JM — Interim / Quarterly Report 2019

Jul 12, 2019

Interim Report January – June 2019

JM GROUP

POSITIVE DEVELOPMENT IN SALES IN THE HOUSING BUSINESS

JANUARY – JUNE 2019

Revenue decreased to SEK 7,613m (8,179), and operating profit decreased to SEK 819m (1,032). The operating margin decreased to 10.8 percent (12.6). Profit includes the one-off cost for the discontinuation of the housing operations (Business area Construction) in the subsidiary JM Entreprenad AB of SEK –180m reported during the first quarter

Revenue excluding JM Construction Business area

Construction amounted to SEK 7,517m (7,672), operating profit to SEK 1,020m (1,042) and operating margin to 13.6 percent (13.6)

Profit before tax decreased to SEK 779m (997). Profit after tax decreased to SEK 614m (776)

Return on equity for the past twelve months decreased to 19.8 percent (30.7). Earnings per share for the first six months amounted to SEK 8.80 (11.10)

Consolidated cash flow including net investment in properties amounted to SEK 371m (–222)

The number of residential units sold increased to 1,548 (1,099), and housing starts amounted to 1,365 (1,417)

APRIL – JUNE 2019

Revenue amounted to SEK 3,944m (4,125), and operating profit amounted to SEK 506m (504). The operating margin increased to 12.8 percent (12.2)

Profit before tax amounted to SEK 488m (485). Profit after tax amounted to SEK 386m (377)

Consolidated cash flow including net investment in properties amounted to SEK –97m (–204)

Number of residential units sold increased to 881 (619), and housing starts increased to 959 (847)

ACCORDING TO SEGMENT REPORTING	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue	7,613	8,179	3,944	4,125	15,595	16,161
Revenue excluding JM Construction, Business area Construction	7,517	7,672	3,798	3,882	15,236	15,391
Operating profit	819	1,032	506	504	1,673	1,886
Operating profit excluding JM Construction, Business area Construction	1,020	1,042	514	509	2,040	2,062
Operating margin, %	10.8	12.6	12.8	12.2	10.7	11.7
Operating margin excluding JM Construction, Business area Construction, %	13.6	13.6	13.5	13.1	13.4	13.4
Profit before tax	779	997	488	485	1,599	1,817
Cash flow from operating activities	371	–222	–97	–204	120	–473
Return on equity, %					19.8	22.2
Equity/assets ratio, %	40	38				41
Earnings per share, SEK	8.80	11.10	5.50	5.40	18.30	20.60
Number of residential units sold	1,548	1,099	881	619	2,912	2,463
Number of housing starts	1,365	1,417	959	847	3,083	3,135
Number of residential units in current production	7,829	7,814				7,835
Revenue according to IFRS	7,481	7,869	3,882	4,044	15,292	15,680
Operating profit according to IFRS	825	1,013	512	506	1,688	1,876
Earnings per share according to IFRS, SEK	8.80	10.90	5.50	5.40	18.30	20.40

For the Group's income statement and balance sheet in accordance with IFRS, IFRS 15 Revenue from Contracts with Customers is applied, which means that revenue and profit/ loss from 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 Group's calculations according to IFRS are presented on pages 21-22. For definitions of key financial figures, see "Definitions 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: K7, Liljeholmskajen, Stockholm

Group

IMPROVED DEMAND FOR JM'S RESIDENTIAL UNITS IN STOCKHOLM

The development in the housing business in both Sweden and the foreign operations continued to be positive. The large supply of newly produced residential units on the market has fallen in 2019 in both Stockholm and the rest of Sweden. The transaction volume also increased clearly in the second quarter.

The housing market in Stockholm continued to be affected

by the stricter amortization requirements and the banks' more conservative approach to lending to home buyers. We are also seeing an improvement in demand for JM's residential units from customer groups in Stockholm that have good purchasing power. In particular, we have very good demand for the freehold apartments we introduced on the market and also started to produce during the second quarter. The gradual stabilization of the market has resulted in continued positive developments in reservations and sales in Stockholm, both in relation to the previous quarter and the previous year, with 268 sold residential units during the second quarter compared to 225 the same period the previous year. Housing starts were supported by a normal level of reservations, where profitability continued to be good in current production volumes despite price adjustments in a number of projects. We have projects for around 250 residential units in Stockholm, where housing starts are delayed pending government decisions. Nontheless, conditions are considered to be good for a substantially higher level of housing starts during the second half of the year, in line with the rate in the second quarter, where we have good level of reservations in forthcoming projects.

The housing operations in the rest of Sweden show good profitability in a market that continues to be stable with good level of sales during the quarter.

In Norway, the level of activity on the housing market was good, and the housing market in Finland was stable during the quarter. In line with the annual plan, we have had a significantly higher level of housing starts within the foreign operations during the second quarter compared to the first quarter. We still make the assessment that the number of housing starts will increase in the second half of 2019, assuming a stable market and stable planning conditions.

Some additional news that is very pleasing is that we sold three rental properties at the start of the third quarter. Two properties, one on Lidingö and one in Täby, are completed, and construction began on the third in Sundyberg during the second quarter, with occupancy planned for Q2 2022. The strong interest in these properties confirms both the strong market for rental apartments and the quality of the homes we develop in-house.

The redirection of the operations in JM Construction is progressing according to plan, and I am very satisfied that we sold two plots of land during the quarter at the expected price based on the schedule set for 2019-2021.

As a long-term housing developer, we continue to acquire land for future production. One large acquisition was for a property in Røa, Oslo. The transaction is conditional on finalized local planning, which is expected to occur in 2023 at the earliest. We have the opportunity here to develop 300 residential units in an established housing area, walking distance to services and the subway.

During the second quarter, we started construction on, among others, the K7 project with 184 freehold apartments at Liljeholmskajen in Stockholm. Most of the residential units JM develops are tenantowned apartments in apartment buildings, but freehold apartments allow us to offer yet another form of tenure and reach new customer groups. Freehold apartments are a common form of tenure outside of Sweden, and they offer the possibility for legal entities to purchase apartments. JM has two additional projects under way with freehold apartments in Sweden, one on Lidingö and one in Uppsala, and we are seeing greater interest for this form of tenure.

Housing starts for tenant-owned apartment projects include Soluret, Älvsjö, which with 102 residential units is one of the largest. Soluret is quality assessed in accordance with Trygg BRF which is an industry initiative in Sweden to strengthen consumer protection on the tenant-owned apartment market, and JM supports this initiative.

We are well-positioned with a good project portfolio that is regularly developed for the housing of the future at the same time as our strong financial position allows us freedom of action.

The conditions are good for continued positive development within our housing business, and the improvement on the housing market in Stockholm is particularly good news. I am cautiously optimistic about the fall, and I wish everyone a wonderful summer.

Johan Skoglund, President and CEO

MARKET, SALES AND HOUSING STARTS JANUARY – JUNE 2019

The housing market in Stockholm continued to improve during the first half of the year. 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 increased to 1,548 (1,099)1). The percentage of sold or reserved homes in relation to current production amounts to 62 percent (58), with an interval of 60–65 percent considered normal. This percentage increased from 61 percent in the first quarter. JM Residential Stockholm sold 506 residential units (342), JM Residential Sweden sold 487 (451), JM International sold 555 (306) and JM Property Development sold 0 (0).

Housing starts amounted to 1,365 (1,417) 2). JM Residential Stockholm started production on 375 residential units (455), JM Residential Sweden on 515 (553), JM International on 332 (281) and JM Property Development on 143 (128).

Of the started and sold residential units in JM International, 182 units in Finland were sold as rental units.

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

The number of residential units in current production increased to 7,829 (7,814), of which 736 are rental units and residential care units (681).

1) Of which 0 rental units and residential care units (0). 2) Of which 143 rental units and residential care units (128).

4

REVENUE, OPERATING PROFIT AND OPERATING MARGIN

JANUARY – JUNE 2019

Consolidated revenue according to segment reporting for the first six months decreased to SEK 7,613m (8,179). Revenue restated according to IFRS decreased to SEK 7,481m (7,869).

Operating profit according to segment reporting decreased to SEK 819m (1,032), and the operating margin decreased to 10.8 percent (12.6). Operating profit restated according to IFRS decreased to SEK 825m (1,013). The restatement is related to JM International and lease contracts according to IFRS 16, with an effect on earnings of SEK –1m (–19) and SEK 7m (0), respectively . Profit includes a loss within JM Construction of SEK –155m (0) where the one-off cost for the discontinuation of the housing operations was reported during the first quarter. Revenue excluding JM Construction Business area Construction amounted to SEK 7,517m (7,672), operating profit to SEK 1,020m (1,042) and operating margin to 13.6 percent (13.6)

During the first six months, properties were sold for SEK 131m (72) with gains of SEK 72m (11).

Rental income from JM's project properties increased to SEK 45m (29). Net rental income increased to SEK 29m (17).

APRIL – JUNE 2019

Consolidated revenue according to segment reporting for the second quarter amounted to SEK 3,944m (4,125). Revenue restated according to IFRS amounted to SEK 3,882m (4,044).

Operating profit according to segment reporting amounted to SEK 506m (504), and the operating margin increased to 12.8 percent (12.2). Operating profit restated according to IFRS amounted to SEK 512m (506). The restatement is related to JM International and lease contracts according to IFRS 16, with an effect on earnings of SEK 3m (2) and SEK 3m (0), respectively. Profit includes gains from the sale of a property within JM Construction of SEK 34m (0).

Properties were sold during the second quarter for SEK 60m (3) with gains of SEK 34m (0).

Rental income from JM's project properties increased to SEK 24m (15). Net rental income increased to SEK 17m (9).

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
OPERATING PROFIT BY BUSINESS SEGMENT, SEK M	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	445	524	216	250	910	989
JM Residential Sweden	373	394	193	181	730	751
JM International	164	136	66	83	359	331
JM Property Development	12	1	6	–1	21	10
JM Construction	–155	0	34	0	–311	–156
Group-wide expenses	–20	–23	–9	–9	–36	–39
Total	819	1,032	506	504	1,673	1,886
Of which property sales	72	11	34	0	74	13

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
OPERATING MARGIN BY BUSINESS SEGMENT, %	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	16.1	17.4	16.2	16.3	16.4	17.1
JM Residential Sweden	16.2	16.9	16.1	17.0	16.5	16.9
JM International	9.3	8.6	7.3	9.6	9.5	9.2
JM Construction	–18.0	0.0	6.2	0.0	–14.7	–5.7
	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
OPERATING PROFIT, SEK M	2019	2018	2019	2018	2018/2019	2018
Operating profit excluding JM Construction, Business area Construction	1,020	1,042	514	509	2,040	2,062
Operating margin excluding JM Construction, Business area Construction, %	13.6	13.6	13.5	13.1	13.4	13.4

Operating profit JM Construction, Business area Construction –201 –10 –8 –5 –367 –176 Operating profit, total 819 1,032 506 504 1,673 1,886

RESIDENTIAL UNITS IN CURRENT PRODUCTION	6/30/2019	6/30/2018	12/31/2018
Number of residential units in current production 1) 2)	7,829	7,814	7,835
Percentage of sold residential units in current production, % 3)	55	52	51
Reserved residential units in current production, %	7	6	6
Sold/reserved residential units in current production, %	62	58	57
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	736	681	593
Including residential units in projects where costs incurred are only reported as project properties under construction	736	681	593

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.

6/30/2019	6/30/2018	12/31/2018
143	88	140
67	79	125

1) After final occupancy according to plan.

RESIDENTIAL BUILDING RIGHTS JANUARY – JUNE 2019

The number of available residential building rights at the end of the first six months amounted to 36,500 (36,000), of which 21,200 (20,400) are recognized in the balance sheet. Capital tied up in building rights (development properties in the balance sheet) for residential units increased to SEK 8,952m (8,827).

JM acquired development properties for residential units during the first six months for SEK 879m (2,057), of which SEK 180m relates to JM Residential Stockholm, SEK 264m to JM Residential Sweden and SEK 435m to JM International.

FINANCIAL ITEMS

JANUARY – JUNE 2019

Net financial items are slightly lower than the previous year, primarily due to a larger average interest-bearing loan.

Total interest-bearing loans according to segment reporting amounted to SEK 2,323m (2,323), of which the provision for the pension liability comprised SEK 1,507m (1,306). At the end of the second quarter, the average interest rate for the total interest-bearing loan stock including pension liabilities was 2.5 percent (2.4). The average term for fixed-rate loans excluding the pension liability was 0.2 years (0.2).

Consolidated available liquidity was SEK 3,968m (4,878). Aside from cash and cash equivalents of SEK 1,168m (2,078), 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 3.5 years (3.5).

Interest-bearing net liabilities in accordance with segment reporting amounted to SEK 1,155m (240) at the end of the period. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 1,196m (1,405). Of these liabilities, SEK 426m (719) were current.

The valuation of financial assets and liabilities shows no significant difference between the carrying amount and fair value.

SEK M		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
	2019	2018	2019	2018	2018/2019	2018
Financial income	3	3	2	2	10	10
Financial expenses	–43	–38	–20	–21	–84	–79
Financial income and expenses	–40	–35	–18	–19	–74	–69

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2019	2018	2018/2019	2018
Interest-bearing net liabilities(+)/receivables(–) at beginning of
period	546	–790	130	–748	240	–790
Change in interest-bearing net liabilities/receivables	609	1,030	1,025	988	915	1,336
Interest-bearing net liabilities(+)/receivables(–) at end of period	1,155	240	1,155	240	1,155	546

CASH FLOW JANUARY – JUNE 2019

Cash flow from operating activities according to segment reporting was SEK 371m (–222) during the first six months. Net investments in development properties resulted in a cash flow of SEK –357m (–573). The reduced holdings of repurchased residential units resulted in a cash flow of SEK 226m (–13). Consolidated cash flow attributable to project properties (sales minus investment) during the first six months was SEK –229m (–234). Cash flow was strengthened by a payment of SEK 320m received during the first quarter for an outstanding accounts receivable in accordance with a settlement agreement.

APRIL – JUNE 2019

Cash flow from operating activities was SEK –97m (–204) during the second quarter. Net investments in development properties resulted in a cash flow of SEK –274m (–255). The reduced holdings of repurchased residential units resulted in a cash flow of SEK 131m (0). Consolidated cash flow attributable to project properties (sales minus investment) during the second quarter was SEK –122m (–116). Increased operating capital had a negative impact on the cash flow.

EVENTS AFTER THE CLOSE OF THE REPORTING PERIOD

At the beginning of July 2019, JM signed an agreement for the sale of three rental unit properties in Stockholm for SEK 1,200m.

The properties that are being sold are the completed properties Lidingö Tryckregulatorn 2 and Täby Spaken 1, as well as Sundbyberg Lådmakaren 4 which entered into production in Q2 2019. They were part of several larger housing development projects by JM. In total, 376 residential units were sold. The sale of Lidingö Tryckregulatorn 2 and Täby Spaken 1 will be reported in the JM Property Development business segment in Q3 2019 with gains of SEK 170m.

The transfer of ownership for Lidingö Tryckregulatorn 2 and Täby Spaken 1 will occur in Q3 2019; for Sundbyberg Lådmakaren 4, the transfer is planned for Q2 2022. Approximately two-thirds of the remuneration will be received in Q3 2019 and the rest when ownership of Sundbyberg Lådmakaren 4 is transferred. Sundbyberg Lådmakaren 4 will be recognized under revenue and profit/loss gradually during the completion of the project under JM Property Development.

RISKS AND UNCERTAINTY FACTORS

JM's risks and risk management are presented in the 2018 Annual Report on pages 30-32 and 75. No significant changes have occurred to change these reported risks.

CONVERTIBLE PROGRAM

The 2019 Annual General Meeting resolved that JM would raise a debenture loan with a maximum value of SEK 160m by issuing a maximum of 700,000 convertible debentures with a maturity of four years targeting all employees in Sweden.

Upon expiry of the subscription period, the loan amounts to about SEK 33m through the issue of about 153,800 convertible debentures.

In accordance with IAS 32, the liability and equity components of the convertible debenture loan are reported separately, which means that the debenture loan is initially reported in the balance sheet as a liability with the nominal amount excluding the equity component.

The subscribed convertible bonds may be converted to shares at a price of SEK 212 between June 1, 2022 and April 21, 2023.

Through conversion, JM's share capital could increase by a maximum of SEK 154,000, which corresponds to a dilution of 0.2 percent of the shares and votes in the company. The convertible debenture loan was settled against cash in June 2019.

OUTSTANDING SHARES

The number of outstanding shares on June 30, 2019, amounts to 69,583,262 (69,583,262). The Company holds no treasury shares (1,476,421).

PERSONNEL

There were 2,635 (2,591) employees at the end of the first six months. The number of wage-earners was 1,045 (1,004), and the number of salaried employees was 1,590 (1,587). Current staffing is considered 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.

Average prices on the existing home market did not change in the second quarter. The total supply of residential units continued to be high, but the supply of newly produced tenant-owned apartments decreased.

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 improve during the second quarter. Customers are showing strong interest in JM's projects, and sales continued to improve. The willingness of customers to sign a contract early in the process has increased and is at a normal level. Residential units available for sale in the business segment largely have estimated occupancy in 2020/2021, and the majority in 2020.

Housing starts in Stockholm in the second quarter were supported by a normal reservation level, where profitability continues to be good in current production volumes despite price adjustments in a number of projects. In the past few quarters, the absence of necessary government decisions has had a negative effect on the business unit's housing starts. This currently affects three projects with a total

of 183 residential units, all with a high degree of reservations. Housing starts in forthcoming phases have also been indirectly delayed. The conditions continue to be good for a substantially higher number of housing starts during the second half of the year, given the strong number of reservations in forthcoming housing projects and that government decisions are less of a restriction in a number of these projects.

Business segment revenue decreased to SEK 2,765m (3,005). Operating profit decreased to SEK 445m (524). The lower revenue and profit in the first half of the year is due to the lower number of housing starts during the past year. Revenue in the quarter is also restricted by the very low level of land transferred to projects. The operating margin decreased to 16.1 percent (17.4).

Cash flow during the first six months is in balance considering the increase in development properties and payments made for previous property acquisitions.

During the second quarter, construction started on a total of 286 residential units in apartment buildings in Stockholm. In Danderyd, 90 building rights were acquired on the condition of finalized local planning.

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue	2,765	3,005	1,330	1,530	5,546	5,786
Operating profit 1)	445	524	216	250	910	989
Operating margin, %	16.1	17.4	16.2	16.3	16.4	17.1
Average operating capital					5,754	5,447
Return on operating capital, %					15.8	18.2
Operating cash flow	199	208	–85	285	325	334
Carrying amount, development properties	5,132	5,185				5,048
Number of available building rights	13,500	13,600				13,400
Number of residential units sold	506	342	268	225	1,015	851
Number of housing starts	375	455	286	240	777	857
Number of residential units in current production	3,001	3,387				3,115
Number of employees	907	924				936

1) Of which property sales - 0 - 0 - 0

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.

Average prices on the existing home market were unchanged or demonstrated marginal fluctuations on the markets in the business segment during the second quarter.

The supply on certain local markets continues to be large. Competition for land for housing is tough in some areas in the business segment and has decreased somewhat on other local markets. Interest in JM's projects is stable with good sales, and customers' willingness to sign a contract early in the process is at a normal level.

Business segment revenue amounted to SEK 2,309m (2,334), and operating profit decreased to SEK 373m (394). The operating margin decreased to 16.2 percent (16.9).

Profit and the margin decreased slightly where demand and prices vary somewhat in each submarket.

Cash flow during the first half of the year is burdened by increased holdings in development properties and an increase in working capital.

During the second quarter, construction started on a total of 244 residential units, of which 207 were in apartment buildings in Örebro, Västerås and Uppsala and 37 were single-family homes in Staffanstorp. In the second quarter, 300 building rights were acquired in Lund and Gothenburg.

	JANUARY–JUNE			APRIL–JUNE		FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue	2,309	2,334	1,199	1,065	4,431	4,456
Operating profit 1)	373	394	193	181	730	751
Operating margin, %	16.2	16.9	16.1	17.0	16.5	16.9
Average operating capital					1,096	1,008
Return on operating capital, %					66.6	74.5
Operating cash flow	143	492	78	260	373	722
Carrying amount, development properties	1,549	1,476				1,388
Number of available building rights	10,500	10,300				10,500
Number of residential units sold	487	451	244	207	953	917
Number of housing starts	515	553	244	267	1,005	1,043
Number of residential units in current production	2,366	2,280				2,418
Number of employees	609	595				598

1) Of which property sales - 0 - - 1 1

JM International

The JM International business segment develops residential projects in Norway and Finland. Operations include acquisitions of development properties, planning, pre-construction, production and sales of residential units. Revenue recognition for the business segment is reported using the percentage of completion method.

Business segment revenue increased to SEK 1,765m (1,574), and operating profit increased to SEK 164m (136). The operating margin increased to 9.3 percent (8.6). The margin excluding profit from the sale of property amounted to 7.1 percent (7.9).

During the first six months of the year, production started on 332 residential units (281), and we still make the assessment that the number of housing starts will increase in the second half of 2019, assuming a stable market and stable planning conditions.

A decrease in working capital had a positive impact on cash flow for the second quarter.

NORWAY

The price level on the existing home market in Norway increased in the second quarter. Supply has been large, and the activity level has been high.

JM Norway's revenue increased to SEK 1,467m (1,344), and operating profit increased to SEK 143m (127). The operating margin increased to 9.7 percent (9.4).

During the second quarter, 128 residential units (146) were sold and production started on 104 units (173).

Housing starts in the second quarter consisted of 72 residential units in apartment buildings and 32 single-family homes in the Oslo region.

The number of residential units in current production amounted to 1,180 (1,207). In the second quarter, building rights corresponding to 300 residential units were acquired in Oslo, and the agreement is conditional on finalized local planning which is expected in 2023 at the earliest.

Available building rights correspond to 8,300 residential units (7,900).

JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
2019	2018	2019	2018	2018/2019	2018
					3,580
1,467	1,344	746	740	3,110	2,987
164	136	66	83	359	331
143	127	54	77	313	297
9.3	8.6	7.3	9.6	9.5	9.2
9.7	9.4	7.2	10.4	10.1	9.9
				2,967	2,723
				12.1	12.2
260	–157	133	–249	376	–41
2,261	2,156				1,821
5	5				4
11,700	11,400				11,200
555	306	369	187	944	695
332	281	286	212	966	915
1,726	1,466				1,709
480	429				458
	1,765	1,574	905	864	3,771

FINLAND

The housing market in the Helsinki region continued to be stable during the second quarter. The housing market is in balance, and activity is good.

During the second quarter 241 residential units (40) were sold and construction started on 182 units (39). The housing starts in the second quarter consist of residential units in apartment buildings in Helsinki and Esbo. All of the projects started during the quarter refer to rental units and the projects have been sold in their entirety. The number of residential units in current production amounted to 546 (259).

The equivalent of 250 building rights were acquired in the second quarter. Available building rights correspond to 3,400 residential units (3,300).

Entréen, Lørenskog, Norway

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. The operations include JM@home, which offers economic and technical management services to tenant-owners associations as well as housing services.

Business segment revenue increased to SEK 53m (30), of which rental income was SEK 45m (28). Operating profit was SEK 12m (1). The operating profit was burdened by start-up costs for the new business operations, JM@home.

Net rental income for project properties was SEK 30m (17).

Cash flow during the first six months is negative due to ongoing investments in project properties.

Within the Dalénum area on Lidingö, the occupancy rate for the remaining commercial buildings that will not be torn down is 91 percent. Within the Bolinder area in Kallhäll, Järfälla, the occupancy rate for the buildings that will not be torn down is 94 percent.

The portfolio of rental units includes three fully rented and occupied projects: Dalénum on Lidingö (Lidingö Tryckregulatorn 2), Tjärtunnan in Stureby and Alphyddan in Nacka.

In the second quarter, construction started on the rental project Valla Park in Sundbyberg (Sundbyberg Lådmakaren 4), consisting of 143 rental apartments. An additional four rental projects in JM's own balance sheet are either under construction or available for occupancy: the Spaken project in Hägernäs (Täby Spaken 1), 136 completed rental units with occupancy in 2019; the Alba Lilium project in Bredäng, Stockholm, 137 rental units with planned occupancy in 2019 and 2020; the Manegen project in Täby, 128 rental units with planned occupancy in 2020; and the Havreflingan project in Järfälla, 192 rental units with planned occupancy in 2021.

In Danderyd 100 building rights for students apartments were acquired on the condition of finalized local planning.

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue	53	30	29	15	96	73
Operating profit	12	1	6	–1	21	10
Average operating capital					1,583	1,314
Return on operating capital, %					1.3	0.8
Operating cash flow	–212	–265	–116	–156	–504	–557
Carrying amount, development properties	10	10				10
Carrying amount, project properties	1,860	1,330				1,631
Number of available residential building rights 1)	800	700				800
Number of residential units sold 1)	-	-	-	-	-	-
Number of housing starts 1)	143	128	143	128	335	320
Number of residential units in current production 1)	736	681				593
Number of employees	65	48				53

1) 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.

Demand in the civil engineering market in Stockholm is at a good level. Demand in the contracting market in Oslo is also good.

Business segment revenue decreased to SEK 862m (1,467), of which the operations in Norway decreased to SEK 161m (327), and operating profit decreased to SEK –155m (0).

A review of JM Construction during the first quarter led to a decision to discontinue the Swedish housing business through which housing and commercial properties were produced for primarily external customers. The business unit will thereafter focus on civil engineering operations in Sweden in their current form.

The discontinuation entails costs of SEK 180m, which were recognized in their entirety in Q1 2019. At the same time, JM has initiated the sale of properties within JM Construction. Some project risks will remain until the ongoing projects are completed.

In the second quarter, a property was sold in Gustavsberg in Värmdö Municipality, with gains of SEK 34m which is recognized in the second quarter.

Cash flow was strengthened due to a settled accounts receivable with payment received of SEK 320m in the first quarter, according to a signed settlement agreement, as well as a completed sale of property and an increase in working capital.

During the second quarter, the business segment received a number of assignments within its civil engineering operations, the largest of which is a cooperation agreement with Tyresö Municipality for several infrastructure projects over a period of around 10 years. The largest ongoing projects are groundwork in the Stockholm Norvik goods harbor in Nynäshamn (Ports of Stockholm), new construction of apartment buildings in Norra Djurgårdsstaden (HSB and Riksbyggen) and new construction of apartment buildings in Tyresö (Småa and Riksbyggen). The largest ongoing project in the Norwegian operations is the new production of apartment buildings in Eidsvoll Municipality north of Oslo (Øvre Romerike Boligutvikling AS).

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue 1)	862	1,467	550	769	2,111	2,716
- of which Business area Construction	96	507	146	243	359	770
Operating profit 2)	–155	0	34	0	–311	–156
- of which Business area Construction	–201	–10	–8	–5	–367	–176
Operating margin, %	–18.0	0.0	6.2	0.0	–14.7	–5.7
- of which Business area Construction		–2.0	–5.5	–2.1		–22.9
Operating cash flow	135	–94	–107	60	45	–184
Carrying amount, development properties	31	42				39
Number of employees	398	440				437
1) Of which internal	141	231	69	118	360	450
2) Of which property sales	34	-	34	-	34	-

Group – segment reporting

CONDENSED CONSOLIDATED INCOME STATEMENT

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue	7,613	8,179	3,944	4,125	15,595	16,161
Production and operating costs	–6,366	–6,589	–3,212	–3,324	–13,024	–13,247
Gross profit	1,247	1,590	732	801	2,571	2,914
Selling and administrative expenses	–500	–569	–260	–297	–972	–1,041
Gains/losses on the sale of property	72	11	34	0	74	13
Operating profit	819	1,032	506	504	1,673	1,886
Financial income and expenses	–40	–35	–18	–19	–74	–69
Profit/loss before tax	779	997	488	485	1,599	1,817
Taxes	–165	–221	–102	–108	–323	–379
Profit for the period	614	776	386	377	1,276	1,438
Other comprehensive income	18	93	–39	6	–131	–56
Comprehensive income for the period	632	869	347	383	1,145	1,382
Earnings per share 1), diluted, SEK	8.80	11.10	5.50	5.40	18.30	20.60
Average number of shares, diluted	69,924,046	69,779,427	69,955,656	69,804,462	69,908,241	69,865,418

1) Profit/loss for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO SEGMENT REPORTING, SEK M	6/30/2019	6/30/2018	12/31/2018
ASSETS
Non-current assets	221	226	214
Project properties	1,865	1,335	1,635
Development properties	8,983	8,869	8,306
Participations in tenant-owners associations, etc.	296	322	567
Current receivables 1)	3,993	3,813	4,083
Cash and cash equivalents	1,168	2,078	1,682
Total current assets	16,305	16,417	16,273
Total assets	16,526	16,643	16,487
EQUITY AND LIABILITIES2)
Equity	6,597	6,285	6,798
Non-current interest-bearing liabilities	314	255	146
Other non-current liabilities	770	686	696
Non-current provisions	3,296	2,850	3,037
Total non-current liabilities	4,380	3,791	3,879
Current interest-bearing liabilities	502	762	694
Other current liabilities	4,904	5,682	4,994
Current provisions	143	123	122
Total current liabilities	5,549	6,567	5,810
Total equity and liabilities	16,526	16,643	16,487
1) Of which receivables from property sales	78	79	53
2) Of which liabilities for property acquisition	1,216	1,439	1,040

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–JUNE
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2018
Opening balance at beginning of period	6,798	6,178	6,178
Total comprehensive income for the period	632	869	1,382
Dividend	–835	–765	–765
Equity component of convertible debentures	2	3	3
Closing balance at end of period	6,597	6,285	6,798

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	JANUARY–JUNE			APRIL–JUNE		FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2019	2018	2018/2019	2018
Cash flow from operating activities before change in
working capital and taxes	1,103	1,206	588	450	2,072	2,175
Paid tax	–272	–398	–141	–137	–571	–697
Investment in development properties, etc. 1)	–1,595	–1,827	–963	–878	–3,496	–3,728
Payment on account for development properties, etc. 2)	1,464	1,241	820	623	3,027	2,804
Investment in project properties	–229	–236	–122	–118	–517	–524
Sale of project properties	-	2	-	2	0	2
Change in current liabilities/receivables	–100	–210	–279	–146	–395	–505
Cash flow from operating activities	371	–222	–97	–204	120	–473
Cash flow from investing activities	1	–3	–1	–2	–4	–8
Loans raised	138	554	125	505	207	623
Amortization of debt	–200	–74	–178	–26	–396	–270
Dividend	–835	–765	–835	–765	–835	–765
Cash flow from financing activities	–897	–285	–888	–286	–1,024	–412
Cash flow for the period	–525	–510	–986	–492	–908	–893
Cash and cash equivalents at end of period	1,168	2,078	1,168	2,078	1,168	1,682
1) Of which investment in shares in tenant-owners associations and freehold apartments	–875	–393	–506	–213	–2,019	–1,537
2) Of which sale of participations in tenant-owners associations and freehold apartments	1,101	380	637	213	1,862	1,141

CONSOLIDATED KEY FINANCIAL FIGURES

ACCORDING TO SEGMENT REPORTING, %	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
	2019	2018	2019	2018	2018/2019	2018
Operating margin	10.8	12.6	12.8	12.2	10.7	11.7
Return on equity					19.8	22.2
Return on capital employed					19.2	22.3
Debt/equity ratio, multiple	0.2	0.0				0.1
Equity/assets ratio	40	38				41

ACCORDING TO SEGMENT REPORTING

REVENUE BY COUNTRY

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Sweden	5,687	6,319	2,977	3,104	11,429	12,061
Norway	1,628	1,630	808	897	3,504	3,506
Finland	298	213	159	119	656	571
Belgium	-	17	-	5	6	23
Total	7,613	8,179	3,944	4,125	15,595	16,161

REVENUE BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	2,765	3,005	1,330	1,530	5,546	5,786
JM Residential Sweden	2,309	2,334	1,199	1,065	4,431	4,456
JM International	1,765	1,574	905	864	3,771	3,580
JM Property Development	53	30	29	15	96	73
JM Construction	862	1,467	550	769	2,111	2,716
Elimination	–141	–231	–69	–118	–360	–450
Total	7,613	8,179	3,944	4,125	15,595	16,161

OPERATING PROFIT BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	445	524	216	250	910	989
JM Residential Sweden	373	394	193	181	730	751
JM International	164	136	66	83	359	331
JM Property Development	12	1	6	–1	21	10
JM Construction	–155	0	34	0	–311	–156
Group-wide expenses	–20	–23	–9	–9	–36	–39
Total	819	1,032	506	504	1,673	1,886

OPERATING MARGIN BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
%	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	16.1	17.4	16.2	16.3	16.4	17.1
JM Residential Sweden	16.2	16.9	16.1	17.0	16.5	16.9
JM International	9.3	8.6	7.3	9.6	9.5	9.2
JM Construction	–18.0	0.0	6.2	0.0	–14.7	–5.7

AVERAGE OPERATING CAPITAL BY BUSINESS SEGMENT

	JULY–JUNE	FULL-YEAR
SEK M	2018/2019	2018
JM Residential Stockholm	5,754	5,447
JM Residential Sweden	1,096	1,008
JM International	2,967	2,723
JM Property Development	1,583	1,314

RETURN ON OPERATING CAPITAL BY BUSINESS SEGMENT

JULY–JUNE	FULL-YEAR
% 2018/2019	2018
JM Residential Stockholm 15.8	18.2
JM Residential Sweden 66.6	74.5
JM International 12.1	12.2
JM Property Development 1.3	0.8

ACCORDING TO SEGMENT REPORTING

OPERATING CASH FLOW BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	199	208	–85	285	325	334
JM Residential Sweden	143	492	78	260	373	722
JM International	260	–157	133	–249	376	–41
JM Property Development	–212	–265	–116	–156	–504	–557
JM Construction	135	–94	–107	60	45	–184

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	6/30/2019	6/30/2018	12/31/2018
JM Residential Stockholm	5,132	5,185	5,048
JM Residential Sweden	1,549	1,476	1,388
JM International	2,261	2,156	1,821
JM Property Development	10	10	10
JM Construction	31	42	39
Total	8,983	8,869	8,306

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	6/30/2019	6/30/2018	12/31/2018
JM Residential Stockholm	13,500	13,600	13,400
JM Residential Sweden	10,500	10,300	10,500
JM International	11,700	11,400	11,200
JM Property Development 1)	800	700	800
Total	36,500	36,000	35,900
Of which rights carried in the balance sheet (development properties)
JM Residential Stockholm	8,400	8,100	8,600
JM Residential Sweden	6,900	6,400	6,800
JM International	5,800	5,700	5,100
JM Property Development 1)	100	200	200
Total	21,200	20,400	20,700

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE	JULY–JUNE	FULL-YEAR
NUMBER	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	506	342	268	225	1,015	851
JM Residential Sweden	487	451	244	207	953	917
JM International	555	306	369	187	944	695
JM Property Development 1)	-	-	-	-	-	-
Total	1,548	1,099	881	619	2,912	2,463

HOUSING STARTS BY BUSINESS SEGMENT

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
NUMBER	2019	2018	2019	2018	2018/2019	2018
JM Residential Stockholm	375	455	286	240	777	857
JM Residential Sweden	515	553	244	267	1,005	1,043
JM International	332	281	286	212	966	915
JM Property Development 1)	143	128	143	128	335	320
Total	1,365	1,417	959	847	3,083	3,135

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	6/30/2019	6/30/2018	12/31/2018
JM Residential Stockholm	3,001	3,387	3,115
JM Residential Sweden	2,366	2,280	2,418
JM International	1,726	1,466	1,709
JM Property Development 1)	736	681	593
Total	7,829	7,814	7,835

1) Refers to rental units and residential care units.

PROJECT PROPERTIES, GROUP

CARRYING AMOUNT, SEK M	6/30/2019	6/30/2018	12/31/2018
Properties under development	1,041	1,100	816
Completed rental unit properties	813	224	808
Completed commercial properties	11	11	11
Total	1,865	1,335	1,635

DEVELOPMENT PROPERTIES, GROUP

		JANUARY–JUNE		APRIL–JUNE		FULL-YEAR
CARRYING AMOUNT, SEK M	2019	2018	2019	2018	2018/2019	2018
Opening balance at beginning of period	8,306	7,543	8,911	8,607	8,869	7,543
New purchases	879	2,057	142	661	1,224	2,402
Transferred to production	–256	–786	–77	–411	–987	–1,517
Other	54	55	7	12	–123	–122
Closing balance at end of period	8,983	8,869	8,983	8,869	8,983	8,306

Group five-year overview

ACCORDING TO SEGMENT REPORTING, SEK M	2018	2017	2016	2015	2014
Revenue	16,161	17,008	15,752	14,447	13,869
Operating profit	1,886	2,369	2,011	1,590	1,716
Profit before tax	1,817	2,579	1,951	1,518	1,641
Total assets	16,487	15,405	12,848	12,230	12,545
Cash flow from operating activities	–473	2,013	1,957	–230	978
Interest-bearing net liabilities (+)/receivables (–)	546	–790	435	1,198	–337
Operating margin, %	11.7	13.9	12.8	11.0	12.4
Return on equity, %	22.2	38.7	31.4	24.8	26.5
Equity/assets ratio, %	41	40	40	38	37
Earnings per share, SEK	20.60	31.00	21.20	15.50	16.00
Dividend per share, SEK	12.00	11.00	9.50	8.25	8.00
Number of available building rights	35,900	34,800	32,500	31,100	29,400
Number of residential units sold	2,463	3,100	3,843	3,770	3,195
Number of housing starts	3,135	3,873	4,187	3,731	3,445
Number of residential units in current production	7,835	8,200	7,984	7,212	6,375

Group Quarterly Overview

ACCORDING TO SEGMENT REPORTING, SEK M	2019			2018
INCOME STATEMENT	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	3,944	3,669	4,150	3,832	4,125	4,054
Production and operating costs	–3,212	–3,154	–3,456	–3,202	–3,324	–3,265
Gross profit	732	515	694	630	801	789
Selling and administrative expenses	–260	–240	–254	–218	–297	–272
Gains/losses on the sale of property	34	38	3	–1	0	11
Operating profit	506	313	443	411	504	528
Financial income and expenses	–18	–22	–13	–21	–19	–16
Profit/loss before tax	488	291	430	390	485	512
Taxes	–102	–63	–71	–87	–108	–113
Profit for the period	386	228	359	303	377	399
BALANCE SHEET	6/30	03/31	12/31	9/30	6/30	03/31
ASSETS
Non-current assets	221	220	214	221	226	221
Project properties	1,865	1,743	1,635	1,423	1,335	1,193
Development properties	8,983	8,911	8,306	8,509	8,869	8,607
Participations in tenant-owners associations, etc.	296	434	567	224	322	309
Current receivables	3,993	4,040	4,083	3,904	3,813	3,828
Cash and cash equivalents	1,168	2,150	1,682	1,854	2,078	2,564
Total current assets	16,305	17,278	16,273	15,914	16,417	16,501
Total assets	16,526	17,498	16,487	16,135	16,643	16,722
EQUITY AND LIABILITIES
Equity	6,597	7,083	6,798	6,520	6,285	6,664
Non-current interest-bearing liabilities	314	171	146	204	255	220
Other non-current liabilities	770	770	696	700	686	700
Non-current provisions	3,296	3,128	3,037	2,994	2,850	2,846
Total non-current liabilities	4,380	4,069	3,879	3,898	3,791	3,766
Current interest-bearing liabilities	502	688	694	816	762	336
Other current liabilities	4,904	5,529	4,994	4,780	5,682	5,831
Current provisions	143	129	122	121	123	125
Total current liabilities	5,549	6,346	5,810	5,717	6,567	6,292
Total equity and liabilities	16,526	17,498	16,487	16,135	16,643	16,722
CASH FLOW STATEMENT	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
From operating activities	–97	468	–17	–234	–204	–18
From investing activities	–1	2	–8	3	–2	–1
From financing activities	–888	–9	–138	11	–286	1
Total cash flow for the period	–986	461	–163	–220	–492	–18
Cash and cash equivalents at end of period	1,168	2,150	1,682	1,854	2,078	2,564
INTEREST-BEARING NET LIABILITIES/RECEIVABLES	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/receivables(–)
at beginning of period	130	546	541	240	–748	–790
Change in interest-bearing net liabilities/receivables	1,025	–416	5	301	988	42
Interest-bearing net liabilities(+)/receivables(–)
at end of period	1,155	130	546	541	240	–748
DEVELOPMENT PROPERTIES	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	8,911	8,306	8,509	8,869	8,607	7,543
New purchases	142	737	154	191	661	1,396
Transferred to production	–77	–179	–219	–512	–411	–375
Other	7	47	–138	–39	12	43
Carrying amount at end of period	8,983	8,911	8,306	8,509	8,869	8,607
KEY RATIOS	Q 2	Q 1	Q 4		Q 2	Q 1
				Q 3
Operating margin, %	12.8	8.5	10.7	10.7	12.2	13.0
Debt/equity ratio, multiple	0.2	0.0	0.1	0.1	0.0	-
Equity/assets ratio, %	40	40	41	40	38	40
Earnings per share, SEK	5.50	3.30	5.20	4.30	5.40	5.70
Number of available building rights	36,500	36,400	35,900	36,700	36,000	34,900
Number of residential units sold	881	667	751	613	619	480
Number of housing starts	959	406	1,038	680	847	570
Number of residential units in current production	7,829	7,842	7,835	8,243	7,814	7,672

Business Segment Quarterly Overview

ACCORDING TO SEGMENT REPORTING, SEK M	2019			2018
JM RESIDENTIAL STOCKHOLM	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,330	1,435	1,352	1,429	1,530	1,475
Operating profit 1)	216	229	232	233	250	274
Operating margin, %	16.2	16.0	17.2	16.3	16.3	18.6
Average operating capital	5,754	5,668	5,447	5,139	4,919	4,663
Return on operating capital, %2)	15.8	16.7	18.2	22.5	25.5	29.3
Operating cash flow	–85	284	–61	187	285	–77
Carrying amount, development properties	5,132	5,042	5,048	5,002	5,185	5,229
Number of available building rights	13,500	13,400	13,400	13,500	13,600	13,300
Number of residential units sold	268	238	286	223	225	117
Number of housing starts	286	89	195	207	240	215
Number of residential units in current production	3,001	3,042	3,115	3,447	3,387	3,510
1) Of which property sales	-	-	-	-	0	-
JM RESIDENTIAL SWEDEN	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,199	1,110	1,202	920	1,065	1,269
Operating profit 1)	193	180	201	156	181	213
Operating margin, %	16.1	16.2	16.7	17.0	17.0	16.8
Average operating capital	1,096	1,042	1,008	1,000	949	897
Return on operating capital, %2)	66.6	68.9	74.5	73.1	76.3	80.0
Operating cash flow	78	65	186	44	260	232
Carrying amount, development properties	1,549	1,559	1,388	1,404	1,476	1,394
Number of available building rights	10,500	10,500	10,500	10,400	10,300	10,200
Number of residential units sold	244	243	239	227	207	244
Number of housing starts	244	271	260	230	267	286
Number of residential units in current production	2,366	2,547	2,418	2,471	2,280	2,210
1) Of which property sales	-	-	1	-	-	0
JM INTERNATIONAL	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	905	860	1,094	912	864	710
Operating profit 1)	66	98	110	85	83	53
Operating margin, %	7.3	11.4	10.1	9.3	9.6	7.5
Average operating capital	2,967	2,888	2,723	2,580	2,444	2,273
Return on operating capital, %2)	12.1	13.0	12.2	11.8	11.6	11.7
Operating cash flow	133	127	164	–48	–249	92
Carrying amount, development properties	2,261	2,261	1,821	2,054	2,156	1,932
Carrying amount, project properties	5	5	4	5	5	8
Number of available building rights	11,700	11,700	11,200	12,100	11,400	10,600
Number of residential units sold	369	186	226	163	187	119
Number of housing starts	286	46	391	243	212	69
Number of residential units in current production	1,726	1,660	1,709	1,644	1,466	1,399
1) Of which property sales	-	38	2	–1	0	11
JM PROPERTY DEVELOPMENT	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	29	24	24	19	15	15
Operating profit	6	6	5	4	–1	2
Average operating capital	1,583	1,447	1,314	1,160	1,036	910
Return on operating capital, %2)	1.3	1.0	0.8	0.7	0.4	2.4
Operating cash flow	–116	–96	–210	–82	–156	–109
Carrying amount, development properties	10	10	10	10	10	10
Carrying amount, project properties	1,860	1,738	1,631	1,418	1,330	1,185
Number of available building rights 1)	800	800	800	700	700	800
Number of residential units sold 1)	-	-	-	-	-	-
Number of housing starts 1)	143	-	192	-	128	-
Number of residential units in current production 1) 1) Refers to rental units and residential care units.	736	593	593	681	681	553
JM CONSTRUCTION	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	550	312	586	663	769	698
Operating profit 1)	34	–189	–95	–61	0	0
Operating margin, %	6.2	–60.6	–16.2	–9.2	0.0	0.0
Operating cash flow	–107	242	–41	–49	60	–154
1) Of which property sales	34	-	-	-	-	-
JM OTHER	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	–69	–72	–108	–111	–118	–113
Operating profit (Group-wide expenses)	–9	–11	–10	–6	–9	–14

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

Group – IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

	JANUARY–JUNE			APRIL–JUNE		FULL-YEAR
ACCORDING TO IFRS, SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue	7,481	7,869	3,882	4,044	15,292	15,680
Production and operating costs	–6,221	–6,298	–3,139	–3,241	–12,699	–12,776
Gross profit	1,260	1,571	743	803	2,593	2,904
Selling and administrative expenses	–507	–569	–265	–297	–979	–1,041
Gains/losses on the sale of property	72	11	34	0	74	13
Operating profit	825	1,013	512	506	1,688	1,876
Financial income and expenses	–49	–35	–23	–19	–83	–69
Profit/loss before tax	776	978	489	487	1,605	1,807
Taxes	–165	–219	–104	–109	–330	–384
Profit for the period	611	759	385	378	1,275	1,423
Other comprehensive income
Items that will be reclassified as income
Translation differences from the translation of foreign operations	97	109	28	31	18	30
Items that will not be reclassified as income
Restatement of defined-benefit pensions	–111	–36	–89	–36	–180	–105
Tax attributable to other comprehensive income	23	8	19	8	30	15
Comprehensive income for the period	620	840	343	381	1,143	1,363
Net profit for the period attributable to shareholders of the Parent Company	611	759	385	378	1,275	1,423
Comprehensive income for the period is attributable to shareholders of
the Parent Company	620	840	343	381	1,143	1,363
Earnings per share1), basic, is attributable to shareholders
of the Parent Company, SEK	8.80	10.90	5.50	5.40	18.30	20.50
Earnings per share 1), diluted, is attributable to shareholders of the Parent Company, SEK	8.80	10.90	5.50	5.40	18.30	20.40
Number of outstanding shares at end of period	69,583,262	69,583,262	69,583,262	69,583,262	69,583,262	69,583,262
Average number of shares, basic	69,583,262	69,583,262	69,583,262	69,583,262	69,583,262	69,583,262
Average number of shares, diluted	69,924,046	69,779,427	69,955,656	69,804,462	69,908,241	69,865,418

1) Profit/loss for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO IFRS, SEK M	6/30/2019	6/30/2018	12/31/2018
ASSETS
Non-current assets1)	470	226	214
Project properties	1,865	1,335	1,635
Development properties	8,983	8,869	8,306
Right-of-use leasehold rights	277	-	-
Participations in tenant-owners associations, etc.	296	322	567
Work in progress	3,201	2,962	2,958
Current receivables	4,791	5,444	5,286
Cash and cash equivalents	1,168	2,078	1,682
Total current assets	20,581	21,010	20,434
Total assets	21,051	21,236	20,648
EQUITY AND LIABILITIES 2) 3) 4) 5)
Equity	6,431	6,121	6,644
Non-current interest-bearing liabilities	995	255	146
Other non-current liabilities	770	686	696
Non-current provisions	3,262	2,808	3,004
Total non-current liabilities	5,027	3,749	3,846
Current interest-bearing liabilities	4,378	5,453	4,968
Other current liabilities	5,072	5,790	5,068
Current provisions	143	123	122
Total current liabilities	9,593	11,366	10,158
Total equity and liabilities	21,051	21,236	20,648
Pledged assets	481	531	476
Contingent liabilities	9,693	8,608	8,693
1) Of which right-of-use offices and cars	249	-	-
2) Of which project financing JM International	2,626	2,503	2,340
3) Of which project financing JM Residential Stockholm and JM Residential Sweden	1,574	2,296	2,003
4) Of which liabilities for property acquisition	1,216	1,439	1,040
5) Of which current and non-current interest-bearing leasing liabilities	527	-	-

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–JUNE
ACCORDING TO IFRS, SEK M	2019	2018	2018
Opening balance at beginning of period	6,644	6,043	6,043
Total comprehensive income for the period	620	840	1,363
Dividend	–835	–765	–765
Equity component of convertible debentures	2	3	3
Closing balance at end of period	6,431	6,121	6,644

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
ACCORDING TO IFRS, SEK M	2019	2018	2019	2018	2018/2019	2018
Cash flow from operating activities before change in
working capital and taxes	581	544	358	3	354	317
Paid tax	–272	–398	–141	–137	–571	–697
Investment in development properties, etc.1)	–1,595	–1,827	–963	–878	–3,496	–3,728
Payment on account for development properties, etc. 2)	1,265	575	775	273	2,375	1,685
Investment in project properties	–229	–236	–122	–118	–517	–524
Sale of project properties	-	2	-	2	0	2
Change in current liabilities/receivables	–319	–640	–369	–357	–349	–670
Cash flow from operating activities 3)	–569	–1,980	–462	–1,212	–2,204	–3,615
Cash flow from investing activities	1	–3	–1	–2	–4	–8
Loans raised	138	554	125	505	207	623
Amortization of debt	–252	–74	–207	–26	–448	–270
Loans raised, project financing 3)	1,433	2,178	593	1,257	3,653	4,398
Amortization of debt, project financing 3)	–441	–420	–199	–249	–1,277	–1,256
Dividend	–835	–765	–835	–765	–835	–765
Cash flow from financing activities	43	1,473	–523	722	1,300	2,730
Cash flow for the period	–525	–510	–986	–492	–908	–893
Cash and cash equivalents at end of period	1,168	2,078	1,168	2,078	1,168	1,682
1) Of which investment in shares in tenant-owners associations and freehold
apartments	–875	–393	–506	–213	–2,019	–1,537
2) Of which sale of participations in tenant-owners associations and freehold apartments	1,101	380	637	213	1,862	1,141

3) JM sometimes recognizes initial project financing for Swedish residential projects where the financing is taken over by the customer at a later point in time. The take-over occurs without any incoming or

outgoing payments, and when the debt is settled there is no impact on the cash flow statement; there is neither a negative item (amortization) in the financing activities nor a positive item in the operating activities.

ACCOUNTING PRINCIPLES

This interim report for the first six months of 2019 has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS). Since the Parent Company is an enterprise within the EU, only EU-approved IFRS are applied. The 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 2018 Annual Report with the exception that IFRS 16 Leases is applied as of January 1, 2019.

JM APPLIES THE FOLLOWING NEW STANDARDS AS OF 2019 IFRS 16 LEASES

This standard replaces 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 will in all material respects remain the same. JM uses the

simplified transition approach, which means that identified leases will not be restated retroactively. This means that comparative figures for periods prior to 2019 will not be affected. For JM, the new standard at the end of the first six months of 2019 has resulted in one right-of-use asset and one lease liability in the balance sheet of around SEK 526m each. These assets consist primarily of the rental of properties in which JM conducts its operations, the rental of the vehicles used in the operations and the rental of land.

Under the new standard, JM reports depreciation/amortization and interest rates related to lease contracts in the income statement, and payments are split in the cash flow between interest and amortization. The impact on JM's profit/loss and balance sheet for the first six months of 2019 is presented in the table on page 23.

IFRS 16 is not applied in the segment reporting.

OTHER CHANGES TO IFRS

Other changed IFRS standards applied as of 2019 had little or no impact on JM's financial reporting.

SEGMENT REPORTING

JM's segment reporting differs from IFRS in three respects. In its segment reporting, revenue for JM International is recognized using the percentage of completion method.

In addition, JM International's project financing, as well as part of the financing of JM Residential Stockholm and JM Residential Sweden, is recorded as a deduction item to "Revenue less progress billings" or "Progress billings in excess of recognized revenue" and raised/ repaid project financing is reported in the cash flow from operating activities.

The new reporting of leases in accordance with IFRS 16 is not applied in the segment reporting.

JM makes the assessment that segment reporting most accurately reflects 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.

ACCOUNTING FOR HOUSING DEVELOPMENT IN SWEDEN

In 2018, Nasdaq Stockholm AB (the Stock Exchange) sent questions to several housing developers regarding in part the basis for the assessment of whether tenant-owners associations are independent. The Stock Exchange's final decision sent to JM in December 2018 stated among other things that it is possible for different companies to reach different conclusions and that there are differences between the companies' operational, business and contractual structures, which may be considered to have an impact on this matter. The Stock Exchanges stated that JM does not consolidate the tenant-owners associations, that there was not enough transparency

surrounding the grounds on which JM has made this assessment and that there thus is no clear account of the facts and circumstances that led to JM's conclusion. The Stock Exchange thus criticized JM, and in the 2018 annual report JM provided expanded and clearer disclosures regarding these grounds. JM also announced that the Swedish Financial Supervisory Authority, Finansinspektionen (FI), had informed JM that FI will investigate the matter.

In June 2019, FI communicated to JM its preliminary assessment that the tenant-owners associations are not independent and must thus be consolidated. As a result, revenue may not be recognized over time (gradually) but rather at the transfer of ownership to individual buyers of tenant-owned apartments. JM does not share FI's preliminary assessment, but rather still considers the tenant-owners associations to be independent and that they should not be consolidated. JM has submitted feedback regarding FI's preliminary assessment and is now monitoring the result of FI's continued investigation.

It is JM's opinion that a restatement is not required, but also notes that IFRS is a principle-based framework that often requires assessments. In complex matters like this, it is possible for different parties to make different assessments. The estimated effects of a potential restatement due to the consolidation of tenant-owners associations for full-year 2018 are described in the 2018 annual report. This type of change does not affect JM's segment reporting, project governance or the business's risk profile. 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.

ACCOUNTING OF IFRS 16 LEASES

	JANUARY–JUNE	APRIL–JUNE
ACCORDING TO IFRS, SEK M	2019	2019
Production and operating costs	14	8
Selling and administrative expenses	–7	–5
Operating profit	7	3
Financial income and expenses	–8	–3
Profit/loss before tax	–1	0
Taxes	0	0
Profit for the period	–1	0

ACCORDING TO IFRS, SEK M	6/30/2019	3/31/2019	1/1/2019
Non-current assets	249	250	275
Current assets	277	266	278
Total assets	526	516	553
Equity	–1	–1	-
Non-current interest-bearing liabilities	519	511	553
Current interest-bearing liabilities	8	6	-
Total equity and liabilities	526	516	553

Parent Company

CONDENSED INCOME STATEMENT, PARENT COMPANY

		JANUARY–JUNE
SEK M	2019	2018	2018
Net sales	5,207	5,407	10,397
Production and operating costs	–4,046	–4,130	–8,025
Gross profit	1,161	1,277	2,372
Selling and administrative expenses	–344	–413	–717
Gains/losses on the sale of property	-	0	-
Operating profit	817	864	1,655
Financial income and expenses	77	–50	46
Profit before appropriations and tax	894	814	1,701
Appropriations	–241	-	–175
Profit/loss before tax	653	814	1,526
Taxes	–119	–182	–323
Profit for the period	534	632	1,203

CONDENSED PARENT COMPANY BALANCE SHEET

SEK M	6/30/2019	6/30/2018	12/31/2018
Assets
Non-current assets	1,363	1,508	1,483
Current assets	12,604	12,881	13,145
Total assets	13,967	14,389	14,628
Equity and liabilities
Equity	3,190	2,919	3,490
Untaxed reserves	2,390	2,360	2,390
Provisions	1,753	1,467	1,583
Non-current liabilities	803	736	722
Current liabilities	5,831	6,907	6,443
Total equity and liabilities	13,967	14,389	14,628
Pledged assets	169	169	169
Contingent liabilities	9,572	8,706	8,785

Reconciliation between segment reporting and IFRS

CONSOLIDATED INCOME STATEMENT

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Revenue for the period (segment reporting)	7,613	8,179	3,944	4,125	15,595	16,161
Restatement JM International	–132	–310	–62	–81	–303	–481
Revenue for the period (IFRS)	7,481	7,869	3,882	4,044	15,292	15,680
Operating profit/loss for the period (segment reporting)	819	1,032	506	504	1,673	1,886
Restatement JM International	–1	–19	3	2	8	–10
Leases IFRS 16	7	-	3	-	7	-
Operating profit/loss for the period (IFRS)	825	1,013	512	506	1,688	1,876
Profit/loss for the period (segment reporting)	614	776	386	377	1,276	1,438
Restatement JM International	–2	–17	–1	1	0	–15
Leases IFRS 16	–1	-	0	-	–1	-
Profit/loss for the period (IFRS)	611	759	385	378	1,275	1,423

CONSOLIDATED BALANCE SHEET

SEK M	6/30/2019	6/30/2018	12/31/2018
Balance sheet total (segment reporting)	16,526	16,643	16,487
Restatement JM International	–201	–206	–182
Reclassification project financing JM International, interest-bearing	2,293	2,151	1,884
Reclassification project financing JM International, non-interest-bearing 1)	333	352	456
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	1,737	2,540	2,390
Transfer between Progress billing in excess of recognized revenue to Revenue less progress billings	–163	–244	–387
Leases IFRS 16	526	-	-
Balance sheet total (IFRS)	21,051	21,236	20,648

1) Billing on account for customers.

CONSOLIDATED EQUITY

SEK M	6/30/2019	6/30/2018	12/31/2018
Equity (segment reporting)	6,597	6,285	6,798
Restatement JM International	–165	–164	–154
Leases IFRS 16	–1	-	-
Equity (IFRS)	6,431	6,121	6,644

CONSOLIDATED KEY FINANCIAL FIGURES

%	6/30/2019	6/30/2018	12/31/2018
Equity/assets ratio (segment reporting)	40	38	41
Equity/assets ratio (IFRS)	31	29	32

CONSOLIDATED CASH FLOW

	JANUARY–JUNE		APRIL–JUNE		JULY–JUNE	FULL-YEAR
SEK M	2019	2018	2019	2018	2018/2019	2018
Cash flow from operating activities (segment reporting)	371	–222	–97	–204	120	–473
Reclassification project financing JM International	–291	–619	–159	–284	–138	–466
Reclassification project financing JM Residential Stockholm and
JM Residential Sweden, interest-bearing	–700	–1,139	–234	–724	–2,237	–2,676
Leases IFRS 16	51	-	28	-	51	-
Cash flow from operating activities (IFRS)	–569	–1,980	–462	–1,212	–2,204	–3,615

CONSOLIDATED INTEREST-BEARING NET LIABILITIES/RECEIVABLES

SEK M	6/30/2019	6/30/2018	12/31/2018
Interest-bearing net liabilities (+)/receivables (–) at end of period (segment
reporting)	1,155	240	546
Reclassification project financing JM International	2,293	2,151	1,884
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	1,737	2,540	2,390
Leases IFRS 16	527	-	-
Interest-bearing net liabilities (+)/receivables (–) at end of period (IFRS)	5,712	4,931	4,820

Stockholm, July 12, 2019 JM AB (publ)

The Board of Directors and the CEO certify that the report for the first six months of the year gives a true and fair view of the Parent Company's and the Group's operations, position and results and describes the substantial risks and uncertainties faced by the Parent Company and the companies included in the Group.

Fredrik Persson Chair of Board

Kaj-Gustaf Bergh Kerstin Gillsbro Olav Line

Member Member Member

Eva Nygren Thomas Thuresson Annica Ånäs Member Member Member

Employee- Employeeappointed appointed

Peter Olsson Jan Strömberg

Johan Skoglund President and CEO

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

Solstrålen, Älvsjöstaden, Stockholm

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 16 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.

PRESS RELEASES, Q2 2019

May 20	JM Construction selling property in Värmdö, Stockholm
May 20	JM acquires property for residential development in
	Ekerö, Stockholm
May 16	JM signs conditional contract to acquire property for
	residential development in Röa, Oslo
April 26	JM Construction selling property in Värmdö, Stockholm
April 26	Interim Report January – March 2019

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 CEST on July 12, 2019.

FOR MORE INFORMATION PLEASE CONTACT:

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

FINANCIAL CALENDAR

October 24, 2019 Interim Report January - September

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

JM AB (publ)

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