JM — Interim / Quarterly Report 2016

Feb 7, 2017

Year-end Report 2016

JM GROUP JANUARY–DECEMBER 2016

INCREASED NUMBER OF HOUSING STARTS AND IMPROVED PROFITABILITY

• According to segment reporting revenue increased to SEK 15,752m (14,447) and operating profit increased to SEK 2,011m (1,590). The operating margin increased to 12.8 percent (11.0)
• Restated in accordance with IFRIC 15, revenue increased to SEK 15,291m (13,939) and operating profit increased to SEK 1,931m (1,499). This restatement is attributable to JM International and had a negative effect on earnings of SEK –80m (–91)
• Profit before tax increased to SEK 1,871m (1,427). Profit after tax increased to SEK 1,478m (1,085)
• Return on equity for the past twelve months increased to 31.2 percent (23.7). Earnings per share during the year increased to SEK 20.40 (14.50)
• Consolidated cash flow including net investment in properties was SEK 1,957m (–230)
• The number of residential units sold increased to 3,843 (3,770) and housing starts increased to 4,187 (3,731)
• Surplus value of development properties was SEK 7.0bn (4.2)
• The Board of Directors proposes a dividend of SEK 9.50 (8.25) for 2016, as well as renewed buy-back authorization.

		January–December		October–December
SEK m	2016	2015	2016	2015
Revenue (segment reporting)	15,752	14,447	4,296	3,958
Operating profit (segment reporting)	2,011	1,590	597	446
Operating margin (segment reporting), %	12.8	11.0	13.9	11.3
Revenue	15,291	13,939	4,294	3,744
Operating profit	1,931	1,499	597	411
Profit before tax	1,871	1,427	572	394
Operating margin, %	12.6	10.8	13.9	11.0
Cash flow from operating activities	1,957	–230	368	–423
Return on equity, %	31.2	23.7
Equity/assets ratio, %	40	38	40	38
Earnings per share, SEK	20.40	14.50	6.60	4.20
Number of residential units sold	3,843	3,770	925	939
Number of housing starts	4,187	3,731	1,357	1,066
Number of residential units in current production	7,984	7,212

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.

GROUP

"Demand for JM's residential units has continued to be stable in JM's main markets during the fourth quarter. The stable demand supports a continued high level of housing starts. We are also pleased to have started two rental unit projects in Stockholm during the quarter. We also recorded a large increase in the value of our development properties during the year, which clearly confirms our geographic acquisition strategy.

The housing operations in Stockholm are showing a positive development with good profitability and continued strong interest in our projects. We are reporting stronger revenue and profit in the rest of Sweden due to strong demand and price increases for our residential units during the year. Even in Norway and Finland the operations are developing at a stable rate with continued good demand in Norway and some improvement in Finland.

During the year, we also worked to develop our products to reflect the stronger preference of our customers to have an individualized home. We are also taking steps to further digitalize our operations. The digitalization supports the development of our customer offer and increases efficiency in our processes.

Structurally, conditions for our business are favorable, including large population increases in the markets where we are active. 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."

MARKET, SALES AND HOUSING STARTS

Demand for newly built homes in Sweden and Norway has been stable during the year. 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 increased to 3,843 (3,770) 1). The percentage of sold or reserved homes in relation to current production amounts to 77 percent (86), with an interval of 60-65 percent considered normal. JM Residential Stockholm sold 1,552 residential units (1,600), JM Residential Sweden sold 1,318 (1,273), JM International sold 973 (843) and JM Property Development sold 0 (54).

The number of housing starts increased to 4,187 (3,731)2). JM Residential Stockholm started production on 1,745 residential units (1,667), JM Residential Sweden on 1,336 (1,228), JM International on 877 (782) and JM Property Development on 229 (54).

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

The number of residential units in current production increased to 7,984 (7,212), of which 416 (338) are rental units and residential care units.

1) Of which 0 rental units and residential care units (54).

2) Of which 229 rental units and residential care units (54).

	January–December			October–December
Operating profit, SEK m	2016	2015	2016	2015
JM Residential Stockholm	1,295	1,078	387	288
JM Residential Sweden	480	308	126	102
JM International	204	166	67	46
JM Property Development	30	38	18	23
JM Construction	43	45	10	0
Group-wide expenses	–41	–45	–11	–13
Total (segment reporting)	2,011	1,590	597	446
Restatement JM International 1)	–80	–91	0	–35
Total	1,931	1,499	597	411
Of which property sales	15	56	-	1

Johan Skoglund, President and CEO

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

1) According to segment reporting

1) According to segment reporting

REVENUE, OPERATING PROFIT AND OPERATING MARGIN

Consolidated revenue in accordance with segment reporting for the year increased to SEK 15,752m (14,447). Revenue restated according to IFRIC 15 increased to SEK 15,291m (13,939).

Operating profit according to segment reporting increased to SEK 2,011m (1,590) and the operating margin increased to 12.8 percent (11.0). Operating profit restated according to IFRIC 15 increased to SEK 1,931m (1,499). This restatement is attributable to JM International and had a negative effect on earnings of SEK –80m (–91).

Properties were sold during the year for SEK 86m (572) with gains of SEK 15m (56).

Rental income from JM's project properties was SEK 25m (23). Net rental income was SEK 5m (8).

		January–December		October–December
Operating margin, %	2016	2015	2016	2015
JM Residential Stockholm	18.1	17.2	19.2	17.7
JM Residential Sweden	12.6	9.4	12.6	10.0
JM International	5.9	5.4	7.2	5.3
JM Construction	2.6	2.2	2.2	0.0

Residential units in current production	12/31/2016	12/31/2015
Number of residential units in current production 1) 2)	7,984	7,212
Percentage of sold residential units in current production, % 3)	65	64
Percentage of reserved residential units in current production, %	12	22
Percentage of sold and reserved residential units in current production, %	77	86
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
Includes residential units in projects where costs incurred are only reported as project properties under
construction	416	284
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	12/31/2016	12/31/2015
Completed production, number of unsold units 1)	70	98
- Of which in the balance sheet reported as "Participations in tenant-owner associations, etc."	64	71

1) After final occupancy according to plan.

RESIDENTIAL BUILDING RIGHTS

The number of available building rights amounted to 32,500 (31,100), of which 17,900 (18,100) are recognized in the balance sheet. Capital tied up in building rights (development properties on the balance sheet) for residential units amounted to SEK 7,037m (6,998) at the end of the year. Valuation of JM's total development properties with a carrying amount of SEK 7.1bn (7.1) shows a surplus value of SEK 7.0bn (4.2). This valuation was carried out in cooperation with an independent appraisal company. This large increase in value confirms JM's geographic acquisition strategy.

During 2016, JM purchased development properties for residential units for SEK 1,894m (2,684), of which SEK 1,021m relates to JM Residential Stockholm, SEK 459m to JM Residential Sweden and SEK 414m to JM International.

PROJECT PROPERTIES

The externally appraised market value of JM's project properties was calculated to be SEK 863m (550) with a carrying amount of SEK 602m (378).

1) Including rental units and residential care units in JM Property Development – not included in percentage of sold/reserved

		12/31/2016		12/31/2015
Development properties (residential units), SEK billion	Market value	Carrying amount	Market value	Carrying amount
JM Residential Stockholm	9.1	4.3	7.3	4.5
JM Residential Sweden	2.5	1.4	2.1	1.3
JM International	2.5	1.4	1.8	1.2
Total	14.1	7.1	11.2	7.0

FINANCIAL ITEMS

Net financial items increased by SEK 12m (of which a currency effect of SEK –9m from the closing of JM's operations in Denmark) compared to the previous year due primarily to lower interest-bearing loans.

The total interest-bearing loan stock was SEK 1,959m (2,473), of which the pensions liability comprised SEK 1,239m (1,129). At the end of the year, the average interest rate for the total loan stock including the pension liability was 2.4 percent (2.3). The average term for fixed-rate loans excluding the pension liability was 0.4 years (0.4).

Consolidated available liquidity was SEK 4,320m (3,575). Aside from cash and cash equivalents of SEK 1,520m (1,275), this includes unutilized overdraft facilities and credit lines totaling SEK 2,800m (2,300), where credit agreements for SEK 2,400m had an average maturity of 1.5 years (1.7).

Interest-bearing net liabilities at the end of the year totaled SEK 435m (1,198). Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 497m (509). Of these liabilities, SEK 329m (349) 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–December		October–December
SEK m	2016	2015	2016	2015
Financial income 1)	17	11	2	2
Financial expenses 2)	–68	–83	–18	–19
Currency effect from the closing down of operations 3)	–9	–	–9	–
Financial income and expenses	–60	–72	–25	–17
1) Of which revaluation and currency hedging	0	2	0	2
2) Of which revaluation and currency hedging	0	–2	0	–2

3) Pertains to JM's operations in Denmark.

	January–December		October–December
SEK m	2016	2015	2016	2015
Interest-bearing net liabilities(+)/receivables(–) at beginning of the period Change in interest-bearing net liabilities/receivables	1,198 –763	–337 1,535	737 –302	596 602
Interest-bearing net liabilities(+)/receivables(–) at end of the period	435	1,198	435	1,198

CASH FLOW

Cash flow from operating activities was SEK 1,957m (–230) during the year. Net investments in development properties resulted in a cash flow of SEK 66m (–902). Holdings of repurchased residential units resulted in a cash flow of SEK –26m (65). Consolidated cash flow from project properties (sales minus investment) during the year was SEK –241m (–168).

RISKS AND UNCERTAINTIES

JM's risk and risk management policies are presented in the 2015 annual report on pages 29-32. No significant changes have occurred to change these reported risks.

BUY-BACK AND HOLDINGS OF OWN SHARES

During the fourth quarter of 2016, 494,047 shares were bought back for a total of SEK 125m. Holdings of own shares subsequently total 1,604,657. After the 2016 Annual General Meeting, shares were bought back for SEK 375m.

The number of outstanding shares, excluding holdings of own shares, at December 31, 2016, totals 71,448,330.

The Board of Directors intends to propose to the Annual General Meeting that all the holdings of own shares be eliminated through a decrease in the share capital for appropriations to unrestricted equity. The Board of Directors' complete proposal for a resolution regarding the elimination of shares will be available in conjunction with the notice of Annual General Meeting on March 27, 2017.

The strong balance sheet and cash flow continue to enable capital transfer to shareholders in addition to regular dividends. In light of this, the Board of Directors will propose that the Annual General Meeting resolve to authorize the Board of Directors, during the period up to the next Annual General Meeting and on one or more occasions, to make a resolution on buying back shares so that the Company's holdings do not at any point in time exceed 10 percent of all the shares in the Company. Acquisition should take place on NASDAQ Stockholm.

The strategy is to spread out the buy-backs on NASDAQ Stockholm up until the 2018 Annual General Meeting. The objective of empowering the Board of Directors is to give it the possibility to adjust the Company's capital structure on a continuous basis.

PERSONNEL

The number of employees increased at the end of the year to 2,422 (2,316). The number of wage-earners was 1,023 (1,010) and the number of salaried employees was 1,399 (1,306). 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.

DIVIDEND

For 2016 the Board of Directors proposes a dividend of SEK 9.50 (8.25) per share, for a total of SEK 679m (602). The proposed record date for the dividend is Tuesday, May 2, 2017. If the Annual General Meeting resolves to adopt the proposal, the dividend will be sent on Friday, May 5, 2017.

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.

	January–December		October–December
SEK m	2016	2015	2016	2015
Revenue	7,162	6,273	2,018	1,631
Operating profit 1)	1,295	1,078	387	288
Operating margin, %	18.1	17.2	19.2	17.7
Average operating capital	4,388	4,134
Return on operating capital, %	29.5	26.1
Operating cash flow	1,558	–344	367	–640
Carrying amount, development properties	4,286	4,517
Number of available building rights	13,000	12,400
Number of residential units sold	1,552	1,600	399	370
Number of housing starts	1,745	1,667	634	470
Number of residential units in current production	3,786	3,627
Number of employees	859	854
1) Of which property sales	-	0	-	0

The average prices on the existing home market increased slightly during the fourth quarter and the supply of homes has been relatively low. The turnover rate remained the same. 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 very 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' tendency to sign a contract early in the process is at a normal level.

Revenue in the business segment increased to SEK 7,162m (6,273), which confirms the continued stable development for the operations. Operating profit increased to SEK 1,295m (1,078). The operating margin increased to 18.1 percent (17.2).

Cash flow during the year is in balance taking into consideration the decrease in development properties.

In total, production was started in the fourth quarter on 634 residential units in apartment buildings in Järfalla and Stockholm.

During the fourth quarter, JM purchased building rights in Stockholm corresponding to 315 residential units.

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.

	January–December		October–December
SEK m	2016	2015	2016	2015
Revenue	3,820	3,278	997	1,019
Operating profit 1)	480	308	126	102
Operating margin, %	12.6	9.4	12.6	10.0
Average operating capital	1,085	1,289
Return on operating capital, %	44.2	23.9
Operating cash flow	720	533	180	192
Carrying amount, development properties	1,350	1,269
Number of available building rights	9,700	9,900
Number of residential units sold	1,318	1,273	343	322
Number of housing starts	1,336	1,228	358	368
Number of residential units in current production	2,240	1,944
Number of employees	586	539
1) Of which property sales	37	0	-	0

Average prices on the existing home market remained the same or rose slightly in most markets within the business segment during the fourth quarter. There were some exceptions, such as Uppsala, Linköping and Lund, where prices decreased slightly. The supply of homes during the quarter decreased and is lower than in the corresponding period last year. The turnover rate remained the same.

Competition for land for residential units is very tough. Interest in JM's projects is strong. The customers' tendency to sign a contract early in the process is at a normal level.

Business segment revenue increased to SEK 3,820m (3,278) and operating profit increased to SEK 480m (308), including gains from the sale of property in Örebro totaling SEK 37m (0). The operating margin increased to 12.6 percent (9.4).

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

JM started production during the fourth quarter on 358 residential units in apartment buildings and single-family homes in Malmö, Gothenburg, Uppsala, Örebro and Staffanstorp.

During the fourth quarter, JM purchased building rights corresponding to 800 residential units in Malmö, Gothenburg, Uppsala and Örebro.

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.

	January–December		October–December
SEK m	2016	2015	2016	2015
Revenue	3,477	3,059	936	873
- of which JM Norway	3,056	2,664	815	761
Operating profit 1)	204	166	67	46
- of which JM Norway	227	181	69	49
Operating margin, %	5.9	5.4	7.2	5.3
- of which JM Norway	7.4	6.8	8.5	6.4
Average operating capital	1,997	2,145
Return on operating capital, %	10.2	7.7
Operating cash flow	153	434	–114	191
Carrying amount, development properties	1,401	1,202
Carrying amount, project properties	13	31
Number of available building rights	8,900	8,200
Number of residential units sold	973	843	183	193
Number of housing starts	877	782	136	228
Number of residential units in current production	1,542	1,303
Number of employees	420	395
1) Of which property sales	–23	39	0	–1

The business segment's revenue increased to SEK 3,477m (3,059) and operating profit increased to SEK 204m (166). The operating margin increased to 5.9 percent (5.4). The profit includes SEK –23m (39) from the sale of a property in Denmark. Excluding this sale, the operating margin is 6.5 percent.

Cash flow during the year was inhibited somewhat by investments in development properties.

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 fourth quarter, and prices in Oslo continued to demonstrate strong growth.

JM Norway's revenue increased to SEK 3,056m (2,664) and operating profit increased to SEK 227m (181), of which property sales accounted for SEK 0m (20). The operating margin increased to 7.4 percent (6.8). During the fourth quarter 149 residential units (168) were sold and production began on 136 units (185). Production starts during the fourth quarter consist of residential units in apartment buildings and single-family homes in Oslo, Bergen, Tönsberg, Skien and Horten. The number of residential units in current production amounts to 1,203 (1,120).

During the fourth quarter, JM purchased building rights corresponding to 995 residential units in the Oslo area and 26 in Larvik.

Available building rights correspond to 6,700 residential units (5,900).

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 year.

During the fourth quarter 31 residential units (20) were sold and production began on 0 units (43). The number of residential units in current production amounts to 277 (121).

No building rights were acquired during the fourth quarter. Available building rights correspond to 2,000 residential units (2,100).

OTHER INTERNATIONAL MARKETS

DENMARK

In 2015, JM completed the final phase of a single-family home project in Humlebäck and since then has not had any production in Denmark.

The Dagelökke Ege property was sold during the second quarter of 2016, and JM's operations in Denmark were closed during the year.

BELGIUM

During 2015, JM closed its office in Brussels and no longer has any staff there. Remaining operations are run by external resources.

During the fourth quarter 3 residential units (2) were sold and production began on 0 units (0). The number of residential units in current production amounts to 62 (62).

No building rights were purchased. 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.

	January–December			October–December
SEK m	2016	2015	2016	2015
Revenue	142	206	46	100
Operating profit 1)	30	38	18	23
Average operating capital	508	326
Return on operating capital, %	5.9	11.7
Operating cash flow	–101	–206	–49	–112
Carrying amount, development properties	35	35
Carrying amount, project properties	589	347
Number of available building rights 2)	900	600
Number of residential units sold 2)	-	54	-	54
Number of housing starts 2)	229	54	229	-
Number of residential units in current production 2)	416	338
Number of employees	31	29
1) Of which property sales	1	17	-	2

2) Refers to rental units and residential care units.

Business segment revenue decreased to SEK 142m (206), including contracting revenue of SEK 117m (185) and rental revenue of SEK 25m (21). Operating profit was SEK 30m (38).

Net rental income for project properties was SEK 5m (7). Profit from construction contracts was SEK 45m (32) and gains from property sales were SEK 1m (17).

Cash flow during the year was 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 93 percent. Within the Bolinder area in Kallhäll, Järfälla, the occupancy rate is 86 percent in the buildings that will not be demolished.

Production continued during the year on a rental unit project in the Dalénum area, on JM's own balance sheet, consisting of 97 residential units. The project was completed at the end of the year and as of the end of the year all apartments were rented.

Production is underway on JM's own balance sheet on the rental unit project Tjärtunnan in Stureby consisting of 187 residential units, and completion is planned for 2017.

During the fourth quarter, production started on an additional two rental projects on JM's own balance sheet; the Spaken project in Hägernäs, Täby, consisting of 136 rental units with planned occupancy in 2018, and the Alphyddan project in Sickla, Nacka, a tower block consisting of 93 student apartments with planned occupancy in 2018.

Production continued in 2016 on a senior housing project, the Vinfatet project in Sollentuna, for an external orderer consisting of 54 residential units. The project was turned over upon its completion in the fourth quarter of 2016.

JM CONSTRUCTION

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

			October–December
		January–December
SEK m	2016	2015	2016	2015
Revenue 1)	1,665	2,084	454	480
Operating profit	43	45	10	0
Operating margin, %	2.6	2.2	2.2	0.0
Operating cash flow	32	–34	47	–65
Carrying amount, development properties	49	44
Number of employees	393	380
1) Of which internal	514	453	155	145

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.

The business segment's revenue decreased to SEK 1,665m (2,084) and operating profit decreased to SEK 43m (45). The operating margin was 2.6 percent (2.2).

The decrease in revenue is attributable to the assignment for the new production of a biofuel cogeneration plant in Stockholm for Fortum Värme, now being completed.

Cash flow during the year was limited by a delayed payment from an external orderer that is under dispute.

The business segment received a number of assignments during the fourth quarter, of which the largest was the construction of a school for Vallentuna Municipality.

The largest ongoing assignments are a new operational area at Arlanda Airport (Swedavia), renovation of quays in Norrtälje Harbor and development projects for future housing production (Norrtälje Municipality), new production of office buildings in Danderyd (Skandia Fastigheter), new production of apartment buildings in Gröndal (Aros Bostad), development work for housing production in Hammarby Sjöstad and the renovation of Slussen (City of Stockholm).

CONDENSED CONSOLIDATED INCOME STATEMENT

		January–December		October–December
SEK m	2016	2015	2016	2015
Revenue	15,291	13,939	4,294	3,744
Production and operating costs	–12,440	–11,630	–3,445	–3,092
Gross profit	2,851	2,309	849	652
Selling and administrative expenses	–935	–866	–252	–242
Gains/losses on the sale of property	15	56	0	1
Operating profit	1,931	1,499	597	411
Financial income and expenses	–60	–72	–25	–17
Profit before tax	1,871	1,427	572	394
Taxes	–393	–342	–96	–84
Profit for the period	1,478	1,085	476	310
Other comprehensive income Items that will be reclassified as income Translation differences from the translation of foreign
operations	102	–87	1	–37
Items that will not be reclassified as income
Restatement of defined-benefit pensions Tax attributable to other comprehensive income	–81 18	–49 11	89 –19	16 –3
Comprehensive income for the period	1,517	960	547	286
Net profit for the period is attributable to shareholders of the Parent Company	1,478	1,085	476	310
Comprehensive income for the period is attributable to shareholders of the Parent Company	1,517	960	547	286
Earnings per share 1), basic, attributable to shareholders of the Parent Company, SEK	20.40	14.50	6.60	4.20
Earnings per share 1), diluted, attributable to shareholders of the Parent Company, SEK	20.30	14.50	6.60	4.20
Number of outstanding shares at end of period	71,448,330	73,594,000	71,448,330	73,594,000
Average number of shares, basic	72,526,479	74,601,637	71,752,144	73,864,358
Average number of shares, diluted	72,725,820	74,846,482	71,986,460	74,099,334

1) Net profit for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

SEK m	12/31/2016	12/31/2015
ASSETS
Non-current assets	230	209
Project properties	602	378
Development properties	7,121	7,067
Participations in tenant-owners associations, etc.	233	235
Current receivables 1)	2,774	2,808
Cash and cash equivalents	1,520	1,275
Total current assets	12,250	11,763
Total assets	12,480	11,972
EQUITY AND LIABILITIES 2)
Shareholders' equity	4,951	4,521
Non-current interest-bearing liabilities	282	410
Other non-current liabilities	168	160
Non-current provisions	2,236	2,069
Total long-term liabilities	2,686	2,639
Current interest-bearing liabilities	438	934
Other current liabilities	4,304	3,784
Current provisions	101	94
Total current liabilities	4,843	4,812
Total equity and liabilities	12,480	11,972
Pledged assets	688	667
Contingent liabilities	9,451	7,985
1) Of which receivables from property sales	72	72
2) Of which liabilities for property acquisition	654	704

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

SEK m	2016	2015
Opening balance at beginning of the year	4,521	4,635
Total comprehensive income for the period	1,517	960
Dividend	–602	–600
Conversion of convertible loan	13	25
Equity component of convertible debentures	2	1
Buy-back of shares	–500	–500
Closing balance at the end of the year	4,951	4,521

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

		January–December		October–December
SEK m	2016	2015	2016	2015
Cash flow from operating activities before change in
working capital	2,213	1,532	666	394
Paid tax	–413	–806	–89	–79
Investment in development properties, etc.1)	–2,215	–3,612	–1,089	–1,519
Payment on account for development properties, etc.2)	2,255	2,775	544	920
Investment in project properties	–242	–219	–72	–105
Sale of project properties	1	51	-	51
Change in current liabilities/receivables	358	49	408	–85
Cash flow from operating activities	1,957	–230	368	–423
Cash flow from investing activities	–6	–11	–1	–2
Loans raised	300	750	114	603
Amortization of debt	–910	–552	–14	–335
Buy-back of shares	–500	–500	–125	–125
Dividend	–602	–600	-	-
Cash flow from financing activities	–1,712	–902	–25	143
Cash flow for the period	239	–1,143	342	–282
Cash and cash equivalents at end of the period	1,520	1,275	1,520	1,275
1) Of which investment in participations in tenant-owners associations and freehold residential units	–283	–345	–117	–72
2) Of which sale of participations in tenant-owners associations and freehold residential units	257	410	73	77

KEY FIGURES

		January–December		October–December
%	2016	2015	2016	2015
Operating margin	12.6	10.8	13.9	11.0
Pre-tax return on capital employed	27.9	22.0
Return on equity	31.2	23.7
Debt/equity ratio, times	0.1	0.3	0.1	0.3
Equity/assets ratio	40	38	40	38

ACCOUNTING PRINCIPLES

This year-end report and interim report for the fourth quarter 2016 was 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 2015, 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–December		October–December
SEK m	2016	2015	2016	2015
Sweden	12,275	11,388	3,360	3,085
Norway	3,056	2,664	815	761
Finland	377	263	114	76
Denmark	15	38	0	6
Belgium	29	94	7	30
Restatement JM International 1)	–461	–508	–2	–214
Total	15,291	13,939	4,294	3,744

REVENUE BY BUSINESS SEGMENT

January–December			October–December
SEK m	2016	2015	2016	2015
JM Residential Stockholm	7,162	6,273	2,018	1,631
JM Residential Sweden	3,820	3,278	997	1,019
JM International	3,477	3,059	936	873
JM Property Development	142	206	46	100
JM Construction	1,665	2,084	454	480
Elimination	–514	–453	–155	–145
Total (segment reporting)	15,752	14,447	4,296	3,958
Restatement JM International 1)	–461	–508	–2	–214
Total	15,291	13,939	4,294	3,744

OPERATING PROFIT BY BUSINESS SEGMENT

	January–December			October–December
SEK m	2016	2015	2016	2015
JM Residential Stockholm	1,295	1,078	387	288
JM Residential Sweden	480	308	126	102
JM International	204	166	67	46
JM Property Development	30	38	18	23
JM Construction	43	45	10	0
Group-wide expenses	–41	–45	–11	–13
Total (segment reporting)	2,011	1,590	597	446
Restatement JM International 1)	–80	–91	0	–35
Total	1,931	1,499	597	411

OPERATING MARGIN BY BUSINESS SEGMENT

		January–December		October–December
%	2016	2015	2016	2015
JM Residential Stockholm	18.1	17.2	19.2	17.7
JM Residential Sweden	12.6	9.4	12.6	10.0
JM International	5.9	5.4	7.2	5.3
JM Construction	2.6	2.2	2.2	0.0

AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT

SEK m	2016	2015
JM Residential Stockholm	4,388	4,134
JM Residential Sweden	1,085	1,289
JM International	1,997	2,145
JM Property Development	508	326

RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT

%	2016	2015
JM Residential Stockholm	29.5	26.1
JM Residential Sweden	44.2	23.9
JM International	10.2	7.7
JM Property Development	5.9	11.7

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–December		October–December
SEK m	2016	2015	2016	2015
JM Residential Stockholm	1,558	–344	367	–640
JM Residential Sweden	720	533	180	192
JM International	153	434	–114	191
JM Property Development	–101	–206	–49	–112
JM Construction	32	–34	47	–65

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

Carrying amount, SEK m	12/31/2016	12/31/2015
JM Residential Stockholm	4,286	4,517
JM Residential Sweden	1,350	1,269
JM International	1,401	1,202
JM Property Development	35	35
JM Construction	49	44
Total	7,121	7,067

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

Number	12/31/2016	12/31/2015
JM Residential Stockholm	13,000	12,400
JM Residential Sweden	9,700	9,900
JM International	8,900	8,200
JM Property Development 1)	900	600
Total	32,500	31,100
Of which, recognized on the balance sheet (development properties)
JM Residential Stockholm	8,000	8,700
JM Residential Sweden	5,500	5,200
JM International	4,300	4,100
JM Property Development 1)	100	100
Total	17,900	18,100

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

		January–December		October–December
Number	2016	2015	2016	2015
JM Residential Stockholm	1,552	1,600	399	370
JM Residential Sweden	1,318	1,273	343	322
JM International	973	843	183	193
JM Property Development 1)	-	54	-	54
Total	3,843	3,770	925	939

HOUSING STARTS BY BUSINESS SEGMENT

		January–December	October–December
Number	2016	2015	2016	2015
JM Residential Stockholm	1,745	1,667	634	470
JM Residential Sweden	1,336	1,228	358	368
JM International	877	782	136	228
JM Property Development 1)	229	54	229	-
Total	4,187	3,731	1,357	1,066

RESIDENTIAL UNITS IN CURRENT PRODUCTION

Number	12/31/2016	12/31/2015
JM Residential Stockholm	3,786	3,627
JM Residential Sweden	2,240	1,944
JM International	1,542	1,303
JM Property Development 1)	416	338
Total	7,984	7,212

1) Refers to rental units and residential care units.

PROJECT PROPERTIES, GROUP

12/31/2016	Market value, SEK m	Carrying amount, SEK m	Area (000) m²	Occupancy rate annual rent, %	Carrying amount, SEK m 12/31/2015
Properties under development	835	583	25	88	341
Completed commercial properties	28	19	1	100	37
Total	863	602	26	89	378

DEVELOPMENT PROPERTIES, GROUP

		January–December	October–December
Carrying amount, SEK m	2016	2015	2016	2015
Opening balance at beginning of period	7,067	6,802	6,547	7,189
New purchases	1,903	2,695	966	546
Transferred to production	–1,896	–1,814	–408	–486
Miscellaneous	47	–616	16	–182
Closing balance at the end of the period	7,121	7,067	7,121	7,067

PARENT COMPANY

CONDENSED INCOME STATEMENT, PARENT COMPANY

	January–December
SEK m	2016	2015
Net sales	11,149	9,761
Production and operating costs	–8,863	–7,875
Gross profit	2,286	1,886
Selling and administrative expenses	–648	–545
Gains/losses on the sale of property	–23	13
Operating profit	1,615	1,354
Financial income and expenses	159	1
Profit before appropriations and tax	1,774	1,355
Appropriations	–147	–167
Profit before tax	1,627	1,188
Taxes	–322	–704 1)
Net profit for the year	1,305	484

1)Of which SEK 409m refers to paid tax attributable to a ruling by the Administrative Court of Appeals in July for the years 2007 and 2008. The proceedings referred to impairment losses on shares in Group companies, which the Administrative Court of Appeals ruled to be non-deductible. JM had made full provisions in the consolidated accounts for a negative outcome.

CONDENSED BALANCE SHEET, PARENT COMPANY

SEK m	12/31/2016	12/31/2015
Assets
Non-current assets	1,247	1,578
Current assets	8,191	7,930
Total assets	9,438	9,508
Equity and liabilities
Shareholders' equity	2,309	2,205
Untaxed reserves	2,170	1,975
Provisions	937	855
Long-term liabilities	312	353
Current liabilities	3,710	4,120
Total equity and liabilities	9,438	9,508
Pledged assets	169	169
Contingent liabilities	9,646	9,250

Stockholm, February 7, 2017 JM AB (publ)

Johan Skoglund President and Chief Executive Officer

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	2016 2015
INCOME STATEMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue Production and operating costs	4,294 –3,445	3,661 –2,988	3,866 –3,156	3,470 –2,851	3,744 –3,092	3,410 –2,886	3,485 –2,899	3,300 –2,753
Gross profit	849	673	710	619	652	524	586	547
Selling and administrative expenses Gains/losses on the sale of property	–252 0	–200 37	–266 –23	–217 1	–242 1	–179 21	–235 10	–210 24
Operating profit	597	510	421	403	411	366	361	361
Financial income and expenses	–25	–12	–7	–16	–17	–24	–12	–19
Profit before tax	572	498	414	387	394	342	349	342
Taxes	–96	–113	–96	–88	–84	–94	–83	–81
Profit for the period	476	385	318	299	310	248	266	261
BALANCE SHEET	12/31	9/30	6/30	3/31	12/31	9/30	6/30	3/31
ASSETS
Non-current assets	230	233	219	212	209	217	229	228
Project properties	602	554	495	437	378	326	280	238
Development properties Participations in tenant-owners associations, etc.	7,121 233	6,547 240	6,534 247	6,769 233	7,067 235	7,189 229	6,727 292	6,839 318
Current receivables	2,774	3,308	3,196	3,027	2,808	2,646	2,048	2,166
Cash and cash equivalents	1,520	1,177	1,282	1,182	1,275	1,557	1,887	2,077
Total current assets	12,250	11,826	11,754	11,648	11,763	11,947	11,234	11,638
Total assets	12,480	12,059	11,973	11,860	11,972	12,164	11,463	11,866
EQUITY AND LIABILITIES
Shareholders' equity	4,951	4,527	4,263	4,719	4,521	4,358	4,277	4,726
Non-current interest-bearing liabilities	282	352	343	375	410	472	489	426
Other non-current liabilities	168	169	152	151	160	150	158	166
Non-current provisions Total non-current liabilities	2,236 2,686	2,330 2,851	2,221 2,716	2,083 2,609	2,069 2,639	2,047 2,669	2,455 3,102	2,352 2,944
Current interest-bearing liabilities	438	267	368	408	934	548	569	640
Other current liabilities	4,304	4,312	4,532	4,035	3,784	4,486	3,412	3,453
Current provisions	101	102	94	89	94	103	103	103
Total current liabilities	4,843	4,681	4,994	4,532	4,812	5,137	4,084	4,196
Total equity and liabilities	12,480	12,059	11,973	11,860	11,972	12,164	11,463	11,866
CASH FLOW STATEMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Cash flow from operating activities	368	102	886	601	–423	–193	659	–273
Cash flow from investing activities	–1	–2	–3	0	–2	–2	–5	–2
Cash flow from financing activities	–25	–207	–784	–696	143	–131	–841	–73
Total cash flow for the period Cash and cash equivalents at	342	–107	99	–95	–282	–326	–187	–348
end of the period	1,520	1,177	1,282	1,182	1,275	1,557	1,887	2,077
INTEREST-BEARING NET LIABILITIES/ RECEIVABLES	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/ receivables(–) at beginning of the period	737	656	741	1,198	596	295	106	–337
Change in interest-bearing net liabilities/ receivables	–302	81	–85	–457	602	301	189	443
Interest-bearing net liabilities(+)/
receivables(–) at end of the period	435	737	656	741	1,198	596	295	106
DEVELOPMENT PROPERTIES	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	6,547	6,534	6,769	7,067	7,189	6,727	6,839	6,802
New purchases	966	562	125	250	546	1,298	347	504
Transferred to production	–408	–594	–344	–550	–486	–476	–433	–419
Miscellaneous	16	45	–16	2	–182	–360	–26	–48
Carrying amount at end of period	7,121	6,547	6,534	6,769	7,067	7,189	6,727	6,839
KEY FIGURES	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	13.9	13.9	10.9	11.6	11.0	10.7	10.4	10.9
Debt/equity ratio, times Equity/assets ratio, %	0.1 40	0.2 38	0.2 36	0.2 40	0.3 38	0.1 36	0.1 37	0.0 40
Earnings per share, SEK	6.60	5.30	4.40	4.10	4.20	3.30	3.50	3.50
Number of available building rights	32,500	30,900	30,400	30,800	31,100	28,700	27,900	29,700
Number of residential units sold	925	960	1,031	927	939	891	1,097	843
Number of housing starts	1,357	1,058	916	856	1,066	888	1,029	748
Number of residential units in current production	7,984	7,793	7,081	7,550	7,212	7,073	6,917	6,635

BUSINESS SEGMENT

QUARTERLY OVERVIEW

SEK m	2016			2015
JM RESIDENTIAL STOCKHOLM	Q 4	Q3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	2,018	1,699	1,741	1,704	1,631	1,522	1,575	1,545
Operating profit 1)	387	308	306	294	288	259	268	263
Operating margin, %	19.2	18.1	17.6	17.3	17.7	17.0	17.0	17.0
Average operating capital	4,388	4,382	4,287	4,229	4,134	3,823	3,530	3,336
Return on operating capital, % 2)	29.5	27.3	26.8	26.2	26.1	30.8	34.2	37.1
Operating cash flow	367	180	551	460	–640	457	252	–413
Carrying amount, development properties	4,286	4,117	4,124	4,310	4,517	4,536	3,928	4,012
Number of available building rights	13,000	12,400	12,100	12,300	12,400	11,900	11,500	11,900
Number of residential units sold	399	353	403	397	370	375	480	375
Number of housing starts	634	456	283	372	470	444	402	351
Number of residential units in current production	3,786	3,564	3,237	3,801	3,627	3,354	3,277	3,332
1) Of which property sales	-	-	-	-	0	-	-	-
JM RESIDENTIAL SWEDEN	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	997	830	986	1,007	1,019	671	851	737
Operating profit 1)	126	135	114	105	102	68	78	60
Operating margin, %	12.6	16.3	11.6	10.4	10.0	10.1	9.2	8.1
Average operating capital	1,085	1,150	1,175	1,249	1,289	1,304	1,323	1,399
Return on operating capital, % 2)	44.2	39.7	33.1	28.3	23.9	20.9	18.9	16.1
Operating cash flow	180	58	308	174	192	–72	334	79
Carrying amount, development properties	1,350	1,096	1,137	1,189	1,269	1,251	1,190	1,101
Number of available building rights	9,700	9,400	9,600	9,600	9,900	9,100	8,900	9,300
Number of residential units sold	343	311	345	319	322	326	358	267
Number of housing starts	358	331	343	304	368	317	278	265
Number of residential units in current production	2,240	2,300	2,075	1,962	1,944	1,979	1,883	1,758
1) Of which property sales	-	37	0	-	0	-	-	0
JM INTERNATIONAL	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	936	874	898	769	873	658	892	636
Operating profit 1)	67	63	31	43	46	40	47	33
Operating margin, %	7.2	7.2	3.5	5.6	5.3	6.1	5.3	5.2
Average operating capital	1,997	1,993	2,013	2,093	2,145	2,211	2,243	2,285
Return on operating capital, % 2)	10.2	9.2	7.9	8.4	7.7	8.3	7.7	6.6
Operating cash flow	–114	71	165	31	191	56	271	–84
Carrying amount, development properties	1,401	1,255	1,194	1,191	1,202	1,321	1,528	1,645
Carrying amount, project properties	13	38	36	35	31	32	28	28
Number of available building rights	8,900	7,900	8,000	8,200	8,200	7,200	7,000	7,900
Number of residential units sold	183	296	283	211	193	190	259	201
Number of housing starts	136	271	290	180	228	127	295	132
Number of residential units in current production	1,542	1,591	1,431	1,449	1,303	1,256	1,273	1,115
1) Of which property sales	0	-	–23	-	–1	20	9	11
JM PROPERTY DEVELOPMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	46	34	34	28	100	14	45	47
Operating profit 1)	18	7	–1	6	23	0	0	15
Average operating capital	508	455	405	361	326	273	245	237
Return on operating capital, % 2)	5.9	7.7	6.9	8.0	11.7	9.5	14.3	24.5
Operating cash flow	–49	–56	–65	69	–112	–55	–34	–5
Carrying amount, development properties	35	35	35	35	35	25	25	25
Carrying amount, project properties	589	516	459	402	347	294	252	210
Number of available building rights 3)	900	1,200	700	700	600	500	500	600
Number of residential units sold 3)	-	-	-	-	54	-	-	-
Number of housing starts 3)	229	-	-	-	-	-	54	-
Number of residential units in current production 3)	416	338	338	338	338	484	484	430
1) Of which property sales	-	-	-	1	2	1	1	13
3) Refers to rental units and residential care units.
JM CONSTRUCTION	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	454	404	447	360	480	492	558	554
Operating profit	10	12	11	10	0	13	16	16
Operating margin, %	2.2	3.0	2.5	2.8	0.0	2.6	2.9	2.9
Operating cash flow	47	25	–34	–6	–65	–11	–66	108
JM OTHER	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	–155	–112	–136	–111	–145	–101	–105	–102
Operating profit (Group-wide expenses)	–11	–4	–13	–13	–13	–7	–10	–15
RESTATEMENT JM INTERNATIONAL	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	–2	–68	–104	–287	–214	154	–331	–117
Operating profit	0	–11	–27	–42	–35	–7	–38	–11

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 of its operations.

Annual sales total approximately SEK 15 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.

PRESS RELEASES, Q4

12/31/2016 Conversion of Convertible debentures in to shares in JM AB (publ)

12/22/2016 JM acquiring land for residential units in Mölndal, Gothenburg

12/16/2016

JM AB's Nomination Committee's Proposals for Chairman and Directors at the 2017 Annual General Meeting

12/07/2016 JM acquiring 120 building rights at Mörby Centrum, Stockholm

12/05/2016

JM acquiring property in central area of Uppsala

11/30/2016

Conversion of Convertible debentures in to shares in JM AB (publ)

11/22/2016

New Chairperson of the Board proposed for JM AB

11/17/2016 JM acquires development property in Oslo

11/10/2016 JM acquiring property in Malmö, Sweden

10/31/2016 Conversion of Convertible debentures in to shares in JM AB (publ)

10/27/2016

JM Construction building Hagaskolan in Vallentuna

10/26/2016 Interim report January - September 2016

DISCLOSURES

JM discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 8:00 AM on February 7, 2017.

FOR MORE INFORMATION PLEASE CONTACT:

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

ADDITIONAL INFORMATION

FINANCIAL CALENDAR

April 27, 2017 Interim report January – March Annual General Meeting

July 14, 2017 Interim report January – June

October 26, 2017 Interim report January – September

The 2016 Annual Report will be available on JM's website week 13.

JM's annual reports, interim reports and other financial information is available at www.jm.se/investors

JM AB (publ)

Telephone +46 8 782 87 00 Fax +46 8 782 86 00 Comp. Reg. No. 556045-2103 Website www.jm.se/en

Mailing address SE-169 82 Stockholm Street address Gustav III:s boulevard 64, Solna