JM — Interim / Quarterly Report 2019

Jan 31, 2020

Year-end Report January – December 2019

JM GROUP

STRONG SALES AND HIGH LEVEL OF PRODUCTION STARTS

JANUARY–DECEMBER 2019

Revenue decreased to SEK 15,692m (16,161), and revenue excluding JM Construction, Business area Construction (under closure), amounted to SEK 15,438m (15,391).

Operating profit increased to SEK 2,008m 1) (1,886). The operating margin increased to 12.8 percent (11.7). Operating profit excluding JM Construction, Business area Construction, increased to SEK 2,243m (2,062) and the operating margin to 14.5 percent (13.4).

Gains from the sale of two completed rental unit properties of SEK 170m are included in the operating profit.

Profit before tax increased to SEK 1,928m (1,817). Profit after tax increased to SEK 1,570m (1,438).

Return on equity for the past twelve months amounted to 22.2 percent (22.2). Earnings per share during the year increased to SEK 22.50 (20.60).

Consolidated cash flow including net investment in properties amounted to SEK 1,291m (–473).

1) 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.

2) Of which 44 refer to residential units in Finland to investors.

The number of residential units sold increased to 3,595 (2,463), of which 376 residential units refer to the sale of rental units within JM Property Development. Housing starts increased to 3,269 (3,135), of which 143 residential units refer to rental units within JM Property Development.

Surplus value of development properties of SEK 6.7bn (7.0).

The Board of Directors proposes SEK 12.50 (12.00) in dividend for 2019.

OCTOBER–DECEMBER 2019

Revenue increased to SEK 4,311m (4,150).

Operating profit increased to SEK 559m (443). The operating margin increased to 13.0 percent (10.7).

Profit before tax increased to SEK 541m (430). Profit after tax increased to SEK 442m (359).

Consolidated cash flow including net investment in properties amounted to SEK 474m (–17).

Number of residential units sold increased to 941 2) (751) and housing starts increased to 1,107 2) (1,038).

ACCORDING TO SEGMENT REPORTING	JANUARY – DECEMBER		OCTOBER – DECEMBER
SEK M	2019	2018	2019	2018
Revenue	15,692	16,161	4,311	4,150
Revenue excluding JM Construction, Business area Construction	15,438	15,391	4,279	4,048
Operating profit	2,008	1,886	559	443
Operating profit excluding JM Construction, Business area Construction	2,243	2,062	587	543
Operating margin, %	12.8	11.7	13.0	10.7
Operating margin excluding JM Construction, Business area Construction, %	14.5	13.4	13.7	13.4
Profit before tax	1,928	1,817	541	430
Cash flow from operating activities	1,291	–473	474	–17
Return on equity, %	22.2	22.2
Equity/assets ratio, %	42	41
Earnings per share, SEK	22.50	20.60	6.30	5.20
Number of residential units sold	3,595	2,463	941	751
Number of housing starts	3,269	3,135	1,107	1,038
Number of residential units in current production	7,813	7,835
Revenue according to IFRS	15,605	15,680	3,864	4,206
Operating profit according to IFRS	1,982	1,876	545	479
Earnings per share according to IFRS, SEK	21.90	20.40	6.10	5.50
1) Of which rental units in JM Property Development	376	-	-	-
2) Of which residential units in JM International to investors	226	-	44	-
3) Of which rental units in JM Property Development	143	320	-	192
4) Of which residential units in JM International to investors	226	-	44	-

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 20-21.

For definitions of key financial figures, see "Definitions Key Financial Figures" at jm.se/investors.

Unless otherwise specified, the analysis and comments in this Year-End Report are based on JM's segment reporting. Cover photo: Läkkiseppä, Helsinki, Finland

Group

A WORD FROM THE CEO

POSITIVE DEVELOPMENT IN THE HOUSING BUSINESS

We continued to experience positive development in the housing business in Sweden, Norway and Finland during the year, which ended with strong sales and high level of production starts in all markets. The supply of newly produced residential units on the market has decreased in 2019 in both Stockholm and the rest of Sweden. The transaction volume on the Swedish housing market increased clearly during the year.

CONTINUED IMPROVEMENT IN THE HOUSING MARKET IN STOCKHOLM

The housing market in Stockholm is affected by the stricter amortization requirements and the cautious approach by the banks in their lending to home buyers. At the same, we see a continued improvement in demand for JM's residential units from customers in Stockholm. There is very strong demand in particular for the freehold apartments we have in current production, and I am pleased that during the fourth quarter we started production on two more freehold apartment projects in Stockholm. The gradual improvement in the market has resulted in reservation and sales growth in Stockholm, with 353 residential units sold in the fourth quarter compared to 286 in the same period the previous year and 261 in the third quarter of this year. The new year also started on a positive note with a large number of visitors to our Stockholm projects during the Open House Day in January.

Housing starts were supported by a normal level of reservations, and profitability continued to be good in the current production volume. We have two projects with around 140 residential units in Stockholm where the housing starts were delayed pending

authority decisions. Nonetheless, the conditions for starting production on these two projects during the first six months of 2020 are considered favorable.

HIGH LEVEL OF HOUSING STARTS IN THE REST OF SWEDEN, NORWAY AND FINLAND

The housing business in the rest of Sweden is showing good profitability in a market that continues to be stable with good sales and housing starts during the quarter.

In Norway, the activity level on the housing market was high, and in Finland the housing market was stable during the quarter. In line with the planning for the year, we have had a high number of housing starts in the foreign operations during the fourth quarter.

GOOD PROJECT PORTFOLIO AND STRONG FINANCIAL POSITION

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

As a result of our strong balance sheet and the growth in our business, the Board of Directors proposes an increase in the dividend to our shareholders.

The conditions are favorable for a continued positive development of our business.

Johan Skoglund, President and CEO

"The gradual improvement in the market has resulted in reservation and sales growth in Stockholm, with 353 residential units sold in the fourth quarter compared to 286 in the same period the previous year"

MARKET, SALES AND HOUSING STARTS JANUARY–DECEMBER 2019

The housing market in Stockholm continued to improve during the year. Housing starts in Stockholm are 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 continuously stable.

In Norway, activity on the housing market was high with stable prices, and in Finland the housing market was stable. The geographic coverage of JM's housing business is gradually widening.

Population growth in our main markets, coupled with continued low interest rates, supports demand for housing.

The number of residential units sold in the form of signed contracts increased to 3,595 (2,463)1) 2). The percentage of sold or reserved homes in relation to current production amounts to 65 percent (57), with an interval of 60–65 percent considered normal. This percentage is in line with the third quarter. JM Residential Stockholm sold 1,120 residential units (851), JM Residential Sweden sold 1,084 (917), JM International sold 1,015 (695) and JM Property Development sold 376 (0).

The number of housing starts was 3,269 (3,135)3) 4). JM Residential Stockholm started production on 989 residential units (857), JM Residential Sweden on 1,095 (1,043), JM International on 1,042 (915) and JM Property Development on 143 (320).

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 amounted to 7,813 (7,835), of which 600 are rental units (593) in JM Property Development.

1) Of which 376 rental units (0) in JM Property Development

2) Of which 226 residential units (0) in JM International to investors

3) Of which 143 rental units (320) in JM Property Development

4) Of which 226 residential units (0) in JM International to investors

REVENUE, OPERATING PROFIT AND OPERATING MARGIN JANUARY–DECEMBER 2019

Consolidated revenue according to segment reporting for the year decreased to SEK 15,692m (16,161). Revenue restated according to IFRS amounted to SEK 15,605m (15,680). Operating profit according to segment reporting increased to SEK 2,008m (1,886) and the operating margin to 12.8 percent (11.7). Operating profit restated according to IFRS amounted to SEK 1,982m (1,876). The restatement is related to JM International, with a negative effect on earnings of SEK –43m (–10) and lease contracts according to IFRS 16 with a positive effect on earnings of SEK 17m (0). Profit/ loss includes a loss in JM Construction of SEK –141m (–156), where the one-off cost of SEK 180m for the discontinuation of the housing operations was reported during the first quarter. Revenue excluding JM Construction Business area Construction amounted to SEK 15,438m (15,391), operating profit to SEK 2,243m (2,062), and the operating margin to 14.5 percent (13.4).

During the year, properties were sold for SEK 923m (116) with gains of SEK 276m (13).

Rental income from JM's project properties increased to SEK 86m (66). Net rental income increased to SEK 58m (42).

OCTOBER–DECEMBER 2019

Consolidated revenue according to segment reporting for the fourth quarter increased to SEK 4,311m (4,150). Revenue restated according to IFRS decreased to SEK 3,864m (4,206).

Operating profit according to segment reporting increased to SEK 559m (443), and the operating margin increased to 13.0 percent (10.7). Operating profit restated according to IFRS increased to SEK 545m (479). The restatement is related to JM International, with a negative effect on earnings of SEK –16m (36) and lease contracts according to IFRS 16 with a positive effect on earnings of SEK 2m (0).

Properties were sold during the fourth quarter for SEK 23m (33), with gains of SEK 7m (3). The sale of the Norwegian construction operations was finalized and reported during the fourth quarter with gains of SEK 15m.

Rental income from JM's project properties amounted to SEK 18m (21). Net rental income amounted to SEK 12m (14).

4

OPERATING PROFIT BY BUSINESS SEGMENT, SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
JM Residential Stockholm	916	989	262	232
JM Residential Sweden	719	751	189	201
JM International	355	331	116	110
JM Property Development	194	10	3	5
JM Construction	–141	–156	0	–95
Group-wide expenses	–35	–39	–11	–10
Total	2,008	1,886	559	443
Of which sale of properties and operations	276	13	22	3

OPERATING MARGIN BY BUSINESS SEGMENT, %		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
JM Residential Stockholm	16.4	17.1	16.9	17.2
JM Residential Sweden	16.1	16.9	15.9	16.7
JM International	8.8	9.2	9.1	10.1
JM Construction	–8.3	–5.7	0.0	–16.2

OPERATING PROFIT, SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Operating profit excluding JM Construction, Business area Construction	2,243	2,062	587	543
Operating margin excluding JM Construction, Business area Construction, %	14.5	13.4	13.7	13.4
Operating profit JM Construction, Business area Construction	–235	–176	–28	–100
Operating profit, total	2,008	1,886	559	443

RESIDENTIAL UNITS IN CURRENT PRODUCTION	12/31/2019	12/31/2018
Number of residential units in current production 1) 2)	7,813	7,835
Sold residential units in current production, % 3)	53	51
Reserved residential units in current production, %	12	6
Sold/reserved residential units in current production, %	65	57
1) Of which rental units and residential care units in current production in JM Property Development — not included in the percentage of sold and reserved residential units in current production	600	593
Including residential units in projects where costs incurred are only recognized as project properties under construction	457	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	12/31/2019	12/31/2018
Completed production, number of unsold units 1)	157	140
The number of unsold residential units in the balance sheet recognized as "Participations
in tenant-owners associations, etc."	82	125

1) After final occupancy according to plan.

included in percentage of sold/reserved

RESIDENTIAL BUILDING RIGHTS JANUARY–DECEMBER 2019

The number of available building rights at the end of the year amounted to 35,900 (35,900), of which 21,100 (20,700) are recognized in the balance sheet. Capital tied up in building rights (development properties in the balance sheet) for residential units increased to SEK 8,917m (8,267).

The valuation of JM's total development properties with a carrying amount of SEK 8.9bn (8.3) shows a surplus value of SEK 6.7bn (7.0). This valuation was carried out in cooperation with an independent appraisal company.

During 2019, JM acquired residential development properties for SEK 1,745m (2,402), of which SEK 284m relates to JM Residential Stockholm, SEK 433m to JM Residential Sweden and SEK 1,028m to JM International.

PROJECT PROPERTIES

The externally appraised market value of JM's development properties was estimated at SEK 1,769m (2,002) with a carrying amount of SEK 1,399m (1,635).

FINANCIAL ITEMS JANUARY–DECEMBER 2019

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

The total interest-bearing liabilities according to segment reporting was SEK 2,817m (2,228), of which the provision for pension liabilities comprised SEK 1,702m (1,388). At the end of the fourth quarter, the average interest rate for the total interest-bearing loan stock including pension liabilities was 2.0 percent (2.5). The average term for fixed-rate loans excluding the pension liability was 0.2 years (0.2).

Consolidated available liquidity amounted to SEK 5,197m (4,482). Aside from cash and cash equivalents of SEK 2,397m (1,682), this includes unutilized overdraft facilities and credit lines totaling SEK 2,800m (2,800), where credit agreements for SEK 2,400m had an average maturity of 3.3 years (4.0).

Interest-bearing net liabilities including pension liabilities according to segment reporting totaled SEK 420m (546) at the end of the period. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 929m (1,020). Of these liabilities, SEK 164m (324) were current.

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

DEVELOPMENT PROPERTIES (RESIDENTIAL UNITS) SEK BN	MARKET VALUE 12/31/2019		CARRYING AMOUNT 12/31/2019	MARKET VALUE 12/31/2018	CARRYING AMOUNT 12/31/2018
JM Residential Stockholm	9.8		4.9	10.2	5.0
JM Residential Sweden	2.5		1.5	2.4	1.4
JM International	3.3		2.5	2.7	1.9
Total	15.6		8.9	15.3	8.3
		JANUARY–DECEMBER		OCTOBER–DECEMBER
SEK M		2019	2018	2019	2018
Financial income		6	10		3 6
Financial expenses		–86	–79	–21	–19
Financial income and expenses		–80	–69	–18	–13

In Spånga and Järfälla, production began during the fourth quarter on two projects with a total of 136 freehold apartments. Project Gunhild with 56 freehold apartments is planned around a lush, shared courtyard in Spånga's new district, Bromstensstaden. Bolinder Entré, a tower block with 16 floors and 80 freehold apartments, is being built at Bolinder Strand in Järfälla close to Lake Mälaren and Görväln Nature Reserve. Both projects offer proximity to services and excellent public transportation. JM now has five projects with just over 450 freehold apartments in current production in Sweden.

Picknick, the first project in Vipeholmsparken in Lund, entered production during the fourth quarter. This project consists of four apartment buildings with a total of 96 residential units in a green setting.

In Finland, production began on two projects at the industrial property in Hertonäs that was acquired during the third quarter. Here, JM is now producing 147 freehold apartments and 44 residential units to investors. The area offers all conceivable services, nice outdoor activity given the proximity to the water, and excellent public communication.

CASH FLOW JANUARY–DECEMBER 2019

Cash flow from operating activities according to segment reporting was SEK 1,291m (–473) during the year. Net investments in development properties resulted in a cash flow of SEK –540m (–528). The reduced holdings of repurchased residential units resulted in a cash flow of SEK 291m (–396). Consolidated cash flow attributable to project properties (sales minus investment) during the year was SEK 439m (–522), where the sale of two completed rental unit properties in the third quarter resulted in a cash payment of SEK 760m. 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.

OCTOBER–DECEMBER 2019

Cash flow from operating activities was SEK 474m (–17) during the fourth quarter. Net investments in development properties resulted in a cash flow of SEK 123m (69). The reduced holdings of repurchased residential units resulted in a cash flow of SEK 120m (–399). Consolidated cash flow attributable to project properties (sales minus investment) amounted to SEK –111m (–200).

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 amounted to 69,583,262 (69,583,262). The company has no holdings of treasury shares.

PERSONNEL

The number of employees at the end of the year was 2,559 (2,630). The number of wage-earners was 996 (1,029), and the number of salaried employees was 1,563 (1,601). Current staffing is aligned with current project volume, and adjustments are made on a regular basis. Demand on the labor market for qualified project development skills continues to be strong but has decreased slightly.

DIVIDEND

For 2019 the Board of Directors proposes a dividend of SEK 12.50 (12.00) per share, for a total of SEK 870m (835). The proposed record date for the dividend is Monday, March 30, 2020. If the Annual General Meeting resolves to adopt the proposal, the dividend will be sent on Thursday, April 2, 2020.

ACCORDING TO SEGMENT REPORTING, SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Interest-bearing net liabilities(+)/receivables(–) at beginning of
period	546	–790	951	541
Change in interest-bearing net liabilities/receivables	–126	1,336	–531	5
Interest-bearing net liabilities(+)/receivables(–) at end of period	420	546	420	546

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 basically did not change during the fourth quarter. The total supply of residential units was high, but the supply of newly produced tenant-owned apartments continued to decrease.

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 fourth 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 is at a normal level.

Greater demand for freehold apartments has resulted in a greater focus from us on this form of tenure and production started on an additional 136 freehold apartments during the quarter, totaling 320 for the year.

Housing starts in Stockholm during the fourth quarter were supported by a normal level of reservations, and profitability continued to be good in current production volume. In the past few quarters, the absence of necessary authority decisions has had a negative effect on the business unit's housing starts. This is currently affecting two projects with a total of around 140 residential units, both with a high reservation rate. Housing starts in forthcoming phases have also been indirectly delayed. Nonetheless, conditions are considered to be good for starting production on these two projects during the first six months of 2020.

The lower profit during the year is due primarily to lower prices in our projects. Revenue and profit were also strengthened during the fourth quarter due to greater sales and a higher number of housing starts.

Cash flow during the year is in balance.

Production was started in the fourth quarter on 336 residential units in apartments buildings and single-family homes in Järfälla, Nacka, Sollentuna and Stockholm.

SEK M		JANUARY–DECEMBER
	2019	2018	2019	2018
Revenue	5,575	5,786	1,551	1,352
Operating profit 1)	916	989	262	232
Operating margin, %	16.4	17.1	16.9	17.2
Average operating capital	5,811	5,447
Return on operating capital, %	15.8	18.2
Operating cash flow	1,118	334	598	–61
Carrying amount, development properties	4,949	5,048
Number of available building rights	12,800	13,400
Number of residential units sold	1,120	851	353	286
Number of housing starts	989	857	336	195
Number of residential units in current production	3,171	3,115
Number of employees	900	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.

Average prices on the existing home market increased slightly or remained the same in the markets within the business segment during the fourth quarter. The supply of newly produced residential units is still at a normal to high level. In Gothenburg and Malmö, the supply of newly produced residential units has been relatively high, and in Uppsala, the supply fell by half during the year. Competition for land for housing continues to be tough in some areas in the business segment. However, this competition has decreased slightly in some 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. Profit and margin decreased slightly where demand and prices vary somewhat on each local market.

Cash flow during the year was burdened by increased holdings of development properties.

Production was started in the fourth quarter on 291 residential units, of which 266 in apartment buildings and 25 in single-family homes, in Lund, Helsingborg, Norrköping and Upplands Väsby.

During the fourth quarter, 115 building rights were acquired in Malmö.

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Revenue	4,468	4,456	1,185	1,202
Operating profit 1)	719	751	189	201
Operating margin, %	16.1	16.9	15.9	16.7
Average operating capital	1,183	1,008
Return on operating capital, %	60.8	74.5
Operating cash flow	557	722	287	186
Carrying amount, development properties	1,461	1,388
Number of available building rights	10,500	10,500
Number of residential units sold	1,084	917	313	239
Number of housing starts	1,095	1,043	291	260
Number of residential units in current production	1,994	2,418
Number of employees	601	598
1) Of which property sales	-	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 due to greater sales and a higher number of housing starts.

Cash flow during the year is burdened by investments in development properties and a slight increase in working capital.

NORWAY

The price level on the existing home market was stable in the Oslo region, where there has been good supply and a high level of activity. In the rest of Norway, the markets had weak price growth during the quarter.

During the fourth quarter, 188 residential units (184) were sold and production started on 289 units (270). Housing starts in the fourth quarter consist of 175 residential units in apartments buildings in the Oslo region, 27 residential units in apartment buildings in Drammen and 87 residential units in apartment buildings outside of Bergen.

The number of residential units in current production amounted

to 1,346 (1,288). During the fourth quarter, no new building rights were acquired. Available building rights correspond to 7,600 residential units (8,200).

FINL AND

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

During the fourth quarter, 87 residential units (41) were sold and production started on 191 units (121). Housing starts in the fourth quarter consist of residential units in apartments buildings in Helsinki. Of the residential units that were started and sold, 44 refer to residential units to investors. The number of residential units in current production amounted to 702 (421).

During the fourth quarter, 315 building rights were acquired in Helsinki and Esbo. Available building rights correspond to 4,200 residential units (3,000).

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Revenue	4,021	3,580	1,275	1,094
- of which JM Norway	3,186	2,987	910	899
Operating profit 1)	355	331	116	110
- of which JM Norway	298	297	90	94
Operating margin, %	8.8	9.2	9.1	10.1
- of which JM Norway	9.4	9.9	9.9	10.5
Average operating capital	3,229	2,723
Return on operating capital, %	11.0	12.2
Operating cash flow	–439	–41	–239	164
Carrying amount, development properties	2,497	1,821
Carrying amount, project properties	5	4
Number of available building rights	11,800	11,200
Number of residential units sold 2)	1,015	695	275	226
Number of housing starts 3)	1,042	915	480	391
Number of residential units in current production	2,048	1,709
Number of employees	518	458
1) Of which property sales	38	12	-	2
2) Of which residential units to investors	226	-	44	-
3) Of which residential units to investors	226	-	44	-

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 227m (73), of which rental income was SEK 86m (65), and contracting revenue and the sale of services amounted to SEK 141m (0). Operating profit was SEK 194m (10). The operating profit is burdened by startup costs for the new business operations, JM@home.

Net rental income for project properties was SEK 58m (42), and profit from sales of property was SEK 170m.

Cash flow during the year is positive due to property sales with a cash payment received of SEK 760m and otherwise burdened by 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 two fully rented and occupied projects: Tjärtunnan in Stureby with 187 rental units and Alphyddan in Nacka with 93 rental units. During the year, the properties Dalénum on Lidingö (Lidingö Tryckregulatorn 2) and Spaken in Hägernäs (Täby Spaken 1) were sold for a gain of SEK 170m. The rental project Valla Park in Sundbyberg (Sundbyberg Lådmakaren 4), with 143 rental units, was also sold with the transfer of legal title upon the planned completion date in 2022. Revenue and profit are recognized gradually as the project is implemented.

An additional three rental projects in JM's own balance sheet continue to be either in production or rented: Alba Lilium in Bredäng, Stockholm, 137 rental units with ongoing occupancy 2019- 2020; Manegen, Täby, 128 rental units with planned occupancy in 2020; and the project Havreflingan in Järfälla, 192 rental units with planned occupancy in 2021.

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Revenue	227	73	40	24
Operating profit 1)	194	10	3	5
Average operating capital	1,570	1,314
Return on operating capital, %	12.4	0.8
Operating cash flow	454	–557	–112	–210
Carrying amount, development properties	10	10
Carrying amount, project properties	1,394	1,631
Number of available building rights 2)	800	800
Number of residential units sold 2)	376	-	-	-
Number of housing starts 2)	143	320	-	192
Number of residential units in current production 2)	600	593
Number of employees	68	53
1) Of which property sales	170	-	-	-

2) Refers to rental units and residential care units.

JM Construction

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

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

Business segment revenue decreased due to the discontinuation of operations in 2019. Operating profit includes SEK 15m for the completed sale of the external contracting operations in Norway and gains from property sales of SEK 53m.

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 segment will thereafter focus on the engineering operations 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 ongoing projects are completed, which has lead to a slightly negative revaluation in the fourth quarter.

Cash flow during the year was enhanced due to a settled receivable with a cash payment received of SEK 320m during the first quarter, in accordance with the signed settlement agreement, and completed property sales as well as being burdened by an increase in working capital.

The business segment received a number of assignments in the fourth quarter within the civil engineering operations, of which the largest is the engineering work for new production of homes in the Igelsta district of Södertälje for JM Residential Stockholm.

The largest ongoing projects are groundworks in the Stockholm Norvik goods harbor in Nynäshamn (Ports of Stockholm), an infrastructure project in Tyresö (Tyresö Municipality), and the new production of apartment buildings in Norra Djurgårdsstaden (Riksbyggen).

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Revenue 1)	1,691	2,716	347	586
- of which Business area Construction	254	770	32	102
Operating profit 2)	–141	–156	0	–95
- of which Business area Construction	–235	–176	–28	–100
Operating margin, %	–8.3	–5.7	0.0	–16.2
- of which Business area Construction	–92.5	–22.9	–87.5	–98.0
Operating cash flow	54	–184	–1	–41
Carrying amount, development properties	21	39
Number of employees	283	437
1) Of which internal	290	450	87	108
2) Of which sale of properties and operations	68	-	22	-

Group – segment reporting

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–DECEMBER		OCTOBER–DECEMBER
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2019	2018
Revenue	15,692	16,161	4,311	4,150
Production and operating costs	–12,994	–13,247	–3,520	–3,456
Gross profit	2,698	2,914	791	694
Selling and administrative expenses	–966	–1,041	–254	–254
Gains/losses on the sale of property 1)	276	13	22	3
Operating profit	2,008	1,886	559	443
Financial income and expenses	–80	–69	–18	–13
Profit before tax	1,928	1,817	541	430
Taxes	–358	–379	–99	–71
Profit for the period	1,570	1,438	442	359
Other comprehensive income	–209	–56	18	–81
Comprehensive income for the period	1,361	1,382	460	278
Earnings per share 2), diluted, SEK	22.50	20.60	6.30	5.20
Average number of shares, diluted	69,985,557	69,865,418	70,046,214	69,950,321
1) Of which sale of operations	15	-	15	-
2) Net profit for the period.

CONDENSED CONSOLIDATED BAL ANCE SHEET

ACCORDING TO SEGMENT REPORTING, SEK M	12/31/2019	12/31/2018
ASSETS
Non-current assets	219	214
Project properties	1,399	1,635
Development properties	8,938	8,306
Participations in tenant-owners associations, etc.	366	567
Current receivables 1)	4,274	4,083
Cash and cash equivalents	2,397	1,682
Total current assets	17,374	16,273
Total assets	17,593	16,487
EQUITY AND LIABILITIES2)
Equity	7,326	6,798
Non-current interest-bearing liabilities	425	146
Other non-current liabilities	765	696
Non-current provisions	3,223	3,037
Total non-current liabilities	4,413	3,879
Current interest-bearing liabilities	690	694
Other current liabilities	5,030	4,994
Current provisions	134	122
Total current liabilities	5,854	5,810
Total equity and liabilities	17,593	16,487
1) Of which receivables from property sales	76	53
2) Of which liabilities for property acquisitions	949	1,040

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–DECEMBER
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018
Opening balance at beginning of period	6,798	6,178
Total comprehensive income for the period	1,361	1,382
Dividend	–835	–765
Equity component of convertible debentures	2	3
Closing balance at end of period	7,326	6,798

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	JANUARY–DECEMBER		OCTOBER–DECEMBER
ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2019	2018
Cash flow from operating activities before change in working capital
and taxes	1,867	2,175	228	496
Paid tax	–433	–697	–67	–115
Investment in development properties, etc. 1)	–3,799	–3,728	–806	–1,001
Payment on account for development properties, etc.2)	3,550	2,804	1,049	671
Investment in project properties	–426	–524	–111	–200
Sale of project properties	865	2	-	-
Change in current liabilities/receivables	–333	–505	181	132
Cash flow from operating activities	1,291	–473	474	–17
Cash flow from investing activities	–7	–8	–2	–8
Loans raised	658	623	122	39
Amortization of debt	–399	–270	–150	–177
Dividend	–835	–765	-	-
Cash flow from financing activities	–576	–412	–28	–138
Cash flow for the period	708	–893	444	–163
Cash and cash equivalents at end of period	2,397	1,682	2,397	1,682
1) Of which investment in participations in tenant-owners associations and freehold residential units	–1,980	–1,537	–420	–837
2) Of which the sale of participations in tenant-owners associations and freehold residential units	2,271	1,141	540	438

CONSOLIDATED KEY FINANCIAL FIGURES

	JANUARY–DECEMBER		OCTOBER–DECEMBER
ACCORDING TO SEGMENT REPORTING, %	2019	2018	2019	2018
Operating margin	12.8	11.7	13.0	10.7
Return on equity	22.2	22.2
Return on capital employed	21.0	22.3
Debt/equity ratio, multiple	0.1	0.1	0.1	0.1
Equity/assets ratio	42	41

ACCORDING TO SEGMENT REPORTING

REVENUE BY COUNTRY

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
Sweden	11,451	12,061	3,038	2,943
Norway	3,407	3,506	909	1,011
Finland	832	571	364	192
Belgium	2	23	0	4
Total	15,692	16,161	4,311	4,150

REVENUE BY BUSINESS SEGMENT

SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
JM Residential Stockholm	5,575	5,786	1,551	1,352
JM Residential Sweden	4,468	4,456	1,185	1,202
JM International	4,021	3,580	1,275	1,094
JM Property Development	227	73	40	24
JM Construction	1,691	2,716	347	586
Elimination	–290	–450	–87	–108
Total	15,692	16,161	4,311	4,150

OPERATING PROFIT BY BUSINESS SEGMENT

	JANUARY–DECEMBER		OCTOBER–DECEMBER
SEK M	2019	2018	2019	2018
JM Residential Stockholm	916	989	262	232
JM Residential Sweden	719	751	189	201
JM International	355	331	116	110
JM Property Development	194	10	3	5
JM Construction	–141	–156	0	–95
Group-wide expenses	–35	–39	–11	–10
Total	2,008	1,886	559	443

OPER ATING MARGIN BY BUSINESS SEGMENT

%	JANUARY–DECEMBER			OCTOBER–DECEMBER
	2019	2018	2019	2018
JM Residential Stockholm	16.4	17.1	16.9	17.2
JM Residential Sweden	16.1	16.9	15.9	16.7
JM International	8.8	9.2	9.1	10.1
JM Construction	–8.3	–5.7	0.0	–16.2

AVER AGE OPER ATING CAPITAL BY BUSINESS SEGMENT

SEK M	2019	2018
JM Residential Stockholm	5,811	5,447
JM Residential Sweden	1,183	1,008
JM International	3,229	2,723
JM Property Development	1,570	1,314

RETURN ON OPER ATING CAPITAL BY BUSINESS SEGMENT

%	2019	2018
JM Residential Stockholm	15.8	18.2
JM Residential Sweden	60.8	74.5
JM International	11.0	12.2
JM Property Development	12.4	0.8

OPERATING CASH FLOW BY BUSINESS SEGMENT

SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
JM Residential Stockholm	1,118	334	598	–61
JM Residential Sweden	557	722	287	186
JM International	–439	–41	–239	164
JM Property Development	454	–557	–112	–210
JM Construction	54	–184	–1	–41

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	12/31/2019	12/31/2018
JM Residential Stockholm	4,949	5,048
JM Residential Sweden	1,461	1,388
JM International	2,497	1,821
JM Property Development	10	10
JM Construction	21	39
Total	8,938	8,306

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	12/31/2019	12/31/2018
JM Residential Stockholm	12,800	13,400
JM Residential Sweden	10,500	10,500
JM International	11,800	11,200
JM Property Development 1)	800	800
Total	35,900	35,900
Of which rights carried in the balance sheet (development properties)
JM Residential Stockholm	7,800	8,600
JM Residential Sweden	6,600	6,800
JM International	6,600	5,100
JM Property Development 1)	100	200
Total	21,100	20,700

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

NUMBER		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2019	2018	2019	2018
JM Residential Stockholm	1,120	851	353	286
JM Residential Sweden	1,084	917	313	239
JM International	1,015	695	275	226
JM Property Development 1)	376	-	-	-
Total	3,595	2,463	941	751

HOUSING STARTS BY BUSINESS SEGMENT

		JANUARY–DECEMBER		OCTOBER–DECEMBER
NUMBER	2019	2018	2019	2018
JM Residential Stockholm	989	857	336	195
JM Residential Sweden	1,095	1,043	291	260
JM International	1,042	915	480	391
JM Property Development 1)	143	320	-	192
Total	3,269	3,135	1,107	1,038

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	12/31/2019	12/31/2018
JM Residential Stockholm	3,171	3,115
JM Residential Sweden	1,994	2,418
JM International	2,048	1,709
JM Property Development 1)	600	593
Total	7,813	7,835

1) Refers to rental units and residential care units.

PROJECT PROPERTIES, GROUP					CARRYING AMOUNT, SEK M 12/31/2018
12/31/2019	MARKET VALUE, SEK M	CARRYING AMOUNT, SEK M AREA (000) M²		OCCUPANCY RATE ANNUAL RENT, %
Properties under development	1,051	801	24	93	816
Completed rental unit properties	698	587	16	100	808
Completed commercial properties	20	11	1	91	11
Total	1,769	1,399	41	97	1,635

DEVELOPMENT PROPERTIES, GROUP

	JANUARY–DECEMBER	OCTOBER–DECEMBER
CARRYING AMOUNT, SEK M	2019	2018	2019	2018 8,509 154
Opening balance at beginning of period	8,306	7,543	9,170
New purchases	1,745	2,402	285
Transferred to production	–1,068	–1,517	–458	–219
Other	–45	–122	–59	–138
Closing balance at end of period	8,938	8,306	8,938	8,306

Group Five-Year Overview

ACCORDING TO SEGMENT REPORTING, SEK M	2019	2018	2017	2016	2015
Revenue	15,692	16,161	17,008	15,752	14,447
Operating profit	2,008	1,886	2,369	2,011	1,590
Profit before tax	1,928	1,817	2,579	1,951	1,518
Total assets	17,593	16,487	15,405	12,848	12,230
Cash flow from operating activities	1,291	–473	2,013	1,957	–230
Interest-bearing net liabilities (+)/receivables (–)	420	546	–790	435	1,198
Operating margin, %	12.8	11.7	13.9	12.8	11.0
Return on equity, %	22.2	22.2	38.7	31.4	24.8
Equity/assets ratio, %	42	41	40	40	38
Earnings per share, SEK	22.50	20.60	31.00	21.20	15.50
Dividend per share, SEK	12.50 1)	12.00	11.00	9.50	8.25
Number of available building rights	35,900	35,900	34,800	32,500	31,100
Number of residential units sold	3,595	2,463	3,100	3,843	3,770
Number of housing starts	3,269	3,135	3,873	4,187	3,731
Number of residential units in current production	7,813	7,835	8,200	7,984	7,212

1) Proposal by the Board of Directors.

Group quarterly overview

ACCORDING TO SEGMENT REPORTING, SEK M	2019				2018
INCOME STATEMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	4,311	3,768	3,944	3,669	4,150	3,832	4,125	4,054
Production and operating costs	–3,520	–3,108	–3,212	–3,154	–3,456	–3,202	–3,324	–3,265
Gross profit	791	660	732	515	694	630	801	789
Selling and administrative expenses	–254	–212	–260	–240	–254	–218	–297	–272
Gains/losses on the sale of property	22	182	34	38	3	–1	0	11
Operating profit	559	630	506	313	443	411	504	528
Financial income and expenses	–18	–22	–18	–22	–13	–21	–19	–16
Profit before tax	541	608	488	291	430	390	485	512
Taxes	–99	–94	–102	–63	–71	–87	–108	–113
Profit for the period	442	514	386	228	359	303	377	399
BALANCE SHEET	12/31	9/30	6/30	03-31	12/31	9/30	6/30	03-31
ASSETS
Non-current assets	219	221	221	220	214	221	226	221
Project properties	1,399	1,286	1,865	1,743	1,635	1,423	1,335	1,193
Development properties	8,938	9,170	8,983	8,911	8,306	8,509	8,869	8,607
Participations in tenant-owners associations, etc.	366	422	296	434	567	224	322	309
Current receivables	4,274	4,013	3,993	4,040	4,083	3,904	3,813	3,828
Cash and cash equivalents	2,397	1,955	1,168	2,150	1,682	1,854	2,078	2,564
Total current assets	17,374	16,846	16,305	17,278	16,273	15,914	16,417	16,501
Total assets	17,593	17,067	16,526	17,498	16,487	16,135	16,643	16,722
EQUITY AND LIABILITIES
Equity	7,326	6,866	6,597	7,083	6,798	6,520	6,285	6,664
Non-current interest-bearing liabilities	425	418	314	171	146	204	255	220
Other non-current liabilities	765	798	770	770	696	700	686	700
Non-current provisions	3,223	3,652	3,296	3,128	3,037	2,994	2,850	2,846
Total non-current liabilities	4,413	4,868	4,380	4,069	3,879	3,898	3,791	3,766
Current interest-bearing liabilities	690	741	502	688	694	816	762	336
Other current liabilities	5,030	4,448	4,904	5,529	4,994	4,780	5,682	5,831
Current provisions	134	144	143	129	122	121	123	125
Total current liabilities	5,854	5,333	5,549	6,346	5,810	5,717	6,567	6,292
Total equity and liabilities	17,593	17,067	16,526	17,498	16,487	16,135	16,643	16,722
CASH FLOW STATEMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
From operating activities	474	446	–97	468	–17	–234	–204	–18
From investing activities	–2	–6	–1	2	–8	3	–2	–1
From financing activities	–28	349	–888	–9	–138	11	–286	1
Total cash flow for the period	444	789	–986	461	–163	–220	–492	–18
Cash and cash equivalents at end of period	2,397	1,955	1,168	2,150	1,682	1,854	2,078	2,564
INTEREST-BEARING NET LIABILITIES/RECEIVABLES	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Interest-bearing net liabilities(+)/receivables(–) at beginning of period	951	1,155	130	546	541	240	–748	–790
Change in interest-bearing net liabilities/receivables	–531	–204	1,025	–416	5	301	988	42
Interest-bearing net liabilities(+)/receivables(–) at end of period	420	951	1,155	130	546	541	240	–748
DEVELOPMENT PROPERTIES	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	9,170	8,983	8,911	8,306	8,509	8,869	8,607	7,543
New purchases	285	581	142	737	154	191	661	1,396
Transferred to production	–458	–354	–77	–179	–219	–512	–411	–375
Other	–59	–40	7	47	–138	–39	12	43
Carrying amount at end of period	8,938	9,170	8,983	8,911	8,306	8,509	8,869	8,607
KEY RATIOS	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	13.0	16.7	12.8	8.5	10.7	10.7	12.2	13.0
Debt/equity ratio, multiple	0.1	0.1	0.2	0.0	0.1	0.1	0.0	-
Equity/assets ratio, %	42	40	40	40	41	40	38	40
Earnings per share, SEK	6.30	7.40	5.50	3.30	5.20	4.30	5.40	5.70
Number of available building rights	35,900	36,400	36,500	36,400	35,900	36,700	36,000	34,900
Number of residential units sold	941	1,106	881	667	751	613	619	480
Number of housing starts	1,107	797	959	406	1,038	680	847	570
Number of residential units in current production	7,813	8,033	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	Q4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,551	1,259	1,330	1,435	1,352	1,429	1,530	1,475
Operating profit 1)	262	209	216	229	232	233	250	274
Operating margin, %	16.9	16.6	16.2	16.0	17.2	16.3	16.3	18.6
Average operating capital	5,811	5,802	5,754	5,668	5,447	5,139	4,919	4,663
Return on operating capital, %2)	15.8	15.3	15.8	16.7	18.2	22.5	25.5	29.3
Operating cash flow	598	321	–85	284	–61	187	285	–77
Carrying amount, development properties	4,949	5,049	5,132	5,042	5,048	5,002	5,185	5,229
Number of available building rights	12,800	13,000	13,500	13,400	13,400	13,500	13,600	13,300
Number of residential units sold	353	261	268	238	286	223	225	117
Number of housing starts	336	278	286	89	195	207	240	215
Number of residential units in current production	3,171	3,112	3,001	3,042	3,115	3,447	3,387	3,510
1) Of which property sales	-	0	-	-	-	-	0	-
JM RESIDENTIAL SWEDEN	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,185	974	1,199	1,110	1,202	920	1,065	1,269
Operating profit 1)	189	157	193	180	201	156	181	213
Operating margin, %	15.9	16.1	16.1	16.2	16.7	17.0	17.0	16.8
Average operating capital	1,183	1,164	1,096	1,042	1,008	1,000	949	897
Return on operating capital, %2)	60.8	62.8	66.6	68.9	74.5	73.1	76.3	80.0
Operating cash flow	287	127	78	65	186	44	260	232
Carrying amount, development properties	1,461	1,545	1,549	1,559	1,388	1,404	1,476	1,394
Number of available building rights	10,500	10,500	10,500	10,500	10,500	10,400	10,300	10,200
Number of residential units sold	313	284	244	243	239	227	207	244
Number of housing starts	291	289	244	271	260	230	267	286
Number of residential units in current production 1) Of which property sales	1,994 -	2,426 -	2,366 -	2,547 -	2,418 1	2,471 -	2,280 -	2,210 0
JM INTERNATIONAL	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,275	981	905	860	1,094	912	864	710
Operating profit 1)	116	75	66	98	110	85	83	53
Operating margin, %	9.1	7.6	7.3	11.4	10.1	9.3	9.6	7.5
Average operating capital	3,229	3,064	2,967	2,888	2,723	2,580	2,444	2,273
Return on operating capital, %2)	11.0	11.4	12.1	13.0	12.2	11.8	11.6	11.7
Operating cash flow	–239	–460	133	127	164	–48	–249	92
Carrying amount, development properties	2,497	2,538	2,261	2,261	1,821	2,054	2,156	1,932
Carrying amount, project properties	5	5	5	5	4	5	5	8
Number of available building rights	11,800	12,100	11,700	11,700	11,200	12,100	11,400	10,600
Number of residential units sold 3)	275	185	369	186	226	163	187	119
Number of housing starts 4)	480	230	286	46	391	243	212	69
Number of residential units in current production	2,048	1,759	1,726	1,660	1,709	1,644	1,466	1,399
1) Of which property sales	-	-	-	38	2	–1	0	11
3) Of which residential units to investors 4) Of which residential units to investors	44 44	- -	182 182	- -	- -	- -	- -	- -
JM PROPERTY DEVELOPMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	40	134	29	24	24	19	15	15
Operating profit 1)	3	179	6	6	5	4	–1	2
Average operating capital	1,570	1,574	1,583	1,447	1,314	1,160	1,036	910
Return on operating capital, %2)	12.4	12.5	1.3	1.0	0.8	0.7	0.4	2.4
Operating cash flow	–112	778	–116	–96	–210	–82	–156	–109
Carrying amount, development properties	10	10	10	10	10	10	10	10
Carrying amount, project properties	1,394	1,281	1,860	1,738	1,631	1,418	1,330	1,185
Number of available building rights 3)	800	800	800	800	800	700	700	800
Number of residential units sold 3)	-	376	-	-	-	-	-	-
Number of housing starts 3)	-	-	143	-	192	-	128	-
Number of residential units in current production 3)	600	736	736	593	593	681	681	553
1) Of which property sales	-	170	-	-	-	-	-	-
3) Refers to rental units and residential care units.
JM CONSTRUCTION	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue Operating profit 1)	347 0	482 14	550 34	312 –189	586 –95	663 –61	769 0	698 0
Operating margin, %	0.0	2.9	6.2	–60.6	–16.2	–9.2	0.0	0.0
Operating cash flow	–1	–80	–107	242	–41	–49	60	–154
1) Of which sale of properties and operations	22	12	34	-	-	-	-	-
JM OTHER	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination) Operating profit (Group-wide expenses)	–87 –11	–62 –4	–69 –9	–72 –11	–108 –10	–111 –6	–118 –9	–113 –14

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

Group – IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–DECEMBER	OCTOBER–DECEMBER
ACCORDING TO IFRS, SEK M	2019	2018	2019	2018
Revenue	15,605	15,680	3,864	4,206
Production and operating costs	–12,750	–12,776	–3,084	–3,476
Gross profit	2,855	2,904	780	730
Selling and administrative expenses	–979	–1,041	–257	–254
Gains/losses on the sale of property 1)	106	13	22	3
Operating profit	1,982	1,876	545	479
Financial income and expenses	–100	–69	–22	–13
Profit before tax	1,882	1,807	523	466
Taxes	–356	–384	–96	–80
Profit for the period	1,526	1,423	427	386
Other comprehensive income
Items that will be reclassified as income
Translation differences from the translation of foreign operations	41	30	–36	–74
Items that will not be reclassified as income
Restatement of defined-benefit pensions	–317	–105	75	–1
Tax attributable to other comprehensive income	65	15	–16	1
Comprehensive income for the period	1,315	1,363	450	312
Net profit for the period attributable to shareholders of the Parent Company	1,526	1,423	427	386
Comprehensive income for the period is attributable to shareholders of the Parent Company	1,315	1,363	450	312
Earnings per share 2), basic, is attributable to shareholders of the
Parent Company, SEK	21.90	20.50	6.10	5.60
Earnings per share 2), diluted, is attributable to shareholders of the
Parent Company, SEK	21.90	20.40	6.10	5.50
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	69,985,557	69,865,418	70,046,214	69,950,321
1) Of which sale of operations	15	-	15	-

2) Net profit for the period.

CONDENSED CONSOLIDATED BAL ANCE SHEET

ACCORDING TO IFRS, SEK M	12/31/2019	12/31/2018
ASSETS1)
Non-current assets	419	214
Project properties	1,399	1,635
Development properties	8,938	8,306
Utilization of site leasehold rights	650	-
Participations in tenant-owners associations, etc.	366	567
Work in progress	3,781	2,958
Current receivables	5,022	5,286
Cash and cash equivalents	2,397	1,682
Total current assets	22,553	20,434
Total assets	22,972	20,648
EQUITY AND LIABILITIES2) 3) 4) 5)
Equity	7,126	6,644
Non-current interest-bearing liabilities	1,359	146
Other non-current liabilities	765	696
Non-current provisions	3,187	3,004
Total non-current liabilities	5,311	3,846
Current interest-bearing liabilities	5,320	4,968
Other current liabilities	5,081	5,068
Current provisions	134	122
Total current liabilities	10,535	10,158
Total equity and liabilities	22,972	20,648
Pledged assets	475	476
Contingent liabilities	9,547	8,693
1) Of which right-of-use offices and cars	200	-
2) Of which project financing JM International	3,093	2,340
3) Of which project financing JM Residential Stockholm and JM Residential Sweden	1,693	2,003
4) Of which liabilities for property acquisition	949	1,040
5) Of which current and non-current interest-bearing leasing liabilities	852	-

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–DECEMBER
ACCORDING TO IFRS, SEK M	2019	2018
Opening balance at beginning of period	6,644	6,043
Total comprehensive income for the period	1,315	1,363
Dividend	–835	–765
Equity component of convertible debentures	2	3
Closing balance at end of period	7,126	6,644

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	JANUARY–DECEMBER		OCTOBER–DECEMBER
ACCORDING TO IFRS, SEK M	2019	2018	2019	2018
Cash flow from operating activities before change in working capital
and taxes	1,129	317	–9	–242
Paid tax	–433	–697	–67	–115
Investment in development properties, etc. 1)	–3,799	–3,728	–806	–1,001
Payment on account for development properties, etc.2)	2,808	1,685	748	601
Investment in project properties	–426	–524	–111	–200
Sale of project properties	105	2	0	-
Change in current liabilities/receivables	–787	–670	42	385
Cash flow from operating activities 3)	–1,403	–3,615	–203	–572
Cash flow from investing activities	–7	–8	–2	–8
Loans raised	658	623	122	39
Amortization of debt	–502	–270	–176	–177
Loans raised, project financing 3)	3,922	4,398	1,208	1,055
Amortization of debt, project financing 3)	–1,125	–1,256	–505	–500
Dividend	–835	–765	-	-
Cash flow from financing activities	2,118	2,730	649	417
Cash flow for the period	708	–893	444	–163
Cash and cash equivalents at end of period	2,397	1,682	2,397	1,682
1) Of which investment in participations in tenant-owners associations and freehold residential units	–1,980	–1,537	–420	–837
2) Of which the sale of participations in tenant-owners associations and freehold residential units	2,271	1,141	540	438

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 in- or outpayments, and when the debt is settled the cash flow statement is not affected, either as a negative item (amortization) in the financing activities or as a positive item in the operating activities.

ACCOUNTING PRINCIPLES

This year-end report and interim report for Q4 2019 were prepared in accordance with IAS 34 Interim Financial Reporting and the 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 2019 has resulted in rightof-use assets in the balance sheet of SEK 850m. The 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 and balance sheet for 2019 and the fourth quarter are presented on Page 22. 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 primarily 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

The report for the first six months of 2019 described the ongoing investigation and the preliminary assessment from Finansinspektionen (FI) that tenant-owner associations cannot be considered independent from an IFRS perspective. JM does not share FI's preliminary assessment and submitted a written response at the end of June stating that the tenant-owners associations are independent and they should not be consolidated.

On January 29, 2020, JM received a new letter entitled "Request for opinion," in which FI's preliminary assessment continues to be that tenant-owners associations cannot be considered independent from an IFRS perspective. JM will respond to FI's letter and continues to consider tenant-owners associations to be independent and that they should not be consolidated.

As at December 31, 2018, JM estimated that a restatement based on FI's preliminary assessment means that equity would be SEK 0.7bn lower. The effect on equity on December 31, 2019, is estimated to be of the same order of magnitude.

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. An accounting revision in line with FI's preliminary assessment does not affect JM's segment reporting, project governance or business 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

ACCORDING TO IFRS, SEK M	JANUARY–DECEMBER	OCTOBER–DECEMBER
	2019	2019
Production and operating costs	30	5
Selling and administrative expenses	–13	–3
Operating profit	17	2
Financial income and expenses	–20	–4
Profit before tax	–3	–2
Taxes	1	1
Profit for the period	–2	–1

ACCORDING TO IFRS, SEK M	12/31/2019	1/1/2019
Non-current assets	200	275
Current assets	650	278
Total assets	850	553
Equity	–2	-
Non-current interest-bearing liabilities	822	553
Current interest-bearing liabilities	30	-
Total equity and liabilities	850	553

Parent Company

CONDENSED INCOME STATEMENT, PARENT COMPANY

SEK M	JANUARY–DECEMBER
	2019	2018
Net sales	10,294	10,397
Production and operating costs	–8,021	–8,025
Gross profit	2,273	2,372
Selling and administrative expenses	–652	–717
Gains/losses on the sale of property	0	-
Operating profit	1,621	1,655
Financial income and expenses	151	46
Profit before appropriations and tax	1,772	1,701
Appropriations	–221	–175
Profit before tax	1,551	1,526
Taxes	–292	–323
Profit for the period	1,259	1,203

CONDENSED PARENT COMPANY BALANCE SHEET

SEK M	12/31/2019	12/31/2018
Assets
Non-current assets	1,680	1,483
Current assets	13,100	13,145
Total assets	14,780	14,628
Equity and liabilities
Equity	3,916	3,490
Untaxed reserves	2,380	2,390
Provisions	1,453	1,583
Non-current liabilities	803	722
Current liabilities	6,228	6,443
Total equity and liabilities	14,780	14,628
Pledged assets	169	169
Contingent liabilities	10,263	8,785

Reconciliation between segment reporting and IFRS

CONSOLIDATED INCOME STATEMENT

	JANUARY–DECEMBER		OCTOBER–DECEMBER
SEK M	2019	2018	2019	2018
Revenue for the period (segment reporting)	15,692	16,161	4,311	4,150
Restatement JM International	–816	–481	–446	56
Reclassification property sale	–729	-	–1	-
Revenue for the period (IFRS)	15,605	15,680	3,864	4,206
Operating profit/loss for the period (segment reporting)	2,008	1,886	559	443
Restatement JM International	–43	–10	–16	36
Leases IFRS 16	17	-	2	-
Operating profit/loss for the period (IFRS)	1,982	1,876	545	479
Profit/loss for the period (segment reporting)	1,570	1,438	442	359
Restatement JM International	–42	–15	–14	27
Leases IFRS 16	–2	-	–1	-
Profit/loss for the period (IFRS)	1,526	1,423	427	386

CONSOLIDATED BAL ANCE SHEET

SEK M	12/31/2019	12/31/2018
Balance sheet total (segment reporting)	17,593	16,487
Restatement JM International	–257	–182
Reclassification project financing JM International, interest-bearing	2,705	1,884
Reclassification project financing JM International, non-interest-bearing 1)	388	456
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	2,007	2,390
Transfer between Progress billing in excess of recognized revenue to Revenue less progress billings	–314	–387
Leases IFRS 16	850	-
Balance sheet total (IFRS)	22,972	20,648

1) Billing on account to customers.

CONSOLIDATED EQUITY

SEK M	12/31/2019	12/31/2018
Equity (segment reporting)	7,326	6,798
Restatement JM International	–198	–154
Leases IFRS 16	–2	-
Equity (IFRS)	7,126	6,644

GROUP KEY FIGURES

%	12/31/2019	12/31/2018
Equity/assets ratio (segment reporting)	42	41
Equity/assets ratio (IFRS)	31	32

CONSOLIDATED CASH FLOW

	JANUARY–DECEMBER		OCTOBER–DECEMBER
SEK M	2019	2018	2019	2018
Cash flow from operating activities (segment reporting)	1,291	–473	474	–17
Reclassification project financing JM International	–776	–466	–364	230
Reclassification project financing JM Residential Stockholm and Sweden, interest
bearing	–2,021	–2,676	–339	–785
Leases IFRS 16	103	-	26	-
Cash flow from operating activities (IFRS)	–1,403	–3,615	–203	–572

CONSOLIDATED INTEREST- BEARING NET LIABILITIES/RECEIVABLES

SEK M	12/31/2019	12/31/2018
Interest-bearing net liabilities (+)/receivables (–) at end of period (segment
reporting)	420	546
Reclassification project financing JM International	2,705	1,884
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	2,007	2,390
Leases IFRS 16	852	-
Interest-bearing net liabilities (+)/receivables (–) at end of period (IFRS)	5,984	4,820

Stockholm, January 31, 2020 JM AB (publ)

Johan Skoglund President and CEO

This year-end 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.

DISCLOSURES

This information is information that JM AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 08.00 CEST on January 31, 2020.

FOR MORE INFORMATION PLEASE CONTACT:

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

FINANCIAL CALENDAR

March 26, 2020	Annual General Meeting
April 28, 2020	Interim Report January - March
July 14, 2020	Interim Report January - June
October 22, 2020	Interim Report January - September

PRESS RELEASES, Q4 2019

December 13	JM Construction selling property in Värmdö, Stockholm
	November 25 JM Construction selling property in Sollentuna,
	Stockholm
October 24	Interim Report January – September 2019

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