JM — Interim / Quarterly Report 2019

Apr 26, 2019

Interim Report January – March 2019

JM GROUP

POSITIVE DEVELOPMENT IN SALES IN HOUSING BUSINESS – PART OF THE CONTRACTING OPERATIONS DISCONTINUED

JANUARY – MARCH 2019

Revenue decreased to SEK 3,669m (4,054), and operating profit decreased to SEK 313m (528). The operating margin decreased to 8.5 percent (13.0). Profit includes a one-off cost for the discontinuation of the housing operations (Business area Construction) within the subsidiary JM Entreprenad AB of SEK –180m

Revenue excluding JM Construction, Business area

Construction amounted to SEK 3,719m (3,790), the operating profit to SEK 506m (533) and the operating margin to 13.6 percent (14.1)

Profit before tax decreased to SEK 291m (512). Profit after tax decreased to SEK 228m (399)

Return on equity for the past twelve months decreased to 18.4 percent (30.5). Earnings per share for the first quarter amounted to SEK 3.30 (5.70)

Consolidated cash flow including net investment in properties amounted to SEK 468m (–18)

Number of residential units sold increased to 667 (480), and housing starts decreased to 406 (570). Municipal decisions delay housing starts

ACCORDING TO SEGMENT REPORTING SEK M	JANUARY–MARCH	APR.–MAR. FULL-YEAR
	2019	2018	2018/2019	2018
Revenue	3,669	4,054	15,776	16,161
Revenue excluding JM Construction, Business area Construction	3,719	3,790	15,320	15,391
Operating profit	313	528	1,671	1,886
Operating profit excluding JM Construction, Business area Construction	506	533	2,035	2,062
Operating margin, %	8.5	13.0	10.6	11.7
Operating margin excluding JM Construction, Business area Construction	13.6	14.1	13.3	13.4
Profit before tax	291	512	1,596	1,817
Cash flow from operating activities	468	–18	13	–473
Return on equity, %			18.4	22.2
Equity/assets ratio, %	40	40		41
Earnings per share, SEK	3.30	5.70	18.20	20.60
Number of residential units sold	667	480	2,650	2,463
Number of housing starts	406	570	2,971	3,135
Number of residential units in current production	7,842	7,672		7,835
Revenue according to IFRS	3,599	3,825	15,454	15,680
Operating profit according to IFRS	313	507	1,682	1,876
Earnings per share according to IFRS, SEK	3.20	5.50	18.20	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 amounts and comments in this Interim Report are based on JM's segment reporting.

Cover photo: Bofinken, Kallhäll, Järfälla

2

Group

CONTINUED GOOD PROFITABILITY IN THE PROJECT DEVELOPMENT OF RESIDENTIAL UNITS

"We started 2019 the way we ended 2018, with stable development for the housing business in both Sweden and the international operations despite a cautious market in Sweden and primarily in Stockholm. The housing market in Stockholm continues to be affected by the stricter amortization requirements and the banks' more conservative approach to lending to home buyers.

In addition, a large supply of newly produced residential units in Stockholm continues to have a slow-down effect.

A gradual stabilization of the market and good sales initiatives resulted in continued growth in reservations and sales in Stockholm, with 238 residential units sold compared to 117 in the same period last year. Housing starts in Stockholm 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 400 residential units in Stockholm, including a rental unit project, where housing starts have been delayed pending municipal decisions. The conditions are also considered to be good for a clearly higher number of housing starts during the remainder of the year, with a good number of reservations in forthcoming housing projects and where municipal decisions are less of a restriction.

The housing operations in the rest of Sweden show good profitability in a primarily stable market with good 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. The low level of housing starts in JM International is in line with the annual plan, with an increasing number of housing starts during the year, predominantly in the second half of 2019, assuming a stable market and stable planning conditions.

After review of the business unit JM Construction we concluded that the conditions were not in place for the stable and successful operation of JM Construction's Swedish housing business. The decision was therefore made to discontinue the housing operations within JM Construction. JM Construction's operations in Sweden will thereafter focus on civil engineering operations in their current form, where there are clear synergies with JM's project development of residential

units. Unfortunately, the elimination of these operations will lead to the termination of employment and the recognition of a large one-off cost during the first quarter. We are very committed to taking the best care of our staff members who become redundant and ensure that ongoing projects will be turned over to our customers in a good way. The one-off cost in the quarter for the discontinuation amounts to SEK 180m. The net expense for completing the reorganization of JM Construction during the period 2019–2021 is expected to amount to SEK 30–50m, and realized gains occur gradually during the period.

We made several large acquisitions in Norway and Sweden during the quarter. An important acquisition in Drammen outside of Oslo was made of a property in the Gulskogen district located walking distance from the shopping center and with good public transit connections. The local planning has been finalized and allows development of 230 residential units. In Trondheim we acquired a property in a major development area, Granås Öst, and the finalized local planning allows for the development of 170 residential units. In Stockholm, we signed an agreement for the acquisition of properties on the island of Stora Essingen. The deal is conditional on finalized local planning, which is expected 2022 at the earliest. The planned project includes 230 residential units.

During the quarter, one of the projects we started was the Bofinken project in the center of Kallhäll, Järfälla, with 68 residential units. In a small-town environment next to Lake Mälaren, close to the commuter train to downtown Stockholm. In Hyllie, Malmö, we started the Hyllie Söderläge project with 44 senior residential units in an area with a good service offering. Both projects are located close to green areas and have good connections to public transport.

With well-planned design and high housing quality, we deliver homes with a high level of customer satisfaction. JM is once again at the top of the list of companies with the housing industry's most satisfied customers, in both Norway and Sweden. More great news is that Prognoscentret's industry rating in 2018 shows that we also score well within the areas of reliability and service.

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."

Johan Skoglund, President and CEO

Havreflingan, Söderdalen, Järfälla

MARKET, SALES AND HOUSING STARTS JANUARY – MARCH 2019

The housing market in Stockholm is cautious, but stabilization continued in the first 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 primarily stable market.

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 667 (480) 1). The percentage of sold or reserved homes in relation to current production amounts to 61 percent (61), with an interval of 60–65 percent considered normal. This percentage increased from 57 percent in the fourth quarter. JM Residential Stockholm sold 238 residential units (117), JM Residential Sweden

sold 243 (244), JM International sold 186 (119) and JM Property Development sold 0 (0).

The number of housing starts amounted to 406 (570) 2), where housing starts in the first quarter were lower than in the fourth quarter, 406 and 1,038 residential units, respectively. In the first quarter, no rental apartments were started compared to 192 in the fourth quarter. JM Residential Stockholm started production on 89 residential units (215), JM Residential Sweden on 271 (286), JM International on 46 (69) and JM Property Development on 0 (0).

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 7,842 (7,672), of which 593 are rental units and residential care units (553).

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

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

OPERATING PROFIT BY BUSINESS SEGMENT, SEK M	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
	2019	2018	2018/2019	2018
JM Residential Stockholm	229	274	944	989
JM Residential Sweden	180	213	718	751
JM International	98	53	376	331
JM Property Development	6	2	14	10
JM Construction	–189	0	–345	–156
Group-wide expenses	–11	–14	–36	–39
Total	313	528	1,671	1,886
Of which property sales	38	11	40	13

OPERATING MARGIN BY BUSINESS SEGMENT, %		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
JM Residential Stockholm	16.0	18.6	16.4	17.1
JM Residential Sweden	16.2	16.8	16.7	16.9
JM International	11.4	7.5	10.1	9.2
JM Construction	–60.6	0.0	–14.8	–5.7

REVENUE , OPER ATING PROFIT AND OPER ATING MARGIN

JANUARY – MARCH 2019

Consolidated revenue according to segment reporting for the first quarter decreased to SEK 3,669m (4,054). Revenue restated according to IFRS decreased to SEK 3,599m (3,825).

Operating profit according to segment reporting decreased to SEK 313m (528), and the operating margin decreased to 8.5 percent (13.0). Operating profit restated according to IFRS decreased to SEK 313m (507). Profit/loss includes a loss within JM Construction of SEK –189m (0).

Revenue excluding JM Construction, Business area Construction amounted to SEK 3,719m (3,790), the operating profit to SEK 506m (533) and the operating margin to 13.6 percent (14.1).

During the first quarter properties were sold for SEK 71m (69) with gains of SEK 38m (11).

Rental income from JM's project properties increased to SEK 21m (14). Net rental income increased to SEK 12m (8).

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
OPERATING PROFIT, SEK M	2019	2018	2018/2019	2018
Operating profit excluding JM Construction, Business area Construction	506	533	2,035	2,062
Operating margin excluding JM Construction, Business area Construction, %	13.6	14.1	13.3	13.4
Operating profit JM Construction, Business area Construction	–193	–5	–364	–176
Operating profit total	313	528	1,671	1,886

RESIDENTIAL UNITS IN CURRENT PRODUCTION	3/31/2019	3/31/2018	12/31/2018
Number of residential units in current production 1) 2)	7,842	7,672	7,835
Percentage of sold residential units in current production, % 3)	55	54	51
Reserved residential units in current production, %	6	7	6
Sold/reserved residential units in current production, %	61	61	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	593	553	593
Including residential units in projects where costs incurred are only reported as project properties under construction	593	553	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.

UNSOLD UNITS	3/31/2019	3/31/2018	12/31/2018
Completed production, number of unsold units 1)	107	96	140
Number of unsold residential units in the balance sheet reported as "Participations in tenant owners associations, etc."	89	79	125

1) After final occupancy according to plan.

RESIDENTIAL BUILDING RIGHTS

JANUARY – MARCH 2019

The number of available building rights at the end of the first quarter amounted to 36,400 (34,900), of which 21,400 (19,400) are recognized in the balance sheet. Capital tied up in building rights (development properties in the balance sheet) for residential units increased to SEK 8,872m (8,565).

JM acquired development properties for residential units during the first quarter for SEK 737m (1,396), of which SEK 90m relates to JM Residential Stockholm, SEK 229m to JM Residential Sweden and SEK 418m to JM International.

FINANCIAL ITEMS

JANUARY – MARCH 2019

Net financial items are slightly lower than the previous year, primarily due to increase in interest-bearing debt.

Total interest-bearing loans according to segment reporting amounted to SEK 2,280m (1,820), of which the provision for the pension liability comprised SEK 1,421m (1,264). At the end of the first quarter, 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 4,950m (5,364). Aside from cash and cash equivalents of SEK 2,150m (2,564), 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 3.8 years (2.4).

Interest-bearing net liabilities in accordance with segment reporting amounted to SEK 130m (–748) at the end of the period. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 1,494m (1,375). Of these liabilities, SEK 725m (675) were current.

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

SEK M		JANUARY–MARCH
	2019	2018	2018/2019	2018
Financial income	1	1	10	10
Financial expenses	–23	–17	–85	–79
Financial income and expenses	–22	–16	–75	–69

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2018/2019	2018
Interest-bearing net liabilities(+)/receivables(–) at beginning
of period	546	–790	–748	–790
Change in interest-bearing net liabilities/receivables	–416	42	878	1,336
Interest-bearing net liabilities(+)/receivables(–) at end of period	130	–748	130	546

CASH FLOW JANUARY – MARCH 2019

Cash flow from operating activities according to segment reporting was SEK 468m (–18) during the first quarter. Net investments in development properties resulted in a cash flow of SEK –83m (–318). The reduced holdings of repurchased residential units resulted in a cash flow of SEK 95m (–13). Consolidated cash flow attributable to project properties (sales minus investment) during the first quarter was SEK –107m (–118). Cash flow was strengthened by a payment of SEK 320m for an outstanding accounts receivable according to a signed settlement agreement.

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.

OUTSTANDING SHARES

The number of outstanding shares on March 31, 2019, amounts to 69,583,262. The Company holds no treasury shares.

PERSONNEL

The number of employees at the end of the first quarter was 2,645 (2,570). The number of wage-earners was 1,052 (1,002), and the number of salaried employees was 1,593 (1,568). 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.

The average prices on the existing home market did not change during the first quarter. The supply of homes continued to be high, particularly 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 first quarter, particularly with regard to new production. 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 is below normal levels but has gradually improved. 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 first 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 municipal 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 are also considered to be good for a clearly higher number of housing starts during the remainder of the year, considering a good number of reservations in forthcoming housing projects and that municipal decisions are less of a restriction in a number of these projects.

Business segment revenue amounted to SEK 1,435m (1,475). Operating profit decreased to SEK 229m (274). The lower revenue and profit in the first quarter is due to lower sales and a lower number of housing starts during the past year. The operating margin decreased to 16.0 percent (18.6).

Cash flow in the first quarter was strengthened by the sale of residential units in the balance sheet.

During the first quarter, production was started on a total of 68 residential units in Järfälla and 21 single-family homes in Solna. A total of 230 building rights were acquired contingent on finalized local planning.

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2019	2018	2018/2019	2018
Revenue	1,435	1,475	5,746	5,786
Operating profit 1)	229	274	944	989
Operating margin, %	16.0	18.6	16.4	17.1
Average operating capital			5,668	5,447
Return on operating capital, %			16.7	18.2
Operating cash flow	284	–77	695	334
Carrying amount, development properties	5,042	5,229		5,048
Number of available building rights	13,400	13,300		13,400
Number of residential units sold	238	117	972	851
Number of housing starts	89	215	731	857
Number of residential units in current production	3,042	3,510		3,115
Number of employees	920	926		936

1) Of which property sales - - 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 first 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.

The business segment's revenue decreased to SEK 1,110m (1,269), and operating profit decreased to SEK 180m (213). The operating margin decreased to 16.2 percent (16.8).

Profit and the margin decreased but are stable given current demand and prices.

Cash flow during the first quarter is burdened by increased holdings in development properties.

During the first quarter, production started on a total of 271 residential units, of which 241 were in apartment buildings in Gothenburg, Lund and Malmö and 30 were single-family homes in Helsingborg.

During the first quarter, 400 building rights were acquired in Uppsala, Gothenburg, Kungsbacka and Malmö.

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2019	2018	2018/2019	2018
Revenue	1,110	1,269	4,297	4,456
Operating profit 1)	180	213	718	751
Operating margin, %	16.2	16.8	16.7	16.9
Average operating capital			1,042	1,008
Return on operating capital, %			68.9	74.5
Operating cash flow	65	232	555	722
Carrying amount, development properties	1,559	1,394		1,388
Number of available building rights	10,500	10,200		10,500
Number of residential units sold	243	244	916	917
Number of housing starts	271	286	1,028	1,043
Number of residential units in current production	2,547	2,210		2,418
Number of employees	610	592		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.

The business segment's revenue increased to SEK 860m (710), and operating profit increased to SEK 98m (53). The operating margin increased to 11.4 percent (7.5). The profit includes SEK 38m (11) from the sale of two properties in Norway. The margin excluding profit from the sale of property amounted to 7.0 percent (5.9).

During the first quarter, production began on 46 residential units (69). The low level of housing starts is in line with the annual plan, with an increasing number of housing starts during the year, predominantly 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 first quarter.

NORWAY

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

JM Norway's revenue increased to SEK 721m (604), and operating profit was SEK 89m (50). The operating margin increased to 12.3 percent (8.3). In the first quarter, two properties were sold in Skien and Röyken Municipality.

During the first quarter, 130 residential units (84) were sold and production began on 46 units (69).

Housing starts during the first quarter consist of residential units in apartment buildings in the Oslo region and single-family homes in Larvik.

The number of residential units in current production amounted to 1,296 (1,138).

During the first quarter, building rights were acquired in Drammen and Trondheim corresponding to 378 residential units.

Available building rights correspond to 8,200 residential units (7,700).

SEK M		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
Revenue	860	710	3,730	3,580
- of which JM Norway	721	604	3,104	2,987
Operating profit 1)	98	53	376	331
- of which JM Norway	89	50	336	297
Operating margin, %	11.4	7.5	10.1	9.2
- of which JM Norway	12.3	8.3	10.8	9.9
Average operating capital			2,888	2,723
Return on operating capital, %			13.0	12.2
Operating cash flow	127	92	–6	–41
Carrying amount, development properties	2,261	1,932		1,821
Carrying amount, project properties	5	8		4
Number of available building rights	11,700	10,600		11,200
Number of residential units sold	186	119	762	695
Number of housing starts	46	69	892	915
Number of residential units in current production	1,660	1,399		1,709
Number of employees	467	417		458
1) Of which property sales	38	11	39	12

FINL AND

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

During the first quarter, 56 residential units (32) were sold and production began on 0 units (0). The number of residential units in current production amounted to 364 (261).

No building rights (0) were acquired during the first quarter. Available building rights correspond to 3,500 residential units (2,700).

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 24m (15), of which rental income was SEK 22m (14). Operating profit was SEK 6m (2). The operating profit is burdened by startup costs for the new business operations, JM@home.

Net rental income for project properties was SEK 12m (8). Cash flow during the first quarter 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, Tjärtunnan in Stureby and Alphyddan in Nacka.

Production is underway on four rental projects in JM's own balance sheet: the Spaken project in Hägernäs, 136 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.

A planned housing start of a large rental unit project is waiting for a municipal decision.

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2019	2018	2018/2019	2018
Revenue	24	15	82	73
Operating profit	6	2	14	10
Average operating capital			1,447	1,314
Return on operating capital, %			1.0	0.8
Operating cash flow	–96	–109	–544	–557
Carrying amount, development properties	10	10		10
Carrying amount, project properties	1,738	1,185		1,631
Number of available residential building rights 1)	800	800		800
Number of residential units sold 1)	-	-	-	-
Number of housing starts 1)	-	-	320	320
Number of residential units in current production 1)	593	553		593
Number of employees	60	47		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 good. Demand in the contracting market in Oslo is also good.

Business segment revenue decreased to SEK 312m (698), of which the operations in Norway decreased to SEK 99m (144), and operating profit decreased to SEK –189m (0).

Review of JM Construction led to the conclusion that the conditions are not in place for the stable and successful operation of JM Construction's Swedish housing business. JM's Board has therefore decided to discontinue the Swedish housing operations that build residential and commercial properties primarily for external customers. The business unit will thereafter focus on civil engineering operations in Sweden in their current form, where there are clear synergies with JM's project development of residential units. The operations will start to be phased out immediately and will result in the termination of employment of around 60 employees, with gradual termination and expenses of SEK 180m for staff lay-offs, support measures in current projects, delay costs and negative valuation effects in the projects to be closed in 2019 and 2020. The estimated expenses are recognized in full in the first quarter. At the same time, sales of properties and

some operations are being initiated within JM Construction that based on a current assessment are estimated to generate realized gains of around SEK 140m for the period 2019–2021. The net expense for the completed reorganization of JM Construction is thus estimated to amount to SEK 30–50m. Some project risks will remain until the ongoing projects are completed.

Cash flow was strengthened due to a settled accounts receivable with payment received of SEK 320m according to a signed settlement agreement and burdened by an increase in working capital.

The business segment received a number of civil engineering assignments during the first quarter, of which the largest was land and engineering work to renovate Östra Finnbodavägen for Nacka Municipality. The largest ongoing projects are groundwork in the Stockholm Norvik goods harbor in Nynäshamn (Ports of Stockholm), 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 a commercial building in Oslo (Olav Thon Group).

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
SEK M	2019	2018	2018/2019	2018
Revenue 1)	312	698	2,330	2,716
- of which Business area Construction	–50	264	456	770
Operating profit	–189	0	–345	–156
- of which Business area Construction	–193	–5	–364	–176
Operating margin, %	–60.6	0.0	–14.8	–5.7
- of which Business area Construction	-	–1.9	–79.8	22.9
Operating cash flow	242	–154	212	–184
Carrying amount, development properties	39	42		39
Number of employees	411	432		437
1) Of which internal	72	113	409	450

Group – segment reporting

CONDENSED CONSOLIDATED INCOME STATEMENT

JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
2019	2018	2018/2019	2018
3,669	4,054	15,776	16,161
–3,154	–3,265	–13,136	–13,247
515	789	2,640	2,914
–240	–272	–1,009	–1,041
38	11	40	13
313	528	1,671	1,886
–22	–16	–75	–69
291	512	1,596	1,817
–63	–113	–329	–379
228	399	1,267	1,438
57	87	–86	–56
285	486	1,181	1,382
3.30	5.70	18.20	20.60
69,950,321	69,800,801	69,914,401	69,865,418

1) Profit/loss for the period.

CONDENSED CONSOLIDATED BALANCE SHEET

ACCORDING TO SEGMENT REPORTING, SEK M	3/31/2019	3/31/2018	12/31/2018
ASSETS
Non-current assets	220	221	214
Project properties	1,743	1,193	1,635
Development properties	8,911	8,607	8,306
Participations in tenant-owners associations, etc.	434	309	567
Current receivables 1)	4,040	3,828	4,083
Cash and cash equivalents	2,150	2,564	1,682
Total current assets	17,278	16,501	16,273
Total assets	17,498	16,722	16,487
EQUITY AND LIABILITIES2)
Equity	7,083	6,664	6,798
Non-current interest-bearing liabilities	171	220	146
Other non-current liabilities	770	700	696
Non-current provisions	3,128	2,846	3,037
Total non-current liabilities	4,069	3,766	3,879
Current interest-bearing liabilities	688	336	694
Other current liabilities	5,529	5,831	4,994
Current provisions	129	125	122
Total current liabilities	6,346	6,292	5,810
Total equity and liabilities	17,498	16,722	16,487
1) Of which receivables from property sales	123	78	53
2) Of which liabilities for property acquisition	1,514	1,448	1,040

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ACCORDING TO SEGMENT REPORTING, SEK M	JANUARY–MARCH	FULL-YEAR
	2019 2018	2018
Opening balance at beginning of period	6,798 6,178	6,178
Total comprehensive income for the period	285 486	1,382
Dividend	-	- –765
Equity component of convertible debentures	-	- 3
Closing balance at end of period	7,083 6,664	6,798

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2018/2019	2018
Cash flow from operating activities before change in working
capital and taxes	515	756	1,934	2,175
Paid tax	–131	–261	–567	–697
Investment in development properties, etc. 1)	–632	–949	–3,411	–3,728
Payment on account for development properties, etc. 2)	644	618	2,830	2,804
Investment in project properties	–107	–118	–513	–524
Sale of project properties	-	-	2	2
Change in current liabilities/receivables	179	–64	–262	–505
Cash flow from operating activities	468	–18	13	–473
Cash flow from investing activities	2	–1	–5	–8
Loans raised	13	49	587	623
Amortization of debt	–22	–48	–244	–270
Dividend	-	-	–765	–765
Cash flow from financing activities	–9	1	–422	–412
Cash flow for the period	461	–18	–414	–893
Cash and cash equivalents at end of period	2,150	2,564	2,150	1,682
1) Of which investment in shares in tenant-owners associations and freehold apartments	–369	–180	–1,726	–1,537
2) Of which sale of participations in tenant-owners associations and freehold apartments	464	167	1,438	1,141

CONSOLIDATED KEY FINANCIAL FIGURES

ACCORDING TO SEGMENT REPORTING, %		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
Operating margin	8.5	13.0	10.3	11.7
Return on equity			18.4	22.2
Return on capital employed			18.8	22.3
Debt/equity ratio, multiple	0.0	-		0.1
Equity/assets ratio	40	40		41

ACCORDING TO SEGMENT REPORTING

REVENUE BY COUNTRY

SEK M		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
Sweden	2,710	3,215	11,556	12,061
Norway	820	733	3,593	3,506
Finland	139	94	616	571
Belgium	0	12	11	23
Total	3,669	4,054	15,776	16,161

REVENUE BY BUSINESS SEGMENT

SEK M		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
JM Residential Stockholm	1,435	1,475	5,746	5,786
JM Residential Sweden	1,110	1,269	4,297	4,456
JM International	860	710	3,730	3,580
JM Property Development	24	15	82	73
JM Construction	312	698	2,330	2,716
Elimination	–72	–113	–409	–450
Total	3,669	4,054	15,776	16,161

OPERATING PROFIT BY BUSINESS SEGMENT

SEK M		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
JM Residential Stockholm	229	274	944	989
JM Residential Sweden	180	213	718	751
JM International	98	53	376	331
JM Property Development	6	2	14	10
JM Construction	–189	0	–345	–156
Group-wide expenses	–11	–14	–36	–39
Total	313	528	1,671	1,886

OPER ATING MARGIN BY BUSINESS SEGMENT

%	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
	2019	2018	2018/2019	2018
JM Residential Stockholm	16.0	18.6	16.4	17.1
JM Residential Sweden	16.2	16.8	16.7	16.9
JM International	11.4	7.5	10.1	9.2
JM Construction	–60.6	0.0	–14.8	–5.7

AVER AGE OPER ATING CAPITAL BY BUSINESS SEGMENT

	APRIL–MARCH	FULL-YEAR
SEK M	2018/2019	2018
JM Residential Stockholm	5,668	5,447
JM Residential Sweden	1,042	1,008
JM International	2,888	2,723
JM Property Development	1,447	1,314

RETURN ON OPER ATING CAPITAL BY BUSINESS SEGMENT

APRIL–MARCH	FULL-YEAR
% 2018/2019	2018
JM Residential Stockholm 16.7	18.2
JM Residential Sweden 68.9	74.5
JM International 13.0	12.2
JM Property Development 1.0	0.8

OPERATING CASH FLOW BY BUSINESS SEGMENT

SEK M	JANUARY–MARCH		APRIL–MARCH	FULL-YEAR
	2019	2018	2018/2019	2018
JM Residential Stockholm	284	–77	695	334
JM Residential Sweden	65	232	555	722
JM International	127	92	–6	–41
JM Property Development	–96	–109	–544	–557
JM Construction	435	–154	212	–184

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	3/31/2019	3/31/2018	12/31/2018
JM Residential Stockholm	5,042	5,229	5,048
JM Residential Sweden	1,559	1,394	1,388
JM International	2,261	1,932	1,821
JM Property Development	10	10	10
JM Construction	39	42	39
Total	8,911	8,607	8,306

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	3/31/2019	3/31/2018	12/31/2018
JM Residential Stockholm	13,400	13,300	13,400
JM Residential Sweden	10,500	10,200	10,500
JM International	11,700	10,600	11,200
JM Property Development 1)	800	800	800
Total	36,400	34,900	35,900
Of which rights carried in the balance sheet (development properties)
JM Residential Stockholm	8,600	8,000	8,600
JM Residential Sweden	6,800	6,100	6,800
JM International	5,800	5,100	5,100
JM Property Development 1)	200	200	200
Total	21,400	19,400	20,700

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

		JANUARY–MARCH		FULL-YEAR
NUMBER	2019	2018	2018/2019	2018
JM Residential Stockholm	238	117	972	851
JM Residential Sweden	243	244	916	917
JM International	186	119	762	695
JM Property Development 1)	-	-	-	-
Total	667	480	2,650	2,463

HOUSING STARTS BY BUSINESS SEGMENT

		JANUARY–MARCH		FULL-YEAR
NUMBER	2019	2018	2018/2019	2018
JM Residential Stockholm	89	215	731	857
JM Residential Sweden	271	286	1,028	1,043
JM International	46	69	892	915
JM Property Development 1)	-	-	320	320
Total	406	570	2,971	3,135

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	3/31/2019	3/31/2018	12/31/2018
JM Residential Stockholm	3,042	3,510	3,115
JM Residential Sweden	2,547	2,210	2,418
JM International	1,660	1,399	1,709
JM Property Development 1)	593	553	593
Total	7,842	7,672	7,835

1) Refers to rental units and residential care units.

PROJECT PROPERTIES, GROUP

CARRYING AMOUNT, SEK M	3/31/2019	3/31/2018	12/31/2018
Properties under development	912	955	816
Completed rental unit properties	820	224	808
Completed commercial properties	11	14	11
Total	1,743	1,193	1,635

DEVELOPMENT PROPERTIES, GROUP

		JANUARY–MARCH		FULL-YEAR
CARRYING AMOUNT, SEK M	2019	2018	2018/2019	2018
Opening balance at beginning of period	8,306	7,543	8,607	7,543
New purchases	737	1,396	1,743	2,402
Transferred to production	–179	–375	–1,321	–1,517
Other	47	43	–118	–122
Closing balance at end of period	8,911	8,607	8,911	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 1	Q 4	Q 3	Q 2	Q 1
Revenue	3,669	4,150	3,832	4,125	4,054
Production and operating costs	–3,154	–3,456	–3,202	–3,324	–3,265
Gross profit	515	694	630	801	789
Selling and administrative expenses	–240	–254	–218	–297	–272
Gains/losses on the sale of property	38	3	–1	0	11
Operating profit	313	443	411	504	528
Financial income and expenses	–22	–13	–21	–19	–16
Profit/loss before tax	291	430	390	485	512
Taxes	–63	–71	–87	–108	–113
Profit for the period	228	359	303	377	399
BALANCE SHEET	03/31	12/31	9/30	6/30	03/31
ASSETS
Non-current assets	220	214	221	226	221
Project properties	1,743	1,635	1,423	1,335	1,193
Development properties	8,911	8,306	8,509	8,869	8,607
Participations in tenant-owners associations, etc.	434	567	224	322	309
Current receivables	4,040	4,083	3,904	3,813	3,828
Cash and cash equivalents	2,150	1,682	1,854	2,078	2,564
Total current assets	17,278	16,273	15,914	16,417	16,501
Total assets	17,498	16,487	16,135	16,643	16,722
EQUITY AND LIABILITIES
Equity	7,083	6,798	6,520	6,285	6,664
Non-current interest-bearing liabilities	171	146	204	255	220
Other non-current liabilities	770	696	700	686	700
Non-current provisions	3,128	3,037	2,994	2,850	2,846
Total non-current liabilities	4,069	3,879	3,898	3,791	3,766
Current interest-bearing liabilities	688	694	816	762	336
Other current liabilities	5,529	4,994	4,780	5,682	5,831
Current provisions	129	122	121	123	125
Total current liabilities	6,346	5,810	5,717	6,567	6,292
Total equity and liabilities	17,498	16,487	16,135	16,643	16,722
CASH FLOW STATEMENT	Q 1	Q 4	Q 3	Q 2	Q 1
From operating activities	468	–17	–234	–204	–18
From investing activities	2	–8	3	–2	–1
From financing activities	–9	–138	11	–286	1
Total cash flow for the period	461	–163	–220	–492	–18
Cash and cash equivalents at end of period	2,150	1,682	1,854	2,078	2,564
INTEREST-BEARING NET LIABILITIES/RECEIVABLES	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/receivables(–)
at beginning of period	546	541	240	–748	–790
Change in interest-bearing net liabilities/receivables	–416	5	301	988	42
Interest-bearing net liabilities(+)/receivables(–)
at end of period	130	546	541	240	–748
DEVELOPMENT PROPERTIES	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	8,306	8,509	8,869	8,607	7,543
New purchases	737	154	191	661	1,396
Transferred to production	–179	–219	–512	–411	–375
Other Carrying amount at end of period	47 8,911	–138 8,306	–39 8,509	12 8,869	43 8,607
KEY RATIOS	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	8.5	10.7	10.7	12.2	13.0
Debt/equity ratio, multiple	0.0	0.1	0.1	0.0	-
Equity/assets ratio, %	40	41	40	38	40
Earnings per share, SEK	3.30	5.20	4.30	5.40	5.70
Number of available building rights	36,400	35,900	36,700	36,000	34,900
Number of residential units sold	667	751	613	619	480
Number of housing starts	406	1,038	680	847	570
Number of residential units in current production	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 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,435	1,352	1,429	1,530	1,475
Operating profit 1)	229	232	233	250	274
Operating margin, %	16.0	17.2	16.3	16.3	18.6
Average operating capital	5,668	5,447	5,139	4,919	4,663
Return on operating capital, %2)	16.7	18.2	22.5	25.5	29.3
Operating cash flow	284	–61	187	285	–77
Carrying amount, development properties	5,042	5,048	5,002	5,185	5,229
Number of available building rights	13,400	13,400	13,500	13,600	13,300
Number of residential units sold	238	286	223	225	117
Number of housing starts	89	195	207	240	215
Number of residential units in current production	3,042	3,115	3,447	3,387	3,510
1) Of which property sales	-	-	-	0	-
JM RESIDENTIAL SWEDEN	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,110	1,202	920	1,065	1,269
Operating profit 1)	180	201	156	181	213
Operating margin, %	16.2	16.7	17.0	17.0	16.8
Average operating capital	1,042	1,008	1,000	949	897
Return on operating capital, %2)	68.9	74.5	73.1	76.3	80.0
Operating cash flow	65	186	44	260	232
Carrying amount, development properties	1,559	1,388	1,404	1,476	1,394
Number of available building rights	10,500	10,500	10,400	10,300	10,200
Number of residential units sold	243	239	227	207	244
Number of housing starts	271	260	230	267	286
Number of residential units in current production	2,547	2,418	2,471	2,280	2,210
1) Of which property sales	-	1	-	-	0
JM INTERNATIONAL	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	860	1,094	912	864	710
Operating profit 1)	98	110	85	83	53
Operating margin, %	11.4	10.1	9.3	9.6	7.5
Average operating capital	2,888	2,723	2,580	2,444	2,273
Return on operating capital, %2)	13.0	12.2	11.8	11.6	11.7
Operating cash flow	127	164	–48	–249	92
Carrying amount, development properties	2,261	1,821	2,054	2,156	1,932
Carrying amount, project properties	5	4	5	5	8
Number of available building rights	11,700	11,200	12,100	11,400	10,600
Number of residential units sold	186	226	163	187	119
Number of housing starts	46	391	243	212	69
Number of residential units in current production	1,660	1,709	1,644	1,466	1,399
1) Of which property sales	38	2	–1	0	11
JM PROPERTY DEVELOPMENT	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	24	24	19	15	15
Operating profit	6	5	4	–1	2
Average operating capital	1,447	1,314	1,160	1,036	910
Return on operating capital, %2)	1.0	0.8	0.7	0.4	2.4
Operating cash flow	–96	–210	–82	–156	–109
Carrying amount, development properties	10	10	10	10	10
Carrying amount, project properties	1,738	1,631	1,418	1,330	1,185
Number of available building rights 1)	800	800	700	700	800
Number of residential units sold 1)	-	-	-	-	-
Number of housing starts 1)	-	192	-	128	-
Number of residential units in current production 1)	593	593	681	681	553
1) Refers to rental units and residential care units.
JM CONSTRUCTION	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	312	586	663	769	698
Operating profit	–189	–95	–61	0	0
Operating margin, %	–60.6	–16.2	–9.2	0.0	0.0
Operating cash flow	242	–41	–49	60	–154
JM OTHER	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	–72	–108	–111	–118	–113
Operating profit (Group-wide expenses)	–11	–10	–6	–9	–14

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

Group – IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–MARCH	APRIL–MARCH	FULL-YEAR
ACCORDING TO IFRS, SEK M	2019	2018	2018/2019	2018
Revenue	3,599	3,825	15,454	15,680
Production and operating costs	–3,082	–3,057	–12,801	–12,776
Gross profit	517	768	2,653	2,904
Selling and administrative expenses	–242	–272	–1,011	–1,041
Gains/losses on the sale of property	38	11	40	13
Operating profit	313	507	1,682	1,876
Financial income and expenses	–26	–16	–79	–69
Profit/loss before tax	287	491	1,603	1,807
Taxes	–61	–110	–335	–384
Profit for the period	226	381	1,268	1,423
Other comprehensive income
Items that will be reclassified as income
Translation differences from the translation of foreign operations	69	78	21	30
Items that will not be reclassified as income
Restatement of defined-benefit pensions	–22	0	–127	–105
Tax attributable to other comprehensive income	4	0	19	15
Comprehensive income for the period	277	459	1,181	1,363
Net profit for the period attributable to shareholders of the Parent Company	226	381	1,268	1,423
Comprehensive income for the period attributable to shareholders of the Parent
Company	277	459	1,181	1,363
Earnings per share 1), basic, attributable to shareholders
of the Parent Company, SEK	3.20	5.50	18.20	20.50
Earnings per share 1), diluted, attributable to shareholders of the Parent
Company, SEK	3.20	5.50	18.20	20.40
Number of outstanding shares at end of period	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
Average number of shares, diluted	69,950,321	69,800,801	69,914,401	69,865,418

1) Profit/loss for the period.

CONDENSED CONSOLIDATED BAL ANCE SHEET

ACCORDING TO IFRS, SEK M	3/31/2019	3/31/2018	12/31/2018
ASSETS
Non-current assets 1)	470	221	214
Project properties	1,743	1,193	1,635
Development properties	8,911	8,607	8,306
Right-of-use leasehold rights	266	-	-
Participations in tenant-owners associations, etc.	434	309	567
Work in progress	3,206	2,651	2,958
Current receivables	4,708	5,075	5,286
Cash and cash equivalents	2,150	2,564	1,682
Total current assets	21,418	20,399	20,434
Total assets	21,888	20,620	20,648
EQUITY AND LIABILITIES 2) 3) 4) 5)
Equity	6,921	6,502	6,644
Non-current interest-bearing liabilities	941	220	146
Other non-current liabilities	770	700	696
Non-current provisions	3,090	2,804	3,004
Total non-current liabilities	4,801	3,724	3,846
Current interest-bearing liabilities	4,273	4,432	4,968
Other current liabilities	5,764	5,837	5,068
Current provisions	129	125	122
Total current liabilities	10,166	10,394	10,158
Total equity and liabilities	21,888	20,620	20,648
Pledged assets	535	503	476
Contingent liabilities	9,472	9,547	8,693
1) Of which right-of-use offices and cars	250	-	-
2) Of which project financing JM International	2,579	2,203	2,340
3) Of which project financing JM Residential Stockholm and JM Residential Sweden	1,526	1,970	2,003
4) Of which liabilities for property acquisition	1,514	1,448	1,040
5) Of which current and non-current interest-bearing leasing liabilities	517	-	-

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–MARCH
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	277	459	1,363
Dividend	-	-	–765
Equity component of convertible debentures	-	-	3
Closing balance at end of period	6,921	6,502	6,644

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

ACCORDING TO IFRS, SEK M		JANUARY–MARCH		FULL-YEAR
	2019	2018	2018/2019	2018
Cash flow from operating activities before change in
working capital and taxes	223	541	–1	317
Paid tax	–131	–261	–567	–697
Investment in development properties, etc.1)	–632	–949	–3,411	–3,728
Payment on account for development properties, etc. 2)	490	302	1,873	1,685
Investment in project properties	–107	–118	–513	–524
Sale of project properties	-	-	2	2
Change in current liabilities/receivables	50	–283	–337	–670
Cash flow from operating activities 3)	–107	–768	–2,954	–3,615
Cash flow from investing activities	2	–1	–5	–8
Loans raised	13	49	587	623
Amortization of debt	–45	–48	–267	–270
Loans raised, project financing 3)	840	921	4,317	4,398
Amortization of debt, project financing 3)	–242	–171	–1,327	–1,256
Dividend	-	-	–765	–765
Cash flow from financing activities	566	751	2,545	2,730
Cash flow for the period	461	–18	–414	–893
Cash and cash equivalents at end of period	2,150	2,564	2,150	1,682
1) Of which investment in shares in tenant-owners associations and freehold apartments	–369	–180	–1,726	–1,537
2) Of which sale of participations in tenant-owners associations and freehold apartments	464	167	1,438	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 quarter 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 1 January 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 in all material respects will be 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 Q1 2019 has resulted in one right-of-use asset and one lease liability in the balance sheet of around SEK 516m 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 Q1 2019 is presented in the following table.

IFRS 16 is not applied in the segment reporting.

ACCOUNTING OF IFRS 16 LEASES

	JANUARY–MARCH
ACCORDING TO IFRS, SEK M		2019
Production and operating costs		6
Selling and administrative expenses		–2
Operating profit		4
Financial income and expenses		–5
Profit/loss before tax		–1
Taxes		0
Profit for the period		–1
ACCORDING TO IFRS, SEK M	1/1/2019	3/31/2019
Non-current assets	275	250
Current assets	278	266
Total assets	553	516
Equity	-	–1
Non-current interest-bearing liabilities	553	511
Current interest-bearing liabilities	-	6

OTHER CHANGES TO IFRS

Other changed IFRS standards applied as of 2019 have 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 according to IAS 11.

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.

Parent Company

CONDENSED PARENT COMPANY INCOME STATEMENT

		JANUARY–MARCH
SEK M	2019	2018	2018
Net sales	2,659	2,730	10,397
Production and operating costs	–2,089	–2,080	–8,025
Gross profit	570	650	2,372
Selling and administrative expenses	–160	–199	–717
Gains/losses on the sale of property	-	0	-
Operating profit	410	451	1,655
Financial income and expenses	90	–18	46
Profit before appropriations and tax	500	433	1,701
Appropriations	–91	-	–175
Profit/loss before tax	409	433	1,526
Taxes	–66	–97	–323
Profit for the period	343	336	1,203

CONDENSED PARENT COMPANY BALANCE SHEET

SEK M	3/31/2019	3/31/2018	12/31/2018
Assets
Non-current assets	1,480	1,365	1,483
Current assets	13,370	12,863	13,145
Total assets	14,850	14,228	14,628
Equity and liabilities
Equity	3,833	3,386	3,490
Untaxed reserves	2,390	2,360	2,390
Provisions	1,642	1,518	1,583
Non-current liabilities	793	765	722
Current liabilities	6,192	6,199	6,443
Total equity and liabilities	14,850	14,228	14,628
Pledged assets	169	169	169
Contingent liabilities	9,332	9,672	8,785

Reconciliation between segment reporting and IFRS

CONSOLIDATED INCOME STATEMENT

		JANUARY–MARCH		FULL-YEAR
SEK M	2019	2018	2018/2019	2018
Revenue for the period (segment reporting)	3,669	4,054	15,776	16,161
Restatement JM International	–70	–229	–322	–481
Revenue for the period (IFRS)	3,599	3,825	15,454	15,680
Operating profit/loss for the period (segment reporting)	313	528	1,671	1,886
Restatement JM International	–4	–21	7	–10
Leases IFRS 16	4	-	4	-
Operating profit/loss for the period (IFRS)	313	507	1,682	1,876
Profit/loss for the period (segment reporting)	228	399	1,267	1,438
Restatement JM International	–1	–18	2	–15
Leases IFRS 16	–1	-	–1	-
Profit/loss for the period (IFRS)	226	381	1,268	1,423

CONSOLIDATED BAL ANCE SHEET

SEK M	3/31/2019	3/31/2018	12/31/2018
Balance sheet total (segment reporting)	17,498	16,722	16,487
Restatement JM International	–231	–275	–182
Reclassification project financing JM International, interest-bearing	2,100	1,826	1,884
Reclassification project financing JM International, non-interest-bearing 1)	479	377	456
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	1,738	2,270	2,390
Transfer between Progress billing in excess of recognized revenue to Revenue less progress
billings	–212	–300	–387
Leases IFRS 16	516	–	–
Balance sheet total (IFRS)	21,888	20,620	20,648

1) Billing on account for customers.

CONSOLIDATED EQUITY

SEK M	3/31/2019	3/31/2018	12/31/2018
Equity (segment reporting)	7,083	6,664	6,798
Restatement JM International	–161	–162	–154
Leases IFRS 16	–1	-	-
Equity (IFRS)	6,921	6,502	6,644

CONSOLIDATED KEY FINANCIAL FIGURES

%	3/31/2019	3/31/2018	12/31/2018
Equity/assets ratio (segment reporting)	40	40	41
Equity/assets ratio (IFRS)	32	32	32

CONSOLIDATED CASH FLOW

		JANUARY–MARCH	APRIL–MARCH	FULL-YEAR
SEK M	2019	2018	2018/2019	2018
Cash flow from operating activities (segment reporting)	468	–18	13	–473
Reclassification project financing JM International	–132	–335	–263	–466
Reclassification project financing JM Residential Stockholm and
JM Residential Sweden, interest-bearing	–466	–415	–2,727	–2,676
Leases IFRS 16	23	-	23	-
Cash flow from operating activities (IFRS)	–107	–768	–2,954	–3,615

CONSOLIDATED INTEREST-BEARING NET LIABILITIES/RECEIVABLES

SEK M	3/31/2019	3/31/2018	12/31/2018
Interest-bearing net liabilities (+)/receivables (–) at end of period (segment
reporting)	130	–748	546
Reclassification project financing JM International	2,100	1,826	1,884
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	1,738	2,270	2,390
Leases IFRS 16	517	-	-
Interest-bearing net liabilities (+)/receivables (–) at end of period (IFRS)	4,485	3,348	4,820

Stockholm, April 26, 2019 JM AB (publ)

Johan Skoglund President and CEO

This interim report has not been reviewed by the Company's auditors.

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.

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

PRESS RELEASES, Q1 2019

March 28	Annual General Meeting at JM AB
March 26	JM acquiring property in Trondheim, Norway
March 20	JM acquiring property in Drammen, Norway
March 18	JM selling property in Skien and Röyken, Norway
March 15	JJM acquiring property in Fålhagen, Uppsala
February 22	Notice of JM AB's Annual General Meeting on March
	28, 2019
February 4	JM signs conditional agreement for the acquisition of
	property on Stora Essingen in Stockholm
February 1	Year-end Report 2018
January 15	Annual General Meeting 2019 - JM AB Regarding
	Chairperson and Board Members

FOR MORE INFORMATION PLEASE CONTACT:

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

below, at 08.00 CEST on April 26, 2019.

FINANCIAL CALENDAR

DISCLOSURES

May 21, 2019 Capital Market Day July 12, 2019 Interim Report January - June 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