JM — Interim / Quarterly Report 2020

Feb 3, 2021

Year-end Report January–December 2020

JM GROUP

STRONG END TO 2020

JANUARY–DECEMBER 2020

Revenue amounted to SEK 15,388m (15,692), and revenue excluding JM Construction, Business area Construction (under closure), amounted to SEK 15,232m (15,438).

Operating profit amounted to SEK 2,028m (2,008) 1). The operating margin was 13.2 percent (12.8). Operating profit excluding JM Construction, Business area Construction, amounted to SEK 2,051m (2,243) and the operating margin to 13.5 percent (14.5).

Gains from sale of properties, etc., of SEK 191m (276) are included in the operating profit.

Profit before tax amounted to SEK 1,955m (1,928). Profit after tax amounted to SEK 1,575m (1,570).

Return on equity for the past twelve months decreased to 20.8 percent (22.2). Earnings per share during the year amounted to SEK 22.50 (22.50).

Consolidated cash flow including net investment in properties amounted to SEK 1,715m (1,291).

The number of sold residential units increased to 4,026 (3,595) and housing starts amounted to 3,199 (3,269).

1) The profit included the one-off cost for the discontinuation of the housing operations (Business area Construction) in JM Construction of SEK −180m reported during the first quarter of 2019.

Surplus value of development properties is SEK 6.5bn (6.7).

The Board of Directors proposes SEK 12.75 (12.50) in dividend for 2020.

The Board of Directors proposes a mandate to buy back own shares.

The Board of Directors decided on amended financial targets.

OCTOBER–DECEMBER 2020

Revenue increased to SEK 4,530m (4,311).

Operating profit increased to 789 percent (559). The operating margin increased to 17.4 percent (13.0).

Gains from sale of properties, etc., of SEK 172m (22) are included in the operating profit

Profit before tax increased to SEK 770m (541). Profit after tax increased to SEK 643m (442).

Consolidated cash flow including net investment in properties was SEK 1,288m (474).

The number of residential units sold increased to 1,623 (941), and housing starts were 976 (1,107).

		OCTOBER–DECEMBER
2020	2019	2020	2019
			4,311
15,232	15,438	4,501	4,279
2,028	2,008	789	559
2,051	2,243	788	587
13.2	12.8	17.4	13.0
13.5	14.5	17.5	13.7
1,955	1,928	770	541
1,715	1,291	1,288	474
20.8	22.2
47	42
22.50	22.50	9.20	6.30
4,026	3,595	1,623	941
3,199	3,269	976	1,107
7,976	7,813
16,291	15,605	5,469	3,864
2,018	1,982	759	545
22.00	21.90	8.60	6.10
418	376	418	–
170	226	–	44
			– 44
	15,388 – 170	JANUARY–DECEMBER 15,692 143 226	4,530 – –

For the Group's income statement and balance sheet in accordance with IFRS, IFRS 15 Revenue from Contracts with Customers is applied, which means that revenue and profit/ loss from JM's operations outside of Sweden, JM International, are reported according to the completed contract method. Segment reporting and project management are reported according to the percentage of completion method. The Group's calculations according to IFRS are presented on pages 21–22.

For definitions of key financial figures, see "Definitions Key Financial Figures" at jm.se/investors. Unless otherwise specified, the analysis and comments in this Year-End Report are based on JM's segment reporting.

Cover photo: Sofia Södra, Stockholm

Group

A WORD FROM THE CEO

STRONG END TO 2020

We had a strong end to the year, with very good sales in all our markets. This, in turn, enabled a good level of housing starts, in line with our strategy to safeguard production capacity during the pandemic. Our digital solutions in our interaction with customers continued to work very well. Operating profit and cash flow were strengthened during the fourth quarter by establishing a joint venture between JM, the Swedish Foundation for Strategic Research and the Knowledge Foundation for the long-term management of rental housing and through the transfer of completed properties. The structure allows for capital-efficient expansion in this part of our business as new business opportunities arise.

The supply of newly produced residential units on the market continued to decrease in Stockholm in Q4 2020, and it increased slightly in the rest of Sweden. The transaction volume increased during the same period.

We assess the underlying demand for housing to continue to be good on our markets. The reservation and sales level is high in the current production of residential units on all our markets. This continues to provide good conditions for housing starts and stable cash flow moving forward. Assuming that the market continues to be positive, we consider there to be a good possibility of achieving a higher level of housing starts in 2021 compared to 2020 based on the planning conditions in the building rights portfolio.

STRONG SALES AND GOOD LEVEL OF HOUSING STARTS IN STOCKHOLM

We have seen a continued recovery in demand from customers in Stockholm in the fourth quarter after an earlier negative impact from COVID-19. We experience good demand for the freehold apartments we have in current production.

Sales in Stockholm have been strong with 474 residential units sold in the fourth quarter compared to 299 in the third quarter.

The housing business in Stockholm continued to have good profitability and a stable level of housing starts during the fourth quarter as a result of the strong sales. The operating margin, however, is somewhat negatively impacted by the lower start and price levels for projects started in 2018–2019.

STRONG SALES AND GOOD LEVEL OF HOUSING STARTS IN THE REST OF SWEDEN, NORWAY AND FINLAND

The housing business in the rest of Sweden showed good sales, profitability, and housing starts during the fourth quarter. The market was less affected in 2020 by COVID-19 than Stockholm and continued to have good demand throughout the fourth quarter. Sales in the rest of Sweden have been strong with 380 residential units sold in the fourth quarter compared to 250 in the third quarter.

In Norway, activity on the housing market recovered in the fourth quarter in relation to the previous cautiousness attributable to COVID-19.

The housing market recovered in Finland as well.

REDUCED UNCERTAINTY CONNECTED TO COVID-19

COVID-19 and its effects created uncertainty and risks during the first half of 2020. Demand has clearly improved during the second half of the year. This, combined with continued limited disruptions in terms of staffing and supplier chains, means that the risk level in JM's business is judged to have decreased going into 2021. At the same time we have contingency plans in place if the COVID-19 situation were to deteriorate. The business is aligned on an ongoing basis within the framework of our business model, which has good adaptability.

GOOD PROJECT PORTFOLIO AND STRONG FINANCIAL POSITION RAISES THE LEVEL OF AMBITION

We are well-positioned with a good project portfolio which is continuously developed for the housing of the future at the same time as our strong financial position allows us freedom of action. The balance sheet enables both growth in JM's business, stable dividends and a resumed mandate to repurchase shares. The fundamental and long-term conditions continue to be favorable for a positive development of our business. With the goal of further supporting balanced growth in the business and earnings per share, we have also opted to update and supplement our financial targets for 2021. Despite 2020 being a very special year, I am very pleased and proud of the Group's performance during the year and expect a good development in 2021 as well.

Johan Skoglund, President and CEO

"We had a strong end to the year, with very good sales in all our markets. This, in turn, also made it possible to achieve a good level of housing starts"

MARKET, SALES AND HOUSING STARTS

JANUARY–DECEMBER 2020

The housing market in Stockholm has clearly recovered during the fourth quarter with an increase in the level of residential units sold. Profitability continued to be good, and housing starts in the quarter have a normal level of reservations.

The housing business in the rest of Sweden showed good profitability with good sales and housing starts in a stable market.

In Norway, activity on the housing market increased during the quarter. The housing market recovered in Finland as well.

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 4,026 (3,595)1) 2). The percentage of sold and reserved homes in relation to current production amounts to 74 percent (65), with an interval of 60–65 percent considered normal. JM Residential Stockholm sold 1,340 residential units (1,120), JM Residential Sweden sold 1,208 (1,084), JM International sold 1,060 (1,015) and JM Property Development sold 418 (376).

The number of housing starts was 3,199 (3,269)3) 4). JM Residential Stockholm started production on 1,032 residential units (989), JM Residential Sweden on 1,072 (1,095), JM International on 1,095 (1,042) and JM Property Development on 0 (143).

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

The number of residential units in current production amounted to 7,976 (7,813), of which 463 are rental units (600) in JM Property Development.

1) Of which 418 rental units (376) in JM Property Development

2) Of which 170 residential units (226) in JM International and JM Residential Sweden to investors

3) Of which 0 rental units (143) in JM Property Development

4) Of which 170 residential units (226) in JM International and JM Residential Sweden to investors

REVENUE, OPERATING PROFIT AND OPERATING MARGIN

JANUARY–DECEMBER 2020

Consolidated revenue according to segment reporting for the year amounted to SEK 15,388m (15,692). Revenue restated according to IFRS increased to SEK 16,291m (15,605).

Operating profit according to segment reporting amounted to SEK 2,028m (2,008), and the operating margin was 13.2 percent (12.8). Operating profit restated according to IFRS amounted to SEK 2,018m (1,982). The restatement is related to JM International, with an effect on earnings of SEK −37m(−43) and leases according to IFRS 16 with a positive effect on earnings of SEK 27m (17). Profit for 2019 included a loss in JM Construction of SEK −141m that was primarily attributable to the discontinuation of the housing operations.

Revenue excluding JM Construction Business area Construction decreased to SEK 15,232m (15,438), operating profit to SEK 2,051m (2,243), and the operating margin to 13.5 percent (14.5).

During the year, properties were sold for SEK 1,078m (923) with gains of SEK 187m (261).

Rental income from JM's project properties amounted to SEK 80m (86). Net rental income was SEK 57m (58).

JM has not received government support attributable to COVID-19 other than the general reduction in employer's contributions and sick pay costs of around SEK 12m, where the effect has been allocated throughout the year.

OCTOBER–DECEMBER 2020

Consolidated revenue according to segment reporting for the fourth quarter increased to SEK 4,530m (4,311). Revenue restated according to IFRS increased to SEK 5,469m (3,864).

Operating profit according to segment reporting increased to SEK 789m (559), and the operating margin increased to 17.4 percent (13.0). Operating profit restated according to IFRS increased to SEK 759m (545). The restatement is related to JM International, with an effect on earnings of SEK −37m(−16) and leases according to IFRS 16 with a positive effect on earnings of SEK 7m (2).

Properties were sold during the fourth quarter for SEK 1,045m (23), with gains of SEK 168m (7).

Rental income from JM's project properties amounted to SEK 20m (18). Net rental income was SEK 14m (12).

1) According to segment reporting

4

OPERATING PROFIT BY BUSINESS SEGMENT, SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
JM Residential Stockholm	926	916	299	262
JM Residential Sweden	657	719	181	189
JM International	276	355	136	116
JM Property Development	178	194	178	3
JM Construction	31	−141	8	0
Group-wide expenses	−40	−35	−13	−11
Total	2,028	2,008	789	559
Of which sale of properties and operations	187	276	168	22
Of which income from joint venture	4	–	4	–

OPERATING MARGIN BY BUSINESS SEGMENT, %		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
JM Residential Stockholm	14.6	16.4	14.8	16.9
JM Residential Sweden	15.7	16.1	15.9	15.9
JM International	7.4	8.8	12.3	9.1
JM Construction	2.5	−8.3	2.6	0.0

	JANUARY–DECEMBER		OCTOBER–DECEMBER
OPERATING PROFIT, SEK M	2020	2019	2020	2019
Operating profit excluding JM Construction, Business area Construction	2,051	2,243	788	587
Operating margin excluding JM Construction, Business area Construction, %	13.5	14.5	17.5	13.7
Operating profit JM Construction, Business area Construction	−23	−235	1	−28
Operating profit, total	2,028	2,008	789	559

RESIDENTIAL UNITS IN CURRENT PRODUCTION	12/31/2020	12/31/2019
Number of residential units in current production 1) 2)	7,976	7,813
Percentage of sold residential units in current production, % 3)	60	53
Percentage reserved residential units in current production, %	14	12
Percentage sold and reserved residential units in current production, %	74	65
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	463	600
Including residential units in projects where costs incurred are only reported as project properties under construction	320	457
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.

12/31/2020	12/31/2019
143	157
85	82

1) After final occupancy according to plan.

RESIDENTIAL BUILDING RIGHTS JANUARY–DECEMBER 2020

The number of available building rights at the end of the year increased to 37,800 (35,900), of which 20,400 (21,100) are recognized in the balance sheet. The increase in available building rights is primarily attributable to JM Finland. Capital tied up in building rights (development properties in the balance sheet) for residential units decreased to SEK 7,815m (8,917).

The valuation of JM's total development properties with a carrying amount of SEK 7.8bn (8.9) shows a surplus value of SEK 6.5bn (6.7). This valuation was carried out in cooperation with an independent appraisal company.

JM acquired development properties for residential units during the year for SEK 1,022m (1,745), of which SEK 617m relates to JM Residential Stockholm, SEK 278m to JM Residential Sweden and SEK 127m to JM International.

PROJECT PROPERTIES

The externally appraised market value of JM's project properties was calculated to be SEK 1,651m (1,769) with a book value of SEK 1,246m (1,399).

year attributable to somewhat lower average interest-bearing liabilities and lower average interest rates.

The total interest-bearing liabilities according to segment reporting was SEK 2,737m (2,817), of which the provision for pension liabilities comprised SEK 1,804m (1,702). At the end of the fourth quarter, the average interest rate for the total interest-bearing loan stock including pension liabilities was 1.5 percent (2.0). The average term for fixed-rate loans excluding the pension liability was 0.5 years(0.2).

Consolidated available liquidity increased to SEK 5,837m (5,197). Aside from cash and cash equivalents of SEK 3,037m (2,397), 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 3.1 years (3.3).

Interest-bearing net receivables including the pension liability according to segment reporting totaled SEK 300m (−420) at the end of the period. Non-interest-bearing liabilities for completed property acquisitions amounted to SEK 435m (929). Of these liabilities, SEK 64m (164) were current.

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

FINANCIAL ITEMS

6

JANUARY–DECEMBER 2020

Net financial items improved somewhat compared to the previous

		MARKET VALUE CARRYING AMOUNT		MARKET VALUE CARRYING AMOUNT
DEVELOPMENT PROPERTIES (RESIDENTIAL UNITS) SEK BN	12/31/2020	12/31/2020	12/31/2019	12/31/2019
JM Residential Stockholm	8.8	4.2	9.8	4.9
JM Residential Sweden	2.6	1.5	2.5	1.5
JM International	2.9	2.1	3.3	2.5
Total	14.3	7.8	15.6	8.9

ACCORDING TO SEGMENT REPORTING, SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Financial income	6	6	1	3
Financial expenses	−79	−86	−20	−21
Financial income and expenses	−73	−80	−19	−18

ACCORDING TO SEGMENT REPORTING, SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Interest-bearing net liabilities(+)/receivables(−) at beginning of period	420	546	409	951
Change in interest-bearing net liabilities/receivables	−720	−126	−709	−531
Interest-bearing net liabilities(+)/receivables(−) at end of period	−300	420	−300	420

CASH FLOW JANUARY–DECEMBER 2020

Cash flow from operating activities according to segment reporting was SEK 1,715m (1,291). Net investments in development properties resulted in a positive cash flow of SEK 481m (−540). The increased holdings of repurchased residential units resulted in a cash flow of SEK −77m (291). Consolidated cash flow attributable to project properties (sales minus investment) during the year was SEK 369m (439).

OCTOBER–DECEMBER 2020

Cash flow from operating activities was SEK 1,288m (474) during the fourth quarter. Net investments in development properties resulted in a cash flow of SEK 288m (123), where payments for previously acquired development properties amounts to around SEK 309m. The decreased holdings of repurchased residential units resulted in a cash flow of SEK 105m (120). Consolidated cash flow attributable to project properties (sales minus investment) amounted to SEK 735m (−111).

RISKS AND UNCERTAINTY FACTORS

JM's risks and risk management are presented in the 2019 Annual Report on pages 32–35 and 79. Aside from the uncertainty from COVID-19, no significant changes have occurred that have affected these reported risks.

COVID-19 and its effects have created uncertainty and risks for some time. However, JM stands strong in terms of both its business model and its finances. The percentage of reserved and sold residential units in current production is at a high level. This, together with very limited disruptions so far in terms of staffing and supplier chains, presents possibilities for keeping the business reasonably stable even during a period of a weaker market, and the risks are judged to have decreased going into 2021. At the same time we have contingency plans in place if the COVID-19 situation were to deteriorate.

JM's strategy during the COVID-19 period is to safeguard cash flows and production capacity.

OUTSTANDING SHARES

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

DIVIDEND

For 2020 the Board of Directors proposes a dividend of SEK 12.75 (12.50) per share, for a total of SEK 887m (870). The proposed record date for the dividend is Friday, March 26, 2021. If the Annual General Meeting resolves to adopt the proposal, the dividend will be sent on Wednesday, March 31, 2021. The Annual General Meeting will be held via absentee ballot pursuant to temporary legislation adopted as a result of the pandemic.

REPURCHASE OF OWN SHARES

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

AMENDED FINANCIAL TARGETS

JM is updating and establishing new financial targets that will go into effect on January 1, 2021, to more clearly support growth in the operations and a steady increase in earnings per share. The overall financial targets aim to provide balanced support for the long-term financial development within the Group and at the same time be adapted to the cyclical nature of the business.

• The target for the Group's operating margin is raised to be on average 12 percent, from the previous target of 10 percent. Gains from sale of property will continue to be included in the target for the operating margin. The increase in the target is an adjustment given the margin JM has realized for a long time and its assessed potential going forward.
• A return target is introduced where return on equity on average over time should be 25 percent. This new target is an adjustment given the return JM has realized for a long time and takes into consideration that the project development business continuously creates risk capital in the form of surplus values in project and development properties that are not reported in the balance sheet. The target also supports an optimal capital structure over time and greater earnings per share.
• A growth target is introduced where the average increase in the number of housing starts long-term should be 4 percent a year. The baseline is an annual rate of 3,800 housing starts, which is considered to correspond to the Group's current resource allocation based on the building rights portfolio and staffing.

The previous targets of an equity/assets ratio of 35 percent over a business cycle and a dividend pay-out ratio of 50 per cent of the Group's profit after tax over a business cycle are retained as benchmarks for the capital structure and dividend policy, respectively, but will not be defined as financial targets for Group governance.

PERSONNEL

The number of employees decreased at the end of the year to 2,530 (2,559). The number of wage-earners decreased to 966 (996) and the number of salaried employees was 1,564 (1,563). Current staffing is aligned with the current and increasing 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.

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 continued to increase during the fourth quarter. The total supply of residential units was normal, and the supply of newly produced residential units is still at a low level with a slight decrease during the quarter. The supply of newly produced homes in Stockholm is lower than compared to the corresponding period last year.

Competition and supply of well-situated land for residential purposes is considered to be normal. 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 with very good sales during the fourth quarter. The willingness of customers to sign a contract early in the process is at a normal level.

Due to continued demand for freehold apartments, we increased our focus on this form of tenure and started production on an additional 123 freehold apartments during the year.

In total, the number of residential units in current production amounts to 544.

No extraordinary measures have been needed during the fourth quarter due to COVID-19.

Profitability has remained good based on the good sales level. Revenue in the fourth quarter was strengthened by a high level of transferred land to projects. The operating margin, however, was somewhat negatively impacted by the lower start and price levels of projects during the period 2018–2019.

Cash flow during the year is in balance, given the decrease in development properties and payments related to the occupancy of previously acquired property.

Production was started in the fourth quarter on a total of 282 residential units in apartment buildings in Järfalla, Lidingö and Stockholm.

No building rights were acquired during the fourth quarter.

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Revenue	6,358	5,575	2,023	1,551
Operating profit 1)	926	916	299	262
Operating margin, %	14.6	16.4	14.8	16.9
Average operating capital	5,372	5,811
Return on operating capital, %	17.2	15.8
Operating cash flow	1,064	1,118	383	598
Carrying amount, development properties	4,246	4,949
Number of available building rights	12,500	12,800
Number of residential units sold	1,340	1,120	474	353
Number of housing starts	1,032	989	282	336
Number of residential units in current production	2,878	3,171
Number of employees	872	900
1) Of which property sales	–	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.

The average prices on the existing home market primarily remained the same during the fourth quarter in all of the business segment's submarkets.

The supply of new production in the fourth quarter increased slightly in most of the submarkets in the business segment compared to the third quarter. The supply of newly produced homes in Gothenburg and Malmö is significantly lower, and in Uppsala the supply is somewhat lower compared to the corresponding period last year.

Competition for land for residential purposes continued to be high in the fourth quarter for most of the business segment's submarkets.

Interest in JM's projects was strong in the fourth quarter with very good sales, and customers' willingness to sign a contract early in the process continues to be at a normal level.

No extraordinary measures have been needed during the quarter due to COVID-19.

Profits and margins decreased slightly compared to last year. Revenue in the fourth quarter was dampened by a low level of land transferred to projects.

Cash flow during the year is burdened by an increase in the working capital.

Production was started in the fourth quarter on 250 residential units in apartment buildings in Vellinge, Gothenburg and Uppsala. No building rights were acquired during the fourth quarter.

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Revenue	4,193	4,468	1,137	1,185
Operating profit 1)	657	719	181	189
Operating margin, %	15.7	16.1	15.9	15.9
Average operating capital	1,307	1,183
Return on operating capital, %	50.3	60.8
Operating cash flow	512	557	270	287
Carrying amount, development properties	1,451	1,461
Number of available building rights	9,900	10,500
Number of residential units sold 1)	1,208	1,084	380	313
Number of housing starts 2)	1,072	1,095	250	291
Number of residential units in current production	2,172	1,994
Number of employees	591	601
1) Of which residential units to investors 2) Of which residential units to investors	69 69	– –	– –	– –

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 is slightly lower than in the previous year. The profit and the margin excluding the sale of property amounted to SEK 277m (317) and 7.4 percent (7.8). The lower profit is primarily due to an adjustment of the Norwegian operations in the second quarter of 2020 to lower the cost level.

Cash flow was strengthened during the year by a reduction in development properties but at the same time was burdened by a slight increase in working capital.

No extraordinary measures have been needed during the fourth quarter due to COVID-19.

NORWAY

Prices on the existing home market have been increasing during the fourth quarter, and the activity level has been high.

JM Norway's revenue decreased to SEK 2,716m (3,186), and operating profit decreased to SEK 205m (298), including profit from property sales of SEK 1m (38). The operating margin decreased to 7.5 percent (9.4).

Good sales during the fourth quarter combined with positive revaluation effects strengthened operating profit and the operating margin after adjustments in previous quarters.

During the fourth quarter, 219 residential units (188) were sold, and production started on 277 residential units (289) in the Oslo region, Vestfold and Trondheim. The number of residential units in current production amounted to 1,369 (1,346). During the fourth quarter, 170 building rights (0) were acquired in Bergen and Oslo. Available building rights correspond to 8,500 residential units

(7,600).

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Revenue	3,747	4,021	1,102	1,275
- of which JM Norway	2,716	3,186	806	910
Operating profit 1)	276	355	136	116
- of which JM Norway	205	298	113	90
Operating margin, %	7.4	8.8	12.3	9.1
- of which JM Norway	7.5	9.4	14.0	9.9
Average operating capital	3,400	3,229
Return on operating capital, %	8.1	11.0
Operating cash flow	326	−439	106	−239
Carrying amount, development properties	2,108	2,497
Carrying amount, project properties	33	5
Number of available building rights	14,200	11,800
Number of residential units sold 2)	1,060	1,015	351	275
Number of housing starts 3)	1,095	1,042	444	480
Number of residential units in current production	2,463	2,048
Number of employees	530	518
1) Of which property sales	−1	38	−2	–
2) Of which residential units to investors	101	226	–	44
3) Of which residential units to investors	101	226	–	44

FINL AND

The housing market in the Helsinki region stabilized at a high level after a previous recovery. Customers are showing strong interest in JM's projects, and their willingness to convert reservations to contracts was at a normal level during the quarter.

JM Finland shows a stable earnings trend.

During the fourth quarter, 132 residential units (87) were sold, and production started on 167 residential units (191). Housing starts consist of residential units in apartment buildings in Helsinki and Esbo.

During the fourth quarter, production started on 78 residential units in a rental project in Villivadelma, Esbo, on JM's own balance sheet.

The number of residential units in current production amounted to 1,094 (702).

During the fourth quarter, 183 building rights (315) were acquired. Available building rights correspond to 5,700 residential units (4,200).

JM Property Development

The JM Property Development business segment primarily develops rental units, residential care units and commercial properties in Greater Stockholm. The business segment's entire portfolio comprises project development properties. The operations include JM@ home, which offers economic and technical management services to tenant-owners associations as well as housing services.

Business segment revenue decreased to SEK 169m (227), of which rental income was SEK 80m (86). Contracting revenue and sales of services amounted to SEK 89m (141). Operating profit amounted to SEK 178m (194).

The operating profit is burdened by start-up and development costs for the new business operations, JM@home.

Net rental income for project properties was SEK 57m (58), and profit from sales of property was SEK 170m (170).

Cash flow during the year has been positively impacted by cash received during the fourth quarter of net SEK 980m for the sale of properties and burdened otherwise by investments in project properties, including payment for the acquisition of the property for JM's new head office.

During the fourth quarter, JM created a new structure for the long-term management of rental housing and, in conjunction with this, transferred the rental properties Tjärtunnan and Alba Lilium in Stockholm and Alphyddan in Nacka, on land with leasehold rights and with a market value of SEK 1,060m, to a new joint venture company. In conjunction with the establishment of the new company and the transfer of properties, JM is realizing gains of SEK 170m and a cash flow of SEK 980m. JM owns 20 percent of the new company.

Three rental projects, of which two in JM's own balance sheet, are either in production or rented: Manegen, Täby, 128 rental units with occupancy in 2020 and planned completion in 2021; Havreflingan, Järfälla, 192 rental units with planned occupancy in 2021; and Valla Park, Sundbyberg, 143 rental units with planned occupancy and completion in 2022 and the transfer of legal title at completion.

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Revenue	169	227	57	40
Operating profit 1) 2)	178	194	178	3
Average operating capital	1,513	1,570
Return on operating capital, %	11.8	12.4
Operating cash flow	284	454	660	−112
Carrying amount, development properties	10	10
Carrying amount, project properties	1,213	1,394
Number of available building rights 3)	1,200	800
Number of residential units sold 3)	418	376	418	–
Number of housing starts 3)	–	143	–	–
Number of residential units in current production 3)	463	600
Number of employees	78	68
1) Of which property sales	170	170	170	–
2) Of which income from Joint venture	4	–	4	–

3) 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 excluding Business area Construction decreased due to lower external activity for JM in the civil engineering operations where profitability is prioritized over volume. The business segment focuses on projects that have synergies with residential project development.

The operating profit includes gains from property sales of SEK 18m (68).

The loss in 2019 of −141m was primarily due to the discontinuation of the housing operations.

All projects in Business area Construction have been completed and turned over to their respective buyers.

Increased operating capital had a negative impact on the cash flow.

In the fourth quarter, the business segment received a number of assignments in the civil engineering operations, of which the largest is the ground- and foundation works for new apartment buildings on Södermalm for the JM Residential Stockholm business unit.

The largest ongoing external assignments are the infrastructure project in Tyresö (Tyresö Municipality), groundworks for Arlanda Terminal 5 (IN3PRENÖR AB), and the restoration and renovation of existing road networks in Huddinge (Huddinge Municipality). The business segment also has several ongoing internal projects.

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Revenue 1)	1,253	1,691	307	347
- of which Business area Construction	156	254	29	32
Operating profit 2)	31	−141	8	0
- of which Business area Construction	−23	−235	1	−28
Operating margin, %	2.5	−8.3	2.6	0.0
- of which Business area Construction	−14.7	−92.5	3.7	−87.5
Operating cash flow	−65	54	9	−1
Carrying amount, development properties	16	21
Number of employees	257	283
1) Of which internal	332	290	96	87
2) Of which sale of properties and operations	18	68	–	22

Group − segment reporting

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–DECEMBER		OCTOBER–DECEMBER
ACCORDING TO SEGMENT REPORTING, SEK M	2020	2019	2020	2019
Revenue	15,388	15,692	4,530	4,311
Production and operating costs	−12,607	−12,994	−3,680	−3,520
Gross profit	2,781	2,698	850	791
Selling and administrative expenses	−944	−966	−233	−254
Gains/losses on the sale of property, etc. 1) 2)	191	276	172	22
Operating profit	2,028	2,008	789	559
Financial income and expenses	−73	−80	−19	−18
Profit before tax	1,955	1,928	770	541
Taxes	−380	−358	−127	−99
Profit for the period	1,575	1,570	643	442
Other comprehensive income	−215	−209	−95	18
Comprehensive income for the period	1,360	1,361	548	460
Earnings per share 3), diluted, SEK	22.50	22.50	9.20	6.30
Average number of shares, diluted	70,061,421	69,985,557	70,125,557	70,046,214
1) Of which sale of operations	–	15	–	15
2) Of which income from joint venture	4	–	4	–
3) Net profit for the period.

CONDENSED CONSOLIDATED BAL ANCE SHEET

ACCORDING TO SEGMENT REPORTING, SEK M	12/31/2020	12/31/2019
ASSETS
Non-current assets	278	219
Project properties	1,246	1,399
Development properties	7,831	8,938
Participations in tenant-owners associations, etc.	445	366
Current receivables 1)	3,828	4,274
Cash and cash equivalents	3,037	2,397
Total current assets	16,387	17,374
Total assets	16,665	17,593
EQUITY AND LIABILITIES2)
Equity	7,817	7,326
Non-current interest-bearing liabilities	354	425
Other non-current liabilities	372	765
Non-current provisions	3,290	3,223
Total non-current liabilities	4,016	4,413
Current interest-bearing liabilities	579	690
Other current liabilities	4,120	5,030
Current provisions	133	134
Total current liabilities	4,832	5,854
Total equity and liabilities	16,665	17,593
1) Of which receivables from property sales	1	76
2) Of which liabilities for property acquisitions	459	949

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–DECEMBER
ACCORDING TO SEGMENT REPORTING, SEK M	2020	2019
Opening balance at beginning of period	7,326	6,798
Total comprehensive income for the period	1,360	1,361
Dividend	−870	−835
Equity component of convertible debentures	1	2
Closing balance at the end of the period	7,817	7,326

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	JANUARY–DECEMBER		OCTOBER–DECEMBER
ACCORDING TO SEGMENT REPORTING, SEK M	2020	2019	2020	2019
Cash flow from operating activities before change in working capital
and taxes 1) 2)	1,720	2,158	704	348
Paid tax	−484	−433	−99	−67
Investment in development properties	−1,529	−1,819	−558	−386
Payment on account for development properties	2,010	1,279	846	509
Investment in project properties	−691	−426	−325	−111
Sale of project properties	1,060	865	1,060	–
Change in current liabilities/receivables	−371	−333	−340	181
Cash flow from operating activities	1,715	1,291	1,288	474
Cash flow from investing activities	−79	−7	−78	−2
Loans raised	453	658	210	122
Amortization of debt	−571	−399	−259	−150
Dividend	−870	−835	−435	–
Cash flow from financing activities	−988	−576	−484	−28
Cash flow for the period	648	708	726	444
Cash and cash equivalents at end of the period	3,037	2,397	3,037	2,397
1) Of which investment in participations in tenant-owners associations and freehold residential units	−1,225	−1,980	−184	−420
2) Of which the sale of participations in tenant-owners associations and freehold residential units	1,148	2,271	289	540

GROUP KEY FIGURES

ACCORDING TO SEGMENT REPORTING, %		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Operating margin	13.2	12.8	17.4	13.0
Return on equity	20.8	22.2
Return on capital employed	19.6	21.0
Debt/equity ratio, multiple	–	0.1		0.1
Equity/assets ratio	47	42

ACCORDING TO SEGMENT REPORTING

REVENUE BY COUNTRY

SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Sweden	11,641	11,451	3,428	3,038
Norway	2,716	3,407	806	909
Finland	1,031	832	296	364
Belgium	0	2	0	0
Total	15,388	15,692	4,530	4,311

REVENUE BY BUSINESS SEGMENT

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
JM Residential Stockholm	6,358	5,575	2,023	1,551
JM Residential Sweden	4,193	4,468	1,137	1,185
JM International	3,747	4,021	1,102	1,275
JM Property Development	169	227	57	40
JM Construction	1,253	1,691	307	347
Elimination	−332	−290	−96	−87
Total	15,388	15,692	4,530	4,311

OPERATING PROFIT BY BUSINESS SEGMENT

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
JM Residential Stockholm	926	916	299	262
JM Residential Sweden	657	719	181	189
JM International	276	355	136	116
JM Property Development	178	194	178	3
JM Construction	31	−141	8	0
Group-wide expenses	−40	−35	−13	−11
Total	2,028	2,008	789	559

OPER ATING MARGIN BY BUSINESS SEGMENT

%		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
JM Residential Stockholm	14.6	16.4	14.8	16.9
JM Residential Sweden	15.7	16.1	15.9	15.9
JM International	7.4	8.8	12.3	9.1
JM Construction	2.5	−8.3	2.6	0.0

AVER AGE OPER ATING CAPITAL BY BUSINESS SEGMENT

SEK M	2020	2019
JM Residential Stockholm	5,372	5,811
JM Residential Sweden	1,307	1,183
JM International	3,400	3,229
JM Property Development	1,513	1,570

RETURN ON OPER ATING CAPITAL BY BUSINESS SEGMENT

%	2020	2019
JM Residential Stockholm	17.2	15.8
JM Residential Sweden	50.3	60.8
JM International	8.1	11.0
JM Property Development	11.8	12.4

ACCORDING TO SEGMENT REPORTING

	OCT–DECEMBER	JULY–SEPTEMBER	APRIL–JUNE	JANUARY–MARCH	OCT–DECEMBER
SEK M	2020	2020	2020	2020	2019
Cost-based effect	318	269	338	345	424
Revaluation effect	255	234	236	146	255
Sales effect	235	68	35	178	92
Total	808	571	609	669	771

PROFIT/LOSS COMPONENTS, HOUSING BUSINESS, PERCENTAGE OF COMPLETION METHOD (GROSS PROFIT)

Starting in Q1 2020, the profit/loss components that are included in gross profit for the housing business are reported. The percentage of completion method in JM and the accounting of gross profit consists of three components: incurred costs (cost-based effect), assessment of expected margin (revaluation effect), and sales rate of projects (sales effect). Profit/loss components are reported quarterly and are not accumulated. The table starts with the business segments' gross operating profit (excluding net rental income from project and development properties) for the housing business. For definitions of profit/loss components in the housing business, see the document entitled "Definitions key financial figures" at om.jm.se/en/ about-jm/investors

REVALUATION EFFECTS — HOUSING BUSINESS

	OCT–DECEMBER	JULY–SEPTEMBER	APRIL–JUNE	JANUARY–MARCH	OCT–DECEMBER
SEK M	2020	2020	2020	2020	2019
JM Residential Stockholm	−31	36	13	−30	17
JM Residential Sweden	166	136	190	135	161
JM International	120	62	33	41	77
Total	255	234	236	146	255

OPERATING CASH FLOW BY BUSINESS SEGMENT

SEK M		JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
JM Residential Stockholm	1,064	1,118	383	598
JM Residential Sweden	512	557	270	287
JM International	326	−439	106	−239
JM Property Development	284	454	660	−112
JM Construction	−65	54	9	−1

DEVELOPMENT PROPERTIES BY BUSINESS SEGMENT

CARRYING AMOUNT, SEK M	12/31/2020	12/31/2019
JM Residential Stockholm	4,246	4,949
JM Residential Sweden	1,451	1,461
JM International	2,108	2,497
JM Property Development	10	10
JM Construction	16	21
Total	7,831	8,938

AVAILABLE RESIDENTIAL BUILDING RIGHTS BY BUSINESS SEGMENT

NUMBER	12/31/2020	12/31/2019
JM Residential Stockholm	12,500	12,800
JM Residential Sweden	9,900	10,500
JM International	14,200	11,800
JM Property Development 1)	1,200	800
Total	37,800	35,900
Including those carried in the balance sheet (development properties)
JM Residential Stockholm	7,300	7,800
JM Residential Sweden	6,300	6,600
JM International	6,500	6,600
JM Property Development 1)	300	100
Total	20,400	21,100

RESIDENTIAL UNITS SOLD BY BUSINESS SEGMENT

		JANUARY–DECEMBER
NUMBER	2020	2019	2020	2019
JM Residential Stockholm	1,340	1,120	474	353
JM Residential Sweden	1,208	1,084	380	313
JM International	1,060	1,015	351	275
JM Property Development 1)	418	376	418	–
Total	4,026	3,595	1,623	941

1) Refers to rental units and residential care units.

HOUSING STARTS BY BUSINESS SEGMENT

		JANUARY–DECEMBER
NUMBER	2020	2019	2020	2019
JM Residential Stockholm	1,032	989	282	336
JM Residential Sweden	1,072	1,095	250	291
JM International	1,095	1,042	444	480
JM Property Development 1)	–	143	–	–
Total	3,199	3,269	976	1,107

RESIDENTIAL UNITS IN CURRENT PRODUCTION

NUMBER	12/31/2020	12/31/2019
JM Residential Stockholm	2,878	3,171
JM Residential Sweden	2,172	1,994
JM International	2,463	2,048
JM Property Development 1)	463	600
Total	7,976	7,813

PROJECT PROPERTIES, GROUP

Total	1,651	1,246	23	89	1,399
Completed commercial properties	36	31	1	81	11
Completed rental unit properties	0	0	0	0	587
Properties under development	1,615	1,215	22	90	801
12/31/2020	SEK M AMOUNT, SEK M		(000) M²	ANNUAL RENT, %	12/31/2019
	MARKET VALUE,	CARRYING	AREA	OCCUPANCY RATE	AMOUNT, SEK M

CARRYING

DEVELOPMENT PROPERTIES, GROUP

	JANUARY–DECEMBER	OCTOBER–DECEMBER
CARRYING AMOUNT, SEK M	2020	2019	2020	2019
Opening balance at beginning of period	8,938	8,306	8,411	9,170
New purchases	1,022	1,745	249	285
Transferred to production	−1,888	−1,068	−792	−458
Other	−241	−45	−37	−59
Closing balance at the end of the period	7,831	8,938	7,831	8,938

1) Refers to rental units and residential care units.

Group five-year overview

ACCORDING TO SEGMENT REPORTING, SEK M	2020	2019	2018	2017	2016
Revenue	15,388	15,692	16,161	17,008	15,752
Operating profit	2,028	2,008	1,886	2,369	2,011
Profit before tax	1,955	1,928	1,817	2,579	1,951
Total assets	16,665	17,593	16,487	15,405	12,848
Cash flow from operating activities	1,715	1,291	−473	2,013	1,957
Interest-bearing net liabilities (+)/receivables (−)	−300	420	546	−790	435
Operating margin, %	13,2	12.8	11.7	13.9	12.8
Return on equity, %	20.8	22.2	22.2	38.7	31.4
Equity/assets ratio, %	47	42	41	40	40
Earnings per share, SEK	22.50	22.50	20.60	31.00	21.20
Dividend per share, SEK	12.75 1)	12.50	12.00	11.00	9.50
Number of available building rights	37,800	35,900	35,900	34,800	32,500
Number of residential units sold	4,026	3,595	2,463	3,100	3,843
Number of housing starts	3,199	3,269	3,135	3,873	4,187
Number of residential units in current production	7,976	7,813	7,835	8,200	7,984

1) Proposal by the Board of Directors

Group quarterly overview

ACCORDING TO SEGMENT REPORTING, SEK M	2020 2019
INCOME STATEMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	4,530	3,382	3,662	3,814	4,311	3,768	3,944	3,669
Production and operating costs	−3,680	−2,786	−3,036	−3,105	−3,520	−3,108	−3,212	−3,154
Gross profit	850	596	626	709	791	660	732	515
Selling and administrative expenses	−233	−198	−269	−244	−254	−212	−260	−240
Gains/losses on the sale of property, etc.	172	1	–	18	22	182	34	38
Operating profit	789	399	357	483	559	630	506	313
Financial income and expenses	−19	−16	−17	−21	−18	−22	−18	−22
Profit before tax	770	383	340	462	541	608	488	291
Taxes	−127	−81	−74	−98	−99	−94	−102	−63
Profit for the period	643	302	266	364	442	514	386	228
CONSOLIDATED BALANCE SHEET	12/31	9/30	6/30	03/31	12/31	9/30	6/30	03/31
ASSETS
Non-current assets	278	194	200	193	219	221	221	220
Project properties	1,246	1,791	1,643	1,498	1,399	1,286	1,865	1,743
Development properties	7,831	8,411	8,724	8,594	8,938	9,170	8,983	8,911
Participations in tenant-owners associations, etc.	445	558	603	438	366	422	296	434
Current receivables	3,828	3,847	3,796	4,007	4,274	4,013	3,993	4,040
Cash and cash equivalents	3,037	2,314	2,572	2,684	2,397	1,955	1,168	2,150
Total current assets	16,387	16,921	17,338	17,221	17,374	16,846	16,305	17,278
Total assets	16,665	17,115	17,538	17,414	17,593	17,067	16,526	17,498
EQUITY AND LIABILITIES
Equity	7,817	7,704	7,430	7,561	7,326	6,866	6,597	7,083
Non-current interest-bearing liabilities	354	362	293	267	425	418	314	171
Other non-current liabilities	372	679	751	749	765	798	770	770
Non-current provisions	3,290	3,398	3,280	3,151	3,223	3,652	3,296	3,128
Total non-current liabilities	4,016	4,439	4,324	4,167	4,413	4,868	4,380	4,069
Current interest-bearing liabilities	579	632	806	899	690	741	502	688
Other current liabilities	4,120	4,198	4,837	4,652	5,030	4,448	4,904	5,529
Current provisions	133	142	141	135	134	144	143	129
Total current liabilities	4,832	4,972	5,784	5,686	5,854	5,333	5,549	6,346
Total equity and liabilities	16,665	17,115	17,538	17,414	17,593	17,067	16,526	17,498
CASH FLOW STATEMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
From operating activities	1,288	−165	404	188	474	446	−97	468
From investing activities	−78	0	0	−1	−2	−6	−1	2
From financing activities	−484	−93	−516	105	−28	349	−888	−9
Total cash flow for the period	726	−258	−112	292	444	789	−986	461
Cash and cash equivalents at end of the period	3,037	2,314	2,572	2,684	2,397	1,955	1,168	2,150
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	409	247	198	420	951	1,155	130	546
Change in interest-bearing net liabilities/receivables	−709	162	49	−222	−531	−204	1,025	−416
Interest-bearing net liabilities(+)/receivables(−) at end
of period	−300	409	247	198	420	951	1,155	130
DEVELOPMENT PROPERTIES	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Carrying amount at beginning of period	8,411	8,724	8,594	8,938	9,170	8,983	8,911	8,306
New purchases	249	103	397	273	285	581	142	737
Transferred to production	−792	−346	−302	−448	−458	−354	−77	−179
Other	−37	−70	35	−169	−59	−40	7	47
Carrying amount at end of period	7,831	8,411	8,724	8,594	8,938	9,170	8,983	8,911
KEY RATIOS	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Operating margin, %	17.4	11.8	9.7	12.7	13.0	16.7	12.8	8.5
Debt/equity ratio, multiple	–	0.1	0.0	0.0	0.1	0.1	0.2	0.0
Equity/assets ratio, %	47	45	42	43	42	40	40	40
Earnings per share, SEK	9.20	4.30	3.80	5.20	6.30	7.40	5.50	3.30
Number of available building rights	37,800	37,900	38,600	35,900	35,900	36,400	36,500	36,400
Number of residential units sold	1,623	956	642	805	941	1,106	881	667
Number of housing starts	976	855	731	637	1,107	797	959	406
Number of residential units in current production	7,976	7,829	7,249	7,583	7,813	8,033	7,829	7,842

Business Segment Quarterly Overview

ACCORDING TO SEGMENT REPORTING, SEK M		2020				2019
JM RESIDENTIAL STOCKHOLM	Q 4	Q 3	Q 2	Q 1	Q4	Q 3	Q 2	Q 1
Revenue	2,023	1,310	1,403	1,622	1,551	1,259	1,330	1,435
Operating profit 1)	299	185	192	250	262	209	216	229
Operating margin, %	14.8	14.1	13.7	15.4	16.9	16.6	16.2	16.0
Average operating capital	5,372	5,552	5,682	5,740	5,811	5,802	5,754	5,668
Return on operating capital, %*)	17.2	16.0	16.1	16.3	15.8	15.3	15.8	16.7
Operating cash flow	383	143	207	331	598	321	−85	284
Carrying amount, development properties	4,246	4,587	4,816	4,812	4,949	5,049	5,132	5,042
Number of available building rights	12,500	12,600	12,800	12,900	12,800	13,000	13,500	13,400
Number of residential units sold	474	299	220	347	353	261	268	238
Number of housing starts	282	252	258	240	336	278	286	89
Number of residential units in current production	2,878	3,095	2,843	3,035	3,171	3,112	3,001	3,042
1) Of which property sales	–	–	–	–	–	0	–	–
JM RESIDENTIAL SWEDEN	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,137	913	1,093	1,050	1,185	974	1,199	1,110
Operating profit	181	141	169	166	189	157	193	180
Operating margin, %	15.9	15.4	15.5	15.8	15.9	16.1	16.1	16.2
Average operating capital	1,307	1,295	1,274	1,226	1,183	1,164	1,096	1,042
Return on operating capital, %*)	50.3	51.4	53.5	57.5	60.8	62.8	66.6	68.9
Operating cash flow	270	60	74	108	287	127	78	65
Carrying amount, development properties	1,451	1,530	1,532	1,461	1,461	1,545	1,549	1,559
Number of available building rights	9,900	10,200	10,500	10,500	10,500	10,500	10,500	10,500
Number of residential units sold 1)	380	250	278	300	313	284	244	243
Number of housing starts 2))	250	285	276	261	291	289	244	271
Number of residential units in current production	2,172	2,138	1,961	1,930	1,994	2,426	2,366	2,547
1) Of which residential units to investors 2) Of which residential units to investors	– –	– –	69 69	– –	– –	– –	– –	– –
JM INTERNATIONAL	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	1,102	867	896	882	1,275	981	905	860
Operating profit 1)	136	70	19	51	116	75	66	98
Operating margin, %	12.3	8.1	2.1	5.8	9.1	7.6	7.3	11.4
Average operating capital	3,400	3,440	3,395	3,368	3,229	3,064	2,967	2,888
Return on operating capital, %*)	8.1	7.4	7.7	9.1	11.0	11.4	12.1	13.0
Operating cash flow	106	−27	285	−38	−239	−460	133	127
Carrying amount, development properties	2,108	2,265	2,347	2,292	2,497	2,538	2,261	2,261
Carrying amount, project properties	33	25	25	4	5	5	5	5
Number of available building rights	14,200	13,900	14,200	11,600	11,800	12,100	11,700	11,700
Number of residential units sold 2)	351	407	144	158	275	185	369	186
Number of housing starts3)	444	318	197	136	480	230	286	46
Number of residential units in current production	2,463	2,133	1,982	2,018	2,048	1,759	1,726	1,660
1) Of which property sales	−2	1	–	–	–	–	–	38
2) Of which residential units to investors	–	101	–	–	44	–	182	–
3) Of which residential units to investors	–	101	–	–	44	–	182	–
JM PROPERTY DEVELOPMENT	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue	57	42	35	35	40	134	29	24
Operating profit 1) 2)	178	3	−6	3	3	179	6	6
Average operating capital	1,513	1,507	1,523	1,545	1,570	1,574	1,583	1,447
Return on operating capital, %*)	11.8	0.2	11.8	12.4	12.4	12.5	1.3	1.0
Operating cash flow	660	−155	−120	−101	−112	778	−116	−96
Carrying amount, development properties	10	10	10	10	10	10	10	10
Carrying amount, project properties	1,213	1,766	1,618	1,494	1,394	1,281	1,860	1,738
Number of available building rights 3)	1,200	1,200	1,100	900	800	800	800	800
Number of residential units sold 3)	418	–	–	–	–	376	–	–
Number of housing starts 3)	–	–	–	–	–	–	143	–
Number of residential units in current production 3)	463	463	463	600	600	736	736	593
1) Of which property sales 2) Of which income from joint venture	170 4	– –	– –	– –	– –	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	307	330	320	296	347	482	550	312
Operating profit 1)	8	3	−2	22	0	14	34	−189
Operating margin, %	2.6	0.9	−0.6	7.4	0.0	2.9	6.2	−60.6
Operating cash flow	9	−55	−24	5	−1	−80	−107	242
1) Of which sale of properties and operations	–	–	–	18	22	12	34	–
JM OTHER	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Revenue (elimination)	−96	−80	−85	−71	−87	−62	−69	−72
Operating profit (Group-wide expenses)	−13	−3	−15	−9	−11	−4	−9	−11

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

Group − IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

		JANUARY–DECEMBER	OCTOBER–DECEMBER
ACCORDING TO IFRS, SEK M	2020	2019	2020	2019
Revenue	16,291	15,605	5,469	3,864
Production and operating costs	−13,337	−12,750	−4,476	−3,084
Gross profit	2,954	2,855	993	780
Selling and administrative expenses	−957	−979	−236	−257
Gains/losses on the sale of property, etc. 1) 2)	21	106	2	22
Operating profit	2,018	1,982	759	545
Financial income and expenses	−101	−100	−26	−22
Profit before tax	1,917	1,882	733	523
Taxes	−378	−356	−128	−96
Profit for the period	1,539	1,526	605	427
Other comprehensive income
Items that will be reclassified as income
Translation differences from the translation of foreign operations	−157	41	−33	−36
Items that will not be reclassified as income
Restatement of defined-benefit pensions	−52	−317	−72	75
Tax attributable to other comprehensive income	11	65	15	−16
Comprehensive income for the period	1,341	1,315	515	450
Net profit for the period attributable to shareholders of the Parent Company	1,539	1,526	605	427
Comprehensive income for the period attributable to shareholders of the Parent Company	1,341	1,315	515	450
Earnings per share 3), basic, attributable to shareholders of the Parent Company, SEK	22.10	21.90	8.70	6.10
Earnings per share 3), diluted, attributable to shareholders of the Parent Company, SEK	22.00	21.90	8.60	6.10
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	70,061,421	69,985,557	70,125,557	70,046,214
1) Of which sale of operations	–	15	–	15
2) Of which income from joint venture	4	–	4	–

3) Net profit for the period.

CONDENSED CONSOLIDATED BAL ANCE SHEET

ACCORDING TO IFRS, SEK M	12/31/2020	12/31/2019
ASSETS1)
Non-current assets	435	419
Project properties	1,246	1,399
Development properties	7,831	8,938
Utilization of site leasehold rights	558	650
Participations in tenant-owners associations, etc.	445	366
Work in progress	3,577	3,781
Current receivables	5,959	5,022
Cash and cash equivalents	3,037	2,397
Total current assets	22,653	22,553
Total assets	23,088	22,972
EQUITY AND LIABILITIES2) 3) 4) 5)
Equity	7,598	7,126
Non-current interest-bearing liabilities	1,180	1,359
Other non-current liabilities	372	765
Non-current provisions	3,255	3,187
Total non-current liabilities	4,807	5,311
Current interest-bearing liabilities	6,480	5,320
Other current liabilities	4,070	5,081
Current provisions	133	134
Total current liabilities	10,683	10,535
Total equity and liabilities	23,088	22,972
Pledged assets	395	475
Contingent liabilities	8,789	9,547
1) Of which right-of-use offices and cars	157	200
2) Of which project financing JM International	2,914	3,093
3) Of which project financing JM Residential Stockholm and JM Residential Sweden	3,064	1,693
4) Of which liabilities for property acquisition	459	949
5) Of which current and non-current interest-bearing leasing liabilities	717	852

JM GROUP YEAR-END REPORT JANUARY–DECEMBER 2020 2 1

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		JANUARY–DECEMBER
ACCORDING TO IFRS, SEK M	2020	2019
Opening balance at beginning of period	7,126	6,644
Total comprehensive income for the period	1,341	1,315
Dividend	−870	−835
Equity component of convertible debentures	1	2
Closing balance at the end of the period	7,598	7,126

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

		JANUARY–DECEMBER	OCTOBER–DECEMBER
ACCORDING TO IFRS, SEK M	2020	2019	2020	2019
Cash flow from operating activities before change in working capital and taxes 1) 2)	116	660	252	111
Paid tax	−484	−433	−99	−67
Investment in development properties	−1,529	−1,819	−558	−386
Payment on account for development properties	433	537	203	208
Investment in project properties	−691	−426	−325	−111
Sale of project properties	1,060	865	1,060	–
Change in current liabilities/receivables	385	−787	149	42
Cash flow from operating activities 3)	−710	−1,403	682	−203
Cash flow from investing activities	−79	−7	−78	−2
Loans raised	453	658	210	122
Amortization of debt	−669	−502	−279	−176
Loans raised, project financing 3)	4,486	3,922	1,295	1,208
Amortization of debt, project financing 3)	−1,963	−1,125	−669	−505
Dividend	−870	−835	−435	–
Cash flow from financing activities	1,437	2,118	122	649
Cash flow for the period	648	708	726	444
Cash and cash equivalents at end of the period	3,037	2,397	3,037	2,397
1) Of which investment in participations in tenant-owners associations and freehold residential units	−1,225	−1,980	−184	−420
2) Of which the sale of participations in tenant-owners associations and freehold residential units	1,148	2,271	289	540

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 2020 is prepared in accordance with IAS 34 Interim Financial Reporting and the Annual Accounts Act The consolidated accounts have been 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 86–89 of the 2019 Annual Report.

NEW AND AMENDED STANDARDS AS OF 2020

The amended standards according to IFRS the Group applies as of January 1, 2020, are expected to have no or a small 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 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 2020 included a description of the ongoing investigation and Finansinspektionen's (FI) decision on 20 May 2020, following which the tenant-owner associations that JM develops may not be considered independent from an IFRS perspective and therefore for accounting purposes must be consolidated in JM's consolidated financial statements.

JM does not share FI's assessment, and even if a change in the accounting will not affect JM's segment reporting, project governance or risk profile, JM considers it to be of principle importance for the matter to be further assessed by a court of law. JM has therefore appealed FI's decision to the Administrative Court at the beginning of June 2020. The process to reach a final ruling is judged to potentially take several years.

In the annual reports for 2018 and 2019, JM provided disclosures regarding effects on earnings, equity and the tenant-owners associations' liabilities in the event that the tenant-owners associations would be consolidated. JM intends to continue to provide such disclosures in the Annual Report.

As at December 31, 2020, JM estimated that the restatement based on FI's preliminary assessment means that equity would be SEK 0.6bn (0.7) lower.

Parent Company

CONDENSED INCOME STATEMENT, PARENT COMPANY

		JANUARY–DECEMBER
SEK M	2020	2019
Net sales	10,790	10,294
Production and operating costs	−8,586	−8,021
Gross profit	2,204	2,273
Selling and administrative expenses	−650	−652
Gains/losses on the sale of property	0	0
Operating profit	1,554	1,621
Financial income and expenses	280	151
Profit before appropriations and tax	1,834	1,772
Appropriations	−61	−221
Profit before tax	1,773	1,551
Taxes	−319	−292
Profit for the period	1,454	1,259

CONDENSED BALANCE SHEET, PARENT COMPANY

SEK M	12/31/2020	12/31/2019
Assets
Non-current assets	1,776	1,680
Current assets	13,834	13,100
Total assets	15,610	14,780
Equity and liabilities
Equity	4,501	3,916
Untaxed reserves	2,410	2,380
Provisions	1,422	1,453
Non-current liabilities	461	803
Current liabilities	6,816	6,228
Total equity and liabilities	15,610	14,780
Pledged assets	100	100
Contingent liabilities	9,459	10,263

Reconciliation between segment reporting and IFRS

CONSOLIDATED INCOME STATEMENT

SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Revenue for the period (segment reporting)	15,388	15,692	4,530	4,311
Restatement JM International	−137	−816	−101	−446
Reclassification property sale	1,040	729	1,040	−1
Revenue for the period (IFRS)	16,291	15,605	5,469	3,864
Operating profit/loss for the period (segment reporting)	2,028	2,008	789	559
Restatement JM International	−37	−43	−37	−16
Leases IFRS 16	27	17	7	2
Operating profit/loss for the period (IFRS)	2,018	1,982	759	545
Profit/loss for the period (segment reporting)	1,575	1,570	643	442
Restatement JM International	−35	−42	−38	−14
Leases IFRS 16	−1	−2	0	−1
Profit/loss for the period (IFRS)	1,539	1,526	605	427

CONSOLIDATED BAL ANCE SHEET

SEK M	12/31/2020	12/31/2019
Balance sheet total (segment reporting)	16,665	17,593
Restatement JM International	−270	−257
Reclassification project financing JM International, interest-bearing	2,609	2,705
Reclassification project financing JM International, non-interest-bearing 1)	305	388
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	3,400	2,007
Transfer between Progress billing in excess of recognized revenue to Revenue less progress billings	−336	−314
Leases IFRS 16	715	850
Balance sheet total (IFRS)	23,088	22,972

1) Billing on account to customers.

CONSOLIDATED EQUITY

SEK M	12/31/2020	12/31/2019
Equity (segment reporting)	7,817	7,326
Restatement JM International	−217	−198
Leases IFRS 16	−2	−2
Equity (IFRS)	7,598	7,126

GROUP KEY FIGURES

%	12/31/2020	12/31/2019
Equity/assets ratio (segment reporting)	47	42
Equity/assets ratio (IFRS)	33	31

CONSOLIDATED CASH FLOW

SEK M	JANUARY–DECEMBER		OCTOBER–DECEMBER
	2020	2019	2020	2019
Cash flow from operating activities (segment reporting)	1,715	1,291	1,288	474
Reclassification project financing JM International	−144	−776	−30	−364
Reclassification project financing JM Residential Stockholm and
JM Residential Sweden, interest-bearing	−2,379	−2,021	−596	−339
Leases IFRS 16	98	103	20	26
Cash flow from operating activities (IFRS)	−710	−1,403	682	−203

CONSOLIDATED INTEREST-BEARING NET LIABILITIES/RECEIVABLES

SEK M	12/31/2020	12/31/2019
Interest-bearing net liabilities (+)/receivables (−) at end of period (segment
reporting)	−300	420
Reclassification project financing JM International	2,609	2,705
Reclassification project financing JM Residential Stockholm and Sweden, interest-bearing	3,400	2,007
Leases IFRS 16	717	852
Interest-bearing net liabilities (+)/receivables (−) at end of period (IFRS)	6,426	5,984

Stockholm, February 3, 2021 JM AB (publ)

Johan Skoglund President and CEO

This year-end report has not been reviewed by the Company's auditors.

In the middle of the Södermalm district in Stockholm city, JM is building the new neighborhood Sofia Södra next to leafy parks and with a unique location close to the Hammarby lake and quay walking path, with services and schools within walking distance. Sofia Södra's fourth sales phase includes 18 residential units with 1–4 rooms plus a kitchen, all of which have at least one balcony or patio. At the top of the building is a common roof terrace, where residents can enjoy the sun and the beautiful view. The garage will house a car pool, with three electrical cars, where membership is included for residents of Sofia Södra.

With homey brick buildings close to everyday necessities and a short tram ride to the city center, it will be difficult not to love leafy Kvibergsstaden in Gothenburg, a growing district with good public transportation, day cares, schools, a grocery store, and lots of activities. Next to the river Säveån, JM is building Kvibergs Allé Östra, a low rise consisting of 21 residential units with 1–4 rooms plus a kitchen and an inviting atmosphere at the end of the street. The large terraces give the residential units a houselike feel, with stairs down to ground level.

JM's project Kultaseppä in Herttoniemi outside of Helsinki offers 51 residential units with 1–4 rooms plus a kitchen, all of which have a glassed-in balcony. The brick facade and the modern architecture give Kultaseppä a unique appearance and are

a nod to the neighborhood's rich industrial history. The residential units are situated close to Herttoniemi's service offerings and has excellent connections to public transport.

In the "Smarta Kvadrat" project Damkvartalet at Myrvoll Stasjon in Nordre Follo, JM is building 33 space-efficient residential units with 2–4 rooms plus a kitchen. The residential units, all of which have a balcony, are located only 20 minutes by train from Oslo and are in immediate proximity to both stores and local services as well as forest and nature.

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 15 billion and the company has around 2,500 employees. JM AB is a public limited company listed on NASDAQ Stockholm, Large Cap segment.

FINANCIAL TARGETS, BENCHMARKS FOR CAPITAL STRUCTURE AND DIVIDEND POLICY

The operating margin should amount to 12 percent on average, including gains/losses from property sales.

Return on equity should be 25 percent on average over time. Long-term growth should amount to 4 percent a year on average for the number of housing starts.

Benchmark for capital structure where the visible equity/assets ratio should amount to at least 35 percent over a business cycle.

Dividend policy where the average dividend should be 50 percent of the Group's profit after tax over a business cycle.

JM's financial targets, benchmarks for capital structure and dividend policy based on segment reporting.

DISCLOSURES

This information is information that JM AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person set out below, at 08.00 CET on February 3, 2021.

FOR MORE INFORMATION PLEASE CONTACT:

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

FINANCIAL CALENDAR

March 3, 2021	Annual Report 2020 is published
March 24, 2021	Annual General Meeting (conducted by
	absentee ballot)
April 28, 2021	Interim Report January–March
July 13, 2021	Interim Report January–June
	October 28, 2021 Interim Report January–September

PRESS RELEASES, Q4 2020

• December 8 JM creates a structure for long-term management of rental housing and transfers properties to a newly formed joint venture
• November 23 Resolution at extraordinary general meeting of JM AB (publ)
• October 27 Notification of extraordinary general meeting in JM AB (publ)
• October 22 Interim Report January–September 2020
• October 20 JM obtains legal title for office building rights in Karlberg, Solna

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

Text: JM

Photo/Illustrations: Sandra Birgersdotter Ek, Kristofer Johnsson, Elisabeth Nærup Lange, Magnus Liam, Dmitry Tkachenko, Sightline, Carbonwhite, WEC360, Pixerymedia.

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