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Dear shareholder,

Property markets and investments
For Balder, 2015 was a very interesting and positive year! The property market continued to perform well due to strong interest from investors driven by record low interest rates, a favourable rental market and also in some cases due to a lack of alternative investment opportunities.

Our largest investment by far during the year, was our gradual acquisition of just over 50 percent of the shares of the Finnish residential property company Sato. Although Finland has shown a weaker performance than the other Nordic countries in recent years, I am convinced that the long-term development in Finland will be positive again. Through Sato, we gain an excellent organisation and a fantastic network, which will give us the basis to find good investment opportunities over time. Our Finnish investment is in safe hands.

In Sweden, we were a net seller of investment properties, although on a small scale, and a net investor in residential projects instead, where we are now gradually obtaining a better and better project portfolio. In the short term, this will have a slightly negative impact on earnings but looking ahead, these investments will be important for our future results.

The property market in Copenhagen was also strong during the year and our operations there are gradually improving and expanding through the construction projects, which are being completed now and in the coming years. We have also initiated our first hotel investment in Copenhagen, which feels great. As you probably know, we are really delighted about our hotels and this division at Balder also advanced its position during 2015.

Associated companies
On the associated company side, we gained some fine new additions in the form of Tornet and Brinova. Even though their impact on our comprehensive income in the balance sheet is not particularly great at present, it gives us additional investment opportunities and options over time and, not least, it gives us new relationships. Creating new relationships and maintaining existing ones is something that I consider to be invaluable and it is also fun and stimulating for me and for the rest of Balder's employees.

In June, Collector was listed on the stock market, which has meant that the company's value has become more clearly visible. We regard Collector as an associated company and we expect that Balder will remain as an owner for the foreseeable future. In accounting terms, this means that we should not recognise Collector's shares at market value but at the cost value (our share of the profit is added to this). To provide as true and fair view as possible, we are also presenting our balance sheet and key ratios including Collector at market value.

Financial goals and key ratios
To maintain a strong balance sheet, we used part of the authorisation to issue shares that we received at the Annual General Meeting 2015. We carried out a directed issue of 10 million shares to Swedish and international institutions and it received a very good response. The offer was strongly oversubscribed.

Balder's Board of Directors has decided to adjust the company's goal for the interest coverage ratio from 1.5 to 2 times. When the interest rate is at prevailing levels, the interest coverage ratio key ratio is not so interesting but who knows what will happen with interest rates over time? (I don't know).

2016 and subsequently
In the short term, the property market feels strong based on the same factors that have prevailed in recent years. However, our focus is completely on the long-term performance, for Balder and for its shareholders. Looking ahead, I am very positive about Balder's opportunities due to the fact that our organisation is continually improving, we are investing in different market segments and because we have so many partners that help us with everything possible. 

Erik Selin
Cheif Executive Officer

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