JM — Interim / Quarterly Report 2017

Apr 27, 2017

JM GROUP INTERIM REPORT JANUARY – MARCH 2017

CONTINUED STABLE DEMAND AND IMPROVED EARNINGS

JANUARY – MARCH 2017

According to segment reporting, revenue increased to SEK 4,245m (3,757) and operating profit increased to SEK 570m (445). The operating margin increased to 13.4 percent (11.8)

Profit before tax increased to SEK 841m (387). Profit after tax increased to SEK 712m (299)

Return on equity for the past twelve months increased to 36.9 percent (23.8). Earnings per share for the first quarter increased to SEK 10.00 (4.10)

Consolidated cash flow including net investment in properties was SEK 1,001m (601)

The number of residential units sold totaled 864 (927) and housing starts were 813 (856)

Gains from the sale of participations in Småa AB amounted to SEK 275m.

	JANUARY–MARCH		APR.–MAR.	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Revenue (segment reporting)	4,245	3,757	16,240	15,752
Operating profit (segment reporting)	570	445	2,136	2,011
Operating margin (segment reporting), %	13.4	11.8	13.2	12.8
Profit before tax	841	387	2,325	1,871
Cash flow from operating activities	1,001	601	2,357	1,957
Return on equity, %			36.9	31.2
Equity/assets ratio, %	41	40		40
Earnings per share, SEK	10.00	4.10	26.30	20.40
Number of residential units sold	864	927	3,780	3,843
Number of housing starts	813	856	4,144	4,187
Number of residential units in current production	7,901	7,550		7,984
Revenue according to IFRIC 15	4,157	3,470	15,978	15,291
Operating profit according to IFRIC 15	582	403	2,110	1,931

The Group applies IFRIC 15 Agreements for the Construction of Real Estate to its income statement and balance sheet. This means that revenue and profit and loss for JM's operations outside of Sweden, JM International, are reported according to the completed contract method. Segment reporting and project management are reported according to IAS 11, percentage of completion method. The description of operations is based on segment reporting.

For definitions of key financial figures, please refer to the Definitions Key Financial Figures document on www.jm.se/investors.

Cover photo: Brohuset, Liljeholmskajen in Stockholm

GROUP

"Demand for JM's residential units has continued to be stable in our main markets during the first quarter. The housing operations in both Stockholm and the rest of Sweden are showing a positive development with good profitability. Even in Norway and Finland the operations are developing at a stable rate with continued good demand in Norway and some improvement in Finland.

We see a high level of competition for land for residential purposes in attractive locations, and the prices are at levels that mean we continue to be selective when making acquisitions. During the quarter, we acquired attractive building rights in Sweden, Norway and Finland.

One large acquisition that I would like to mention is the development property in Groruddalen, an attractive growth area in northeast Oslo. The transaction is conditional on final approval of the local planning for residential units, which is expected at the end of the year. We are planning to develop more than 600 residential units here.

During the quarter, we started the first phase of the Esplanaden project, for example, which is located in Kungsängen, Uppsala. In the area we have to date started production on approximately 800 of the planned 1,400 residential units. As in all JM projects, conscious decisions to facilitate meeting places and green areas were made when designing the buildings and courtyards. At the street level, several commercial premises will add life and activity. The Esplanaden project is one example of JM's contribution to the creation of a thriving city

We are now increasing our investments in digital support for our interaction with customers and the building process. Virtual reality apartment tours make it easy for customers to see our offer, and digital support is needed for our working methods in the form of process control and mobility. The investments that we are making now aim to increase customer value and achieve higher efficiency in our projects. The digitalization work is also part of the skills development program for JM's employees.

Structurally, the conditions for JM's business are good. We are well positioned with a good project portfolio that we continue to improve for housing for the future, at the same time as our strong balance sheet offers us freedom."

Johan Skoglund, President and CEO

MARKET, SALES AND HOUSING STARTS JANUARY – MARCH 2017

Demand for newly built homes in Sweden and Norway has been stable during the first quarter. Interest in JM's projects is strong. Population growth in our main markets, coupled with continued low interest rates, supports demand for housing.

The number of residential units sold in the form of signed contracts was 864 (927) 1). The percentage of sold or reserved homes in relation to current production amounts to 78 percent (86), with an interval of 60-65 percent considered normal. JM Residential Stockholm sold 354 residential units (397), JM Residential Sweden sold 321 (319), JM International sold 189 (211) and JM Property Development sold 0 (0).

The number of housing starts amounted to 813 (856) 2). JM Residential Stockholm started production on 300 residential units (372), JM Residential Sweden on 343 (304), JM International on 170 (180) and JM Property Development on 0 (0).

Planning processes continue to be an important criterion for the rate of housing starts.

The number of residential units in current production increased to 7,901 (7,550), of which 416 are rental units and residential care units (338).

1) Of which 0 rental units and residential care units (0). 2) Of which 0 rental units and residential care units (0).

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
OPERATING PROFIT (SEK m)	2017	2016	2016/2017	2016
JM Residential Stockholm	347	294	1,348	1,295
JM Residential Sweden	164	105	539	480
JM International	59	43	220	204
JM Property Development	7	6	31	30
JM Construction	9	10	42	43
Group-wide expenses	–16	–13	–44	–41
Total (segment reporting)	570	445	2,136	2,011
Restatement JM International 1)	12	–42	–26	–80
Total	582	403	2,110	1,931
Of which property sales	-	1	14	15

1) Effect of restatement on revenue and profit and loss according to IFRIC 15 in relation to segment reporting.

		JANUARY–MARCH		FULL-YEAR
OPERATING MARGIN, %	2017	2016	2016/2017	2016
JM Residential Stockholm	18.9	17.3	18.5	18.1
JM Residential Sweden	14.3	10.4	13.6	12.6
JM International	6.4	5.6	6.1	5.9
JM Construction	2.1	2.8	2.4	2.6

REVENUE, OPERATING PROFIT AND OPERATING MARGIN JANUARY – MARCH 2017

Consolidated revenue according to segment reporting for the first quarter increased to SEK 4,245m (3,757). Revenue restated according to IFRIC 15 increased to SEK 4,157m (3,470).

Operating profit according to segment reporting increased to SEK 570m (445) and the operating margin increased to 13.4 percent (11.8). Operating profit restated according to IFRIC 15 increased to SEK 582m (403). The restatement is related to JM International and had an effect on earnings of SEK 12m (–42).

During the first quarter properties were sold for SEK 0m (7) with gains of SEK 0m (1).

Rental income from JM's project properties was SEK 8m (5). Net rental income was SEK 4m (1).

RESIDENTIAL BUILDING RIGHTS JANUARY – MARCH 2017

The number of available building rights at the end of the first quarter amounted to 33,600 (30,800), of which 18,500 (17,900) are recognized in the balance sheet. Capital tied up in building rights (development properties on the balance sheet) for residential units amounted to SEK 6,837m (6,700).

JM acquired development properties for residential units during the first quarter for SEK 355m (250), of which SEK 144m relates to JM Residential Stockholm, SEK 125m to JM Residential Sweden and SEK 86m to JM International.

RESIDENTIAL UNITS IN CURRENT PRODUCTION	3/31/2017	3/31/2016	12/31/2016
Number of residential units in current production 1) 2)	7,901	7,550	7,984
Percentage of sold residential units in current production, % 3)	66	67	65
Percentage of reserved residential units in current production, %	12	19	12
Percentage of sold and reserved residential units in current production, %	78	86	77
1) Of which rental units and residential care units in current production in JM Property Development – are not included in the percentage of sold and reserved residential units in current production	416	338	416
Includes residential units in projects where costs incurred are only reported as project properties under construction	416	284	416
2) Beginning with production startup through final occupancy according to plan.

3) Percentage of sold residential units expressed as binding contract with the end customer.

COMPLETED PRODUCTION, UNSOLD UNITS	3/31/2017	3/31/2016	12/31/2016
Completed production, number of unsold units 1)	66	75	70
- Of which in the balance sheet reported as "Participations in tenant-owner associations, etc."	52	68	64

1) After final occupancy according to plan.

of sold/reserved

FINANCIAL ITEMS

JANUARY – MARCH 2017

The sale of the participations in the housing developer Småa AB resulted in gains of SEK 275m. Excluding this sale, net financial items are the same as last year.

The total interest-bearing loan stock was SEK 1,845m (1,923), of which the pensions liability comprised SEK 1,252m (1,140). At the end of the first quarter, the average interest rate for the total interest-bearing loan stock including pension liabilities was 2.4 percent (2.6). The average term for fixed-rate loans excluding the pension liability was 0.4 years (0.5).

Consolidated available liquidity was SEK 5,419m (3,982). Aside from cash and cash equivalents of SEK 2,619m (1,182), this includes unutilized overdraft facilities and credit lines totaling SEK 2,800m (2,800), where credit agreements for SEK 2,400m had an average maturity of 1.2 years (2.0).

Interest-bearing net receivables at the end of the first quarter totaled SEK 778m (–741). Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 463m (493). Of these liabilities, SEK 313m (343) were short-term.

The valuation of financial assets and liabilities shows that there is no material difference between the carrying amount and the fair value.

		JANUARY–MARCH		FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Financial income 1)	275	1	291	17
Financial expenses	–16	–17	–67	–68
Currency effect from the closing down of operations 2)	-	-	–9	–9
Financial income and expenses	259	–16	215	–60
1) Of which gains from the sale of participations in Småa AB	275	-	-	-

2) Pertains to JM's operations in Denmark.

		JANUARY–MARCH		FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Interest-bearing net liabilities(+)/receivables(–) at beginning of the period	435	1,198	741	1,198
Change in interest-bearing net liabilities/receivables	–1,213	–457	–1,519	–763
Interest-bearing net liabilities(+)/receivables(–) at end of the period	–778	741	–778	435

CASH FLOW

JANUARY – MARCH 2017

Cash flow from operating activities was SEK 1,001m (601) during the first quarter. Net investments in development properties resulted in a positive cash flow of SEK 122m (319). Holdings of repurchased residential units resulted in a negative cash flow of SEK –39m (10). Consolidated cash flow attributable to project properties (sales minus investment) during the first quarter was SEK –86m (–54).

In addition, cash flow was strengthened in the quarter by SEK 301m from the sale of the participations in Småa AB.

RISKS AND UNCERTAINTIES

JM's risk and risk management policies are presented in the 2016 annual report on pages 29-32. No significant changes have occurred to change these reported risks.

BUY-BACK AND HOLDINGS OF OWN SHARES

After the 2016 Annual General Meeting, 2,044,847 shares were repurchased for SEK 500m, of which 440,190 shares were repurchased during the first quarter for SEK 125m. Holdings of own shares subsequently total 2,044,847.

The number of outstanding shares, excluding holdings of own shares, at March 31, 2017, totals 71,010,408.

The Board has proposed that the 2017 Annual General Meeting resolve to reduce the share capital by SEK 2,044,847 through the elimination of 2,044,847 shares.

PERSONNEL

The number of employees at the end of the first quarter was 2,444 (2,308). The number of wage-earners was 1,008 (1,007) and the number of salaried employees was 1,436 (1,301). Current staffing is considered well balanced for the current project volume and some adjustments are made on a regular basis. Demand on the labor market is strong for qualified project development skills.

BUSINESS SEGMENTS JM RESIDENTIAL STOCKHOLM

The JM Residential Stockholm business segment develops residential projects in Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units.

The average prices on the existing home market increased slightly during the first quarter and the supply of homes has been relatively low. The supply of new residential units continues to be low in relation to long-term demand in the Stockholm area.

Competition for well-situated land for residential units continues to be tough, and the prices for building rights continue to be at a level that requires JM to be very selective when acquiring land.

Interest in JM's projects is strong. The customers' willingness to sign a contract early in the process continued to be at a normal level.

Revenue in the business segment increased to SEK 1,840m (1,704), which confirms the continued stable development for the operations. Operating profit increased to SEK 347m (294). The operating margin increased to 18.9 percent (17.3).

Cash flow during the first quarter is in balance taking into consideration the reduction in development properties.

During the first quarter, production was started on a total of 300 residential units, of which 278 in apartment buildings in Stockholm and Österåker and 22 single-family homes in Österåker. The lower level of housing starts during the first quarter of the year is in line with the planning for the year, which means an increasing percentage of starts during the remainder of the year.

During the first quarter JM purchased building rights in Stockholm corresponding to 70 residential units.

JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
2017	2016	2016/2017	2016
1,840	1,704	7,298	7,162
347	294	1,348	1,295
18.9	17.3	18.5	18.1
		4,345	4,388
		31.0	29.5
498	460	1,596	1,558
4,121	4,310		4,286
12,800	12,300		13,000
354	397	1,509	1,552
300	372	1,673	1,745
3,714	3,801		3,786
854	843		859

JM RESIDENTIAL SWEDEN

The JM Residential Sweden business segment develops residential projects in growth areas in Sweden, excluding Greater Stockholm. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. Contracting operations are also conducted to a limited extent.

The average prices on the existing home market increased in Gothenburg and Malmö and decreased in Linköping and Örebro. Prices have otherwise remained unchanged in the business segment during the first quarter.

Competition for land for residential purposes is tough. Interest in JM's projects is strong. Customers' willingness to sign a contract early in the process is at a normal level.

The business segment's revenue increased to SEK 1,146m (1,007) and operating profit increased to SEK 164m (105). The operating margin increased to 14.3 percent (10.4). The profit and the margin improved as a result of strong demand and an increase in prices.

A temporary decrease in working capital had a positive impact on cash flow during the first quarter.

JM started production during the first quarter on 343 residential units in apartment buildings in Malmö, Gothenburg, Uppsala and Linköping.

During the first quarter, JM purchased building rights corresponding to 240 residential units in Malmö, Lund, Vellinge, Uppsala and Örebro.

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Revenue	1,146	1,007	3,959	3,820
Operating profit 1)	164	105	539	480
Operating margin, %	14.3	10.4	13.6	12.6
Average operating capital			967	1,085
Return on operating capital, %			55.7	44.2
Operating cash flow	497	174	1,043	720
Carrying amount, development properties	1,322	1,189		1,350
Number of available building rights	9,800	9,600		9,700
Number of residential units sold	321	319	1,320	1,318
Number of housing starts	343	304	1,375	1,336
Number of residential units in current production	2,169	1,962		2,240
Number of employees	581	544		586
1) Of which property sales	-	0	37	37

JM INTERNATIONAL

The JM International business segment develops residential projects primarily in Norway and Finland. Contracting operations are also conducted to a limited extent in Norway. Revenue recognition for the business segment is reported according to IAS 11, percentage of completion method.

Business segment revenue increased to SEK 922m (769) and operating profit increased to SEK 59m (43). The operating margin increased to 6.4 percent (5.6). Cash flow during the first quarter is in balance.

NORWAY

Demand for both newly built homes and homes on the existing home market continues to be high, particularly in the Oslo region. Prices on the existing home market increased during the first quarter, and prices in Oslo continued to demonstrate strong growth.

JM Norway's revenue increased to SEK 813m (677) and operating profit increased to SEK 57m (42). The operating margin increased to 7.0 percent (6.2).

During the first quarter 135 residential units (149) were sold and production began on 129 units (107). Housing starts during the first quarter consist of residential units in apartment buildings in Oslo, Skien, Porsgrunn and Bergen. The number of residential units in current production amounts to 1,327 (1,193).

During the first quarter, JM purchased building rights corresponding to 340 residential units in Larvik, Tønsberg and Bergen.

Available building rights correspond to 7,500 residential units (6,000).

		JANUARY–MARCH		FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Revenue	922	769	3,630	3,477
- of which JM Norway	813	677	3,192	3,056
Operating profit 1)	59	43	220	204
- of which JM Norway	57	42	242	227
Operating margin, %	6.4	5.6	6.1	5.9
- of which JM Norway	7.0	6.2	7.6	7.4
Average operating capital			2,034	1,997
Return on operating capital, %			10.8	10.2
Operating cash flow	77	31	199	153
Carrying amount, development properties	1,394	1,191		1,401
Carrying amount, project properties	13	35		13
Number of available building rights	10,100	8,200		8,900
Number of residential units sold	189	211	951	973
Number of housing starts	170	180	867	877
Number of residential units in current production	1,602	1,449		1,542
Number of employees	431	391		420

1) Of which property sales - - -23 -23

FINLAND

The level of activity on the housing market in Helsinki continues to be low but continues to show signs of weak improvement. Customers are still cautious and time to closing is long. Prices in the capital region increased slightly during the first quarter.

During the first quarter, 53 residential units (57) were sold and production began on 41 units (73). The number of residential units in current production amounts to 275 (194).

During the first quarter, JM purchased building rights in Helsinki corresponding to 105 residential units.

Available building rights correspond to 2,400 residential units (2,000).

BELGIUM

JM has closed its operations in Belgium during the first quarter. JM still owns one development property and six residential units that are available for sale. During the first quarter, 1 residential unit (5) was sold.

Available building rights correspond to 200 residential units (200).

JM PROPERTY DEVELOPMENT

The JM Property Development business segment primarily develops rental units, residential care units and commercial properties in Greater Stockholm. The business segment's entire portfolio comprises project development properties.

Business segment revenue decreased to SEK 18m (28), including contracting revenue of SEK 10m (23) and rental income of SEK 8m (5). Operating profit was SEK 7m (6).

Net rental income for project properties was SEK 3m (0). The profit from construction contracts was SEK 8m (9) and gains from property sales were SEK 0m (1).

Cash flow during the period is negative due to ongoing investments in project properties.

Within the Dalénum area on Lidingö, the occupancy rate in the remaining commercial buildings that will not be demolished is 92 percent. Within the Bolinder area in Kallhäll, Järfälla, the occupancy rate is 87 percent in the buildings that will not be demolished.

The Dalénum rental project consisting of 97 apartments was completed in 2016 and is held on JM's balance sheet. All apartments have been rented.

Production is ongoing on three rental projects on JM's own balance sheet: the Tjärtunnan project in Stureby, 187 residential units with occupancy planned for 2018, the Spaken project in Hägernäs, Täby, 136 rental apartments with occupancy planned for 2018, and the Alphyddan project in Sickla, Nacka, 93 student apartments with occupancy planned for 2018.

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Revenue	18	28	132	142
Operating profit 1)	7	6	31	30
Average operating capital			550	508
Return on operating capital, %			5.6	5.9
Operating cash flow	–71	69	–241	–101
Carrying amount, development properties	35	35		35
Carrying amount, project properties	675	402		589
Number of available building rights 2)	900	700		900
Number of residential units sold 2)	-	-	-	-
Number of housing starts 2)	-	-	229	229
Number of residential units in current production 2)	416	338		416
Number of employees	30	30		31
1) Of which property sales	-	1	-	1

2) Refers to rental units and residential care units.

JM CONSTRUCTION

The JM Construction business segment carries out construction work for external and internal customers in the Greater Stockholm area.

Demand in the contracting market in Stockholm is at a good level with customers displaying a good willingness to invest. Both the building and civil engineering markets are stable, although there is tough competition for the assignments. Orders are good in the business segment, with a large number of projects in current production.

Business segment revenue increased to SEK 437m (360) and the operating profit was SEK 9m (10). The operating margin was 2.1 percent (2.8).

Cash flow was strengthened by cash received for a completed project.

During the first quarter, the business segment received a number of assignments for new production of apartment buildings in Norra Djurgårdsstaden for HSB and Riksbyggen and in Tyresö for Riksbyggen. The largest ongoing projects are a new operational area at Arlanda Airport (Swedavia), new production of a school (Vallentuna Municipality), new production of office buildings in Danderyd (Skandia Fastigheter), renovation of quays in Norrtälje Harbor and development projects for future housing production (Norrtälje Municipality), new production of apartment buildings in Gröndal (Aros Bostad) and the renovation of Slussen (City of Stockholm).

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Revenue 1)	437	360	1,742	1,665
Operating profit	9	10	42	43
Operating margin, %	2.1	2.8	2.4	2.6
Operating cash flow	32	–6	70	32
Carrying amount, development properties	50	44		49
Number of employees	406	379		393
1) Of which internal	118	111	521	514

GROUP

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–MARCH	APRIL–MARCH	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Revenue	4,157	3,470	15,978	15,291
Production and operating costs	–3,329	–2,851	–12,918	–12,440
Gross profit	828	619	3,060	2,851
Selling and administrative expenses	–246	–217	–964	–935
Gains/losses on the sale of property	-	1	14	15
Operating profit	582	403	2,110	1,931
Financial income and expenses	259	–16	215	–60
Profit before tax	841	387	2,325	1,871
Taxes	–129	–88	–434	–393
Profit for the period	712	299	1,891	1,478
Other comprehensive income
Items that will be reclassified as income
Translation differences from the translation of foreign operations	–12	22	68	102
Items that will not be reclassified as income
Restatement of defined-benefit pensions	0	0	–81	–81
Tax attributable to other comprehensive income	0	0	18	18
Comprehensive income for the period	700	321	1,896	1,517
Net profit for the period is attributable to shareholders of the Parent Company	712	299	1,891	1,478
Comprehensive income for the period is attributable to shareholders of the Parent Company	700	321	1,896	1,517
Earnings per share 1), basic, attributable to shareholders of the Parent Company, SEK	10.00	4.10	26.30	20.40
Earnings per share 1), diluted, attributable to shareholders of the Parent Company, SEK	10.00	4.10	26.20	20.30
Number of outstanding shares at end of period	71,010,408	72,981,780	71,010,408	71,448,330
Average number of shares, basic	71,288,879	72,365,666	72,008,323	72,526,479
Average number of shares, diluted	71,520,740	73,593,262	72,224,424	72,725,820

1) Net profit for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

SEK M	3/31/2017	3/31/2016	12/31/2016
ASSETS
Non-current assets	215	212	230
Project properties	688	437	602
Development properties	6,922	6,769	7,121
Participations in tenant-owners associations, etc.	205	233	233
Current receivables 1)	2,801	3,027	2,774
Cash and cash equivalents	2,619	1,182	1,520
Total current assets	13,235	11,648	12,250
Total assets	13,450	11,860	12,480
EQUITY AND LIABILITIES 2)
Shareholders' equity	5,526	4,719	4,951
Non-current interest-bearing liabilities	259	375	282
Other non-current liabilities	150	151	168
Non-current provisions	2,267	2,083	2,236
Total non-current liabilities	2,676	2,609	2,686
Current interest-bearing liabilities	334	408	438
Other current liabilities	4,813	4,035	4,304
Current provisions	101	89	101
Total current liabilities	5,248	4,532	4,843
Total equity and liabilities	13,450	11,860	12,480
Pledged assets	708	592	688
Contingent liabilities	10,254	8,731	9,451
1) Of which receivables from property sales	60	69	72
2) Of which liabilities for property acquisition	580	689	654

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–MARCH	FULL-YEAR
SEK M	2017	2016	2016
Opening balance at beginning of period	4,951	4,521	4,521
Total comprehensive income for the period	700	321	1,517
Dividend	-	-	-602
Conversion of convertible loan	0	2	13
Equity component of convertible debentures	-	-	2
Buy-back of shares	–125	–125	–500
Closing balance at the end of the period	5,526	4,719	4,951

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Cash flow from operating activities before change in
working capital and taxes	668	398	2,483	2,213
Paid tax	–99	–135	–377	–413
Investment in development properties, etc.1)	–591	–334	–2,472	–2,215
Payment on account for development properties, etc.2)	674	663	2,266	2,255
Investment in project properties	–86	–55	–273	–242
Sale of project properties	-	1	0	1
Change in current liabilities/receivables	435	63	730	358
Cash flow from operating activities	1,001	601	2,357	1,957
Cash flow from investing activities	307	0	301	–6
Loans raised	21	29	292	300
Amortization of debt	–105	–600	–415	–910
Buy-back of shares	–125	–125	–500	–500
Dividend	-	-	–602	–602
Cash flow from financing activities	–209	–696	–1,225	–1,712
Cash flow for the period	1,099	–95	1,433	239
Cash and cash equivalents at end of the period	2,619	1,182	2,619	1,520
1) Of which investment in participations in tenant-owners associations and freehold residential units	–162	–77	–368	–283
2) Of which sale of participations in tenant-owners associations and freehold residential units	123	87	293	257

KEY FIGURES

		JANUARY–MARCH		FULL-YEAR
%	2017	2016	2016/2017	2016
Operating margin	14.0	11.6	13.2	12.6
Return on capital employed			34.2	27.9
Return on equity			36.9	31.2
Debt/equity ratio, multiple	-	0.2		0.1
Equity/assets ratio	41	40		40

ACCOUNTING PRINCIPLES

This interim report for the first quarter of 2017 has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS). Since the Parent Company is an enterprise within the EU, only EU-approved IFRS are applied.

The accounting policies applied in this interim report are described in the annual report for 2016 on pages 68-71. The accounting principles and methods of calculation for the Group are the same as those applied in the annual report for the previous year.

REVENUE BY COUNTRY

		JANUARY–MARCH		FULL-YEAR
SEK M	2017	2016	2016/2017	2016
Sweden	3,323	2,988	12,610	12,275
Norway	813	677	3,192	3,056
Finland	108	80	405	377
Denmark	-	2	13	15
Belgium	1	10	20	29
Restatement JM International 1)	–88	–287	–262	–461
Total	4,157	3,470	15,978	15,291

REVENUE BY BUSINESS SEGMENT

		JANUARY–MARCH		FULL-YEAR
SEK M	2017	2016	2016/2017	2016
JM Residential Stockholm	1,840	1,704	7,298	7,162
JM Residential Sweden	1,146	1,007	3,959	3,820
JM International	922	769	3,630	3,477
JM Property Development	18	28	132	142
JM Construction	437	360	1,742	1,665
Elimination	–118	–111	–521	–514
Total (segment reporting)	4,245	3,757	16,240	15,752
Restatement JM International 1)	–88	–287	–262	–461
Total	4,157	3,470	15,978	15,291

OPERATING PROFIT BY BUSINESS SEGMENT

		JANUARY–MARCH		FULL-YEAR
SEK M	2017	2016	2016/2017	2016
JM Residential Stockholm	347	294	1,348	1,295
JM Residential Sweden	164	105	539	480
JM International	59	43	220	204
JM Property Development	7	6	31	30
JM Construction	9	10	42	43
Group-wide expenses	–16	–13	–44	–41
Total (segment reporting)	570	445	2,136	2,011
Restatement JM International 1)	12	–42	–26	–80
Total	582	403	2,110	1,931

OPERATING MARGIN BY BUSINESS SEGMENT

		JANUARY–MARCH		FULL-YEAR
%	2017	2016	2016/2017	2016
JM Residential Stockholm	18.9	17.3	18.5	18.1
JM Residential Sweden	14.3	10.4	13.6	12.6
JM International	6.4	5.6	6.1	5.9
JM Construction	2.1	2.8	2.4	2.6

AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT

	APRIL–MARCH	FULL-YEAR
SEK M	2016/2017	2016
JM Residential Stockholm	4,345	4,388
JM Residential Sweden	967	1,085
JM International	2,034	1,997
JM Property Development	550	508

RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT

	APRIL–MARCH
%	2016/2017	2016
JM Residential Stockholm	31.0	29.5
JM Residential Sweden	55.7	44.2
JM International	10.8	10.2
JM Property Development	5.6	5.9

1) Effect of restatement on revenue and profit and loss according to IFRIC 15 in relation to segment reporting.

OPERATING CASH FLOW BY BUSINESS SEGMENT

		JANUARY–MARCH	APRIL–MARCH	FULL-YEAR
SEK M	2017	2016	2016/2017	2016
JM Residential Stockholm	498	460	1,596	1,558
JM Residential Sweden	497	174	1,043	720
JM International	77	31	199	153
JM Property Development	–71	69	–241	–101
JM Construction	32	-6	70	32

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	3/31/2017	3/31/2016	12/31/2016
JM Residential Stockholm	4,121	4,310	4,286
JM Residential Sweden	1,322	1,189	1,350
JM International	1,394	1,191	1,401
JM Property Development	35	35	35
JM Construction	50	44	49
Total	6,922	6,769	7,121

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	3/31/2017	3/31/2016	12/31/2016
JM Residential Stockholm	12,800	12,300	13,000
JM Residential Sweden	9,800	9,600	9,700
JM International	10,100	8,200	8,900
JM Property Development 1)	900	700	900
Total	33,600	30,800	32,500
Of which, recognized on the balance sheet (development properties)
JM Residential Stockholm	7,900	8,300	8,000
JM Residential Sweden	5,700	5,300	5,500
JM International	4,800	4,200	4,300
JM Property Development 1)	100	100	100
Total	18,500	17,900	17,900

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

NUMBER		JANUARY–MARCH		FULL-YEAR
	2017	2016	2016/2017	2016
JM Residential Stockholm	354	397	1,509	1,552
JM Residential Sweden	321	319	1,320	1,318
JM International	189	211	951	973
JM Property Development 1)	-	-	-	-
Total	864	927	3,780	3,843

HOUSING STARTS BY BUSINESS SEGMENT

NUMBER		JANUARY–MARCH		FULL-YEAR
	2017	2016	2016/2017	2016
JM Residential Stockholm	300	372	1,673	1,745
JM Residential Sweden	343	304	1,375	1,336
JM International	170	180	867	877
JM Property Development 1)	-	-	229	229
Total	813	856	4,144	4,187

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	3/31/2017	3/31/2016	12/31/2016
JM Residential Stockholm	3,714	3,801	3,786
JM Residential Sweden	2,169	1,962	2,240
JM International	1,602	1,449	1,542
JM Property Development 1)	416	338	416
Total	7,901	7,550	7,984

1) Refers to rental units and residential care units.

PROJECT PROPERTIES, GROUP

CARRYING AMOUNT, SEK M	3/31/2017	3/31/2016	12/31/2016
Properties under development	451	396	583
Fully developed rental unit properties	218	-	-
Fully developed commercial properties	19	41	19
Total	688	437	602

DEVELOPMENT PROPERTIES, GROUP

		JANUARY–MARCH
CARRYING AMOUNT, SEK M	2017	2016	2016/2017	2016
Opening balance at beginning of period	7,121	7,067	6,769	7,067
New purchases	355	250	2,008	1,903
Transferred to production	–539	–550	–1,885	–1,896
Miscellaneous	–15	2	30	47
Closing balance at the end of the period	6,922	6,769	6,922	7,121

PARENT COMPANY

CONDENSED INCOME STATEMENT, PARENT COMPANY

	JANUARY–MARCH	FULL-YEAR
SEK M	2017	2016	2016
Net sales	3,047	2,747	11,149
Production and operating costs	–2,379	–2,222	–8,863
Gross profit	668	525	2,286
Selling and administrative expenses	–174	–148	–648
Gains/losses on the sale of property	-	0	-23
Operating profit	494	377	1,615
Financial income and expenses	262	110	159
Profit before appropriations and tax	756	487	1,774
Appropriations	-	-	–147
Profit before tax	756	487	1,627
Taxes	–106	–80	–322
Profit for the period	650	407	1,305

CONDENSED BALANCE SHEET, PARENT COMPANY

SEK M	3/31/2017	3/31/2016	12/31/2016
Assets
Non-current assets	1,237	1,536	1,247
Current assets	9,119	7,577	8,191
Total assets	10,356	9,113	9,438
Equity and liabilities
Shareholders' equity	2,835	2,488	2,309
Untaxed reserves	2,170	1,975	2,170
Provisions	944	854	937
Long-term liabilities	254	343	312
Current liabilities	4,153	3,453	3,710
Total equity and liabilities	10,356	9,113	9,438
Pledged assets	169	169	169
Contingent liabilities	10,378	10,033	9,646

Stockholm, April 27, 2017 JM AB (publ)

Johan Skoglund President and Chief Executive Officer

The company's auditors did not review this interim report.

GROUP FIVE-YEAR OVERVIEW

SEK M	2016	2015	2014	2013	2012
Revenue	15,291	13,939	14,216	12,603	12,480
Operating profit	1,931	1,499	1,819	1,523	1,374
Profit before tax	1,871	1,427	1,744	1,464	1,318
Total assets	12,480	11,972	12,375	11,150	11,556
Cash flow from operating activities	1,957	–230	978	898	979
Interest-bearing net liabilities (+)/receivables (–)	435	1,198	–337	–642	–667
Operating margin, %	12.6	10.8	12.8	12.1	11.0
Return on equity, %	31.2	23.7	28.7	25.0	21.9
Equity/assets ratio, %	40	38	37	40	38
Earnings per share, SEK	20.40	14.50	17.00	14.10	11.70
Dividend per share, SEK	9.50 1)	8.25	8.00	7.25	6.75
Number of available building rights	32,500	31,100	29,400	27,700	26,600
Number of residential units sold	3,843	3,770	3,195	3,265	2,952
Number of housing starts	4,187	3,731	3,445	2,953	3,163
Number of residential units in current production	7,984	7,212	6,375	5,609	5,988

1) Board proposal.

GROUP QUARTERLY OVERVIEW

SEK M	2017		2016
INCOME STATEMENT	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	4,157	4,294	3,661	3,866	3,470
Production and operating costs	–3,329	–3,445	–2,988	–3,156	–2,851
Gross profit	828	849	673	710	619
Selling and administrative expenses	–246	–252	–200	–266	–217
Gains/losses on the sale of property	-	0	37	-23	1
Operating profit	582	597	510	421	403
Financial income and expenses	259	–25	–12	–7	–16
Profit before tax	841	572	498	414	387
Taxes	–129	–96	–113	–96	–88
Profit for the period	712	476	385	318	299
BALANCE SHEET	3/31	12/31	9/30	6/30	3/31
ASSETS
Non-current assets	215	230	233	219	212
Project properties	688	602	554	495	437
Development properties	6,922	7,121	6,547	6,534	6,769
Participations in tenant-owners associations, etc.	205	233	240	247	233
Current receivables	2,801	2,774	3,308	3,196	3,027
Cash and cash equivalents	2,619	1,520	1,177	1,282	1,182
Total current assets	13,235	12,250	11,826	11,754	11,648
Total assets	13,450	12,480	12,059	11,973	11,860
EQUITY AND LIABILITIES
Shareholders' equity	5,526	4,951	4,527	4,263	4,719
Non-current interest-bearing liabilities	259	282	352	343	375
Other non-current liabilities	150	168	169	152	151
Non-current provisions	2,267	2,236	2,330	2,221	2,083
Total non-current liabilities	2,676	2,686	2,851	2,716	2,609
Current interest-bearing liabilities	334	438	267	368	408
Other current liabilities	4,813	4,304	4,312	4,532	4,035
Current provisions	101	101	102	94	89
Total current liabilities	5,248	4,843	4,681	4,994	4,532
Total equity and liabilities	13,450	12,480	12,059	11,973	11,860
CASH FLOW STATEMENT	Q 1	Q 4	Q 3	Q 2	Q 1
Cash flow from operating activities	1,001	368	102	886	601
Cash flow from investing activities	307	–1	–2	–3	0
Cash flow from financing activities	–209	–25	–207	–784	–696
Total cash flow for the period	1,099	342	–107	99	–95
Cash and cash equivalents at end of the period	2,619	1,520	1,177	1,282	1,182
INTEREST-BEARING NET LIABILITIES/RECEIVABLES	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/receivables(–)
at beginning of the period	435	737	656	741	1,198
Change in interest-bearing net liabilities/receivables	–1,213	–302	81	–85	–457
Interest-bearing net liabilities(+)/receivables(–)
at end of the period	–778	435	737	656	741
DEVELOPMENT PROPERTIES	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	7,121	6,547	6,534	6,769	7,067
New purchases	355	966	562	125	250
Transferred to production	–539	–408	–594	–344	–550
Miscellaneous	–15	16	45	–16	2
Carrying amount at end of period	6,922	7,121	6,547	6,534	6,769
KEY FIGURES	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	14.0	13.9	13.9	10.9	11.6
Debt/equity ratio, multiple	-	0.1	0.2	0.2	0.2
Equity/assets ratio, %	41	40	38	36	40
Earnings per share, SEK	10.00	6.60	5.30	4.40	4.10
Number of available building rights	33,600	32,500	30,900	30,400	30,800
Number of residential units sold	864	925	960	1,031	927
Number of housing starts	813	1,357	1,058	916	856
Number of residential units in current production	7,901	7,984	7,793	7,081	7,550

BUSINESS SEGMENT QUARTERLY OVERVIEW

SEK M	2017		2016
JM RESIDENTIAL STOCKHOLM	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,840	2,018	1,699	1,741	1,704
Operating profit	347	387	308	306	294
Operating margin, %	18.9	19.2	18.1	17.6	17.3
Average operating capital	4,345	4,388	4,382	4,287	4,229
Return on operating capital, % 2)	31.0	29.5	27.3	26.8	26.2
Operating cash flow	498	367	180	551	460
Carrying amount, development properties	4,121	4,286	4,117	4,124	4,310
Number of available building rights	12,800	13,000	12,400	12,100	12,300
Number of residential units sold	354	399	353	403	397
Number of housing starts	300	634	456	283	372
Number of residential units in current production	3,714	3,786	3,564	3,237	3,801
JM RESIDENTIAL SWEDEN	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,146	997	830	986	1,007
Operating profit 1)	164	126	135	114	105
Operating margin, %	14.3	12.6	16.3	11.6	10.4
Average operating capital	967	1,085	1,150	1,175	1,249
Return on operating capital, % 2)	55.7	44.2	39.7	33.1	28.3
Operating cash flow	497	180	58	308	174
Carrying amount, development properties	1,322	1,350	1,096	1,137	1,189
Number of available building rights	9,800	9,700	9,400	9,600	9,600
Number of residential units sold	321	343	311	345	319
Number of housing starts	343	358	331	343	304
Number of residential units in current production 1) Of which property sales	2,169 -	2,240 -	2,300 37	2,075 0	1,962 -
JM INTERNATIONAL	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue Operating profit 1)	922 59	936 67	874 63	898 31	769 43
Operating margin, %	6.4	7.2	7.2	3.5	5.6
Average operating capital	2,034	1,997	1,993	2,013	2,093
Return on operating capital, % 2)	10.8	10.2	9.2	7.9	8.4
Operating cash flow	77	–114	71	165	31
Carrying amount, development properties	1,394	1,401	1,255	1,194	1,191
Carrying amount, project properties	13	13	38	36	35
Number of available building rights	10,100	8,900	7,900	8,000	8,200
Number of residential units sold	189	183	296	283	211
Number of housing starts	170	136	271	290	180
Number of residential units in current production	1,602	1,542	1,591	1,431	1,449
1) Of which property sales	-	0	-	-23	-
JM PROPERTY DEVELOPMENT	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	18	46	34	34	28
Operating profit 1)	7	18	7	–1	6
Average operating capital	550	508	455	405	361
Return on operating capital, % 2)	5.6	5.9	7.7	6.9	8.0
Operating cash flow	–71	–49	–56	–65	69
Carrying amount, development properties	35	35	35	35	35
Carrying amount, project properties	675	589	516	459	402
Number of available building rights 3)	900	900	1,200	700	700
Number of residential units sold 3)	-	-	-	-	-
Number of housing starts 3) Number of residential units in current production 3)	- 416	229 416	- 338	- 338	- 338
1) Of which property sales	-	-	-	-	1
3) Refers to rental units and residential care units.
JM CONSTRUCTION	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	437	454	404	447	360
Operating profit	9	10	12	11	10
Operating margin, %	2.1	2.2	3.0	2.5	2.8
Operating cash flow	32	47	25	-34	-6
JM OTHER	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	–118	–155	–112	–136	–111
Operating profit (Group-wide expenses)	–16	–11	–4	–13	–13
RESTATEMENT JM INTERNATIONAL	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue Operating profit	–88 12	–2 0	–68 –11	–104 –27	–287 –42

2) Calculated on 12-month rolling profits and average capital.

JM IN BRIEF

BUSINESS CONCEPT

To create attractive living and working environments that satisfy individual needs both today and in the future.

VISION

JM creates houses where people feel at home.

BUSINESS

JM is one of the leading developers of housing and residential areas in the Nordic region.

Operations focus on new production of homes in attractive locations, with the main focus on expanding metropolitan areas and university towns in Sweden, Norway and Finland. We are also involved in the project development of commercial premises and contract work, primarily in the Greater Stockholm area.

JM should promote long-term sustainability work in all operations. Annual sales total approximately SEK 16 billion and the company has approximately 2,400 employees. JM AB is a public limited company listed on NASDAQ Stockholm, Large Cap segment.

FINANCIAL TARGETS AND DIVIDENDS POLICY

The operating margin should amount to 10 percent, including gains/losses from property sales. The visible equity ratio should amount to 35 percent over a business cycle.

Over time, the dividend should reflect the earnings trend in total operating activities and over a business cycle on average correspond to 50 percent of consolidated profit after tax. Capital gains from property sales are a natural part of JM's project development operations and therefore are included in the calculation of dividends.

DISCLOSURES

This information is information that JM AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out below, at 14.00 CET on April 27, 2017.

FOR MORE INFORMATION PLEASE CONTACT:

Claes Magnus Åkesson, CFO, Head of IR Tel. +46 8 782 89 71

FINANCIAL CALENDAR

July 14, 2017 Interim Report January – June October 26, 2017 Interim Report January – September

PRESS RELEASES, Q1 2017

March 29	JM Construction building residential units in Tyresö,
	Stockholm
March 24	Notice of JM's Annual General Meeting on April 27,
	2017
February 27	JM Construction building apartments in Norra
	Djurgårdsstaden, Stockholm
February 21	JM completes selling its stake in Småa AB
February 13	JM acquiring development property for 660 residential
	units in Oslo
February 10	JM Construction building energy-efficient homes in
	Norra Djurgårdsstaden, Stockholm
February 8	JM selling its stake in Småa AB
February 7	Year-end Report 2016
February 6	JM's outstanding receivables
January 31	Conversion of Convertible debentures in to shares in
	JM AB (publ)

JM's Annual Reports, Interim Reports and other financial information are available at jm.se/investors

JM AB (publ)

Comp. Reg. No. 556045-2103 Website www.jm.se/en

Mailing address SE-169 82 Stockholm Street address Gustav III:s boulevard 64, Solna Telephone +46 8 782 87 00 Fax +46 8 782 86 00