Peab : 2022/06/30

Alternative performance measures and financial definitions

Alternative performance measures are used to describe the development of operations and to enhance comparability between periods. These are not defined under IFRS but correspond to the methods applied by executive management and Board of Directors to measure the company's financial performance. Alternative performance measures should not be viewed as a substitute for financial information presented in accordance with IFRS but rather as a complement.

The difference between segment reporting and reporting according to IFRS is described in more detail in note 1, and note 4 in the Annual Report 2021. The difference primarily consists of differences in accounting principles for our own housing development projects where revenue and profit are recognized over time in segment reporting and at one point in time, when homebuyers take over their homes, in reporting according to IFRS. In segment reporting leasing fees for the lessee are recognized linearly over the leasing period for leases that are classified by the counterparty (the lessor) as operational leases. IFRS 16 Leases is applied in Group reporting according to IFRS, which entails that lessees recognize depreciation and interest attributable to leasing assets and liabilities. As a result the difference between segment reporting and reporting according to IFRS even affects the items on the balance sheet, including net debt. Nonetheless, in the key ratios below the method of calculation is the same for both segment reporting and reporting according to IFRS.

Definition and motivation of use	Calculation at quarterly report January-June 2022
Available liquidity	Reporting according to IFRS	MSEK
Liquid funds and short-term investments along with unutilized credit facilities, excluding unutilized project
financing. Shows the Group's available liquidity.	Liquid funds	1,319
	Unutilized credit facilities	6,369
	Available liquidity		7,688
Equity per share	Reporting according to IFRS
Equity attributable to shareholders in parent company divided by the number of outstanding shares at	Equity, MSEK	12,736
the end of the period. Shows equity per share.	Less equity attributable to non-controlling
	interests, MSEK	-1
	Equity attributable to shareholders
	in parent company, MSEK	12,735
	Number of outstanding shares at the end of
	the period	293,262,746
	Equity per share, SEK	43.43
	Segment reporting
	Equity, MSEK	13,868
	Less equity attributable to non-controlling
	interests, MSEK	-1
	Equity attributable to shareholders
	in parent company, MSEK	13,867
	Number of outstanding shares at the end of
	the period	293,262,746
	Equity per share, SEK	47.29
Cash flow per share	Reporting according to IFRS
Cash flow per share calculated as the total of the cash flow from current operations and cash flow from	Cash flow from current operations, MSEK	-2,831
investment operations divided by the average number of outstanding shares during the period. Shows cash	Cash flow from investment operations, MSEK	-344
flow per share.	Total cash flow before financing, MSEK		-3,175
	Average number of outstanding shares	294,676,068
	Cash flow per share, SEK	-10.77
	Segment reporting
	Cash flow from current operations, MSEK	-1,519
	Cash flow from investment operations, MSEK	-344
	Total cash flow before financing, MSEK		-1,863
	Average number of outstanding shares	294,676,068
	Cash flow per share, SEK	-6.32

Definition and motivation of use	Calculation at quarterly report January-June 2022
Net investments
Change in the period of the reported value of current assets (CB-OB) plus depreciation and write-downs.
Shows the size of net investments made.
Net debt	Reporting according to IFRS	MSEK
Interest-bearing liabilities including provisions for pensions less liquid funds and interest-bearing assets.	Interest-bearinglong-term liabilities	5,930
Shows financial position.	Interest-bearinglong-term liabilities, project financing	474
	Interest-bearing current liabilities	2,943
	Interest-bearing current liabilities, project financing	9,149
	- Interest-bearinglong-term receivables	-1,230
	- Interest-bearing current receivables	-78
	- Liquid funds	-1,319
	Net debt		15,869
	Segment reporting	MSEK
	Interest-bearinglong-term liabilities	4,543
	Interest-bearinglong-term liabilities, project financing	-
	Interest-bearing current liabilities	2,620
	Interest-bearing current liabilities, project financing	1,797
	- Interest-bearinglong-term receivables	-1,230
	- Interest-bearing current receivables	-78
	- Liquid funds	-1,319
	Net debt		6,333
	Reconciliation between IFRS and segment reporting
	Net debt according to IFRS	15,869
	Additional IFRS 16 Leases	-1,618
	Project financing, sold part of housing projects	-7,918
	Net debt according to segment reporting		6,333
Operative cash flow
Cash flow before financing according to segment reporting. The cash flow does not include received internal
Group interest, paid interest and paid tax that is not allocated to the business areas but only reported for the
Group. Investments via leasing charge cash flow from investment operations in the business areas.
Operative cash flow is only calculated for the business areas. Shows the cash flow generated per business
area.
Orders received
The sum of orders received during the period. Measures how new orders replace produced work.
In our own developed housing projects tenant-owned housing associations/residential limited companies
are considered external customers.
Order backlog
The value at the end of the period of the remaining income in ongoing production plus orders received yet to
be produced. Order backlog is based on segment reporting. Shows how much will be produced in the future.

Definition and motivation of use	Calculation at quarterly report January-June 2022
Earnings per share	Reporting according to IFRS
Profit for the period attributable to shareholders in parent company divided by the average number of	Profit for the period, MSEK					562
outstanding shares during the period. Shows profit per share.	Adjustment of profit for the period attributable to
	non-controlling interests, MSEK					0
	Profit for the period attributable to
	shareholders in parent company, MSEK				562
	Average number of outstanding shares				294,676,068
	Earnings per share, SEK					1.91
	Segment reporting
	Profit for the period, MSEK					707
	Adjustment of profit for the period attributable to
	non-controlling interests, MSEK					0
	Profit for the period attributable to
	shareholders in parent company, MSEK				707
	Average number of outstanding shares				294,676,068
	Earnings per share, SEK					2.40
Return on equity	Reporting according to IFRS
Profit of the rolling 12 month period attributable to shareholders in the parent company divided by the	Profit for the period, MSEK					2,463
average (last four quarters) equity attributable to shareholders in the parent company. The measurement	Average equity, MSEK
is used to create efficient business and a rational capital structure and shows how the Group has multiplied	Q2 2022	12,735
shareholder's equity.	Q1 2022	13,791
	Q4 2021	13,681
	Q3 2021	12,499
		52,706	/	4		13,177
	Return on equity, %					18.7
	Segment reporting
	Profit for the period, MSEK					2,628
	Average equity, MSEK
	Q2 2022	13,867
	Q1 2022	14,811
	Q4 2021	14,655
	Q3 2021	13,555
		56,888	/	4		14,222
	Return on equity, %					18.5

Definition and motivation of use	Calculation at quarterly report January-June 2022
Return on capital employed	Reporting according to IFRS
Pre-tax profit for the rolling 12 month period with the addition of financial expenses in percent of the average	Pre-tax profit, MSEK					3,023
(last four quarters) capital employed. The measurement is used to measure capital efficiency and to	Financial expenses, MSEK					161
allocate capital for new investments and shows the Group's earning capacity independent of financing.	Total profit, MSEK					3,184
	Average capital employed, MSEK
	Q2 2022	31,232
	Q1 2022	29,765
	Q4 2021	28,698
	Q3 2021	26,840
	116,535	/	4		29,134
	Return on capital employed, %					10.9
	Segment reporting
	Pre-tax profit, MSEK					3,224
	Financial expenses, MSEK					113
	Total profit, MSEK					3,337
	Average capital employed, MSEK
	Q2 2022	22,828
	Q1 2022	22,117
	Q4 2021	21,561
	Q3 2021	20,691
		87,197	/	4		21,799
	Return on capital employed, %					15.3
Interest coverage ratio	Reporting according to IFRS
Pre-tax profit items plus interest expenses in relation to interest expenses. The measurement shows how	Pre-tax profit, MSEK					726
well interest expenses can be covered.	Interest expenses, MSEK					151
	Total, MSEK					877
	Interest coverage ratio, multiple					5.8
	Segment reporting
	Pre-tax profit, MSEK					889
	Interest expenses, MSEK					70
	Total, MSEK					959
	Interest coverage ratio, multiple					13.8
Operating margin	Reporting according to IFRS
Operating profit as a percentage of net sales. Shows the profitability in the business.	Operating profit, MSEK					755
	Net sales, MSEK					28,595
	Operating margin, %					2.6
	Segment reporting
	Operating profit, MSEK					895
	Net sales, MSEK					29,402
	Operating margin, %					3.0
Net debt/equity ratio	Reporting according to IFRS
Interest-bearing net debt in relation to equity. Shows financial position.	Net debt, MSEK					15,869
	Equity, MSEK					12,736
	Net debt/equity ratio, multiple					1.2
	Segment reporting
	Net debt, MSEK					6,333
	Equity, MSEK					13,868
	Net debt/equity ratio, multiple					0.5

Definition and motivation of use	Calculation at quarterly report January-June 2022
Equity/assets ratio	Reporting according to IFRS
Equity as a percentage of total assets at the end of the period. Shows financial position.	Equity, MSEK	12,736
	Total assets, MSEK	49,953
	Equity/assets ratio, %	25.5
	Segment reporting
	Equity, MSEK	13,868
	Total assets, MSEK	42,260
	Equity/assets ratio, %	32.8
Capital employed for the Group	Reporting according to IFRS	MSEK
Total assets at the end of the period less non-interest-bearing operating liabilities and provisions. The	Total assets	49,953
measurement is used to measure capital utilization and its effectiveness.	- Deferred tax liabilities	-282
	- Other long-term liabilities	-1,558
	- Other current liabilities	-16,881
	Capital employed		31,232
	Segment reporting	MSEK
	Total assets	42,260
	- Deferred tax liabilities	-290
	- Other long-term liabilities	-1,558
	- Other current liabilities	-17,584
	Capital employed		22,828
	Reconciliation between IFRS and segment reporting	MSEK
	Capital employed according to IFRS	31,232
	IFRS 16, additional leases	-1 591
	Housing projects, sold part	-6,813
	Capital employed according to segment reporting		22,828
Capital employed for the business areas
Total assets in the business areas at the end of the period reduced by deferred tax recoverables and internal
receivables from the internal bank Peab Finans with deductions for non-interest-bearing liabilities, provisions
and deferred tax liabilities. The measurement is used to measure capital utilization and its effectiveness for
the business areas, and is only presented as a net amount per business area.

All amounts, if not otherwise specified, have been rounded to the nearest SEK million. The numbers in the quarterly report are based on the Group's consolidation system which is in SEK thousands. By rounding numbers presented key ratios may differ slightly from calcuated according to the definition.