JM — Interim / Quarterly Report 2018

Oct 25, 2018

JM GROUP INTERIM REPORT JANUARY – SEPTEMBER 2018

POSITIVE DEVELOPMENT IN SALES IN STOCKHOLM – GOOD PROFITABILITY CONTINUED

JANUARY – SEPTEMBER 2018

Revenue decreased to SEK 12,011m (12,457) and operating profit decreased to SEK 1,443m (1,731). The operating margin decreased to 12.0 percent (13.9). Profit includes a loss in JM Construction of SEK –61m (24)

Profit before tax decreased to SEK 1,387m (1,958) 1). Profit after tax decreased to SEK 1,079m (1,588)1)

Return on equity for the past twelve months decreased to 27.7 percent (39.7) 1). Earnings per share during the nine-month period amounted to SEK 15.50 (22.40) 1)

Consolidated cash flow including net investment in properties amounted to SEK –456m (1,868)

The number of residential units sold decreased to 1,712 (2,416) and housing starts decreased to 2,097 (2,690)

1) Including gains of SEK 275m from the sale of the participations in Småa AB in 2017

JULY – SEPTEMBER 2018

Revenue amounted to SEK 3,832m (3,813) and operating profit decreased to SEK 411m (543). The operating margin decreased to 10.7 percent (14.2). A negative revaluation in the JM Construction business unit resulted in a loss of SEK –61m (5)

Profit before tax decreased to SEK 390m (528). Profit after tax decreased to SEK 303m (411)

Consolidated cash flow including net investment in properties was SEK –234m (574)

The number of residential units sold decreased to 613 (681) and housing starts decreased to 680 (971)

The operations in JM Construction will be assessed during the fourth quarter with regard to future focus and scope

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	12,011	12,457	3,832	3,813	16,562	17,008
Operating profit	1,443	1,731	411	543	2,081	2,369
Operating margin, %	12.0	13.9	10.7	14.2	12.6	13.9
Profit before tax	1,387	1,958	390	528	2,008	2,579
Cash flow from operating activities	–456	1,868	–234	574	–311	2,013
Return on equity, %					27.7	38.7
Equity/assets ratio, %	40	39				40
Earnings per share, SEK	15.50	22.40	4.30	5.80	24.00	31.00
Number of residential units sold	1,712	2,416	613	681	2,396	3,100
Number of housing starts	2,097	2,690	680	971	3,280	3,873
Number of residential units in current production	8,243	7,739				8,200
Revenue according to IFRS	11,474	12,713	3,605	4,062	16,036	17,275
Operating profit according to IFRS	1,397	1,807	384	582	2,046	2,456
Earnings per share according to IFRS, SEK	14.90	23.20	4.00	6.30	23.50	31.90

IFRS 15 Revenue from Contracts with Customers is applied to the consolidated income statement and balance sheet, which 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 the percentage of completion method. The consolidated statements in accordance with IFRS are presented on pages 21-22. For definitions of key financial figures, see the document entitled "Definitions of key financial figures" at jm.se/investors.

Unless otherwise specified, the analysis and comments in this interim report are based on JM's segment reporting.

Cover photo: Bergerløkka, Asker, Norway

ACCORDING TO SEGMENT REPORTING

GROUP

"The housing market in Stockholm is cautious, but stabilization continued in the third quarter. The cautious market applies in particular to new production of residential units with a long time until occupancy, although the willingness to sign a contract early in the process has improved in recent quarters. Sales of our residential units in Stockholm showed

positive development in the third quarter, in particular given the limited supply for occupancy in the near future. Sales in the third quarter were at the same level as in the second quarter. Housing starts in Stockholm during the quarter were supported by a normal level of reservations, and profitability continues to be good in the current production volume. The planned housing start in the third quarter of a project in Stockholm that has a high reservation rate was deferred pending a final agreement regarding municipal development work.

Part of our contracting operations in Stockholm have profitability problems, which means that we will evaluate in the fourth quarter the future focus and scope of the contracting business.

Our housing operations in the rest of Sweden are showing good profitability in a largely stable market, where sales in the third quarter increased slightly compared to the second quarter. Housing starts in the third quarter were slightly lower than in the second quarter.

In Norway, the level of activity on the housing market was good, and the housing market in Finland was stable during the third quarter. Our business in the foreign operations has continued to develop well in 2018, including good land acquisitions that is gradually broadening the geographic scope of the housing business. Sales in our foreign operations in the third quarter were slightly lower than in the second quarter, in part due to the limited number of housing starts in Norway. We are planning to increase the number of housing starts in Norway in the fourth quarter assuming continued stable sales growth and well-functioning planning processes.

We have noted that the supply of residential development properties in Stockholm is relatively high, and JM has a very good position to take advantage of the possibilities for acquisitions that may arise. In the rest of Sweden, competition for land declined slightly during the year. JM's strong financial position also supports our decision to prioritize the start of new housing projects.

During the quarter, one of the projects we started is a large project in Norway, Bergerløkka, with a first phase of 102 residential units in popular Asker. It is centrally located close to Sandvika and Oslo. Asker Municipality is planning to build more than 1,600 residential units here in a new residential area, and JM is one of several companies that has been entrusted with the development of the area. JM will be responsible for the development of in total around 570 residential units in the area.

In September, we invited decision-makers and partners to JM's Urban Development Day. The objective, in addition to the exchange of information, was to increase awareness about JM as a competent urban and social developer: that JM is a long-term actor with a wide range of skills and primarily builds tenant-owner apartments but also rental apartments, freehold apartments, commercial premises, and residential care accommodation. We also highlighted our sustainability work and Trygg Bostadsrättsförening (Safe Tenant-Owner Association), an industry initiative that JM and other housing companies stand behind to strengthen consumer protection on the tenant-owned apartment market. This mark of quality assurance identifies and describes critical key performance indicators so the housing customer can easily compare the economic commitments associated with newly produced apartments. The initiative benefits households, serious housing producers and lenders and contributes to the development of an efficient market for new production.

We are well-positioned with a good project portfolio that we continue to improve for the housing of 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 – SEPTEMBER 2018

The housing market in Stockholm is cautious, but stabilization continued in the third quarter. Housing starts in Stockholm were supported by a normal level of reservations, and profitability continued to be good in the current production volume.

The housing operations in the rest of Sweden are showing good profitability in a market that is primarily stable.

In Norway, the level of activity on the housing market was good with a slight increase in prices, and the housing market in Finland was stable. The geographic scope of JM's housing business is gradually expanding.

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 decreased to 1,712 (2,416) 1), and sales in the third quarter were at the same level as in the second quarter, 613 and 619 residential units, respectively. The percentage of sold or reserved homes in relation to current production amounts to 59 percent (71), with an interval of 60-65 percent considered normal. The percentage has increased slightly from 58 percent in the second quarter. JM Residential Stockholm sold 565 residential units (955), JM Residential Sweden sold 678 (1,001), JM International sold 469 (460) and JM Property Development sold 0 (0).

The number of housing starts amounted to 2,097 (2,690) 2), and housing starts in the third quarter were lower than in the second quarter, 680 and 847 residential units, respectively. In the third quarter, no rental apartments were started compared to 128 in the second quarter. JM Residential Stockholm started production on 662 residential units (1,119), JM Residential Sweden on 783 (1,051), JM International on 524 (520) and JM Property Development on 128 (0).

In addition to demand, planning processes continue to be an important criterion for the rate of housing starts.

The number of residential units in current production increased to 8,243 (7,739), of which 681 are rental units and residential care units (416).

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

2) Of which 128 rental units and residential care units (0).

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
OPERATING PROFIT BY BUSINESS SEGMENT, SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	757	1,041	233	331	1,154	1,438
JM Residential Sweden	550	488	156	149	731	669
JM International	221	187	85	63	305	271
JM Property Development	5	24	4	0	8	27
JM Construction	–61	24	–61	5	–74	11
Group-wide expenses	–29	–33	–6	–5	–43	–47
Total	1,443	1,731	411	543	2,081	2,369
Of which property sales	10	14	–1	-	10	14

OPERATING MARGIN BY BUSINESS SEGMENT, %	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	17.1	19.5	16.3	20.5	18.5	20.1
JM Residential Sweden	16.9	15.2	17.0	16.3	16.8	15.5
JM International	8.9	8.0	9.3	8.7	8.9	8.3
JM Construction	–2.9	1.3	–9.2	0.7	–2.5	0.4

1) According to segment reporting

REVENUE, OPERATING PROFIT AND OPERATING MARGIN JANUARY – SEPTEMBER 2018

Consolidated revenue in accordance with segment reporting decreased to SEK 12,011m (12,457). Revenue restated according to IFRS decreased to SEK 11,474m (12,713).

Operating profit according to segment reporting decreased to SEK 1,443m (1,731), and the operating margin decreased to 12.0 percent (13.9). Operating profit restated according to IFRS decreased to SEK 1,397m (1,807). The restatement is related to JM International and had an effect on earnings of SEK –46m (76). Profit includes a loss in JM Construction of SEK –61m (24).

During the nine-month period, properties were sold for SEK 83m (15) with gains of SEK 10m (14).

Rental income from JM's project properties increased to SEK 45m (28). Net rental income increased to SEK 28m (17).

JULY – SEPTEMBER 2018

Consolidated revenue according to segment reporting for the third quarter amounted to SEK 3,832m (3,813). Revenue restated according to IFRS decreased to SEK 3,605m (4,062).

Operating profit according to segment reporting decreased to SEK 411m (543), and the operating margin decreased to 10.7 percent (14.2). Operating profit restated according to IFRS decreased to SEK 384m (582). The restatement is related to JM International and had an effect on earnings of SEK –27m (39). Profit includes a loss in JM Construction of SEK –61m (5).

During the third quarter, properties were sold for SEK 11m (0) with gains/losses of SEK –1m (0).

Rental income from JM's project properties increased to SEK 16m (10). Net rental income increased to SEK 11m (7).

RESIDENTIAL BUILDING RIGHTS JANUARY – SEPTEMBER 2018

The number of available building rights amounted at the end of the nine-month period to 36,700 (34,800), of which 20,300 (18,100) are recognized in the balance sheet. Capital tied up in building rights (development properties in the balance sheet) for residential units increased to SEK 8,470m (6,924).

JM acquired development properties for residential units during the nine-month period for SEK 2,248m (1,214), of which SEK 1,320m relates to JM Residential Stockholm, SEK 285m to JM Residential Sweden and SEK 643m to JM International.

RESIDENTIAL UNITS IN CURRENT PRODUCTION	9/30/2018	9/30/2017	12/31/2017
Number of residential units in current production 1) 2)	8,243	7,739	8,200
Percentage of sold residential units in current production, % 3)	53	62	58
Percentage reserved residential units in current production, %	6	9	7
Percentage sold and reserved residential units in current production, %	59	71	65
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	681	416	553
Including residential units in projects where costs incurred are only reported as project properties under construction	681	416	553
2) Beginning with production start-up through final occupancy according to plan.

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

UNSOLD UNITS	9/30/2018	9/30/2017	12/31/2017
Completed production, number of unsold units 1)	66	86	72
The number of unsold residential units in the balance sheet reported as
"Participations in tenant-owners associations, etc."	56	67	82

1) After final occupancy according to plan.

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

FINANCIAL ITEMS

JANUARY – SEPTEMBER 2018

Net financial items were somewhat lower than in the previous year, excluding the sale in 2017 of the participations in Småa AB.

The total interest-bearing loan stock according to segment reporting increased to SEK 2,395m (1,834), of which the provision for pensions comprised SEK 1,375m (1,297). At the end of the nine-month period, the average interest rate for the total interest-bearing loan stock including pension liabilities was 2.5 percent (2.5). The average term for fixed-rate loans excluding the pension liability was 0.2 years (0.2).

Consolidated available liquidity was SEK 4,654m (5,357). Aside from cash and cash equivalents of SEK 1,854m (2,557), 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 3.3 years (1.7).

Interest-bearing net liabilities according to segment reporting totaled SEK 541m (–727) at the end of the nine-month period. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 1,023m (543). Of these liabilities, SEK 324m (394) were current.

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

		JANUARY–SEPTEMBER		JULY–SEPTEMBER		FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Financial income 1)	4	276	1	0	7	279
Financial expenses	–60	–49	–22	–15	–80	–69
Financial income and expenses	–56	227	–21	–15	–73	210
1) Of which gains from the sale of participations in Småa AB	-	275	-	-	-	275

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2018	2017	2017/2018	2017
Interest-bearing net liabilities(+)/receivables(–) at beginning of period	–790	435	240	–274	–727	435
Change in interest-bearing net liabilities/receivables	1,331	–1,162	301	–453	1,268	–1,225
Interest-bearing net liabilities(+)/receivables(–) at end of the period	541	–727	541	–727	541	–790

CASH FLOW

JANUARY – SEPTEMBER 2018

Cash flow from operating activities according to segment reporting was SEK –456m (1,868) during the nine-month period. Net investments in development properties resulted in a cash flow of SEK –597m (113). Holdings of repurchased residential units resulted in a cash flow of SEK 3m (–64). Consolidated cash flow attributable to project properties (sales minus investment) during the nine-month period was SEK –322m (–288). Increased operating capital had a negative impact on the cash flow.

JULY – SEPTEMBER 2018

Cash flow from operating activities was SEK –234m (574) during the third quarter. Net investments in development properties resulted in a cash flow of SEK –24m (6). Holdings of repurchased residential units resulted in a cash flow of SEK 16m (7). Consolidated cash flow attributable to project properties (sales minus investment) during the third quarter was SEK –88m (–98). Increased operating capital had a negative impact on the cash flow.

RISKS AND UNCERTAINTIES

JM's risk and risk management policies are presented in the 2017 Annual Report on pages 30-33. No significant changes have occurred to change these reported risks.

HOLDINGS OF TREASURY SHARES

At the end of August, the Annual General Meeting resolution to reduce the share capital by SEK 1,476,421 for 1,476,421 shares held by the company was taken into effect.

The company has thereafter no holdings of treasury shares.

PERSONNEL

The number of employees at the end of the nine-month period was 2,610 (2,540). The number of wage-earners was 1,004 (1,006), and the number of salaried employees was 1,606 (1,534). 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 third quarter. The supply of homes continued to be high, in particular in some local markets.

Competition for well-situated land for housing is judged to be relatively low at the same time as the supply of properties for housing development is relatively high. However, prices of building rights are still at a level that requires selective acquisition.

The housing market in Stockholm continued to be cautious during the third quarter, particularly with regard to new production. However, the market continued to stabilize during quarter. Customers are showing strong interest in JM's projects, and sales improved during the quarter, sales being at the same level as the second quarter. The willingness of customers to sign a contract early in the process also improved during the third quarter. Residential units available for sale in the business segment largely have planned occupancy in 2019/2020, with the majority falling in 2020.

Housing starts in Stockholm during the third quarter were

supported by a normal level of reservations, and profitability continued to be good in the current production volume. The planned housing start during the quarter of a project that has a high reservation rate was deferred pending a final agreement regarding municipal development work.

The business segment's revenue decreased to SEK 4,434m (5,331). The decreased revenue in the third quarter is due to lower sales and a lower number of housing starts over the past year. Operating profit decreased to SEK 757m (1,041). Profit was burdened by the lower sales. The operating margin was 17.1 percent (19.5).

Cash flow during the nine-month period is in balance taking into consideration the increase in development properties.

Production was started in the third quarter on 207 residential units in apartment buildings and single-family homes in Solna and Järfälla. During the third quarter, JM purchased building rights corresponding to about 60 residential units in Järfälla.

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	4,434	5,331	1,429	1,613	6,254	7,151
Operating profit 1)	757	1,041	233	331	1,154	1,438
Operating margin, %	17.1	19.5	16.3	20.5	18.5	20.1
Average operating capital					5,139	4,450
Return on operating capital, %					22.5	32.3
Operating cash flow	395	1,378	187	505	620	1,603
Carrying amount, development properties	5,002	3,941				4,406
Number of available building rights	13,500	13,300				13,400
Number of residential units sold	565	955	223	213	762	1,152
Number of housing starts	662	1,119	207	365	986	1,443
Number of residential units in current production	3,447	3,837				3,842
Number of employees	930 2)	878				877
1) Of which property sales	0	6	-	-	0	6

2) Of which 42 employees who previously belonged to JM Construction.

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 did not change or increased slightly in the business segment during the third quarter.

The supply on certain local markets continues to be large. Competition for land for residential purposes has eased slightly. Interest in JM's projects is stable, and customers' willingness to sign a contract early in the process is at a normal level.

Business segment revenue amounted to SEK 3,254m (3,215), and operating profit increased to SEK 550m (488). The operating margin increased to 16.9 percent (15.2). The profit and the margin improved as a result of strong demand and an increase in prices in previous years. Sales in the third quarter increased slightly compared to the second quarter.

A temporary increase in operating capital had a negative impact on cash flow for the nine-month period.

Production was started in the third quarter on 230 residential units in apartment buildings in Uppsala, Västerås and Linköping, which is slightly lower than in the second quarter.

During the third quarter, JM purchased building rights in Örebro corresponding to 88 residential units.

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	3,254	3,215	920	916	4,348	4,309
Operating profit 1)	550	488	156	149	731	669
Operating margin, %	16.9	15.2	17.0	16.3	16.8	15.5
Average operating capital					1,000	892
Return on operating capital, %					73.1	75.0
Operating cash flow	536	457	44	–11	695	616
Carrying amount, development properties	1,404	1,486				1,540
Number of available building rights	10,400	10,100				10,100
Number of residential units sold	678	1,001	227	332	979	1,302
Number of housing starts	783	1,051	230	372	1,143	1,411
Number of residential units in current production	2,471	2,196				2,351
Number of employees	596	597				590
1) Of which property sales	0	-	-	-	0	-

JM INTERNATIONAL

The JM International business segment develops residential projects in Norway and Finland. Revenue and profit for the business segment is reported according to the percentage of completion method. Contracting operations are also conducted to a limited extent in Norway, and as of 2018 they are reported in the JM Construction business segment. Comparative figures have been restated.

Business segment revenue amounted to SEK 2,486m (2,336), and operating profit was SEK 221m (187). The operating margin was 8.9 percent (8.0).

Cash flow during the nine-month period is burdened by investments in development properties.

Sales in the business segment in the third quarter were slightly lower than in the second quarter, in part due to the limited number of housing starts in Norway where sales are reported at the earliest in combination with housing starts.

NORWAY

Prices on the existing home market in Norway were stable during the third quarter, and the level of activity was good. The time to a signed contract is somewhat longer than in previous years.

JM Norway's revenue amounted to SEK 2,088m (1,961), and

operating profit was SEK 203m (178). The operating margin was 9.7 percent (9.1).

During the third quarter, 111 residential units (106) were sold and production began on 122 units (137). Housing starts during the third quarter consist of residential units in apartment buildings in Oslo Municipality and Asker outside of Oslo as well as single-family homes in Skien. The number of residential units in current production amounted to 1,264 (1,112).

The lower level of housing starts during the nine-month period is in line with the yearly planning, in which proportionately more starts are planned during the fourth quarter, assuming continued stable sales development and well-functioning planning processes.

During the third quarter, JM purchased building rights corresponding to 236 residential units in Tønsberg and Drammen.

Available building rights correspond to 8,700 residential units (7,700).

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	2,486	2,336	912	721	3,412	3,262
- of which JM Norway	2,088	1,961	744	609	2,904	2,777
Operating profit 1)	221	187	85	63	305	271
- of which JM Norway	203	178	76	57	288	263
Operating margin, %	8.9	8.0	9.3	8.7	8.9	8.3
- of which JM Norway	9.7	9.1	10.2	9.4	9.9	9.5
Average operating capital					2,580	2,175
Return on operating capital, %					11.8	12.5
Operating cash flow	–205	326	–48	179	–412	119
Carrying amount, development properties	2,054	1,497				1,545
Carrying amount, project properties	5	14				7
Number of available building rights	12,100	10,500				10,500
Number of residential units sold	469	460	163	136	655	646
Number of housing starts	524	520	243	234	886	882
Number of residential units in current production	1,644	1,290				1,454
Number of employees	439	408				406

FINLAND

The housing market in the Helsinki region was stable during the third quarter. The housing market is in balance and activity is good.

During the third quarter, 52 residential units (30) were sold and production began on 121 units (97). Housing starts during the third quarter consisted of residential units in apartment buildings in the Greater Helsinki area. The number of residential units in current production amounted to 380 (178).

No building rights were acquired during the third quarter. Available building rights correspond to 3,200 residential units (2,600).

BELGIUM

JM closed its operations in Belgium in Q1 2017. JM is still the owner of one development property and one residential unit that are for sale. During the third quarter, 0 residential units (0) were 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. This business segment also includes JM@home as of January 1, 2018, which offers economic and technical management services to tenant-owners associations as well as home services.

Business segment revenue was SEK 49m (48), of which rental income was SEK 45m (28). Operating profit was SEK 5m (24). The operating profit was burdened by start-up costs for the new business operation JM@home.

Net rental income for project properties increased to SEK 28m (16).

Cash flow during the nine-month 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 91 percent. Within the Bolinder area in Kallhäll, Järfälla, the occupancy rate in the buildings that will not be demolished is 94 percent.

The Dalénum rental project and its 97 apartments were completed in 2016. All apartments are rented out.

Production is ongoing for five rental apartment projects: Tjärtunnan in Stureby, Stockholm, 187 residential units with occupancy in 2018; Alphyddan in Sickla, Nacka, 93 student apartments with occupancy planned for 2018; Spaken in Hägernäs, Täby, 136 residential units with occupancy planned for 2018/2019; Alba Lilium, Bredäng, Stockholm, 137 residential units with occupancy planned for 2019; and Manegen in Täby, 128 residential units with occupancy planned for 2020.

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	49	48	19	11	61	60
Operating profit 1)	5	24	4	0	8	27
Average operating capital					1,160	800
Return on operating capital, %					0.7	3.4
Operating cash flow	–347	–213	–82	–65	–550	–416
Carrying amount, development properties	10	10				10
Carrying amount, project properties	1,418	864				1,067
Number of available building rights 2)	700	900				800
Number of residential units sold 2)	-	-	-	-	-	-
Number of housing starts 2)	128	-	-	-	265	137
Number of residential units in current production 2)	681	416				553
Number of employees	52	35				35
1) Of which property sales	-	8	-	-	-	8

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 Greater Stockholm and Oslo. Contracting operations conducted in Norway are reported in the JM Construction business segment as of January 1, 2018. Comparative figures have been restated.

Demand in the contracting market in Stockholm is good in terms of the civil engineering market. With regard to house-related activities, competition for assignments has increased. Demand in the contracting market in Oslo is also good.

Business segment revenue amounted to SEK 2,130m (1,918), of which the operations in Norway amounted to SEK 469m (327), and the operating profit decreased to SEK –61m (24). Two projects in the Swedish house-related operations were subject to strong, negative revaluations primarily due to major revisions and as a consequence, higher production costs and delays. Due to weak profitability for an extended period of time, the operations in JM Construction will be assessed in the fourth quarter 2018 regarding future focus and scope.

An increase in operating capital had a negative impact on cash flow for the nine-month period.

The business segment received a number of assignments during the third quarter, of which the largest was a collaboration on the engineering work in Orminge for Nacka Municipality.

The largest ongoing assignments are a new operational area at Arlanda Airport (Swedavia), land work in the Stockholm Norvik freight harbor in Nynäshamn (Ports of Stockholm), new production of a school (Vallentuna Municipality), new production of apartment buildings in Norra Djurgårdsstaden (HSB and Riksbyggen) and new production of apartment buildings in Tyresö (Småa and Riksbyggen). The largest ongoing project in the Norwegian operations is the new production of residential units in apartment buildings in Strømmen, Oslo (JM Norway).

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue 1)	2,130	1,918	663	689	2,963	2,751
Operating profit	–61	24	–61	5	–74	11
Operating margin, %	–2.9	1.3	–9.2	0.7	–2.5	0.4
Operating cash flow	–143	46	–49	78	–103	86
Carrying amount, development properties	39	50				42
Number of employees	439	470				462
1) Of which internal	342	391	111	137	476	525

GROUP – SEGMENT REPORTING

CONDENSED CONSOLIDATED INCOME STATEMENT

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue	12,011	12,457	3,832	3,813	16,562	17,008
Production and operating costs	–9,791	–9,989	–3,202	–3,047	–13,450	–13,648
Gross profit	2,220	2,468	630	766	3,112	3,360
Selling and administrative expenses	–787	–751	–218	–223	–1,041	–1,005
Gains/losses on the sale of property	10	14	–1	-	10	14
Operating profit	1,443	1,731	411	543	2,081	2,369
Financial income and expenses	–56	227	–21	–15	–73	210
Profit before tax	1,387	1,958	390	528	2,008	2,579
Taxes	–308	–370	–87	–117	–323	–385
Profit for the period	1,079	1,588	303	411	1,685	2,194
Other comprehensive income	25	–54	–68	–16	69	–10
Comprehensive income for the period	1,104	1,534	235	395	1,754	2,184
Earnings per share 1), diluted, SEK	15.50	22.40	4.30	5.80	24.00	31.00
Average number of shares, diluted	69,836,391	71,062,512	69,950,321	70,677,051	70,135,947	70,844,023

1) Net profit for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO SEGMENT REPORTING, SEK M	9/30/2018	9/30/2017	12/31/2017
ASSETS
Non-current assets	221	211	209
Project properties	1,423	878	1,074
Development properties	8,509	6,984	7,543
Participations in tenant-owners associations, etc.	224	267	309
Current receivables 1)	3,904	3,524	3,698
Cash and cash equivalents	1,854	2,557	2,572
Total current assets	15,914	14,210	15,196
Total assets	16,135	14,421	15,405
EQUITY AND LIABILITIES 2)
Equity	6,520	5,653	6,178
Non-current interest-bearing liabilities	204	333	203
Other non-current liabilities	700	150	273
Non-current provisions	2,994	2,405	2,656
Total non-current liabilities	3,898	2,888	3,132
Current interest-bearing liabilities	816	204	332
Other current liabilities	4,780	5,564	5,654
Current provisions	121	112	109
Total current liabilities	5,717	5,880	6,095
Total equity and liabilities	16,135	14,421	15,405
1) Of which receivables from property sales	34	39	83
2) Of which liabilities for property acquisition	1,058	615	794

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ACCORDING TO SEGMENT REPORTING, SEK M	JANUARY–SEPTEMBER	FULL-YEAR
	2018	2017	2017
Opening balance at beginning of period	6,178	5,158	5,158
Total comprehensive income for the period	1,104	1,534	2,184
Dividend	–765	–675	–675
Conversion of convertible loan	-	10	10
Equity component of convertible debentures	3	1	1
Buy-back of shares	-	–375	–500
Closing balance at the end of the period	6,520	5,653	6,178

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2018	2017	2017/2018	2017
Cash flow from operating activities before change in
working capital and taxes	1,679	1,998	473	633	2,776	3,095
Paid tax	–582	–313	–184	–93	–630	–361
Investment in development properties, etc. 1)	–2,727	–1,611	–900	–478	–3,610	–2,494
Payment on account for development properties, etc. 2)	2,133	1,660	892	491	2,511	2,038
Investment in project properties	–324	–288	–88	–98	–526	–490
Sale of project properties	2	-	-	-	8	6
Change in current liabilities/receivables	–637	422	–427	119	–840	219
Cash flow from operating activities	–456	1,868	–234	574	–311	2,013
Cash flow from investing activities	0	303 3)	3	–1	–3	300 3)
Loans raised	584	153	30	13	645	214
Amortization of debt	–93	–234	–19	–113	–157	–298
Buy-back of shares	-	–375	-	–125	–125	–500
Dividend	–765	–675	-	-	–765	–675
Cash flow from financing activities	–274	–1,131	11	–225	–402	–1,259
Cash flow for the period	–730	1,040	–220	348	–716	1,054
Cash and cash equivalents at end of the period	1,854	2,557	1,854	2,557	1,854	2,572
1) Of which investment in participations in tenant-owners associations and freehold residential units	–700	–367	–307	–84	–908	–575
2) Of which the sale of participations in tenant-owners associations and freehold residential units	703	303	323	91	895	495
3) Of which SEK 310m refers to the sale of the participations in Småa AB.

GROUP KEY FIGURES

		JANUARY–SEPTEMBER		JULY–SEPTEMBER		FULL-YEAR
ACCORDING TO SEGMENT REPORTING, %	2018	2017	2018	2017	2017/2018	2017
Operating margin	12.0	13.9	10.7	14.2	12.6	13.9
Return on equity					27.7	38.7
Return on capital employed					25.4	35.1
Debt/equity ratio, multiple	0.1	-				-
Equity/assets ratio	40	39				40

ACCORDING TO SEGMENT REPORTING

REVENUE BY COUNTRY

SEK M		JANUARY–SEPTEMBER		JULY–SEPTEMBER		FULL-YEAR
	2018	2017	2018	2017	2017/2018	2017
Sweden	9,056	9,804	2,778	2,989	12,531	13,279
Norway	2,557	2,278	886	712	3,523	3,244
Finland	379	373	166	112	488	482
Belgium	19	2	2	-	20	3
Total	12,011	12,457	3,832	3,813	16,562	17,008

REVENUE BY BUSINESS SEGMENT

		JANUARY–SEPTEMBER		JULY–SEPTEMBER		FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	4,434	5,331	1,429	1,613	6,254	7,151
JM Residential Sweden	3,254	3,215	920	916	4,348	4,309
JM International	2,486	2,336	912	721	3,412	3,262
JM Property Development	49	48	19	11	61	60
JM Construction	2,130	1,918	663	689	2,963	2,751
Elimination	–342	–391	–111	–137	–476	–525
Total	12,011	12,457	3,832	3,813	16,562	17,008

OPERATING PROFIT BY BUSINESS SEGMENT

		JANUARY–SEPTEMBER		JULY–SEPTEMBER		FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	757	1,041	233	331	1,154	1,438
JM Residential Sweden	550	488	156	149	731	669
JM International	221	187	85	63	305	271
JM Property Development	5	24	4	0	8	27
JM Construction	–61	24	–61	5	–74	11
Group-wide expenses	–29	–33	–6	–5	–43	–47
Total	1,443	1,731	411	543	2,081	2,369

OPERATING MARGIN BY BUSINESS SEGMENT

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
%	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	17.1	19.5	16.3	20.5	18.5	20.1
JM Residential Sweden	16.9	15.2	17.0	16.3	16.8	15.5
JM International	8.9	8.0	9.3	8.7	8.9	8.3
JM Construction	–2.9	1.3	–9.2	0.7	–2.5	0.4

AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT

	OCT–SEPT	FULL-YEAR
SEK M	2017/2018	2017
JM Residential Stockholm	5,139	4,450
JM Residential Sweden	1,000	892
JM International	2,580	2,175
JM Property Development	1,160	800

RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT

	OCT–SEPT	FULL-YEAR
%	2017/2018	2017
JM Residential Stockholm	22.5	32.3
JM Residential Sweden	73.1	75.0
JM International	11.8	12.5
JM Property Development	0.7	3.4

ACCORDING TO SEGMENT REPORTING

OPERATING CASH FLOW BY BUSINESS SEGMENT

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	395	1,378	187	505	620	1,603
JM Residential Sweden	536	457	44	–11	695	616
JM International	–205	326	–48	179	–412	119
JM Property Development	–347	–213	–82	–65	–550	–416
JM Construction	–143	46	–49	78	–103	86

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	9/30/2018	9/30/2017	12/31/2017
JM Residential Stockholm	5,002	3,941	4,406
JM Residential Sweden	1,404	1,486	1,540
JM International	2,054	1,497	1,545
JM Property Development	10	10	10
JM Construction	39	50	42
Total	8,509	6,984	7,543

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	9/30/2018	9/30/2017	12/31/2017
JM Residential Stockholm	13,500	13,300	13,400
JM Residential Sweden	10,400	10,100	10,100
JM International	12,100	10,500	10,500
JM Property Development 1)	700	900	800
Total	36,700	34,800	34,800
Including those carried in the balance sheet (development properties)
JM Residential Stockholm	8,000	7,700	7,800
JM Residential Sweden	6,400	6,000	6,100
JM International	5,700	4,300	4,600
JM Property Development 1)	200	100	200
Total	20,300	18,100	18,700

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

		JANUARY–SEPTEMBER		JULY–SEPTEMBER		FULL-YEAR
NUMBER	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	565	955	223	213	762	1,152
JM Residential Sweden	678	1,001	227	332	979	1,302
JM International	469	460	163	136	655	646
JM Property Development 1)	-	-	-	-	-	-
Total	1,712	2,416	613	681	2,396	3,100

HOUSING STARTS BY BUSINESS SEGMENT

		JANUARY–SEPTEMBER		JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
NUMBER	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	662	1,119	207	365	986	1,443
JM Residential Sweden	783	1,051	230	372	1,143	1,411
JM International	524	520	243	234	886	882
JM Property Development 1)	128	-	-	-	265	137
Total	2,097	2,690	680	971	3,280	3,873

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	9/30/2018	9/30/2017	12/31/2017
JM Residential Stockholm	3,447	3,837	3,842
JM Residential Sweden	2,471	2,196	2,351
JM International	1,644	1,290	1,454
JM Property Development 1)	681	416	553
Total	8,243	7,739	8,200

1) Refers to rental units and residential care units.

ACCORDING TO SEGMENT REPORTING

PROJECT PROPERTIES, GROUP

CARRYING AMOUNT, SEK M	9/30/2018	9/30/2017	12/31/2017
Properties under development	1,188	634	837
Completed rental unit properties	224	224	224
Completed commercial properties	11	20	13
Total	1,423	878	1,074

DEVELOPMENT PROPERTIES, GROUP

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
CARRYING AMOUNT, SEK M	2018	2017	2018	2017	2017/2018	2017
Opening balance at beginning of period	7,543	7,121	8,869	6,892	6,984	7,121
New purchases	2,248	1,214	191	477	3,051	2,017
Transferred to production	–1,298	–1,306	–512	–379	–1,526	–1,534
Other	16	–45	–39	–6	0	–61
Closing balance at the end of the period	8,509	6,984	8,509	6,984	8,509	7,543

GROUP FIVE-YEAR OVERVIEW

ACCORDING TO SEGMENT REPORTING, SEK M	2017	2016	2015	2014	2013
Revenue	17,008	15,752	14,447	13,869	12,652
Operating profit	2,369	2,011	1,590	1,716	1,576
Profit before tax	2,579	1,951	1,518	1,641	1,517
Total assets	15,405	12,848	12,230	12,545	11,394
Cash flow from operating activities	2,013	1,957	–230	978	898
Interest-bearing net liabilities (+)/receivables (–)	–790	435	1,198	–337	–642
Operating margin, %	13.9	12.8	11.0	12.4	12.5
Return on equity, %	38.7	31.4	24.8	26.5	25.1
Equity/assets ratio, %	40	40	38	37	40
Earnings per share, SEK	31.00	21.20	15.50	16.00	14.50
Dividend per share, SEK	11.00	9.50	8.25	8.00	7.25
Number of available building rights	34,800	32,500	31,100	29,400	27,700
Number of residential units sold	3,100	3,843	3,770	3,195	3,265
Number of housing starts	3,873	4,187	3,731	3,445	2,953
Number of residential units in current production	8,200	7,984	7,212	6,375	5,609

GROUP QUARTERLY OVERVIEW

ACCORDING TO SEGMENT REPORTING, SEK M		2018			2017
INCOME STATEMENT	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	3,832	4,125	4,054	4,551	3,813	4,399	4,245
Production and operating costs	–3,202	–3,324	–3,265	–3,659	–3,047	–3,513	–3,429
Gross profit	630	801	789	892	766	886	816
Selling and administrative expenses	–218	–297	–272	–254	–223	–282	–246
Gains/losses on the sale of property	–1	0	11	0	-	14	-
Operating profit	411	504	528	638	543	618	570
Financial income and expenses	–21	–19	–16	–17	–15	–17	259
Profit before tax	390	485	512	621	528	601	829
Taxes	–87	–108	–113	–15	–117	–130	–123
Profit for the period	303	377	399	606	411	471	706
BALANCE SHEET	9/30	6/30	3/31	12/31	9/30	6/30	3/31
ASSETS
Non-current assets	221	226	221	209	211	213	215
Project properties	1,423	1,335	1,193	1,074	878	791	688
Development properties	8,509	8,869	8,607	7,543	6,984	6,892	6,922
Participations in tenant-owners associations, etc.	224	322	309	309	267	269	205
Current receivables	3,904	3,813	3,828	3,698	3,524	3,477	3,173
Cash and cash equivalents	1,854	2,078	2,564	2,572	2,557	2,211	2,619
Total current assets	15,914	16,417	16,501	15,196	14,210	13,640	13,607
Total assets	16,135	16,643	16,722	15,405	14,421	13,853	13,822
EQUITY AND LIABILITIES
Equity	6,520	6,285	6,664	6,178	5,653	5,381	5,725
Non-current interest-bearing liabilities	204	255	220	203	333	223	259
Other non-current liabilities	700	686	700	273	150	150	150
Non-current provisions	2,994	2,850	2,846	2,656	2,405	2,371	2,321
Total non-current liabilities	3,898	3,791	3,766	3,132	2,888	2,744	2,730
Current interest-bearing liabilities	816	762	336	332	204	435	334
Other current liabilities	4,780	5,682	5,831	5,654	5,564	5,184	4,932
Current provisions	121	123	125	109	112	109	101
Total current liabilities	5,717	6,567	6,292	6,095	5,880	5,728	5,367
Total equity and liabilities	16,135	16,643	16,722	15,405	14,421	13,853	13,822
CASH FLOW STATEMENT	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
From operating activities	–234	–204	–18	145	574	293	1,001
From investing activities	3	–2	–1	–3	–1	–3	307
From financing activities	11	–286	1	–128	–225	–697	–209
Total cash flow for the period	–220	–492	–18	14	348	–407	1,099
Cash and cash equivalents at end of period	1,854	2,078	2,564	2,572	2,557	2,211	2,619
INTEREST-BEARING NET LIABILITIES/RECEIVABLES	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/receivables(–)
at beginning of period	240	–748	–790	–727	–274	–778	435
Change in interest-bearing net liabilities/receivables	301	988	42	–63	–453	504	–1,213
Interest-bearing net liabilities(+)/receivables(–)
at end of the period	541	240	–748	–790	–727	–274	–778
DEVELOPMENT PROPERTIES	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	8,869	8,607	7,543	6,984	6,892	6,922	7,121
New purchases	191	661	1,396	803	477	382	355
Transferred to production	–512	–411	–375	–228	–379	–388	–539
Other	–39	12	43	–16	–6	–24	–15
Carrying amount at end of period	8,509	8,869	8,607	7,543	6,984	6,892	6,922
KEY RATIOS	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	10.7	12.2	13.0	14.0	14.2	14.0	13.4
Debt/equity ratio, multiple	0.1	0.0	-	-	-	-	-
Equity/assets ratio, %	40	38	40	40	39	39	41
Earnings per share, SEK	4.30	5.40	5.70	8.60	5.80	6.70	9.90
Number of available building rights	36,700	36,000	34,900	34,800	34,800	34,600	33,600
Number of residential units sold	613	619	480	684	681	871	864
Number of housing starts	680	847	570	1,183	971	906	813
Number of residential units in current production	8,243	7,814	7,672	8,200	7,739	7,641	7,901

BUSINESS SEGMENT QUARTERLY OVERVIEW

ACCORDING TO SEGMENT REPORTING, SEK M		2018			2017
JM RESIDENTIAL STOCKHOLM	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,429	1,530	1,475	1,820	1,613	1,878	1,840
Operating profit 1)	233	250	274	397	331	363	347
Operating margin, %	16.3	16.3	18.6	21.8	20.5	19.3	18.9
Average operating capital	5,139	4,919	4,663	4,450	4,374	4,354	4,345
Return on operating capital, % 2)	22.5	25.5	29.3	32.3	32.6	32.3	31.0
Operating cash flow	187	285	–77	225	505	375	498
Carrying amount, development properties	5,002	5,185	5,229	4,406	3,941	4,074	4,121
Number of available building rights	13,500	13,600	13,300	13,400	13,300	13,000	12,800
Number of residential units sold	223	225	117	197	213	388	354
Number of housing starts	207	240	215	324	365	454	300
Number of residential units in current production	3,447	3,387	3,510	3,842	3,837	3,598	3,714
1) Of which property sales	-	0	-	-	-	6	-
JM RESIDENTIAL SWEDEN	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	920	1,065	1,269	1,094	916	1,153	1,146
Operating profit 1)	156	181	213	181	149	175	164
Operating margin, %	17.0	17.0	16.8	16.5	16.3	15.2	14.3
Average operating capital	1,000	949	897	892	898	893	967
Return on operating capital, % 2)	73.1	76.3	80.0	75.0	68.4	67.2	55.7
Operating cash flow	44	260	232	159	–11	–29	497
Carrying amount, development properties	1,404	1,476	1,394	1,540	1,486	1,225	1,322
Number of available building rights	10,400	10,300	10,200	10,100	10,100	10,000	9,800
Number of residential units sold	227	207	244	301	332	348	321
Number of housing starts	230	267	286	360	372	336	343
Number of residential units in current production	2,471	2,280	2,210	2,351	2,196	2,279	2,169
1) Of which property sales	-	-	0	-	-	-	-
JM INTERNATIONAL	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	912	864	710	926	721	808	807
Operating profit 1)	85	83	53	84	63	66	58
Operating margin, %	9.3	9.6	7.5	9.1	8.7	8.2	7.2
Average operating capital	2,580	2,444	2,273	2,175	2,106	2,074	2,028
Return on operating capital, % 2)	11.8	11.6	11.7	12.5	12.0	12.0	10.3
Operating cash flow	–48	–249	92	–207	179	69	78
Carrying amount, development properties	2,054	2,156	1,932	1,545	1,497	1,533	1,394
Carrying amount, project properties	5	5	8	7	14	12	13
Number of available building rights	12,100	11,400	10,600	10,500	10,500	10,700	10,100
Number of residential units sold	163	187	119	186	136	135	189
Number of housing starts	243	212	69	362	234	116	170
Number of residential units in current production	1,644	1,466	1,399	1,454	1,290	1,348	1,602
1) Of which property sales	–1	0	11	0	-	-	-
JM PROPERTY DEVELOPMENT	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	19	15	15	12	11	19	18
Operating profit 1)	4	–1	2	3	0	17	7
Average operating capital	1,160	1,036	910	800	697	623	550
Return on operating capital, % 2)	0.7	0.4	2.4	3.4	6.0	7.9	5.6
Operating cash flow	–82	–156	–109	–203	–65	–77	–71
Carrying amount, development properties	10	10	10	10	10	10	35
Carrying amount, project properties	1,418	1,330	1,185	1,067	864	779	675
Number of available building rights 3)	700	700	800	800	900	900	900
Number of residential units sold 3)	-	-	-	-	-	-	-
Number of housing starts 3)	-	128	-	137	-	-	-
Number of residential units in current production 3)	681	681	553	553	416	416	416
1) Of which property sales	-	-	-	-	-	8	-
3) Refers to rental units and residential care units.
JM CONSTRUCTION	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	663	769	698	833	689	677	552
Operating profit	–61	0	0	–13	5	9	10
Operating margin, %	–9.2	0.0	0.0	–1.6	0.7	1.3	1.8
Operating cash flow	–49	60	–154	40	78	–63	31
JM OTHER	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	–111	–118	–113	–134	–137	–136	–118
Operating profit (Group-wide expenses)	–6	–9	–14	–14	–5	–12	–16

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

GROUP – IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

				OCT–SEPT	FULL-YEAR
2018	2017	2018	2017	2017/2018	2017
					17,275
–9,300	–10,169	–3,002	–3,257	–12,959	–13,828
					3,447
–787	–751	–218	–223	–1,041	–1,005
10	14	–1	-	10	14
1,397	1,807	384	582	2,046	2,456
–56	227	–21	–15	–73	210
1,341	2,034	363	567	1,973	2,666
–304	–386	–85	–120	–325	–407
1,037	1,648	278	447	1,648	2,259
104	–32	–5	–13	92	–44
–104	–22	–68	-	–29	53
14	5	6	-	–3	–12
1,051	1,599	211	434	1,708	2,256
					2,259
Comprehensive income for the period is attributable to shareholders of					2,256
					32.00
14.90	23.20	4.00	6.30	23.50	31.90
69,583,262	70,204,033	69,583,262	70,204,033	69,583,262	69,583,262
69,583,262	70,866,770	69,583,262	70,458,945	69,903,318	70,642,592
69,836,391	71,062,512	69,950,321	70,677,051	70,135,947	70,844,023
	11,474 2,174 1,037 1,051 14.90	JANUARY–SEPTEMBER 12,713 2,544 1,648 1,599 23.30	3,605 603 278 211 4.00	JULY–SEPTEMBER 4,062 805 447 434 6.30	16,036 3,077 1,648 1,708 23.60

1) Net profit for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO IFRS, SEK M	9/30/2018	9/30/2017	12/31/2017
ASSETS
Non-current assets	221	211	209
Project properties	1,423	878	1,074
Development properties	8,509	6,984	7,543
Participations in tenant-owners associations, etc.	224	267	309
Work in progress	2,980	1,980	2,291
Current receivables	3,259	2,813	2,949
Cash and cash equivalents	1,854	2,557	2,572
Total current assets	18,249	15,479	16,738
Total assets	18,470	15,690	16,947
EQUITY AND LIABILITIES 1) 2)
Equity	6,332	5,511	6,043
Non-current interest-bearing liabilities	204	333	203
Other non-current liabilities	700	150	273
Non-current provisions	2,950	2,362	2,619
Total non-current liabilities	3,854	2,845	3,095
Current interest-bearing liabilities	3,030	1,744	1,728
Other current liabilities	5,133	5,478	5,972
Current provisions	121	112	109
Total current liabilities	8,284	7,334	7,809
Total equity and liabilities	18,470	15,690	16,947
Pledged assets	573	545	744
Contingent liabilities	8,771	10,058	9,993
1) Of which project financing JM International	2,574	1,540	1,857
2) Of which liabilities for property acquisition	1,058	615	794

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	JANUARY–SEPTEMBER		FULL-YEAR
ACCORDING TO IFRS, SEK M	2018	2017	2017
Opening balance at beginning of period	6,043	4,951	4,951
Total comprehensive income for the period	1,051	1,599	2,256
Dividend	–765	–675	–675
Conversion of convertible loan	-	10	10
Equity component of convertible debentures	3	1	1
Buy-back of shares	-	–375	–500
Closing balance at the end of the period	6,332	5,511	6,043

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
ACCORDING TO IFRS, SEK M	2018	2017	2018	2017	2017/2018	2017
Cash flow from operating activities before change in
working capital and taxes	1,633	2,074	446	672	2,741	3,182
Paid tax	–582	–313	–184	–93	–630	–361
Investment in development properties, etc. 1)	–2,727	–1,611	–900	–478	–3,610	–2,494
Payment on account for development properties, etc.2)	2,133	1,660	892	491	2,511	2,038
Investment in project properties	–324	–288	–88	–98	–526	–490
Sale of project properties	2	-	-	-	8	6
Change in current liabilities/receivables	–1,287	609	–477	311	–1,374	522
Cash flow from operating activities	–1,152	2,131	–311	805	–880	2,403
Cash flow from investing activities	0	303 3)	3	–1	–3	300 3)
Loans raised	584	153	30	13	645	214
Amortization of debt	–93	–234	–19	–113	–157	–298
Loans raised, project financing	1,220	507	351	208	1,505	792
Amortization of debt, project financing	–524	–770	–274	–439	–936	–1,182
Buy-back of shares	-	–375	-	–125	–125	–500
Dividend	–765	–675	-	-	–765	–675
Cash flow from financing activities	422	–1,394	88	–456	167	–1,649
Cash flow for the period	–730	1,040	–220	348	–716	1,054
Cash and cash equivalents at end of the period	1,854	2,557	1,854	2,557	1,854	2,572
1) Of which investment in participations in tenant-owners associations and freehold residential units	–700	–367	–307	–84	–908	–575
2) Of which the sale of participations in tenant-owners associations and freehold residential units	703	303	323	91	895	495

3) Of which SEK 310m refers to the sale of the participations in Småa AB.

ACCOUNTING PRINCIPLES

This interim report for the nine-month period of 2018 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 Parent Company's accounts were prepared in accordance with RFR 2.

The accounting principles and methods of calculation for the Group have not changed compared to the description on pages 82-85 of the 2017 Annual Report with two exceptions: IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments apply as of January 1, 2018. However, the transition to IFRS 15 and IFRS 9 has not had any impact on the Group's or the Parent Company's performance and financial position. For more information about JM's implementation of and principles for IFRS 15 and IFRS 9, refer to pages 82-85 in the 2017 Annual Report.

JM APPLIES THE FOLLOWING NEW STANDARDS AS OF 2018 IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS

IFRS 15 refers to the recognition of revenue from contracts and the sale of some non-financial assets.

JM's accounting of the reporting of the project development of residential units in Sweden continues to occur with the application of the percentage of completion method. The contracts with the tenant-owners association are entered into simultaneously, are priced as a single unit and are assessed to constitute a performance obligation. Since JM is contractually obligated to deliver a specific building and during the course of the project is entitled to payment, the assessment is made that revenue must be reported over time, i.e. using the percentage of completion method.

With regard to corresponding business in Norway and Finland, the assessment is made that there is no entitlement to payment, which means that, in the same manner as today, revenue must be reported at a specific point in time, i.e. completion.

The revenue in JM Construction is also reported using the percentage of completion method since the construction is carried out on land that the customer controls.

As a whole, IFRS 15 has not changed JM's revenue recognition principles.

IFRS 9 FINANCIAL INSTRUMENTS

IFRS 9 refers to the reporting of financial instruments. It contains rules for classification and measurement of financial assets and liabilities, impairment of financial instruments and hedge accounting. JM makes the assessment that IFRS 9 could affect the measurement of some receivables, but the effect is not considered material.

For more information about JM's application of IFRS 15 and IFRS 9, refer to pages 82-85 in the 2017 Annual Report.

NEW STANDARDS ENTERING INTO EFFECT AFTER 2018 IFRS 16 LEASES

This standard will replace IAS 17 Leases and all related interpretations. It requires lessees to report assets and liabilities that are attributable to all lease contracts, with the exception of contracts that are shorter than 12 months and/or refer to small amounts. Reporting for lessors in all material respects will be unchanged. The standard must be applied as of January 1, 2019. IFRS 16 will affect JM in part in terms of agreements regarding rental of the buildings in which JM conducts its operations. JM is also currently conducting a review of the agreements with suppliers regarding equipment rentals. These agreements refer in many cases to smaller amounts, may include service components and normally are in reference to relatively short periods of time. The analysis and evaluation has been initiated. Additional information will be presented before the first quarter 2019.

SEGMENT REPORTING

JM's contracting operations in Norway are reported in the JM Construction business segment as of 2018. Comparative figures for the business segments JM International and JM Construction have been restated.

REVENUE RECOGNITION OF HOUSING DEVELOPMENT IN SWEDEN

In April 2018, Nasdaq Stockholm AB (Stock Exchange) submitted questions to a number of listed housing developers regarding the implementation of IFRS 15 Revenue from Contracts with Customers and the basis for the assessment of whether or not the tenant-owner associations are independent. JM answered these questions on May 7.

On October 9, the Stock Exchange wrote a joint letter to the listed housing developers stating it is the Stock Exchange's current assessment that the tenant-owners associations cannot be considered to be independent. It is thus the individual buyer of the tenant-owned apartment, not the association, who is the customer, and according to the Stock Exchange this means that revenue must be reported at a single point in time and not over time (gradually). Before the Stock Exchange determines its final position, it will gather feedback from concerned companies.

JM does not share the Stock Exchange's assessment but rather considers the association to be independent and that it is JM's contract with the association that is to be evaluated according to IFRS 15. The effect of a potential translation has not yet been determined. Such a change does not affect JM's segment reporting, project management or the risk profile of the business. JM considers segment reporting to most accurately reflect the economic implications of JM's business at the same time as it correlates well with the Group's internal governance, which is based on the Group's cash flows, risk profile and capital allocation.

PARENT COMPANY

CONDENSED INCOME STATEMENT, PARENT COMPANY

	JANUARY–SEPTEMBER		FULL-YEAR
SEK M	2018	2017	2017
Net sales	7,809	8,616	11,602
Production and operating costs	–6,019	–6,638	–8,878
Gross profit	1,790	1,978	2,724
Selling and administrative expenses	–557	–536	–699
Gains/losses on the sale of property	0	14	14
Operating profit	1,233	1,456	2,039
Financial income and expenses	55	290	310
Profit before appropriations and tax	1,288	1,746	2,349
Appropriations	-	-	–167
Profit before tax	1,288	1,746	2,182
Taxes	–261	–314	–288
Profit for the period	1,027	1,432	1,894

PARENT COMPANY, CONTINUED

CONDENSED BALANCE SHEET, PARENT COMPANY

SEK M	9/30/2018	9/30/2017	12/31/2017
Assets
Non-current assets	1,478	1,194	1,221
Current assets	10,702	9,368	10,155
Total assets	12,180	10,562	11,376
Equity and liabilities
Equity	3,314	2,713	3,050
Untaxed reserves	2,360	2,170	2,360
Provisions	1,550	1,030	1,334
Non-current liabilities	737	215	340
Current liabilities	4,219	4,434	4,292
Total equity and liabilities	12,180	10,562	11,376
Pledged assets	169	169	169
Contingent liabilities	8,923	10,228	10,162

RECONCILIATION BETWEEN SEGMENT REPORTING AND IFRS

CONSOLIDATED INCOME STATEMENT

	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Revenue for the period (segment reporting)	12,011	12,457	3,832	3,813	16,562	17,008
Restatement JM International	–537	256	–227	249	–526	267
Revenue for the period (IFRS)	11,474	12,713	3,605	4,062	16,036	17,275
Operating profit/loss for the period (segment reporting)	1,443	1,731	411	543	2,081	2,369
Restatement JM International	–46	76	–27	39	–35	87
Operating profit/loss for the period (IFRS)	1,397	1,807	384	582	2,046	2,456
Profit/loss for the period (segment reporting)	1,079	1,588	303	411	1,685	2,194
Restatement JM International	–42	60	–25	36	–37	65
Profit/loss for the period (IFRS)	1,037	1,648	278	447	1,648	2,259
CONSOLIDATED BALANCE SHEET
SEK M			9/30/2018		9/30/2017	12/31/2017
Balance sheet total (segment reporting)			16,135		14,421	15,405
Restatement JM International			–239		–271	–315
Reclassification project financing JM International			2,214		1,540	1,396
Reclassification project financing JM International, non-interest-bearing 1)			360		-	461
Balance sheet total (IFRS)			18,470		15,690	16,947
1) Billing on account to customers
CONSOLIDATED EQUITY
SEK M			9/30/2018		9/30/2017	12/31/2017
Equity (segment reporting)			6,520		5,653	6,178
Restatement JM International			–188		–142	–135
Equity (IFRS)			6,332		5,511	6,043
GROUP KEY FIGURES
%			9/30/2018		9/30/2017	12/31/2017
Equity/assets ratio (segment reporting)			40		39	40
Equity/assets ratio (IFRS)			34		35	35
CONSOLIDATED CASH FLOW
	JANUARY–SEPTEMBER			JULY–SEPTEMBER	OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
Cash flow from operating activities (segment reporting)	–456	1,868	–234	574	–311	2,013
Reclassification project financing JM International	–696	263	–77	231	–569	390

Cash flow from operating activities (IFRS) –1,152 2,131 –311 805 –880 2,403

CONSOLIDATED INTEREST-BEARING NET LIABILITIES/RECEIVABLES

SEK M	9/30/2018	9/30/2017	12/31/2017
Interest-bearing net liabilities (+)/receivables (–) at end of period
(segment reporting)	541	–727	–790
Reclassification project financing JM International	2,214	1,540	1,396
Interest-bearing net liabilities (+)/receivables (–) at end of period (IFRS)	2,755	813	606

REVENUE PER BUSINESS SEGMENT ACCORDING TO IFRS 15

	JANUARY–SEPTEMBER		JULY–SEPTEMBER		OCT–SEPT	FULL-YEAR
SEK M	2018	2017	2018	2017	2017/2018	2017
JM Residential Stockholm	4,434	5,331	1,429	1,613	6,254	7,151
JM Residential Sweden	3,254	3,215	920	916	4,348	4,309
JM International	1,949	2,592	685	970	2,886	3,529
JM Property Development	49	48	19	11	61	60
JM Construction	2,130	1,918	663	689	2,963	2,751
Elimination	–342	–391	–111	–137	–476	–525
Total	11,474	12,713	3,605	4,062	16,036	17,275

Stockholm, October 25, 2018 JM AB (publ)

Johan Skoglund President and Chief Executive Officer

REVIEW REPORT JM AB (PUBL), CORPORATE IDENTITY NUMBER 556045-2103

INTRODUCTION

We have reviewed the condensed interim financial information (interim report) of JM AB as of September 30, 2018 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

SCOPE OF REVIEW

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, October 25, 2018 PricewaterhouseCoopers AB

Auditor in charge

Håkan Malmström Ann-Christine Hägglund Authorized Public Accountant Authorized Public Accountant

JM IN BRIEF

BUSINESS CONCEPT

With people in focus and through constant development, we create homes and sustainable living environments.

VISION

We are laying the foundations for a better life.

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 project development of commercial premises and contract work, primarily in the Greater Stockholm area.

JM should promote long-term sustainability work in all its operations. Annual sales total approximately SEK 17 billion and the company has around 2,600 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.

JM's financial targets are defined based on segment reporting.

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 08.00 CET on October 25, 2018.

FOR MORE INFORMATION PLEASE CONTACT:

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

FINANCIAL CALENDAR

February 1, 2019	Year-end report 2018
March 28, 2019	Annual General Meeting
April 26, 2019	Interim Report January - March
July 12, 2019	Interim Report January - June
October 24, 2019	Interim Report January - September

PRESS RELEASES, Q3 2018

July 2	JM acquiring property in Espoo, Helsinki
July 13	Interim report January – June 2018
August 31	Notification of reduction share of capital in JM AB
September 24	JM AB's Nomination Committee for the 2019
	Annual General Meeting

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