a natural evolution of residential markets. These changes can be related to a wide range of legislation, including housing laws, tax, and VAT, and may have both a positive and negative long-term impact on property values, operations, or financial performance.

Our local end-to-end in-house operations contribute to in-depth knowledge of each of our markets and we continuously monitor changes in the respective regulatory environment. We maintain active dialogue with policy makers and other stakeholders. What is discussed and proposed varies in the countries, but with increased focus on living costs, which has become more relevant in recent years.

Negative Media Attention

Significant negative media coverage poses a risk to our reputation and the trust of crucial stakeholders and could potentially detrimentally affect relationships with owners, banks, bondholders, suppliers, employees, and recruitment efforts.

We have implemented a stakeholder management plan with regular communication to key stakeholders and provide regular communication to all employees. The external communication strategy is regularly revised to counteract media mentions of the company.

Operational Risks

Increased Employee Turnover

The loss of individuals in management or in other key positions poses a risk to operations and profitability. To manage this risk, we take a structured approach to succession planning for key positions, interim or long-term, as well as continuous monitoring of employee satisfaction and the underlying reasons for turnover. We provide employees with development opportunities through a shared learning platform, mentoring, and various leadership and people skills training. We are an equal-opportunities employer with zero tolerance for discrimination and harassment. To ensure competitive compensation, we annually benchmark remuneration using Mercer data. This guides salary ranges for hires, role changes, and international transitions, and informs gender pay gap analyses. In 2023, we also launched a centralised recruitment function to streamline hiring and access passive talent swiftly.

In 2024, the focus is on evaluating and expanding centralised recruitment, enhancing Diversity, Inclusion, and Belonging efforts to reduce bias and support job opportunities, and implementing specific measures for Health & Well-being to boost engagement and motivation while preventing illness.

New Strategic Direction - Privatisation

Our historical emphasis on robust growth may conflict with the current strategy of privatisation and potential downsizing in specific markets. This shift poses risks to the workforce, including decreased motivation, heightened turnover, and challenges in attracting new talent. There is also a risk of increased passive attrition due to this new strategic direction.

Complex Organisational Structure

Our organisational structure can be perceived as complex, posing a risk of sub-cultures and sub optimisation. focusing on activities not generating business value. To mitigate this, a split between Investment and Operations has occurred, with planned actions for 2024, including a focus on process adherence and the establishment of a shared service organisation for efficient cross-entity support and accurate cost allocation.

Cyber Security

Cyberattacks may lead to data breaches, operational disruption, and ransomware incidents that may negatively impact our operations, financial performance, and reputation.

We have implemented several levels of protection, such as two-factor authentication, external 24/7 security operation centre for monitoring/response, firewalls, antivirus, and backup systems. We are implementing a centralised cloud-based policy for data centres and cyber security. In 2023, an IT Security Policy and Manual was implemented to ensure structured way of work and to address topics such as annual security awareness training of employees, periodically engagement of white hat hackers, disaster recovery and similar.

Privacy/GDPR

Non-compliance with data protection laws, including the General Data Protection Regulation (GDPR) could potentially lead to significant fines, reputational damage, and damage to customers' and employees' privacy.

To address this risk, we consistently safeguard individual privacy and comply with data protection laws. Our measures include deploying modern system platforms, such as HR systems, and providing mandatory GDPR training to enhance employee competence and awareness. An updated Privacy Policy and Manual will be implemented in Q1 2024.

Relevance to Future Tenants

In today's digital society, availability is crucial. To prevent dissatisfaction, lower occupancy, or increased churn, we prioritise proactive customer service, property management, and on-site presence. Continuous personalisation of services and communication is essential to stay relevant.

To accomplish this, our fully integrated operational platform aligns with a customer-centric philosophy embedded in our strategy, values, and goals. We consistently monitor rental markets, engage with tenant unions, and conduct annual customer surveys across our markets. Additionally, we invest in ongoing enhancements to in-house digital customer-service platforms for effective tenant engagement and communication. Read more about our customer-centric approach on page 169 of this report.

Bribery & Corruption

Failing to operate within the norms of corporate responsibility may cause significant damage to our reputation and operations, elevating the risk of losing tenants and strategic investors, as well as suffering economic losses in terms of fines or penalties.

We apply high ethical standards and integrity throughout our operations with zero tolerance for any forms of corruption, fraud, bribery, or threats, and have developed a compliance management system involving a Code of Conduct, Business Partner Principles, and different Policies and Manuals. Mandatory training programmes within relevant areas and repeated regularly to help us improve the awareness across our markets. A new anti-bribery and anti-corruption training programme was created and implemented in 2023 as part of the mandatory courses. All employees signed the Code of Conduct as a specific task for 2023.

Climate Change Risk

The growing complexity of ESG-related risks, coupled with the integration of sustainability into daily operations, poses challenges in monitoring and maintaining responsible business practices. Environmental risks, if not adequately managed, can impact people, properties, and operations, potentially harming our reputation and profits. Failure to meet investors' ESG criteria may also limit access to capital.

Climate change poses significant environmental risks, such as increased energy costs, fines, operational impacts, supply chain disruptions, and reputational damage. In the long term, there's potential for property damage, emergency measures, decreased property values, and higher insurance prices.

To mitigate these risks, we've adopted a comprehensive ESG strategy, embedding sustainability into daily operations and setting ambitious climate targets aligned with the Paris Agreement's 1.5°C goal. ESG matters are a key focus at the Board level, integral to Heimstaden Bostad's overall strategy. Additional details on climate risks can be found on page 149 and 150 of this report.

We have developed a methodology for carrying out climate risk and vulnerability assessments (CRVA) at property level and the CRVA process covers three phases: Assess property exposure, assess property vulnerability, and implement adaptation measures.

Internal Control

The planning, governance, and control of operations follow the Company's organisational structure, with a clear delegation of responsibilities and authority. Policies, manuals, guidelines, and Standard Operating Procedures (SOPs) provide our framework for internal control. We continue our commitment to strong internal control by strengthening our governance, doing a full review and update of policies, manuals, and guidelines in our key policy framework for Heimstaden Bostad.

Internal Control over Operations

Heimstaden Bostad performs several control activities to ensure internal control over our operations. Key policies and manuals are established and finalised together with Standard Operating Procedures (SOPs) to ensure operation in line with our values and are designed to manage significant risks related to our operations. Control activities exist both at the overall and detailed level within the Group. For example, monthly management reporting is prepared and reviewed by the business unit and function managers and controllers.

Internal Control and Governance Activities 2024

In 2024, Heimstaden Bostad will continue to develop its internal governance, risk and compliance function, and control processes, also helped by establishing an internal audit function. The following planned activities are in focus:

•	Focus on implementation and knowledge of our Policy framework and perform a maturity assessment to see the status per policy in each country, based on this plan for specific activities tailored to each country
•	Further improve our Group and Country Authorisation matrices based on input and experience of use
•	Year-end assessment of the Manager's formalised self-assessment procedure on internal controls

Internal Control Over Financial Reporting

Regular monitoring, combined with a close collaboration with the Company's auditors, and the control and monitoring conducted through the annual audit and quarterly reviews, ensure accurate reporting. The Board has, as part of its strong commitment to internal control, established an Audit & GRC Committee to increase quality of financial reporting processes and how we work.

To ensure the quality of financial reporting, the Company applies several internal controls, such as a financial policy, new Group and Country Authorisation Matrices, and segregation of duties. Regarding financial reporting, the risks are primarily judged to derive from material errors being able to arise in the reporting of the Company's financial performance. The Board is responsible for identifying and managing significant financial risks and risks of errors in the financial reporting.

The Board reviews each interim report and discusses its contents with the Senior Executives and, where applicable, with the Company's Auditor.

The senior executives hold regular meetings through the Executive GRC & Internal Control Committee in front of bi-annual reporting to the Board's Audit & GRC committee to discuss ongoing financial performance and issues, update the top risk picture, define processes, and focus areas for improvement and internal control activities.

The Audit and GRC committee has established a pre-approval guideline governing the engagement of Heimstaden Bostad's primary external auditors for audit and non-audit services to Heimstaden Bostad or any entity within the group. The committee has in the guideline defined and pre-approved subcategories of audit and non-audit services, and includes annual monetary thresholds for each of the following categories of services:

•	Audit
•	Audit-related
•	Tax
•	Other - not related to financial audit and tax

Heimstaden Bostad has established a whistleblower function that can be accessed anonymously.

The finance function has regular contact with business unit managers to discuss operational and financial matters and to verify that processes are followed and developed. The Board monitors the operations through regular reporting, in which the CEO comments on the development of operations, profit, and financial position. Necessary measures and activities are implemented with the aim of strengthening and streamlining the internal controls.

The internal controls over operations are regularly monitored. This mainly takes the form of reporting deviations in comparison with the budget/forecast, as well as monthly operational reporting and business reviews.

Insider Policy

The Insider Policy contains guidelines for the handling and communication of insider information as well as other external information obligations. The communication shall be long-term, and compatible with the brand, vision, business concept, strategies, targets, and values of Heimstaden Bostad. In addition, the communication shall be open, factual, well-structured, and well-planned. Heimstaden Bostad shall provide correct, relevant, and clear information in accordance with applicable laws and regulations.

The following information is available from the Corporate Governance pages on www.heimstadenbostad.com:

•	Statement of Corporate Governance
•	Articles of Association
•	Code of Conduct
•	Annual and Interim Reports from the 2016 financial year and onwards
•	Annual and Sustainability reports from the 2019 financial year and onwards
•	More detailed information on specific important policies and applicable statements

Our Policy Framework

The Board approved the Policy framework in October 2022. In 2023, we refined and expanded it with updated policies and new and updated governing documents such as manuals, guidelines, and standard operating procedures.

The policy framework is regularly updated, at least bi-annually or when needed, and comprises of fifteen policy areas, along with our Code of Conduct and business plan. The framework is accessible to all employees on our intranet's top menu, with necessary documents and information also shared at our external webpages. Each Policy area has a designated Policy Owner, including a CxO in management and a local Policy Owner from management in each country.

Our Policy framework consists of the following (in random order):

Policy Framework our Governing documents	Group Policy Owner	Approved by	Last update	Next update
Code of Conduct is equivalent of rules and foundations that sets the standard of integrity we follow and is available in local language in all countries.	BoD	BOD	2022	2024
Business Plan outlines our investments, visions for acquisitions, projects, geographical markets, and return profiles, including our rental growth strategy and refurbishments. In 2023, both the Group and Country Authorisation matrices were presented and implemented to specify the authority levels for task execution.	Chief Executive Officer	BOD	2022	2024
Financial Policy sets Company financial standards, with any changes requiring approval from the Board.	Chief Financial Officer	BOD	2023	2025
Sustainability Policy ensures high-quality, integrated, and aligned sustainability efforts throughout the organisation, fostering engagement and involvement to achieve set goals and support our overarching aim of contributing to society through inspiration and enrichment.	Chief Sustainability Officer	BOD	2022	2024
Investment/CapEx Policy aims to mitigate investment risks and enhance the yield on cost for our capital expenditures.	Chief Asset Management and Development Officer	CEO	2023	2025
Corporate Communications Policy ensures high-quality, aligned communication, and stakeholder engagement to foster relationships, achieve goals, implement decisions, and promote internal and external engagement.	Chief Communications Officer	CEO	2023	2025
Risk Policy establishes a comprehensive risk management programme aimed at optimising the balance between risk and return across a spectrum of potential business risks.	Chief Legal Officer/Director GRC	CEO	2023	2025
Anti-Corruption Policy outlines our commitment to the highest standards of integrity, transparency, and ethical business conduct, guiding initiatives to ensure honesty and accountability across all aspects of our business.	Chief Legal Officer/Director GRC	CEO	2023	2025
Whistleblower Policy ensures Company transparency and compliance with laws, facilitating the reporting of irregularities in accordance with legal requirements.	Chief People & Culture Officer	CEO	2023	2025
Cyber Security Policy outlines protection measures, user expectations, and responsibilities for safeguarding information based on industrialised security standards to protect customers, employees and assets.	Chief Technology Officer	CEO	2022	2024
Business Partner Policy, Procurement Manual and Business Partner Principles align with the UN's Global Compact principles on human rights, working conditions, environment, and anti-corruption and are mandatory to all business partners/third parties.	Chief Asset Management and Development Officer	CEO	2022	2024
People & Culture Policy strives to create and sustain a Friendly Workplace that embodies our values of Care, Dare, and Share.	Chief People & Culture Officer	CEO	2022	2025
Investment and Financing Policy minimises legal and financial risks in property acquisitions or divestments, aligning with the business plan and investment strategy to ensure quality, fairness, and transparency in property portfolio valuation assessments.	Chief Investment Officer	CEO	2024	2026
Brand & Marketing Policy ensures consistent internal and external marketing communications across all locations in alignment with our brand identity and values, supporting our strategic plan.	Chief Brand and Marketing Communication Officer	CEO	2022	2024
Privacy Policy mitigates privacy risks by establishing a unified set of requirements across all countries, ensuring accountability and compliance with privacy/GDPR standards in our Company.	Chief Legal Officer	CEO	2023	2025
Insider Policy ensures responsible management of investment- and equity capital transactions and financing opportunities which may involve insider information.	Chief Legal Officer	CEO	2023	2025
Operational Policy ensures high-quality and aligned operations, focusing on increasing efficiency and transparency throughout the organisation.	Chief Operating Officer	CEO	2024	2026

Financial Information

Financial Five-Year Summary

SEK million	2023	2022 ¹	2021 ¹	2020 ¹	2019 ¹
Consolidated Statement of Comprehensive Income
Rental income	14,974	12,702	8,608	6,332	4,135
Service charges paid by tenants	1,750	1,217	639	389	-
Property expenses	-6,633	-5,778	-3,861	-2,828	-1,732
Net operating income	10,091	8,141	5,386	3,893	2,403
Corporate administrative expenses	-860	-887	-546	-345	-193
Other operating income	275	468	5	48	11
Other operating expenses	-448	-231	-2,340	-39	-46
Realised gains/losses from divestment of properties	235	10	109	10	-
Profit before unrealised fair value adjustments	9,293	7,501	2,614	3,567	2,175
Fair value adjustment of investment properties	-31,130	-5,121	21,254	7,924	4,834
Value adjustment of inventory properties	25	402	-2	188	-
Operating profit/loss	-21,812	2,782	23,866	11,679	7,009
Share of net profits/losses of associated companies and joint ventures	-844	410	329	32	88
Impairment of goodwill	-1,058	-	-	-	-
Interest income	324	316	152	81	35
Interest expenses	-4,939	-2,275	-1,288	-1,269	-923
Net currency translation gains/losses	419	-6,578	76	656	-241
Fair value adjustment of derivative financial instruments	-1,173	1,115	819	-178	39
Other financial items	461	-2,131	70	-168	-154
Profit/loss before tax	-28,623	-6,362	24,024	10,833	5,853
Current tax expense	-466	-836	-492	-386	-200
Deferred tax income/expense	4,234	1,878	-4,580	-1,774	-1,193
Profit/loss for the period	-24,855	-5,321	18,952	8,673	4,460
Currency translation differences	-1,428	13,703	3,627	-4,479	279
Total comprehensive income/loss	-26,283	8,382	22,579	4,194	4,740
Property-related key data
Lettable time-weighted area, sqm thousands	11,258	10,766	8,365	6,441	3,047
Net operating income, %	67.4	64.1	62.6	61.5	58.1
¹ Comparables restated, see Note 1.

SEK million	2023	2022	2021	2020	2019
Consolidated Statement of Financial Position
Investment properties	319,491	344,856	300,584	144,404	113,331
Other non-current assets	31,920	35,226	20,183	1,299	1,660
Current assets	14,807	17,245	28,299	11,223	6,573
Total assets	366,219	397,327	349,066	156,926	121,564
Equity	148,731	180,854	160,338	77,741	57,548
Deferred tax liabilities	18,492	22,941	21,904	4,212	2,526
Other non-current liabilities	174,835	175,201	136,488	65,929	54,492
Current liabilities	24,162	18,330	30,336	9,044	6,998
Total equity and liabilities	366,219	397,327	349,066	156,926	121,564
Financial key data
Cash flow from operating, investing and financing activities	1,723	-10,751	10,503	3,390	2,018
Interest coverage ratio (ICR), multiple	2.0	3.8	4.1	2.9	2.5
Net loan-to-value ratio (LTV), %	56.3	50.3	46.2	43.9	48.0
Average interest rate on outstanding debt, %	2.9	1.8	1.0	1.7	1.9
Average loan tenor, number of years	8.0	8.3	8.9	10.5	10.5

Financial Information

Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

1. Corporate information and general accounting policies

1.1 Corporate information

1.2 General accounting policies

1.3 Judgements and estimates

1.4 New and changed accounting policies and disclosures

2. Income and expenses

2.1 Segment reporting

2.2 Rental income and service charges paid by tenants

2.3 Property expenses

2.4 Other operating income

2.5 Other operating expenses

2.6 Employee benefit expenses and senior management compensation

2.7 Realised gains/losses from divestment of properties

2.8 Fair value adjustment of investment properties

2.9 Fair value adjustment of derivative financial instruments

2.10 Financial income and expenses

2.11 Income tax expenses

2.12 Other comprehensive income

3. Non-current assets

3.1 Investment properties

3.2 Goodwill and Intangible assets

3.3 Machinery and equipment

3.4 Investments in associated companies and joint ventures

3.5 Other financial assets

4. Current assets

4.1 Inventory properties

4.2 Rent and trade receivables

4.3 Other financial assets

4.4 Prepayments

4.5 Cash and cash equivalents

4.6 Other adjustments in Statement of Cash Flows

5. Equity

6. Capital structure and financial items

6.1 Financial instruments

6.2 Financial risks

6.3 Interest-bearing liabilities

6.4 Capital management

6.5 Leases

7. Other liabilities

7.1 Deferred tax

7.2 Other liabilities

7.3 Accrued expenses and prepaid income

8. Other disclosures

8.1 Related-party disclosures

8.2 Pledged assets

8.3 Contingencies and commitments

8.4 Events after the reporting period

Parent Company Financial Statements

Parent Company Income Statement

Parent Company Statement of Comprehensive Income

Parent Company Statement of Financial Position

Parent Company Statement of Changes in Equity

Cash Flow Statement

Notes to the Parent Company Financial Statements

1. Accounting policies

2. Income and expenses

3. Assets

4. Equity

5. Capital structure and financial items

6. Other liabilities

7. Other disclosures

Proposed Appropriation of Accumulated Profit

Signatures

Auditor's Report

Alternative Performance Measurements

Quarterly Financial Information

Consolidated Statement of Comprehensive Income

SEK million	Note	2023	2022 ¹
Rental income	2.1, 2.2	14,974	12,702
Service charges paid by tenants	2.1, 2.2	1,750	1,217
Property expenses	2.1, 2.3, 2.6	-6,633	-5,778
Net operating income		10,091	8,141
Corporate administrative expenses	8.1	-860	-887
Other operating income	2.4	275	468
Other operating expenses	2.5	-448	-231
Realised gains/losses from divestment of properties	2.7	235	10
Profit before unrealised fair value adjustments		9,293	7,501
Fair value adjustment of investment properties	2.1, 2.8, 3.1	-31,130	-5,121
Value adjustment of inventory properties	2.1, 4.1	25	402
Operating profit/loss		-21,812	2,782
Share of net profits/losses of associated companies and joint ventures	3.4	-844	410
Impairment of goodwill	3.2	-1,058	-
Interest income	2.10	324	316
Interest expenses	2.10	-4,939	-2,275
Net currency translation gains/losses	2.10	419	-6,578
Fair value adjustment of derivative financial instruments	2.9	-1,173	1,115
Other financial items	6.1	461	-2,131
Profit/loss before tax		-28,623	-6,362
Current tax expense	2.11	-466	-836
Deferred tax income/expense	2.11	4,234	1,878
Profit/loss for the period		-24,855	-5,321
Other comprehensive income
Currency translation differences	2.12	-1,428	13,703
Total comprehensive income/loss		-26,283	8,382
Profit/loss attributable to:
The Parent Company's shareholders		-22,926	-5,105
Non-controlling interests		-1,928	-216
Comprehensive income/loss attributable to:
The Parent Company's shareholders		-24,403	8,598
Non-controlling interests		-1,880	-216
¹ Comparables restated, see Note 1.

Consolidated Statement of Financial Position

SEK million	Note	31 December 2023	31 December 2022
ASSETS
Investment properties	2.1, 3.1	319,491	344,856
Goodwill and Intangible assets	3.2	18,674	19,693
Machinery and equipment	3.3, 6.5	332	314
Investments in associated companies and joint ventures	3.4	8,636	9,698
Derivative financial instruments	6.1	34	836
Deferred tax assets	7.1	800	982
Other financial assets	3.5	3,444	3,703
Total non-current assets		351,411	380,082
Inventory properties	4.1	538	573
Rent and trade receivables	4.2	227	359
Other financial assets	4.3	863	4,867
Derivative financial instruments	6.1	464	645
Prepayments	4.4	1,146	1,416
Cash and cash equivalents	4.5	11,276	9,385
Assets held for sale	3.1	294	-
Total current assets		14,807	17,245
TOTAL ASSETS		366,219	397,327

SEK million	Note	31 December 2023	31 December 2022
EQUITY AND LIABILITIES
Share capital		97	93
Other capital contributions		131,887	128,559
Hybrid bonds		24,249	24,330
Currency translation reserve		10,166	11,643
Retained earnings		-31,152	-662
Total equity attributable to Parent Company shareholders	5	135,246	163,964
Non-controlling interests	5	13,485	16,891
Total equity	5	148,731	180,854
Interest-bearing liabilities	6.1, 6.2, 6.3	171,650	171,119
Lease liabilities	6.5	1,091	1,331
Derivative financial instruments	6.1	481	51
Deferred tax liabilities	7.1	18,492	22,941
Other financial liabilities		1,614	2,700
Total non-current liabilities		193,326	198,142
Interest-bearing liabilities	6.3	19,601	11,572
Lease liabilities	6.5	85	84
Trade payables		738	833
Other liabilities	7.2	1,017	3,008
Derivative financial instruments	6.1	-	75
Accrued expenses and prepaid income	7.3	2,721	2,758
Total current liabilities		24,162	18,330
TOTAL EQUITY AND LIABILITIES		366,219	397,327

Consolidated Statement of Changes in Equity

SEK million	Note	Share capital	Other capital contributions	Hybrid bonds	Currency translation reserve
Opening balance, 1 January 2022		72	97,626	33,666	-2,060
Profit/loss for the period		-	-	960	-
Currency translation differences	2.12	-	-	-	13,703
Total comprehensive income/loss		-	-	960	13,703
New share issue		22	30,970	-	-
Costs of issuance		-	-36	-	-
Buyback of hybrid bonds		-	-	-9,336	-
Dividends		-	-	-960	-
Transactions with non-controlling interests		-	-	-	-
Total transactions with the company's shareholders		22	30,934	-10,296	-
Equity, 31 December 2022	5	93	128,559	24,330	11,643
Opening balance, 1 January 2023		93	128,559	24,330	11,643
Profit/loss for the period		-	-	841	-
Currency translation differences	2.12	-	-	-	-1,477
Total comprehensive income/loss		-	-	841	-1,477
New share issue		3	3,334	-	-
Costs of issuance		-	-6	-	-
Buyback of hybrid bonds		-	-	-82	-
Dividends		-	-	-841	-
Total transactions with the company's shareholders		3	3,328	-922	-
Equity, 31 December 2023	5	97	131,887	24,249	10,166

SEK million	Retained earnings	Attributable to Parent Company shareholders	Non-controlling interests	Total equity
Opening balance, 1 January 2022	30,969	160,273	65	160,338
Profit/loss for the period	-6,065	-5,105	-216	-5,321
Currency translation differences	-	13,703	-	13,703
Total comprehensive income/loss	-6,065	8,598	-216	8,382
New share issue	-	30,991	-	30,991
Costs of issuance	-	-36	-	-36
Buyback of hybrid bonds	1,692	-7,644	-	-7,644
Dividends	-26,585	-27,545	-	-27,545
Transactions with non-controlling interests	-673	-673	17,042	16,368
Total transactions with the company's shareholders	-25,567	-4,907	17,042	12,135
Equity, 31 December 2022	-662	163,964	16,891	180,854
Opening balance, 1 January 2023	-662	163,964	16,891	180,854
Profit/loss for the period	-23,767	-22,926	-1,928	-24,855
Currency translation differences	-	-1,477	49	-1,428
Total comprehensive income/loss	-23,767	-24,403	-1,880	-26,283
New share issue	-	3,337	-	3,337
Costs of issuance	-	-6	-	-6
Buyback of hybrid bonds	19	-63	-	-63
Dividends	-6,742	-7,583	-1,526	-9,109
Total transactions with the company's shareholders	-6,723	-4,315	-1,526	-5,841
Equity, 31 December 2023	-31,152	135,246	13,485	148,731

Consolidated Statement of Cash Flows

SEK million	Note	2023	2022
Operating activities
Profit/loss before tax		-28,623	-6,362
Adjustments to reconcile profit before tax to net cash flows:
Fair value adjustment on investment properties	3.1	31,130	5,121
Value adjustment of inventory properties	4.1	-25	-402
Fair value adjustment of derivative financial instruments	2.9	1,173	-1,115
Interest income	2.10	-324	-315
Interest expenses	2.10	4,939	2,275
Share of net profits/losses of associated companies and joint ventures	3.4	844	1,617
Other adjustments	4.6	-313	7,685
Working capital changes
Increase(-)/decrease(+) in rent and other receivables		-293	-1,903
Increase(+)/decrease(-) in trade and other payables		-1,024	864
Cash generated from operations		7,482	7,465
Interest paid		-4,880	-1,858
Interest received		324	344
Paid income tax		-1,000	-843
Net cash flows from operating activities		1,926	5,107

SEK million	Note	2023	2022
Investing activities
Acquisitions of businesses, net of cash		-	-2,837
Acquisition of investment and inventory properties		-2,132	-11,131
Capital expenditure on investment and inventory properties	3.1, 4.1	-7,964	-9,568
Divestments of investment properties	2.7	2,703	661
Deposits for signed acquisitions		320	-731
Purchase of machinery and equipment		-63	-11
Purchase of intangible assets		-62	-
Transactions with associated companies and joint ventures	3.4, 3.5	711	-168
Purchase of quoted equity investments	3.4, 6.1	-	-4,474
Other cash flows from investing activities		-543	2
Net cash flows from investing activities		-7,029	-28,257
Financing activities
Proceeds from interest-bearing liabilities	6.3	35,264	48,656
Repayment of interest-bearing liabilities	6.3	-25,584	-40,270
Dividends paid	5	-5,851	-3,229
Proceeds from non-controlling interests		3,937	7,694
Proceeds from share issuances	5	920	7,635
Buyback of hybrid bonds	5	-58	-7,100
Repayments on hybrid bonds		-841	-960
Settlement of derivative financial instruments		176	232
Other cash flows from financing activities		-1,137	-259
Net cash flows from financing activities		6,826	12,399
Net change in cash and cash equivalents		1,723	-10,751
Cash and cash equivalents at the beginning of the period		9,385	19,508
Net currency exchange effect in cash and cash equivalents		168	628
Cash and cash equivalents at the end of the period		11,276	9,385

Notes to the Consolidated Financial Statements

1. Corporate information and general accounting policies

1.1 Corporate information

Heimstaden Bostad AB (publ), Corp. ID No. 556864-0873, is a Swedish limited liability company with its registered office in Malmö, at Östra Promenaden 7A, SE-211 28. Heimstaden Bostad's operations consist of owning, developing, and managing residential properties.

1.2 General accounting policies

Basis of preparation

The Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and in accordance with Swedish law by applying the Swedish Financial Reporting Board's recommendation RFR 1 Supplementary accounting rules for groups. This section provides summary of material accounting policies in the preparation of these financial statements. This section must be read in conjunction with the specific notes that also include material accounting policies.

The Consolidated Financial Statements were approved by the Board of Directors on 26 February 2024 and will be laid before the Annual General Meeting for approval on 8 March 2024.

The Financial Statements are presented in SEK and rounded to the nearest million. Numbers and percentages presented in the financial statements may not add up precisely to the totals provided.

The Consolidated Financial Statements have been prepared on a going-concern basis, applying a historical cost convention except for the measurement of investment property, derivative financial instruments and contingent consideration, that have been measured at fair value.

Heimstaden Bostad presents assets and liabilities in the Statement of Financial Position based on a current and non-current classification.

Heimstaden Bostad presents income and expenses in Statement of Comprehensive Income classified by based on their function.

Consolidation

Subsidiaries are fully consolidated from the date on which control is transferred to Heimstaden Bostad and deconsolidated from the date that control ceases. All Heimstaden Bostad's companies are set to have 31 December as their year-end. Newly acquired companies that have a different financial year-end are changed to align with the Group at the earliest opportunity. Accounting policies of subsidiaries are changed where necessary to ensure consistency.

Intercompany transactions, balances, and unrealised gains or losses on transactions between Group companies are eliminated.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

When Heimstaden Bostad ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in the carrying amount recognised in Statement of Comprehensive Income. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture, or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if Heimstaden Bostad had directly disposed of the related assets or liabilities. This mean that amounts previously recognised in other comprehensive income are reclassified to Statement of Comprehensive Income.

Non-controlling interests share of the results and equity of subsidiaries are shown separately in the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Financial Position, respectively.

Asset acquisitions, business combinations, and goodwill

Where properties are acquired, either through business combinations or otherwise, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents a business combination or an asset acquisition. If Heimstaden Bostad choose to perform a 'concentration test' and further prove that the acquisition is an asset acquisition, no further assessment is required. If the fair value of the gross assets acquired can substantially be attributed to an asset or a group of similar assets, the voluntary test shows the acquisition to constitute an asset acquisition. If the test is performed and it is not possible to determine the acquisition to be an asset acquisition, further assessment must be made. For more information regarding jugements and estimates see Note 1.3.

Business combinations and goodwill

Heimstaden Bostad determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that, together, significantly contribute to the ability to create outputs. The process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For impairment testing purposes, goodwill acquired in a business combination is, from the acquisition date, allocated to each of Heimstaden Bostad's cash-generating units (CGUs) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU.

Asset acquisitions

For acquisition of a subsidiary that is not considered a business combination, Heimstaden Bostad allocates the cost between the individual identifiable assets and liabilities based on their relative fair values as at the date of acquisition. Such transactions or events do not give rise to goodwill.

The Group recognises only the identifiable assets and liabilities. Any deferred tax is subject to the initial recognition exemption in accordance with IAS 12.

Foreign currencies

Heimstaden Bostad's Consolidated Financial Statements are presented in SEK, which is also the Parent Company's functional currency. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is reclassified to Statement of Comprehensive Income.

Transactions in foreign currencies are converted to the functional currency at the exchange rate prevailing on the transaction date. Income and expenses in a foreign operation are translated into functional currency at an average rate that represents an approximation of the prevailing exchange rates at the date of each transaction. Translation differences arising on currency translation of foreign operations are recognised in other comprehensive income.

Net currency translation gains and losses from monitory assets and liabilities is presented in net currency translation gains/losses in the consolidated statement of comprehensive income.

Monetary assets and liabilities in foreign currency are translated into the functional currency at the period-end rate. Historical cost non-monetary items use the transaction date rate, and fair value non-monetary items use the fair value measurement date rate.

Cash Flow Statement

Cash Flow Statements have been prepared in accordance with the indirect method in accordance with IAS 7, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals, or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows.

1.3 Judgements and estimates

Management makes judgements, estimates, and assumptions each reporting period that affect the Statement of Comprehensive Income and Consolidated Statement of Financial Position. These assumptions and assessments are based on historical experience and other factors that appear reasonable under the existing circumstances.

Estimation of fair value of investment properties

Property valuations are estimates and accordingly are subject to a degree of judgement in their determination.

Valuations are obtained from independent third parties, who exercise their professional judgement in arriving at their opinion of value. Management exercises its judgement when assessing the accuracy and reasonableness of third-party values provided, prior to their adoption, as well as in relation to the valuation of assets under construction or redevelopment where internal assumptions of outstanding cost and margin deductions are required. See Note 3.1 for further information.

Impairment testing of goodwill

Each year and whenever impairment indicators are present, the Group tests goodwill for impairment in accordance with the accounting policy described in Note 3.2. Recoverable amounts for CGU have been determined by calculating value in use. For these calculations management apply estimates related to key assumptions. For such estimates made, see Note 3.2.

Recognition of property acquisition and business combinations

When determining whether the acquisition represent a business combination or an asset acquisition, management makes judgements with regards to the application of the optional concentration test and the substance of the assets and activities acquired.

If substantially all the fair value of the gross assets acquired is concentrated in a single asset (or a group of similar assets) the transaction is treated as an asset acquisition.

To determine whether the acquisition is a business combination or an asset acquisition, management makes judgements regarding inputs, processes, and output of the acquired assets.

Purchase price allocation

The Group prepares a purchase price allocation for accounting by applying the acquisition method according to IFRS 3.

Accounting for an acquisition involves a high degree of judgement and estimation, mainly with regard to the allocation of premiums and discounts to assets and liabilities (net assets) in the purchase price allocation, as well as adjusting entries for adaptation to the Group's accounting policies. Fair value adjustments and resultant goodwill are presented in Note 3.2.

Classification of investments in associated companies

Classification of investments in associated companies When determining whether the Company's investment is an associated company or an equity investment, management makes judgements with regards to an assessment of significant influence. For more information see Note 3.4.

Climate risks

The Group considers climate-related matters in estimates and assumptions, where appropriate. This assessment includes a wide range of possible impacts on the group due to both physical and transition risks. Even though the Group believes its business model will still be viable after the transition to a low-carbon economy, climate-related matters is considered in estimates and assumptions underpinning impairment assessments and fair value measurements, among others, in the financial statements. Even though climate-related risks might not currently have a significant impact on measurement, the Group is closely monitoring relevant changes and developments, such as new climate-related legislation.

Environmental risks are those related to climate change, including direct risks such as increased energy costs and other operational implications, and indirect risks such as supply chain interruptions and reputational impact. There are also risks of damaged properties and/or emergency measures, mostly linked to climate impact, that may lead to decreased property values and higher property insurance prices, among other factors. To ensure that efforts to reduce our climate impact are sufficient, the Group has committed to the Science-Based Targets initiative (SBTi). To achieve its climate goals by 2030, Heimstaden has developed a climate action plan with a detailed plan for each country. See page 146 for more information. The initiatives are expected to have a positive impact on Heimstaden's investment properties and reduce energy and electricity costs for tenants.

The Group has established local carbon emission pathways in all the countries where it operates. The climate impact and carbon emission pathways in local markets vary due to differences in national climate policies, the energy mix, EPC scheme implementation, and differences in properties' energy performance.

Transition to a low-carbon society also presents opportunities for Heimstaden. By switching to renewable energy sources, investing in renewable electricity generation, and continuing to work on energy efficiency, circular economy and biodiversity measures, we will reduce our greenhouse gas (GHG) emissions and, in many cases, our operating costs. At the same time, we are increasing the number of energy-efficient buildings in the portfolio and adapting to climate change.

Heimstaden will continue to evaluate long-term climate risks and opportunities, develop its climate reporting according to the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy and continue to make climate assessments of the properties. This will provide knowledge about which properties may be affected by a changed climate and society, and what is required in order to adapt the Group's operations to handle a changing climate. This is an important foundation for decisions on necessary climate adaptations, define business opportunities and to remain a relevant and attractive property owner in the long term. Climate-related projects are a central part of Heimstaden' s sustainability focus, covering areas such as investments in climate change mitigation and adaptation measures, supply chain management with and ESG focus, ESG in acquisitions, and access to capital. The current and future property portfolio and investments will be continuously monitored and assessed in terms of climate impact.

1.4 New and changed accounting policies and disclosures

New and amended standards and interpretations

Definition of Accounting Estimates - Amendments to IAS 8

The amendments to IAS 8 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. They amendments also clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments had no impact on the Group's consolidated financial statements.

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to provide more useful disclosures by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the Group's disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group's financial statements.

Voluntary changes in accounting principles

Associated companies and joint ventures

Effective 1 January 2023, the Condensed Statement of Comprehensive Income has been revised to provide the user of the consolidated financial statements with more relevant information, including relevant and comparable subtotals. Share of net profits/ losses of associated companies and joint ventures are now reclassified from operating profit/loss to profit/loss for the period. The revised presentation did not have any impact on any financial statement line item, the group's profit for the year, the financial position or equity. The comparative financial data has been reclassified accordingly.

Realised gains/losses from divestment of properties

The Board of Directors have approved a Privatisation Plan that represents a new line of business that works across all segments. The goal of this plan it to sell a significant part of the portfolio in the private home-owner market. In response to the new strategy the accounting policy for divestment of properties has been revised. The new policy separates realised gains/losses form unrealised change in value. Gains/losses from divestments, both from privatisation and other divestments, are realised and shown on a new financial statement line, "Realised gains/losses from divestment of properties". This also includes realised gain/losses from inventory properties. Gain/loss is calculated based on the valuation in the latest interim financial statement and net of direct transactions cost. To clarify the distinction of realised gains/losses and unrealised value change the following line items have been changed:

•	"Profit before inventory properties and fair value adjustments" renamed to "Profit before unrealised fair value adjustments"
•	"Change in value and gains/losses from sale of inventory properties" renamed to "Value adjustment of inventory properties"

The revised presentation did not have any impact on the group's profit/loss before tax for the year, the financial position or equity. The change impacted "Profit before unrealised fair value adjustment" by the realised amount for each reporting period. Fair value adjustment of investment properties and value adjustment of inventory properties has changed with the realised amount for each reporting period. Comparable figures in the Consolidated Statement of Comprehensive Income of have been changed accordingly.

IFRS 17 Insurance Contracts

IFRS 17 Insurance Contracts is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. IFRS 17 replaces IFRS 4 Insurance Contracts. IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them as well as to certain guarantees and financial instruments with discretionary participation features; a few scope exceptions will apply. The overall objective of IFRS 17 is to provide a comprehensive accounting model for insurance contracts that is more useful and consistent for insurers, covering all relevant accounting aspects. IFRS 17 is based on a general model, supplemented by:

•	A specific adaptation for contracts with direct participation features (the variable fee approach)
•	A simplified approach (the premium allocation approach) mainly for short-duration contracts

The new standard had no impact on the Group's consolidated financial statements.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12

The amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities. The amendments had no impact on the Group's consolidated financial statements.

International Tax Reform-Pillar Two Model Rules - Amendments to IAS 12

The amendments to IAS 12 have been introduced in response to the OECD's BEPS Pillar Two rules and include:

•	A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and
•	Disclosure requirements for affected entities to help users of the financial statements better understand an entity's exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.

The mandatory temporary exception - the use of which is required to be disclosed - applies immediately. The remaining disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim periods ending on or before 31 December 2023. The group is in scope for the new Pillar Two model rules. The management have assessed that the immediate effects of the new rules will be limited. Transitional safe-harbour relief can be utilized as all current operations of the group is in territories with an effective tax rate above the threshold of 15%.

No other standards, amendments or interpretations effective from fiscal years beginning on or after 1 January 2023 had a material impact on the consolidated financial statements. No other new standards or interpretations that come into effect after 31 December 2023 are expected to have any material impact on the consolidated financial statements.

2. Income and expenses

2.1 Segment reporting

Accounting policies

The Group organises and governs its activities based on geographical areas where the investment properties are located, and these geographical areas form the basis of the definition of segments. Senior management is the chief operating decision maker and monitors net operating income and changes in the value of managed properties in the identified segments; other Statement of Comprehensive Income items are not distributed per segment. Additionally, management monitors the value of investment properties. Other items are not distributed per segment in the segments' profits, assets, and liabilities. The segment statements include only directly attributable items and items that can be allocated to the segments in a reasonable and reliable manner. See also Note 3.1 for fair value of investment properties per segment.

2023

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia	Norway
Statement of Comprehensive Income
Rental income	4,448	2,693	3,539	1,404	1,718	741
Service charges paid by tenants	84	934	4	-	663	34
Property expenses	-1,967	-1,553	-1,118	-353	-1,170	-219
Net operating income	2,565	2,074	2,425	1,051	1,211	556
Net operating margin %	57.7	77.0	68.5	74.8	70.5	75.1
Corporate administrative expenses	-	-	-	-	-	-
Other income and expenses	-	-	-	-	-	-
Realised gains/losses from divestment of properties	29	-	104	87	15	-1
Segment Profit before unrealised fair value adjustment	2,594	2,074	2,529	1,137	1,227	555
Fair value adjustment on investment properties	-10,385	-14,511	-4,138	-3,659	1,704	-275
Value adjustment of inventory properties	-	-	-	-	-	25
Segment profit/loss	-7,791	-12,436	-1,608	-2,522	2,931	305

SEK million	United Kingdom	Finland	Poland	Corporate/ Adjustments	Total
Statement of Comprehensive Income
Rental income	95	268	69	-1	14,974
Service charges paid by tenants	-	12	17	-1	1,750
Property expenses	-53	-155	-45	2	-6,633
Net operating income	42	125	42	0	10,091
Net operating margin %	44.0	46.8	60.3	-	67.4
Corporate administrative expenses	-	-	-	-860	-860
Other income and expenses	-	-	-	-173	-173
Realised gains/losses from divestment of properties	-	-	-	-	235
Segment Profit before unrealised fair value adjustment	42	125	42	-1,033	9,293
Fair value adjustment on investment properties	367	-404	171	-	-31,130
Value adjustment of inventory properties	-	-	-	-	25
Segment profit/loss	409	-279	212	-1,033	-21,812

2022

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia	Norway
Statement of Comprehensive Income
Rental income	4,113	2,065	3,026	1,242	1,382	758
Service charges paid by tenants	70	640	2	-	478	30
Property expenses	-2,051	-1,200	-971	-431	-904	-278
Net operating income	2,132	1,505	2,057	810	955	511
Net operating margin %	51.8	72.9	68.0	65.3	69.1	67.3
Corporate administrative expenses	-	-	-	-	-	-
Other income and expenses	-	-	-	-	-	-
Realised gains/losses from divestment of properties	5	17	-16	7	-	-4
Segment Profit before unrealised fair value adjustment	2,138	1,522	2,041	818	955	507
Fair value adjustment on investment properties	-6,632	3,130	-3,856	-750	2,372	254
Value adjustment of inventory properties	-	-	-	-	-	402
Segment profit/loss	-4,494	4,652	-1,815	67	3,328	1,162

SEK million	United Kingdom	Finland	Poland	Corporate/ Adjustments	Total
Statement of Comprehensive Income
Rental income	8	193	6	-90	12,702
Service charges paid by tenants	-	8	1	-11	1,217
Property expenses	-7	-107	-16	187	-5,778
Net operating income	1	93	-9	86	8,141
Net operating margin %	-	48.3	-	-	64.1
Corporate administrative expenses	-	-	-	-887	-887
Other income and expenses	-	-	-	237	237
Realised gains/losses from divestment of properties	-	-	-	-	10
Segment Profit before unrealised fair value adjustment	1	93	-9	-564	7,501
Fair value adjustment on investment properties	131	154	77	-	-5,121
Value adjustment of inventory properties	-	-	-	-	402
Segment profit/loss	132	247	68	-564	2,782

Reconciliation of profit

SEK million	2023	2022
Segment profit/loss	-21,812	2,782
Share of net profits/losses of associated companies and joint ventures	-844	410
Impairment of goodwill	-1,058	-
Financial income and expenses	-3,736	-10,669
Fair value adjustment of derivative financial instruments	-1,173	1,115
Profit/loss before tax	-28,623	-6,362

2023

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia	Norway
Statement of Financial Position
Investment properties	89,262	79,404	71,446	27,337	25,185	17,109
Inventory properties	-	-	-	-	-	538
Non-current segment assets	3,094	10,835	3,697	630	197	21
Total segment assets	92,356	90,239	75,143	27,967	25,381	17,669
Total segment liabilities	-	-	-	-	-	-
Capital expenditures in investment properties	3,000	873	923	838	773	107

SEK million	United Kingdom	Finland	Poland	Corporate/ Adjustments	Total
Statement of Financial Position
Investment properties	4,305	3,627	1,815	-	319,491
Inventory properties	-	-	-	-	538
Non-current segment assets	6	4	7	-	18,491
Total segment assets	4,311	3,631	1,822	-	338,520
Total segment liabilities	-	-	-	-	-
Capital expenditures in investment properties	1,070	170	132	-	7,885

2022

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia	Norway
Statement of Financial Position
Investment properties	96,851	92,820	73,640	30,048	23,443	20,338
Inventory properties	-	-	-	-	-	573
Non-current segment assets	4,151	10,809	3,095	810	420	125
Total segment assets	101,002	103,629	76,735	30,858	23,863	21,036
Total segment liabilities	-	-	-	-	-	-
Capital expenditures in investment properties	4,675	666	1,310	873	784	366

SEK million	United Kingdom	Finland	Poland
Statement of Financial Position
Investment properties	2,854	3,837	1,026
Inventory properties	-	-	-
Non-current segment assets	9	122	27
Total segment assets	2,863	3,959	1,053
Total segment liabilities	-	-	-
Capital expenditures in investment properties	1,380	75	-

SEK million	Corporate/Adjustments	Total
Statement of Financial Position
Investment properties	-	344,856
Inventory properties	-	573
Non-current segment assets	-	19,569
Total segment assets	-	364,997
Total segment liabilities	-	-
Capital expenditures in investment properties	-	10,130

Investments in financial assets that are managed by the Corporate Finance Team are not considered to be segment assets.

The group's borrowings and derivative financial instruments are not considered to be segment liabilities, but are managed by the Corporate Finance Team at Group level.

Reconciliation of assets

SEK million	2023	2022
Total segment assets	338,520	364,997
Other assets, non-current	4,793	5,959
Investments in associated companies and joint ventures	8,636	9,698
Other assets, current	2,994	7,287
Cash and cash equivalents	11,276	9,385
Total assets	366,219	397,327

Reconciliation of liabilities

SEK million	2023	2022
Total segment liabilities	-	-
Interest-bearing liabilities, non current	171,650	171,119
Other liabilities, non-current	21,677	27,023
Interest-bearing liabilities, current	19,601	11,572
Other liabilities, current	4,561	6,758
Total liabilities	217,488	216,472

2.2 Rental income and service charges paid by tenants

Accounting policies

Heimstaden Bostad leases out its investment properties to third parties with contracted non-cancellable lease terms and a normal term of notice for the customer of three months. The Group classifies these leases as operating because they do not transfer substantially all the risks and rewards, or control, incidental to ownership of the properties to the counterparties. For investment property leases the rental income is largely fixed under the contracts, however, it is subject to an annual index adjustment.

The rental income is accounted for on a straight-line basis over the contractual period and is included in the Statement of Comprehensive Income due to its operating nature. Residential rental contracts (leases) is invoiced monthly, and there are no substantial financing components included in any rental contracts. Initial direct costs incurred in negotiating and arranging an operating lease are recognised as an expense when they incur. Lease incentives that are paid or payable to the lessee are deducted from lease payments. Accordingly, tenant lease incentives are recognised as a reduction of rental income on a straight-line basis over the term of the lease. Amounts received from tenants to terminate leases or to compensate for dilapidations are recognised in the Statement of Comprehensive Income when the right to receive them arises.

Service charges to tenants mainly comprise utility cost and other operating costs that can be recharged. The services charged are seperately invoiced to tenants and include fees charged based on percentage of square metre in the building and reimburmenet of certain expenses incurred. The Group arranges for third parties to provide certain of these services to its tenants. The Group acts as a principal in relation to these services as it controls the specified services before transferring them to the customer. Therefore, the Group records revenue on a gross basis.

No single customer accounts for more than 1% of total revenues. For rental income and service charges paid by tenants by geographic market, see Note 2.1.

Rental income and service charges paid by tenants

SEK million	2023	2022
Rental income before straight-lining of lease	15,099	12,761
Straight-lining of lease	-125	-58
Rental income	14,974	12,702
Services to tenants	1,750	1,217
Service charges paid by tenants	1,750	1,217
Total income	16,724	13,919

Rental income distributed by property category

SEK million	2023	2022
Residential	13,757	11,691
Commercial premises	1,010	838
Garages, parking spaces and other premises	207	173
Total rental income	14,974	12,702

Service charges paid by tenants distributed by property category

SEK million	2023	2022
Residential	1,643	1,146
Commercial premises	107	70
Total service charges paid by tenants	1,750	1,217

Most of the Company's lease contracts (source of rental income) have a notice period of three months, hence most of the contracts only have three months guaranteed lease payments to be received. An undiscounted maturity analysis of operating leases as of 31 December are as follows:

2023 Maturity on lease contracts

SEK million	Residential	Commercial premises	Garages and parking spaces
Within one year	4,141	1,254	125
1-5 years	47	-	-
> 5 years	59	-	-
Total lease contracts	4,247	1,254	125

2022 Maturity on lease contracts

SEK million	Residential	Commercial premises	Garages and parking spaces
Within one year	3,370	1,026	113
1-5 years	58	-	-
> 5 years	1	-	-
Total lease contracts	3,429	1,026	113

2.3 Property expenses

Accounting policies

Property expenses include costs for electricity, heating, water, property management, cleaning, and insurance. Maintenance costs consist of both periodic and ongoing measures to maintain the properties' standard. Property management refers to costs incurred by the Group to facilitate the overall management such as back-office functions like bookeeping, letting, marketing and other overarching property managment services. Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred.

Property expenses

SEK million	2023	2022
Utilities	2,260	1,773
Repairs and maintenance	755	697
Property tax	475	446
Property management	2,460	2,208
Other	682	654
Total property expenses	6,633	5,778

2.4 Other operating income

Other operating income

SEK million	2023	2022
Buy-out settlement	106	-
Transaction costs from business combination	-	182
Hospitality income	45	-
Other	123	286
Total other operating income	275	468

2.5 Other operating expenses

Other operating expenses

SEK million	2023	2022
A Home for a Home	140	143
Audit assignment	34	29
Acquisition cost	59	15
Depreciation	18	18
Hospitality cost	49	-
Other	147	26
Total other operating expenses	448	231

During 2023, SEK 140 million (143) were expensed as donations to SOS Children's Villages. See page 29 for more information regarding the partnership "A Home for a Home".

The audit assignment refers to the audit of the Consolidated Financial Statements and the annual financial statements for the Group companies. Other assurance services provided by the auditors include services related to review procedures on interim reports and other attestation services. The fees are summarised in the table below:

EY

SEK million	2023	2022
Audit assignment	29	26
Other assurance services	3	2
Other services	-	1
Total	32	29

Other

SEK million	2023	2021
Audit assignment	5	3
Other assurance services	1	0
Other services	2	-
Total	7	3

Total

SEK million	2022	2022
Audit assignment	34	29
Other assurance services	4	2
Other services	2	1
Total	39	32

2.6 Employee benefit expenses and senior management compensation

Accounting policies

Employee benefits in the form of salaries, paid vacation, paid absence due to illness, etc., are recognised as employees perform services in exchange for compensation. Pensions and other post-employment benefits may be classified as defined contribution plans or defined benefit plans. All Heimstaden Bostad's pension obligations consist of defined contribution plans, which are met through ongoing payments to the independent authorities or organisations that administer the plans. Obligations regarding defined contribution plans are expensed in Statement of Comprehensive Income as they are incurred.

Average number of employees	2023			2022
	Women	Men	Total	Women	Men	Total
Sweden	176	271	447	190	244	434
Germany	132	160	292	79	82	161
Denmark	77	146	223	45	83	128
Netherlands	52	64	116	35	40	75
Czechia	277	391	668	184	233	417
Norway	16	54	70	16	33	49
United Kingdom	5	6	12	1	1	2
Finland	-	4	4	-	2	2
Poland	9	5	14	2	2	4
Total	744	1,102	1,846	552	720	1,272

On 1 July 2022, the Country Management organisation in Sweden, Germany, Denmark, Netherlands, Czechia, Norway, United Kingdom, Finland, and Poland was sold to Heimstaden Bostad AB from Heimstaden AB. The transaction included companies that employed about 2,000 people in nine countries, carrying out local management of Heimstaden Bostad's properties.

Remuneration

The CEO, Deputy CEO and senior management receive remuneration from Heimstaden AB and these costs are included in the administrative services from Heimstaden AB. For other employees, the customary pension commitments within the framework of general pension plans apply.

The Board of Directors and Group management are presented on pages 35-37.

Board Member remuneration	2023	2022
SEK	Board fees	Board fees
Casper von Koskull ¹	607,342	960,000
Helge Leiro Baastad	352,658	-
Ivar Tollefsen	-	-
John Giverholt	-	-
Bente A Landsnes	375,000	300,000
Fredrik Reinfeldt	-	-
Daniel Kristiansson	-	-
Rebecka Elkert	-	-
Klas Åkerbäck	-	-
Vibeke Krag ¹	-	-
Axel Brändström ¹	-	-
Stefan Attefall ¹	-	-
Birgitta Stenmark ¹	-	-
Anna Magnusson ¹	-	-
Total	1,335,000	1,260,000
¹ Resigned during 2023.

Salaries, remuneration, social security, and pension cost 2023

2023

Position	Board Members	Employees	Total
SEK million
Base salary	-	1,110	1,110
Benefits	-	43	43
Social security costs	-	249	249
Pension costs	-	68	68
Variable remuneration	-	20	20
Board remunerations	1	-	1
Total	1	1,490	1,491
Women in %	29	40

2022

Position	Board Members	Employees	Total
SEK million
Base salary	-	394	394
Benefits	-	18	18
Social security costs	-	70	70
Pension costs	-	35	35
Variable remuneration	-	8	8
Board remunerations	1	-	1
Total	1	525	527
Women in %	44	43	43

2.7 Realised gains/losses from divestment of properties

Accounting policies

Gain/loss is calculated based on the valuation in the latest interim financial statement and proceeds net of direct transactions cost. Gains and losses arising from divestment of properties are included in Statement of Comprehensive Income in the period which they arise. For more information see Note 1.2.

Realised gains/losses from divestment of investment properties and inventory properties

SEK million	2023	2022
Net proceeds from divestments of properties	2,702	671
Book value of divestments of properties	-2,468	-661
Realised gains/losses on divestments of properties	235	10

2.8 Fair value adjustment of investment properties

Investment properties are measured at fair value. Gains and losses arising from changes in the fair value of the investment property are included in Statement of Comprehensive Income in the period in which they arise. For more information regarding fair value assessments see Note 3.1.

Fair Value adjustment of investment properties

		2023		2022
	%	SEK million	%	SEK million
Sweden	-10.4	-10,385	-6.4	-6,632
Germany	-15.5	-14,511	3.5	3,130
Denmark	-5.5	-4,138	-5.0	-3,856
Netherlands	-11.7	-3,659	-2.4	-750
Czechia	7.3	1,704	11.3	2,372
Norway	-1.6	-275	1.3	254
United Kingdom	9.3	367	4.8	131
Finland	-10.0	-404	4.2	154
Poland	10.4	171	8.1	77
Total / % of fair value	-8.9	-31,130	-1.5	-5,121

2.9 Fair value adjustment of derivative financial instruments

Accounting policies

Derivative financial instruments include interest rate derivatives and forward purchase contracts and are measured at fair value. Gains and losses arising from changes in the fair value of the derivative financial instruments are included in Statement of Comprehensive Income in the period in which they arise. For more information regarding fair value assessments see Note 6.1.

SEK million	2023	2022
Unrealised value change	-1,186	883
Realised value change	13	232
Total fair value adjustment of derivative financial instruments	-1,173	1,115

2.10 Financial income and expenses

Accounting policies

Interest income on bank balances, as well as interest and other borrowing costs, are recognised as income and expenses, respectively. Payments in accordance with interest-rate derivative agreements are included in interest expenses and are expensed in the period to which they relate. Changes in the fair value of interest-rate derivatives are presented in the Statement of Comprehensive Income. Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalised to the cost of those assets, until the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in Statement of Comprehensive Income in the period they incur. For more information see Note 1.2.

Financial income and expenses reported in Comprehensive Income Statement

SEK million	2023	2022
Assets and liabilities measured at amortised cost:
Interest income, promissory notes	64	33
Interest income, associated companies and joint ventures	51	39
Interest income, other financial assets	209	244
Total interest income	324	316
Interest expenses, loans	-5,073	-2,364
Borrowing expenses capitalised within investment property	133	89
Total interest expenses	-4,939	-2,275
Currency translation losses	-301	-8,751
Currency translation gains	720	2,172
Total net currency translation gains/losses	419	-6,578

2.11 Income tax expenses

Accounting policies

Income tax is recognised in the Statement of Comprehensive Income and are measured at the amount expected to be recovered from or paid to the taxation authorities in the countries where Heimstaden Bostad operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the group operates and generates taxable income. This also includes adjustment of tax attributable to previous periods.

Current tax is determined by this year's taxable income, adjusted for non-taxable income, non-deductible expenses, and changes in temporary differences between carrying amount and tax bases of assets and liabilities. The group's current tax is calculated using the tax rates applicable on the balance sheet date.

Income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Comprehensive Income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. The Group has recognised taxes related to Hybrid capital (see Note 5.1) directly in equity. No other tax items has beed recoginsed directly in other comprehensive income or equity For information about deferred tax see Note 7.1.

Consolidated Statement of Comprehensive Income

SEK million	2023	2022
Current tax expense	-466	-836
Deferred tax	4,234	1,878
Income tax expenses reported in the Consolidated Statement of Comprehensive Income	3,768	1,041

Reconciliation of effective tax rate

SEK million	2023	2022
Reported profit/loss before tax	-28,623	-6,362
Nominal Swedish tax rate (20,6%)	5,896	1,311
Tax effect of:
Tax effect of different statutory tax rates	-601	-203
Non-deductible interest	-36	-250
Tax effect of Hybrid bonds	173	198
Tax on share in earnings from associated companies	-172	-335
Fair value change of investment properties below initial recognition	-888	-
Non-taxable income	-	-20
Non-deductible costs	-343	-50
Changes in statutory tax rates	-480	-
Tax attributable to previous years	197	-82
Other	22	472
Income tax expenses reported in the Consolidated Statement of Comprehensive Income	3,768	1,041
Effective tax rate, %	13	16

2.12 Other comprehensive income

Other comprehensive income is related to foreign currency translation differences that may be reclassified to Statement of Comprehensive Income in subsequent periods. For more information see Note 1.2.

Specification of other comprehensive income

SEK million
Country	Currency code	2023	2022
Czechia	CZK	-623	2,250
Denmark	DKK	45	2,974
Netherlands, Germany, and Finland	EUR	98	7,471
Norway	NOK	-1,321	734
Poland	PLN	308	207
United Kingdom	GBP	17	67
Non-controlling interests	EUR	49	-
Total		-1,428	13,703

3. Non-current assets

3.1 Investment properties

Total property value per segment

The total property value, measured at fair value, was SEK 319,491 million (344,856). This value included value decrease for 2023 of SEK 31,130 million (decrease 5,121). In percentage, the decrease in value was 8.9 (1.5) of the total property value before changes in value.

The fair value of investment properties is based on external valuation. The fair value of investment properties is based on external valuation. The decrease in fair value over the course of the year was primarily driven by sentiment-based yield increases (in some cases supported by a limited number of individual comparable transactions) outweighing the positive effects of rent increases and outlook in Heimstaden Bostad's larger markets (Sweden, Germany, Denmark, Netherlands and Finland). In addition, in the Netherlands, an increase in Real Estate Transfer Tax (RETT) combined with negative owner-occupier house price development earlier in the year negatively impacted values, whilst Norway experienced decreases in owner-occupier House Price Index (HPI) later in the year. However, this was mitigated to a degree in the final two quarters by increasing owner-occupier house prices along with value increases in the Czechia, Poland and the United Kingdom where rental increases outweighed sentiment-based yield increases. The total properties value per operating segment is shown below.

Valuation gain or loss investment properties

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia	Norway
Fair Value of investment properties, 31 December 2021	97,057	70,651	66,635	27,324	17,932	18,951
Acquisitions during the period	2,134	11,601	3,523	196	-	125
Divestments	-471	-26	-16	-33	-2	-113
Land leases	89	-4	-	-	-	92
Capital expenditure on investment properties	2,202	645	491	873	784	139
Capital expenditure on investment properties under construction	2,473	21	818	-	-	227
Currency translation	-	6,802	6,043	2,438	2,356	665
Fair Value after transactions	103,483	89,690	77,496	30,798	21,071	20,084
Value change	-6,632	3,130	-3,856	-750	2,372	254
Fair Value of investment properties, 31 December 2022	96,851	92,820	73,640	30,048	23,443	20,338
Acquisitions during the period	24	-	1,768	613	-	-
Divestments	-243	-	-426	-251	-36	-1,512
Land leases	15	-	-	-	-	-254
Capital expenditure on investment properties	1,650	873	524	838	773	36
Capital expenditure on investment properties under construction	1,350	-	399	-	-	70
Currency translation	-	222	-311	32	-699	-1,294
Fair Value after transactions	99,647	93,915	75,595	31,279	23,481	17,385
Value change	-10,385	-14,511	-4,138	-3,659	1,704	-275
Reclassification to assets held for sale	-	-	-11	-283	-	-
Fair Value of investment properties, 31 December 2023	89,262	79,404	71,446	27,337	25,185	17,109

SEK million	United Kingdom	Finland	Poland	Total
Fair Value of investment properties, 31 December 2021	1,019	1,014	-	300,584
Acquisitions during the period	268	1,985	901	20,733
Divestments	-	-	-	-661
Land leases	-	337	-	513
Capital expenditure on investment properties	-	75	-	5,210
Capital expenditure on investment properties under construction	1,380	-	-	4,919
Currency translation	55	272	48	18,679
Fair Value after transactions	2,723	3,683	949	349,977
Value change	131	154	77	-5,121
Fair Value of investment properties, 31 December 2022	2,854	3,837	1,026	344,856
Acquisitions during the period	-	0	399	2,805
Divestments	-	-	-	-2,468
Land leases	-	25	-	-214
Capital expenditure on investment properties	1	170	-	4,865
Capital expenditure on investment properties under construction	1,068	-	132	3,020
Currency translation	14	0	87	-1,948
Fair Value after transactions	3,938	4,031	1,644	350,915
Value change	367	-404	171	-31,130
Reclassification to assets held for sale	-	-	-	-294
Fair Value of investment properties, 31 December 2023	4,305	3,627	1,815	319,491

Breakdown by category, 31 December 2022

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia
Investment properties	91,616	92,820	72,402	30,048	23,236
Investment properties under construction	4,742	-	1,061	-	-
Land and building rights	267	-	178	-	207
Land leases	226	-	-	-	-
Total	96,851	92,820	73,640	30,048	23,443

SEK million	Norway	United Kingdom	Finland	Poland	Total
Investment properties	19,672	186	3,500	562	334,040
Investment properties under construction	-	2,668	-	464	8,934
Land and building rights	-	-	-	-	652
Land leases	666	-	337	-	1,229
Total	20,338	2,854	3,837	1,026	344,856

Breakdown by category, 31 December 2023

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia
Investment properties	86,904	79,404	71,051	26,720	24,984
Investment properties under construction	1,863	-	327	617	-
Land and building rights	254	-	68	-	200
Land leases	241	-	-	-	-
Total	89,262	79,404	71,446	27,337	25,185

SEK million	Norway	United Kingdom	Finland	Poland	Total
Investment properties	16,698	3,271	3,265	1,605	313,902
Investment properties under construction	-	1,034	-	210	4,052
Land and building rights	-	-	-	-	522
Land leases	412	-	362	-	1,015
Total	17,109	4,305	3,627	1,815	319,491

Accounting policies

Investment properties comprise completed properties, properties under construction, and land and building rights that are held, to earn rental income or for capital appreciation or both. A property held under a lease is classified as investment property when it is held to earn rental income or for capital appreciation, or both. Contracts related to land leases are accounted for as long-term lease contracts.

An investment property is recognised when Heimstaden obtain control. Such control is obtained when Heimstaden has the material risk and reward associated with the investment property, typically at delivery of the property. Investment properties are measured initially at cost, including transaction costs. Transaction costs include transfer taxes, brokers' fees, and professional fees for legal services. Borrowing costs that are directly attributable to the construction or redevelopment of assets that take a substantial period to get ready for their intended use are capitalised. Subsequent recognitions are at fair value, which reflects market conditions at the reporting date. Gains or losses are recognised in Statement of Comprehensive Income in the period in which they arise, including the corresponding tax effect. Subsequent expenditure is capitalised when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the cost of the replacement is included in the carrying amount of the property, and the fair value is reassessed. Investment property under construction is measured at fair value if the fair value is reliably determinable. Investment properties under construction for which the fair value cannot be determined reliably, but for which the Group expects the fair value to be reliably determinable when construction is completed, are measured at cost until the fair value becomes reliably determinable or construction is completed.

Management has determined that investment properties under construction are eligible for fair value measurements once all three following criteria are fulfilled

•	Administrative authorisations are obtained
•	Construction commenced and costs are committed toward the constructor
•	Uncertainty in future rental income has been assumed low

Management considers the following factors when evaluating whether the fair value of property under construction can be measured reliably

•	Provisions of the construction contract
•	Stage of construction
•	Custom or standard project/property
•	Reliability of cash inflows after completion
•	Risks specific to the property
•	Experience with similar construction
•	Status of construction permits

Transfers are made to (or from) investment property

When there is evidence of a change in use of an investment property, it is transferred from investment property to inventories. The deemed cost for subsequent accounting is the fair value at the date of change in use. If an inventory property becomes an investment property, the difference between the fair value of the property at the date of transfer and its previous carrying amount is recognised in the Statement of Comprehensive Income. There have been no transfers to or from investment properties within the year.

Derecognition of investment properties

An investment property is derecognised either when it has been divested of or when it is permanently withdrawn from use and no economic benefit is expected from its future disposal or use.

If an investment property is divested, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in Realised gains/losses from divestment of properties.

Investment properties are recognised in the Statement of Financial Position as Assets held for sale when a contract with a buyer of a unit is signed but transfer of the unit is not completed.

External valuation

All investment properties (residential, commercial premises, garages, parking spaces, other premises and land and building rights) are valued quarterly by external acknowledged real-estate advisory companies, whose employees are professionally qualified, and have the appropriate competence to carry out the valuation in accordance with the required international valuation standards. The Group has a dedicated in-house valuation team ensuring quality assurance of all external valuations.

From 30 ^th June 2021 and onwards, each Property shall be evaluated by the same valuator for a maximum period of five (5) years at the time and shall thereafter be evaluated by another valuator for a maximum period of five (5) years.

Country	Valuer
Sweden	CBRE
Germany	CBRE, Savills
Denmark	CBRE
Netherlands	Cushman & Wakefield
Czechia	iO Partners (JLL)
Norway	Cushman & Wakefield, Nyverdi, Eie, Aktiv
United Kingdom	Savills
Finland	CBRE
Poland	CBRE

Valuation assumptions

The adopted valuation methodologies are based on best market practice in each respective country. Typically, valuations are based on a "highest-and-best-use" principle, adopting the highest value given by a re-letting scenario (assuming a re-letting of units at market terms upon tenant fluctuation) or a divestment scenario (assuming a sale of each unit upon tenant fluctuation).

In most markets, properties are valued using either an explicit income approach (discounted cash flow), or implicit income approach (income capitalisation), except for Norway where a sales comparison approach is applied.

When using an explicit income approach, future cash flows are projected for a certain period, usually 10 years, with an assumed sale/exit of either

•	part of the property (individual units) during the cashflow period and the remainder at the end of the cashflow period; or
•	the whole property at the end of the cash flow period. The projected cash flows are then discounted back to a present value using an appropriate discount rate.

The inputs into the projected cash flows and the discount rate take into consideration the characteristics, market position and risk profile of the property and, where possible, are informed by market data. Significant estimates applied in the cash flow is

•	Rental income based on the location, type, and quality of the properties and supported by any existing leases, other contracts or external evidence such as current market rents for similar units;
•	Vacancy rates based on current and expected future market conditions after expiry of any current leases;
•	Property costs and capital expenditures including maintenance and necessary investments (including climate related investments) to maintain functionality of the property for expected useful life as well as fixed cost like property taxes, insurance etc.;
•	Capitalisation rates based on location and quality of the properties where market data at the valuation date is taken into account; and
•	Terminal value taking into account assumptions regarding maintenance costs, vacancy rates, and market rents on a stabilised basis.

The resulting value is benchmarked against other similar transactions in the market.

The Group acknowledges that there may be instances where observable inputs are limited or not available, necessitating the use of non-observable inputs which are based on assumptions, estimates, and judgments. These inputs may include, but are not limited to, future expectations on rental income data, future vacancy levels, future discount rate and other proprietary information that is not publicly accessible. Assumptions made in the absence of observable data are based on the best available information and judgment of the management.

When using an implicit income approach an estimate of net operating income is made, and this is then capitalised using an appropriate yield to arrive at a value. The net operating income and yield take into consideration the characteristics, market position and risk profile of the property and, where possible, are informed by market data. The resulting value is benchmarked against other similar transactions in the market. In addition, further valuation checks are performed, e.g. a comparison with the aggregate sales value of the individual units.

There were no material changes to the valuation techniques during the year. In most markets, properties are valued according to the discounted cash flow (DCF) method using operating and market inputs.

In Norway, the residential units are valued individually on a vacant possession value basis using a sales comparison approach. The units are compared to market transaction data of similar units taking into consideration the key attributes of each unit. Values are assigned to each unit by three external valuers. The average of those three values is then adopted. The commercial units, parking units and development potential are valued each quarter by an external valuer.

For properties under construction or redevelopment, the DCF model also takes into account cost to complete including developers margin and completion date based on internal forecasts and management's experience and knowledge of market conditions. Additionally, properties under construction require approval or permits from regulatory bodies at various points in the development process. Based on management's experience with similar developments, all relevant permits and approvals are expected to be obtained.

Valuation hierarchy

The majority of the property portfolio is deemed to be at Level 3 in the fair value hierarchy according to IFRS 13 fair value Measurement, with the exception of the Norwegian residential assets which are based on Level 2. For Level 3, the estimated future cash flows are based on existing rental income and operating and maintenance costs, adjusted for expected changes herein. The fair value of the properties is the sum of the discounted cash flows during the calculation period and the terminal value. There have been no transfers between the levels in the valuation hierarchy throughout the period.

Valuation process

Valuations are based on appraisals from independent external valuers. The policies and procedures for property valuations are assessed by the group's in-house valuation team, which has aligned methods with the external valuers. The valuation team holds relevant professional qualifications and are experienced in valuing the types of property in the applicable locations.

At each reporting date, the valuation team analyses the development in property value including verifying major inputs applied and agreeing the information in the valuation computation to rent rolls, market reports, and other relevant documents. The internal team also compares each property's change in fair value with relevant external benchmarks to determine whether the change in fair value is reasonable.

Sensitivity analysis

A quantitative sensitivity analysis regarding return requirements and net operating income in accordance with the present value method is shown in the below table.

Property valuations are estimates and the actual fair value of a property can only be determined when it is sold. Accordingly, the valuation, uncertainty intervals, and sensitivity analysis, include unobservable inputs and a degree of uncertainty in the inputs and assumptions made. However, uncertainty related to the valuation and its assumptions are reduced by obtaining external assurance from independent third parties in addition to management's internal review, which among other factors includes comparing values to recent transactions in the market. This years fair value adjustment of investment properties serves as an indicator of the potential range of uncertainty regarding the future increase/decrease in value of investment properties in the upcoming year.

The complexity of the interconnections makes it challenging to quantify interactions between parameters, even though such interactions are possible. Significant increases (decreases) in operating income would in isolation result in higher running yields and as higher (lower) fair values of investment property. Significant increases (decreases) in the discount rate in isolation would result in a significant decrease (increase) in fair value if investment property. Discount rate and operation income is not directly linked, but generally one can expect that an increase in discount rates is often accompanied by an increase in operation income and long-term vacancy rates somewhat offsetting the isolated effect on fair value on investment property.

The table on the next page presents the following information for investment properties in each of our markets

1.	The fair value measurements at the end of the reporting period
2.	The level of the fair value hierarchy (e.g., Level 2 or Level 3) within which the fair value measurements are categorised in their entirety
3.	Valuation technique applied
4.	The inputs used in the fair value measurement
5.	Quantitative information about the significant unobservable inputs used in the fair value measurement
6.	Uncertainty interval and sensitivity analysis

2023

Markets	Fair value (SEK million)	Valuation technique	Fair Value hierarchy level	Net operating income	Of which regulated, %	Running yield, %
Sweden	89,262	DCF	Level 3	2,932	100	3.28
Germany	79,404	DCF	Level 3	2,175	100	2.74
Denmark	71,446	DCF	Level 3	2,976	14	4.16
Netherlands	27,337	DCF	Level 3	1,023	58	3.74
Czechia	25,185	DCF	Level 3	1,184	25	4.70
Norway	17,109	Sale comparison	Level 2	551	0	3.22
United Kingdom	4,305	DCF	Level 3	191	0	4.44
Finland	3,627	DCF	Level 3	159	0	4.38
Poland	1,815	DCF	Level 3	103	0	5.66
	319,491			11,293	57	3.53

Markets	Average rental income pr sqm. Pr. month	Average operating expenditure pr sqm. Pr. month	Stabilised vacancy rates	Sensitivities in running yield, change in percentage point ¹
				1.00%	0.75%	0.50%
Sweden	124	44	0.48%	-20,834	-16,594	-11,793
Germany	118	18	0.95%	-21,233	-17,065	-12,255
Denmark	154	30	1.75%	-13,833	-10,902	-7,658
Netherlands	113	29	1.71%	-5,765	-4,564	-3,222
Czechia	59	16	3.91%	-4,418	-3,466	-2,422
Norway	295	67	N/A	-	-	-
United Kingdom	280	58	4.00%	-792	-622	-436
Finland	154	47	2.76%	-674	-530	-371
Poland	275	67	2.02%	-272	-212	-147

Markets	Sensitivities in running yield, change in percentage point ¹
	0.25%	-0.25%	-0.50%	-0.75%	-1.00%
Sweden	-6,314	7,354	16,029	26,415	39,075
Germany	-6,640	7,973	17,726	29,930	45,642
Denmark	-4,046	4,562	9,747	15,691	22,575
Netherlands	-1,712	1,957	4,216	6,852	9,970
Czechia	-1,272	1,415	2,998	4,782	6,807
Norway	-	-	-	-	-
United Kingdom	-230	257	547	875	1,252
Finland	-196	219	467	749	1,072
Poland	-77	84	176	277	389

Markets	Sensitivities in net operating income (NOI)
	-2.00%	-1.50%	-1.00%	1.00%	1.50%	2.00%
Sweden	-1,785	-1,339	-893	893	1,339	1,785
Germany	-1,588	-1,191	-794	794	1,191	1,588
Denmark	-1,429	-1,072	-714	714	1,072	1,429
Netherlands	-547	-410	-273	273	410	547
Czechia	-504	-378	-252	252	378	504
Norway	-342	-257	-171	171	257	342
United Kingdom	-86	-65	-43	43	65	86
Finland	-73	-54	-36	36	54	73
Poland	-36	-27	-18	18	27	36

2022

Markets	Fair value (SEK million)	Valuation technique	Fair Value hierarchy level	Net operating income	Of which regulated, %	Running yield, %
Sweden	96,851	DCF	Level 3	2,737	100	2.83
Germany	92,820	DCF	Level 3	2,334	100	2.51
Denmark	73,640	DCF	Level 3	2,875	16	3.90
Netherlands	30,048	DCF	Level 3	999	53	3.32
Czechia	23,443	DCF	Level 3	1,081	28	4.61
Norway	20,338	Sale comparison	Level 2	602	0	2.96
United Kingdom	2,854	DCF	Level 3	131	0	4.60
Finland	3,837	DCF	Level 3	179	0	4.66
Poland	1,026	DCF	Level 3	53	0	5.16
	344,856			10,991	60	3.17

Markets	Average rental income pr sqm. Pr. month	Average operating expenditure pr sqm. Pr. month	Stabilised vacancy rates	Sensitivities in running yield, change in percentage point ¹
				1.00%	0.75%	0.50%
Sweden	115	43	1.10%	-25,311	-20,310	-14,558
Germany	113	16	1.22%	-26,414	-21,327	-15,398
Denmark	152	30	2.00%	-15,014	-11,865	-8,359
Netherlands	108	26	1.73%	-6,950	-5,533	-3,930
Czechia	54	15	3.49%	-4,178	-3,279	-2,293
Norway	299	81	N/A	-	-	-
United Kingdom	378	75	4.00%	-509	-400	-280
Finland	148	45	2.76%	-678	-532	-372
Poland	259	64	3.00%	-166	-130	-91

Markets	Sensitivities in running yield, change in percentage point ¹
	0.25%	-0.25%	-0.50%	-0.75%	-1.00%
Sweden	-7,870	9,398	20,816	34,983	53,028
Germany	-8,395	10,249	23,043	39,462	61,304
Denmark	-4,431	5,037	10,814	17,507	25,352
Netherlands	-2,102	2,444	5,322	8,758	12,934
Czechia	-1,206	1,344	2,851	4,553	6,491
Norway	-	-	-	-	-
United Kingdom	-147	164	348	556	792
Finland	-195	217	461	735	1,048
Poland	-47	52	110	174	247

Markets	Sensitivities in net operating income (NOI)
	-2.00%	-1.50%	-1.00%	1.00%	1.50%	2.00%
Sweden	-1,937	-1,453	-969	969	1,453	1,937
Germany	-1,856	-1,392	-928	928	1,392	1,856
Denmark	-1,473	-1,105	-736	736	1,105	1,473
Netherlands	-601	-451	-300	300	451	601
Czechia	-469	-352	-234	234	352	469
Norway	-407	-305	-203	203	305	407
United Kingdom	-57	-43	-29	29	43	57
Finland	-77	-58	-38	38	58	77
Poland	-21	-15	-10	10	15	21

¹ In Norway the sales comparison approach is applied. A +/-10% change in sale price pr. square meter will increase/decrease the fair value with SEK 1,711/-1,711

(2,034/-2,034) million. Stabilised vacancy is not relevant for the valuation technique sales comparison approach.

3.2 Goodwill and Intangible assets

Accounting policies

Goodwill is derived from the business combination of Akelius Lägenheter Aktiebolag, Akelius Bolig Holding ApS (DK) and Akelius GmbH (DE) that was completed in 2021, herby referred to as Akelius portfolio, and the Country Management organisation in Sweden, Germany, Denmark, Netherlands, Czechia, Norway, Finland, United Kingdom and Poland that was sold from Heimstaden AB to Heimstaden Bostad AB in 2022. Goodwill has an infinite useful life and is subsequently carried at cost less accumulated impairment. Intangible assets comprise of software and are expected to have a useful life of 3-15 years.

SEK million	Goodwill	Software	Total
Opening balance, 1 January 2022	16,489	35	16,524
Business combinations	2,859	10	2,869
Final Adjustment Purchase Price Allocation	-600	-	-
Investments for the year	-	118	118
Changes in value from foreign currency	821	5	826
Closing balance, 31 December 2022	19,569	167	19,737
Opening balance accumulated depreciation, 1 January 2022	-	-28	-28
Business combinations	-	-1	-1
Depreciation for the year	-	-4	-4
Disposals	-	-10	-10
Closing balance accumulated depreciation, 31 December 2022	-	-43	-43
Opening balance accumulated impairment, 1 January 2022	-	-	-
Impairment for the year	-	-	-
Closing balance accumulated impairment, 31 December 2022	-	-	-
Carrying amount, 31 December 2022	19,569	124	19,693

SEK million	Goodwill Software/Licences		Total
Opening balance, 1 January 2023	19,569	167	19,737
Investments for the year	-	62	62
Changes in value from foreign currency	-20	2	-19
Closing balance, 31 December 2023	19,549	231	19,780
Opening balance accumulated impairment, 1 January 2023	-	-	-
Impairment for the year	-1,058	-	-1,058
Closing balance accumulated impairment, 31 December 2023	-1,058	-	-1,058
Carrying amount, 31 December 2023	18,491	183	18,674

Impairment

When testing for impairment on goodwill, management identify the recoverable amount by calculating the "value in use" by discounting the estimated future cash flows from the groups cash generating units (CGU's).

The goodwill identified in the business combination is allocated to the Group's CGU's. Heimstaden Bostad's CGU's are defined as the Group's operating segments as this is the lowest level within the Group which goodwill is monitored, hence the impairment assessment is performed at this level.

The Group performs impairment test annually, and whenever impairment indicators are present, of the CGU's which goodwill is allocated. The Group considers the relationship between the current real estate market, such as declining property values, market prices, among other factors, when reviewing for indicators. The management also takes into consideration adverse economic factors, such as changes in risk free rate and development in equity risk premium, vacancy rates and yield trends, which may impact the groups CGU's. In additional to pure financial factors, the Group also considered future environmental risk such as the possible impact of climate change, see Note 1.3 for more information.

Akelius goodwill

The total carrying amount of the Akelius goodwill amounted to SEK 15,622 as at 31 December 2023 (16,700). Heimstaden Bostad's operating segments are expected to benefit from the synergies derived by combining the Akelius and Heimstaden Bostad asset base and lower financing cost. Goodwill of SEK 10,960 (12,950) attributable to the difference between nominal tax and the deferred tax that is calculated on the acquisition of properties.

The projected cash flows have been updated to reflect the budget approved by the Board of Directors at the end of 2023. Based on the budget and assumptions on inflation, rent adjustments at churn, the expected cash flow for the following four-year period is estimated. Based on the final year of the estimated five-year period, the terminal value of the cash flows is calculated using Gordons-growth model.

The discount rate applied is specified per CGU in table. The growth rate used beyond the five-year period was held constant at 2.0% (2.0%), the same growth rate was applied to all CGU's. As a result of the impairment test, management did not identify impairment for these CGU's at the balance sheet date. Management did however recognise an impairment of 1,058 million in the first quarter of 2023, due to a steep increase in interest rates. The impairment was allocated to the CGU's Denmark, Netherlands, and Finland.

Country Management goodwill

The carrying amount of the Country Management goodwill amounted to SEK 2,869 million as at 31 December 2023 (2,869). The goodwill is derived from the management companies in each country and relates to operational cost savings. The projected cash flows have been updated to reflect the budget approved by the Bord of Directors at the end of 2023. The discount rate applied is specified per CGU in table. The growth rate used beyond the five-year period was held constant at 2.0% (2.0%), the same growth rate was applied to all CGU's. As a result of the analysis, the economic benefits derived from the combined asset base is higher than the operating segment's carrying amount. Henc, no impairment was identified.

Assumptions

The calculation of value in use for both Akelius CGU's and Country Management CGUs are both sensitive to the following assumptions.

Net Operating Income (NOI)

NOI reflect the budget approved by the Board of Directors and is influenced by a combination of factors, ranging from setting competitive rental rates, inflation forecasts, maintaining investment properties, managing operating expenses and the transition to green economy. Cash flow between two and five years are based on long term financial plan with growth specific for each CGU.

Discount rates

The discount rate calculation is based on the specific circumstances of the Group and its operating segments and is derived from its weighted average cost of capital (WACC). The WACC takes into account both equity and debt. The cost of equity is derived from the risk free rate, market risk premium and levered beta. These factors are derived from public available market data and is segment specific. Beta is updated and evaluated when conducting an impairment assessment The cost of debt is based on the average borrowing cost and leverage rate of a group of relevant peers. In addition, the group has issued and obtained green financing, which require investments in environmentally sustainable projects, which can influence cost of debt.

Growth rates

Growth rates are based on external observable data published by well reputable industry researchers. The terminal growth rate is corresponding to 2.0% (2.0%) for all CGU's. This growth is based on reasonable prudence and does not exceed long term growth for the industry.

Sensitivity analysis

Heimstaden Bostad has conducted an analysis on the assumptions with highest sensitivity within the impairment assessment. The change in assumption is applied based on management's best estimate on what could be a reasonable change of the different assumptions. The analysis assumes all other variables/assumptions held constant.

Akelius goodwill

Assumption	Change in assumption	Impairment (SEK million)
Discount rates	+0.25 pp	2,366
Terminal Growth rates	- 0.25 pp	0

Country Management goodwill

Assumption	Change in assumption	Impairment (SEK million)
Discount rates	+0.25 pp	0
Terminal Growth rates	- 0.25 pp	0

Impairment of Country management goodwill will start with an increase of discount rate of 1 percentage point, all other factors held constant or decrease of growth rate of 2 percentage points, all other factors held constant.

Carrying amount of goodwill allocated by CGU

	2023			2022
	Discount rate	Goodwill Akelius Lägenheter Aktiebolag, Akelius Bolig Holding ApS and Akelius GmbH	Goodwill Country Management	Discount rate	Goodwill Akelius Lägenheter Aktiebolag, Akelius Bolig Holding ApS and Akelius GmbH	Goodwill Country Management
Sweden	5.0	2,851	243	5.3	3,928	223
Germany	4.5	9,937	899	4.9	9,981	828
Denmark	4.7	2,366	1,331	4.9	1,998	1,097
Netherlands	5.0	468	162	5.4	677	133
Czechia	7.0	-	197	-	-	420
Norway	5.9	-	21	-	-	125
United Kingdom	6.9	-	4	5.8	-	9
Finland	5.6	-	6	-	116	6
Poland	7.9	-	7	-	-	27
Total		15,622	2,869		16,700	2,869

3.3 Machinery and equipment

Accounting policies

Machinery and equipment mainly comprises machinery, office and computer equipment. Machinery and equipment are recognised at cost less accumulated depreciation and impairment. Cost includes expenses directly attributable to the acquisition of the asset. Additional expenses are capitalised to the asset's carrying amount or recognised as a separate asset only if it is likely that future economic benefits associated with the asset will be received by the Group and when the cost of the asset can be reliably calculated. The useful life of computer equipment and of other machinery and equipment has been calculated at three years and five years, respectively. Depreciation is applied on a straight-line basis over the useful life and is recognised in Statement of Comprehensive Income. The residual value of the assets and their useful life is reviewed at every closing and adjusted when necessary.

SEK million	Equipment
Opening balance, 1 January 2022	120
Business combinations	133
Investments for the year	16
Changes in value from foregin currency	6
Closing balance, 31 December 2022	274
Opening balance accumulated depreciation, 1 January 2022	-61
Business combinations	-65
Depreciation for the year	-18
Divestments	1
Change in value from foregin currency	1
Closing balance accumulated depreciation, 31 December 2022	-143
Carrying amount, 31 December 2022	131
Opening balance, 1 January 2023	274
Acquisitions	26
Investments for the year	43
Divestments	-6
Changes in value from foregin currency	-7
Closing balance, 31 December 2023	331
Opening balance accumulated depreciation, 1 January 2023	-143
Depreciation for the year	-18
Divestments	3
Change in value from foregin currency	2
Closing balance accumulated depreciation, 31 December 2023	-157
Carrying amount, 31 December 2023	174

3.4 Investments in associated companies and joint ventures

Accounting policies

The group has interest in associated companies and joint ventures. Associated companies and joint ventures are investments where Heimstaden Bostad has significant influence or joint control. The investments are accounted for using the equity method in the Consolidated Financial Statements. The financial information is based on the same reporting period as the Group.

Under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group's share of net assets of the associate or joint venture since the acquisition date.

The Statement of Comprehensive Income reflects the Group's share of the results of operations of the associate or joint venture. Unrealised gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.

Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in Statement of Comprehensive Income.

Impairment

At each reporting date, Heimstaden Bostad determines whether there is objective evidence that the investment in each joint venture and associated company is impaired. If there is such evidence, Heimstaden Bostad calculates the amount of impairment as the difference between the recoverable amount of the associated company and joint venture and its carrying value, and then recognises the loss as 'Share of profit of joint ventures' in the Statement of Comprehensive Income.

As the share price of Kojamo Oyi per 31 December 2023 was below book value, Heimstaden Bostad has performed an impairment test for its holding in the Company. The assessment is based upon the same assumptions as described in Note 3.2. Assumptions relevant are discount rate, net operating income and growth rate for Finland. With the assumptions applied, the recoverable amount exceeds the carrying amount. Fluctuations in the book equity of Kojamo will directly impact the value of our investment, with our proportional ownership share in the equity.

Investments in associated companies and joint ventures

SEK million	31 December 2023	31 December 2022
Opening balance	9,698	739
Investment for the year	16	186
Financial investments that were reclassified as associated companies ¹	-	10,058
Divestments of associated companies and joint ventures	-25	-
Change in value from foregin currency	6	332
Dividend from associated companies and joint ventures	-215	-
Share of net profits/losses of associated companies and joint ventures	-844	-1,617
Closing balance	8,636	9,698

¹ During 2022, the Company's investment in Kojamo Oyi was classified as an associated company based on an assessment of significant influence. The assessment of significant influence is determined by the fact that Heimstaden Bostad AB is by far the largest owner in Kojamo Oyi with significant voting power, owning 19.98%, and took a position on the nomination committee of the company in September 2022. Based on the difference between the cost of the investment and the Company's share of the estimated net fair value of the investee's identifiable assets and liabilities, Heimstaden Bostad recorded a bargain gain of SEK 2,027 million.

2023 Specifications of the Group's investments in associated companies

Company	Corp. ID No	Reg. office	No. of shares	Share in %	Value of share of equity in the Group, SEK million
Rosengård Fastighets AB	559085-4708	Malmö	25,000	25	231
Kojamo Oyj ¹	0116336-2	Helsingfors	49,389,283	20	8,070
Kiinteistö Oy Hiihtomäentie 14	0819867-2	Helsingfors	13,327	47	101
Asunto Oy Jyväskylän Tanhurinne	2550507-2	Jyväskylä	2,412	24	8
Asunto Oy Hämeenlinnan Aaponkuja 3	0476973-0	Hämeenlinna	3,339	33	3
Asunto Oy Jyväskylän Harjukartano	2000294-3	Jyväskylä	1,837	23	19
Asunto Oy Lahden Jyrkkärinteenpuisto	0149959-5	Lahti	2,094	41	23
Asunto Oy Lahden Roopenkuja	0854949-5	Lahti	2,556	26	5
Asunto Oy Jyväskylän Vaneritori 4	1656220-0	Jyväskylä	3,666	37	23
Asunto Oy Oulun Tulliveräjä	2335738-7	Oulu	4,068	41	17
Asunto Oy Puolukkavarikko	0823818-7	Jyväskylä	3,391	34	6
Asunto Oy Jyväskylän maalaiskunnan Kirkkotie 3	1518422-8	Jyväskylä	6,158	38	19
Asunto Oy Oulun Notaarintie 1	1749066-7	Oulu	2,440	24	15
Byggrätt Norr AB	559207-4859	Skellefteå	94	19	0
Total					8,540

¹ Heimstaden Bostad's share price of Kojamo Oyj as at 31 December 2023 amounted to SEK 6,546 million. Heimstaden Bostad have performed an impairment test and assessed that there is no need for write-down. Heimstaden bases its investment book value on its share of Kojamo Oy's equity. If Kojamo has not published its financial statements on time, Heimstaden estimates its share of Kojamo's equity using assumptions similar to its Finnish operations, adjusted for known portfolio differences.

2022 Specifications of the Group's investments in associated companies

Company	Corp. ID No	Reg. office	No. of shares	Share in %	Value of share of equity in the Group, SEK million
Rosengård Fastighets AB	559085-4708	Malmö	25,000	25	224
Kojamo Oyj ¹	0116336-2	Helsingfors	49,389,283	20	9,071
Kiinteistö Oy Hiihtomäentie 14	0819867-2	Helsingfors	13,327	47	102
Asunto Oy Jyväskylän Tanhurinne	2550507-2	Jyväskylä	2,412	24	7
Asunto Oy Hämeenlinnan Aaponkuja 3	0476973-0	Hämeenlinna	3,339	33	4
Asunto Oy Jyväskylän Harjukartano	2000294-3	Jyväskylä	1,837	23	19
Asunto Oy Lahden Jyrkkärinteenpuisto	0149959-5	Lahti	2,094	41	23
Asunto Oy Lahden Roopenkuja	0854949-5	Lahti	2,556	26	6
Asunto Oy Jyväskylän Vaneritori 4	1656220-0	Jyväskylä	3,666	37	24
Asunto Oy Oulun Tulliveräjä	2335738-7	Oulu	4,068	41	22
Asunto Oy Puolukkavarikko	0823818-7	Jyväskylä	3,391	34	7
Asunto Oy Jyväskylän maalaiskunnan Kirkkotie 3	1518422-8	Jyväskylä	6,158	38	20
Asunto Oy Oulun Notaarintie 1	1749066-7	Oulu	2,440	24	16
Byggrätt Norr AB	559207-4859	Skellefteå	94	19	0
Total					9,544

¹ Heimstaden Bostad's share price of Kojamo Oyj as at 31 December 2022 amounted to SEK 7,606 million. Heimstaden Bostad have performed an impairment test and assessed that there is no need for write-down. Heimstaden bases its investment book value on its share of Kojamo Oy's equity. If Kojamo has not published its financial statements on time, Heimstaden estimates its share of Kojamo's equity using assumptions similar to its Finnish operations, adjusted for known portfolio differences.

2023 Specifications of the Group's investments in joint ventures

Company	Corp. ID No	Reg. office	No. of shares	Share in %	Value of share of equity in the Group, SEK million
Upplands Bro Brogårds etapp 2	559175-4915	Stockholm	500	50	49
Gamlebro AB	556791-3990	Norrköping	500	50	16
Österåkerporten AB	559175-4907	Stockholm	500	50	32
Total					97

2022 Specifications of the Group's investments in joint ventures

Company	Corp. ID No	Reg. office	No. of shares	Share in %	Value of share of equity in the Group, SEK million
Upplands Bro Brogårds etapp 2	559175-4915	Stockholm	500	50	94
A Place 2 A/S	39754134	Charlottenlund	5,000	50	22
Gamlebro AB	556791-3990	Norrköping	500	50	11
Österåkerporten AB	559175-4907	Stockholm	500	50	26
Total					153

2023 Financial Statements

SEK million	Kojamo Oyj	Rosengård Fastighets AB	Upplands Bro Brogårds Etapp 2 AB	Kiinteistö OY Hiihtomäentie 14	Other
Rental income	5,074	160	16	7	34
Property expenses	-1,663	-43	-10	-6	-28
Net operating income	3,411	117	5	1	6
Corporate administrative expenses	-492	-13	-2	-1	-3
Financial items, net - including Group adjustments	-3,760	-17	-73	0	-7
Unrealised value change	-3,390	-68	-30	-2	-10
Tax expenses	267	7	8	0	2
Profit/loss for the period	-3,963	26	-91	-1	-12
Group's share of profit/loss	-792	7	-45	-1	-11
Financial position
Investment properties	89,532	1,898	787	157	900
Assets except investment properties	1,331	35	231	4	89
Equity	40,383	968	94	148	451
Liabilities	50,480	964	924	13	538
Group's carrying amount of the investment as of 31 December 2023	8,070	231	49	101	186

2022 Financial Statements

SEK million	Kojamo Oyj	Rosengård Fastighets AB	Upplands Bro Brogårds Etapp 2 AB	Kiinteistö OY Hiihtomäentie 14	Other
Rental income	1,148	159	5	6	99
Property expenses	-378	-76	-4	-8	-44
Net operating income	770	83	0	-2	54
Corporate administrative expenses	-130	-26	-1	0	-41
Financial items, net	-168	-16	-43	0	-61
Unrealised value change	-8,603	-167	-39	6	-509
Tax expenses	1,621	23	8	-1	44
Profit/loss for the period	-6,510	-104	-75	3	-513
Group's share of profit/loss	-1,301	-26	-38	4	-256
Financial position
Investment properties	90,950	1,972	823	159	859
Assets except investment properties	3,706	48	210	4	84
Equity	45,392	1,037	188	149	431
Liabilities	49,264	982	845	14	512
Group's carrying amount of the investment as of 31 December 2022	9,071	224	94	102	206

3.5 Other financial assets

SEK million	31 December 2023	31 December 2022
Funds granted for properties under construction	1,725	1,977
Loans granted to associated companies and joint ventures	557	1,053
Other	1,163	672
Closing balance	3,444	3,703

4. Current assets

4.1 Inventory properties

Accounting policies

Property acquired or being constructed or redeveloped for sale, rather than to be held for rental or capital appreciation, is held as inventory property and measured at the lower of cost and net realisable value (NRV). Principally, this is residential property that Heimstaden Bostad develops and intends to sell before, or on completion of, development. NRV for completed inventory property is assessed by reference to market conditions and prices existing at the reporting date, and is determined by the Group based on comparable transactions identified by the Group for property in the same geographical market serving the same segment. NRV in respect of inventory property under development is assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete the development and the estimated costs necessary to make the sale, considering the time value of money, if material. Inventory properties are primarily related to certain projects in Oslo, Norway.

SEK million	31 December 2023	31 December 2022
Opening balance	573	846
Capital expenditures	79	15
Currency translation	-38	27
Reclassification to non-current assets	-	-
Divestments of inventory properties	-80	-
Value change ¹	5	-315
Closing balance	538	573

¹ Value adjustment of inventory properties in the Statement of Comprehensive Income, SEK 25 million (402), also includes return on investment guarantee from Fredensborg of SEK 19 million (717).

In 2018, Fredensborg AS sold the Norwegian housing portfolio to Heimstaden Bostad. As part of the commercial agreement between the parties, Fredensborg AS guaranteed that the development projects would provide an annual equity return of at least 7.5% until April 2025. The guarantee is settled in cash on an ongoing basis for completed projects that do not generate a return above the minimum level, and the total guarantee responsibility must be settled in cash at the end of the guarantee period, with potential subsequent settlement for projects that have been started but not completed at this time.

The investment guarantee is not reflected in the table above. The balance as per 31 December 2023 is recognised as other financial assets, non-current.

4.2 Rent and trade receivables

Accounting policies

Heimstaden Bostad holds rent and trade receivables with the objective to collect contractual cash flows. Trade receivables are recognised initially at transaction price and subsequently at amortised cost using the effective interest method, less a provision for expected credit losses.

Heimstaden Bostad applies the simplified method for recognising expected losses for leases and trade receivables. This means that expected credit losses are recognised for the remaining term, which is expected to be less than one year for all receivables. Rent is invoiced in advance, meaning that all reported rent receivables have fallen due for payment. Heimstaden Bostad makes provisions for expected credit losses based on historical credit losses and forward-looking information. The change impacted "Profit before unrealised fair value adjustment" by the realised amount for each reporting period. Fair value adjustment of investment properties and value adjustment of inventory properties has changed with the realised amount for each reporting period.. Any major individual receivables are assessed per counterparty. To mitigate any risks regarding the leased properties, Heimstaden Bostad assesses the creditworthiness of its counterparties, receives rent deposits, and receives guaranties from its lessees. Heimstaden Bostad writes off a receivable when there is no longer any expectation of receiving payment and when active measures to obtain payment have been discontinued. See Note 6.1 for further information.

SEK million	31 December 2023	31 December 2022
Rent and trade receivables	227	359
Total rent and trade receivables	227	359

Age distribution of rent and trade receivables

SEK million	31 December 2023	31 December 2022
-30 days	111	250
31-60 days	32	21
61-90 days	18	12
91 days +	159	133
Total	320	415
Expected credit loss provision	-93	-56
Rent and trade receivables, net	227	359

Expected credit loss provision

SEK million	31 December 2023	31 December 2022
Opening balance	-56	-47
Provisions made during the year	-87	-95
Provisions used during the year	29	39
Unutilised provisions reversed during the year	22	47
Closing balance	-93	-56

4.3 Other financial assets

SEK million	31 December 2023	31 December 2022
Current tax assets	196	234
Deposits related to acquisitions	13	315
Receivable from sale of subsidiaries	-	3,937
Other receivables	655	382
Total	863	4,867

4.4 Prepayments

SEK million	31 December 2023	31 December 2022
Prepaid insurance premium	33	34
Prepaid interest	273	427
Prepaid operating expenses	338	379
Other	502	576
Total	1,146	4,867

4.5 Cash and cash equivalents

Accounting policies

Cash and cash equivalents primarily comprises of traditional cash and short-term, easily convertible investments that is readily convertible to a known amount of cash and subject to and insignificant risk of changes in value.

SEK million	31 December 2023	31 December 2022
Cash	5,625	9,385
Cash equivalents	5,650	-
Total	11,276	9,385

There are unutilised credit commitments of SEK 18,855 million (19,847), which are not included in cash and cash equivalents.

4.6 Other adjustments in Statement of Cash Flows

SEK million	2023	2022
Depreciation	124	50
Rental losses	86	74
Exchange rate difference	-419	6,578
Other financial items	-928	993
Realised gains/losses from divestment of properties	-235	-10
Impairment of goodwill	1,058	-
Total	-313	7,685

5. Equity

At the end of the financial year there were 12,914,568 (12,563,147) ordinary shares, 200 (200) Share Class A shares, 47,155,687 (45,872,521) Share Class B shares and, 941,963 (514,421) Share Class C shares. The voting value of an ordinary share is one half vote per share, the voting value for Share Class A and B shares is one tenth of a vote per share and the voting value for Share Class C shares is one vote per share.

Event	Type	Date of registration	Change in number of shares	Total number of shares
Opening balance, 1 January 2022				45,258,892
New share issue	Ordinary, Share Class B	29.03.2022	9,671,291	54,930,183
New share issue	Ordinary, Share Class B and C	25.07.2022	3,554,262	58,484,445
New share issue	Ordinary, Share Class B and C	21.12.2022	465,844	58,950,289
Closing balance, 31 December 2022				58,950,289
Opening balance, 1 January 2023				58,950,289
New share issue	Ordinary, Share Class B and C	06.03.2023	2,062,129	61,012,418
Closing balance, 31 December 2023				61,012,418

Event	Change in share capital	Total share capital	Par value
Opening balance, 1 January 2022		71,595,578	1.58
New share issue	15,298,995	86,894,573	1.58
New share issue	5,622,480	92,517,053	1.58
New share issue	736,918	93,253,971	1.58
Closing balance, 31 December 2022		93,253,971	1.58
Opening balance, 1 January 2023		93,253,971	1.58
New share issue	3,262,078	96,516,048	1.58
Closing balance, 31 December 2023		96,516,048	1.58

Other capital contributions

Other contributed capital refers to equity contributed by the owners, as well as share premiums for issues of ordinary shares and other share classes.

In 2023, SEK 3,337 million has been raised from new equity offerings, whereof SEK 2,418 million as a result of raising equity from existing shareholders. SEK 2,418 million of dividends were set-off against the subscripted price in the share issue.

Hybrid bonds

Accounting policies

At initial recognition, the hybrid bonds are classified as an equity instrument. The classification is based on that there is no explicit contractual obligation to settle the agreement by paying cash or another financial asset. Nor are there any other circumstances indicating that the agreement will be settled in cash or other financial assets. Heimstaden Bostad is entitled to postpone interest payments for an indefinite period in so far as hybrid bond holders are notified within the agreed period and the hybrid bond is subordinated to all other creditors.

Heimstaden Bostad had SEK 24.2 (24.3) billion in outstanding hybrid bonds. These have a perpetual maturity with a variable coupon rate. Heimstaden Bostad has the opportunity to redeem outstanding hybrid bonds as of first possible redemption day, which is 5-7 years from the issue date. See Note 6.3 for further details.

During 2023, Heimstaden Bostad bought back hybrid bonds amounting to SEK 82 million. The company realised an average discount of 34.6%, corresponding to net gain of SEK 25 million after tax.

Currency translation difference

Accumulated translation differences arise as a result of translation of foreign operations that have prepared their financial statements in a currency other than the currency in which the Group's financial statements are presented. Please refer to Note 2.12 for specification of other comprehensive income.

Retained earnings

Retained earnings refer to earned profits in the Group. This item also includes previous allocations to the reserve fund.

Non-controlling interests

Non-controlling interests consist of external ownership interests in subsidiaries and their subsidiaries. Non-controlling interests refers primarily to Allianz Real Estate's investments in Heimstaden Bostad.

Non-controlling interests' share of comprehensive income/loss for the period

SEK million	2023	2022
Comprehensive income/loss for the period	-1,880	-216

6. Capital structure and financial items

6.1 Financial instruments

Accounting policies

Financial assets

The Group's financial assets include rent and other trade receivables, cash, derivative financial instruments and publicly traded shares.

For purposes of initial and subsequent measurement, Heimstaden Bostad's financial assets are classified in two categories:

•

Financial assets at fair value through Statement of Comprehensive Income (derivative financial instruments). These financial assets are carried in the Statement for financial position at fair value with fair value changes recognised in Statement of Comprehensive Income line item fair value adjustment of derivative financial instruments.

•

Financial assets at amortised cost (rent and other trade receivables, and cash). These financial assets are measured using the effective interest method. Gains and losses are recognised in Statement of Comprehensive Income when asset is derecoginsed, modified or impaired. The financial assets are only classified in this category if the financial asset is held to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

Impairment of financial assets

Financial assets of the Group is subject to value change. Assets carried at fair value such value change part of the fair value assessment. Financial assets at amortised cost are subject to impairment. The Group has identified rent and trade receivables for such impairment, please refer to Note 4.2 for accounting policy and details. Impairment of other financial assets are assessed to be immaterial at the reporting date.

Financial liabilities

Heimstaden Bostad's financial liabilities comprise interest-bearing liabilities, lease liabilities, derivative financial instruments, trade payables and other liabilties. The main purpose of these financial liabilities is to finance the Group's operations. All financial liabilities are recognised initially at fair value and, except for derivative financial instruments and trade payables, net of directly attributable transaction costs. For the purposes of subsequent measurement, all financial liabilities, except derivative financial instruments, are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in Statement of Comprehensive Income when the liabilities are derecognised, as well as through the effective interest rate amortisation process. Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate.

The effective interest rate amortisation is included as interest expenses in the Statement of Comprehensive Income.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Comprehensive Income.

When the group repurchase financial liabilities, the existing financial liability is derecognised at carrying amount. Differences between carrying amount and fair value is recognised in Other financial items in the Statement of Comprehensive Income.

Derivative financial instruments

Heimstaden Bostad does not apply hedge accounting in accordance with IFRS 9. Derivative financial assets and liabilities are classified as financial assets or liabilities at fair value through Statement of Comprehensive Income. Derivative financial assets and liabilities comprise mainly interest rate swaps, and forward purchase contracts ( Note 3.1) for investment properties held in limited liability companies. Recognition of the derivative financial instruments takes place when the economic contracts are entered. They are measured initially and subsequently at fair value; transaction costs are included directly in fair value adjustment of derivative financial instruments. When forward purchase contracts for investment properties held in limited liability companies are settled and the Group takes control of the new subsidiary, the fair value of the forward contract is transferred to the fair value of the investment property.

The Group accounts for forward purchase contracts of investment properties held in limited liability companies as a financial instrument under IFRS 9 at fair value through Statement of Comprehensive Incomes, where the investment properties are valued based on the assumption that it will be completed and then let out. For further information, see Note 3.1.

Derivatives are classified based on their final settlement date. Derivatives with settlement date within 12 months are classified as current asset/liability and derivatives that are expected to be held for more than 12 months and with settlement date after 12 months are classified as non-current.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the Consolidated Statement of Financial Position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Fair Value Measurements of Financial Instruments

Below is a comparison of the carrying amounts and fair values of financial assets and financial liabilities:

	31 December 2023		31 December 2022
SEK million	Carrying amount	Fair value	Carrying amount	Fair value
Financial assets
Derivative financial instruments	498	498	1,481	1,481
Other financial assets, non-current	3,444	3,444	3,703	3,703
Rent and trade receivables	227	227	359	359
Other financial assets, current	863	863	4,867	4,867
Cash and cash equivalents	11,276	11,276	9,385	9,385
Total	16,308	16,308	19,796	19,796
Financial liabilities
Derivative financial instruments	481	481	127	127
Interest-bearing liabilities, non-current	171,650	156,872	171,119	155,011
Other financial liabilities, non-current	1,614	1,614	2,700	2,700
Interest-bearing liabilities, current	19,601	19,601	11,572	11,572
Trade payables	738	738	833	833
Lease liabilities	1,175	1,175	1,416	1,416
Other liabilities, current	1,017	1,017	3,008	3,008
Total	196,275	181,497	190,773	174,665

The following tables provide the fair value measurement hierarchy of the Group's financial assets and financial liabilities:

As at 31 December 2023

		Fair value measurement using:
SEK million	Total	Quoted prices in active markets (Level 1)	Significant observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Financial assets measured at fair value:	498	-	363	135
Derivative financial assets
Interest rate swaps	363	-	363	-
Foward purchase contracts	135	-	-	135
Financial liabilities measured at fair value:	-481	-	-481	-
Derivative financial liabilities
Interest rate swaps	-481	-	-481	-
Loan for which fair values are disclosed	156,872	-	66,676	90,196
Loans and borrowings	156,872	-	66,676	90,196

There were no changes in the Group's valuation processes, valuation techniques, or types of inputs used in the fair value measurements during the period. In 2022, Heimstaden Bostads holding in quoted equity investments were reclassified to associated companies. Upon this classification value change of quoted equity investments was SEK -2,208 million. There were no transfers between Level 1 and Level 2 fair value measurements during 2023, and no transfers into or out of Level 3 fair value measurements during 2023.

As at 31 December 2022

		Fair value measurement using:
SEK million	Total	Quoted prices in active markets (Level 1)	Significant observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Financial assets measured at fair value:	1,481	-	1,281	200
Derivative financial assets
Cross currency swap	163	-	163	-
Interest rate swaps	1,118	-	1,118	-
Foward purchase contracts	200	-	-	200
Financial liabilities measured at fair value:	-127	-	-127	-
Derivative financial liabilities
Interest rate swaps	-127	-	-127	-
Loan for which fair values are disclosed	155,011	-	75,633	79,378
Loans and borrowings	155,011	-	75,633	79,378

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based on the lowest-level input that is significant to the fair value measurement as a whole, as follows:

	Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
	Level 2 - Valuation techniques for which the lowest-level input that is significant to the fair value measurement is directly or indirectly observable.
	Level 3 - Valuation techniques for which the lowest-level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest-level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no changes in the Group's valuation processes, valuation techniques, and types of inputs used in the fair value measurements during the period. For more information regarding fair value hierarchy see Note 3.1.

Maturity, interest rate derivatives

		31 December 2023
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Maturity, year
Within 1 year of the Balance Sheet date	Paying	16,052	29	0.21
Within 1-2 year of the Balance Sheet date	Paying	5,391	10	2.94
Within 2-3 year of the Balance Sheet date	Paying	8,787	16	2.89
Within 3-4 year of the Balance Sheet date	Paying	11,078	20	2.72
Within 4-5 year of the Balance Sheet date	Paying	8,427	15	2.74
>5 years after balance sheet date	Paying	4,994	9	2.88
Total interest rate derivatives		54,728	100	2.05

	31 December 2022
SEK million	Nominal amount	Share, %	Average interest, % ¹
Maturity, year
Within 1 year of the Balance Sheet date	22,786	50	0.89
Within 1-2 year of the Balance Sheet date	10,976	24	-0.11
Within 2-3 year of the Balance Sheet date	1,013	2	0.35
Within 3-4 year of the Balance Sheet date	106	0	1.53
Within 4-5 year of the Balance Sheet date	3,107	7	2.88
>5 years after balance sheet date	7,753	17	2.88
Total interest rate derivatives	45,742	100	1.11

		31 December 2023
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Maturity, year
Within 1 year of the Balance Sheet date	Received	53,931	99	-3.58
Within 1-2 year of the Balance Sheet date	Received	797	1	-1.69
Within 2-3 year of the Balance Sheet date	Received	-	-	-
Within 3-4 year of the Balance Sheet date	Received	-	-	-
Within 4-5 year of the Balance Sheet date	Received	-	-	-
>5 years after balance sheet date	Received	-	-	-
Total interest rate derivatives		54,728	100	-3.55

	31 December 2022
SEK million	Nominal amount	Share, %	Average interest, % ¹
Maturity, year
Within 1 year of the Balance Sheet date	44,916	98	-2.30
Within 1-2 year of the Balance Sheet date	-	-	-
Within 2-3 year of the Balance Sheet date	825	2	-1.70
Within 3-4 year of the Balance Sheet date	-	-	-
Within 4-5 year of the Balance Sheet date	-	-	-
>5 years after balance sheet date	-	-	-
Total interest rate derivatives	45,742	100	-2.29

Maturity, cross currency swaps

		31 December 2023
SEK million	Type	Nominal amount	Share, %	Average interest, % ¹
Within 1 year of the Balance Sheet date	Receives variable	-	-	-
Within 1-2 year of the Balance Sheet date	Receives variable	-	-	-
Within 2-3 year of the Balance Sheet date	Receives variable	-	-	-
Within 3-4 year of the Balance Sheet date	Receives variable	-	-	-
Within 4-5 year of the Balance Sheet date	Receives variable	-	-	-
>5 years after balance sheet date	Receives variable	-	-	-
Total cross currency swaps		-	-	-

	31 December 2022
SEK million	Nominal amount	Share, %	Average interest, % ¹
Within 1 year of the Balance Sheet date	5,624	100	4.96
Within 1-2 year of the Balance Sheet date	-	-	-
Within 2-3 year of the Balance Sheet date	-	-	-
Within 3-4 year of the Balance Sheet date	-	-	-
Within 4-5 year of the Balance Sheet date	-	-	-
>5 years after balance sheet date	-	-	-
Total cross currency swaps	5,624	100	4.96
¹ Indicates average interest rate. A negative value indicates received interest.

6.2 Financial risks

The guiding framework for management of the financial risks is the financial policy together with key funding agreements such as the EMTN programme under which the Company's listed senior unsecured bonds are issued. Oversight of the financial policy is delegated to the Board per the Shareholder Agreement. The financial policy sets firm thresholds for financial risk and provides guidance to the daily funding operations of the Company. The key metrics of the financial policy can be found on page 80. The Board of the Company is provided with regular reporting and forecasts, as well as dedicated material covering financial risks and actions taken to mitigate these risks. The Company has identified Refinancing risk, Liquidity risk, Financial Obligations and Covenants, Interest rate risk, Rating risk, Currency risk and Credit risk as the key financial risks.

Refinancing risk

To minimise refinancing risk, the Company uses various funding sources with a diversified maturity profile. The Company's financial policy stipulates the level of key credit ratios, such as a minimum average loan tenor of the debt portfolio of 4 years. To mitigate refinancing risk, the Company also maintains adequate liquidity reserves and unutilised credit facilities.

Liquidity risk

Liquidity risk is the risk that the Company doesn't have the accessible means to fulfil its financial or operational obligations, or that the Group cannot pay for other obligations such as signed acquisitions and capital expenditures. To mitigate this risk, the Company has unutilised credit facilities of 18,855 SEK million available, a financial policy stating that there can never be more than 25% of debt maturing in a single year and that the estimated liquidity ratio always has to exceed 125%. See Note 6.3 and Note 6.4 for further information.

The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments (including interest payments):

Maturity 31 December, 2023, SEK million	0-1 years	1-5 years	>5 years
Derivative financial instruments	-	418	62
Interest-bearing liabilities ¹	25,210	111,918	112,158
Trade payables	738	-	-
Lease liabilities	97	81	1,015
Other financial liabilities	2,631	-	-
Total	28,675	112,418	113,236

Maturity 31 December, 2022, SEK million	0-1 years	1-5 years	>5 years
Derivative financial instruments	75	51	-
Interest-bearing liabilities ¹	14,583	100,328	100,895
Trade payables	833	-	-
Lease liabilities	84	120	1,369
Other financial liabilities	5,707	-	-
Total	21,282	100,499	102,264
¹ Of which interest-bearing liabilities excluding interest expenses amounts to SEK 191,757 million (183,250).

Financial obligations and Covenants

The Company's debt agreements include financial covenants such as

•

The EMTN programmes which are stating

―	Limitations on the Incurrence of Financial Indebtedness. Consolidated Solvency Ratio, defined as "Net Debt / Total Assets". Covenant limited to below 65%.
―	Maintenance of Consolidated Coverage Ratio, defined as "Profit before financial items" (or any equivalent line item) divided by net interest charges (interest expense minus interest income). Covenant limited to above 1.5x.

•

Limitations on the Incurrence of Secured Indebtedness. "Secured LTV", defined as secured debt divided by total assets. The covenant is limited to below 45%.

•

Bank and mortgage facilities: often a set of covenants for individual properties and/or property portfolios, such as Loan to value, Interest coverage ratio and Equity ratio.

A breach of a financial covenant normally includes cure rights to give the Company time to meet the covenant with certain actions, but it can also lead to a requirements of extra ordinary amortization, termination of loans, or a claim on secured assets. The Company's financial policy stipulates levels of key credit ratios to ensure that no covenants are breached. Continuous internal review and external auditing assures accurate reporting and information. There have been no breaches of the financial covenants of any interest-bearing loans and borrowing in the current period.

Rating risk

The Company views an investment grade rating as fundamental to conducting its business, meeting obligations and to ensure access to capital. A rating downgrade below investment grade may be seen as negative by the Company's creditors hence the access to financing and the terms can deteriorate. Heimstaden Bostad is nurturing its capital markets reputation.

Credit risk

If counterparties cannot meet their obligations towards the Company or if a substantial number of customers fail to pay rent, it would lead to reduced liquidity and losses. To counter this, the Company regularly assesses the creditworthiness of its counterparties. For the majority of rental contracts rent is paid in advance and risk is further reduced through a large and diversified customer base.

Interest rate risk

Rising interest rates increase the financing cost for the Company and may negatively impact profitability. According to the financial policy, the Company shall maintain at least 75% of its loan portfolio at a fixed rate as of the balance sheet date, which is managed through having a high share of fixed rate loans and bonds together with interest rate swaps, see Note 6.4 for further information.

Currency risk

The Company owns assets in other currencies than the reporting currency, which leads to a risk of negative impact on cash flows or asset values in the case of fluctuating currency exchange rates. To mitigate this risk the Company is targeting a currency match funding principle between assets and liabilities.

Changes in values of derivatives

The value of currency derivatives may be affected by changes in base rates or foreign currency exchange rates. The Company's financial policy dictates which derivative instruments may be used for hedging strategies, stating that only marketable instruments for which prices can be obtained may be utilised. The Company also continuously monitors market movements and obtains external and internal derivative valuations.

Interest rate sensitivity

The following table shows the sensitivity by a change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Group's profit before tax is affected as follows:

Interest expenses

2023

SEK million	Increase/decrease in underlying IBOR	Effect on profit before tax (+)	Effect on profit before tax (-)	Effect on equity (+)	Effect on equity (-)
	1%	271	-271	224	-224
	2%	543	-543	449	-449

2022

SEK million	Increase/decrease in underlying IBOR	Effect on profit before tax (+)	Effect on profit before tax (-)	Effect on equity (+)	Effect on equity (-)
	1%	445	-501	363	-363
	2%	850	-1,001	694	-694

Foreign currency sensitivity

The following table shows the sensitivity by a change in foreign currency on senior unsecured bonds. With all other variables held constant, the Group's profit before tax is affected through the impact of changes in foreign currency as follows:

2023

million	Increase/decrease in foreign currency rate	Effect on profit before tax (+)	Effect on profit before tax (-)
EUR	10%	1,346	-1,346
NOK	10%	290	-290

2022

million	Increase/decrease in foreign currency rate	Effect on profit before tax (+)	Effect on profit before tax (-)
EUR	10%	765	-765
NOK	10%	310	-310

6.3 Interest-bearing liabilities

	2023
SEK million	Interest-bearing liabilties	Secured loans, %	Share, %	Unutilised credit commitment
Corporate bonds	74,037	-	39
Mortgages/bank loans	117,720	99	61	18,855
Total	191,757	61	100	18,855
Deferred charges	-506
Total incl. deferred charges	191,250

	2022
SEK million	Interest-bearing liabilties	Secured loans, %	Share, %	Unutilised credit commitment
Corporate bonds	91,779	-	50	-
Mortgages/bank loans	91,471	99	50	19,847
Total	183,250	37	100	19,847
Deferred charges	-559
Total incl. deferred charges	182,691

As of 31 December 2023, SEK 861 million of the total unutilised credit commitments, is related to future ESG Capex and Construction Facilities.

Interest-bearing liabilities per currency

	2023		2022
Currency	SEK million	Local currencies	SEK million	Local currencies
SEK	31,020	31,020	33,459	33,459
NOK	3,010	3,035	3,826	3,600
EUR	119,575	10,736	110,840	9,933
DKK	38,151	25,541	35,125	23,385
Total	191,757		183,250
Deferred charges	-506		-559
Total incl. deferred charges	191,250		182,691

Quoted bonds

Maturity	Currency	Outstanding amount (million)	Of which held on own book (million)	Fair value (million) ²	Rating ³
2024-01-19	EUR	700	193	699	BBB
2024-10-13	EUR	1,250	96	1,180	BBB-
2025-07-24	EUR	700	24	622	BBB-
2026-01-21	EUR	500	15	429	BBB-
2027-03-03	EUR	700	27	557	BBB-
2028-04-13	EUR	750	96	540	BBB-
2028-07-24	EUR	500	30	361	BBB-
2029-09-06	EUR	750	72	496	BBB-
2031-10-13	EUR	750	50	476	BBB-
2035-05-04	EUR	50	-	30	BBB-
2035-05-04	EUR	50	-	30	BBB
Total		6,700	603	5,418
2024-01-22	SEK	850	750	846	BBB
2024-04-08	SEK	500	419	498	BBB
2025-02-25	SEK	800	-	766	BBB
2025-02-25	SEK	400	-	372	BBB
2025-04-07	SEK	750	-	710	BBB
2026-11-23	SEK	1,000	-	887	N/A
2027-02-22	SEK	500	-	442	N/A
Total		4,800	1,169	4,521
2024-06-07	NOK	500	428	494	BBB-
2025-02-25	NOK	400	-	365	BBB
2025-02-25	NOK	400	-	384	BBB
2026-04-22	NOK	1,250	-	1,133	BBB
2028-04-24	NOK	350	-	296	BBB
Total		2,900	428	2,672

Maturity	Fixed/Floating	Coupon (bps)	Exchange	ISIN
2024-01-19	Floating	Euribor 3m + 55	Euronext Dublin	XS2430702873
2024-10-13	Fixed	25	Euronext Dublin	XS2397239000
2025-07-24	Fixed	63	Euronext Dublin	XS2435603571
2026-01-21	Fixed	113	Euronext Dublin	XS2105772201
2027-03-03	Fixed	138	Euronext Dublin	XS2225207468
2028-04-13	Fixed	100	Euronext Dublin	XS2397252102
2028-07-24	Fixed	138	Euronext Dublin	XS2435611244
2029-09-06	Fixed	75	Euronext Dublin	XS2384269366
2031-10-13	Fixed	163	Euronext Dublin	XS2397252011
2035-05-04	Fixed	280	Euronext Dublin	XS2168047087
2035-05-04	Fixed	280	Euronext Dublin	XS2161838276
Total
2024-01-22	Fixed	88	Euronext Dublin	XS2420346517
2024-04-08	Floating	Stibor 3m + 67	Euronext Dublin	XS2327839580
2025-02-25	Floating	Stibor 3m + 130	Euronext Dublin	XS2259800121
2025-02-25	Fixed	137	Euronext Dublin	XS2259781230
2025-04-07	Floating	Stibor 3m + 80	Euronext Dublin	XS2327990649
2026-11-23	Floating	Stibor 3m + 110	Euronext Dublin	XS2412106853
2027-02-22	Floating	Stibor 3m + 140	Euronext Dublin	XS2447755351
Total
2024-06-07	Floating	Nibor 3m + 240	Oslo Børs	NO0010838899
2025-02-25	Fixed	202	Oslo Børs	NO0010906951
2025-02-25	Floating	Nibor 3m + 135	Oslo Børs	NO0010906944
2026-04-22	Floating	Nibor 3m + 95	Oslo Børs	NO0010976327
2028-04-24	Floating	Nibor 3m + 115	Oslo Børs	NO0010976335
Total

Hybrid bonds ¹

First Call Date	First Reset Date	Currency	Outstanding amount (million)	Of which held on own book (million)	Fair value (million) ²
2024-11-19	2025-02-19	EUR	800	211	419
2026-01-15	2026-04-15	EUR	500	164	211
2026-10-13	2027-01-13	EUR	600	119	237
2027-02-01	2027-05-01	EUR	800	176	279
2027-10-29	2028-01-29	EUR	600	254	211
Total			3,300	924	1,357

First Call Date	Rating ³	Fixed/Floating	Coupon (bps)	Exchange	ISIN
2024-11-19	N/A	Fixed	325	Euronext Dublin	XS2010037765
2026-01-15	BB+	Fixed	338	Euronext Dublin	XS2125121769
2026-10-13	BB+	Fixed	363	Euronext Dublin	XS2397251807
2027-02-01	BB+	Fixed	263	Euronext Dublin	XS2294155739
2027-10-29	BB+	Fixed	300	Euronext Dublin	XS2357357768
Total
¹ Hybrid bonds are classified as equity in the Statement of Financial Position. Maturity refers to first call date.
² Based on quoted market prices as of the Balance Sheet date.
³ Based on S&P rating or, if not available, on Fitch rating.

Maturity structure interest-bearing liabilities

	31 December 2023
SEK million	Loans and borrowings, secured	Loans and borrowings, unsecured	Total loans and borrowings	Share, %	Unutilised credit commitment	Share, %
Loan maturity
Within 1 year of the Balance Sheet date	107	18,869	18,976	10	81	0
Within 1-2 year of the Balance Sheet date	5,672	10,272	15,945	8	4,841	26
Within 2-3 year of the Balance Sheet date	30,486	7,638	38,124	20	11,794	63
Within 3-4 year of the Balance Sheet date	7,737	7,997	15,734	8	-	-
Within 4-5 year of the Balance Sheet date	10,367	14,166	24,533	13	2,138	11
>5 years after balance sheet date	61,989	16,456	78,445	41	-	-
Total	116,357	75,399	191,757	100	18,855	100

	31 December 2023
SEK million	Loans and borrowings, secured	Loans and borrowings, unsecured	Total loans and borrowings	Share, %	Unutilised credit commitment	Share, %
Loan maturity
Within 1 year of the Balance Sheet date	1,307	9,600	10,906	6	3,738	19
Within 1-2 year of the Balance Sheet date	1,995	23,854	25,849	14	1,000	5
Within 2-3 year of the Balance Sheet date	5,631	10,598	16,229	9	10,278	52
Within 3-4 year of the Balance Sheet date	25,080	7,908	32,988	18	-	-
Within 4-5 year of the Balance Sheet date	6,528	8,311	14,839	8	-	-
>5 years after balance sheet date	49,631	32,807	82,438	45	4,830	24
Total	90,171	93,079	183,250	100	19,847	100

The average remaining loan maturity, as at 31 Decmber 2023 was: 7.96 years (8.32)

	Interest maturity, 31 December 2023
SEK million	Secured borrowing	Unsecured borrowing	Total borrowing	Average interest rate,% incl. margin	Share, %
Interest maturity
Within 1 year of the Balance Sheet date	70,003	25,203	95,206	4.57	50
Within 1-2 year of the Balance Sheet date	5,486	8,326	13,812	1.11	7
Within 2-3 year of the Balance Sheet date	8,704	5,399	14,102	3.19	7
Within 3-4 year of the Balance Sheet date	6,597	7,497	14,094	2.37	7
Within 4-5 year of the Balance Sheet date	2,193	12,519	14,713	1.55	8
>5 years after balance sheet date	23,375	16,456	39,830	2.34	21
Total	116,357	75,399	191,757	3.36	100

	Interest maturity, incl financial instruments, 31 December 2023
SEK million	Total borrowing	Average interest rate,% incl. margin	Share, %
Interest maturity
Within 1 year of the Balance Sheet date	57,326	4.28	30
Within 1-2 year of the Balance Sheet date	18,406	1.62	10
Within 2-3 year of the Balance Sheet date	22,889	3.07	12
Within 3-4 year of the Balance Sheet date	25,172	2.52	13
Within 4-5 year of the Balance Sheet date	23,140	1.98	12
>5 years after balance sheet date	44,824	2.40	23
Total	191,757	2.93	100

	Interest maturity, 31 December 2022
SEK million	Secured borrowing	Unsecured borrowing	Total borrowing	Average interest rate,% incl. margin	Share, %
Interest maturity
Within 1 year of the Balance Sheet date	64,185	25,131	89,316	2.69	49
Within 1-2 year of the Balance Sheet date	1,839	14,799	16,638	0.37	9
Within 2-3 year of the Balance Sheet date	5,928	8,623	14,552	1.20	8
Within 3-4 year of the Balance Sheet date	3,006	5,580	8,585	1.23	5
Within 4-5 year of the Balance Sheet date	1,803	7,811	9,615	1.41	5
>5 years after balance sheet date	13,410	31,135	44,545	1.41	24
Total	90,171	93,079	183,250	1.92	100

	Interest maturity, incl financial instruments, 31 December 2022
SEK million	Total borrowing	Average interest rate,% incl. margin	Share, %
Interest maturity
Within 1 year of the Balance Sheet date	66,882	2.96	37
Within 1-2 year of the Balance Sheet date	27,614	0.18	15
Within 2-3 year of the Balance Sheet date	14,739	1.11	8
Within 3-4 year of the Balance Sheet date	8,692	1.23	5
Within 4-5 year of the Balance Sheet date	12,722	1.77	7
>5 years after balance sheet date	52,298	1.63	29
Total	182,947	1.85	100

The average remaining term of fixed interest in the loan portfolio, including derivatives, as at 31 Decmber 2023 was: 3.28 years (3.20)

Reconciliation of liabilities attributable to financing activities

SEK million	Corporate bonds	Mortgages/bank loans	Deferred charges	Lease liabilities	Total
Opening balance, 1 January 2022	75,282	83,651	-553	733	159,114
Loan repayments	-11,115	-29,154	-	-88	-40,358
New borrowings	21,507	27,150	-	693	49,349
Assumed debt in connection with acquisitions	-	3,912	-	-	3,912
Currency exchange effect on loans	6,106	5,913	-	69	12,087
Capitalisation of debt issuance cost, net of amortisation	-	-	-6	9	3
Closing balance, 31 December 2022	91,779	91,471	-559	1,416	184,107
Opening balance, 1 January 2022	91,779	91,471	-559	1,416	184,107
Loan repayments	-18,434	-7,990	-	-111	-26,535
New borrowings	719	34,544	-	-83	35,181
Assumed debt in connection with acquisitions	-	697	-	-	697
Currency exchange effect on loans	-28	-1,002	-	-46	-1,077
Capitalisation of debt issuance cost, net of amortisation	-	-	53	-	53
Closing balance, 31 December 2023	74,037	117,720	-506	1,176	192,426

During 2023, Heimstaden Bostad bought back SEK 11,868 million of outstanding senior unsecured bonds, obtaining an average discount of 7.5% and resulted in a SEK 839 million gain, net of SEK 173 million in tax, recognised in other financial items.

6.4 Capital management

Having access to long-term capital is important for Heimstaden Bostad to operate and actively optimise our property portfolio. The Company defines its managed capital as the sum of consolidated net debt and equity, including hybrid capital and the part attributable to non-controlling interests. The changed macro environment with higher rates has triggered changes to the capital structure to adjust to the changed circumstances. The Company has launched a strategic plan to reduce leverage, the privatisation plan, that will support renewed compliance with the financial policy that the Company is committed to.

Financial Policy

		Policy	2023	2022
Interest coverage ratio, S&P method	Multiple	≥ 1.8	1.7	2.7
Net debt / net debt + equity, S&P method	%	≤ 60	58.6	52.6
Average loan tenor	Years	≥ 4	8.0	8.3
Loan maturity in individual year	%	≤ 25	20	18
Loans from individual lender	%	≤ 20	7.7	8.1
Interest rate hedge ratio	%	≥ 75	86	76
Liquidity ratio	Multiple	≥ 1.25	1.40	1.49

6.5 Leases

Accounting policies

Heimstaden Bostad has a lease commitment for leasehold rights, premises, and vehicles. The commitment is classified as a lease liability in the Statement of Financial Position and the right to use the underlying asset during the lease term is classified as an asset. Amortisation of the asset is reported in the Statement of Comprehensive Income. Lease payments are reported partly as payment of interest and partly as amortisation of the lease liability. Lease payments are renegotiated at the end of the agreements to reflect market rents. The agreements mainly fall due for renegotiation in more than 5 years. Premises and vehicles are reported at discounted values in the Statement of Financial Position as a right-of-use asset and a lease liability. In the Statement of Comprehensive Income, the right-of-use asset is depreciated over the term of the agreement and payment made to the landlord / lessor is reported partly as amortisation of the lease liability and partly as interest expense in Statement of Comprehensive Income.

The Group applies the recognition exemption and recognise lease payments for low value leases and leases with lease term less than 12 months as other operating expenses in the Consolidated Statement of Comprehensive Income.

The table below shows the rights of use per category:

SEK million	Premises	Vehicles	Other	Total
Opening balance, 1 January 2022	15	2	-	17
Changes to contracts	157	82	1	240
Depreciation	-55	-29	-1	-84
Currency translation	7	3	-	10
Closing balance, 31 December 2022	125	58	1	183
Changes to contracts	29	51	-	80
Depreciation	-71	-35	-1	-106
Currency translation	0	0	0	0
Closing balance, 31 December 2022	83	74	0	158

Below are the carrying amounts of lease liabilities and the movements during the period:

SEK million	2023	2022
As at 1 January	1,416	733
Additions	136	728
Divestments	-225	-35
Accretions of interest	5	7
Payments	-111	-88
Reclassification	0	2
Currency translation	-46	69
As at 31 December	1,175	1,416
Current	85	84
Non-current	1,091	1,331

The following amounts are recognised in Statement of Comprehensive Income:

SEK million	2023	2022
Depreciation expense of right-of-use assets	-106	-84
Interest expense on lease liabilities	-5	-7
Expense relating to short-term leases	-4	-2
Expense relating to leases of low-value assets	-4	-1
Total amount recognised in Statement of Comprehensive Income	-119	-94

Breakdown of undiscounted lease debt:

SEK million	2023	2022
Within one year	97	99
1-5 years	81	120
> 5 years	1,015	1,369
Total	1,193	1,588

The Group's lease income from operating leases is presented in rental income in Statement of Comprehensive Income. For more information see Note 2.2.

The Group had total cash outflows as a lessee of SEK 111 million (88).

7. Other liabilities

7.1 Deferred tax

Accounting policies

Deferred tax is estimated in accordance with the liability method based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Heimstaden Bostad recognise temporary differences from fair value adjustments of investment property, derivative financial instruments and other events affecting the tax and accounting treatment of assets and liabilities.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

•	When deferred tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
•	Deferred tax is not accounted for in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal can be controlled by Heimstaden Bostad and it is probable that it will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised, exept:

•	When it arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
•	In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. Deferred tax is recognised on subsequent changes to the taxable and temporary differences.

Deferred tax

	2023		2022
SEK million	Tax base	Deferred tax	Tax base	Deferred tax
Deferred tax asset loss carryforwards
Opening balance	-5,034	-982	-1,085	-236
Change for the year	766	182	-3,949	-746
Closing balance	-4,268	-800	-5,034	-982
Deferred tax liabilities investment properties
Opening balance	95,568	22,694	91,163	21,880
Depreciation for the year	282	58	246	51
Value change for investment properties	-24,964	-5,489	-5,436	-1,315
Reversal for the year due to sale	-120	-26	-156	-32
Corporate acquisition	-	-	9,751	2,110
Changed tax rate	-	500	-	-
Closing balance	70,766	17,738	95,568	22,694
Derivative financial instruments
Opening balance	1,354	281	434	91
Change for the year	-1,337	-261	920	190
Closing balance	17	20	1,354	281
Other temporary differences
Opening balance	-396	-33	629	169
Change for the year	3,614	768	-1,025	-202
Closing balance	3,218	735	-396	-33
Net deferred tax
Opening balance	91,492	21,960	91,141	21,904
Change for the year	-21,759	-4,268	351	56
Closing balance	69,733	17,692	91,492	21,960

Capitalised tax loss carryforward relates to a tax loss of SEK 4,268 million (5,034). There are no expiry date on capitalised tax losses carried forward.

7.2 Other liabilities

SEK million	31 December 2023	31 December 2022
Current tax liabilities	37	603
Real estate transfer tax	103	1,543
Liabilities related to real estate transactions	405	392
Social security charges	18	21
Other liabilites	454	448
Total	1,017	3,008

7.3 Accrued expenses and prepaid income

SEK million	31 December 2023	31 December 2022
Accrued interest	652	593
Prepaid rent	479	513
Accrued personnel expenses	114	95
Accrued operating expenses	488	751
Accrued administrative expenses	30	51
Other accrued items	959	755
Total	2,721	2,758

8. Other disclosures

8.1 Related-party disclosures

Transactions with related parties are carried out at arm's length terms.

The following are defined as related parties:

•	All companies within the Heimstaden- and Fredensborg Group
•	Board Members and Group management
•	Close family members of Board Members or Group management
•	Companies controlled by Board Members or Group management
•	Shareholders in control of more than 10% of the shares or votes in the Group
•	Transactions with associated companies and joint ventures

Summary of transactions with related parties

In 2023, Heimstaden Bostad acquired administrative services from Heimstaden AB and its subsidiaries for SEK 860 million (1,716).

The reduction in acquired administrative services from 2022 is due to the sell-down of the Country Management organisation from Heimstaden AB to Heimstaden Bostad on July 1, 2022.

In 2023, Heimstaden Bostad AB acquired properties from Group companies for SEK 0 million (157).

Heimstaden Bostad AB received an investment guarantee from Fredensborg AS in 2018, recognised in non-current other financial assets. The investment guarantee decreased with SEK 22 million to SEK 695 million during 2023 (717), see Note 4.1 for more information.

In 2023, Ivar Tollefsen and his family received SEK 11 million (12) in total fees for ground rent.

Transactions with associated companies and joint ventures

SEK million	2023	2022
Interest income from investments in associated companies and joint ventures	51	39
Loans to associated companies and joint ventures	-7	104
Acquisition of joint venture to subsidiary	-489	-
Capital contributions to investments in associated companies and joint ventures	16	41

In addition to the related parties presented above see also Note 3.4, Associated companies and joint ventures, and Note 2.6 Employee benefit expenses and senior management compensation.

8.2 Pledged assets

SEK million	31 December 2023	31 December 2022
Mortgages ¹	156,349	102,993
Pledged shares in subsidiaries, associated companies and joint ventures ¹	12,336	10,750
Total	168,685	113,743
¹ The collateral has been pledged with regard to interest-bearing loans from credit institutions.

8.3 Contingencies and commitments

Investment obligations and capital expenditures

Heimstaden Bostad has entered into contracts with sellers of investment property under construction placed in a corporate wrapper. Heimstaden Bostad will acquire 100% of the outstanding shares in the corporate wrapper at a future date. The contract is either for a fixed price (forward purchase) or at a variable price (forward funding) based on the equity in the corporate wrapper, where the investment property is measured at fair value. The arrangements are recognised as financial instruments under IFRS 9 at fair value through Statement of Comprehensive Income. For more information see Note 6.1.

As of 31 December 2023, Heimstaden Bostad had total investment obligations of SEK 1,595 million (5,492). The forward funding contracts with third parties is committed to future capital expenditure in respect of investment properties under construction of SEK 2,019 million (3,676).

During the year, Heimstaden Bostad reached agreements with developers on four turn-key projects whereby the developers have bought themselves out of their turnkey obligations via payment to Heimstaden Bostad. As a result of the agreement, Heimstaden Bostad also reduces future commitments by SEK 1,713 million. The income and acquisition cost from these agreements are recognised in other operating income and other operating expenses, respectively.

2023

SEK million	2024	2025	2026	2027	Total
Forward funding	1,430	445	39	21	1,934
Own development	85	-	-	-	85
Forward purchase	1,592	3	-	-	1,595
Total	3,107	448	39	21	3,614

2022

SEK million	2023	2024	2025	2026	Total
Forward funding	923	1,629	615	282	3,450
Own development	25	202	-	-	226
Forward purchase	3,179	1,862	451	-	5,492
Total	4,127	3,693	1,066	282	9,168

Disputes

As of the balance sheet date and to the best of our knowledge, Heimstaden Bostad is not a part in any ongoing legal processes or administrative proceedings which have had or may have a material impact to its financial statements.

8.4 Events after the reporting period

The outstanding amounts of a EUR senior unsecured bond ISIN XS2430702873 and SEK senior unsecured bond ISIN XS2420346517 were redeemed, a total of EUR 507 million and SEK 100 million, respectively.

The financial statements form part of the Annual Report and were approved by the Board of Directors and the CEO on 26 February 2024.

Parent Company Financial Statements and Notes

Parent Company Income Statement

SEK million	Note	2023	2022
Management service income		390	450
Other operating expenses		-44	-58
Administrative expenses	2.1, 2.2, 7.2	-778	-777
Operating profit/loss		-432	-385
Dividends from subsidiaries		99	-
Dividends from associated companies and joint ventures		215	-
Results from divestment of shares in subsidiaries	2.3	-	-2,018
Impairment of investment in subsidiaries and associated companies	3.1, 7.4	-2,716	-175
Interest income	2.4	4,128	2,012
Interest expenses	2.4	-2,138	-1,333
Net currency translation gains/losses	2.4	-165	-4,902
Fair value adjustment of derivative financial instruments	5.2	-16	174
Other financial items	2.4	4	-74
Profit/loss after financial items		-1,021	-6,701
Appropriations	2.5	1,078	5,517
Profit/loss before tax		57	-1,184
Income tax expense	2.6	-	-
Deferred tax income/expense	2.6	-77	540
Profit/loss for the period		-20	-644

Parent Company Statement of Comprehensive Income

SEK million	Note	2023	2022
Profit/loss for the year according to the Income Statement		-20	-644
Other comprehensive income		-	-
Total comprehensive income/loss		-20	-644

Parent Company Statement of Financial Position

SEK million	Note	31 December 2023	31 December 2022
ASSETS
Shares in subsidiaries	7.4	60,115	55,643
Investments in associated companies and joint ventures	3.1	8,096	9,544
Bonds		5,683	511
Deferred tax assets	3.2	439	555
Non-current receivables, subsidiaries	3.3, 7.2	90,696	97,472
Total non-current assets		165,028	163,725
Current receivables, subsidiaries	3.4, 7.2	43,005	48,374
Accrued income, group companies		188	-
Other financial assets		126	4,016
Cash and cash equivalents	3.5	8,777	4,735
Total current assets		52,097	57,125
TOTAL ASSETS		217,124	220,850

SEK million	Note	31 December 2023	31 December 2022
EQUITY AND LIABILITIES
Share capital		97	93
Restricted equity		97	93
Share premium reserve		129,437	126,110
Hybrid bonds		24,234	24,316
Retained earnings		-38,706	-31,122
Unrestricted equity		114,966	119,304
Total equity	4.1	115,062	119,397
Interest-bearing liabilities	5.1	18,855	18,775
Derivative financial instruments	5.2	318	127
Deferred tax liability		483	518
Non-current liabilities, subsidiaries	6.1, 7.2	81,628	72,158
Total non-current liabilities		101,285	91,577
Interest-bearing liabilities	5.1	302	9,600
Trade and other payables		1	2
Short-term debt, group companies		39	-
Accrued expenses, group companies		187	-
Accrued expenses and prepaid income	6.2	248	275
Total current liabilities		778	9,877
TOTAL EQUITY AND LIABILITIES		217,124	220,850

Parent Company Statement of Changes in Equity

SEK million	Share capital	Share premium reserve	Hybrid bonds	Retained earnings	Total equity
Opening balance, 1 January 2022	72	95,176	33,652	-4,625	124,274
Profit/loss for the period	-	-	960	-1,604	-644
Total profit/loss	-	-	960	-1,604	-644
New share issue	22	30,970	-	-	30,991
Costs of issuance	-	-36	-	-	-36
Buyback of hybrid bonds	-	-	-9,336	1,692	-7,644
Dividends	-	-	-960	-26,585	-27,545
Total transactions with the Company's shareholders	22	30,934	-10,296	-24,893	-4,233
Equity, 31 December 2022	93	126,110	24,316	-31,122	119,397
Opening balance, 1 January 2023	93	126,110	24,316	-31,122	119,397
Profit/loss for the period	-	-	841	-860	-20
Total profit/loss	-	-	841	-860	-20
New share issue	3	3,334	-	-	3,337
Costs of issuance	-	-6	-	-	-6
Buyback of hybrid bonds	-	-	-82	19	-63
Dividends	-	-	-841	-6,742	-7,583
Total transactions with the Company's shareholders	3	3,328	-922	-6,723	-4,315
Equity, 31 December 2023	97	129,437	24,234	-38,706	115,062

Cash Flow Statement

SEK million	Note	2023	2022
Operating activities
Profit/loss before income tax		57	-1,184
Adjustments to reconcile profit before tax to net cash flows:
Other adjustments	7.3	-3,005	7,019
Working capital changes
Increase(-)/decrease(+) in rent and other receivables		3,890	-3,931
Increase(+)/decrease(-) in trade and other payables		-237	-490
Cash generated from operations		705	1,414
Paid income tax		-	-51
Net cash flows from operating activities		705	1,363

SEK million	Note	2023	2022
Investing activities
Acquisitions of businesses, net of cash	8.2	-	-2,603
Purchase of quoted equity investments		-	-4,474
Proceeds from sale of subsidiaries		-	7,722
Net cash flows from investing activities		-	645
Financing activities
Proceeds from interest-bearing liabilities	5.1	6,103	4,118
Repayment of interest-bearing liabilities	5.1	-4,290	-23,075
Bonds		-16,224	-501
Dividends paid	4.1	-1,133	-3,229
Proceeds from share issuances	4.1	-2,272	7,635
Proceeds to subsidiaries		22,402	8,902
Buyback of hybrid bonds		-58	-7,100
Repayment on hybrid bonds	4.1	-847	-996
Settlement of derivative financial instruments		-196	102
Net cash flows from financing activities		3,485	-14,144
Cash and cash equivalents at the beginning of the period		4,735	16,555
Net change in cash and cash equivalents		4,190	-12,136
Net currency exchange effect in cash and cash equivalents		-148	316
Cash and cash equivalents at the end of the period		8,777	4,735

Notes to the Parent Company Financial Statements

1. Accounting policies

1.1 Accounting Policies

The Parent Company applies the same accounting policies as the Group (see Note 1.2, Significant accounting policies), with the following differences:

Investments in subsidiaries

Investments in subsidiaries are recognised at historical cost less deductions for any impairments. Acquisition-related costs and any contingent consideration are capitalised if there are indications that participations in Group companies have decreased in value. The recoverable amount is calculated and if this is lower than the carrying amount, the investment is impaired. Impairment is recognised under the item 'Impairment of investments in subsidiaries.

Investments in associated companies

Participations in associated companies are recognised in the Parent Company in accordance with the cost method.

Financial instruments

The guidance for financial instruments under IFRS 9 is not applied by the Parent Company. The Parent Company applies the lower of cost or market method in accordance with the Swedish Annual Accounts Act. Accordingly, financial non-current assets are valued at cost and financial current assets at the lower of cost or market. The Parent Company applies the expected credit loss method under IFRS 9 for assets that are debt instruments. For other financial assets, impairment is based on market value.

The Parent Company applies the exemption not to value financial guarantee agreements benefitting subsidiaries, associated companies, and joint ventures in accordance with IFRS 9, applying instead the valuation policies under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

Impairment of financial assets

The Parent Company applies the same impairment method as the Group for expected credit losses. The Parent Company considers the subsidiaries to have similar risk profiles and assessments are performed on a collective basis for similar transactions. At the Balance Sheet date, no material increase in credit risk has been deemed to prevail for any intra-Group receivables. The Parent Company's receivables from its subsidiaries are subordinated external lenders' claims. The Parent Company's expected loss in the event of default takes into account the average of the subsidiaries' loan-to-value ratios and their expected market value in the event of a forced sale. Based on the Parent Company's assessments, it is estimated that expected loan losses will not be significant and no provision has been reported.

Group contributions and shareholder contributions

Group contributions are deductible, unlike shareholder contributions. Group contributions paid and received are reported in the Comprehensive Income Statement. Shareholder contributions are reported as an increase of participations in Group companies and tested for impairment.

Credit risk

The Parent Company's maximum credit risk is the net amount of the financial assets. The Parent Company has no collateral for its net financial assets.

Based on our assessment there has been no significant increase in credit risk of the Parent Company's financial assets.

Leases as a lessee

When the Parent Company is the lessee, lease payments are expensed on a straight-line basis over the term of the lease. The cost of leases attributable to leaseholds and the cost for other leases are recognised in operating profit. The right-of-use asset and the lease liability are therefore not recognised in the Balance Sheet.

Presentation

For the Parent Company, the Income Statement and other comprehensive Income are presented in two reports. For the Parent Company, the Statement of Comprehensive Income and Balance Sheet are prepared in accordance with the Annual Accounts Act's schedule while the Statement of Changes in Equity and the Cash Flow Statement are based on IAS 1, Presentation of Financial Statements, and IAS 7 Statement of Cash Flows.

2. Income and expenses

2.1 Audit fee

The audit assignment refers to the audit of the financial statements. Other assurance services provided by the auditors include services related to review procedures on interim reports and other attestation services. The fees are summarised in the table below:

EY

SEK million	2023	2022
Audit assignment	3	3
Other assurance services	3	2
Other services	-	1
Total	6	6

2.2 Personnel and senior management

The remuneration to the Chairman of the Board amounts to SEK 0,96 million (0,96). No other remuneration was paid to the Members of the Board except board fees presented in Group Note 2.6. The CEO receives remuneration from Heimstaden Group Norway AS.

During the year, the Board of Directors consisted of 9 (9) Members, of whom 6 (5) were men. There was 1 (1) other senior management, of whom 1 (1) are men.

2.3 Results from divestment of shares in subsidiaries

SEK million	2023	2022
Results from divestment of shares in subsidiaries	-	-2,018
Total	-	-2,018

2.4 Financial income and expenses

SEK million	2023	2022
Assets and liabilities measured at amortised cost:
Interest income, subsidiaries	3,805	1,987
Interest income, other financial assets	323	25
Total interest income in accordance with the effective interest method	4,128	2,012
Interest expenses, loans	-988	-752
Interest expenses, Group companies	-1,150	-581
Total interest expenses in accordance with the effective interest method	-2,138	-1,333
Other financial items
Foregin currency, financial items	-165	-4,902
Other financial income	43	-
Other financial expenses	-39	-74
Total other financial items	-161	-4,976
Total income/loss from financial items	1,829	-4,297

2.5 Appropriations

SEK million	2023	2022
Group contributions received	1,078	5,517
Total	1,078	5,517

2.6 Income tax expense

SEK million	2023	2022
Current tax expense	-	-
Deferred tax	-77	540
Income tax expense reported in Comprehensive Income Statement	-77	540
Profit before tax	57	-1,184
Tax according to current rate	-12	244
Tax effect of:
Non-taxable income	-	21
Non-deductible interest, net	-	-26
Transferred deductible interest from subsidiaries	283	-
Tax effects hybrid bonds	156	648
Tax attributable to previous years	-	51
Deferred tax capitalised on prior years losses carried forward	116	67
Fiscal adjustment divestment of co-ownership rights	-	-417
Write down of shares in subsidiaries and associated companies	-559	-35
Non-deductible costs	-49	14
Dividends	65	-
Change in deferred tax derivatives	39	-
Deferred tax capitalized on prior years losses carried forward	-116	-
Income tax expense reported in Comprehensive Income Statement	-77	540

3. Assets

3.1 Investments in associated companies

SEK million	31 December 2023	31 December 2022
Opening balances	9,544	-
Reclassification from financial investments	-	9,663
Impairment	-1,448	-119
Closing balance	8,096	9,544

The Company's investment in Kojamo Oyi (01163336-2, Helsingfors, Finland) is classified as an associated company based on an assessment of significant influence. The assessment of significant influence is determined by the fact that Heimstaden Bostad AB is the largest owner in Kojamo Oyi with significant voting power, owning 19.98%, and took a position on the nomination committee of the company in September 2022. Shares in associated companies are valued at the lowest value principle.

3.2 Deferred tax assets

SEK million	31 December 2023	31 December 2022
Opening balance	555	41
Change for the year	-116	514
Closing balance	439	555

Capitalised tax loss carryforward relates to tax loss of SEK 2,100 million (2,982).

3.3 Non-current receivables, subsidiaries

SEK million	31 December 2023	31 December 2022
Opening balance	97,472	100,209
Change for the year	-6,776	-2,737
Closing balance	90,696	97,472

Receivables from Group companies are attributable to transactions between the Parent Company and the subsidiaries. Intra-group loans are subject to market terms and are without collateral.

3.4 Current receivables, subsidiaries

SEK million	31 December 2023	31 December 2022
Opening balance	48,374	40,369
Change for the year	-5,369	8,005
Closing balance	43,005	48,374

Receivables from Group companies are attributable to transactions between the Parent Company and the subsidiaries. Intra-group loans are subject to market terms and are without collateral.

3.5 Cash and cash equivalents

Cash and cash equivalents primarily comprises traditional cash and short-term, easily convertible investments that can quickly be transformed into known amounts of cash. The change in cash and cash equivalents is shown in the Consolidated Statement of Cash Flows.

4. Equity

4.1 Equity

Event	Type	Date of registration	Change in number of shares	Total number of shares
Opening balance at 1 January 2022				45,258,892
New share issue	Ordinary, Share Class B	29.03.2022	9,671,291	54,930,183
New share issue	Ordinary, Share Class B and C	25.07.2022	3,554,262	58,484,445
New share issue	Ordinary, Share Class B and C	21.12.2022	465,844	58,950,289
Closing balance at 31 December 2022				58,950,289
Opening balance at 1 January 2023
New share issue	Ordinary, Share Class B and C	06.03.2023	2,062,129	61,012,418
Closing balance at 31 December 2023				61,012,418

Event	Change in share capital	Total share capital	Quota value
Opening balance at 1 January 2022		71,595,577	1.58
New share issue	15,298,995	86,894,573	1.58
New share issue	5,622,480	92,517,053	1.58
New share issue	736,918	93,253,340	1.58
Closing balance at 31 December 2022		93,253,340	1.58
Opening balance at 1 January 2023
New share issue	3,262,078	96,515,418	1,58
Closing balance at 31 December 2023		96,515,418

At 31 December 2023, there were 12,914,568 (12,563,147) ordinary shares, 200 (200) Share Class A shares, 47,155,687 (45,872,521) Share Class B shares, and 941,963 (514,421) Share Class C shares. The voting value of an ordinary share is one-half vote per share, the voting value for Share Class A and B is one-tenth of a vote per share and the voting value for Share Class C is one vote per share. For information regarding hybrid bonds, see Group Note 5.

Proposed appropriation of accumulated profit, SEK
Share premium reserve	129,437,115,324	Dividend to shareholders	-
Hybrid bonds	24,234,311,971	Share premium reserve	129,437,115,324
Retained earnings	-38,686,109,664	Hybrid bonds	24,234,311,971
Profit/loss for the year	-19,737,578	Retained earnings	-38,705,847,242
Total	114,965,580,054	Total	114,965,580,054

It is proposed that the funds at the disposal of the Annual General Meeting of SEK 114,965,580,054 is to be carried forward. No dividend shall be paid to any of the Share Classes. No dividend shall be paid to any of the Share Classes.

5. Capital structure and financial items

5.1 Interest-bearing liabilities

SEK million	31 December 2023	31 December 2022
Loan maturity, year
Within 1 year of the Balance Sheet date	302	9,600
Within 1-2 year of the Balance Sheet date	2,743	2,093
Within 2-3 year of the Balance Sheet date	13,048	2,799
Within 3-4 year of the Balance Sheet date	500	10,864
Within 4-5 year of the Balance Sheet date	1,647	500
>5 years after balance sheet date	1,114	2,788
Total	19,354	28,644
Deferred charges	-197	-269
Total	19,157	28,375

	2023		2022
SEK million	Loan amount	Average interest, % incl. margin	Loan amount	Average interest, % incl. margin
Interest maturity, year
Within 1 year of the Balance Sheet date	12,045	5.5	20,274	2.9
Within 1-2 year of the Balance Sheet date	797	3.9	850	1.3
Within 2-3 year of the Balance Sheet date	5,399	2.0	825	6,0
Within 3-4 year of the Balance Sheet date	-	-	5,579	1,1
Within 4-5 year of the Balance Sheet date	-	-	-	-
>5 years after Balance Sheet date	1,114	2.8	1,116	3.2
Total	19,354	4.3	28,644	2.6
Deferred charges	-197	-	-269	-
Total	19,157	-	28,375	-

Reconciliation of liabilities attributable to financing activitie

SEK million	Corporate bonds	Morgages/bank loans	Deferred charges	Total
Opening balance, 1 January 2022	40,655	4,950	-302	45,303
Loan repayments	-23,077	-	-	-23,077
New borrowings/assumed debt in connection with acquisitions	1,300	2,818	-	4,118
Currency exchange effect on loans	1,780	139	112	2,031
Closing balance, 31 December 2022	20,658	7,907	-190	28,375
Opening balance, 1 January 2023	20,658	7,907	-190	28,375
Loan repayments	-12,404	-1,148	-	-13,552
New borrowings/assumed debt in connection with acquisitions	719	3,670	-	4,389
Currency exchange effect on loans	-70	-57	72	-55
Closing balance, 31 December 2023	8,903	10,372	-118	19,157

5.2 Interest-rate derivatives

SEK million	2023	2022
Gains or losses on disposal of interest-rate derivatives	210	103
Value change	-226	71
Total	-16	174

		2023
SEK million	Type	Nominal amount	Share, %	Average interest, %
Interest maturity, year
Within 1 year of the Balance Sheet date	Paying fixed	4,354	17	1.18
Within 1-2 year of the Balance Sheet date	Paying fixed	3,400	13	3.33
Within 2-3 year of the Balance Sheet date	Paying fixed	5,700	22	3.00
Within 3-4 years of the Balance Sheet date	Paying fixed	7,245	28	2.74
Within 4-5 years of the Balance Sheet date	Paying fixed	2,000	8	2.87
>5 years from the Balance Sheet date	Paying fixed	3,500	13	2.84
Total purchased swaps		26,198	100	2.64
Within 1 year of the Balance Sheet date	Paying variable	25,402	97	-4.03
Within 1-2 year of the Balance Sheet date	Paying variable	797	3	-1.69
Within 2-3 year of the Balance Sheet date	Paying variable	-	-	-
Within 3-4 years of the Balance Sheet date	Paying variable	-	-	-
Within 4-5 years of the Balance Sheet date	Paying variable	-	-	-
>5 years from the Balance Sheet date	Paying variable	-	-	-
Total sold swaps		26,198	100	-3.96

		2022
SEK million	Type	Nominal amount	Share, %	Average interest, %
Interest maturity, year
Within 1 year of the Balance Sheet date	Paying fixed	13,982	58	1.17
Within 1-2 year of the Balance Sheet date	Paying fixed	1,750	7	0.24
Within 2-3 year of the Balance Sheet date	Paying fixed	500	2	0.23
Within 3-4 years of the Balance Sheet date	Paying fixed	-	-	-
Within 4-5 years of the Balance Sheet date	Paying fixed	2,250	9	2.92
>5 years from the Balance Sheet date	Paying fixed	5,500	23	2.85
Total purchased swaps		23,982	100	1.63
Within 1 year of the Balance Sheet date	Paying variable	23,156	97	-2.41
Within 1-2 year of the Balance Sheet date	Paying variable	-	-	-
Within 2-3 year of the Balance Sheet date	Paying variable	825	3	-1.70
Within 3-4 years of the Balance Sheet date	Paying variable	-	-	-
Within 4-5 years of the Balance Sheet date	Paying variable	-	-	-
>5 years from the Balance Sheet date	Paying variable	-	-	-
Total sold swaps		23,982	100	-2,38

6. Other liabilities

6.1 Non-current liabilities, subsidiaries

SEK million	31 December 2023	31 December 2022
Opening balance	72,158	54,242
Change for the year	9,470	17,916
Closing balance	81,628	72,158

6.2 Accrued expenses and prepaid income

SEK million	31 December 2023	31 December 2022
Accrued interest expenses	225	225
Other accrued expenses	19	50
Total	244	275

7. Other disclosures

7.1 Contingencies and commitments

SEK million	31 December 2023	31 December 2022
Issued financial guarantees for the benefit of subsidiaries	93,692	101,756
Total	93,692	101,756

There are pledged assets of 8,096 mSEK (0) as of 31 December 2023.

7.2 Related-party disclosures

Heimstaden Bostad has bought asset management services from Heimstaden AB of SEK 43 million in 2023 (589).

For more information, see Group Note 8.1.

Transactions with subsidiaries

SEK million	2023	2022
Sales to subsidiaries	387	422
Purchases from subsidiaries	834	11
Interest income from subsidiaries	3,794	1,987
Interest costs to subsidiaries	-1,150	-581
Receivables from subsidiaries	133,701	145,846
Liabilities to subsidiaries	81,667	72,158
Capital contributions to subsidiaries	-5,735	-
Issued financial guarantees for the benefit of subsidiaries	93,692	101,756
Total	318,664	321,599

Executive management

For information of remuneration to the Board of Directors and the CEO, see Note 2.2.

7.3 Other adjustments in Cash Flow Statement

SEK million	2023	2022
Fair value adjustment of derivative financial instruments	192	-71
Dividends	-313	-
Results from divestment of shares in subsidaries	-	2,018
Impairment of investment in subsidiaries and associated companies	-2,715	173
Exchange rate difference	-169	4,900
Total	-3,005	7,019

7.4 Group companies

Shareholdings in subsidiaries

					Recognised value in Parent Company, SEK million
Company	Corp.ID.nr	Registrered office	Number of shares	Share in % ^{1, 2}	2023	2022
Heimstaden Bostad Invest 1 AB	556867-8444	Malmö	1,000	100	1,039	1,039
Heimstaden Bostad Invest 2 AB	556867-8451	Malmö	1,000	100	249	249
Heimstaden Bostad Invest 3 AB	556871-1153	Malmö	1,000	100	608	608
Heimstaden Bostad Invest 4 AB	556871-1104	Malmö	1,000	100	1,358	889
Heimstaden Bostad Invest 5 AB	556910-3467	Malmö	500	100	1,086	1,086
Heimstaden Bostad Invest 6 AB	556989-5690	Malmö	500	100	348	371
Heimstaden Bostad Invest 7 AB	559106-1584	Malmö	500	100	917	917
Heimstaden Bostad Invest 8 AB	559106-1550	Malmö	500	100	2,329	2,329
Heimstaden Bostad Invest 9 A/S	38714953	Copenhagen	500	100	10,356	10,356
Heimstaden Bostad Invest 10 AS	819330492	Oslo	500	100	10,095	10,095
Heimstaden Bostad Invest 12 AB	559228-4433	Malmö	500	100	7,613	4,592
Heimstaden Bostad Invest 13 AB	559276-3345	Malmö	500	100	1,356	1,303
Heimstaden Bostad Invest 14 AB	559295-8168	Malmö	500	100	0	0
Heimstaden Bostad Invest 15 AB	559298-5260	Malmö	500	100	771	312
Heimstaden Bostad Invest 16 AB	559326-5225	Malmö	500	100	4	0
Heimstaden Eagle AB	559326-5233	Malmö	500	500	500	500
Heimstaden Bostad Invest AB	559190-1607	Malmö	500	500	500	500
Heimstaden Bostad Bostadsfinansiering AB	559112-2105	Malmö	500	500	500	500
Heimstaden Bostads Portalen AB	559085-2264	Malmö	500	500	500	500
Heimstaden Satelliten AB	559163-3457	Malmö	500	500	500	500
Heimstaden Bostad Skrinet AB	559177-3436	Malmö	500	500	500	500
Heimstaden Bostad Skrinet 2 AB	559322-6771	Malmö	500	500	500	500
Heimstaden Bostad Portalen 2 AB	559177-3451	Malmö	500	500	500	500
Heimstaden Bostad Parkering AB	559001-2414	Malmö	500	500	500	500
Heimstaden Burlöv AB	559147-4076	Malmö	500	500	500	500
Heimstaden Castor AB	559101-4963	Malmö	500	500	500	500
Heimstaden Bostad Treasury B.V.	78619610	Amsterdam	100	100	100	100
Heimstaden Country Manager AB	559382-7909	Malmö	25,000	25,000	25,000	25,000
Heimstaden Bostad Invest 19 AB	559365-7512	Malmö	250	250	250	250
Heimstaden Services AB	559382-7917	Malmö	25,000	25,000	25,000	25,000
Heimstaden Bostad Invest 20 AB	559396-1120	Malmö	250	250	250	250
Heimstaden Bostad Invest 18 AB	559331-8768	Malmö	250	250	250	250
Total					60,114	55,643

¹ The share of capital corresponds to the share of votes.

² Except for the Group companies acquired in 2023 the share of capital in 2023 corresponds to the share of capital in 2022.

SEK million	31 December 2023	31 December 2022
Opening balance	55,643	62,021
Acquisitions	-	2,668
Divestments	-	-
Write-down	-1,268	-57
Shareholder contributions	5,739	-8,989
Closing balance	60,114	55,643

Proposed Appropriation of Accumulated Profit

According to the Parent Company's Balance Sheet, the following earnings are at the disposal of the Annual General Meeting:

SEK
Share premium reserve	129,437,115,324
Hybrid bonds	24,234,311,971
Retained earnings	-38,686,109,664
Profit (loss) for the year	-19,737,578
Total	114,965,580,054

The Board of Directors proposes that loss for the year is distributed as follows:

SEK
Dividens to shareholders	-
Share premium reserve	129,437,115,324
Hybrid bonds	24,234,311,971
Retained earnings	-38,705,847,242
Total	114,965,580,054

It is proposed that the funds at the disposal of the Annual General Meeting of SEK 114,965,580,054 is to be carried forward. No dividend shall be paid to any of the Share Classes.

Signatures

The undersigned provide their assurance that the Consolidated Financial Statements have been prepared in accordance with the International Accounting Standards (IFRS), as adopted by the EU, as well as the Swedish Financial Reporting Board's recommendation RFR 1, and that the Annual Report has been prepared in accordance with the Annual Accounts Act and the recommendation RFR2 of the Swedish Financial Reporting Board. The Consolidated and Annual Financial Statements have been prepared in accordance with good accounting practices, and provide a fair view of the Group's and the Parent Company's financial position and profit, and that the Administration Report provides a fair overview of the development of the operations, position, and results of the Group and the Company, as well as describing significant risks and uncertainty factors facing the companies within the Group.

Malmö, 26 February 2024

Helge Krogsbøl, CEO

Helge Leiro Baastad, Chairman of the Board

Ivar Tollefsen, Board Member

John Giverholt, Board Member

Bente A. Landsnes, Board Member

Fredrik Reinfeldt, Board Member

Daniel Kristiansson, Board Member

Klas Åkerbäck, Board Member

Rebecka Elkert, Board Member

Our Audit Report was submitted on 26 February 2024

Ernst & Young AB

Jonas Svensson

Authorised Public Accountant

Auditor's Report

To the general meeting of the shareholders of Heimstaden Bostad AB (publ), corporate identity number 556864-0873

Report on the annual accounts and consolidated accounts

Opinions

We have audited the annual accounts and consolidated accounts of Heimstaden Bostad AB (publ) except for the corporate governance statement on pages 30-42 and the statutory sustainability report on pages 122-192 for the year 2023. The annual accounts and consolidated accounts of the company are included on pages 1-2, 5, 17-20, 43-100 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31st of December 2023 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31st of December 2023 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS Accounting Standards), as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 30-42 and the statutory sustainability report on pages 122-192. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the consolidated comprehensive income statement and the consolidated balance sheet for the group.

Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Key Audit Matters

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Property Valuations

Description

The fair value of the Group's investment properties reported in the Statement of Financial Position at 31 December 2023 amount to SEK 319,491 million. The valuations are made through a combination of local price analyses and market simulations of future cash flows. The properties were valued externally at year-end. The properties' direct return requirements are assessed on the basis of each property's unique risk and transactions made in the market for objects of a similar nature.

In view of the many assumptions and assessments made in connection with the valuation of investment properties, we believe that this area is to be considered of particular importance in our audit. A description of the valuation of the property holdings is shown in the Annual Report under Note 3.1 Investment Properties.

How our audit addressed this key audit matter

In our audit of the fair value of the Group ́s investment properties, we have among other things:

•	Evaluated and examined the property valuation process.
•	Evaluated the valuation method.
•	With the support of our internal property valuation specialists, we have examined a sample of the external property valuations and assessed the reasonableness of assumptions made, such as direct return requirements, vacancy rates, rental income and operating costs.
•	For a selection of investment properties, we have examined inputs on revenue and operating expenses and calculations in the external valuations at the property level.
•	We have evaluated the external valuers' competence and objectivity.
•	We have reviewed supplementary disclosures made in the Annual Report.

Goodwill

Description

At 31 December 2023 the Group's consolidated statements of financial position includes goodwill amounting to SEK 18,491 million.

The Group has assessed goodwill for impairment at 31 December 2023. Assessment of the impairment of the Group's goodwill incorporate significant judgments and estimates, specifically concerning factors such as forecast cashflows, discounts rates and terminal growth rates. Minor changes in certain assumptions can lead to significant changes in the recoverable amount of these assets.

Accordingly, based on the significant judgements and estimates involved in the impairment testing of goodwill we considered this to be a key audit matter in our audit.

Break-down of Goodwill and impairment test is found in note 3.2 Goodwill and Intangible assets in the Annual Report.

How our audit addressed this key audit matter

Our audit procedures included among others the following:

•	Assessed the cash flow forecasts, assumptions and estimates used by the Group, by considering the reliability of the Group's cash flow forecasts based of our knowledge of the business.
•	With support from our valuation specialists assessed applied methodology for impairment and evaluated the key assumptions applied in the impairment models. These include in particular the discount rates and growth rates.
•	Tested the mathematical accuracy of the impairment testing models and relevant inputs.
•	Performed sensitivity analysis on key assumptions.
•	We have reviewed supplementary disclosures made in the Annual Report.

Other Information than the annual accounts and consolidated accounts

This document also contains other information than the annual accounts and consolidated accounts and is found on pages 3-4, 6-16, 21-29 and 104-121. The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS Accounting Standards as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process.

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•	Identify and assess the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•	Obtain an understanding of the company's internal control relevant to our audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.
•	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors and the Managing Director.
•	Conclude on the appropriateness of the Board of Directors' and the Managing Director's use of the going concern basis of accounting in preparing the annual accounts and consolidated accounts. We also draw a conclusion, based on the audit evidence obtained, as to whether any material uncertainty exists related to events or conditions that may cast significant doubt on the company's and the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our opinion about the annual accounts and consolidated accounts. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause a company and a group to cease to continue as a going concern.
•	Evaluate the overall presentation, structure and content of the annual accounts and consolidated accounts, including the disclosures, and whether the annual accounts and consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation.
•	Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions.

We must inform the Board of Directors of, among other matters, the planned scope and timing of the audit. We must also inform of significant audit findings during our audit, including any significant deficiencies in internal control that we identified.

We must also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or related safeguards applied.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are therefore the key audit matters. We describe these matters in the auditor's report unless law or regulation precludes disclosure about the matter.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Heimstaden Bostad AB (publ) for the year 2023 and the proposed appropriations of the company's profit or loss.

We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

•	has undertaken any action or been guilty of any omission which can give rise to liability to the company, or
•	in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally accepted auditing standards in Sweden, we exercise professional judgment and maintain professional skepticism throughout the audit. The examination of the administration and the proposed appropriations of the company's profit or loss is based primarily on the audit of the accounts. Additional audit procedures performed are based on our professional judgment with starting point in risk and materiality. This means that we focus the examination on such actions, areas and relationships that are material for the operations and where deviations and violations would have particular importance for the company's situation. We examine and test decisions undertaken, support for decisions, actions taken and other circumstances that are relevant to our opinion concerning discharge from liability. As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss we examined whether the proposal is in accordance with the Companies Act.

The auditor's examination of the corporate governance statement

The Board of Directors is responsible for that the corporate governance statement on pages 30-42 has been prepared in accordance with the Annual Accounts Act.

Our examination of the corporate governance statement is conducted in accordance with FAR ́s standard RevR 16 The auditor ́s examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions.

A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act.

The auditor ́s opinion regarding the statutory sustainability report

The Board of Directors is responsible for the statutory sustainability report on pages 122-192, and that it is prepared in accordance with the Annual Accounts Act.

Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor ́s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

A statutory sustainability report has been prepared.

Ernst & Young AB, P.O Box 7850, 103 99 Stockholm, was appointed auditor of Heimstaden Bostad AB (publ) by the general meeting of the shareholders on the 30 ^th of March 2023 has been the company's auditor since the 16 ^th of April 2018.

Stockholm the 26th of February 2024

Ernst & Young AB

Jonas Svensson

Authorized Public Accountant

Alternative Performance Measures

For more information, definitions, and methodology please refer to www.heimstadenbostad.com

Net Loan-to-Value

SEK million	2023	2022
Interest-bearing secured liabilities	116,357	89,612
Interest-bearing unsecured liabilities	74,893	93,079
Less: Cash and cash equivalents	11,276	9,385
Net interest-bearing liabilities	179,975	173,306
Fair value of investment properties	319,491	344,856
Net LTV, %	56.3	50.3

Net Debt / Total Assets

SEK million	2023	2022
Net interest-bearing liabilities	179,975	173,306
Total assets	366,219	397,327
Net Debt / Total Assets, %	49.1	43.6

Interest Coverage Ratio (ICR)

SEK million	2023	2022
Profit before unrealised fair value adjustment	9,293	7,911
Transaction costs from business combination	5	-182
Adjustment for operating result of associated companies and joint ventures	-	-262
Adjusted profit before unrealised fair value adjustment	9,298	7,466
Interest expenses	4,939	2,275
Less: Interest income	324	316
Net financial items	4,615	1,960
ICR	2.0	3.8

Net debt / (Net debt + Equity) (S&P method)

SEK million	2023	2022
Equity	148,731	180,854
50% hybrid	12,124	12,165
Equity, adjusted	136,606	168,689
Total interest-bearing liabilities	191,250	182,691
Lease liabilities	1,175	1,416
Less: Cash and cash equivalents	-11,276	-9,385
50% of hybrid equity as debt (S&P adjusted)	12,124	12,165
Net interest-bearing liabilities, adjusted (Net debt)	193,274	186,887
Net debt + Equity	329,881	355,576
Net debt / (Net debt + Equity), %	58.6	52.6

This metric is calculated according to S&P's rating methodology, with 50% of hybrid bonds classified as debt.

ICR (S&P method)

SEK million	2023	2022
Profit before unrealised fair value adjustment	9,293	7,911
Depreciation and amortisation	18	4
SOS Partnership	140	143
Transaction costs from business combination	5	-182
Realised gains/losses from divestment of properties	-235	-10
Share of net profits/losses of associated companies and joint ventures	-	-410
EBITDA, adjusted	9,222	7,456
Interest expenses	4,939	2,275
Adjustment interest reclassification	-	-76
Capitalised interest	133	89
50% interim-equity hybrid dividend annual (S&P)	442	473
Interest expense, adjusted	5,515	2,761
ICR incl. hybrid equity as 50% debt	1.7	2.7

This metric is based on S&P's rating methodology, with 50% of hybrid bonds classified as debt.

Residential share of investment properties, %

SEK million	2023	2022
Fair value residential properties, standing assets	290,833	310,684
Fair value investment properties, standing assets	313,902	334,040
Residential share of investment properties, %	92.7	93.0

Like-for-like rental income growth

SEK million	2023 ¹	2022 ²
Rental income current period	13,485	8,197
Rental income previous period	12,836	7,774
Like-for-like rental income growth, %	5.1	5.4
¹ 2023: only properties owned as of 2021-12-31 are included.
² 2022: only properties owned as of 2020-12-31 are included.

Net operating income margin

SEK million	2023	2022
Rental income	14,974	12,702
Net operating income	10,091	8,141
Net operating income, %	67.4	64.1

Economic occupancy, residential

SEK million	2023	2022
Theoretical rental income on residential units	14,244	12,105
Economic vacancy	-557	-418
Rental income on residential units	13,689	11,688
Economic occupancy, %	96.1	96.5

Real economic occupancy, residential

SEK million	2023	2022
Theoretical rental income on residential units	14,244	12,105
Adjusted to real vacancy	-255	-196
Adjusted theoretical rental income	13,989	11,909
Real economic occupancy, %	98.2	98.4

Equity ratio

SEK million	2023	2022
Equity	148,731	180,854
Assets	366,219	397,327
Equity ratio, %	40.6	45.5

EBITDA

SEK million	2023	2022
Profit before unrealised fair value adjustment	9,293	7,911
Transaction costs from business combination	5	-182
Depreciation and amortisation	18	4
EBITDA	9,317	7,732

Debt / EBITDA

SEK million	2023	2022
Interest-bearing liabilities	189,645	167,896
EBITDA	9,317	7,732
Debt / EBITDA, multiple	20.4	21.7

Secured loan-to-value

SEK million	2023	2022
Interest-bearing secured liabilities	116,357	89,612
Total assets	366,219	397,327
Secured Loan-to-Value, %	31.8	22.6

Quarterly Financial Information

Consolidated Key figures

SEK million	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022
Financials
Rental income	3,845	3,812	3,707	3,610	3,387
Growth year-on-year, %	13.5	19.2	19.4	19.8	41.6
Net operating income	2,538	2,654	2,556	2,342	2,060
Net operating income margin, %	66.0	69.6	69.0	64.9	60.8
Total comprehensive income/loss	-8,502	-5,771	481	-12,491	-4,730
Capital expenditures	2,006	1,989	1,900	1,989	3,199
Portfolio Metrics
Fair value of investment properties	319,491	331,754	339,736	335,082	344,856
Homes, units	161,553	161,532	160,517	159,089	158,326
Real economic occupancy, residential, %	98.4	98.1	98.1	98.2	98.2
Like-for-like rental income growth, year-on-year, %	5.6	4.2	5.6	4.8	5.4
Credit metrics
Net Loan-to-Value, %	56.3	55.1	54.4	52.7	50.3
Net debt / (Net debt + Equity), S&P method, %	58.6	57.2	56.6	55.5	52.6
Net debt / Total assets, %	49.1	48.6	47.7	46.4	43.6
Interest Coverage Ratio (ICR), multiple	2.0	2.2	2.5	3.2	3.8
Interest Coverage Ratio, S&P, multiple	1.7	1.8	2.1	2.5	2.7

Earnings capacity

Earnings capacity represents annualised earnings calculated on the basis of the contracted rental income, current property expenses and administrative expenses of the property portfolio as of 31 December 2023. Announced property acquisitions that closed after the balance sheet date are not included in the calculation. Earnings capacity does not include any adjustment for development trends in rent levels, vacancy rates, property expenses or interest rates, nor does the earnings capacity provide any adjustment for expected changes in the fair value of properties, foreign exchange rates, acquisitions or divestments. Earnings capacity should not be considered a forecast for the current year or for the next 12-month period.

Key figures per market

SEK million	Sweden	Germany	Denmark	Netherlands	Czechia
Q4 2023
Like-for-like rental income growth	5.2	8.5	2.4	4.6	9.0
Real Economic occupancy	99.0	99.7	97.4	99.7	97.0
Economic occupancy	97.5	96.6	95.6	99.5	94.0
Full year 2023
Like-for-like rental income growth	4.6	5.7	1.3	4.6	12.5
Real Economic occupancy	99.0	99.3	97.1	99.7	96.8
Economic occupancy	97.5	96.3	95.1	98.1	94.2
Expenses for repair and maintenance ¹	-205	-173	-182	-92	-187
Capitalised repair and maintenance	1,034	443	393	544	409
Tenant improvements	616	430	130	294	364
Investment properties under construction	1,350	-	399	-	-

SEK million	Norway	United Kingdom	Finland	Poland	Group in total
Q4 2023
Like-for-like rental income growth	7.6	5.3	4.5	N/A	5.6
Real Economic occupancy	99.6	94.7	95.5	98.0	98.4
Economic occupancy	98.9	92.0	88.9	97.2	96.5
Full year 2023
Like-for-like rental income growth	7.3	3.6	2.3	-	5.1
Real Economic occupancy	99.5	87.7	94.2	96.4	98.2
Economic occupancy	98.4	79.1	87.9	94.7	96.0
Expenses for repair and maintenance ¹	-55	-3	-18	-1	-915
Capitalised repair and maintenance	23	1	129	-	2,976
Tenant improvements	14	-	40	-	1,888
Investment properties under construction	70	1,068	-	132	3,020
¹ Excluding group adjustments, see Note 2.1.

Earnings capacity

SEK million	Q4 2023
Rental income	14,896
Service charges paid by tenants	1,723
Property expenses	-6,463
Net operating income	10,156
Corporate administrative expenses	-825
Profit before financial items	9,331

Quarterly Review

Figures in parenthesis refer to the previous quarter.

Income

Rental income increased by 0.9% to SEK 3,845 million (3,812), mainly driven by delivery of new development assets in Sweden, United Kingdom, and Poland. As well as annual indexations on part of the portfolio mainly in Germany. Heimstaden Bostad's new strategy, privatisation, have started to impact the revenues, where a decrease of approximately SEK 19 million is noted for the quarter directly related to the privatisation strategy.

Service charge paid by tenants increased to SEK 431 million (389), due to seasonality effects of heating costs mainly in Czechia. The like-for-like rental income growth amounted to 5.6% (4.2%), and made up 88% of total rental income. The stable rental income growth for the quarter now exceeds the blended CPI of 3.6% for the quarter, showcasing the possibility to pass on rent above CPI.

Operating expenses

The total amount of operating expenses increased to SEK 1,738 million (1,546), driven mainly by seasonality of heating and electricity expenses. Due to different rental regimes between markets, these costs impact net operating income margins differently, where costs in Czechia and Germany are recoverable from tenants via Service income, hence no impact on country margins.

Expenditure for repair and maintenance increased slightly to SEK 191 million (177), mainly due to increased costs for water damages as well as higher churn leading to increased number of small repairs. The cost for Facility and Property management remained stable with seasonality effects and amounted to SEK 623 million (657).

Capital expenditures and Repair & Maintenance

Total expenditure in standing assets was SEK 1,628 million (1,474), corresponding to 0.51% of fair value (0.44%), while investments in properties under construction, excluding forward purchase contracts, amounted to SEK 616 million (731) as the number of homes under construction was reduced from 3,100 to 2,886 at the end of fourth quarter.

SEK million	Q4 2023	Q3 2023	FY 2023	FY 2022
Income statement items
Expenses for repair & maintenance ¹	238	217	915	957
Balance sheet items
Capitalised cost on standing assets excluding tenant improvements	955	812	2,976	3,828
Tenant improvements	435	445	1,888	1,382
Balance sheet expenditure	1,390	1,258	4,865	5,210
Expenditure on standing assets	1,628	1,474	5,779	6,168
Investment properties under construction	616	731	3,020	4,919
Capital expenditures	2,006	1,989	7,885	10,130
¹ Excluding group eliminations, see Note 2.1.

Net operating income

Net operating income down by 4.4% to SEK 2,538 million (2,654), resulting in a net operating income margin of 66.0% (69.6%), mainly driven by higher utility costs due to seasonality effects.

Change in fair value of investment properties 1

Net loss from fair value adjustments on investment properties was SEK 5,334 million (4,924) corresponding to -1.6% of fair value. The decrease in fair value during the quarter was primarily driven by sentiment-based yield increases outweighing the positive effects of rent increases and outlook Sweden, Germany and Finland. The yield requirement in the valuation amounted to an average 3.54%, up from 3.50% at the end of the previous quarter. Denmark and The Netherlands saw values marginally decrease as rental performance and owner-occupied price developments partially offset the effect of increasing yields, and Norway experienced decreases in owner-occupier HPI. These negative movements were mitigated to a small extent by value increases in the Czechia, Poland, and the United Kingdom where rental increases outweighed sentiment-based yield increases.

	Q4 2023		FY 2023
SEK million	%	SEK million	%	SEK million
Sweden	-2.7	-2,466	-10.4	-10,385
Germany	-3.1	-2,536	-15.5	-14,511
Denmark	-0.2	-158	-5.5	-4,138
Netherlands	-0.9	-256	-11.7	-3,659
Czechia	2.8	678	7.3	1,704
Norway	-2.9	-518	-1.6	-275
United Kingdom	-0.4	-18	9.3	367
Finland	-4.1	-154	-10.0	-404
Poland	5.4	94	10.4	171
Total	-1.6	-5,334	-8.9	-31,130
¹ For more information regarding fair value assessments, see Note 3.1.

Interest expenses

Apart from the bank financing closed by the end of Q4 in Czechia to an amount of SEK 7,017 million the total debt portfolio didn't change materially thus the interest expenses increased on the margin to SEK 1,404 million (1,334), and the average interest rate was 2.9% (2.8%). At the balance sheet date the interest rate hedge ratio was 85.9% (75.6%). Heimstaden Bostad decided by the end of the quarter to take advantage of the decreasing interest rates and increased the hedging ratio. The interest coverage ratio for the last 12 months was 2,0x (2.2x) as debt with higher interest rates become a larger share of the 12 months backward looking ICR calculation.

Foreign currency

Heimstaden Bostad has holdings and operations in SEK, EUR, DKK, NOK, CZK, PLN and GBP. Exchange differences on translation of foreign operations gave other comprehensive loss of SEK 6,111 million (loss 3,331), which was partially offset by SEK 3,023 million in foreign exchange gain (gain 1,308), the latter mainly related to development in EUR/ SEK in the quarter.

Cash Flow

SEK million	Q4 2023	Q3 2023	FY 2023	FY 2022
Operating activities	547	534	1,926	5,107
Investing activities	-2,597	-1,190	-7,029	-28,257
Financing activities	6,613	-814	6,826	12,399
Currency effects	-74	16	168	628
Change	4,489	-1,455	1,891	-10,123
Period opening balance - Cash and cash equivalents	6,787	8,242	9,385	19,508
Closing balance - Cash and cash equivalents	11,276	6,787	11,276	9,385

Cash generated from operation was SEK 1,760 million (2,342). Interest and taxes paid in period was SEK 1,213 million (1,808) resulting in a net cash flow from operating activities of SEK 547 million (534). The main difference between operating profit and cash flow from operations is fair value adjustments on investment properties of SEK -5,334 million (-4,924).

Cash flow from investing activities was SEK -2,597 million (-1,190) and included capital expenditures on investment properties of SEK -2,029 million (-2,007), and net proceeds from divestments of properties of SEK 900 million (281), the majority relating to investment property in Denmark and Netherlands.

Cash flow from financing activities was positive by SEK 6,613 million (-814), foremost due to the larger bank financing closed by the end of quarter in Czechia. The cash position of the Group increased to SEK 11,276 million.

Sweden

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	1,155	1,109	1,043	4,448	4,113
Net operating income	SEK m	634	723	516	2,565	2,132
Net operating income margin	%	54.9	65.2	49.5	57.7	51.8
Like-for-like rental income growth	%	5.2	4.8	2.8	4.6	3.0
Real economic occupancy	%	99.0	99.0	99.2	99.0	99.1
Fair value of investment properties	SEK m	89,262	91,148	96,851	89,262	96,851
Fair value change	SEK m	-2,466	-2,321	-4,540	-10,385	-6,632
Capital expenditures	SEK m	789	774	1,432	3,000	4,675
Average valuation yield requirement ¹	%	3.3	3.3	2.8	3.3	2.8
Acquisitions	SEK m	-	-	147	24	2,134
Divestments	SEK m	-210	-	-	-243	-471

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Germany

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	699	683	548	2,693	2,065
Net operating income	SEK m	565	500	375	2,074	1,505
Net operating income margin	%	80.7	73.3	68.4	77.0	72.9
Like-for-like rental income growth	%	8.5	3.6	2.8	5.7	7.8
Real economic occupancy	%	99.7	99.2	98.3	99.3	98.4
Fair value of investment properties	SEK m	79,404	84,595	92,820	79,404	92,820
Fair value change	SEK m	-2,536	-2,130	-1,404	-14,511	3,130
Capital expenditures	SEK m	324	149	120	873	666
Average valuation yield requirement ¹	%	2.7	2.7	2.5	2.7	2.5
Acquisitions	SEK m	-	-	8,982	-	11,601
Divestments	SEK m	-	-	-	-	-26

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Denmark

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	895	912	802	3,539	3,026
Net operating income	SEK m	603	649	520	2,425	2,057
Net operating income margin	%	67.3	71.2	64.8	68.5	68.0
Like-for-like rental income growth	%	2.4	0.5	4.5	1.3	5.7
Real economic occupancy	%	97.4	97.2	97.0	97.1	98.0
Fair value of investment properties	SEK m	71,446	74,516	73,640	71,446	73,640
Fair value change	SEK m	-158	-311	-3,713	-4,138	-3,856
Capital expenditures	SEK m	207	265	373	923	1,310
Average valuation yield requirement ¹	%	4.2	4.1	3.9	4.2	3.9
Acquisitions	SEK m	36	6	863	1,732	3,523
Divestments	SEK m	-406	-19	-	-426	-16

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Netherlands

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	354	366	328	1,404	1,242
Net operating income	SEK m	253	278	218	1,051	810
Net operating income margin	%	71.6	76.0	66.5	74.8	65.3
Like-for-like rental income growth	%	4.6	4.1	4.9	4.6	3.7
Real economic occupancy	%	99.7	99.7	99.7	99.7	99.7
Fair value of investment properties	SEK m	27,337	28,181	30,048	27,337	30,048
Fair value change	SEK m	-256	-143	-1,384	-3,659	-750
Capital expenditures	SEK m	191	188	343	838	873
Average valuation yield requirement ¹	%	3.7	3.7	3.3	3.7	3.3
Acquisitions	SEK m	613	-	-	613	196
Divestments	SEK m	-99	-82	-17	-251	-33

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Czechia

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	427	434	388	1,718	1,382
Net operating income	SEK m	280	307	253	1,211	955
Net operating income margin	%	65,5	70.9	65.3	70.5	69.1
Like-for-like rental income growth	%	9.0	10.1	12.6	12.5	9.1
Real economic occupancy	%	97.0	96.4	97.1	96.8	96.9
Fair value of investment properties	SEK m	25,185	25,509	23,443	25,185	23,443
Fair value change	SEK m	678	400	51	1,704	2,372
Capital expenditures	SEK m	239	210	314	773	784
Average valuation yield requirement ¹	%	4.7	4.7	4.6	4.7	4.6
Acquisitions	SEK m	-	-	-	-	-
Divestments	SEK m	-12	-19	-	-36	-2

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Norway

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	180	189	198	741	758
Net operating income	SEK m	128	142	145	556	511
Net operating income margin	%	70.8	74.9	73.0	75.1	67.3
Like-for-like rental income growth	%	7.6	6.3	8.4	7.3	8.2
Real economic occupancy	%	99.6	99.6	99.4	99.5	98.1
Fair value of investment properties	SEK m	17,109	18,170	20,338	17,109	20,338
Fair value change	SEK m	-518	-464	-723	-275	254
Capital expenditures	SEK m	-34	31	103	107	366
Average valuation yield requirement ¹	%	3.2	3.2	3.0	3.2	3.0
Acquisitions	SEK m	-	-	-	-	125
Divestments	SEK m	-	-189	-108	-1,512	-113

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

United Kingdom

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	43	29	2	95	8
Net operating income	SEK m	29	7	0	42	1
Net operating income margin	%	67.4	23.7	N/A	44.0	N/A
Like-for-like rental income growth	%	5.3	5.1	N/A	3.6	N/A
Real economic occupancy	%	94.7	83.2	100.0	87.7	99.2
Fair value of investment properties	SEK m	4,305	4,268	2,854	4,305	2,854
Fair value change	SEK m	-18	97	-33	367	131
Capital expenditures	SEK m	210	293	464	1,070	1,381
Average valuation yield requirement ¹	%	4.5	4.4	4.6	4.5	4.6
Acquisitions	SEK m	-	-	-	-	268
Divestments	SEK m	-	-	-	-	-

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Finland

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	69			268	193
Net operating income	SEK m	31	69	63	125	93
Net operating income margin	%	45.8	34	24	46.8	48.3
Like-for-like rental income growth	%	4.5	50.3	38.1	2.3	N/A
Real economic occupancy	%	95.5	3.5	N/A	94.2	95.6
Fair value of investment properties	SEK m	3,627	93.6	95.6	3,627	3,837
Fair value change	SEK m	-154	3,853	3,837	-404	154
Capital expenditures	SEK m	63	-106	-46	170	75
Average valuation yield requirement ¹	%	4.7	48	50	4.7	4.7
Acquisitions	SEK m	-	4.4	4.7	-	1,985
Divestments	SEK m	-	-	-	-	0

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Poland

		Q4 2023	Q3 2023	Q4 2022	FY 2023	FY 2022
Rental income	SEK m	24	21	5	69	6
Net operating income	SEK m	15	12	-1	42	-9
Net operating income margin	%	64.4	59.1	N/A	60.3	N/A
Like-for-like rental income growth	%	N/A	N/A	N/A	N/A	N/A
Real economic occupancy	%	98.0	97.1	81.8	96.4	84.7
Fair value of investment properties	SEK m	1,815	1,515	1,026	1,815	1,026
Fair value change	SEK m	94	54	63	171	77
Capital expenditures	SEK m	18	32	-	132	-
Average valuation yield requirement ¹	%	5.7	5.4	5.2	5.7	5.2
Acquisitions	SEK m	150	5	439	399	901
Divestments	SEK m	-	-	-	-	-

¹ The yield applied on the valuation-assumed property-generated cashflow to determine the valuation of said property. The yield corresponds to the valuers market assumptions in each region.

Consolidated Statement of Comprehensive Income

SEK million	Q4 2023	Q3 2023	Q2 2023 ¹	Q1 2023 ¹	Q4 2022 ¹
Rental income	3,845	3,812	3,707	3,610	3,387
Service charges paid by tenants	431	389	414	516	386
Property expenses	-1,738	-1,546	-1,565	-1,784	-1,713
Net operating income	2,538	2,654	2,556	2,342	2,060
Corporate administrative expenses	-211	-218	-218	-212	-229
Other operating income	36	56	44	139	35
Other operating expenses	-180	-96	-83	-89	-37
Realised gains/losses from divestment of properties	182	28	20	4	19
Profit before unrealised fair value adjustment	2,365	2,425	2,319	2,184	1,848
Fair value adjustment of investment properties	-5,334	-4,924	-7,351	-13,521	-11,729
Value adjustment of inventory properties	-8	18	-5	20	437
Operating profit/loss	-2,977	-2,481	-5,037	-11,318	-9,444
Share of net profits/losses of associated companies and joint ventures	715	-1,225	114	-447	-973
Impairment of goodwill	-	-	-	-1,058	-
Interest income	162	115	8	39	208
Interest expenses	-1,404	-1,334	-1,202	-999	-849
Net currency translation gains/losses	3,023	1,308	-3,296	-617	-2,203
Fair value adjustment of derivative financial instruments	-963	-19	257	-448	152
Other financial items	-75	-71	-85	691	142
Profit/loss before tax	-1,518	-3,707	-9,241	-14,157	-12,967
Current tax expense	260	-221	-247	-257	17
Deferred tax income/expense	-1,118	1,489	2,723	1,140	3,114
Profit/loss for the period	-2,376	-2,440	-6,765	-13,274	-9,836
Currency translation differences	-6,125	-3,331	7,246	783	5,106
Total comprehensive income/loss	-8,502	-5,771	481	-12,491	-4,730
Profit/loss attributable to:
The Parent Company's shareholders	-1,843	-1,944	-6,487	-12,727	-9,754
Non-controlling interests	-534	-496	-278	-546	-81
Comprehensive income/loss attributable to:
The Parent Company's shareholders	-7,910	-5,231	640	-11,976	-4,649
Non-controlling interests	-591	-540	-159	-515	-81

¹ Comparables restated, see Note 1.

Consolidated Statement of Financial Position

SEK million	31 December 2023	30 September 2023	30 June 2023	31 March 2023	31 December 2022
ASSETS
Investment properties	319,491	331,754	339,736	335,082	344,856
Intangible assets	18,674	19,022	19,204	18,760	19,693
Machinery and equipment	332	340	383	403	314
Investments in associated companies and joint ventures	8,636	8,220	9,622	9,113	9,698
Derivative financial instruments	34	509	759	699	836
Deferred tax assets	800	1,223	1,293	919	982
Other financial assets	3,444	3,028	3,435	3,484	3,703
Total non-current assets	351,411	364,097	374,430	368,458	380,082
Inventory properties	538	538	493	475	573
Rent and trade receivables	227	487	188	410	359
Other financial assets	863	2,383	2,247	1,173	4,867
Derivative financial instruments	464	541	348	335	645
Prepayments	1,146	1,369	1,511	1,501	1,416
Cash and cash equivalents	11,276	6,787	8,242	8,344	9,385
Assets held for sale	294	-	-	-	-
Total current assets	14,807	12,104	13,029	12,238	17,245
TOTAL ASSETS	366,219	376,201	387,460	380,697	397,327

SEK million	31 December 2023	30 September 2023	30 June 2023	31 March 2023	31 December 2022
EQUITY AND LIABILITIES
Total equity	148,731	158,739	164,495	164,393	180,854
Interest-bearing liabilities	171,650	179,163	178,174	170,920	171,119
Lease liabilities	1,091	1,133	1,335	1,330	1,331
Derivative financial instruments	481	46	51	66	51
Deferred tax liabilities	18,492	18,340	20,252	21,856	22,941
Other financial liabilities	1,614	1,705	1,645	1,571	2,700
Total non-current liabilities	193,326	200,386	201,456	195,743	198,142
Interest-bearing liabilities	19,601	10,314	14,861	13,897	11,572
Lease liabilities	85	91	109	113	84
Trade payables	738	434	509	815	833
Other financial liabilities	1,017	3,504	3,365	2,703	3,008
Derivative financial instruments	-	15	40	60	75
Accrued expenses and prepaid income	2,721	2,719	2,624	2,973	2,758
Total current liabilities	24,162	17,076	21,509	20,561	18,330
TOTAL EQUITY AND LIABILITIES	366,219	376,201	387,460	380,697	397,327

Consolidated Statement of Cash Flows

SEK million	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022
Operating activities
Profit/loss before tax	-1,518	-3,707	-9,241	-14,157	-12,967
Adjustments to reconcile profit before tax to net cash flows:
Fair value adjustment on investment properties	5,334	4,924	7,351	13,521	11,729
Value adjustment of inventory properties	8	-18	5	-20	-437
Fair value adjustment of derivative financial instruments	963	19	-257	448	-150
Interest income	-162	-115	-8	-39	-208
Interest expenses	1,404	1,334	1,202	999	849
Share of net profits/losses of associated companies and joint ventures	-715	1,225	-114	447	1,443
Other adjustments	-3,156	-1,325	3,336	832	2,243
Working capital changes
Increase(-)/decrease(+) in rent and other receivables	386	271	-787	-163	-1,810
Increase(+)/decrease(-) in trade and other payables	-783	-266	6	18	2,218
Cash generated from operations	1,760	2,342	1,494	1,887	2,909
Interest paid	-1,378	-1,405	-1,129	-968	-757
Interest received	162	115	18	29	318
Paid income tax	3	-518	128	-612	-183
Net cash flows from operating activities	547	534	511	335	2,286

SEK million	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022
Investing activities
Acquisitions of businesses, net of cash	-	-	-	-	-156
Acquisition of investment and inventory properties	-900	80	-143	-1,169	-3,970
Capital expenditure on investment and inventory properties	-2,029	-2,007	-1,918	-2,009	-2,626
Divestments of investment properties	900	281	35	1,487	126
Deposits for signed acquisitions	320	-	-298	298	-177
Purchases of machinery and equipment	-25	-3	-13	-22	-
Purchases of intangible assets	-62	-	-	-	-
Transactions with associated companies and joint ventures	37	184	226	264	-108
Other cash flows from investing activities	-839	275	-10	31	2
Net cash flows from investing activities	-2,597	-1,190	-2,120	-1,122	-6,910
Financing activities
Proceeds from interest-bearing liabilities	11,295	8,313	2,736	12,919	17,501
Repayment of interest-bearing liabilities	-3,514	-9,186	-1,214	-11,670	-8,530
Dividends paid	-1,526	-	-	-4,325	-
Proceeds from non-controlling interests	398	-12	-	3,550	-
Proceeds from share issuances	-	-	-	920	750
Buyback of hybrid bonds	-	-	-	-58	-317
Repayments on hybrid bonds	-	-	-350	-491	-10
Settlement of derivative financial instruments	-	-	176	-	2
Other cash flows from financing activities	-40	71	-74	-1,093	-162
Net cash flows from financing activities	6,613	-814	1,274	-247	9,234
Net change in cash and cash equivalents	4,563	-1,471	-336	-1,033	4,610
Cash and cash equivalents at the beginning of the period	6,787	8,242	8,344	9,385	4,671
Net currency exchange effect in cash and cash equivalents	-74	16	234	-8	104
Cash and cash equivalents at the end of the period	11,276	6,787	8,242	8,344	9,385